I 111th CONGRESS 1st Session H. R. 760 IN THE HOUSE OF REPRESENTATIVES January 28, 2009 Ms. Eshoo (for herself, Mr. Thompson of California, and Mr. Markey of Massachusetts) introduced the following bill; which was referred to the Committee on Ways and Means, 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 amend the Internal Revenue Code of 1986 to provide an income tax credit to holders of bonds financing new advanced broadband infrastructure, and for other purposes.

1.

Short title

This Act may be cited as the Advanced Broadband Infrastructure Bond Initiative of 2009.

2.

Credit to holders of qualified advanced broadband infrastructure bonds

(a)

In general

Subpart I of part IV of subchapter A of chapter 1 (relating to qualified tax credit bonds) is amended by adding at the end the following new section:

54F.

Credit to holders of qualified advanced broadband infrastructure bonds

(a)

Qualified advanced broadband infrastructure bond

For purposes of this subpart the term qualified advanced broadband infrastructure bond means any bond issued as part of an issue if— (1)100 percent of the available project proceeds of such issue are to be used for any or a series of designated qualified advanced broadband infrastructure projects, and (2)the bond is issued by a qualified issuer. (b)

Limitation on amount of bonds designated

(1)

National limitation

There is a national advanced broadband infrastructure bond limitation for each calendar year. Such limitation for each calendar year, 2009, 2010, and 2011, is— (A)in the case of qualified issuers which are States or local governments, $1,000,000,000, and (B)in the case of all other issuers, $10,000,000,000, and, except as provided in paragraph (4), zero thereafter.(2)

Allocation of limitation

The national advanced broadband infrastructure bond limitation for a calendar year shall be allocated by the Secretary among the qualified advanced broadband infrastructure projects designated for such year to ensure an equitable distribution among the States and to maximize the number of jobs and economic output. (3)

Designation subject to limitation amount

The maximum aggregate face amount of bonds issued during any calendar year which may be designated under subsection (a) with respect to any qualified advanced broadband infrastructure project shall not exceed the limitation amount allocated to such project under paragraph (2) for such calendar year. (4)

Carryover of unused limitation

(A)

In general

If for any calendar year— (i)the national advanced broadband infrastructure limitation amount, exceeds (ii)the amount of bonds issued during such year which are designated under subsection (a) with respect to qualified advanced broadband infrastructure projects, the national advanced broadband infrastructure limitation amount for the following calendar year shall be increased by the amount of such excess.(B)

Limitation of carryover

Any carryforward of a limitation amount may be carried only to the first 3 years following the unused limitation year. For purposes of the preceding sentence, a limitation amount shall be treated as used on a first-in first-out basis. (c)

Qualified advanced broadband infrastructure project

For purposes of this section— (1)

In general

The term qualified advanced broadband infrastructure project means a project approved by the Secretary to construct advanced broadband infrastructure that— (A)provides residential or small business consumers with access to the internet in the normal course of operations at transmission speeds that comply with the requirements of paragraph (3) for the provision of advanced broadband communications services; and (B)operates advanced broadband service networks on an open access basis, as defined by the Federal Communications Commission. (2)

Approval requirements

(A)

In general

A project may not be approved as a qualified advanced broadband infrastructure project unless— (i)the issuer with respect to such project certifies that the NTIA Administrator has approved such project in writing, and (ii)the project— (I)in the case of a qualified issuer which is a State or local government, meets the requirements of subparagraph (B), and (II)in the case of any other qualified issuer, meets the requirements of subparagraph (C). (B)

Requirements for State or local government projects

The requirements of this subparagraph are met if— (i)the project is nominated by a State or local government for approval as a qualified advanced broadband infrastructure project, (ii)such State or local government has provided private sector entities with notice of the opportunity during a 30-day period to bid to provide the services offered by such nominated project, and (iii)such project is approved by the Secretary, upon recommendation of the Secretary of Commerce, as a qualified advanced broadband infrastructure project or a series of qualified advanced broadband infrastructure projects. (C)

