Updated from 3:16 p.m. EDT

A new Senate bill could grant nonprofit status to newspaper companies, many of which are currently struggling to survive in a worsening economic environment.

Sen. Benjamin Cardin (D., Md.) has introduced what he calls the Newspaper Revitalization Act, which would grant newspaper companies nonprofit status under the same U.S. Internal Revenue Service code reserved for religious, educational and other charitable organizations.

"We are losing our newspaper industry," Sen. Cardin said in a statement. "The economy has caused an immediate problem, but the business model for newspapers, based on circulation and advertising revenue, is broken, and that is a real tragedy for communities across the nation and for our democracy.

Because newspaper profits have been falling in recent years, no substantial loss of federal revenue is expected, Cardin said.

If the bill were approved, newspapers would not be allowed to make political endorsements, but would be allowed to freely report on all issues, including political campaigns. Advertising and subscription revenue would be tax exempt and contributions to support coverage or operations could be tax deductible.

While a transformation to a nonprofit organization may not be the first choice for some major newspapers or corporate media chains, Cardin said "it should be an option for many newspapers that are struggling to stay afloat."

A number of published newspapers have run aground recently, including the 149-year-old Rocky Mountain News in Denver, The New York Sun and The Seattle Post-Intelligencer, which is now only on the Internet. Meanwhile, the Ann Arbor News has announced it would stop publishing later this year, and the Hearst Corp. has threatened to shut down The San Francisco Chronicle if a buyer cannot be found.

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