Gigabit Opportunity Act
This bill amends the Internal Revenue Code to authorize the designation of qualified gigabit opportunity zones in low-income communities and to provide tax incentives for investments in the zones.
Governors may submit nominations for a limited number of qualified gigabit opportunity zones in low-income communities to the Department of the Treasury for certification and designation. Governors must give particular consideration to areas that
For eligible taxpayers who sell certain broadband services, the bill allows (1) deferrals, reductions, or exemptions from taxes on capital gains invested in certain property used to provide broadband services in a zone (depending on how long the property is held); and (2) immediate expensing of the costs of the property.
The bill also allows tax-exempt private activity bonds to be used for certain broadband projects in the zones.
Within one year of enactment of this bill, the Federal Communications Commission must publish a Uniform Model Broadband Deployment Act containing laws for the state regulation of the deployment of broadband services. Qualified zones must either adopt the Act or laws comparable to the Act.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5082 Introduced in House (IH)]
<DOC>
116th CONGRESS
1st Session
H. R. 5082
To amend the Internal Revenue Code of 1986 to provide tax benefits for
investments in gigabit opportunity zones.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 14, 2019
Mr. Collins of Georgia (for himself, Mr. Cuellar, Mr. Riggleman, Mr.
Loudermilk, Mr. Hurd of Texas, Mr. Tipton, Mr. Pence, Mr. Wittman, and
Mr. Mooney of West Virginia) introduced the following bill; which was
referred to the Committee on Ways and Means, and in addition to the
Committee on Energy and Commerce, for a period to be subsequently
determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide tax benefits for
investments in gigabit opportunity zones.
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 ``Gigabit Opportunity Act''.
SEC. 2. GIGABIT OPPORTUNITY ZONES.
(a) In General.--Chapter 1 of the Internal Revenue Code of 1986 is
amended by inserting after subchapter V the following new subchapter:
``Subchapter W--Gigabit Opportunity Zones
``Sec. 1400W-1. Designation.
``Sec. 1400W-2. Deferral for eligible taxpayer of capital gains
invested in gigabit opportunity zones.
``Sec. 1400W-3. Immediate expensing of qualified gigabit opportunity
zone business property.
``SEC. 1400W-1. DESIGNATION.
``(a) Qualified Gigabit Opportunity Zone Defined.--For the purposes
of this subchapter, the term `qualified gigabit opportunity zone' means
a population census tract that is a low-income community--
``(1) which does not have fixed terrestrial broadband
service that meets the current speed benchmark for fixed
services (as determined by the Federal Communications
Commission in its most recent report issued pursuant to section
706 of the Telecommunications Act of 1996 (47 U.S.C. 1302)),
``(2) which is located in a jurisdiction--
``(A) that has been certified by Secretary, in
consultation with the National Telecommunications and
Information Administration, as having adopted the
Uniform Model Broadband Deployment Act prescribed by
the Federal Communications Commission pursuant to
section 4 of the Gigabit Opportunity Act, or
``(B) which has been determined by the Secretary,
in consultation with the National Telecommunications
and Information Administration, to have adopted laws
which are comparable to such Uniform Model Broadband
Deployment Act, and
``(3) which is designated as a qualified gigabit
opportunity zone.
Paragraph (1)(B) shall not apply with respect to any jurisdiction for
which a determination has been made after the date which is 3 years
after the date of the enactment of this section.
``(b) Designation.--
``(1) In general.--For purposes of subsection (a)(3), a
population census tract that is a low-income community and
which meets the requirements of paragraph (1) of subsection (a)
is designated as a qualified gigabit opportunity zone if--
``(A) not later than the end of the determination
period, the governor of the State in which the tract is
located--
``(i) nominates the tract for designation
as a qualified gigabit opportunity zone, and
``(ii) notifies the Secretary in writing of
such nomination, and
``(B) the Secretary certifies such nomination and
designates such tract as a qualified gigabit
opportunity zone before the end of the consideration
period.
``(2) Extension of periods.--A governor may request that
the Secretary extend either the determination or consideration
period, or both (determined without regard to this
subparagraph), for an additional 30 days.
``(c) Other Definitions.--For purposes of this subsection--
``(1) Low-income communities.--The term `low-income
community' has the same meaning as when used in section 45D(e).
