(a) Preamble.  For the past ten (10) years, the schools and libraries of Rhode Island have benefited from a regulatory agreement with Verizon and its predecessor companies that has provided up to two million dollars ($2,000,000) annually for support of telecommunications lines for internet access. In addition, the funds provided for in the original regulatory agreement and every dollar generated hereunder leverages a one dollar and twenty-seven cents ($1.27) federal E-Rate match. With the regulatory agreement approaching its termination and the advent of more advanced technologies, it is the intent of this section to provide a continued source of funding for internet access for eligible public and private schools and libraries.

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(b) Definitions.  As used in this section, the following terms have the following meanings:

(1)  “Department” means the Rhode Island department of elementary and secondary education.

(2)  “Division” means the division of public utilities and carriers.

(3)  “Telecommunications education access fund” means the programs and funding made available to qualified libraries and schools to assist in paying the costs of acquiring, installing, and using telecommunications technologies to access the internet.

(c) Purpose.  The purpose of the telecommunications education access fund shall be to fund a basic level of internet connectivity for all of the qualified schools (kindergarten through grade 12) and libraries in the state.

(d) Authority.  The division shall establish, by rule or regulation, an appropriate funding mechanism to recover from the general body of ratepayers the costs of providing telecommunications technology to access the internet.

(1)  The general assembly shall determine the amount of a monthly surcharge to be levied upon each residence and business telephone access line or trunk in the state, including PBX trunks and centrex equivalent trunks and each service line or trunk, and upon each user interface number or extension number or similarly identifiable line, trunk, or path to or from a digital network. The department will provide the general assembly with information and recommendations regarding the necessary level of funding to effectuate the purposes of this section. The surcharge shall be billed by each telecommunications services provider and shall be payable to the telecommunications services provider by the subscriber of the telecommunications services. State, local, and quasi-governmental agencies shall be exempt from the surcharge. The surcharge shall be deposited in a restricted-receipt account, hereby created within the department of elementary and secondary education and known as the telecommunications education access fund, to pay any and all costs associated with subsection (b)(3). The amount of the surcharge shall not exceed thirty-five cents ($.35) per access line or trunk.

(2)  The surcharge is hereby determined to be twenty-six cents ($.26) per access line or trunk.

(3)  The amount of the surcharge shall not be subject to the sales and use tax imposed under chapter 18 of Title 44 nor be included within the gross earnings of the telecommunications corporation providing telecommunications service for the purpose of computing the tax under chapter 13 of Title 44.

(e) Administration.  The division, with input from the department, shall administer the telecommunications education access fund consistent with the requirements of the Universal Service (E-Rate) program. The division of taxation shall collect from the telecommunications service providers the amounts of the surcharge collected from their subscribers. The department, with the approval of the division, shall publish requests for proposals that do not favor any particular technology, evaluate competitive bids, and select products and services that best serve the internet access needs of schools and libraries. In doing so, the department shall endeavor to obtain all available E-Rate matching funds. The department is further authorized and encouraged to seek matching funds from all local, state, and federal public or private entities. The department shall approve disbursement of funds under this section in accordance with the division’s directives. Unsuccessful bids may be appealed to the division. The division shall annually review the department’s disbursements from this account to ensure that the department’s decisions do not favor any competitor.

(f) Eligibility.  All schools seeking support from the fund must be eligible for Universal Service (E-Rate) support and meet the definition of “elementary school” or “secondary school” in the Elementary and Secondary Education Act of 1965, as amended (20 U.S.C. § 8801). Schools operating as a for-profit business or with endowments exceeding fifty million dollars ($50,000,000) are not eligible for support. All libraries seeking support from the fund must meet the definition of “library” or “library consortium” in the Library Services and Technology Act, Pub. L. No. 104-208, § 211 et seq., 110 Stat. 3009 (1996) and must be eligible for assistance from a state library administrative agency under that act. Only libraries that have budgets that are completely separate from any schools (including, but not limited to, elementary and secondary, colleges and universities) shall be eligible to receive support. Libraries operating as a for-profit business shall not be eligible for support.

(g) Effective date.  The effective date of assessment for the telecommunications education access fund shall be January 1, 2004.