Requirements for other projects

The requirements of this subparagraph are met if— (i)the project— (I)in the case of a qualified issuer described in subsection (d)(1)(B), is with respect to such provision of services within the designated operating area of the jurisdiction of the State or local governing authority from which such qualified issuer has obtained a certificate of public convenience and necessity (or the equivalent), or, in the case of a qualified issuer described in subsection (d)(1)(C), is with respect to such provision of services within the area for which such qualified issuer is licensed to provide commercial mobile service by the Federal Communications Commission, or (II)is nominated by a State Public Utility Commission or local governing authority for approval as a qualified advanced broadband infrastructure project, or by the Federal Communications Commission under paragraph (5), and (ii)such project is approved by the Secretary, upon receipt of such a nomination, as a qualified advanced broadband infrastructure project or a series of qualified advanced broadband infrastructure projects. (3)

Transmission speed requirements

(A)

In general

A project complies with the requirements of this subparagraph if it provides each subscribing residential or small business consumer with access to the internet in the normal course of operations at transmission speeds of at least— (i)50 megabits per second downstream and 20 megabits per second upstream, or (ii)10 megabits per second downstream and 2 megabits per second upstream for the provision of advanced broadband communications services using commercial mobile services. (B)

Transmission speed adjustments

The Secretary shall adjust the transmission speeds required under clause (i) to reflect the most recent increase in the transmission speed requirements prescribed by the NTIA Administrator under section 159(c) of the National Telecommunications and Information Administration Organization Act. Any adjustment under the preceding sentence shall apply to bonds issued later than 60 days after the date such increase is prescribed by the NTIA Administrator. (4)

Technology neutrality

The Secretary shall approve projects as qualified advanced broadband infrastructure projects on a technology neutral basis. (5)

Alternate nominating procedure

If a State Public Utility Commission or local governing authority that receives, from an entity holding a certificate of public convenience and necessity (or the equivalent) described in paragraph (2)(C)(i)(I), a formal request for nomination under paragraph (2)(C)(i)(II) does not act on the nomination within 30 days of the submission of such request, the Federal Communications Commission shall act on such request for nomination within 30 days the submission of a notice from such entity of the inaction by such State Public Utility Commission or local governing authority on such formal request. (d)

Other definitions

For purposes of this section— (1)

Qualified issuer

The term qualified issuer means— (A)a State or local government, (B)an entity that has obtained from a State Public Utility Commission or local governing authority a certificate of public convenience and necessity (or the equivalent), (C)an entity that has a project that is nominated by a State Public Utility Commission or local governing authority for approval as a qualified advanced broadband infrastructure project, or (D)a commercial mobile service provider which is licensed to provide mobile service by the Federal Communication Commission. (2)

NTIA Administrator

The term NTIA Administrator means the Administrator of the National Telecommunications and Information Administration within the Department of Commerce, who is the Assistant Secretary of Commerce for Communications and Information. (3)

State Regulatory Utility Commission

The term State Regulatory Utility Commission means the government agency in a State that regulates the entry into and provision of telecommunications services. (e)

Designation preferences

(1)

In general

With respect to designations under this section, preferences shall be given— (A)to nominations reflecting expeditious deployment of advanced broadband infrastructure, (B)to approved projects serving areas in the following order: unserved areas, underserved areas, and served areas, and (C)in the case of a project with respect to a qualified issuer which is a State or local government, to nominations reflecting partnerships and comprehensive planning between State and local governments and the private sector or existing governmental entities that provide telecommunications services, with construction and operation performed by the private sector entity or the existing governmental entity. (2)

Definitions

For purposes of this subsection— (A)

Served area

The term served area means an area served by at least 2 wireline broadband service providers. (B)

Underserved area

The term underserved area means an area served by 1 wireline broadband service provider. (C)

Unserved area

The term unserved area means an area not served by any wireline broadband service provider. (f)

Failure To maintain transmission speed requirements

For purposes of subsection (a)(1), the proceeds from the sale of an issue shall not be treated as used for a qualified advanced broadband infrastructure project to the extent that it is certified to the Secretary by the NTIA Administrator under section 159 of the National Telecommunications and Information Administration Organization Act that the project has failed to meet the applicable transmission speed requirements. The Secretary shall, in consultation with the NTIA Administrator, prescribe regulations specifying remedial actions that may be taken (including conditions to taking such remedial actions) to prevent such a failure from causing a bond to fail to be a qualified advanced broadband infrastructure bond. (g)

