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Citations Affected: IC 4-4; IC 5-21.5 ; IC 8-1; IC 20-12; noncode.

Synopsis: Statewide broadband system. Establishes a coordinating body to determine the feasibility of implementing a statewide broadband network, scheduled to dissolve July 15, 2007. Establishes the Indiana broadband development program, a separate body corporate and politic, to be administered by the Indiana development finance authority. The broadband development program is established to encourage the development of affordable broadband services and networks in underserved areas in Indiana. The broadband development program coordinates the financing of broadband infrastructure development and otherwise facilitates the establishment of broadband service in underserved areas in Indiana.

Effective: Upon passage.

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Ford, Jackman

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    January 11, 2005, read first time and referred to Committee on Economic Development and Technology.
    January 31, 2005, reported favorably _ Do Pass.
    February 3, 2005, read second time, amended, ordered engrossed.
    February 4, 2005, engrossed.
    February 14, 2005, returned to second reading.
    February 22, 2005, reread second time, amended, ordered engrossed.

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PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 2004 Regular Session of the General Assembly.

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    A BILL FOR AN ACT to amend the Indiana Code concerning state and local administration and to make an appropriation.

SOURCE: IC 4-4-10.9-2.1; (05)SB0381.3.1. -->     SECTION 1. IC 4-4-10.9-2.1 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 2.1. "Broadband development program" refers to the Indiana broadband development program established by IC 8-1-33-12.

SOURCE: IC 4-4-10.9-2.2; (05)SB0381.3.2. -->     SECTION 2. IC 4-4-10.9-2.2 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 2.2. "Broadband development project" means a project authorized by the broadband development program under IC 8-1-33.

SOURCE: IC 4-4-10.9-11; (05)SB0381.3.3. -->     SECTION 3. IC 4-4-10.9-11 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 11. (a) Except as provided in subsection (b), "industrial development project" includes:
        (1) the acquisition of land, site improvements, infrastructure improvements, buildings, or structures, rehabilitation, renovation, and enlargement of buildings and structures, machinery, equipment, furnishings, or facilities (or any combination of these),

comprising or being functionally related and subordinate to any project (whether manufacturing, commercial, agricultural, environmental, or otherwise) the development or expansion of which serves the public purposes set forth in IC 4-4-11-2;
        (2) educational facility projects; and
        (3) child care facility projects; and
        (4) broadband development projects.
    (b) For purposes of the industrial development guaranty fund program, "industrial development project" includes the acquisition of land, interests in land, site improvements, infrastructure improvements (including information and high technology infrastructure (as defined in IC 4-4-8-1)), buildings, or structures, rehabilitation, renovation, and enlargement of buildings and structures, machinery, equipment, furnishings, or facilities (or any combination of these), comprising or being functionally related and subordinate to any of the following:
        (1) A pollution control facility.
        (2) A manufacturing enterprise.
        (3) A business service enterprise involved in:
            (A) computer and data processing services; or
            (B) commercial testing services.
        (4) A business enterprise the primary purpose of which is the operation of an education and permanent marketing center for manufacturers and distributors of robotic and flexible automation equipment.
        (5) Any other business enterprise, if the use of the guaranty program creates a reasonable probability that the effect on Indiana employment will be creation or retention of at least fifty (50) jobs.
        (6) An agricultural enterprise in which:
            (A) the enterprise operates pursuant to a producer or growout agreement; and
            (B) the output of the enterprise is processed predominantly in Indiana.
        (7) A business enterprise that is required by a state, federal, or local regulatory agency to make capital expenditures to remedy a violation of a state or federal law or a local ordinance.
        (8) A recycling market development project.
        (9) A high growth company with high skilled jobs (as defined in IC 4-4-10.9-9.5).
         (10) A broadband development project.

