[Congressional Record Volume 151, Number 22 (Wednesday, March 2, 2005)]
[Senate]
[Pages S1943-S1946]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SALAZAR:
  S. 497. A bill to revitalize our nation's rural communities by 
expanding broadband services; to the Committee on Finance.
  Mr. SALAZAR. Mr. President, I rise to speak about two bills I am 
introducing today and to speak out in support of rural Colorado and 
rural America. The two bills--one to increase investment in broadband 
technology in rural areas, and another to permanently fund the payment 
in lieu of taxes program--are the first bills I am introducing as a 
Senator. I am proud they are both targeted at rural Colorado.
  Over 400 years ago, in 1598, my family helped found the oldest city 
in what is now these United States. They named the city Santa Fe--the 
City of Holy Faith--because they knew the hand of God would guide them 
through the struggles of survival in the ages ahead.
  For the next four centuries, that faith in their future guided them 
to overcome extremely painful and challenging times. As humble and poor 
farmers, the circumstances of their lives forged the priceless and 
tireless values of my father Henry and mother Emma. And they instilled 
those values in their children.
  My family has now farmed the same lands in southern Colorado, 110 
miles north of Santa Fe, for almost 150 years. On that ranch, we did 
not have a telephone, and the power lines did not reach us until 1981. 
Although we were poor in material goods, we were rich in spirit. My 
parents were part of the World's ``greatest generation''--my father a 
proud veteran of World War II and my mother a proud servant in the War 
Department. Although neither had a college degree, they taught us about 
the values and the promise of America. All eight of their children 
became first-generation college graduates, inspired by their dedication 
to God, family, community, and country.
  As Colorado's U.S. Senator, I am proud of my values and roots in 
rural Colorado. Rural America is the heart of our great Nation.
  The values my parents taught me are the fundamental values that make 
this country the place I am privileged to call home.
  Unfortunately, the America where I grew up is vanishing, left behind 
by a Washington DC that has lost touch with what is important to the 
people of the heartland. I fear that rural Colorado, like the rest of 
rural America, has become ``the forgotten America.''
  Rural America has given up its sons and daughters to the cause of 
freedom without hesitation and in numbers that far exceed its 
proportion of the country's population. It has worked quietly to put 
food on our tables, and remains humbly grounded, seeking neither praise 
nor thanks.
  Yet when the President reported on the State of the Union, there was 
not a word on the state of the more than 3,000 counties that make up 
rural America--not a word. And in the administration's budget, the 
programs and investments vital to those communities--PILT, block 
grants, conservation programs, investments in animal and food safety, 
and investments in technology, schools and law enforcement--were 
drastically cut.
  Last week, I traveled nearly 2,000 miles to every corner of Colorado 
and convened 17 meetings with elected officials representing Colorado's 
64 counties.
  In those meetings, I heard the state of rural America in the words of 
the people who are fighting for their families everyday.
  The state of rural America is sadly the state of the forgotten 
America.
  In rural Colorado, residents face lower incomes and are far more 
likely to be unemployed than people in urban and suburban areas.
  In Crowley County, east of Pueblo, there is only one nurse 
practitioner to serve a county of nearly 6,000 people. If you get sick 
in Crowley County, you have three choices: wait, go to the emergency 
room, or hope you get better.
  In Routt County, veterans have to travel nearly 200 miles to Grand 
Junction to see a doctor in the VA clinic. A few months ago, there was 
