Alaska Native Conservation Parity Act of 2009

Mr. President, I am pleased today to join my colleague, Senator Murkowski, in introducing legislation that would give Alaska Native Corporation, ANC, parity for an important tax incentive encouraging the permanent protection of land through the charitable donation of a conservation easement. I would also like to commend our colleague Congressman Don Young, who today introduces a companion bill in the House of Representatives.

America's wildlife, waters, and land are an invaluable part of our Nation's heritage. It is imperative to preserve these natural treasures for future generations. Congress long ago concluded that it was good public policy to encourage the charitable contribution of conservation easements to organizations dedicated to maintaining natural habitats or open spaces help protect the nation's heritage. A conservation easement creates a legally enforceable land preservation agreement between a willing landowner and another organization. The purpose of a conservation easement is to protect permanently land from certain forms of development or use. The property that is the subject to the easement remains the private property of the landowner. The organization holding the easement must monitor future uses of the land to ensure compliance with the terms of the easement and to enforce the terms if a violation occurs.

In 2006, Congress enhanced the charitable tax deduction for conservation easements in order to encourage such gifts. With the 2006 legislation, Congress temporarily increased the maximum deduction limit for individuals donating qualified conservation easements from 30 percent to 50 percent of the taxpayer's adjusted gross income. Congress also created an exception for qualified farmers or ranchers, which are non-publicly traded corporations or individuals whose gross income from the trade or business of farming is greater than 50 percent of the taxpayer's gross income. In the case of a qualified farmer or rancher, the limitation increased from 30 percent to 100 percent. The 2008 Farm Bill extended the temporary rules for two additional years to charitable contributions made before December 31, 2009.

Unfortunately, the way the law was crafted has disadvantaged a number of important landowners in my home state. Alaska Native Corporations, ANCs, own nearly 90 percent of the private land in Alaska, including some of the most scenic and resource rich. However, although they are very similar to the small communal family farms that are eligible, subsistence-based Alaskan Native communities are ineligible for these important new tax incentives. For thousands of years, Alaska has been home to Native communities, whose rich heritages, languages, and traditions have thrived in the region's unique landscape. Members of Alaska Native communities continue to have a deeply symbiotic relationship with the land even today. Much like their ancestors, many Native Alaskan communities engage in

traditional subsistence activities, with nearly 70 percent of their food coming from the land or adjacent waters. For many communities, subsistence is an economic necessity considering both the lack of economic development and the cost and difficulty involved in purchasing food. For example, in Kotzebue, a community in Northwestern Alaska, milk costs nearly $10 per gallon. In Buckland, a village home to approximately 400 people, a pound of hamburger, when it is actually available, costs $14.00.

In Alaska, the Native Corporations have an important role to be stewards of the land. Their shareholders see themselves as the caretakers of the land and water as their ancestors have for thousands of years. Nonetheless, in Alaska today this means they have to balance the need for resource development and the need to cultivate the land for subsistence activities. The traditional lifestyles of Native Alaskans are under increasing stress from outside influences. Population growth and the pressure to pursue cash-generating activities have increased the desire for substantial development, significantly adding to the ecological stress on already fragile ecosystems. Without permanent protection, their lands could be developed in a manner that would destroy its ability to support the traditional ways and subsistence lifestyles crucial to Alaskan Native communities. Making use of tax incentives available to other Americans will make it easier for Native communities to make the right decisions for their shareholders.

Today, Alaska Native communities are not eligible for the 50 percent deduction available to individuals because they are federally chartered as C corporations under the Alaska Native Claims Settlement Act of 1971, ANCSA. This leaves Alaska Natives without the ability to convert to an eligible entity as other landowners can. In addition, most Alaska Native Corporations do not have sufficient gross income from the trade or business of what is considered traditional farming to be eligible for the 100 percent deduction available to qualified farmers or ranchers. This is in spite of the fact that as a group the Alaska Native shareholders of Alaska Native Corporations receive far more in subsistence benefits than they receive in income from the Alaska Native Corporation. As a result, Alaska Native Corporations do not have the same ability to offset the cost to permanently protect their properties, which contain important wildlife, fish, and other habitats, through donations of qualified conservation easements.

