<enum>I</enum><header>Tax-preferred bonds</header> <section id="idA544BE422B6440D1AD04B92432933041" section-type="subsequent-section"><enum>101.</enum><header>Private activity bonds for qualified broadband projects</header> <subsection id="id9A9A267D7938477992A3236B8789ACFA"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/142">Section 142(a)</external-xref> of the Internal Revenue Code of 1986 is amended by striking <quote>or</quote> at the end of paragraph (14), by striking the period at the end of paragraph (15) and inserting <quote>, or</quote>, and by adding at the end the following new paragraph:</text> <quoted-block display-inline="no-display-inline" id="HFC1932EDA4704B5885D5933E726BC821" style="tax"> <paragraph id="H212936C50C194DD089724D2788EDD9DB"><enum>(16)</enum><text display-inline="yes-display-inline">qualified broadband projects.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HF187AC3BE3544C359C6A913F4DB3B73C"><enum>(b)</enum><header>Qualified broadband projects</header><text>Section 142 of such Code is amended by adding at the end the following new subsection:</text> <quoted-block display-inline="no-display-inline" id="H0F917F1489224E9D919D972642C04F5A" style="tax"> <subsection id="HC0660B863CD54A33B1C7EB842E2C7D58"><enum>(n)</enum><header>Qualified broadband project</header> <paragraph id="H62B2F6204BCE42D195B652CB9A622728"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">For purposes of subsection (a)(16), the term <term>qualified broadband project</term> means any project which—</text> <subparagraph id="id4F7BE72B7BD94D2885A5A35FB5C7B774"><enum>(A)</enum><text display-inline="yes-display-inline">is designed to provide broadband service solely to 1 or more areas—</text> <clause id="id43B4C36B48EC44B78CAABF0DFA870685"><enum>(i)</enum><text display-inline="yes-display-inline">which are rural areas (as defined in section 343(a)(13) of the Consolidated Farm and Rural Development Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1991">7 U.S.C. 1991(a)(13)</external-xref> without regard to subparagraph (B) or (C) thereof), and</text></clause> <clause id="idD71CF1AB158F4A1E8BEBCF86646D093E"><enum>(ii)</enum><text display-inline="yes-display-inline">in which more than 50 percent of residential households do not have access to fixed, terrestrial broadband service which delivers at least 25 megabits per second downstream and at least 3 megabits service upstream, and</text></clause></subparagraph> <subparagraph id="id446D065602294FE7A1406A9B7DD406A0"><enum>(B)</enum><text display-inline="yes-display-inline">results in gigabit capable internet access to residential locations, commercial locations, or a combination of residential and commercial locations, but only if at least 90 percent of the locations provided such access under the project are locations where, before the project, a broadband service provider—</text> <clause id="id3CF866602C454916A395F9C0D627BE2B"><enum>(i)</enum><text display-inline="yes-display-inline">did not provide service, or</text></clause> <clause id="idA8B431E7E8DD4350981FA86E33B2579C"><enum>(ii)</enum><text display-inline="yes-display-inline">did not provide service meeting the minimum speed requirements described in subparagraph (A)(ii).</text></clause></subparagraph></paragraph> <paragraph id="id36385CD0398A433F8673E7FFC4BEA17D"><enum>(2)</enum><header>Notice to broadband providers</header><text display-inline="yes-display-inline">A project shall not be treated as a qualified broadband project unless, before the issue date of any issue the proceeds of which are to be used to fund the project, the issuer—</text> <subparagraph id="idB94B475EA8964948848FD3A5BE7F684E"><enum>(A)</enum><text display-inline="yes-display-inline">notifies each broadband service provider providing broadband service in the area within which broadband services are to be provided under the project of the project and its intended scope,</text></subparagraph> <subparagraph id="idE25CF3EF95F4472E8BB5C4D9438077CD"><enum>(B)</enum><text display-inline="yes-display-inline">includes in such notice a request for information from each such provider with respect to the provider's ability to deploy, manage, and maintain a broadband network capable of providing gigabit capable Internet access to residential or commercial locations, and</text></subparagraph> <subparagraph id="id0CB9D19309B34548945B5564834556E8"><enum>(C)</enum><text display-inline="yes-display-inline">allows each such provider at least 90 days to respond to such notice and request.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="id7CC217521D814625AD79E2DAF0217894"><enum>(c)</enum><header>Partial exception from volume cap</header> <paragraph id="idD123DD92A9414E13BF8A96116396CB9E"><enum>(1)</enum><header>In general</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/146">Section 146(g)</external-xref> of the Internal Revenue Code of 1986 is amended by striking <quote>and</quote> at the end of paragraph (3), by striking the period at the end of paragraph (4) and inserting <quote>, and</quote>, and by inserting immediately after paragraph (4) the following new paragraph:</text> <quoted-block display-inline="no-display-inline" id="idC3D6F91D51194AA29246ABF525836619" style="OLC"> <paragraph commented="no" display-inline="no-display-inline" id="ide029940d-b211-11e9-968c-d1fea73f430f"><enum>(5)</enum><text display-inline="yes-display-inline">75 percent of any exempt facility bond issued as part of an issue described in paragraph (16) of section 142(a) (relating to qualified broadband projects).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="idB51B0258B78F444E8F59D0CB60B9858F"><enum>(2)</enum><header>Government-owned projects</header><text>The last sentence of section 146(g) of such Code is amended by striking <quote>Paragraph (4)</quote> and inserting <quote>Paragraphs (4) and (5)</quote>.</text></paragraph></subsection> <subsection commented="no" display-inline="no-display-inline" id="idB4B15B45CD1740E9A5B9754A6966B405"><enum>(d)</enum><header>Effective date</header><text>The amendments made by this section shall apply to obligations issued in calendar years beginning after the date of the enactment of this Act.</text></subsection></section> <section commented="no" id="H1CBB5678E372489FA03AD0A97A63A0DD"><enum>102.</enum><header>Credit for broadband infrastructure bonds allowed to issuers</header> <subsection id="idE67965AB093849279EC6B7BBFC44FFC6"><enum>(a)</enum><header>In general</header><text>Subchapter B of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/65">chapter 65</external-xref> of the Internal Revenue Code of 1986 is amended by inserting after section 6430 the following new section:</text> <quoted-block id="id206DE06062CB4BE4960EE08BA47FF598" display-inline="no-display-inline" style="OLC"> <section id="id5C5DB8CFB0194AA38D8F1D472C36F040"><enum>6431.</enum><header>Credit for broadband infrastructure bonds allowed to issuer</header> <subsection id="idD66841842BB1404F97FBDBEBF37EB26E"><enum>(a)</enum><header>In General</header><text>In the case of a broadband infrastructure bond, the issuer of such bond shall be allowed a credit with respect to each interest payment under such bond which shall be payable by the Secretary as provided in subsection (b).</text></subsection> <subsection id="id0B735A7175DE41F088C49500731054E3"><enum>(b)</enum><header>Payment of Credit</header><text>The Secretary shall pay (contemporaneously with each interest payment date under such bond) to the issuer of such bond (or to any person who makes such interest payments on behalf of the issuer) 35 percent of the interest payable under such bond on such date.