This bill has been amended

Bill S5481-2013

Relates to enacting the credit for rural broadband act of 2013

Creates a refundable tax credit for broadband deployment to residences and small businesses located in rural, unserved areas.

Details

Actions

  • Jan 8, 2014: REFERRED TO ENERGY AND TELECOMMUNICATIONS
  • Jan 8, 2014: returned to senate
  • Jan 8, 2014: died in assembly
  • Jun 12, 2013: referred to governmental operations
  • Jun 12, 2013: DELIVERED TO ASSEMBLY
  • Jun 12, 2013: PASSED SENATE
  • Jun 11, 2013: ORDERED TO THIRD READING CAL.1295
  • Jun 11, 2013: COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • Jun 4, 2013: REPORTED AND COMMITTED TO FINANCE
  • May 16, 2013: REFERRED TO ENERGY AND TELECOMMUNICATIONS

Meetings

Votes

VOTE: COMMITTEE VOTE: - Energy and Telecommunications - Jun 4, 2013
Ayes (10): Maziarz, Carlucci, Fuschillo, Griffo, O'Mara, Ritchie, Robach, Parker, Adams, Kennedy
Ayes W/R (1): Dilan

Memo

BILL NUMBER:S5481

TITLE OF BILL: An act to amend the state technology law and the tax law, in relation to a refundable tax credit provided to broadband deployment to residences and small businesses located in rural, unserved areas

PURPOSE: This bill promotes rural broadband deployment by providing residents and small businesses with tax credits for broadband deployment.

SUMMARY OF PROVISIONS:

Section 1: Sites the name of this act as the Rural Broadband Deployment Act of 2013

Section 2. of the bill charges the office of information technology services, in conjunction with input from the advisory council, to verifying an "unserved" area under the credit for rural broadband act of 2013, using broadband mapping data at the time a project is proposed.

Section 3. of the bill creates a fully refundable broadband deployment tax credit for small businesses' reasonable out of pocket expenses for broadband network construction in their unserved areas, in partnership with a broadband provider. The credit is paid to the customer over a 5 year period.

Section 4 of the bill creates a fully refundable broadband deployment tax credit for residents' reasonable out of pocket expenses for broadband network construction in their unserved areas, in partnership with a broadband provider. The credit is paid to the customer over a 5 year period.

Section 5. contains the immediate effective date for tax years in 2014 and thereafter.

JUSTIFICATION: Our rural areas in New York pose an extraordinary challenge for broadband deployment. Geographic isolation, topographic conditions and centuries-old settlement patterns leave small pockets of New Yorkers without access to a high speed broadband connection capable of managing today's bandwidth-hungry applications. Critics say broadband providers are moving too slowly to offer affordable high-speed broadband services to rural areas, but that isn't accurate. Despite large investments by broadband providers, it is not economically feasible for providers to reach these areas. Unfortunately, the projects just don't pay off the investment before it is time to reinvest and rebuild the network with next-generation technology.

That's why the NYS Senate supported the Governor's ConnectNY program, creating public/private partnerships (PPP's) to bring broadband to our unserved rural areas. This totally refundable tax credit is a continuation of that effort and has numerous strengths that will enhance broadband deployment to rural, unserved areas. The Rural Broadband Deployment Act will allow residents and small businesses in unserved areas to come together, pool their economic power and select

a broadband provider to deploy services to their area. Any eligible out of pocket expenses the resident or small business incurs for the construction of the network, will be eligible for a 100% refundable tax credit, over 5 years. No broadband provider is eligible for the credit and the provider must make a significant contribution to the construction costs.

Strengths include:

* More bang for the buck. Credits are only allowed for deployment in unserved areas so precious tax expenditures will not be used to duplicate existing infrastructure;

* Rural broadband will deploy far more rapidly. It is expected that 10,000 residents and small businesses will take advantage annually.

* The program is technology and provider neutral. The local taxpayers decide what technology and provider they wish to select for service (wireline, wireless, etc.) - so all providers and technology types compete on a level playing field;

* The program is a true PPP. The program requires a significant provider contribution in partnership with the public, and only residential and small business customers can receive a Rural Broadband Deployment tax credit.