The bill I am introducing with Senator Murkowski will allow Alaska Native Corporations to protect these important wildlife habitats, many used for subsistence, by providing an enhanced deduction for qualified conservation easements. The legislation modifies Section 170(b)(2) of the Internal Revenue Code by creating a new subsection that provides Alaska Native Corporations with a deduction for donations of certain qualified conservation easements. In order to be eligible, a qualified charitable conservation contribution must: (1) otherwise qualify under Section 170(h)(1); (2) be made by a Native Corporation; and (3) be land that was conveyed by ANCSA. Under Section 170(b)(2)(iii)(I), ``Native Corporation'' is defined by ANCSA, section 3(m). Under Section 170(b)(2)(i), the maximum deduction limit would be set at 100 percent of the taxpayer's adjusted gross income. If the taxpayer has deductions in excess of the applicable percentage-of-income limitation, Section 170(b)(2)(ii) would allow the taxpayer to carry-forward the deduction for up to 15 years.

Congress must act to assist Alaska Native communities in permanently protecting their culturally, historically, and ecologically significant land, preserving the communities and their rich traditions in the process. I urge my colleagues to support this important legislation.

Mr. President, I am pleased today to join my colleague, Senator Murkowski, in introducing legislation that would give Alaska Native Corporation, ANC, parity for an important tax incentive encouraging the permanent protection of land through the charitable donation of a conservation easement. I would also like to commend our colleague Congressman Don Young, who today introduces a companion bill in the House of Representatives.

America's wildlife, waters, and land are an invaluable part of our Nation's heritage. It is imperative to preserve these natural treasures for future generations. Congress long ago concluded that it was good public policy to encourage the charitable contribution of conservation easements to organizations dedicated to maintaining natural habitats or open spaces help protect the nation's heritage. A conservation easement creates a legally enforceable land preservation agreement between a willing landowner and another organization. The purpose of a conservation easement is to protect permanently land from certain forms of development or use. The property that is the subject to the easement remains the private property of the landowner. The organization holding the easement must monitor future uses of the land to ensure compliance with the terms of the easement and to enforce the terms if a violation occurs.

In 2006, Congress enhanced the charitable tax deduction for conservation easements in order to encourage such gifts. With the 2006 legislation, Congress temporarily increased the maximum deduction limit for individuals donating qualified conservation easements from 30 percent to 50 percent of the taxpayer's adjusted gross income. Congress also created an exception for qualified farmers or ranchers, which are non-publicly traded corporations or individuals whose gross income from the trade or business of farming is greater than 50 percent of the taxpayer's gross income. In the case of a qualified farmer or rancher, the limitation increased from 30 percent to 100 percent. The 2008 Farm Bill extended the temporary rules for two additional years to charitable contributions made before December 31, 2009.

Unfortunately, the way the law was crafted has disadvantaged a number of important landowners in my home state. Alaska Native Corporations, ANCs, own nearly 90 percent of the private land in Alaska, including some of the most scenic and resource rich. However, although they are very similar to the small communal family farms that are eligible, subsistence-based Alaskan Native communities are ineligible for these important new tax incentives. For thousands of years, Alaska has been home to Native communities, whose rich heritages, languages, and traditions have thrived in the region's unique landscape. Members of Alaska Native communities continue to have a deeply symbiotic relationship with the land even today. Much like their ancestors, many Native Alaskan communities engage in

traditional subsistence activities, with nearly 70 percent of their food coming from the land or adjacent waters. For many communities, subsistence is an economic necessity considering both the lack of economic development and the cost and difficulty involved in purchasing food. For example, in Kotzebue, a community in Northwestern Alaska, milk costs nearly $10 per gallon. In Buckland, a village home to approximately 400 people, a pound of hamburger, when it is actually available, costs $14.00.

In Alaska, the Native Corporations have an important role to be stewards of the land. Their shareholders see themselves as the caretakers of the land and water as their ancestors have for thousands of years. Nonetheless, in Alaska today this means they have to balance the need for resource development and the need to cultivate the land for subsistence activities. The traditional lifestyles of Native Alaskans are under increasing stress from outside influences. Population growth and the pressure to pursue cash-generating activities have increased the desire for substantial development, significantly adding to the ecological stress on already fragile ecosystems. Without permanent protection, their lands could be developed in a manner that would destroy its ability to support the traditional ways and subsistence lifestyles crucial to Alaskan Native communities. Making use of tax incentives available to other Americans will make it easier for Native communities to make the right decisions for their shareholders.

