Cultural Radio Tax Credit Act of 2005 - Amends the Internal Revenue Code to allow a business tax credit for 125 percent of the fair market value of a radio broadcasting commercial license and 100 percent of the fair market value of radio station assets donated to a tax-exempt organization which agrees to operate the station on a for-profit basis and to donate operational profits to support nonprofit fine arts and performing arts organizations in its service area.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2904 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 2904
To amend the Internal Revenue Code of 1986 to allow a credit against
the income tax for an owner of a radio broadcasting station which
donates the license and other assets of such station to a nonprofit
corporation for purposes of supporting nonprofit fine arts and
performing arts organizations, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 15, 2005
Mr. Andrews introduced the following bill; which was referred to the
Committee on Ways and Means
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A BILL
To amend the Internal Revenue Code of 1986 to allow a credit against
the income tax for an owner of a radio broadcasting station which
donates the license and other assets of such station to a nonprofit
corporation for purposes of supporting nonprofit fine arts and
performing arts organizations, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Cultural Radio Tax Credit Act of
2005''.
SEC. 2. CREDIT FOR DONATION OF LICENSE AND OTHER ASSETS OF COMMERCIAL
RADIO BROADCASTING STATIONS TO NONPROFIT CORPORATIONS.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to general business
credits) is amended by adding at the end the following new section:
``SEC. 45J. CREDIT FOR DONATION OF LICENSE AND OTHER ASSETS OF
COMMERCIAL RADIO BROADCASTING STATION TO CERTAIN
NONPROFIT CORPORATIONS.
``(a) Radio Broadcasting Station Donation Credit.--For purposes of
section 38, the radio broadcasting station donation credit is an amount
equal to the sum of--
``(1) 125 percent of the fair market value of a radio
broadcasting commercial license which is donated to a qualified
recipient,
``(2) 100 percent of the fair market value of any radio
broadcasting station assets, including equipment and other real
property owned by the station, which are donated to the same
qualified recipient, and
``(3) the total amount deposited into an operations escrow
fund established by the donor of the license and assets during
the taxable year.
``(b) Qualified Recipient.--For purposes of this section, a
qualified recipient is an entity which--
``(1) is a corporation described in section 501(c)(3) which
is exempt from taxation under section 501(a),
``(2) agrees to operate the radio broadcasting station
being donated to it as a for-profit venture, with profits
dedicated to the support of non-profit fine arts and performing
arts organizations in its service area,
``(3) has at least 3 arts organizations from its service
area on its board of trustees, or on a board of trustees of a
subsidiary established to oversee operation of the radio
broadcasting station,
``(4) agrees that, in the event that it ceases operation of
the radio broadcasting station--
``(A) it will not sell the station to a for-profit
broadcaster under any circumstances, and
``(B) it will either--
``(i) transfer the license to another
corporation described in section 501(c)(3)
which is exempt from taxation under section
501(a) and which agrees to continue operation
of the station for the support of nonprofit
fine arts and performing arts organizations in
its service area, or
``(ii) surrender the license to the Federal
Communications Commission.
``(c) Operations Escrow Fund.--
``(1) In general.--For purposes of this section, an
operations escrow fund is a fund established by a taxpayer who
has donated a radio broadcasting commercial license or radio
broadcasting station assets to a qualified recipient for the
purpose of covering operating expenses during the recipient's
first year of operation of the radio broadcasting station if
the station's revenues are not adequate to cover such expenses.
An operations escrow fund may be established only if the
qualified recipient is not able to meet the financial
responsibility requirement of the Federal Communications
Commission.
``(2) Recapture of credit for amounts remaining in escrow
fund.--In any case in which there is an amount remaining in an
operations escrow fund after the first year of operation of the
radio broadcasting station for which the fund was established,
such amount (not including any interest that accrued on the
amount in the fund) shall be added to the tax imposed by this
chapter on the taxpayer for the taxpayer's taxable year which
includes the end of such first year of operation.
``(d) Special Rules in Case of Surrender of License to FCC.--If a
qualified recipient surrenders its donated radio broadcasting license
to the Federal Communications Commission, the Commission shall notify
the donor of the license that the donor may, within 6 months after such
notification, post a bond equal to the amount of the tax credit under
subsection (a) that it received for donating the station, plus
interest. After such a bond is posted, the donor may apply for the
license. If the Commission approves the donor's application for the
license, the bond shall be used in lieu of an auction fee. If the donor
does not exercise its option within such six months, or waives its
option earlier, the license shall be auctioned in the same manner as a
new license.
``(e) Denial of Double Benefit.--A donation or deposit for which a
credit is allowed under subsection (a) shall not be treated as a
charitable contribution under section 170.
``(f) Election.--This section shall apply to any taxpayer for any
taxable year only if such taxpayer elects (at such time and in such
manner as the Secretary may by regulations prescribe) to have this
section apply for such taxable year.''.
(b) Conforming Amendments.--
(1) Subsection (b) of section 38 of such Code is amended by
striking ``plus'' at the end of paragraph (18), by striking the
period at the end of paragraph (19) and inserting ``, plus'',
and by adding at the end the following new paragraph:
``(20) the radio broadcasting station donation credit
determined under section 45J(a).''.
(2) The table of sections for subpart D of part IV of
subchapter A of chapter 1 of such Code is amended by adding at
the end the following new item:
``Sec. 45J. Credit for donation of license and other assets of
commercial radio broadcasting stations to
certain nonprofit corporations.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2005.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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