Broadband Pilot Program, 64315-64325 [2018-27038]

Download as PDF Federal Register / Vol. 83, No. 240 / Friday, December 14, 2018 / Notices • Phytosanitary treatment (cold treatment or irradiation), • Pre-export inspection by the NPPO and issuance of a phytosanitary certificate with an additional declaration, and • Port of entry inspections. Each of the pest risk mitigation measures that would be required, along with evidence of their efficacy in removing pests of concern from the pathway, are described in detail in the RMD. Therefore, in accordance with § 319.56–4(c)(3), we are announcing the availability of our PRA and RMD for public review and comment. Those documents, as well as a description of the economic considerations associated with the importation of fresh guava fruit from Taiwan and a treatment evaluation document that supports the addition of new cold treatment schedules for Bactrocera spp. fruit flies in guava from Taiwan, may be viewed on the Regulations.gov website or in our reading room (see ADDRESSES above for a link to Regulations.gov and information on the location and hours of the reading room). You may request paper copies of these documents by calling or writing to the person listed under FOR FURTHER INFORMATION CONTACT. Please refer to the subject of the analysis you wish to review when requesting copies. After reviewing any comments we receive, we will announce our decision regarding the import status of fresh guava fruit from Taiwan in a subsequent notice. If the overall conclusions of our analysis and the Administrator’s determination of risk remain unchanged following our consideration of the comments, then we will authorize the importation of fresh guava fruit from Taiwan into the continental United States subject to the requirements specified in the RMD. Authority: 7 U.S.C. 1633, 7701–7772, and 7781–7786; 21 U.S.C. 136 and 136a; 7 CFR 2.22, 2.80, and 371.3. Done in Washington, DC, this 10th day of December 2018. Kevin Shea, Administrator, Animal and Plant Health Inspection Service. [FR Doc. 2018–27053 Filed 12–13–18; 8:45 am] amozie on DSK3GDR082PROD with NOTICES1 BILLING CODE 3410–34–P DEPARTMENT OF AGRICULTURE Rural Utilities Service Broadband Pilot Program Rural Utilities Service, Department of Agriculture. AGENCY: VerDate Sep<11>2014 16:57 Dec 13, 2018 Jkt 247001 Funding Opportunity Announcement (FOA) and solicitation of applications. ACTION: The Rural Utilities Service (RUS) announces its general policy and application procedures for funding under the broadband pilot program established pursuant to the Consolidated Appropriations Act, 2018 which provides loans, grants, and loan/ grant combinations to facilitate broadband deployment in rural areas. In facilitating the expansion of broadband services and infrastructure, the pilot will fuel long-term rural economic development and opportunities in rural America. One of those opportunities is precision agriculture. The use of this technology requires a robust broadband connection. The awards made under this program will bring high speed broadband to the farms which will allow them to increase productivity. Please note that the application process is designed so that an applicant must demonstrate financial and technical feasibility of the project and the entire operation of the applicant. Applicants that do not demonstrate financial or technical feasibility will not be considered for an award. DATES: The Agency will finalize the application window by notice in the Federal Register and Grants.gov on February 22, 2019. Please note there are three funding categories with each category having different application windows. Please refer to the specific funding category for the appropriate application deadline. ADDRESSES: Application Submission: The application system for electronic submissions will be available at https:// reconnect.usda.gov. Electronic submissions: Electronic submissions of applications will allow for the expeditious review of an Applicant’s proposal. As a result, all Applicants must file their application electronically. FOR FURTHER INFORMATION CONTACT: For general inquiries, contact Chad Parker, Assistant Administrator Telecommunications Program, Rural Utilities Service, U.S. Department of Agriculture (USDA), email: chad.parker@wdc.usda.gov, telephone (202) 720–9554. You may obtain additional information regarding applications at https:// reconnect.usda.gov. SUPPLEMENTARY INFORMATION: SUMMARY: Authority: This solicitation is issued pursuant to the Consolidated Appropriations Act, 2018, Pub. L. 115–141, and the Rural Electrification Act of 1936, 7 U.S.C. 901 et seq. PO 00000 Frm 00005 Fmt 4703 Sfmt 4703 64315 Overview Federal Agency: Rural Utilities Service, USDA. Funding Opportunity Title: Rural eConnectivity Pilot Program (ReConnect Program). Announcement Type: Funding Opportunity Announcement (FOA) and solicitation of applications. Catalog of Federal Domestic Assistance (CFDA) Number: Rural eConnectivity Pilot Program (ReConnect Program)—10.752. Items in Supplementary Information I. Overview II. Definitions III. Substantially Underserved Trust Areas IV. Funding Opportunity Description V. Eligibility Information VI. Application and Submission Information VII. Application Evaluation Criteria VIII. Notice of Proposed Funded Service Areas IX. Evaluation and Processing Procedures X. Award Administration Information XI. Other Information I. Overview On March 23, 2018, Congress passed the Consolidated Appropriations Act 2018 (the FY2018 Appropriations), which established a broadband loan and grant pilot program, the Rural eConnectivity Pilot Program (hereinafter the ReConnect Program). One of the essential goals of the ReConnect Program is to expand broadband service to rural areas without sufficient access to broadband, defined as 10 megabits per second (Mbps) downstream and 1 Mbps upstream. For this purpose, Congress provided RUS with $600 million and expanded its existing authority to make loans and grants. Additionally, the FY2018 Appropriations specifically authorized technical assistance to assist the Agency in expanding needed service to the most rural communities where 90 percent of the households are without sufficient access to broadband service. To promote broadband in rural America, RUS encourages state and local jurisdictions to waive any fees associated with granting rights-of-ways and to assist applicants and awardees with satisfying any environmental requirements such as approval from the State Historical Preservation Office. II. Definitions The terms and conditions provided in this FOA are applicable to and for purposes of this FOA only. Unless otherwise provided in the award documents, all financial terms not defined herein shall have the meaning as defined by Generally Accepted Accounting Principles. E:\FR\FM\14DEN1.SGM 14DEN1 amozie on DSK3GDR082PROD with NOTICES1 64316 Federal Register / Vol. 83, No. 240 / Friday, December 14, 2018 / Notices Administrator means the RUS Administrator, or the Administrator’s designee. Applicant means an entity requesting funding under this FOA. Application means the Applicant’s request for federal funding, which may be approved in whole or part by RUS. Award documents mean, as applicable, all associated grant agreements, loan agreements, or loan/ grant agreements. Award means a grant, loan, or loan/ grant combination made under this FOA. Awardee means a grantee, borrower, or borrower/grantee that has applied and been awarded federal assistance under this FOA. Broadband loan means, for purposes of this FOA, a loan that has been approved or is currently under review by RUS after the beginning of Fiscal Year 2000 in the Telecommunications Infrastructure Program, Farm Bill Broadband Program, or the Broadband Initiatives Program. Loans that were approved and then subsequently fully de-obligated are not included in this definition. Broadband service means any technology as having the capacity to transmit data to enable a subscriber to the service to originate and receive highquality voice, data, graphics and video. Business means a commercial or mercantile activity engaged in as a means of livelihood. For purposes of this FOA, farms will not be counted as businesses for scoring purposes. CALEA means the Communications Assistance for Law Enforcement Act, 47 U.S.C. 1001 et seq. Composite economic life means the weighted (by dollar amount of each class of facility) average economic life of all classes of facilities necessary to complete construction of the broadband facilities in the proposed funded service area. Critical community facilities means public facilities that provide community services essential for supporting the safety, health, and well-being of residents, including, but not limited to, emergency response and other public safety activities, hospitals and clinics, libraries and schools. Current ratio means the current assets divided by the current liabilities. Debt service coverage ratio (DSCR) means (Total Net Income or Margins + Interest Expense¥Allowance for Funds Used during Construction + Depreciation + Amortization)/(Interest on Funded Debt + Other Interest + Principal Payment on Debt and Capital Leases). VerDate Sep<11>2014 16:57 Dec 13, 2018 Jkt 247001 Economic life means the estimated useful service life of an asset as determined by RUS. Eligible service area means any proposed funded service area where 90 percent of the households to be served do not have sufficient access to broadband. For eligibility purposes, if an applicant is applying for multiple proposed funded service areas, each service area will be evaluated on a stand-alone basis. Equity means total assets minus total liabilities as reflected on the Applicant’s balance sheet. Farm means any establishment from which $1,000 or more of agricultural products were sold or would normally be sold during the year. Forecast period means the five-year period of projections in an application, which shall be used by RUS to determine financial and technical feasibility of the application. GAAP means accounting principles generally accepted in the United States of America. Grant means any federal assistance in the form of a grant made under this FOA. Grant agreement means the grant contract and security agreement between RUS and the Awardee securing the Grant awarded under this FOA, including any amendments thereto, available for review at https:// reconnect.usda.gov. Loan means any federal assistance in the form of a loan made under this FOA. Loan agreement means the loan contract and security agreement between RUS and the Awardee securing the Loan, including all amendments thereto, available for review at https:// reconnect.usda.gov. Loan/grant means any federal assistance