2018 Agriculture Improvement Act, HR.2

TITLE VI — Rural infrastructure and economic development

SEC. 6101. Establishing forward-looking broadband standards.

(a) In general. — Section 601 of the Rural Electrification Act of 1936 (7 U.S.C. 950bb) is amended—

   (1) in subsection (d)(1)(A), by striking clause (i) and inserting the following:

         “(i) demonstrate the ability to furnish or improve service in order to meet the broadband service standards established under subsection (e)(1) in all or part of an unserved or underserved rural area;”;

   (2) in subsection (e)—

      (A) by striking paragraphs (1) and (2) and inserting the following:

   “(1) IN GENERAL.—Subject to paragraph (2), for purposes of this section, the Secretary shall establish broadband service standards for rural areas which provide for—

      “(A) a minimum acceptable standard of service that requires the speed to be at least 25 megabits per second downstream transmission capacity and 3 megabits per second upstream transmission capacity; and

      “(B) projections of minimum acceptable standards of service for 5, 10, 15, 20, and 30 years into the future.

   “(2) ADJUSTMENTS.—

      “(A) IN GENERAL.—At least once every 2 years, the Secretary shall review, and may adjust through notice published in the Federal Register, the broadband service standards in effect under paragraph (1) to encourage the delivery of high quality, cost-effective broadband service in rural areas.

      “(B) CONSIDERATIONS.—In establishing and adjusting the broadband service standards in effect under paragraph (1), the Secretary shall consider—

         “(i) the broadband service needs of rural families and businesses;

         “(ii) broadband service available to urban and suburban areas;

         “(iii) future technology needs of rural residents;

         “(iv) advances in broadband technology; and

         “(v) other relevant factors as determined by the Secretary.”; and

      (B) by adding at the end the following:

   “(4) AGREEMENT.—The Secretary shall not provide a loan or loan guarantee under this section for a project unless the Secretary determines, at the time the agreement to provide the loan or loan guarantee is entered into, that, at any time while the loan or loan guarantee is outstanding, the project will be capable of providing broadband service at not less than the minimum acceptable standard of service established under paragraph (1)(B) for that time.

   “(5) SUBSTITUTE SERVICE STANDARDS FOR UNIQUE SERVICE TERRITORIES.—If an applicant shows that it would be cost prohibitive to meet the minimum acceptable level of broadband service established under paragraph (1)(B) for the entirety of a proposed service territory due to the unique characteristics of the proposed service territory, the Secretary and the applicant may agree to utilize substitute standards for any unserved portion of the project. Any substitute service standards should continue to consider the matters described in paragraph (2)(B) and reflect the best technology available to meet the needs of the residents in the unserved area.”; and

   (3) in subsection (g)—

      (A) in paragraph (2)(A), by striking “level of broadband service established under subsection (e)” and inserting “standard of service established under subsection (e)(1)(A)”; and

      (B) by adding at the end the following:

   “(4) MINIMUM STANDARDS.—To the extent possible, the terms and conditions under which a loan or loan guarantee is provided to an applicant for a project shall require that, at any time while the loan or loan guarantee is outstanding, the broadband network provided by the project will meet the lower of—

      “(A) the minimum acceptable standard of service projected under subsection (e)(1)(B) for that time, as agreed to by the applicant at the time the loan or loan guarantee is provided; or

      “(B) the minimum acceptable standard of service in effect under subsection (e)(1)(A) for that time.”.

(b) Report to Congress.—Within 12 months after the date of the enactment of this Act, the Administrator of the Rural Utilities Service (in this subsection referred to as the “RUS”) shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a written report on the effectiveness of RUS loan and loan guarantee programs for the purpose of expanding broadband to rural areas (as defined in RUS regulations), which shall—

   (1) identify administrative and legislative options for incentivizing private investment by utilizing RUS loan guarantee programs for the purpose of expanding broadband to rural areas;

   (2) evaluate the existing borrower and lending guidelines for RUS loan and loan guarantee applicants to incentivize participation in both programs;

   (3) evaluate the loan and loan guarantee application processes for lenders and borrowers by eliminating burdensome and unnecessary steps in the application process and providing a more streamlined process to decrease the complexity of the application and the timeline from application to approval or denial;

   (4) identify opportunities to provide technical assistance and pre-development planning activities to assist rural counties and communities to assess current and future broadband needs; and

   (5) identify and evaluate emerging technologies, including next-generation satellite technologies, and ways to leverage the technologies to provide high-speed, low-latency internet connectivity to rural areas.

SEC. 6102. Incentives for hard to reach communities.

Title VI of the Rural Electrification Act of 1936 (7 U.S.C. 950bb) is amended by adding at the end the following:

“SEC. 604. Incentives for hard to reach communities.

(a) Definitions. — In this section:

   “(1) ASSOCIATED LOAN.—The term ‘associated loan’ means a loan or loan guarantee to finance all or part of a project under title I or II or this title for which an application has been submitted under such title and for which an application has also been submitted for a grant under this section.

   “(2) DENSITY.—

      “(A) IN GENERAL.—The term ‘density’ means service points per road-mile.

