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``(b) RULEMAKING PROCEEDING.--The Commission shall conduct a rulemaking proceeding to implement the provisions of this section and shall promulgate final regulations pursuant to that proceeding not later than 9 months after the date of enactment of
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``(1) may exempt from the prohibition under subsection (a) programming (including news programs and sporting events) whose distribution does not conflict with the objective of protecting children from the negative influences of violent video programming, as that objective is reflected in the findings in section 551(a) of the Telecommunications Act of 1996;
``(2) shall exempt premium and pay-per-view cable programming; and
``(3) shall define the term `hours when children are reasonably likely to comprise a substantial portion of the audience' and the term `violent video programming'.
``(c) REPEAT VIOLATIONS.--If a person repeatedly violates this section or any regulation promulgated under this section, the Commission shall, after notice and opportunity for hearing, revoke any license issued to that person under this Act.
``(d) CONSIDERATION OF VIOLATIONS IN LICENSE RENEWALS.--The Commission shall consider, among the elements in its review of an application for renewal of a license under this Act, whether the licensee has complied with this section and the regulations promulgated under this section.
``(e) DISTRIBUTE DEFINED.--In this section, the term `distribute' means to send, transmit, retransmit, telecast, broadcast, or cablecast, including by wire, microwave, or satellite.''.
SEC. 4. SEPARABILITY.
If any provision of this Act, or any provision of an amendment made by this Act, or the application thereof to particular persons or circumstances, is found to be unconstitutional, the remainder of this Act or that amendment, or the application thereof to other persons or circumstances shall not be affected.
SEC. 5. EFFECTIVE DATE.
The prohibition contained in section 715 of the Communications Act of 1934 (as added by section 3 of this Act) and the regulations promulgated thereunder shall take effect 1 year after the regulations are adopted by the Commission.
By Mr. BROWNBACK (for himself, Mr. NICKLES, and Mr. CRAIG):
S. 877. A bill to encourage the provision of advanced service, and for other purposes; to the Committee on Commerce, Science, and Transportation.
BROADBAND INTERNET REGULATORY RELIEF ACT OF 1999
Mr. BROWNBACK. Mr. President, I rise today to introduce the Broadband Internet Regulatory Relief Act of 1999 on behalf of myself, Senator NICKLES, and Senator CRAIG. This bill is intended to speed up the deployment of broadband networks throughout the United States and to make residential high-speed Internet access a widely-available service.
Mr. President, the Internet has revolutionized the way we communicate, conduct business, shop, and learn. The Internet presents us with the opportunity to remove distance as an obstacle to employment and education. But while tens of millions of Americans now log onto the Internet every day, narrowband connections to the Internet make using the Net a slow and cumbersome process.
Broadband connections, on the other hand, provide ultra-fast access to the Internet. With a broadband connection, users may download and upload data from and to the Internet at substantially greater speeds than with a narrowband connection. From downloading full-motion video to uploading an architect's plans, broadband permits consumers to utilize many more applications that will increase the value of the Internet as a communications medium.
The technology to provide broadband connections to the Internet is a reality. Cable companies are deploying hybrid fiber-coax (HFC) networks that will enable cable modems to provide high-speed Internet access. In addition, telephone companies have discovered a way to provide high-speed Internet access over their copper-based telephone loops. With the addition of a digital switch in a telephone company's central office, a digital modem at a customer's premises, and the conditioning of a copper loop, consumers may obtain access to the Internet at more than ten time the speed of narrowband connections.
The most promising technology employed by telephone companies for residential high-speed Internet access is digital subscriber line (DSL) technology. The family of DSL services, especially asymmetric digital subscriber line (ADSL) service, have the greatest potential to ensure that all consumers throughout the United States obtain high-speed Internet access. Cable service has penetration rates approaching telephone service in urban and densely-populated suburban areas. However, cable penetration is much lower in rural areas whereas the ubiquity of the telephone network makes telephone penetration rates close to one hundred percent even in rural areas. Thus, for many rural consumers, including those in Kansas, high-speed Internet access may only be available in the next several years through the telephone network.
As a result, Congress needs to ensure that high-speed Internet access is being made available over the public telephone network as rapidly as possible. While ADSL service is being rolled out in may urban and densely-populated suburban areas, most rural consumers do not have access to it.
I am introducing the Broadband Internet Regulatory Relief Act to ensure that high-speed Internet access is available to my rural constituents as soon as possible. To accomplish this goal, I am proposing to provide regulatory relief to telephone companies willing to deliver broadband connections to rural areas. My proposal has several components.
First, incumbent local exchange carriers that make seventy percent of their loops ready to support high-speed Internet access will not have to resell their advanced services to competitors and will not have to make the network elements used exclusively for the provision of advanced services available to competitors. Second, the prices for advanced services offered by incumbent local exchange carriers that face competition in the provision of such services will be deregulated. Third, where incumbent local exchange carriers are offering advanced services but do not face competition, the companies will receive pricing flexibility. Fourth, competitive local exchange carriers will not be required to resell their advanced services.
