[Federal Register Volume 85, Number 179 (Tuesday, September 15, 2020)]
[Rules and Regulations]
[Pages 57077-57085]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-19033]



 ========================================================================
 Rules and Regulations
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
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 The Code of Federal Regulations is sold by the Superintendent of Documents. 
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  Federal Register / Vol. 85, No. 179 / Tuesday, September 15, 2020 / 
Rules and Regulations  

[[Page 57077]]



DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Parts 1710, 1779, 1780 and 1783

Rural Housing Service

Rural Business-Cooperative Service,

Rural Utilities Service

Farm Service Agency

7 CFR Parts 1942 and 1980

Rural Housing Service

7 CFR Part 3570

Rural Business-Cooperative Service

Rural Utilities Service

7 CFR Parts 4274, 4279, and 4280

[Docket Numbers: RUS-20-TELECOM-0022]
RIN 0572-AC50


Special Authority To Enable Funding of Broadband and Smart 
Utility Facilities Across Select Rural Development Programs

AGENCY: Rural Utilities Service, Rural Housing Service, Rural Business-
Cooperative Service, USDA.

ACTION: Final rule; request for comments.

-----------------------------------------------------------------------

SUMMARY: The Rural Utilities Service, Rural Business-Cooperative 
Service, and Rural Housing Service, agencies that comprise the Rural 
Development Mission Area within the United States Department of 
Agriculture, are issuing this final rule to establish the authority 
authorized by Section 6210 of the Agriculture Improvement Act of 2018, 
which will assist rural families and small businesses in gaining access 
to broadband service by permitting recipients of a loan, grant, or loan 
guarantee from RD to use up to 10 percent of the amount provided to 
construct broadband infrastructure in areas not served by minimum 
acceptable level of broadband service. This rule describes the 
procedures by which these agencies will consider projects eligible for 
special broadband authority.

DATES: Effective date: September 15, 2020.
    Comment date: This rule is being issued to allow for immediate 
implementation of this program. Although this final rule is effective 
immediately, comments are solicited from interested members of the 
public on all aspects of the rule. These comments must be submitted 
electronically and received on or before November 16, 2020. Rural 
Development will consider these comments and the need for making any 
revisions as a result of these comments.

ADDRESSES: Comments may be submitted on this rule using the following 
method:
     Electronically using the Federal eRulemaking Portal: Go to 
https://www.regulations.gov and, in the ``Search Documents'' box, enter 
the RUS-20-TELECOM-0022 or the RIN No. 0572-AC50, and click the 
``Search'' button. To submit a comment, choose the ``Comment Now!'' 
button. Information on using Regulations.gov, including instructions 
for accessing documents, submitting comments, and viewing the docket 
after the close of the comment period, is available under the ``Help'' 
tab at the top of the Home page. In the Docket ID column, select RUS-
20-TELECOM-0022 to submit or view public comments and to view 
supporting and related materials available electronically. Information 
on using Regulations.gov, including instructions for accessing 
documents, submitting comments, and viewing the docket after the close 
of the comment period, is available through the site's ``User Tips'' 
link.
     Other Information: Additional information about Rural 
Development and its programs is available on the internet at http://www.rd.usda.gov.

FOR FURTHER INFORMATION CONTACT: For inquiries directly related to this 
rulemaking, contact Michele Brooks, Director, Regulations Management 
Division, Innovation Center, Rural Development, United States 
Department of Agriculture, 400 Independence Avenue SW, Washington, DC 
20250; Telephone: (202) 690.1078; Email: [email protected].

SUPPLEMENTARY INFORMATION:

Executive Summary

Background

    Rural Development (RD) is a mission area within the United States 
Department of Agriculture (USDA) comprised of the Rural Utilities 
Service (RUS), Rural Housing Service (RHS) and Rural Business-
Cooperative Service (RBCS). RD's mission is to increase economic 
opportunity and improve the quality of life for all rural Americans. RD 
meets its mission by providing loans, loan guarantees, grants, and 
technical assistance through more than 40 programs aimed at creating 
and improving housing, businesses, and infrastructure throughout rural 
America. Part of rebuilding America's infrastructure is investing in 
rural broadband. Access to broadband has become essential for the 
social and economic benefits it provides to American residents, 
businesses, governments and communities. Broadband is crucial for 
increased health, educational and economic opportunities, as well as 
for job and business creation and growth. Broadband can help close the 
digital divide between rural and urban communities. RD provides a 
variety of loans and grants to build broadband networks and deliver 
service to rural households and businesses, provide capital for rural 
telecommunications companies and broadband providers.
    On December 20, 2018, Congress passed The Agricultural Improvement 
Act of 2018 (2018 Farm Bill) (Pub. L. 115-334). In addition to sweeping 
changes in broadband program authorities, Congress provided for special 
use of funding from other RD programs for broadband deployment in 
Section 6210, ``Smart Utility Authority for Broadband.'' The provision 
granted the Secretary of Agriculture the discretion to allow recipients 
of grants, loans, or loan guarantees under RD programs to use not more 
than 10 percent of such funding to finance broadband infrastructure in 
areas not served by the minimum acceptable level of broadband service, 
as defined in this part, and which will not result in

[[Page 57078]]

competitive harm to a current RD loan, grant, or loan guarantee. While 
Section 6210 only imposes the competitive harm restriction with respect 
to RUS loan, grant, and loan guarantee recipients, RD has determined to 
apply the restriction RD-wide, consistent with the statutory guidance 
on conflicts and duplications of awards provided in 7 U.S.C. 
2204b(d)(2).
    Rural community leaders, businesses and utilities must consider 
broadband availability and uses as they plan for, and implement, new 
and improved facilities and services to support community and economic 
development. While integration of communications technology into a 
planned investment can be used for internal purposes, it can also serve 
as a catalyst to rural broadband deployment efforts. For example, 
investment in health care, public safety and businesses can be enhanced 
or leveraged to expand the availability and utilization of advanced 
broadband in rural areas. Smart highways can facilitate vehicle to 
infrastructure communications to enhance driver safety; smart water 
systems can remotely detect contaminants before they pose a health 
risk; smart pipelines can report leaks and structural weaknesses before 
they become dangerous; and smart grid systems deliver enhanced security 
and energy efficiency, as well as speed recovery after an electric 
outage. Through this regulation, RD enables limited integration of 
broadband deployment with other rural investments funded through its 
broad suite of programs. It does so without adding the burden of 
seeking funding through separate program areas.
    Note however that this regulation is not intended to affect 
existing authority available under Rural Development programs that can 
fund smart utility and broadband infrastructure. Notwithstanding such 
authority, such funding will be subject to this regulation with respect 
to the public notice and reporting requirements contained in this part 
when retail broadband service is provided.

