[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1439 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 1439

  To reauthorize the broadband loan and loan guarantee program under 
           title VI of the Rural Electrification Act of 1936.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 21, 2007

  Mr. Roberts (for himself and Mr. Salazar) introduced the following 
      bill; which was read twice and referred to the Committee on 
                  Agriculture, Nutrition, and Forestry

_______________________________________________________________________

                                 A BILL


 
  To reauthorize the broadband loan and loan guarantee program under 
           title VI of the Rural Electrification Act of 1936.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Rural Broadband 
Improvement Act of 2007''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Rural broadband access reauthorization.
Sec. 3. Clarification of eligible rural area.
Sec. 4. Acceleration of loan applications.
Sec. 5. Elimination of 2-percent limit.
Sec. 6. Grant program.
Sec. 7. Loan security.
Sec. 8. Expansion of the terms of loans.
Sec. 9. Clarification of neutrality standard.

SEC. 2. RURAL BROADBAND ACCESS REAUTHORIZATION.

    (a) Extension of Loan Program.--Section 601(k) of the Rural 
Electrification Act of 1936 (7 U.S.C. 950bb(k)) is amended by striking 
``September 30, 2007'' and inserting ``September 30, 2012''.
    (b) Authorization of Appropriations.--Section 601(j) of the Rural 
Electrification Act of 1936 (7 U.S.C. 950bb(j)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (A), by striking ``2002 through 
                2005'' and inserting ``2008 through 2010''; and
                    (B) in subparagraph (B), by striking ``2006 and 
                2007'' and inserting ``2011 and 2012''; and
            (2) in paragraph (3), by striking ``2007'' and inserting 
        ``2012''.

SEC. 3. CLARIFICATION OF ELIGIBLE RURAL AREA.

    (a) In General.--Section 601(b)(2) of the Rural Electrification Act 
of 1936 (7 U.S.C. 950bb(b)(2)) is amended to read as follows:
            ``(2) Eligible rural area.--The term `eligible rural area' 
        means any area other than--
                    ``(A) a city or town that has a population of 
                greater than 20,000 inhabitants;
                    ``(B) the urbanized area contiguous and adjacent to 
                such a city or town; and
                    ``(C) an area determined by the Secretary to be 
                predominantly urban in character.''.
    (b) Conforming Amendment.--Section 601 of the Rural Electrification 
Act of 1936 (7 U.S.C. 950bb) is amended--
            (1) by striking ``eligible rural community'' each place 
        that term appears and inserting ``eligible rural area''; and
            (2) by striking ``eligible rural communities'' each place 
        that term appears and inserting ``eligible rural areas''.
    (c) Non-Duplication Requirement.--Section 601(c) of the Rural 
Electrification Act of 1936 (7 U.S.C. 950bb(c)) is amended by adding at 
the end the following:
            ``(3) Non-duplication requirement.--
                    ``(A) In general.--No loan shall be made under this 
                section unless the Secretary determines (and set forth 
                his reasons therefor in writing) that no duplication of 
                terrestrial lines, facilities, or systems, providing 
                broadband services will result therefrom.
                    ``(B) Exception.--
                            ``(i) In general.--The non-duplication 
                        prohibition under subparagraph (A) may be 
                        waived if the Secretary, in his discretion, 
                        determines that such duplication is necessary 
                        and incidental in order to furnish or improve 
                        broadband service in an eligible rural area.
                            ``(ii) Limitation.--The waiver authority 
                        granted to the Secretary under clause (i) may 
                        only be used to provide loans or loan 
                        guarantees for duplication of service when at 
                        least 75 percent of the total end users served 
                        by the proposed project to be funded by such 
                        loan or loan guarantee are without access to 
                        broadband service.
            ``(4) Submission and notification of required 
        information.--
                    ``(A) In general.--No loan shall be made under this 
                section unless the entity eligible to obtain such loan 
                or loan guarantee--
                            ``(i) submits to the Secretary the 
                        following information relating to each 
                        incumbent broadband service provider that 
                        provides broadband service in the area to be 
                        served by the entity:
                                    ``(I) Name and physical address of 
                                such provider.
                                    ``(II) The rate such provider 
                                charges for use of its network or 
                                services.
                                    ``(III) The service area of such 
                                provider; and
                            ``(ii) provides notice, in writing, to each 
                        such provider when the entity has submitted 
                        such information to the Secretary.
                    ``(B) 30-day public comment period.--The 
                Secretary--
                            ``(i) shall make no loan under this section 
                        unless the Secretary has provided for a 30-day 
                        period for public comment on the loan and the 
                        proposed scope and use of the proceeds from 
                        such loan; and
                            ``(ii) may, in response to such comments, 
                        make such modifications to the loan as he deems 
                        appropriate.''.