in the form of a loan/grant combination made under this FOA. Loan/grant agreement means the loan/grant contract and security agreement between RUS and the Awardee securing the Loan/grant, including all amendments thereto available at https://reconnect.usda.gov. Non-funded service area means any area in which the applicant offers service or intends to offer service during the forecast period but is not a part of its proposed funded service area. Pre-application expenses means any reasonable expenses, as determined by RUS, incurred after the release of this FOA to prepare an Application or to respond to RUS inquiries about the Application. Premises means households, farms and businesses. Project means all of the work to be performed to bring broadband service to PO 00000 Frm 00006 Fmt 4703 Sfmt 4703 all premises in the proposed funded service area under the Application, including construction, the purchase and installation of equipment, and professional services including engineering and accountant/consultant fees, whether funded by federal assistance, matching, or other funds. Proposed funded service area (PFSA) means the area (whether all or part of an existing or new service area) where the applicant is requesting funds to provide broadband service. Multiple service areas will be treated as separate standalone service areas for the purpose of determining how much of the proposed funded service area does not have sufficient access to broadband. Each service area must meet the minimum requirements for the appropriate funding category to be an eligible area. RE Act means the ‘‘Rural Electrification Act of 1936,’’ as amended (7 U.S.C. 901 et seq.). Rural area means any area which is not located within: (1) A city, town, or incorporated area that has a population of greater than 20,000 inhabitants; or (2) an urbanized area contiguous and adjacent to a city or town that has a population of greater than 50,000 inhabitants. RUS Accounting Requirements shall mean compliance with U.S. GAAP, acceptable to RUS, the system of accounting prescribed by RUS Bulletin 1770B–1, and the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, found at 2 CFR part 200. For all Awardees the term ‘‘grant recipient’’ in 2 CFR 200 shall also be read to encompass ‘‘loan recipient’’ and ‘‘loan/grant recipient’’, such that 2 CFR 200 shall be applicable to all Awardees under this FOA. Sufficient access to broadband means any rural area that has fixed, terrestrial broadband service delivering at least 10 Mbps downstream and 1 Mbps upstream. Mobile and satellite services will not be considered in making the determination that households in the proposed funded service area do not have sufficient access to broadband. Tangible equity means a measure of a company’s capital, which is used by financial institutions to evaluate potential losses by eliminating intangible assets, goodwill and preferred stock from total equity. Tangible equity to total assets means tangible equity divided by total assets. Times interest earned ratio (TIER) means (Total Net Income or Margins + Total Interest Expense¥Allowance for Funds Used during Construction) divided by (Total Interest E:\FR\FM\14DEN1.SGM 14DEN1 Federal Register / Vol. 83, No. 240 / Friday, December 14, 2018 / Notices Expense¥Allowance for Funds Used during Construction). III. Substantially Underserved Trust Areas A. If the Administrator determines that a community within ‘‘trust land’’ (as defined in 38 U.S.C. 3765) has a high need for the benefits of the ReConnect Program, the Administrator may designate the community as a ‘‘substantially underserved trust area’’ (as defined in section 306F of the RE Act). B. To receive consideration as a substantially underserved trust area, the applicant must submit to the Agency a completed application that includes all of the information requested in 7 CFR part 1700, subpart D. In addition, the application must identify the discretionary authorities within subpart D that it seeks to have applied to its application. Note, however, that given the prohibition on funding operating expenses in the ReConnect Program, requests for waiver of the equity requirements cannot be considered. In addition, due to the statutory requirements that established the ReConnect Program, waiver of the nonduplication requirements also cannot be considered. IV. Funding Opportunity Descriptions amozie on DSK3GDR082PROD with NOTICES1 A. Funding Categories 1. 100 Percent Loan The interest rate for a 100 percent loan will be set at a fixed 2 percent. The proposed funded service area for this category must be in an area where 90 percent of the households do not have sufficient access to broadband. Applicants must propose to build a network that is capable of providing service to every premise in the proposed funded service area at a speed of 25 Mbps downstream and 3 Mbps upstream. Tangible equity to total assets must be at least 20 percent at the end of the calendar year starting in the third year of the forecast period through the remainder of the forecast period. The Agency anticipates that applications will be accepted on a rolling basis ending June 28, 2019. In the event two loan applications are received for the same proposed funded service area the application to arrive first will be considered first. The agency reserves the right to make funding offers or seek consultations to resolve partially overlapping applications. RUS may contact the applicant for additional information during the review process. If additional information is requested, the applicant will have up to 30 calendar days to submit the information. VerDate Sep<11>2014 16:57 Dec 13, 2018 Jkt 247001 64317 If such information is not timely submitted, RUS may reject the application. Once all funds for this category have been expended for the ReConnect program, all remaining applications will be returned. calendar days to submit such information. If the information is not submitted, RUS may reject the application. 2. 50 Percent Loan/50 Percent Grant Combination The interest rate for the 50 percent loan component will be set at the Treasury rate for the remaining amortization period at the time of each advance of funds. The proposed funded service area for this category must be in an area where 90 percent of the households do not have sufficient access to broadband. Applicants must propose to build a network that is capable of providing service to every premises in the proposed funded service area at a speed of 25 Mbps downstream and 3 Mbps upstream. Applicants may propose substituting cash for the loan component at the time of application. The Agency anticipates that applications will be accepted ending May 29, 2019. All eligible applications will be scored and, subject to Section V(C)(5)(b)(i) (overlapping applications) applications with the highest score will receive an award offer until all funds are expended for this category. RUS reserves the right to request additional information which would not affect scoring. If RUS requests additional information the applicant will have 30 calendar days to submit such information. If the information is not submitted, RUS may reject the application. 1. General 3. 100 Percent Grant The proposed funded service area for this category must be in an area where 100 percent of the households do not have sufficient access to broadband. Applicants must propose to build a network that is capable of providing service to every premise in the proposed funded service area at a speed of 25 Mbps downstream and 3 Mbps upstream. Applicants must provide a matching contribution equal to 25 percent of the cost of the overall project. The matching contribution can only be used for eligible purposes. The Agency anticipates that applications will be accepted ending April 29, 2019. All eligible applications will be scored, and subject to Section V(C)(5)(b)(i) (overlapping applications) applications with the highest score will receive an award offer until all funds are expended for this category. RUS reserves the right to request additional information which would not affect scoring. If RUS requests additional information the applicant will have 30 PO 00000 Frm 00007 Fmt 4703 Sfmt 4703 B. Available Funds Approximately $560,000,000 in funding has been set aside for funding opportunities under this FOA. 2. Funding Limits Award amounts under this FOA will be limited as follows: a. 100 Percent Loan. Up to $200,000,000 is available for loans. The maximum amount that can be requested in an application is $50,000,000. b. 50 Percent Loan—50 Percent Grant. Up to $200,000,000 is available for loan/ grant combinations. The maximum amount that can be requested in an application is $25,000,000 for the loan and $25,000,000 for the grant. Loan and grant amounts will always be equal. c. 100 Percent Grant. Up to $200,000,000 is available for grants. The maximum amount that can be requested in an application is $25,000,000. d. Reserve. Additional budget authority is available for a reserve, which may be used for loans or grants under this FOA, or may be included in additional FOAs. The agency reserves the right to increase funding utilizing the application queue under this FOA should additional appropriations become available for the same purposes. 3. Repooling RUS retains the discretion to divert funds from one funding category to another. 4. Award Period Awards can be made until all funds have been expended in any given funding category. While the completion time will vary depending on the complexity of the project, award recipients must complete their projects within 5 years from the date funds are first made available. 5. Type of Funding Instrument The funding instruments will be grants, loans, and loan/grant combinations. V. Eligibility Information A. General Applicants must satisfy the following eligibility requirements to qualify for funding. B. Eligible Entities The following entities are eligible to apply for assistance: E:\FR\FM\14DEN1.SGM 14DEN1 64318 Federal Register / Vol. 83, No. 240 / Friday, December 14, 2018 / Notices 1. States, local governments, or any agency, subdivision, instrumentality, or political subdivision thereof; 2. A territory or possession of the United States; 3. An Indian tribe (as defined in section 4 of the Indian SelfDetermination and Education Assistance Act (25 U.S.C. 450b)); 4. Non-profit entities; 5. For-profit corporations; 6. Limited liability companies; and 7. Cooperative or mutual organizations. C. Application Eligibility Factors The following requirements must be met by all applications to be eligible for an award. Applications failing to comply with these requirements will be rejected. 