SF 461 (LSB 1386SV (3) 86)

SENATE FILE 461

BY  COMMITTEE ON ECONOMIC GROWTH

(SUCCESSOR TO SF 60)

A BILL FOR

An Act relating to the coordination of, access to, and availability of broadband via fiberoptic network infrastructure throughout the state, including a broadband grant program and fund, the use of tax incentives and statewide school infrastructure funding, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
STATEWIDE BROADBAND COORDINATION
    Section 1.  Section 8B.1, Code 2015, is amended by adding the following new subsections:
   NEW SUBSECTION.  01.  “Broadband” means a high-speed, high-capacity electronic transmission medium that can carry data signals from multiple independent network sources by establishing different bandwidth channels and that is commonly used to deliver internet services to the public.
   NEW SUBSECTION.  001.  “Communications service provider” means a service provider that provides broadband service using fiberoptic network infrastructure.
   NEW SUBSECTION.  0001.  “Fiberoptic network infrastructure” means the physical infrastructure used for the transmission of data via broadband over fiberoptic networks, including but not limited to any fiberoptic cable equipment, systems, switches, routers, conduits, servers, software, technology, base transceiver station sites, or other equipment used to transmit broadband communications via fiberoptics. “Fiberoptic network infrastructure” does not include land, buildings, structures, improvements, or equipment not directly used in the transmission of data via broadband over fiberoptic networks.
   NEW SUBSECTION.  7A.  “Targeted underserved service area” means one or more homes or businesses that do not have access to broadband service provided by fiberoptic network infrastructure.
    Sec. 2.  Section 8B.1, subsection 1, Code 2015, is amended to read as follows:
   1.  “Information technology” means computing and electronics applications used to process and distribute information in digital and other forms and includes information technology devices, information technology services, infrastructure services, broadband and fiberoptic network infrastructure, and value-added services.
    Sec. 3.  Section 8B.3, subsection 1, Code 2015, is amended to read as follows:
   1.  The office is created for the purpose of leading, directing, managing, coordinating, and providing accountability for the information technology resources of state government and for coordinating statewide broadband availability and access provided by fiberoptic network infrastructure. 
    Sec. 4.  Section 8B.4, Code 2015, is amended by adding the following new subsections:
   NEW SUBSECTION.  14A.  Streamline, consolidate, and coordinate the access to and availability of broadband via fiberoptic network infrastructure throughout the state, including but not limited to developing policies and recommendations for expanding the installation of fiberoptic network infrastructure in targeted underserved service areas of the state, facilitating public-private partnerships, ensuring that all state agencies’ broadband and fiberoptic network infrastructure policies and procedures are aligned, promoting accountability regarding broadband and fiberoptic network infrastructure availability and access, integrating broadband with cyber security standards and rules, resolving issues which arise with regard to implementation efforts, collecting data and developing metrics or standards against which the data may be measured and evaluated regarding fiberoptic network infrastructure installation and deployment, and identifying options regarding the creation of standing resources for stakeholders, such as a fiberoptic database or a fiberoptic network conduit installation coordination effort for state-funded construction projects.
   NEW SUBSECTION.  14B.  Establish and administer the broadband grant program pursuant to section 8B.11.
   NEW SUBSECTION.  14C.  Coordinate the fiberoptic network conduit installation program established in section 8B.25.
    Sec. 5.  Section 8B.9, Code 2015, is amended by adding the following new subsection:
   NEW SUBSECTION.  5.  An annual report regarding the status of broadband expansion and coordination via fiberoptic networks and the broadband grant program established under section 8B.11.
    Sec. 6.  NEW SECTION.  8B.11  Broadband grant program —— fund.
   1.  The office shall administer a broadband grant program to award grants to communication service providers that reduce or eliminate targeted underserved service areas by providing broadband services via fiberoptic network infrastructure.
   2.  a.  A broadband grant fund is established in the state treasury under the authority of the office. The fund shall consist of moneys appropriated to the fund or appropriated to the office for purposes of the grant program, moneys available to and obtained or accepted by the office from the federal government or private sources, or other funds available to the office for purposes of the grant program. Moneys in the fund are appropriated to the office to be used for the grant program.
   b.  The office shall use moneys in the fund to provide grants to communication service providers pursuant to this section. The office shall use moneys in the fund to leverage available federal moneys.
   c.  Notwithstanding section 8.33, moneys in the fund that remain unencumbered or unobligated at the close of the fiscal year shall not revert but shall remain available for expenditure for the purposes designated until the close of the succeeding fiscal year.
   3.  Communication service providers may apply to the office for a grant pursuant to this section for the installation of fiberoptic network infrastructure to provide broadband services in targeted underserved service areas. The office shall include representatives from schools, communities, agriculture, industry, and other areas as appropriate to review and recommend grant awards. The office shall conduct an open application review process and include a public internet site for applications, results, and performance.
   4.  a.  The office shall award grants on a competitive basis after considering the following:
   (1)  The relative need for broadband services in the area.
   (2)  The geographic diversity of the project areas of all the applicants.
   (3)  The economic impact of the project to the area.
   (4)  The applicant’s total proposed budget for the project, including the amount or percentage of local match, if any.
   (5)  Other factors the office deems relevant.
   b.  Except as otherwise provided in this section, the office shall not evaluate applications based on the office’s knowledge of the applicant except for the information provided in the application.
   5.  The office shall not award a grant pursuant to this section that exceeds ten percent of the communication service provider’s project cost.
   6.  The office shall adopt rules pursuant to chapter 17A, including but not limited to the broadband grant program process, management, and measurements as deemed necessary by the office.
    Sec. 7.  NEW SECTION.  8B.25  Fiberoptic network conduit installation program.
   1.  For the purposes of this section, “fiberoptic network conduit” means a pipe or duct used to enclose fiberoptic cable facilities buried alongside a roadway or surface mounted on a bridge, overpass, or other facility where placement below ground is impossible or impractical.
   2.  The office shall lead and coordinate a program to provide for the installation of fiberoptic network conduit where such conduit does not exist. The chief information officer shall consult and coordinate with the department of administrative services, the department of transportation, the Iowa communications network, and other agencies and entities as determined appropriate to ensure that the opportunity is provided to lay or install fiberoptic network conduit wherever a state-funded construction project involves trenching, boring, a bridge, a roadway, or opening of the ground, or alongside any state-owned infrastructure.
   3.  Contingent upon the provision of funding for such purposes by the general assembly, the office may contract with a third party to manage, lease, install, or otherwise provide fiberoptic network conduit access for projects described in this section. This section shall not prohibit the office from purchasing or installing fiberoptic cable within any fiberoptic network conduit installed pursuant to the program.
    Sec. 8.  NEW SECTION.  8B.26  Broadband permitting process —— expeditious response.

