Bill pushes private sector for gear donations

Rep. Anna Eshoo (D-Calif.) introduced legislation last week that is aimed at increasing the number of computers the private sector donates to public school systems and local and state government agencies.

Eshoo's bill follows, though is not related to, an executive order that President Clinton signed last month that directed federal agencies to donate surplus computer equipment to public schools, particularly to those in poor communities [FCW, Feb. 19].

The Computer Donation Incentive Act would allow computer manufacturers to deduct from corporate taxes the manufacturing costs and half of the fair market value of computers donated to public schools, libraries, recreational centers or other governmental groups.

The law would elevate the treatment of computer donations to public schools to the level of computer donations to private schools, colleges and universities.

Under current Internal Revenue Service rules, manufacturers can only deduct the manufacturing cost of a computer if it is donated to a public school. If the manufacturer donates acomputer to a private educational institution, the rule allows the manufacturer to deduct production costs and half of the computer's market value.

The bill also would broaden the IRS' ruling to include software products and to allow any corporation to donate computers and receive the similar tax deduction.

Sen. Barbara Boxer (D-Calif.) is expected to introduce a companion bill in the Senate.

Although not stated in the House bill, Congress will include language in the bill's report that directs corporations to favor donating computer equipment to poorer school districts, a spokesman for Eshoo said.

Eshoo, whose district includes the Silicon Valley, conceived the computer donation bill after a March event organized by Silicon Valley technology community to hook up public schools to the Internet. "Even in the Silicon Valley, schools may not have computers," the spokesman said.

The bill's tax incentives certainly will encourage corporations to donate more computers to public schools, said Jim Wharton, president of the Gateway 2000 Foundation, an organization that the computer manufacturer Gateway 2000 Inc. formed nearly two years ago. The foundation receives 40 to 60 requests a day from nonprofit groups, schools and other organizations for donations of computer systems.

"This will increase the availability of systems that will be given to schools and governments if companies know they can offset the cost of getting a new [computer] system through tax write-offs," Wharton said.

The law may push companies to upgrade systems sooner than they otherwise may have, Wharton added, giving public schools and state and local governments computer systems that are not as obsolete.

But Bob Cohen, a vice president of the Information Technology Association of America, said the bill, while laudable, is "just one piece of the puzzle." Other services and equipment, such as training, software, networking and maintenance contracts, are essential if public schools are to make any use of donated computers.

"Otherwise, these computers just pile up in warehouses because no one can use them," he added.