Vermont’s year old L3C law may help newspapers:UPDATED below

As struggling newspapers across the country are looking for ways to survive the L3C is getting close scrutiny in several places. A Chicago Sun-times editor in the Huffington Post, an article in E&P magazine and Robert Lang (L3C Advisors CEO and the creator of the L3C model) are touting L3C’s as possible methods for saving struggling newspapers.
The state of Vermont was among the first states to enact L3C (low profit limited Liability Corporation) legislation in April last year. Since then Michigan and the Crow Nation passed similar laws and legislatures in Georgia, Montana, North Carolina and Oregon are also expected to pass L3C legislation. The law allows establishing a low profit, non-profit hybrid entity. The entity would be a low-profit company with "charitable or educational" goals and some return for investors. The social benefit, educational and social responsibility features play to the newspapers hopefully continuing (and improving?) role as public advocates and leaders of public debate.

Historically, newspapers are not considered nonprofits. However, a federal L3C bill and the Federal Program-Related Investment Promotion Act, if passed, would expand charitable purposes to include newspapers.
Robert Lang creator of the L3C model, stated, "What we are looking at is the newspaper as a self-sufficient entity. It will not be a high profit entity." Unlike other current options, the L3C is sustainable, allowing newspapers to tap into the $17M available for PRIs while the L3C’s social purpose business model continues to realign newspapers with their community service mission.

The L3C structure plays well in Peoria where the Peoria Newspaper Guild, and a coalition of Journal Star employees and community leaders have been quietly looking for two years at alternatives including co-ops and employee stock ownership plans (ESOPs) to operate the Peoria Journal Star.
The one idea that really clicked was the L3C. Because it can tap into foundation money, an L3C is sustainable, and because an L3C business must meet a social purpose, it realigns newspapers with their mission of community service.
"We are looking at long-term ownership that puts journalism first," said Jennifer Towery, President of the Peoria Newspaper Guild and also Neighbors Editor for the Peoria Journal Star. "[The L3C] just resonated. It has so much potential."

Vermont companies pay $75 to file as an L3C and those located elsewhere, $100, not including the fees generated by filing annual reports, said Deputy Secretary of State Bill Dalton. There are no estimates last year on how much money the measure could raise.
In Vermont roughly 35 L3C entities have been or are in the process of being created , such as CoolPass, L3C, Faithful Travelers, L3C, and Monkton Community Coffeehouse, L3C. A list of established L3Cs in Vermont is searchable through the corporation database on the Vermont Secretary of State website.

UPDATE : Newspaper Revitalization Act

This bill has yet get any co-sponsors and does not use an L3C style law .So it would operate under traditional non-profit regulations 501c3.

U.S. Sen. Benjamin Cardin introduced legislation Tuesday that would allow newspapers to operate as nonprofit organizations, providing significant tax breaks to the struggling industry.Cardin's Newspaper Revitalization Act would allow newspapers to operate as nonprofits for educational purposes under the U.S. tax code, giving them a similar status to public broadcasting companies.Under the proposal, newspapers could operate as nonprofits, if they chose to do so, claiming 501(c)(3) status for educational purposes, similar to public broadcasting.Newspapers would still be free to report on all issues, including political campaigns. But they would be prohibited from making political endorsements.Advertising and subscription revenue would be tax exempt, and contributions to support news coverage or operations could be tax deductible.

http://www.marketwatch.com/news/story/senate-democrat-proposes-nonprofit-status/story.aspx?guid={D7827992-C28B-41DE-89E8-F480762D989E}&dist=msr_32




http://www.huffingtonpost.com/sally-duros/how-to-save-newspapers_b_164849.html
http://www.nonprofitlawblog.com/home/2009/03/l3c-developments-resources.html
also posted at http://www.greenmountaindaily.com/showDiary.do?diaryId=4209