What This Bill Does
This bill changes tax rules for broadband grants. It stops people who receive certain broadband grants from having to count that money as income on their taxes. The bill amends the federal tax code to create new rules for how to handle broadband grants from government programs.
Who It Affects
People or organizations who receive grants for broadband deployment (the process of building broadband infrastructure). The U.S. Department of the Treasury (the government agency that handles taxes). State, territorial, tribal and local governments that give out broadband grants.
Key Provisions
• Broadband grants do not count as income that people have to report on their taxes, meaning recipients cannot be taxed on the money they receive for broadband purposes (Sec. 2(a))
• People cannot get tax deductions or credits for the same expenses they already paid for with a broadband grant, to prevent people from getting double tax benefits (Sec. 2(b))
• The rule applies to grants from the Broadband Equity, Access, and Deployment Program, the State Digital Equity Capacity Grant Program, the Digital Equity Competitive Grant Program, middle mile grants, certain rural broadband programs, and grants from state or local governments funded for broadband infrastructure (Sec. 2(c))
What Changes
If this bill becomes law, recipients of specified broadband grants will not have to count those grant amounts as taxable income. They cannot also claim tax deductions or credits for expenses paid with these grants. The value of any property purchased with these grants must be reduced in tax calculations by the grant amount.
Important Definitions
The bill defines a "qualified broadband grant" as grants received under seven specific federal and state broadband programs listed in the bill (Sec. 2(c)).
Effective Date
This law applies to grants received in tax years ending after March 11, 2021 (Sec. 2(c)).
I
118TH CONGRESS
1ST SESSION
H. R. 889
To amend the Internal Revenue Code of 1986 to exclude certain broadband
grants from gross income.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 9, 2023
Mr. KELLY of Pennsylvania (for himself, Mr. PANETTA, Mr. FERGUSON, Ms.
SEWELL, Mr. CARTER of Georgia, and Mr. KILDEE) introduced the fol-
lowing bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to exclude
certain broadband grants from gross income.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE.
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This Act may be cited as the ‘‘Broadband Grant Tax
4
Treatment Act’’.
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SEC. 2. CERTAIN GRANTS FOR BROADBAND EXCLUDED
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FROM GROSS INCOME.
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(a) IN GENERAL.—Part III of subchapter B of chap-
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ter 1 of the Internal Revenue Code of 1986 is amended
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•HR 889 IH
by inserting after section 139I the following new sub-
1
section:
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‘‘SEC. 139J. CERTAIN BROADBAND GRANTS.
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‘‘(a) IN GENERAL.—Gross income shall not include
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any qualified broadband grant made for purposes of
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broadband deployment.
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‘‘(b) DENIAL
OF
DOUBLE
BENEFIT.—Notwith-
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standing any other provision of this subtitle, no deduction
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or credit shall be allowed for, or by reason of, any expendi-
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ture to the extent of the amount excluded under sub-
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section (a) for any qualified broadband grant which was
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provided with respect to such expenditure. The adjusted
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basis of any property shall be reduced by the amount ex-
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cluded under subsection (a) which was provided with re-
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spect to such property.
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‘‘(c) QUALIFIED BROADBAND GRANT.—For purposes
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of this section, the term ‘qualified broadband grant’
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means—
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‘‘(1) any grant or subgrant received under the
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Broadband Equity, Access, and Deployment Pro-
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gram established under section 60102 of the Infra-
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structure Investment and Jobs Act,
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‘‘(2) any grant or subgrant received under the
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State Digital Equity Capacity Grant Program estab-
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lished under section 60304 of such Act,
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•HR 889 IH
‘‘(3) any grant received under the Digital Eq-
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uity Competitive Grant Program established under
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section 60305 of such Act,
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‘‘(4) any grant received under section 60401 of
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such Act (relating to middle mile grants),
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‘‘(5) any grant received—
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‘‘(A) under the broadband loan and grant
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pilot program established by section 779 of
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Public Law 115–141 under the Rural Elec-
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trification Act of 1936; and
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‘‘(B) from funds made available for such
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program under the heading ‘Distance Learning,
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Telemedicine, and Broadband Program’ under
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the heading ‘Rural Utilities Service’ under title
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I of division J of the Infrastructure Investment
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and Jobs Act,
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‘‘(6) any grant received from a State, territory,
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Tribal government, or unit of local government to
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the extent such grant was—
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‘‘(A) funded by amounts provided to the
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State or local government under section 602,
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603, or 604 of the Social Security Act, and
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‘‘(B) provided for the stated purposes of
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making investments in broadband infrastruc-
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ture, or
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•HR 889 IH
‘‘(7) any grant or subgrant received under sec-
1
tion 905 of division N of the Consolidated Appro-
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priations Act, 2021.
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‘‘(d) REGULATIONS.—The Secretary shall issue such
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regulations or other guidance as may be necessary or ap-
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propriate to carry out the purposes of this section.’’.
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(b) CLERICAL AMENDMENT.—The table of sections
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for part III of subchapter B of chapter 1 of the Internal
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Revenue Code of 1986 is amended by inserting after the
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item related to section 139I the following new item:
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‘‘Sec. 139J. Certain broadband grants.’’.
(c) EFFECTIVE DATE.—The amendments made by
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this section shall apply to amounts received in taxable
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years ending after March 11, 2021.
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Æ
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