Texas 2025 - 89th Regular

Texas Senate Bill SB1405 Compare Versions

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Version 2 (New)

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1	1		By: Nichols, Hagenbuch S.B. No. 1405
2		-
3		-
	2	+	(In the Senate - Filed February 19, 2025; March 6, 2025,
	3	+	read first time and referred to Committee on Business & Commerce;
	4	+	April 7, 2025, reported adversely, with favorable Committee
	5	+	Substitute by the following vote: Yeas 11, Nays 0; April 7, 2025,
	6	+	sent to printer.)
	7	+	Click here to see the committee vote
	8	+	COMMITTEE SUBSTITUTE FOR S.B. No. 1405 By: Nichols
4	9
5	10
6	11		A BILL TO BE ENTITLED
7	12		AN ACT
8	13		relating to increasing access to and reducing taxation of Internet
9	14		services.
10	15		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	16		SECTION 1. Section 403.553(o), Government Code, is amended
12	17		to read as follows:
13	18		(o) Not later than November 1 of each year [the 60th day
14	19		after the date the pole replacement fund receives money for the pole
15	20		replacement program], the comptroller shall [maintain and] publish
16	21		on the comptroller's Internet website:
17	22		(1) statistics on the number of applications received,
18	23		processed, and rejected by the program in the preceding state
19	24		fiscal year;
20	25		(2) statistics on the size, number, and status of
21	26		reimbursements awarded by the program in the preceding state fiscal
22	27		year, including the retail broadband service providers and pole
23	28		owners receiving reimbursements; and
24	29		(3) the estimated amount of money available for grants
25	30		from the program as of the last day of the preceding state fiscal
26	31		year [remaining in the pole replacement fund].
27	32		SECTION 2. Section 490I.0101(a), Government Code, is
28	33		amended to read as follows:
29	34		(a) For purposes of this chapter, subject to Subsection (b),
30	35		"broadband service" means Internet service with the capability of
31	36		providing a:
32	37		(1) speed of not less than 100 [25] megabits per second
33	38		for a download;
34	39		(2) speed of not less than 20 [three] megabits per
35	40		second for an upload; and
36	41		(3) network round-trip latency of less than or equal
37	42		to 100 milliseconds based on the 95th percentile of speed
38	43		measurements.
39	44		SECTION 3. Sections 490I.0105(a), (c), (f), and (q),
40	45		Government Code, are amended to read as follows:
41	46		(a) The broadband development office shall create, update
42	47		annually, and publish on the comptroller's Internet website a map
43	48		classifying each broadband serviceable location in this state as:
44	49		(1) an unserved location if the location:
45	50		(A) does not have access to reliable broadband
46	51		service capable of providing [the] speeds matching standards
47	52		adopted by the Federal Communications Commission if required by the
48	53		comptroller under Section 490I.0101(b), or if the comptroller has
49	54		not exercised the comptroller's authority under that subsection,
50	55		speeds described by Section 490I.0101(a); or
51	56		(B) is a public school or community anchor
52	57		institution and does not have access to reliable broadband service
53	58		capable of providing symmetrical upload and download speeds of at
54	59		least one gigabit per second with a network round-trip latency of
55	60		less than or equal to 100 milliseconds based on the 95th percentile
56	61		of speed measurements;
57	62		(2) an underserved location if the location is not an
58	63		unserved location but does not have access to reliable broadband
59	64		service with the capability of providing:
60	65		(A) a speed of not less than 250 [100] megabits
61	66		per second for a download;
62	67		(B) a speed of not less than 25 [20] megabits per
63	68		second for an upload; and
64	69		(C) a network round-trip latency of less than or
65	70		equal to 100 milliseconds based on the 95th percentile of speed
66	71		measurements; or
67	72		(3) a served location if the location is neither an
68	73		unserved nor an underserved location.
