[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1856 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                S. 1856

  To amend the Internal Revenue Code of 1986 to promote employer and 
    employee participation in telework arrangements, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

            December 19 (legislative day, December 18), 2001

    Mr. Kerry (for himself, Mr. Burns, Mr. Corzine, and Mr. Baucus) 
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 promote employer and 
    employee participation in telework arrangements, and for other 
                               purposes.

    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 ``Teleworking Advancement Act''.

 SEC. 2. CREDIT FOR TELEWORKING.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to foreign tax credit, 
etc.) is amended by inserting after section 30A the following new 
section:

``SEC. 30B. TELEWORK CREDIT.

    ``(a) General Rule.--There shall be allowed as a credit against the 
tax imposed by this chapter for any taxable year an amount equal to the 
sum of--
            ``(1) the employer telework tax credit, plus
            ``(2) the telework equipment tax credit.
    ``(b) Employer Telework Tax Credit; Telework Equipment Tax 
Credit.--For purposes of this section--
            ``(1) Employer telework tax credit.--Except as provided for 
        in subsection (c)(1), the employer telework tax credit for any 
        taxable year is equal to $500 for each employee who 
        participates in an employer sponsored telework arrangement 
        during the taxable year.
            ``(2) Telework equipment tax credit.--Except as provided 
        for in subsection (c)(2), the telework equipment tax credit for 
        any taxable year is equal to 10 percent of qualified telework 
        expenses paid or incurred during the taxable year by either the 
        employer on behalf of the employee, or directly by the 
        employee, pursuant to an employer sponsored telework 
        arrangement.
    ``(c) Special Rule for Disabled Employees and Employees of Small 
Businesses.--For purposes of this section:
            ``(1) For each employee who is covered under the Americans 
        with Disabilities Act of 1990 (42 U.S.C. 1201), or for each 
        employee of a small business, the employer telework tax credit 
        for any taxable year is equal to $1,000 for each employee who 
        participates in an employer sponsored telework arrangement 
        during the taxable year.
            ``(2) For each employee who is covered under the Americans 
        with Disabilities Act of 1990 (42 U.S.C. 1201), or for each 
        employee of a small business, the telework equipment tax credit 
        for any taxable year is equal to 20 percent of qualified 
        telework expenses paid or incurred during the taxable year by 
        either the employer on behalf of the employee, or directly by 
        the employee, pursuant to an employer sponsored telework 
        arrangement.
    ``(d) Credit Adjustments and Limitations.--
            ``(1) Credit adjustments.--In computing the credit allowed 
        under subsection (b)(1) or (c)(1) for any taxable year, the 
        following adjustments shall apply:
                    ``(A) In the case of an employee who participates 
                in an employer sponsored telework arrangement for less 
                than the full taxable year, the credit amount 
                identified in subsection (b)(1) or (c)(1), whichever is 
                applicable, shall be multiplied by a fraction, the 
                numerator of which is the total number of months in the 
                taxable year that the employee participates in an 
                employer sponsored telework arrangement and the 
                denominator of which is 12. For purposes of the 
                preceding sentence, an employee is considered to be 
                participating in an employer sponsored telework 
                arrangement for a month if the employee teleworks for 
                at least one full day of such month.
                    ``(B) In the case of an employee who participates 
                in an employer sponsored telework arrangement but does 
                not telework every day of the taxable year that the 
                employee is required by his or her employer to work, 
                the credit amount identified in subsection (b)(1) or 
                (c)(1), whichever is applicable, shall be multiplied by 
                a fraction, the numerator of which is the total number 
                of full days in the taxable year that the employee 
                teleworks and the denominator of which is the total 
                number of days in the taxable year that the employee is 
                required by his or her employer to work.
            ``(2) Telework equipment credit limitations.--
                    ``(A) In computing the credit allowed under 
                subsection (b)(2) for any taxable year, the following 
                limitations shall apply:
                            ``(i) The maximum credit claimed by any 
                        employer with respect to qualified telework 
                        expenses paid or incurred on behalf of an 
                        employee shall not exceed $500 for each 
                        employee who participates in an employer 
                        sponsored telework arrangement.
                            ``(ii) The maximum credit claimed by any 
                        employee with respect to qualified telework 
                        expenses paid or incurred directly by the 
                        employee pursuant to an employer sponsored 
                        telework arrangement shall not exceed $500.
                    ``(B) In computing the credit allowed under 
                subsection (c)(2) for any taxable year with respect to 
                employees who are covered under the Americans with 
                Disabilities Act of 1990 (42 U.S.C. 1201), or for each 
                employee of  a small business, the following 
limitations shall apply:
                            ``(i) The maximum credit claimed by any 
                        employer with respect to qualified telework 
                        expenses paid or incurred on behalf of an 
                        employee shall not exceed $1,000 for each 