``(2) Definition of periods.--
``(A) Consideration period.--The term
`consideration period' means the 30-day period
beginning on the date on which the Secretary receives
notice under subsection (b)(1)(A)(ii), as extended
under subsection (b)(2).
``(B) Determination period.--The term
`determination period' means the 90-day period
beginning on the date on which the State adopts the
Uniform Model Broadband Deployment Act described in
subsection (a)(2)(A), as extended under subsection
(b)(2).
``(d) Guidance for Opportunity Zone Nominations.--When considering
the nomination of qualified gigabit opportunity zones, governors should
strive for the creation of qualified gigabit opportunity zones that are
geographically concentrated and contiguous clusters of population
census tracts and should give particular consideration to areas that--
``(1) are currently facing obstacles to economic
development due to a lack of geographic broadband coverage or a
lack of broadband speed,
``(2) are currently the focus of mutually reinforcing
State, local, or private economic development initiatives, and
``(3)(A) are poised for economic growth that requires
access to high speed broadband for commercial purposes, and
``(B) represent the areas of a State where such service
would result in the highest return on investment.
``(e) Number of Designations.--
``(1) In general.--Except as provided by paragraph (2), the
number of population census tracts in a State that may be
designated as qualified gigabit opportunity zones under this
section may not exceed 25 percent of the number of low-income
communities in the State.
``(2) Exception.--If the number of low-income communities
in a State is less than 100, then a total of 25 of such tracts
may be designated as qualified gigabit opportunity zones.
``(f) Designation of Tracts Contiguous With Low-Income
Communities.--
``(1) In general.--A population census tract that is not a
low-income community may be designated as a qualified gigabit
opportunity zone under this section if--
``(A) such tract meets the requirements of
paragraph (1) of subsection (a),
``(B) the tract is contiguous with the low-income
community that is designated as a qualified gigabit
opportunity zone, and
``(C) the median family income of the tract does
not exceed 150 percent of the median family income of
the low-income community with which the tract is
contiguous.
``(2) Limitation.--Not more than 25 percent of the
population census tracts designated in a State as a qualified
gigabit opportunity zone may be designated under paragraph (1).
``(g) Period for Which Designation Is in Effect.--A designation as
a qualified gigabit opportunity zone shall remain in effect for the
period beginning on the date of the designation and ending at the close
of the 7th calendar year beginning on or after such date of
designation.
``SEC. 1400W-2. DEFERRAL FOR ELIGIBLE TAXPAYER OF CAPITAL GAINS
INVESTED IN GIGABIT OPPORTUNITY ZONES.
``(a) In General.--
``(1) Exclusion of gain invested in gigabit opportunity
zone property.--In the case of gain from the sale to, or
exchange with, an unrelated person of any property held by an
eligible taxpayer, at the election of the eligible taxpayer--
``(A) gross income for the taxable year shall not
include so much of such gain as does not exceed the
aggregate cost of all qualified gigabit opportunity
zone property acquired by the taxpayer during the 180-
day period beginning on the date of such sale or
exchange, and
``(B) the amount of gain excluded by subparagraph
(A) shall be included in gross income as provided by
paragraph (2).
``(2) Deferral of gain invested in qualified gigabit
opportunity zone property.--
``(A) Year of inclusion.--Except as provided by
subparagraph (C), gain to which paragraph (1)(B)
applies shall be included in income in the taxable year
in which the qualified gigabit opportunity zone
property related to such gain is sold or exchanged in
the amount determined under subparagraph (B).
``(B) Amount includible.--The amount of gain
determined under this clause shall be--
``(i) 100 percent of such gain in the case
of the sale or exchange of the qualified
gigabit opportunity zone property with respect
to which gain is deferred under paragraph (1)
that is held for less than 5 years,
``(ii) 90 percent of such gain in the case
of the sale or exchange of the qualified
gigabit opportunity zone property with respect
to which gain is deferred under paragraph (1)
that is held for at least 5 years but less than
7 years, and
``(iii) 85 percent of such gain in the case
of the sale or exchange of the qualified
gigabit opportunity zone property with respect
to which gain is deferred under paragraph (1)
that is held for at least 7 years.
``(3) Exclusion of gain on qualified gigabit opportunity
zone property held for at least 10 years.--Except as provided
in paragraph (2), in the case of the sale or exchange of
qualified gigabit opportunity zone property, or an investment
in a qualified opportunity fund, held for at least 10 years,
gross income for the taxable year shall not include any gain
from the sale or exchange of such property or investment.
