HR 2597 IH
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 arrangements.
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 Representatives of the United States of America in Congress assembled,
SECTION. 1. SHORT TITLE.
This Act may be cited as the `Broadband Deployment 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, especially 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' communications 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 access because of their dependence on narrowband facilities.
(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 expansion.
(6) Federal, State, and local governments spend billions of dollars annually on the Nation's transportation 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 equipment 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 commuting to work.
(10) It was recently reported that if an identified 10 to 20 percent of commuters switched to teleworking, 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 infrastructure costs would decrease by $500,000,000 annually 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 decrease 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 productivity 5 percent to 20 percent.
(14) Today 60 percent of the workforce is involved in information work (an increase of 43 percent since 1990) allowing and encouraging decentralization 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 Americans 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 disparity in the level of broadband access to the Internet, to accelerate deployment of broadband capability, and to promote broad employer and employee participation in telework arrangements.
(b) PURPOSE- The purpose of this Act is to accelerate deployment of broadband access to the Internet for those Americans located in certain rural and urban areas and to promote employer and employee participation in telework arrangements.
SEC. 3. CREDIT FOR TELEWORKING.
(a) IN GENERAL- Subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to foreign tax credit, etc.) is amended by inserting after section 30A the following new section:
`SEC. 30B. TELEWORK CREDIT.
`(a) GENERAL RULE- There shall be allowed as a credit against the tax imposed by this chapter for any taxable year an amount equal to the sum of--
`(1) the employer telework tax credit, plus
`(2) the telework equipment tax credit.
`(b) EMPLOYER TELEWORK TAX CREDIT; TELEWORK EQUIPMENT TAX CREDIT- For purposes of this section--
`(1) EMPLOYER TELEWORK TAX CREDIT- Except as provided for in subsection (c)(1), the employer telework tax credit for any taxable year is
equal to $500 for each employee who participates in an employer sponsored telework arrangement during the taxable year.
`(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 employer 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 business, the employer telework tax credit for any taxable year is equal to $1,000 for each employee who participates in an employer sponsored telework arrangement 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 businesses, 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 directly 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 participates in an employer sponsored telework arrangement for less than the full taxable year, 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 of months in the taxable year that the employee participates in an employer sponsored telework arrangement and the denominator 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 employee teleworks for at least one day of such month.
`(B) In the case of an employee who participates in an employer sponsored telework arrangement 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 employee 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 employer to work.
`(A) Except as otherwise provided in subparagraph (2)(B) of this subsection, in computing the credit allowed under subsection (b)(2) or (c)(2) for any taxable year the following limitations shall apply--
`(i) The maximum credit claimed by any employer with respect to qualified telework expenses paid or incurred on behalf 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 behalf of an employee shall not exceed $1,000 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 $1,000.
`(e) DEFINITIONS- For purposes of this section--
`(1) EMPLOYER SPONSORED TELEWORK ARRANGEMENT- The term `employer sponsored telework arrangement' means an arrangement established by an employer that enables employees of the employer to telework for a minimum of 25 days per taxable year. Such an arrangement shall be supported by a written agreement between the employer and each teleworking employee that describes the terms of the employer sponsored telework arrangement.
`(2) QUALIFIED TELEWORK EXPENSES-
`(A) IN GENERAL- The term `qualified telework expenses' shall include, but not be limited to, expenses paid or incurred for computers, computer-related hardware and software, modems, data processing equipment, telecommunications equipment, and access to Internet or broadband technologies, including applicable taxes and other expenses for the delivery, installation, or maintenance of such equipment.
`(B) ONLY CERTAIN EXPENSES TAKEN INTO ACCOUNT- Expenses shall be taken into
account under subparagraph (A) only to the extent they are authorized by the employer pursuant to an employer sponsored telework arrangement and are necessary to enable the employee to telework.
`(3) SMALL BUSINESS- The term `small business' 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 locations other than the traditional work place of the employer thereby eliminating or substantially reducing the physical commute to and from that traditional work place.
`(1) LIMITATION BASED ON AMOUNT OF TAX-
`(A) LIABILITY FOR TAX- The credit allowable 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 allowable under subpart A and the preceding sections of this subpart, over
`(ii) the tentative minimum tax for the taxable year.
