Senate Finance Approves Broadband Tax-Credit Bonds
The Senate Finance Committee voted 17-4 to provide $400 million in tax credit bonds for projects that would include rural broadband. The package could be added to the farm bill (S-2419), said Sen. Tom Harkin, D-Iowa, chairman of the Senate Agriculture Committee. “As the Senate edges closer to considering its version of the farm bill, this funding comes at an opportune time and gives us some important assistance” in investments that are needed, Harkin said in a written statement.
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The Finance Committee measure creates a new category of tax credit bonds for distance learning and telemedicine programs, rural telephone and broadband access and rural community facility projects. It would create a two-tiered tax incentive to stimulate investment in broadband: 50 percent expensing for investment in current-generation broadband infrastructure (5 Mbps download, 1 Mbps upload) in rural and underserved areas, and full expensing for next generation broadband investments (100 Mbps download, 20 Mbps upload). The provision would cost $72 million over 10 years, according to a committee statement.
The tax incentive provisions were promoted by Sens. John Rockefeller, D-W.Va., and Olympia Snowe, R-Me., members of the Finance and Senate Commerce committees. Praising the committee’s late Thursday action, USTelecom President Walter McCormick said the tax measures would help bring broadband services to rural and unserved communities. “It is critical that Congress continues its good work on this important issue,” McCormick said.
The Senate Agriculture Committee postponed a markup on the farm bill Thursday scheduled to take place after the Finance Committee markup. The Agriculture markup now is expected to take place after the Columbus Day recess. Broadband provisions in the Agriculture Committee bill differ slightly from the House measure (HR-2419). There are differences in broadband buildout provisions and the definitions of an eligible rural community, according to a draft that circulated recently (CD Sept 19 p9) But the Agriculture bill includes a broadband mapping provision with some of the goals of a bill proposed by Senate Commerce Committee Chairman Daniel Inouye (D-Hawaii).