I
107TH CONGRESS
1ST SESSION
H. R. 2597
To amend the Internal Revenue Code of 1986 to provide incentives to ensure
that all Americans gain timely and equitable access to the Internet
and to promote employer and employee participation in telework arrange-
ments.
IN THE HOUSE OF REPRESENTATIVES
JULY 23, 2001
Mr. MCINNIS (for himself, Mr. TANNER, Mr. FOLEY, and Mr. BLAGOJEVICH)
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
incentives to ensure that all Americans gain timely and
equitable access to the Internet and to promote employer
and employee participation in telework arrangements.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION. 1. SHORT TITLE.
This Act may be cited as the ‘‘Broadband Deploy-
ment and Telework Incentive Act of 2001’’.
SEC. 2. FINDINGS AND PURPOSE.
(a) FINDINGS.—The Congress finds the following:
(1) The Internet has been the single greatest
contributor to the unprecedented economic expansion
experienced by the United States over the last 8
years.
(2) Today, most residential Internet users, es-
pecially those located in rural and urban areas, are
extremely limited in the type of information they can
send and receive over the Internet because their
means of access is limited to ‘‘narrowband’’ commu-
nications media, typically conventional phone lines at
a maximum speed of 56,000 bits per second.
(3) Similarly, small businesses in rural and
urban areas are also deprived of full information ac-
cess because of their dependence on narrowband fa-
cilities.
(4) The result is a growing disparity in the
speed of access to the Internet and the opportunities
it creates between subscribers located in certain
rural and urban areas and subscribers located in
other areas.
(5) The disparity in current broadband access
to the Internet and the slow pace of deployment of
broadband capability in certain areas will likely
prove detrimental to the on-going economic expan-
sion.
(6) Federal, State, and local governments spend
billions of dollars annually on the Nation’s transpor-
tation needs.
(7) Congestion on the Nation’s roads costs over
$74,000,000,000 annually in lost work time, fuel
consumption, and costs of infrastructure and equip-
ment repair.
(8) On average on-road-vehicles contribute 30
percent of nitrogen oxides emissions.
(9) It is estimated that staying at home to work
requires 3 times less energy consumption than com-
muting to work.
(10) It was recently reported that if an identi-
fied 10 to 20 percent of commuters switched to tele-
working, 1,800,000 tons of regulated pollutants
would be eliminated, 3,500,000,000 gallons of gas
would be saved, 3,100,000,000 hours of personal
time would be freed up, and maintenance and infra-
structure costs would decrease by $500,000,000 an-
nually because of reduced congestion and reduced
vehicle miles traveled.
(11) The average American daily commute is
62 minutes for a 44-mile round-trip (a total of 6
days per year and 5,808 miles per year).
(12) The increase in work from 1969 to 1996,
the increase in hours mothers spend in paid work,
combined with a shift toward single-parent families
resulted in families on average experiencing a de-
crease of 22 hours a week (14 percent) in parental
time available outside of paid work they could spend
with their children.
(13) Companies with teleworking programs
have found that teleworking can boost employee pro-
ductivity 5 percent to 20 percent.
(14) Today 60 percent of the workforce is in-
volved in information work (an increase of 43 per-
cent since 1990) allowing and encouraging decen-
tralization of paid work to occur.
(15) In recent years, studies performed in the
United States have shown a marked expansion of
teleworking, with an estimate of 19,000,000 Ameri-
cans teleworking by the year 2002, 5 times the
amount in 1990.
(16) It is, therefore, appropriate for Congress
to take action to narrow the current and future dis-
parity in the level of broadband access to the Inter-
net, to accelerate deployment of broadband capa-
bility, and to promote broad employer and employee
participation in telework arrangements.
‘‘(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% of qualified telework expenses paid
or incurred during the taxable year by either the em-
ployer 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 busi-
ness, the employer telework tax credit for any tax-
able year is equal to $1,000 for each employee who
participates in an employer sponsored telework ar-
rangement 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 busi-
nesses, the telework equipment tax credit for any
taxable year is equal to 20% of qualified telework
expenses paid or incurred during the taxable year by
either the employer on behalf of the employee, or di-
rectly 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 par-
ticipates in an employer sponsored telework ar-
rangement for less than the full taxable year,
the credit amount identified in subsection (b)(1)
or (c)(1), whichever is applicable, shall be mul-
tiplied 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 de-
nominator 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 em-
ployee teleworks for at least one day of such
month.
‘‘(B) In the case of an employee who par-
ticipates in an employer sponsored telework ar-
rangement 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 days in the taxable year that the em-
ployee 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 em-
ployer to work.
‘‘(2) CREDIT LIMITATIONS.—
‘‘(A) Except as otherwise provided in sub-
paragraph (2)(B) of this subsection, in com-
puting the credit allowed under subsection
(b)(2) or (c)(2) for any taxable year the fol-
lowing limitations shall apply—
‘‘(i) The maximum credit claimed by
any employer with respect to qualified
telework expenses paid or incurred on be-
half 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 be-
half of an employee shall not exceed
$1,000 for each employee who participates
in an employer sponsored telework ar-
rangement.
