[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2344 Introduced in Senate (IS)]
<DOC>
116th CONGRESS
1st Session
S. 2344
To establish a broadband infrastructure finance and innovation program
to make available loans, loan guarantees, and lines of credit for the
construction and deployment of broadband infrastructure, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 30, 2019
Mr. Peters introduced the following bill; which was read twice and
referred to the Committee on Commerce, Science, and Transportation
_______________________________________________________________________
A BILL
To establish a broadband infrastructure finance and innovation program
to make available loans, loan guarantees, and lines of credit for the
construction and deployment of broadband infrastructure, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Broadband
Infrastructure Finance and Innovation Act of 2019''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Determination of eligibility and project selection.
Sec. 4. Secured loans.
Sec. 5. Lines of credit.
Sec. 6. Alternative prudential lending standards for small projects.
Sec. 7. Program administration.
Sec. 8. State and local permits.
Sec. 9. Regulations.
Sec. 10. Funding.
Sec. 11. Reports to Congress.
SEC. 2. DEFINITIONS.
In this Act:
(1) Assistant secretary.--The term ``Assistant Secretary''
means the Assistant Secretary of Commerce for Communications
and Information.
(2) BIFIA program.--The term ``BIFIA program'' means the
broadband infrastructure finance and innovation program
established under this Act.
(3) Broadband service.--The term ``broadband service''--
(A) means broadband internet access service that is
a mass-market retail service, or a service provided to
an entity described in paragraph (12)(B)(ii), by wire
or radio that provides the capability to transmit data
to and receive data from all or substantially all
internet endpoints, including any capabilities that are
incidental to and enable the operation of the
communications service;
(B) includes any service that is a functional
equivalent of the service described in subparagraph
(A); and
(C) does not include dial-up internet access
service.
(4) Eligible project costs.--The term ``eligible project
costs'' means amounts substantially all of which are paid by,
or for the account of, an obligor in connection with a project,
including the cost of--
(A) development phase activities, including
planning, feasibility analysis, revenue forecasting,
environmental review, historic preservation review,
permitting, preliminary engineering and design work,
and other preconstruction activities;
(B) construction and deployment phase activities,
including--
(i) construction, reconstruction,
rehabilitation, replacement, and acquisition of
real property (including land relating to the
project and improvements to land), equipment,
instrumentation, networking capability,
hardware and software, and digital network
technology;
(ii) environmental mitigation; and
(iii) construction contingencies; and
(C) capitalized interest necessary to meet market
requirements, reasonably required reserve funds,
capital issuance expenses, and other carrying costs
during construction and deployment.
(5) Federal credit instrument.--The term ``Federal credit
instrument'' means a secured loan, loan guarantee, or line of
credit authorized to be made available under the BIFIA program
with respect to a project.
(6) Investment-grade rating.--The term ``investment-grade
rating'' means a rating of BBB minus, Baa3, bbb minus, BBB
(low), or higher assigned by a rating agency to project
obligations.
(7) Lender.--The term ``lender'' means any non-Federal
qualified institutional buyer (as defined in section
230.144A(a) of title 17, Code of Federal Regulations (or any
successor regulation), known as Rule 144A(a) of the Securities
and Exchange Commission and issued under the Securities Act of
1933 (15 U.S.C. 77a et seq.)), including--
(A) a qualified retirement plan (as defined in
section 4974(c) of the Internal Revenue Code of 1986)
that is a qualified institutional buyer; and
(B) a governmental plan (as defined in section
414(d) of the Internal Revenue Code of 1986) that is a
qualified institutional buyer.
(8) Letter of interest.--The term ``letter of interest''
means a letter submitted by a potential applicant prior to an
application for credit assistance under the BIFIA program in a
format prescribed by the Assistant Secretary on the website of
the BIFIA program that--
(A) describes the project and the location,
purpose, and cost of the project;
(B) outlines the proposed financial plan, including
the requested credit assistance and the proposed
obligor;
(C) provides a status of environmental review; and
(D) provides information regarding satisfaction of
other eligibility requirements of the BIFIA program.
(9) Line of credit.--The term ``line of credit'' means an
agreement entered into by the Assistant Secretary with an
obligor under section 5 to provide a direct loan at a future
date upon the occurrence of certain events.
