[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2321 Introduced in Senate (IS)]







106th CONGRESS
  2d Session
                                S. 2321

 To amend the Internal Revenue Code of 1986 to allow a tax credit for 
   development costs of telecommunications facilities in rural areas.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 29, 2000

 Mr. Rockefeller (for himself and Ms. Snowe) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to allow a tax credit for 
   development costs of telecommunications facilities in rural areas.

    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 ``Rural Telecommunications 
Modernization Act of 2000''.

SEC. 2. CREDIT FOR TELECOMMUNICATIONS FACILITIES DEVELOPMENT IN RURAL 
              AREAS.

    (a) In General.--Section 46(a) of the Internal Revenue Code of 1986 
(relating to amount of investment credit) is amended by striking 
``and'' at the end of paragraph (2), by striking the period at the end 
of paragraph (3) and inserting ``, and'', and by adding at the end the 
following:
            ``(4) the rural telecommunications facilities credit.''
    (b) Amount of Credit.--Subpart E of part IV of subchapter A of 
chapter 1 of the Internal Revenue Code of 1986 (relating to rules for 
computing investment credit) is amended by inserting after section 47 
the following:

``SEC. 47A. RURAL TELECOMMUNICATIONS FACILITIES CREDIT.

    ``(a) In General.--For purposes of section 46, the rural 
telecommunications facilities credit for any taxable year is an amount 
equal to the applicable percentage of the qualified broadband local 
access facilities expenditures for such taxable year.
    ``(b) Applicable Percentage.--For purposes of subsection (a), the 
applicable percentage in the case of qualified broadband local access 
facilities expenditures in connection with--
            ``(1) broadband telecommunications facilities, is 10 
        percent, and
            ``(2) enhanced broadband telecommunications facilities, is 
        15 percent.
    ``(c) Qualified broadband local access facilities expenditure.--For 
purposes of this section, the term `qualified broadband local access 
facilities expenditure' means any expenditure--
            ``(1) chargeable to capital account--
                    ``(A) for property for which depreciation is 
                allowable under section 168, and
                    ``(B) incurred in connection with broadband 
                telecommunications facilities or enhanced broadband 
                telecommunications facilities serving rural 
                subscribers, and
            ``(2) incurred during the period--
                    ``(A) beginning with the taxpayer's (or any 
                predecessor's) first taxable year beginning after the 
                date of the enactment of this section, and
                    ``(B) ending with the taxpayer's (or any 
                predecessor's) third taxable year beginning after such 
                date.
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Broadband telecommunications facilities.--The term 
        `broadband telecommunications facilities' means broadband local 
        access facilities capable of--
                    ``(A) transmitting voice, and
                    ``(B) downloading data at a rate of 1.5 MBPS and 
                uploading data at a rate of .5 MBPS.
            ``(2) Enhanced broadband telecommunications facilities.--
        The term `enhanced broadband telecommunications facilities' 
        means the broadband local access facilities capable of--
                    ``(A) transmitting voice, and
                    ``(B) downloading and uploading data at a rate of 
                10 MBPS.
            ``(3) Determination of broadband local access facilities.--
        Broadband local access facilities--
                    ``(A) begin at the switching point closest to the 
                rural subscriber, which is--
                            ``(i) the subscriber side of the nearest 
                        switching facility in the case of local 
                        exchange carriers,
                            ``(ii) the subscriber side of the headend 
                        or the node in the case of cable television 
                        operators, and
                            ``(iii) the subscriber side of the 
                        transmission and reception facilities in the 
                        case of a wireless or satellite carrier,
                    ``(B) end at the interface between the network and 
                the rural subscriber's location, and
                    ``(C) do not include any switching facility.
            ``(4) Rural subscriber.--The term `rural subscriber' means 
        a subscriber who lives in area which--
                    ``(A) is not within 10 miles of any incorporated or 
                census designated places 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.''
    (c) Special Rule for Mutual or Cooperative Telephone Companies.--
Section 501(c)(12)(B) of the Internal Revenue Code of 1986 (relating to 
list of exempt organizations) is amended by striking ``or'' at the end 
of clause (iii), by striking the period at the end of clause (iv) and 
inserting ``, or'', and by adding at the end the following new clause:
                            ``(v) which is not described in 
                        subparagraph (A), in an amount which does not 
                        exceed in any year an amount equal to the 
                        applicable percentage of the qualified 
                        broadband local access facilities expenditures 
                        (as determined in section 47A) of the mutual or 
                        cooperative telephone company for such year.''
    (d) Conforming Amendment.--The table of sections for subpart E of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after the item relating to section 47 the 
following:

``Sec. 47A. Rural telecommunications facilities credit.''
    (e) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to expenditures 
        incurred after the date of the enactment of this Act.
            (2) Special rule.--The amendments made by subsection (c) 
        shall apply to amounts received after the date of the enactment 
        of this Act.
                                 <all>