1. Audited Financial Statement Applicants must submit unqualified, audited financial statements for the two previous years from the date the application is submitted. If an application is submitted in the first quarter of the calendar year and the most recent yearend audit has not been completed, the applicant can submit the two previous unqualified audits that have been completed. If qualified audits or audits containing a disclaimer or adverse opinion are submitted, the application will not be considered; 2. Fully Completed Application Applicants must submit a complete application and provide all supporting documentation required for the application. amozie on DSK3GDR082PROD with NOTICES1 3. Timely Buildout Completion A project is eligible only if the application demonstrates that the project can be completely built out within 5 years from the date funds are first made available. 5. Service Areas a. Eligible Service Areas i. Applicants must propose to provide broadband service directly to the premises in the proposed funded service 16:57 Dec 13, 2018 Jkt 247001 b. Ineligible Service Areas i. Overlapping Service Areas RUS will not fund more than one project that serves any one given geographic area. Invariably, however, applicants will propose service areas that overlap, varying from small de minimus areas of the territory, but which may be significant with respect to households involved, to larger areas of the service territory, but which may contain few households or businesses, if any. As a result, devising a procedure which will cover every overlap circumstance cannot be done. Nevertheless, it is the agency’s intent to make as many eligible applications viable for consideration as possible. That may mean the agency may: (1) Determine the overlap to be so insignificant that no agency action is necessary; (2) request one or more applications to be revised to eliminate the overlapping territory; (3) choose one application over another given the amount of assistance requested, the number of awards already chosen in the area or State, or the need for the project in the specific area due to other factors; or (4) simply choose the project that scores higher or in the judgement of the agency is more financially feasible. ii. Prior Funded Service Areas 4. Technical Feasibility Only projects that RUS determines to be technically feasible will be eligible for an award. Applicants will be required to submit a network design, network diagram, project costs and a buildout timeline, all certified by a professional engineer. The certification from the professional engineer must state that the proposed network can deliver broadband service at the required level of service to all premises in the proposed funded service area. VerDate Sep<11>2014 area that do not have sufficient access to broadband. ii. If part or parts of the applicant’s proposed funded service area are ineligible, RUS, in its sole discretion, may request that an applicant modify its application, if RUS believes the modification is feasible. Otherwise, RUS will reject the application. (A) RUS Broadband Loans. Service areas of borrowers that have RUS broadband loans, as defined in this FOA, are ineligible for all other applicants, and can be found at https:// reconnect.usda.gov. However, RUS broadband borrowers that received funding to provide service in an area where the borrower is not currently providing sufficient access to broadband pursuant to this FOA would be eligible to apply for funding for these service areas if they have not defaulted on, and have materially complied with, in the sole discretion of RUS, their prior broadband loan requirements. (B) RUS Community Connect Grants. Service areas that received grants under the RUS Community Connect Grant Program are eligible if they do not have sufficient access to broadband, except for those grants still under construction. Service areas still under construction PO 00000 Frm 00008 Fmt 4703 Sfmt 4703 can be found at https:// reconnect.usda.gov. (C) RUS BIP Grants. Service areas that received a 100 percent grant under the RUS Broadband Initiatives Program (BIP) are eligible if they do not have sufficient access to broadband. However, if the applicant is the same BIP grantee, then the applicant may only request a 100 percent loan. (D) State-funded Areas. Areas that received State funding to deploy broadband at a speed of at least 10 Mbps downstream and 1 Mbps upstream are ineligible areas under this FOA. Applicants must provide a map of the proposed funded service area to the appropriate State government office and the State government office must certify that either funds have or have not been allotted for the area. Applicants must submit the map and the State certification as part of the application for funding. For applications that are proposing to provide service in multiple States, a map and certification will be required for each State. If the map(s) and certification(s) are not submitted, RUS may reject the application. (E) Connect America Fund Phase II Auction—Auction 903 (CAF II). Funding for service areas of CAF II recipients can only be requested by the entity that is receiving the CAF II support, and such funding is limited to a 100% loan. The CAF II service areas can be found at https:// reconnect.usda.gov and may also be found on the FCC web page. 6. Fully Funded A project is eligible only if, all project costs can be fully funded or accounted for in the application. To demonstrate this, applications must include evidence of all funding, other than the RUS award, necessary to support the project, such as bank account statements, firm letters of commitment from equity participants, or outside loans, which must evidence the timely availability of funds. If outside loans are used, they may only be secured by assets other than those used for collateral under this FOA. Equity partners that are not specifically identified by name will not be considered in the financial analysis of the application. 7. Financial Feasibility and Sustainability Only projects that RUS determines to be financially feasible and sustainable will be eligible for an award under this FOA. A project is financially feasible when the applicant demonstrates to the satisfaction of RUS that it will be able to generate sufficient revenues to cover expenses; will have sufficient cash flow E:\FR\FM\14DEN1.SGM 14DEN1 Federal Register / Vol. 83, No. 240 / Friday, December 14, 2018 / Notices to service all debts and obligations as they come due; will have a positive ending cash balance as reflected on the cash flow statement for each year of the forecast period; and, by the end of the forecast period, will meet at least two of the following requirements: A minimum TIER requirement of 1.2, a minimum DSCR requirement of 1.2, and a minimum current ratio of 1.2. In addition, applicants must demonstrate positive cash flow from operations at the end of the forecast period. If an applicant has no existing debt, is not proposing to borrow funds during the forecast period, and is applying only for grant funds, only the current ratio will be applied and not the TIER or DSCR. For this situation, applicants must meet the minimum current ratio requirement. amozie on DSK3GDR082PROD with NOTICES1 8. Service Requirements Facilities funded with grant funds must provide broadband service proposed in the application for the composite economic life of the facilities, as approved by RUS, or as provided in the Award Documents. 9. Application Transparency a. Pre-award Public Notice. To ensure transparency for the ReConnect Program, the Agency’s mapping tool will include the following information from each application and be displayed for the public: (i) The identity of the applicant; (ii) the areas to be served; (iii) the type of funding requested; (iv) the status of the application; (v) the number of households without sufficient access to broadband; and (vi) a list of the census blocks to be served. b. Post-award Public Notice. For all approved applications, the agency will post on its website: The name of the company receiving funding, the type of funding received, the location of the proposed funded service area and the purposes of the funding. c. Post-award Reporting. Awardees will be required to submit semi-annual reports for three years after the completion of construction on the following information: (i) The number and location of residences and businesses that will receive service at or greater than the requirement for the appropriate funding category. (ii) the types of facilities constructed and installed; (iii) the speed of the data services being delivered; (iv) the average price of the data services being delivered in each proposed service area; and (v) the broadband adoption rate for each proposed service territory, VerDate Sep<11>2014 16:57 Dec 13, 2018 Jkt 247001 including the number of new subscribers generated from the facilities funded. This information will be used to analyze the effectiveness of the funding provided and will allow the Agency to track adoption rates as new and improved broadband services are being provided. D. Eligible Cost Purposes 1. General Award and matching funds must be used only to pay for eligible costs incurred post award, except for approved pre-application expenses. Eligible costs must be consistent with the cost principles identified in 2 CFR 200, Subpart E, Cost Principles. In addition, costs must be reasonable, allocable, and necessary to the project. Any application that proposes to use any portion of the award or matching funds for any ineligible cost may be rejected. 