The text below should be taken as a “floor” that reflects the recommended components of a local journalist employment credit bill, as identified by Rebuild Local News.
Base Version
AN ACT RELATING TO ECONOMIC DEVELOPMENT; CREATING A LOCAL JOURNALIST EMPLOYMENT CREDIT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE:
SECTION 1. SHORT TITLE.
This Act may be cited as the Community Newsroom Employment and Workforce Sustainability Act, or the “[STATE NAME] Community NEWS Act.”
SECTION 2. DEFINITIONS.
As used in this Act:
A. “Eligible local news organization” means an entity legally incorporated within this state or legally registered to conduct business within this state for at least the previous 12 months, that:
(1) operates a qualifying digital news outlet, broadcast station, or print publication as defined in this Act, wherein an organization operating in multiple mediums may elect the category under which its eligibility shall be determined;
(2) employs at least one qualifying journalist, or operates as a qualifying journalist and sole proprietor, working on a full-time basis of at least 30 hours a week;
(3) publicly discloses, on its website or in its publication, its beneficial ownership or, for a not-for-profit entity, its board of directors;
(4) maintains and publicly displays an editorial policy for error correction and clarification, via a clearly labeled link or section on the organization’s website or publication, that includes an accessible process for reporting errors or complaints to the eligible local news organization;
(5) carries active media liability insurance coverage and, starting one year after the enactment of this act, has maintained such coverage continuously over the previous taxable year; and
(6) is not, and is not controlled directly or indirectly through one or more intermediaries by, any of the following disqualified organizations:
(a) a political action committee or other entity described in Section 527 of the federal Internal Revenue Code; or
(b) an organization that maintains Section 501(c)(4) status under the federal Internal Revenue Code.
B. “Qualifying digital news outlet” means an entity that:¹
(1)has been publishing news and information about the state or a local community at least monthly for each of the previous four quarters; and
(2) can demonstrate with data on digital subscribers or traffic to have an audience that is at least 33 percent located within this state over the previous taxable year.²
C. “Qualifying broadcast station” means an entity that:
(1) is a broadcast station as defined under section 3 of the Communications Act of 1934 (47 U.S.C. 153); and
(2) can demonstrate with Federal Communications Commission service contour maps to have a broadcasting area at least 33 percent located within this state.
D. “Qualifying print publication” means an entity that:
(1) is a local newspaper or news magazine publisher with Periodicals mailing privileges from the United States Postal Service and has been publishing at least monthly for each of the previous four quarters; and
(2) maintains its known office of publication for the original entry Post Office of Periodicals mailing privileges within this state or can demonstrate with data on subscribers or print distribution to have an audience that is at least 33 percent located within this state over the previous taxable year.
E. “Qualifying journalist” means an individual who:
(1) is employed by or is the sole proprietor of an eligible local news organization on a full-time basis of at least 30 hours per week for more than twenty-six weeks with annualized wages or pass-through income of no less than $35,000;
(2) has primary job duties that consist of gathering, preparing, directing the recording of, producing, collecting, photographing, recording, writing, editing, reporting, presenting, or publishing state or local community news for dissemination to the local community, including roles such as reporter, correspondent, photographer, videographer, editor, and digital producer; and
(3) resides within 50 miles of the coverage area of the eligible local news organization.
F. “Number of new journalism positions” means the amount by which the number of qualifying journalists for whom the eligible local news organization is eligible to claim a retention credit for the taxable year exceeds the prior-year baseline. For purposes of this subsection, the “prior-year baseline” is the number of individuals employed by the organization during the immediately preceding taxable year who would have satisfied the requirements for a retention credit had the organization been an eligible local news organization during that year. Journalism positions created at an eligible local news organization solely due to an asset sale, merger, reorganization, or similar transaction shall not be counted as new journalism positions for the purposes of this section.
G. “Affiliated group” means any two or more eligible local news organizations that are under common ownership or control. For the purposes of this Act, “common ownership or control” shall be presumed to exist when a person, an entity, or a group of persons or entities acting in concert:³
(1) owns 25 percent or more of the voting stock, capital, or profits interest of an entity;
(2) has the power to appoint or elect a majority of the members of an entity’s governing body; or
(3) possesses the power to direct or cause the direction of the management and policies of an entity, whether through ownership, by contract, or otherwise.
SECTION 3. LOCAL JOURNALIST EMPLOYMENT TAX CREDITS.
A. For taxable years beginning on or after January 1, XXXX, and prior to January 1, YYYY [five years later], an eligible local news organization may receive a refundable credit against state tax withholding liabilities⁴ or, in the case of a sole proprietor, income tax liabilities,⁵ as set out in this section.
