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.
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 ‘‘Tech Bond Initiative
of 2001’’.
SEC. FINDINGS.
Congress finds the following:
(1) Access to high-speed Internet is as impor-
tant to 21st Century businesses as access to the rail-
roads meant to businesses of the last century.
(2) In States across the Nation, up to one-third
of the population lacks access to high-speed Inter-
net.
(3) Companies without access to high-speed
Internet are at a competitive disadvantage.
(4) Tech bonds would give State and local gov-
ernments incentives to expand broadband deploy-
ment in their communities.
SEC. 2. CREDIT TO HOLDERS OF QUALIFIED TECHNOLOGY
BONDS.
(a) IN GENERAL.—Part IV of subchapter A of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to
credits against tax) is amended by adding at the end the
following new subpart:
‘‘Subpart H—Nonrefundable Credit for Holders of
Qualified Technology Bonds
‘‘Sec. 54. Credit to holders of qualified technology bonds.
‘‘SEC. 54. CREDIT TO HOLDERS OF QUALIFIED TECH-
NOLOGY BONDS.
‘‘(a) ALLOWANCE OF CREDIT.—In the case of a tax-
payer who holds a qualified technology bond on a credit
allowance date of such bond which occurs during the tax-
able year, there shall be allowed as a credit against the
tax imposed by this chapter for such taxable year the
amount determined under subsection (b).
‘‘(b) AMOUNT OF CREDIT.—
‘‘(1) IN GENERAL.—The amount of the credit
determined under this subsection with respect to any
qualified technology bond is the amount equal to the
product of—
‘‘(A) the credit rate determined by the Sec-
retary under paragraph (2) for the month in
which such bond was issued, multiplied by
‘‘(B) the face amount of the bond held by
the taxpayer on the credit allowance date.
‘‘(2) DETERMINATION.—During each calendar
month, the Secretary shall determine a credit rate
which shall apply to bonds issued during the fol-
lowing calendar month. The credit rate for any
month is the percentage which the Secretary esti-
mates will permit the issuance of qualified tech-
nology bonds without discount and without interest
cost to the issuer.
‘‘(c) LIMITATION BASED ON AMOUNT OF TAX.—The
credit allowed under subsection (a) for any taxable year
shall not exceed the excess of—
‘‘(1) the sum of the regular tax liability (as de-
fined in section 26(b)) plus the tax imposed by sec-
tion 55, over
‘‘(2) the sum of the credits allowable under this
part (other than this subpart and subpart C).
‘‘(d) QUALIFIED TECHNOLOGY BOND.—For pur-
poses of this part—
‘‘(1) IN GENERAL.—The term ‘qualified tech-
nology bond’ means any bond issued as part of an
issue if—
‘‘(A) 95 percent or more of the proceeds of
such issue are to be used for any qualified
project,
‘‘(B) the bond is issued by a State or local
government within the jurisdiction of which
such project is located,
‘‘(C) the issuer designates such bond for
purposes of this section,
‘‘(D) certifies that it has obtained the writ-
ten approval of the Secretary of Commerce for
such project, and
‘‘(E) the term of each bond which is part
of such issue does not exceed 15 years.
‘‘(2) QUALIFIED PROJECT.—
‘‘(1) NATIONAL LIMITATION.—There is a na-
tional technology bond limitation for each calendar
year. Such limitation is $100,000,000 for 2002,
2003, 2004, 2005, and 2006, and, except as pro-
vided in paragraph (4), zero thereafter.
‘‘(2) ALLOCATION
OF
LIMITATION.—The na-
tional technology bond limitation for a calendar year
shall be allocated by the Secretary among the quali-
fied projects designated for such year.
‘‘(3) DESIGNATION
SUBJECT
TO
LIMITATION
AMOUNT.—The maximum aggregate face amount of
bonds issued during any calendar year which may be
designated under subsection (d)(1) with respect to
any qualified project shall not exceed the limitation
amount allocated to such project under paragraph
(2) for such calendar year.
