I

107TH CONGRESS

1ST SESSION H. R. 1415

To amend the Internal Revenue Code of 1986 to provide an income tax

credit to holders of bonds financing new communications technologies,

and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

APRIL 4, 2001

Mr. RANGEL (for himself, Mr. MCNULTY, Mr. TOWNS, Mr. LAFALCE, Ms.

SLAUGHTER, Mr. HINCHEY, Mr. CROWLEY, Mrs. MALONEY of New York,

and Mr. SERRANO) 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 provide

an income tax credit to holders of bonds financing new

communications technologies, and for other purposes.

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 ‘‘Tech Bond Initiative

5 of 2001’’.

6 SEC. FINDINGS.

7 Congress finds the following:
2

•HR 1415 IH

1 (1) Access to high-speed Internet is as impor2 tant to 21st Century businesses as access to the rail3 roads meant to businesses of the last century.

4 (2) In States across the Nation, up to one-third

5 of the population lacks access to high-speed Inter6 net.

7 (3) Companies without access to high-speed

8 Internet are at a competitive disadvantage.

9 (4) Tech bonds would give State and local gov10 ernments incentives to expand broadband deploy11 ment in their communities.

12 SEC. 2. CREDIT TO HOLDERS OF QUALIFIED TECHNOLOGY

13 BONDS.

14 (a) IN GENERAL.—Part IV of subchapter A of chap15 ter 1 of the Internal Revenue Code of 1986 (relating to

16 credits against tax) is amended by adding at the end the

17 following new subpart:

18 ‘‘Subpart H—Nonrefundable Credit for Holders of

19 Qualified Technology Bonds

‘‘Sec. 54. Credit to holders of qualified technology bonds.

20 ‘‘SEC. 54. CREDIT TO HOLDERS OF QUALIFIED TECH21 NOLOGY BONDS.

22 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of a tax23 payer who holds a qualified technology bond on a credit

24 allowance date of such bond which occurs during the tax-
3

•HR 1415 IH

1 able year, there shall be allowed as a credit against the

2 tax imposed by this chapter for such taxable year the

3 amount determined under subsection (b).

4 ‘‘(b) AMOUNT OF CREDIT.—

5 ‘‘(1) IN GENERAL.—The amount of the credit

6 determined under this subsection with respect to any

7 qualified technology bond is the amount equal to the

8 product of—

9 ‘‘(A) the credit rate determined by the Sec10 retary under paragraph (2) for the month in

11 which such bond was issued, multiplied by

12 ‘‘(B) the face amount of the bond held by

13 the taxpayer on the credit allowance date.

14 ‘‘(2) DETERMINATION.—During each calendar

15 month, the Secretary shall determine a credit rate

16 which shall apply to bonds issued during the fol17 lowing calendar month. The credit rate for any

18 month is the percentage which the Secretary esti19 mates will permit the issuance of qualified tech20 nology bonds without discount and without interest

21 cost to the issuer.

22 ‘‘(c) LIMITATION BASED ON AMOUNT OF TAX.—The

23 credit allowed under subsection (a) for any taxable year

24 shall not exceed the excess of—
4

•HR 1415 IH

1 ‘‘(1) the sum of the regular tax liability (as de2 fined in section 26(b)) plus the tax imposed by sec3 tion 55, over

4 ‘‘(2) the sum of the credits allowable under this

5 part (other than this subpart and subpart C).

6 ‘‘(d) QUALIFIED TECHNOLOGY BOND.—For pur7 poses of this part—

8 ‘‘(1) IN GENERAL.—The term ‘qualified tech9 nology bond’ means any bond issued as part of an

10 issue if—

11 ‘‘(A) 95 percent or more of the proceeds of

12 such issue are to be used for any qualified

13 project,

14 ‘‘(B) the bond is issued by a State or local

15 government within the jurisdiction of which

16 such project is located,

17 ‘‘(C) the issuer designates such bond for

18 purposes of this section,

19 ‘‘(D) certifies that it has obtained the writ20 ten approval of the Secretary of Commerce for

21 such project, and

22 ‘‘(E) the term of each bond which is part

23 of such issue does not exceed 15 years.

24 ‘‘(2) QUALIFIED PROJECT.—
5

•HR 1415 IH

1 ‘‘(A) IN GENERAL.—The term ‘qualified

2 project’ means a project—

3 ‘‘(i) to expand broadband tele4 communications services in an area within

5 the jurisdiction of a State or local govern6 ment,

7 ‘‘(ii) which is nominated by such State

8 or local government for designation as a

9 qualified project, and

10 ‘‘(iii) which the Secretary of Com11 merce, after consultation with the Sec12 retary of Housing and Urban Development

13 designates as a qualified project.

14 ‘‘(B) DESIGNATION PREFERENCES.—With

15 respect to designations under this section, pref16 erences shall be given to—

17 ‘‘(i) nominations of projects involving

18 underserved or rural areas lacking access

19 to high-speed Internet connections, and

20 ‘‘(ii) nominations reflecting partner21 ships and comprehensive planning between

22 State and local governments and the pri23 vate sector.

24 ‘‘(e) LIMITATION ON AMOUNT OF BONDS DES25 IGNATED.—
6

•HR 1415 IH

1 ‘‘(1) NATIONAL LIMITATION.—There is a na2 tional technology bond limitation for each calendar

3 year. Such limitation is $100,000,000 for 2002,

4 2003, 2004, 2005, and 2006, and, except as pro5 vided in paragraph (4), zero thereafter.