   Notwithstanding any other provision to the contrary and in compliance with applicable federal laws and regulations, a political subdivision vested with permitting authority shall approve, approve with modification, or disapprove nonwireless, broadband-related permits within sixty business days following the submission of a permit application and fee. In the event that no action is taken during the sixty-day period, the application shall be deemed approved.
    Sec. 9.  Section 8D.3, subsection 2, paragraph a, Code 2015, is amended to read as follows:
   a.  The commission is composed of five voting members appointed by the governor and subject to confirmation by the senate. Members Voting members of the commission shall not serve in any manner or be employed by an authorized user of the network or by an entity seeking to do or doing business with the network.
   (1)  The governor shall appoint a voting member as the chairperson of the commission from the five voting members appointed by the governor, subject to confirmation by the senate.
   (2)  Members Voting members of the commission shall serve six-year staggered terms as designated by the governor and appointments to the commission are subject to the requirements of sections 69.16, 69.16A, and 69.19. Vacancies shall be filled by the governor for the duration of the unexpired term.
   (3)  The salary of the voting members of the commission shall be twelve thousand dollars per year, except that the salary of the chairperson shall be seventeen thousand dollars per year. Members Voting members of the commission shall also be reimbursed for all actual and necessary expenses incurred in the performance of duties as members. The benefits and salary paid to the voting members of the commission shall be adjusted annually equal to the average of the annual pay adjustments, expense reimbursements, and related benefits provided under collective bargaining agreements negotiated pursuant to chapter 20.
    Sec. 10.  Section 8D.3, subsection 2, paragraph b, Code 2015, is amended to read as follows:
   b.  In addition to the members appointed by the governor, the The auditor of state or the auditor’s designee and the chief information officer appointed pursuant to section 8B.2 or the chief information officer’s designee shall serve as a nonvoting, ex officio member members of the commission.
    Sec. 11.  Section 8D.4, Code 2015, is amended to read as follows:
   8D.4  Executive director appointed.

