Regular Session 2019-2020 Senate Bill 0835 P.N. 2112

HOUSE AMENDED

PRIOR PRINTER'S NOS. 1144, 1800

PRINTER'S NO. 2112

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

835

Session of

2019

INTRODUCED BY LANGERHOLC, PITTMAN, STEFANO, ARGALL, MENSCH,

J. WARD, STREET, BREWSTER, YUDICHAK AND BROOKS,

AUGUST 26, 2019

AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES,

OCTOBER 21, 2020

AN ACT

Providing for funding of high-speed broadband service

infrastructure deployment in unserved areas of this

Commonwealth and for powers and duties of the Commonwealth

Financing Authority; establishing the Unserved High-speed

Broadband Funding Program Account; making an appropriation;

and making a related repeal.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Short title.

This act shall be known and may be cited as the Unserved

High-Speed Broadband Funding Pilot Program Act.

Section 2. Declaration of policy.

The General Assembly finds and declares as follows:

(1) The purpose of this act is to facilitate the

deployment of high-speed broadband service infrastructure in

unserved areas of this Commonwealth.

(2) The economic and business incentives to deploy high-

speed broadband service infrastructure may be insufficient to

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ensure full access to high-speed broadband services in low-

density, rural locations and other areas of this Commonwealth

where the unit costs of providing service may not provide an

adequate return on investment for private companies.

(3) Access to high-speed broadband services in unserved

areas of this Commonwealth will enhance economic development,

education, health care and emergency services in this

Commonwealth.

(4) Establishing a grant program to facilitate the

deployment of high-speed broadband services infrastructure in

unserved areas will further these objectives through new

private sector investments and is in the policy interest of

this Commonwealth.

Section 3. Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Account." The Unserved High-speed Broadband Funding Program

Account established under section 7(c).

"Authority." The Commonwealth Financing Authority.

"Board." The board of directors of the authority.

"High-speed broadband service." Any wireline or fixed

wireless technology having the capacity to transmit data from or

to the Internet at minimum speeds of at least 25 megabits per

second downstream and 3 megabits per second upstream. WIRELESS,

WIRELINE OR FIXED WIRELESS TECHNOLOGY HAVING THE CAPACITY TO

TRANSMIT DATA FROM OR TO THE INTERNET AT:

(1) MINIMUM SPEEDS OF AT LEAST 25 MEGABITS PER SECOND

DOWNSTREAM AND THREE MEGABITS PER SECOND UPSTREAM; OR

(2) MINIMUM SPEEDS ADOPTED BY THE FEDERAL COMMUNICATIONS

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COMMISSION, WHICHEVER IS GREATER.

"High-speed broadband service infrastructure." The signal

transmission facilities and associated network equipment

proposed to be deployed in a project area used for the provision

of high-speed broadband service.

"Overbuild." The deployment of high-speed broadband service

infrastructure in an area where high-speed broadband service

infrastructure has been deployed and high-speed broadband

services are offered to the public at the time of submitting a

grant application THAT IS NOT UNSERVED.

"Program." The Unserved High-Speed Broadband Funding Pilot

Program established under section 4(a).

"Project." The proposed deployment of high-speed broadband

service infrastructure in an unserved area of this Commonwealth

as set forth in an application for grant funding authorized

under this act.

"Unserved area." A project area without access to WIRELINE

OR FIXED WIRELESS broadband service with minimum speeds of at

least 25 megabits per second downstream and 3 megabits per

second upstream.

Section 4. Establishment.

The Unserved High-Speed Broadband Funding Pilot Program is

established. The authority shall administer and act as the

fiscal agent for the program and shall be responsible for

receiving and reviewing all grant applications and awarding

grants.

Section 5. Grant awards generally.

(a) General rule.--Grant awards shall be at the discretion

of the authority and shall be limited to amounts annually

allocated to the authority for the program.

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(b) Eligible entities.--A nongovernmental entity with the

technical, managerial and financial expertise to design, build

and operate a high-speed broadband service infrastructure within

this Commonwealth is eligible to receive grant funding for the

deployment of high-speed broadband service infrastructure. The

nongovernmental entity must commit to using a minimum of 25% of

the entity's private capital to finance a proposed project.

government grants, loans or subsidies received by a

nongovernmental entity to finance a project shall not be counted

toward the capital investment requirement under subsection (b).