      “(B) METHOD OF CALCULATION.—The Secretary shall further define, by rule, a method for calculating service points per road-mile, where appropriate by geography, which—

         “(i) divides the total number of service points by the total number of road-miles in a proposed service territory;

         “(ii) requires an applicant to count all potential service points in a proposed service territory; and

         “(iii) includes any other requirements the Secretary deems necessary to protect the integrity of the program.

   “(3) ELIGIBLE PROJECT.—The term ‘eligible project’ means any project for which the applicant—

      “(A) has submitted an application for an associated loan;

      “(B) does not receive any other broadband grant administered by the Rural Utilities Service; and

      “(C) proposes to—

         “(i) offer retail broadband service to rural households;

         “(ii) serve an area with a density of less than 12;

         “(iii) provide service that meets the standard that would apply under section 601(e)(4) if the associated loan had been applied for under section 601;

         “(iv) provide service in an area where no incumbent provider delivers fixed terrestrial broadband service at or above the minimum broadband speed described in section 601(e)(1); and

         “(v) provide service in an area where no eligible borrower, other than the applicant, has outstanding Rural Utilities Service telecommunications debt or is subject to a current Rural Utilities Service telecommunications grant agreement.

   “(4) SERVICE POINT.—The term ‘service point’ means a home, business, or institution in a proposed service area.

   “(5) ROAD-MILE.—The term ‘road-mile’ means a mile of road in a proposed service area.

(b) Establishment of grant program.—The Secretary shall establish a competitive grant program to provide applicants funds to carry out eligible projects for the purposes of construction, improvement, or acquisition of facilities for the provision of broadband service in rural areas.

(c) Applications.—The Secretary shall establish an application process for grants under this section that—

   “(1) has 1 application window per year;

   “(2) permits a single application for the grant and the associated loan; and

   “(3) provides a single decision to award the grant and the associated loan.

(d) Priority. — In making grants under this section, the Secretary shall prioritize applications in which the applicant proposes to—

   “(1) provide the highest quality of service as measured by—

      “(A) network speed;

      “(B) network latency; and

      “(C) data allowances;

   “(2) serve the greatest number of service points; and

   “(3) use the greatest proportion of non-Federal dollars.

(e) Amount.—The Secretary shall make each grant under this section in an amount that is—

   “(1) not greater than 75 percent of the total project cost with respect to an area with a density of less than 4;

   “(2) not greater than 50 percent of the total project cost with respect to an area with a density of 4 or more and not more than 9; and

   “(3) not greater than 25 percent of the total project cost with respect to an area with a density of more than 9 and not more than 12.

(f) Terms and conditions.—With respect to a grant provided under this section, the Secretary shall require that—

   “(1) the associated loan is secured by the assets purchased with funding from the grant and from the loan;

   “(2) the agreement in which the terms of the grant are established is for a period equal to the duration of the associated loan; and

   “(3) at any time at which the associated loan is outstanding, the broadband service provided by the project will meet the lower of the standards that would apply under section 601(g)(4) if the associated loan had been made under section 601.

(g) Payment assistance for certain applicants under this title.

   “(1) IN GENERAL.—As part of the grant program under this section, the Secretary, at the sole discretion of the Secretary, may provide to applicants who are eligible borrowers under this title and not eligible borrowers under title I or II all or a portion of the grant funds in the form of payment assistance.

   “(2) PAYMENT ASSISTANCE.—The Secretary may provide payment assistance under paragraph (1) by reducing a borrower’s interest rate or periodic principal payments or both.

   “(3) AGREEMENT ON MILESTONES AND OBJECTIVES.—With respect to payment assistance provided under paragraph (1), before entering into the agreement for the grant and associated loan under which the payment assistance will be provided, the applicant and the Secretary shall agree to milestones and objectives of the project.

   “(4) CONDITION.—The Secretary shall condition any payment assistance provided under paragraph (1) on—

      “(A) the applicant fulfilling the terms and conditions of the grant agreement under which the payment assistance will be provided; and

      “(B) completion of the milestones and objectives agreed to under paragraph (3).

   “(5) AMENDMENT OF MILESTONES AND OBJECTIVES.—The Secretary and the applicant may jointly agree to amend the milestones and objectives agreed to under paragraph (3).

(h) Existing projects.—The Secretary may not provide a grant under this section to an applicant for a project that was commenced before the date of the enactment of this section.

(i) Authorization of appropriations.—There are authorized to be appropriated to carry out this section $350,000,000 for each of fiscal years 2019 to 2023.”.

SEC. 6103. Requiring guaranteed broadband lending.

Section 601(c)(1) of the Rural Electrification Act of 1936 (7 U.S.C. 950bb(c)(1)) is amended by striking “shall make or guarantee loans” and inserting “shall make loans and shall guarantee loans”.

SEC. 6104. Smart utility authority for broadband.

(a) Section 331 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981) is amended by adding at the end the following:

“(e)

   (1) Except as provided in paragraph (2), the Secretary may allow a recipient of a grant, loan, or loan guarantee provided by the Office of Rural Development under this title to use not more than 10 percent of the amount so provided—

      “(A) for any activity for which assistance may be provided under section 601 of the Rural Electrification Act of 1936; or

      “(B) to construct other broadband infrastructure.

