Rural Broadband Modernization Act

I 118TH CONGRESS 1ST SESSION H. R. 3964 To increase access to broadband telecommunications services in rural areas, to increase minimum broadband speeds in rural areas, and to provide grants, loans, and loan guarantees to finance the costs of the construc- tion, improvement, and acquisition of facilities and equipment for broadband service in rural areas, and other purposes. IN THE HOUSE OF REPRESENTATIVES JUNE 9, 2023 Mr. FEENSTRA (for himself, Mrs. MILLER-MEEKS, Mr. BOST, and Mr. BOW- MAN) introduced the following bill; which was referred to the Committee on Agriculture, and in addition to the Committee on Energy and Com- merce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdic- tion of the committee concerned A BILL To increase access to broadband telecommunications services in rural areas, to increase minimum broadband speeds in rural areas, and to provide grants, loans, and loan guarantees to finance the costs of the construction, im- provement, and acquisition of facilities and equipment for broadband service in rural areas, and other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 19:55 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3964.IH H3964 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 3964 IH SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Rural Broadband Mod- 2 ernization Act’’. 3 SEC. 2. RURAL BROADBAND MODERNIZATION. 4 (a) IN GENERAL.—Section 601 of the Rural Elec- 5 trification Act of 1936 (7 U.S.C. 950bb) is amended to 6 read as follows: 7 ‘‘SEC. 601. ACCESS TO BROADBAND TELECOMMUNICATIONS 8 SERVICES IN RURAL AREAS. 9 ‘‘(a) PURPOSE.—The purpose of this section is to 10 provide grants, provide loans, and provide loan guarantees 11 to provide funds for the costs of the construction, improve- 12 ment, and acquisition of facilities and equipment for 13 broadband service in rural areas. 14 ‘‘(b) DEFINITIONS.—In this section: 15 ‘‘(1) BROADBAND SERVICE.—The term 16 ‘broadband service’ means any technology identified 17 by the Secretary as having the capacity to transmit 18 data to enable a subscriber to the service to origi- 19 nate and receive high-quality voice, data, graphics, 20 and video. 21 ‘‘(2) RURAL AREA.— 22 ‘‘(A) IN GENERAL.—The term ‘rural area’ 23 means any area other than— 24 ‘‘(i) an area described in clause (i) or 25 (ii) of section 343(a)(13)(A) of the Con- 26 VerDate Sep 11 2014 19:55 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3964.IH H3964 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 3964 IH solidated Farm and Rural Development 1 Act (7 U.S.C. 1991(a)(13)(A)); and 2 ‘‘(ii) in the case of a grant or direct 3 loan, a city, town, or incorporated area 4 that has a population of greater than 5 20,000 inhabitants. 6 ‘‘(B) URBAN AREA GROWTH.—The Sec- 7 retary may, by regulation only, consider an area 8 described in section 343(a)(13)(F)(i)(I) of such 9 Act to not be a rural area for purposes of this 10 section. 11 ‘‘(C) EXCLUSION OF CERTAIN POPU- 12 LATIONS.—The term does not include any pop- 13 ulation described in subparagraph (H) or (I) of 14 section 343(a)(13) of such Act (7 U.S.C. 15 1991(a)(13)). 16 ‘‘(c) GRANTS, LOANS, AND LOAN GUARANTEES.— 17 ‘‘(1) IN GENERAL.—The Secretary shall make 18 grants, shall make loans, and shall guarantee loans 19 to eligible entities described in subsection (d) to pro- 20 vide funds for the construction, improvement, or ac- 21 quisition of facilities and equipment for the provision 22 of broadband service in rural areas that, at a min- 23 imum, delivers 100 Mbps (or such greater rate as 24 the Secretary may establish) symmetrical through- 25 VerDate Sep 11 2014 19:55 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3964.IH H3964 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 3964 IH put for each rural household in the proposed service 1 area. 2 ‘‘(2) APPLICATIONS.—The Secretary shall es- 3 tablish an application process for grants under this 4 section that— 5 ‘‘(A) permits a single application for a 6 grant and a loan under title I, II, or this title 7 that is associated with the grant; 8 ‘‘(B) provides a single decision to award 9 such a grant and loan; and 10 ‘‘(C) ensures timely consideration of appli- 11 cations by approving or denying applications 12 within 30 days after submission. 13 ‘‘(3) PRIORITY.— 14 ‘‘(A) IN GENERAL.