senate Bill S5481A

Relates to enacting the credit for rural broadband act of 2014

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 16 / May / 2013
    • REFERRED TO ENERGY AND TELECOMMUNICATIONS
  • 04 / Jun / 2013
    • REPORTED AND COMMITTED TO FINANCE
  • 11 / Jun / 2013
    • COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • 11 / Jun / 2013
    • ORDERED TO THIRD READING CAL.1295
  • 12 / Jun / 2013
    • PASSED SENATE
  • 12 / Jun / 2013
    • DELIVERED TO ASSEMBLY
  • 12 / Jun / 2013
    • REFERRED TO GOVERNMENTAL OPERATIONS
  • 08 / Jan / 2014
    • DIED IN ASSEMBLY
  • 08 / Jan / 2014
    • RETURNED TO SENATE
  • 08 / Jan / 2014
    • REFERRED TO ENERGY AND TELECOMMUNICATIONS
  • 17 / Jan / 2014
    • AMEND AND RECOMMIT TO ENERGY AND TELECOMMUNICATIONS
  • 17 / Jan / 2014
    • PRINT NUMBER 5481A
  • 28 / Jan / 2014
    • REPORTED AND COMMITTED TO FINANCE

Summary

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

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Bill Details

See Assembly Version of this Bill:
A7588A
Versions:
S5481
S5481A
Legislative Cycle:
2013-2014
Current Committee:
Senate Finance
Law Section:
State Technology Law
Laws Affected:
Amd §104, St Tech L; amd §§210 & 606, Tax L

Votes

10
0
10
Aye
0
Nay
0
aye with reservations
0
absent
0
excused
0
abstained
show Energy and Telecommunications committee vote details

Sponsor Memo

BILL NUMBER:S5481A

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 2014

Section 2. of the bill charges the office of information technology
services, in conjunction with input from the advisory council, tc
verifying an "unserved" area under the credit for rural broadband act
of 2014, 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 2015
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 invest- meats by broadband providers, it is not
economically feasible for providers to reach these areas.
Unfortunately, the projects just dcn'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.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 5481--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              May 16, 2013
                               ___________

Introduced  by  Sens.  MAZIARZ,  DeFRANCISCO, MARCHIONE, O'MARA, PARKER,
  RANZENHOFER, RITCHIE, SAMPSON, TKACZYK, VALESKY, YOUNG --  read  twice
  and ordered printed, and when printed to be committed to the Committee
  on  Energy  and  Telecommunications -- recommitted to the Committee on
  Energy and Telecommunications in accordance with Senate Rule 6, sec. 8
  -- committee discharged, bill amended, ordered  reprinted  as  amended
  and recommitted to said committee

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 2014".
  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  FOURTEEN,
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
48 to read as follows:
  48.  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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11110-02-4

S. 5481--A                          2

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. Subsections (yy) and (zz) of section  606  of  the  tax  law,  as
relettered  by section 5 of part H of chapter 1 of the laws of 2003, are
relettered subsections (yyy) and (zzz) and a  new  subsection  (bbb)  is
added to read as follows:
  (BBB) 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

S. 5481--A                          3

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, 2015.

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