                        employee who participates in an employer 
                        sponsored telework arrangement.
                            ``(ii) The maximum credit claimed by any 
                        employee with respect to qualified telework 
                        expenses paid or incurred directly by the 
                        employee pursuant to an employer sponsored 
                        telework arrangement shall not exceed $1,000.
    ``(e) Definitions.--For purposes of this section--
            ``(1) Employer sponsored telework arrangement.--The term 
        `employer sponsored telework arrangement' means an arrangement 
        established by an employer that enables employees of the 
        employer to telework for a minimum of 25 full days per taxable 
        year. Such an arrangement shall be supported by a written 
        agreement between the employer and each teleworking employee 
        that describes the terms of the employer sponsored telework 
        arrangement.
            ``(2) Qualified telework expenses.--
                    ``(A) In general.--The term `qualified telework 
                expenses' shall include expenses paid or incurred for 
                computers, computer-related hardware and software, 
                modems, data processing equipment, telecommunications 
                equipment, and access to Internet or broadband 
                technologies, including applicable taxes and other 
                expenses for the delivery, installation, or maintenance 
                of such equipment.
                    ``(B) Only certain expenses taken into account.--
                Expenses shall be taken into account under subparagraph 
                (A) only to the extent they are authorized by the 
                employer pursuant to an employer sponsored telework 
                arrangement and are necessary to enable the employee to 
                telework.
            ``(3) Small business.--The term `small business' means a 
        business with an average of 100 or fewer employees during the 
        taxable year.
            ``(4) Telework.--An employee shall be treated as engaged in 
        telework if--
                    ``(A) the employee's normal and regular work 
                functions are performed at a fixed location provided by 
                the employer,
                    ``(B)(i) the employee, under an employer sponsored 
                telework arrangement, performs such functions at the 
                employee's residence or at a location specifically 
                designed to allow employees to perform such functions 
                closer to their residence, and
                            ``(ii) the performance of such functions at 
                        such residence or location eliminates or 
                        substantially reduces the physical commute of 
                        the employee to the fixed location described in 
                        subparagraph (A), and
                    ``(C) the employee transmits by electronic or other 
                communications medium the employee's work product from 
                such residence or location to the fixed location where 
                such functions would otherwise have been performed.
    ``(f) Special Rules.--
            ``(1) Limitation based on amount of tax.--
                    ``(A) Liability for tax.--The credit allowable 
                under subsection (a) for any taxable year shall not 
                exceed the excess (if any) of--
                            ``(i) the regular tax for the taxable year, 
                        reduced by the sum of the credits allowable 
                        under subpart A and the preceding sections of 
                        this subpart, over
                            ``(ii) the tentative minimum tax for the 
                        taxable year.
                    ``(B) Carryforward of unused credit.--If the amount 
                of the credit allowable under subsection (a) for any 
                taxable year exceeds the limitation under paragraph 
                (1)(A) for the taxable year, the excess shall be 
                carried to the succeeding taxable year and added to the 
                amount allowable as a credit under subsection (a) for 
                such succeeding taxable year.
            ``(2) Basis reduction.--The basis of any property for which 
        a credit is allowable under subsection (a) shall be reduced by 
        the amount of such credit (determined without regard to 
        paragraph (1)).
            ``(3) Recapture.--The Secretary shall, by regulations, 
        provide for recapturing the benefit of any credit allowable 
        under subsection (a) with respect to any property which ceases 
        to be property eligible for such credit.
            ``(4) Property used outside united states, etc., not 
        qualified.--No credit shall be allowed under subsection (a) 
        with respect to any property referred to in section 50(b) or 
        with respect to the portion of the cost of any property taken 
        into account under section 179.
            ``(5) Election not to take credits.--No credits shall be 
        allowed under subsection (a) for any expense if the taxpayer 
        elects to not have this section apply with respect to such 
        expense.
            ``(6) Denial of double benefit.--No deduction or credit 
        (other than under this section) shall be allowed under this 
        chapter with respect to any expense which is taken into account 
        in determining the credit under this section.
            ``(7) Documentation.--Employers and employees are 
        responsible for maintaining adequate documentation to support 
        any credits claimed under this section.''
    (b) Conforming Amendment.--Subsection (a) of section 1016 of the 
Internal Revenue Code of 1986 (relating to general rule for adjustments 
to basis) is amended by striking ``and'' at the end of paragraph (27), 
by striking the period at the end of paragraph (28) and inserting ``, 
and'', and by adding at the end the following:
            ``(29) in the case of property with respect to which a 
        credit was allowed under section 30B, to the extent provided in 
        section 30B(f)(2).''
    (c) Clerical Amendment.--The table of sections for subpart B 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 30A the 
following new item:

