The Federal Communications Commission would be forced to keep its minority tax certificate program under a provision of the agency's appropriations bill now before the Senate.
The FCC's minority tax certificate program encourages the sale of radio and television stations to minorities by giving a tax break to the seller. The agency is reviewing the program and two related preference procedures to determine if they should be continued. The appropriations bill would force the agency to end the review and continue the programs.
The programs, which favor minorities and women over other potential buyers of radio and television stations, have been under FCC review to determine if they are constitutional, according to Diane Killory, the agency's general counsel.
"We are not speeding anything up out of the ordinary course of business," Killory said yesterday, when asked if the FCC would move to abandon the programs before the appropriations bill becomes law. "If it is signed into law, then the commission will comply with the statute."
Killory added that the FCC has not been "lobbying or anything like that."
Congressional sources said the provision was attached to the appropriations bill at the request of Sens. Frank R. Lautenberg (D-N.J.) and Lowell P.Weicker Jr. (R-Conn.), who feared the FCC would abandon the program on grounds it discriminates against white males.
Earlier this year, the largest station sale ever under the minority tax certificate program was criticized by some supporters of the program, who charged that it was a "sham." The deal involved Gaylord Broadcasting Co.'s $365 million sale of its Tampa television station to a corporation controlled by attorney Clarence McKee and Nashville broadcast executive George Gillett.
Since McKee is black, Gaylord received a tax certificate from the FCC that permits the company to defer tens of millions of dollars in taxes on gains from the sale of the station. Because Gaylord received the tax break, the company was willing to sell the Tampa station to Gillett, an established operator of television stations, and McKee, for about $100 million less than other bidders would have been required to pay, Wall Street sources said.
Although McKee put no money into the deal, he received 21 percent of the stock of the corporation that now owns the Tampa station. After two years, Gillett has the option to buy McKee's stake for at least $1 million