[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2601 Introduced in Senate (IS)]







106th CONGRESS
  2d Session
                                S. 2601

 To amend the Internal Revenue Code of 1986 to exclude from the gross 
income of an employee any employer-provided home computer and Internet 
                                access.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 22, 2000

 Mr. Ashcroft 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 exclude from the gross 
income of an employee any employer-provided home computer and Internet 
                                access.

    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 ``Bridging the Digital Divide Act of 
2000''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Only 40 percent of computer sales are being made to 
        households purchasing a computer for the first time.
            (2) According to Forrester Research, only 33 percent of 
        African American households are on-line, 10 percent fewer than 
        the national average.
            (3) According to Forrester Research, income is the main 
        driver of Internet adoption.
            (4) Too many people are opting out or being left behind by 
        the Internet economy.
            (5) According to Dr. Mark E. Dean, a specialist in advanced 
        technology development for IBM, the solution to the digital 
        divide is to put computers in as many homes as possible.
            (6) According to a 1998 study by the Department of 
        Commerce, households with income of at least $75,000 are over 
        20 times more likely to have Internet access than those at the 
        lowest income levels.
            (7) According to the same report, black and Hispanic 
        households are roughly two-fifths as likely to have Internet 
        access as white households.
            (8) When employers have tried to help bridge this gap by 
        providing their employees with computers and Internet access, 
        the Federal tax code has widened the digital divide by treating 
        the receipt of the new equipment as taxable income.

SEC. 3. QUALIFIED HOME COMPUTER FRINGE BENEFIT.

    (a) In General.--Section 132(a) of the Internal Revenue Code of 
1986 (relating to the exclusion from gross income of certain fringe 
benefits) is amended by striking ``or'' at the end of paragraph (5), by 
striking the period at the end of paragraph (6) and inserting ``, or'' 
and by adding at the end the following new paragraph:
            ``(7) qualified home computer fringe.''.
    (b) Qualified Home Computer Fringe.--Section 132 of the Internal 
Revenue Code of 1986 is amended by redesignating subsections (h) 
through (m) as subsections (i) through (n), respectively, and by 
inserting after subsection (g) the following new subsection (h):
    ``(h) Qualified Home Computer Fringe.--For purposes of this 
section--
            ``(1) In general.--The term `qualified home computer 
        fringe' means a home computer or Internet service or both 
        provided by an employer to an employee under a written program 
        adopted by such employer.
    ``(2) Definitions and special rules.--
            ``(A) Home computer.--
                            ``(i) In general.--The term `home computer' 
                        means computer technology or equipment (as 
                        defined in section 170(e)(6)(E)(i)) which--
                                    ``(I) at a minimum, is capable of 
                                providing access to the Internet, and 
                                is able to perform office automation 
                                and e-learning functions; and
                                    ``(II) is furnished for home use.
                            ``(ii) Home use of computers.--For purposes 
                        of clause (i)(II), the rules under subsection 
                        (i)(2) shall apply.
            ``(B) Internet service.--The term `Internet service' means 
        access to the Internet through an Internet Service Provider 
        (including the ability to send and receive electronic mail) 
        from one's home.''.
    (c) No Discrimination in Favor of Highly Compensated.--Paragraph 
(1) of subsection 132(k) of the Internal Revenue Code of 1986, as 
redesignated by subsection (b), is amended to read as follows:
            ``(1) Exclusions under subsection (a)(1), (2), and (7) 
        apply to highly compensated employees only if no 
        discrimination.--Paragraphs (1), (2), and (7) of subsection (a) 
        shall apply with respect to any fringe benefit described 
        therein provided with respect to any highly compensated 
        employee only if such fringe benefit is available on 
        substantially the same terms to each member of a group of 
        employees which is defined under a reasonable classification 
        set up by the employer which does not discriminate in favor of 
        highly compensated employees.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2000.
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