no waiting list to see a doctor. Now, there's a waiting list of 400, 
which means veterans in western Colorado wait 5 months to see a doctor.
  The Dolores County Sheriff, Jerry Martin, has to make hiring 
decisions based not on public security demands but on the ability of 
his department to provide health care to the prospective employee. 
Health care premiums have risen 20 percent every year the last 3 years 
in Dolores County.
  Across the State, people told me that their health care premiums 
dwarf their mortgage payments because in many cases they pay over 
$1,000 per month for health insurance for their families.
  Between 1996 and 2000, one in three of our rural schools saw its 
enrollment drop more than 10 percent.
  Though they continue to excel on State tests, too many of our rural 
schools have been forced to divert valuable resources to fulfill the 
unfunded mandates of No Child Left Behind.
  In Kiowa, Moffat, and Custer Counties, our teachers are paid much 
less than teachers in the big cities. In Kit Carson County, where 
teachers sometimes teach two and three subjects, only half of our 
teachers right now would meet new Federal standards requiring them to 
be certified for each subject.
  And in the town of Rico, half of Main Street is boarded up: there's a 
liquor store, but not much else. According to the Kansas City Federal 
Reserve Bank, that may be part of a larger trend: Main Street in rural 
Colorado is losing its storefronts at an alarming rate.
  Compare those needs to the budget the Administration recently 
proposed.
  While we are facing a shortage of qualified and trained health care 
employees, the administration budget this year cut health professions 
training by almost two thirds, $290 million.
  While our State tries to deal with a devastating budget crisis, the 
Administration dramatically reduced funding for the Community 
Development Block Grants on which towns, from Greeley to Grand Junction 
to Denver, depend.
  For the fifth year in a row, the Administration's budget fails to 
fulfill the funding promises made in the No Child Left Behind law, but 
still heaps mandates on local schools.
  Moreover, the proposed budget eliminates low-interest loans for 
students who have the grades but can't afford to go to college and 
eliminates funding for vocational training that many rural Colorado 
students use.
  The proposed budget cuts $250 million from one of the most successful 
small business investment programs and decimates USDA investments in 
rural economic development.
  While we combat methamphetamine production and invest precious 
resources in meth lab clean up, the budget cuts Safe and Drug Free 
School grants, the COPS program by nearly $500 million, and State and 
local homeland security training programs by 60 percent.
  I want to propose two small steps in my effort to reinvest in rural 
America. In coming months I intend to introduce measures to strengthen 
rural law enforcement, revitalize rural health care, invest in Main 
Street, strengthen rural education, help ensure efficient and equitable 
sharing of water resources and underscore the values that shape every 
rural community in Colorado.
  The first bill is on the PILT program. I know that education in rural 
America is funded through a variety of means, including through 
resources passed to rural counties through the Payment in Lieu of Taxes 
program.
  The idea behind the PILT program is simple. It makes sure that local 
communities in States like Colorado--States that have seen large parts 
of land set aside by the Federal Government for public use--do not lose 
valuable resources from foregone property taxes. Those resources fund 
programs from education to law enforcement.
  Unfortunately, this year the administration's budget is again 
proposing to cut that funding. Thanks to the efforts of my Democratic 
and Republican colleagues, such as Senator Bingaman, some of that 
funding has been won back over the last several years, and I

