I

106TH CONGRESS

2D SESSION H. R. 5069

To encourage the deployment of broadband telecommunications in rural

America, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

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

A BILL

To encourage the deployment of broadband

telecommunications in rural America, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Comprehensive Rural

5 Telecommunications Act’’.
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1 TITLE I—RURAL TELEWORK

2 SEC. 101. FINDINGS AND PURPOSES.

3 (a) FINDINGS.—Congress finds that—

4 (1) many rural communities and Indian res5 ervations have not benefited from the historic eco6 nomic expansion in recent years, and high levels of

7 unemployment and underemployment persist in the

8 rural communities and reservations;

9 (2) many economic opportunities, especially in

10 information technology fields, are located away from

11 many rural communities and reservations;

12 (3) the United States has a significant and

13 growing need for skilled information technology

14 workers;

15 (4) unemployed and underemployed rural em16 ployees represent a potential workforce to fill infor17 mation technology jobs;

18 (5) teleworking allows rural employees to per19 form skill intensive information technology jobs from

20 their communities for firms located outside rural

21 communities; and

22 (6) employing a rural teleworkforce in informa23 tion technology fields will require—
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1 (A) employers that are willing to hire rural

2 residents or contract for work to be performed

3 in rural communities;

4 (B) recruitment and training of rural resi5 dents appropriate for work in information tech6 nology fields;

7 (C) means of connecting employers with

8 employees through advanced telecommuni9 cations services; and

10 (D) innovative approaches and collabo11 rative models to create rural technology busi12 ness opportunities and facilitate the employ13 ment of rural individuals.

14 (b) PURPOSES.—The purposes of this Act are—

15 (1) to authorize the Secretary of Agriculture to

16 make competitive grants to establish National Cen17 ters for Distance Working in rural areas to provide

18 assistance to individuals in rural communities to

19 support the use of teleworking in information tech20 nology fields;

21 (2) to promote teleworking arrangements, small

22 electronic business development, and creation of in23 formation technology jobs in rural areas for the pur24 pose of creating sustainable economic opportunities

25 in rural communities;
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1 (3) to promote the practice of teleworking to in2 formation technology jobs among rural, urban, and

3 suburban residents, Indian tribes, job training and

4 workforce development providers, educators, and em5 ployers;

6 (4) to meet the needs of information technology

7 and other industries for skilled employees by accel8 erating the training and hiring of rural employees to

9 fill existing and future jobs from rural communities

10 and Indian reservations;

11 (5) to promote teleworking and small electronic

12 business as sustainable income sources for rural

13 communities and Indian tribes; and

14 (6) to study, collect information, and develop

15 best practices for rural teleworking employment

16 practices.

17 SEC. 102. NATIONAL CENTERS FOR DISTANCE WORKING

18 PROGRAM.

19 Subtitle D of the Consolidated Farm and Rural De20 velopment Act (7 U.S.C. 1981 et seq.) is amended by add21 ing at the end the following:

22 ‘‘SEC. 376. NATIONAL CENTERS FOR DISTANCE WORKING

23 PROGRAM.

24 ‘‘(a) DEFINITIONS.—In this section:
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1 ‘‘(1) CENTER.—The term ‘Center’ means a Na2 tional Center for Distance Working established

3 under subsection (b) that receives a grant under this

4 section.

5 ‘‘(2) ELIGIBLE ORGANIZATION.—The term ‘eli6 gible organization’ means a nonprofit entity, an edu7 cational institution, a tribal government, or any

8 other organization that meets the requirements of

9 this section and such other requirements as are es10 tablished by the Secretary.

11 ‘‘(3) INFORMATION TECHNOLOGY.—The term

12 ‘information technology’ means any equipment, or

13 interconnected system or subsystem of equipment,

14 that is used in the automatic acquisition, storage,

15 manipulation, management, movement, control, dis16 play, switching, interchange, transmission, or recep17 tion of data or information, including a computer,

18 ancillary equipment, software, firmware and similar

19 procedures, services (including support services), and

20 related resources.

21 ‘‘(4) RURAL AREA.—The terms ‘rural’ and

22 ‘rural area’ have the meaning given the terms in sec23 tion 381A.
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1 ‘‘(5) SECRETARY.—The term ‘Secretary’ means

2 the Secretary, acting through the Administrator of

3 the Rural Utility Service.

4 ‘‘(6) TELEWORKING.—The term ‘teleworking’

5 means the use of telecommunications to perform

6 work functions over a distance and to reduce or

7 eliminate the need to perform work at a traditional

8 worksite.

