Public Broadcasting Self-Sufficiency Act of 1996, H.R. 2979

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Introduced by Rep. Jack Fields, 1996; no action taken

A bill governing the phase-out of federal appropriations to CPB, introduced in the House, Feb. 28, 1996, by Rep. Jack Fields (R-Tex.), then chairman of the House telecommunications subcommittee. Cosponsors: Porter, Oxley, Moorhead, Schaefer, Barton (Tex.), Hastert, Gillmor and Frisa. This text was originally posted on the Library of Congress web site.

To ensure the financial self-sufficiency of public broadcasting, 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 `Public Broadcasting Self-Sufficiency Act
of 1996′.

TITLE I–TRANSITION FROM FEDERAL FUNDING

Subtitle A–Public Broadcasting Station Opportunities

SEC. 101. DEFINITIONS.

Section 397 of the Communications Act of 1934 (47 U.S.C. 397) is amended
by adding at the end the following new paragraph:

`(18) The term `transition period’ means the period beginning on the
date of enactment of the Public Broadcasting Self-Sufficiency Act of 1996
and ending at the close of September 30, 2000.’.

SEC. 102. EXPANDED UNDERWRITING OPPORTUNITIES.

Section 399B(b) of the Communications Act of 1934 (47 U.S.C. 399b) is amended
by adding at the end thereof the following new paragraph:

`(3) Paragraph (2) shall not prohibit a public broadcast station from broadcasting
or accepting remuneration for broadcasting–

`(A) well-established corporate logos or slogans, even if such logos
or slogans include a call to action by the viewer or listener; or

`(B) strictly quantifiable comparative descriptions of products, services,
or providers of products or services.’.

SEC. 103. PUBLIC/COMMERCIAL PARTNERSHIPS.

Section 399(b) of the Communications Act of 1934 is further amended by
adding at the end the following new paragraph:

`(4) A noncommercial educational broadcast station may broadcast programs
produced by, or at the expense of, or furnished by persons other than the
licensee, and may receive compensation (in addition to costs incidental
to production and broadcasting) for broadcasting such programs.’.

SEC. 104. CONVERSION OF STATIONS TO COMMERCIAL STATUS.

Subpart E of part IV of title III of the Communications Act of 1934 is
amended by adding at the end the following new section:

`SEC. [Struck out->][ 399D. ][<-Struck
out] TELEVISION CHANNEL EXCHANGES.

`(a) PETITION- The licensees or permittees of a commercial and a public
broadcast television station may jointly petition the Commission to request
an exchange of channels (including public broadcast television stations
on VHF channels to be exchanged for UHF channels). The Commission shall,
within 90 days after receipt of such a petition, amend the television table
of allotments and modify the licenses (or permits) of the petitioners to
specify operation on the appropriately exchanged channels upon finding that–

`(1) the stations serve substantially the same market; and

`(2) the consideration to be paid to the public broadcast television
licensee or permittee–

`(A) will be dedicated to the provision of public telecommunications
services; and

`(B) fairly reflects the value of the exchange of channels and related
facilities.

`(b) OTHER CONSIDERATIONS PROHIBITED- In acting on the joint petition,
the Commission may not consider proposals by other parties to become licensees
or permittees on the channels to be exchanged.’.

SEC. 105. REMUNERATIVE USES OF OVERLAPPING STATIONS.

Subpart E of part IV of title III of the Communications Act of 1934 is
further amended by inserting after section 399D (as added by section 104
of this Act) the following new section:

`SEC. [Struck out->][ 399E. ][<-Struck
out] REMUNERATIVE USES OF OVERLAPPING STATIONS.

`(a) REMUNERATIVE USES-

`(1) AUTHORITY TO OPERATE FOR REMUNERATIVE PURPOSES-
Subject to the requirements and limitations of this section, the licensee
or licensees of 2 overlapping stations may, notwithstanding the allocated
and licensed status of such stations as noncommercial educational television
stations, operate one such station for remunerative purposes, including
the transmission of commercial television programming originated by such
licensee or by another party and transmission of subscription television
or pay-per-view services.