In addition to any grant award under the program, a

nongovernmental entity may use funds from a Federal, State or

local government grant or loan program to finance a proposed

project as long as the nongovernmental entity satisfies the

capital investment requirement under subsection (b).

(d) Ineligible projects.--Projects that result in overbuild

or are proposed to be managed or operated by a Federal, State or

local government entity are ineligible to receive grant funding

for the deployment of high-speed broadband service

infrastructure.

Section 6. Application process.

(a) Application period.--The authority shall establish an

annual application period during which applications for grant

funding under the program may be submitted. The annual

application period shall be no fewer than 90 days and no longer

than 150 days.

(b) Form and contents.--An application shall be submitted to

the authority. An application shall include the following

information:

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(1) Evidence demonstrating the applicant's experience

and ability in building, operating and managing high-speed

broadband service infrastructure networks serving households

and businesses.

(2) A description of the project area, including a list

of census blocks covered by the proposed deployment. If a

census block included in an application is currently

partially served by a provider of high-speed broadband

service, the application must describe the portions of the

census block that are already served and which constitute an

unserved area.

(3) A certification that none of the grant money

provided by the program for the proposed project will be used

to extend or deploy high-speed broadband service

infrastructure to areas with access to high-speed broadband

service at the time of submitting a grant application.

(4) A description of the high-speed broadband service

infrastructure that is proposed to be deployed, including

facilities, equipment and network capabilities and minimum

speed thresholds.

(5) The number of households and businesses that would

have new or improved access to high-speed broadband service

as a result of the grant award.

(6) The total cost of the proposed project and the

proposed completion date of the project.

(7) The amount of private capital pledged to finance the

proposed project and a certification that no portion of the

private capital pledged is derived from any Federal, State or

local government grant or loan program.

(8) Evidence demonstrating the economic and commercial

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feasibility of the proposed project.

(9) A list of all government authorizations, permits and

other required approvals to deploy high-speed broadband

service infrastructure and a timetable for the applicant's

acquisition of the approvals.

(10) Any other information required by the authority.

close of the application period, the authority shall make the

applications received available for review on the authority's

publicly accessible Internet website.

(d) Overbuild challenge.--Within 45 days of the authority

making the applications available on the authority's publicly

accessible Internet website, a broadband service provider

providing high-speed broadband service to households and

businesses within a proposed project area may challenge an

application on the grounds that granting an award to the

applicant will result in an overbuild. The challenge must be

submitted in writing to the authority and include the following:

(1) A declaration disputing that a proposed project area

is unserved.

(2) An affidavit of the broadband service provider

challenging the application of the provider's existing or

planned provision of high-speed broadband service within the

applicant's proposed project area.

(e) Review.--In reviewing an application and any

accompanying challenge, the authority shall conduct a review of

the proposed project areas to ensure that all grants awarded are

used to deploy high-speed broadband service infrastructure to

unserved areas. The authority may not award a grant to fund

deployment of high-speed broadband service infrastructure for

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any project area that results in an overbuild.

(f) Criteria.--The authority shall award grants for projects

based upon a scoring system, which shall be released to the

public at least 30 days prior to the beginning of the

application period. Specific criteria to be considered when

weighing or scoring an application are as follows:

(1) The size and scope of the unserved area to be

deployed.

(2) The experience, technical ability and financial

capability of the applicant to successfully deploy high-speed

broadband service infrastructure and provide high-speed

broadband service.

(3) Length of time which the applicant has been

providing high-speed broadband service.

(4) The extent to which Federal, State or local

government funding support is necessary to deploy high-speed

broadband network infrastructure in an economically feasible

manner in the proposed project area.

(5) The proportion of the private capital pledged by the

applicant to finance the proposed project.

(6) The high-speed broadband service speed thresholds

proposed in the application and the scalability of the high-

speed broadband service infrastructure proposed to be

deployed to provide high-speed broadband service to

households and businesses.

(7) An affidavit that no project grant awards are to be

used to overbuild an area that is already served with high-

speed broadband service.