9 ‘‘(b) ESTABLISHMENT.—

10 ‘‘(1) IN GENERAL.—The Secretary shall estab11 lish a National Centers for Distance Working Pro12 gram under which the Secretary shall make competi13 tive grants to eligible organizations to pay the Fed14 eral share of the cost of establishing National Cen15 ters for Distance Working in rural areas to conduct

16 projects in accordance with subsection (c).

17 ‘‘(2) ELIGIBLE ORGANIZATION.—The Secretary

18 shall establish criteria that an organization must

19 meet to be eligible to receive a grant under this sec20 tion.

21 ‘‘(c) PROJECTS.—A Center shall use a grant received

22 under this section to conduct a 5-year project—

23 ‘‘(1) to provide training, referral, assessment,

24 and employment-related services and assistance to

25 individuals in rural communities and Indian tribes to
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1 support the use of teleworking in information tech2 nology fields, including services and assistance re3 lated to high technology training, telecommuni4 cations infrastructure, capital equipment, job place5 ment services, and other means of promoting tele6 working;

7 ‘‘(2) to identify skills that are needed by the

8 business community and that will enable trainees to

9 secure employment after the completion of training;

10 ‘‘(3) to recruit employers for rural individuals

11 and residents of Indian reservations;

12 ‘‘(4) to provide for high-speed communications

13 between the individuals in the targeted rural com14 munity or reservation and employers that carry out

15 information technology work that is suitable for tele16 working;

17 ‘‘(5) to provide for access to or ownership of

18 the facilities, hardware, software, and other equip19 ment necessary to perform information technology

20 jobs; and

21 ‘‘(6) to perform such other functions as the

22 Secretary considers appropriate.

23 ‘‘(d) ELIGIBILITY CRITERIA.—

24 ‘‘(1) APPLICATION AND PLAN.—As a condition

25 of receiving a grant under this section for use with
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1 respect to a rural area, an organization shall submit

2 to the Secretary, and obtain the approval of the Sec3 retary of, an application and 5-year plan for the use

4 of the grant to carry out a project described in sub5 section (c), including a description of—

6 ‘‘(A) the businesses and employers that

7 will provide employment opportunities in the

8 rural area;

9 ‘‘(B) fundraising strategies;

10 ‘‘(C) training and training delivery meth11 ods to be employed;

12 ‘‘(D) the rural community of individuals to

13 be targeted to receive assistance;

14 ‘‘(E) any support from State and local gov15 ernments and other non-Federal sources; and

16 ‘‘(F) outreach activities to be carried out

17 to reach potential information technology em18 ployers.

19 ‘‘(2) NON-FEDERAL SHARE.—

20 ‘‘(A) IN GENERAL.—As a condition of re21 ceiving a grant under this section, an organiza22 tion shall agree to obtain, after the application

23 of the organization has been approved and no24 tice of award has been issued, contributions

25 from non-Federal sources that are equal to—
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1 ‘‘(i) during each of the first, second,

2 and third years of a project, 1 non-Federal

3 dollar for each 2 Federal dollars provided

4 under the grant; and

5 ‘‘(ii) during each of the fourth and

6 fifth years of the project, 1 non-Federal

7 dollar for each Federal dollar provided

8 under the grant.

9 ‘‘(B) INDIAN TRIBES.—Notwithstanding

10 subparagraph (A), an Indian tribe may use

11 Federal funds made available to the tribe for

12 self-governance to pay the non-Federal con13 tributions required under subparagraph (A).

14 ‘‘(C) FORM.—The non-Federal contribu15 tions required under subparagraph (A) may be

16 in the form of in-kind contributions, including

17 office equipment, office space, and services.

18 ‘‘(e) SELECTION CRITERIA.—

19 ‘‘(1) IN GENERAL.—The Secretary shall—

20 ‘‘(A) establish criteria for the selection of

21 eligible organizations to receive grants under

22 this section; and

23 ‘‘(B) evaluate, rank, and select eligible or24 ganizations on the basis of the selection cri25 teria.
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1 ‘‘(2) FACTORS.—The selection criteria estab2 lished under paragraph (1) shall include—

3 ‘‘(A) the experience of the eligible organi4 zation in conducting programs or ongoing ef5 forts designed to improve or upgrade the skills

6 of rural employees or members of Indian tribes;

