,,ii #aaeth ,,congress #ast ,session ,s4 #ajac ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,may #c1 #bjag,mrs4 ,capito introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to provide tax benefits for investments in gigabit opportunity zones4 #a4 ,short title ,this ,act may be cited as the ,gigabit ,opportunity ,act4 #b4 ,gigabit ,opportunity ,zones 7a7 ,establishment of zones and benefits 7#a7 ,in general ,chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following3 ,z ,gigabit ,opportunity ,zones ,sec4 #adjj,z-#a4 ,designation4 ,sec4 #adjj,z-#b4 ,deferral for eligible taxpayer of capital gains invested in gigabit opportunity zones4 ,sec4 #adjj,z-#c4 ,immediate expensing of qualified gigabit opportunity zone business property4 #adjj,z-#a4 ,designation 7a7 ,qualified gigabit opportunity zone defined ,for the purposes of this subchapter1 the term qualified gigabit opportunity zone means a population census tract that is a low-income community-- 7#a7 which is located in a jurisdiction-- 7,a7 that has been certified by ,secretary1 in consultation with the ,national ,telecommunications and ,information ,administration1 as having adopted the ,uniform ,model ,broadband ,deployment ,act prescribed by the ,federal ,communications ,commission pursuant to section #d of the ,gigabit ,opportunity ,act1 or 7,b7 which has been determined by the ,secretary1 in consultation with the ,national ,telecommunications and ,information ,administration1 to have adopted laws which are comparable to such ,model ,broadband ,development ,act1 and 7#b7 which is designated as a qualified gigabit opportunity zone4 ,paragraph 7#a77;,b7 shall not apply with respect to any jurisdiction for which a determination has been made after the date which is #c years after the date of the enactment of this section4 7b7 ,designation 7#a7 ,in general ,for purposes of subsection 7a77#c71 a population census tract that is a low-income community and which meets the requirements of paragraph 7#a7 of subsection 7a7 is designated as a qualified gigabit opportunity zone if-- 7,a7 not later than the end of the determination period1 the governor of the ,state in which the tract is located-- 7i7 nominates the tract for designation as a qualified gigabit opportunity zone1 and 7ii7 notifies the ,secretary in writing of such nomination1 and 7,b7 the ,secretary certifies such nomination and designates such tract as a qualified gigabit opportunity zone before the end of the consideration period4 7#b7 ,extension of periods ,a governor may request that the ,secretary extend either the determination or consideration period1 or both 7determined without regard to this subparagraph71 for an additional #cj days4 7c7 ,other definitions ,for purposes of this subsection-- 7#a7 ,low-income communities ,the term low-income community has the same meaning as when used in section #de;,d7e74 7#b7 ,definition of periods 7,a7 ,consideration period ,the term consideration period means the #cj-;day period beginning on the date on which the ,secretary receives notice under subsection 7b77#a77;,a77ii71 as extended under subsection 7b77#b74 7,b7 ,determination period ,the term determination period means the #ij-;day period beginning on the date on which the ,state adopts the ,uniform ,model ,broadband ,act described in subsection 7a77#a77;,a71 as extended under subsection 7b77#b74 7d7 ,guidance for opportunity zone nominations ,when considering the nomination of qualified gigabit opportunity zones1 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-- 7#a7 are currently facing obstacles to economic development due to a lack of geographic broadband coverage or a lack of broadband speed1 7#b7 are currently the focus of mutually reinforcing ,state1 local1 or private economic development initiatives1 and 7#c7 7,a7 are poised for economic growth that requires access to high speed broadband for commercial purposes1 and 7,b7 represent the areas of a ,state where such service would result in the highest return on investment4 7e7 ,number of designations 7#a7 ,in general ,except as provided by paragraph 7#b71 the number of population census tracts in a ,state that may be designated as qualified gigabit opportunity zones under this section may not exceed #be percent of the number of low-income communities in the ,state4 7#b7 ,exception ,if the number of low-income communities in a ,state is less than #ajj1 then a total of #be of such tracts may be designated as qualified gigabit opportunity zones4 7f7 ,designation of tracts contiguous with low-,income communities 7#a7 ,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-- 7,a7 such tract meets the requirements of paragraph 7#a7 of subsection 7a71 7,b7 the tract is contiguous with the low-income community that is designated as a qualified gigabit opportunity zone1 and 7,c7 the median family income of the tract does not exceed #aej percent of the median family income of the low-income community with which the tract is contiguous4 7#b7 ,limitation ,not more than #be percent of the population census tracts designated in a ,state as a qualified gigabit opportunity