(10) Loan guarantee.--The term ``loan guarantee'' means any
guarantee or other pledge by the Assistant Secretary to pay all
or part of the principal of and interest on a loan or other
debt obligation issued by an obligor and funded by a lender.
(11) Obligor.--The term ``obligor'' means a party that--
(A) is primarily liable for payment of the
principal of or interest on a Federal credit
instrument; and
(B) may be a corporation, company, partnership,
joint venture, trust, or governmental entity, agency,
or instrumentality.
(12) Project.--The term ``project'' means a project--
(A) to construct and deploy infrastructure for the
provision of broadband service; and
(B) that the Assistant Secretary determines will--
(i) provide access or improved access to
broadband service to consumers residing in
areas of the United States that have no access
to broadband service or do not have access to
broadband service offered--
(I) with a download speed of at
least 25 megabits per second;
(II) with an upload speed of at
least 3 megabits per second; and
(III) with latency that is
sufficiently low to allow real-time,
interactive applications; or
(ii) provide access or improved access to
broadband service to--
(I) schools, libraries, medical and
healthcare providers, community
colleges and other institutions of
higher education, and other community
support organizations and entities to
facilitate greater use of broadband
service by or through such
organizations;
(II) organizations and agencies
that provide outreach, access,
equipment, and support services to
facilitate greater use of broadband
service by low-income, unemployed,
aged, and otherwise vulnerable
populations;
(III) job-creating strategic
facilities located within--
(aa) a State-designated
economic zone;
(bb) an economic
development district designated
by the Secretary of Commerce
under section 401 of the Public
Works and Economic Development
Act of 1965 (42 U.S.C. 3171);
(cc) a renewal community
designated by the Secretary of
Housing and Urban Development
under section 1400E of the
Internal Revenue Code of 1986
(as in effect before the repeal
of that section by section
401(d)(5)(A) of division U of
the Consolidated Appropriations
Act, 2018 (Public Law 115-141;
132 Stat. 348));
(dd) an empowerment zone
designated by the Secretary of
Housing and Urban Development
under section 1391 of the
Internal Revenue Code of 1986;
or
(ee) an enterprise
community designated by the
Secretary of Agriculture under
section 1391 of the Internal
Revenue Code of 1986; or
(IV) public safety agencies.
(13) Project obligation.--The term ``project obligation''
means any note, bond, debenture, or other debt obligation
issued by an obligor in connection with the financing of a
project, other than a Federal credit instrument.
(14) Public authority.--The term ``public authority'' means
the Federal Government or a State, county, town, township,
Indian Tribe, municipal government, or other local government,
or an instrumentality thereof, with authority to finance,
build, operate, or maintain infrastructure for the provision of
broadband service.
(15) Rating agency.--The term ``rating agency'' means a
credit rating agency registered with the Securities and
Exchange Commission as a nationally recognized statistical
rating organization (as defined in section 3(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a))).
(16) Secured loan.--The term ``secured loan'' means a
direct loan or other debt obligation issued by an obligor and
funded by the Assistant Secretary in connection with the
financing of a project under section 4.
(17) Small project.--The term ``small project'' means a
project having eligible project costs that are reasonably
anticipated not to equal or exceed $20,000,000.
(18) State.--The term ``State'' has the meaning given such
term in section 3 of the Communications Act of 1934 (47 U.S.C.
153).
(19) Subsidy amount.--The term ``subsidy amount'' means the
amount of budget authority sufficient to cover the estimated
long-term cost to the Federal Government of a Federal credit
instrument--
(A) calculated on a net present value basis; and
(B) excluding administrative costs and any
incidental effects on governmental receipts or outlays
in accordance with the Federal Credit Reform Act of
1990 (2 U.S.C. 661 et seq.).
(20) Substantial completion.--The term ``substantial
completion'' means, with respect to a project receiving credit
assistance under the BIFIA program--
(A) the commencement of the provision of broadband
service using the infrastructure being financed; or
(B) a comparable event, as determined by the
Assistant Secretary and specified in the credit
agreement.
SEC. 3. DETERMINATION OF ELIGIBILITY AND PROJECT SELECTION.
