HR 5069 IH

To encourage the deployment of broadband telecommunications in rural America, and for other purposes.

July 27, 2000

Mr. MINGE (for himself, Ms. HOOLEY of Oregon, Mr. BAIRD, Mr. RODRIGUEZ, Mr. UDALL of New Mexico, Mr. BOSWELL, Ms. KAPTUR, Mr. OLVER, Mr. BISHOP, Mr. LUCAS of Kentucky, Mr. THOMPSON of California, Mr. DEFAZIO, and Ms. BALDWIN) introduced the following bill; which was referred to the Committee on Commerce, and in addition to the Committees on Ways and Means, and Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

To encourage the deployment of broadband telecommunications in rural America, 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.

This Act may be cited as the `Comprehensive Rural Telecommunications Act'.

TITLE I--RURAL TELEWORK

SEC. 101. FINDINGS AND PURPOSES.

(a) FINDINGS- Congress finds that--

(1) many rural communities and Indian reservations have not benefited from the historic economic expansion in recent years, and high levels of unemployment and underemployment persist in the rural communities and reservations;

(2) many economic opportunities, especially in information technology fields, are located away from many rural communities and reservations;

(3) the United States has a significant and growing need for skilled information technology workers;

(4) unemployed and underemployed rural employees represent a potential workforce to fill information technology jobs;

(5) teleworking allows rural employees to perform skill intensive information technology jobs from their communities for firms located outside rural communities; and

(6) employing a rural teleworkforce in information technology fields will require--

(A) employers that are willing to hire rural residents or contract for work to be performed in rural communities;

(B) recruitment and training of rural residents appropriate for work in information technology fields;

(C) means of connecting employers with employees through advanced telecommunications services; and

(D) innovative approaches and collaborative models to create rural technology business opportunities and facilitate the employment of rural individuals.

(b) PURPOSES- The purposes of this Act are--

(1) to authorize the Secretary of Agriculture to make competitive grants to establish National Centers for Distance Working in rural areas to provide assistance to individuals in rural communities to support the use of teleworking in information technology fields;

(2) to promote teleworking arrangements, small electronic business development, and creation of information technology jobs in rural areas for the purpose of creating sustainable economic opportunities in rural communities;

(3) to promote the practice of teleworking to information technology jobs among rural, urban, and suburban residents, Indian tribes, job training and workforce development providers, educators, and employers;

(4) to meet the needs of information technology and other industries for skilled employees by accelerating the training and hiring of rural employees to fill existing and future jobs from rural communities and Indian reservations;

(5) to promote teleworking and small electronic business as sustainable income sources for rural communities and Indian tribes; and

(6) to study, collect information, and develop best practices for rural teleworking employment practices.

SEC. 102. NATIONAL CENTERS FOR DISTANCE WORKING PROGRAM.

Subtitle D of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981 et seq.) is amended by adding at the end the following:

`SEC. 376. NATIONAL CENTERS FOR DISTANCE WORKING PROGRAM.

`(a) DEFINITIONS- In this section:

`(1) CENTER- The term `Center' means a National Center for Distance Working established under subsection (b) that receives a grant under this section.

`(2) ELIGIBLE ORGANIZATION- The term `eligible organization' means a nonprofit entity, an educational institution, a tribal government, or any other organization that meets the requirements of this section and such other requirements as are established by the Secretary.

`(3) INFORMATION TECHNOLOGY- The term `information technology' means any equipment, or interconnected system or subsystem of equipment, that is used in the automatic acquisition, storage, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information, including a computer, ancillary equipment, software, firmware and similar procedures, services (including support services), and related resources.

`(4) RURAL AREA- The terms `rural' and `rural area' have the meaning given the terms in section 381A.

`(5) SECRETARY- The term `Secretary' means the Secretary, acting through the Administrator of the Rural Utility Service.

`(6) TELEWORKING- The term `teleworking' means the use of telecommunications to perform work functions over a distance and to reduce or

eliminate the need to perform work at a traditional worksite.

`(b) ESTABLISHMENT-

`(1) IN GENERAL- The Secretary shall establish a National Centers for Distance Working Program under which the Secretary shall make competitive grants to eligible organizations to pay the Federal share of the cost of establishing National Centers for Distance Working in rural areas to conduct projects in accordance with subsection (c).

`(2) ELIGIBLE ORGANIZATION- The Secretary shall establish criteria that an organization must meet to be eligible to receive a grant under this section.