2. Eligible and Ineligible Costs a. Eligible Award Costs Award funds may be used to pay for the following costs: (i) To fund the construction or improvement of facilities, including buildings and land, required to provide broadband service, including facilities required for providing other services over the same facilities, such as equipment required to comply with CALEA; (ii) To fund reasonable preapplication expenses in an amount not to exceed five percent of the award. Preapplication expenses may be reimbursed only if they are incurred after the publication date of this FOA, and properly documented. Preapplication expenses must be included in the first request for award funds, and will be funded with either grant or loan funds. If the funding category applied for has a grant component, then grant funds will be used for this purpose; (iii) To fund the acquisition of an existing system that does not currently provide sufficient access to broadband for upgrading that system to meet the requirements of this FOA. The cost of the acquisition is limited to 40 percent of the amount requested. Acquisitions can only be considered in the 100 percent loan category; and (iv) To fund terrestrial-based facilities for satellite broadband service, provided the applicant clearly identifies the PFSA, demonstrates the ability to provide 25 Mbps downstream and 3 Mbps upstream simultaneously to every premise in the PFSA, and offers PO 00000 Frm 00009 Fmt 4703 Sfmt 4703 64319 subscribers reasonable service plans that do not cap bandwidth usage. (b) Ineligible Award Costs Award funds may not be used for any of the following purposes: (i) To fund operating expenses of the Awardee; (ii) To fund costs incurred prior to the date on which the application was submitted, and with respect to eligible pre-application expenses, those costs incurred prior to the date of the publication date of this FOA; (iii) To fund an acquisition of an affiliate, or the purchase or acquisition of any facilities or equipment of an affiliate. Note that if affiliated transactions are contemplated in the application, approval of the application does not constitute approval to enter into affiliated transactions, nor acceptance of the affiliated arrangements that conflict with the obligations under the award documents; (iv) To fund the acquisition of a system previously funded by RUS; (v) To fund the purchase or lease of any vehicle other than those used primarily in construction or system improvements; (vi) To fund broadband facilities leased under the terms of an operating lease or an indefeasible right of use (IRU) agreement; (vii) To fund the merger or consolidation of entities; (viii) To fund costs incurred in acquiring spectrum as part of an FCC auction or in a secondary market acquisition. Spectrum that is part of an acquisition may be considered for loan funding; (ix) To fund facilities that provide mobile services; (x) To fund the acquisition of a system that is providing sufficient access to broadband; nor (x) To refinance outstanding debt. VI. Application and Submission Information A. Online Application System All applications under this FOA must be submitted through the RUS Online Application System to be located through https://reconnect.usda.gov. Additional information can be found in the Application Guidelines found at the above location. This website will be updated regularly. B. Registration 1. Dun and Bradstreet Universal Numbering System (DUNS) Number All applicants must register for a DUNS number as part of the application. The applicant can obtain E:\FR\FM\14DEN1.SGM 14DEN1 64320 Federal Register / Vol. 83, No. 240 / Friday, December 14, 2018 / Notices the DUNS number free of charge by calling Dun and Bradstreet. Go to https:// fedgov.dnb.com/webform for more information on assignment of a DUNS number or confirmation. 2. System for Award Management (SAM) Prior to submitting an application, the applicant must also register in SAM at https://www.sam.gov/portal/SAM/#1 and supply a Commercial and Government Entity (CAGE) Code number as part of the application. SAM registration must be active with current data at all times, from the application review throughout the active Federal award funding period. To maintain active SAM registration, the applicant must review and update the information in the SAM database annually from the date of initial registration or from the date of the last update. The applicant must ensure that the information in the database is current, accurate, and complete. amozie on DSK3GDR082PROD with NOTICES1 C. Contents of the Application 1. Requirements for the Applications Given the varying expected closing dates for each funding type, and the inability of the agency to announce awards for a funding window while applicants have other applications in more than one funding type, applicants will be limited to ONE application for this FOA. A complete application will include the following information as requested in the RUS Online Application System: a. General information on the applicant and the project including: (i) A description of the project that will be made public consistent with the requirements herein and (ii) The estimated dollar amount of the funding request. b. An executive summary of the proposed project. This summary shall include, but not be limited to, a detailed description of existing operations, discussion about key management, description of the workforce, description of interactions between any parent, affiliated or subsidiary operation and a detailed description of the proposed project. c. A description of the proposed funded service area including the number of premises passed. d. Subscriber projections including the number of subscribers for broadband, video and voice services and any other service that may be offered; A description of the proposed service offerings, and the associated pricing plan that the applicant proposes to offer; and an explanation of how the proposed service offerings are affordable. VerDate Sep<11>2014 16:57 Dec 13, 2018 Jkt 247001 e. A map, utilizing the RUS mapping tool located at https:// reconnect.usda.gov of the proposed funded service areas identifying the areas without sufficient access to broadband and any non-funded service areas of the applicant. f. A description of the advertised prices of service offerings by competitors in the same area. g. A network design which includes a description of the proposed technology used to deliver the broadband service demonstrating that all premises in the proposed funded service area can be offered broadband service, a network diagram, a buildout timeline and milestones for implementation of the project, and a capital investment schedule showing that the system can be built within 5 years, all of which must be certified by a professional engineer who is certified in at least one of the states where there is project construction. The certification from the professional engineer must clearly state that the proposed network can deliver the broadband service to all premises in the proposed funded service area at the minimum required service level. In addition, if the applicant is requesting the points for providing a 100 Mbps upstream and 100 Mbps downstream, the certification must also state that the proposed system is capable of delivering this service to all premises; a list of all required licenses and regulatory approvals needed for the proposed project and how much the applicant will rely on contractors or vendors to deploy the network facilities. Note that in preparing budget costs for equipment and materials, RUS’ Buy American requirements apply. h. Resumes of key management personnel, a description of the organization’s readiness to manage a broadband services network, and an organizational chart showing all parent organizations and/or holding companies (including parents of parents, etc.), and all subsidiaries and affiliates. i. A legal opinion that: (1) Addresses the applicant’s ability to enter into the award documents; (2) describes all material pending litigation matters; (3) addresses the applicant’s ability to pledge security as required by the award documents and (4) addresses the applicant’s ability to provide broadband service under state law. j. Summary and itemized budgets of the infrastructure costs of the proposed project, including if applicable, the ratio of loans to grants, and any other sources of outside funding. k. A detailed description of working capital requirements and the source of these funds. PO 00000 Frm 00010 Fmt 4703 Sfmt 4703 l. Historical financial statements for the last four years consisting of a balance sheet, income statement, and cash flow statement. If an entity has not been operating for four years, historical statements for the period of time the entity has been operating. m. Audited financial statements for the previous two calendar years. For governmental entities financial statements must be accompanied with certifications as to unrestricted cash that may be available on a yearly basis to the applicant. For startup operations formed from partnerships of existing utility providers, audited financial statements are required for the two previous years from each of the partners. In addition, the partners must guarantee any loan component of the requested funding. n. Pro Forma financial analysis, prepared in conformity with U.S. GAAP and the Agency’s guidance on grant accounting found at https:// www.rd.usda.gov/files/Accounting Guidance10.pdf. The Pro Forma should validate the sustainability of the project by including subscriber estimates related to all proposed service offerings; annual financial projections with balance sheets, income statements, and cash flow statements; supporting assumptions for a five-year forecast period and a depreciation schedule for existing facilities and those funded with federal assistance, matching, and other funds. This pro forma should indicate the committed sources of capital funding and include a bridge year prior to the start of the forecast period. This bridge year shall be used as a buffer between the historical financial information and the forecast period and is the year in which the application is submitted. o. All attachments required in the RUS Online application system; p. A scoring sheet, analyzing the scoring criteria set forth in this FOA; q. A list of all the applicant’s outstanding and contingent obligations, including copies of existing notes, loan and security agreements, guarantees, any existing management or service agreements, and any other agreements with parents, subsidiaries and affiliates, including but not limited to debt instruments that use the applicant’s assets, revenues or stock as collateral; r. All environmental information required to certify that the proposed construction meets the requirements of the National Environmental Policy Act of 1969, as amended (42 U.S.C. 4321 et seq.) (NEPA), the National Historic Preservation Act of 1966, as amended (16 U.S.C. 470 et seq.) (NHPA), and the Endangered Species Act of 1973, as amended (16 U.S.C. 1534 et seq.) (ESA) E:\FR\FM\14DEN1.SGM 14DEN1 Federal Register / Vol. 83, No. 240 / Friday, December 14, 2018 / Notices as applicable and any other information requested by the Agency. Information will be submitted in two parts. Applicants must submit all information that is requested in the Agency’s on-line applications system as well as provide any information requested by the Agency after applications are submitted. s. Certification from the applicant that agreements with, or obligations to, investors do not breach the obligations to the government under the draft Award Documents, especially distribution requirements, and that any such agreements will be amended so that such obligations are made contingent to compliance with the Award Documents. Such certification should also specifically identify which, if