* The expense is broadly shared. As a tax credit, the expenditures will come from the State's general fund so no one group of New Yorkers are singled out to bear the burden of deployment, consistent with the ConnectNY approach.

LEGISLATIVE HISTORY: This is a new bill.

FISCAL IMPLICATIONS: Approximately $10 million in the first year

EFFECTIVE DATE: Immediately, and to be applied to tax years beginning on and after January 1 immediately following enactment.


Text

STATE OF NEW YORK ________________________________________________________________________ 5481 2013-2014 Regular Sessions IN SENATE May 16, 2013 ___________
Introduced by Sen. MAZIARZ -- read twice and ordered printed, and when printed to be committed to the Committee on Energy and Telecommuni- cations AN ACT to amend the state technology law and the tax law, in relation to a refundable tax credit provided to broadband deployment to residences and small businesses located in rural, unserved areas THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. This act shall be known and may be cited as the "credit for rural broadband act of 2013". S 2. Section 104 of the state technology law is amended by adding a new subdivision 3 to read as follows: 3. THE OFFICE OF INFORMATION TECHNOLOGY SERVICES, IN CONJUNCTION WITH INPUT FROM THE ADVISORY COUNCIL, IS HEREBY AUTHORIZED AND DIRECTED TO PROMULGATE RULES AND REGULATIONS NECESSARY FOR VERIFYING AN "UNSERVED" AREA UNDER THE CREDIT FOR RURAL BROADBAND ACT OF TWO THOUSAND THIRTEEN, USING BROADBAND MAPPING DATA AT THE TIME A PROJECT IS PROPOSED. S 3. Section 210 of the tax law is amended by adding a new subdivision 47 to read as follows: 47. CREDIT FOR RURAL BROADBAND DEPLOYMENT. (A) ALLOWANCE OF CREDIT. A QUALIFIED TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE EQUAL TO ANY QUALIFIED CUSTOMER CONTRIBUTION IN AID OF CONSTRUCTION RESULTING FROM NEW NETWORK CONSTRUCTION TO DELIVER BROAD- BAND SERVICE TO THE INDIVIDUAL'S RESIDENCE OR PLACE OF BUSINESS LOCATED IN AN UNSERVED AREA. THE CREDIT ALLOWED BY THIS SUBDIVISION SHALL BE CLAIMED ANNUALLY OVER A FIVE-YEAR PERIOD EQUAL TO ONE-FIFTH OF THE CRED- IT AMOUNT. IF THE CREDIT ALLOWED UNDER THIS SUBDIVISION IS GREATER THAN THE TAX DUE IN ANY TAXABLE YEAR, THE AMOUNT BY WHICH SUCH CREDIT EXCEEDS SUCH TAX DUE IS TREATED AS AN OVERPAYMENT OF TAX TO BE REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER.