`(B) CARRYFORWARD OF UNUSED CREDIT- If the amount of the credit allowable under subsection (a) for any taxable year exceeds the limitation under paragraph (1)(A) for the taxable year, the excess shall be carried to the succeeding 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 subsection (a) shall be reduced by the amount of such credit (determined without regard to paragraph (1)).
`(3) RECAPTURE- The Secretary shall, by regulations, 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 section apply with respect to such expense.
`(6) DENIAL OF DOUBLE BENEFIT- No deduction or credit (other than under this section) shall be allowed under this chapter with respect to any expense which is taken into account in determining the credit under this section.
`(7) DOCUMENTATION- Employers and employees 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 relating to section 30A the following new item:
`Sec. 30B. Telework credit.'
(1) PROHIBITION- No Federal or State agency or instrumentality shall adopt regulations or ratemaking 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 employers and employees. Accordingly, the Secretary of the Treasury shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of section 30B of such Code, including regulations describing the information, records, and data that employers and employees are required to provide the Secretary to substantiate compliance with the requirements of section and 30B of such Code. Until the Secretary prescribes such regulations, employers 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 beginning after December 31, 2001.
SEC. 4. DEDUCTION FOR CERTAIN DEPRECIABLE BUSINESS ASSETS.
(a) IN GENERAL- Part VI of Subchapter B of chapter 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 TELECOMMUNICATION 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.
`(1) An election under this section for any taxable 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 Secretary 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 operator' 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 CARRIER- 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.
`(A) IN GENERAL- The term `cost' means any amount that may otherwise be chargeable to a capital account with respect to the purchase, upgrade, maintenance, or installation of qualified equipment, that is incurred after December 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 SERVICE- The term `current generation broadband service' 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 subscriber.
`(5) NONRESIDENTIAL SUBSCRIBER- The term `nonresidential subscriber' means a subscriber who purchases current generation broadband service which are delivered to the permanent place of business of such subscriber.
`(6) OPEN VIDEO SYSTEM OPERATOR- The term `open video system operator' means any person authorized to provide service under section 653 of the Communications Act of 1934 (47 U.S.C. 573).
`(7) OTHER WIRELESS CARRIER- The term `other wireless carrier' means any person (other than a telecommunications carrier, commercial mobile service carrier, cable operator, open video system operator, or satellite carrier) providing current generation broadband services to subscribers through the radio transmission of energy.
`(8) QUALIFIED EQUIPMENT-
`(A) IN GENERAL- The term `qualified equipment' means equipment capable of providing current generation broadband service to each subscriber who is utilizing such service.
`(B) ONLY CERTAIN EQUIPMENT TAKEN INTO ACCOUNT- Qualified equipment shall be taken into account under subparagraph (A) only to the extent it--
`(i) is located on or within a central switching office, cable hub, head end, or other similar network gateway or delivery point,
`(ii) extends from the subscriber side of the point or points described in (B)(i) to the outside of the unit, building, dwelling, or office owned or leased by a subscriber, or
`(iii) is located on the outside of the unit, building, dwelling, or office owned or leased by a subscriber.
`(9) RURAL AREA- The term `rural area' means any census tract--
`(A) which is not within 10 miles of any incorporated or census designated place containing more than 25,000 people and is not within a county or county equivalent which has an overall population density of more than 500 people per square mile of land,
`(B) that is designated as a rural enterprise community or rural empowerment zone by the Secretary of Agriculture pursuant to section 1391, or
`(C) that is designated by Congress as a rural area for purposes of this section.
`(10) RURAL SUBSCRIBER- The term `rural subscriber' means a residential subscriber residing in a dwelling located in a rural area or nonresidential subscriber maintaining a permanent place of business located in a rural area.
`(11) SATELLITE CARRIER- The term `satellite carrier' means any person using the facilities of a satellite or satellite service licensed by the Federal Communications Commission and operating in the Fixed-Satellite Service under part 25 of title 47 of the Code of Federal Regulations or the Direct Broadcast Satellite Service under part 100 of title 47 of such Code to establish and operate a channel of communications for point-to-multipoint distribution of signals, and owning or leasing a capacity or service on a satellite in order to provide such point-to-multipoint distribution.
