I
107TH CONGRESS
1ST SESSION
H. R. 2281
To amend the Internal Revenue Code of 1986 to extend and expand the
enhanced deduction for charitable contributions of computers to provide
greater public access to computers, including access by the poor.
IN THE HOUSE OF REPRESENTATIVES
JUNE 21, 2001
Mr. JEFFERSON (for himself, Mr. ENGLISH, Mr. CUMMINGS, Mrs. JONES of
Ohio, Mr. ISRAEL, Mr. FATTAH, Mr. UPTON, Mr. BERMAN, Mr. MOORE,
Mrs. CLAYTON, Ms. CARSON of Indiana, Mr. RODRIGUEZ, Ms. SLAUGH-
TER, Mr. KUCINICH, Mr. WEXLER, Mr. MCGOVERN, Ms. MCKINNEY, Mr.
FROST, Mrs. CHRISTENSEN, Mr. PAYNE, Ms. JACKSON-LEE of Texas,
Mr. LEWIS of Georgia, Mr. MEEKS of New York, Mr. OWENS, Ms. LEE,
and Mr. CLEMENT) 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 extend
and expand the enhanced deduction for charitable con-
tributions of computers to provide greater public access
to computers, including access by the poor.
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 ‘‘Digital Divide Elimi-
nation Act of 2001’’.
SEC. 2. CREDIT FOR PURCHASE OF COMPUTERS BY LOW-
INCOME INDIVIDUALS.
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to refundable credits) is amended by redes-
ignating section 35 as section 36 and by inserting after
section 34 the following new section:
‘‘SEC. 35. PURCHASE OF COMPUTERS BY LOW-INCOME INDI-
VIDUALS.
‘‘(a) IN GENERAL.—In the case of an eligible indi-
vidual, there shall be allowed as a credit against the tax
imposed by this subtitle for the taxable year an amount
equal to 50 percent of the amount paid by the taxpayer
for qualified computer technology or equipment.
‘‘(b) DOLLAR LIMITATION.—The credit allowed by
subsection (a) for any taxable year shall not exceed $500.
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) ELIGIBLE INDIVIDUAL.—The term ‘eligible
individual’ means any taxpayer who is allowed a
credit under section 32 (relating to earned income
credit) for the taxable year.
‘‘(2) QUALIFIED COMPUTER TECHNOLOGY OR
EQUIPMENT.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), the term ‘qualified computer
technology or equipment’ means any computer
technology or equipment (as defined in section
170(e)(6)) acquired by purchase (as defined in
section 170(d)(2)).
‘‘(B) EXCEPTIONS.—
‘‘(i) 
CERTAIN
SOFTWARE
EX-
CLUDED.—Such term shall not include
game software or any other software which
is not necessary for—
‘‘(I) use of the computer for ac-
cess and use of the Internet (including
email), or
‘‘(II) business or educational use.
‘‘(ii) COMPUTER
MUST
BE
CAPABLE
OF
INTERNET
ACCESS.—Such term shall
not include any computer which does not
have a modem or other equipment capable
of supporting Internet access.’’
(b) CONFORMING AMENDMENTS.—
(1) Paragraph (2) of section 1324(b) of title
31, United States Code, is amended by inserting be-
fore the period ‘‘, or from section 35 of such Code’’.
(2) The table of sections for subpart C of part
IV of subchapter A of chapter 1 of such Code is
amended by striking the last item and inserting the
following new items:
‘‘Sec. 35. Purchase of computers by low-income individuals.
‘‘Sec. 36. Overpayments of tax.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
the date of the enactment of this Act.
SEC. 3. EXTENSION AND EXPANSION OF ENHANCED DEDUC-
TION FOR CHARITABLE CONTRIBUTIONS OF
COMPUTERS.
(a) EXTENSION.—Subparagraph (G) of section
170(e)(6) of the Internal Revenue Code of 1986 (relating
to special rule for contributions of computer technology
and equipment for elementary or secondary school pur-
poses) is amended by striking ‘‘December 31, 2003’’ and
inserting ‘‘June 30, 2004’’.
(b) EXPANSION.—Paragraph (6) of section 170(e) of
such Code is amended by redesignating subparagraphs
(C), (D), (E), (F) and (G) as subparagraphs (D), (E),
(F), (G), and (H), respectively, and by striking all that
precedes subparagraph (D) (as so redesignated) and in-
serting the following:
‘‘(6) SPECIAL RULE FOR CONTRIBUTIONS OF
COMPUTER TECHNOLOGY AND EQUIPMENT.—
‘‘(A) IN GENERAL.—The amount of any
qualified computer contribution which is taken
into account under this section shall be the
greater of—
‘‘(i) the amount determined without
regard to paragraph (1), or
‘‘(ii) the amount determined with re-
gard to paragraph (1).
‘‘(B) QUALIFIED
COMPUTER
CONTRIBU-
TION.—For purposes of this paragraph, the
term ‘qualified computer contribution’ means a
charitable contribution by a corporation of any
computer technology or equipment, but only
if—
‘‘(i) the contribution is to a qualified
organization,
‘‘(ii) the contribution is made not
later than 3 years after the date the tax-
payer acquired the property (or in the case
of property constructed by the taxpayer,
the date the construction of the property is
substantially completed),
‘‘(iii) the original use of the property
is by the donor or the donee,
‘‘(iv) substantially all of the use of the
property by the donee is for use within the
United States and, in the case of a quali-
fied educational organization, for edu-
cational purposes that are related to the
purpose or function of the organization,
‘‘(v) the property is not transferred by
the donee in exchange for money, other
property, or services, except for shipping,
installation and transfer costs,
‘‘(vi) in the case of a qualified edu-
cational organization, the property will fit
productively into the entity’s education
plan,
‘‘(vii) the entity’s use and disposition
of the property will be in accordance with
the provisions of clauses (iv) and (v), and
‘‘(viii) the property meets such stand-
ards, if any, as the Secretary may pre-
scribe by regulation to assure that the
property meets minimum functionality and
suitability standards for educational pur-
poses.
‘‘(C) 
QUALIFIED
ORGANIZATION.—For
purposes of this paragraph—
‘‘(i) IN GENERAL.—The term ‘quali-
fied organization’ means—
‘‘(I) any qualified educational or-
ganization,
‘‘(II) a public library (within the
meaning of section 213(2)(A) of the
Library Services and Technology Act
(20 U.S.C. 9122(2)(A)), as in effect
on the date of the enactment of the
Community Renewal Tax Relief Act of
2000, established and maintained by
an entity described in subsection
(c)(1) or located in an area which is
an empowerment zone, enterprise
community, or a high-poverty area (as
determined by the Secretary),
‘‘(III) any technology center lo-
cated in such an area, and
‘‘(IV) any entity described in sec-
tion 501(c)(3) and exempt from tax
under section 501(a) that is organized
primarily for purposes of providing
computers without charge to lower in-
come families.
‘‘(ii) QUALIFIED EDUCATIONAL ORGA-
NIZATION.—For purposes of clause (i), the
term ‘qualified educational organization’
means—
‘‘(I) an educational organization
described in subsection (b)(1)(A)(ii),
and
‘‘(II) an entity described in sec-
tion 501(c)(3) and exempt from tax
under section 501(a) (other than an
entity described in subclause (I)) that
is organized primarily for purposes of
supporting elementary and secondary
education.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
the date of the enactment of this Act.
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