[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3964 Introduced in House (IH)]
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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
construction, 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. Bowman)
introduced the following bill; which was referred to the Committee on
Agriculture, and in addition to the Committee on Energy and Commerce,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction 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, improvement, and acquisition of facilities and equipment
for broadband service in rural areas, and other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Rural Broadband Modernization Act''.
SEC. 2. RURAL BROADBAND MODERNIZATION.
(a) In General.--Section 601 of the Rural Electrification Act of
1936 (7 U.S.C. 950bb) is amended to read as follows:
``SEC. 601. ACCESS TO BROADBAND TELECOMMUNICATIONS SERVICES IN RURAL
AREAS.
``(a) Purpose.--The purpose of this section is to provide grants,
provide loans, and provide 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) 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 343(a)(13)(A) of the
Consolidated Farm and Rural Development Act (7
U.S.C. 1991(a)(13)(A)); and
``(ii) in the case of a grant or direct
loan, 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
343(a)(13)(F)(i)(I) of such Act to not be a rural area
for purposes of this section.
``(C) Exclusion of certain populations.--The term
does not include any population described in
subparagraph (H) or (I) of section 343(a)(13) of such
Act (7 U.S.C. 1991(a)(13)).
``(c) Grants, Loans, and Loan Guarantees.--
``(1) In general.--The Secretary shall make grants, shall
make loans, and shall 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
that, at a minimum, delivers 100 Mbps (or such greater rate as
the Secretary may establish) symmetrical throughput for each
rural household in the proposed service area.
``(2) Applications.--The Secretary shall establish an
application process for grants under this section that--
``(A) permits a single application for a grant and
a loan under title I, II, or this title that is
associated with the grant;
``(B) provides a single decision to award such a
grant and loan; and
``(C) ensures timely consideration of applications
by approving or denying applications within 30 days
after submission.
``(3) Priority.--
``(A) In general.--In making grants, making loans,
and guaranteeing loans under paragraph (1), the
Secretary shall--
``(i) give the highest priority to
applications for projects to provide broadband
service to unserved rural communities that do
not have any residential broadband service of
at least--
``(I) a 25-Mbps downstream
transmission capacity; and
``(II) a 3-Mbps upstream
transmission capacity;
``(ii) give priority to applications for
projects to provide the maximum level of
broadband service to the greatest proportion of
rural households in the proposed service area
identified in the application;
``(iii) give priority to eligible entities
that have provided broadband service or utility
service in rural areas for at least 5 years in
the State for which an award is sought;
``(iv) provide equal consideration to all
eligible entities, based on organizational
form; and
``(v) with respect to 2 or more
applications that are given the same priority
under clause (i), give priority to an
application that requests less grant funding
than loan funding.
``(B) Other.--After giving priority to the
applications described in clauses (i) through (iii) of
subparagraph (A), the Secretary shall give priority to
applications--
``(i) for projects to provide broadband
service to rural communities--
``(I) with a population of less
than 10,000 permanent residents;
``(II) that are experiencing
outmigration and have adopted a
strategic community investment plan
under section 379H(d) of the
Consoldiated Farm and Rural Development
Act that includes considerations for
improving and expanding broadband
service;
``(III) with a high percentage of
low income families or persons (as
defined in section 501(b) of the
Housing Act of 1949 (42 U.S.C.
1471(b)));
``(IV) that are isolated from other
significant population centers; or
``(V) that provide rapid and
expanded deployment of fixed and mobile
broadband on cropland and ranchland
within a service territory for use in
various applications of precision
agriculture; and
``(ii) that were developed with the
participation of, and will receive a
substantial portion of the funding for the
project from, 2 or more stakeholders,
including--
``(I) State, local, and tribal
governments;
``(II) nonprofit institutions; that
provide community development or
assistance services;
``(III) community anchor
institutions, such as--
``(aa) public libraries;
``(bb) elementary schools
and secondary schools (as
defined in section 8101 of the
Elementary and Secondary
Education Act of 1965 (20
U.S.C. 7801));
``(cc) institutions of
higher education; and
``(dd) health care
facilities;
``(IV) private entities; and
``(V) philanthropic organizations.
