Broadband Infrastructure Finance and Innovation Act of 2019

II 116TH CONGRESS 1ST SESSION S. 2344 To establish a broadband infrastructure finance and innovation program to make available loans, loan guarantees, and lines of credit for the con- struction and deployment of broadband infrastructure, and for other purposes. IN THE SENATE OF THE UNITED STATES JULY 30, 2019 Mr. PETERS introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation A BILL To establish a broadband infrastructure finance and innova- tion program to make available loans, loan guarantees, and lines of credit for the construction and deployment of broadband infrastructure, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Broadband Infrastructure Finance and Innovation Act of 5 2019’’. 6 (b) TABLE OF CONTENTS.—The table of contents for 7 this Act is as follows: 8 VerDate Sep 11 2014 04:43 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2344.IS S2344 kjohnson on DSK79L0C42 with BILLS 2 •S 2344 IS Sec. 1. Short title; table of contents. Sec. 2. Definitions. Sec. 3. Determination of eligibility and project selection. Sec. 4. Secured loans. Sec. 5. Lines of credit. Sec. 6. Alternative prudential lending standards for small projects. Sec. 7. Program administration. Sec. 8. State and local permits. Sec. 9. Regulations. Sec. 10. Funding. Sec. 11. Reports to Congress. SEC. 2. DEFINITIONS. 1 In this Act: 2 (1) ASSISTANT SECRETARY.—The term ‘‘Assist- 3 ant Secretary’’ means the Assistant Secretary of 4 Commerce for Communications and Information. 5 (2) BIFIA PROGRAM.—The term ‘‘BIFIA pro- 6 gram’’ means the broadband infrastructure finance 7 and innovation program established under this Act. 8 (3) BROADBAND SERVICE.—The term ‘‘broad- 9 band service’’— 10 (A) means broadband internet access serv- 11 ice that is a mass-market retail service, or a 12 service provided to an entity described in para- 13 graph (12)(B)(ii), by wire or radio that pro- 14 vides the capability to transmit data to and re- 15 ceive data from all or substantially all internet 16 endpoints, including any capabilities that are 17 incidental to and enable the operation of the 18 communications service; 19 VerDate Sep 11 2014 04:43 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2344.IS S2344 kjohnson on DSK79L0C42 with BILLS 3 •S 2344 IS (B) includes any service that is a func- 1 tional equivalent of the service described in sub- 2 paragraph (A); and 3 (C) does not include dial-up internet access 4 service. 5 (4) ELIGIBLE PROJECT COSTS.—The term ‘‘eli- 6 gible project costs’’ means amounts substantially all 7 of which are paid by, or for the account of, an obli- 8 gor in connection with a project, including the cost 9 of— 10 (A) development phase activities, including 11 planning, feasibility analysis, revenue fore- 12 casting, environmental review, historic preserva- 13 tion review, permitting, preliminary engineering 14 and design work, and other preconstruction ac- 15 tivities; 16 (B) construction and deployment phase ac- 17 tivities, including— 18 (i) construction, reconstruction, reha- 19 bilitation, replacement, and acquisition of 20 real property (including land relating to 21 the project and improvements to land), 22 equipment, instrumentation, networking 23 capability, hardware and software, and dig- 24 ital network technology; 25 VerDate Sep 11 2014 04:43 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2344.IS S2344 kjohnson on DSK79L0C42 with BILLS 4 •S 2344 IS (ii) environmental mitigation; and 1 (iii) construction contingencies; and 2 (C) capitalized interest necessary to meet 3 market requirements, reasonably required re- 4 serve funds, capital issuance expenses, and 5 other carrying costs during construction and 6 deployment. 7 (5) FEDERAL CREDIT INSTRUMENT.—The term 8 ‘‘Federal credit instrument’’ means a secured loan, 9 loan guarantee, or line of credit authorized to be 10 made available under the BIFIA program with re- 11 spect to a project. 12 (6) INVESTMENT-GRADE RATING.—The term 13 ‘‘investment-grade rating’’ means a rating of BBB 14 minus, Baa3, bbb minus, BBB (low), or higher as- 15 signed by a rating agency to project obligations. 16 (7) LENDER.—The term ‘‘lender’’ means any 17 non-Federal qualified institutional buyer (as defined 18 in section 230.144A(a) of title 17, Code of Federal 19 Regulations (or any successor regulation), known as 20 Rule 144A(a) of the Securities and Exchange Com- 21 mission and issued under the Securities Act of 1933 22 (15 U.S.C. 77a et seq.)), including— 23 (A) a qualified retirement plan (as defined 24 in section 4974(c) of the Internal Revenue Code 25 VerDate Sep 11 2014 04:43 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2344.IS S2344 kjohnson on DSK79L0C42 with BILLS 5 •S 2344 IS of 1986) that is a qualified institutional buyer; 1 and 2 (B) a governmental plan (as defined in 3 section 414(d) of the Internal Revenue Code of 4 1986) that is a qualified institutional buyer. 