</text></subsection> <subsection commented="no" id="id96BAC374E00C4801977ACBACD46C5C68"><enum>(c)</enum><header>Broadband infrastructure bond</header><text>For purposes of this section—</text> <paragraph commented="no" id="id4F380377879A4BB082B1786F8391D29F"><enum>(1)</enum><header>In general</header><text>The term <term>broadband infrastructure bond</term> means any obligation—</text> <subparagraph commented="no" id="idBE0C03AE8ECF4BEB9D13819780FB3AE5"><enum>(A)</enum><text>the interest on which would (but for this section) be excludable from gross income under section 103,</text></subparagraph> <subparagraph commented="no" id="id38FD50AAA32F47FEA902117C41ECEF71"><enum>(B)</enum><text>which is issued by a qualified issuer,</text></subparagraph> <subparagraph commented="no" id="id33EC0DBF45A14E94880A4B1CAC062418"><enum>(C)</enum><text>which is issued as part of an issue with respect to which—</text> <clause commented="no" id="id388715EAEF724FAF8F6A1BE5DC287DCC"><enum>(i)</enum><text>the requirements of paragraph (2) are met,</text></clause> <clause commented="no" id="idDB4A252F02B54AA5ACE6A766459A07A1"><enum>(ii)</enum><text>all of the property to be financed by the net proceeds of the issue is to be owned by a governmental unit (within the meaning of section 142(b)(1)), and</text></clause> <clause commented="no" id="idA073FC800800431C9B3518C9DAAF3623"><enum>(iii)</enum><text>the aggregate face amount of bonds issued pursuant to the issue, when added to the aggregate face amount of broadband infrastructure bonds previously issued by the issuing authority during the calendar year, does not exceed such issuing authority's allocation of its State's volume cap under subsection (d) for such year, and</text></clause></subparagraph> <subparagraph id="id8B21D58B48E4412FA6AACBFF37355DD0"><enum>(D)</enum><text>with respect to which the issuer makes an irrevocable election to have this section apply.</text></subparagraph></paragraph> <paragraph id="id615D48C831C140CFA58DE32BF9F65B3C"><enum>(2)</enum><header>Special rules relating to expenditures</header> <subparagraph id="id51B7D640B5CA4AA6803CFF8D37700BA8"><enum>(A)</enum><header>In general</header><text>An issue shall be treated as meeting the requirements of this paragraph if, as of the date of issuance, the issuer reasonably expects—</text> <clause id="idb1b488e4c58a427aba5ad5a5972e0e89"><enum>(i)</enum><text>95 percent of the available project proceeds to be spent in connection with 1 or more qualified broadband projects within the 3-year period beginning on such date of issuance, and</text></clause> <clause id="id2be24db70f2b4902930bfcf093328ecb"><enum>(ii)</enum><text>a binding commitment with a third party to spend at least 10 percent of such available project proceeds will be incurred within the 6-month period beginning on such date of issuance.</text></clause></subparagraph> <subparagraph id="id3D483F807A2149B790EA98AC0948DBE6"><enum>(B)</enum><header>Failure to spend required amount of bond proceeds within 3 years</header> <clause id="id48AF7BA45B5946D1BD0EA79F48D287FB"><enum>(i)</enum><header>In general</header><text>To the extent that less than 95 percent of the available project proceeds of the issue are expended by the close of the expenditure period, the issuer shall redeem all of the nonqualified bonds within 90 days after the end of such period. For purposes of this paragraph, the amount of the nonqualified bonds required to be redeemed shall be determined in the same manner as under section 142.</text></clause> <clause id="id699EF2EB1B73475FB6BF565F30714F17"><enum>(ii)</enum><header>Expenditure period</header><text>For purposes of this section, the term <term>expenditure period</term> means, with respect to any issue, the 3-year period beginning on the date of issuance. Such term shall include any extension of such period under clause (iii).</text></clause> <clause id="id171F17FDBE604096A5D4F79199060346"><enum>(iii)</enum><header>Extension of period</header><text> Upon submission of a request prior to the expiration of the expenditure period (determined without regard to any extension under this clause), the Secretary may extend such period if the issuer establishes that the failure to expend the proceeds within the original expenditure period is due to reasonable cause and the expenditures in connection with 1 or more qualified broadband projects will continue to proceed with due diligence.</text></clause></subparagraph> <subparagraph id="id836F78642948451598AFC1000261FDBB"><enum>(C)</enum><header>Reimbursement</header><text>For purposes of this subtitle, available project proceeds of an issue shall be treated as spent in connection with 1 or more qualified broadband projects if such proceeds are used to reimburse the issuer for amounts paid in connection with such projects after the date that an allocation of a State's volume cap under subsection (d) has been made with respect to such issue, but only if- </text> <clause id="id6d1f15fb33ac4baa9e9212bec61ae575"><enum>(i)</enum><text>prior to the payment of the original expenditure, the issuer declared its intent to reimburse such expenditure with the proceeds of such issue,</text></clause> <clause id="id2b8f86f279d64a1e89bba52eadeb408a"><enum>(ii)</enum><text>not later than 60 days after payment of the original expenditure, the issuer adopts an official intent to reimburse the original expenditure with such proceeds, and</text></clause> <clause id="id81a21e9c51f0467aae9042164bc554fc"><enum>(iii)</enum><text>the reimbursement is made not later than 18 months after the date the original expenditure is paid. </text></clause></subparagraph></paragraph> <paragraph id="ide68567166ec14d2c9e7b81d97726237a"><enum>(3)</enum><header>Limitation on issue price</header><text>An obligation shall not be treated as a broadband infrastructure bond if the issue price has more than a de minimis amount (determined under rules similar to the rules of section 1273(a)(3)) of premium over the stated principal amount of the obligation. </text></paragraph> <paragraph id="id139221E815E241EE8357107A5A124E23"><enum>(4)</enum><header>Available project proceeds</header><text>For purposes of this subsection, the term <term>available project proceeds</term> means, with respect to any issue, the sum of—</text> <subparagraph id="id6F583EC585154F57A4C6135CC97C13EA"><enum>(A)</enum><text>the excess of—</text> <clause id="idce31caeb60c9445e9c8e4269e368b94e"><enum>(i)</enum><text>the proceeds from the sale of an issue, over</text></clause> <clause id="id59e9137c44d74d1fb90bead0cdb10782"><enum>(ii)</enum><text>the issuance costs financed by the issue (to the extent that such costs do not exceed 2 percent of such proceeds), plus</text></clause></subparagraph> <subparagraph id="ide427bc488b0641f7b70aacb5fc100db4"><enum>(B)</enum><text>the proceeds from any investment of the excess described in subparagraph (A).</text></subparagraph></paragraph> <paragraph id="id0F13B9F8D7334C54AA8E5B61F3AAAEA6"><enum>(5)</enum><header>Qualified broadband project</header><text> For purposes of this subsection, the term <term>qualified broadband project</term> has the meaning given such term by section 142(n).</text></paragraph></subsection> <subsection id="id65F8B39F2F1B4746BA8B1D17B33ACF25"><enum>(d)</enum><header>Limitation on amount of bonds designated</header> <paragraph id="id449C0AF362FC41029CA60FC6E3E7EE88"><enum>(1)</enum><header>National limitation</header><text>There is a national broadband infrastructure bond limitation for each calendar year of $2,500,000,000.</text></paragraph> <paragraph id="id3230188DC4594522B36CCF9AE269DBAA"><enum>(2)</enum><header>State volume cap; allocation</header><text>For purposes of this subsection, the broadband infrastructure bonds volume cap of a State for any calendar year is the portion of the national broadband infrastructure bond limitation under paragraph (1) equal to the sum of— </text> <subparagraph id="id900501DA484445D59B8A5A2B834EB904"><enum>(A)</enum><text>$25,000,000, plus</text></subparagraph> <subparagraph id="id8AF2A73E963F490E83222A8EFDDBB175"><enum>(B)</enum><text>the amount which bears the same ratio to $1,250,000,000 as the—</text> <clause id="id2A4CA8BD40D54215B8A152289C82DC09"><enum>(i)</enum><text>number of individuals in such State who reside in rural areas (as defined in section 343(a)(13) of the Consolidated Farm and Rural Development Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1991">7 U.S.C. 1991(a)(13)</external-xref> without regard to subparagraph (B) or (C) thereof), bears to</text></clause> <clause id="id264066B7A93543EDB52545ED5EAE0433"><enum>(ii)</enum><text>the total number of individuals living in such rural areas in all States.