SEC. 4. ACCELERATION OF LOAN APPLICATIONS.

    (a) 180-Day Processing Period.--Section 601(c) of the Rural 
Electrification Act of 1936 (7 U.S.C. 950bb(c)), as amended by section 
4(c), is further amended by adding at the end the following:
            ``(5) 180-day processing period.--Not later than 180 days 
        after the receipt of an application for a loan or loan 
        guarantee under this section, the Secretary shall complete 
        processing of each such application.''.
    (b) Simplification of the Application Process and Post-Application 
Audit Requirements.--
            (1) In general.--In carrying out title VI of the Rural 
        Electrification Act of 1936 (7 U.S.C. 950bb et seq.), the 
        Secretary of Agriculture, in consultation with the 
        Administrator of the Rural Utilities Service, shall--
                    (A) remove any duplicative or unnecessary 
                application or audit requirements under that title, 
                including allowing parent companies, and their wholly 
                owned subsidiaries, to file a single consolidated 
                application or audit report, if such application or 
                report includes all relevant financial information 
                concerning the project which is the subject of the loan 
                or loan guarantee;
                    (B) reduce the cost and paperwork associated with 
                such requirements;
                    (C) ensure that the Secretary examines the total 
                business plan of each applicant for a loan or loan 
                guarantee under that title, including the revenue such 
                applicant generated from sources unrelated to its 
                broadband service, but connected or otherwise related 
                to the facilities financed by the loan or loan 
                guarantee;
                    (D) ensure that the Secretary requires franchise 
                agreements--
                            (i) only from those areas in which the 
                        funds from any loan or loan guarantee under 
                        that title are to be used; and
                            (ii) from such areas only upon the release 
                        of such funds, as a condition for such release, 
                        and not upon the initial filing of any 
                        application under section 601 of the Rural 
                        Electrification Act of 1936 (7 U.S.C. 950bb);
                    (E) eliminate the required submission of an area 
                survey under that title; and
                    (F) require that any recipient of a loan or loan 
                guarantee under that title uses the funds from such 
                loan or loan guarantee within 3 years after receipt of 
                such funds to build out its broadband service in the 
                eligible rural area for which such funds were approved, 
                except if the Secretary determines that the recipient 
                was unable to expend such funds due to circumstances 
                beyond the control of the recipient.
            (2) Definition of subsidiary.--In this subsection, the term 
        ``subsidiary'' means a business entity controlled, directly or 
        indirectly, by another business entity or person.
    (c) Additional Funding for Staff.--Section 601 of the Rural 
Electrification Act of 1936 (7 U.S.C. 950bb) is amended by adding at 
the end the following:
    ``(l) Additional Staff.--The Secretary, in his or her discretion, 
may hire such additional administrative personnel, including general 
field representatives and legal staff, as is necessary to carry out the 
administrative duties under this section.''.

SEC. 5. ELIMINATION OF 2-PERCENT LIMIT.

    Section 601(d) of the Rural Electrification Act of 1936 (7 U.S.C. 
950bb(d)) is amended by striking paragraph (3).

SEC. 6. GRANT PROGRAM.

    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. 602. RURAL AREA MAP AND CONNECT GRANT PROGRAM.

