I 
107TH CONGRESS 
1ST SESSION H. R. 2761 
To amend the Internal Revenue Code of 1986 to provide tax benefits for 
small businesses, to repeal the Federal communications excise tax, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
AUGUST 2, 2001 
Ms. HOOLEY of Oregon 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 
tax benefits for small businesses, to repeal the Federal 
communications excise tax, 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; REFERENCES; TABLE OF CON-
TENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Small Business Tax Fairness Act of 2001’’. 
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment 
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to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; references; table of contents. 
TITLE I—SMALL BUSINESS PROVISIONS 
Sec. 101. Deduction for 100 percent of health insurance costs of self-employed 
individuals. 
Sec. 102. Increase in expense treatment for small businesses. 
Sec. 103. Increased deduction for meal expenses. 
Sec. 104. Increased deductibility of business meal expenses for individuals sub-
ject to Federal limitations on hours of service. 
Sec. 105. Income averaging for farmers and fishermen not to increase alter-
native minimum tax liability. 
Sec. 106. Clarification of cash accounting rules for small business. 
Sec. 107. Extension of research credit made permanent. 
TITLE II—TIMBER INCENTIVES 
Sec. 201. Partial inflation adjustment for timber. 
Sec. 202. Amortization of reforestation expenditures and reforestation tax 
credit. 
TITLE III—ENERGY EFFICIENT HOMES 
Sec. 301. Credit for energy efficiency improvements to existing homes. 
Sec. 302. Business credit for construction of new energy efficient home. 
TITLE IV—REPEAL OF FEDERAL COMMUNICATIONS EXCISE TAX 
Sec. 401. Repeal of Federal communications excise tax. 
TITLE V—DONATION OF COMPUTER TECHNOLOGY AND 
EQUIPMENT TO ELEMENTARY AND SECONDARY SCHOOLS 
Sec. 501. Credit for donation of computer technology and equipment to elemen-
tary and secondary schools. 
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TITLE I—SMALL BUSINESS 
PROVISIONS 
SEC. 101. DEDUCTION FOR 100 PERCENT OF HEALTH IN-
SURANCE COSTS OF SELF-EMPLOYED INDI-
VIDUALS. 
(a) IN GENERAL.—Paragraph (1) of section 162(l) 
is amended to read as follows: 
‘‘(1) ALLOWANCE OF DEDUCTION.—In the case 
of an individual who is an employee within the 
meaning of section 401(c)(1), there shall be allowed 
as a deduction under this section an amount equal 
to 100 percent of the amount paid during the tax-
able year for insurance which constitutes medical 
care for the taxpayer and the taxpayer’s spouse and 
dependents.’’. 
(b) CLARIFICATION OF LIMITATIONS ON OTHER COV-
ERAGE.—The first sentence of section 162(l)(2)(B) is 
amended to read as follows: ‘‘Paragraph (1) shall not 
apply to any taxpayer for any calendar month for which 
the taxpayer participates in any subsidized health plan 
maintained by any employer (other than an employer de-
scribed in section 401(c)(4)) of the taxpayer or the spouse 
of the taxpayer.’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2000. 
SEC. 102. INCREASE IN EXPENSE TREATMENT FOR SMALL 
BUSINESSES. 
(a) IN GENERAL.—Paragraph (1) of section 179(b) 
(relating to dollar limitation) is amended to read as fol-
lows: 
‘‘(1) DOLLAR LIMITATION.—The aggregate cost 
which may be taken into account under subsection 
(a) for any taxable year shall not exceed $30,000.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2000. 
SEC. 103. INCREASED DEDUCTION FOR MEAL EXPENSES. 
(a) IN GENERAL.—Paragraph (1) of section 274(n) 
(relating to only 50 percent of meal and entertainment 
expenses allowed as deduction) is amended by striking ‘‘50 
percent’’ in the text and inserting ‘‘the allowable percent-
age’’. 