SOURCE: IC 5-21.5; (05)SB0381.3.4. -->     SECTION 4. IC 5-21.5 IS ADDED TO THE INDIANA CODE AS A NEW ARTICLE TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]:

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     ARTICLE 21.5. INDIANA STATEWIDE BROADBAND SYSTEM
    Chapter 1. Definitions
    Sec. 1. The definitions in this chapter apply throughout this article.
    Sec. 2. "Authorized user" means:
        (1) an authorized user of the intelenet system under IC 5-21-1-2, including:
            (A) political subdivisions;
            (B) instrumentalities of state or local government that provide public safety or emergency management services;
            (C) school corporations;
            (D) institutions of higher education; and
            (E) community networks;
        (2) an authorized user of the Indiana Telecommunications Network administered by the Indiana higher education telecommunications system under IC 20-12-12;
        (3) a local hospital authority or corporation, or other publicly funded hospital; or
        (4) a certified technology park established under IC 36-7-32.
    Sec. 3. "Coordinating body" refers to the representatives designated under IC 5-21.5-2-1 to coordinate the establishment of a statewide broadband system.
    Sec. 4. "Holder" means a state agency or other instrumentality of state government that holds the contract for the state's indefeasible right of use to I-Light.
    Sec. 5. "I-Light" refers to the statewide high speed optical fiber network. The term includes the fiber optic networks known at any time as I-Light and I-Light 2.
    Sec. 6. "Indefeasible right of use" means a temporary ownership right in a fiber optic cable, specified in terms of a certain number of channels of a given bandwidth.
    Sec. 7. "Person" means any individual, corporation, limited liability company, partnership, firm, association, public or private agency, or other organization.
    Sec. 8. "System" refers to a statewide broadband system that:
        (1) makes use of the best available technology, as determined by the coordinating body, including wireless broadband technology;
        (2) allows broadband communications at a speed of at least twenty (20) megabits per second downstream to a subscriber; and

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        (3) includes:
            (A) a statewide system of wireless broadband access points as described in IC 5-21.5-2-2(b); and
            (B) a system of Ethernet ports at nodes distributed throughout the network to allow access to the system by authorized users and persons other than authorized users, as described in IC 5-21.5-2-2(c).
    Chapter 2. Establishment of the System; General Administration
    Sec. 1. (a) The coordinating body to establish a statewide broadband system comprises seven (7) individuals. The state chief information officer serves as a member of the coordinating body by virtue of the office. The governor shall designate one (1) individual to represent the telecommunications industry. In addition, each of the following entities shall designate one (1) representative:
        (1) The coordinating unit established by IC 20-12-12-3.
        (2) The holder.
        (3) Purdue University.
        (4) Indiana University.
        (5) Ball State University.
    (b) The holder may assign to the coordinating body an indefeasible right of use of all or part of the I-Light fiber optic network.
    (c) The coordinating body shall cease operation and be dissolved on July 15, 2007.
    Sec. 2. (a) The coordinating body shall determine the feasibility of a statewide broadband system to be made available to authorized users and other persons as provided in section 3 of this chapter.
    (b) In developing the system described by this section, the coordinating body may test and deploy a system of wireless broadband access points throughout Indiana. A wireless system established under this subsection must:
        (1) provide bandwidth transmission of at least five (5) megabits per second at each I-Light node; and
        (2) be designed to permit the accommodation of additional capacity and coverage as the communication needs of the system's users may require.
    (c) In developing the system described by this section, the coordinating body may provide Ethernet ports at each I-Light node to allow access to the system by authorized users and persons

other than authorized users, as permitted under section 3 of this chapter.
    Sec. 3. (a) This section applies only if a functioning system is deployed by the coordinating body.
    (b) The system shall be made available first to authorized users. However, if the coordinating body determines at any time that the system has sufficient capacity to serve other users, the coordinating body shall permit any person to access the system, subject to subsections (c), (d), and (e). A person eligible to access the system under this section includes a commercial:
        (1) telecommunications provider; or
        (2) Internet service provider;
that meets any qualifications or criteria for access established by the coordinating body under subsection (e).
    (c) If the coordinating body acts under subsection (b) to permit one (1) or more persons to access capacity on the system that is not needed to meet the broadband needs of authorized users, and it becomes necessary to allocate the available capacity among those persons, the coordinating body shall consider the following for each new person seeking access:
        (1) Whether the person's allocated capacity on the system will be used by the person to provide broadband service to users:
            (A) at a competitive rate; and
            (B) within a reasonable period after the person acquires access to the system;
        as determined by the coordinating body.
        (2) The extent to which the person's allocated capacity on the system will be used to provide broadband service to underserved areas of Indiana.
        (3) The extent to which allowing the person to access the system will contribute to the broadband service choices available to Indiana residents and businesses.
    (d) The coordinating body may establish standards or other requirements for access to the system by a person other than an authorized user. However, any standards or requirements established under this subsection must be applied on a uniform and competitively neutral basis.
    (e) The coordinating body shall provide access to the system under subsection (b) or (c) at a cost that does not exceed the coordinating body's costs to establish, operate, maintain, and administer the system, including any costs of upgrading the system to incorporate the best available technology, as determined by the