69	74		(c) The [After creation of the initial map described in
70	75		Subsection (a), the] office may evaluate the usefulness of the
71	76		standards for unserved and underserved locations outlined in
72	77		Subsection (a) and, if appropriate, make a recommendation to the
73	78		legislature to revise the standards.
74	79		(f) The [Except as provided by Subsection (g), the] office
75	80		shall use the best available data, including information available
76	81		from the Federal Communications Commission, to create or update the
77	82		map.
78	83		(q) The office is not required to create, update, or publish
79	84		a map under this section if the office adopts a map produced by the
80	85		Federal Communications Commission [produces a map] that[:
81	86		[(1)] enables the office to identify unserved,
82	87		underserved, and served locations [eligible and ineligible areas,]
83	88		as described by Subsection (a)[; and
84	89		[(2) meets the requirements of Subsection (d)].
85		-	SECTION 4. Sections 490I.0106, Government Code, is amended
86		-	by amending Subsections (a), (a-1), (a-2), (a-3), (b), (d), (f),
87		-	and (h) and adding Subsection (h-1) to read as follows:
	90	+	SECTION 4. Sections 490I.0106(a), (a-1), (a-2), (a-3), (b),
	91	+	(d), and (f), Government Code, are amended to read as follows:
88	92		(a) The broadband development office shall establish a
89	93		program to award grants, low-interest loans, and other financial
90	94		incentives [to applicants] for the purpose of expanding access to
91	95		and adoption of broadband service.
92	96		(a-1) The office may award grants, low-interest loans, and
93	97		other financial incentives [to applicants] for eligible broadband
94	98		infrastructure projects designed to provide qualifying broadband
95	99		service to unserved and underserved locations. For the purposes of
96	100		this subsection, an eligible broadband infrastructure project
97	101		includes a project in which not less than 80 percent of the
98	102		broadband serviceable locations to be served by the project are
99	103		unserved and underserved locations.
100	104		(a-2) The office may award grants, low-interest loans, and
101	105		other financial incentives [to applicants] for middle-mile
102	106		broadband infrastructure projects.
103	107		(a-3) The office may award grants, low-interest loans, and
104	108		other financial incentives [to applicants] for projects not
105	109		involving the deployment of broadband infrastructure that expand
106	110		the accessibility, affordability, or adoption of broadband
107	111		service, including education, training, community outreach, remote
108	112		learning or telehealth facilities, equipment purchases, or any
109	113		other use permitted by the applicable funding source.
110	114		(b) The office shall establish eligibility and award
111	115		criteria for making awards under this chapter for each applicable
112	116		notice of funds availability. The comptroller by rule may
113	117		prescribe the manner in which the office shall provide notice [to
114	118		applicants] of the applicable criteria. In establishing
115	119		eligibility and award criteria, the office shall:
116	120		(1) take into consideration grants and other financial
117	121		incentives awarded by the federal government for the deployment of
118	122		broadband service;
119	123		(2) prioritize the applications [of applicants] that
120	124		will expand access to and adoption of broadband service in
121	125		designated areas in which the highest percentage of broadband
122	126		serviceable locations are unserved or underserved locations;
123	127		(3) prioritize the applications [of applicants] that
124	128		will expand access to broadband service in public and private
125	129		primary and secondary schools and institutions of higher education;
126	130		(4) give preference to an applicant that provided the
127	131		information requested by the office under Section [490I.0105 or]
128		-	490I.01061; [and]
	132	+	490I.01061; and
129	133		(5) take into consideration whether an applicant has
130	134		forfeited federal funding for defaulting on a project to deploy
131		-	qualifying broadband service; and
132		-	(6) take into consideration whether an applicant has
133		-	repeatedly used private property in an unauthorized manner or
134		-	caused damage to private property, as demonstrated by affidavits
135		-	submitted to the office by property owners affected by that
136		-	conduct.
	135	+	qualifying broadband service.