Purpose of the Regulatory Action

    The purpose of this regulation is to implement Section 6210 of the 
2018 Farm Bill designed to leverage the federal resources available for 
the deployment of broadband services in rural areas. Under Section 
6210, the Secretary has discretion to allow recipients of RD grants, 
loan, or loan guarantees to a limited amount of funds for broadband 
purposes.

Rural Development Program Cross-References

    This rulemaking includes modifying each of the individual program 
regulations to include a cross-reference to the new 7 CFR part 1980, 
subpart M. These cross-references allow the Agencies to establish the 
necessary requirements in each of the included programs so that the 
Agencies can successfully carry out the purposes of sec. 6210 of the 
2018 Farm Bill. The following paragraphs provide a brief description of 
the included programs.
    7 CFR Part 1710--General and Pre-Loan Policies and Procedures 
Common To Electric Loans and Guarantees. The Electric Program makes 
loans and loan guarantees to finance the construction of electric 
distribution, transmission, and generation facilities, including system 
improvements to improve electric service in rural areas, as well as 
demand side management, smart grid, energy efficiency and conservation 
programs, and on-grid and off-grid renewable energy systems.
    7 CFR Part 1779--Water and Waste Disposal Programs Guaranteed 
Loans. This program provides guaranteed loans to assist private lenders 
to provide affordable financing to qualified borrowers to improve 
access to clean, reliable water and waste disposal systems for 
households and businesses in rural areas.
    7 CFR Part 1780--Water and Waste Loans And Grants. This program 
provides direct loans and grants to fund clean and reliable drinking 
water systems, sanitary sewage disposal, sanitary solid waste disposal, 
and storm water drainage to households and businesses in eligible rural 
areas.
    7 CFR Part 1783--Revolving Funds for Financing Water And Wastewater 
Projects (Revolving Fund Program). This program helps qualified 
nonprofits create revolving loan funds that can provide financing to 
extend and improve water and waste disposal systems in rural areas.
    7 CFR Part 1942, Subpart A--Community Facility Loans. This program 
provides affordable funding to develop essential community facilities 
in rural areas. An essential community facility is defined as a 
facility that provides an essential service to the local community for 
the orderly development of the community in a primarily rural area, and 
does not include private, commercial, or business undertakings.
    7 CFR Part 3570, Subpart B--Community Facilities Grant Program. The 
purpose of this program is to assist in the development of essential 
community facilities in rural areas. The Agency will authorize grant 
funds on a graduated basis. Eligible applicants located in smaller 
communities with lower populations and lower median household incomes 
may receive a higher percentage of grant funds.
    7 CFR Part 3575, Subpart A--Community Programs Guaranteed Loans. 
This program provides loan guarantees to eligible private lenders to 
help build essential community facilities in rural areas.
    7 CFR Part 4274, Subpart D--Intermediary Relending Program (IRP). 
This program provides 1 percent low-interest loans to local lenders or 
``intermediaries'' that re-lend to businesses to improve economic 
conditions and create jobs in rural communities.
    7 CFR Part 4279, Subpart B--Business and Industry Loans. The 
Business and Industry Guaranteed Loan Program bolsters the availability 
of private credit by guaranteeing loans for rural businesses.
    7 CFR Part 4279, Subpart C--Biorefinery, Renewable Chemical, and 
Biobased Product Manufacturing Assistance Loans. This program, also 
known as the Section 9003 Program, provides loan guarantees to assist 
in the development of advanced biofuels, renewable chemicals, and 
biobased products manufacturing facilities.
    7 CFR, PART 4280, Subpart A--Rural Economic Development Loan And 
Grant. This program, also known as REDLG, provides funding for rural 
projects through local utility organizations. USDA provides zero-
interest loans to local utilities which they, in turn, pass through to 
local businesses (ultimate recipients) for projects that will create 
and retain employment in rural areas. The ultimate recipients repay the 
lending utility directly. The utility is then responsible for repayment 
to USDA.
    7 CFR Part 4280, Subpart B--Rural Energy For America Program. This 
program, also known as REAP, provides guaranteed loan financing and 
grant funding to agricultural producers and rural small businesses to 
purchase or install renewable energy systems or make energy efficiency 
improvements.
    7 CFR Part 4280, Subpart E--Rural Business Development Grants. This 
program, also known as RBDG, is designed to provide technical 
assistance and training and other activities leading to the development 
or expansion of small and emerging private businesses that have fewer 
than 50 new workers and less than $1 million in gross revenue, in rural 
areas.

[[Page 57079]]

Request for Comments

    To enhance program delivery, RD seeks input from the public on this 
rule and will consider these comments and the need for making any 
revisions as a result of them. A final rule, if necessary, will be 
published in the Federal Register. Please refer to the ADDRESSESS 
section on how to submit comments on this rule.

Executive Orders and Other Certifications

Executive Order 12372, Intergovernmental Review

    This rule is excluded from the scope of Executive Order 12372 
(Intergovernmental Consultation), which may require a consultation with 
State and local officials. See the final rule related notice entitled, 
``Department Programs and Activities Excluded from Executive Order 
12372'' (50 FR 47034).

Executive Order 12866, Regulatory Planning and E.O. 13563, Improving 
Regulation and Regulatory Review

    This rule has been determined to be not significant for purposes of 
Executive Order 12866 and E.O. 13563 and, therefore, has not been 
reviewed by the Office of Management and Budget (OMB).

Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Management and Budget designated this rule as not a major 
rule, as defined by 5 U.S.C. 804(2).

Regulatory Flexibility Act Certification

    RD has determined that the Regulatory Flexibility Act is not 
applicable to this rule because the Agency is not required by 5 U.S.C. 
553 or any other provision of law to publish a notice of proposed 
rulemaking with respect to the subject matter of this rule.

Executive Order 12988, Civil Justice Reform

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. RD has determined that this rule meets the applicable 
standards provided in section 3 of the Executive Order. In addition, 
all state and local laws and regulations that conflict with this rule 
will be preempted. No retroactive effect will be given to this rule 
and, in accordance with section 212(e) of the Department of Agriculture 
Reorganization Act of 1994 (7 U.S.C. 6912(e)), administrative appeal 
procedures must be exhausted before an action against the Department or 
its agencies may be initiated.

Executive Order 13132, Federalism

    The policies contained in this rule do not have any substantial 
direct effect on States, on the relationship between the National 
Government and the States, or on the distribution of power and 
responsibilities among the various levels of government. Nor does this 
rule impose substantial direct compliance costs on State and local 
governments. Therefore, consultation with the States is not required.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, ``Consultation and Coordination with Indian 
Tribal Governments.'' Executive Order 13175 requires Federal agencies 
to consult and coordinate with tribes on a government-to-government 
basis on policies that have tribal implications, including regulations, 
legislative comments or proposed legislation, and other policy 
statements or actions that have substantial direct effects on one or 
more Indian tribes, on the relationship between the Federal Government 
and Indian tribes or on the distribution of power and responsibilities 
between the Federal Government and Indian tribes. RD has assessed the 
impact of this rule on Indian tribes and determined that it does not, 
to our knowledge, have tribal implications that require tribal 
consultation under E.O. 13175. If a tribe would like to engage in 
consultation with RD on this rule, please contact RD's Native American 
Coordinator at (720) 544-2911 or [email protected].
    Additionally, Rural Development recognizes the challenges of 
deploying broadband in tribal communities. Therefore, Rural Development 
will coordinate with USDA's Office of Tribal Relations to conduct at 
least one listening session to collect recommendations from tribes on 
how this program can help tribes address current broadband challenges, 
and gain additional insight into the unique economic, geographical and 
political realities that continue to impair access to affordable 
broadband infrastructure in many tribal communities.

Executive Order 13771, Reducing Regulation and Controlling Regulatory 
Costs

    Executive Order 13771 directs agencies to control regulatory costs 
through a budgeting process. This rule is not subject to the 
requirements of Executive Order 13771 (82 FR 9339, February 3, 2017) 
because it is not significant under Executive Order 12886.

Information Collection and Recordkeeping Requirements

    The Information Collection and Recordkeeping requirements contained 
in this rule have been approved by an emergency clearance under OMB 
Control Number 0572-0156. In accordance with the Paperwork Reduction 
Act of 1995 (44 U.S.C. chapter 35), Rural Development invites comments 
on any aspect of this collection of information including suggestions 
for reducing the burden, for which the Agency intends to request 
approval from the Office of Management and Budget (OMB). Comments may 
be submitted regarding this information collection by the following 
method:
    Comments may be submitted on this interim final rule using the 
following method:
     Electronically using the Federal eRulemaking Portal: Go to 
http://www.regulations.gov and in the ``Search Documents'' box, enter 
the Docket Number RUS-20-TELECOM-0022 or the RIN No. 0572-AC50, and 
click the ``Search'' button. To submit a comment, choose the ``Comment 
Now!'' button. Information on using Regulations.gov, including 
instructions for accessing documents, submitting comments, and viewing 
the docket after the close of the comment period, is available under 
the ``Help'' tab at the top of the Home page. In the Docket ID column, 
select RUS-20-TELECOM-0022 to submit or view public comments and to 
view supporting and related materials available electronically. 
Information on using Regulations.gov, including instructions for 
accessing documents, submitting comments, and viewing the docket after 
the close of the comment period, is available through the site's ``User 
Tips'' link.
    Other Information: Additional information about Rural Development 
and its programs is available on the internet at http://www.rd.usda.gov.
    Comments are invited on: (a) The accuracy of the agency's estimate 
of burden including the validity of the methodology and assumption 
used; (b) ways to enhance the quality, utility, and clarity of the 
information to be collected; and (c) ways to minimize the burden of the 
collection of information on those who are to respond, including using 
appropriate automated, electronic, mechanical, or other technological 
collection techniques on other forms and information technology.

[[Page 57080]]

    Title: Special Authority to Enable Funding of Broadband and Smart 
Utility Facilities Across Select Rural Development Programs.
    OMB Control Number: 0572-0156.
    Type of Request: New.
    Abstract: The Rural Utilities Service, Rural Business-Cooperative 
Service, and Rural Housing Service, agencies that comprise the Rural 
Development Mission Area within the United States Department of 
Agriculture, are issuing this final rule to establish the authority 
authorized by Section 6210 of the Agriculture Improvement Act of 2018. 
This rule describes the procedures by which these agencies will 
consider projects eligible for special broadband authority and Smart 
Utility facilities.
    The collection of information is necessary for RD to determine an 
applicant's ability to borrow under the terms of the 2018 Farm Bill and 
included programs and that the applicant complies with statutory, 
regulatory, and administrative eligibility requirements for loan 
assistance. As part of that submission, applicants are required to 
provide a service area map, where applicable, of their entire service 
territory.
    Applicants seeking funding to finance the provision of retail 
broadband under the special broadband authority of this part are 
generally expected to comply with the rules related to broadband 
funding under Title VI of the Rural Electrification Act. To be 
considered for funding under special broadband authority, applicants 
must provide:
    (1) A description of the proposed retail broadband project;
    (2) a map, where applicable, of the proposed service area to be 
funded under smart utility authority of the applicant;
    (3) the amount and type of support requested by the applicant;
    (4) any other information required of similar applicants under 
Title VI of the Rural Electrification Act.
    Fully Searchable Data Base--The applicant information provided will 
be made part of a fully searchable database which could disclose to the 
public the information above.
    Public Notice Survey--The agency will post a public notice filing 
on the agency's website. Incumbent service providers in the area may 
respond to the public notice filing by providing a public notice 
response.
    Estimated Number of Respondents: 53.
    Estimated Number of Responses per Respondent: 3.
    Estimated Total Annual Responses: 159.
    Estimate of Hours (Burden) per Response: 1.5 hours.
    Estimated Total Annual Burden on Respondents: 239 hours.
    Copies of this information collection can be obtained from MaryPat 
Daskal, Branch 2 Regulations Management Division, Innovation Center, 
Rural Development, U.S. Department of Agriculture, 1400 Independence 
Ave. SW, Stop 1522, Washington, DC 20250. Phone: 202-720-7853.
    All responses to this information collection and recordkeeping 
notice will be summarized and included in the request for OMB approval. 
All comments will also become a matter of public record.

