[Federal Register Volume 86, Number 173 (Friday, September 10, 2021)]
[Rules and Regulations]
[Pages 50604-50610]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19319]


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DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Parts 1735 and 1737

[RUS-20-TELECOM-0044]
RIN 0572-AC48


Implementation of Telecommunications Provisions of the 
Agricultural Improvement Act of 2018

AGENCY: Rural Utilities Service, Department of Agriculture (USDA).

ACTION: Final rule; request for comments.

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SUMMARY: The Rural Utilities Service (RUS) is issuing a final rule with 
comment to implement statutory provisions of the Agriculture 
Improvement Act of 2018 (2018 Farm Bill). The intent of this rule is to 
modify existing regulations to include the statutory revisions 
authorized by the 2018 Farm Bill.

DATES: 
    Effective date: This final rule with comment is effective September 
10, 2021.
    Comment date: Comments due on or before November 9, 2021.

ADDRESSES: You may submit comments, identified by docket number RUS-20-
TELECOM-0044 and Regulatory Information Number (RIN) number 0572-AC48 
through https://www.regulations.gov.
    Instructions: All submissions received must include the Agency name 
and docket number or RIN for this rulemaking. All comments received 
will be posted without change to https://www.regulations.gov, including 
any personal information provided.
    Docket: For access to the docket to read background documents or 
comments received, go to https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: For general inquiries, contact Laurel 
Leverrier, Assistant Administrator Telecommunications Program, Rural 
Utilities Service, U.S. Department of Agriculture (USDA), email: 
<a href="/cdn-cgi/l/email-protection#4824293d3a2d2466242d3e2d3a3a212d3a083d3b2c29662f273e"><span class="__cf_email__" data-cfemail="cba7aabeb9aea7e5a7aebdaeb9b9a2aeb98bbeb8afaae5aca4bd">[email protected]</span></a>, telephone: (202) 720-9556.

SUPPLEMENTARY INFORMATION:

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches to maximize 
net benefits (including potential economic, environmental, public 
health, and safety advantages; distributive impacts; and equity). 
Executive Order 13563 emphasizes the importance of quantifying both 
costs and benefits, of reducing costs, of harmonizing rules, and of 
promoting flexibility. This rule has been determined to be significant 
and was reviewed by the Office of Management and Budget (OMB) under 
Executive Order 12866. In accordance with Executive Order 12866, the 
Agency conducted a Regulatory Impact Analysis, outlining the costs and 
benefits of implementing this program in rural America. The complete 
analysis is available in Docket No. RUS-20-TELECOM-0044. The following 
is a summary discussion of the Analysis:
    This final rule does not directly address any specific market 
failure. The Agency is publishing this rulemaking action to codify the 
mandatory changes

[[Page 50605]]

outlined in the 2018 Farm Bill. Many of the benefits provided by these 
mandatory changes include:
    (1) Providing new information regarding grant eligibility in 
conjunction with the Farm Bill Broadband Program covered under 7 CFR 
part 1738;
    (2) General language clarifications and duplication removals;
    (3) Providing information for, or the removals of, specific service 
requirements;
    (4) Changes in program financing thresholds to conform to the 2018 
Farm Bill requirements;
    (5) Additional application information to ensure criteria are met;
    (6) New reporting requirements that ensure similar data is reported 
and collected across multiple USDA broadband programs to improve 
oversight and integrity; and
    (7) Changes in language to ensure that programs can meet funding 
deadlines while still maintaining the integrity of the environmental 
review process.
    These changes are expected to result in great transparency from the 
Agency and increased financing opportunities for providers of rural 
telecommunications services. Telecommunications services are having a 
profound effect on the Nation's economy, its strength and its growth by 
reducing the barriers of distance, remoteness, and time.

Congressional Review Act

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

Executive Order 12988, Civil Justice Reform

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. The Agency has determined that this rule meets the 
applicable standards provided in section 3 of the Executive order. In 
addition, all state and local laws and regulations that conflict with 
this rule will be preempted. No retroactive effect will be given to 
this rule.

Executive Order 12372, Intergovernmental Consultation

    This final rule has been excluded from the scope of Executive Order 
12372 (Intergovernmental Consultation), which may require a 
consultation with state and local officials. See ``Department Programs 
and Activities Excluded from Executive Order 12372,'' 50 FR 47034 (Nov. 
14, 1985).