`(2) CONDITIONS FOR REMUNERATIVE USE- The licensee or licensees of overlapping
stations intending to operate one of such stations for remunerative purposes
pursuant to paragraph (1) shall file with the Commission a joint operating
agreement or other instrument providing assurances that–

`(A) the remuneration from such operations (in excess of the costs
of the commercial and public television operations of such station)
is dedicated to the provision of local public telecommunications services
on the other overlapping station to substantially the same market; and

`(B) the station operated for remunerative purposes is, but for the
remunerative operations, otherwise operated consistent with the provisions
of this Act and the rules and policies of the Commission applicable
to such operations.

`(3) INELIGIBILITY FOR GRANTS- No noncommercial educational television
station operating under an agreement or instrument filed under paragraph
(2) shall be eligible to receive any grant from funds appropriated pursuant
to section 396.

`(b) SALE OF OVERLAPPING STATION-

`(1) SALE PERMITTED- Upon application by the licensee of 2 or more overlapping
public television stations, the Commission shall approve the assignment
of one of the licenses of such licensee for a television station to another
person or entity, and shall permit such person or entity to operate such
station as a commercial television station, if–

`(A) the licensee assigning such license will dedicate all compensation
received for such assignment to the support of the local public telecommunications
services on the retained station; and

`(B) the compensation provided to the licensee for assigning such license
fairly reflects the value of the license and related facilities.

`(2) INELIGIBILITY FOR GRANTS- No public television station operated
by the licensee making an assignment of a license under paragraph (1)
shall be eligible to receive a grant from funds appropriated pursuant
to section 396.

`(c) DEFINITIONS- For purposes of this section:

`(1) OVERLAPPING STATION- Two public television stations are `overlapping
stations’ if the Grade A contour of one of such stations reaches more
than 50 percent of the Grade A contour of the other such station in the
same television market.

`(2) TELEVISION MARKET- The term `television market’ has the meaning
provided in section 76.55(e)(1) of the Commission’s rules (47 C.F.R. 76.55(e)(1)).’.

Subtitle B–Corporation for Public Broadcasting Financial
Flexibility

SEC. 121. RELAXATION AND REDUCTION OF STATUTORY MANDATES.

(a) PURPOSES- Subsection (a) of section 396 of the Communications Act of
1934 (47 U.S.C. 396(a)) is amended to read as follows:


`(a) PURPOSES- The purposes of the Corporation for Public Broadcasting
shall be–

`(1) to promote the delivery of local public telecommunications services
which advance education,

support culture, and foster citizenship for all Americans;

`(2) to promote efficiency and effectiveness in the provision of public
broadcasting services, through technological advances and, where appropriate,
through mergers, consolidations, and joint operating agreements;

`(3) to promote and support program production;

`(4) to preserve and enhance the geographic and cultural diversity of
public broadcasting programs and services;

`(5) to support public broadcasting services for rural and underserved
areas and audiences;

`(6) to create and deliver creative and diverse
programming and services of high quality and excellence;

`(7) to preserve and protect their editorial integrity and independence;
and

`(8) to pioneer new telecommunications technologies and to adapt those
technologies for educational and public service purposes.’.

(b) AUTHORIZED ACTIVITIES- Subsection (g) of such section is amended to
read as follows:

`(g) The Corporation is authorized to take such actions consistent with
the District of Columbia Nonprofit Corporation Act (D.C. Code, sec. 29-1001
et seq.) as it may, in the exercise of its business judgment, determine
to be necessary to carry out the purposes set forth in subsection (a) of
this section. To carry out such purposes and to take such actions, the Corporation
shall have the usual powers conferred on a nonprofit corporation by such
Act.’.

(c) FINANCING-

(1) AUTHORIZATION OF APPROPRIATIONS- Section 396(k)(1)
of the Communications Act of 1934 (47 U.S.C. 396(k)(1)) is amended–

(A) by striking subparagraph (B) and inserting the following:

`(B) There are authorized to be appropriated to the Fund $250,000,000 for
each of the fiscal years 1998, 1999, and 2000.’;

(B) by striking subparagraphs (C) and (E);

(C) by redesignating subparagraph (D) as subparagraph (C); and

(D) by inserting after such subparagraph (C) the following new subparagraph:

`(D) The Secretary of the Treasury shall make the appropriated funds under
this subsection available on a fiscal year basis.’.