</text></clause></subparagraph></paragraph> <paragraph id="idBCC4A2C5F92C474383290CB6ACBACFE5"><enum>(3)</enum><header>Allocation of volume cap</header> <subparagraph id="idC0A1ACEEB3A247B082D89C51BB2F7322"><enum>(A)</enum><header>In general</header><text>For purposes of this section—</text> <clause id="id26AEA420B4BF4C4EB9B3A80D6FB426DD"><enum>(i)</enum><text>except as provided in subparagraph (C), 50 percent of the State broadband infrastructure bonds volume cap of a State for any calendar year shall be allocated to qualified issuers that are not agencies of the State in the amount determined under subparagraph (B), and</text></clause> <clause id="idBF48DE1A81544DFB8F42B80785938C85"><enum>(ii)</enum><text>the remaining 50 percent of such volume cap shall be allocated to qualified issuers in such manner as the State provides.</text></clause></subparagraph> <subparagraph id="idA6C8001AA2494F1898A53E21639C83EA"><enum>(B)</enum><header>Amount of allocation</header> <clause id="id0B29FE2622FE4BB185F530DBA406FE98"><enum>(i)</enum><header>In general</header><text>The amount of the State broadband infrastructure bonds volume cap for any calendar year allocated under this subparagraph to any qualified issuer described in subparagraph (A)(i) shall be equal to the amount which bears the same ratio to the amount described in subparagraph (A)(i) for such calendar year as—</text> <subclause id="idAFCCF94E5E8B4E38832F9AAC2B06FDDD"><enum>(I)</enum><text>the number of individuals in such State who reside in rural areas (as defined in section 343(a)(13) of the Consolidated Farm and Rural Development Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1991">7 U.S.C. 1991(a)(13)</external-xref> without regard to subparagraph (B) or (C) thereof) within the jurisdiction of such qualified issuer, bears to</text></subclause> <subclause id="id07A95F504A724C21BD06D700FBF564EF"><enum>(II)</enum><text>the total number of individuals living in such rural areas in the State.</text></subclause></clause> <clause id="idC87C5514E4864A20B3A2D3E53BD4B20A"><enum>(ii)</enum><header>Special rule for overlapping jurisdictions</header><text>For purposes of clause (i)(I), if an area is within the jurisdiction of 2 or more governmental units, such area shall be treated as only within the jurisdiction of the unit having jurisdiction over the smallest geographical area unless such unit agrees to surrender all or part of such jurisdiction for such calendar year to the unit with overlapping jurisdiction which has the next smallest geographical area. </text></clause></subparagraph> <subparagraph id="id9034E8A5F69A49FEAC65C3B30951EC9F"><enum>(C)</enum><header>Reallocation</header><text>The amount allocated under this paragraph to any qualified issuer may be reallocated by such issuer to the State for reallocation to other qualified issuers (including agencies of the State).</text></subparagraph></paragraph> <paragraph id="id7A4FBEFABC564CA99EEF27CC8F263CC1"><enum>(4)</enum><header>Carryover of unused limitation</header> <subparagraph id="id2EA3FF9C377F4FECB7417EA19627809A"><enum>(A)</enum><header>In general</header><text>If, for any calendar year, a State's broadband infrastructure bonds volume cap exceeds the amount of bonds issued during such year which are designated as broadband infrastructure bonds under subsection (c)(1)(D) with respect to broadband projects within such State, the broadband infrastructure bonds volume cap for such State for the following calendar year shall be increased by the amount of such excess.</text></subparagraph> <subparagraph id="id3FE68D7DD7B6444283F379F92D7A549D"><enum>(B)</enum><header>Limitation on carryover</header><text>Any carryforward of an excess amount may be carried only to the first 2 years following the unused volume cap year. For purposes of the preceding sentence, a volume cap amount shall be treated as used on a first-in first-out basis.</text></subparagraph></paragraph></subsection> <subsection id="idB994BF42D16A4CD8B4FFB5E6D46F7225"><enum>(e)</enum><header>Other rules and definitions</header> <paragraph id="idE41780E9ECC841B4939666C20A448E12"><enum>(1)</enum><header>Interest includible in income</header><text>For purposes of this title, interest on any broadband infrastructure bond shall be includible in gross income.</text></paragraph> <paragraph id="id46DA1898029949739E9CF4ADAF98B5B0"><enum>(2)</enum><header>Credit not a Federal guarantee</header><text>For purposes of section 149(b), a broadband infrastructure bond shall not be treated as Federally guaranteed by reason of the credit allowed under this section.</text></paragraph> <paragraph id="id2298AD45D871431BBFD92AF5E5FDCA55"><enum>(3)</enum><header>Coordination with section 148</header> <subparagraph id="idBC7DC1F6B26146DCA2C52D1F0AE87D87"><enum>(A)</enum><header>Yield reduced by credit</header><text>For purposes of section 148, the yield on a broadband infrastructure bond shall be determined by reducing the otherwise effective yield by the amount of the credit allowed to the issuer under this section.</text></subparagraph> <subparagraph id="id8219C732D3FA4FB3918B7F592FA46992"><enum>(B)</enum><header>Investment during extension period</header><text>An issue shall not be treated as failing to meet the requirements of section 148 by reason of any investment of available project proceeds during the expenditure period.</text></subparagraph></paragraph> <paragraph id="id532A74EC2EBE4566AA575194206D345E"><enum>(4)</enum><header>Rural populations</header><text>For purposes of this section, the determination of the number of individuals living in rural areas shall be made in consultation with the Secretary of Agriculture.</text></paragraph> <paragraph id="id1A55DED777244CA8BA86A4A6EB3CA6B6"><enum>(5)</enum><header>Definitions</header><text>For purposes of this section—</text> <subparagraph id="id781A921E8EDD4F0489115872BC407081"><enum>(A)</enum><header>Qualified issuer</header><text>The term <term>qualified issuer</term> means a State or any political subdivision or instrumentality thereof having authority to issue private activity bonds. </text></subparagraph> <subparagraph id="idE2811922ADDF40D696B8B42F0DAFABC1"><enum>(B)</enum><header>State</header><text>Notwithstanding section 7701(a)(10), the term <term>State</term> only includes the 50 States. </text></subparagraph></paragraph></subsection> <subsection id="idD0CABB6E67E945B2B67AABA0C5D7D464" commented="no" display-inline="no-display-inline"><enum>(f)</enum><header display-inline="yes-display-inline">Regulations</header><text display-inline="yes-display-inline">The Secretary may prescribe such regulations and other guidance as may be necessary or appropriate to carry out this section.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="id4B4FF67F86D24E1BBC5CCA6BAAF27B85"><enum>(b)</enum><header>Conforming amendments</header> <paragraph commented="no" display-inline="no-display-inline" id="HF11113AC2AF74263B04E8A7FEBA1ED0A"><enum>(1)</enum><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/6401">Section 6401(b)(1)</external-xref> of the Internal Revenue Code of 1986 is amended by striking <quote>under subparts A, B, D, and G of such part IV</quote> and inserting <quote>under all subparts of such part IV other than such subpart C</quote>.</text></paragraph> <paragraph id="id4BB8AB778B8148D7A421FA8E13EB508F"><enum>(2)</enum><text>The table of sections for subchapter B of chapter 65 of such Code is amended by inserting after the item related to section 6430 the following new section:</text> <quoted-block id="id06f0d7cf-0cd9-45dc-9aad-7d916b71f922" style="OLC"> <toc> <toc-entry level="section">Sec. 6431. Credit for broadband infrastructure bonds allowed to issuer.