Administrative Procedures Act

    The Administrative Procedures Act (APA) exempts from notice and 
comment requirements rules ``relating to agency management or personnel 
or to public property, loans, grants, benefits, or contracts'' (5 
U.S.C.553(a)(2)). The Rural Telecommunications Program provides loans 
to borrowers at interest rates and on terms that are more favorable 
than those generally available from the private sector. RUS borrowers, 
as a result of obtaining Federal financing, receive economic benefits 
under the loan program. Based on this, any changes to the program fall 
under this exemption.

Regulatory Flexibility Act Certification

    The Regulatory Flexibility Act (5 U.S.C. 601-602) (RFA) generally 
requires an agency to prepare a regulatory flexibility analysis of any 
rule subject to notice and comment rulemaking requirements under the 
APA or any other statute. As outlined above, this rule is not subject 
to the APA under 5 U.S.C. 553(a)(2).

Environmental Impact Statement

    This final rule has been reviewed in accordance with 7 CFR part 
1970 (``Environmental Policies and Procedures''). The Agency has 
determined that (i) this action meets the criteria established in 7 CFR 
1970.53(f); (2) no extraordinary circumstances exist; and (iii) the 
action is not ``connected'' to other actions with potentially 
significant impacts, is not considered a ``cumulative action'' and is 
not precluded by 40 CFR 1506.1. Therefore, the Agency has determined 
that the action does not have a significant effect on the human 
environment, and therefore neither an Environmental Assessment nor an 
Environmental Impact Statement is required.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance (CFDA) number assigned 
to the Telecommunications Infrastructure Loans & Guarantees Program is 
10.851. The Catalog is available on the internet at https://beta.sam.gov/. The Government Publishing Office (GPO) prints and sells 
the CFDA to interested buyers. For information about purchasing the 
Catalog of Federal Domestic Assistance from GPO, call the 
Superintendent of Documents at (202) 512-1800 or toll free at (866) 
512-1800, or access GPO's online bookstore at https://bookstore.gpo.gov.

Unfunded Mandates

    This rule contains no federal mandates (under the regulatory 
provisions of Title II of the Unfunded Mandates Reform Act of 1995) for 
state, local, and tribal governments or the private sector. Therefore, 
this rule is not subject to the requirements of sections 202 and 205 of 
the Unfunded Mandates Reform Act of 1995.

E-Government Act Compliance

    Rural Development is committed to complying with the E-Government 
Act of 2002, which requires Government agencies in general to provide 
the public the option of submitting information or transacting business 
electronically to the maximum extent possible.

Executive Order 13132, Federalism

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

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, ``Consultation and Coordination with Indian 
Tribal Governments.'' Executive Order 13175 requires Federal agencies 
to consult and coordinate with Tribes on a government-to-government 
basis on policies that have Tribal implications, including regulations, 
legislative comments or proposed legislation, and other policy 
statements or actions that have substantial direct effects on one or 
more Indian Tribes, on the relationship between the Federal Government 
and Indian Tribes, or on the distribution of power and responsibilities 
between the Federal Government and Indian Tribes.
    Broadband programs in general have a significant impact on Tribes. 
These specific statutory provisions, however, were predominantly 
mandatory, leaving very few areas for discretion for Tribal 
consultation and guidance. The primary areas of discretion were: (1) 
Removing guarantee fee language, (2) correcting a citation, (3) 
removing obsolete year 2000 compliance information and (4) removing a 
duplicative refinancing section.
    USDA has held a series of Tribal consultations conducted by USDA 
Rural Development and USDA Office of Tribal

[[Page 50606]]