``(4) One election per property.--No election may be made
under paragraph (1) with respect to a sale or exchange if an
election previously made with respect to such sale or exchange
is in effect.
``(b) Basis Rules Relating to Qualified Gigabit Opportunity Zone
Property.--
``(1) Reduced by gain deferred under subsection (a)(1).--
The basis of a qualified gigabit opportunity zone property
immediately after its acquisition under subsection (a) shall be
reduced by the amount of gain deferred by reason of subsection
(a)(1)(A) with respect to such property.
``(2) Increase for gain recognized under subsection
(a)(2).--The basis of qualified gigabit opportunity zone
property shall be increased by the amount of gain recognized by
reason of subsection (a)(2) with respect to such property.
``(3) Subsequent increase in basis for property held for at
least 5 years but less than 10 years.--In the case of qualified
gigabit opportunity zone property held for at least 5 years but
less than 10 years--
``(A) Property held for 5 years.--For qualified
gigabit opportunity zone property held for at least 5
years, the basis of such property shall be increased by
an amount equal to 10 percent of the amount of gain
deferred by reason of subsection (a)(1)(A) with respect
to such property.
``(B) Property held for 7 years.--For qualified
gigabit opportunity zone property held for at least 7
years, the basis of such property shall be increased by
an amount equal to 5 percent of the amount of gain
deferred by reason of subsection (a)(1)(A) with respect
to such property.
``(c) Eligible Taxpayer.--For purposes of this section, the term
`eligible taxpayer' means any taxpayer who has a trade or business a
substantial part of which consists of selling broadband Internet
service to commercial customers, residential customers, or both through
one or a combination of the following technologies:
``(1) Digital Subscriber Line transmission technology that
transmits data faster over traditional copper telephone lines,
without regards to the specific type of Digital Subscriber Line
transmission technology such as Asymmetrical Digital Subscriber
Line, Symmetrical Digital Subscriber Line, High data rate
Digital Subscriber Line, or Very High data rate Digital
Subscriber Line.
``(2) Cable Modem transmission technology that enables
operators to provide broadband using the same coaxial cables
that deliver pictures and sound to televisions.
``(3) Fiber optic transmission technology that converts
electrical signals carrying data to light and sends the light
through transparent glass fibers.
``(4) Wireless transmission technology that utilizes a
radio link between the customer's location and the service
provider's facility, whether mobile or fixed.
``(5) Satellite transmission technology that provides
broadband links via orbiting satellites.
``(6) Broadband over powerline transmission technology that
delivers broadband over the existing low- and medium-voltage
electric power distribution network.
``(7) Such other technologies as the Secretary, in
consultation with the Federal Communications Commission, may
designate by rule as a broadband provider technology.
``(d) Qualified Gigabit Opportunity Zone Property.--For purposes of
this section:
``(1) In general.--The term `qualified gigabit opportunity
zone property' means property which is--
``(A) qualified gigabit opportunity zone stock,
``(B) qualified gigabit opportunity zone
partnership interest,
``(C) qualified gigabit opportunity zone business
property, or
``(D) an interest in a qualified investment fund.
``(2) Qualified gigabit opportunity zone stock.--
``(A) In general.--Except as provided in
subparagraph (B), the term `qualified gigabit
opportunity zone stock' means any stock in a domestic
corporation if--
``(i) such stock is acquired by the
taxpayer after December 31, 2019, at its
original issue (directly or through an
underwriter) from the corporation solely in
exchange for cash,
``(ii) as of the time such stock was
issued, such corporation was a qualified
gigabit opportunity zone business (or, in the
case of a new corporation, such corporation was
being organized for purposes of being a
qualified gigabit opportunity zone business),
and
``(iii) during substantially all of the
taxpayer's holding period for such stock, such
corporation qualified as a qualified gigabit
opportunity zone business.
``(B) Redemptions.--A rule similar to the rule of
section 1202(c)(3) shall apply for purposes of this
paragraph.