‘‘(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—
ment and are necessary to enable the employee
to telework.
‘‘(3) SMALL BUSINESS.—The term ‘small busi-
ness’ means a business with an average of 100 or
fewer employees during the taxable year.
‘‘(4) TELEWORK.—The term ‘telework’ means
to perform normal and regular work functions at lo-
cations other than the traditional work place of the
employer thereby eliminating or substantially reduc-
ing the physical commute to and from that tradi-
tional work place.
‘‘(f) SPECIAL RULES.—
‘‘(1) LIMITATION
BASED
ON
AMOUNT
OF
TAX.—
‘‘(A) LIABILITY FOR TAX.—The credit al-
lowable 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 al-
lowable under subpart A and the preceding
sections of this subpart, over
‘‘(ii) the tentative minimum tax for
the taxable year.
‘‘(B) CARRYFORWARD OF UNUSED CRED-
IT.—If the amount of the credit allowable under
subsection (a) for any taxable year exceeds the
limitation under paragraph (1)(A) for the tax-
able year, the excess shall be carried to the suc-
ceeding 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 sub-
section (a) shall be reduced by the amount of such
credit (determined without regard to paragraph (1)).
‘‘(3) RECAPTURE.—The Secretary shall, by reg-
ulations, 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 sec-
tion apply with respect to such expense.
‘‘(6) DENIAL OF DOUBLE BENEFIT.—No deduc-
tion or credit (other than under this section) shall
be allowed under this chapter with respect to any ex-
pense which is taken into account in determining the
credit under this section.
‘‘(7) DOCUMENTATION.—Employers and em-
ployees are responsible for maintaining adequate
documentation to support any credits claimed under
this section.’’
(b) CLERICAL AMENDMENT.—The table of sections
for subpart B of part IV of subchapter A of chapter 1
of such Code is amended by inserting after the item relat-
ing to section 30A the following new item:
‘‘Sec. 30B. Telework credit.’’
(c) REGULATORY MATTERS.—
(1) PROHIBITION.—No Federal or State agency
or instrumentality shall adopt regulations or rate-
making 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 em-
ployers and employees. Accordingly, the Secretary of
the Treasury shall prescribe such regulations as may
be necessary or appropriate to carry out the pur-
poses of section 30B of such Code, including regula-
tions describing the information, records, and data
that employers and employees are required to pro-
vide the Secretary to substantiate compliance with
the requirements of section and 30B of such Code.
Until the Secretary prescribes such regulations, em-
ployers and employees may base such determinations
on any reasonable method that is consistent with the
purposes of section 30B of such Code.
(d) EFFECTIVE DATE.—The amendments made by
this section shall be effective for the taxable years begin-
ning after December 31, 2001.
SEC. 4. DEDUCTION FOR CERTAIN DEPRECIABLE BUSINESS
ASSETS.
(a) IN GENERAL.—Part VI of Subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to
itemized deductions for individuals and corporations) is
amended by inserting after section 179A the following new
section:
‘‘SEC. 179B. DEDUCTION FOR BROADBAND TELECOMMUNI-
CATION EQUIPMENT.
‘‘(a) GENERAL RULE.—A taxpayer may elect to treat
as an expense the cost of any qualified equipment capable
of providing current generation broadband services to
rural subscribers or urban subscribers. Any cost so treated
shall be allowed as a deduction for the taxable year in
which the cost is paid or incurred by the taxpayer.
‘‘(b) ELECTION.—
‘‘(1) An election under this section for any tax-
able year shall—
‘‘(A) specify the qualified equipment and
associated cost to which the election applies,
and
‘‘(B) be made on the taxpayer’s return of
the tax imposed by this chapter for the taxable
year.
‘‘Such election shall be made in such manner as the Sec-
retary may by regulations prescribe.
‘‘(2) ELECTION
IRREVOCABLE.—Any election
made under this section may not be revoked without
the consent of the Secretary.
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) CABLE OPERATOR.—The term ‘cable oper-
ator’ has the meaning given such term by section
602(5) of the Communications Act of 1934 (47
U.S.C. 522(5)).
‘‘(2) COMMERCIAL
MOBILE
SERVICE
CAR-
RIER.—The term ‘commercial mobile service carrier’
means any person authorized to provide commercial
mobile radio service as defined in section 20.3 of
title 47, Code of Federal Regulations.
‘‘(3) COST.—
‘‘(A) IN GENERAL.—The term ‘cost’ means
any amount that may otherwise be chargeable
to a capital account with respect to the pur-
chase, upgrade, maintenance, or installation of
qualified equipment, that is incurred after De-
cember 31, 2001 and before January 1, 2007.
‘‘(B) CERTAIN SATELLITE EXPENDITURES
EXCLUDED.—The term ‘cost’ shall not include
any expenditure with respect to the launching
or insuring of any satellite equipment.
‘‘(4) CURRENT GENERATION BROADBAND SERV-
ICE.—The term ‘current generation broadband serv-
ice’ means the transmission of signals at a rate of
at least 1,000,000 bits per second to the subscriber
and at least 128,000 bits per second from the sub-
scriber.