Relations regarding tribal broadband. The consultations included 
consultations on (1) tribal broadband specifically (both at the 
national level and numerous regional and state level tribal 
consultations), (2) the USDA ReConnect broadband program, (3) 
participation with Department of Commerce NTIA on the Tribal Broadband 
Connectivity Program, and on (4) Executive Order 13985, ``Advancing 
Racial Equity and Support for Underserved Communities Through the 
Federal Government'' (1/20/21). Through these consultations, the USDA 
compiled the following Tribal government requested ``Tribal Broadband 
Principles'' which were considered and used where applicable in 
drafting this regulation:
    <bullet> Require Tribal resolution. Require any new or legacy 
applicant for USDA funds proposing to serve Tribal lands to have a 
Tribal resolution of support to qualify for eligibility.
    <bullet> Increase flexibility. Read any ambiguous statutory 
requirements and limitations as broadly as possible and in favor of 
Tribes in light of our trust obligations.
    <bullet> Narrow duplication definition. Read ``duplication'' 
limitations as broadly and as flexibly as possible when working with 
Tribal nations to ensure their eligibility for USDA programs to serve 
their own lands.
    <bullet> All self-certification. Tribal nations must be the 
certifiers of whether they are being served/are underserved or other 
similar requirements.
    <bullet> Enforce compliance with Tribal laws. Include a requirement 
of compliance with Tribal laws and regulations in the sections of loan 
and grant agreements that require compliance with state and local laws. 
Enforce the terms of Federal loan and grant agreements which require 
compliance with local (including tribal) laws and regulatory bodies.

Civil Rights Impact Analysis

    The Rural Development's Civil Rights Office reviewed this rule in 
accordance with USDA Regulation 4300-4, ``Civil Rights Impact 
Analysis,'' to identify any major civil rights impacts the rule might 
have on program participants on the basis of age, race, color, national 
origin, sex, or disability. The Rural Development's Civil Rights Office 
worked with the RUS program offices to compile program descriptions, 
data, and outreach activities strategies for the subject program. The 
Rural Development's Civil Rights Office assessed civil rights 
implications and impacts of eligibility criteria, methods of 
administration, and other requirements associated with the final rule 
including strategies to eliminate, alleviate, or mitigate (where 
applicable) civil rights impacts identified in the Civil Rights Impact 
Analysis. The Rural Development's Civil Rights Office agrees to monitor 
the implementation of all civil rights strategies that were instituted 
in connection with this final rule, evaluate their effectiveness, and 
take follow-up action where civil rights impacts may ensue.

Information Collection and Recordkeeping Requirements

    The Information Collection and Recordkeeping requirements contained 
in this rule have been approved under OMB Control Number 0572-0079 and 
submitted for approval under OMB Control Number 0572-0154.

Background

    Rural Development is a mission area within the USDA comprising the 
Rural Utilities Service, Rural Housing Service, and Rural Business/
Cooperative Service. Rural Development's mission is to increase 
economic opportunity and improve the quality of life for all rural 
Americans. Rural Development meets its mission by providing loans, loan 
guarantees, grants, and technical assistance through more than 40 
programs aimed at creating and improving housing, business, and 
infrastructure throughout rural America.
    The Agricultural Improvement Act of 2018 (2018 Farm Bill) made 
mandatory changes to the Rural Telephone Loan Program administered by 
the Telecommunications Program of the Rural Utilities Service.
    These modifications to the program's regulations will allow RUS to 
fully implement the requirements of the 2018 Farm Bill. RUS is also 
taking the opportunity to make minor changes to the program regulations 
that will update or correct existing regulatory citations, data speeds, 
and other program provisions to bring them in line with the statutory 
changes required by the 2018 Farm Bill.
    Changes to 7 CFR part 1735 ``General Policies, Types of Loans, Loan 
Requirements--Telecommunications Program'' include:
    Adding paragraph (d) to Sec.  1735.1. The addition of paragraph (d) 
provides notice to applicants that they may be eligible to receive 
grant assistance through Title VI which is governed by 7 CFR part 1738. 
The Agency determined this was the most effective way to provide this 
information.
    The addition of a definition of Retail Broadband Service to Sec.  
1735.2. The definition provides information to the public on what the 
Agency considers ``retail broadband service'' for the purposes of this 
part.
    Clarifying, at Sec.  1735.10(a)(2)(ii), that multiuse networks that 
provide critical transportation-related services are considered 
integrated interoperable emergency communications and therefore are an 
eligible loan purpose.
    Removing the requirement for a certificate of convenience and 
necessity from Sec.  1735.12. While necessary when the program was 
implemented, the prevalence of services at this time and changes to 
state regulatory bodies has rendered the certificate meaningless for 
Agency purposes. The Agency also expanded the authority of the RUS 
Administrator, at Sec.  1735.12(a), to determine non-duplication of 
services. Previously the Administrator only made that determination for 
states in which there was no regulatory body. This change will reduce 
the burden on applicants and aid in streamlining the application 
process. Clarification regarding non-duplication verification for 
existing borrowers is provided by the Agency, at Sec.  1735.12(b).
    Modifying the criteria at Sec.  1735.12(c) to remove specific 
transmission and reception rates and require coverage as described in 
Sec.  1735.11 for local area exchanges. These changes remove outdated 
terminology, create a single requirement which reduces confusion and 
creates consistency for all applicants.
    Changing the thresholds, at Sec.  1735.21, regarding refinancing to 
conform to 2018 Farm Bill requirements. Prior to the 2018 Farm Bill, 
the Agency was only able to refinance non-RUS loans as long as no more 
than 40 percent of the new loan was used for refinancing. The 2018 Farm 
Bill removed the 40 percent cap and extended the ability to refinance 
100 percent of non-RUS and RUS debt. Refinancing limits will be 
published in the funding opportunity announcement opening an 
application window and based on amounts that are authorized for a given 
fiscal year. However, the Agency is considering limiting refinancing of 
non-RUS loans to 50 percent of the total loan amount while allowing 100 
percent refinancing of existing RUS loans. Additional information was 
added to this section to provide information on loans eligible for 
refinancing as well as maximum amortizations.
    Modifications to Sec.  1735.22(f), (g), and (i) to remove outdated 
references to year 2000 compliant systems and correct an incorrect 
reference that was carried forward from a previous version of the 
regulation, respectively.