                              ``Sec. 30B. Telework credit.''
    (d) Regulatory Matters.--
            (1) Prohibition.--No Federal or State agency or 
        instrumentality shall adopt regulations or ratemaking 
        procedures that would have the effect of confiscating any 
        credit or portion thereof allowed under sections 30B of the 
        Internal Revenue Code of 1986 (as added by this Act) or 
        otherwise subverting the purpose of this Act.
            (2) Treasury regulatory authority.--It is the intent of 
        Congress in providing the telework tax credit under section 30B 
        of the Internal Revenue Code of 1986 (as added by this Act) to 
        promote broad participation in employer sponsored telework 
        arrangements by providing incentives to both employers and 
        employees. Accordingly, the Secretary of the Treasury shall 
        prescribe such regulations as may be necessary or appropriate 
        to carry out the purposes of section 30B of such Code, 
        including regulations describing the information, records, and 
        data that employers and employees are required to provide the 
        Secretary to substantiate compliance with the requirements of 
        this section and section 30B of such Code. Until the Secretary 
        prescribes such regulations, employers and employees may base 
        such determinations on any reasonable method that is consistent 
        with the purposes of section 30B of such Code.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

SEC. 3. SMALL BUSINESS TELECOMMUTING PILOT PROGRAM.

    (a) In General.--In accordance with this section, the Administrator 
shall conduct, in not more than 5 of the Small Business 
Administration's regions, a pilot program to raise awareness about 
telecommuting among small business employers and to encourage such 
employers to offer telecommuting options to employees.
    (b) Special Outreach to Individuals With Disabilities.--In carrying 
out subsection (a), the Administrator shall make special efforts to do 
outreach to--
            (1) businesses owned by or employing individuals with 
        disabilities, and disabled American veterans in particular;
            (2) Federal, State, and local agencies having knowledge and 
        expertise in assisting individuals with disabilities or 
        disabled American veterans; and
            (3) any group or organization, the primary purpose of which 
        is to aid individuals with disabilities or disabled American 
        veterans.
    (c) Permissible Activities.--In carrying out the pilot program, the 
Administrator may only--
            (1) produce educational materials and conduct presentations 
        designed to raise awareness in the small business community of 
        the benefits and the ease of telecommuting;
            (2) conduct outreach--
                    (A) to small business concerns that are considering 
                offering telecommuting options; and
                    (B) as provided in subsection (b); and
            (3) acquire telecommuting technologies and equipment to be 
        used for demonstration purposes.
    (d) Selection of Regions.--In determining which regions will 
participate in the pilot program, the Administrator shall give priority 
consideration to regions in which Federal agencies and private-sector 
employers have demonstrated a strong regional commitment to 
telecommuting.
    (e) Report to Congress.--Not later than 2 years after the first 
date on which funds are appropriated to carry out this section, the 
Administrator shall transmit to the Committee on Small Business of the 
House of Representatives and the Committee on Small Business of the 
Senate a report containing the results of an evaluation of the pilot 
program and any recommendations as to whether the pilot program, with 
or without modification, should be extended to include the 
participation of all Small Business Administration regions.
    (f) Definitions.--In this section--
            (1) the term ``Administrator'' means the Administrator of 
        the Small Business Administration;
            (2) the term ``disability'' has the same meaning as in 
        section 3 of the Americans with Disabilities Act of 1990 (42 
        U.S.C. 12102);
            (3) the term ``pilot program'' means the program 
        established under this section; and
            (4) the term ``telecommuting'' means the use of 
        telecommunications to perform work functions under 
        circumstances which reduce or eliminate the need to commute.
    (g) Termination.--The pilot program shall terminate 2 years after 
the first date on which funds are appropriated to carry out this 
section.
    (h) Authorization of Appropriations.--There is authorized to be 
appropriated to the Small Business Administration $5,000,000 to carry 
out this section.
                                 <all>