`(c) PROJECTS- A Center shall use a grant received under this section to conduct a 5-year project--

`(1) to provide training, referral, assessment, and employment-related services and assistance to individuals in rural communities and Indian tribes to support the use of teleworking in information technology fields, including services and assistance related to high technology training, telecommunications infrastructure, capital equipment, job placement services, and other means of promoting teleworking;

`(2) to identify skills that are needed by the business community and that will enable trainees to secure employment after the completion of training;

`(3) to recruit employers for rural individuals and residents of Indian reservations;

`(4) to provide for high-speed communications between the individuals in the targeted rural community or reservation and employers that carry out information technology work that is suitable for teleworking;

`(5) to provide for access to or ownership of the facilities, hardware, software, and other equipment necessary to perform information technology jobs; and

`(6) to perform such other functions as the Secretary considers appropriate.

`(d) ELIGIBILITY CRITERIA-

`(1) APPLICATION AND PLAN- As a condition of receiving a grant under this section for use with respect to a rural area, an organization shall submit to the Secretary, and obtain the approval of the Secretary of, an application and 5-year plan for the use of the grant to carry out a project described in subsection (c), including a description of--

`(A) the businesses and employers that will provide employment opportunities in the rural area;

`(B) fundraising strategies;

`(C) training and training delivery methods to be employed;

`(D) the rural community of individuals to be targeted to receive assistance;

`(E) any support from State and local governments and other non-Federal sources; and

`(F) outreach activities to be carried out to reach potential information technology employers.

`(2) NON-FEDERAL SHARE-

`(A) IN GENERAL- As a condition of receiving a grant under this section, an organization shall agree to obtain, after the application of the organization has been approved and notice of award has been issued, contributions from non-Federal sources that are equal to--

`(i) during each of the first, second, and third years of a project, 1 non-Federal dollar for each 2 Federal dollars provided under the grant; and

`(ii) during each of the fourth and fifth years of the project, 1 non-Federal dollar for each Federal dollar provided under the grant.

`(B) INDIAN TRIBES- Notwithstanding subparagraph (A), an Indian tribe may use Federal funds made available to the tribe for self-governance to pay the non-Federal contributions required under subparagraph (A).

`(C) FORM- The non-Federal contributions required under subparagraph (A) may be in the form of in-kind contributions, including office equipment, office space, and services.

`(e) SELECTION CRITERIA-

`(1) IN GENERAL- The Secretary shall--

`(A) establish criteria for the selection of eligible organizations to receive grants under this section; and

`(B) evaluate, rank, and select eligible organizations on the basis of the selection criteria.

`(2) FACTORS- The selection criteria established under paragraph (1) shall include--

`(A) the experience of the eligible organization in conducting programs or ongoing efforts designed to improve or upgrade the skills of rural employees or members of Indian tribes;

`(B) the ability of the eligible organization to initiate a project within a minimum period of time;

`(C) the ability and experience of the eligible organization in providing training to rural individuals who are economically disadvantaged or who face significant barriers to employment;

`(D) the ability and experience of the eligible organization in conducting information technology skill training;

`(E) the degree to which the eligible organization has entered into partnerships or contracts with local, tribal, and State governments, community-based organizations, and prospective employers to provide training, employment, and supportive services;

`(F) the ability and experience of the eligible organization in providing job placement for rural employees with employers that are suitable for teleworking;

`(G) the computer and telecommunications equipment that the eligible organization has or

expects to possess or use under contract on initiation of the project; and

`(H) the means the applicant proposes, such as high-speed Internet access, to allow communication between rural employees and employers.

`(3) PUBLICATION- The Secretary shall--

`(A) publish the selection criteria established under this subsection in the Federal Register; and

`(B) include a description of the selection criteria in any solicitation for applications for grants made by the Secretary.

`(f) STUDIES OF TELEWORKING-

`(1) IN GENERAL- To promote the development of teleworking in rural areas, the Secretary may make grants to entities to conduct research on economic, operational, social, and policy issues relating to teleworking in rural areas, including the development of best practices for businesses that employ teleworkers.

`(2) LIMITATION- The Secretary shall use not more than $1,000,000 of funds made available for a fiscal year under subsection (g) to carry out this subsection.

`(g) AUTHORIZATION OF APPROPRIATION- There is authorized to be appropriated to carry out this section $11,000,000 for each fiscal year.'.