—In making grants, 15 making loans, and guaranteeing loans under 16 paragraph (1), the Secretary shall— 17 ‘‘(i) give the highest priority to appli- 18 cations for projects to provide broadband 19 service to unserved rural communities that 20 do not have any residential broadband 21 service of at least— 22 ‘‘(I) a 25-Mbps downstream 23 transmission capacity; and 24 VerDate Sep 11 2014 19:55 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3964.IH H3964 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •HR 3964 IH ‘‘(II) a 3-Mbps upstream trans- 1 mission capacity; 2 ‘‘(ii) give priority to applications for 3 projects to provide the maximum level of 4 broadband service to the greatest propor- 5 tion of rural households in the proposed 6 service area identified in the application; 7 ‘‘(iii) give priority to eligible entities 8 that have provided broadband service or 9 utility service in rural areas for at least 5 10 years in the State for which an award is 11 sought; 12 ‘‘(iv) provide equal consideration to all 13 eligible entities, based on organizational 14 form; and 15 ‘‘(v) with respect to 2 or more appli- 16 cations that are given the same priority 17 under clause (i), give priority to an appli- 18 cation that requests less grant funding 19 than loan funding. 20 ‘‘(B) OTHER.—After giving priority to the 21 applications described in clauses (i) through 22 (iii) of subparagraph (A), the Secretary shall 23 give priority to applications— 24 VerDate Sep 11 2014 19:55 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3964.IH H3964 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •HR 3964 IH ‘‘(i) for projects to provide broadband 1 service to rural communities— 2 ‘‘(I) with a population of less 3 than 10,000 permanent residents; 4 ‘‘(II) that are experiencing out- 5 migration and have adopted a stra- 6 tegic community investment plan 7 under section 379H(d) of the 8 Consoldiated Farm and Rural Devel- 9 opment Act that includes consider- 10 ations for improving and expanding 11 broadband service; 12 ‘‘(III) with a high percentage of 13 low income families or persons (as de- 14 fined in section 501(b) of the Housing 15 Act of 1949 (42 U.S.C. 1471(b))); 16 ‘‘(IV) that are isolated from 17 other significant population centers; 18 or 19 ‘‘(V) that provide rapid and ex- 20 panded deployment of fixed and mo- 21 bile broadband on cropland and 22 ranchland within a service territory 23 for use in various applications of pre- 24 cision agriculture; and 25 VerDate Sep 11 2014 19:55 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3964.IH H3964 pbinns on DSKJLVW7X2PROD with $$_JOB 7 •HR 3964 IH ‘‘(ii) that were developed with the par- 1 ticipation of, and will receive a substantial 2 portion of the funding for the project from, 3 2 or more stakeholders, including— 4 ‘‘(I) State, local, and tribal gov- 5 ernments; 6 ‘‘(II) nonprofit institutions; that 7 provide community development or as- 8 sistance services; 9 ‘‘(III) community anchor institu- 10 tions, such as— 11 ‘‘(aa) public libraries; 12 ‘‘(bb) elementary schools 13 and secondary schools (as defined 14 in section 8101 of the Elemen- 15 tary and Secondary Education 16 Act of 1965 (20 U.S.C. 7801)); 17 ‘‘(cc) institutions of higher 18 education; and 19 ‘‘(dd) health care facilities; 20 ‘‘(IV) private entities; and 21 ‘‘(V) philanthropic organizations. 22 ‘‘(4) GRANT AMOUNTS.— 23 ‘‘(A) MAXIMUM.—Except as provided in 24 subparagraph (B), the amount of any grant 25 VerDate Sep 11 2014 19:55 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3964.IH H3964 pbinns on DSKJLVW7X2PROD with $$_JOB 8 •HR 3964 IH made under this section shall not exceed 75 1 percent of the total project cost. 2 ‘‘(B) SECRETARIAL AUTHORITY TO AD- 3 JUST.— 4 ‘‘(i) IN GENERAL.—The Secretary 5 may make grants of 100 percent of the de- 6 velopment costs of the project for which 7 the grant is provided to an eligible entity 8 if the Secretary determines that the project 9 serves an area of rural households where 10 the population density is fewer than 7 11 households per square mile. 12 ‘‘(ii) DEFINITION OF DEVELOPMENT 13 COSTS.—In this paragraph, the term ‘de- 14 velopment costs’ means costs of— 15 ‘‘(I) construction, including labor 16 and materials; 17 ‘‘(II) project applications; and 18 ‘‘(III) other development activi- 19 ties, as determined by the Secretary. 20 ‘‘(iii) DENSITY DETERMINATIONS.—In 21 determining population density under this 22 section, the Secretary shall prescribe a cal- 23 culation method which— 24 VerDate Sep 11 2014 19:55 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3964.IH H3964 pbinns on DSKJLVW7X2PROD with $$_JOB 9 •HR 3964 IH ‘‘(I) utilizes publicly available 1 data; and 2 ‘‘(II) includes only those areas in 3 which the applicant is able to meet 4 the service requirements under this 5 section, as determined by the Sec- 6 retary. 7 ‘‘(5) FEES.—In the case of loan guarantees 8 issued or modified under this section, the Secretary 9 shall charge and collect from the lender fees in such 10 amounts as to reduce the costs of subsidies for guar- 11 anteed loans, except that the amount of the fees 12 shall be determined so as to not act as a bar to par- 13 ticipation in the programs and to not be inconsistent 14 with current practices in the marketplace. 