zone may be designated under paragraph 7#a74 7g7 ,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 #gth calendar year beginning on or after such date of designation4 #adjj,z-#b4 ,deferral for eligible taxpayer of capital gains invested in gigabit opportunity zones 7a7 ,in general 7#a7 ,exclusion of gain invested in gigabit opportunity zone property ,in the case of gain from the sale to1 or exchange with1 an unrelated person of any property held by an eligible taxpayer1 at the election of the eligible taxpayer-- 7,a7 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 #ahj-;day period beginning on the date of such sale or exchange1 and 7,b7 the amount of gain excluded by subparagraph 7,a7 shall be included in gross income as provided by paragraph 7#b74 7#b7 ,deferral of gain invested in qualified gigabit opportunity zone property 7,a7 ,year of inclusion ,except as provided by subparagraph 7,c71 gain to which paragraph 7#a77;,b7 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 7,b74 7,b7 ,amount includible ,the amount of gain determined under this clause shall be-- 7i7 #ajj 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 7#a7 that is held for less than #e years1 7ii7 #ij 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 7#a7 that is held for at least #e years but less than #g years1 and 7iii7 #he 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 7#a7 that is held for at least #g years4 7#c7 ,exclusion of gain on qualified gigabit opportunity zone property held for at least #aj years ,except as provided in paragraph 7#b71 in the case of the sale or exchange of qualified gigabit opportunity zone property1 or an investment in a qualified opportunity fund1 held for at least #aj years1 gross income for the taxable year shall not include any gain from the sale or exchange of such property or investment4 7#d7 ,one election per property ,no election may be made under paragraph 7#a7 with respect to a sale or exchange if an election previously made with respect to such sale or exchange is in effect4 7b7 ,basis rules relating to qualified gigabit opportunity zone property 7#a7 ,reduced by gain deferred under subsection 7a77#a7 ,the basis of a qualified gigabit opportunity zone property immediately after its acquisition under subsection 7a7 shall be reduced by the amount of gain deferred by reason of subsection 7a77#a77;,a7 with respect to such property4 7#b7 ,increase for gain recognized under subsection 7a77#b7 ,the basis of qualified gigabit opportunity zone property shall be increased by the amount of gain recognized by reason of subsection 7a77#b7 with respect to such property4 7#c7 ,subsequent increase in basis for property held for at least #e years but less than #aj years ,in the case of qualified gigabit opportunity zone property held for at least #e years but less than #aj years-- 7,a7 ,property held for #e years ,for qualified gigabit opportunity zone property held for at least #e years1 the basis of such property shall be increased by an amount equal to #aj percent of the amount of gain deferred by reason of subsection 7a77#a77;,a7 with respect to such property4 7,b7 ,property held for #g years ,for qualified gigabit opportunity zone property held for at least #g years1 the basis of such property shall be increased by an amount equal to #e percent of the amount of gain deferred by reason of subsection 7a77#a77;,a7 with respect to such property4 7c7 ,eligible taxpayer ,for purposes of this section1 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 customers1 residential customers1 or both through one or a combination of the following technologies3 7#a7 ,digital ,subscriber ,line transmission technology that transmits data faster over traditional copper telephone lines1 without regards to the specific type of ,digital ,subscriber ,line transmission technology such as ,asymmetrical ,digital ,subscriber ,line1 ,symmetrical ,digital ,subscriber ,line1 ,high data rate ,digital ,subscriber ,line1 or ,very ,high data rate ,digital ,subscriber ,line4 7#b7 ,cable ,modem transmission technology that enables operators to provide broadband using the same coaxial cables that deliver pictures and sound to televisions4 7#c7 ,fiber optic transmission technology that converts electrical signals carrying data to light and sends the light through transparent glass fibers4 7#d7 ,wireless transmission technology that utilizes a radio link between the customer's location and the service provider's facility1 whether mobile or fixed4 7#e7 ,satellite transmission technology that provides broadband links via orbiting satellites4 7#f7 ,broadband over powerline transmission technology that delivers broadband over the existing low- and medium-voltage electric power distribution network4 7#g7 ,such other technologies as the ,secretary1 in consultation with the ,federal ,communications ,commission1 may designate by rule as a broadband provider technology4 7d7 ,qualified gigabit opportunity zone property ,for purposes of this section3 7#a7 ,in general ,the term qualified gigabit opportunity zone property means property which is-- 7,a7 