`(12) SUBSCRIBER- The term `subscriber' means a person who purchases current generation broadband service from a taxpayer.
`(13) TAXPAYER- The term `taxpayer' means--
`(B) a commercial mobile service carrier,
`(C) an open video system operator, or
`(D) a satellite carrier, telecommunications carrier, or other wireless carrier.
`(14) TELECOMMUNICATIONS CARRIER- The term `telecommunications carrier' has the meaning given such term by section 3(44) of the Communications Act of 1934 (47 U.S.C. 153 (44)), but--
`(A) includes all members of an affiliated group of which a telecommunications carrier is a member, and
`(B) does not include a commercial mobile service carrier.
`(15) URBAN AREA- The term `urban area' means any census tract--
`(A) the poverty level of which is at least 30% (based on the most recent census data),
`(B) the median family income of which does not exceed--
`(i) in the case of a census tract located in a metropolitan statistical area, 70 percent of the greater of the metropolitan
area median family income or the statewide median family income, or
`(ii) in the case of a census tract located in a nonmetropolitan statistical area, 70% of the nonmetropolitan statewide median family income,
`(C) that is designated as an urban enterprise community or urban empowerment zone by the Secretary of Housing and Urban Development pursuant to section 1391,
`(D) that represents the District of Columbia Enterprise Zone established under section 1400,
`(E) that is designated as a renewal community pursuant to section 1400E,
`(F) that is designated as a low-income community pursuant to section 45D, or
`(G) that is designated by Congress as an urban area for purposes of this section.
`(16) URBAN SUBSCRIBER- The term `urban subscriber' means a residential subscriber residing in a dwelling located in an urban area or nonresidential subscriber maintaining a permanent place of business located in an urban area.
`(d) DESIGNATION OF CENSUS TRACTS- The Secretary shall, not later than 90 days after the date of the enactment of this section, designate and publish those census tracts meeting the criteria described in paragraphs (9) and (15) of subsection (c).'
(b) CLERICAL AMENDMENT- The table of sections for part VI of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 179A the following new item:
`Sec. 179B. Deduction for broadband telecommunications equipment.'
(1) PROHIBITION- No Federal or State agency or instrumentality shall adopt regulations or ratemaking procedures that would have the effect of confiscating any expense or portion thereof allowed under section 179B of the Internal Revenue Code of 1986 (as added by this section) or otherwise subverting the purpose of this section.
(2) TREASURY REGULATORY AUTHORITY- It is the intent of Congress in providing the expense under section 179B of the Internal Revenue Code of 1986 (as added by this section) to provide incentives for the purchase, installation, and connection of equipment and facilities offering expanded broadband access to the Internet for users in certain rural and urban areas of the United States in a manner that maintains competitive neutrality among the various classes of providers of broadband services. Accordingly, the Secretary of the Treasury shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of section 179B of such Code, including--
(A) regulations to determine how and when a taxpayer that incurs qualified expenditures satisfies the requirements of section 179B of such Code to provide broadband services, and
(B) regulations describing the information, records, and data taxpayers are required to provide the Secretary to substantiate compliance with the requirements of section 179B of such Code.
Until the Secretary prescribes such regulations, taxpayers may base such determinations on any reasonable method that is consistent with the purposes of section 179B of such Code.
(d) EFFECTIVE DATE- The amendments made by this section shall apply to expenditures incurred after December 31, 2001.
SEC. 5. BROADBAND CREDIT.
(a) IN GENERAL- Subpart E of part IV of chapter 1 of the Internal Revenue Code of 1986 (relating to rules for computing investment credit) is amended by inserting after section 48 the following new section:
`SEC. 48A. BROADBAND CREDIT.
`(a) IN GENERAL- For purposes of section 46, the broadband credit for any taxable year is equal to 20 percent of the cost of qualified equipment capable of providing next generation broadband services to rural subscribers or urban subscribers. Qualified expenditures shall be taken into account during the taxable year in which such expenditures are paid or incurred by the taxpayer.