15 ‘‘(d) ELIGIBILITY.— 16 ‘‘(1) ELIGIBLE ENTITIES.— 17 ‘‘(A) IN GENERAL.—To be eligible to ob- 18 tain a grant, loan, or loan guarantee under this 19 section, an entity shall— 20 ‘‘(i) demonstrate the ability to furnish 21 or improve service in order to meet the 22 broadband buildout requirements estab- 23 lished under subsection (e)(3) in all or part 24 of an unserved rural area; 25 VerDate Sep 11 2014 19:55 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3964.IH H3964 pbinns on DSKJLVW7X2PROD with $$_JOB 10 •HR 3964 IH ‘‘(ii) submit to the Secretary an appli- 1 cation at such time, in such manner, and 2 containing such information as the Sec- 3 retary may require; and 4 ‘‘(iii) agree to complete buildout of 5 the broadband infrastructure described in 6 the application by not later than 5 years 7 after the initial date on which the applica- 8 tion is approved and the initial funds pur- 9 suant to that award are received by the ap- 10 plicant. 11 ‘‘(B) LIMITATION.—The Secretary may 12 not provide to an eligible entity that provides 13 telecommunications or broadband service to at 14 least 20 percent of the households in the United 15 States, funds under this section for a fiscal year 16 in excess of 15 percent of the funds made avail- 17 able under subsection (j) for the fiscal year. 18 ‘‘(2) ELIGIBLE PROJECTS.— 19 ‘‘(A) GRANT.—To be eligible for a grant 20 under this section, a project shall— 21 ‘‘(i) be carried out in a proposed serv- 22 ice territory in which not less than 90 per- 23 cent of the households are unserved by ter- 24 restrial wireline or licensed wireless 25 VerDate Sep 11 2014 19:55 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3964.IH H3964 pbinns on DSKJLVW7X2PROD with $$_JOB 11 •HR 3964 IH broadband service speeds of at least 100 1 Mbps downstream transmission capacity 2 and 20 Mbps upstream transmission ca- 3 pacity, or such higher speed thresholds as 4 the Secretary may determine constitute an 5 unserved rural area pursuant to subsection 6 (e)(2); and 7 ‘‘(ii) not concurrently receive any 8 other broadband grant administered by the 9 Rural Utilities Service, the Department of 10 the Treasury, the National Telecommuni- 11 cations and Information Administration, or 12 a State grant program. 13 ‘‘(B) LOAN OR LOAN GUARANTEE.—A bor- 14 rower may use a loan or loan guarantee pro- 15 vided under this section to carry out a project 16 in a proposed service territory only if, as of the 17 date on which the application for the loan or 18 loan guarantee is submitted, not less than 50 19 percent of the locations in the proposed service 20 territory are unserved or have service levels 21 below the minimum acceptable level of fixed ter- 22 restrial broadband service, whether wireline or 23 licensed wireless, established under subsection 24 (e). 25 VerDate Sep 11 2014 19:55 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3964.IH H3964 pbinns on DSKJLVW7X2PROD with $$_JOB 12 •HR 3964 IH ‘‘(3) EQUITY AND MARKET SURVEY REQUIRE- 1 MENTS.— 2 ‘‘(A) IN GENERAL.—The Secretary may re- 3 quire an entity to provide matching funds under 4 this section in an amount not to exceed 10 per- 5 cent of the amount of the grant, loan, or loan 6 guarantee requested in the application of the 7 entity, unless the Secretary determines that a 8 higher percentage is required for financial feasi- 9 bility. 10 ‘‘(B) MARKET SURVEY.— 11 ‘‘(i) IN GENERAL.—The Secretary 12 may require an entity that proposes to 13 have a subscriber projection of more than 14 20 percent of the broadband service mar- 15 ket in a rural area to submit to the Sec- 16 retary a market survey. 17 ‘‘(ii) LESS THAN 20 PERCENT.—The 18 Secretary may not require an entity that 19 proposes to have a subscriber projection of 20 less than 20 percent of the broadband 21 service market in a rural area to submit a 22 market survey under clause (i). 23 VerDate Sep 11 2014 19:55 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H3964.IH H3964 pbinns on DSKJLVW7X2PROD with $$_JOB 13 •HR 3964 IH ‘‘(iii) INFORMATION.—Information 1 submitted under this subparagraph shall 2 be— 3 ‘‘(I) certified by the affected 4 community, city, county, or designee; 5 or 6 ‘‘(II) demonstrated on— 7 ‘‘(aa) the broadband map of 8 the affected State if the map con- 9 tains address-level data; or 10 ‘‘(bb) the National 11 Broadband Map if address-level 12 data is unavailable. 13 ‘‘(4) STATE AND LOCAL GOVERNMENTS AND IN- 14 DIAN TRIBES.—Subject to paragraph (1), a State or 15 local government (including any agency, subdivision, 16 or instrumentality thereof (including consortia there- 17 of)) and an Indian tribe shall be eligible for assist- 18 ance under this section to provide broadband serv- 19 ices to a ru [Text truncated for display. 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