I

106TH CONGRESS

1ST SESSION H. R. 2308

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

for computer donations to schools and public libraries and to allow

a tax credit for donated computers.

IN THE HOUSE OF REPRESENTATIVES

JUNE 22, 1999

Mr. PORTMAN (for himself, Mr. BECERRA, Mr. CUNNINGHAM, Mr. MATSUI,

Mr. ARMEY, Mr. WATTS of Oklahoma, Mr. TANNER, Mr. JEFFERSON,

Mr. KUYKENDALL, Mrs. THURMAN, Mr. FROST, Mr. FLETCHER, Mr.

MOAKLEY, Mr. FARR of California, Mr. SHAYS, Mr. LATHAM, Mr.

CUMMINGS, Ms. LEE, Mr. BILBRAY, Mr. SHOWS, Mr. REYES, Mrs.

KELLY, Mrs. CHRISTENSEN, Mr. FILNER, Mr. PITTS, Mr. DOOLEY of

California, Mr. SCOTT, Mr. PICKERING, Ms. LOFGREN, Ms. SANCHEZ,

Mr. COOK, Mrs. NAPOLITANO, Mr. GREEN of Texas, Mr. MCINTOSH, Ms.

MILLENDER-MCDONALD, Ms. CARSON, Mrs. MORELLA, Mr. MORAN of

Virginia, Mr. NADLER, Mr. PASTOR, Mr. KILDEE, Mr. HORN, Mr. KENNEDY of Rhode Island, and Mr. HINCHEY) introduced the following bill;

which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to expand

the deduction for computer donations to schools and

public libraries 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,
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1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘New Millennium Class3 rooms Act’’.

4 SEC. 2. EXPANSION OF DEDUCTION FOR COMPUTER DONA5 TIONS TO SCHOOLS AND PUBLIC LIBRARIES.

6 (a) EXPANSION OF COMPUTER DONATIONS TO PUB7 LIC LIBRARIES.—

8 (1) IN GENERAL.—Paragraph (6) of section

9 170(e) of the Internal Revenue Code of 1986 (relat10 ing to special rule for contributions of computer

11 technology and equipment for elementary or sec12 ondary school purposes) is amended by striking

13 ‘‘qualified elementary or secondary educational con14 tribution’’ each place it occurs in the headings and

15 text and inserting ‘‘qualified computer contribution’’.

16 (2) QUALIFIED COMPUTER CONTRIBUTION DE17 FINED.—Subclause (II) of section 170(e)(6)(B)(i) of

18 such Code (relating to qualified elementary or sec19 ondary educational contribution) is amended by

20 striking ‘‘or’’ at the end of subclause (I), by insert21 ing ‘‘or’’ at the end of subclause (II), and by insert22 ing after subclause (II) the following new subclause:

23 ‘‘(III) a public library (within the

24 meaning of section 213(2)(A) of the

25 Library Services and Technology Act

26 (20 U.S.C. 9122(2)(A)), as in effect
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1 on the date of the enactment of the

2 New Millennium Classrooms Act, es3 tablished and maintained by an entity

4 described in subsection (c)(1).’’.

5 (3) CONFORMING AMENDMENT.—The heading

6 of paragraph (6) of section 170(e) of such Code is

7 amended by striking ‘‘ELEMENTARY OR SECONDARY

8 SCHOOL PURPOSES’’ and inserting ‘‘SCHOOL AND LI9 BRARY PURPOSES’’.

10 (b) EXTENSION OF AGE OF ELIGIBLE COM11 PUTERS.—Clause (ii) of section 170(e)(6)(B) of such Code

12 (defining qualified elementary or secondary educational

13 contribution) is amended—

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

15 years’’, and

16 (2) by striking ‘‘date’’ the first place it appears

17 and all that follows and inserting the following:

18 ‘‘date—

19 ‘‘(I) the taxpayer acquired or re20 acquired the property,

21 ‘‘(II) construction of the property

22 is substantially completed in the case

23 of property constructed by the tax24 payer for its own use in its trade or
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1 business and which is not inventory

2 with respect to the taxpayer, or

3 ‘‘(III) the property was originally

4 sold, leased, or otherwise disposed of

5 by the taxpayer in the case of prop6 erty reacquired by the taxpayer.’’.

7 (c) REACQUIRED COMPUTERS ELIGIBLE FOR DONA8 TION.—Clause (iii) of section 170(e)(6)(B) of such Code

9 (defining qualified elementary or secondary educational

10 contribution) is amended by inserting ‘‘, the person from

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

12 donor’’.