(b) ALLOWABLE PERCENTAGES.—Subsection (n) of 
section 274 is amended by redesignating paragraphs (2) 
and (3) as paragraphs (3) and (4), respectively, and by 
inserting after paragraph (1) the following new paragraph: 
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162(a)(2)) by an individual during, or incident to, 
the period of duty subject to the hours of service 
limitations of the Department of Transportation, 
paragraph (2)(B) shall be applied by substituting 
‘80 percent’ for the percentage otherwise applicable 
under paragraph (2)(B).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to taxable years beginning after 
December 31, 2000. 
SEC. 105. INCOME AVERAGING FOR FARMERS AND FISHER-
MEN NOT TO INCREASE ALTERNATIVE MIN-
IMUM TAX LIABILITY. 
(a) IN GENERAL.—Section 55(c) (defining regular 
tax) is amended by redesignating paragraph (2) as para-
graph (3) and by inserting after paragraph (1) the fol-
lowing: 
‘‘(2) COORDINATION WITH INCOME AVERAGING 
FOR
FARMERS
AND
FISHERMEN.—Solely for pur-
poses of this section, section 1301 (relating to aver-
aging of farm and fishing income) shall not apply in 
computing the regular tax.’’. 
(b) ALLOWING INCOME AVERAGING
FOR FISHER-
MEN.— 
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(1) IN GENERAL.—Section 1301(a) is amended 
by striking ‘‘farming business’’ and inserting ‘‘farm-
ing business or fishing business,’’. 
(2) DEFINITION OF ELECTED FARM INCOME.— 
(A) IN
GENERAL.—Clause (i) of section 
1301(b)(1)(A) is amended by inserting ‘‘or fish-
ing business’’ before the semicolon. 
(B) CONFORMING AMENDMENT.—Subpara-
graph (B) of section 1301(b)(1) is amended by 
inserting ‘‘or fishing business’’ after ‘‘farming 
business’’ both places it occurs. 
(3) DEFINITION OF FISHING BUSINESS.—Sec-
tion 1301(b) is amended by adding at the end the 
following new paragraph: 
‘‘(4) FISHING
BUSINESS.—The term ‘fishing 
business’ means the conduct of commercial fishing 
as defined in section 3 of the Magnuson-Stevens 
Fishery Conservation and Management Act (16 
U.S.C. 1802).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2000. 
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SEC. 106. CLARIFICATION OF CASH ACCOUNTING RULES 
FOR SMALL BUSINESS. 
(a) Section 446 (relating to general rule for methods 
of accounting) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(g) SMALL TAXPAYERS PERMITTED TO USE CASH 
ACCOUNTING METHOD WITHOUT LIMITATION.—A tax-
payer shall not be required to use an accrual method of 
accounting for any taxable year by reason of using mer-
chandise or inventory, if the average annual gross receipts 
of such taxpayer (or any predecessor) for the 3-year-period 
ending with such prior taxable year does not exceed 
$5,000,000. The rules of paragraphs (2) and (3) of section 
448(c) shall apply for purposes of the preceding sentence. 
In the case of a C corporation or a partnership which has 
a C corporation as a partner, the first sentence of this 
subsection shall apply only if such C corporation or part-
nership meets the requirements of section 448(b)(3).’’ 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 107. EXTENSION OF RESEARCH CREDIT MADE PERMA-
NENT. 
(a) IN GENERAL.—Section 41 (relating to credit for 
increasing research activities) is amended by striking sub-
section (h). 
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(b) CONFORMING AMENDMENT.—Paragraph (1) of 
section 45C(b) of such Code is amended by striking sub-
paragraph (D). 
TITLE II—TIMBER INCENTIVES 
SEC. 201. PARTIAL INFLATION ADJUSTMENT FOR TIMBER. 
(a) IN GENERAL.—Part I of subchapter P of chapter 
1 (relating to treatment of capital gains) is amended by 
adding at the end the following new section: 
‘‘SEC. 1203. PARTIAL INFLATION ADJUSTMENT FOR TIM-
BER. 
‘‘(a) IN GENERAL.—At the election of any taxpayer 
who has qualified timber gain for any taxable year, there 
shall be allowed as a deduction from gross income an 
amount equal to the qualified percentage of such gain. 
‘‘(b) QUALIFIED TIMBER GAIN.—For purposes of 
this section, the term ‘qualified timber gain’ means long- 
term capital gain from the sale or exchange of timber. 