137	136		(d) The office may not:
138	137		(1) except as provided by Section 490I.01062, favor a
139	138		particular broadband technology in awarding grants, loans, or other
140	139		financial incentives;
141	140		(2) award a grant, loan, or other financial incentive
142	141		to a noncommercial provider of broadband service for a broadband
143	142		serviceable location if an eligible commercial provider of
144	143		broadband service has submitted an application for the same
145	144		location;
146	145		(3) take into consideration distributions from the
147	146		state universal service fund established under Section 56.021,
148	147		Utilities Code, when deciding to award grants, loans, or other
149	148		financial incentives; or
150	149		(4) except as provided by Section 490I.01061, award a
151	150		grant, loan, or other financial incentive for deployment of
152	151		last-mile broadband service for a location that is subject to an
153	152		existing [a] federal commitment to deploy qualifying broadband
154	153		service on the date the application is submitted or during the
155	154		application process.
156	155		(f) During the 30-day posting period described by
157	156		Subsection (e) for an application, the office shall accept from any
158	157		interested party, other than a broadband service provider that does
159	158		not report information requested by the office under Section
160	159		[490I.0105 or] 490I.01061, a written protest of an [the]
161	160		application submitted for a grant, loan, or other financial
162	161		incentive under Subsection (a-1) relating to whether the
163	162		broadband-serviceable locations contained in the application are
164	163		eligible to receive funding [applicant or project is eligible for
165	164		an award or should not receive an award based on the criteria
166	165		prescribed by the office].
167		-	(h) The office shall establish and publish criteria for
168		-	award recipients. The criteria must include requirements that
169		-	grants, loans, and other financial incentives awarded through the
170		-	program for the deployment of broadband infrastructure may be:
171		-	(1) used only for capital expenses, purchase or lease
172		-	of property, and other expenses, including backhaul and transport,
173		-	that will facilitate the provision or adoption of broadband
174		-	service; and
175		-	(2) subject to withdrawal if the award recipient is
176		-	found, in accordance with rules adopted by the office, to have
177		-	repeatedly used private property in an unauthorized manner or
178		-	caused damage to private property.
179		-	(h-1) The comptroller by rule shall establish a process for
180		-	determining whether a financial incentive is subject to withdrawal
181		-	under Subsection (h) that:
182		-	(1) provides for the submission of a notarized
183		-	affidavit by an affected property owner; and
184		-	(2) requires the office to notify an award recipient of
185		-	the potential withdrawal and provide the recipient an opportunity
186		-	to respond before taking action.
187	166		SECTION 5. Sections 151.00394(b) and (c), Tax Code, are
188	167		amended to read as follows:
189	168		(b) "Internet access service" does not include [and the
190	169		exemption under Section 151.325 does not apply to] any [other]
191	170		taxable service listed in Section 151.0101(a), unless the taxable
192	171		service is provided in conjunction with and is merely incidental to
193	172		the provision of Internet access service.
194	173		(c) [On and after October 1, 1999,] "Internet access
195	174		service" is not included in the definitions of "data processing
196	175		service" and "information service."
197	176		SECTION 6. Section 151.0101(a), Tax Code, is amended to
198	177		read as follows:
199	178		(a) "Taxable services" means:
200	179		(1) amusement services;
201	180		(2) cable television services;
202	181		(3) personal services;
203	182		(4) motor vehicle parking and storage services;
204	183		(5) the repair, remodeling, maintenance, and
205	184		restoration of tangible personal property, except:
206	185		(A) aircraft;
207	186		(B) a ship, boat, or other vessel, other than:
208	187		(i) a taxable boat or motor as defined by
209	188		Section 160.001;
210	189		(ii) a sports fishing boat; or
211	190		(iii) any other vessel used for pleasure;
212	191		(C) the repair, maintenance, and restoration of a
213	192		motor vehicle; and
214	193		(D) the repair, maintenance, creation, and
215	194		restoration of a computer program, including its development and
216	195		modification, not sold by the person performing the repair,
217	196		maintenance, creation, or restoration service;
218	197		(6) telecommunications services;
219	198		(7) credit reporting services;
220	199		(8) debt collection services;
221	200		(9) insurance services;
222	201		(10) information services;
223	202		(11) real property services;
224	203		(12) data processing services;
225	204		(13) real property repair and remodeling;
226	205		(14) security services;
227	206		(15) telephone answering services; and
228	207		(16) [Internet access service; and
229	208		[(17)] a sale by a transmission and distribution
230	209		utility, as defined in Section 31.002, Utilities Code, of
231	210		transmission or delivery of service directly to an electricity
232	211		end-use customer whose consumption of electricity is subject to
233	212		taxation under this chapter.