7 ‘‘(B) the ability of the eligible organization

8 to initiate a project within a minimum period of

9 time;

10 ‘‘(C) the ability and experience of the eligi11 ble organization in providing training to rural

12 individuals who are economically disadvantaged

13 or who face significant barriers to employment;

14 ‘‘(D) the ability and experience of the eligi15 ble organization in conducting information tech16 nology skill training;

17 ‘‘(E) the degree to which the eligible orga18 nization has entered into partnerships or con19 tracts with local, tribal, and State governments,

20 community-based organizations, and prospective

21 employers to provide training, employment, and

22 supportive services;

23 ‘‘(F) the ability and experience of the eligi24 ble organization in providing job placement for
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1 rural employees with employers that are suit2 able for teleworking;

3 ‘‘(G) the computer and telecommunications

4 equipment that the eligible organization has or

5 expects to possess or use under contract on ini6 tiation of the project; and

7 ‘‘(H) the means the applicant proposes,

8 such as high-speed Internet access, to allow

9 communication between rural employees and

10 employers.

11 ‘‘(3) PUBLICATION.—The Secretary shall—

12 ‘‘(A) publish the selection criteria estab13 lished under this subsection in the Federal Reg14 ister; and

15 ‘‘(B) include a description of the selection

16 criteria in any solicitation for applications for

17 grants made by the Secretary.

18 ‘‘(f) STUDIES OF TELEWORKING.—

19 ‘‘(1) IN GENERAL.—To promote the develop20 ment of teleworking in rural areas, the Secretary

21 may make grants to entities to conduct research on

22 economic, operational, social, and policy issues relat23 ing to teleworking in rural areas, including the de24 velopment of best practices for businesses that em25 ploy teleworkers.
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1 ‘‘(2) LIMITATION.—The Secretary shall use not

2 more than $1,000,000 of funds made available for a

3 fiscal year under subsection (g) to carry out this

4 subsection.

5 ‘‘(g) AUTHORIZATION OF APPROPRIATION.—There is

6 authorized to be appropriated to carry out this section

7 $11,000,000 for each fiscal year.’’.

8 TITLE II—RURAL TELE9 COMMUNICATIONS MOD10 ERNIZATION

11 SEC. 201. CREDIT FOR TELECOMMUNICATIONS FACILITIES

12 DEVELOPMENT IN RURAL AREAS.

13 (a) IN GENERAL.—Section 46(a) of the Internal Rev14 enue Code of 1986 (relating to amount of investment cred15 it) is amended by striking ‘‘and’’ at the end of paragraph

16 (2), by striking the period at the end of paragraph (3)

17 and inserting ‘‘, and’’, and by adding at the end the fol18 lowing:

19 ‘‘(4) the rural telecommunications facilities

20 credit.’’

21 (b) AMOUNT OF CREDIT.—Subpart E of part IV of

22 subchapter A of chapter 1 of the Internal Revenue Code

23 of 1986 (relating to rules for computing investment credit)

24 is amended by inserting after section 47 the following:
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1 ‘‘SEC. 47A. RURAL TELECOMMUNICATIONS FACILITIES

2 CREDIT.

3 ‘‘(a) IN GENERAL.—For purposes of section 46, the

4 rural telecommunications facilities credit for any taxable

5 year is an amount equal to the applicable percentage of

6 the qualified broadband local access facilities expenditures

7 for such taxable year.

8 ‘‘(b) APPLICABLE PERCENTAGE.—For purposes of

9 subsection (a), the applicable percentage in the case of

10 qualified broadband local access facilities expenditures in

11 connection with—

12 ‘‘(1) broadband telecommunications facilities, is

13 10 percent, and

14 ‘‘(2) enhanced broadband telecommunications

15 facilities, is 15 percent.

16 ‘‘(c) QUALIFIED BROADBAND LOCAL ACCESS FACILI17 TIES EXPENDITURE.—For purposes of this section, the

18 term ‘qualified broadband local access facilities expendi19 ture’ means any expenditure—

20 ‘‘(1) chargeable to capital account—

21 ‘‘(A) for property for which depreciation is

22 allowable under section 168, and

23 ‘‘(B) incurred in connection with

24 broadband telecommunications facilities or en25 hanced broadband telecommunications facilities

26 serving rural subscribers, and
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1 ‘‘(2) incurred during the period—

2 ‘‘(A) beginning with the taxpayer’s (or any

3 predecessor’s) first taxable year beginning after

4 the date of the enactment of this section, and

5 ‘‘(B) ending with the taxpayer’s (or any

6 predecessor’s) third taxable year beginning

7 after such date.

