Relates to enacting the credit for rural broadband act of 2016

Section 2: 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 2016, using broadband mapping data at the time a project is proposed.

Section 3: 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: 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 2016 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 Connect NY approach.

Legislative history

2013-14 - S. 5481a - Finance Committee/A. 7588- Governmental Operations Committee.

Fiscal implications

Approximately $10 million in the first year.

Effective date

Immediately, and to be applied to tax years beginning on and after January 1,2017 immediately following enactment.