House Bill 1512

(As Passed the House)

AN ACT TO AUTHORIZE AN INCOME AND FRANCHISE TAX CREDIT FOR TELECOMMUNICATIONS ENTERPRISES THAT DEPLOY BROADBAND TECHNOLOGIES BEFORE JULY 1, 2014, IN CENSUS TRACTS THAT LACK ACCESS TO FACILITIES-BASED TERRESTRIAL BROADBAND SERVICE AT THE MINIMUM TRANSMISSION SPEED SET FORTH BY THE NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION OR THAT DEPLOY BROADBAND TECHNOLOGIES TO CERTAIN COMMUNITY INSTITUTIONS; TO PROVIDE FOR THE AMOUNT OF THE CREDIT AND TO LIMIT THE AMOUNT OF THE CREDIT THAT MAY BE TAKEN IN ANY ONE TAX YEAR; TO AUTHORIZE UNUSED CREDITS TO BE CARRIED FORWARD FOR TEN CONSECUTIVE YEARS; TO AMEND SECTION 57-87-5, MISSISSIPPI CODE OF 1972, TO LIMIT THE INCOME TAX AND CORPORATION FRANCHISE TAX CREDIT FOR TELECOMMUNICATIONS ENTERPRISES THAT DEPLOY BROADBAND TECHNOLOGIES AUTHORIZED IN THIS SECTION TO INVESTMENTS MADE BEFORE JULY 1, 2012; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. (1) For purposes of this section:

(a) "Telecommunications enterprises" shall have the meaning ascribed to such term in Section 57-73-21(13).

(b) "Unserved area" means a census tract that, according to definitions promulgated by the National Telecommunications and Information Administration at the United States Department of Commerce, lacks access to facilities-based terrestrial broadband service at the minimum transmission speed set forth by the National Telecommunications and Information Administration.

(c) "Community anchor institutions" means schools, libraries, medical and health care providers, community colleges and other institutions of higher education and other community support organizations and entities that facilitate greater use of broadband service by or through those organizations.

(d) "Equipment used in the deployment of broadband technologies" means any equipment capable of being used for or in connection with the transmission of information at a rate, prior to taking into account the effects of any signal degradation, that is not less than one (1) megabit per second downstream and five hundred (500) kilobits per second upstream, including, but not limited to, asynchronous transfer mode switches, digital subscriber line access multiplexers, routers, servers, multiplexers, fiber optics and related equipment.

(2) With respect to the investment in each year by a telecommunications enterprise before July 1, 2014, there shall be allowed annually as a credit against the aggregate tax imposed by Chapters 7 and 13 of Title 27, Mississippi Code of 1972, an amount equal to:

(a) Ten percent (10%) of the cost of equipment used in the deployment of broadband technologies in an unserved area; and

(b) Fifteen percent (15%) of the cost of equipment used in the deployment of broadband technologies to community anchor institutions in an unserved area.

(3) The annual credits shall be allowed commencing with the taxable year in which the equipment is placed in service and continue for nine (9) consecutive years thereafter. The aggregate credit established by this section taken in any one (1) tax year shall be limited to an amount not greater than fifty percent (50%) of the taxpayer's tax liabilities under Chapters 7 and 13 of Title 27, Mississippi Code of 1972; however, any tax credit claimed under this section, but not used in any taxable year, may be carried forward for ten (10) consecutive years from the close of the tax year in which the credits were earned.

(4) The maximum aggregate amount of credits that may be claimed under this section shall not exceed the original investment made by a telecommunications enterprise in the qualifying equipment used in the deployment of broadband technologies.

(5) The Mississippi Department of Information Technology Services shall provide to the Department of Revenue a list of census tracts in this state that are unserved areas. Once listed, a census tract shall remain an unserved area regardless of the later availability of access to facilities-based terrestrial broadband service in the census tract.

SECTION 2. Section 57-87-5, Mississippi Code of 1972, is amended as follows:

57-87-5. (1) For purposes of this section:

(a) "Telecommunications enterprises" shall have the meaning ascribed to such term in Section 57-73-21(13);

(b) "Tier One areas" mean counties designated as Tier One areas pursuant to Section 57-73-21(1);

(d) "Tier Three areas" mean counties designated as Tier Three areas pursuant to Section 57-73-21(1); and

(e) "Equipment used in the deployment of broadband technologies" means any equipment capable of being used for or in connection with the transmission of information at a rate, prior to taking into account the effects of any signal degradation, that is not less than three hundred eighty-four (384) kilobits per second in at least one (1) direction, including, but not limited to, asynchronous transfer mode switches, digital subscriber line access multiplexers, routers, servers, multiplexers, fiber optics and related equipment.

(2) With respect to the investment in each year by a telecommunications enterprise after June 30, 2003, and before July 1, 2012, there shall be allowed annually as a credit against the aggregate tax imposed by Chapters 7 and 13 of Title 27, Mississippi Code of 1972, an amount equal to:

(a) Five percent (5%) of the cost of equipment used in the deployment of broadband technologies in Tier One areas;

(b) Ten percent (10%) of the cost of equipment used in the deployment of broadband technologies in Tier Two areas; and

(3) Such annual credits shall be allowed commencing with the taxable year in which such property is placed in service and continue for nine (9) consecutive years thereafter. The aggregate credit established by this section taken in any one (1)

tax year shall be limited to an amount not greater than fifty percent (50%) of the taxpayer's tax liabilities under Chapters 7 and 13 of Title 27, Mississippi Code of 1972; however, any tax credit claimed under this section, but not used in any taxable year, may be carried forward for ten (10) consecutive years from the close of the tax year in which the credits were earned.

(5) For purposes of this section, the tier in which broadband technology is deployed shall be determined in the year in which such technology is deployed in a county and such tier shall not change if the county is later designated in another tier.

SECTION 3. This act shall take effect and be in force from and after July 1, 2012, but shall stand repealed June 30, 2012.