``(3) Qualified gigabit opportunity zone partnership
interest.--The term `qualified gigabit opportunity zone
partnership interest' means any capital or profits interest in
a domestic partnership if--
``(A) such interest is acquired by the taxpayer
after December 31, 2019, from the partnership solely in
exchange for cash,
``(B) as of the time such interest was acquired,
such partnership was a qualified gigabit opportunity
zone business (or, in the case of a new partnership,
such partnership was being organized for purposes of
being a qualified gigabit opportunity zone business),
and
``(C) during substantially all of the taxpayer's
holding period for such interest, such partnership
qualified as a qualified gigabit opportunity zone
business.
``(4) Qualified gigabit opportunity zone business
property.--
``(A) In general.--The term `qualified gigabit
opportunity zone business property' means tangible
property used in a trade or business of the taxpayer
if--
``(i) such property--
``(I) is used primarily to provide
broadband transmission services to
areas which do not have fixed
terrestrial broadband service that
meets the current speed benchmark for
fixed services (as determined by the
Federal Communications Commission in
its most recent report issued pursuant
to section 706 of the
Telecommunications Act of 1996 (47
U.S.C. 1302)), and
``(II) is capable of transmitting
signals at a rate of at least
1,000,000,000 bits per second,
``(ii) such property was acquired by the
taxpayer by purchase (as defined in section
179(d)(2)) after December 31, 2019,
``(iii) the original use of such property
in the qualified gigabit opportunity zone
commences with the taxpayer or the taxpayer
substantially improves the property, and
``(iv) during substantially all of the
taxpayer's holding period for such property,
substantially all of the use of such property
was in a qualified gigabit opportunity zone.
``(B) Special rule for certain property.--In the
case of property which is placed in service before
January 1, 2023, and which is with respect to
technology described in paragraph (4) or (5) of
subsection (c), subparagraph (A)(i)(II) shall be
applied by substituting `150,000,000 bits per second'
for `1,000,000,000 bits per second'.
``(C) Substantial improvement.--For purposes of
subparagraph (A)(iii), property shall be treated as
substantially improved by the taxpayer only if, during
any 30-month period beginning after the date of
acquisition of such property, additions to basis with
respect to such property in the hands of the taxpayer
exceed an amount equal to the adjusted basis of such
property at the beginning of such 30-month period in
the hands of the taxpayer.
``(D) Treatment of related parties.--For purposes
of subparagraph (A)(ii), the rules of subparagraph (A)
of section 179(d)(2) shall be applied using the
relationship described in subsection (e)(2) in lieu of
the relationship described in such subparagraph.
``(5) Qualified gigabit opportunity fund.--The term
`qualified gigabit opportunity fund' means any investment
vehicle organized as a corporation or a partnership for the
purpose of investing in qualified gigabit opportunity zone
property (other than another qualified opportunity fund) that
holds at least 90 percent of its assets in qualified
opportunity zone property, determined--
``(A) on the last day of the first 6-month period
of the taxable year of the fund, and
``(B) on the last day of the taxable year of the
fund.
``(6) Qualified gigabit opportunity zone business.--
``(A) In general.--The term `qualified gigabit
opportunity zone business' means a trade or business--
``(i) in which substantially all of the
tangible property owned or leased by the
taxpayer is qualified gigabit opportunity zone
business property,
``(ii) which satisfies the requirements of
paragraphs (2), (4), and (8) of section
1397C(b), and
``(iii) which is not described in section
144(c)(6)(B).
``(B) Special rule.--For purposes of subparagraph
(A), tangible property that ceases to be a qualified
gigabit opportunity zone business property shall
continue to be treated as a qualified gigabit
opportunity zone business property for the lesser of--
``(i) 5 years after the date on which such
tangible property ceases to be so qualified, or
``(ii) the date on which such tangible
property is no longer held by the qualified
gigabit opportunity zone business.
``(e) Applicable Rules.--
``(1) In general.--For purposes of this section and except
as otherwise provided in this section, rules similar to the
rules applicable to deferred like kind exchanges under section
1031 shall apply except that reinvestment in qualified gigabit
opportunity zone property need not require an intermediary
party.
``(2) Related persons.--For purposes of this subsection,
persons are related to each other if such persons are described
in section 267(b) or 707(b)(1), determined by substituting `20
percent' for `50 percent' each place it occurs in such
sections.
``(3) Decedents.--In the case of a decedent, amounts
recognized under this section shall, if not properly includible
in the gross income of the decedent, be includible in gross
income as provided by section 691.