Today, Alaska Native communities are not eligible for the 50 percent deduction available to individuals because they are federally chartered as C corporations under the Alaska Native Claims Settlement Act of 1971, ANCSA. This leaves Alaska Natives without the ability to convert to an eligible entity as other landowners can. In addition, most Alaska Native Corporations do not have sufficient gross income from the trade or business of what is considered traditional farming to be eligible for the 100 percent deduction available to qualified farmers or ranchers. This is in spite of the fact that as a group the Alaska Native shareholders of Alaska Native Corporations receive far more in subsistence benefits than they receive in income from the Alaska Native Corporation. As a result, Alaska Native Corporations do not have the same ability to offset the cost to permanently protect their properties, which contain important wildlife, fish, and other habitats, through donations of qualified conservation easements.

The bill I am introducing with Senator Murkowski will allow Alaska Native Corporations to protect these important wildlife habitats, many used for subsistence, by providing an enhanced deduction for qualified conservation easements. The legislation modifies Section 170(b)(2) of the Internal Revenue Code by creating a new subsection that provides Alaska Native Corporations with a deduction for donations of certain qualified conservation easements. In order to be eligible, a qualified charitable conservation contribution must: (1) otherwise qualify under Section 170(h)(1); (2) be made by a Native Corporation; and (3) be land that was conveyed by ANCSA. Under Section 170(b)(2)(iii)(I), ``Native Corporation'' is defined by ANCSA, section 3(m). Under Section 170(b)(2)(i), the maximum deduction limit would be set at 100 percent of the taxpayer's adjusted gross income. If the taxpayer has deductions in excess of the applicable percentage-of-income limitation, Section 170(b)(2)(ii) would allow the taxpayer to carry-forward the deduction for up to 15 years.

Congress must act to assist Alaska Native communities in permanently protecting their culturally, historically, and ecologically significant land, preserving the communities and their rich traditions in the process. I urge my colleagues to support this important legislation.

Mr. President, during the past decade we have witnessed tremendous development in the way video content is made available to consumers. Today, as a result of digital technology, we can watch movies, television programs, and other video not only on our television sets, but also on our computers, phones, and other mobile devices. In order to maximize the potential of digital content, Congress must ensure that our copyright and communications laws are modernized and updated to accommodate the digital revolution. Today, I join with Senators Sessions, Kohl, Hatch, and Kyl in introducing the Satellite Television Modernization Act of 2009. Our legislation will reauthorize, modernize, and simplify important portions of the statutory license used by satellite providers that will otherwise expire at the end of this year.

The transition to digital television requires Congress to modernize the statutory copyright licenses that allow cable and satellite providers to retransmit the content of local broadcast stations. In February, many stations across the country, including those in Vermont, made the digital transition and can now offer multiple programming channels over a single, crystal-clear digital signal. In June, the remaining broadcast stations across the country completed the digital transition. The current statutory licenses, however, are based on the now outdated analog standard. In our reauthorization, we seek to ensure that the licenses work properly in the digital world.

In June 2008, the U.S. Copyright Office issued a report on the statutory licenses, and offered recommendations on how to improve the current system. The Copyright Office's principal recommendation was to move toward abolishing the compulsory licenses, in particular the distant signal licenses. Short of that, the Copyright Office offered suggestions on how to harmonize and streamline the licenses.

The legislation we introduce today draws on the recommendations of the Copyright Office and takes important steps toward limiting future reliance on the section 119 distant signal license used by satellite providers. This legislation will move locally oriented elements out of the distant signal license--such as the special exception that allows Vermonters in the State's southern-most counties to receive Vermont broadcast stations by satellite--and place them into the section 122 license, which facilitates the retransmission of local content with the consent of the broadcaster. The bill will also fix an anomaly in the distant signal license, which will make it easier for satellite providers to serve local markets that are missing a network affiliate.