‘‘(c) QUALIFIED PERCENTAGE.—For purposes of this 
section, the term ‘qualified percentage’ means the percent-
age (not exceeding 50 percent) determined by multi-
plying— 
‘‘(1) 3 percent, by 
‘‘(2) the number of years in the holding period 
of the taxpayer with respect to the timber. 
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‘‘(d) ESTATES AND TRUSTS.—In the case of an es-
tate or trust, the deduction under subsection (a) shall be 
computed by excluding the portion of (if any) the gains 
for the taxable year from sales or exchanges of capital as-
sets which, under sections 652 and 662 (relating to inclu-
sions of amounts in gross income of beneficiaries of 
trusts), is includible by the income beneficiaries as gain 
derived from the sale or exchange of capital assets.’’ 
(b) COORDINATION WITH MAXIMUM RATES OF TAX 
ON NET CAPITAL GAINS.— 
(1) Subsection (h)(4) of section 1 (relating to 
maximum capital gains rate) is amended by striking 
‘‘and’’ at the end of subparagraph (A), by striking 
the period at the end of subparagraph (B) and in-
serting ‘‘, and’’, and by adding at the end the fol-
lowing new subparagraph: 
‘‘(C) qualified timber gain with respect to 
which an election is in effect under section 
1203.’’ 
(2) Subsection (a) of section 1201 (relating to 
the alternative tax for corporations) is amended by 
inserting at the end thereof the following new sen-
tence: 
‘‘For purposes of this section, net capital gain shall be 
determined without regard to qualified timber gain (as de-
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fined in section 1203) with respect to which an election 
is in effect under section 1203.’’ 
(c) ALLOWANCE OF DEDUCTION IN COMPUTING AD-
JUSTED GROSS INCOME.—Subsection (a) of section 62 
(relating to definition of adjusted gross income) is amend-
ed by inserting after paragraph (18) the following new 
paragraph: 
‘‘(19) PARTIAL INFLATION ADJUSTMENT FOR 
TIMBER.—The deduction allowed by section 1203.’’ 
(d) TECHNICAL AMENDMENTS.— 
(1) Subparagraph (B) of section 172(d)(2) is 
amended to read as follows: 
‘‘(B) the exclusion under section 1202 and 
the deduction under section 1203 shall not be 
allowed.’’ 
(2) The last sentence of section 453A(c)(3) is 
amended by striking ‘‘(whichever is appropriate)’’ 
and inserting ‘‘or the deduction under section 1203 
(whichever is appropriate)’’. 
(3) Section 641(c)(2)(C) is amended by insert-
ing after clause (iii) the following new clause: 
‘‘(iv) The deduction under section 
1203.’’ 
(4) The first sentence of section 642(c)(4) is 
amended to read as follows: ‘‘To the extent that the 
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(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to sales or exchanges after Decem-
ber 31, 2000. 
SEC. 202. AMORTIZATION OF REFORESTATION EXPENDI-
TURES AND REFORESTATION TAX CREDIT. 
(a) DECREASE IN AMORTIZATION PERIOD.— 
(1) IN GENERAL.—Section 194(a) is amended 
by striking ‘‘84 months’’ and inserting ‘‘60 months’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
194(a) is amended by striking ‘‘84-month period’’ 
and inserting ‘‘60-month period’’. 
(b) REMOVAL OF CAP ON AMORTIZABLE BASIS.— 
(1) Section 194 is amended by striking sub-
section (b) and by redesignating subsections (c) and 
(d) as subsections (b) and (c), respectively. 
(2) Subsection (b) of section 194 (as redesig-
nated by paragraph (1)) is amended by striking 
paragraph (4). 
(3) Paragraph (1) of section 48(b) is amended 
by striking ‘‘(after the application of section 
194(b)(1))’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to additions to capital account 
made after December 31, 2000. 
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TITLE III—ENERGY EFFICIENT 
HOMES 
SEC. 301. CREDIT FOR ENERGY EFFICIENCY IMPROVE-
MENTS TO EXISTING HOMES. 