B. The amount of the credit shall be applied as follows:
(1) For up to five individuals employed as qualifying journalists by an eligible local news organization, a job retention credit of $20,000 per qualifying journalist;⁶
(2) For all other individuals employed as qualifying journalists by an eligible local news organization, a job retention credit of $15,000 per qualifying journalist;
(3) An additional job creation credit of $15,000 multiplied by the number of new journalism positions.
SECTION 4. APPLICATION AND CERTIFICATION.
A. In order to qualify for a tax credit award under this Act, an eligible local news organization applicant must apply to the [DEPARTMENT]⁷ for each award cycle for which a credit is sought. Applications shall be filed after the close of the taxable year for which the credit is claimed, in the form and manner prescribed by the Department. A credit certificate issued under this Act shall be based on the applicant’s employment during the completed taxable year and shall be applied against withholding obligations in subsequent reporting periods. The applicant shall provide all information required by the Department to determine eligibility and calculate the credit amount.
(1) If the Department determines that an application contains an error or omission made in good faith, the Department shall notify the applicant of the deficiency. The applicant shall have thirty (30) days from the date of notification to provide corrected information without being disqualified from the award cycle.
(2) A credit shall not be awarded, and any previously awarded credit shall be subject to recapture, if the Department finds that an applicant knowingly or through gross negligence provided materially false information.
B. Upon verifying that the applicant meets the requirements of this Act, the Department shall issue a credit certificate to the eligible local news organization stating the amount of the tax credit awarded.
C. Upon issuance of the credit certificate, the Department shall inform the State Tax Department, in the form and manner as agreed between the agencies, of the date the credit certificate was issued, the name and tax identification number of the recipient, the amount of the credit, and such other information as the State Tax Department may require. The credit certificate shall be attached to the taxpayer’s return.
D. The credit shall be applied to the first reporting period after the credit certificate is issued. If the amount of credit exceeds the liability for the reporting period, the excess credit shall be refunded to the taxpayer.
E. The Department shall issue guidance for eligible local news organizations that use third-party payors,⁸ such as professional employer organizations (PEOs) or payroll service providers, and assist any such organizations awarded a credit under this Act to apply it correctly. Such guidance shall require that the eligible employer, not the third-party payor, shall be responsible for the accounting of the credit and for any liability for improperly claimed credits.
F. Nothing in this Act shall prohibit a tax credit award to an applicant that uses a professional employer organization or payroll service provider if all other award criteria are satisfied.
G. Upon denying an application due to ineligibility, the Department shall provide the applicant with a written explanation of the reasons for the denial.
SECTION 5. PUBLIC REPORTING REQUIREMENTS.
A. By October 1 of each year, the Department shall prepare and publish a comprehensive annual report on this Act for the preceding taxable year. The report shall be made publicly available on the Department’s official website.
B. The report shall include, but not be limited to:
(1) A list of all organizations that received a credit;
(2) The total amount of tax credits awarded to each recipient;
(3) The total number of qualifying journalists whose positions were supported by the credit, disaggregated by retained positions and new journalism positions; and
(4) The geographic distribution of the credits by county within the state.
SECTION 6. CONFIDENTIALITY.
Any documentary materials or data received from an applicant by the Department shall be considered confidential and not public records to the extent that the materials consist of proprietary commercial or financial information regarding the operation of the applicant. In order to protect the confidential and proprietary information of local news organizations applying for credits under this Act, it is necessary that this Act limit the public’s right of access to that information. This confidentiality shall not prohibit the Department from publishing the information required under Section 5 of this Act.
SECTION 7. RULEMAKING.
The [DEPARTMENT(S)] may adopt any rules necessary to administer the provisions of this Act.
SECTION 8. APPLICABILITY.
The provisions of this act apply to taxable years beginning on or after January 1, XXXX, and before January 1, YYYY [at least five years later].
WHEN FUNDING IS LIMITED: CAPS MODULE
SECTION [#]. PROGRAM AND PER ORGANIZATION CAPS.
A. The total amount of credits awarded under this Act in any single year shall not exceed [TOTAL PROGRAM CAP].⁹
B. The total amount of credits awarded to a single eligible local news organization shall not exceed [INDIVIDUAL OUTLET CAP] in any single year.
C. The aggregate total amount of credits awarded to all eligible local news organizations that are part of the same affiliated group shall not exceed [AFFILIATED GROUP CAP] in any single year.
[MODULE VERSION 1 FOR FUNDING-LIMITED PROGRAMS: FIRST COME, FIRST SERVED]¹⁰
D. Completed applications shall be considered for approval on a first-come, first-served basis until the annual cap is reached. If the [DEPARTMENT] receives a completed application and determines the applicant is otherwise eligible for the tax credit, but the application cannot be certified because the total amount of credits authorized under this Act has been exhausted for that year, the Department shall place the applicant on a priority waitlist. If an applicant is deemed eligible but cannot be awarded a credit because the annual cap has been reached, the Department shall notify the applicant of their placement on the priority waitlist for the subsequent year.