Making these changes will improve the ability of satellite providers to deliver a full complement of network stations to consumers, as well as make it easier for them to offer local stations. In Vermont, these changes will have the additional benefit of fostering competition between DISH Network and DirecTV, by allowing DISH to offer Vermont broadcast stations in southern Vermont, a service DirecTV provides today. The legislation also adds a new provision to the local license that will allow satellite providers such as DISH to import a missing network station from an adjacent market when the local market is not served by all four principle networks, after the provider first obtains the station's consent. This new provision will make it more likely and reasonable for DISH to launch local service in these markets, which is good for local broadcasters, good for satellite providers, and good for consumers.

These changes will not only improve the satellite licenses, but will begin the process of phasing out the distant signal license as satellite providers offer local service in more markets. As the distant signal license fades, Congress should follow the Copyright Office's suggestion and move ultimately toward a market-based system, in which statutory licenses are unnecessary.

One further step we can take toward a marketplace model this year is to allow broadcast stations to opt-out of the statutory licenses. All non-broadcast channels carried by cable and satellite providers, such as ESPN and the USA Network, are able to aggregate a complex series of content rights, and negotiate for carriage in the free market. Local broadcasters should be permitted to do the same if they, too, are able to aggregate the necessary rights to license directly to cable and satellite providers. This is a proposal I expect the Judiciary Committee to examine as the bill moves through the mark up process. I encourage all industry participants to work with the Committee so that we can address any concerns about this market-based approach.

Short of repealing the compulsory licenses, the Copyright Office recommended harmonizing the cable and satellite licenses in order to create regulatory parity between the two industries. The section 111 license used by cable, for instance, is based on FCC rules that have long since been repealed, and the license itself has not been significantly updated since it was established more than 30 years ago. The arcane nature of the cable license can at times produce unintended results, such as cable companies paying copyright holders for content that consumers do not actually receive. This is referred to as the phantom signal problem. In contrast, satellite companies pay a flat, per subscriber rate based on consumers actually receiving a broadcast station. Comprehensive reforms to section 111 that aim to modernize the statute and create regulatory parity between cable and satellite providers would address these disparities. We take a more modest approach in the bill we introduce today. The legislation contains an amendment that will resolve the phantom signal issue. I appreciate that members of the content community and the cable system came together to find a solution on which they can all agree.

The Satellite Television Modernization Act is one component of the reauthorization. Portions of the expiring law are within the jurisdiction of the Senate Committee on Commerce, and I look forward to working with the leadership of that Committee, and our counterparts in the House of Representatives, to enact legislation that once again improves the law by fostering competition, protecting broadcasters, and improving service to consumers.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I rise today to introduce with my colleague from Vermont, Senator Leahy, the Satellite Television Modernization Act. I also note the efforts of Senators Sessions, Kohl, and Kyl in crafting this bipartisan bill.

It is hard to believe that 5 years have transpired since we passed the Satellite Home Viewer Extension Act, SHVERA, of 2004. Much has occurred since that time, including the transition from analog to digital signals, which occurred in June. That is why the proposed legislation will not only reauthorize the statutory license used by satellite television providers, but will bring all of the statutory licenses into the digital age so that consumers can receive a good quality digital signal. Additionally, S. 1670 expands access to low power stations by broadening the license for low power stations to cover the entire local market; permits satellite providers to carry a noncommercial educational broadcast station if a station is part of a state-wide network; improves the ability of both DirecTV and DISH Network to provide local signals to local markets; and addresses the ``phantom signal'' issue, where currently cable providers may be required to pay royalty fees under section 111 based on subscribers who do not receive the content for which the royalty is being paid.

I hasten to point out, however, that much more needs to be done to move away from government regulation and toward a marketplace where satellite providers and cable providers can compete based on market forces. This is not a new issue for this body. In fact, during the 2004 reauthorization of SHVERA, Congress required that the U.S. Copyright Office prepare a report to make recommendations on the operations of, and revisions to, sections 111, 119, and 122 of the Copyright Act. The Copyright Office provided this report to Congress on June 30, 2008.

While I will not provide a line by line summary of the Report, I will underscore some key findings that the Copyright Office, under the leadership of Register of Copyrights Marybeth Peters, suggests that Congress consider

when legislating in this area of the law. Specifically, the Copyright Office found that ``below-market rates may have been justifiable when cable and satellite were nascent industries and needed a mechanism to allow them to serve their subscriber base with valuable distant signals.'' The Report continues by stating that ``the current multichannel video distribution marketplace is robust and has, for a long time, overshadowed the broadcast industry.'' Moreover, the Copyright Office further argues that ``it is now time to phase out section 111 and section 119 so that copyright owners can negotiate market rates for the carriage of programming.''