[[Page 50607]]

    The addition of public notice filing and response requirements at 
Sec.  1735.23. The notice will allow existing service providers to 
respond to pending applications before the agency that propose to 
provide broadband service outside of their territory that receives 
federal universal support.
    New reporting requirements at Sec.  1735.24. These new requirements 
ensure similar data is reported and collected across multiple USDA 
broadband programs to improve oversight and integrity.
    Removal of refinancing language at Sec.  1735.52 that is now 
duplicative due to the changes at Sec.  1735.21.
    Changes to 7 CFR part 1737, ``Pre-Loan Policies and Procedures 
Common to Insured and Guaranteed Telecommunications Loans'' include 
multiple changes to Sec.  1737.22 to include the removal of the 
requirement for a certified copy of a certificate of convenience and 
necessity as that certificate is no longer required due to changes 
implemented by the 2018 Farm Bill.
    Additional application information was added to Sec.  1737.22(c) 
and (e) for loans involving refinancing. This additional information is 
necessary to ensure that the loans to be refinanced meet the criteria 
set forth in this regulation and the funding opportunity announcement 
that opens a funding window.
    Changes at Sec.  1737.90 to include language allowing obligation 
but not disbursal of funds, under certain circumstances, prior to the 
completion of historical or other types of review identified during the 
environmental review. This change allows for obligation of funds so 
awardees know that funds will be available while still maintaining the 
integrity of the environmental review process.

Amendments and Comparison to the Current Regulation

    The Telecommunications Program and the organizations that apply for 
its funding face significant challenges putting in place projects that 
can deliver and maintain robust, affordable telecommunication services 
to rural consumers. These challenges include rapidly evolving 
technology, competition, and the ever-present higher costs of serving 
rural areas. The final rule will implement statutory changes required 
by the 2018 Farm Bill, as well as minor conforming changes that will 
update and/or correct existing regulatory citations, data speeds and 
other program provisions to ensure they are in line with the required 
statutory changes. The changes are expected to create greater program 
transparency and ensure program rules are clear and consistent.
    Table 1 below shows which sections of the regulations were changed 
due to the statutory authority contained in the 2018 Farm Bill and 
those changes where RUS is exercising discretion to improve program 
clarity. If the sections of the regulations are not specifically stated 
within the table, no changes were made to those sections.