    ``(a) Purposes.--The purposes of any grant under subsection (b) 
are--
            ``(1) to complement the loan and loan guarantee program 
        under section 601 with grants administered by the Secretary;
            ``(2) to promote public-private partnerships for the 
        mapping of broadband availability and demand in rural areas; 
        and
            ``(3) to enhance the feasibility of providing broadband 
        service to rural areas.
    ``(b) Grants Authorized.--
            ``(1) In general.--The Secretary shall award grants to 
        eligible entities for the development and implementation of 
        statewide initiatives to identify and track the availability 
        and adoption of broadband services within eligible rural areas.
            ``(2) Competitive basis.--All grants under paragraph (1) 
        shall be awarded on a competitive basis.
    ``(c) Application.--To be eligible to receive a grant under 
subsection (b), an eligible entity shall submit an application to the 
Secretary, at such time, in such manner, and containing such 
information as the Secretary may require.
    ``(d) Cap on Grant Amount.--Any grant awarded under subsection (b) 
shall not exceed an amount that is equal to the amount that is 20 
percent of the net projected cost of any initiative to be funded by 
such amounts.
    ``(e) Use of Funds.--A grant awarded to an eligible entity under 
subsection (b) shall be used--
            ``(1) to ensure that such entity works collaboratively with 
        broadband service providers to encourage broadband deployment 
        and use in areas without broadband service;
            ``(2) to identify and track--
                    ``(A) rural areas in each State that do not have 
                broadband service;
                    ``(B) the rate at which residential and business 
                end users adopt such service;
                    ``(C) possible suppliers of such service; and
                    ``(D) barriers to the adoption of such service, 
                including whether or not--
                            ``(i) the demand for such services is 
                        absent; and
                            ``(ii) the supply for such services is 
                        capable of meeting the demand for such 
                        services;
            ``(3) to create and facilitate in eligible rural areas in a 
        State a local rural broadband planning team--
                    ``(A) comprised of relevant rural area 
                representatives, including, where applicable, 
                representatives of business, education, health care, 
                local government, agriculture, and broadband service 
                providers; and
                    ``(B) which shall--
                            ``(i) baseline broadband use across 
                        relevant rural area sectors;
                            ``(ii) set goals for improved broadband use 
                        within each sector; and
                            ``(iii) develop a tactical business plan 
                        for achieving its goals;
            ``(4) to facilitate information exchange regarding the use, 
        demand, and existence of broadband service between the public 
        and private sectors;
            ``(5) to create within each State a geographic inventory 
        map of broadband service in order to identify gaps in broadband 
        service in eligible rural areas through a method of geographic 
        information system mapping of service availability and 
        geographic information system analysis at the census block 
        level;
            ``(6) to provide a baseline assessment of statewide 
        broadband deployment in eligible rural areas within the State; 
        and
            ``(7) to ensure nondisclosure of any proprietary content or 
        information that may be accessed, discovered, or reported in 
        carrying out any of the activities described in paragraphs (1) 
        through (6).
    ``(f) Participation Limit.--
            ``(1) Avoiding duplicative initiatives.--No State shall 
        have more than 1 eligible entity receive a grant under this 
        section to perform the activities described in subsection (d) 
        within that State.
            ``(2) Prohibition on continuing grants.--For each State, an 
        eligible entity may not receive a new grant under this section 
        to fund the activities described in subsection (d) within that 
        State, if such entity obtained prior grant awards under this 
        section to fund the same activities in that State in any 
        previous year.
    ``(g) Report.--Each recipient of a grant under subsection (b) shall 
submit a report on the use of the funds provided by the grant to the 
Secretary.
    ``(h) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out the provisions of this section $20,000,000 
for each of fiscal years 2008 through 2012.
    ``(i) No Regulatory Authority.--Nothing in this section shall be 
construed as giving any public or private entity established or 
affected by this section any regulatory jurisdiction or oversight 
authority over providers of broadband services or information 
technology.
    ``(j) Definitions.--In this section:
            ``(1) Secretary, broadband service, and eligible rural 
        area.--The terms `Secretary', `broadband service', and 
        `eligible rural area' have the same meaning as in section 601 
        of this Act.
            ``(2) Eligible entity.--The term `eligible entity' means a 
        nonprofit organization that is selected by a State to work in 
        partnership with State agencies and private sector partners in 
        identifying and tracking the availability and adoption of 
        broadband services in eligible rural areas of that State.
            ``(3) Nonprofit organization.--The term `nonprofit 
        organization' means an organization--
                    ``(A) described in section 501(c)(3) of the 
                Internal Revenue Code of 1986 and exempt from tax under 
                section 501(a) of such Code;
                    ``(B) no part of the net earnings of which inures 
                to the benefit of any member, founder, contributor, or 
                individual;
                    ``(C) that has an established competency and proven 
                record of working with public and private sectors to 
                accomplish widescale deployment and adoption of 
                broadband services and information technology; and
                    ``(D) the board of directors of which is not 
                composed of a majority of individuals who are also 
                employed by, or otherwise associated with, any Federal, 
                State, or local government or any Federal, State, or 
                local agency.''.

