Rural Broadband Investment Tax Credit Act

II 116TH CONGRESS 1ST SESSION S. 2867 To amend the Internal Revenue Code of 1986 to provide an investment credit for qualified broadband projects. IN THE SENATE OF THE UNITED STATES NOVEMBER 14, 2019 Ms. HASSAN (for herself and Mrs. CAPITO) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to provide an investment credit for qualified broadband projects. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Rural Broadband In- 4 vestment Tax Credit Act’’. 5 SEC. 2. INVESTMENT CREDIT FOR QUALIFYING 6 BROADBAND PROJECTS. 7 (a) IN GENERAL.—Subpart E of part IV of sub- 8 chapter A of chapter 1 of the Internal Revenue Code of 9 VerDate Sep 11 2014 00:17 Nov 20, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2867.IS S2867 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 2867 IS 1986 is amended by inserting after section 48C the fol- 1 lowing new section: 2 ‘‘SEC. 48D. QUALIFYING BROADBAND PROJECT CREDIT. 3 ‘‘(a) IN GENERAL.—For purposes of section 46, the 4 qualifying broadband project credit for any taxable year 5 is an amount equal to 10 percent of the qualified invest- 6 ment for such taxable year with respect to any qualifying 7 broadband project. 8 ‘‘(b) QUALIFIED INVESTMENT.— 9 ‘‘(1) IN GENERAL.—For purposes of subsection 10 (a), the qualified investment for any taxable year is 11 the basis of eligible property placed in service by the 12 taxpayer during such taxable year which is part of 13 a qualifying broadband project— 14 ‘‘(A)(i) the construction, reconstruction, or 15 erection of which is completed by the taxpayer, 16 or 17 ‘‘(ii) which is acquired by the taxpayer if 18 the original use of such property commences 19 with the taxpayer, and 20 ‘‘(B) with respect to which depreciation (or 21 amortization in lieu of depreciation) is allow- 22 able. 23 ‘‘(2) SPECIAL RULE FOR CERTAIN SUBSIDIZED 24 PROPERTY.—Rules similar to section 48(a)(4) (with- 25 VerDate Sep 11 2014 00:17 Nov 20, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2867.IS S2867 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 2867 IS out regard to subparagraph (D) thereof) shall apply 1 for purposes of this section. 2 ‘‘(3) CERTAIN QUALIFIED PROGRESS EXPENDI- 3 TURES RULES MADE APPLICABLE.—Rules similar to 4 the rules of subsections (c)(4) and (d) of section 46 5 (as in effect on the day before the enactment of the 6 Revenue Reconciliation Act of 1990) shall apply for 7 purposes of this section. 8 ‘‘(c) LIMITATION.— 9 ‘‘(1) IN GENERAL.—The amount of the credit 10 allowed under subsection (a) for any taxable year 11 with respect to any qualifying broadband project 12 shall not exceed the broadband credit dollar amount 13 allocated to such project by a State under this sec- 14 tion. 15 ‘‘(2) BROADBAND CREDIT DOLLAR AMOUNT.— 16 ‘‘(A) IN GENERAL.—The aggregate 17 broadband credit dollar amount which may be 18 allocated for any calendar year by any State 19 shall not exceed the sum of— 20 ‘‘(i) $5,000,000, plus 21 ‘‘(ii) the amount that bears the same 22 ratio to $2,500,000 as the population of 23 individuals in the state residing in rural 24 VerDate Sep 11 2014 00:17 Nov 20, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2867.IS S2867 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 2867 IS areas bears the population of individuals 1 residing in rural areas in all States. 2 ‘‘(B) BROADBAND CREDIT DOLLAR 3 AMOUNT CARRYFORWARD.— 4 ‘‘(i) IN GENERAL.—If the limitation 5 under subparagraph (A) (determined with- 6 out regard to this subparagraph) exceeds 7 the aggregate amount of broadband credit 8 dollar amounts allocated for any calendar 9 year, such excess shall be treated as a 10 broadband credit dollar amount 11 carryforward and added to the limitation 12 under such subparagraph for the 2 suc- 13 ceeding calendar years. 14 ‘‘(ii) ORDERING RULES.—Broadband 15 credit dollar amount carryforwards shall be 16 treated as used in the order in which they 17 arose. 18 ‘‘(d) QUALIFYING BROADBAND PROJECT.—For pur- 19 poses of this section— 20 ‘‘(1) IN GENERAL.—The term ‘qualifying 21 broadband project’ means any project which— 22 ‘‘(A) is designed solely to provide 23 broadband service to 1 or more areas— 24 ‘‘(i) which are rural areas, and 25 VerDate Sep 11 2014 00:17 Nov 20, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2867.IS S2867 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 2867 IS ‘‘(ii) in which more than 50 percent of 1 residential households do not have access 2 to fixed, terrestrial broadband service 3 which delivers at least 10 megabits per 4 second downstream and at least 1 megabit 5 service upstream, 6 ‘‘(B) results in gigabit capable Internet ac- 7 cess to residential or commercial locations but 8 only if at least 90 percent of the residential or 9 commercial locations provided such access 10 under the project are locations where, before 11 the project, a broadband service provider— 12 ‘‘(i) did not provide service, or 13 ‘‘(ii) did not provide service which 14 meets the minimum speed requirements 15 described in subparagraph (A)(ii), and 16 ‘‘(C) is certified by the Secretary pursuant 17 to paragraph (2). 