E-Government Act Compliance

    RD is committed to the E-Government Act, which requires Government 
agencies in general to provide the public the option of submitting 
information or transacting business electronically to the maximum 
extent possible.

National Environmental Policy Act Certification

    This rule has been examined under RD environmental regulations at 7 
CFR part 1970. RD has determined that this is not a major Federal 
action significantly affecting the environment. Therefore, in 
accordance with the National Environmental Policy Act of 1969 (42 
U.S.C. 4321 et seq.), an Environmental Impact Statement is not 
required.

Catalog of Federal Domestic Assistance

    The programs eligible for special broadband authority under this 
rule are as follows:

 Business and Industry Loan Program--10.768
 Biorefinery Assistance--10.865
 Community Facilities Loans and Grants--10.766
 Grant Program to Establish a Fund for Financing Water and 
Wastewater Projects--10.864
 Intermediary Relending Program--10.767
 Rural Business Development Grant--10.351
 Rural Economic Development Loans and Grants--10.854
 Rural Electrification Loans and Loan Guarantees--10.850
 Rural Energy for America Program--10.868
 Rural Rental Housing Loans--10.415
 Sec. 538 Rural Rental Housing Guaranteed Loans--10.438
 Water & Waste Disposal Systems for Rural Communities--10.760

    The Catalog of Federal Domestic Assistance Programs is available on 
a subscription basis from the Superintendent of Documents, the United 
States Government Printing Office, Washington, DC 20402-9325, telephone 
number (202) 512-1800 or online at https://beta.sam.gov/.

Unfunded Mandates

    This rule contains no Federal mandates (under the regulatory 
provision of title II of the Unfunded Mandates Reform Act of 1995) for 
State, local, and Tribal governments or the private sector. Therefore, 
this rule is not subject to the requirements of section 202 and 205 of 
the Unfunded Mandates Reform Act.

Civil Rights Impact Analysis

    RD has reviewed this rule in accordance with USDA Regulation 4300-
4, ``Civil Rights Impact Analysis,'' to identify any major civil rights 
impacts the rule might have on program participants on the basis of 
age, race, color, national origin, sex or disability. After review and 
analysis of the rule and available data, it has been determined that 
the program purpose, application submission and eligibility criteria, 
and the issuance of this rule will neither adversely nor 
disproportionately impact very low, low and moderate-income 
populations, minority populations, women, Indian tribes or persons with 
a disability, by virtue of their race, color, national origin, sex, 
age, disability, marital, or familial status.

USDA Non-Discrimination Policy

    In accordance with Federal civil rights law and USDA civil rights 
regulations and policies, the USDA, its Agencies, offices, and 
employees, and institutions participating in or administering USDA 
programs are prohibited from discriminating based on race, color, 
national origin, religion, sex, gender identity (including gender 
expression), sexual orientation, disability, age, marital status, 
family/parental status, income derived from a public assistance 
program, political beliefs, or reprisal or retaliation for prior civil 
rights activity, in any program or activity conducted or funded by USDA 
(not all bases apply to all programs). Remedies and complaint filing 
deadlines vary by program or incident.
    Persons with disabilities who require alternative means of 
communication for program information (e.g., Braille, large print, 
audiotape, American Sign Language, etc.) should contact the responsible 
Agency or USDA's TARGET Center at (202) 720-2600 (voice and TTY) or 
contact USDA through the Federal Relay Service at (800) 877-8339.

[[Page 57081]]

Additionally, program information may be made available in languages 
other than English.
    To file a program discrimination complaint, complete the USDA 
Program Discrimination Complaint Form, AD-3027, found online at http://www.ascr.usda.gov/complaint_filing_cust.html and at any USDA office or 
write a letter addressed to USDA and provide in the letter all of the 
information requested in the form. To request a copy of the complaint 
form, call (866) 632-9992. Submit your completed form or letter to USDA 
by: (1) Mail: U.S. Department of Agriculture, Office of the Assistant 
Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC 
20250-9410; (2) fax: (202) 690-7442; or (3) email: 
[email protected].
    USDA is an equal opportunity provider, employer, and lender.

List of Subjects

7 CFR Part 1710

    Electric power, Grant programs--energy, Loan programs--energy, 
Reporting and recordkeeping requirements, Rural areas.

7 CFR Part 1779

    Loan programs, Waste treatment and disposal, Water supply.

7 CFR Part 1780

    Community development, Community facilities, Grant programs--
housing and community development, Loan programs--housing and community 
development, Reporting and recordkeeping requirements, Rural areas, 
Waste treatment and disposal, Water supply, Watersheds.

7 CFR Part 1783

    Business and industry, Community development, Community facilities, 
Grant programs--housing and community development, Reporting and 
recordkeeping requirements, Rural areas Waste treatment and disposal, 
Water supply, Watersheds.

7 CFR Part 1942

    Business and industry, Community facilities, Fire prevention, Grant 
programs--business, Grant programs--housing and community development, 
Grant programs--Indians, Indians, Loan programs--agriculture, Loan 
programs--housing and community development, Loan programs--Indians, 
Loan programs--natural resources, Reporting and recordkeeping 
requirements, Rural areas, Soil conservation, Waste treatment and 
disposal, Water supply, Watersheds.