   The commission, in consultation with the director of the department of administrative services and the chief information officer, shall appoint an executive director of the commission, subject to confirmation by the senate. Such individual shall not serve as a member of the commission. The executive director shall serve at the pleasure of the commission. The executive director shall be selected primarily for administrative ability and knowledge in the field, without regard to political affiliation. The governor shall establish the salary of the executive director within range nine as established by the general assembly. The salary and support of the executive director shall be paid from funds deposited in the Iowa communications network fund.
    Sec. 12.  Section 80.28, subsection 2, Code 2015, is amended to read as follows:
   2.  The board shall consist of fifteen nineteen voting members, as follows:
   a.  The following members representing state agencies:
   (1)  One member representing the department of public safety.
   (2)  One member representing the state department of transportation.
   (3)  One member representing the department of homeland security and emergency management.
   (4)  One member representing the department of corrections.
   (5)  One member representing the department of natural resources.
   (6)  One member representing the Iowa department of public health.
   (7)  One member representing the office of the chief information officer created in section 8B.2.
   b.  The governor shall solicit and consider recommendations from professional or volunteer organizations in appointing the following members:
   (1)  Two members who are representatives from municipal police departments.
   (2)  Two members who are representatives of sheriff’s offices.
   (3)  Two members who are representatives from fire departments. One of the members shall be a volunteer fire fighter and the other member shall be a paid fire fighter.
   (4)  Two members who are law communication center managers employed by state or local government agencies.
   (05)  One member who is an emergency medical care provider as defined in section 147A.1.
   (005)  One member who is a local emergency management coordinator as described in section 29C.9.
   (0005)  One member representing the communication workers of America in Iowa.
   (5)  One at-large member.
    Sec. 13.  RULES.  The office of the chief information officer shall adopt rules pursuant to chapter 17A to certify that fiberoptic network infrastructure is installed in a targeted underserved service area and to allow challenges to claims that an area meets the definition of a targeted underserved service area.