TITLE II--RURAL TELECOMMUNICATIONS MODERNIZATION

SEC. 201. CREDIT FOR TELECOMMUNICATIONS FACILITIES DEVELOPMENT IN RURAL AREAS.

(a) IN GENERAL- Section 46(a) of the Internal Revenue Code of 1986 (relating to amount of investment credit) is amended by striking `and' at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting `, and', and by adding at the end the following:

`(4) the rural telecommunications facilities credit.'

(b) AMOUNT OF CREDIT- Subpart E of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to rules for computing investment credit) is amended by inserting after section 47 the following:

`SEC. 47A. RURAL TELECOMMUNICATIONS FACILITIES CREDIT.

`(a) IN GENERAL- For purposes of section 46, the rural telecommunications facilities credit for any taxable year is an amount equal to the applicable percentage of the qualified broadband local access facilities expenditures for such taxable year.

`(b) APPLICABLE PERCENTAGE- For purposes of subsection (a), the applicable percentage in the case of qualified broadband local access facilities expenditures in connection with--

`(1) broadband telecommunications facilities, is 10 percent, and

`(2) enhanced broadband telecommunications facilities, is 15 percent.

`(c) QUALIFIED BROADBAND LOCAL ACCESS FACILITIES EXPENDITURE- For purposes of this section, the term `qualified broadband local access facilities expenditure' means any expenditure--

`(1) chargeable to capital account--

`(A) for property for which depreciation is allowable under section 168, and

`(B) incurred in connection with broadband telecommunications facilities or enhanced broadband telecommunications facilities serving rural subscribers, and

`(2) incurred during the period--

`(A) beginning with the taxpayer's (or any predecessor's) first taxable year beginning after the date of the enactment of this section, and

`(B) ending with the taxpayer's (or any predecessor's) third taxable year beginning after such date.

`(d) DEFINITIONS AND SPECIAL RULES- For purposes of this section--

`(1) BROADBAND TELECOMMUNICATIONS FACILITIES- The term `broadband telecommunications facilities' means broadband local access facilities capable of--

`(A) transmitting voice, and

`(B) downloading data at a rate of 1.5 MBPS and uploading data at a rate of .5 MBPS.

`(2) ENHANCED BROADBAND TELECOMMUNICATIONS FACILITIES- The term `enhanced broadband telecommunications facilities' means the broadband local access facilities capable of--

`(A) transmitting voice, and

`(B) downloading and uploading data at a rate of 10 MBPS.

`(3) DETERMINATION OF BROADBAND LOCAL ACCESS FACILITIES- Broadband local access facilities--

`(A) begin at the switching point closest to the rural subscriber, which is--

`(i) the subscriber side of the nearest switching facility in the case of local exchange carriers,

`(ii) the subscriber side of the headend or the node in the case of cable television operators, and

`(iii) the subscriber side of the transmission and reception facilities in the case of a wireless or satellite carrier,

`(B) end at the interface between the network and the rural subscriber's location, and

`(C) do not include any switching facility.

`(4) RURAL SUBSCRIBER- The term `rural subscriber' means a subscriber who lives in an incorporated or unincorporated place which is not located in an area designated as a Metropolitan Area by the Office of Management and Budget.'.

(c) SPECIAL RULE FOR MUTUAL OR COOPERATIVE TELEPHONE COMPANIES- Section 501(c)(12)(B) of the Internal Revenue Code of 1986 (relating to list of exempt organizations) is amended by striking `or' at the end of clause (iii), by striking the period at the end of clause (iv) and inserting `, or', and by adding at the end the following new clause:

`(v) which is not described in subparagraph (A), in an amount which does not exceed in any year an amount equal to the applicable percentage of the qualified broadband local access facilities expenditures (as determined in section 47A) of the mutual or cooperative telephone company for such year.'

(d) CONFORMING AMENDMENT- The table of sections for subpart E of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 47 the following:

`Sec. 47A. Rural telecommunications facilities credit.'

(e) EFFECTIVE DATES-

(1) IN GENERAL- Except as provided in paragraph (2), the amendments made by this section shall apply to expenditures incurred after the date of the enactment of this Act.

(2) SPECIAL RULE- The amendments made by subsection (c) shall apply to amounts received after the date of the enactment of this Act.