(a) Eligibility.--
(1) In general.--A project shall be eligible to receive
credit assistance under the BIFIA program if--
(A) the entity proposing to carry out the project
submits a letter of interest prior to submission of a
formal application for the project; and
(B) the project meets the criteria described in
this subsection.
(2) Creditworthiness.--
(A) In general.--Except as provided in subparagraph
(B), to be eligible for assistance under the BIFIA
program, a project shall satisfy applicable
creditworthiness standards, which, at a minimum, shall
include--
(i) adequate coverage requirements to
ensure repayment;
(ii) an investment-grade rating from at
least 2 rating agencies on debt senior to the
Federal credit instrument; and
(iii) a rating from at least 2 rating
agencies on the Federal credit instrument.
(B) Small projects.--In order for a small project
to be eligible for assistance under the BIFIA program,
such project shall satisfy alternative creditworthiness
standards that shall be established by the Assistant
Secretary under section 6 for purposes of this
paragraph.
(3) Application.--A State, local government, agency or
instrumentality of a State or local government, public
authority, public-private partnership, or other legal entity
undertaking a project and authorized by the Assistant Secretary
shall submit a project application that is acceptable to the
Assistant Secretary.
(4) Eligible project cost parameters for infrastructure
projects.--Eligible project costs shall be reasonably
anticipated to equal or exceed $2,000,000 in the case of a
project or program of projects--
(A) in which the applicant is a local government,
an instrumentality of a local government, or a public
authority (other than a public authority that is the
Federal Government or a State government, or an
instrumentality thereof);
(B) located on a facility owned by a local
government; or
(C) for which the Assistant Secretary determines
that a local government is substantially involved in
the development of the project.
(5) Dedicated revenue sources.--The applicable Federal
credit instrument shall be repayable, in whole or in part,
from--
(A) amounts charged to--
(i) subscribers of broadband service for
such service; or
(ii) subscribers of any related service
provided over the same infrastructure for such
related service;
(B) user fees;
(C) payments owing to the obligor under a public-
private partnership; or
(D) other dedicated revenue sources that also
secure or fund the project obligations.
(6) Applications where obligor will be identified later.--A
State, local government, agency or instrumentality of a State
or local government, or public authority may submit to the
Assistant Secretary an application under paragraph (3), under
which a private party to a public-private partnership will be--
(A) the obligor; and
(B) identified later through completion of a
procurement and selection of the private party.
(7) Beneficial effects.--The Assistant Secretary shall
determine that financial assistance for a project under the
BIFIA program will--
(A) foster, if appropriate, partnerships that
attract public and private investment for the project;
(B) enable the project to proceed at an earlier
date than the project would otherwise be able to
proceed or reduce the lifecycle costs (including debt
service costs) of the project; and
(C) reduce the contribution of Federal grant
assistance for the project.
(8) Project readiness.--To be eligible for assistance under
the BIFIA program, the applicant shall demonstrate a reasonable
expectation that the contracting process for the construction
and deployment of infrastructure for the provision of broadband
service through the project can commence by no later than 90
days after the date on which a Federal credit instrument is
obligated for the project under the BIFIA program.
(b) Selection Among Eligible Projects.--
(1) Establishment of application process.--The Assistant
Secretary shall establish a rolling application process under
which projects that are eligible to receive credit assistance
under subsection (a) shall receive credit assistance on terms
acceptable to the Assistant Secretary, if adequate funds are
available to cover the subsidy costs associated with the
Federal credit instrument.
(2) Preliminary rating opinion letter.--The Assistant
Secretary shall require each project applicant to provide--
(A) a preliminary rating opinion letter from at
least 1 rating agency--
(i) indicating that the senior obligations
of the project, which may be the Federal credit
instrument, have the potential to achieve an
investment-grade rating; and
(ii) including a preliminary rating opinion
on the Federal credit instrument; or
(B) in the case of a small project, alternative
documentation that the Assistant Secretary shall
require in the standards established under section 6
for purposes of this paragraph.
(3) Technology neutrality required.--In selecting projects
to receive credit assistance under the BIFIA program, the
Assistant Secretary may not favor a project using any
particular technology.
(c) Federal Requirements.--
(1) In general.--The following provisions of law shall
apply to funds made available under the BIFIA program and
projects assisted with those funds:
(A) Title VI of the Civil Rights Act of 1964 (42
U.S.C. 2000d et seq.).