[[Page S1944]]

am hopeful we will do so again this year.
  But our local communities should not have to wait and wonder every 
year whether their resources for schools, roads and law enforcement 
will make it into the budget, and that is why I am introducing a bill 
to make permanent the funding for the payment in lieu of taxes program.
  I am also introducing a bill to increase investment in broadband 
technology in rural communities. Bringing broadband to our rural 
schools will give our students there access to technology that millions 
of other students take for granted. With broadband will come world 
class research and access to AP courses at Colorado's universities. And 
with broadband we will see the economic development for which rural 
Colorado has been waiting.
  The benefits of this investment do not stop in education and 
business. Telehealth is increasingly vital in rural Colorado, held back 
in some cases by the lack of investment in infrastructure. That same 
infrastructure limits investment opportunities in rural communities.
  With this bill I am building on the hard work of others and saying 
that it is long past time for us to invest in the world class broadband 
that rural communities need and are right to expect. My bill does that 
in three ways.
  First, it will establish our Nation's first Rural Broadband Office to 
coordinate all Federal Government resources as they relate to 
broadband.
  Second, it will help broadband providers keep pace with our rapidly 
changing technology.
  And third, it calls on the Congress to live up to its responsibility 
to fully fund rural utilities.
  It has been a long road that has carried me from that ranch in the 
San Luis Valley, growing up as one of eight siblings and proudly 
attending college and law school before having the privilege to serve 
in U.S. Senate.
  In all of this, I have never forgotten where I come from. In my 
office, I have a sign on my desk that reads ``No Farms, No Food.'' 
Every day I look at it, and I am reminded of just how dependent we are 
on the people of rural Colorado, and in rural communities all across 
America.
  At a meeting with leaders from Colorado's farmer and rancher 
community last month, a wheat farmer from southeastern Colorado told me 
this: ``Senator, you'd never believe how many farmers refuse to go to 
the doctor when they get sick. It's not that they aren't really sick. 
It's that they can't afford the doctor.''
  Unfortunately, Mr. President, I do believe that wheat farmer, and I 
know rural America needs our help.
  In America, the most powerful, prosperous, idealistic country the 
world has ever known, we can do better.
  And protecting that way of life--in our churches and town halls, Main 
Streets and living rooms, ranches and independent drug stores--demands 
it. Together, we can make sure that no one anywhere in this country 
feels that he is part of a ``Forgotten America'' any longer.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. CORZINE. Mr. President, I congratulate my colleague from 
Colorado. His maiden speech was as brilliant as his life has been. It 
is an honor to serve with him, when I think about the story of his 
family and its presence and contribution to this country and the power 
with which he speaks for those he represents in rural America. This 
will be one of many speeches that make a great impact on our country. I 
am honored to serve with him and congratulate him on his initial 
voyage.
  Mr. SALAZAR. Mr. President, I appreciate the comments from the 
Senator from New Jersey.
  I ask unanimous consent that the text of the bills be printed in the 
Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                 S. 496

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``PILT and Refuge Revenue 
     Sharing Permanent Funding Act''.

     SEC. 2. PERMANENT FUNDING.

       (a) Payments in Lieu of Taxes.--
       (1) In general.--Section 6906 of title 31, United States 
     Code, is amended to read as follows:

     ``Sec. 6906. Funding

       ``For fiscal year 2006 and each fiscal year thereafter, 
     amounts authorized under this chapter shall be made available 
     to the Secretary of the Interior, out of any amounts in the 
     Treasury not otherwise appropriated and without further 
     appropriation, for obligation or expenditure in accordance 
     with this chapter.''.
       (2) Conforming amendment.--The table of sections for 
     chapter 69 of title 31, United States Code, is amended by 
     striking the item relating to section 6906 and inserting the 
     following:

``6906. Funding.''.

       (b) Refuge Revenue Sharing.--Section 401(d) of the Act of 
     June 15, 1935 (16 U.S.C. 715s(d)) is amended--
       (1) by striking ``If the net receipts'' and inserting the 
     following:
       ``(1) If the net receipts''; and
       (2) by adding at the end the following:
       ``(2) For fiscal year 2006 and each fiscal year thereafter, 
     the amount made available under paragraph (1) shall be made 
     available to the Secretary, out of any funds in the Treasury 
     not otherwise appropriated and without further appropriation, 
     for obligation or expenditure in accordance with this 
     section.''.

                                 S. 497

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Broadband Rural 
     Revitalization Act of 2005''.

     SEC. 2. RURAL BROADBAND OFFICE.

       (a) Establishment.--There is established within the 
     Department of Commerce, the Rural Broadband Office.
       (b) Duties.--The Office shall coordinate all Federal 
     Government resources as they relate to the expansion of 
     broadband technology into rural areas.
       (c) Report.--Not later than 1 year after the date of the 
     enactment of this Act, and annually thereafter, the Rural 
     Broadband Office shall submit a report to the Congress that--
       (1) assesses the availability of, and access to, broadband 
     technology in rural areas;
       (2) estimates the number of individuals using broadband 
     technology in rural areas;
       (3) estimates the unmet demand for broadband technology in 
     rural areas; and
       (4) sets forth a strategic plan to meet the demand 
     described in paragraph (3).

