S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  7175--A
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 3, 2018
                                ___________
 
 Introduced  by  Sen.  PARKER -- read twice and ordered printed, and when
   printed to be committed to  the  Committee  on  Finance  --  committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to said committee
 
 AN  ACT  to  amend  the public service law and the state finance law, in
   relation to state contracts being only with internet service providers
   compliant with net neutrality and establishes a revolving fund for the
   establishment of municipal internet service providers; and  making  an
   appropriation therefor
 
   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  "NYS  Net
 Neutrality Protection Act".
   §  2.  Subdivision 1 of section 5 of the public service law is amended
 by adding a new paragraph i to read as follows:
   I. TO EVERY BROADBAND INTERNET LINE WHICH LIES WHOLLY WITHIN THE STATE
 AND THAT PART WITHIN THE STATE OF NEW YORK OF EVERY  BROADBAND  INTERNET
 LINE  WHICH  LIES  PARTLY WITHIN AND PARTLY WITHOUT THE STATE AND TO THE
 PERSONS OR CORPORATIONS OWNING, LEASING OR OPERATING ANY SUCH  BROADBAND
 INTERNET LINE.
   §  3.  Section  5 of the public service law is amended by adding a new
 subdivision 7 to read as follows:
   7. THE COMMISSION SHALL REQUIRE ANY PERSON ENGAGED IN THE PROVISION OF
 BROADBAND INTERNET ACCESS SERVICE IN NEW YORK STATE  TO  REPORT  TO  THE
 COMMISSION, AND PUBLICLY DISCLOSE ANNUALLY, ACCURATE INFORMATION REGARD-
 ING  THE NETWORK MANAGEMENT PRACTICES, PERFORMANCE, AND COMMERCIAL TERMS
 OF ITS BROADBAND INTERNET ACCESS SERVICES SUFFICIENT  FOR  CONSUMERS  TO
 MAKE  INFORMED  CHOICES  REGARDING USE OF SUCH SERVICES AND FOR CONTENT,
 APPLICATION, SERVICE, AND DEVICE PROVIDERS TO DEVELOP, MARKET, AND MAIN-
 TAIN INTERNET OFFERINGS.
   § 4. Subdivision 1 of section 165 of the state finance law is  amended
 by adding three new paragraphs f, g and h to read as follows:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD14001-04-7