(B) The National Environmental Policy Act of 1969
(42 U.S.C. 4321 et seq.).
(C) Division A of subtitle III of title 54, United
States Code (formerly known as the ``National Historic
Preservation Act'').
(D) The Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970 (42 U.S.C.
4601 et seq.).
(2) NEPA.--No funding shall be obligated under the BIFIA
program for a project that has not received an environmental
categorical exclusion, a finding of no significant impact, or a
record of decision under the National Environmental Policy Act
of 1969 (42 U.S.C. 4321 et seq.).
(3) Title vi of the civil rights act of 1964.--For purposes
of title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et
seq.), any project that receives credit assistance under the
BIFIA program shall be considered a program or activity within
the meaning of section 606 of such title (42 U.S.C. 2000d-4a).
(d) Application Processing Procedures.--
(1) Notice of complete application.--Not later than 30 days
after the date of receipt of an application under this section,
the Assistant Secretary shall provide to the applicant a
written notice to inform the applicant whether--
(A) the application is complete; or
(B) additional information or materials are needed
to complete the application.
(2) Approval or denial of application.--Not later than 60
days after the date of issuance of the written notice under
paragraph (1), the Assistant Secretary shall provide to the
applicant a written notice informing the applicant whether the
Assistant Secretary has approved or disapproved the
application.
(3) Approval before nepa review.--Subject to subsection
(c)(2), an application for a project may be approved before the
project receives an environmental categorical exclusion, a
finding of no significant impact, or a record of decision under
the National Environmental Policy Act of 1969 (42 U.S.C. 4321
et seq.).
(e) Development Phase Activities.--Any credit instrument secured
under the BIFIA program may be used to finance up to 100 percent of the
cost of development phase activities as described in section 2(4)(A).
SEC. 4. SECURED LOANS.
(a) In General.--
(1) Agreements.--Subject to paragraphs (2) and (3), the
Assistant Secretary may enter into agreements with one or more
obligors to make secured loans, the proceeds of which shall be
used--
(A) to finance eligible project costs of any
project selected under section 3;
(B) to refinance interim construction financing of
eligible project costs of any project selected under
section 3; or
(C) to refinance long-term project obligations or
Federal credit instruments, if the refinancing provides
additional funding capacity for the completion,
enhancement, or expansion of any project that--
(i) is selected under section 3; or
(ii) otherwise meets the requirements of
section 3.
(2) Limitation on refinancing of interim construction
financing.--A loan under paragraph (1) shall not refinance
interim construction financing under paragraph (1)(B)--
(A) if the maturity of such interim construction
financing is later than 1 year after the substantial
completion of the project; and
(B) later than 1 year after the date of substantial
completion of the project.
(3) Risk assessment.--Before entering into an agreement
under this subsection, the Assistant Secretary, in consultation
with the Director of the Office of Management and Budget, shall
determine an appropriate capital reserve subsidy amount for
each secured loan, taking into account each rating letter
provided by a rating agency under section 3(b)(2)(A)(ii) or, in
the case of a small project, the alternative documentation
provided under section 3(b)(2)(B).
(b) Terms and Limitations.--
(1) In general.--A secured loan under this section with
respect to a project shall be on such terms and conditions and
contain such covenants, representations, warranties, and
requirements (including requirements for audits) as the
Assistant Secretary determines to be appropriate.
(2) Maximum amount.--The amount of a secured loan under
this section shall not exceed the lesser of 49 percent of the
reasonably anticipated eligible project costs or, if the
secured loan is not for a small project and does not receive an
investment-grade rating, the amount of the senior project
obligations.
(3) Payment.--A secured loan under this section--
(A) shall--
(i) be payable, in whole or in part, from--
(I) amounts charged to--
(aa) subscribers of
broadband service for such
service; or
(bb) subscribers of any
related service provided over
the same infrastructure for
such related service;
(II) user fees;
(III) payments owing to the obligor
under a public-private partnership; or
(IV) other dedicated revenue
sources that also secure the senior
project obligations; and
(ii) include a coverage requirement or
similar security feature supporting the project
obligations; and
(B) may have a lien on revenues described in
subparagraph (A), subject to any lien securing project
obligations.
