,i  #aafth ,,congress  #b;d ,session    
,h4 ,r4 #gheg  ,,in ,,the ,,house ,,of  
,,representatives  ,july #cj1 #bjbj,mr4 
,ferguson introduced the following bill2
 which was referred to the ,committee on
 ,ways and ,means  ,a ,,bill  ,to amend 
the ,internal ,revenue ,code of #aihf to
 exclude gain from the sale or exchange 
of the entire interest in a wholly-owned
 rural incumbent local exchange carrier1
 and for other purposes4  #a4 ,short    
title ,this ,act may be cited as the    
,connect ,america ,now ,act or as the   
,,can ,act4  #b4 ,exclusion of gain from
 sale of rural incumbent local exchange 
carrier stock  7a7 ,in general ,part    
,,iii of subchapter ,b of chapter #a of 
the ,internal ,revenue ,code of #aihf is
 amended by inserting before section    
#adj the following new section3         
#aci;,i4 ,gain from sale of rural       
incumbent local exchange carrier stock  
7a7 ,exclusion ,gross income shall not  
include gain from the sale or exchange  
of the entire interest in a wholly-owned

 rural incumbent local exchange carrier4
  7b7 ,apportionment ,in the case of a  
carrier described in paragraph 7#a7 that
 serves areas not described in paragraph
 7#a71 the amount excluded under        
subsection 7a7 shall not exceed the     
product of such amount 7without regard  
to this paragraph7 and the ratio of--   
7#a7 revenues attributable to the       
provision of communications services in 
an area described in subsection 7c7     
during the #a-year period preceding such
 sale1 to  7#b7 all revenues during such
 period4  7c7 ,rural incumbent local    
exchange carrier ,for purposes of this  
section1 the term rural incumbent local 
exchange carrier means an incumbent     
local exchange carrier that serves an   
area that is an area-- 7#a7 where the   
carrier was required 7on the date of the
 enactment of the ,telecommunications   
,act of #aiif7 by law or regulation to  
provide communications services to any  
customer regardless of cost1 and  7#b7  
other than an urbanized area with-- 7,a7

 not fewer than #ej1jjj people1 and     
7,b7 a core where there are not fewer   
than #a1jjj people per square mile4  7d7
 ,definitions ,for purposes of this     
section1 terms defined in the           
,communications ,act of #aicd have the  
meaning given such terms in such ,act4  
7e7 ,termination ,this section shall not
 apply to sales or exchanges for which  
an application for a certificate under  
section #bad of the ,communications ,act
 of #aicd is filed after the date that  
is #e years after the date of the       
enactment of this section4  4  7b7      
,conforming amendment ,section #cch7;a7 
of such ,code is amended by inserting   
7other than section #aci;,i7 after ,for 
purposes of this subtitle4  7c7         
,clerical amendment ,the table of       
sections for part ,,iii of subchapter ,b
 of chapter #a of such ,code is amended 
by inserting before the item relating to
 section #adj the following new item3   
,sec4 #aci;,i4 ,gain from sale of rural 
incumbent local exchange carrier stock4 

4  7d7 ,effective date ,the amendments  
made by this section shall apply to     
sales or exchanges after the date of the
 enactment of this ,act4  #c4 ,recapture
 of exclusion of gain from sale of rural
 incumbent local exchange carrier stock 
7a7 ,in general ,subchapter ,b of       
chapter #a of the ,internal ,revenue    
,code of #aihf is amended by adding at  
the end the following new part3  ,,xii  
,recapture of exclusion of gain from    
sale of rural incumbent local exchange  
carrier stock  ,sec4 #bib4 ,recapture of
 exclusion of gain from sale of rural   
incumbent local exchange carrier stock4 
#bib4 ,recapture of exclusion of gain   
from sale of rural incumbent local      
exchange carrier stock  7a7 ,in general 
,if a taxpayer acquired stock of a rural
 incumbent local exchange carrier in a  
sale or exchange described in section   
#aci;,i and such carrier is not1 for a  
qualified #a-year period with respect to
 such sale or exchange1 a rural         
incumbent local exchange carrier1 such  

taxpayer's taxable income under this    
chapter for the taxable year in which   
such #a-year period ends shall be       
increased by product of #a_/f and any   
amount excluded from tax by any person  
with respect to such sale or exchange   
under such section4 ,such increase shall
 be treated as capital gain4  7b7 ,rural
 incumbent local exchange carrier ,for  
purposes of this section1 the term rural
 incumbent local exchange carrier means1
 with respect to a qualified #a-year    
period1 a rural incumbent local exchange
 carrier 7as defined in section #dh;,d7 
that offers broadband internet access   
service at upload and download speeds of
 at least #a1jjj megabits per second--  
7#a7 in the case of the #dth qualified  
#a-year period1 to not less than #cj    
percent of locations in an area         
described in section #aci;,i7c77#b71    
7#b7 in the case of the #eth qualified  
#a-year period1 to not less than #dj    
percent of such locations1 and  7#c7 in 
the case of the #fth qualified #a-year  