 S. 7175--A                          2
 
   F.  A "NET NEUTRAL SOURCE OF INTERNET SERVICES" SHALL MEAN AN INTERNET
 SERVICE PROVIDER WHO ADHERES TO THE PRINCIPLES OF NET NEUTRALITY.
   G.  A  "NON-NET  NEUTRAL  SOURCE  OF  INTERNET SERVICES" SHALL MEAN AN
 INTERNET SERVICE PROVIDER WHO VIOLATES ANY  OF  THE  PRINCIPLES  OF  NET
 NEUTRALITY.
   H.  "THE  PRINCIPLES OF NET NEUTRALITY" SHALL MEAN THE RULES AND REGU-
 LATIONS UNDER THE OPEN INTERNET REPORT AND ORDER ON REMAND,  DECLARATORY
 RULING,  AND  ORDER  BY  THE  FEDERAL COMMUNICATIONS COMMISSION RELEASED
 MARCH TWELFTH, TWO THOUSAND FIFTEEN, GN DOCKET NO. 14-28.
   § 5. Section 165 of the state finance law is amended by adding  a  new
 subdivision 9 to read as follows:
   9. PROHIBITION ON PURCHASE OF INTERNET SERVICES FROM A NON-NET NEUTRAL
 SOURCE OF INTERNET SERVICES.
   A.  (I)  WITH RESPECT TO CONTRACTS DESCRIBED IN SUBPARAGRAPHS (II) AND
 (III) OF THIS PARAGRAPH, AND IN ACCORDANCE WITH SUCH SUBPARAGRAPHS,  THE
 STATE  AND  ANY  GOVERNMENTAL  AGENCY OR POLITICAL SUBDIVISION OR PUBLIC
 BENEFIT CORPORATION OR MUNICIPALITY OF THE STATE SHALL NOT CONTRACT  FOR
 THE  SUPPLY  OF INTERNET SERVICES WITH ANY CONTRACTOR WHO DOES NOT AGREE
 TO STIPULATE TO THE FOLLOWING, IF THERE IS ANOTHER CONTRACTOR  WHO  WILL
 CONTRACT TO SUPPLY INTERNET SERVICES OF COMPARABLE QUALITY AT A COMPARA-
 BLE  PRICE OR COST, THE CONTRACTOR AND ANY INDIVIDUAL OR LEGAL ENTITY IN
 WHICH THE CONTRACTOR HOLDS A TEN PERCENT OR GREATER  OWNERSHIP  INTEREST
 AND  ANY  INDIVIDUAL OR LEGAL ENTITY THAT HOLDS A TEN PERCENT OR GREATER
 OWNERSHIP INTEREST IN THE CONTRACTOR SHALL MAKE  LAWFUL  STEPS  IN  GOOD
 FAITH  TO  CONDUCT  ANY  BUSINESS  OPERATIONS AS A NET NEUTRAL SOURCE OF
 INTERNET SERVICES.
   (II) IN THE CASE OF CONTRACTS LET BY A COMPETITIVE  PROCESS,  WHENEVER
 THE  RESPONSIVE  AND RESPONSIBLE OFFERER HAVING THE LOWEST PRICE OR BEST
 VALUE OFFER HAS NOT AGREED TO STIPULATE TO THE CONDITIONS SET  FORTH  IN
 THIS  SUBDIVISION AND ANOTHER RESPONSIVE AND RESPONSIBLE OFFERER WHO HAS
 AGREED TO STIPULATE TO SUCH CONDITIONS  HAS  SUBMITTED  AN  OFFER  SHALL
 DETERMINE THAT THE CONTRACT BE AWARDED TO THE LOWEST PRICE OR BEST VALUE
 OFFER  FOR  INTERNET  SERVICES  FROM  A  NET  NEUTRAL SOURCE OF INTERNET
 SERVICES.
   (III) IN THE CASE OF CONTRACTS LET BY OTHER THAN A COMPETITIVE PROCESS
 INTERNET SERVICES INVOLVING AN EXPENDITURE OF AN AMOUNT GREATER THAN THE
 DISCRETIONARY BUYING THRESHOLD  AS  SPECIFIED  IN  SECTION  ONE  HUNDRED
 SIXTY-THREE OF THIS ARTICLE, THE CONTRACTING ENTITY SHALL NOT AWARD TO A
 PROPOSED  CONTRACTOR  WHO  HAS NOT AGREED TO STIPULATE TO THE CONDITIONS
 SET FORTH IN THIS SUBDIVISION UNLESS  THE  ENTITY  SEEKING  TO  USE  THE
 INTERNET  SERVICES  DETERMINES  THAT THE INTERNET SERVICES ARE NECESSARY
 FOR THE ENTITY TO PERFORM ITS FUNCTIONS AND THERE IS NO OTHER  RESPONSI-
 BLE  CONTRACTOR  WHO WILL SUPPLY INTERNET SERVICES OF COMPARABLE QUALITY
 AT A COMPARABLE PRICE. SUCH DETERMINATIONS SHALL BE MADE IN WRITING  AND
 SHALL BE PUBLIC DOCUMENTS.
   B. UPON RECEIVING INFORMATION THAT A CONTRACTOR WHO HAS MADE THE STIP-
 ULATION  REQUIRED  BY  THIS  SUBDIVISION  IS  IN  VIOLATION THEREOF, THE
 CONTRACTING ENTITY SHALL REVIEW SUCH INFORMATION AND OFFER THE  CONTRAC-
 TOR  AN  OPPORTUNITY  TO RESPOND. IF THE CONTRACTING ENTITY FINDS THAT A
 VIOLATION HAS OCCURRED, IT SHALL TAKE SUCH ACTION AS MAY BE  APPROPRIATE
 AND  PROVIDED  FOR  BY LAW, RULE OR CONTRACT, INCLUDING, BUT NOT LIMITED
 TO,  IMPOSING  SANCTIONS,  SEEKING  COMPLIANCE,  RECOVERING  DAMAGES  OR
 DECLARING THE CONTRACTOR IN DEFAULT.
   C.  AS USED IN THIS SUBDIVISION, THE TERM "CONTRACT" SHALL NOT INCLUDE
 CONTRACTS WITH  GOVERNMENTAL  AND  NON-PROFIT  ORGANIZATIONS,  CONTRACTS
 AWARDED  PURSUANT  TO  EMERGENCY  PROCUREMENT  PROCEDURES  OR CONTRACTS,