(B) FOR PURPOSES OF THIS SUBDIVISION, THE FOLLOWING DEFINITIONS SHALL APPLY: (1) "QUALIFIED CONSTRUCTION EXPENSES" EQUAL THE TOTAL COST OF CONSTRUCTION OF NEW NETWORKS IN THE PROPOSED UNSERVED SERVICE AREA, AS CERTIFIED BY THE BROADBAND SERVICE PROVIDER, BUT NOT TO EXCEED A REASON- ABLE COST BASED UPON THE AVERAGE COST PER MILE OF BROADBAND NETWORK CONSTRUCTION AS DETERMINED BY THE COMMISSIONER IN CONSULTATION WITH THE PUBLIC SERVICE COMMISSION AND BROADBAND SERVICE PROVIDERS. (2) "QUALIFIED CUSTOMER CONTRIBUTION IN AID OF CONSTRUCTION" IS DETER- MINED IN ACCORDANCE WITH THE FOLLOWING FORMULA: (QCE/TC) - (ACM/35) = QC, WHERE QCE EQUALS THE QUALIFIED CONSTRUCTION EXPENSES; ACM EQUALS THE AVERAGE COST OF CONSTRUCTION PER MILE IN THE PROPOSED UNSERVED SERVICE AREA, AS CERTIFIED BY THE BROADBAND SERVICE PROVIDER, BUT NOT TO EXCEED A REASONABLE COST BASED UPON THE AVERAGE COST PER MILE OF BROADBAND NETWORK CONSTRUCTION AS DETERMINED BY THE COMMISSIONER IN CONSULTATION WITH THE PUBLIC SERVICE COMMISSION AND BROADBAND SERVICE PROVIDERS; TC EQUALS THE NUMBER OF RESIDENTS AND SMALL BUSINESS CUSTOMERS IN THE PROPOSED UNSERVED SERVICE AREA MAKING A QUALIFIED CUSTOMER CONTRIBUTION IN AID TO CONSTRUCTION AND CONTRACTING FOR SERVICES OVER THE NETWORK; AND QC EQUALS THE QUALIFIED CUSTOMER CONTRIBUTION IN AID OF CONSTRUCTION. (3) "REQUIRED PROVIDER CONTRIBUTION IN AID TO CONSTRUCTION" SHALL EQUAL THE QUALIFIED CONSTRUCTION EXPENSES, LESS THE SUM OF ALL THE QUAL- IFIED CUSTOMER CONTRIBUTIONS IN AID TO CONSTRUCTION IN THE PROPOSED UNSERVED SERVICE AREA. (4) "BROADBAND SERVICE" MEANS INTERNET ACCESS SERVICE WITH TRANS- MISSION SPEEDS THAT ARE EQUAL TO OR GREATER THAN COMBINED ADVERTISED DOWNLOAD SPEEDS OF AT LEAST 4 MEGABITS PER SECOND (MBPS) AND UPLOAD SPEEDS OF AT LEAST 1 MBPS PER SECOND OVER THE PROVIDER'S NETWORK. (5) "UNSERVED AREA" MEANS AN AREA COMPOSED OF ONE OR MORE CONTIGUOUS CENSUS BLOCKS WHERE AT LEAST NINETY PERCENT OF HOUSEHOLDS LACK ACCESS TO FACILITIES-BASED TERRESTRIAL BROADBAND SERVICE. A HOUSEHOLD HAS ACCESS TO A BROADBAND SERVICE IF THE HOUSEHOLD CAN READILY SUBSCRIBE TO THAT SERVICE UPON REQUEST. (6) "QUALIFIED TAXPAYER" MEANS A TAXPAYER WHICH IS A SMALL BUSINESS CORPORATION AS DEFINED IN PARAGRAPH THREE OF SUBSECTION (C) OF SECTION TWELVE HUNDRED FORTY-FOUR OF THE INTERNAL REVENUE CODE (WITHOUT REGARD TO THE SECOND SENTENCE OF SUBPARAGRAPH (A) THEREOF) AS OF THE LAST DAY OF THE TAXABLE YEAR. S 4. Section 606 of the tax law is amended by adding a new subsection (ww) to read as follows: (WW) CREDIT FOR RURAL BROADBAND DEPLOYMENT. (A) ALLOWANCE OF CREDIT. A QUALIFIED TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE EQUAL TO ANY QUALIFIED CUSTOMER CONTRIBUTION IN AID OF CONSTRUCTION RESULTING FROM NEW NETWORK CONSTRUCTION TO DELIVER BROAD- BAND SERVICE TO THE INDIVIDUAL'S RESIDENCE OR PLACE OF BUSINESS LOCATED IN AN UNSERVED AREA. THE CREDIT ALLOWED BY THIS SUBSECTION SHALL BE CLAIMED ANNUALLY OVER A FIVE-YEAR PERIOD EQUAL TO ONE-FIFTH OF THE CRED- IT AMOUNT. IF THE CREDIT ALLOWED UNDER THIS SUBSECTION IS GREATER THAN THE TAX DUE IN ANY TAXABLE YEAR, THE AMOUNT BY WHICH SUCH CREDIT EXCEEDS SUCH TAX DUE IS TREATED AS AN OVERPAYMENT OF TAX TO BE REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. (B) FOR PURPOSES OF THIS SUBSECTION, THE FOLLOWING DEFINITIONS SHALL APPLY:
(1) "QUALIFIED CONSTRUCTION EXPENSES" EQUAL THE TOTAL COST OF CONSTRUCTION OF NEW NETWORKS IN THE PROPOSED UNSERVED SERVICE AREA, AS CERTIFIED BY THE BROADBAND SERVICE PROVIDER, BUT NOT TO EXCEED A REASON- ABLE COST BASED UPON THE AVERAGE COST PER MILE OF BROADBAND NETWORK CONSTRUCTION AS DETERMINED BY THE COMMISSIONER IN CONSULTATION WITH THE PUBLIC SERVICE COMMISSION AND BROADBAND SERVICE PROVIDERS. (2) "QUALIFIED CUSTOMER CONTRIBUTION IN AID OF CONSTRUCTION" IS DETER- MINED IN ACCORDANCE WITH THE FOLLOWING FORMULA: (QCE/TC) - (ACM/35) = QC, WHERE QCE EQUALS THE QUALIFIED CONSTRUCTION EXPENSES; ACM EQUALS THE AVERAGE COST OF CONSTRUCTION PER MILE IN THE PROPOSED UNSERVED SERVICE AREA, AS CERTIFIED BY THE BROADBAND SERVICE PROVIDER, BUT NOT TO EXCEED A REASONABLE COST BASED UPON THE AVERAGE COST PER MILE OF BROADBAND NETWORK CONSTRUCTION AS DETERMINED BY THE COMMISSIONER IN CONSULTATION WITH THE PUBLIC SERVICE COMMISSION AND BROADBAND SERVICE PROVIDERS; TC EQUALS THE NUMBER OF RESIDENTS AND SMALL BUSINESS CUSTOMERS IN THE PROPOSED UNSERVED SERVICE AREA MAKING A QUALIFIED CUSTOMER CONTRIBUTION IN AID TO CONSTRUCTION AND CONTRACTING FOR SERVICES OVER THE NETWORK; AND QC EQUALS THE QUALIFIED CUSTOMER CONTRIBUTION IN AID OF CONSTRUCTION. (3) "REQUIRED PROVIDER CONTRIBUTION IN AID TO CONSTRUCTION" SHALL EQUAL THE QUALIFIED CONSTRUCTION EXPENSES, LESS THE SUM OF ALL THE QUAL- IFIED CUSTOMER CONTRIBUTIONS IN AID TO CONSTRUCTION IN THE PROPOSED UNSERVED SERVICE AREA. (4) "BROADBAND SERVICE" MEANS INTERNET ACCESS SERVICE WITH TRANS- MISSION SPEEDS THAT ARE EQUAL TO OR GREATER THAN COMBINED ADVERTISED DOWNLOAD SPEEDS OF AT LEAST 4 MEGABITS PER SECOND (MBPS) AND UPLOAD SPEEDS OF AT LEAST 1 MBPS PER SECOND OVER THE PROVIDER'S NETWORK. (5)"UNSERVED AREA" MEANS AN AREA COMPOSED OF ONE OR MORE CONTIGUOUS CENSUS BLOCKS WHERE AT LEAST NINETY PERCENT OF HOUSEHOLDS LACK ACCESS TO FACILITIES-BASED TERRESTRIAL BROADBAND SERVICE. A HOUSEHOLD HAS ACCESS TO A BROADBAND SERVICE IF THE HOUSEHOLD CAN READILY SUBSCRIBE TO THAT SERVICE UPON REQUEST. (6)"QUALIFIED TAXPAYER" MEANS ANY INDIVIDUAL WITH NEW YORK ADJUSTED GROSS INCOME OF TWO HUNDRED FIFTY THOUSAND DOLLARS OR LESS. S 5. This act shall take effect immediately and shall apply to tax years beginning on or after January 1, 2014.

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