``(4) Grant amounts.--
``(A) Maximum.--Except as provided in subparagraph
(B), the amount of any grant made under this section
shall not exceed 75 percent of the total project cost.
``(B) Secretarial authority to adjust.--
``(i) In general.--The Secretary may make
grants of 100 percent of the development costs
of the project for which the grant is provided
to an eligible entity if the Secretary
determines that the project serves an area of
rural households where the population density
is fewer than 7 households per square mile.
``(ii) Definition of development costs.--In
this paragraph, the term `development costs'
means costs of--
``(I) construction, including labor
and materials;
``(II) project applications; and
``(III) other development
activities, as determined by the
Secretary.
``(iii) Density determinations.--In
determining population density under this
section, the Secretary shall prescribe a
calculation method which--
``(I) utilizes publicly available
data; and
``(II) includes only those areas in
which the applicant is able to meet the
service requirements under this
section, as determined by the
Secretary.
``(5) Fees.--In the case of loan guarantees issued or
modified under this section, the Secretary shall charge and
collect from the lender fees in such amounts as to reduce the
costs of subsidies for guaranteed loans, except that the amount
of the fees shall be determined so as to not act as a bar to
participation in the programs and to not be inconsistent with
current practices in the marketplace.
``(d) Eligibility.--
``(1) Eligible entities.--
``(A) In general.--To be eligible to obtain a
grant, loan, or loan guarantee under this section, an
entity shall--
``(i) demonstrate the ability to furnish or
improve service in order to meet the broadband
buildout requirements established under
subsection (e)(3) in all or part of an unserved
rural area;
``(ii) submit to the Secretary an
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 infrastructure described in the
application by not later than 5 years after the
initial date on which the application is
approved and the initial funds pursuant to that
award are received by the applicant.
``(B) Limitation.--The Secretary may not provide to
an eligible entity that provides telecommunications or
broadband service to at least 20 percent of the
households in the United States, funds under this
section for a fiscal year in excess of 15 percent of
the funds made available under subsection (j) for the
fiscal year.
``(2) Eligible projects.--
``(A) Grant.--To be eligible for a grant under this
section, a project shall--
``(i) be carried out in a proposed service
territory in which not less than 90 percent of
the households are unserved by terrestrial
wireline or licensed wireless broadband service
speeds of at least 100 Mbps downstream
transmission capacity and 20 Mbps upstream
transmission capacity, or such higher speed
thresholds as the Secretary may determine
constitute an unserved rural area pursuant to
subsection (e)(2); and
``(ii) not concurrently receive any other
broadband grant administered by the Rural
Utilities Service, the Department of the
Treasury, the National Telecommunications and
Information Administration, or a State grant
program.
``(B) Loan or loan guarantee.--A borrower may use a
loan or loan guarantee provided under this section 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, not less than
50 percent of the locations in the proposed service
territory are unserved or have service levels below the
minimum acceptable level of fixed terrestrial broadband
service, whether wireline or licensed wireless,
established under subsection (e).
``(3) Equity and market survey requirements.--
``(A) In general.--The Secretary may require an
entity to provide matching funds under this section in
an amount not to exceed 10 percent of the amount of the
grant, 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 a market survey under clause (i).
``(iii) Information.--Information 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 assistance under this section to provide broadband
services to a rural area.
``(5) Technical assistance and training.--
``(A) In general.--The Secretary may provide to any
eligible entity described in paragraph (1) of this
subsection that is applying for assistance under this
section for a project described in subsection
(c)(3)(A)(i) technical assistance and training--
``(i) to prepare reports and surveys
necessary to request grants, loans, and loan
guarantees under this section for broadband
deployment;
``(ii) to improve management, including
financial management, relating to the proposed
broadband deployment;
``(iii) to prepare applications for grants,
loans, and loan guarantees under this section;
or
``(iv) to assist with other areas of need
identified by the Secretary.
``(B) Funding.--Not less than 3 percent and not
more than 5 percent of the amounts appropriated to
carry out this section for a fiscal year shall be used
for technical assistance and training under this
paragraph.
``(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 to be deemed served for purposes of
this section shall be via terrestrial wireline or licensed
wireless networks with at least--
``(A) a 100-Mbps downstream transmission capacity;
and
``(B) a 20-Mbps upstream transmission capacity.
