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.