   “(2) Paragraph (1) of this subsection shall not apply to a recipient who is seeking to provide retail broadband service in any area where retail broadband service is available at the minimum broadband speeds, as defined under section 601(e) of the Rural Electrification Act of 1936.”.

(b) Title I of the Rural Electrification Act of 1936 (7 U.S.C. 901–918a) is amended by inserting after section 7 the following:

“SEC. 8. Limitations on use of assistance.

“(a) Subject to subsections (b) and (c) of this section, the Secretary may allow a recipient of a grant, loan, or loan guarantee under this title to set aside not more than 10 percent of the amount so received to provide retail broadband service.

“(b) A recipient who sets aside funds under subsection (a) of this section may use the funds only in an area that is not being provided with the minimum acceptable level of broadband service established under section 601(e), unless the recipient meets the requirements of section 601(d).

“(c) Nothing in this section shall be construed to limit the ability of any borrower to finance or deploy services authorized under this title.”.

SEC. 6105. Modifications to the Rural Gigabit Program.

Section 603 of the Rural Electrification Act of 1936 (7 U.S.C. 950bb–2) is amended—

   (1) in the section heading, by striking “Rural Gigabit Network Pilot” and inserting “Innovative Broadband Advancement”;

   (2) in subsection (d), by striking “2014 through 2018” and inserting “2019 through 2023”;

   (3) by redesignating subsection (d) as subsection (e); and

   (4) by striking subsections (a) through (c) and inserting the following:

(a) In general.—The Secretary shall establish a program to be known as the ‘Innovative Broadband Advancement Program’, under which the Secretary may provide a grant, a loan, or both to an eligible entity for the purpose of demonstrating innovative broadband technologies or methods of broadband deployment that significantly decrease the cost of broadband deployment, and provide substantially faster broadband speeds than are available, in a rural area.

“(b) Rural area.—In this section, the term ‘rural area’ has the meaning provided in section 601(b)(3).

(c) Eligibility.—To be eligible to obtain assistance under this section for a project, an entity shall—

   “(1) submit to the Secretary an application—

      “(A) that describes a project designed to decrease the cost of broadband deployment, and substantially increase broadband speed to not less than the 20-year broadband speed established by the Rural Utilities Service under this title, in a rural area to be served by the project; and

      “(B) at such time, in such manner, and containing such other information as the Secretary may require;

   “(2) demonstrate that the entity is able to carry out the project; and

   “(3) agree to complete the project build-out within 5 years after the date the assistance is first provided for the project.

(d) Prioritization.—In awarding assistance under this section, the Secretary shall give priority to proposals for projects that—

   “(1) involve partnerships between or among multiple entities;

   “(2) would provide broadband service to the greatest number of rural residents at or above the minimum broadband speed referred to in subsection (c)(1)(A); and

   “(3) the Secretary determines could be replicated in rural areas described in paragraph (2).”.

SEC. 6106. Unified broadband reporting requirements.

Section 601 of the Rural Electrification Act of 1936 (7 U.S.C. 950bb) is amended—

   (1) in subsection (j)—

      (A) in the matter preceding paragraph (1), by striking “Not later than” and all that follows through “section” and inserting “Each year, the Secretary shall submit to the Congress a report that describes the extent of participation in the broadband loan, loan guarantee, and grant programs administered by the Secretary”;

      (B) in paragraph (1), by striking “loans applied for and provided under this section” and inserting “loans, loan guarantees, and grants applied for and provided under the programs”;

      (C) in paragraph (2)—

         (i) in subparagraph (A), by striking “loan”; and

         (ii) in subparagraph (B), by striking “loans and loan guarantees provided under this section” and inserting “loans, loan guarantees, and grants provided under the programs”;

      (D) in paragraph (3), by striking “loan application under this section” and inserting “application under the programs”;

      (E) in each of paragraphs (4) and (6), by striking “this section” and inserting “the programs”; and

      (F) in paragraph (5)—

         (i) by striking “service” and inserting “technology”; and

         (ii) by striking “(b)(1)” and inserting “(e)(1)”; and

   (2) in subsection (k)(2), in each of subparagraphs (A)(i) and (C), by striking “loans” and inserting “grants, loans,”.

SEC. 6107. Improving access by providing certainty to broadband borrowers.

(a) Telephone loan program.—Title II of the Rural Electrification Act of 1936 (7 U.S.C. 922–928) is amended by adding at the end the following:

“SEC. 208. Authority to obligate, but not disburse, funds before the completion of reviews.

(a) In general.—The Secretary may obligate, but shall not disburse, funds under this title for a project before the completion of any otherwise required environmental, historical, or other review of the project.

(b) Authority to deobligate funds.—The Secretary may deobligate funds under this title for a project if any such review will not be completed within a reasonable period of time.”.