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 (relating to nonrefundable personal 
credits) is amended by inserting after section 25B the fol-
lowing new section: 
‘‘SEC. 25C. ENERGY EFFICIENCY IMPROVEMENTS TO EXIST-
ING HOMES. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax 
imposed by this chapter for the taxable year an amount 
equal to 20 percent of the amount paid or incurred by 
the taxpayer for qualified energy efficiency improvements 
installed during such taxable year. 
‘‘(b) LIMITATIONS.— 
‘‘(1) MAXIMUM CREDIT.—The credit allowed by 
this section with respect to a dwelling shall not ex-
ceed $2,000. 
‘‘(2) PRIOR CREDIT AMOUNTS FOR TAXPAYER 
ON SAME DWELLING TAKEN INTO ACCOUNT.—If a 
credit was allowed to the taxpayer under subsection 
(a) with respect to a dwelling in 1 or more prior tax-
able years, the amount of the credit otherwise allow-
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able for the taxable year with respect to that dwell-
ing shall not exceed the amount of $2,000 reduced 
by the sum of the credits allowed under subsection 
(a) to the taxpayer with respect to the dwelling for 
all prior taxable years. 
‘‘(c) CARRYFORWARD OF UNUSED CREDIT.—If the 
credit allowable under subsection (a) exceeds the limita-
tion imposed by section 26(a) for such taxable year re-
duced by the sum of the credits allowable under subpart 
A of part IV of subchapter A (other than this section), 
such excess shall be carried to the succeeding taxable year 
and added to the credit allowable under subsection (a) for 
such taxable year. 
‘‘(d) QUALIFIED ENERGY EFFICIENCY IMPROVE-
MENTS.—For purposes of this section, the term ‘qualified 
energy efficiency improvements’ means any energy effi-
cient building envelope component, and any energy effi-
cient heating, cooling, or water heating appliance, the in-
stallation of which, by itself or in combination with other 
such components or appliances, is certified to improve the 
annual energy performance of the existing home by at 
least 30 percent, if— 
‘‘(1) such component or appliance is installed in 
or on a dwelling— 
‘‘(A) located in the United States, and 
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‘‘(B) owned and used by the taxpayer as 
the taxpayer’s principal residence (within the 
meaning of section 121), 
‘‘(2) the original use of such component or ap-
pliance commences with the taxpayer, and 
‘‘(3) such component or appliance reasonably 
can be expected to remain in use for at least 5 
years. 
Such certification shall be made by the contractor who in-
stalled such improvements, a local building regulatory au-
thority, or a qualified energy consultant (such as a utility 
or an accredited home energy rating system provider). 
‘‘(e) SPECIAL RULES.— 
‘‘(1) TENANT-STOCKHOLDER IN COOPERATIVE 
HOUSING CORPORATION.—In the case of an indi-
vidual who is a tenant-stockholder (as defined in sec-
tion 216) in a cooperative housing corporation (as 
defined in such section), such individual shall be 
treated as having paid his tenant-stockholder’s pro-
portionate share (as defined in section 216(b)(3)) of 
the cost of qualified energy efficiency improvements 
made by such corporation. 
‘‘(2) CONDOMINIUMS.— 
‘‘(A) IN GENERAL.—In the case of an indi-
vidual who is a member of a condominium man-
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agement association with respect to a condo-
minium which he owns, such individual shall be 
treated as having paid his proportionate share 
of the cost of qualified energy efficiency im-
provements made by such association. 
‘‘(B) CONDOMINIUM
MANAGEMENT
ASSO-
CIATION.—For purposes of this paragraph, the 
term ‘condominium management association’ 
means an organization which meets the require-
ments of paragraph (1) of section 528(c) (other 
than subparagraph (E) thereof) with respect to 
a condominium project substantially all of the 
units of which are used as residences. 
‘‘(f) BASIS ADJUSTMENT.—For purposes of this sub-
title, if a credit is allowed under this section for any ex-
penditure with respect to any property, the increase in the 
basis of such property which would (but for this sub-
section) result from such expenditure shall be reduced by 
the amount of the credit so allowed. 
‘‘(g) TERMINATION.—Subsection (a) shall apply to 
qualified energy efficiency improvements installed during 
the period beginning on January 1, 2000, and ending on 
December 31, 2004.’’. 