qualified gigabit opportunity zone stock1 7,b7 qualified gigabit opportunity zone partnership interest1 7,c7 qualified gigabit opportunity zone business property1 or 7,d7 an interest in a qualified investment fund4 7#b7 ,qualified gigabit opportunity zone stock 7,a7 ,in general ,except as provided in subparagraph 7,b71 the term qualified gigabit opportunity zone stock means any stock in a domestic corporation if-- 7i7 such stock is acquired by the taxpayer after ,december #ca1 #bjag1 at its original issue 7directly or through an underwriter7 from the corporation solely in exchange for cash1 7ii7 as of the time such stock was issued1 such corporation was a qualified gigabit opportunity zone business 7or1 in the case of a new corporation1 such corporation was being organized for purposes of being a qualified gigabit opportunity zone business71 and 7iii7 during substantially all of the taxpayer's holding period for such stock1 such corporation qualified as a qualified gigabit opportunity zone business4 7,b7 ,redemptions ,a rule similar to the rule of section #abjb7;c77#c7 shall apply for purposes of this paragraph4 7#c7 ,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-- 7,a7 such interest is acquired by the taxpayer after ,december #ca1 #bjag1 from the partnership solely in exchange for cash1 7,b7 as of the time such interest was acquired1 such partnership was a qualified gigabit opportunity zone business 7or1 in the case of a new partnership1 such partnership was being organized for purposes of being a qualified gigabit opportunity zone business71 and 7,c7 during substantially all of the taxpayer's holding period for such interest1 such partnership qualified as a qualified gigabit opportunity zone business4 7#d7 ,qualified gigabit opportunity zone business property 7,a7 ,in general ,the term qualified gigabit opportunity zone business property means tangible property used in a trade or business of the taxpayer if-- 7i7 such property-- 7,i7 is used primarily to provide broadband transmission services to locations which do not have such service that meets the minimum speed requirements required for universal service support under ,phase ,,ii of the ,connect ,america ,fund of the ,federal ,communications ,commission1 as set forth under subpart ,d of part #ed of title #dg1 ,code of ,federal ,regulations1 and 7,,ii7 is capable of transmitting signals at a rate of at least #a1jjj1jjj1jjj bits per second1 7ii7 such property was acquired by the taxpayer by purchase 7as defined in section #agi7;d77#b77 after ,december #ca1 #bjag1 7iii7 the original use of such property in the qualified gigabit opportunity zone commences with the taxpayer or the taxpayer substantially improves the property1 and 7iv7 during substantially all of the taxpayer's holding period for such property1 substantially all of the use of such property was in a qualified gigabit opportunity zone4 7,b7 ,special rule for certain property ,in the case of property which is placed in service before ,january #a1 #bjba1 and which is with respect to technology described in paragraph 7#d7 or 7#e7 of subsection 7c71 subparagraph 7,a77i77,,ii7 shall be applied by substituting #aej1jjj1jjj bits per second for #a1jjj1jjj1jjj bits per second4 7,c7 ,substantial improvement ,for purposes of subparagraph 7,a77iii71 property shall be treated as substantially improved by the taxpayer only if1 during any #cj-month period beginning after the date of acquisition of such property1 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 #cj-month period in the hands of the taxpayer4 7,d7 ,treatment of related parties ,for purposes of subparagraph 7,a77ii71 the rules of subparagraph 7,a7 of section #agi7;d77#b7 shall be applied using the relationship described in subsection 7e77#b7 in lieu of the relationship described in such subparagraph4 7#e7 ,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 7other than another qualified opportunity fund7 that holds at least #ij percent of its assets in qualified opportunity zone property1 determined-- 7,a7 on the last day of the first #f-month period of the taxable year of the fund1 and 7,b7 on the last day of the taxable year of the fund4 7#f7 ,qualified gigabit opportunity zone business 7,a7 ,in general ,the term qualified gigabit opportunity zone business means a trade or business-- 7i7 in which substantially all of the tangible property owned or leased by the taxpayer is qualified gigabit opportunity zone business property1 7ii7 which satisfies the requirements of paragraphs 7#b71 7#d71 and 7#h7 of section #acig;,c7b71 and 7iii7 which is not described in section #add7;c77#f77;,b74 7,b7 ,special rule ,for purposes of subparagraph 7,a71 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-- 7i7 #e years after the date on which such tangible property ceases to be so qualified1 or 7ii7 the date on which such tangible property is no longer held by the qualified gigabit opportunity zone business4 7e7 ,applicable rules 7#a7 ,in general ,for purposes of this section and except as otherwise provided in this section1 rules similar to the rules applicable to deferred