``(2) Adjustments.--At least once every 2 years and more
frequently as the Secretary deems necessary and appropriate,
the Secretary shall review, and may adjust through notice
published in the Federal Register--
``(A) the minimum acceptable level of broadband
service established under paragraph (1) for an area to
be deemed unserved and thus eligible for an award under
this section; and
``(B) the broadband buildout requirements under
paragraph (3), to ensure that high quality, cost-
effective broadband service is provided to rural areas.
``(3) Broadband buildout requirements.--
``(A) In general.--The term `broadband buildout
requirement' means the level of broadband service an
applicant receiving assistance under this section must
agree, at the time the application is finalized, to
provide for the duration of any project-related
agreement between the applicant and the Secretary.
``(B) Minimum requirement.--The broadband buildout
requirement shall, at a minimum, deliver 100 Mbps
symmetrical throughout for each rural household in the
proposed service area. The Secretary may increase this
minimum requirement for the performance broadband
service in considering new applications.
``(C) Substitute service standards for unique
service territories.--If an applicant shows that it
would be cost prohibitive to meet the broadband
buildout requirements established under this paragraph
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 that should continue to consider the
best technology available to meet the needs of the
residents in the unserved area.
``(f) Technological Neutrality.--For purposes of determining
whether to provide assistance for a project under this section, the
Secretary shall use criteria that are technologically neutral and
criteria that ensures the technology can meet program broadband
buildout requirements and the evolving needs of rural households and
businesses, including precision agriculture.
``(g) Terms and Conditions for Loans and Loan Guarantees.--
``(1) In general.--Notwithstanding 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) Recurring revenue.--The Secretary shall consider the
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) Payment Assistance for Certain Loan and Grant Recipients.--
``(1) Use of grant funds.--The Secretary may use the funds
appropriated for a grant under this title for the cost (as
defined by section 502 of the Congressional Budget Act of 1974)
of providing assistance under paragraph (2) of this subsection.
``(2) Payment assistance.--When providing a grant under
this title, the Secretary, at the sole discretion of the
Secretary, may make--
``(A) a subsidized loan, which shall bear a reduced
interest rate at such a rate as the Secretary
determines appropriate to meet the objectives of the
program; or
``(B) a payment assistance loan, which shall--
``(i) require no interest and principal
payments while the borrower is--
``(I) in material compliance with
the loan agreement; and
``(II) meeting the milestones and
objectives of the project agreed to
under paragraph (3); and
``(ii) require such nominal periodic
payments as the Secretary determines to be
appropriate.
``(3) Agreement on milestones and objectives.--With respect
to payment assistance provided under paragraph (2), before
entering into the agreement under which the payment assistance
will be provided, the applicant and the Secretary shall agree
to milestones and objectives of the project.
``(4) Amendment of milestones and objectives.--The
Secretary and the applicant may jointly agree to amend the
milestones and objectives agreed to under paragraph (3).
``(5) Considerations.--In deciding to utilize the payment
assistance authority under paragraph (2), the Secretary shall
consider whether or not the payment assistance will--
``(A) improve the compliance of the grantee with
any commitments made through the grant agreement;
``(B) promote the completion of the broadband
project;
``(C) protect taxpayer resources; and
``(D) support the integrity of the broadband
programs administered by the Secretary.
``(6) Limitations on payment assistance.--The Secretary may
not make a payment assistance loan under paragraph (2)(B) to an
entity receiving a grant under this section that is a recipient
of a loan under title I or II that is associated with the
grant.
``(j) Funding.--
``(1) Limitations on authorization of appropriations.--
There is authorized to be appropriated to the Secretary to
carry out this section not more than $500,000,000 for each of
fiscal years 2024 through 2028, to remain available until
expended.
``(2) Allocation of funds.--
``(A) In general.--From 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) Amount.--The 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 or fewer inhabitants in the
State; bears to
``(ii) the number of communities with a
population of 2,500 or fewer inhabitants 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.
``(k) Termination of Authority.--No grant, or loan, or loan
guarantee may be made under this section after September 30, 2028.''.
(b) Effective Date.--The amendment made by subsection (a) shall
take effect on October 1, 2023.
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