TITLE III--RURAL BROADBAND ENHANCEMENT

SEC. 301. FEDERAL COMMUNICATIONS COMMISSION TO PROVIDE SUPPORT FROM UNIVERSAL SERVICE FUND.

Section 254(e) of the Communications Act of 1934 (47 U.S.C. 254(e)) is amended--

(1) by redesignating so much of the text of such subsection as follows `(e) UNIVERSAL SERVICE SUPPORT- ' as paragraph (1);

(2) by inserting before `After' the following heading: `(1) IN GENERAL- '; and

(3) by adding at the end the following:

`(2) RURAL AREA BROADBAND SUPPORT- In addition to any other support provided under paragraph (1), the Commission shall, within 90 days after the date of enactment of the Rural Broadband Enhancement Act, initiate a proceeding to provide Federal universal service support for the deployment of broadband service (as defined in section 156(e)(1) of the National Telecommunications and Information Administration Organization Act) to eligible rural communities (as defined in section 156(e)(2) of that Act). The proceeding shall be completed within 240 days. Federal universal service support provided as a result of that proceeding shall be determined without cost averaging of any above-average cost areas with any lower cost areas, such as would occur in statewide or study averaging, and may be used for the deployment of--

`(A) loop treatments and digital subscriber line access multiplexers;

`(B) cable modems;

`(C) wireless technology; and

`(D) satellite technology.'.

SEC. 302. RURAL UTILITIES SERVICE LOAN PROGRAM.

Part C of title I of the National Telecommunications and Information Administration Organization Act (47 U.S.C. 901 et seq.) is amended by adding at the end thereof the following:

`SEC. 156. BROADBAND TELECOMMUNICATIONS SERVICES.

`(a) IN GENERAL- The Rural Utilities Service of the Department of Agriculture, after consultation with the NTIA, shall make loans or other extensions of credit to companies certified as eligible telecommunications carriers providers, or that accept the obligations of an eligible telecommunications carrier, in accordance with the provisions of this section to finance the deployment of broadband telecommunications services to eligible rural communities.

`(b) ELIGIBILITY REQUIREMENTS- To be eligible for a loan or other extension of credit under this section, a project shall--

`(1) be capable of delivering broadband service;

`(2) be for the purpose of making access to broadband service available to an eligible rural community where broadband service is not otherwise generally available throughout that community; and

`(3) be subject to the standards for service and area wide coverage applicable to other projects administered by the Rural Utilities Service.

`(c) TERMS AND CONDITIONS- Loans made under this section--

`(1) shall be made available in accordance with the requirements of the Federal Credit Reform Act of 1990 (2 U.S.C. 661);

`(2) shall bear interest at an annual rate of not more than 2 percent per annum; and

`(3) shall be made for the longer of--

`(A) a term of 30 years; or

`(B) the useful life of the assets constructed, reconstructed, or acquired.

`(d) Limitations-

`(1) TECHNOLOGY NEUTRALITY- In making loans under this section, the Rural Utilities Service may not take into consideration the technology proposed to be employed.

`(2) SECURITY INTEREST- The Rural Utilities Service may take a security interest in assets or revenue streams, in connection with a loan or other extension of credit made under this section, of not more than the amount sufficient to cover the assets financed by that loan or extension of credit.

`(e) DEFINITIONS- In this section:

`(1) BROADBAND SERVICE- The term `broadband service' includes, without regard to any particular transmission medium or technology, high-speed, switched, broadband telecommunications capable of delivering not less than 1.0 megabits of data per second to the user and 0.5 megabits of data per second from the user that enables users to originate and receive high-quality voice, data, graphics, and video telecommunications. The Commission shall, from time-to-time as circumstances warrant, revise the rate-of-data-transmission criteria stated in the preceding sentence upward to reflect technological advances, and the criteria, as so revised, shall be applied under the preceding sentence in lieu of the rate-of-data-transmission criteria stated or previously revised by the Commission under this sentence.

`(2) ELIGIBLE RURAL COMMUNITY- The term `eligible rural community' means any incorporated or unincorporated place that is not located in an area designated as a Metropolitan Area by the Office of Management and Budget.'.

SEC. 303. FUNDING.

There are authorized to be appropriated to the Secretary of Agriculture to carry out the provisions of section 156 of the National Telecommunications and Information Administration Organization Act $3,000,000,000 for fiscal years 2001, 2002, 2003, 2004, through 2005, such amount to remain available until expended.

END