7 CFR Part 1980

    Agriculture, Business and industry, Community facilities, Credit, 
Disaster assistance, Livestock, Loan programs--agriculture, Loan 
programs--business, Loan programs--housing and community development, 
Low- and moderate-income housing, Reporting and recordkeeping 
requirements, Rural areas.

7 CFR Part 3570

    Administrative practice and procedure, Fair housing, Grant 
programs--housing and community development, Housing, Low- and 
moderate-income housing, Reporting and recordkeeping requirements, 
Rural areas.

7 CFR Part 4274

    Community development, Loan programs--business, Reporting and 
recordkeeping requirements, Rural areas.

7 CFR Part 4279

    Loan programs--business, Reporting and recordkeeping requirements, 
Rural areas.

7 CFR Part 4280

    Business and industry, Energy, Grant programs--business, Loan 
programs--business, Rural areas.

    Accordingly, for reasons set forth in the preamble, chapters XVII, 
XVIII, XXXV, and XLII of title 7 of the Code of Federal Regulations 
(CFR) are amended as follows:

Chapter XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE

PART 1710--GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO 
ELECTRIC LOANS AND GUARANTEES

0
1. The authority citation for part 1710 continues to read as follows:

    Authority:  7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

Subpart C--Loan Purposes and Basic Policies

0
2. Amend Sec.  1710.106 by adding paragraph (g) to read as follows:


Sec.  1710.106   Uses of loan funds.

* * * * *
    (g) A borrower is permitted to use up to 10 percent of the amount 
provided under this part to construct, improve, or acquire broadband 
infrastructure related to the project financed, subject to the 
requirements of 7 CFR part 1980, subpart M.

PART 1779--WATER AND WASTE DISPOSAL PROGRAMS GUARANTEED LOANS

0
3. The authority citation for part 1779 continues to read as follows:

    Authority:  5 U.S.C. 301; 7 U.S.C. 1989; 16 U.S.C. 1005.


0
4. Amend Sec.  1779.24 by adding paragraph (f) to read as follows:


Sec.  1779.24   Eligible loan purposes.

* * * * *
    (f) A borrower is permitted to use up to 10 percent of the amount 
provided under this part to construct, improve, or acquire broadband 
infrastructure related to the project financed, subject to the 
requirements of 7 CFR part 1980, subpart M.

PART 1780--WATER AND WASTE LOANS AND GRANTS

0
5. The authority citation for part 1780 continues to read as follows:

    Authority: 5 U.S.C. 301; 7 U.S.C. 1989; 16 U.S.C. 1005.

Subpart A--General Policies and Requirements

0
6. Amend Sec.  1780.9 by adding paragraph (h) to read as follows:


Sec.  1780.9   Eligible loan and grant purposes.

* * * * *
    (h) A borrower is permitted to use up to 10 percent of the amount 
provided under this part to construct, improve, or acquire broadband 
infrastructure related to the project financed, subject to the 
requirements of 7 CFR part 1980, subpart M.

PART 1783--REVOLVING FUNDS FOR FINANCING WATER AND WASTEWATER 
PROJECTS (REVOLVING FUND PROGRAM)

0
7. The authority citation for part 1783 continues to read as follows:

    Authority: 7 U.S.C. 1926(a)(2)(B).

Subpart A--General

0
8. Revise Sec.  1783 to read as follows:


Sec.  1783.1   What is the purpose of the Revolving Fund Program?

    This part sets forth the policies and procedures for making grants 
to qualified private, non-profit entities to capitalize revolving funds 
for the purpose of providing financing to eligible entities for pre-
development costs associated with proposed water and wastewater 
projects or with existing water and wastewater systems, and short-term 
costs incurred for

[[Page 57082]]

replacement equipment, small-scale extension of services, or other 
small capital projects that are not part of the regular operations and 
maintenance activities of existing water and wastewater systems. An 
eligible entity is permitted to use up to 10 percent of the amount 
provided under this part to construct, improve, or acquire broadband 
infrastructure related to the project financed, subject to the 
requirements of 7 CFR part 1980, subpart M.

CHAPTER XVIII--RURAL HOUSING SERVICE, RURAL BUSINESS-COOPERATIVE 
SERVICE, RURAL UTILITIES SERVICE, AND FARM SERVICE AGENCY, DEPARTMENT 
OF AGRICULTURE

PART 1942--ASSOCIATIONS

0
9. The authority citation for part 1942 continues to read as follows

    Authority:  5 U.S.C. 301; 7 U.S.C. 1989.

Subpart A--Community Facility Loans

0
10. Amend Sec.  1942.17 by revising paragraph (d)(1)(i)(B)(5) to read 
as follows:


 Sec.  1942.17  Community facilities.

* * * * *
    (d) * * *
    (1) * * *
    (i) * * *
    (B) * * *
    (5) Supplemental and supporting structures for other rural 
electrification or telephone systems (including facilities such as 
headquarters and office buildings, storage facilities, and maintenance 
shops) when not eligible for Rural Electrification Administration 
financing. Additionally, a borrower is permitted to use up to 10 
percent of the amount provided under this subpart to construct, 
improve, or acquire broadband infrastructure related to the project 
financed, subject to the requirements of 7 CFR part 1980, subpart M.
* * * * *

PART 1980--GENERAL

0
11. Add subpart M, consisting of Sec. Sec.  1980.1201 through 1980.1210 
to read as follows:

Subpart M--Special Authority To Enable Funding of Broadband and 
Smart Utility Facilities Across Select Rural Development Programs

Sec.
1980.1201 Purpose.
1980.1202 Special broadband and smart utility facility funding.
1980.1203 Definitions.
1980.1204 Eligibility.
1980.1205 Eligible purposes.
1980.1206 Application process and public notice requirement.
1980.1207 Approval to provide retail broadband service.
1980.1208 Award procedures and compliance.
1980.1209 Reporting.
1980.1210 OMB Control Number.

