IRS News Release  
January 18, 1995

Johnson Announces Details of
Hearing on FCC Provision

Congresswoman Nancy L. Johnson (R-CT), Chairman of the Subcommittee on Oversight of the Committee on Ways and Means, today announced that the subcommittee will hold a hearing to examine the operation and administration of a tax provision which allows the Federal Communication Commission to grant tax relief with respect to the sales of radio, television, and other properties under certain circumstances. This provision is known as Internal Revenue Code section 1071. The hearing will be held on Friday, January 27, l995, in room B-318 of the Rayburn House Office Building, beginning at 10:00 a.m.


Code section 1071 was enacted in 1943 to address concerns with respect to involuntary conversions of radio stations arising from wartime restrictions on the purchase and availability of new radio property. Under section 1071, gain from the sale or exchange of broadcast facilities may be deferred in cases where the sale or exchange is certified by the Federal Communications Commission "to be necessary or appropriate to effectuate a change in a policy of, or the adoption of a new policy by, the Commission with respect to the ownership and control of radio broadcasting stations...." In 1978, the FCC announced a policy of promoting minority ownership of broadcast facilities by offering a tax certificate to those who voluntarily sell such facilities to minority individuals or minority-controlled entities. Since that time, the FCC has issued over 300 such tax certificates. Recent press reports about the FCC's administration of section 1071, both in terms of the types of properties covered and the size of the tax benefits being granted, raise significant questions about this provision.


The Subcommittee will examine: (1) whether the FCC's 1978 policy is consistent with the underlying intent of section 1071; (2) whether the FCC's administration of section 1071 constitutes an impermissible exercise of legislative authority; (3) whether the tax incentive provided in section 1071 in fact fosters minority ownership of broadcast facilities; and (4) whether the FCC policy is a necessary or appropriate means of achieving this goal.


Requests to be heard at the hearing must be made by telephone to Traci Altman or Bradley Schreiber at (202) 225-1721 no later than the close of business on Monday, January 23, 1995. The telephone request should be followed by a formal written request to Phillip D. Moseley, Chief of Staff, Committee on Ways and Means, U.S. House of Representatives, 1102 Longworth House Office Building, Washington, D.C. 20515. The staff of the subcommittee on Oversight will notify by telephone those scheduled to appear as soon as possible after the filing deadline. Any questions concerning a scheduled appearance should be directed to the subcommittee staff at (202) 225-7601.

In view of the limited time available to hear witnesses, the Subcommittee may not be able to accommodate all requests to be heard. Those persons and organizations not scheduled for an oral appearance are encouraged to submit written statements for the record of the hearing. All persons requesting to be heard, whether they are scheduled for oral testimony or not, will be notified as soon as possible after the filing deadline.


Witnesses scheduled to present oral testimony are required to summarize briefly their written statements in no more than five minutes. THE FIVE MINUTE RULE WILL BE STRICTLY ENFORCED. The full written statement of each witness will be included in the printed record.

In order to assure the most productive use of the limited amount of time available to question witnesses, all witnesses scheduled to appear before the Subcommittee are required to submit 200 copies of their prepared statements for review by Members prior to the hearing. Testimony should arrive at the Subcommittee on Oversight office, room 1136 Longworth House Office Building, no later than noon, Thursday, January 26,1995. Failure to do so may result in the witness being denied the opportunity to testify in person.


Any person or organization wishing to submit a written statement for the printed record of the hearing should submit at least six (6) copies of their statement by the close of business on Tuesday, February 7, 1995, to Phillip D. Moseley, Chief of Staff, Committee on Ways and Means, U.S. House of Representatives, 1102 Longworth House Office Building, Washington, D.C. 20515. If those filing written statements wish to have their statements distributed to the press and interested public at the hearing, they may deliver 200 additional copies for this purpose to the Subcommittee on Oversight office, room 1136 Longworth House Office Building, at least one hour before the hearing begins.

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