like kind exchanges under section #ajca shall apply except that reinvestment in qualified gigabit opportunity zone property need not require an intermediary party4 7#b7 ,related persons ,for purposes of this subsection1 persons are related to each other if such persons are described in section #bfg7;b7 or #gjg7;b77#a71 determined by substituting #bj percent for #ej percent each place it occurs in such sections4 7#c7 ,decedents ,in the case of a decedent1 amounts recognized under this section shall1 if not properly includible in the gross income of the decedent1 be includible in gross income as provided by section #fia4 7#d7 ,regulations ,the ,secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section1 including-- 7,a7 rules providing for proportionate inclusion in income and increases in basis for purposes of subsections 7a7 and 7b7 in cases in which a sale or exchange of any qualified gigabit opportunity zone property with respect to which gain is deferred under subsection 7a77#a77;,a7 is less than all of such property1 7,b7 rules requiring taxpayers to provide such information as the ,secretary determines to be necessary or appropriate for the identification of both the assets sold 7including basis and sale price7 and the assets acquired and investments made1 and 7,c7 rules to prevent abuse4 #adjj,z-#c4 ,immediate expensing of qualified gigabit opportunity zone business property 7a7 ,in general ,a eligible taxpayer may elect to treat the cost of any qualified gigabit opportunity zone business property 7as defined in section #adjj,z-#b7 as an expense which is not chargeable to capital account4 ,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 service4 7b7 ,eligible taxpayer ,for purposes of this section1 the term eligible taxpayer has the same meaning given to such term under section #adjj,z-#b7;c74 7c7 ,exception for certain property ,for purposes of this section1 the term qualified gigabit opportunity zone business property shall not include any property to which section #afh7;g7 applies4 7d7 ,election ,an election under this section shall be made under rules similar to the rules of section #agi7;c74 7e7 ,coordination with section #agi ,for purposes of section #agi1 qualified gigabit opportunity zone business property shall not be treated as section #agi property4 7f7 ,application of other rules ,rules similar to the rules of paragraphs 7#c71 7#d71 7#e71 7#g71 7#i71 and 7#aj7 of section #agi7;d7 shall apply for purposes of this section4 7g7 ,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 part4 4 7#b7 ,basis adjustments ,section #ajaf7;a7 of such ,code is amended by striking and at the end of paragraph 7#cf71 by striking the period at the end of paragraph 7#cg7 and inserting 1 and1 and by inserting after paragraph 7#cg7 the following3 7#ch7 to the extent provided in section #adjj,z-#b7;b74 4 7#c7 ,clerical amendment ,the table of subchapters for chapter #a of such ,code is amended by adding at the end the following new item3 ,subchapter ,z4 ,gigabit opportunity zones 4 7#d7 ,effective date ,the amendments made by this subsection shall take effect on the date of the enactment of this ,act4 #c4 ,private activity bonds for qualified broadband projects 7a7 ,in general ,section #adb7;a7 of the ,internal ,revenue ,code of #aihf is amended by striking or at the end of paragraph 7#ad71 by striking the period at the end of paragraph 7#ae7 and inserting 1 or1 and by adding at the end the following new paragraph3 7#af7 qualified broadband projects4 4 7b7 ,qualified broadband projects ,section #adb of such ,code is amended by adding at the end the following new subsection3 7n7 ,qualified broadband project 7#a7 ,in general ,for purposes of subsection 7a77#af71 the term qualified broadband project means any project which-- 7,a7 is located in a jurisdiction that has been certified by ,secretary1 in consultation with the ,national ,telecommunications and ,information ,administration1 as having adopted the ,uniform ,model ,broadband ,deployment ,act prescribed by the ,federal ,communications ,commission pursuant to section #d of the ,gigabit ,opportunity ,act1 and 7,b7 results in gigabit capable ,internet access to residential or commercial locations-- 7i7 where a broadband service provider previously did not provide service1 or 7ii7 which do not have broadband service which meets the minimum speed requirements required for universal service support under ,phase ,,ii of the ,connect ,america ,fund of the ,federal ,communications ,commission1 as set forth under subpart ,d of part #ed of title #dg1 ,code of ,federal ,regulations4 4 7c7 ,effective date ,the amendments made by this section shall apply to bonds issued after the date of the enactment of this ,act4 #d4 ,uniform ,model ,broadband ,act 7a7 ,in general ,not later than #a year after the date of the enactment of this ,act1 the ,federal ,communications ,commission shall publish a ,uniform ,model ,broadband ,deployment ,act containing laws for the ,state regulation of the deployment of broadband services4 7b7 ,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 ,administration4