(b) Rural broadband program.—Section 601(d) of the Rural Electrification Act of 1936 (7 U.S.C. 950bb(d)) is amended by adding at the end the following:

“(11) AUTHORITY TO OBLIGATE, BUT NOT DISBURSE, FUNDS BEFORE COMPLETION OF REVIEWS; AUTHORITY TO DEOBLIGATE FUNDS.—The Secretary may obligate, but shall not disburse, funds under this section for a project before the completion of any otherwise required environmental, historical, or other review of the project. The Secretary may deobligate funds under this section for a project if any such review will not be completed within a reasonable period of time.”.

SEC. 6108. Simplified application window.

Section 601(c)(2)(A) of the Rural Electrification Act of 1936 (7 U.S.C. 950bb(c)(2)(A)) is amended by striking “not less than 2 evaluation periods” and inserting “1 evaluation period”.

SEC. 6109. Elimination of requirement to give priority to certain applicants.

Section 601(c)(2) of the Rural Electrification Act of 1936 (7 U.S.C. 950bb(c)(2)) is amended—

   (1) by striking “; and” at the end of subparagraph (C) and inserting a period; and

   (2) by striking subparagraph (D).

SEC. 6110. Modification of buildout requirement.

Section 601(d)(1)(A)(iii) of the Rural Electrification Act of 1936 (7 U.S.C. 950bb(d)(1)(A)(iii)) is amended—

   (1) by striking “service” and inserting “infrastructure”; and

   (2) by striking “3” and inserting “5”.

SEC. 6111. Improving borrower refinancing options.

(a) Refinancing of broadband loans.—Section 201 of the Rural Electrification Act of 1936 (7 U.S.C. 922) is amended by inserting “including indebtedness on a loan made under section 601” after “furnishing telephone service in rural areas”.

(b) Refinancing of other loans.—Section 601(i) of such Act (7 U.S.C. 950bb(i)) is amended by inserting “, or on any other loan if the purpose for which such other loan was made is a telecommunications purpose for which assistance may be provided under this Act,” before “if the use of”.

SEC. 6112. Elimination of unnecessary reporting requirements.

Section 601(d)(8)(A)(ii) of the Rural Electrification Act of 1936 (7 U.S.C. 950bb(d)(8)(A)(ii)) is amended—

   (1) in subclause (I), by striking “and location”; and

(   2) in subclause (IV), by striking “any changes in broadband service adoption rates, including”.

SEC. 6113. Access to broadband telecommunications services in rural areas.

Section 601 of the Rural Electrification Act of 1936 (7 U.S.C. 950bb) is amended—

   (1) in subsection (k), by striking paragraph (1) and inserting the following:

   “(1) LIMITATIONS ON AUTHORIZATION OF APPROPRIATIONS.—For loans and loan guarantees under this section, there is authorized to be appropriated to the Secretary $150,000,000 for each of fiscal years 2019 through 2023, to remain available until expended.”; and

   (2) in subsection (l), by striking “2018” and inserting “2023”.

SEC. 6114. Middle mile broadband infrastructure.

Section 601 of the Rural Electrification Act of 1936 (7 U.S.C. 950bb) is amended—

   (1) in subsection (a), by inserting “or middle mile infrastructure” before “in rural areas”;

   (2) in subsection (b), by redesignating paragraphs (2) and (3) as paragraphs (3) and (4) and inserting after paragraph (1) the following:

   “(2) MIDDLE MILE INFRASTRUCTURE.—The term ‘middle mile infrastructure’ means any broadband infrastructure that does not connect directly to end user locations (including anchor institutions) and may include interoffice transport, backhaul, Internet connectivity, data centers, or special access transport to rural areas.”;

   (3) in subsection (c)—

      (A) in paragraph (1), by inserting “and to construct, improve, or acquire middle mile infrastructure” before “in rural areas”;

      (B) in paragraph (2)(B), by inserting “, or in the case of middle mile infrastructure, offer the future ability to link,” before “the greatest proportion”; and

      (C) by adding at the end the following:

   “(3) LIMITATION ON MIDDLE MILE INFRASTRUCTURE PROJECTS.—The Secretary shall limit loans or loan guarantees for middle mile infrastructure projects to no more than 20 percent of the amounts made available to carry out this section.”;

   (4) in subsection (d)—

      (A) in paragraph (1)(A)—

         (i) in clause (i) (as amended by section 6101(1) of this Act), by inserting “or extend middle mile infrastructure” before “in all”; and

      (ii) in clause (iii), by inserting “or middle mile infrastructure” before “described”;

      (B) in paragraph (2)—

         (i) in subparagraph (B), by inserting “or install middle mile infrastructure” before “in the proposed”;

         (ii) in subparagraph (C), by striking clause (ii) and inserting the following:

         “(ii) EXCEPTION.—Clause (i) shall not apply with respect to a project if the project is eligible for funding under another title of this Act.”; and

         (iii) by adding at the end the following:

     “(D) EXCEPTION FOR MIDDLE MILE INFRASTRUCTURE.—Portions of a middle mile infrastructure project that ultimately meet the rural service requirements of this section may traverse an area not described in subsection (b)(4) when necessary.”;

      (C) in paragraph (4), by inserting “, or construct, improve, or acquire middle mile infrastructure in,” before “a rural area”;

      (D) in paragraph (5)(A)(v), by inserting “or, in the case of middle mile infrastructure, connect” before the semicolon; and

      (E) in paragraph (8)(A)(ii)—

         (i) in subclause (I), by inserting “or may” before “receive”;

         (ii) in subclause (II), by inserting “or capability of middle mile infrastructure” before the semicolon; and

         (iii) in subclause (III), by inserting “, if applicable” before the semicolon;

   (5) in subsection (i)—

      (A) in the subsection heading, by inserting “or middle mile infrastructure” after “service”; and

      (B) by inserting “or middle mile infrastructure” before “in rural areas”; and

   (6) in subsection (j)(6), by inserting “or middle mile infrastructure” after “service” the 1st and 3rd places it appears.