`(b) SPECIAL ALLOCATION RULES- For purposes of determining the next generation broadband credit under subsection (a), if the qualified equipment is capable of serving rural, urban, and other subscribers, the qualified expenditures shall be multiplied by a fraction--
`(1) the numerator of which is the sum of the total potential subscriber populations within the rural areas and urban areas which the equipment is capable of serving with next generation broadband services, and
`(2) the denominator of which is the total potential subscriber population of the area which the equipment is capable of serving with next generation broadband services.
`(c) DEFINITIONS- For purposes of this section--
`(1) CABLE OPERATOR- The term `cable operator' 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 CARRIER- 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.
`(A) IN GENERAL- The term `cost' means any amount that may otherwise be chargeable to a capital account with respect to the purchase, upgrade, maintenance, or installation of qualified equipment, that is incurred after December 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) NEXT GENERATION BROADBAND SERVICE- The term `next generation broadband service'
means the transmission of signals at a rate of at least 22,000,000 bits per second to the subscriber and at least 5,000,000 bits per second from the subscriber.
`(5) NONRESIDENTIAL SUBSCRIBER- The term `nonresidential subscriber' means a subscriber who purchases next generation broadband service which are delivered to the permanent place of business of such subscriber.
`(6) OPEN VIDEO SYSTEM OPERATOR- The term `open video system operator' means any person authorized to provide service under section 653 of the Communications Act of 1934 (47 U.S.C. 573).
`(7) OTHER WIRELESS CARRIER- The term `other wireless carrier' means any person (other than a telecommunications carrier, commercial mobile service carrier, cable operator, open video system operator, or satellite carrier) providing current generation broadband services to subscribers through the radio transmission of energy.
`(8) QUALIFIED EQUIPMENT-
`(A) IN GENERAL- The term `qualified equipment' means equipment capable of providing next generation broadband service to each subscriber who is utilizing such service.
`(B) ONLY CERTAIN EQUIPMENT TAKEN INTO ACCOUNT- Qualified equipment shall be taken into account under subparagraph (A) only to the extent it--
`(i) is located on or within a central switching office, cable hub, head end, or other similar network gateway or delivery point,
`(ii) extends from the subscriber side of the point or points described in (B)(i) to the outside of the unit, building, dwelling, or office owned or leased by a subscriber, or
`(iii) is located on the outside of the unit, building, dwelling, or office owned or leased by a subscriber.
`(9) RURAL AREA- The term `rural area' means any census tract--
`(A) which is not within 10 miles of any incorporated or census designated place containing more than 25,000 people and is not within a county or county equivalent which has an overall population density of more than 500 people per square mile of land,
`(B) that is designated as a rural enterprise community or rural empowerment zone by the Secretary of Agriculture pursuant to section 1391, or
`(C) that is designated by Congress as a rural area for purposes of this section.
`(10) RURAL SUBSCRIBER- The term `rural subscriber' means a residential subscriber residing in a dwelling located in a rural area or nonresidential subscriber maintaining a permanent place of business located in a rural area.
`(11) SATELLITE CARRIER- The term `satellite carrier' means any person using the facilities of a satellite or satellite service licensed by the Federal Communications Commission and operating in the Fixed-Satellite Service under part 25 of title 47 of the Code of Federal Regulations or the Direct Broadcast Satellite Service under part 100 of title 47 of such Code to establish and operate a channel of communications for point-to-multipoint distribution of signals, and owning or leasing a capacity or service on a satellite in order to provide such point-to-multipoint distribution.
`(12) SUBSCRIBER- The term `subscriber' means a person who purchases next generation broadband service from a taxpayer.
`(13) TAXPAYER- The term `taxpayer' means--
`(B) a commercial mobile service carrier,
`(C) an open video system operator, or
`(D) a satellite carrier, telecommunications carrier, or other wireless carrier.
`(14) TELECOMMUNICATIONS CARRIER- The term `telecommunications carrier' has the meaning given such term by section 3(44) of the Communications Act of 1934 (47 U.S.C. 153 (44)), but--
`(A) includes all members of an affiliated group of which a telecommunications carrier is a member, and
`(B) does not include a commercial mobile service carrier.