(b) CONFORMING AMENDMENTS.— 
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(1) Subsection (c) of section 23 is amended by 
inserting ‘‘, section 25C, and section 1400C’’ after 
‘‘other than this section’’. 
(2) Subparagraph (C) of section 25(e)(1) is 
amended by inserting ‘‘25C,’’ after ‘‘25B’’. 
(3) Subsection (d) of section 1400C is amended 
by striking ‘‘and 25B’’ and inserting ‘‘, 25B, and 
25C’’. 
(4) Subsection (a) of section 1016 is amended 
by striking ‘‘and’’ at the end of paragraph (27), by 
striking the period at the end of paragraph (28) and 
inserting ‘‘; and’’, and by adding at the end the fol-
lowing new paragraph: 
‘‘(29) to the extent provided in section 25C(f), 
in the case of amounts with respect to which a credit 
has been allowed under section 25C.’’. 
(5) The table of sections for subpart A of part 
IV of subchapter A of chapter 1 is amended by in-
serting after the item relating to section 25B the fol-
lowing new item: 
‘‘Sec. 25C. Energy efficiency improvements to existing homes.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after De-
cember 31, 2000. 
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SEC. 302. BUSINESS CREDIT FOR CONSTRUCTION OF NEW 
ENERGY EFFICIENT HOME. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 (relating to business related cred-
its) is amended by inserting after section 45F the fol-
lowing new section: 
‘‘SEC. 45G. NEW ENERGY EFFICIENT HOME CREDIT. 
‘‘(a) IN GENERAL.—For purposes of section 38, in 
the case of an eligible contractor, the credit determined 
under this section for the taxable year is an amount equal 
to the aggregate adjusted bases of all energy efficient 
property installed in a qualified new energy efficient home 
during construction of such home. 
‘‘(b) LIMITATIONS.— 
‘‘(1) MAXIMUM CREDIT.— 
‘‘(A) IN GENERAL.—The credit allowed by 
this section with respect to a dwelling shall not 
exceed $2,000. 
‘‘(B) PRIOR CREDIT AMOUNTS ON SAME 
DWELLING TAKEN INTO ACCOUNT.—If a credit 
was allowed under subsection (a) with respect 
to a dwelling in 1 or more prior taxable years, 
the amount of the credit otherwise allowable for 
the taxable year with respect to that dwelling 
shall not exceed the amount of $2,000 reduced 
by the sum of the credits allowed under sub-
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section (a) with respect to the dwelling for all 
prior taxable years. 
‘‘(2) COORDINATION
WITH
REHABILITATION 
AND ENERGY CREDITS.—For purposes of this sec-
tion— 
‘‘(A) the basis of any property referred to 
in subsection (a) shall be reduced by that por-
tion of the basis of any property which is attrib-
utable to qualified rehabilitation expenditures 
(as defined in section 47(c)(2)) or to the energy 
percentage of energy property (as determined 
under section 48(a)), and 
‘‘(B) expenditures taken into account 
under either section 47 or 48(a) shall not be 
taken into account under this section. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) ELIGIBLE CONTRACTOR.—The term ‘eligi-
ble contractor’ means the person who constructed 
the new energy efficient home. 
‘‘(2) ENERGY
EFFICIENT
PROPERTY.—The 
term ‘energy efficient property’ means any energy 
efficient building envelope component, and any en-
ergy efficient heating, cooling, or water heating ap-
pliance. 
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‘‘(3) QUALIFIED
NEW
ENERGY
EFFICIENT 
HOME.—The term ‘qualified new energy efficient 
home’ means a dwelling— 
‘‘(A) located in the United States, 
‘‘(B) the construction of which is substan-
tially completed after December 31, 2000, 
‘‘(C) the original use of which is as a prin-
cipal residence (within the meaning of section 
121) which commences with the person who ac-
quires such dwelling from the eligible con-
tractor, and 
‘‘(D) the energy efficiency of which is cer-
tified to exceed by 30 percent or more the ap-
plicable standards for energy efficiency, based 
upon energy use or building component per-
formance established for comparable dwellings 
under the 1998 International Energy Conserva-
tion Code. 