(d) ALLOCATION OF APPROPRIATIONS- Section 396(k) of such Act is further
amended by striking paragraphs (2) through (10) and inserting the following:

`(2) BUDGET FOR ALLOCATION- During the transition
period, the Corporation shall establish an annual budget for use in allocating
amounts from the Fund. Of the amounts appropriated into the Fund available
for allocation for any fiscal year during the transition period–

`(A) not more than 5 percent of all the amounts appropriated into the
Fund available for allocation for any fiscal year shall be available
for administrative expenses;

`(B) 75 percent of the remainder (after allocations are made under
subparagraph (A) shall be allocated in direct grants to public television
stations for the provision of public television broadcasting; and

`(C) 25 percent of such remainder shall be allocated in direct grants
to public radio stations for the provision of public radio broadcasting.

`(3) CONDITIONS ON ALLOCATIONS PERMITTED- The Corporation shall have
the authority to establish requirements, guidelines, and limitations with
respect to the use of Federal funds by public broadcasting stations.

`(4) PUBLIC ACCOUNTABILITY OF RECIPIENTS- During the transition period,
funds may not be distributed pursuant to this subsection to the Public
Broadcasting Service or National Public Radio (or any successor organization),
or to the licensee or permittee of any public broadcast station, unless
the governing body of any such organization, any committee of such governing
body, or any advisory body of any such organization, holds open meetings
preceded by reasonable notice to the public. All persons shall be permitted
to attend any meeting of the board, or of any such committee or body,
and no person shall be required, as a condition to attendance at any such
meeting, to register such person’s name or to provide any other information.
Nothing contained in this paragraph shall be construed to prevent any
such board, committee, or body from holding closed sessions to consider
matters relating to individual employees, proprietary information, litigation
and other matters requiring the confidential advice of counsel, commercial
or financial information obtained from a person on a privileged or confidential
basis, or the purchase of property or services whenever the premature
exposure of such purchase would compromise the business interests of any
such organization. If any such meeting is closed pursuant to the provisions
of this paragraph, the organization involved shall thereafter (within
a reasonable period of time) make available to the public a written statement
containing an explanation of the reasons for closing the meeting.

`(5) PUBLIC ACCESS TO REPORTS- During the transition period, funds may
not be distributed pursuant to this subsection to any public telecommunications
entity that does not maintain for public examination copies of the annual
financial and audit reports, or other information regarding finances,
submitted to the Corporation.

`(6) ONE-STATION-TO-A-MARKET SUPPORT- During
the transition period, the Corporation shall ensure that–

`(A) in communities in which there is a substantial overlap in the
service areas of public television stations, the total funds made available
to those stations are not more than would be provided if such areas
were served by a single station; and

`(B) in communities in which there is a substantial overlap in the
service areas of public radio station, the total funds made available
to those stations are not more than would be provided if such areas
were served by a single station, unless such stations serve significantly
different listening audiences, using distinct formats and providing
a high proportion of locally originated programming.

`(7) RATES OF PAY- During the transition period, funds may not be distributed
pursuant to this subsection to the Public Broadcasting Service or National
Public Radio (or any successor organization) unless assurances are provided
to the Corporation that no officer or employee of the Public Broadcasting
Service or National Public Radio (or any successor organization), as the
case may be, will be compensated at an annual rate of pay which exceeds
the rate of basic pay in effect from time to time for level I of the Executive
Schedule under section 5312 of title 5, United States Code, and unless
further assurances are provided to the Corporation that no officer or
employee of such an entity will be loaned money by that entity on an interest-free
basis.

`(8) SATELLITE INTERCONNECTION FUND-

`(A) There is hereby established in the Treasury a fund which shall
be known as the Public Broadcasting Satellite Interconnection Fund (hereinafter
in this subsection referred to as the `Satellite Interconnection Fund’),
to be administered by the Secretary of the Treasury.