Mr. President, the ubiquity of our nation's telephone network presents us with a tremendous opportunity to deliver high-speed Internet access to our rural constituents at a pace comparable with the rate at which urban and suburban consumers will be offered such service. But to realize this goal, we must remove unnecessary regulation that has impeded the rapid deployment of broadband networks. Advanced services should not be regulated in the same manner as basic telephone service. Broadband services are an entirely new market, one in which no company can exercise market power.
In the absence of market power, the incumbents should not have to resell their advanced services or provide competitors with access to unbundled advanced service elements. And pricing regulations applied to telephone service should not be applied to advanced services. In addition, a competitive local exchange carrier willing to deploy the facilities necessary to provide broadband services should not be forced to resell its service.
Mr. President, I am confident that we can ensure the rapid deployment of broadband networks to rural areas. But to do so, we must be willing to provide companies with an incentive to build out their broadband networks in rural areas. The Broadband Internet Regulatory Relief Act would provide companies with such incentives, and I hope that my colleagues will support this crucial legislation.
By Mr. TORRICELLI (for himself, Mr. MACK, Mr. GREGG, Mr. GRAHAM, Mr. MOYNIHAN, Mr. KERRY, Mrs. BOXER, Mr. REED, Mrs. FEINSTEIN, and Mrs. MURRAY):
S. 878. A bill to amend the Federal Water Pollution Control Act to permit grants for the national estuary program to be used for the development and implementation of a comprehensive conservation and management plan, to reauthorize appropriations to carry out the program, and for other purposes; to the Committee on Environment and Public Works.
NATIONAL ESTUARY CONSERVATION ACT OF 1999
Mr. TORRICELLI. Mr. President, today, Senators MACK, GREGG, GRAHAM, MOYNIHAN, KERRY, BOXER, REED, FEINSTEIN, MURRAY, and I are introducing the National Estuary Conservation Act of 1999. I rise to draw this country's attention to our nationally significant estuaries that are threatened by pollution, development, or
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Estuaries are significant habitat for fish, birds, and other wildlife because they provide safe spawning grounds and nurseries. Seventy five percent of the U.S. commercial fish catch depends on estuaries during some stage of their life. Commercial and recreational fisheries contribute $111 billion to the nation's economy and support 1.5 million jobs. Estuaries are also important to our nation's tourist economy for boating and outdoor recreation. Coastal tourism in just four states--New Jersey, Florida, Texas, and California--totals $75 billion.
Due to their popularity, the overall capacity of our nation's estuaries to function as healthy productive ecosystems is declining. This is a result of the cumulative effects of increasing development and fast growing year round populations which increase dramatically in the summer. Land development, and associated activities that come with people's desire to live and play near these beautiful resources, cause runoff and storm water discharges that contribute to siltation, increased nutrients, and other contamination. Bacterial contamination closes many popular beaches and shellfish harvesting areas in estuaries. Also, several estuaries are afflicted by problems that still require significant research. Examples include the outbreaks of the toxic microbe, Pfiesteria piscicida, in rivers draining to estuaries in Maryland and Virginia.
Congress recognized the importance of preserving and enhancing coastal environments with the establishment of the National Estuary Program in the Clean Water Act Amendments of 1987. The Program's purpose is of facilitate state and local governments preparation of comprehensive conservation and management plans for threatened estuaries of national significance. In support of this effort, section 320 of the Clean Water Act authorized the EPA to make grants to states to develop environmental management plans. To date, 28 estuaries across the country have been designated into the Program. However, the law fails to provide assistance once plans are complete and ready for implementation. Already, 18 of the 28 plans are finished.
As the majority of plans are now in the implementation stage, it is incumbent upon us to maintain the partnership the Federal Government initiated ten years ago to insure that our nationally significant estuaries are protected. The legislation we are introducing will take the next step by giving EPA authority to make grants for plan implementation and authorize annual appropriations in the amount of $50 million. To insure the program is a true partnership and leverage scarce resources, there is a direct match requirement for grant recipients so funds will be available to upgrade sewage treatment plants, fix combined sewer overflows, control urban stormwater discharges, and reduce polluted runoff into estuarine areas.
By Mr. CONRAD (for himself, Mr. MACK, Mr. NICKLES, Mr. ROBB, and Mr. BAUCUS):
S. 879. A bill to amend the Internal Revenue Code of 1986 to provide a shorter recovery period for the depreciation of certain leasehold improvements; to the Committee on Finance.
TEN-YEAR LEASEHOLD IMPROVEMENT DEPRECIATION
Mr. CONRAD. Mr. President, I rise today, joined by my colleagues Mr. NICKLES, Mr. MACK, Mr. ROBB, and Mr. BAUCUS, to introduce important legislation to provide for a 10-year depreciation life for leasehold improvements. Leasehold improvements are the alterations to leased space made by a building owner as part of the lease agreement with a tenant.