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="id61703b97794d40d79bc376bc7783a2ef"><enum>(c)</enum><header>Gross-Up of payment to issuers in case of sequestration</header><text>The amount of any payment under <external-xref legal-doc="usc" parsable-cite="usc/26/6431">section 6431(b)</external-xref> of the Internal Revenue Code of 1986 made after the date of the enactment of this Act to which sequestration applies shall be increased by the amount necessary to preserve the full amount of such payment payable to the issuer before sequestration. For purposes of this subsection, the term <term>sequestration</term> means any reduction in direct spending ordered in accordance with a sequestration report prepared by the Director of the Office and Management and Budget pursuant to the Balanced Budget and Emergency Deficit Control Act of 1985 or the Statutory Pay-As-You-Go Act of 2010.</text></subsection> <subsection id="H42C9089F1A1149918856A24768430FDE" commented="no" display-inline="no-display-inline"><enum>(d)</enum><header display-inline="yes-display-inline">Effective date</header><text display-inline="yes-display-inline">The amendments made by this section shall apply to bonds issued in calendar years beginning after the date of the enactment of this Act. </text></subsection></section>

117 S1676 IS: Rural Broadband Financing Flexibility Act U.S. Senate 2021-05-18 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

Short title

This Act may be cited as the

Rural Broadband Financing Flexibility Act

<enum>I</enum><header>Tax-preferred bonds</header> <section id="idA544BE422B6440D1AD04B92432933041" section-type="subsequent-section"><enum>101.</enum><header>Private activity bonds for qualified broadband projects</header> <subsection id="id9A9A267D7938477992A3236B8789ACFA"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/142">Section 142(a)</external-xref> of the Internal Revenue Code of 1986 is amended by striking <quote>or</quote> at the end of paragraph (14), by striking the period at the end of paragraph (15) and inserting <quote>, or</quote>, and by adding at the end the following new paragraph:</text> <quoted-block display-inline="no-display-inline" id="HFC1932EDA4704B5885D5933E726BC821" style="tax"> <paragraph id="H212936C50C194DD089724D2788EDD9DB"><enum>(16)</enum><text display-inline="yes-display-inline">qualified broadband projects.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HF187AC3BE3544C359C6A913F4DB3B73C"><enum>(b)</enum><header>Qualified broadband projects</header><text>Section 142 of such Code is amended by adding at the end the following new subsection:</text> <quoted-block display-inline="no-display-inline" id="H0F917F1489224E9D919D972642C04F5A" style="tax"> <subsection id="HC0660B863CD54A33B1C7EB842E2C7D58"><enum>(n)</enum><header>Qualified broadband project</header> <paragraph id="H62B2F6204BCE42D195B652CB9A622728"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">For purposes of subsection (a)(16), the term <term>qualified broadband project</term> means any project which—</text> <subparagraph id="id4F7BE72B7BD94D2885A5A35FB5C7B774"><enum>(A)</enum><text display-inline="yes-display-inline">is designed to provide broadband service solely to 1 or more areas—</text> <clause id="id43B4C36B48EC44B78CAABF0DFA870685"><enum>(i)</enum><text display-inline="yes-display-inline">which are rural areas (as defined in section 343(a)(13) of the Consolidated Farm and Rural Development Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1991">7 U.S.C. 1991(a)(13)</external-xref> without regard to subparagraph (B) or (C) thereof), and</text></clause> <clause id="idD71CF1AB158F4A1E8BEBCF86646D093E"><enum>(ii)</enum><text display-inline="yes-display-inline">in which more than 50 percent of residential households do not have access to fixed, terrestrial broadband service which delivers at least 25 megabits per second downstream and at least 3 megabits service upstream, and</text></clause></subparagraph> <subparagraph id="id446D065602294FE7A1406A9B7DD406A0"><enum>(B)</enum><text display-inline="yes-display-inline">results in gigabit capable internet access to residential locations, commercial locations, or a combination of residential and commercial locations, but only if at least 90 percent of the locations provided such access under the project are locations where, before the project, a broadband service provider—</text> <clause id="id3CF866602C454916A395F9C0D627BE2B"><enum>(i)</enum><text display-inline="yes-display-inline">did not provide service, or</text></clause> <clause id="idA8B431E7E8DD4350981FA86E33B2579C"><enum>(ii)</enum><text display-inline="yes-display-inline">did not provide service meeting the minimum speed requirements described in subparagraph (A)(ii).</text></clause></subparagraph></paragraph> <paragraph id="id36385CD0398A433F8673E7FFC4BEA17D"><enum>(2)</enum><header>Notice to broadband providers</header><text display-inline="yes-display-inline">A project shall not be treated as a qualified broadband project unless, before the issue date of any issue the proceeds of which are to be used to fund the project, the issuer—</text> <subparagraph id="idB94B475EA8964948848FD3A5BE7F684E"><enum>(A)</enum><text display-inline="yes-display-inline">notifies each broadband service provider providing broadband service in the area within which broadband services are to be provided under the project of the project and its intended scope,</text></subparagraph> <subparagraph id="idE25CF3EF95F4472E8BB5C4D9438077CD"><enum>(B)</enum><text display-inline="yes-display-inline">includes in such notice a request for information from each such provider with respect to the provider's ability to deploy, manage, and maintain a broadband network capable of providing gigabit capable Internet access to residential or commercial locations, and</text></subparagraph> <subparagraph id="id0CB9D19309B34548945B5564834556E8"><enum>(C)</enum><text display-inline="yes-display-inline">allows each such provider at least 90 days to respond to such notice and request.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="id7CC217521D814625AD79E2DAF0217894"><enum>(c)</enum><header>Partial exception from volume cap</header> <paragraph id="idD123DD92A9414E13BF8A96116396CB9E"><enum>(1)</enum><header>In general</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/146">Section 146(g)</external-xref> of the Internal Revenue Code of 1986 is amended by striking <quote>and</quote> at the end of paragraph (3), by striking the period at the end of paragraph (4) and inserting <quote>, and</quote>, and by inserting immediately after paragraph (4) the following new paragraph:</text> <quoted-block display-inline="no-display-inline" id="idC3D6F91D51194AA29246ABF525836619" style="OLC"> <paragraph commented="no" display-inline="no-display-inline" id="ide029940d-b211-11e9-968c-d1fea73f430f"><enum>(5)</enum><text display-inline="yes-display-inline">75 percent of any exempt facility bond issued as part of an issue described in paragraph (16) of section 142(a) (relating to qualified broadband projects).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="idB51B0258B78F444E8F59D0CB60B9858F"><enum>(2)</enum><header>Government-owned projects</header><text>The last sentence of section 146(g) of such Code is amended by striking <quote>Paragraph (4)</quote> and inserting <quote>Paragraphs (4) and (5)</quote>.</text></paragraph></subsection> <subsection commented="no" display-inline="no-display-inline" id="idB4B15B45CD1740E9A5B9754A6966B405"><enum>(d)</enum><header>Effective date</header><text>The amendments made by this section shall apply to obligations issued in calendar years beginning after the date of the enactment of this Act.</text></subsection></section> <section commented="no" id="H1CBB5678E372489FA03AD0A97A63A0DD"><enum>102.