Gigabit Opportunity Act

I 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. WITT- MAN, and Mr. MOONEY of West Virginia) introduced the following bill; which was referred to the Committee on Ways and Means, and in addi- tion to the Committee on Energy and Commerce, for a period to be sub- sequently 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 Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Gigabit Opportunity 4 Act’’. 5 VerDate Sep 11 2014 05:28 Nov 22, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5082.IH H5082 kjohnson on DSK79L0C42 with BILLS 2 •HR 5082 IH SEC. 2. GIGABIT OPPORTUNITY ZONES. 1 (a) IN GENERAL.—Chapter 1 of the Internal Rev- 2 enue Code of 1986 is amended by inserting after sub- 3 chapter V the following new subchapter: 4 ‘‘Subchapter W—Gigabit Opportunity Zones 5 ‘‘Sec. 1400W–1. Designation. ‘‘Sec. 1400W–2. Deferral for eligible taxpayer of capital gains invested in gig- abit opportunity zones. ‘‘Sec. 1400W–3. Immediate expensing of qualified gigabit opportunity zone business property. ‘‘SEC. 1400W–1. DESIGNATION. 6 ‘‘(a) QUALIFIED GIGABIT OPPORTUNITY ZONE DE- 7 FINED.—For the purposes of this subchapter, the term 8 ‘qualified gigabit opportunity zone’ means a population 9 census tract that is a low-income community— 10 ‘‘(1) which does not have fixed terrestrial 11 broadband service that meets the current speed 12 benchmark for fixed services (as determined by the 13 Federal Communications Commission in its most re- 14 cent report issued pursuant to section 706 of the 15 Telecommunications Act of 1996 (47 U.S.C. 1302)), 16 ‘‘(2) which is located in a jurisdiction— 17 ‘‘(A) that has been certified by Secretary, 18 in consultation with the National Telecommuni- 19 cations and Information Administration, as 20 having adopted the Uniform Model Broadband 21 Deployment Act prescribed by the Federal 22 VerDate Sep 11 2014 05:28 Nov 22, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5082.IH H5082 kjohnson on DSK79L0C42 with BILLS 3 •HR 5082 IH Communications Commission pursuant to sec- 1 tion 4 of the Gigabit Opportunity Act, or 2 ‘‘(B) which has been determined by the 3 Secretary, in consultation with the National 4 Telecommunications and Information Adminis- 5 tration, to have adopted laws which are com- 6 parable to such Uniform Model Broadband De- 7 ployment Act, and 8 ‘‘(3) which is designated as a qualified gigabit 9 opportunity zone. 10 Paragraph (1)(B) shall not apply with respect to any ju- 11 risdiction for which a determination has been made after 12 the date which is 3 years after the date of the enactment 13 of this section. 14 ‘‘(b) DESIGNATION.— 15 ‘‘(1) IN GENERAL.—For purposes of subsection 16 (a)(3), a population census tract that is a low-in- 17 come community and which meets the requirements 18 of paragraph (1) of subsection (a) is designated as 19 a qualified gigabit opportunity zone if— 20 ‘‘(A) not later than the end of the deter- 21 mination period, the governor of the State in 22 which the tract is located— 23 VerDate Sep 11 2014 05:28 Nov 22, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5082.IH H5082 kjohnson on DSK79L0C42 with BILLS 4 •HR 5082 IH ‘‘(i) nominates the tract for designa- 1 tion as a qualified gigabit opportunity 2 zone, and 3 ‘‘(ii) notifies the Secretary in writing 4 of such nomination, and 5 ‘‘(B) the Secretary certifies such nomina- 6 tion and designates such tract as a qualified 7 gigabit opportunity zone before the end of the 8 consideration period. 9 ‘‘(2) EXTENSION OF PERIODS.—A governor 10 may request that the Secretary extend either the de- 11 termination or consideration period, or both (deter- 12 mined without regard to this subparagraph), for an 13 additional 30 days. 14 ‘‘(c) OTHER DEFINITIONS.—For purposes of this 15 subsection— 16 ‘‘(1) LOW-INCOME COMMUNITIES.—The term 17 ‘low-income community’ has the same meaning as 18 when used in section 45D(e). 19 ‘‘(2) DEFINITION OF PERIODS.— 20 ‘‘(A) CONSIDERATION PERIOD.—The term 21 ‘consideration period’ means the 30-day period 22 beginning on the date on which the Secretary 23 receives notice under subsection (b)(1)(A)(ii), 24 as extended under subsection (b)(2). 25 VerDate Sep 11 2014 05:28 Nov 22, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5082.IH H5082 kjohnson on DSK79L0C42 with BILLS 5 •HR 5082 IH ‘‘(B) DETERMINATION PERIOD.—The term 1 ‘determination period’ means the 90-day period 2 beginning on the date on which the State 3 adopts the Uniform Model Broadband Deploy- 4 ment Act described in subsection (a)(2)(A), as 5 extended under subsection (b)(2). 6 ‘‘(d) GUIDANCE FOR OPPORTUNITY ZONE NOMINA- 7 TIONS.