A BILL TO BE ENTITLED
AN ACT to remove the sunset on the e‑Nc authority, to increase the distribution to local governments of the sales tax on telecommunications and video programming services and to earmark a portion of the state's share of the sales tax on these services for grants for broadband connectivity, peg channels, and community media centers.
The General Assembly of North Carolina enacts:
SECTION 1.  Section 4 of S.L. 2003‑425, as rewritten by Section 12.3(a) of S.L. 2006‑66, reads as rewritten:
"SECTION 4. Sections 1 and 2 of this act become effective December 31, 2003, with the e‑NC Authority hereby designated as the successor entity of the Rural Internet Access Authority that will dissolve on that date, as provided by Section 5 of S.L. 2000‑149. The remainder of this act is effective when it becomes law."
SECTION 2.  G.S. 143B‑437.45 reads as rewritten:
"§ 143B‑437.45.  Definitions.
The following definitions apply in this Part:
(1)	Account. – The Public Access Account.
(2)	Authority. – The e‑NC Authority.
(3)	Commission. – The governing body of the Authority.
(4)	Community Media Center (CMC). – A facility in which a community commonly creates or coordinates the operation of public, education, or government access channels and provides digital media training, video production, and economic development opportunities for the community as a whole.
(5)	Distressed urban areas. – Areas where at least one of the following requirements is met: (i) more than ten percent (10%) of children enrolled in public schools meet the requirements for the Food Stamp Program of the United States Department of Agriculture, (ii) ten percent (10%) of the citizens meet the TANF guidelines of the United States Department of Health and Human Services, or (iii) twenty‑five percent (25%) of the children in the public school district meet the requirements for a federal government‑sponsored free lunch.
(6)	High‑speed broadband Internet access. – Internet access with transmission speeds that are consistent with requirements for high‑speed broadband Internet access as defined by the Federal Communications Commission from time to time.
(7)	PEG channel. – Defined in G.S. 66‑350.
(8)	Regional Partnerships. – Defined in G.S. 143B‑437.21(6).
(9)	Rural county. – A county with a density of fewer than 250 people per square mile based on the 2000 United States decennial census."
SECTION 3.  G.S. 143B‑437.46(a) reads as rewritten:
"(a)	Creation. – The e‑NC Authority is created within the Department of Commerce for organizational and budgetary purposes only, and the Commission shall exercise all of its statutory authority under this Part independent of the control of the Department of Commerce. The functions of the Secretary of Commerce are ministerial and shall be performed only pursuant to the direction and policy of the Commission.
The purpose of the Authority is to manage, oversee, promote, and monitor efforts to provide rural counties and distressed urban areas with high‑speed broadband Internet access and to administer the grants for the PEG channels and CMCs. The Authority shall also serve as the central rural and urban distressed areas Internet access policy planning body of the State and shall communicate and coordinate with federal, State, regional, and local agencies and private entities in order to continue the development and facilitation of a coordinated Internet access policy for the citizens of North Carolina."
SECTION 4.  G.S. 143B‑437.47(e) reads as rewritten:
"(e)	Reports. – The Authority shall submit quarterly reports to the Governor, the Joint Legislative Oversight Committee on Information Technology, and the Joint Legislative Commission on Governmental Operations. The reports shall summarize the Authority's activities during the quarter and contain any information about the Authority's activities that is requested by the Governor, the Committee, or the Commission.
The Authority shall publish an annual report on grants awarded under this Part. The report must list each grant applicant, the amount of the grant, and the purpose of the grant. The Authority shall report every two years on the development of high‑speed broadband access in rural counties and distressed urban areas and on the development of PEG channels through CMCs."
SECTION 5.  G.S. 66‑359 is recodified as G.S. 143B‑437.48 and reads as rewritten:
"§ 143B‑437.48.  Public Access Account.
(a)	Public Access Account. – The Public Access Account is created  within the Department of Commerce. The Authority administers the Account. The Account provides revenue for grants for broadband connectivity, PEG channels, and CMCs in accordance with criteria established by the Authority. Revenue in the Account does not revert at the end of the fiscal year. The Account consists of the following:
(1)	Gifts and grants.
(2)	Appropriations by the General Assembly.
(3)	Reserved.
(b)	Use. – The Authority may use the revenue in the Account only as follows:
(1)	Up to four percent (4%) annually of the available funds to cover the Authority's expenses in grant letting and monitoring.
(2)	Up to fifty percent (50%) of the remaining revenue to award broadband connectivity competitive incentive grants to private sector providers of broadband service or to public/private partnerships so that at least seventy percent (70%) of the households in each county have the ability to access broadband services by 2011. A grant recipient must match a grant on a cash basis in an amount equal to at least fifty percent (50%) of the grant. A grant recipient must specify the number of additional households to be served as a result of the grant.
(3)	The remaining revenue to award grants to establish, operate, and support PEG channels and CMCs.
(c)	Grants for PEG Channels and CMCs. – Municipalities, counties, and educational, nonprofit, or public institutions may apply directly to the Account for PEG channel and CMC grants. In awarding grants from the Account, the e‑NC Authority must, to the extent possible, select applicants from all parts of the State based upon need. Grants from the Fund are subject to the following limitations:
(1)	A grant for a PEG channel may not exceed fifty thousand dollars ($50,000), and a grant for a CMC may not exceed two hundred fifty thousand dollars ($250,000).
