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Sen. John McCain (R-AZ), ranking Republican on the Senate Commerce Committee, has introduced a new bill which would bring back tax certificates for selling communications companies - - including radio and TV stations - - to qualified small business buyers. By aiming the tax certificates at small businesses, McCain is apparently trying to help minority and women buyers without running afoul of the federal courts, which have lately been striking down laws which specifically benefit minorities.

"It is critically important that new entrants and small businesses have a chance to participate across the broad spectrum of areas that make up the telecommunications industry," McCain said in announcing the Telecommunications Ownership Diversification Act of 2002 (S. 3112). "The market-based incentives in this bill are the most effective way of leveling the playing field between small business owners and CEOs of huge corporations trying to purchase a telecommunications business."

McCain's bill would give sellers of radio and TV stations and other telecommunications businesses a tax deferral if their assets are bought for cash by qualified small businesses. In addition, the seller could claim a tax deferral on capital gains if it invests the proceeds of that sale into purchasing an interest in a qualified telecommunications small business.

To prevent abuses, McCain's bill would require that eligible small business buyers hold the acquired assets for a minimum of three years. The maximum tax deferral would be $250M, with no more than $85M in any one tax year.

McCain's bill drew a quick endorsement from the largest US radio group owner, Clear Channel Communications (N:CCU).

"The approach he is taking is well thought out and structured to eliminate the problems that arose with similar programs in the past. We support the goals of this legislation," the company said in a statement. "Clear Channel has a long history of supporting minorities and economically disadvantaged ownership in the media. For example, Clear Channel Chairman and CEO Lowry Mays has been instrumental in the Minority Media and Telecommunications Council, which strives to improve and guide the involvement of minorities in U.S. media. The company also has gone to great lengths to sell spin-off radio stations, during our mergers, to minority owners. In fact, we have sold numerous stations to minority owners during the past several years. In addition, Clear Channel has contributed approximately $15 million to a special investment fund, the Quetzal/Chase Fund, established in 1999 to promote greater ownership diversity in the U.S. communications industry."

NAB is also supporting the bill. CEO Eddie Fritts issued this statement: "We strongly endorse passage of S. 3112, the Telecommunications Ownership Diversification Act of 2002. NAB continues to sponsor many programs to recruit new entrants into the employee, management and ownership ranks of broadcasting. It is our belief that ownership diversity is good for localism and good for the business of broadcasting."