                         Table 1--Statutory and Discretionary Changes to the Regulations
----------------------------------------------------------------------------------------------------------------
                                                                                 2018 Farm Bill
           Section of regulation                         Revision                 requirement     Discretionary
----------------------------------------------------------------------------------------------------------------
        7 CFR Part 1735--General Policies, Types of Loans, Loan Requirements--Telecommunications Program
----------------------------------------------------------------------------------------------------------------
Sec.   1735.1 General Statement...........  Paragraph that entities applying                 X   ...............
                                             under this part could be eligible
                                             for grant funds under 7 CFR
                                             1738.101 added.
Sec.   1735.2 Definitions.................  Retail Broadband service                         X   ...............
                                             definition added.
Sec.   1735.10 General....................  Updated terminology for 911                      X   ...............
                                             service added.
                                            Language on guaranteed fees         ...............               X
                                             removed.
Sec.   1735.12 Nonduplication.............  Certificate of Convenience and                   X   ...............
                                             Necessity requirement was removed.
                                            Outdated broadband speeds were                   X   ...............
                                             removed.
Sec.   1735.21 Refinancing Loans..........  Updated with new RUS refinancing                 X   ...............
                                             authorities.
Sec.   1735.22 Loan Security..............  ``Year 2000'' system compliance     ...............               X
                                             language was removed.
                                            Paragraph citation errors           ...............               X
                                             corrected.
Sec.   1735.23 Public Notice..............  New public notice requirements and               X   ...............
                                             timeframe added.
Sec.   1735.24 Additional Reporting         New reporting requirements and                   X   ...............
 Requirements.                               policies added.
Sec.   1735.51 Required Findings..........  Certificate of Convenience and                   X   ...............
                                             Necessity requirement removed.
Sec.   1735.52 Findings Required for        Duplicative refinancing language    ...............               X
 Particular Loan Purposes.                   removed.
----------------------------------------------------------------------------------------------------------------
   7 CFR Part 1737--Pre-Loan Policies and Procedures Common to Insured and Guaranteed Telecommunications Loans
----------------------------------------------------------------------------------------------------------------
Sec.   1737.22 Supplemental Information...  Certificate of Convenience and                   X   ...............
                                             Necessity requirement removed.
                                            Refinancing requirements updated..               X   ...............
                                            Public Notice requirements added..               X   ...............
Sec.   1737.90 Loan Approval Requirements.  Language added to allow                          X   ...............
                                             obligations prior to
                                             environmental reviews being
                                             complete if related to specific
                                             broadband equipment.
----------------------------------------------------------------------------------------------------------------

List of Subjects

7 CFR Part 1735

    Loan programs-communications, Reporting and recordkeeping 
requirements, Rural areas, Telephone.

7 CFR Part 1737

    Loan programs-communications, Reporting and recordkeeping 
requirements, Rural areas, Telephone.

    For reasons set forth in the preamble, 7 CFR parts 1735 and 1737 
are amended as follows:

PART 1735--GENERAL POLICIES, TYPES OF LOANS, LOAN REQUIREMENTS--
TELECOMMUNICATIONS PROGRAM

0
1. The authority citation for part 1735 continues to read as follows:


[[Page 50608]]


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

Subpart A--General

0
2. Amend Sec.  1735.1 by adding paragraph (d) to read as follows:


Sec.  1735.1  General statement.

* * * * *
    (d) Entities applying for a loan under this part may be eligible to 
receive a grant under 7 CFR 1738.101, for a portion of the project 
providing retail broadband service.

0
3. Amend Sec.  1735.2 by adding, in alphabetical order, the definition 
of ``Retail broadband service'' to read as follows:


Sec.  1735.2  Definitions.

* * * * *
    Retail broadband service means any technology identified by the 
Administrator as having the capacity to provide transmission facilities 
that enable the subscriber to receive a minimum level of service equal 
to at least a downstream transmission capacity of 25 megabits per 
second (Mbps) and an upstream transmission capacity of 3 Mbps. The 
agency may change the minimum transmission capacity by way of notice in 
the Federal Register. The minimum transmission capacity may be higher 
than 25 Mbps downstream and 3 Mbps upstream but cannot be lower.
* * * * *

Subpart B--Loan Purposes and Basic Policies

0
4. Amend Sec.  1735.10 by:
0
a. Revising paragraph (a)(2)(ii);
0
b. Removing paragraph (e); and
0
c. Redesignating paragraphs (f) and (g) as paragraphs (e) and (f), 
respectively.
    The revision reads as follows:


Sec.  1735.10  General.