(1) At the start of the subsequent year, the Department shall process applications from applicants on the priority waitlist before reviewing other applications received for that year. Applications on the priority waitlist shall be reviewed and certified in the order the original completed applications were received during the prior year.
(2) An applicant placed on the priority waitlist must, at the beginning of the subsequent year and prior to certification, submit verification to the Department that the organization continues to meet all eligibility requirements of this Act and that the employment data submitted in the original application remains accurate or provide updated employment documentation as required by the Department.
[END VERSION 1]
[MODULE VERSION 2 FOR FUNDING-LIMITED PROGRAMS: PRO RATA REDUCTIONS]¹¹
D. The Department shall establish an annual application period of one month. Following the close of the application period, the [DEPARTMENT] shall review all applications to determine the total amount of qualified credits requested by all eligible applicants. If the total amount of qualified credits requested is equal to or less than the total program credit cap, the Department shall approve the full amount of the credit for each eligible applicant. If the total amount of qualified credits requested exceeds the total program credit cap, the Department shall reduce the credit award for each eligible applicant on a pro rata basis. For purposes of this section, “pro rata basis” means the credit amount awarded to an eligible applicant is determined by multiplying the Total Program Credit Cap by the ratio of that applicant’s eligible credit to the aggregate total of all eligible credits requested.
[END VERSION 2]
GRANTS MODULE
For states where applying refundable tax credits to nonprofit newsrooms may not be feasible, including public broadcasters operating within public universities, this module proposes a grant structure to create parallel eligibility for those newsrooms.¹²
SECTION [#]. NON-PROFIT LOCAL JOURNALIST EMPLOYMENT GRANT.
A. There is hereby established in the State Treasury a special fund to be known as the “Non-Profit Local Journalism Employment Support Fund” (hereinafter “the Fund”).¹³
(1). Subject to appropriation by the Legislature, monies in the Fund shall be used solely for the purpose of awarding formula grants to eligible nonprofit local news organizations as provided in this Act, in a manner equivalent to the application of tax credits to eligible commercial local news organizations.
(2) Any unexpended balance remaining in the Fund at the end of any fiscal year shall not revert to the General Fund but shall remain available for expenditure in subsequent fiscal years.
B. To be eligible for a grant under this Section, an organization must:
(1) Be organized and operated as a nonprofit organization exempt from state income tax under [State Code Section] and recognized as tax-exempt under Section 501(c)(3) of the Internal Revenue Code, or have received a Community Service Grant from the Corporation for Public Broadcasting prior to fiscal year 2026;
(2) Meet all requirements of an “eligible local news organization” as defined in Section 2 of this Act; and
(3) Be in good standing with the State Secretary of State’s office and all relevant state agencies.
C. The amount of each grant shall be calculated using the same formula as provided in this Act for tax credits, based on the number of qualifying journalists employed by the organization and whether positions are new or existing.
D. To apply for a grant under this Section, a nonprofit local news organization shall apply to the [DEPARTMENT], in the form and manner prescribed by the Department. A separate application shall be filed for each eligible local news organization seeking a grant award.
[MODULE VERSION 1 FOR FUNDING-LIMITED PROGRAMS: FIRST COME, FIRST SERVED]¹⁴
E. No single nonprofit local news organization may receive more than [INDIVIDUAL ORGANIZATION CAP] in grant funds in any year. Completed applications shall be considered for approval on a first-come, first-served basis until the annual amount appropriated by the Legislature to the “Non-Profit Local Journalism Employment Support Fund” is reached.
(1) If the [DEPARTMENT] receives a completed application and determines the applicant is otherwise eligible for the grant, but the application cannot be certified because the total amount of appropriations to the Non-Profit Local Journalism Employment Support Fund has been exhausted for that year, the Department shall place the applicant on a priority waitlist and notify the applicant.
(2) At the start of the subsequent year, the Department shall process applications from applicants on the priority waitlist before reviewing other applications received for that year. Applications on the priority waitlist shall be reviewed and certified in the order the original completed applications were received during the prior year.
(3) An applicant placed on the priority waitlist must, at the beginning of the subsequent year and prior to certification, submit verification to the Department that the organization continues to meet all eligibility requirements of this Act and that the employment data submitted in the original application remains accurate or provide updated employment documentation as required by the Department.