(8) Other factors which the authority determines to be

reasonable and appropriate, consistent with the purposes of

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this act.

(g) Limitation.--In awarding grants, except as required

under applicable law, the authority shall not consider any

additional regulatory obligations, including, but not limited

to, open access network requirements or any rate, service or

other obligation beyond the speed requirements set forth in the

definition of "high-speed broadband service" in section 3.

(h) Time for project completion.--Applicants shall be

afforded a reasonable length of time to complete projects

selected for grant funding approval.

Section 7. Implementation.

(a) Requirements.--The following apply:

(1) The requirements for the administration of the

program shall be as follows:

(i) An application for a grant under this section

must be received by a deadline established by the

authority under section 6.

(ii) The authority shall execute a grant agreement

between the board and a grant recipient before the

payment of a grant award.

(iii) A grant recipient shall maintain full and

accurate records for the project.

(iv) A grant recipient shall submit to the authority

copies of all canceled checks or other records verifying

expenditures of grant money.

(v) A grant recipient shall submit to the authority

a final report of the project, including any information

as required by the board.

(2) The authority may establish additional requirements

for the program as the authority deems necessary to

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administer the program.

(b) Restrictions and limitations.--The following apply:

(1) A grant recipient may not commence work on a project

before receiving authority approval of the grant under

section 6. Commencement of work prior to receiving authority

approval will result in a project application being

ineligible for funding consideration.

(2) A grant recipient may not make a substantial change

to an approved project without first obtaining authority

consent in writing.

(3) Any unused portion of a grant award shall be

returned to the authority.

(4) Grant money may only be used for new projects

approved by the board.

(5) Grant money may not be used for any of the

following:

(i) Paying fees for securing financing.

(ii) Paying interest on borrowed money.

(iii) Refinancing existing debt.

(iv) Paying for lobbying services.

(v) Paying fines.

(vi) Application preparation fees.

(6) The authority may establish additional restrictions

and limitations as the authority deems necessary to

administer the program.

High-Speed Broadband Funding Program Account. The following

shall apply:

(1) The purpose of the account is to award grants under

this act.

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(2) The following shall be sources of funding for the

account:

(i) Appropriations, including Federal money.

(ii) Return on the money in the account.

(3) Money in the account is continuously appropriated to

the account. This appropriation shall not lapse at the end of

a fiscal year.

(d) Guidelines.--Within 180 days of the effective date of

this section, the board shall adopt guidelines to implement this

section. The guidelines shall include provisions for submission,

review and approval of applications, award of grants and

administration of projects funded under the program, including a

provision for reasonable oversight and reporting to ensure that

project grant awards are used as intended.

(e) Prohibition.--The authority may not provide, by

regulation or otherwise, for third-party audit requirements,

liquidated damages provisions or provisions that are not

reasonably related to the deployment of high-speed broadband

service infrastructure by an applicant in accordance with the

purposes and provisions of this act.

(f) (E) Construction.--Nothing in this section shall be

construed to preclude the authority from considering an

applicant's financial ability to complete a proposed project or

making reasonable requests for information necessary for the

oversight and administration of projects awarded grant funding.

Section 8. Effect on grant recipients.

Nothing in this act is intended to subject a grant recipient,

solely by virtue of receipt of the grant award, to a statutory

or regulatory requirement not provided for under this act if,

absent the receipt of the grant award, the requirement would not

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otherwise apply to the grant recipient.

Section 9. Appropriation.

The sum of $5,000,000 is hereby appropriated to the authority

from the General Fund for the 2020-2021 fiscal year for purposes

of the program.

Section 10. Prohibition and repeals.

(a) Prohibition.--The Department of Revenue may not award a

tax credit under Article XVIII-E of the act of March 4, 1971

(P.L.6, No.2), known as the Tax Reform Code of 1971, after June

30, 2020.

(b) Repeals.--Repeals are as follows:

(1) The General Assembly declares that the repeal under

paragraph (2) is necessary to effectuate this act.

(2) Sections 1804-E and 1805-E of the act of March 4,

1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, are

repealed.

Section 11. Effective date.

This act shall take effect immediately.

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