    (a) * * *
    (2) * * *
    (ii) Integrated interoperable emergency communications, including 
multiuse networks that provide critical transportation-related 
information services in addition to emergency communications services;
* * * * *

0
5. Amend Sec.  1735.12 by:
0
a. Revising paragraph (a) and (b);
0
b. Removing paragraphs (c)(2) and (3);
0
c. Redesignating paragraphs (c)(4) through (12) as paragraphs (c)(2) 
through (10), respectively; and
0
d. Revising newly redesignated paragraph (c)(5).
    The revisions read as follows:


Sec.  1735.12  Nonduplication.

    (a) A loan will not be made unless the Administrator determines 
that no duplication of lines, facilities, or systems already providing 
reasonably adequate services shall result from such a loan.
    (b) Existing borrowers that apply to upgrade existing facilities in 
their existing service area are exempt from the non-duplication 
requirement in paragraph (a) of this section.
    (c) * * *
    (5) The LEC's network is capable of providing retail broadband 
service as defined in Sec.  1735.2 to any subscriber location.
* * * * *

0
6. Revise Sec.  1735.21 to read as follows:


Sec.  1735.21  Refinancing loans.

    (a) Any new direct or guaranteed loan authority provided under the 
RE Act may be used to refinance an outstanding obligation of the 
applicant on another loan made under Titles II and VI of the RE Act, or 
on a non-RUS loan if that loan would have been for eligible 
telecommunications purposes under the RE Act provided that:
    (1) The applicant is current with its payments on the RUS loan(s) 
to be refinanced; and
    (2) The amortization period for that portion of the loan request 
that will be needed for refinancing will not exceed the remaining 
amortization period for the loan(s) to be refinanced. If multiple notes 
are being refinanced, an average remaining amortization period will be 
calculated based on the weighted dollar average of the notes being 
refinanced.
    (b) The amount that can be refinanced will be included in the 
funding opportunity announcement that will open a funding window based 
on the funds authorized for any given fiscal year.

0
7. Amend Sec.  1735.22 by revising paragraphs (f), (g), and (i) to read 
as follows:


Sec.  1735.22  Loan security.

* * * * *
    (f) RUS makes loans only if the borrower's entire system, including 
the facilities to be constructed with the proceeds of the loan, is 
economically feasible, as determined by RUS.
    (g) For purposes of determining compliance with TIER requirements, 
unless a borrower whose existing mortgage contains TIER maintenance 
requirements notifies RUS in writing differently, RUS will apply the 
requirements described in paragraph (h) of this section to the borrower 
regardless of the provisions of the borrower's existing mortgage.
* * * * *
    (i) Nothing in this section shall affect any rights of supplemental 
lenders under the RUS mortgage, or other creditors of the borrower, to 
limit a borrower's TIER requirement to a level above that established 
in paragraph (h) of this section.
* * * * *

0
8. Add Sec.  1735.23 to read as follows:


Sec.  1735.23  Public notice.

    (a) Applications for funding request in which the applicant will 
provide retail broadband service, the Agency's mapping tool will 
include the following information from each application, and will be 
displayed for the public:
    (1) The identity of the applicant;
    (2) A description of the project that can deliver retail broadband 
service;
    (3) A map of the areas to be served, the proposed funded service 
area (PFSA), including identification of the associated census blocks;
    (4) The amount and type of funding requested;
    (5) The status of the application; and
    (6) The estimated number and proportion of households and 
businesses in the proposed funded service area without fixed retail 
broadband service, whether terrestrial or wireless, excluding mobile 
and satellite service.
    (b) For funding requests outside an area where the applicant 
receives Federal universal service support, the public notice filing 
referenced under paragraph (a) of this section will accept public 
notice responses from existing service providers with respect to retail 
broadband service already being provided in the PFSA for 45 calendar 
days on the Agency's web page. Existing service providers are requested 
to submit the following information through the Agency's mapping tool:
    (1) The number of residential and business customers within the 
PFSA currently purchasing broadband at the minimum threshold, the rates 
of data transmission being offered, and the cost of each level of 
broadband service charged by the existing service provider;
    (2) The number of residential and business customers within the 
applicant's service area receiving voice and video services and the 
associated rates for these other services;
    (3) A map showing where the existing service provider's services 
coincide with the applicant's service area using the Agency's mapping 
tool; and
    (4) Test results for the service area in question for a minimum of 
at least the