[END VERSION 1]
[MODULE VERSION 2 FOR FUNDING-LIMITED PROGRAMS: PRO RATA REDUCTIONS]¹⁵
E. No single nonprofit local news organization may receive more than [INDIVIDUAL ORGANIZATION CAP] in grant funds in any year. The [DEPARTMENT] shall establish an annual application period of one month. Following the close of the application period, the Department shall review all applications to determine the total amount of qualified grants requested by all eligible applicants. If the total amount of qualified grants requested is equal to or less than the total program expenditure cap, the Department shall approve the full amount of the grant for each eligible applicant. If the total amount of qualified grants requested exceeds the total program expenditure cap, the Department shall reduce the grant award for each eligible applicant on a pro rata basis. For purposes of this section, “pro rata basis” means the grant amount awarded to an eligible applicant is determined by multiplying the Total Program Expenditure Cap by the ratio of that applicant’s eligible grant to the aggregate total of all eligible grants requested.
[END VERSION 2]
F. Grant performance audits shall be limited to verifying employment and financial records. No state agency or official shall condition, modify, or revoke grants based on editorial content or coverage decisions other than qualifications established by this Act.
G. Upon denying an application due to ineligibility, the Department shall provide the applicant with a written explanation of the reasons for the denial.
H. An organization may not receive both a grant under this Section and tax credits under Section 3 of this Act within the same annual award period.
Endnotes
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- The next three definitions set out how to qualify as a digital, broadcast, or print outlet. These are intended to be doors for outlets to choose from rather than boxes that they sit in, i.e. an outlet with both print and digital operations can choose whether to apply using the print or the digital qualifications, whichever they prefer.
- At least 33 percent local audience, demonstrated by digital traffic data, broadcast maps, or print distribution, is used as a generally applicable standard. Individual state coalitions may want to adjust this standard higher or lower depending on their media market and border state context.
- Affiliated group creates a standard for identifying shared ownership of multiple media outlets, such as a corporate chain or subsidiary. This definition is needed only when applying a cap on credits available across such a shared ownership chain.
- Note that the credit is applied against tax withholding by the employer of employees’ personal income taxes. While the credit is administratively applied against employees’ taxes, the funds go to the local news organization employer. This mechanism allows commercial and non-profit organizations to benefit on the same terms, as they all withhold personal income taxes on employee wages even if they do not have direct corporate tax liabilities.
- A sole proprietor with no other employees will not have withholding tax liabilities. The model law allows individuals in this situation to claim the credit on their personal income taxes.
- News organizations receive higher credit amounts for their first five employees. This creates a progressive tax structure, with the smallest news organizations receiving a higher proportional benefit, while avoiding any benefit cliff that might disincentivize employing additional journalists.
- The most appropriate Department to task with implementation depends on the context of each state. This may be a Commerce Department, Tax Department, or other agency.
- This language seeks to proactively address any confusion that may arise with external payroll providers who may not be familiar with implementing a credit of this type.
- Specific cap amounts will depend on the political and budget context of each state. For example, in Illinois, the total program cap is $5 million, outlet cap is $150,000, and affiliated group cap is $250,000. In New York, the total program cap is $30 million, outlet cap is $320,000, and there is not an affiliated group cap.
- Alternate options are provided for how to handle when the credit is oversubscribed. Version 1 is First Come, First Served, where organizations that apply later may be cut off entirely if funding runs out. In this version, we recommend creating a priority waitlist so that organizations that missed out on a credit solely due to timing can be first in the line for the following year.
- Version 2 makes pro rata reductions when the credit is oversubscribed. All eligible applicants would have their credit awards reduced by that same percentage until the credit cap is met. This ensures that no news organization is left out, but it creates the possibility of endangering the effectiveness of the job incentive if the credit is reduced by too much.
- For states that do not have a personal income tax or that for another are not able to implement a credit against withholding that benefits commercial and non-profit news organizations equally, we propose a non-profit grants module. These grants would be established alongside the tax credit program and follow the model of the tax credit as closely as possible, with non-profits able to receive grants of the same funding amounts based on the same criteria as commercial news organizations receive the tax credit.
- One difference between the tax credit program and a grants program that could be unavoidable in some states is that grants must appropriated year to year while a tax credit program can be established on a longer timescale with need for annual reauthorization. One way around this limitation would be to dedicate a revenue source to the grants fund before other appropriations are made. Specific revenue options are beyond the scope of this model policy, but we urge any implementing state to create as much parity as possible between commercial and non-profit organizations in the most appropriate way for that state’s budget and revenue systems.
- Alternate options are provided for how to handle when the credit is oversubscribed. Version 1 is First Come, First Served, where organizations that apply later may be cut off entirely if funding runs out. In this version, we recommend creating a priority waitlist so that organizations that missed out on a credit solely due to timing can be first in the line for the following year.
- Version 2 makes pro rata reductions when the credit is oversubscribed. All eligible applicants would have their credit awards reduced by that same percentage until the credit cap is met. This ensures that no news organization is left out, but it creates the possibility of endangering the effectiveness of the job incentive if the credit is reduced by too much.
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