I agree with the Copyright Office that something needs to be done to ``phase out'' these compulsory licenses. There is no longer any reason that the cable and satellite industries need a government-sponsored subsidy--paid for by program providers--for the right to retransmit broadcast signals. I believe we can devise a way that would phase out these compulsory licenses without disrupting the market. In fact, it is already being done today, as cable and satellite services license programming for more than 550 non-broadcast networks directly in the marketplace without a need for a compulsory license.

Some have suggested a market trigger mechanism that would create an opportunity for, but not require, copyright owners to license their copyrighted programming on broadcast television in the same manner as they do currently for cable channels like TBS, ESPN, Nickelodeon, Disney Channel, FX, and Bravo. Copyright owners would have a choice between continuing to operate under the compulsory license, or if they prefer, licensing cable and satellite retransmission of their works directly through the free market as is done every day for the hundreds of non-broadcast cable channels.

I hope that industry stakeholders will participate in creating a practical and reasonable approach to rectifying this important issue. At a minimum, it is time to let program creators and distributors have the option to determine the terms and conditions for their intellectual property rights. I am pleased that Senate Judiciary Committee Chairman Pat Leahy is committed to exploring viable options for a marketplace model, and I look forward to working with him and our colleagues on this and other issues before final passage of this bill.

Mr. President, a key component of the health reform debate is ensuring that all people--regardless of their health status--have access to comprehensive and affordable coverage options. Unfortunately, under current law Medicare beneficiaries are subject to discriminatory medical practices that deny coverage options based on their age, condition, or disability.

Medigap plans provide vital assistance to Medicare beneficiaries in paying Medicare cost-sharing. Without supplemental coverage, the absence of an out-of-pocket limit in Medicare leaves beneficiaries vulnerable to catastrophic medical expenses.

Unfortunately, Medicare beneficiaries with disabilities or who have end-stage renal disease, ESRD, do not have the same guaranteed issue rights as Medicare beneficiaries age 65 and older. In the absence of equal opportunity and access to Medigap policies at the Federal level, 29 States have chosen to grant the same rights to disabled and ESRD beneficiaries that seniors currently enjoy.

ESRD beneficiaries are also the only group of Medicare beneficiaries currently denied the same Medicare choices as other Medicare beneficiaries. They are statutorily prohibited from enrolling in Medicare Advantage plans.

Today I am introducing the Equal Access to Medicare Options Act, a bill that improves coverage options to Medicare beneficiaries. First, the legislation would extend guaranteed issue of Medigap policies to all Medicare beneficiaries rather than limiting guaranteed issue to those beneficiaries who are over 65 years of age. This change will significantly improve coverage options and affordability for beneficiaries with disabilities or end-stage renal disease.

Second, the legislation recognizes that Medicare beneficiaries need flexibility to adjust their coverage as changes to their plans are made. More specifically, the legislation would give guaranteed issue rights to Medicare Advantage enrollees if they decide to switch to traditional Medicare during an enrollment period. Today, if a Medicare Advantage enrollee learns of premium increases or benefit reduction in their plan, they have the option of returning to traditional Medicare but they have no assurance they can buy Medigap coverage if they do so.

Third, the legislation would provide guaranteed issue to dual eligibles who lose their Medicaid coverage and find themselves in traditional Medicare without the cost protections of Medicaid and without supplemental coverage options.

Finally, this legislation would for the first time give beneficiaries with end-stage renal disease the option of enrolling in Medicare Advantage plans.

I would like to thank a number of organizations who have been integral to the development of the Equal Access to Medicare Options Act and who have endorsed it today, including the AARP, California Health Advocates, Center for Medicare Advocacy, Consortium for Citizens with Disabilities, Consumers Union, Dialysis Patient Citizens, Fresenius Medical Care, Medicare Rights Center, and the National Kidney Foundation.

These reforms would ensure that all Medicare beneficiaries regardless of their disability or age have equal opportunity and access to affordable Medicare options to reduce out-of-pocket costs. I look forward to working with my colleagues in the Senate to achieve these goals in the context of health care reform.