Senate Bill S9340

                                 
BILL NUMBER: S9340

SPONSOR: MAY
 
TITLE OF BILL:

An act to amend the local finance law, in relation to the period of
probable usefulness of broadband and related telecommunications infras-
tructure

 
PURPOSE:

To extend the period of probable usefulness of broadband and related
telecommunications infrastructure from 10 to 30 years.

 
SUMMARY OF PROVISIONS:

Section 1 is the short tide.

Section 2 extends the period of probable usefulness of broadband and
related telecommunications infrastructure under the Local Finance Law
from 10 to 30 years.

              

Section 3 is the effective date.

 
JUSTIFICATION:

When a municipality finances broadband infrastructure through bonds, the
period of probable usefulness under the Local Finance Law determines how
long the municipality has to pay that debt back.  Currently that period
is 10 years. This bill extends it to 30.

The core of broadband infrastructure is the passive fiber plant: the
conduit, cable, splice enclosures, and related physical components that
form the backbone of any fiber network. This is typically the largest
share of construction cost, and it lasts. The physical lifespan of
passive fiber infrastructure is widely understood to be 30 to 40 years
or more. A 10-year repayment window is badly misaligned with that reali-
ty.

The active electronics that sit on top of the fiber have shorter lifes-
pans, but they are not what this bill addresses. Those components are
maintained and replaced through ongoing operating revenue, not long-term
bonds. This bill applies to the long-life physical infrastructure, and
sets the repayment period to match what that infrastructure actually is:
a 30-year asset.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
This act shall take effect immediately.