Reporting

Issuers of qualified advanced broadband infrastructure bonds shall submit reports similar to the reports required under section 149(e) and shall maintain a file for public inspection that contains quarterly certifications by an officer of the entity operating the advanced broadband infrastructure that it is providing in the course of normal operations advanced broadband communication services to each consumer served by the qualified advanced broadband infrastructure project. Such reports and certifications shall be made available on the issuer’s website and shall include a description of the use of the proceeds of issues by such issuer.

. (b)

Conforming amendments

(1)Paragraph (1) of section 54A(d) is amended by striking or at the end of subparagraph (C), by inserting or at the end of subparagraph (D), and by inserting after subparagraph (D) the following new subparagraph: (E)a qualified advanced broadband infrastructure bond. . (2)Subparagraph (C) of section 54A(d)(2) is amended by striking and at the end of clause (iii), by striking the period at the end of clause (iv) and inserting , and, and by adding at the end the following new clause: (v)in the case of a qualified advanced broadband infrastructure bond, a purpose specified in section 54F(a)(1). . (c)

Clerical amendment

The table of sections for subpart I of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item: Sec. 54F. Credit to holders of qualified advanced broadband infrastructure bonds. . (d)

Effective date

The amendments made by this section shall apply to obligations issued after the date of enactment of this Act. (e)

NTIA responsibilities

The National Telecommunications and Information Administration Organization Act (47 U.S.C. 901 et seq.) is amended by adding at the end of part C the following new section:

159.

Advanced Broadband Infrastructure Bond Program

(a)

Initial Certification

The NTIA shall receive requests for approval of qualified advanced broadband infrastructure projects with respect to qualified advanced infrastructure bonds under section 54F of the Internal Revenue Code of 1986, and, within 30 days of receipt, issue a written decision as to whether such project meets the requirements of such section relating to qualified advanced broadband infrastructure projects. (b)

Monitoring

The NTIA shall develop a program to monitor the implementation of qualified advanced broadband infrastructure projects under section 54F of such Code— (1)to ensure that such projects meet the applicable transmission speed requirements under such section; (2)to provide notification to any issuer with respect to a project not in compliance with such speed requirements and include in such notice an explanation that if such project fails to satisfy such requirements not later than 60 days after the date of such notice— (A)the certification described in paragraph (3) shall be made, and (B)the bond with respect to such project risks failing to be a qualified advanced broadband infrastructure bond; and (3)in the case of a project which does not satisfy such requirements before the expiration of such 60-day period, to certify to the Secretary of the Treasury that such a project has not met such requirements. (c)

Authority To Increase Transmission Speed Requirements

On December 31, 2009, and December 31, 2010, the NTIA shall, after providing public notice and an opportunity for comment, issue a decision determining whether and by what amount to increase the transmission speed requirements of the advanced broadband infrastructure bond program under section 54F(c)(3) of the Internal Revenue Code of 1986. In reaching the determination, the Assistant Secretary shall ensure that the transmission speed requirements reflect the fastest speeds currently being offered in a generally available service in the normal course of operations to residential and small business consumers by wireline broadband service providers. (d)

Annual report

The NTIA shall, in consultation with the Secretary of the Treasury, transmit to Congress an annual report describing the progress in achieving the goals of the advanced broadband infrastructure bond program, including for the year upon which the report is based— (1)the monetary value of the bonds issued; (2)the transmission speeds being deployed by bond issuers; (3)a description of the qualified advanced broadband infrastructure projects using proceeds from bonds issued under section 54F of such Code; and (4)the results of any rule-making proceedings carried out under the authority provided in subsection (b), including any changes to the transmission speed requirements of the program.

. (f)

FCC Responsibilities

Not later than 45 days after the date of enactment of this Act, the Federal Communications Commission shall complete a rule-making proceeding to define operates advanced broadband service networks on an open access basis, as used in section 54F(c)(1)(B) of the Internal Revenue Code of 1986 (as amended by subsection (a) of this Act).