</enum><header>Credit for broadband infrastructure bonds allowed to issuers</header> <subsection id="idE67965AB093849279EC6B7BBFC44FFC6"><enum>(a)</enum><header>In general</header><text>Subchapter B of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/65">chapter 65</external-xref> of the Internal Revenue Code of 1986 is amended by inserting after section 6430 the following new section:</text> <quoted-block id="id206DE06062CB4BE4960EE08BA47FF598" display-inline="no-display-inline" style="OLC"> <section id="id5C5DB8CFB0194AA38D8F1D472C36F040"><enum>6431.</enum><header>Credit for broadband infrastructure bonds allowed to issuer</header> <subsection id="idD66841842BB1404F97FBDBEBF37EB26E"><enum>(a)</enum><header>In General</header><text>In the case of a broadband infrastructure bond, the issuer of such bond shall be allowed a credit with respect to each interest payment under such bond which shall be payable by the Secretary as provided in subsection (b).</text></subsection> <subsection id="id0B735A7175DE41F088C49500731054E3"><enum>(b)</enum><header>Payment of Credit</header><text>The Secretary shall pay (contemporaneously with each interest payment date under such bond) to the issuer of such bond (or to any person who makes such interest payments on behalf of the issuer) 35 percent of the interest payable under such bond on such date.</text></subsection> <subsection commented="no" id="id96BAC374E00C4801977ACBACD46C5C68"><enum>(c)</enum><header>Broadband infrastructure bond</header><text>For purposes of this section—</text> <paragraph commented="no" id="id4F380377879A4BB082B1786F8391D29F"><enum>(1)</enum><header>In general</header><text>The term <term>broadband infrastructure bond</term> means any obligation—</text> <subparagraph commented="no" id="idBE0C03AE8ECF4BEB9D13819780FB3AE5"><enum>(A)</enum><text>the interest on which would (but for this section) be excludable from gross income under section 103,</text></subparagraph> <subparagraph commented="no" id="id38FD50AAA32F47FEA902117C41ECEF71"><enum>(B)</enum><text>which is issued by a qualified issuer,</text></subparagraph> <subparagraph commented="no" id="id33EC0DBF45A14E94880A4B1CAC062418"><enum>(C)</enum><text>which is issued as part of an issue with respect to which—</text> <clause commented="no" id="id388715EAEF724FAF8F6A1BE5DC287DCC"><enum>(i)</enum><text>the requirements of paragraph (2) are met,</text></clause> <clause commented="no" id="idDB4A252F02B54AA5ACE6A766459A07A1"><enum>(ii)</enum><text>all of the property to be financed by the net proceeds of the issue is to be owned by a governmental unit (within the meaning of section 142(b)(1)), and</text></clause> <clause commented="no" id="idA073FC800800431C9B3518C9DAAF3623"><enum>(iii)</enum><text>the aggregate face amount of bonds issued pursuant to the issue, when added to the aggregate face amount of broadband infrastructure bonds previously issued by the issuing authority during the calendar year, does not exceed such issuing authority's allocation of its State's volume cap under subsection (d) for such year, and</text></clause></subparagraph> <subparagraph id="id8B21D58B48E4412FA6AACBFF37355DD0"><enum>(D)</enum><text>with respect to which the issuer makes an irrevocable election to have this section apply.</text></subparagraph></paragraph> <paragraph id="id615D48C831C140CFA58DE32BF9F65B3C"><enum>(2)</enum><header>Special rules relating to expenditures</header> <subparagraph id="id51B7D640B5CA4AA6803CFF8D37700BA8"><enum>(A)</enum><header>In general</header><text>An issue shall be treated as meeting the requirements of this paragraph if, as of the date of issuance, the issuer reasonably expects—</text> <clause id="idb1b488e4c58a427aba5ad5a5972e0e89"><enum>(i)</enum><text>95 percent of the available project proceeds to be spent in connection with 1 or more qualified broadband projects within the 3-year period beginning on such date of issuance, and</text></clause> <clause id="id2be24db70f2b4902930bfcf093328ecb"><enum>(ii)</enum><text>a binding commitment with a third party to spend at least 10 percent of such available project proceeds will be incurred within the 6-month period beginning on such date of issuance.</text></clause></subparagraph> <subparagraph id="id3D483F807A2149B790EA98AC0948DBE6"><enum>(B)</enum><header>Failure to spend required amount of bond proceeds within 3 years</header> <clause id="id48AF7BA45B5946D1BD0EA79F48D287FB"><enum>(i)</enum><header>In general</header><text>To the extent that less than 95 percent of the available project proceeds of the issue are expended by the close of the expenditure period, the issuer shall redeem all of the nonqualified bonds within 90 days after the end of such period. For purposes of this paragraph, the amount of the nonqualified bonds required to be redeemed shall be determined in the same manner as under section 142.</text></clause> <clause id="id699EF2EB1B73475FB6BF565F30714F17"><enum>(ii)</enum><header>Expenditure period</header><text>For purposes of this section, the term <term>expenditure period</term> means, with respect to any issue, the 3-year period beginning on the date of issuance. Such term shall include any extension of such period under clause (iii).</text></clause> <clause id="id171F17FDBE604096A5D4F79199060346"><enum>(iii)</enum><header>Extension of period</header><text> Upon submission of a request prior to the expiration of the expenditure period (determined without regard to any extension under this clause), the Secretary may extend such period if the issuer establishes that the failure to expend the proceeds within the original expenditure period is due to reasonable cause and the expenditures in connection with 1 or more qualified broadband projects will continue to proceed with due diligence.</text></clause></subparagraph> <subparagraph id="id836F78642948451598AFC1000261FDBB"><enum>(C)</enum><header>Reimbursement</header><text>For purposes of this subtitle, available project proceeds of an issue shall be treated as spent in connection with 1 or more qualified broadband projects if such proceeds are used to reimburse the issuer for amounts paid in connection with such projects after the date that an allocation of a State's volume cap under subsection (d) has been made with respect to such issue, but only if- </text> <clause id="id6d1f15fb33ac4baa9e9212bec61ae575"><enum>(i)</enum><text>prior to the payment of the original expenditure, the issuer declared its intent to reimburse such expenditure with the proceeds of such issue,</text></clause> <clause id="id2b8f86f279d64a1e89bba52eadeb408a"><enum>(ii)</enum><text>not later than 60 days after payment of the original expenditure, the issuer adopts an official intent to reimburse the original expenditure with such proceeds, and</text></clause> <clause id="id81a21e9c51f0467aae9042164bc554fc"><enum>(iii)</enum><text>the reimbursement is made not later than 18 months after the date the original expenditure is paid. </text></clause></subparagraph></paragraph> <paragraph id="ide68567166ec14d2c9e7b81d97726237a"><enum>(3)</enum><header>Limitation on issue price</header><text>An obligation shall not be treated as a broadband infrastructure bond if the issue price has more than a de minimis amount (determined under rules similar to the rules of section 1273(a)(3)) of premium over the stated principal amount of the obligation. </text></paragraph> <paragraph id="id139221E815E241EE8357107A5A124E23"><enum>(4)</enum><header>Available project proceeds</header><text>For purposes of this subsection, the term <term>available project proceeds</term> means, with respect to any issue, the sum of—</text> <subparagraph id="id6F583EC585154F57A4C6135CC97C13EA"><enum>(A)</enum><text>the excess of—</text> <clause id="idce31caeb60c9445e9c8e4269e368b94e"><enum>(i)</enum><text>the proceeds from the sale of an issue, over</text></clause> <clause id="id59e9137c44d74d1fb90bead0cdb10782"><enum>(ii)</enum><text>the issuance costs financed by the issue (to the extent that such costs do not exceed 2 percent of such proceeds), plus</text></clause></subparagraph> <subparagraph id="ide427bc488b0641f7b70aacb5fc100db4"><enum>(B)</enum><text>the proceeds from any investment of the excess described in subparagraph (A).