period1 to not less than #ej percent of 
such locations4  7c7 ,qualified #a-,year
 period ,for purposes of this section1  
the term qualified #a-year period means1
 with respect to a rural incumbent local
 exchange carrier with respect to a sale
 or exchange described in subsection    
#aci;,i1 the #a-year period starting on 
the date of such sale or exchange1 and  
each of the #e subsequent #a-year       
periods4  7d7 ,definitions ,for purposes
 of this section1 terms defined in the  
,communications ,act of #aicd have the  
meaning given such terms in such ,act4  
4  7b7 ,clerical amendment ,the table of
 parts of subchapter ,b of chapter #a of
 such ,code is amended by adding at the 
end the following new item3  ,part      
,,xii--,recapture of exclusion of gain  
from sale of rural incumbent local      
exchange carrier stock  4  7c7          
,effective date ,the amendments made by 
this section shall apply after the date 
of the enactment of this ,act4  #d4     
,rural communications investment tax    

credit  7a7 ,in general ,subpart ,e of  
part ,,iv of subchapter ,a of chapter #a
 of the ,internal ,revenue ,code of     
#aihf is amended by inserting after     
subsection #dh;,c the following new     
section3  #dh;,d4 ,rural communications 
investment credit  7a7 ,in general  7#a7
 ,credit amount ,for the purposes of    
section #df1 in the case of a rural     
incumbent local exchange carrier1 the   
rural communications investment credit  
for any taxable year is an amount equal 
to #cj percent of the amounts that are  
paid or incurred by such carrier during 
any qualified #a-year period ending in  
such taxable year to purchase1 maintain1
 or improve property for the purpose of 
providing voice telephone service or    
broadband internet access service in an 
area described in section               
#aci;,i7c77#b74  7#b7 ,exclusion of     
certain ,federal funds ,amounts paid or 
incurred which are otherwise taken into 
account under paragraph 7#a7 with       
respect to any qualified #a-year period 

shall be reduced 7including for purposes
 of subsection 7b77 by the amount of any
 ,federal universal service support     
under section #bed of the               
,communications ,act of #aicd for the   
deployment of communications            
infrastructure1 or any ,federal grant   
for the deployment of communications    
infrastructure received by such carrier 
and properly attributable to such       
period4  7b7 ,rural incumbent local     
exchange carrier ,for purposes of this  
section1 the term rural incumbent local 
exchange carrier means1 for a #a-year   
period1 an incumbent local exchange     
carrier-- 7#a7 whose stock has been     
acquired in a sale or exchange described
 in section #aci;,i1  7#b7 for which--  
7,a7 the ratio of-- 7i7 the amount      
described in subsection 7a77#a71 divided
 by  7ii7 the average active voice      
telephone service or broadband internet 
access service connections during the   
qualified #a-year period referred to in 
subsection 7a77#a71 is not less than    

7,b7 the ratio of-- 7i7 the product of  
#a4be and the annualized average of the 
amounts described in subsection 7a77#a7 
for the #c-year period preceding the    
sale or exchange1 divided by  7ii7 the  
average active voice telephone service  
or broadband internet access service    
connections during such #c-year period1 
and  7#c7 in the case of the #crd       
qualified #a-year period1 that offers   
broadband internet access service       
described in section #bib7;b7 to not    
less than #bj percent of locations in an
 area described in section              
#aci;,i7c77#b74  7c7 ,qualified #a-,year
 period ,for purposes of this section1  
the term qualified #a-year period means1
 with respect to a rural incumbent local
 exchange carrier with respect to a sale
 or exchange described in subsection    
#aci;,i1 the #a-year period starting on 
the date of such sale or exchange1 and  
each of the #b subsequent #a-year       
periods4  7d7 ,definitions ,for purposes
 of this section1 terms defined in the  

,communications ,act of #aicd have the  
meaning given such terms in such ,act4  
7e7 ,transfer of credit ,if1 with       
respect to a credit under subsection 7a7
 for any taxable year1 the taxpayer     
elects the application of this paragraph
 for such taxable year with respect to  
all 7or any portion specified in such   
election7 of such credit1 the person    
specified in such election1 and not the 
taxpayer1 shall be treated as the       
taxpayer for purposes of this title with
 respect to such credit 7or such portion
 thereof74  4  7b7 ,conforming amendment
 ,paragraph 7#f7 of section #df of such 
,code is amended to read as follows3    
7#f7 the rural communications investment
 credit4  4  7c7 ,clerical amendment    
,the table of sections for subpart ,e of
 part ,,iv of subchapter ,a of chapter  
#a of such ,code is amended by inserting
 after the item relating to section     
#dh;,c the following new item3  ,sec4   
#dh;,d4 ,rural communications investment
 credit4  4  7d7 ,effective date ,the   

amendments made by this section shall   
apply to amounts paid or incurred after 
the date of the enactment of this ,act4 
#e4 ,increase and expansion of private  
activity bonds  7a7 ,increase in volume 
cap ,section #adf7;d77#a7 of the        
,internal ,revenue ,code of #aihf is    
amended by inserting #abj percent of    
before the greater of4  7b7 ,exempt     
facility bonds for broadband            
infrastructure ,section #adb7;a7 of such
 ,code 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 
infrastructure for the provision of     
broadband internet access service4  4   
7c7 ,effective dates  7#a7 ,increase in 
volume cap ,the amendment made by       
subsection 7a7 shall apply to calendar  
years after #bjai4  7#b7 ,exempt        
facility bonds for broadband            
infrastructure ,the amendments made by  
subsection 7b7 shall apply to bonds     

issued after the date of the enactment  
of this ,act4