any, provisions would need to be amended; and t. If service is being proposed on tribal land, a certification from the proper tribal official that they are in support of the project and will allow construction to take place on tribal land. The certification must: (1) Include a description of the land proposed for use as part of the proposed project; (2) identify whether the land is owned, held in Trust, land held in fee simple by the Tribe, or land under a long-term lease by the Tribe; (3) if owned, identify the land owner; and (4) provide a commitment in writing from the land owner authorizing the applicant’s use of that land for the proposed project. If no certification is provided, then this area will be ineligible for funding. u. Any other information requested in the online application system. D. Material Representations The application, including certifications, and all forms submitted as part of the application will be treated as material representations upon which RUS will rely in awarding grants and loans. VII. Application Evaluation Criteria amozie on DSK3GDR082PROD with NOTICES1 A. Evaluation Criteria Applications in the same funding category will be scored and ranked against the following criteria, and not against each other. However, applications for 50/50 loan/grant combos and 100 percent grants that cover the same proposed service area will be evaluated as described in Section V(C)(5)(b)(i) above. Points will be awarded for serving the least dense rural areas as measured by the population of the area per square mile. If multiple service areas are 16:57 Dec 13, 2018 Jkt 247001 2. Farms Served (20 Points) Applicants will receive 1 point for each farm that pre-subscribes for broadband service up to a maximum of 20 points. Applicants must have the head of the farm sign the presubscription form provided in the application system and submit them as part of their application. 3. Performance of the Offered Service (20 Points) For projects that are proposing to build a network that is capable of providing at least 100 Mbps symmetrical service to all premises, 20 points will be awarded. The certification from the Professional Engineer must certify that the proposed system can deliver these speeds to every premises in the proposed funded service area. 4. Businesses (15 Points) Applicants will receive 1 point for each business that pre-subscribes for broadband service up to a maximum of 15 points. Applicants must have the owner of the business sign the presubscription form provided in the application system and submit them as part of their application. 5. Healthcare Centers (15 Points) For every healthcare center served 1 point will be awarded up to a maximum of 15 points. Healthcare centers will be counted using the GIS layer located in the RUS mapping tool at https:// reconnect.usda.gov. 6. Educational Facilities (15 Points) For every school served 1 point will be awarded up to a maximum of 15 points. Schools will be counted using the GIS layer provided in the RUS mapping tool located at https:// reconnect.usda.gov. 7. Critical Community Facilities (15 Points) 1. Rurality of Proposed Funded Service Area (25 Points) VerDate Sep<11>2014 proposed, the density calculation will be made on the combined areas as if they were a single area, and not the average densities. For population densities of 6 or less, 25 points will be awarded. For every critical community facility served 1 point will be awarded up to a maximum of 15 points. Critical community facilities will be counted using the GIS layer located in the RUS mapping tool at https:// reconnect.usda.gov. 8. Tribal Lands (5 Points) For applications where, at a minimum, 50 percent of the PO 00000 Frm 00011 Fmt 4703 Sfmt 4703 64321 geographical area of the proposed funded service area(s) is to provide service on tribal lands, 5 points shall be awarded. Tribal lands will be analyzed using the GIS layer located at https:// www.census.gov/geo/maps-data/data/ cbf/cbf_aiannh.html. This layer is included in the RUS mapping tool. 9. State Broadband Activity (20 Points) For projects that are in a State that has a broadband plan that has been updated within five years of the date of publication of this FOA, 10 points will be awarded. An additional 5 points will be awarded for projects located in states that do not restrict utilities from delivering broadband service, and 5 more points for projects located in states that expedite right-of-way and environmental requirements. Applicants will be required to submit evidence from the appropriate State official that a broadband plan has been implemented and updated, that there are no restrictions on utilities providing broadband service, and that procedures are in place for expediting right-of-way and environmental requirements. If service is proposed in multiple states, then evidence must be submitted from each state to get the appropriate points. VIII. Notice of Proposed Funded Service Areas A. The Agency Will Publish a Public Notice of Each Application The application must provide a summary of the information required for such public notice including the following: 1. The identity of the applicant; 2. A map of each proposed funded service area showing the rural area boundaries and the areas without sufficient access to broadband using the Agency’s Mapping Tool; 3. The amount and type of support requested; 4. The status of the review of the application; 5. The estimated number of households without sufficient access to broadband in each service area exclusive of satellite and mobile broadband service; and 6. A description of all the types of services that the applicant proposes to offer in each service area. B. Notification After the Application Has Been Received The Agency will publish the public notice on an Agency web page after the application has been submitted through the online application system and will remain on the web page for a period of 30 calendar days. E:\FR\FM\14DEN1.SGM 14DEN1 64322 Federal Register / Vol. 83, No. 240 / Friday, December 14, 2018 / Notices The notice will ask existing service providers to submit to the Agency, within this notice period, the following information: 1. The number of residential and business customers within the applicant’s service area currently purchasing broadband service, defined as at a minimum speed of 10 Mbps downstream and 1 Mbps upstream, 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; and 3. A map showing where the existing service provider’s services coincide with the applicant’s service area using the Agency’s Mapping Tool. C. Agency Determination of Sufficient Access to Broadband in Proposed Funded Service Area The Agency will use the information submitted to determine if there is sufficient access to broadband in any part of the proposed funded service area. Notwithstanding non-responses by actual and potential providers, the Agency will use all information available in evaluating the feasibility of the project. D. Treatment of Submitted Information The information submitted by an existing service provider will be treated as proprietary and confidential to the extent permitted under applicable law. E. Notice of Application Is Approved If an application is approved, an additional notice will be published on the agency’s website that will include the following information: 1. The name of the entity receiving the financial assistance; 2. The type of assistance being received; 3. The purpose of the assistance and the location of the proposed funded service area; and 4. The semiannual reports submitted under Section X(B)(6)e of this FOA. amozie on DSK3GDR082PROD with NOTICES1 IX. Evaluation and Processing Procedures A. Review of Application Applications will be evaluated using the criteria stated in Section V.C of this FOA. Public comments received with respect to an application’s proposed funded service area will be reviewed and evaluated. Eligibility of proposed funded service areas will be verified by the Agency. VerDate Sep<11>2014 16:57 Dec 13, 2018 Jkt 247001 RUS also reserves the right to ask applicants for clarifying information and additional verification of assertions in the application. For those applications that RUS has selected for funding, RUS will send award documents. B. Review of Awardee Operations 1. Entities That Receive Funding Under This FOA For all entities that receive funding under this FOA, RUS may send a team to the awardee’s facilities to complete a Management Analysis Profile (MAP) of the entire operation. MAPs are used by RUS as a means of evaluating an Awardee’s strengths and weaknesses and ensuring that awardees are prepared to fulfil the terms of the award. Once an applicant accepts an award offer, RUS may schedule a site visit as soon as possible. 2. Agency Right Not To Advance Funds RUS reserves the right not to advance funds until the MAP has been completed. If the MAP identifies issues that can affect the operation and completion of the project, those issues must be addressed to the satisfaction of RUS before funds can be advanced. Funding may be rescinded if following a MAP the agency determines that the awardee will be unable to meet the requirements of the award. X. Award Administration Information A. Award Notices Successful applicants will receive an offer letter and award documents from RUS following award notification. Applicants may view sample award documents at https:// reconnect.usda.gov. B. Administrative Requirements 1. Pre-Award Conditions No funds will be disbursed under this program until all other sources of funding have been obtained and any other pre-award conditions have been met. Failure to obtain one or more sources of funding committed to in the Application or to fulfill any other preaward condition within 90 days of award announcement may result in withdrawal of the award. 2. Failure To Comply With Award Requirements If an Awardee fails to comply with the terms of the award as specified in the award documents, RUS may exercise rights and remedies. PO 00000 Frm 00012 Fmt 4703 Sfmt 4703 3. Advance Procedures RUS loan and grant advances are made at the request of the Awardee according to the procedures stipulated in the Award Documents. ALL MATCHING FUNDS OR CASH PROVIDED IN LIEU OF LOAN FUNDS MUST BE EXPENDED FIRST, FOLLOWED BY LOAN FUNDS, AND THEN BY GRANT FUNDS, EXCEPT FOR RUS APPROVED PRE– APPLICATION EXPENSES. Grant funds, if any, will be used for eligible preapplication expenses only on the first advance request. Accordingly, applications that do not account for such advance procedures in the Pro Forma five-year forecast may be rejected. 