	(3)	No more than fifty percent (50%) of a grant may be used for operating costs.
(4)	An applicant may receive no more than one grant per fiscal year.
	(d)	Grants for Broadband. – Municipalities, counties, and educational, nonprofit, for‑profit, or public institutions may apply directly for broadband connectivity competitive incentive grants. Broadband grants are subject to contracts and procedures of the e‑NC Authority, but must be granted first to providers who would serve counties with less than fifty percent (50%) access to high‑speed Internet, then seventy percent (70%) until the State reaches at least ninety‑five percent (95%) access from homes and businesses to high‑speed Internet."
SECTION 6.  G.S. 105‑164.44F(a)(2) reads as rewritten: 
"(a)	Amount. – The Secretary must distribute part of the taxes imposed by G.S. 105‑164.4(a)(4c) on telecommunications service and ancillary service. The Secretary must make the distribution within 75 days after the end of each calendar quarter. The amount the Secretary must distribute is the following percentages of the net proceeds of the taxes collected during the quarter:
…
(2)	Eight and six‑tenths percent (8.6%) must be distributed to counties and cities as provided in G.S. 105‑164.44I."
SECTION 7.  G.S. 105‑164.44I(a) reads as rewritten:
"(a)	Distribution. – The Secretary must distribute to the counties and cities part of the taxes imposed by G.S. 105‑164.4(a)(4c) on telecommunications service and G.S. 105‑164.4(a)(6) on video programming service. The Secretary must make the distribution within 75 days after the end of each calendar quarter. The amount the Secretary must distribute is the sum of the revenue listed in this subsection. The Secretary must distribute seven million dollars ($7,000,000) of this amount in accordance with subsection (b) of this section and the remainder in accordance with subsections (c) and (d) of this section. The revenue to be distributed under this section consists of the following:
(1)	The amount specified in G.S. 105‑164.44F(a)(2).
(2)	Twenty‑six and nine‑tenths percent (26.9%) of the net proceeds of the taxes collected during the quarter on video programming, other than on direct‑to‑home satellite service.(3)	Forty and  four‑tenths percent (40.4%) of the net proceeds of the taxes collected during the quarter on direct‑to‑home satellite service."
SECTION 8.  G.S. 105‑164.44I(b) reads as rewritten:
"(b)	Supplemental PEG Support. – The Secretary must include the applicable amount of supplemental PEG channel support in each quarterly distribution to a county or city. The amount to include is one‑fourth of twenty‑five thousand dollars ($25,000) for each qualifying PEG channel operated by the county or city. The amount of money distributed under this subsection may not exceed seven million dollars ($7,000,000) in a fiscal year. If the amount to be distributed for qualifying PEG channels in a fiscal year would otherwise exceed this maximum amount, the Secretary must proportionately reduce the applicable amount distributable for each PEG channel. If the amount to be distributed for qualifying PEG channels in a fiscal year is less than seven million dollars ($7,000,000), the Secretary must credit the excess amount to the Public Access Account established in G.S. 143B‑437.48.
A county or city must certify to the Secretary by July 15 of each year the number of qualifying PEG channels it operates. A qualifying PEG channel is one that meets the programming requirements under G.S. 66‑357(d). A county or city may not receive PEG channel support under this subsection for more than three qualifying PEG channels.
The amount included under this subsection in a distribution to a county or city is intended to supplement the PEG channel support available in the amount distributed under this section. The money distributed to a county or city under this subsection must be used by it for the operation and support of PEG channels. For purposes of this subsection, the term "PEG channel" has the same meaning as in G.S. 66‑350."
SECTION 9.  Article 5 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑164.44J.  Distribution of part of State share of sales tax on video programming service and telecommunications service to Public Access Account.
(a)	Distribution. – The State's share of the revenue imposed on telecommunications service under G.S. 105‑164.4(a)(4c) and on video programming service under G.S. 105‑164.4(a)(6) is the amount that is not distributed to counties and cities under G.S. 105‑164.44F and G.S. 105‑164.44I. The Secretary must transfer part of the State's share to the Public Access Account established in G.S. 143B‑437.48 on a quarterly basis. The Secretary must make the transfer within 75 days after the end of each calendar quarter. The amount the Secretary must transfer is the amount by which the State's share for the quarter exceeds the amount of the State's share for the same quarter in fiscal year 2008‑2009. The amount transferred may not exceed two million five hundred thousand dollars ($2,500,000) per quarter.
(b)	Sunset. – This section is repealed July 1, 2017, and does not apply to distributions for months beginning on or after that date."
SECTION 10.  G.S. 143B‑437.48(a), as amended by this act, reads as rewritten:
"(a)	Public Access Account. – The Public Access Account is created  within the Department of Commerce. The Authority administers the Account. The Account provides revenue for grants for broadband connectivity, PEG channels, and CMCs in accordance with criteria established by the Authority. Revenue in the Account does not revert at the end of the fiscal year. The Account consists of the following:
(1)	Gifts and grants.
(2)	Appropriations by the General Assembly.
(3)	Revenue credited under G.S. 105‑164.44J."
SECTION 11.  This act becomes effective July 1, 2009, and applies to distributions for months beginning on or after that date.