13 (d) EFFECTIVE DATE.—The amendments made by

14 this section shall apply to contributions made in taxable

15 years ending after the date of the enactment of this Act.

16 SEC. 3. CREDIT FOR COMPUTER DONATIONS TO SCHOOLS

17 AND PUBLIC LIBRARIES.

18 (a) IN GENERAL.—Subpart D of part IV of sub19 chapter A of chapter 1 of the Internal Revenue Code of

20 1986 (relating to business related credits) is amended by

21 adding at the end the following:

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

23 SCHOOLS AND PUBLIC LIBRARIES.

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

25 the school and public library computer donation credit de-
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1 termined under this section is an amount equal to 30 per2 cent of the qualified computer contributions made by the

3 taxpayer during the taxable year.

4 ‘‘(b) INCREASED PERCENTAGE FOR CONTRIBUTIONS

5 TO SCHOOLS OR PUBLIC LIBRARIES IN EMPOWERMENT

6 ZONES, ENTERPRISE COMMUNITIES, AND INDIAN RES7 ERVATIONS.—In the case of a qualified computer con8 tribution to an educational organization, public library, or

9 entity located in an empowerment zone or enterprise com10 munity designated under section 1391 or an Indian res11 ervation (as defined in section 168(j)(6)), subsection (a)

12 shall be applied by substituting ‘50 percent’ for ‘30 per13 cent’.

14 ‘‘(c) LIMITATION.—No credit shall be allowed under

15 subsection (a) for the contribution of a computer (as de16 fined in section 168(i)(2)(B)(ii)) if the computer software

17 (as defined in section 197(e)(3)(B)) that serves as the op18 erating system of such computer has not been lawfully in19 stalled.

20 ‘‘(d) QUALIFIED COMPUTER CONTRIBUTION.—For

21 purposes of this section, the term ‘qualified computer con22 tribution’ has the meaning given such term by section

23 170(e)(6)(B).
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1 ‘‘(e) CERTAIN RULES MADE APPLICABLE.—For pur2 poses of this section, rules similar to the rules of para3 graphs (1) and (2) of section 41(f) shall apply.

4 ‘‘(f) TERMINATION.—This section shall not apply to

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

6 years after the date of the enactment of the New Millen7 nium Classrooms Act.’’

8 (b) CURRENT YEAR BUSINESS CREDIT CALCULA9 TION.—Section 38(b) of such Code (relating to current

10 year business credit) is amended by striking ‘‘plus’’ at the

11 end of paragraph (11), by striking the period at the end

12 of paragraph (12) and inserting ‘‘, plus’’, and by adding

13 at the end the following:

14 ‘‘(13) the school and public library computer

15 donation credit determined under section 45D(a).’’.

16 (c) DISALLOWANCE OF DEDUCTION BY AMOUNT OF

17 CREDIT.—Section 280C of such Code (relating to certain

18 expenses for which credits are allowable) is amended by

19 adding at the end the following:

20 ‘‘(d) CREDIT FOR SCHOOL AND PUBLIC LIBRARY

21 COMPUTER DONATIONS.—No deduction shall be allowed

22 for that portion of the qualified computer contributions

23 (as defined in section 170(e)(6)(B)) made during the tax24 able year that is equal to the amount of credit determined

25 for the taxable year under section 45D(a). In the case of
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1 a corporation which is a member of a controlled group of

2 corporations (within the meaning of section 52(a)) or a

3 trade or business which is treated as being under common

4 control with other trades or businesses (within the mean5 ing of section 52(b)), this subsection shall be applied

6 under rules prescribed by the Secretary similar to the

7 rules applicable under subsections (a) and (b) of section

8 52.’’

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

10 section 39 of such Code (relating to carryback and

11 carryforward of unused credits) is amended by adding at

12 the end the following:

13 ‘‘(9) NO CARRYBACK OF SCHOOL AND PUBLIC

14 LIBRARY COMPUTER DONATION CREDIT BEFORE EF15 FECTIVE DATE.—No amount of unused business

16 credit available under section 45D may be carried

17 back to a taxable year beginning on or before the

18 date of the enactment of this paragraph.’’.

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

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

21 of such Code is amended by inserting after the item relat22 ing to section 45C the following:

‘‘Sec. 45D. Credit for computer donations to schools and public

libraries.’’

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

24 this section shall apply to contributions made in taxable
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1 years beginning after the date of the enactment of this

2 Act.

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