    Authority: 7 U.S.C. 1981(e) and 7 U.S.C. 908.


Sec.  1980.1201   Purpose.

    This subpart establishes policies and procedures for the review, 
approval and servicing of projects authorized to use funding for 
broadband and smart utility facilities (Special Broadband Authority) in 
select Rural Development programs. This special broadband authority 
will leverage the federal resources available for the deployment 
broadband services in rural areas. The Secretary has discretion to 
allow recipients of RD grants, loans, or loan guarantees to use a 
limited amount of funds for broadband purposes.


Sec.  1980.1202   Special broadband and smart utility facility funding.

    (a) The Secretary, acting directly or through authority delegated 
to the RD agency heads, may allow a recipient of an RD grant, loan, or 
loan guarantee to use up to 10 percent of project funds for any purpose 
outlined in Sec.  1980.1205 and in compliance with this part.
    (b) Prior to exercising authority under this part, the Agency with 
a request for special broadband authority (the Awarding Agency) shall 
consult with the Administrator of the affected RD Agency to determine:
    (1) If the provision of broadband service by the recipient (or 
another party under a wholesale broadband service agreement) would 
cause competitive harm to a current Rural Development borrower, 
grantee, or guaranteed lender with respect to an active project for 
broadband deployment and provision of services With respect to a 
current RD awardee in the project service area that has significantly 
defaulted on, or not material complied with its award requirements, the 
affected RD agency may make a finding of no competitive harm unless it 
is necessary to protect the government's interest;
    (2) If the recipient intends to use the funds for the provision of 
retail broadband service and, if so, assist the agency in providing 
public notice and receiving responses from existing service providers, 
as provided in this rule, so that a determination can be made as to 
whether the minimum acceptable level of broadband service exists in the 
service area at the time of the request; and
    (3) If the recipient does not intend to provide broadband service, 
and the funded facilities will only be used for internal use, such as 
smart utility, there shall be no finding of competitive harm and the 
recipient shall be relieved of the public notice provision requirement 
of Sec.  1980.1207 and reporting requirements of Sec.  1980.1209. Note 
that recipients funding broadband facilities for internal use under an 
RD program's existing authority would not be subject to this part with 
respect to the 10 percent funding limitation; however, if such 
facilities are contemplated to provide retail broadband service in the 
future, the public notice requirements of Sec.  1980.1206(b) and (c) 
will apply.


Sec.  1980.1203   Definitions.

    Agency. One of the three Rural Development agencies, the Rural 
Housing Service, the Rural Business-Cooperative Service or the Rural 
Utilities Service.
    Agency head. The Administrator of the applicable RD agency.
    Awarding Agency. An agency which has received an application for 
special broadband authority or has approved an application for such 
authority.
    Broadband service. Any technology identified by the Secretary as 
having the capacity to provide transmission facilities that enable a 
subscriber to originate and receive voice, data, graphics, and video.
    Con Act. The Consolidated Farm and Rural Development Act of 1972, 
as codified and amended at 7 U.S.C. 1921 et seq.
    Minimum acceptable level of broadband service. The minimum 
transmission capacity with respect to terrestrial service that will 
qualify as broadband service, as published by the RUS in the Federal 
Register pursuant to 7 CFR part 1738. If a new minimum transmission 
capacity is published in the Federal Register while a request for smart 
utility authority is pending, broadband service for the purpose of 
reviewing the request will be defined by the minimum transmission 
capacity that was in effect at the time the request was received by the 
Agency.
    Rural Development (RD). A mission area of the United States 
Department of Agriculture (USDA) made up of the Rural Housing Service 
(RHS), Rural Business-Cooperative Service (RBCS) and the Rural 
Utilities Service (RUS).
    Retail broadband service. For the purposes of this subpart, retail 
broadband service means any broadband service that is provided to the 
public at a charge. Broadband

[[Page 57083]]

Service which is used exclusively by the recipient for its own purposes 
and is not sold to the public is not retail broadband. Broadband 
service which is sold to other service providers through wholesale 
agreements shall also not be considered retail broadband service.
    RE Act. The Rural Electrification Act of 1936, as codified and 
amended at 7 U.S.C. 901 et seq.
    Secretary. The Secretary of Agriculture.
    Special broadband authority. Approval by an RD program to use up to 
10 percent of the proceeds of an RD loan, grant, or loan guarantee for 
the purposes of constructing, improving, or acquiring broadband 
facilities and equipment in rural areas, whether or not retail or 
wholesale broadband service will be provided.
    Smart utility. The use of broadband facilities and equipment that 
is only available internally by a recipient during the economic life of 
the assets financed by an RD loan, grant, or loan guarantee.


Sec.  1980.1204  Eligibility.

    Programs eligible to be considered for smart utility and broadband 
service authority include RD programs under the Rural Electrification 
Act and the Consolidated Farm and Rural Development Act. Programs 
included, but not limited to, are as follows:
    (a) 7 CFR part 1710--General and Pre-Loan Policies and Procedures 
Common to Electric Loans and Guarantees;
    (b) 7 CFR part 1779--Water and Waste Disposal Programs Guaranteed 
Loans;
    (c) 7 CFR part 1780--Water and Waste Loans and Grants;
    (d) 7 CFR part 1783--Revolving Funds for Financing Water and 
Wastewater Projects (Revolving Fund Program);
    (e) 7 CFR part 1942, subpart A--Community Facility Loans;
    (f) 7 CFR part 3575, subpart A--Community Programs Guaranteed 
Loans;
    (g) 7 CFR part 3560--Direct Multi-Family Housing Loans and Grants;
    (h) 7 CFR part 3565--Guaranteed Rural Rental Housing Program;
    (i) 7 CFR part 3570, subpart B--Community Facilities Grant Program;
    (j) 7 CFR part 4274, subpart D--Intermediary Relending Program 
(IRP);
    (k) 7 CFR part 4279, subpart B--Business and Industry Loans;
    (l) 7 CFR part 4279, subpart C--Biorefinery, Renewable Chemical and 
Biobased Product Manufacturing Assistance Loans;
    (m) 7 CFR, part 4280, subpart A--Rural Economic Development Loan 
and Grant Programs;
    (n) 7 CFR part 4280, subpart B--Rural Energy for American Program; 
and
    (o) 7 CFR part 4280, subpart E--Rural Business Development Grants.