</text></subparagraph></paragraph> <paragraph id="id0F13B9F8D7334C54AA8E5B61F3AAAEA6"><enum>(5)</enum><header>Qualified broadband project</header><text> For purposes of this subsection, the term <term>qualified broadband project</term> has the meaning given such term by section 142(n).</text></paragraph></subsection> <subsection id="id65F8B39F2F1B4746BA8B1D17B33ACF25"><enum>(d)</enum><header>Limitation on amount of bonds designated</header> <paragraph id="id449C0AF362FC41029CA60FC6E3E7EE88"><enum>(1)</enum><header>National limitation</header><text>There is a national broadband infrastructure bond limitation for each calendar year of $2,500,000,000.</text></paragraph> <paragraph id="id3230188DC4594522B36CCF9AE269DBAA"><enum>(2)</enum><header>State volume cap; allocation</header><text>For purposes of this subsection, the broadband infrastructure bonds volume cap of a State for any calendar year is the portion of the national broadband infrastructure bond limitation under paragraph (1) equal to the sum of— </text> <subparagraph id="id900501DA484445D59B8A5A2B834EB904"><enum>(A)</enum><text>$25,000,000, plus</text></subparagraph> <subparagraph id="id8AF2A73E963F490E83222A8EFDDBB175"><enum>(B)</enum><text>the amount which bears the same ratio to $1,250,000,000 as the—</text> <clause id="id2A4CA8BD40D54215B8A152289C82DC09"><enum>(i)</enum><text>number of individuals in such State who reside in rural areas (as defined in section 343(a)(13) of the Consolidated Farm and Rural Development Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1991">7 U.S.C. 1991(a)(13)</external-xref> without regard to subparagraph (B) or (C) thereof), bears to</text></clause> <clause id="id264066B7A93543EDB52545ED5EAE0433"><enum>(ii)</enum><text>the total number of individuals living in such rural areas in all States.</text></clause></subparagraph></paragraph> <paragraph id="idBCC4A2C5F92C474383290CB6ACBACFE5"><enum>(3)</enum><header>Allocation of volume cap</header> <subparagraph id="idC0A1ACEEB3A247B082D89C51BB2F7322"><enum>(A)</enum><header>In general</header><text>For purposes of this section—</text> <clause id="id26AEA420B4BF4C4EB9B3A80D6FB426DD"><enum>(i)</enum><text>except as provided in subparagraph (C), 50 percent of the State broadband infrastructure bonds volume cap of a State for any calendar year shall be allocated to qualified issuers that are not agencies of the State in the amount determined under subparagraph (B), and</text></clause> <clause id="idBF48DE1A81544DFB8F42B80785938C85"><enum>(ii)</enum><text>the remaining 50 percent of such volume cap shall be allocated to qualified issuers in such manner as the State provides.</text></clause></subparagraph> <subparagraph id="idA6C8001AA2494F1898A53E21639C83EA"><enum>(B)</enum><header>Amount of allocation</header> <clause id="id0B29FE2622FE4BB185F530DBA406FE98"><enum>(i)</enum><header>In general</header><text>The amount of the State broadband infrastructure bonds volume cap for any calendar year allocated under this subparagraph to any qualified issuer described in subparagraph (A)(i) shall be equal to the amount which bears the same ratio to the amount described in subparagraph (A)(i) for such calendar year as—</text> <subclause id="idAFCCF94E5E8B4E38832F9AAC2B06FDDD"><enum>(I)</enum><text>the number of individuals in such State who reside in rural areas (as defined in section 343(a)(13) of the Consolidated Farm and Rural Development Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1991">7 U.S.C. 1991(a)(13)</external-xref> without regard to subparagraph (B) or (C) thereof) within the jurisdiction of such qualified issuer, bears to</text></subclause> <subclause id="id07A95F504A724C21BD06D700FBF564EF"><enum>(II)</enum><text>the total number of individuals living in such rural areas in the State.</text></subclause></clause> <clause id="idC87C5514E4864A20B3A2D3E53BD4B20A"><enum>(ii)</enum><header>Special rule for overlapping jurisdictions</header><text>For purposes of clause (i)(I), if an area is within the jurisdiction of 2 or more governmental units, such area shall be treated as only within the jurisdiction of the unit having jurisdiction over the smallest geographical area unless such unit agrees to surrender all or part of such jurisdiction for such calendar year to the unit with overlapping jurisdiction which has the next smallest geographical area. </text></clause></subparagraph> <subparagraph id="id9034E8A5F69A49FEAC65C3B30951EC9F"><enum>(C)</enum><header>Reallocation</header><text>The amount allocated under this paragraph to any qualified issuer may be reallocated by such issuer to the State for reallocation to other qualified issuers (including agencies of the State).</text></subparagraph></paragraph> <paragraph id="id7A4FBEFABC564CA99EEF27CC8F263CC1"><enum>(4)</enum><header>Carryover of unused limitation</header> <subparagraph id="id2EA3FF9C377F4FECB7417EA19627809A"><enum>(A)</enum><header>In general</header><text>If, for any calendar year, a State's broadband infrastructure bonds volume cap exceeds the amount of bonds issued during such year which are designated as broadband infrastructure bonds under subsection (c)(1)(D) with respect to broadband projects within such State, the broadband infrastructure bonds volume cap for such State for the following calendar year shall be increased by the amount of such excess.</text></subparagraph> <subparagraph id="id3FE68D7DD7B6444283F379F92D7A549D"><enum>(B)</enum><header>Limitation on carryover</header><text>Any carryforward of an excess amount may be carried only to the first 2 years following the unused volume cap year. For purposes of the preceding sentence, a volume cap amount shall be treated as used on a first-in first-out basis.</text></subparagraph></paragraph></subsection> <subsection id="idB994BF42D16A4CD8B4FFB5E6D46F7225"><enum>(e)</enum><header>Other rules and definitions</header> <paragraph id="idE41780E9ECC841B4939666C20A448E12"><enum>(1)</enum><header>Interest includible in income</header><text>For purposes of this title, interest on any broadband infrastructure bond shall be includible in gross income.</text></paragraph> <paragraph id="id46DA1898029949739E9CF4ADAF98B5B0"><enum>(2)</enum><header>Credit not a Federal guarantee</header><text>For purposes of section 149(b), a broadband infrastructure bond shall not be treated as Federally guaranteed by reason of the credit allowed under this section.</text></paragraph> <paragraph id="id2298AD45D871431BBFD92AF5E5FDCA55"><enum>(3)</enum><header>Coordination with section 148</header> <subparagraph id="idBC7DC1F6B26146DCA2C52D1F0AE87D87"><enum>(A)</enum><header>Yield reduced by credit</header><text>For purposes of section 148, the yield on a broadband infrastructure bond shall be determined by reducing the otherwise effective yield by the amount of the credit allowed to the issuer under this section.</text></subparagraph> <subparagraph id="id8219C732D3FA4FB3918B7F592FA46992"><enum>(B)</enum><header>Investment during extension period</header><text>An issue shall not be treated as failing to meet the requirements of section 148 by reason of any investment of available project proceeds during the expenditure period.</text></subparagraph></paragraph> <paragraph id="id532A74EC2EBE4566AA575194206D345E"><enum>(4)</enum><header>Rural populations</header><text>For purposes of this section, the determination of the number of individuals living in rural areas shall be made in consultation with the Secretary of Agriculture.