SEC. 6115. Outdated broadband systems.

Title VI of the Rural Electrification Act of 1936 (7 U.S.C. 950bb et seq.) is amended by adding at the end the following:

“SEC. 605. Outdated broadband systems.

“Beginning October 1, 2020, the Secretary shall consider any portion of a service territory subject to an outstanding grant agreement between the Secretary and a broadband provider in which broadband service is not provided at at least 10 megabits per second download and at least 1 megabit per second upload as unserved for the purposes of all broadband loan programs under this Act, unless the broadband provider has constructed or begun to construct broadband facilities in the service territory that meet the minimum acceptable standard of service established under section 601(e)(1) for the area in which the service territory is located.”.

SEC. 6116. Federal broadband program coordination.

(a) Consultation between USDA and NTIA.—The Secretary shall consult with the Assistant Secretary to assist in the verification of eligibility of the broadband loan and grant programs of the Department of Agriculture. In providing assistance under the preceding sentence, the Assistant Secretary shall make available the broadband assessment and mapping capabilities of the National Telecommunications and Information Administration.

(b) Consultation between USDA and FCC.

   (1) BY USDA.—The Secretary shall consult with the Commission before making a broadband loan or grant for a project to serve an area with respect to which another entity is receiving Connect America Fund or Mobility Fund support under the Federal universal service support mechanisms established under section 254 of the Communications Act of 1934 (47 U.S.C. 254).

   (2) BY FCC.—The Commission shall consult with the Secretary before offering or providing Connect America Fund or Mobility Fund support under the Federal universal service support mechanisms established under section 254 of the Communications Act of 1934 (47 U.S.C. 254) to serve an area with respect to which another entity has received an award under a broadband loan or grant program of the Department of Agriculture.

(c) Report to Congress.—Not later than 1 year after the date of the enactment of this Act, the Secretary, the Commission, and the Assistant Secretary shall submit to the Committee on Agriculture and the Committee on Energy and Commerce of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry and the Committee on Commerce, Science, and Transportation of the Senate a report on how best to coordinate federally supported broadband programs and activities in order to achieve the following objectives:

   (1) Promote high-quality broadband service that meets the long-term needs of rural residents and businesses, by evaluating the broadband service needs in rural areas for each decade through 2050.

   (2) Support the long-term viability, sustainability, and utility of federally supported rural broadband infrastructure, by analyzing the technical capabilities of the technologies currently available and reasonably expected to be available by 2035 to meet the broadband service needs of rural residents identified under paragraph (1), including by analyzing the following:

      (A) The real-world performance of such technologies, including data rates, latency, data usage restrictions, and other aspects of service quality, as defined by the Commission.

      (B) The suitability of each such technology for residential, agricultural, educational, healthcare, commercial, and industrial purposes in rural areas.

      (C) The cost to deploy and support such technologies in several rural geographies.

      (D) The costs associated with online platforms, specifically the resulting constraints on rural network bandwidth.

   (3) Identify and quantify the availability of broadband service and ongoing broadband deployment in rural areas, including ways to do the following:

      (A) Harmonize broadband notification and reporting requirements and develop common verification procedures across all federally supported broadband programs.

      (B) Consolidate and utilize the existing broadband service data.

      (C) Collect and share data on those projects in rural areas where Federal programs are currently supporting broadband deployment, including areas with respect to which an entity is receiving—

         (i) support under a broadband loan or grant program of the Department of Agriculture; or

         (ii) Connect America Fund or Mobility Fund support under the Federal universal service support mechanisms established under section 254 of the Communications Act of 1934 (47 U.S.C. 254).

      (D) Leverage support technologies and services from online platforms for providers of broadband service in rural areas.

(d) Definitions.—In this section:

   (1) ASSISTANT SECRETARY.—The term “Assistant Secretary” means the Assistant Secretary of Commerce for Communications and Information.

   (2) COMMISSION.—The term “Commission” means the Federal Communications Commission.

   (3) RURAL AREA.—The term “rural area” has the meaning given the term in section 601(b)(3) of the Rural Electrification Act of 1936.

SEC. 6117. Effective date.

(a) In general.—The amendments made by this subtitle shall not take effect until the Secretary of Agriculture has issued final regulations to implement the amendments.

(b) Deadline for issuing regulations.—Within 90 days after the date of the enactment of this Act, the Secretary of Agriculture shall prescribe final regulations to implement the amendments made by sections 6101 and 6102.