‘‘(4) CARRYOVER OF UNUSED LIMITATION.—If
for any calendar year—
‘‘(A) the national technology limitation
amount, exceeds
‘‘(B) the amount of bonds issued during
such year which are designated under sub-
section (d)(1) with respect to qualified projects,
the national technology limitation amount for the
following calendar year shall be increased by the
amount of such excess.
‘‘(f) OTHER DEFINITIONS.—For purposes of this
subpart—
‘‘(1) BOND.—The term ‘bond’ includes any ob-
ligation.
‘‘(2) CREDIT
ALLOWANCE
DATE.—The term
‘credit allowance date’ means, with respect to any
issue, the last day of the 1-year period beginning on
the date of issuance of such issue and the last day
of each successive 1-year period thereafter.
‘‘(3) STATE.—The term ‘State’ means the sev-
eral States and the District of Columbia.
‘‘(g) CREDIT INCLUDED IN GROSS INCOME.—Gross
income includes the amount of the credit allowed to the
taxpayer under this section (determined without regard to
subsection (c)) and the amount so included shall be treat-
ed as interest income.
‘‘(h) OTHER SPECIAL RULES.—
‘‘(1) PARTNERSHIP; 
S
CORPORATION; 
AND
OTHER
PASS-THRU
ENTITIES.—Under regulations
prescribed by the Secretary, in the case of a partner-
ship, trust, S corporation, or other pass-thru entity,
rules similar to the rules of section 41(g) shall apply
with respect to the credit allowable under subsection
(a).
‘‘(2) BONDS
HELD
BY
REGULATED
INVEST-
MENT COMPANIES.—If any qualified technology bond
is held by a regulated investment company, the cred-
it determined under subsection (a) shall be allowed
to shareholders of such company under procedures
prescribed by the Secretary.
‘‘(3) TREATMENT FOR ESTIMATED TAX PUR-
POSES.—Solely for purposes of sections 6654 and
6655, the credit allowed by this section to a tax-
payer by reason of holding a qualified technology
bond on a credit allowance date shall be treated as
if it were a payment of estimated tax made by the
taxpayer on such date.
‘‘(4) REPORTING.—Issuers of qualified tech-
nology bonds shall submit reports similar to the re-
ports required under section 149(e).’’.
(b) REPORTING.—Subsection (d) of section 6049 of
the Internal Revenue Code of 1986 (relating to returns
regarding payments of interest) is amended by adding at
the end the following new paragraph:
‘‘(8) REPORTING
OF
CREDIT
ON
QUALIFIED
TECHNOLOGY BONDS.—
‘‘(A) IN GENERAL.—For purposes of sub-
section (a), the term ‘interest’ includes amounts
includible in gross income under section 54(g)
and such amounts shall be treated as paid on
the credit allowance date (as defined in section
54(f)(2)).
‘‘(B) 
REPORTING
TO
CORPORATIONS,
ETC.—Except as otherwise provided in regula-
tions, in the case of any interest described in
subparagraph (A) of this paragraph, subsection
(b)(4) of this section shall be applied without
regard to subparagraphs (A), (H), (I), (J), (K),
and (L)(i).
‘‘(C) REGULATORY AUTHORITY.—The Sec-
retary may prescribe such regulations as are
necessary or appropriate to carry out the pur-
poses of this paragraph, including regulations
which require more frequent or more detailed
reporting.’’.
(c) CLERICAL AMENDMENTS.—
(1) The table of subparts for part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code
of 1986 is amended by adding at the end the fol-
lowing new item:
‘‘Subpart H. Nonrefundable Credit for Holders of Qualified Tech-
nology Bonds.’’.
(2) Section 6401(b)(1) of such Code is amend-
ed by striking ‘‘and G’’ and inserting ‘‘G, and H’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to obligations issued after Decem-
ber 31, 2001.
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