     SEC. 3. FULL FUNDING FOR RURAL BROADBAND SERVICES.

       It is the sense of Congress that the loan program 
     established in section 4 of the Rural Electrification Act of 
     1936 (7 U.S.C. 901 et seq.), which is essential to the 
     economic well-being of small telecommunications providers and 
     to the quality of life for all rural residents, be funded 
     fully.

     SEC. 4. EXPENSING OF BROADBAND INTERNET ACCESS EXPENDITURES 
                   FOR RURAL COMMUNITIES.

       (a) In General.--Part VI of subchapter B of chapter 1 of 
     the Internal Revenue Code of 1986 (relating to itemized 
     deductions for individuals and corporations) is amended by 
     inserting after section 190 the following new section:

     ``SEC. 191. BROADBAND EXPENDITURES FOR RURAL COMMUNITIES.

       ``(a) Treatment of Expenditures.--
       ``(1) In general.--A taxpayer may elect to treat any 
     qualified broadband expenditure which is paid or incurred by 
     the taxpayer as an expense which is not chargeable to capital 
     account. Any expenditure which is so treated shall be allowed 
     as a deduction.
       ``(2) Election.--An election under paragraph (1) shall be 
     made at such time and in such manner as the Secretary may 
     prescribe by regulation.
       ``(b) Qualified Broadband Expenditures.--For purposes of 
     this section--
       ``(1) In general.--The term `qualified broadband 
     expenditure' means, with respect to any taxable year, any 
     direct or indirect costs incurred and properly taken into 
     account with respect to--
       ``(A) the purchase or installation of qualified equipment 
     (including any upgrades thereto), and
       ``(B) the connection of such qualified equipment to any 
     qualified subscriber.
       ``(2) Certain satellite expenditures excluded.--Such term 
     shall not include any costs incurred with respect to the 
     launching of any satellite equipment.
       ``(3) Leased equipment.--Such term shall include so much of 
     the purchase price paid by the lessor of qualified equipment 
     subject to a lease described in subsection (c)(2)(B) as is 
     attributable to expenditures incurred by the lessee which 
     would otherwise be described in paragraph (1).
       ``(c) When Expenditures Taken Into Account.--For purposes 
     of this section--
       ``(1) In general.--Qualified broadband expenditures with 
     respect to qualified equipment shall be taken into account 
     with respect to the first taxable year in which--
       ``(A) current generation broadband services are provided 
     through such equipment to qualified subscribers, or
       ``(B) next generation broadband services are provided 
     through such equipment to qualified subscribers.
       ``(2) Limitation.--
       ``(A) In general.--Qualified expenditures shall be taken 
     into account under paragraph (1) only with respect to 
     qualified equipment--

[[Page S1945]]