U.S. Code That is Being Amended by HR.2

Link to 7 U.S. Code § 950bb

Access to broadband telecommunications services in rural areas

(a) Purpose. — The purpose of this section is to provide loans and loan guarantees to provide funds for the costs of the construction, improvement, and acquisition of facilities and equipment for broadband service in rural areas.

(b) Definitions In this section.

   (1) Broadband service. — The term “broadband service” means any technology identified by the Secretary as having the capacity to transmit data to enable a subscriber to the service to originate and receive high-quality voice, data, graphics, and video.

   (2) Incumbent service provider — The term “incumbent service provider”, with respect to an application submitted under this section, means an entity that, as of the date of submission of the application, is providing broadband service to not less than 5 percent of the households in the service territory proposed in the application.

   (3) Rural area

      (A) In general, the term “rural area” means any area other than—

         (i) an area described in clause (i) or (ii) of section 1991(a)(13)(A) of this title; and

         (ii) a city, town, or incorporated area that has a population of greater than 20,000 inhabitants.

   (B) Urban area growth — The Secretary may, by regulation only, consider an area described in section 1991(a)(13)(F)(i)(I) of this title to not be a rural area for purposes of this section.

(c) Loans and loan guarantees.

   (1) In general — The Secretary shall make or guarantee loans to eligible entities described in subsection (d) to provide funds for the construction, improvement, or acquisition of facilities and equipment for the provision of broadband service in rural areas.

   (2) Priority — In making loans or loan guarantees under paragraph (1), the Secretary shall —

      (A) establish not less than 2 evaluation periods for each fiscal year to compare loan and loan guarantee applications and to prioritize loans and loan guarantees to all or part of rural communities that do not have residential broadband service that meets the minimum acceptable level of broadband service established under subsection (e);

      (B) give the highest priority to applicants that offer to provide broadband service to the greatest proportion of unserved households or households that do not have residential broadband service that meets the minimum acceptable level of broadband service established under subsection (e), as —

         (i) certified by the affected community, city, county, or designee; or

         (ii) demonstrated on —

            (I) the broadband map of the affected State if the map contains address-level data; or

            (II) the National Broadband Map if address-level data is unavailable; and
(
      C) provide equal consideration to all qualified applicants, including applicants that have not previously received loans or loan guarantees under paragraph (1); and

      (D) give priority to applicants that offer in the applications of the applicants to provide broadband service not predominantly for business service, if at least 25 percent of the customers in the proposed service territory are commercial interests.

(d) Eligibility.

   (1) Eligible entities

      (A) In generalTo be eligible to obtain a loan or loan guarantee under this section, an entity shall—

         (i) demonstrate the ability to furnish, improve in order to meet the minimum acceptable level of broadband service established under subsection (e), or extend broadband service to all or part of an unserved rural area or an area below the minimum acceptable level of broadband service established under subsection (e);

         (ii) submit to the Secretary a loan application at such time, in such manner, and containing such information as the Secretary may require; and

         (iii) agree to complete buildout of the broadband service described in the loan application by not later than 3 years after the initial date on which proceeds from the loan made or guaranteed under this section are made available.

      (B) Limitation — An eligible entity that provides telecommunications or broadband service to at least 20 percent of the households in the United States may not receive an amount of funds under this section for a fiscal year in excess of 15 percent of the funds authorized and appropriated under subsection (k) for the fiscal year.

   (2) Eligible projects

      (A) In generalExcept as provided in subparagraphs (B) and (C), the proceeds of a loan made or guaranteed under this section may be used to carry out a project in a proposed service territory only if, as of the date on which the application for the loan or loan guarantee is submitted—

         (i) not less than 15 percent of the households in the proposed service territory are unserved or have service levels below the minimum acceptable level of broadband service established under subsection (e); and

         (ii) broadband service is not provided in any part of the proposed service territory by 3 or more incumbent service providers.

   (B) Exception to percent requirement

Subparagraph (A)(i) shall not apply to the proposed service territory of a project if a loan or loan guarantee has been made under this section to the applicant to provide broadband service in the proposed service territory.

      (C) Exception to incumbent service provider requirement

         (i) In general — Except as provided in clause (ii), subparagraph (A)(ii) shall not apply to an incumbent service provider in the portion of a proposed service territory in which the provider is upgrading broadband service to meet the minimum acceptable level of broadband service established under subsection (e) for the existing territory of the incumbent service provider.

         (ii) Exception — Clause (i) shall not apply if the applicant is eligible for funding under another subchapter of this chapter.

   (3) Equity and market survey requirements

      (A) In general — The Secretary may require an entity to provide a cost share in an amount not to exceed 10 percent of the amount of the loan or loan guarantee requested in the application of the entity, unless the Secretary determines that a higher percentage is required for financial feasibility.

      (B) Market survey

          (i) In general — The Secretary may require an entity that proposes to have a subscriber projection of more than 20 percent of the broadband service market in a rural area to submit to the Secretary a market survey.