5 (8) LETTER OF INTEREST.—The term ‘‘letter 6 of interest’’ means a letter submitted by a potential 7 applicant prior to an application for credit assistance 8 under the BIFIA program in a format prescribed by 9 the Assistant Secretary on the website of the BIFIA 10 program that— 11 (A) describes the project and the location, 12 purpose, and cost of the project; 13 (B) outlines the proposed financial plan, 14 including the requested credit assistance and 15 the proposed obligor; 16 (C) provides a status of environmental re- 17 view; and 18 (D) provides information regarding satis- 19 faction of other eligibility requirements of the 20 BIFIA program. 21 (9) LINE OF CREDIT.—The term ‘‘line of cred- 22 it’’ means an agreement entered into by the Assist- 23 ant Secretary with an obligor under section 5 to pro- 24 VerDate Sep 11 2014 04:43 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2344.IS S2344 kjohnson on DSK79L0C42 with BILLS 6 •S 2344 IS vide a direct loan at a future date upon the occur- 1 rence of certain events. 2 (10) LOAN GUARANTEE.—The term ‘‘loan guar- 3 antee’’ means any guarantee or other pledge by the 4 Assistant Secretary to pay all or part of the prin- 5 cipal of and interest on a loan or other debt obliga- 6 tion issued by an obligor and funded by a lender. 7 (11) OBLIGOR.—The term ‘‘obligor’’ means a 8 party that— 9 (A) is primarily liable for payment of the 10 principal of or interest on a Federal credit in- 11 strument; and 12 (B) may be a corporation, company, part- 13 nership, joint venture, trust, or governmental 14 entity, agency, or instrumentality. 15 (12) PROJECT.—The term ‘‘project’’ means a 16 project— 17 (A) to construct and deploy infrastructure 18 for the provision of broadband service; and 19 (B) that the Assistant Secretary deter- 20 mines will— 21 (i) provide access or improved access 22 to broadband service to consumers residing 23 in areas of the United States that have no 24 VerDate Sep 11 2014 04:43 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2344.IS S2344 kjohnson on DSK79L0C42 with BILLS 7 •S 2344 IS access to broadband service or do not have 1 access to broadband service offered— 2 (I) with a download speed of at 3 least 25 megabits per second; 4 (II) with an upload speed of at 5 least 3 megabits per second; and 6 (III) with latency that is suffi- 7 ciently low to allow real-time, inter- 8 active applications; or 9 (ii) provide access or improved access 10 to broadband service to— 11 (I) schools, libraries, medical and 12 healthcare providers, community col- 13 leges and other institutions of higher 14 education, and other community sup- 15 port organizations and entities to fa- 16 cilitate greater use of broadband serv- 17 ice by or through such organizations; 18 (II) organizations and agencies 19 that provide outreach, access, equip- 20 ment, and support services to facili- 21 tate greater use of broadband service 22 by low-income, unemployed, aged, and 23 otherwise vulnerable populations; 24 VerDate Sep 11 2014 04:43 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2344.IS S2344 kjohnson on DSK79L0C42 with BILLS 8 •S 2344 IS (III) job-creating strategic facili- 1 ties located within— 2 (aa) a State-designated eco- 3 nomic zone; 4 (bb) an economic develop- 5 ment district designated by the 6 Secretary of Commerce under 7 section 401 of the Public Works 8 and Economic Development Act 9 of 1965 (42 U.S.C. 3171); 10 (cc) a renewal community 11 designated by the Secretary of 12 Housing and Urban Development 13 under section 1400E of the In- 14 ternal Revenue Code of 1986 (as 15 in effect before the repeal of that 16 section by section 401(d)(5)(A) 17 of division U of the Consolidated 18 Appropriations Act, 2018 (Public 19 Law 115–141; 132 Stat. 348)); 20 (dd) an empowerment zone 21 designated by the Secretary of 22 Housing and Urban Development 23 under section 1391 of the Inter- 24 nal Revenue Code of 1986; or 25 VerDate Sep 11 2014 04:43 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2344.IS S2344 kjohnson on DSK79L0C42 with BILLS 9 •S 2344 IS (ee) an enterprise commu- 1 nity designated by the Secretary 2 of Agriculture under section 3 1391 of the Internal Revenue 4 Code of 1986; or 5 (IV) public safety agencies. 6 (13) PROJECT OBLIGATION.—The term 7 ‘‘project obligation’’ means any note, bond, deben- 8 ture, or other debt obligation issued by an obligor in 9 connection with the financing of a project, other 10 than a Federal credit instrument. 11 (14) PUBLIC AUTHORITY.