To amend the Internal Revenue Code of 1986 to provide a credit against income tax for businesses furnishing broadband services to underserved and rural areas.

Summary: Broadband Access Equality Act of 2009 - Amends the Internal Revenue Code to allow a general business tax credit for broadband property installed in underserved and rural areas. Allow a 50% credit for the cost of such property installed in areas in which not more than the greater of 5% of households or 20 households have broadband access and a 30% credit for all other underserved and rural areas. Increases by 10% the rate of such credit for high speed broadband service.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Broadband Access Equality Act of 
2009''.

SEC. 2. CREDIT FOR PROPERTY USED TO FURNISH BROADBAND SERVICES IN 
              UNDERSERVED AND RURAL AREAS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by inserting after section 45Q the following new 
section:

``SEC. 45R. PROPERTY USED TO FURNISH BROADBAND SERVICES IN UNDERSERVED 
              AND RURAL AREAS.

    ``(a) In General.--For purposes of section 38, the broadband 
services credit determined under this section is an amount equal to the 
applicable percentage of the cost of each qualified broadband property 
placed in service during the taxable year.
    ``(b) Applicable Percentage.--
            ``(1) In general.--For purposes of subsection (a), the 
        applicable percentage is--
                    ``(A) 50 percent for qualified broadband property 
                for underserved and rural areas in which, on the date 
                of the enactment of this section, not more than the 
                greater of--
                            ``(i) 5 percent of the households, or
                            ``(ii) 20 households,
                have broadband access, and
                    ``(B) 30 percent for qualified broadband property 
                for underserved and rural areas which, on such date, 
                are not described in paragraph (1).
            ``(2) Increased percentage where high speed service 
        provided.--The applicable percentage determined under paragraph 
        (1) shall be increased by 10 percentage points for qualified 
        broadband property providing transmission service at a speed 
        which is not less than--
                    ``(A) except in the case of commercial mobile radio 
                services, 50 megabits per second downstream and 20 
                megabits per second upstream, and
                    ``(B) in the case of commercial mobile radio 
                services, 10 megabits per second downstream and 2 
                megabits per second upstream.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified broadband property.--The term `qualified 
        broadband property' means section 1245 property (as defined in 
        section 1245(a)(3))--
                    ``(A) which is used to provide broadband services 
                in underserved or rural areas to purchasers of such 
                services,
                    ``(B) which is--
                            ``(i) tangible property (to which section 
                        168 applies), or
                            ``(ii) computer software (as defined in 
                        section 197(e)(3)(B)) which is described in 
                        section 197(e)(3)(A) and to which section 167 
                        applies, and
                    ``(C) the original use of which commences with the 
                taxpayer.
        Such term shall not include any property described in section 
        50(b).
            ``(2) Broadband.--The term `broadband' means an Internet 
        Protocol-based transmission service (at a speed which is not 
        less than 5 megabits per second downstream and 1 megabit per 
        second upstream) that enables users to send and receive voice, 
        video, data, graphics, or a combination, without regard to any 
        transmission media or technology.
            ``(3) Underserved area.--The term `underserved area' 
        means--
                    ``(A) any census tract that is located in--
                            ``(i) an empowerment zone or enterprise 
                        community designated under section 1391, or
                            ``(ii) the District of Columbia Enterprise 
                        Zone established under section 1400, or
                    ``(B) any census tract--
                            ``(i) the poverty level of which is at 
                        least 30 percent (based on the most recent 
                        census data), and
                            ``(ii) the median family income of which 
                        does not exceed--
                                    ``(I) in the case of a census tract 
                                located in a metropolitan statistical 
                                area, 70 percent of the greater of the 
                                metropolitan area median family income 
                                or the statewide median family income, 
                                and
                                    ``(II) in the case of a census 
                                tract located in a nonmetropolitan 
                                statistical area, 70 percent of the 
                                nonmetropolitan statewide median family 
                                income.
            ``(4) Rural area.--The term `rural area' means any census 
        tract outside a metropolitan statistical area (as defined by 
        the Office of Management and Budget).
            ``(5) Regulated entities.--The credit determined under 
        subsection (a) may not be used to reduce a taxpayer's cost of 
        service, but may be used to reduce rate base, provided that 
        such reduction is restored not less rapidly than ratably. For 
        purposes of determining ratable restorations to rate base, the 
        period of time used in computing depreciation expense for 
        purposes of reflecting operating results in the taxpayer's 
        regulated books of account shall be used.
    ``(d) Recapture in Case of Dispositions, etc.--Under regulations 
prescribed by the Secretary--
            ``(1) Early disposition.--If, before the close of the 
        period to which section 50(a)(1) applies, qualified broadband 
        property is disposed of or ceases to be used to provide 
        broadband services to any underserved area, then the tax under 
        this chapter for the taxable year in which such disposition or 
        cessation occurs shall be increased by the recapture percentage 
        (determined under the table contained in section 50(a)(1)(B)) 
        of the aggregate credits allowed under subsection (a) for all 
        prior taxable years.
            ``(2) Subsection not to apply in certain cases.--Rules 
        similar to the rules of section 50(a)(4) shall apply for 
        purposes of paragraph (1).
    ``(e) Other Rules To Apply.--Rules similar to the rules of 
paragraphs (3), (4), and (5) of section 179(d) shall apply for purposes 
of this section.
    ``(f) Basis Reduction.--Rules similar to the rules of sections 
50(c) (other than paragraph (3)) and 1016(a)(19) shall apply for 
purposes of this section.''.
    (b) Credit To Be Part of General Business Credit.--Subsection (b) 
of section 38 of such Code is amended by striking ``plus'' at the end 
of paragraph (34), by striking the period at the end of paragraph (35) 
and inserting ``, plus'', and by adding at the end the following new 
paragraph:
            ``(36) the broadband services credit determined under 
        section 45R(a).''.
    (c) Clerical Amendment.--The table of sections subpart D of part IV 
of subchapter A of chapter 1 of such Code is amended by adding at the 
end the following new item:

``Sec. 45R. Property used to furnish broadband services in underserved 
                            and rural areas.''
    (d) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of enactment of this 
Act in taxable years ending after such date.