(4) Interest rate.--The interest rate on a secured loan
under this section shall be not less than the yield on United
States Treasury securities of a similar maturity to the
maturity of the secured loan on the date of execution of the
loan agreement.
(5) Maturity date.--The final maturity date of a secured
loan under this section shall be the earlier of--
(A) the date that is 35 years after the date of
substantial completion of the project; or
(B) the last day of the useful life of the
infrastructure for the provision of broadband service
being financed.
(6) Nonsubordination.--
(A) In general.--Except as provided in subparagraph
(B), a secured loan under this section shall not be
subordinated to the claims of any holder of project
obligations in the event of bankruptcy, insolvency, or
liquidation of the obligor.
(B) Preexisting indenture.--
(i) In general.--The Assistant Secretary
shall waive the requirement under subparagraph
(A) for a public agency borrower that is
financing ongoing capital programs and has
outstanding senior bonds under a preexisting
indenture, if--
(I) the secured loan--
(aa) is rated in the A
category or higher; or
(bb) in the case of a small
project, meets an alternative
standard that the Assistant
Secretary shall establish under
section 6 for purposes of this
subclause;
(II) the secured loan is secured
and payable from pledged revenues not
affected by project performance, such
as a tax-backed revenue pledge or a
system-backed pledge of project
revenues; and
(III) the BIFIA program share of
eligible project costs is 33 percent or
less.
(ii) Limitation.--If the Assistant
Secretary waives the nonsubordination
requirement under this subparagraph--
(I) the maximum credit subsidy to
be paid by the Federal Government shall
be not more than 10 percent of the
principal amount of the secured loan;
and
(II) the obligor shall be
responsible for paying the remainder of
the subsidy cost, if any.
(7) Fees.--The Assistant Secretary may establish fees at a
level sufficient to cover all or a portion of the costs to the
Federal Government of making a secured loan under this section.
(8) Non-federal share.--The proceeds of a secured loan
under the BIFIA program, if the loan is repayable from non-
Federal funds--
(A) may be used for any non-Federal share of
project costs required under this Act; and
(B) shall not count toward the total Federal
assistance provided for a project for purposes of
paragraph (9).
(9) Maximum federal involvement.--The total Federal
assistance provided for a project receiving a loan under the
BIFIA program shall not exceed 80 percent of the total project
cost.
(c) Repayment.--
(1) Schedule.--The Assistant Secretary shall establish a
repayment schedule for each secured loan under this section
based on--
(A) the projected cash flow from project revenues
and other repayment sources; and
(B) the useful life of the infrastructure for the
provision of broadband service being financed.
(2) Commencement.--Scheduled loan repayments of principal
or interest on a secured loan under this section shall commence
not later than 5 years after the date of substantial completion
of the project.
(3) Deferred payments.--
(A) In general.--If, at any time after the date of
substantial completion of the project, the project is
unable to generate sufficient revenues to pay the
scheduled loan repayments of principal and interest on
the secured loan, the Assistant Secretary may, subject
to subparagraph (C), allow the obligor to add unpaid
principal and interest to the outstanding balance of
the secured loan.
(B) Interest.--Any payment deferred under
subparagraph (A) shall--
(i) continue to accrue interest in
accordance with subsection (b)(4) until fully
repaid; and
(ii) be scheduled to be amortized over the
remaining term of the loan.
(C) Criteria.--
(i) In general.--Any payment deferral under
subparagraph (A) shall be contingent on the
project meeting criteria established by the
Assistant Secretary.
(ii) Repayment standards.--The criteria
established pursuant to clause (i) shall
include standards for reasonable assurance of
repayment.
(4) Prepayment.--
(A) Use of excess revenues.--Any excess revenues
that remain after satisfying scheduled debt service
requirements on the project obligations and secured
loan and all deposit requirements under the terms of
any trust agreement, bond resolution, or similar
agreement securing project obligations may be applied
annually to prepay the secured loan without penalty.
(B) Use of proceeds of refinancing.--The secured
loan may be prepaid at any time without penalty from
the proceeds of refinancing from non-Federal funding
sources.
(d) Sale of Secured Loans.--
(1) In general.--Subject to paragraph (2), as soon as
practicable after substantial completion of a project and after
notifying the obligor, the Assistant Secretary may sell to
another entity or reoffer into the capital markets a secured
loan for the project if the Assistant Secretary determines that
the sale or reoffering can be made on favorable terms.