—When considering the nomination of qualified 8 gigabit opportunity zones, governors should strive for the 9 creation of qualified gigabit opportunity zones that are 10 geographically concentrated and contiguous clusters of 11 population census tracts and should give particular consid- 12 eration to areas that— 13 ‘‘(1) are currently facing obstacles to economic 14 development due to a lack of geographic broadband 15 coverage or a lack of broadband speed, 16 ‘‘(2) are currently the focus of mutually rein- 17 forcing State, local, or private economic development 18 initiatives, and 19 ‘‘(3)(A) are poised for economic growth that re- 20 quires access to high speed broadband for commer- 21 cial purposes, and 22 ‘‘(B) represent the areas of a State where such 23 service would result in the highest return on invest- 24 ment. 25 VerDate Sep 11 2014 05:28 Nov 22, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5082.IH H5082 kjohnson on DSK79L0C42 with BILLS 6 •HR 5082 IH ‘‘(e) NUMBER OF DESIGNATIONS.— 1 ‘‘(1) IN GENERAL.—Except as provided by 2 paragraph (2), the number of population census 3 tracts in a State that may be designated as qualified 4 gigabit opportunity zones under this section may not 5 exceed 25 percent of the number of low-income com- 6 munities in the State. 7 ‘‘(2) EXCEPTION.—If the number of low-income 8 communities in a State is less than 100, then a total 9 of 25 of such tracts may be designated as qualified 10 gigabit opportunity zones. 11 ‘‘(f) DESIGNATION OF TRACTS CONTIGUOUS WITH 12 LOW-INCOME COMMUNITIES.— 13 ‘‘(1) IN GENERAL.—A population census tract 14 that is not a low-income community may be des- 15 ignated as a qualified gigabit opportunity zone under 16 this section if— 17 ‘‘(A) such tract meets the requirements of 18 paragraph (1) of subsection (a), 19 ‘‘(B) the tract is contiguous with the low- 20 income community that is designated as a 21 qualified gigabit opportunity zone, and 22 ‘‘(C) the median family income of the tract 23 does not exceed 150 percent of the median fam- 24 VerDate Sep 11 2014 05:28 Nov 22, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5082.IH H5082 kjohnson on DSK79L0C42 with BILLS 7 •HR 5082 IH ily income of the low-income community with 1 which the tract is contiguous. 2 ‘‘(2) LIMITATION.—Not more than 25 percent 3 of the population census tracts designated in a State 4 as a qualified gigabit opportunity zone may be des- 5 ignated under paragraph (1). 6 ‘‘(g) PERIOD FOR WHICH DESIGNATION IS IN EF- 7 FECT.—A designation as a qualified gigabit opportunity 8 zone shall remain in effect for the period beginning on 9 the date of the designation and ending at the close of the 10 7th calendar year beginning on or after such date of des- 11 ignation. 12 ‘‘SEC. 1400W–2. DEFERRAL FOR ELIGIBLE TAXPAYER OF 13 CAPITAL GAINS INVESTED IN GIGABIT OP- 14 PORTUNITY ZONES. 15 ‘‘(a) IN GENERAL.— 16 ‘‘(1) EXCLUSION OF GAIN INVESTED IN GIG- 17 ABIT OPPORTUNITY ZONE PROPERTY.—In the case 18 of gain from the sale to, or exchange with, an unre- 19 lated person of any property held by an eligible tax- 20 payer, at the election of the eligible taxpayer— 21 ‘‘(A) gross income for the taxable year 22 shall not include so much of such gain as does 23 not exceed the aggregate cost of all qualified 24 gigabit opportunity zone property acquired by 25 VerDate Sep 11 2014 05:28 Nov 22, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5082.IH H5082 kjohnson on DSK79L0C42 with BILLS 8 •HR 5082 IH the taxpayer during the 180-day period begin- 1 ning on the date of such sale or exchange, and 2 ‘‘(B) the amount of gain excluded by sub- 3 paragraph (A) shall be included in gross income 4 as provided by paragraph (2). 5 ‘‘(2) DEFERRAL OF GAIN INVESTED IN QUALI- 6 FIED GIGABIT OPPORTUNITY ZONE PROPERTY.— 7 ‘‘(A) YEAR OF INCLUSION.—Except as 8 provided by subparagraph (C), gain to which 9 paragraph (1)(B) applies shall be included in 10 income in the taxable year in which the quali- 11 fied gigabit opportunity zone property related to 12 such gain is sold or exchanged in the amount 13 determined under subparagraph (B). 14 ‘‘(B) AMOUNT INCLUDIBLE.—The amount 15 of gain determined under this clause shall be— 16 ‘‘(i) 100 percent of such gain in the 17 case of the sale or exchange of the quali- 18 fied gigabit opportunity zone property with 19 respect to which gain is deferred under 20 paragraph (1) that is held for less than 5 21 years, 22 ‘‘(ii) 90 percent of such gain in the 23 case of the sale or exchange of the quali- 24 fied gigabit opportunity zone property with 25 VerDate Sep 11 2014 05:28 Nov 22, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H5082.IH H5082 kjohnson on DSK79L0C42 with BILLS 9 •HR 5082 IH respect to which gain is deferred under 1 paragraph (1) that is held for at least 5 2 years but less than 7 years, and 3 ‘‘(iii) 85 percent of such gain in the 4 case of the sale or exchange of the quali- 5 fied gigabit opportunity zone property with 6 respect to which gain is deferred under 7 paragraph (1) that is held for at least 7 8 years. 