4. Construction a. All project assets must comply with 7 CFR part 1788, and 7 CFR part 1970 located at https://www.rd.usda.gov/ publications/regulations-guidelines/ regulations, the ReConnect Program Construction Procedures located at https://reconnect.usda.gov, any successor regulations found on the agency’s website, and any other guidance from the Agency. b. The build-out of the project must be completed within five years from the date funds are made available. Build-out is considered complete when the network design has been fully implemented, the service operations and management systems infrastructure is operational, and the awardee is ready to support the activation and commissioning of individual customers to the new system. 5. Servicing a. Awardees must make payments on the loan as required in the note and Award Documents. b. Awardees must comply with all terms, conditions, affirmative covenants, and negative covenants contained in the Award Documents. c. In the event of default of the Award Documents: (i) A late charge may be charged on any payment not made in accordance with the terms of the loan. (ii) The Agency may exercise any and all remedies provided in the Award Documents. 6. Accounting, Monitoring, and Reporting Requirements a. Awardees must adopt a system of accounts for maintaining financial records acceptable to the Agency, as described in 7 CFR part 1770, subpart B. b. Awardees must submit annual comparable audited financial statements along with a report on compliance and E:\FR\FM\14DEN1.SGM 14DEN1 amozie on DSK3GDR082PROD with NOTICES1 Federal Register / Vol. 83, No. 240 / Friday, December 14, 2018 / Notices on internal control over financial reporting, and management letter in accordance with the requirements of 7 CFR part 1773. The Certified Public Accountant (CPA) conducting the annual audit is selected by the borrower and must be satisfactory to RUS as set forth in 7 CFR 1773 Subpart B—RUS Audit Requirements. c. Awardees must comply with all reasonable Agency requests to support ongoing monitoring efforts. The Awardee shall afford RUS, through its representatives, reasonable opportunity, at all times during business hours and upon prior notice, to have access to and the right to inspect: The Broadband System, any other property encumbered by the Award Documents, any and all books, records, accounts, invoices, contracts, leases, payrolls, timesheets, cancelled checks, statements, and other documents, electronic or paper of every kind belonging to or in the possession of the Awardee or in any way pertaining to its property or business, including its subsidiaries, if any, and to make copies or extracts therefore. d. Awardee records shall be retained and preserved in accordance with the provisions of 7 CFR part 1770, subpart A. e. Awardees must submit semiannual reports for 3 years after completion of the project, which must include the following: (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); (2) The progress towards fulfilling the objectives for which the assistance was granted, including: (i) The number of residences and businesses that will receive service equal to or greater than the speed required for the appropriate funding category; (ii) The types of facilities constructed and installed; (iii) The speed of the broadband services being delivered; (iv) The average price of the broadband services being delivered in each proposed service area; (v) The broadband adoption rate for each proposed service territory, including the number of new subscribers generated from the facilities funded; and VerDate Sep<11>2014 16:57 Dec 13, 2018 Jkt 247001 7. Assistance Instruments a. Terms and conditions of loans, grants, or loan/grant combinations are set forth in the non-negotiable standard loan, grant, or loan/grant agreements and the corresponding note, and/or mortgage, if applicable, which may be found at https://reconnect.usda.gov. b. Award Documents must be executed prior to any advance of funds. c. Sample Award Documents can be found at https://reconnect.usda.gov. 8. Loan and Loan/Grant Terms and Conditions Among others, the following terms shall apply to the loans: a. Interest Rate If an applicant is applying for a 100% loan, the interest rate shall be fixed at 2%. If an applicant is applying for a 50/ 50 loan/grant combination, the loan shall bear interest at a rate equal to the cost of borrowing to the Department of Treasury for obligations, as determined by the government, of comparable maturity. The applicable interest rate will be set at the time of each advance. b. Repayment Period Unless the Applicant requests a shorter repayment period, loans must be repaid with interest within a period that, rounded to the nearest whole year, is equal to the expected Composite Economic Life of the project assets, as determined by RUS based upon acceptable depreciation rates, plus three years. Acceptable depreciation rates can be found in the ReConnect Program Constructions Procedures found at https://reconnect.usda.gov. c. Amortization Period Interest begins accruing on the date of each loan advance. All interest and principle payments will be deferred for a three-year period starting when funds are made available to be drawn by the Awardee. At the end of the three-year deferral period, accrued interest will be capitalized and added to the outstanding principal, and monthly payments will be established in an amount that amortizes the outstanding balance in equal payments over the remaining term of the loan. d. Build-out Period All proposed construction (including construction with matching and other funds) and all advance of funds must be completed no later than five years from the time funds are made available. e. Fidelity Bonding Applicants must agree to obtain a fidelity bond for 15 percent of the award amount. The fidelity bond must be obtained as a condition of award closing. RUS may reduce the percentage required if it determines that 15 percent PO 00000 Frm 00013 Fmt 4703 Sfmt 4703 64323 is not commensurate with the risk involved. f. Loan Security. The loan portion of the award must be adequately secured, as determined by RUS. (i) For Corporations and LLC’s, the loan and loan/grant combinations must be secured by all assets of the Awardee. RUS must be given an exclusive first lien, in form and substance satisfactory to RUS, on all assets of the Awardee, including all revenues. RUS may share its first lien position with one or more lenders on a pari passu basis, except with respect to grant funds, if security arrangements are acceptable to RUS. Applicants must submit a certification that their prior lender or lienholder on any Awardee assets has already agreed to sign the RUS’ standard intercreditor agreement or co-mortgage found at https://reconnect.usda.gov. Note that RUS will not consider sharing assets with any related party or affiliate of the Awardee. Moreover, given that RUS cannot renegotiate these standard agreements, Awardees that are unable to obtain sign-off on the security arrangements may have their awards rescinded within 60 days of the date the Awardee is made aware of the approval of its application. (ii) For Tribal entities and municipalities, RUS will develop appropriate security arrangements. (iii) Unless otherwise approved by RUS in writing, all property and facilities purchased with award funds must be owned by the Awardee. g. Grant Security. The grant portion of the award must also be adequately secured, as determined by RUS. (i) The government must be provided an exclusive first lien on all grant assets during the service obligation of the grant, and thereafter any sale or disposition of grant assets must comply with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, codified in 2 CFR part 200. Note that this part will apply to ALL grant funds of an Awardee, regardless of the entity status or type of organization. (ii) All Awardees must repay the grant if the project is sold or transferred without RUS approval during the service obligation of the grant. 9. Award Terms and Conditions a. Scope Awardees are required to comply with the requirements established herein. Any obligation that applies to the Awardee shall extend for the life of the award-funded facilities. b. Sale or Lease of Project Assets E:\FR\FM\14DEN1.SGM 14DEN1 64324 Federal Register / Vol. 83, No. 240 / Friday, December 14, 2018 / Notices amozie on DSK3GDR082PROD with NOTICES1 The sale or lease of any portion of the Awardee’s facilities must be approved in writing by RUS. c. Certifications (i) The Applicant must certify that it is authorized to submit the application on behalf of the eligible entity(ies) listed in the Application; that the Applicant has examined the Application; that all information in the Application, including certifications and forms submitted, are, at the time furnished, true and correct in all material respects; that the entity requesting funding will comply with the terms, conditions, purposes, and federal requirements of the program; that no kickbacks were paid; and that a false, fictitious, or fradulent statement or claim on the Application is grounds for denial or termination of an award, and/or possible punishment by a fine or imprisonment as provided in 18 U.S.C. § 1001 and civil violations of the False Claims Act (31 U.S.C. 3729 et seq.); (ii) The Applicant must certify that it will comply with all applicable federal, tribal, state, and local laws, rules, regulations, ordinances, codes, orders, and programmatic rules and requirements relating to the project, and acknowledges that failure to do so may result in rejection or de-obligation of the award, as well as civil or criminal prosecution, if applicable, by the appropriate law enforcement authorities. 