coordinating body.
     (f) An authorized user may not sell, lease, or license the authorized user's right to use the system described in this chapter.

SOURCE: IC 8-1-33; (05)SB0381.3.5. -->     SECTION 5. IC 8-1-33 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]:
     Chapter 33. Indiana Broadband Development Program
    Sec. 1. (a) The general assembly finds that:
        (1) certain areas of Indiana are not being adequately served with broadband services;
        (2) for the benefit of the people of Indiana and the improvement of their health, welfare, and living conditions, the improvement of the economic and educational welfare of Indiana, and the improvement of its public safety and security, it is essential that broadband infrastructure be expanded to provide broadband services throughout Indiana;
        (3) the private sector should be encouraged to continue to invest in the deployment of broadband services and networks and that financing through this program will encourage broadband investment in underserved areas;
        (4) economic, technological, and logistical integrated broadband services should be provided throughout Indiana on a nondiscriminatory basis;
        (5) the provision of affordable broadband services and networks in underserved areas will:
            (A) ensure the long term growth of and the enhancement and delivery of services by the business, educational, medical, commercial, nonprofit, and governmental entities within Indiana; and
            (B) benefit residential, commercial, public, governmental, and nonprofit entities within Indiana; and
        (6) the program created and powers conferred by this chapter constitute a necessary program and serve a necessary public purpose.
    (b) To increase the speed and availability at which affordable broadband services become available in underserved areas in Indiana, it is declared to be a valid public purpose to assist in the financing and refinancing of the development of a statewide broadband infrastructure.
    (c) It is further declared to be a valid public purpose for the development finance authority to issue bonds and notes, and loan the proceeds of those bonds and notes to the program, so that the

authority may provide for financing or refinancing to broadband developers and broadband operators serving underserved areas.
    Sec. 2. As used in this chapter, "authority" refers to the Indiana development finance authority established in IC 4-4-11-4.
    Sec. 3. As used in this chapter, "broadband developer" means a person selected by the authority to acquire, construct, develop, and create any part of the broadband infrastructure.
    Sec. 4. As used in this chapter, "broadband development program" or "program" refers to the Indiana broadband development program established by section 16 of this chapter.
    Sec. 5. As used in this chapter, "broadband infrastructure" includes all facilities, hardware, and software and other intellectual property used for and necessary to provide broadband services in underserved areas of Indiana, including voice, video, and data.
    Sec. 6. As used in this chapter, "broadband operator" means a person selected by the authority to operate any part of the broadband infrastructure.
    Sec. 7. As used in this chapter, "broadband services" includes services, including voice, video, and data, that provide capacity for transmission of more than two hundred (200) kilobits per second in at least one (1) direction regardless of the technology or medium used, including wireless, copper wire, fiber optic cable, or coaxial cable. If voice transmission capacity is offered in conjunction with other services using transmission of more than two hundred (200) kilobits per second, the voice transmission capacity may be less than two hundred (200) kilobits per second. The authority shall annually reconsider the two hundred (200) kilobits threshold in the definition of the term with a bias toward raising the threshold in a manner consistent with technological advances.
    Sec. 8. As used in this chapter, "development costs" means the costs associated with the broadband infrastructure that have been approved by the authority and includes all the following:
        (1) The costs for the planning, acquiring, leasing, constructing, maintaining, and operating of the broadband infrastructure.
        (2) Payments for options to purchase, deposits on contracts of purchase, and payments for the purchases of properties for the broadband infrastructure.
        (3) Financing, refinancing, acquisition, demolition, construction, rehabilitation, and site development of new and existing buildings.
        (4) Carrying charges during construction.

