II

106TH CONGRESS

1ST SESSION S. 542

To amend the Internal Revenue Code of 1986 to expand the deduction

for computer donations to schools and to allow a tax credit for donated

computers.

IN THE SENATE OF THE UNITED STATES

MARCH 4, 1999

Mr. ABRAHAM (for himself, Mr. WYDEN, Mr. HATCH, Mr. KERREY, Mr.

COVERDELL, Mr. DASCHLE, Mr. JEFFORDS, Mr. LIEBERMAN, Mr. ALLARD, Mr. GORTON, Mr. BURNS, and Mr. MCCONNELL) 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 expand

the deduction for computer donations to schools and

to allow a tax credit for donated computers.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘New Millennium Class5 rooms Act’’.
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1 SEC. 2. EXPANSION OF DEDUCTION FOR COMPUTER DONA2 TIONS TO SCHOOLS.

3 (a) EXTENSION OF AGE OF ELIGIBLE COMPUT4 ERS.—Section 170(e)(6)(B)(ii) of the Internal Revenue

5 Code of 1986 (defining qualified elementary or secondary

6 educational contribution) is amended—

7 (1) by striking ‘‘2 years’’ and inserting ‘‘3

8 years’’, and

9 (2) by inserting ‘‘for the taxpayer’s own use’’

10 after ‘‘constructed by the taxpayer’’.

11 (b) REACQUIRED COMPUTERS ELIGIBLE FOR DONA12 TION.—

13 (1) IN GENERAL.—Section 170(e)(6)(B)(iii) of

14 the Internal Revenue Code of 1986 (defining quali15 fied elementary or secondary educational contribu16 tion) is amended by inserting ‘‘, the person from

17 whom the donor reacquires the property,’’ after ‘‘the

18 donor’’.

19 (2) CONFORMING AMENDMENT.—Section

20 170(e)(6)(B)(ii) of such Code is amended by insert21 ing ‘‘or reaquired’’ after ‘‘acquired’’.

22 (c) EFFECTIVE DATE.—The amendments made by

23 this section shall apply to contributions made in taxable

24 years ending after the date of the enactment of this Act.
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1 SEC. 3. CREDIT FOR COMPUTER DONATIONS TO SCHOOLS.

2 (a) IN GENERAL.—Subpart D of part IV of sub3 chapter A of chapter 1 of the Internal Revenue Code of

4 1986 (relating to business related credits) is amended by

5 adding at the end the following:

6 ‘‘SEC. 45D. CREDIT FOR COMPUTER DONATIONS TO

7 SCHOOLS.

8 ‘‘(a) GENERAL RULE.—For purposes of section 38,

9 the school computer donation credit determined under this

10 section is an amount equal to 30 percent of the qualified

11 elementary or secondary educational contributions (as de12 fined in section 170(e)(6)(B)) made by the taxpayer dur13 ing the taxable year.

14 ‘‘(b) INCREASED PERCENTAGE FOR CONTRIBUTIONS

15 TO SCHOOLS IN EMPOWERMENT ZONES, ENTERPRISE

16 COMMUNITIES, AND INDIAN RESERVATIONS.—In the case

17 of a qualified elementary or secondary educational con18 tribution (as so defined) to an educational organization

19 or entity located in an empowerment zone or enterprise

20 community designated under section 1391 or an Indian

21 reservation (as defined in section 168(j)(6)), subsection

22 (a) shall be applied by substituting ‘50 percent’ for ‘30

23 percent’.

24 ‘‘(c) CERTAIN RULES MADE APPLICABLE.—For pur25 poses of this section, rules similar to the rules of para26 graphs (1) and (2) of section 41(f) shall apply.
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1 ‘‘(d) TERMINATION.—This section shall not apply to

2 taxable years beginning on or after the date which is 3

3 years after the date of the enactment of the New Millen4 nium Classrooms Act.

5 (b) CURRENT YEAR BUSINESS CREDIT CALCULA6 TION.—Section 38(b) of the Internal Revenue Code of

7 1986 (relating to current year business credit) is amended

8 by striking ‘‘plus’’ at the end of paragraph (11), by strik9 ing the period at the end of paragraph (12) and inserting

10 ‘‘, plus’’, and by adding at the end the following:

11 ‘‘(13) the school computer donation credit de12 termined under section 45D(a).’’

13 (c) DISALLOWANCE OF DEDUCTION BY AMOUNT OF

14 CREDIT.—Section 280C of the Internal Revenue Code of

15 1986 (relating to certain expenses for which credits are

16 allowable) is amended by adding at the end the following:

17 ‘‘(d) CREDIT FOR SCHOOL COMPUTER DONA18 TIONS.—No deduction shall be allowed for that portion of

19 the qualified elementary or secondary educational con20 tributions (as defined in section 170(e)(6)(B)) made dur21 ing the taxable year that is equal to the amount of credit

22 determined for the taxable year under section 45D(a). In

23 the case of a corporation which is a member of a controlled

24 group of corporations (within the meaning of section

25 52(a)) or a trade or business which is treated as being
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1 under common control with other trades or businesses

2 (within the meaning of section 52(b)), this subsection shall

3 be applied under rules prescribed by the Secretary similar

4 to the rules applicable under subsections (a) and (b) of

5 section 52.’’

6 (d) LIMITATION ON CARRYBACK.—Subsection (d) of

7 section 39 of the Internal Revenue Code of 1986 (relating

8 to carryback and carryforward of unused credits) is

9 amended by adding at the end the following:

10 ‘‘(9) NO CARRYBACK OF SCHOOL COMPUTER

11 DONATION CREDIT BEFORE EFFECTIVE DATE.—No

12 amount of unused business credit available under

13 section 45D may be carried back to a taxable year

14 beginning on or before the date of the enactment of

15 this paragraph.’’

16 (e) CLERICAL AMENDMENT.—The table of sections

17 for subpart D of part IV of subchapter A of chapter 1

18 of the Internal Revenue Code of 1986 is amended by in19 serting after the item relating to section 45C the following:

‘‘Sec. 45D. Credit for computer donations to schools.’’

20 (f) EFFECTIVE DATE.—The amendments made by

21 this section shall apply to contributions made in taxable

22 years beginning after the date of the enactment of this

23 Act.

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