10. Financial and Compliance Reporting Requirements Awardees must submit to RUS 30 calendar days after the end of each calendar year quarter, balance sheets, income statements, statements of cash flow, rate package summaries, and the number of customers taking broadband service on a per community basis utilizing RUS’ on-line reporting system. These reports must be submitted throughout the loan amortization period or for the economic life of the facilities funded with a 100 percent grant. In addition, Awardees will be required to submit annually updated service area maps through the RUS mapping tool showing the areas where construction has been completed and premises are receiving service until the entire proposed funded service area can receive the broadband service. At the end of the project, Awardees must submit a service area map indicating that all construction has been completed as proposed in the application. If parts of the proposed funded service area have not been constructed, RUS may require a portion of the award to be rescinded or paid back. VerDate Sep<11>2014 16:57 Dec 13, 2018 Jkt 247001 XI. Other Information C. De-Obligation A. Discretionary Awards The government is not obligated to make any award as a result of this announcement and will fund only projects that are deemed likely to achieve the program’s goals and for which funds are available. The RUS reserves the right to deobligate awards to Awardees under this FOA that demonstrate an insufficient level of performance, wasteful or fraudulent spending, or noncompliance with environmental and historic preservation requirements. B. Environmental and National Historic Preservation Requirements Federal Agencies are required to analyze the potential environmental impacts, as required by the NEPA and the NHPA for Applicant projects or proposals seeking funding. All Applicants are required to complete an Environmental Questionnaire, provide a description of program activities and to submit all other required environmental documentation as requested in the application system or by the Agency after the application is submitted. It is the Applicant’s responsibility to obtain all necessary federal, tribal, state, and local governmental permits and approvals necessary for the proposed work to be conducted. Applicants are expected to design their projects so that they minimize the potential for adverse impacts to the environment. Applicants also will be required to cooperate with the granting agencies in identifying feasible measures to reduce or avoid any identified adverse environmental impacts of their proposed projects. The failure to do so may be grounds for not making an award. Applications will be reviewed to ensure that they contain sufficient information to allow Agency staff to conduct a NEPA analysis so that appropriate NEPA documentation can be submitted to the appropriate federal and state agencies, along with the recommendation that the proposal is in compliance with applicable environmental and historic preservations laws. Applicants proposing activities that cannot be covered by existing environmental compliance procedures will be informed after the technical review stage whether NEPA compliance and other environmental requirements can otherwise be expeditiously met so that a project can proceed within the timeframes anticipated under the ReConnect Program. If additional information is required after an application is accepted for funding, funds can be withheld by the agency under a special award condition requiring the Awardee to submit additional environmental compliance information sufficient for the Agency to assess any impacts that a project may have on the environment. D. Confidentiality of Applicant Information PO 00000 Frm 00014 Fmt 4703 Sfmt 4703 Applicants are encouraged to identify and label any confidential and proprietary information contained in their applications. The Agency will protect confidential and proprietary information from public disclosure to the fullest extent authorized by applicable law, including the Freedom of Information Act, as amended (5 U.S.C. 552), the Trade Secrets Act, as amended (18 U.S.C. 1905), the Economic Espionage Act of 1996 (18 U.S.C. 1831 et seq.), and CALEA (47 U.S.C. 1001 et seq.). Applicants should be aware, however, that the Consolidated Appropriations Act requires substantial transparency. For example, RUS is required to make publicly available on the internet a list of each entity that has applied for a loan or grant, a description of each application, the status of each application, the name of each entity receiving funds, and the purpose for which the entity is receiving the funds. E. Compliance With Applicable Laws Any recipient of funds under this FOA shall be required to comply with all applicable federal, tribal and state laws, including but not limited to: 1. The nondiscrimination and equal employment opportunity requirements of Title VI of the Civil Rights Act of 1964, as amended (42 U.S.C. 2000e et seq., 7 CFR pt. 15); 2. Section 504 of the Rehabilitation Act (29 U.S.C. 794 et seq.; 7 CFR pt. 15b); 3. The Age Discrimination Act of 1975, as amended (42 U.S.C. 6101 et seq.; 45 CFR pt. 90); 4. Executive Order 11375, amending Executive Order 11246, Relating to Equal Employment Opportunity (3 CFR pt. 102). See 7 CFR pts. 15 and 15b and 45 CFR pt. 90, RUS Bulletin 1790–1 (‘‘Nondiscrimination among Beneficiaries of RUS Programs’’), and RUS Bulletin 20–15:320–15 (‘‘Equal Employment Opportunity in Construction Financed with RUS Loans’’); 5. The Architectural Barriers Act of 1968, as amended (42 U.S.C. 4151 et seq.); E:\FR\FM\14DEN1.SGM 14DEN1 Federal Register / Vol. 83, No. 240 / Friday, December 14, 2018 / Notices 6. The Uniform Federal Accessibility Standards (UFAS) (Appendix A to 41 CFR subpart 101–19.6); and 7. The Council on Environmental Quality Regulations for Implementing the Procedural Provisions of NEPA and certain related federal environmental laws, statutes, regulations, and Executive Orders found in 7 CFR 1970. A more complete list of such requirements can be found in the applicable Award Documents. F. Communications Laws Awardees will be required to comply with all applicable federal, tribal and state communications laws and regulations, including, for example, the Communications Act of 1934, as amended, (47 U.S.C. 151 et seq.) the Telecommunications Act of 1996, as amended (Pub. L. 104–104, 110 Stat. 56 (1996), and CALEA. For further information, see https://www.fcc.gov. G. Executive Order 13132 It has been determined that this notice does not contain policies with federalism implications as that term is defined in Executive Order 13132. amozie on DSK3GDR082PROD with NOTICES1 H. Authorized Signatories Only authorized grant and loan officers can bind the Government to the expenditure of funds. I. Paperwork Reduction Act and Recordkeeping Requirements Copies of all forms, regulations, and instructions referenced in this FOA may be obtained from RUS. Data furnished by the Applicants will be used to determine eligibility for program benefits. Furnishing the data is voluntary; however, the failure to provide data could result in program benefits being withheld or denied. The Information Collection and Recordkeeping requirements contained in this FOA have been approved by an emergency clearance under OMB Control Number 0572–0152. In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), RUS invites comments on this information collection for which the Agency intends to request approval from the Office of Management and Budget (OMB). Comments on this notice must be received by February 12, 2019. Comments are invited on (a) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency’s estimate of burden including the validity of the methodology and VerDate Sep<11>2014 16:57 Dec 13, 2018 Jkt 247001 assumption used; (c) ways to enhance the quality, utility and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology. Comments may be sent to Michele Brooks, Team Lead, Rural Development Innovation Center—Regulations Management Team, U.S. Department of Agriculture, 1400 Independence Ave. SW, Stop 1522, Room 5162 South Building, Washington, DC 20250–1522. Title: Rural eConnectivity Pilot Program (ReConnect Program). Type of Request: New collection. Estimate of Burden: Public reporting burden for this collection of information is estimated to average 6.77 hours per response. Respondents: Businesses and other for-profits. Estimated Number of Respondents: 2000. Estimated Number of Responses per Respondent: 34.96. Estimated Total Annual Burden and Record Keeping Hours on Respondents: 477,820 hours. Copies of this information collection can be obtained from MaryPat Daskal, Rural Development Innovation Center— Regulations Management Team, at (202) 720–7853 or email: marypat.daskal@ wdc.usda.gov. All responses to this information collection and recordkeeping notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record. Dated: December 6, 2018. Christopher A. McLean, Acting Administrator, Rural Utilities Service. [FR Doc. 2018–27038 Filed 12–13–18; 4:15 pm] BILLING CODE P COMMISSION ON CIVIL RIGHTS Notice of Public Meeting of the Ohio Advisory Committee to the U.S. Commission on Civil Rights U.S. Commission on Civil Rights. ACTION: Announcement of meeting. AGENCY: Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission) and the Federal Advisory Committee Act that the Ohio Advisory Committee SUMMARY: PO 00000 Frm 00015 Fmt 4703 Sfmt 4703 64325 (Committee) will hold a meeting via teleconference on Thursday January 17, 2019, from 2–3 p.m. EST for the purpose of reviewing received testimony and planning for future testimony on education funding in the state. DATES: The meeting will be held on Thursday, January 17, 2019, at 2:00 p.m. EST. Public Call Information: Dial: 888– 254–3590, Conference ID: 3192445. FOR FURTHER INFORMATION CONTACT: Melissa Wojnaroski, DFO, at mwojnaroski@usccr.gov or 312–353– 8311. SUPPLEMENTARY INFORMATION: Members of the public can listen to the discussion. This meeting is available to the public through the above listed toll free number. An open comment period will be provided to allow members of the public to make a statement as time allows. The conference call operator will ask callers to identify themselves, the organization they are affiliated with (if any), and an email address prior to placing callers into the conference room. Callers can expect to incur regular charges for calls they initiate over wireless lines, according to their wireless plan. The Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free telephone number. Persons with hearing impairments may also follow the proceedings by first calling the Federal Relay Service at 1–800–877– 8339 and providing the Service with the conference call number and conference ID number. Members of the public are also entitled to submit written comments; the comments must be received in the regional office within 30 days following the meeting. Written comments may be mailed to the Regional Programs Unit Office, U.S. Commission on Civil Rights, 230 S. Dearborn, Suite 2120, Chicago, IL 60604. They may also be faxed to the Commission at (312) 353–8324, or emailed to Carolyn Allen at callen@ usccr.gov. Persons who desire additional information may contact the Regional Programs Unit Office at (312) 353–8311. Records generated from this meeting may be inspected and reproduced at the Regional Programs Unit Office, as they become available, both before and after the meeting. Records of the meeting will be available via www.facadatabase.gov under the Commission on Civil Rights, Ohio Advisory Committee link. Persons interested in the work of this Committee are also directed to the Commission’s website, https://www.usccr.gov, or may contact the Regional Programs Unit E:\FR\FM\14DEN1.SGM 14DEN1

