S 542 IS (106th Congress), "New Millennium Classrooms Act".
Re: increasing tax incentives for donating computers to schools.
Sponsor: Sen. Spencer Abraham (R-MI), Sen. Ron Wyden (D-OR), Sen. Paul Coverdell (R-GA), and others.
Date introduced: March 4, 1999.
Source: Library of Congress.

To amend the Internal Revenue Code of 1986 to expand the deduction for computer donations to schools and to allow a tax credit for donated computers.

IN THE SENATE OF THE UNITED STATES

March 4, 1999

Mr. ABRAHAM (for himself, Mr. WYDEN, Mr. HATCH, Mr. KERREY, Mr. COVERDELL, Mr. DASCHLE, Mr. JEFFORDS, Mr. LIEBERMAN, Mr. ALLARD, Mr. GORTON, Mr. BURNS, and Mr. MCCONNELL) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to expand the deduction for computer donations to schools and to allow a tax credit for donated computers.

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 `New Millennium Classrooms Act'.

SEC. 2. EXPANSION OF DEDUCTION FOR COMPUTER DONATIONS TO SCHOOLS.

(a) EXTENSION OF AGE OF ELIGIBLE COMPUTERS- Section 170(e)(6)(B)(ii) of the Internal Revenue Code of 1986 (defining qualified elementary or secondary educational contribution) is amended--

(1) by striking `2 years' and inserting `3 years', and

(2) by inserting `for the taxpayer's own use' after `constructed by the taxpayer'.

(b) REACQUIRED COMPUTERS ELIGIBLE FOR DONATION-

(1) IN GENERAL- Section 170(e)(6)(B)(iii) of the Internal Revenue Code of 1986 (defining qualified elementary or secondary educational contribution) is amended by inserting `, the person from whom the donor reacquires the property,' after `the donor'.

(2) CONFORMING AMENDMENT- Section 170(e)(6)(B)(ii) of such Code is amended by inserting `or reaquired' after `acquired'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to contributions made in taxable years ending after the date of the enactment of this Act.

SEC. 3. CREDIT FOR COMPUTER DONATIONS TO SCHOOLS.

(a) IN GENERAL- Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business related credits) is amended by adding at the end the following:

`SEC. 45D. CREDIT FOR COMPUTER DONATIONS TO SCHOOLS.

`(a) GENERAL RULE- For purposes of section 38, the school computer donation credit determined under this section is an amount equal to 30 percent of the qualified elementary or secondary educational contributions (as defined in section 170(e)(6)(B)) made by the taxpayer during the taxable year.

`(b) INCREASED PERCENTAGE FOR CONTRIBUTIONS TO SCHOOLS IN EMPOWERMENT ZONES, ENTERPRISE COMMUNITIES, AND INDIAN RESERVATIONS- In the case of a qualified elementary or secondary educational contribution (as so defined) to an educational organization or entity located in an empowerment zone or enterprise community designated under section 1391 or an Indian reservation (as defined in section 168(j)(6)), subsection (a) shall be applied by substituting `50 percent' for `30 percent'.

`(c) CERTAIN RULES MADE APPLICABLE- For purposes of this section, rules similar to the rules of paragraphs (1) and (2) of section 41(f) shall apply.

`(d) TERMINATION- This section shall not apply to taxable years beginning on or after the date which is 3 years after the date of the enactment of the New Millennium Classrooms Act.

(b) CURRENT YEAR BUSINESS CREDIT CALCULATION- Section 38(b) of the Internal Revenue Code of 1986 (relating to current year business credit) is amended by striking `plus' at the end of paragraph (11), by striking the period at the end of paragraph (12) and inserting `, plus', and by adding at the end the following:

`(13) the school computer donation credit determined under section 45D(a).'

(c) DISALLOWANCE OF DEDUCTION BY AMOUNT OF CREDIT- Section 280C of the Internal Revenue Code of 1986 (relating to certain expenses for which credits are allowable) is amended by adding at the end the following:

`(d) CREDIT FOR SCHOOL COMPUTER DONATIONS- No deduction shall be allowed for that portion of the qualified elementary or secondary educational contributions (as defined in section 170(e)(6)(B)) made during the taxable year that is equal to the amount of credit determined for the taxable year under section 45D(a). In the case of a corporation which is a member of a controlled group of corporations (within the meaning of section 52(a)) or a trade or business which is treated as being under common control with other trades or businesses (within the meaning of section 52(b)), this subsection shall be applied under rules prescribed by the Secretary similar to the rules applicable under subsections (a) and (b) of section 52.'

(d) LIMITATION ON CARRYBACK- Subsection (d) of section 39 of the Internal Revenue Code of 1986 (relating to carryback and carryforward of unused credits) is amended by adding at the end the following:

`(9) NO CARRYBACK OF SCHOOL COMPUTER DONATION CREDIT BEFORE EFFECTIVE DATE- No amount of unused business credit available under section 45D may be carried back to a taxable year beginning on or before the date of the enactment of this paragraph.'

(e) CLERICAL AMENDMENT- The table of sections for subpart D 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 45C the following:

`Sec. 45D. Credit for computer donations to schools.'

(f) EFFECTIVE DATE- The amendments made by this section shall apply to contributions made in taxable years beginning after the date of the enactment of this Act.