DIVISION II
PROPERTY TAX INCENTIVES AND ASSESSMENT
    Sec. 14.  Section 421.1A, subsection 3, Code 2015, is amended to read as follows:
   3.  At the election of a property owner or aggrieved taxpayer or an appellant described in section 441.42, the property assessment appeal board shall review any final decision, finding, ruling, determination, or order of a local board of review relating to protests of an assessment, valuation, or application of an equalization order, or any final decision of the county board of supervisors relating to denial of an application for a property tax exemption pursuant to section 427.1, subsection 40.
    Sec. 15.  Section 421.1A, subsection 4, Code 2015, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  0b.  Affirm or reverse a final decision of a county board of supervisors relating to denial of an application for a property tax exemption under section 427.1, subsection 40.
    Sec. 16.  Section 427.1, Code 2015, is amended by adding the following new subsection:
   NEW SUBSECTION.  40.  Fiberoptic network infrastructure.
   a.  The owner of fiberoptic network infrastructure shall be entitled to an exemption from taxation to the extent provided in this subsection. For the purposes of this subsection, “fiberoptic network infrastructure” and “targeted underserved service area” mean the same as defined in section 8B.1. 
   b.  The exemption shall apply to the installation of fiberoptic network infrastructure commenced and completed on or after July 1, 2015, in a targeted underserved service area, and used to deliver internet services to the public. A person claiming an exemption under this subsection shall certify to the local assessor prior to commencement of the installation that the fiberoptic network installation will take place within a targeted underserved service area.
   c.  The tax exemption shall be a one hundred percent exemption from taxation for a period of five years in an amount equal to the actual value added by installation of the fiberoptic network infrastructure.
   d.  For companies assessed by the department of revenue pursuant to chapter 433, the exemption shall be limited to an amount equal to the actual value added by installation of the fiberoptic network infrastructure as of the assessment date, as determined by the department, and the exemption shall be applied prior to any other exemption applicable to the unit value, as determined under that chapter.
   e.  (1)  An application for an exemption shall be filed by the owner of the property with the county board of supervisors of each county in which the property is located by February 1 of the year in which the fiberoptic network infrastructure is first assessed for taxation, or the following two assessment years, and in each case the exemption is allowed for five years.
   (2)  In lieu of subparagraph (1), and notwithstanding any provision in this subsection to the contrary, an owner may at any time before completion of the project submit a proposal to the board of supervisors requesting that the board allow the owner to file an application for exemption by February 1 of any other assessment year following completion of the project, which year shall be selected by the board. If the board, by resolution, approves the proposal, the exemption is allowed for five years.
   f.  (1)  The application shall be made on forms prescribed by the director of revenue. The application shall contain but not be limited to the following information:
   (a)  The nature of the fiberoptic network infrastructure installation.
   (b)  The actual cost of installing the fiberoptic network infrastructure under the project, if available. The application shall contain supporting documents demonstrating the actual cost.
   (c)  Certification from the office of the chief information officer that the installation is being performed or was completed in a targeted underserved service area and certification of the date of commencement and actual or estimated date of completion.
   (d)  A copy of any permit related to fiberoptic network infrastructure issued by a political subdivision.
   (e)  If applying pursuant to paragraph “e”, subparagraph (2), the actual cost already incurred for installation of fiberoptic network infrastructure, if any, the estimated costs for project completion, and the estimated date of project completion. The application shall contain supporting documents demonstrating the actual cost.
   (2)  The board of supervisors shall forward all approved applications and any necessary information regarding the applications to the appropriate local assessor or to the department of revenue, as applicable, by March 1 annually. After the tax exemption is granted, the local assessor shall continue to grant the tax exemption for five years, and applications for exemption for succeeding years shall not be required.
   (3)  An applicant for a property tax exemption under this subsection may appeal the decision of the board of supervisors regarding denial of the application to the property assessment appeal board.
   g.  (1)  If a company whose property in the county is not assessed by the department of revenue is approved to receive a property tax exemption pursuant to this subsection, the actual value added by installation of the fiberoptic network infrastructure shall be determined by the local assessor who shall certify the amount of exemption determined to the county auditor at the time of transmitting the assessment rolls.
   (2)  Notwithstanding any other provision of law to the contrary, if a company in which all or a portion of the company’s property in the county is assessed by the department pursuant to chapter 433 and the company’s property in the county is approved to receive a property tax exemption pursuant to this subsection, the department shall assess all the company’s property in the county used for operating telegraph and telephone lines, broadband, or cable systems for each assessment year the company receives the exemption, for purposes of determining the actual value added by installation of the fiberoptic network infrastructure.
   (3)  (a)  If assessing property pursuant to subparagraph (2), the department shall certify the assessment value and exemption amounts for all property used for the operation of providing cable and broadband services and generally not assessed by the department to the local assessor for inclusion on the assessment rolls as provided in section 433.8, subsection 2.
   (b)  A company whose property is assessed by the department pursuant to subparagraph (2) shall follow the appeal procedures in chapter 429 for appealing any part of the assessment on all the company’s property, including the company’s property that would have been valued by the local assessor but for subparagraph (2). For appeal proceedings for assessed values submitted pursuant to subparagraph division (a), the department shall notify the taxpayer of the right to appeal pursuant to chapter 429.
   h.  The director of revenue may adopt rules pursuant to chapter 17A for the interpretation and proper administration of the exemption provided in this subsection.
    Sec. 17.  Section 433.8, Code 2015, is amended to read as follows:
   433.8  Assessment in each county —— how certified.
   1.  The director of revenue shall, for the purpose of determining what amount shall be assessed to each company in each county of the state into which the line of the said company extends, certify to the several county auditors of the respective counties into, over, or through which said line extends the number of miles of line in the county for that company, the actual value per mile of line for that company, and the exemption value per mile of line for that company for exemptions received pursuant to section 427.1, subsection 40, section 433.4, or any other exemptions.  In no case, however, shall the taxable value of the property be reduced below zero.
   2.  If assessing all of the property of a company pursuant to section 427.1, subsection 40, paragraph “g”, subparagraph (2), the director shall also certify such amounts to the assessor for inclusion on the assessment rolls.
    Sec. 18.  IMPLEMENTATION.  Section 25B.7 shall not apply to this division of this Act.
    Sec. 19.  APPLICABILITY.  This division of this Act applies to assessment years beginning on or after January 1, 2016.