‘‘(4) CONSTRUCTION.—The term ‘construction’ 
includes reconstruction and rehabilitation. 
‘‘(5) ACQUIRE.—The term ‘acquire’ includes 
purchase and, in the case of reconstruction and re-
habilitation, such term includes a binding written 
contract for such reconstruction or rehabilitation. 
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‘‘(d) CERTIFICATION.—A certification described in 
subsection (c)(3)(D) with respect to a dwelling shall be 
made by the eligible contractor, a local building regulatory 
authority, or a qualified energy consultant (such as a util-
ity or an accredited home energy rating system provider). 
‘‘(e) BASIS ADJUSTMENT.—For purposes of this sub-
title, if a credit is allowed under this section for any ex-
penditure with respect to any property, the increase in the 
basis of such property which would (but for this sub-
section) result from such expenditure shall be reduced by 
the amount of the credit so allowed. 
‘‘(f) TERMINATION.—Subsection (a) shall apply to 
dwellings purchased during the period beginning on Janu-
ary 1, 2000, and ending on December 31, 2004.’’. 
(b) CREDIT MADE PART OF GENERAL BUSINESS 
CREDIT.—Subsection (b) of section 38 (relating to current 
year business credit) is amended by striking ‘‘plus’’ at the 
end of paragraph (14), by striking the period at the end 
of paragraph (15) and inserting ‘‘, plus’’, and by adding 
at the end thereof the following new paragraph: 
‘‘(16) the new energy efficient home credit de-
termined under section 45G.’’. 
(c) DENIAL OF DOUBLE BENEFIT.—Section 280C 
(relating to certain expenses for which credits are allow-
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able) is amended by adding at the end thereof the fol-
lowing new subsection: 
‘‘(d) NEW ENERGY EFFICIENT HOME EXPENSES.— 
No deduction shall be allowed for that portion of expenses 
for a new energy efficient home otherwise allowable as a 
deduction for the taxable year which is equal to the 
amount of the credit determined for such taxable year 
under section 45G.’’. 
(d) CREDIT ALLOWED AGAINST REGULAR AND MIN-
IMUM TAX.— 
(1) IN GENERAL.—Subsection (c) of section 38 
(relating to limitation based on amount of tax) is 
amended by redesignating paragraph (4) as para-
graph (5) and by inserting after paragraph (3) the 
following new paragraph: 
‘‘(4) SPECIAL RULES FOR NEW ENERGY EFFI-
CIENT HOME CREDIT.— 
‘‘(A) IN GENERAL.—In the case of the new 
energy efficient home credit— 
‘‘(i) this section and section 39 shall 
be applied separately with respect to the 
credit, and 
‘‘(ii) in applying paragraph (1) to the 
credit— 
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‘‘(I) subparagraph (A) thereof 
shall not apply, and 
‘‘(II) the limitation under para-
graph (1) (as modified by subclause 
(I)) shall be reduced by the credit al-
lowed under subsection (a) for the 
taxable year (other than the new en-
ergy efficient home credit). 
‘‘(B) NEW
ENERGY
EFFICIENT
HOME 
CREDIT.—For purposes of this subsection, the 
term ‘new energy efficient home credit’ means 
the credit allowable under subsection (a) by rea-
son of section 45G.’’. 
(2) CONFORMING AMENDMENT.—Subclause (II) 
of section 38(c)(2)(A)(ii) is amended by inserting ‘‘, 
the new energy efficient home credit,’’ after ‘‘em-
ployment credit’’. 
(e) LIMITATION ON CARRYBACK.—Subsection (d) of 
section 39 is amended by adding at the end the following 
new paragraph: 
‘‘(11) NO CARRYBACK OF NEW ENERGY EFFI-
CIENT HOME CREDIT BEFORE EFFECTIVE DATE.— 
No portion of the unused business credit for any 
taxable year which is attributable to the credit deter-
mined under section 45G may be carried back to any 
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taxable year ending before the date of the enactment 
of section 45G.’’. 