[[Page 50609]]

prior three months demonstrating that the asserted level of broadband 
is being provided. The test results shall be for different times of the 
day.
    (c) The Agency may contact service providers that respond under 
paragraph (b) of this section to validate their submission, and so 
responding service providers should be prepared to:
    (1) Provide additional information supporting that the area in 
question has sufficient access to broadband service;
    (2) Have a technician on site during the field validation by RUS 
staff;
    (3) Run on site tests with RUS personnel being present, if 
requested; and
    (4) Provide copies of any test results that have been conducted in 
the last six months and validate the information submitted in the 
public notice response months.
    (d) If no broadband service provider submits information pursuant 
to a pending application or if the existing provider does not provide 
the information requested under paragraphs (b) and (c) of this section, 
RUS will consider the extent of broadband service using any other data 
available through reasonable efforts, including utilizing the National 
Telecommunications and Information Administration's National Broadband 
Availability Map and the Federal Communications Commission broadband 
availability map. That may include the agency conducting field 
validations so as to locate facilities in the application service area 
and determine, to the extent possible, if those facilities can provide 
the minimum threshold of broadband. Notwithstanding, conclusive 
evidence as to the existence of the level of broadband will be taken 
only through the public notice process. As a result, the Agency highly 
recommends that existing service providers in a PFSA submit public 
notice response to ensure that their service is considered in the 
determination of eligibility on an application.
    (e) The Agency will notify respondents who are existing service 
providers whether their public notice response was accepted or not and 
allow for an opportunity to respond.
    (f) The information submitted by an existing service provider under 
paragraphs (b) and (c) of this section will be treated as proprietary 
and confidential and not subject to disclosure, pursuant to 7 U.S.C. 
950cc(b)(3).
    (g) For all applications that are approved, the following 
information will be made available to the public:
    (1) The information provided in paragraph (a) of this section;
    (2) Each annual report required under Sec.  1735.24 will be 
redacted to protect any proprietary information; and
    (3) Such other information as the Administrator of the RUS deems 
sufficient to allow the public to understand the assistance provided.

0
9. Add Sec.  1735.24 to read as follows:


Sec.  1735.24  Additional reporting requirements.

    (a) Entities receiving financial assistance from RUS that are used 
for retail broadband must submit annual reports for 3 years after 
project completion. The reports must include the following information:
    (1) The purpose of the financing, including new equipment and 
capacity enhancements that support high-speed broadband access for 
educational institutions, health care providers, and public safety 
service providers (including the estimated number of end users who are 
currently using or forecasted to use the new or upgraded 
infrastructure); and
    (2) The progress towards fulfilling the objectives for which the 
assistance was made, including:
    (i) The number of service points that will receive new broadband 
service, existing network improvements, and facility upgrades resulting 
from the federal assistance;
    (ii) The speed of the broadband services;
    (iii) The average price of the most subscribed tier of retail 
broadband service in each PFSA;
    (iv) The number of new subscribers generated from the project; and
    (v) Complete, reliable, and precise geolocation information that 
indicates the location of new broadband service that is being provided 
or upgraded within the service territory supported by the grant, loan, 
or loan guarantee.
    (b) A notice will be published on the Agency's website that will 
include each annual broadband improvement report, redacted as 
appropriate to protect any proprietary information in the report.

Subpart E--Basic Requirements for Loan Approval

0
10. Amend Sec.  1735.51 by revising paragraph (c) to read as follows:


Sec.  1735.51  Required findings.

* * * * *
    (c) Nonduplication or certificate requirement. The borrower shall 
provide RUS with satisfactory evidence to enable the Administrator to 
determine that no duplication of telephone service shall result from a 
particular loan.


Sec.  1735.52  [Amended]

0
11. Amend Sec.  1735.52 by removing paragraph (a) and removing the 
paragraph (b) designation and heading.