SEC. 7. LOAN SECURITY.

    (a) Adequacy of Security.--In carrying out title VI of the Rural 
Electrification Act of 1936 (7 U.S.C. 950bb et seq.), the Secretary of 
Agriculture, in consultation with the Administrator of the Rural 
Utilities Service, shall ensure that--
            (1) the type, amount, and method of security used to secure 
        any loan or loan guarantee under that title is commensurate to 
        the risk involved with each such loan or loan guarantee, 
        particularly when a loan or loan guarantee is issued to a 
        financially healthy, strong, and stable entity; and
            (2) any loan guarantee issued under that title is 
        guaranteed for not less than 80 percent of the amount of the 
        outstanding principal of the loan to be guaranteed.
    (b) 10 Percent Equity Requirement.--Section 601(d) of the Rural 
Electrification Act of 1936 (7 U.S.C. 950bb(d)), as amended by section 
5, is further amended by adding at the end the following:
            ``(3) 10 percent equity requirement.--
                    ``(A) In general.--An entity shall not be eligible 
                for a loan or loan guarantee under this section unless 
                the entity can demonstrate a minimum equity position 
                equal to or greater than 10 percent of the requested 
                loan or loan guarantee amount.
                    ``(B) Shortfall exception.--If at the time an 
                entity submits its application for a loan under this 
                section, the entity cannot meet the requirement under 
                subparagraph (A), the Secretary may modify or waive the 
                requirement, if the entity can meet a minimum TIER 
                requirement of 1.''.
    (c) Proof of Financial Feasability.--Section 601(d) of the Rural 
Electrification Act of 1936 (7 U.S.C. 950bb(d)), as amended by 
subsection (c) and section 5, is further amended by adding at the end 
the following:
            ``(4) Proof of financial feasability.--
                    ``(A) In general.--An entity shall not be eligible 
                for a loan under this section unless the entity can 
                demonstrate the ability to generate sufficient revenues 
                to--
                            ``(i) cover its expenses and service its 
                        debt; and
                            ``(ii) meet a minimum TIER requirement of 1 
                        by the end of the 5-year forecast period used 
                        by the Secretary to determine the feasability 
                        of each loan.
                    ``(B) Limitation.--The Secretary shall not 
                promulgate regulations requiring eligible entities to 
                meet a minimum TIER requirement greater than 1.
            ``(5) Definition of tier.--In this subsection, the term 
        `TIER' or `Times Interest Earned Ratio' means the ratio of an 
        entity's net income (after taxes) adding back in any interest 
        expense, divided by the entity's interest expense.''.

SEC. 8. EXPANSION OF THE TERMS OF LOANS.

    Section 601(g)(2) of the Rural Electrification Act of 1936 (7 
U.S.C. 950bb(g)(2)) is amended to read as follows:
            ``(2) have a term to be decided by the borrower, provided--
                    ``(A) that such term does not exceed 35 years; and
                    ``(B) that the loan is adequately secured.''.

SEC. 9. CLARIFICATION OF NEUTRALITY STANDARD.

    Section 601(f) of the Rural Electrification Act of 1936 (7 U.S.C. 
950bb(g)(2)) is amended by inserting after ``neutral'' the following: 
``, including the use of the following technologies:
            ``(1) Digital subscriber lines.
            ``(2) Fiber-optic cable.
            ``(3) Coaxial cable.
            ``(4) Wireless technology.
            ``(5) Satellite.''.
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