234	213		SECTION 7. Section 171.10132, Tax Code, is amended by
235	214		amending Subsection (a) and adding Subsection (a-1) to read as
236	215		follows:
237	216		(a) In this section, "qualifying broadband grant" means a
238	217		grant for broadband deployment in this state received by a taxable
239	218		entity:
240	219		(1) under the Broadband Equity, Access, and Deployment
241	220		Program established under 47 U.S.C. Section 1702;
242	221		(2) under the State Digital Equity Capacity Grant
243	222		Program established under 47 U.S.C. Section 1723;
244	223		(3) under the Digital Equity Competitive Grant Program
245	224		established under 47 U.S.C. Section 1724;
246	225		(4) under the provisions of 47 U.S.C. Section 1741
247	226		providing for middle mile grants;
248	227		(5) under the broadband loan and grant pilot program
249	228		authorized under Section 779, Title VII, Div. A, Consolidated
250	229		Appropriations Act, 2018 (Pub. L. No. 115-141, 132 Stat. 399), from
251	230		funds made available for that program under the heading "Distance
252	231		Learning, Telemedicine, and Broadband Program," "Rural Utilities
253	232		Service," "Rural Development Programs" in Title I, Infrastructure
254	233		Investments and Jobs Appropriations Act (Title I, Div. J, Pub. L.
255	234		No. 117-58, 135 Stat. 1351);
256	235		(6) under Section 905, Division N, Consolidated
257	236		Appropriations Act, 2021 (Pub. L. No. 116-260, 134 Stat. 2136);
258	237		[or]
259	238		(7) from a state, territory, tribal government, or
260	239		unit of local government to the extent the grant was:
261	240		(A) funded by amounts provided under 42 U.S.C.
262	241		Section 802, 803, or 804; and
263	242		(B) provided for the stated purposes of making
264	243		investments in broadband infrastructure; or
265	244		(8) from the comptroller under Subchapter S, Chapter
266	245		403, Government Code, or Chapter 490I of that code.
267	246		(a-1) For purposes of Subsection (a)(8), a reimbursement
268	247		award received by a taxable entity under Subchapter S, Chapter 403,
269	248		Government Code, is considered a grant for broadband development in
270	249		this state.
271	250		SECTION 8. The following provisions are repealed:
272	251		(1) Chapter 490H, Government Code;
273	252		(2) Sections 490I.0105(g), (h), (i), (j), (k), (l),
274	253		(n), (o), and (p), Government Code; and
275	254		(3) Section 151.325, Tax Code.
276	255		SECTION 9. The changes in law made by this Act do not affect
277	256		tax liability accruing before the effective date of this Act. That
278	257		liability continues in effect as if this Act had not been enacted,
279	258		and the former law is continued in effect for the collection of
280	259		taxes due and for civil and criminal enforcement of the liability
281	260		for those taxes.
282	261		SECTION 10. Section 171.10132, Tax Code, as amended by this
283	262		Act, applies only to a report originally due on or after January 1,
284	263		2026.
285	264		SECTION 11. This Act takes effect July 1, 2025, if it
286	265		receives a vote of two-thirds of all the members elected to each
287	266		house, as provided by Section 39, Article III, Texas Constitution.
288	267		If this Act does not receive the vote necessary for effect on that
289	268		date, this Act takes effect September 1, 2025.
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