(f) DEDUCTION FOR CERTAIN UNUSED BUSINESS 
CREDITS.—Subsection (c) of section 196 is amended by 
striking ‘‘and’’ at the end of paragraph (8), by striking 
the period at the end of paragraph (9) and inserting ‘‘, 
and’’, and by adding after paragraph (9) the following new 
paragraph: 
‘‘(10) the new energy efficient home credit de-
termined under section 45G.’’. 
(g) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
is amended by inserting after the item relating to section 
45F the following new item: 
‘‘Sec. 45G. New energy efficient home credit.’’. 
(h) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after De-
cember 31, 2000. 
TITLE IV—REPEAL OF FEDERAL 
COMMUNICATIONS EXCISE TAX 
SEC. 401. REPEAL OF FEDERAL COMMUNICATIONS EXCISE 
TAX. 
(a) IN GENERAL.—Chapter 33 (relating to facilities 
and services) is amended by striking subchapter B. 
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(b) PHASE-OUT OF TAX.—Paragraph (2) of section 
4251(b) (defining applicable percentage) is amended to 
read as follows: 
‘‘(2) APPLICABLE
PERCENTAGE.—The term 
‘applicable percentage’ means— 
‘‘(A) 2 percent with respect to amounts 
paid pursuant to bills first rendered on or after 
the 30th day after the date of the enactment of 
this subparagraph and before October 1, 2001, 
and 
‘‘(B) 1 percent with respect to amounts 
paid pursuant to bills first rendered after Sep-
tember 30, 2001, and before October 1, 2002.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 4293 is amended by striking ‘‘chap-
ter 32 (other than the taxes imposed by sections 
4064 and 4121) and subchapter B of chapter 33,’’ 
and inserting ‘‘and chapter 32 (other than the taxes 
imposed by sections 4064 and 4121),’’. 
(2)(A) Paragraph (1) of section 6302(e) is 
amended by striking ‘‘section 4251 or’’. 
(B) Paragraph (2) of section 6302(e) is amend-
ed— 
(i) by striking ‘‘imposed by—’’ and all that 
follows through ‘‘with respect to’’ and inserting 
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‘‘imposed by section 4261 or 4271 with respect 
to’’, and 
(ii) by striking ‘‘bills rendered or’’. 
(C) The subsection heading for section 6302(e) 
is amended by striking ‘‘COMMUNICATIONS SERV-
ICES AND’’. 
(3) Section 6415 is amended by striking ‘‘4251, 
4261, or 4271’’ each place it appears and inserting 
‘‘4261 or 4271’’. 
(4) Paragraph (2) of section 7871(a) is amend-
ed by inserting ‘‘or’’ at the end of subparagraph 
(B), by striking subparagraph (C), and by redesig-
nating subparagraph (D) as subparagraph (C). 
(5) The table of subchapters for chapter 33 is 
amended by striking the item relating to subchapter 
B. 
(d) EFFECTIVE DATES.— 
(1) REPEAL.—The amendments made by sub-
sections (a) and (c) shall apply to amounts paid pur-
suant to bills first rendered after September 30, 
2002. 
(2) PHASE-OUT.—The amendment made by 
subsection (b) shall apply to amounts paid pursuant 
to bills first rendered on or after the 30th day after 
the date of the enactment of this Act. 
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TITLE V—DONATION OF COM-
PUTER 
TECHNOLOGY 
AND 
EQUIPMENT TO ELEMENTARY 
AND SECONDARY SCHOOLS 
SEC. 501. CREDIT FOR DONATION OF COMPUTER TECH-
NOLOGY AND EQUIPMENT TO ELEMENTARY 
AND SECONDARY SCHOOLS. 
(a) GENERAL RULE.—Subpart D of part IV of sub-
chapter A of chapter 1 (relating to business related cred-
its) is amended by adding at the end the following new 
section: 
‘‘SEC. 45H. DONATION OF COMPUTER TECHNOLOGY AND 
EQUIPMENT 
TO 
ELEMENTARY 
AND 
SEC-
ONDARY SCHOOLS. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
the computer donation credit determined under this sec-
tion for the taxable year is an amount equal to 50 percent 
of the qualified computer technology donations made in 
the taxable year by a corporation. 
