I 

111TH CONGRESS 

1ST SESSION H. R. 691 

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. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 26, 2009 

Mr. MEEK of Florida introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Broadband Access 

5 Equality Act of 2009’’. 


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1 SEC. 2. CREDIT FOR PROPERTY USED TO FURNISH 

2 BROADBAND SERVICES IN UNDERSERVED 

3 AND RURAL AREAS. 

4 (a) IN GENERAL.—Subpart D of part IV of sub5 chapter A of chapter 1 of the Internal Revenue Code of 

6 1986 (relating to business related credits) is amended by 

7 inserting after section 45Q the following new section: 

8 ‘‘SEC. 45R. PROPERTY USED TO FURNISH BROADBAND 

9 SERVICES IN UNDERSERVED AND RURAL 

10 AREAS. 

11 ‘‘(a) IN GENERAL.—For purposes of section 38, the 

12 broadband services credit determined under this section 

13 is an amount equal to the applicable percentage of the cost 

14 of each qualified broadband property placed in service dur15 ing the taxable year. 

16 ‘‘(b) APPLICABLE PERCENTAGE.— 

17 ‘‘(1) IN GENERAL.—For purposes of subsection 

18 (a), the applicable percentage is— 

19 ‘‘(A) 50 percent for qualified broadband 

20 property for underserved and rural areas in 

21 which, on the date of the enactment of this sec22 tion, not more than the greater of— 

23 ‘‘(i) 5 percent of the households, or 

24 ‘‘(ii) 20 households, 

25 have broadband access, and 


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1 ‘‘(B) 30 percent for qualified broadband 

2 property for underserved and rural areas which, 

3 on such date, are not described in paragraph 

4 (1). 

5 ‘‘(2) INCREASED PERCENTAGE WHERE HIGH

6 SPEED SERVICE PROVIDED.—The applicable percent7 age determined under paragraph (1) shall be in8 creased by 10 percentage points for qualified 

9 broadband property providing transmission service 

10 at a speed which is not less than— 

11 ‘‘(A) except in the case of commercial mo12 bile radio services, 50 megabits per second 

13 downstream and 20 megabits per second up14 stream, and 

15 ‘‘(B) in the case of commercial mobile 

16 radio services, 10 megabits per second down17 stream and 2 megabits per second upstream. 

18 ‘‘(c) DEFINITIONS.—For purposes of this section— 

19 ‘‘(1) QUALIFIED BROADBAND PROPERTY.—The 

20 term ‘qualified broadband property’ means section 

21 1245 property (as defined in section 1245(a)(3))— 

22 ‘‘(A) which is used to provide broadband 

23 services in underserved or rural areas to pur24 chasers of such services, 

25 ‘‘(B) which is— 


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1 ‘‘(i) tangible property (to which sec2 tion 168 applies), or 

3 ‘‘(ii) computer software (as defined in 

4 section 197(e)(3)(B)) which is described in 

5 section 197(e)(3)(A) and to which section 

6 167 applies, and 

7 ‘‘(C) the original use of which commences 

8 with the taxpayer. 

9 Such term shall not include any property described 

10 in section 50(b). 

11 ‘‘(2) BROADBAND.—The term ‘broadband’ 

12 means an Internet Protocol-based transmission serv13 ice (at a speed which is not less than 5 megabits per 

14 second downstream and 1 megabit per second up15 stream) that enables users to send and receive voice, 

16 video, data, graphics, or a combination, without re17 gard to any transmission media or technology. 

18 ‘‘(3) UNDERSERVED AREA.—The term ‘under19 served area’ means— 

20 ‘‘(A) any census tract that is located in— 

21 ‘‘(i) an empowerment zone or enter22 prise community designated under section 

23 1391, or 


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1 ‘‘(ii) the District of Columbia Enter2 prise Zone established under section 1400, 

3 or 

4 ‘‘(B) any census tract— 

5 ‘‘(i) the poverty level of which is at 

6 least 30 percent (based on the most recent 

7 census data), and 

8 ‘‘(ii) the median family income of 

9 which does not exceed— 

10 ‘‘(I) in the case of a census tract 

11 located in a metropolitan statistical 

12 area, 70 percent of the greater of the 

13 metropolitan area median family in14 come or the statewide median family 

15 income, and 

16 ‘‘(II) in the case of a census tract 

17 located in a nonmetropolitan statis18 tical area, 70 percent of the non19 metropolitan statewide median family 

20 income. 

21 ‘‘(4) RURAL AREA.—The term ‘rural area’ 

22 means any census tract outside a metropolitan sta23 tistical area (as defined by the Office of Manage24 ment and Budget). 


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1 ‘‘(5) REGULATED ENTITIES.—The credit deter2 mined under subsection (a) may not be used to re3 duce a taxpayer’s cost of service, but may be used 

4 to reduce rate base, provided that such reduction is 

5 restored not less rapidly than ratably. For purposes 

6 of determining ratable restorations to rate base, the 

7 period of time used in computing depreciation ex8 pense for purposes of reflecting operating results in 

9 the taxpayer’s regulated books of account shall be 

10 used. 

11 ‘‘(d) RECAPTURE IN CASE OF DISPOSITIONS, ETC.— 

12 Under regulations prescribed by the Secretary— 

13 ‘‘(1) EARLY DISPOSITION.—If, before the close 

14 of the period to which section 50(a)(1) applies, 

15 qualified broadband property is disposed of or ceases 

16 to be used to provide broadband services to any un17 derserved area, then the tax under this chapter for 

18 the taxable year in which such disposition or ces19 sation occurs shall be increased by the recapture 

20 percentage (determined under the table contained in 

21 section 50(a)(1)(B)) of the aggregate credits allowed 

22 under subsection (a) for all prior taxable years. 

23 ‘‘(2) SUBSECTION NOT TO APPLY IN CERTAIN

24 CASES.—Rules similar to the rules of section 

25 50(a)(4) shall apply for purposes of paragraph (1). 


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1 ‘‘(e) OTHER RULES TO APPLY.—Rules similar to the 

2 rules of paragraphs (3), (4), and (5) of section 179(d) 

3 shall apply for purposes of this section. 

4 ‘‘(f) BASIS REDUCTION.—Rules similar to the rules 

5 of sections 50(c) (other than paragraph (3)) and 

6 1016(a)(19) shall apply for purposes of this section.’’. 

7 (b) CREDIT TO BE PART OF GENERAL BUSINESS

8 CREDIT.—Subsection (b) of section 38 of such Code is 

9 amended by striking ‘‘plus’’ at the end of paragraph (34), 

10 by striking the period at the end of paragraph (35) and 

11 inserting ‘‘, plus’’, and by adding at the end the following 

12 new paragraph: 

13 ‘‘(36) the broadband services credit determined 

14 under section 45R(a).’’. 

15 (c) CLERICAL AMENDMENT.—The table of sections 

16 subpart D of part IV of subchapter A of chapter 1 of such 

17 Code is amended by adding at the end the following new 

18 item: 

‘‘Sec. 45R. Property used to furnish broadband services in underserved and 

rural areas.’’ 

19 (d) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply to property placed in service after 

21 the date of enactment of this Act in taxable years ending 

22 after such date. 

Æ 


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