Sec.  1980.1205   Eligible purposes.

    Recipients may use funds for the costs of the construction, 
improvement, and acquisition of broadband facilities and equipment in 
rural areas, as set forth in this part. Rural area shall be defined by 
the applicable program regulations.


Sec.  1980.1206   Application process and public notice requirement.

    (a) Initial notification to agency for all programs. Applicants 
seeking to use program funds for eligible purposes under Sec.  
1980.1205 must inform the RD agency at the time of application, except 
for Smart Grid loans authorized under the RE Act and 7 CFR part 1710. 
This is to determine that sufficient funding is available in the 
applicable program to consider funding this special broadband authority 
in addition to the underlying RD project.
    (b) Notice for retail broadband. All applicants that use special 
broadband authority to provide retail broadband service must provide 
the following information, which will be posted publicly on RUS' fully 
searchable website, in addition to the identity of the applicant and 
the status of the application:
    (1) A description of the proposed retail broadband project;
    (2) A map of the proposed service area to be funded under smart 
utility authority of the applicant;
    (3) The amount and type of support requested by the applicant;
    (4) The estimated number and proportion of service points in the 
proposed service territory without fixed broadband service, whether 
terrestrial or wireless; and
    (5) Any other information required of the applicant in a funding 
notice.
    (c) Information available to the public for approved applications. 
For applications that are approved for the provision of retail 
broadband service under the special broadband authority, the following 
information will be made available to the public:
    (1) The information provided in paragraph (a) of this section;
    (2) Each annual report required under Sec.  1980.1209, which will 
be redacted to protect any proprietary information; and
    (3) Such other information as the Administrator of the RUS deems 
sufficient to allow the public to understand the assistance provided.
    (d) Alternative methods of public notice. The Administrator of the 
RUS will provide instructions on the RUS website for alternative 
methods of public notice and responses by existing service providers 
related to projects seeking funding under the special broadband 
authority where the Administrator determines that existing procedures 
and systems used by applicants to RUS' broadband programs would be 
impracticable, costly, or impose excessive delay.
    (e) Additional requirements for guarantees, intermediaries and 
revolving loan programs. In addition to paragraphs (a) through (d) of 
this section, participants and recipients of funds from eligible RD 
guarantee, intermediary, and revolving loan programs set forth in Sec.  
1980.1204 shall be subject to the following requirements:
    (1) No funds may be issued by program participants to recipients 
for special broadband authority without written approval from the 
Awarding Agency.
    (2) Recipients must apply for special broadband authority on a 
project-by-project basis through program participants. Program 
participants shall serve as the applicant to the Awarding Agency and 
shall be responsible for ensuring that the public notice, reporting and 
other requirements of this part are contained in applicable agreements 
between the participant and the recipient.


Sec.  1980.1207   Approval to provide retail broadband service.

    (a) Service area assessment. For applicants requesting to provide 
retail broadband service under the special broadband authority, 
applications must be posted publicly for 45 days.
    (1) During the public notice period, service providers may 
voluntarily submit information required by the RUS Administrator onto 
the agency's mapping tool, or alternate methods if determined by the 
RUS Administrator under Sec.  1980.1206(d). Information submitted by 
service providers shall be exempt from disclosure pursuant to 5 U.S.C. 
552(b)(2)(B).552.
    (2) If no broadband service provider submits information under 
paragraph (a)(1) of this section, the agency shall consider the number 
of providers in the proposed service area to be established by using 
any other data regarding the availability of broadband service that the 
RUS may collect or obtain through reasonable efforts.
    (b) Use of funds. After review of information submitted from 
service providers, if any, and all available data on broadband 
availability, if the RUS determines that the minimum acceptable level 
of broadband service is

[[Page 57084]]

available in the proposed retail service area, the Awarding Agency 
shall not approve the use of funds for such purpose. The Awarding 
Agency, however, may approve the use of funds for retail broadband 
service if:
    (1) Areas with the minimum acceptable level of broadband service 
are eliminated from the proposed service area; and
    (2) The applicant covenants that it will not provide service in 
these areas with funds from the Awarding Agency.
    (c) Use of Funds for wholesale broadband service. For applicants 
requesting that funds be used for wholesale broadband service, the 
applicant must agree:
    (1) To publicly advertise in the service area that broadband 
service is available at wholesale to any service provider; and
    (2) That the same wholesale contract will be used for all service 
providers requesting wholesale service and offered at the same per unit 
price.


Sec.  1980.1208   Award procedures and compliance.

    (a) The Awarding Agency will inform applicants seeking 
consideration of funding under this part of the agency's disposition of 
the applicant's request;
    (b) Except as provided in Sec.  1980.1206(e), awards made under 
this part shall be managed and serviced by the Awarding Agency;
    (c) Except as provided in Sec.  1980.1206(e), the Agency shall be 
responsible for oversight and compliance of projects utilizing 
authority under this part;
    (d) Requirements for providing retail broadband service or 
wholesale broadband service under Sec. Sec.  1980.1206, 1980.1207, and 
this section shall be made part of the applicable loan or grant 
agreement between the recipient and the Awarding Agency, or, with 
respect to guarantees and intermediaries, between the program 
participants and the recipients;
    (e) The applicable agreement must provide that non-compliance with 
this part or use of funds for retail broadband service or wholesale 
broadband service without having received agency authority to do so as 
required in this part, shall:
    (1) Be an automatic event of default under the applicable 
agreement; and
    (2) Require that the associated loan or grant funds used in 
violation of this part be disallowed or returned immediately to the 
awarding agency or to the program participant for eligible relending.


Sec.  1980.1209   Reporting.