         (ii) Less than 20 percent — The Secretary may not require an entity that proposes to have a subscriber projection of less than 20 percent of the broadband service market in a rural area to submit to the Secretary a market survey.

         (iii) InformationInformation submitted under this subparagraph shall be—

            (I) certified by the affected community, city, county, or designee; or

            (II) demonstrated on—

               (aa) the broadband map of the affected State if the map contains address-level data; or

               (bb) the National Broadband Map if address-level data is unavailable.

   (4) State and local governments and Indian tribes — Subject to paragraph (1), a State or local government (including any agency, subdivision, or instrumentality thereof (including consortia thereof)) and an Indian tribe shall be eligible for a loan or loan guarantee under this section to provide broadband services to a rural area.

   (5) Notice requirementsThe Secretary shall promptly provide a fully searchable database on the website of the Rural Utilities Service that contains, at a minimum —

      (A) notice of each application for a loan or loan guarantee under this section describing the application, including—

         (i) the identity of the applicant;

         (ii) a description of each application, including—

            (I) each area proposed to be served by the applicant; and

            (II) the amount and type of support requested by each applicant;

         (iii) the status of each application;
(iv) the estimated number and proportion relative to the service territory of households without terrestrial-based broadband service in those areas; and

         (v) a list of the census block groups or proposed service territory, in a manner specified by the Secretary, that the applicant proposes to service;

      (B) notice of each entity receiving assistance under this section, including—

         (i) the name of the entity;

         (ii) the type of assistance being received;

         (iii) the purpose for which the entity is receiving the assistance;

         (iv) each semiannual report submitted under paragraph (8)(A) (redacted to protect any proprietary information in the report); and

      (C) such other information as is sufficient to allow the public to understand assistance provided under this section.

   (6) Paperwork reduction — The Secretary shall take steps to reduce, to the maximum extent practicable, the cost and paperwork associated with applying for a loan or loan guarantee under this section by first-time applicants (particularly first-time applicants who are small and start-up broadband service providers), including by providing for a new application that maintains the ability of the Secretary to make an analysis of the risk associated with the loan involved.

   (7) Preapplication process — The Secretary shall establish a process under which a prospective applicant may seek a determination of area eligibility prior to preparing a loan application under this section.

   (8) Reporting

      (A) In generalThe Secretary shall require any entity receiving assistance under this section to submit a semiannual report for 3 years after completion of the project, in a format specified by the Secretary, that describes—

         (i) the use by the entity of the assistance, including new equipment and capacity enhancements that support high-speed broadband access for educational institutions, health care providers, and public safety service providers (including the estimated number of end users who are currently using or forecasted to use the new or upgraded infrastructure); and

         (ii) the progress towards fulfilling the objectives for which the assistance was granted, including—

            (I) the number and location of residences and businesses that will receive new broadband service, existing network service improvements, and facility upgrades resulting from the Federal assistance;

            (II) the speed of broadband service;

            (III) the average price of broadband service in a proposed service area;

            (IV) any changes in broadband service adoption rates, including new subscribers generated from demand-side projects; and

            (V) any metrics the Secretary determines to be appropriate; [1]

      (B) Additional reporting — The Secretary may require any additional reporting and information by any recipient of any assistance under this section so as to ensure compliance with this section.

   (9) Default and deobligationIn addition to other authority under applicable law, the Secretary shall establish written procedures for all broadband programs administered by the Rural Utilities Service under this or any other Act that, to the maximum extent practicable—

      (A) recover funds from loan defaults;

      (B) deobligate any awards, less allowable costs that demonstrate an insufficient level of performance (including metrics determined by the Secretary) or fraudulent spending, to the extent funds with respect to the award are available in the account relating to the program established by this section;

      (C) award those funds, on a competitive basis, to new or existing applicants consistent with this section; and

      (D) minimize overlap among the programs.

   (10) Service area assessmentThe Secretary shall, with respect to an application for assistance under this section—

      (A) provide not less than 15 days for broadband service providers to voluntarily submit information concerning the broadband services that the providers offer in the census block groups or tracts described in paragraph (5)(A)(v) so that the Secretary may assess whether the applications submitted meet the eligibility requirements under this section; and

      (B) if no broadband service provider submits information under subparagraph (A), consider the number of providers in the census block group or tract to be established by using—

         (i) the most current National Broadband Map of the National Telecommunications and Information Administration; or

         (ii) any other data regarding the availability of broadband service that the Secretary may collect or obtain through reasonable efforts.

(e) Broadband service

   (1) In general — Subject to paragraph (2), for purposes of this section, the minimum acceptable level of broadband service for a rural area shall be at least —

      (A) a 4-Mbps downstream transmission capacity; and

      (B) a 1-Mbps upstream transmission capacity.

   (2) Adjustments

      (A) In general — At least once every 2 years, the Secretary shall review, and may adjust through notice published in the Federal Register, the minimum acceptable level of broadband service established under paragraph (1) to ensure that high quality, cost-effective broadband service is provided to rural areas over time.

      (B) Considerations — In making an adjustment to the minimum acceptable level of broadband service under subparagraph (A), the Secretary may consider establishing different transmission rates for fixed broadband service and mobile broadband service.