(2) Consent of obligor.--In making a sale or reoffering
under paragraph (1), the Assistant Secretary may not change the
original terms and conditions of the secured loan without the
written consent of the obligor.
(e) Loan Guarantees.--
(1) In general.--The Assistant Secretary may provide a loan
guarantee to a lender in lieu of making a secured loan under
this section if the Assistant Secretary determines that the
budgetary cost of the loan guarantee is substantially the same
as that of a secured loan.
(2) Terms.--The terms of a loan guarantee under paragraph
(1) shall be consistent with the terms required under this
section for a secured loan, except that the rate on the
guaranteed loan and any prepayment features shall be negotiated
between the obligor and the lender, with the consent of the
Assistant Secretary.
(f) Streamlined Application Process.--
(1) In general.--The Assistant Secretary shall develop one
or more expedited application processes, available at the
request of entities seeking secured loans under the BIFIA
program, that use a set or sets of conventional terms
established pursuant to this section.
(2) Terms.--In establishing the streamlined application
process required by this subsection, the Assistant Secretary
may allow for an expedited application period and include terms
such as those that require--
(A) that the project be a small project;
(B) the secured loan to be secured and payable from
pledged revenues not affected by project performance,
such as a tax-backed revenue pledge, tax increment
financing, or a system-backed pledge of project
revenues; and
(C) repayment of the loan to commence not later
than 5 years after disbursement.
SEC. 5. LINES OF CREDIT.
(a) In General.--
(1) Agreements.--Subject to paragraphs (2) through (4), the
Assistant Secretary may enter into agreements to make available
to one or more obligors lines of credit in the form of direct
loans to be made by the Assistant Secretary at future dates on
the occurrence of certain events for any project selected under
section 3.
(2) Use of proceeds.--The proceeds of a line of credit made
available under this section shall be available to pay debt
service on project obligations issued to finance eligible
project costs, extraordinary repair and replacement costs,
operation and maintenance expenses, and costs associated with
unexpected Federal or State environmental restrictions.
(3) Risk assessment.--
(A) In general.--Except as provided in subparagraph
(B), before entering into an agreement under this
subsection, the Assistant Secretary, in consultation
with the Director of the Office of Management and
Budget and each rating agency providing a preliminary
rating opinion letter under section 3(b)(2)(A), shall
determine an appropriate capital reserve subsidy amount
for each line of credit, taking into account the rating
opinion letter.
(B) Small projects.--Before entering into an
agreement under this subsection to make available a
line of credit for a small project, the Assistant
Secretary, in consultation with the Director of the
Office of Management and Budget, shall determine an
appropriate capital reserve subsidy amount for each
such line of credit, taking into account the
alternative documentation provided under section
3(b)(2)(B) instead of preliminary rating opinion
letters provided under section 3(b)(2)(A).
(4) Investment-grade rating requirement.--The funding of a
line of credit under this section shall be contingent on--
(A) the senior obligations of the project receiving
an investment-grade rating from 2 rating agencies; or
(B) in the case of a small project, the project
meeting an alternative standard that the Assistant
Secretary shall establish under section 6 for purposes
of this paragraph.
(b) Terms and Limitations.--
(1) In general.--A line of credit under this section with
respect to a project shall be on such terms and conditions and
contain such covenants, representations, warranties, and
requirements (including requirements for audits) as the
Assistant Secretary determines to be appropriate.
(2) Maximum amounts.--The total amount of a line of credit
under this section shall not exceed 33 percent of the
reasonably anticipated eligible project costs.
(3) Draws.--Any draw on a line of credit under this section
shall--
(A) represent a direct loan; and
(B) be made only if net revenues from the project
(including capitalized interest, but not including
reasonably required financing reserves) are
insufficient to pay the costs specified in subsection
(a)(2).
(4) Interest rate.--The interest rate on a direct loan
resulting from a draw on the line of credit shall be not less
than the yield on 30-year United States Treasury securities, as
of the date of execution of the line of credit agreement.