</text></paragraph> <paragraph id="id1A55DED777244CA8BA86A4A6EB3CA6B6"><enum>(5)</enum><header>Definitions</header><text>For purposes of this section—</text> <subparagraph id="id781A921E8EDD4F0489115872BC407081"><enum>(A)</enum><header>Qualified issuer</header><text>The term <term>qualified issuer</term> means a State or any political subdivision or instrumentality thereof having authority to issue private activity bonds. </text></subparagraph> <subparagraph id="idE2811922ADDF40D696B8B42F0DAFABC1"><enum>(B)</enum><header>State</header><text>Notwithstanding section 7701(a)(10), the term <term>State</term> only includes the 50 States. </text></subparagraph></paragraph></subsection> <subsection id="idD0CABB6E67E945B2B67AABA0C5D7D464" commented="no" display-inline="no-display-inline"><enum>(f)</enum><header display-inline="yes-display-inline">Regulations</header><text display-inline="yes-display-inline">The Secretary may prescribe such regulations and other guidance as may be necessary or appropriate to carry out this section.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="id4B4FF67F86D24E1BBC5CCA6BAAF27B85"><enum>(b)</enum><header>Conforming amendments</header> <paragraph commented="no" display-inline="no-display-inline" id="HF11113AC2AF74263B04E8A7FEBA1ED0A"><enum>(1)</enum><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/6401">Section 6401(b)(1)</external-xref> of the Internal Revenue Code of 1986 is amended by striking <quote>under subparts A, B, D, and G of such part IV</quote> and inserting <quote>under all subparts of such part IV other than such subpart C</quote>.</text></paragraph> <paragraph id="id4BB8AB778B8148D7A421FA8E13EB508F"><enum>(2)</enum><text>The table of sections for subchapter B of chapter 65 of such Code is amended by inserting after the item related to section 6430 the following new section:</text> <quoted-block id="id06f0d7cf-0cd9-45dc-9aad-7d916b71f922" style="OLC"> <toc> <toc-entry level="section">Sec. 6431. Credit for broadband infrastructure bonds allowed to issuer.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="id61703b97794d40d79bc376bc7783a2ef"><enum>(c)</enum><header>Gross-Up of payment to issuers in case of sequestration</header><text>The amount of any payment under <external-xref legal-doc="usc" parsable-cite="usc/26/6431">section 6431(b)</external-xref> of the Internal Revenue Code of 1986 made after the date of the enactment of this Act to which sequestration applies shall be increased by the amount necessary to preserve the full amount of such payment payable to the issuer before sequestration. For purposes of this subsection, the term <term>sequestration</term> means any reduction in direct spending ordered in accordance with a sequestration report prepared by the Director of the Office and Management and Budget pursuant to the Balanced Budget and Emergency Deficit Control Act of 1985 or the Statutory Pay-As-You-Go Act of 2010.</text></subsection> <subsection id="H42C9089F1A1149918856A24768430FDE" commented="no" display-inline="no-display-inline"><enum>(d)</enum><header display-inline="yes-display-inline">Effective date</header><text display-inline="yes-display-inline">The amendments made by this section shall apply to bonds issued in calendar years beginning after the date of the enactment of this Act. </text></subsection></section> <enum>II</enum><header>Investment tax credit</header> <section id="idBF631703D1174D75B9C3603FE7F1ECB1"><enum>201.</enum><header>Investment credit for qualifying broadband projects</header> <subsection id="idB313DD2F2513435797DC07E44CD9200F"><enum>(a)</enum><header>In general</header><text>Subpart E of part IV of subchapter A of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> of the Internal Revenue Code of 1986 is amended by inserting after section 48C the following new section:</text> <quoted-block display-inline="no-display-inline" id="idc8877a929dc94ca7b569297b44d203d0" style="OLC"> <section id="idb6717659bfc442718dd62c182d659ca5"><enum>48D.</enum><header>Qualifying broadband project credit</header> <subsection id="id63003674081544e3ab5d9b2a0bbfe6ed"><enum>(a)</enum><header>In general</header><text>For purposes of section 46, the qualifying broadband project credit for any taxable year is an amount equal to 10 percent of the qualified investment for such taxable year with respect to any qualifying broadband project.</text></subsection> <subsection id="idcc712e6bb5d14f6b8c84b8e9c36b22bd"><enum>(b)</enum><header>Qualified investment</header> <paragraph id="idc91573c0275a43a598cac6c84882868d"><enum>(1)</enum><header>In general</header><text>For purposes of subsection (a), the qualified investment for any taxable year is the basis of eligible property placed in service by the taxpayer during such taxable year which is part of a qualifying broadband project—</text> <subparagraph id="id74f1c50f12554d05a33ac67f12ee3625"><enum>(A)</enum> <clause commented="no" display-inline="yes-display-inline" id="id598F762B5CED435892599B06D57AD7DA"><enum>(i)</enum><text>the construction, reconstruction, or erection of which is completed by the taxpayer, or</text></clause> <clause id="id7E900073D6E648EB8CA70704EA2D6934" indent="up1"><enum>(ii)</enum><text>which is acquired by the taxpayer if the original use of such property commences with the taxpayer, and</text></clause></subparagraph> <subparagraph id="idcfae7da803f140fea20ee7b313b9ede0"><enum>(B)</enum><text>with respect to which depreciation (or amortization in lieu of depreciation) is allowable.</text></subparagraph></paragraph> <paragraph id="idd6d4bcc932554190962f09040ac0d3e9"><enum>(2)</enum><header>Special rule for certain subsidized property</header><text>Rules similar to section 48(a)(4) (without regard to subparagraph (D) thereof) shall apply for purposes of this section.</text></paragraph> <paragraph id="id7db81edcf6fc455abd4af46128a1cca9"><enum>(3)</enum><header>Certain qualified progress expenditures rules made applicable</header><text>Rules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of this section.</text></paragraph></subsection> <subsection commented="no" id="id291D1B16C93249F4BDE9EC4117D200B7"><enum>(c)</enum><header>Limitation</header> <paragraph commented="no" id="id210AB554CA614656A9DADB00A6688FCD"><enum>(1)</enum><header>In general</header><text>The amount of the credit allowed under subsection (a) for any taxable year with respect to any qualifying broadband project shall not exceed the broadband credit dollar amount allocated to such project by a State under this section.</text></paragraph> <paragraph commented="no" id="id3D1FC9BEDF3649EABC675935F87822AA"><enum>(2)</enum><header>Broadband credit dollar amount</header> <subparagraph commented="no" id="id7B5EA4D72B134EAA851E9875F27DD683"><enum>(A)</enum><header>In general</header><text>The aggregate broadband credit dollar amount which may be allocated for any calendar year by any State shall not exceed the sum of—</text> <clause commented="no" id="idA93CD9D0515C4BA1A611305A1F257101"><enum>(i)</enum><text>$5,000,000, plus</text></clause> <clause commented="no" id="id9AC5FCF3E6634D6E8AD5CF8A625978E8"><enum>(ii)</enum><text>the amount that bears the same ratio to $2,500,000 as the population of individuals in the state residing in rural areas bears the population of individuals residing in rural areas in all States.</text></clause></subparagraph> <subparagraph commented="no" id="id5A3AD31C0EAE4E148047A4C52DA56E7F"><enum>(B)</enum><header>Broadband credit dollar amount carryforward</header> <clause commented="no" id="id538BA83B24644E4CA90FC2D059699F4B"><enum>(i)</enum><header>In general</header><text>If the limitation under subparagraph (A) (determined without regard to this subparagraph) exceeds the aggregate amount of broadband credit dollar amounts allocated for any calendar year, such excess shall be treated as a broadband credit dollar amount carryforward and added to the limitation under such subparagraph for the 2 succeeding calendar years.</text></clause> <clause commented="no" id="id4CAA2A5986144C5984112A063FADDF83"><enum>(ii)</enum><header>Ordering rules</header><text>Broadband credit dollar amount carryforwards shall be treated as used in the order in which they arose.