   (3) Prohibition — The Secretary shall not establish requirements for bandwidth or speed that have the effect of precluding the use of evolving technologies appropriate for rural areas.

(f) Technological neutrality. — For purposes of determining whether to make a loan or loan guarantee for a project under this section, the Secretary shall use criteria that are technologically neutral.

(g) Terms and conditions for loans and loan guarantees.

   (1) In generalNotwithstanding any other provision of law, a loan or loan guarantee under this section shall—

      (A) bear interest at an annual rate of, as determined by the Secretary—

         (i) in the case of a direct loan, a rate equivalent to—

            (I) the cost of borrowing to the Department of the Treasury for obligations of comparable maturity; or

            (II) 4 percent; and

         (ii) in the case of a guaranteed loan, the current applicable market rate for a loan of comparable maturity; and

      (B) have a term of such length, not exceeding 35 years, as the borrower may request, if the Secretary determines that the loan is adequately secured.

   (2) Terms — In determining the term and conditions of a loan or loan guarantee, the Secretary may—

      (A) consider whether the recipient is or would be serving an area that is unserved or has service levels below the minimum acceptable level of broadband service established under subsection (e); and

      (B) if the Secretary makes a determination in the affirmative under subparagraph (A), establish a limited initial deferral period or comparable terms necessary to achieve the financial feasibility and long-term sustainability of the project.

   (3) Recurring revenue — The Secretary shall consider the existing recurring revenues of the entity at the time of application in determining an adequate level of credit support.

(h) Adequacy of security

   (1) In general — The Secretary shall ensure that the type and amount of, and method of security used to secure, any loan or loan guarantee under this section is commensurate to the risk involved with the loan or loan guarantee, particularly in any case in which the loan or loan guarantee is issued to a financially strong and stable entity, as determined by the Secretary.

   (2) Determination of amount and method of security — In determining the amount of, and method of security used to secure, a loan or loan guarantee under this section, the Secretary shall consider reducing the security in a rural area that does not have broadband service.

(i) Use of loan proceeds to refinance loans for deployment of broadband service — Notwithstanding any other provision of this chapter, the proceeds of any loan made or guaranteed by the Secretary under this chapter may be used by the recipient of the loan for the purpose of refinancing an outstanding obligation of the recipient on another telecommunications loan made under this chapter if the use of the proceeds for that purpose will support the construction, improvement, or acquisition of facilities and equipment for the provision of broadband service in rural areas.

(j) Reports — Not later than 1 year after the date of enactment of the Food, Conservation, and Energy Act of 2008, and annually thereafter, the Administrator shall submit to Congress a report that describes the extent of participation in the loan and loan guarantee program under this section for the preceding fiscal year, including a description of—

   (1) the number of loans applied for and provided under this section, including any loan terms or conditions for which the Secretary provided additional assistance to unserved areas;

   (2)

      (A) the communities proposed to be served in each loan application submitted for the fiscal year; and

      (B) the communities served by projects funded by loans and loan guarantees provided under this section;

   (3) the period of time required to approve each loan application under this section;

   (4) any outreach activities carried out by the Secretary to encourage entities in rural areas without broadband service to submit applications under this section;

   (5) the method by which the Secretary determines that a service enables a subscriber to originate and receive high-quality voice, data, graphics, and video for purposes of subsection (b)(1);

   (6) each broadband service, including the type and speed of broadband service, for which assistance was sought, and each broadband service for which assistance was provided, under this section; and

   (7) the overall progress towards fulfilling the goal of improving the quality of rural life by expanding rural broadband access, as demonstrated by metrics, including—

      (A) the number of residences and businesses receiving new broadband services;

      (B) network improvements, including facility upgrades and equipment purchases;

      (C) average broadband speeds and prices on a local and statewide basis;

      (D) any changes in broadband adoption rates; and

      (E) any specific activities that increased high speed broadband access for educational institutions, health care providers, and public safety service providers.

(k) Funding

   (1) Authorization of appropriations — There is authorized to be appropriated to the Secretary to carry out this section $25,000,000 for each of fiscal years 2008 through 2018, to remain available until expended.

   (2) Allocation of funds

      (A) In generalFrom amounts made available for each fiscal year under this subsection, the Secretary shall—

         (i) establish a national reserve for loans and loan guarantees to eligible entities in States under this section; and

         (ii) allocate amounts in the reserve to each State for each fiscal year for loans and loan guarantees to eligible entities in the State.

   (B) AmountThe amount of an allocation made to a State for a fiscal year under subparagraph (A) shall bear the same ratio to the amount of allocations made for all States for the fiscal year as—

         (i) the number of communities with a population of 2,500 inhabitants or less in the State; bears to

         (ii) the number of communities with a population of 2,500 inhabitants or less in all States.

      (C) Unobligated amounts — Any amounts in the reserve established for a State for a fiscal year under subparagraph (B) that are not obligated by April 1 of the fiscal year shall be available to the Secretary to make loans and loan guarantees under this section to eligible entities in any State, as determined by the Secretary.

(l) Termination of authority — No loan or loan guarantee may be made under this section after September 30, 2018.