[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2424 Introduced in Senate (IS)]







106th CONGRESS
  2d Session
                                S. 2424

  To amend the Internal Revenue Code of 1986 to extend and expand the 
enhanced deduction for charitable contributions of computers to provide 
   greater public access to computers, including access by the poor.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 13, 2000

  Mr. Breaux 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 extend and expand the 
enhanced deduction for charitable contributions of computers to provide 
   greater public access to computers, including access by the poor.

    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 ``Digital Divide Elimination Act of 
2000''.

SEC. 2. CREDIT FOR PURCHASE OF COMPUTERS BY LOW-INCOME INDIVIDUALS.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 35 as section 36 and by inserting 
after section 34 the following new section:

``SEC. 35. PURCHASE OF COMPUTERS BY LOW-INCOME INDIVIDUALS.

    ``(a) In General.--In the case of an eligible individual, there 
shall be allowed as a credit against the tax imposed by this subtitle 
for the taxable year an amount equal to 50 percent of the amount paid 
by the taxpayer for qualified computer technology or equipment.
    ``(b) Dollar Limitation.--The credit allowed by subsection (a) for 
any taxable year shall not exceed $500.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Eligible individual.--The term `eligible individual' 
        means any taxpayer who is allowed a credit under section 32 
        (relating to earned income credit) for the taxable year.
            ``(2) Qualified computer technology or equipment.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `qualified computer 
                technology or equipment' means any computer technology 
                or equipment (as defined in section 170(e)(6)) acquired 
                by purchase (as defined in section 170(d)(2)).
                    ``(B) Exceptions.--
                            ``(i) Certain software excluded.--Such term 
                        shall not include game software or any other 
                        software which is not necessary for--
                                    ``(I) use of the computer for 
                                access and use of the Internet 
                                (including email), or
                                    ``(II) business or educational use.
                            ``(ii) Computer must be capable of internet 
                        access.--Such term shall not include any 
                        computer which does not have a modem or other 
                        equipment capable of supporting Internet 
                        access.''
    (b) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting before the period ``, or 
        from section 35 of such Code''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of such Code is amended by striking 
        the last item and inserting the following new items:

``Sec. 35. Purchase of computers by low-income individuals.
``Sec. 36. Overpayments of tax.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 3. EXTENSION AND EXPANSION OF ENHANCED DEDUCTION FOR CHARITABLE 
              CONTRIBUTIONS OF COMPUTERS.

    (a) Extension.--Subparagraph (F) of section 170(e)(6) of the 
Internal Revenue Code of 1986 (relating to special rule for 
contributions of computer technology and equipment for elementary or 
secondary school purposes) is amended by striking ``December 31, 2000'' 
and inserting ``June 30, 2004''.
    (b) Expansion.--
            (1) In general.--Paragraph (6) of section 170(e) of such 
        Code is amended by redesignating subparagraphs (C), (D), (E), 
        and (F) as subparagraphs (D), (E), (F), and (G), respectively, 
        and by striking all that precedes subparagraph (D) (as so 
        redesignated) and inserting the following:
            ``(6) Special rule for contributions of computer technology 
        and equipment.--
                    ``(A) In general.--The amount of any qualified 
                computer contribution which is taken into account under 
this section shall be the greater of--
                            ``(i) the amount determined without regard 
                        to paragraph (1), or
                            ``(ii) the amount determined with regard to 
                        paragraph (1).
                    ``(B) Qualified computer contribution.--For 
                purposes of this paragraph, the term `qualified 
                computer contribution' means a charitable contribution 
                by a corporation of any computer technology or 
                equipment, but only if--
                            ``(i) the contribution is to a qualified 
                        organization,
                            ``(ii) the contribution is made not later 
                        than 2 years after the date the taxpayer 
                        acquired the property (or in the case of 
                        property constructed by the taxpayer, the date 
                        the construction of the property is 
                        substantially completed),
                            ``(iii) the original use of the property is 
                        by the donor or the donee,
                            ``(iv) substantially all of the use of the 
                        property by the donee is for use within the 
                        United States and, in the case of a qualified 
                        educational organization, for educational 
                        purposes in any of the grades K-12 that are 
                        related to the purpose or function of the 
                        organization,
                            ``(v) the property is not transferred by 
                        the donee in exchange for money, other 
                        property, or services, except for shipping, 
                        installation and transfer costs,
                            ``(vi) in the case of a qualified 
                        educational organization, the property will fit 
                        productively into the entity's education plan, 
                        and
                            ``(vii) the entity's use and disposition of 
                        the property will be in accordance with the 
                        provisions of clauses (iv) and (v).
                    ``(C) Qualified organization.--For purposes of this 
                paragraph--
                            ``(i) In general.--The term `qualified 
                        organization' means--
                                    ``(I) any qualified educational 
                                organization,
                                    ``(II) any public library located 
                                in an area which is an empowerment 
                                zone, enterprise community, or a high-
                                poverty area (as determined by the 
                                Secretary),
                                    ``(III) any technology center 
                                located in such an area, and
                                    ``(IV) any entity described in 
                                section 501(c)(3) and exempt from tax 
                                under section 501(a) that is organized 
                                primarily for purposes of providing 
                                computers without charge to lower 
                                income families.
                            ``(ii) Qualified educational 
                        organization.--For purposes of clause (i), the 
                        term `qualified educational organization' 
                        means--
                                    ``(I) an educational organization 
                                described in subsection (b)(1)(A)(ii), 
                                and
                                    ``(II) an entity described in 
                                section 501(c)(3) and exempt from tax 
                                under section 501(a) (other than an 
                                entity described in subclause (I)) that 
                                is organized primarily for purposes of 
                                supporting elementary and secondary 
                                education.''
            (2) Conforming amendment.--Subparagraph (D) of section 
        170(e)(6) of such Code, as redesignated by paragraph (1), is 
        amended by striking ``qualified elementary or secondary 
        educational contribution'' and inserting ``qualified computer 
        contribution''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
                                 <all>