(5) Security.--A line of credit issued under this section--
(A) shall--
(i) be payable, in whole or in part, from--
(I) amounts charged to--
(aa) subscribers of
broadband service for such
service; or
(bb) subscribers of any
related service provided over
the same infrastructure for
such related service;
(II) user fees;
(III) payments owing to the obligor
under a public-private partnership; or
(IV) other dedicated revenue
sources that also secure the senior
project obligations; and
(ii) include a coverage requirement or
similar security feature supporting the project
obligations; and
(B) may have a lien on revenues described in
subparagraph (A), subject to any lien securing project
obligations.
(6) Period of availability.--The full amount of a line of
credit under this section, to the extent not drawn upon, shall
be available during the 10-year period beginning on the date of
substantial completion of the project.
(7) Rights of third-party creditors.--
(A) Against federal government.--A third-party
creditor of the obligor shall not have any right
against the Federal Government with respect to any draw
on a line of credit under this section.
(B) Assignment.--An obligor may assign a line of
credit under this section to--
(i) one or more lenders; or
(ii) a trustee on the behalf of such a
lender.
(8) Nonsubordination.--
(A) In general.--Except as provided in subparagraph
(B), a direct loan under this section shall not be
subordinated to the claims of any holder of project
obligations in the event of bankruptcy, insolvency, or
liquidation of the obligor.
(B) Pre-existing indenture.--
(i) In general.--The Assistant Secretary
shall waive the requirement of subparagraph (A)
for a public agency borrower that is financing
ongoing capital programs and has outstanding
senior bonds under a preexisting indenture,
if--
(I) the line of credit--
(aa) is rated in the A
category or higher; or
(bb) in the case of a small
project, meets an alternative
standard that the Assistant
Secretary shall establish under
section 6 for purposes of this
subclause;
(II) the BIFIA program loan
resulting from a draw on the line of
credit is payable from pledged revenues
not affected by project performance,
such as a tax-backed revenue pledge or
a system-backed pledge of project
revenues; and
(III) the BIFIA program share of
eligible project costs is 33 percent or
less.
(ii) Limitation.--If the Assistant
Secretary waives the nonsubordination
requirement under this subparagraph--
(I) the maximum credit subsidy to
be paid by the Federal Government shall
be not more than 10 percent of the
principal amount of the secured loan;
and
(II) the obligor shall be
responsible for paying the remainder of
the subsidy cost.
(9) Fees.--The Assistant Secretary may establish fees at a
level sufficient to cover all or a portion of the costs to the
Federal Government of providing a line of credit under this
section.
(10) Relationship to other credit instruments.--A project
that receives a line of credit under this section may not also
receive a secured loan or loan guarantee under section 4 in an
amount that, combined with the amount of the line of credit,
exceeds 49 percent of eligible project costs.
(c) Repayment.--
(1) Terms and conditions.--The Assistant Secretary shall
establish repayment terms and conditions for each direct loan
under this section based on--
(A) the projected cash flow from project revenues
and other repayment sources; and
(B) the useful life of the infrastructure for the
provision of broadband service being financed.
(2) Timing.--All repayments of principal or interest on a
direct loan under this section shall be scheduled--
(A) to commence not later than 5 years after the
end of the period of availability specified in
subsection (b)(6); and
(B) to conclude, with full repayment of principal
and interest, by the date that is 25 years after the
end of the period of availability specified in
subsection (b)(6).
SEC. 6. ALTERNATIVE PRUDENTIAL LENDING STANDARDS FOR SMALL PROJECTS.
Not later than 180 days after the date of the enactment of this
Act, the Assistant Secretary shall establish alternative, streamlined
prudential lending standards for small projects receiving credit
assistance under the BIFIA program to ensure that such projects pose no
additional risk to the Federal Government, as compared with projects
that are not small projects.
SEC. 7. PROGRAM ADMINISTRATION.
(a) Requirement.--The Assistant Secretary shall establish a uniform
system to service the Federal credit instruments made available under
the BIFIA program.
(b) Fees.--The Assistant Secretary may collect and spend fees,
contingent on authority being provided in appropriations Acts, at a
level that is sufficient to cover--
(1) the costs of services of expert firms retained pursuant
to subsection (d); and
(2) all or a portion of the costs to the Federal Government
of servicing the Federal credit instruments.