`(15) TOTAL POTENTIAL SUBSCRIBER POPULATION- The term `total potential subscriber population' means, with respect to any area and based on the most recent census data, the total number of potential residential subscribers residing in dwellings located in such area and potential nonresidential subscribers maintaining permanent places of business located in such area.
`(16) URBAN AREA- The term `urban area' means any census tract--
`(A) the poverty level of which is at least 30% (based on the most recent census data),
`(B) the median family income of which does not exceed--
`(i) in the case of a census tract located in a metropolitan statistical area, 70 percent of the greater of the metropolitan area median family income or the statewide median family income, or
`(ii) in the case of a census tract located in a nonmetropolitan statistical area, 70% of the nonmetropolitan statewide median family income,
`(C) that is designated as an urban enterprise community or urban empowerment zone by the Secretary of Housing and Urban Development pursuant to section 1391,
`(D) that represents the District of Columbia Enterprise Zone established under section 1400,
`(E) that is designated as a renewal community pursuant to section 1400E,
`(F) that is designated as a low-income community pursuant to section 45D, or
`(G) that is designated by Congress as an urban area for purposes of this section.
`(17) URBAN SUBSCRIBER- The term `urban subscriber' means a residential subscriber residing in a dwelling located in an urban area or nonresidential subscriber maintaining a permanent place of business located in an urban area.
`(d) DESIGNATION OF CENSUS TRACTS- The Secretary shall, not later than 90 days after the date of the enactment of this section, designate and publish those census tracts meeting the criteria described in paragraphs (9) and (16) of subsection (c).'
(b) CREDIT TO BE PART OF INVESTMENT CREDIT- Section 46 of the Internal Revenue Code of 1986 (relating to the amount of investment credit) is amended by striking `and' at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting `, and', and by adding at the end the following new paragraph:
`(4) the broadband credit.'
(c) SPECIAL RULE FOR MUTUAL OR COOPERATIVE TELEPHONE COMPANIES- Section 501(c)(12)(B) of the Internal Revenue Code of 1986 (relating to list of exempt organizations) is amended by striking `or' at the end of clause (iii), by striking the period at the end of clause (iv) and inserting `, or', and by adding at the end the following new clause:
`(v) from sources not described in subparagraph (A), but only to the extent such income does not in any year exceed an amount equal to the credit for qualified expenditures which would be determined under section 48A for such year if the mutual or cooperative telephone company was not exempt from taxation.'
(d) CONFORMING AMENDMENT- The table of sections for subpart E of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 48 the following new item:
`Sec. 48A. Broadband credit.'
(1) PROHIBITION- No Federal or State agency or instrumentality shall adopt regulations or ratemaking procedures that would have the effect of confiscating any credit or portion thereof allowed under section 48A of the Internal Revenue Code of 1986 (as added by this section) or otherwise subverting the purpose of this section.
(2) TREASURY REGULATORY AUTHORITY- It is the intent of Congress in providing the broadband credit under section 48A of the Internal Revenue Code of 1986 (as added by this section) to provide incentives for the purchase, installation, and connection of equipment and facilities offering expanded broadband access to the Internet for users in certain low income and rural areas of the United States in a manner that maintains competitive neutrality among the various classes of providers of broadband services. Accordingly, the Secretary of the Treasury shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of section 48A of such Code, including--
(A) regulations to determine how and when a taxpayer that incurs qualified expenditures satisfies the requirements of section 48A of such Code to provide broadband services, and
(B) regulations describing the information, records, and data taxpayers are required to provide the Secretary to substantiate compliance with the requirements of section 48A of such Code.
Until the Secretary prescribes such regulations, taxpayers may base such determinations on any reasonable method that is consistent with the purposes of section 48A of such Code.
(1) IN GENERAL- Except as provided in paragraph (2), the amendments made by this section shall apply to expenditures incurred after December 31, 2001.
(2) SPECIAL RULE- The amendments made by subsection (c) shall apply to amounts received after December 31, 2001.
END