—The term ‘‘public 12 authority’’ means the Federal Government or a 13 State, county, town, township, Indian Tribe, munic- 14 ipal government, or other local government, or an in- 15 strumentality thereof, with authority to finance, 16 build, operate, or maintain infrastructure for the 17 provision of broadband service. 18 (15) RATING AGENCY.—The term ‘‘rating agen- 19 cy’’ means a credit rating agency registered with the 20 Securities and Exchange Commission as a nationally 21 recognized statistical rating organization (as defined 22 in section 3(a) of the Securities Exchange Act of 23 1934 (15 U.S.C. 78c(a))). 24 VerDate Sep 11 2014 04:43 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2344.IS S2344 kjohnson on DSK79L0C42 with BILLS 10 •S 2344 IS (16) SECURED LOAN.—The term ‘‘secured 1 loan’’ means a direct loan or other debt obligation 2 issued by an obligor and funded by the Assistant 3 Secretary in connection with the financing of a 4 project under section 4. 5 (17) SMALL PROJECT.—The term ‘‘small 6 project’’ means a project having eligible project costs 7 that are reasonably anticipated not to equal or ex- 8 ceed $20,000,000. 9 (18) STATE.—The term ‘‘State’’ has the mean- 10 ing given such term in section 3 of the Communica- 11 tions Act of 1934 (47 U.S.C. 153). 12 (19) SUBSIDY AMOUNT.—The term ‘‘subsidy 13 amount’’ means the amount of budget authority suf- 14 ficient to cover the estimated long-term cost to the 15 Federal Government of a Federal credit instru- 16 ment— 17 (A) calculated on a net present value basis; 18 and 19 (B) excluding administrative costs and any 20 incidental effects on governmental receipts or 21 outlays in accordance with the Federal Credit 22 Reform Act of 1990 (2 U.S.C. 661 et seq.). 23 (20) SUBSTANTIAL COMPLETION.—The term 24 ‘‘substantial completion’’ means, with respect to a 25 VerDate Sep 11 2014 04:43 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2344.IS S2344 kjohnson on DSK79L0C42 with BILLS 11 •S 2344 IS project receiving credit assistance under the BIFIA 1 program— 2 (A) the commencement of the provision of 3 broadband service using the infrastructure 4 being financed; or 5 (B) a comparable event, as determined by 6 the Assistant Secretary and specified in the 7 credit agreement. 8 SEC. 3. DETERMINATION OF ELIGIBILITY AND PROJECT SE- 9 LECTION. 10 (a) ELIGIBILITY.— 11 (1) IN GENERAL.—A project shall be eligible to 12 receive credit assistance under the BIFIA program 13 if— 14 (A) the entity proposing to carry out the 15 project submits a letter of interest prior to sub- 16 mission of a formal application for the project; 17 and 18 (B) the project meets the criteria described 19 in this subsection. 20 (2) CREDITWORTHINESS.— 21 (A) IN GENERAL.—Except as provided in 22 subparagraph (B), to be eligible for assistance 23 under the BIFIA program, a project shall sat- 24 VerDate Sep 11 2014 04:43 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2344.IS S2344 kjohnson on DSK79L0C42 with BILLS 12 •S 2344 IS isfy applicable creditworthiness standards, 1 which, at a minimum, shall include— 2 (i) adequate coverage requirements to 3 ensure repayment; 4 (ii) an investment-grade rating from 5 at least 2 rating agencies on debt senior to 6 the Federal credit instrument; and 7 (iii) a rating from at least 2 rating 8 agencies on the Federal credit instrument. 9 (B) SMALL PROJECTS.—In order for a 10 small project to be eligible for assistance under 11 the BIFIA program, such project shall satisfy 12 alternative creditworthiness standards that shall 13 be established by the Assistant Secretary under 14 section 6 for purposes of this paragraph. 15 (3) APPLICATION.—A State, local government, 16 agency or instrumentality of a State or local govern- 17 ment, public authority, public-private partnership, or 18 other legal entity undertaking a project and author- 19 ized by the Assistant Secretary shall submit a 20 project application that is acceptable to the Assist- 21 ant Secretary. 22 (4) ELIGIBLE PROJECT COST PARAMETERS FOR 23 INFRASTRUCTURE PROJECTS.—Eligible project costs 24 shall be reasonably anticipated to equal or exceed 25 VerDate Sep 11 2014 04:43 Aug 06, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S2344.IS S2344 kjohnson on DSK79L0C42 with BILLS 13 •S 2344 IS $2,000,000 in the case of a project or program of 1 projects— 2 (A) in which the applicant is a local gov- 3 ernment, an instrumentality of a local govern- 4 ment, or a public authority (other than a public 5 authority that is the Federal Government or a 6 State government, or an instrumentality there- 7 of); 8 (B) located on a facility owned by a local 9 government; or 10 (C) for which the Assistant Secretary de- 11 termines that a local government is substan- 12 tially involved in the development of the project. 13 (5) DEDICAT [Text truncated for display. 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