 S. 7175--A                          3
 
 RESOLUTIONS, INDENTURES, DECLARATIONS  OF  TRUST  OR  OTHER  INSTRUMENTS
 AUTHORIZING  OR  RELATING TO THE AUTHORIZATION, ISSUANCE, AWARD, SALE OR
 PURCHASE OF BONDS, CERTIFICATES OF INDEBTEDNESS, NOTES OR  OTHER  FISCAL
 OBLIGATIONS,  PROVIDED  THAT  THE  POLICIES OF THIS SUBDIVISION SHALL BE
 CONSIDERED WHEN SELECTING A CONTRACTOR TO  PROVIDE  FINANCIAL  OR  LEGAL
 ADVICE, AND WHEN SELECTING MANAGING UNDERWRITERS IN CONNECTION WITH SUCH
 ACTIVITIES.
   D. THE PROVISIONS OF THIS SUBDIVISION SHALL NOT APPLY TO CONTRACTS FOR
 WHICH  THE STATE OR OTHER CONTRACTING ENTITY RECEIVES FUNDS ADMINISTERED
 BY THE UNITED STATES, EXCEPT TO THE EXTENT CONGRESS HAS DIRECTED TO  NOT
 WITHHOLD  FUNDS  FROM  STATES  AND  LOCALITIES  THAT CHOOSE TO IMPLEMENT
 SELECTIVE PURCHASING POLICIES BASED ON AN AGREEMENT TO COMPLY  WITH  THE
 PRINCIPLES  OF  NET NEUTRALITY, OR TO THE EXTENT THAT SUCH FUNDS ARE NOT
 OTHERWISE WITHHELD BY CONGRESS.
   § 6. The state finance law is amended by adding a new section 99-bb to
 read as follows:
   § 99-BB. MUNICIPAL INTERNET SERVICE PROVIDER REVOLVING LOAN FUND.   1.
 THERE  IS HEREBY ESTABLISHED IN THE JOINT CUSTODY OF THE COMPTROLLER AND
 THE PUBLIC SERVICE COMMISSION A FUND  TO  BE  KNOWN  AS  THE  "MUNICIPAL
 INTERNET  SERVICE PROVIDER REVOLVING LOAN FUND". SUCH FUND SHALL CONSIST
 OF MONEYS MADE AVAILABLE PURSUANT TO APPROPRIATION AND ANY OTHER SOURCES
 IN ORDER TO PROVIDE SUPPORT  FOR  MUNICIPALITIES  ATTEMPTING  TO  CREATE
 THEIR OWN INTERNET SERVICE PROVIDER.
   2.  THE  ACCOUNT  SHALL  CONSIST  OF  ALL  MONEYS APPROPRIATED FOR ITS
 PURPOSE, ALL MONEYS TRANSFERRED TO SUCH ACCOUNT PURSUANT TO LAW, AND ALL
 MONEYS REQUIRED BY THIS SECTION OR ANY OTHER LAW  TO  BE  PAID  INTO  OR
 CREDITED  TO  THIS ACCOUNT, INCLUDING ALL MONEYS RECEIVED BY THE ACCOUNT
 OR DONATED TO IT, PAYMENTS OF PRINCIPAL AND INTEREST ON LOANS MADE  FROM
 THE ACCOUNT, AND ANY INTEREST EARNINGS WHICH MAY ACCRUE FROM THE INVEST-
 MENT OR REINVESTMENT OF MONEYS FROM THE ACCOUNT.
   3.  MONEYS  OF  THE ACCOUNT, WHEN ALLOCATED, SHALL BE AVAILABLE TO THE
 PUBLIC SERVICE COMMISSION TO MAKE LOANS AS PROVIDED IN THIS SECTION.  UP
 TO  FIVE PERCENT OF THE MONEYS OF THE ACCOUNT OR TWO HUNDRED FIFTY THOU-
 SAND DOLLARS, WHICHEVER IS LESS,  MAY  BE  USED  TO  PAY  THE  EXPENSES,
 INCLUDING  PERSONAL SERVICE AND MAINTENANCE AND OPERATION, IN CONNECTION
 WITH THE ADMINISTRATION OF SUCH LOANS.
   4. (A) THE PUBLIC SERVICE COMMISSION MAY MAKE, UPON  APPLICATION  DULY
 MADE,  UP  TO  THE AMOUNTS AVAILABLE BY APPROPRIATION, LOANS FOR ANY AND
 ALL COSTS ASSOCIATED WITH THE CREATION OF A MUNICIPALLY OWNED  BROADBAND
 INTERNET SERVICE PROVIDER.
   (B)  THE  PUBLIC  SERVICE COMMISSION SHALL HAVE THE POWER TO MAKE SUCH
 RULES AND REGULATIONS AS MAY BE NECESSARY AND PROPER TO  EFFECTUATE  THE
 PURPOSES OF THIS SECTION.
   5.  (A)  APPLICATION FOR LOANS MAY BE MADE BY A TOWN, VILLAGE, CITY OR
 COUNTY PROVIDED THAT THE APPLICATION IS OTHERWISE  CONSISTENT  WITH  ITS
 RESPECTIVE POWERS.  APPLICATIONS MAY ALSO BE SUBMITTED JOINTLY BY MULTI-
 PLE  APPLICANTS  PROVIDED  THAT  THE APPLICATION IS OTHERWISE CONSISTENT
 WITH EACH APPLICANT'S RESPECTIVE POWERS.
   (B) EVERY APPLICATION SHALL BE IN A  FORM  ACCEPTABLE  TO  THE  PUBLIC
 SERVICE  COMMISSION.  EVERY  APPLICATION  SHALL  ACCURATELY  REFLECT THE
 CONDITIONS WHICH GIVE RISE TO THE PROPOSED  EXPENDITURE  AND  ACCURATELY
 REFLECT THE ABILITY OF THE APPLICANT TO MAKE SUCH AN EXPENDITURE WITHOUT
 THE PROCEEDS OF A LOAN UNDER THIS SECTION.
   (C)  (I)  THE PUBLIC SERVICE COMMISSION SHALL GIVE PREFERENCE TO THOSE
 APPLICATIONS WHICH DEMONSTRATE THE GREATEST  NEED,  JOINT  APPLICATIONS,
 AND  TO  THOSE APPLICATIONS THE PROCEEDS OF WHICH WILL BE APPLIED TOWARD