    For three years starting the first January 31st after completion of 
the broadband project, recipients of funds used for retail broadband 
service under this part must submit the following information each year 
utilizing RUS' online reporting system:
    (a) Existing network service improvements and facility upgrades, as 
well as new equipment and capacity enhancements that support high-speed 
broadband access for educational institutions, health care providers, 
and public safety service providers;
    (b) The estimated number of end users who are currently using or 
forecast to use the new or upgraded infrastructure;
    (c) The progress towards fulfilling the objectives for which the 
assistance was granted;
    (d) The number and geospatial location of residences and businesses 
that will receive new broadband service;
    (e) The speed and price of the Recipient's broadband service 
offerings; and
    (f) The average price of broadband service in the project's service 
area.


Sec.  1980.1211  OMB Control Number.

    The information collection requirements in this part are approved 
by the Office of Management and Budget and assigned OMB control number 
0572-0156.

CHAPTER XXXV--RURAL HOUSING SERVICE, DEPARTMENT OF AGRICULTURE

PART 3570--COMMUNITY PROGRAMS

0
12. The authority citation for part 3570 continues to read as follows:

    Authority:  64 FR 32388, June 17, 1999, unless otherwise noted.

Subpart B--Community Facilities Grant Program

0
13. Amend Sec.  3570.62 by adding paragraph (a)(2)(iii) to read as 
follows:


Sec.  3570.62  Use of grant funds.

* * * * *
    (a) * * *
    (2) * * *
    (iii) A borrower is permitted to use up to 10 percent of the amount 
provided under this subpart to construct, improve, or acquire broadband 
infrastructure related to the project financed, subject to the 
requirements of 7 CFR part 1980, subpart M.
* * * * *

PART 3575--GENERAL

0
14. The authority citation for part 3575 continues to read as follows:

    Authority:  5 U.S.C. 301, 7 U.S.C. 1989.

Subpart A--Community Programs Guaranteed Loans

0
15. Amend Sec.  3575.24 by adding paragraph (b)(5) to read as follows:


Sec.  3575.24   Eligible loan purposes.

* * * * *
    (b) * * *
    (5) A borrower is permitted to use up to 10 percent of the amount 
provided under this subpart to construct, improve, or acquire broadband 
infrastructure related to the project financed, subject to the 
requirements of 7 CFR part 1980, subpart M.

CHAPTER XLII--RURAL BUSINESS-COOPERATIVE SERVICE AND RURAL UTILITIES 
SERVICE, DEPARTMENT OF AGRICULTURE

PART 4274--DIRECT AND INSURED LOANMAKING

0
16. The authority citation for part 4274 continues to read as follows:

    Authority:  5 U.S.C. 301; 7 U.S.C. 1932 note; 7 U.S.C. 1989.

Subpart D--Intermediary Relending Program (IRP)

0
17. Amend Sec.  4274.314 by adding paragraph (b)(16) to read as 
follows:


Sec.  4274.314   Loan purposes.

* * * * *
    (b) * * *
    (16) A borrower is permitted to use up to 10 percent of the amount 
provided under this subpart to construct, improve, or acquire broadband 
infrastructure related to the project financed, subject to the 
requirements of 7 CFR part 1980, subpart M.

PART 4279--GUARANTEED LOANMAKING

0
18. The authority citation for part 4279 is revised to read as follows:

    Authority:  5 U.S.C. 301; 7 U.S.C. 1989; 7 U.S.C. 310B(a)(2); 
and 7 U.S.C 8103.

Subpart B--Business and Industry Loans

0
19. Amend Sec.  4279.113 by adding paragraph (z) to read as follows:


Sec.  4279.113   Eligible uses of funds.

* * * * *
    (z) A borrower is permitted to use up to 10 percent of the amount 
provided under this subpart to construct, improve, or acquire broadband 
infrastructure related to the project financed, subject to the 
requirements of 7 CFR part 1980, subpart M.

[[Page 57085]]

Subpart C--Biorefinery, Renewable Chemical, and Biobased Product 
Manufacturing Assistance Loans

0
20. Amend Sec.  4279.210 by adding paragraph (d)(10) to read as 
follows:


Sec.  4279.210   Project eligibility requirements.

* * * * *
    (d) * * *
    (10) A borrower is permitted to use up to 10 percent of the amount 
provided under this subpart to construct, improve, or acquire broadband 
infrastructure related to the project financed, subject to the 
requirements of 7 CFR part 1980, subpart M.
* * * * *

PART 4280--LOANS AND GRANTS

0
21. The authority citation for part 4280 continues to read as follows:

    Authority:  5 U.S.C. 301; 7 U.S.C. 940c; 7 U.S.C. 1932(c).

Subpart A--Rural Economic Development Loan and Grant Programs

0
22. Amend Sec.  4280.15 by adding paragraph (i) to read as follows:


Sec.  4280.15   Ultimate recipient projects eligible for rural economic 
development loan funding.

* * * * *
    (i) A borrower is permitted to use up to 10 percent of the amount 
provided under this subpart to construct, improve, or acquire broadband 
infrastructure related to the project financed, subject to the 
requirements of 7 CFR part 1980, subpart M.

Subpart B--Rural Energy for America Program

0
23. Amend Sec.  4280.101 by adding paragraph (c) to read as follows:


Sec.  4280.101   Purpose.

* * * * *
    (c) Grants or guaranteed loans, or a combination grant and 
guaranteed loan to a borrower is permitted to use up to 10 percent of 
the amount provided under this subpart to construct, improve, or 
acquire broadband infrastructure related to the project financed, 
subject to the requirements of 7 CFR part 1980, subpart M.

Subpart E--Rural Business Development Grants

0
24. Amend Sec.  4280.417 by adding paragraph (e) to read as follows:


Sec.  4280.417  Project eligibility.

* * * * *
    (e) An applicant is permitted to use up to 10 percent of the amount 
provided under this subpart to construct, improve, or acquire broadband 
infrastructure related to the project financed, subject to the 
requirements of 7 CFR part 1980, subpart M.

Bette B. Brand,
Deputy Under Secretary, Rural Development.
[FR Doc. 2020-19033 Filed 9-14-20; 8:45 am]
BILLING CODE 3410-15-P