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        (5) Purchases of hardware, software, facilities, or other expenses related to the broadband infrastructure.
        (6) Legal, organizational, and marketing expenses, project manager and clerical staff salaries, office rent, and other incidental expenses.
        (7) Payment of fees for preliminary feasibility studies and advances for planning, engineering, and architectural work.
        (8) Any other costs and expenses necessary for the acquisition, construction, maintenance, and operation of all or part of the broadband infrastructure.
    Sec. 9. As used in this chapter, "development finance authority" refers to the Indiana development finance authority established by IC 4-4-11-4.
    Sec. 10. As used in this chapter, "person" means an individual, a corporation, a limited or general partnership, a joint venture, a limited liability company, or a governmental entity, including a body corporate and politic, political subdivision, municipal corporation, school, college, university, hospital, health care facility, library, or nonprofit organization. The term does not include the state.
    Sec. 11. (a) As used in this chapter, "relevant services" refers to:
        (1) cable service (as defined in 47 U.S.C. 522(6));
        (2) telecommunications service (as defined in 47 U.S.C. 153(46)); and
        (3) information service (as defined in 47 U.S.C. 153(20)).
    (b) The term includes:
        (1) advanced services (as defined in 47 CFR 51.5);
        (2) broadband service; and
        (3) Internet Protocol enabled services;
however classified by the Federal Communications Commission.
    Sec. 12. As used in this chapter, "political subdivision" has the meaning set forth in IC 36-1-2-13. The term includes any entity:
        (1) owned, operated, or controlled by a political subdivision; or
        (2) in which a political subdivision otherwise has an interest, whether direct or indirect.
    Sec. 13. As used in this chapter, “underserved area" means an area within Indiana that the authority determines does not have a person that:
        (1) provides broadband service in the area at the time of the authority's inquiry under this section; or
        (2) intends to provide broadband service not later than three

(3) months after the date of the authority's inquiry under section 14 of this chapter.
    Sec. 14. (a) The authority shall conduct an inquiry to determine underserved areas within Indiana. The authority shall send a written request by certified mail to each person that provides a relevant service in the proposed broadband service area. A written request under this subsection must inquire as to whether the person:
        (1) provides broadband service; or
        (2) intends to provide broadband service not later than three (3) months after the date of the authority's written request under this subsection;
in the proposed broadband service area.
    (b) The authority may determine that there is not a person that provides or intends to provide broadband service in the proposed broadband service area if the authority's inquiry under subsection (a) results in any of the following:
        (1) The authority does not receive a written response to any of the requests sent under subsection (a) within sixty (60) days after the date the requests were postmarked.
        (2) The authority:
            (A) receives one (1) or more responses to a request under subsection (a) that indicate that the persons responding provide broadband service in the proposed broadband service area at the time of the request; and
            (B) determines that no person responding actually provides broadband service in the designated area.
        (3) The authority:
            (A) receives one (1) or more responses to a request under subsection (a) that indicate that the persons responding intend to provide broadband service in the proposed broadband service area not later than three (3) months after the date of the authority's written request under subsection (a); and
            (B) determines, after the appropriate amount of time, that no person responding actually provided broadband service in the proposed broadband service area not later than three (3) months after the date of the authority's written request under subsection (a).
    Sec. 15. The Indiana broadband development program is established in order to encourage the provision of affordable broadband services and networks that will:

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        (1) ensure the long term growth of and the enhancement and delivery of services by the business, educational, medical, commercial, nonprofit, and governmental entities in underserved areas in Indiana; and
        (2) benefit residential, commercial, public, governmental, and nonprofit entities in underserved areas in Indiana.
    Sec. 16. (a) The Indiana broadband development program is established as a separate body corporate and politic, constituting an instrumentality of the state, but not a state agency, for the public purposes set forth in this chapter. The program is separate and apart from the state in its corporate and sovereign capacity, and though separate from the state, the exercise by the authority of its powers constitutes an essential governmental, public, and corporate function.
    (b) The Indiana development finance authority shall administer the broadband development program.
    Sec. 17. The program may do the following:
        (1) Request the development finance authority to issue bonds or notes and loan the proceeds to the authority to provide funds to enable the authority to participate in financing and refinancing the expansion of broadband infrastructure services to underserved residential, commercial, public, governmental, and nonprofit customers in Indiana to enhance the delivery of services by the business, educational, medical, commercial, nonprofit, and governmental entities in Indiana.
        (2) Request the development finance authority to issue bonds or notes and loan the proceeds to the authority to enable the making of loans to broadband developers and broadband operators serving or proposing to serve underserved areas.
        (3) Authorize the imposition and collection of rents, charges, and fees for the services furnished by the broadband infrastructure in conjunction with financing entered into by the authority.
        (4) Assist broadband developers and operators with all other matters necessary for the acquisition, construction, maintenance, and operation of the broadband infrastructure.
        (5) Continuously evaluate all types of technologies to encourage the widest deployment of broadband services in underserved areas and broadband infrastructure in Indiana.
        (6) Make broadband services to authorized users (as defined in IC 5-21.5-1-2) located in underserved areas a priority under authority financing programs.

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        (7) Ensure that the financing and refinancing of the development of broadband services under this chapter includes provisions ensuring that small businesses and each region of Indiana will have an equal opportunity to receive financing and refinancing.
    Sec. 18. (a) The powers of the authority under this chapter include all those necessary to carry out and effectuate the purposes of this chapter, including the following:
        (1) To borrow money from the development finance authority for the purposes described in section 17(1) and 17(2) of this chapter.
        (2) To invest any money of the authority at the authority's discretion, in any obligations determined proper by the authority, and name and use depositories for its money.
        (3) To receive and distribute state or local funding, including grants, loans, and appropriations.
        (4) To make loans to broadband developers and broadband operators that will acquire, construct, maintain, and operate all or part of the broadband infrastructure.
        (5) To provide operating assistance to make broadband services more affordable to broadband developers, broadband operators, and broadband customers in underserved areas, in conjunction with broadband infrastructure financed by the authority.
        (6) To impose and collect charges, fees, or rentals for the services furnished by those parts of the broadband infrastructure financed by the authority under this chapter.
        (7) To set construction, operation, and financing standards for the broadband infrastructure in connection with authority financing and to provide for inspections to determine compliance with those standards.
        (8) To investigate, evaluate, and assess the current broadband infrastructure and the future broadband infrastructure needs of Indiana and to encourage and participate in aggregation strategies for the broadband services of all public entities and nonprofit corporations in Indiana to maximize the interconnectivity and efficiencies of the broadband infrastructure.
    (b) As part of an application for financing under this chapter, a broadband developer or broadband operator must file with the authority a participation plan for small and minority owned businesses and a communitywide outreach plan to educate the

public with respect to the availability of broadband services. The authority may not approve an application unless a plan is submitted under this subsection.
    Sec. 19. The development finance authority may exercise any of its powers to assist the authority in the accomplishment of the purposes of this chapter, including the power to borrow money, issue bonds and notes, and loan the proceeds to the authority to permit the authority to:
        (1) finance or refinance part or all of the development costs of the broadband infrastructure;
        (2) refinance existing debt for technology that constitutes part of or is related to the broadband infrastructure;
        (3) make loans to persons for development costs;
        (4) make loans to enable persons to make purchases related to the broadband infrastructure;
        (5) make loans to persons to refinance existing debt incurred by persons in connection with the acquisition or development of technology that constitutes a part of or is related to the broadband infrastructure; and
        (6) make other expenditures necessary to carry out the authority's duties under this chapter, including the payment of the authority's operating expenses.
    Sec. 20. (a) The authority, as administrator of the broadband development program, may negotiate one (1) or more loans from the development finance authority upon any terms and conditions the authority considers appropriate, necessary, or desirable to carry out the purposes of this chapter.
    (b) A loan under this section must be evidenced by a note of the authority, executed by the chairperson and attested to by the executive director.
    Sec. 21. All property of the broadband development program is public property devoted to an essential public and governmental function and purpose and is exempt from all taxes and special assessments, direct or indirect, of the state or a political subdivision of the state. All notes and bonds issued under this chapter are issued by a body corporate and politic of the state, but not a state agency, and for an essential public and governmental purpose, and the notes and bonds, the interest thereon, the proceeds received by the holder from the sale of the notes and bonds to the extent of the holder's cost of acquisition proceeds received upon redemption before maturity, and proceeds received at maturity and the receipt of the interest and proceeds are exempt from taxation in the state