8 ‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur9 poses of this section—

10 ‘‘(1) BROADBAND TELECOMMUNICATIONS FA11 CILITIES.—The term ‘broadband telecommunications

12 facilities’ means broadband local access facilities ca13 pable of—

14 ‘‘(A) transmitting voice, and

15 ‘‘(B) downloading data at a rate of 1.5

16 MBPS and uploading data at a rate of .5

17 MBPS.

18 ‘‘(2) ENHANCED BROADBAND TELECOMMUNI19 CATIONS FACILITIES.—The term ‘enhanced

20 broadband telecommunications facilities’ means the

21 broadband local access facilities capable of—

22 ‘‘(A) transmitting voice, and

23 ‘‘(B) downloading and uploading data at a

24 rate of 10 MBPS.
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1 ‘‘(3) DETERMINATION OF BROADBAND LOCAL

2 ACCESS FACILITIES.—Broadband local access

3 facilities—

4 ‘‘(A) begin at the switching point closest to

5 the rural subscriber, which is—

6 ‘‘(i) the subscriber side of the nearest

7 switching facility in the case of local ex8 change carriers,

9 ‘‘(ii) the subscriber side of the

10 headend or the node in the case of cable

11 television operators, and

12 ‘‘(iii) the subscriber side of the trans13 mission and reception facilities in the case

14 of a wireless or satellite carrier,

15 ‘‘(B) end at the interface between the net16 work and the rural subscriber’s location, and

17 ‘‘(C) do not include any switching facility.

18 ‘‘(4) RURAL SUBSCRIBER.—The term ‘rural

19 subscriber’ means a subscriber who lives in an incor20 porated or unincorporated place which is not located

21 in an area designated as a Metropolitan Area by the

22 Office of Management and Budget.’’.

23 (c) SPECIAL RULE FOR MUTUAL OR COOPERATIVE

24 TELEPHONE COMPANIES.—Section 501(c)(12)(B) of the

25 Internal Revenue Code of 1986 (relating to list of exempt
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1 organizations) is amended by striking ‘‘or’’ at the end of

2 clause (iii), by striking the period at the end of clause (iv)

3 and inserting ‘‘, or’’, and by adding at the end the fol4 lowing new clause:

5 ‘‘(v) which is not described in sub6 paragraph (A), in an amount which does

7 not exceed in any year an amount equal to

8 the applicable percentage of the qualified

9 broadband local access facilities expendi10 tures (as determined in section 47A) of the

11 mutual or cooperative telephone company

12 for such year.’’

13 (d) CONFORMING AMENDMENT.—The table of sec14 tions for subpart E of part IV of subchapter A of chapter

15 1 of the Internal Revenue Code of 1986 is amended by

16 inserting after the item relating to section 47 the fol17 lowing:

‘‘Sec. 47A. Rural telecommunications facilities credit.’’

18 (e) EFFECTIVE DATES.—

19 (1) IN GENERAL.—Except as provided in para20 graph (2), the amendments made by this section

21 shall apply to expenditures incurred after the date of

22 the enactment of this Act.

23 (2) SPECIAL RULE.—The amendments made by

24 subsection (c) shall apply to amounts received after

25 the date of the enactment of this Act.
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1 TITLE III—RURAL BROADBAND

2 ENHANCEMENT

3 SEC. 301. FEDERAL COMMUNICATIONS COMMISSION TO

4 PROVIDE SUPPORT FROM UNIVERSAL SERV5 ICE FUND.

6 Section 254(e) of the Communications Act of 1934

7 (47 U.S.C. 254(e)) is amended—

8 (1) by redesignating so much of the text of such

9 subsection as follows ‘‘(e) UNIVERSAL SERVICE SUP10 PORT.—’’ as paragraph (1);

11 (2) by inserting before ‘‘After’’ the following

12 heading: ‘‘(1) IN GENERAL.—’’; and

13 (3) by adding at the end the following:

14 ‘‘(2) RURAL AREA BROADBAND SUPPORT.—In

15 addition to any other support provided under para16 graph (1), the Commission shall, within 90 days

17 after the date of enactment of the Rural Broadband

18 Enhancement Act, initiate a proceeding to provide

19 Federal universal service support for the deployment

20 of broadband service (as defined in section 156(e)(1)

21 of the National Telecommunications and Informa22 tion Administration Organization Act) to eligible

23 rural communities (as defined in section 156(e)(2)

24 of that Act). The proceeding shall be completed

25 within 240 days. Federal universal service support
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1 provided as a result of that proceeding shall be de2 termined without cost averaging of any above-aver3 age cost areas with any lower cost areas, such as

4 would occur in statewide or study averaging, and

5 may be used for the deployment of—

6 ‘‘(A) loop treatments and digital subscriber

7 line access multiplexers;

8 ‘‘(B) cable modems;

9 ‘‘(C) wireless technology; and

10 ‘‘(D) satellite technology.’’.