18 ‘‘(2) QUALIFYING BROADBAND PROJECT CER- 19 TIFICATION PROGRAM.— 20 ‘‘(A) IN GENERAL.—Not later than 180 21 days after the date of enactment of this section, 22 the Secretary, in consultation with the Chair- 23 man of the Federal Communications Commis- 24 sion and the Secretary of Agriculture, shall es- 25 VerDate Sep 11 2014 00:17 Nov 20, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2867.IS S2867 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 2867 IS tablish a qualifying broadband project certifi- 1 cation program to consider and award certifi- 2 cations for qualified investments eligible for 3 credits under this section. 4 ‘‘(B) APPLICATION PERIOD.— 5 ‘‘(i) IN GENERAL.—Each applicant for 6 certification under this paragraph shall 7 submit an application containing such in- 8 formation as the Secretary may require 9 during each annual application period. 10 ‘‘(ii) ANNUAL APPLICATION PE- 11 RIOD.—For purposes of this paragraph, 12 the term ‘annual application period’ means 13 a 60-day period beginning each calendar 14 year on the date determined by the Sec- 15 retary. 16 ‘‘(C) NOMINATION.—A project may not be 17 certified under this paragraph unless— 18 ‘‘(i) the project is nominated by a 19 State or local government in a single, uni- 20 form application that is submitted to the 21 Secretary by each State on behalf of 22 projects nominated by the State and by its 23 localities, and 24 VerDate Sep 11 2014 00:17 Nov 20, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2867.IS S2867 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 2867 IS ‘‘(ii) such State or local government 1 provides written assurances within the ap- 2 plication under clause (i) that the project 3 satisfies the requirements of subpara- 4 graphs (A) and (B) of paragraph (1). 5 ‘‘(D) CERTIFICATION.—Not later than 60 6 days after the end of the annual application pe- 7 riod, the Secretary, in consultation with the 8 Chairman of the Federal Communications Com- 9 mission and the Secretary of Agriculture, shall 10 award certifications under this section. 11 ‘‘(e) DEFINITIONS.—For purposes of this section— 12 ‘‘(1) ELIGIBLE PROPERTY.—The term ‘eligible 13 property’ means any property which is a part of a 14 qualifying broadband project. 15 ‘‘(2) RURAL AREA.—The term ‘rural area’ has 16 the meaning given such term under section 17 343(a)(13) of the Consolidated Farm and Rural De- 18 velopment Act (7 U.S.C. 1991(a)(13)), determined 19 without regard to subparagraph (B) or (C) thereof. 20 ‘‘(3) STATE.—The term ‘State’ means the 50 21 States.’’. 22 (b) CONFORMING AMENDMENTS.— 23 (1) Section 46 of the Internal Revenue Code of 24 1986 is amended by striking ‘‘and’’ at the end of 25 VerDate Sep 11 2014 00:17 Nov 20, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2867.IS S2867 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 2867 IS paragraph (5), by striking the period at the end of 1 paragraph (6) and inserting ‘‘, and’’, and by adding 2 at the end the following new paragraph: 3 ‘‘(7) the qualifying broadband project credit.’’. 4 (2) Section 49(a)(1)(C) of such Code is amend- 5 ed by striking ‘‘and’’ at the end of clause (iv), by 6 striking the period at the end of clause (v) and in- 7 serting ‘‘, and’’, and by adding at the end the fol- 8 lowing new clause: 9 ‘‘(vi) the basis of any property which 10 is part of a qualifying broadband project 11 under section 48D.’’. 12 (3) Section 50(a)(2)(E) of such Code is amend- 13 ed by striking ‘‘or 48C(b)(2)’’ and inserting 14 ‘‘48C(b)(2), or 48D(b)(3)’’. 15 (4) The table of sections for subpart E of part 16 IV of subchapter A of chapter 1 of such Code is 17 amended by inserting after the item relating to sec- 18 tion 48C the following new item: 19 ‘‘Sec. 48D. Qualifying broadband project credit.’’. (c) EFFECTIVE DATE.—The amendments made by 20 this section shall apply to periods after December 31, 21 2019, in taxable years ending after such date, under rules 22 similar to the rules of section 48(m) of such Code (as in 23 VerDate Sep 11 2014 00:17 Nov 20, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2867.IS S2867 pamtmann on DSKBC07HB2PROD with BILLS 9 •S 2867 IS effect on the day before the date of the enactment of the 1 Revenue Reconciliation Act of 1990). 2 Æ VerDate Sep 11 2014 00:17 Nov 20, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6301 E:\BILLS\S2867.IS S2867 pamtmann on DSKBC07HB2PROD with BILLS