‘‘(b) LIMITATION.—The credit allowed under sub-
section (a) shall not exceed 10 percent of the corporation’s 
taxable income computed without regard to— 
‘‘(1) this section, 
‘‘(2) part VIII (except section 248), 
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‘‘(3) any net operating loss carryback to the 
taxable year under section 172, and 
‘‘(4) any capital loss carryback to the taxable 
year under section 1212(a)(1). 
‘‘(c) DEFINITIONS.—For purposes of subsection 
(a)— 
‘‘(1) QUALIFIED COMPUTER TECHNOLOGY DO-
NATIONS.—The term ‘qualified computer technology 
donations’ means a qualified elementary or sec-
ondary educational contribution (as defined in sec-
tion 170(e)(6). 
‘‘(2) CORPORATION.—The term ‘corporation’ 
shall have the meaning given to such term by section 
170(e)(4)(D).’’ 
(b) CREDIT MADE PART OF GENERAL BUSINESS 
CREDIT.—Subsection (b) of section 38 is amended by 
striking ‘‘plus’’ at the end of paragraph (15), by striking 
the period at the end of paragraph (16) and inserting ‘‘, 
plus’’, and by adding at the end thereof the following new 
paragraph: 
‘‘(17) the computer donation credit determined 
under section 45H(a).’’. 
(c) CREDIT ALLOWED AGAINST REGULAR AND MIN-
IMUM TAX.— 
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(1) IN GENERAL.—Subsection (c) of section 38 
(relating to limitation based on amount of tax) is 
amended by redesignating paragraph (5) as para-
graph (6) and by inserting after paragraph (4) the 
following new paragraph: 
‘‘(5) SPECIAL
RULES
FOR
COMPUTER
DONA-
TION CREDIT.— 
‘‘(A) IN
GENERAL.—In the case of the 
computer donation credit— 
‘‘(i) this section and section 39 shall 
be applied separately with respect to the 
credit, and 
‘‘(ii) in applying paragraph (1) to the 
credit— 
‘‘(I) subparagraph (A) thereof 
shall not apply, and 
‘‘(II) the limitation under para-
graph (1) (as modified by subclause 
(I)) shall be reduced by the credit al-
lowed under subsection (a) for the 
taxable year (other than the computer 
donation credit). 
‘‘(B) COMPUTER DONATION CREDIT.—For 
purposes of this subsection, the term ‘computer 
donation credit’ means the credit allowable 
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under subsection (a) by reason of section 
45H(a).’’. 
(2) CONFORMING AMENDMENT.—Subclause (II) 
of section 38(c)(2)(A)(ii) is amended by inserting 
‘‘or the computer donation credit’’ after ‘‘the new 
energy efficient home credit’’. 
(d) LIMITATION ON CARRYBACK.—Subsection (d) of 
section 39 is amended by adding at the end thereof the 
following new paragraph: 
‘‘(12) NO CARRYBACK OF COMPUTER DONATION 
CREDIT BEFORE EFFECTIVE DATE.—No portion of 
the unused business credit for any taxable year 
which is attributable to the credit determined under 
section 45H may be carried back to any taxable year 
ending before the date of the enactment of section 
45H.’’. 
(e) DEDUCTION FOR CERTAIN UNUSED BUSINESS 
CREDITS.—Subsection (c) of section 196 is amended by 
striking ‘‘and’’ at the end of paragraph (9), by striking 
the period at the end of paragraph (10) and inserting ‘‘, 
and’’, and by adding after paragraph (10) the following 
new paragraph: 
‘‘(11) the computer donation credit determined 
under section 45H.’’. 
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(f) DENIAL OF DOUBLE BENEFIT.—Section 280C is 
amended by adding at the end thereof the following new 
subsection: 
‘‘(e) CREDIT
FOR QUALIFIED COMPUTER TECH-
NOLOGY DONATIONS.—No deduction shall be allowed for 
that portion of the donations referred to in section 
45H(c)(1) otherwise allowable as a deduction for the tax-
able year which is equal to the amount of the credit deter-
mined for such taxable year under section 45H(a).’’. 
(g) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter (A) of chapter 
1 is amended by adding at the end the following new item: 
‘‘Sec. 45H. Donation of computer technology and equipment to elementary and 
secondary schools.’’. 
(h) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
Æ 
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