DIVISION III
INFORMATION TECHNOLOGY INFRASTRUCTURE FOR EDUCATION
    Sec. 20.  Section 423F.3, subsection 6, Code 2015, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  0c.  Additionally, “school infrastructure” includes the acquisition or installation of information technology infrastructure. For purposes of this paragraph, “information technology infrastructure” means the basic, underlying physical framework or system necessary to deliver technology connectivity to a school district and to network school buildings within a school district.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill relates to the coordination of and availability of broadband access via fiberoptic network infrastructure across the state.
   Division I of the bill modifies provisions in Code chapter 8B, the information technology chapter which creates the office of the chief information officer, by adding several definitions to the Code chapter. The division defines “broadband” as a high-speed, high-capacity electronic transmission medium that can carry data signals from multiple independent network sources by establishing different bandwidth channels and that is commonly used to deliver internet services to the public. The division defines “fiberoptic network infrastructure” as the physical infrastructure used for the transmission of data via broadband over fiberoptic networks. The division also adds definitions for “communications service provider” and “targeted underserved service area”. The division changes the definition of “information technology” to include broadband and fiberoptic network infrastructure.
   The division adds additional powers and duties for the chief information officer relating to broadband and fiberoptic network infrastructure. The division includes coordination of statewide broadband availability and access via fiberoptic network infrastructure as a mission of the office of the chief information officer. The division also requires the chief information officer to streamline, consolidate, and coordinate access to and availability of broadband via fiberoptic network infrastructure. The division directs the chief information officer to submit an annual report regarding the status of broadband expansion and coordination via fiberoptic networks and the broadband grant program. The division also adds the chief information officer as a nonvoting, ex officio member to the telecommunication and technology commission, established in current Code section 8D.3 and which oversees the operation of the Iowa communications network, and adds the chief information officer as a voting member of the statewide interoperable communications system board established in current Code section 80.28 under the purview of the departments of public safety and transportation. The division makes corresponding amendments regarding voting members of the commission and the appointment of the executive director of the telecommunication and technology commission. The division also adds an emergency care provider, a local emergency management coordinator, and a person representing the communication workers of America in Iowa to the statewide interoperable communications system board.
   The division establishes a broadband grant program and fund. The division requires the office of the chief information officer to administer a broadband grant program to award grants to communication service providers that reduce or eliminate targeted underserved service areas by providing broadband services via fiberoptic network infrastructure. The division establishes a fund, consisting of moneys appropriated to it or appropriated to the office or otherwise available to the office for purposes of the grant program. The moneys in the fund are appropriated to the office of the chief information officer. The division provides that communication service providers may apply to the office for a grant. The division requires the office to include representatives from schools, communities, agriculture, industry, and other areas as appropriate to review and recommend grant awards. The division also requires the office to conduct an open application review process and include a public internet site for applications, results, and performance. The division sets criteria for the office to consider when awarding grants. The division limits grant amounts to a maximum of 10 percent of the communication service provider’s project cost.
   The division adds the responsibility for coordinating a new fiberoptic network conduit installation program to facilitate incorporation of fiberoptic network conduit installations, as defined by the bill, into state-funded construction projects or by state-owned infrastructure to the powers and duties of the chief information officer. The division provides that, subject to funding from the general assembly, the office may contract with a third party to manage, lease, install, or otherwise provide fiberoptic network conduit access, and the program shall not prohibit the office from purchasing or installing fiberoptic cable within fiberoptic network conduit installed pursuant to the program.
   Additionally, the division specifies expeditious response requirements regarding the approval, modification, or disapproval of nonwireless broadband-related permits. The division provides that, notwithstanding any other provision to the contrary, a political subdivision vested with permitting authority shall approve, approve with modification, or disapprove nonwireless broadband-related permits within 60 business days following the submission of a permit application and fee. If the political subdivision does not take action during the 60-day period, the application shall be deemed approved.
   Division II of the bill provides a property tax exemption for installation of fiberoptic network infrastructure commenced and completed on or after July 1, 2015, in a targeted underserved service area and used to deliver internet services to the public. The exemption shall be a 100 percent exemption from taxation for a period of five years based on the actual value added by the installation of the fiberoptic network infrastructure. The division specifies procedures relating to applying for the tax exemption with the board of supervisors in the county within which the fiberoptic network infrastructure is located, granting the tax exemption, and assessing the property of companies receiving the exemption. The division applies to assessment years beginning on or after January 1, 2016. Code section 25B.7 provides that for a property tax credit or exemption enacted on or after January 1, 1997, if a state appropriation made to fund the credit or exemption is not sufficient to fully fund the credit or exemption, the political subdivision shall be required to extend to the taxpayer only that portion of the credit or exemption estimated by the department of revenue to be funded by the state appropriation. The division provides that Code section 25B.7 does not apply to the property tax exemption created under the division.
   Division III of the bill adds the acquisition or installation of information technology infrastructure, as defined in the bill, to the definition of “school infrastructure” for purposes of the statewide school infrastructure funding provisions contained in Code chapter 423F.