Various changes to the broadband expansion grant program; local government telecommunications, video, or broadband service facilities; claiming the manufacturing and agriculture tax credit; granting rule-making authority; and making appropriations. (FE)

This bill appropriates $200,000,000 in general purpose revenues in the 2017-19 fiscal biennium for the broadband expansion grant program administered by the Public Service Commission under current law. Under that program, the PSC makes grants to eligible applicants for the purpose of constructing broadband infrastructure in underserved areas designated by PSC. The bill's appropriation is in addition to appropriations from the universal service fund for the grants under current law.

The bill creates a definition for “broadband infrastructure,” which is not defined under current law. The bill defines “broadband infrastructure” as infrastructure that provides broadband service at a minimum download speed of 25 megabits per second and a minimum upload speed of 3 megabits per second. Under the bill, infrastructure is eligible for a broadband expansion grant only if it satisfies the foregoing definition. The bill requires a person who receives a grant to reimburse the PSC for the grant if 1) the person fails to complete construction of the infrastructure;

or 2) the infrastructure that is constructed fails to provide minimum download or upload speeds specified in the bill's definition of “broadband infrastructure.” The bill changes the priorities that apply to the PSC in awarding grants.

Current law requires the PSC to give priority to projects that satisfy various requirements, including projects that affect “unserved areas,” which current law defines as areas without specified types of Internet service. The bill requires instead that the PSC give first priority to projects for areas in which no broadband service is available and secondary priority to projects that satisfy the requirements specified under current law, except that the bill eliminates the priority for unserved areas. In addition, the bill requires the PSC to award no less than 85 percent of the grants in a fiscal year for projects to construct broadband infrastructure in counties with populations of 65,000 or less.

The bill also changes eligibility requirements for the grants. Under current law, telecommunications utilities are eligible to apply. Under the bill, a telecommunications utility is eligible only if it has not applied for or received support for broadband deployment under certain federal programs administered by the Federal Communications Commission. The bill also allows a city, village, town, or county to apply for a grant without submitting the application in partnership with a telecommunications utility or for-profit or not-for-profit organization, which is required under current law. The bill also specifies that a city, village, town, or county may use a grant for planning related to broadband infrastructure construction, including broadband feasibility reports. Also, the bill requires all applicants for grants to specify the broadband infrastructure the applicant intends to construct with a grant and requires the applicant to complete that construction before applying for a subsequent grant.

The bill also does the following:

1. Requires persons who receive grants to submit reports to the PSC on the progress of broadband infrastructure construction, the number of broadband service connections provided by that infrastructure, and the average download and upload speeds for those service connections.

2. Beginning on January 1, 2019, requires the Legislative Audit Bureau to conduct biennial performance audits of the broadband expansion grant program.

3. Requires the PSC to require retail electric utilities and cooperatives to survey customers and members about broadband service availability. The PSC must reimburse the utilities and cooperatives for conducting the surveys and use the survey results to improve broadband mapping.

Local government telecommunications, video, and broadband service facilities.

The bill eliminates a requirement for a city, village, or town (local government) to prepare a report before holding a public hearing on a proposed ordinance or resolution authorizing the local government to construct or operate facilities for providing telecommunications service, cable television or similar video service, or broadband service to the public. With exceptions, current law prohibits a local government from enacting an ordinance or adopting a resolution authorizing the local government to construct or operate such a facility unless the local government gives notice and holds a public hearing on the proposed ordinance or resolution. In addition, at least 30 days prior to the hearing, current law requires the local government to prepare and make available to the public a report that estimates the total costs and revenues for the facility and includes a cost-benefit analysis of the facility for a period of at least three years. Under this bill, a local government is not required to prepare that report.

Manufacturing and agricultural tax credit.

The bill provides that an individual whose income is greater than $2,000,000 a year may not claim the manufacturing and agriculture tax credit for taxable years beginning after December 31, 2017. Under current law, any person who has qualified production activities income from manufacturing or agriculture may claim the credit in an amount equal to the income multiplied by 7.5 percent.