(c) Servicer.--
(1) In general.--The Assistant Secretary may appoint a
financial entity to assist the Assistant Secretary in servicing
the Federal credit instruments.
(2) Duties.--A servicer appointed under paragraph (1) shall
act as the agent for the Assistant Secretary.
(3) Fee.--A servicer appointed under paragraph (1) shall
receive a servicing fee, subject to approval by the Assistant
Secretary.
(d) Assistance From Expert Firms.--The Assistant Secretary may
retain the services of expert firms, including counsel, in the field of
municipal and project finance to assist in the underwriting and
servicing of Federal credit instruments.
(e) Expedited Processing.--The Assistant Secretary shall implement
procedures and measures to economize the time and cost involved in
obtaining approval and the issuance of credit assistance under the
BIFIA program.
(f) Assistance to Small Projects.--Of the amount appropriated under
section 10(a), and after the set-aside for administrative expenses
under section 10(b), not less than 20 percent shall be made available
for the Assistant Secretary to use in lieu of fees collected under
subsection (b) for small projects.
SEC. 8. STATE AND LOCAL PERMITS.
The provision of credit assistance under the BIFIA program with
respect to a project shall not--
(1) relieve any recipient of the assistance of any
obligation to obtain any required State or local permit or
approval with respect to the project;
(2) limit the right of any unit of State or local
government to approve or regulate any rate of return on private
equity invested in the project; or
(3) otherwise supersede any State or local law (including
any regulation) applicable to the construction or operation of
the project.
SEC. 9. REGULATIONS.
The Assistant Secretary may promulgate such regulations as the
Assistant Secretary determines to be appropriate to carry out the BIFIA
program.
SEC. 10. FUNDING.
(a) Authorization of Appropriations.--There are authorized to be
appropriated to the Assistant Secretary to carry out this Act
$5,000,000,000 for fiscal year 2020, to remain available until
expended.
(b) Administrative Expenses.--Of the amount appropriated under
subsection (a), the Assistant Secretary may use not more than 5 percent
for the administration of the BIFIA program.
SEC. 11. REPORTS TO CONGRESS.
(a) In General.--Not later than 1 year after the date of the
enactment of this Act, and every 2 years thereafter, the Assistant
Secretary shall submit to Congress a report summarizing the financial
performance of the projects that are receiving, or have received,
assistance under the BIFIA program, including a recommendation as to
whether the objectives of the BIFIA program are best served by--
(1) continuing the program under the authority of the
Assistant Secretary; or
(2) establishing a Federal corporation or federally
sponsored enterprise to administer the program.
(b) Application Process Report.--
(1) In general.--Not later than 1 year after the date of
the enactment of this Act, and annually thereafter, the
Assistant Secretary shall submit to the Committee on Energy and
Commerce of the House of Representatives and the Committee on
Commerce, Science, and Transportation of the Senate a report
that includes a list of all of the letters of interest and
applications received for assistance under the BIFIA program
during the preceding fiscal year.
(2) Inclusions.--
(A) In general.--Each report under paragraph (1)
shall include, at a minimum, a description of, with
respect to each letter of interest and application
included in the report--
(i) the date on which the letter of
interest or application was received;
(ii) the date on which a notification was
provided to the applicant regarding whether the
application was complete or incomplete;
(iii) the date on which a revised and
completed application was submitted (if
applicable);
(iv) the date on which a notification was
provided to the applicant regarding whether the
project was approved or disapproved; and
(v) if the project was not approved, the
reason for the disapproval.
(B) Correspondence.--Each report under paragraph
(1) shall include copies of any correspondence provided
to the applicant in accordance with section 3(d).
<all>
Broadband Infrastructure Finance and Innovation Act of 2019
#2344 | S Congress #116
Policy Area: Science, Technology, Communications
Subjects: AgingCommunity life and organizationCongressional oversightEconomic developmentEducational facilities and institutionsGovernment lending and loan guaranteesHealth care coverage and accessHealth facilities and institutionsHigher educationInternet and video servicesInternet, web applications, social mediaLaw enforcement administration and fundingLibraries and archivesPerformance measurementPublic-private cooperationUnemployment
Last Action: Read twice and referred to the Committee on Commerce, Science, and Transportation. (7/30/2019)
Bill Text Source: Congress.gov
Summary and Impacts
Original Text