`(B) By December 31, 1996, the Public Broadcasting Service and National
Public Radio shall prepare a final report for Congress on the status
of the Satellite Interconnection Fund.

`(9) POST-TRANSITION DISCRETION- The provisions of this subsection shall
cease to be effective upon the expiration of the transition period. Thereafter,
the Corporation may make funding and financing decisions, and place requirements
on licensees, permittees and other public broadcasting entities, in the
exercise of its business judgment in consultation with public television
and radio licensees.’.

TITLE II–PRIVATIZATION OF THE CORPORATION FOR PUBLIC BROADCASTING

SEC. 201. CONVERSION OF CORPORATION.

(a) CONVERSION OF BOARD TO PRIVATE APPOINTMENT PROCEDURES- Section 396(c)
of the Communications Act of 1934 is amended to read as follows:

`Board of Directors

`(c)(1) The Corporation for Public Broadcasting shall have a Board of Directors
(hereinafter in this section referred to as the `Board’). Until the expiration
of the transition period, the Board shall consist of 9 members appointed
by the President, no more than 6 of whom may be members of the same political
party.

`(2) Members of the Board appointed after the date of enactment of the
Public Broadcasting Self-Sufficiency Act shall be selected by the President
from a list of candidates nominated by the selection committee convened
under paragraph (3). The President may request the selection committee to
nominate additional candidates. Such candidates shall be selected by the
selection committee and the President on the basis of their qualifications
and expertise in one or more of the following fields:

`(A) Investment management.

`(B) Corporate finance.

`(C) Telecommunications.

`(D) Education.

`(E) Public broadcasting.

`(3) Upon the occurrence of any vacancy in the Board prior to the expiration
of the transition period, a selection committee is established to nominate
candidates for such vacancy. The selection committee shall be composed of
the majority and minority leaders of the Senate and the Speaker and minority
leader of the House of Representatives. The selection committee shall consult
with representatives of public broadcast station licensee prior to nominating
any candidates.

`(4) After the expiration of the transition period, members of the Board
shall be appointed in accordance with the bylaws of the Corporation. The
terms of all members appointed pursuant to this subsection shall expire
upon the expiration of the transition period, except as otherwise provided
in such bylaws as in effect on that date.

`(5) Any vacancy in the Board shall not affect its power.’.

(e) TERMINATION OF PROVISIONS- Section 396 of such Act is further amended
by adding at the end the following new subsection:

`Termination of Provisions

`(n) Effective at the end of the transition period, the following provisions
of this section shall cease to be effective: subsections (d), (e), (h),
(i), (l), and (m).

SEC. 202. ESTABLISHMENT OF TRUST FOR PUBLIC BROADCASTING.

(a) ESTABLISHMENT- Subpart D of part IV of title III of the Communications
Act of 1934 is amended by inserting after section 396 (47 U.S.C. 396) the
following new section:

`SEC. 396A. TRUST FOR PUBLIC BROADCASTING.

`(a) PURPOSE- It is the purpose of this section–

`(1) to provide for the establishment of a trust fund by the Corporation
to provide ongoing support for public broadcasting after the cessation
of annual appropriations under section 396(k);

`(2) to prohibit expenditures from the corpus of such trust fund; and

`(3) to authorize the appropriations to the trust fund of the proceeds
of certain competitive bidding procedures, to form the corpus of the trust
fund.

`(b) REQUIREMENTS- The Corporation shall, in accordance with the laws of
the District of Columbia, establish a trust fund for the investment and
management of

funds made available under this section. The instruments governing such trust
fund shall provide–

`(1) that no part of the trust fund corpus may be expended for the operations
of the Corporation or otherwise in furtherance of the purposes of the
Corporation;

`(2) such trust fund corpus shall be invested in such manner as the Board
of the Corporation determines to be reasonable and prudent; and


`(3) the trust fund income shall be available in accordance with the bylaws
of the Corporation–

`(A) to carry out the purposes of section 396;

`(B) to pay the operational and administrative expenses of the Corporation;

`(C) to pay for public broadcasting system support; and

`(D) to provide direct grants to public broadcasting stations.