6 ‘‘(2) ALLOCATION OF LIMITATION.—The na7 tional technology bond limitation for a calendar year

8 shall be allocated by the Secretary among the quali9 fied projects designated for such year.

10 ‘‘(3) DESIGNATION SUBJECT TO LIMITATION

11 AMOUNT.—The maximum aggregate face amount of

12 bonds issued during any calendar year which may be

13 designated under subsection (d)(1) with respect to

14 any qualified project shall not exceed the limitation

15 amount allocated to such project under paragraph

16 (2) for such calendar year.

17 ‘‘(4) CARRYOVER OF UNUSED LIMITATION.—If

18 for any calendar year—

19 ‘‘(A) the national technology limitation

20 amount, exceeds

21 ‘‘(B) the amount of bonds issued during

22 such year which are designated under sub23 section (d)(1) with respect to qualified projects,
7

•HR 1415 IH

1 the national technology limitation amount for the

2 following calendar year shall be increased by the

3 amount of such excess.

4 ‘‘(f) OTHER DEFINITIONS.—For purposes of this

5 subpart—

6 ‘‘(1) BOND.—The term ‘bond’ includes any ob7 ligation.

8 ‘‘(2) CREDIT ALLOWANCE DATE.—The term

9 ‘credit allowance date’ means, with respect to any

10 issue, the last day of the 1-year period beginning on

11 the date of issuance of such issue and the last day

12 of each successive 1-year period thereafter.

13 ‘‘(3) STATE.—The term ‘State’ means the sev14 eral States and the District of Columbia.

15 ‘‘(g) CREDIT INCLUDED IN GROSS INCOME.—Gross

16 income includes the amount of the credit allowed to the

17 taxpayer under this section (determined without regard to

18 subsection (c)) and the amount so included shall be treat19 ed as interest income.

20 ‘‘(h) OTHER SPECIAL RULES.—

21 ‘‘(1) PARTNERSHIP; S CORPORATION; AND

22 OTHER PASS-THRU ENTITIES.—Under regulations

23 prescribed by the Secretary, in the case of a partner24 ship, trust, S corporation, or other pass-thru entity,

25 rules similar to the rules of section 41(g) shall apply
8

•HR 1415 IH

1 with respect to the credit allowable under subsection

2 (a).

3 ‘‘(2) BONDS HELD BY REGULATED INVEST4 MENT COMPANIES.—If any qualified technology bond

5 is held by a regulated investment company, the cred6 it determined under subsection (a) shall be allowed

7 to shareholders of such company under procedures

8 prescribed by the Secretary.

9 ‘‘(3) TREATMENT FOR ESTIMATED TAX PUR10 POSES.—Solely for purposes of sections 6654 and

11 6655, the credit allowed by this section to a tax12 payer by reason of holding a qualified technology

13 bond on a credit allowance date shall be treated as

14 if it were a payment of estimated tax made by the

15 taxpayer on such date.

16 ‘‘(4) REPORTING.—Issuers of qualified tech17 nology bonds shall submit reports similar to the re18 ports required under section 149(e).’’.

19 (b) REPORTING.—Subsection (d) of section 6049 of

20 the Internal Revenue Code of 1986 (relating to returns

21 regarding payments of interest) is amended by adding at

22 the end the following new paragraph:

23 ‘‘(8) REPORTING OF CREDIT ON QUALIFIED

24 TECHNOLOGY BONDS.—
9

•HR 1415 IH

1 ‘‘(A) IN GENERAL.—For purposes of sub2 section (a), the term ‘interest’ includes amounts

3 includible in gross income under section 54(g)

4 and such amounts shall be treated as paid on

5 the credit allowance date (as defined in section

6 54(f)(2)).

7 ‘‘(B) REPORTING TO CORPORATIONS,

8 ETC.—Except as otherwise provided in regula9 tions, in the case of any interest described in

10 subparagraph (A) of this paragraph, subsection

11 (b)(4) of this section shall be applied without

12 regard to subparagraphs (A), (H), (I), (J), (K),

13 and (L)(i).

14 ‘‘(C) REGULATORY AUTHORITY.—The Sec15 retary may prescribe such regulations as are

16 necessary or appropriate to carry out the pur17 poses of this paragraph, including regulations

18 which require more frequent or more detailed

19 reporting.’’.

20 (c) CLERICAL AMENDMENTS.—

21 (1) The table of subparts for part IV of sub22 chapter A of chapter 1 of the Internal Revenue Code

23 of 1986 is amended by adding at the end the fol24 lowing new item:

‘‘Subpart H. Nonrefundable Credit for Holders of Qualified Technology Bonds.’’.
10

•HR 1415 IH

1 (2) Section 6401(b)(1) of such Code is amend2 ed by striking ‘‘and G’’ and inserting ‘‘G, and H’’.

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

4 this section shall apply to obligations issued after Decem5 ber 31, 2001.

Æ