SB 321 — Relating to: telephone company tax exemption for property used to provide broadband service. (FE)

- 2020 LEGISLATURE LRBa0748/1LRB-3510/1 EKL:kjfEKL:cdc&kjf SENATE AMENDMENTBILL 1,321 TOJuly SENATE10, SUBSTITUTE2019 AMENDMENT- 1,Introduced TOby SENATESenators BILLM 321ARKLEIN, DecemberTESTIN, 4,BERNIER 2019, -FEYEN, OfferedP ETROWSKI and T IFFANY, cosponsored by SenatoARKLEIN.Representatives QUINN , ALLWEG , D ITTRICH, DMING , ORLACHER , AMES , ATSMA , KITCHENS, RUG , ULP, KURTZ, M URPHY , M URSAU, N OVAK, O LDENBURG , PETRYK , PLUMER , PRONSCHINSKE , S NYDER, SORTWELL , PIROS, TAFSHOLT , UMMERFIELD , SWEARINGEN , AUCHEN , T RANEL, TUSLER, VANDER M EER and Z IMMERMAN .

AtReferred theto locationsCommittee indicated,on amendUtilities theand substituteHousing. amendment as follows:

A N A CT to amend 76.81;

and to create 76.80 (2), (2m) and (5) of the statutes;

relating to:

telephone company tax exemption for property used to provide broadband service.

Analysis by the Legislative Reference Bureau This bill exempts property used to provide broadband service to a rural or underserved area from the telephone company tax that is paid by telephone companies in lieu of the general property tax.

To qualify for the exemption, property installed prior to January 1, 2020, must be used to provide Internet access service to a rural area at a download speed of at least 25 megabits per second and an upload speed of at least 3 megabits per second.

Property installed after December 31, 2019, must be used to provide Internet access service to a rural or underserved area at those same speeds or, if higher, speeds designated by the Federal Communications Commission.

Under the bill, an “underserved area” is any area in the state served by fewer than two wired service providers, and a “rural area” is any area in the state that is located outside a federal metropolitan statistical area or is located in a city, village, or town with a population of not more than 14,000.

For property installed prior to January 1, 2020, the determination of whether an area is a rural area is based on the 2010 federal decennial census.

Because this bill relates to an exemption from state or local taxes, it may be referred to the Joint Survey Committee on Tax Exemptions for a report to be printed as an appendix to the bill.

- 2020 Legislature - 2 - LRB-3510/1 EKL:cdc&kjf SENATE BILL 321 For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SECTION 1.

76.80 (2), (2m) and (5) of the statutes are created to read:

76.80 (2) “Qualified broadband service property” means tangible personal property that meets any of the following standards:

(a) The property is installed prior to January, 1, 2020, and is used to provide Internet access service to a rural area at actual speeds that are at least a download speed of 25 megabits per second and an upload speed of 3 megabits per second.

(b) The property is installed after December 31, 2019, and is used to provide Internet access service to a rural or underserved area at actual speeds that meet or exceed the higher of the following thresholds:

PageA 1,download linespeed 7:of 25 megabits per second and an upload speed of 3 megabits per second.

after “installed" insert “in a rural area".

PageThe 1,download lineand 8:upload speed benchmarks for fixed services as designated by the federal communications commission in its inquiries regarding advanced telecommunications capability under 47 USC 1302 (b).

delete(2m) “to“Rural a"area” andmeans substitutean “toarea the".in this state that is located outside a federal metropolitan statistical area or is located in a city, village, or town with a population of not more than 14,000.

3.For purposes of sub.

Page(2) 1,(a), linethe 10:determination of whether an area meets the criteria of this subsection shall be made on the basis of the 2010 federal decennial census.

afterLRB-3510/1 “installed"- insert2020 “inLegislature a- rural3 or- underservedEKL:cdc&kjf area".SECTION 1 SENATE BILL 321 (5) “Underserved area" means an area in this state in which Internet access service at the highest speed threshold described in sub.

4.(2) (b) is not available from at least 2 wired providers.

PageS 1,ECTION line2. 11:

delete76.81 “a"of andthe substitutestatutes “the".is amended to read:

5.76.81 Imposition.

PageThere 2,is lineimposed 8:a tax on the real property of, and the tangible personal property of, every telephone company, excluding property that is exempt from the property tax under s.

after70.11 “14,000"(39) insertand “and(39m), amotor populationvehicles densitythat ofare notexempt moreunder thans. 2,500 per square mile".

6.70.112 (5), property that is used less than 50 percent in the operation of a telephone company, as provided under s.

Page70.112 2,(4) line(b), 10:andnt plant and pollution abatement equipment that is exempt under s.

after70.11 “census"(21), insertand “,qualified exceptbroadband thatservice theproperty. determination of population density shall be made using the 2017 population density per square mile by municipality estimates available from the department of administration".

Except as provided in s.

76.815, the rate for the tax imposed on each description of real property and on each item of tangible personal property is the net rate for the prior year for the tax under ch.

70 in the taxing jurisdictions where the description or item is located.

The real and tangible personal property of a telephone company shall be assessed as provided under s.

70.112 (4) (b).