1.Short
title; table of contents
(a)This Act may be cited
as the Rural Broadband Improvement Act
of 2007
.
(b)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.
2.Rural broadband
access reauthorization
(a)Extension of
loan programSection 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 appropriationsSection
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
.
3.Clarification of
eligible rural area
(a)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)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)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
requirementSection 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)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)
(i)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)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)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 periodThe 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.
.
4.Acceleration of
loan applications
(a)180-day
processing periodSection
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 periodNot 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 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)In this subsection, the term subsidiary
means a business entity controlled, directly or indirectly, by another business
entity or person.
(c)Additional
funding for staffSection 601 of the Rural Electrification Act of
1936 (7 U.S.C. 950bb) is amended by adding at the end the following:
(l)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.
.
5.Elimination of
2-percent limitSection 601(d)
of the Rural Electrification Act of 1936 (7 U.S.C. 950bb(d)) is amended by
striking paragraph (3).
6.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:
602.Rural area map
and connect grant program
(a)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)
(1)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)All grants under paragraph (1) shall be awarded on a
competitive basis.
(c)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)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)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)
(1)Avoiding
duplicative initiativesNo 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 grantsFor 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)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 appropriationsThere 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)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)In
this section:
(1)Secretary,
broadband service, and eligible rural areaThe terms
Secretary
, broadband service, and eligible
rural area
have the same meaning as in section 601 of this Act.
(2)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)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.
.
7.
(a)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 requirementSection 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)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)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 feasabilitySection 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)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)The
Secretary shall not promulgate regulations requiring eligible entities to meet
a minimum TIER requirement greater than 1.
(5)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.
.
8.Expansion of the
terms of loansSection
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.
.
9.Clarification of
neutrality standardSection
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.
.