for all purposes except the financial institutions tax imposed under IC 6-5.5 or a state inheritance tax imposed under IC 6-4.1

SOURCE: IC 20-12-12-6; (05)SB0381.3.6. -->     SECTION 6. IC 20-12-12-6 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 6. (a) A special and distinct fund is hereby created to be known as the higher education statewide telecommunications fund. Expenditures from the fund may be made only for the following:
        (1) Payments by the universities for the use of a telecommunications system or the lease, purchase, rental, or production of a videotape program as provided in this chapter.
        (2) Studies regarding the possibilities of extending the use of the telecommunications system described in section 1(a) of this chapter to other colleges and universities in Indiana and of extending the use of the system for post-high school and other educational uses.
        (3) The expenses of coordinating, planning, and supervising the use of the telecommunications system, and the videotape program.
        (4) Equipment for the originating and receiving of instructional communication and educational information by means of the telecommunications system and the videotape program.
     (b) The statewide broadband account is established within the fund to pay the costs of the coordinating body established under IC 5-21.5-2-1 to establish, operate, maintain, and administer a statewide broadband system under IC 5-21.5. Costs under this subdivision include any costs of upgrading the system to incorporate the best available technology, as determined by the coordinating body. The account consists of fees or charges collected by the coordinating body for providing access to the system by authorized users or other persons, to the extent permitted under IC 5-21.5-2-3(d). Money in the account is continuously appropriated for the purposes of this subsection. Money in the account at the end of a state fiscal year does not revert to the fund.
    (b) (c) The state auditor of state shall pay, as needed, from the fund and the account established under subsection (b) amounts to the trustees of Indiana University as agent for the universities and the coordinating body established under IC 5-21.5-2. The trustees of Indiana University as the agent shall apply the funds to the payment of items as payment becomes due from the higher education statewide telecommunications fund or the account established under subsection (b).

SOURCE: ; (05)SB0381.3.7. -->     SECTION 7. [EFFECTIVE UPON PASSAGE] (a) As used in this

SECTION, "coordinating body" refers to the coordinating body established under IC 5-21.5-2-1, as added by this act.
    (b) As used in this SECTION, "system" refers to the statewide broadband system described in IC 5-21.5-2-2, as added by this act.
    (c) Not later than October 1, 2005, the coordinating body shall submit the initial report on the feasibility of establishing and implementing the system to the general assembly in an electronic format under IC 5-14-6. The report must provide a detailed analysis of broadband penetration throughout Indiana, specifically stating all broadband options in use and detailing available:
         (1) technologies;
        (2) types of service;
        (3) areas of service;
        (4) costs of service; and
        (5) the populations in Indiana to whom the capabilities described in this subsection are available.
    (d) On April 1, 2006, and October 1, 2006, the coordinating body shall submit reports on the coordinating body's progress in determining the feasibility of establishing and implementing the system to the general assembly in an electronic format under IC 5-14-6.
    (e) Not later than July 1, 2007, the coordinating body shall submit the final report on the feasibility of establishing and implementing the system to the general assembly in an electronic format under IC 5-14-6. The report may include a recommendation on how to structure governance of the system.
    (d) This SECTION expires July 15, 2007.

SOURCE: ; (05)SB0381.3.8. -->     SECTION 8. An emergency is declared for this act.