       ``(i) the original use of which commences with the 
     taxpayer, and
       ``(ii) which is placed in service, after the date of the 
     enactment of this Act.
       ``(B) Sale-leasebacks.--For purposes of subparagraph (A), 
     if property--
       ``(i) is originally placed in service after the date of the 
     enactment of this Act by any person, and
       ``(ii) sold and leased back by such person within 3 months 
     after the date such property was originally placed in 
     service, such property shall be treated as originally placed 
     in service not earlier than the date on which such property 
     is used under the leaseback referred to in clause (ii).
       ``(d) Special Allocation Rules.--
       ``(1) Current generation broadband services.--For purposes 
     of determining the amount of qualified broadband expenditures 
     under subsection (a)(1) with respect to qualified equipment 
     through which current generation broadband services are 
     provided, if the qualified equipment is capable of serving 
     both qualified subscribers and other subscribers, the 
     qualified broadband expenditures shall be multiplied by a 
     fraction--
       ``(A) the numerator of which is the sum of the number of 
     potential qualified subscribers within the rural areas which 
     the equipment is capable of serving with current generation 
     broadband services, and
       ``(B) the denominator of which is the total potential 
     subscriber population of the area which the equipment is 
     capable of serving with current generation broadband 
     services.
       ``(2) Next generation broadband services.--For purposes of 
     determining the amount of qualified broadband expenditures 
     under subsection (a)(1) with respect to qualified equipment 
     through which next generation broadband services are 
     provided, if the qualified equipment is capable of serving 
     both qualified subscribers and other subscribers, the 
     qualified expenditures shall be multiplied by a fraction--
       ``(A) the numerator of which is the sum of--
       ``(i) the number of potential qualified subscribers within 
     the rural areas, plus
       ``(ii) the number of potential qualified subscribers within 
     the area consisting only of residential subscribers not 
     described in clause (i), which the equipment is capable of 
     serving with next generation broadband services, and
       ``(B) the denominator of which is the total potential 
     subscriber population of the area which the equipment is 
     capable of serving with next generation broadband services.
       ``(e) Definitions.--For purposes of this section--
       ``(1) Antenna.--The term `antenna' means any device used to 
     transmit or receive signals through the electromagnetic 
     spectrum, including satellite equipment.
       ``(2) Cable operator.--The term `cable operator' has the 
     meaning given such term by section 602(5) of the 
     Communications Act of 1934 (47 U.S.C. 522(5)).
       ``(3) Commercial mobile service carrier.--The term 
     `commercial mobile service carrier' means any person 
     authorized to provide commercial mobile radio service as 
     defined in section 20.3 of title 47, Code of Federal 
     Regulations.
       ``(4) Current generation broadband service.--The term 
     `current generation broadband service' means the transmission 
     of signals at a rate of at least 1,000,000 bits per second to 
     the subscriber and at least 128,000 bits per second from the 
     subscriber.
       ``(5) Multiplexing or demultiplexing.--The term 
     `multiplexing' means the transmission of 2 or more signals 
     over a single channel, and the term `demultiplexing' means 
     the separation of 2 or more signals previously combined by 
     compatible multiplexing equipment.
       ``(6) Next generation broadband service.--The term `next 
     generation broadband service' means the transmission of 
     signals at a rate of at least 22,000,000 bits per second to 
     the subscriber and at least 5,000,000 bits per second from 
     the subscriber.
       ``(7) Nonresidential subscriber.--The term `nonresidential 
     subscriber' means any person who purchases broadband services 
     which are delivered to the permanent place of business of 
     such person.
       ``(8) Open video system operator.--The term `open video 
     system operator' means any person authorized to provide 
     service under section 653 of the Communications Act of 1934 
     (47 U.S.C. 573).
       ``(9) Other wireless carrier.--The term `other wireless 
     carrier' means any person (other than a telecommunications 
     carrier, commercial mobile service carrier, cable operator, 
     open video system operator, or satellite carrier) providing 
     current generation broadband services or next generation 
     broadband service to subscribers through the radio 
     transmission of energy.
       ``(10) Packet switching.--The term `packet switching' means 
     controlling or routing the path of any digitized transmission 
     signal which is assembled into packets or cells.
       ``(11) Provider.--The term `provider' means, with respect 
     to any qualified equipment--
       ``(A) a cable operator,
       ``(B) a commercial mobile service carrier,
       ``(C) an open video system operator,
       ``(D) a satellite carrier,
       ``(E) a telecommunications carrier,
       ``(F) any other wireless carrier, providing current 
     generation broadband services or next generation broadband 
     services to subscribers through such qualified equipment; or