 S. 7175--A                          4
 
 ATTAINING COMPLIANCE WITH FEDERAL AND STATE LAWS AND MAY DISAPPROVE  ANY
 APPLICATION  WHICH  CONTAINS  NO ADEQUATE DEMONSTRATION OF NEED OR WHICH
 WOULD RESULT IN INEQUITABLE OR INEFFICIENT USE  OF  THE  MONEYS  IN  THE
 ACCOUNT.
   (II) IN MAKING DETERMINATIONS ON LOAN APPLICATIONS, THE PUBLIC SERVICE
 COMMISSION  SHALL ASSURE THAT LOAN FUND MONEYS ARE EQUITABLY DISTRIBUTED
 AMONG ALL GEOGRAPHICAL AREAS OF THE STATE.
   (D) THE PUBLIC SERVICE COMMISSION SHALL, TO THE MAXIMUM EXTENT  FEASI-
 BLE,  AND  CONSISTENT WITH THE OTHER PROVISIONS OF THIS SECTION, SEEK TO
 PROVIDE THAT LOANS AUTHORIZED BY THIS  SECTION  REFLECT  AN  APPROPRIATE
 GEOGRAPHIC   DISTRIBUTION,   ARE  DISTRIBUTED  EQUITABLY  AND  ENCOURAGE
 REGIONAL COOPERATION.
   § 7. The sum of two hundred fifty million dollars  ($250,000,000),  or
 so  much  thereof  as  may be necessary, is hereby appropriated from any
 moneys in the state treasury in the general fund to the  credit  of  the
 state purposes account for the initial capital of the municipal internet
 service  provider  revolving loan fund in carrying out the provisions of
 this act. Such sum shall be payable on the  audit  and  warrant  of  the
 state  comptroller  on  vouchers  certified  or  approved  in the manner
 provided by law. No expenditure shall be made  from  this  appropriation
 until  a  certificate of approval of availability shall have been issued
 by the director of the budget and filed with the state comptroller and a
 copy filed with the chairman of the senate  finance  committee  and  the
 chairman  of the assembly ways and means committee. Such certificate may
 be amended from time to time by the director of the budget and a copy of
 each such amendment shall be  filed  with  the  state  comptroller,  the
 chairman  of the senate finance committee and the chairman of the assem-
 bly ways and means committee.
   § 8. This act shall take effect immediately.