</text></clause></subparagraph></paragraph></subsection> <subsection id="id67C4075C6C8F442BA41C6C0E8FFED52C"><enum>(d)</enum><header>Qualifying broadband project</header><text display-inline="yes-display-inline">For purposes of this section—</text> <paragraph id="id811D937FF91E4997A1A64F11CBD6C633"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>qualifying broadband project</term> means any project which—</text> <subparagraph id="idE017F65A29E74D65A2B2473CBE5502F2"><enum>(A)</enum><text display-inline="yes-display-inline">is designed to provide broadband service solely to 1 or more areas—</text> <clause id="id1088A9521BDF41928694F1F06FE01D2A"><enum>(i)</enum><text display-inline="yes-display-inline">which are rural areas, and</text></clause> <clause id="id5BF29B7027574ACCAE4DD8441FA2D447"><enum>(ii)</enum><text display-inline="yes-display-inline">in which more than 50 percent of residential households do not have access to fixed, terrestrial broadband service which delivers at least 25 megabits per second downstream and at least 3 megabits service upstream, </text></clause></subparagraph> <subparagraph id="idED37A7C9C7D648BF86CBFEAF11D506B8"><enum>(B)</enum><text display-inline="yes-display-inline">results in gigabit capable Internet access to residential locations, commercial locations, or a combination of residential and commercial locations, but only if at least 90 percent of the locations provided such access under the project are locations where, before the project, a broadband service provider—</text> <clause id="idDD9A8B626DD642558D05C29356030B16"><enum>(i)</enum><text display-inline="yes-display-inline">did not provide service, or</text></clause> <clause id="idB93B4AE3021E4CEC938D89D93F02BE34"><enum>(ii)</enum><text display-inline="yes-display-inline">did not provide service which meets the minimum speed requirements described in subparagraph (A)(ii), and</text></clause></subparagraph> <subparagraph id="id835B37D12DC5470B913A4BD0AF4FA0D5"><enum>(C)</enum><text>is certified by the Secretary pursuant to paragraph (2).</text></subparagraph></paragraph> <paragraph id="idB4137C0672F94B30B82BEE89700266B6"><enum>(2)</enum><header>Qualifying broadband project certification program</header> <subparagraph id="id04cc0ce43db64df6b17f88a1f0f167de"><enum>(A)</enum><header>In general</header><text>Not later than 180 days after the date of enactment of this section, the Secretary, in consultation with the Chairman of the Federal Communications Commission and the Secretary of Agriculture, shall establish a qualifying broadband project certification program to consider and award certifications for qualified investments eligible for credits under this section.</text></subparagraph> <subparagraph id="idc17a4018c72f470297a38a8a4ac74c26"><enum>(B)</enum><header>Application period</header> <clause id="id2719127D07DA4753983FC3E547D8EA33"><enum>(i)</enum><header>In general</header><text>Each applicant for certification under this paragraph shall submit an application containing such information as the Secretary may require during each annual application period.</text></clause> <clause id="id5557FF1929D94558BD7296D19707D1FF"><enum>(ii)</enum><header>Annual application period</header><text>For purposes of this paragraph, the term <term>annual application period</term> means a 60-day period beginning each calendar year on the date determined by the Secretary.</text></clause></subparagraph> <subparagraph id="id4D09E22F6A364B3DB7E8405401FADB70"><enum>(C)</enum><header>Nomination</header><text>A project may not be certified under this paragraph unless—</text> <clause id="id497F615702C544FBB588DE416DAF157A"><enum>(i)</enum><text>the project is nominated by a State or local government in a single, uniform application that is submitted to the Secretary by each State on behalf of projects nominated by the State and by its localities, and </text></clause> <clause id="id370A1F96088A4D729E857546C6BEECEA"><enum>(ii)</enum><text>such State or local government provides written assurances within the application under clause (i) that the project satisfies the requirements of subparagraphs (A) and (B) of paragraph (1).</text></clause></subparagraph> <subparagraph id="id14C280BDB11843CEBF972A4DD21BA2B7"><enum>(D)</enum><header>Certification</header><text>Not later than 60 days after the end of the annual application period, the Secretary, in consultation with the Chairman of the Federal Communications Commission and the Secretary of Agriculture, shall award certifications under this section.</text></subparagraph></paragraph></subsection> <subsection commented="no" id="idFE1D5BD0936747D78BB1BA821E284A32"><enum>(e)</enum><header>Definitions</header><text>For purposes of this section—</text> <paragraph id="id42872738357B4C11A3B51B38747D9A2C"><enum>(1)</enum><header>Eligible property</header><text>The term <term>eligible property</term> means any property which is a part of a qualifying broadband project.</text></paragraph> <paragraph id="idA3F95E748DA84324838817DF80161AF1"><enum>(2)</enum><header>Rural area</header><text>The term <term>rural area</term> has the meaning given such term under section 343(a)(13) of the Consolidated Farm and Rural Development Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1991">7 U.S.C. 1991(a)(13)</external-xref>), determined without regard to subparagraph (B) or (C) thereof.</text></paragraph> <paragraph commented="no" id="id718031C2BEE14DD4B84375BDAD1A113B"><enum>(3)</enum><header>State</header><text>The term <term>State</term> means the 50 States.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="id74EBBEC8C51743BAAFC1AB9C466CC150"><enum>(b)</enum><header>Conforming amendments</header> <paragraph id="idcebdec2a315f43809ef8a0e5df18138f"><enum>(1)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/46">Section 46</external-xref> of the Internal Revenue Code of 1986 is amended by striking <quote>and</quote> at the end of paragraph (5), by striking the period at the end of paragraph (6) and inserting <quote>, and</quote>, and by adding at the end the following new paragraph:</text> <quoted-block display-inline="no-display-inline" id="id915e0392f9334f409a166a9a81cfd109" style="OLC"> <paragraph id="id4e9d312c5d17454ea500667ff3f8d66b"><enum>(7)</enum><text>the qualifying broadband project credit.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="id193c3e6735e1484fae9465300c6c665f"><enum>(2)</enum><text>Section 49(a)(1)(C) of such Code is amended by striking <quote>and</quote> at the end of clause (iv), by striking the period at the end of clause (v) and inserting <quote>, and</quote>, and by adding at the end the following new clause:</text> <quoted-block display-inline="no-display-inline" id="idaae7fd7334154688889c0cd70f1530ea" style="OLC"> <clause id="id1c5bc83221e141f3944b7d56065598ac"><enum>(vi)</enum><text>the basis of any property which is part of a qualifying broadband project under section 48D.</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="id8AF2E215488D4FC989602F7F659D1CE3"><enum>(3)</enum><text>Section 50(a)(2)(E) of such Code is amended by striking <quote>or 48C(b)(2)</quote> and inserting <quote>48C(b)(2), or 48D(b)(3)</quote>.</text></paragraph> <paragraph id="idac7e20e103e54e06839361e34a7882a5"><enum>(4)</enum><text>The table of sections for subpart E of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 48C the following new item:</text> <quoted-block id="id941e0b6a-7d8c-4428-b673-057f36f46ce3" style="OLC"> <toc> <toc-entry idref="idb6717659bfc442718dd62c182d659ca5" level="section">Sec. 48D. Qualifying broadband project credit.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="id3d4c0f5447314e85b71324f374ebeda3" commented="no" display-inline="no-display-inline"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to periods after December 31, 2021, in taxable years ending after such date, under rules similar to the rules of section 48(m) of such Code (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).</text></subsection></section>