`(c) ALLOCATION REQUIREMENTS-

`(1) ONE-STATION-TO-A-MARKET SUPPORT- The Corporation shall ensure that–

`(A) in communities in which there is a substantial overlap in the
service areas of public television stations, the total funds made available
through direct grants to those stations are not more than would be provided
if such areas were served by a single station; and

`(B) in communities in which there is a substantial overlap in the
service areas of public radio station, the total funds made available
through direct grants to those stations are not more than would be provided
if such areas were served by a single station, unless such stations
serve significantly different listening audiences, using distinct formats
and providing a high proportion of locally originated programming.

`(2) USE TO SUPPORT PROGRAM PRODUCTION- The Corporation may expend up
to 25 percent of the income from trust for television and radio program
production.

`(d) AUTHORITY TO AUCTION VACANT RESERVED CHANNELS-

`(1) COMMISSION ACTION REQUIRED- The Commission shall allocate by means
of competitive bidding under section 309(j) the initial licenses and construction
permits for the use of such portions of the electromagnetic spectrum as
are, on the date of the enactment of the Public Broadcasting Self-Sufficiency
Act, reserved for noncommercial education television stations and as to
which no application has been accepted for filing by the Commission by
such date. In addition, the Commission shall allocate by such means licenses
and permits for stations relinquished under paragraph (5).

`(2) BIDDING REQUIREMENTS- The competitive bidding required by paragraph
(1) shall be completed not later than January 1, 1999. In conducting such
competitive bidding, the Commission–

`(A) shall, notwithstanding section 309(j)(4)(A), require lump sum
payment of all bids;

`(B) shall, notwithstanding section 309(j)(4)(D), not prescribe regulations
granting bidding preferences that would reduce receipts from the competitive
bidding required by paragraph (1) of this subsection;

`(C) shall, prior to conducting such competitive, make such adjustments
to the communities of license of the stations to be allocated as necessary,
consistent with the avoidance of harmful interference, to recover for
the public the full value of the spectrum resource being made available;
and

`(D) shall allocate to winning bidders the same rights to obtain an
allocation of spectrum for the provision of advanced television services
as is available to any incumbent television broadcast station licensee.

`(3) USE OF PROCEEDS; BIDDING CONTINGENT ON APPROPRIATIONS- The proceeds
of any competitive bidding conducted pursuant to this subsection, not
to exceed $1,000,000,000, are authorized to be appropriated to the trust
fund established by the Corporation under this section. No competitive
bidding may be conducted with respect to the portions of the electromagnetic
spectrum described in paragraph (1) unless the proceeds of such bidding
are appropriated to such trust fund.

`(4) USE OF SPECTRUM- The Commission shall award commercial television
broadcast licenses to persons or entities that are successful bidders
in the competitive bidding required by paragraph (1).

`(5) AUTHORITY TO COMPENSATE RELINQUISHING LICENSEES-
The Commission may enter into agreements with public broadcasting entities
for the purpose of making available additional stations for allocation by
competitive bidding under paragraph (1). Such agreements may provide that
a public broadcasting entity that agrees to relinquish its station license
may obtain 50 percent of the proceeds of the competitive bidding for the spectrum
previously allocated to that station. Any such agreement shall provide that
any amounts provided to such entity under this paragraph shall be used to
support public broadcasting or education.

`(e) COMPLIANCE VERIFICATION- Before making any funds appropriated under
subsection (d)(3) available to the Corporation, the Secretary of the Treasury–

`(1) shall verify that the Corporation has established the trust fund
in accordance with the requirements of this section;

`(2) shall require the Corporation to agree that, in the event of a substantial
failure by the Corporation to carry out the purposes of section 396, the
corpus of the trust fund shall revert to the United States;

`(3) shall verify that the Corporation has amended its bylaws to provide
for the prudent administration of the trust fund by the Corporation after
the expiration of the transition period; and

`(4) may require such other information or agreements as may be necessary
to protect the Federal fiscal interest.

`(f) ANNUAL REPORT- The Corporation shall submit to the Congress an annual
statement on the financial condition of the trust fund.’.

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