9 ‘‘(3) EXCLUSION OF GAIN ON QUALIFIED GIG- 10 ABIT OPPORTUNITY ZONE PROPERTY HELD FOR AT 11 LEAST 10 YEARS.—Except as provided in paragraph 12 (2), in the case of the sale or exchange of qualified 13 gigabit opportunity zone property, or an investment 14 in a qualified opportunity fund, held for at least 10 15 years, gross income for the taxable year shall not in- 16 clude any gain from the sale or exchange of such 17 property or investment. 18 ‘‘(4) ONE ELECTION PER PROPERTY.—No elec- 19 tion may be made under paragraph (1) with respect 20 to a sale or exchange if an election previously made 21 with respect to such sale or exchange is in effect. 22 ‘‘(b) BASIS RULES RELATING TO QUALIFIED GIG- 23 ABIT OPPORTUNITY ZONE PROPERTY.— 24 VerDate Sep 11 2014 05:28 Nov 22, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H5082.IH H5082 kjohnson on DSK79L0C42 with BILLS 10 •HR 5082 IH ‘‘(1) REDUCED BY GAIN DEFERRED UNDER 1 SUBSECTION (a)(1).—The basis of a qualified gig- 2 abit opportunity zone property immediately after its 3 acquisition under subsection (a) shall be reduced by 4 the amount of gain deferred by reason of subsection 5 (a)(1)(A) with respect to such property. 6 ‘‘(2) INCREASE FOR GAIN RECOGNIZED UNDER 7 SUBSECTION (a)(2).—The basis of qualified gigabit 8 opportunity zone property shall be increased by the 9 amount of gain recognized by reason of subsection 10 (a)(2) with respect to such property. 11 ‘‘(3) SUBSEQUENT INCREASE IN BASIS FOR 12 PROPERTY HELD FOR AT LEAST 5 YEARS BUT LESS 13 THAN 10 YEARS.—In the case of qualified gigabit op- 14 portunity zone property held for at least 5 years but 15 less than 10 years— 16 ‘‘(A) PROPERTY HELD FOR 5 YEARS.—For 17 qualified gigabit opportunity zone property held 18 for at least 5 years, the basis of such property 19 shall be increased by an amount equal to 10 20 percent of the amount of gain deferred by rea- 21 son of subsection (a)(1)(A) with respect to such 22 property. 23 ‘‘(B) PROPERTY HELD FOR 7 YEARS.—For 24 qualified gigabit opportunity zone property held 25 VerDate Sep 11 2014 05:28 Nov 22, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H5082.IH H5082 kjohnson on DSK79L0C42 with BILLS 11 •HR 5082 IH for at least 7 years, the basis of such property 1 shall be increased by an amount equal to 5 per- 2 cent of the amount of gain deferred by reason 3 of subsection (a)(1)(A) with respect to such 4 property. 5 ‘‘(c) ELIGIBLE TAXPAYER.—For purposes of this sec- 6 tion, the term ‘eligible taxpayer’ means any taxpayer who 7 has a trade or business a substantial part of which con- 8 sists of selling broadband Internet service to commercial 9 customers, residential customers, or both through one or 10 a combination of the following technologies: 11 ‘‘(1) Digital Subscriber Line transmission tech- 12 nology that transmits data faster over traditional 13 copper telephone lines, without regards to the spe- 14 cific type of Digital Subscriber Line transmission 15 technology such as Asymmetrical Digital Subscriber 16 Line, Symmetrical Digital Subscriber Line, High 17 data rate Digital Subscriber Line, or Very High 18 data rate Digital Subscriber Line. 19 ‘‘(2) Cable Modem transmission technology that 20 enables operators to provide broadband using the 21 same coaxial cables that deliver pictures and sound 22 to televisions. 23 VerDate Sep 11 2014 05:28 Nov 22, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H5082.IH H5082 kjohnson on DSK79L0C42 with BILLS 12 •HR 5082 IH ‘‘(3) Fiber optic transmission technology that 1 converts electrical signals carrying data to light and 2 sends the light through transparent glass fibers. 3 ‘‘(4) Wireless transmission technology that uti- 4 lizes a radio link between the customer’s location 5 and the service provider’s facility, whether mobile or 6 fixed. 7 ‘‘(5) Satellite transmission technology that pro- 8 vides broadband links via orbiting satellites. 9 ‘‘(6) Broadband over powerline transmission 10 technology that delivers broadband over the existing 11 low- and medium-voltage electric power distribution 12 network. 13 ‘‘(7) Such other technologies as the Secretary, 14 in consultation with the Federal Communications 15 Commission, may designate by rule as a broadband 16 provider technology. 17 ‘‘(d) QUALIFIED GIGABIT OPPORTUNITY ZONE 18 PROPERTY.—For purpose [Text truncated for display. Full text available on Congress.gov.]