``(4) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out the
purposes of this section, including--
``(A) rules providing for proportionate inclusion
in income and increases in basis for purposes of
subsections (a) and (b) in cases in which a sale or
exchange of any qualified gigabit opportunity zone
property with respect to which gain is deferred under
subsection (a)(1)(A) is less than all of such property,
``(B) rules requiring taxpayers to provide such
information as the Secretary determines to be necessary
or appropriate for the identification of both the
assets sold (including basis and sale price) and the
assets acquired and investments made, and
``(C) rules to prevent abuse.
``SEC. 1400W-3. IMMEDIATE EXPENSING OF QUALIFIED GIGABIT OPPORTUNITY
ZONE BUSINESS PROPERTY.
``(a) In General.--An eligible taxpayer may elect to treat the cost
of any qualified gigabit opportunity zone business property (as defined
in section 1400W-2) as an expense which is not chargeable to capital
account. Any cost so treated shall be allowed as a deduction for the
taxable year in which the qualified gigabit opportunity zone business
property is placed in service.
``(b) Eligible Taxpayer.--For purposes of this section, the term
`eligible taxpayer' has the same meaning given to such term under
section 1400W-2(c).
``(c) Exception for Certain Property.--For purposes of this
section, the term `qualified gigabit opportunity zone business
property' shall not include any property to which section 168(g)
applies.
``(d) Election.--An election under this section shall be made under
rules similar to the rules of section 179(c).
``(e) Coordination With Section 179.--For purposes of section 179,
qualified gigabit opportunity zone business property shall not be
treated as section 179 property.
``(f) Application of Other Rules.--Rules similar to the rules of
paragraphs (3), (4), (5), (7), (9), and (10) of section 179(d) shall
apply for purposes of this section.
``(g) Taxpayer Reporting.--This section shall not apply with
respect to any taxpayer for any taxable year unless such taxpayer
provides the Secretary with such information as the Secretary may
require to allow the Secretary to evaluate the effectiveness of the
program established under this part.''.
(b) Basis Adjustments.--Section 1016(a) of such Code is amended by
striking ``and'' at the end of paragraph (37), by striking the period
at the end of paragraph (38) and inserting ``, and'', and by inserting
after paragraph (38) the following new paragraph:
``(39) to the extent provided in section 1400W-2(b).''.
(c) Clerical Amendment.--The table of subchapters for chapter 1 of
such Code is amended by inserting after the item relating to subchapter
V the following new item:
``subchapter w. gigabit opportunity zones''.
SEC. 3. PRIVATE ACTIVITY BONDS FOR QUALIFIED BROADBAND PROJECTS.
(a) In General.--Section 142(a) of the Internal Revenue Code of
1986 is amended by striking ``or'' at the end of paragraph (14), by
striking the period at the end of paragraph (15) and inserting ``,
or'', and by adding at the end the following new paragraph:
``(16) qualified broadband projects.''.
(b) Qualified Broadband Projects.--Section 142 of such Code is
amended by adding at the end the following new subsection:
``(n) Qualified Broadband Project.--
``(1) In general.--For purposes of subsection (a)(16), the
term `qualified broadband project' means any project which--
``(A) is located in a jurisdiction that has been
certified by Secretary, in consultation with the
National Telecommunications and Information
Administration, as having adopted the Uniform Model
Broadband Deployment Act prescribed by the Federal
Communications Commission pursuant to section 4 of the
Gigabit Opportunity Act, and
``(B) results in gigabit capable Internet access to
residential or commercial locations--
``(i) where a broadband service provider
previously did not provide service, or
``(ii) which do not have fixed terrestrial
broadband service that meets the current speed
benchmark for fixed services (as determined by
the Federal Communications Commission in its
most recent report issued pursuant to section
706 of the Telecommunications Act of 1996 (47
U.S.C. 1302)).''.
(c) Effective Date.--The amendments made by this section shall
apply to bonds issued after the date of the enactment of this Act.
SEC. 4. UNIFORM MODEL BROADBAND DEPLOYMENT ACT.
(a) In General.--Not later than 1 year after the date of the
enactment of this Act, the Federal Communications Commission shall
publish a Uniform Model Broadband Deployment Act containing laws for
the State regulation of the deployment of broadband services.
(b) No Inference Relating to Data Collection.--Nothing in this Act
or the amendments made by this Act shall be construed to provide
additional authority for the collection of data to the Federal
Communications Commission or the National Telecommunications and
Information Administration.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Communications and Technology.
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