11 SEC. 302. RURAL UTILITIES SERVICE LOAN PROGRAM.

12 Part C of title I of the National Telecommunications

13 and Information Administration Organization Act (47

14 U.S.C. 901 et seq.) is amended by adding at the end there15 of the following:

16 ‘‘SEC. 156. BROADBAND TELECOMMUNICATIONS SERVICES.

17 ‘‘(a) IN GENERAL.—The Rural Utilities Service of

18 the Department of Agriculture, after consultation with the

19 NTIA, shall make loans or other extensions of credit to

20 companies certified as eligible telecommunications carriers

21 providers, or that accept the obligations of an eligible tele22 communications carrier, in accordance with the provisions

23 of this section to finance the deployment of broadband

24 telecommunications services to eligible rural communities.
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1 ‘‘(b) ELIGIBILITY REQUIREMENTS.—To be eligible

2 for a loan or other extension of credit under this section,

3 a project shall—

4 ‘‘(1) be capable of delivering broadband service;

5 ‘‘(2) be for the purpose of making access to

6 broadband service available to an eligible rural com7 munity where broadband service is not otherwise

8 generally available throughout that community; and

9 ‘‘(3) be subject to the standards for service and

10 area wide coverage applicable to other projects ad11 ministered by the Rural Utilities Service.

12 ‘‘(c) TERMS AND CONDITIONS.—Loans made under

13 this section—

14 ‘‘(1) shall be made available in accordance with

15 the requirements of the Federal Credit Reform Act

16 of 1990 (2 U.S.C. 661);

17 ‘‘(2) shall bear interest at an annual rate of not

18 more than 2 percent per annum; and

19 ‘‘(3) shall be made for the longer of—

20 ‘‘(A) a term of 30 years; or

21 ‘‘(B) the useful life of the assets con22 structed, reconstructed, or acquired.

23 ‘‘(d) LIMITATIONS.—

24 ‘‘(1) TECHNOLOGY NEUTRALITY.—In making

25 loans under this section, the Rural Utilities Service
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1 may not take into consideration the technology pro2 posed to be employed.

3 ‘‘(2) SECURITY INTEREST.—The Rural Utilities

4 Service may take a security interest in assets or rev5 enue streams, in connection with a loan or other ex6 tension of credit made under this section, of not

7 more than the amount sufficient to cover the assets

8 financed by that loan or extension of credit.

9 ‘‘(e) DEFINITIONS.—In this section:

10 ‘‘(1) BROADBAND SERVICE.—The term

11 ‘broadband service’ includes, without regard to any

12 particular transmission medium or technology, high13 speed, switched, broadband telecommunications ca14 pable of delivering not less than 1.0 megabits of

15 data per second to the user and 0.5 megabits of

16 data per second from the user that enables users to

17 originate and receive high-quality voice, data, graph18 ics, and video telecommunications. The Commission

19 shall, from time-to-time as circumstances warrant,

20 revise the rate-of-data-transmission criteria stated in

21 the preceding sentence upward to reflect techno22 logical advances, and the criteria, as so revised, shall

23 be applied under the preceding sentence in lieu of

24 the rate-of-data-transmission criteria stated or pre-
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1 viously revised by the Commission under this sen2 tence.

3 ‘‘(2) ELIGIBLE RURAL COMMUNITY.—The term

4 ‘eligible rural community’ means any incorporated or

5 unincorporated place that is not located in an area

6 designated as a Metropolitan Area by the Office of

7 Management and Budget.’’.

8 SEC. 303. FUNDING.

9 There are authorized to be appropriated to the Sec10 retary of Agriculture to carry out the provisions of section

11 156 of the National Telecommunications and Information

12 Administration Organization Act $3,000,000,000 for fis13 cal years 2001, 2002, 2003, 2004, through 2005, such

14 amount to remain available until expended.

Æ