       ``(G) any carrier or operator using any other technology.
       ``(12) Provision of services.--A provider shall be treated 
     as providing services to 1 or more subscribers if--
       ``(A) such a subscriber has been passed by the provider's 
     equipment and can be connected to such equipment for a 
     standard connection fee,
       ``(B) the provider is physically able to deliver current 
     generation broadband services or next generation broadband 
     services, as applicable, to such a subscriber without making 
     more than an insignificant investment with respect to such 
     subscriber,
       ``(C) the provider has made reasonable efforts to make such 
     subscribers aware of the availability of such services,
       ``(D) such services have been purchased by 1 or more such 
     subscribers, and
       ``(E) such services are made available to such subscribers 
     at average prices comparable to those at which the provider 
     makes available similar services in any areas in which the 
     provider makes available such services.
       ``(13) Qualified equipment.--
       ``(A) In general.--The term `qualified equipment' means 
     equipment which provides current generation broadband 
     services or next generation broadband services--
       ``(i) at least a majority of the time during periods of 
     maximum demand to each subscriber who is utilizing such 
     services, and
       ``(ii) in a manner substantially the same as such services 
     are provided by the provider to subscribers through equipment 
     with respect to which no deduction is allowed under 
     subsection (a)(1).
       ``(B) Only certain investment taken into account.--Except 
     as provided in subparagraph (C) or (D), equipment shall be 
     taken into account under subparagraph (A) only to the extent 
     it--
       ``(i) extends from the last point of switching to the 
     outside of the unit, building, dwelling, or office owned or 
     leased by a subscriber in the case of a telecommunications 
     carrier,
       ``(ii) extends from the customer side of the mobile 
     telephone switching office to a transmission/receive antenna 
     (including such antenna) owned or leased by a subscriber in 
     the case of a commercial mobile service carrier,
       ``(iii) extends from the customer side of the headend to 
     the outside of the unit, building, dwelling, or office owned 
     or leased by a subscriber in the case of a cable operator or 
     open video system operator, or
       ``(iv) extends from a transmission/receive antenna 
     (including such antenna) which transmits and receives signals 
     to or from multiple subscribers, to a transmission/receive 
     antenna (including such antenna) on the outside of the unit, 
     building, dwelling, or office owned or leased by a subscriber 
     in the case of a satellite carrier or other wireless carrier, 
     unless such other wireless carrier is also a 
     telecommunications carrier.
       ``(C) Packet switching equipment.--Packet switching 
     equipment, regardless of location, shall be taken into 
     account under subparagraph (A) only if it is deployed in 
     connection with equipment described in subparagraph (B) and 
     is uniquely designed to perform the function of packet 
     switching for current generation broadband services or next 
     generation broadband services, but only if such packet 
     switching is the last in a series of such functions performed 
     in the transmission of a signal to a subscriber or the first 
     in a series of such functions performed in the transmission 
     of a signal from a subscriber.
       ``(D) Multiplexing and demultiplexing equipment.--
     Multiplexing and demultiplexing equipment shall be taken into 
     account under subparagraph (A) only to the extent it is 
     deployed in connection with equipment described in 
     subparagraph (B) and is uniquely designed to perform the 
     function of multiplexing and demultiplexing packets or cells 
     of data and making associated application adaptions, but only 
     if such multiplexing or demultiplexing equipment is located 
     between packet switching equipment described in subparagraph 
     (C) and the subscriber's premises.
       ``(14) Qualified subscriber.--The term `qualified 
     subscriber' means--
       ``(A) with respect to the provision of current generation 
     broadband services--
       ``(i) any nonresidential subscriber maintaining a permanent 
     place of business in a rural area, or
       ``(ii) any residential subscriber residing in a dwelling 
     located in a rural area which is not a saturated market, and
       ``(B) with respect to the provision of next generation 
     broadband services--
       ``(i) any nonresidential subscriber maintaining a permanent 
     place of business in a rural area, or
       ``(ii) any residential subscriber.
       ``(15) Residential subscriber.--The term `residential 
     subscriber' means any individual who purchases broadband 
     services which are delivered to such individual's dwelling.
       ``(16) Rural area.--The term `rural area' means any census 
     tract which--
       ``(A) is not within 5 miles of any incorporated or census 
     designated place containing more than 25,000 people, and
       ``(B) is not within a county or county equivalent which has 
     an overall population density of more than 500 people per 
     square mile of land.
       ``(17) Rural subscriber.--The term `rural subscriber' means 
     any residential subscriber residing in a dwelling located in 
     a rural area or nonresidential subscriber maintaining a