These improvements can include interior walls, partitions, flooring, lighting, wiring and plumbing--essentially any fixture that an owner provides in space leased to a tenant. They keep a building modern, upgraded, and energy efficient. In actual commercial use, leasehold improvements typically last as long as the lease--an average of 5 to 10 years. However, the Internal Revenue Code requires leasehold improvements to be depreciated over 39 years--the life of the building.
Economically, this makes no sense. The owner receives taxable income over the life of the lease (i.e., 10 years), yet can only recover the costs of the improvements associated with the lease over 39 years--a rate nearly four times slower. This wild mismatch of income and expenses causes the owner to incur an artificially high tax cost on these improvements.
The bill we introduce today will correct this irrational and uneconomic tax treatment by shortening the cost recovery period for certain leasehold improvements from 39 years to a more realistic 10 years. If enacted, this legislation would more closely align the expenses incurred to construct these improvements with the income they generate during the lease term.
For example, a building owner who makes a $100,000 leasehold improvement for a 10-year, $1 million lease would be able to recover this entire investment by the end of that lease at a rate of $10,000 per year. Under current law, this $100,000 improvement is recovered at a rate of $2,564 per year over 39 years.
By reducing this cost recovery period, the expense of making these improvements would fall more into line with the economics of a commercial lease transaction, and more property owners would be able to adapt their buildings to fit the demanding needs of today's modern business tenant. Small business should find this bill particularly helpful, because small businesses turn over their rental space more frequently than larger businesses. And we cannot forget that over 80 percent of building owners who provide space to small businesses are themselves small businesses.
We have an interest in keeping existing buildings commercially viable. When older buildings can serve tenants who need modern, efficient commercial space, there is less pressure for developing greenfields in outlying areas. Americans are concerned about preserving open space, natural resources and a sense of neighborhood. The current law 39-year cost recovery for leasehold improvements is an impediment to reinvesting in existing properties and communities.
This legislation has the strong backing of six major real estate organizations, including the National Realty Committee, the national Association of Realtors, the International Council of Shopping Centers, the national Association of Industrial and Office Properties, the national Association of Real Estate Investment Trusts, and the Building and Office Managers Association, International.
I urge all Senators to join us in supporting this legislation to provide rational depreciation treatment for leasehold improvements.
Mr. President, I ask unanimous consent that the text of the bill be printed in the RECORD.
There being no objection, the bill was ordered to be printed in the RECORD, as follows:
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION.1..RECOVERY PERIOD FOR DEPRECIATION OF CERTAIN LEASEHOLD IMPROVEMENTS.
(a) 10-YEAR RECOVERY PERIOD.--Subparagraph (D) of section 168(e)(3) of the Internal Revenue Code of 1986 (relating to 10-year property) is amended by striking ``and'' at the end of clause (i), by striking the period at the end of clause (ii) and inserting ``, and'', and by adding at the end the following new clause:
``(iii) any qualified leasehold improvement property.''.
(b) QUALIFIED LEASEHOLD IMPROVEMENT PROPERTY.--Subsection (e) of section 168 of such Code is amended by adding at the end the following new paragraph:
``(6) QUALIFIED LEASEHOLD IMPROVEMENT PROPERTY.--
``(A) IN GENERAL.--The term `qualified leasehold improvement property' means any improvement to an interior portion of a building which is nonresidential real property if--
``(i) such improvement is made under or pursuant to a lease (as defined in subsection (h)(7))--
``(I) by the lessee (or any sublessee) of such portion, or
``(II) by the lessor of such portion,
``(ii) such portion is to be occupied exclusively by the lessee (or any sublessee) of such portion, and
``(iii) such improvement is placed in service more than 3 years after the date the building was first placed in service.
``(B) CERTAIN IMPROVEMENTS NOT INCLUDED.--Such term shall not include any
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``(i) the enlargement of the building,
``(ii) any elevator or escalator,
``(iii) any structural component benefiting a common area, and
``(iv) the internal structural framework of the building.
``(C) DEFINITIONS AND SPECIAL RULES.--For purposes of this paragraph--
``(i) COMMITMENT TO LEASE TREATED AS LEASE.--A commitment to enter into a lease shall be treated as a lease, and the parties to such commitment shall be treated as lessor and lessee, respectively.
``(ii) RELATED PERSONS.--A lease between related persons shall not be considered a lease. For purposes of the preceding sentence, the term `related persons' means--
``(I) members of an affiliated group (as defined in section 1504), and
``(II) persons having a relationship described in subsection (b) of section 267; except that, for purposes of this clause, the phrase `80 percent or more' shall be substituted for the phrase `more than 50 percent' each place it appears in such subsection.''
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