PART 1737--PRE-LOAN POLICIES AND PROCEDURES COMMON TO INSURED AND 
GUARANTEED TELECOMMUNICATIONS LOANS

0
12. The authority citation for part 1737 continues to read as follows:

    Authority: 7 U.S.C. 901 et seq., 1921 et seq.; Pub. L. 103-354, 
108 Stat. 3178 (7 U.S.C. 6941 et. seq.).

Subpart C--The Loan Application

0
13. Amend Sec.  1737.22 by:
0
a. Removing paragraph (a)(13);
0
b. Redesignating paragraphs (a)(14) through (20) as paragraphs (a)(13) 
through (19), respectively;
0
c. Designating the text of newly redesignated paragraph (a)(19) as 
paragraph (a)(19)(i);
0
d. Designating the undesignated paragraph following newly designated 
paragraph (a)(19)(i) as paragraph (a)(19)(ii);
0
e. In newly designated paragraph (a)(19)(ii), removing ``(a)(19)'' and 
adding ``(a)(18)'' in its place;
0
f. Revising paragraphs (b) introductory text, (c) introductory text, 
and (c)(3);
0
g. Redesignating paragraph (d) as paragraph (e); and
0
h. Adding a new paragraph (d) and paragraph (f).
    The revisions and additions read as follows:


Sec.  1737.22  Supplementary information.

* * * * *
    (b) The following must be submitted by borrowers seeking subsequent 
loans:
* * * * *
    (c) For borrowers requesting funds for construction or refinancing, 
in addition to the information included in paragraphs (a) and (b) of 
this section, the following must be submitted:
* * * * *
    (3) Justification for refinancing and evidence that the underlying 
loan to be refinanced would have been eligible for RUS financing under 
the RE Act.
    (d) Loan requests whose sole purpose is to refinance loans under 
Titles II and VI of the RE Act must submit the following:
    (1) Certified financial statements for the last 3 years.
    (2) Five-year financial projections consisting of Income Statement, 
Balance Sheet, and Cash Flow Statement.
    (3) A ``Certification Regarding Lobbying'' for loans, or a 
``Statement for Loan Guarantees and Loan Insurance''

[[Page 50610]]

for loan guarantees, and when required, an executed Standard Form LLL, 
``Disclosure of Lobbying Activities,'' (see section 319, Pub. L. 101-
121 (31 U.S.C. 1352)).
    (4) Executed copy of Form AD-1047, ``Certification Regarding 
Debarment, Suspension, and Other Responsibility Matters--Primary 
Covered Transactions.''
    (5) Borrower's determination of loan maturity.
    (6) A statement that the borrower is or is not delinquent on any 
Federal debt, such as income tax obligations or a loan or loan 
guarantee from another Federal agency. If delinquent, the reasons for 
the delinquency must be explained and RUS will take such explanation 
into consideration in deciding whether to approve the loan. RUS Form 
490, ``Application for Telephone Loan or Guarantee,'' contains a 
section for providing the required statement and any appropriate 
explanation.
    (7) Any other supporting data required by the Administrator.
* * * * *
    (f) For all applications that request funding for retail broadband 
as defined in 7 CFR 1735.2, the application must include all 
information required for the public notice as stated in 7 CFR 
1735.23(a).
* * * * *

Subpart J--Final Loan Approval Procedures

0
14. Amend Sec.  1737.90 by revising paragraph (a)(6) to read as 
follows:


Sec.  1737.90  Loan approval requirements.

    (a) * * *
    (6) All environmental review requirements must be met in accordance 
with 7 CFR part 1970. The Agency may obligate, but not disperse, funds 
under the program pursuant to 7 U.S.C. 950cc-1, before the completion 
of the otherwise required environmental, historical, or other types of 
reviews if the Secretary of Agriculture determines that subsequent 
site-specific review shall be adequate and easily accomplished for the 
location of towers, poles, or other broadband facilities in the service 
area of the awardee without compromising the project or the required 
reviews.
* * * * *

Christopher A. McLean,
Acting Administrator, Rural Utilities Service.
[FR Doc. 2021-19319 Filed 9-9-21; 8:45 am]
BILLING CODE 3410-15-P


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