[[Page S1946]]

     permanent place of business located in a rural area.
       ``(18) Satellite carrier.--The term `satellite carrier' 
     means any person using the facilities of a satellite or 
     satellite service licensed by the Federal Communications 
     Commission and operating in the Fixed-Satellite Service under 
     part 25 of title 47 of the Code of Federal Regulations or the 
     Direct Broadcast Satellite Service under part 100 of title 47 
     of such Code to establish and operate a channel of 
     communications for distribution of signals, and owning or 
     leasing a capacity or service on a satellite in order to 
     provide such point-to-multipoint distribution.
       ``(19) Saturated market.--The term `saturated market' means 
     any census tract in which, as of the date of the enactment of 
     this section--
       ``(A) current generation broadband services have been 
     provided by a single provider to 85 percent or more of the 
     total number of potential residential subscribers residing in 
     dwellings located within such census tract, and
       ``(B) such services can be utilized--
       ``(i) at least a majority of the time during periods of 
     maximum demand by each such subscriber who is utilizing such 
     services, and
       ``(ii) in a manner substantially the same as such services 
     are provided by the provider to subscribers through equipment 
     with respect to which no deduction is allowed under 
     subsection (a)(1).
       ``(20) Subscriber.--The term `subscriber' means any person 
     who purchases current generation broadband services or next 
     generation broadband services.
       ``(21) Telecommunications carrier.--The term 
     `telecommunications carrier' has the meaning given such term 
     by section 3(44) of the Communications Act of 1934 (47 U.S.C. 
     153(44)), but--
       ``(A) includes all members of an affiliated group of which 
     a telecommunications carrier is a member, and
       ``(B) does not include a commercial mobile service carrier.
       ``(22) Total potential subscriber population.--The term 
     `total potential subscriber population' means, with respect 
     to any area and based on the most recent census data, the 
     total number of potential residential subscribers residing in 
     dwellings located in such area and potential nonresidential 
     subscribers maintaining permanent places of business located 
     in such area.
       ``(f) Special Rules.--
       ``(1) Property used outside the united states, etc., not 
     qualified.--No expenditures shall be taken into account under 
     subsection (a)(1) with respect to the portion of the cost of 
     any property referred to in section 50(b) or with respect to 
     the portion of the cost of any property specified in an 
     election under section 179.
       ``(2) Basis reduction.--
       ``(A) In general.--For purposes of this title, the basis of 
     any property shall be reduced by the portion of the cost of 
     such property taken into account under subsection (a)(1).
       ``(B) Ordinary income recapture.--For purposes of section 
     1245, the amount of the deduction allowable under subsection 
     (a)(1) with respect to any property which is of a character 
     subject to the allowance for depreciation shall be treated as 
     a deduction allowed for depreciation under section 167.
       ``(3) Coordination with section 38.--No credit shall be 
     allowed under section 38 with respect to any amount for which 
     a deduction is allowed under subsection (a)(1).''.
       (b) Special Rule for Mutual or Cooperative Telephone 
     Companies.--Section 512(b) (relating to modifications) is 
     amended by adding at the end the following new paragraph:
       ``(18) Special rule for mutual or cooperative telephone 
     companies.--A mutual or cooperative telephone company which 
     for the taxable year satisfies the requirements of section 
     501(c)(12)(A) may elect to reduce its unrelated business 
     taxable income for such year, if any, by an amount that does 
     not exceed the qualified broadband expenditures which would 
     be taken into account under section 191 for such year by such 
     company if such company was not exempt from taxation. Any 
     amount which is allowed as a deduction under this paragraph 
     shall not be allowed as a deduction under section 191 and the 
     basis of any property to which this paragraph applies shall 
     be reduced under section 1016(a)(32).''.
       (c) Conforming Amendments.--
       (1) Section 263(a)(1) of the Internal Revenue Code of 1986 
     (relating to capital expenditures) is amended by striking 
     ``or'' at the end of subparagraph (H), by striking the period 
     at the end of subparagraph (I) and inserting ``, or'', and by 
     adding at the end the following new subparagraph:
       ``(J) expenditures for which a deduction is allowed under 
     section 191.''.
       (2) Section 1016(a) of such Code is amended by striking 
     ``and'' at the end of paragraph (30), by striking the period 
     at the end of paragraph (31) and inserting ``, and'', and by 
     adding at the end the following new paragraph:
       ``(32) to the extent provided in section 191(f)(2).''.
       (3) The table of sections for part VI of subchapter A of 
     chapter 1 of such Code is amended by inserting after the item 
     relating to section 190 the following new item:

``Sec. 191. Broadband expenditures for rural communities.''.

       (d) Designation of Census Tracts.--
       (1) In general.--The Secretary of the Treasury shall, not 
     later than 90 days after the date of the enactment of this 
     Act, designate and publish those census tracts meeting the 
     criteria described in paragraphs (16) and (22) of section 
     191(e) of the Internal Revenue Code of 1986 (as added by this 
     section). In making such designations, the Secretary of the 
     Treasury shall consult with such other departments and 
     agencies as the Secretary determines appropriate.
       (2) Saturated market.--
       (A) In general.--For purposes of designating and publishing 
     those census tracts meeting the criteria described in 
     subsection (e)(19) of such section 191--
       (i) the Secretary of the Treasury shall prescribe not later 
     than 30 days after the date of the enactment of this Act the 
     form upon which any provider which takes the position that it 
     meets such criteria with respect to any census tract shall 
     submit a list of such census tracts (and any other 
     information required by the Secretary) not later than 60 days 
     after the date of the publication of such form, and
       (ii) the Secretary of the Treasury shall publish an 
     aggregate list of such census tracts and the applicable 
     providers not later than 30 days after the last date such 
     submissions are allowed under clause (i).
       (B) No subsequent lists required.--The Secretary of the 
     Treasury shall not be required to publish any list of census 
     tracts meeting such criteria subsequent to the list described 
     in subparagraph (A)(ii).
       (e) Other Regulatory Matters.--
       (1) Prohibition.--No Federal or State agency or 
     instrumentality shall adopt regulations or ratemaking 
     procedures that would have the effect of eliminating or 
     reducing any deduction or portion thereof allowed under 
     section 191 of the Internal Revenue Code of 1986 (as added by 
     this section) or otherwise subverting the purpose of this 
     section.
       (2) Treasury regulatory authority.--It is the intent of 
     Congress in providing the election to deduct qualified 
     broadband expenditures under section 191 of the Internal 
     Revenue Code of 1986 (as added by this section) to provide 
     incentives for the purchase, installation, and connection of 
     equipment and facilities offering expanded broadband access 
     to the Internet for users in certain rural areas of the 
     United States, as well as to residential users nationwide, in 
     a manner that maintains competitive neutrality among the 
     various classes of providers of broadband services. 
     Accordingly, the Secretary of the Treasury shall prescribe 
     such regulations as may be necessary or appropriate to carry 
     out the purposes of section 191 of such Code, including--
       (A) regulations to determine how and when a taxpayer that 
     incurs qualified broadband expenditures satisfies the 
     requirements of section 191 of such Code to provide broadband 
     services, and
       (B) regulations describing the information, records, and 
     data taxpayers are required to provide the Secretary to 
     substantiate compliance with the requirements of section 191 
     of such Code.
       (f) No Implication Regarding the Need for Next Generation 
     Incentive in Urban Areas.--Nothing in this section shall be 
     construed to imply that an incentive for next generation 
     broadband is not needed in urban areas.
       (g) Effective Date.--The amendments made by this section 
     shall apply to expenditures incurred after the date of the 
     enactment of this Act and before the date which is 12 months 
     after the date of the enactment of this Act.
                                 ______