Agencies

[Federal Register Volume 83, Number 240 (Friday, December 14, 2018)]
[Notices]
[Pages 64315-64325]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27038]


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DEPARTMENT OF AGRICULTURE

Rural Utilities Service


Broadband Pilot Program

AGENCY: Rural Utilities Service, Department of Agriculture.

ACTION: Funding Opportunity Announcement (FOA) and solicitation of 
applications.

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SUMMARY: The Rural Utilities Service (RUS) announces its general policy 
and application procedures for funding under the broadband pilot 
program established pursuant to the Consolidated Appropriations Act, 
2018 which provides loans, grants, and loan/grant combinations to 
facilitate broadband deployment in rural areas. In facilitating the 
expansion of broadband services and infrastructure, the pilot will fuel 
long-term rural economic development and opportunities in rural 
America. One of those opportunities is precision agriculture. The use 
of this technology requires a robust broadband connection. The awards 
made under this program will bring high speed broadband to the farms 
which will allow them to increase productivity.
    Please note that the application process is designed so that an 
applicant must demonstrate financial and technical feasibility of the 
project and the entire operation of the applicant. Applicants that do 
not demonstrate financial or technical feasibility will not be 
considered for an award.

DATES: The Agency will finalize the application window by notice in the 
Federal Register and Grants.gov on February 22, 2019. Please note there 
are three funding categories with each category having different 
application windows. Please refer to the specific funding category for 
the appropriate application deadline.

ADDRESSES: Application Submission: The application system for 
electronic submissions will be available at https://reconnect.usda.gov.
    Electronic submissions: Electronic submissions of applications will 
allow for the expeditious review of an Applicant's proposal. As a 
result, all Applicants must file their application electronically.

FOR FURTHER INFORMATION CONTACT: For general inquiries, contact Chad 
Parker, Assistant Administrator Telecommunications Program, Rural 
Utilities Service, U.S. Department of Agriculture (USDA), email: 
[email protected], telephone (202) 720-9554. You may obtain 
additional information regarding applications at https://reconnect.usda.gov.

SUPPLEMENTARY INFORMATION: 

    Authority: This solicitation is issued pursuant to the 
Consolidated Appropriations Act, 2018, Pub. L. 115-141, and the 
Rural Electrification Act of 1936, 7 U.S.C. 901 et seq.

Overview

    Federal Agency: Rural Utilities Service, USDA.
    Funding Opportunity Title: Rural eConnectivity Pilot Program 
(ReConnect Program).
    Announcement Type: Funding Opportunity Announcement (FOA) and 
solicitation of applications.
    Catalog of Federal Domestic Assistance (CFDA) Number: Rural 
eConnectivity Pilot Program (ReConnect Program)--10.752.

Items in Supplementary Information

I. Overview
II. Definitions
III. Substantially Underserved Trust Areas
IV. Funding Opportunity Description
V. Eligibility Information
VI. Application and Submission Information
VII. Application Evaluation Criteria
VIII. Notice of Proposed Funded Service Areas
IX. Evaluation and Processing Procedures
X. Award Administration Information
XI. Other Information

I. Overview

    On March 23, 2018, Congress passed the Consolidated Appropriations 
Act 2018 (the FY2018 Appropriations), which established a broadband 
loan and grant pilot program, the Rural eConnectivity Pilot Program 
(hereinafter the ReConnect Program). One of the essential goals of the 
ReConnect Program is to expand broadband service to rural areas without 
sufficient access to broadband, defined as 10 megabits per second 
(Mbps) downstream and 1 Mbps upstream. For this purpose, Congress 
provided RUS with $600 million and expanded its existing authority to 
make loans and grants. Additionally, the FY2018 Appropriations 
specifically authorized technical assistance to assist the Agency in 
expanding needed service to the most rural communities where 90 percent 
of the households are without sufficient access to broadband service.
    To promote broadband in rural America, RUS encourages state and 
local jurisdictions to waive any fees associated with granting rights-
of-ways and to assist applicants and awardees with satisfying any 
environmental requirements such as approval from the State Historical 
Preservation Office.

II. Definitions

    The terms and conditions provided in this FOA are applicable to and 
for purposes of this FOA only. Unless otherwise provided in the award 
documents, all financial terms not defined herein shall have the 
meaning as defined by Generally Accepted Accounting Principles.

[[Page 64316]]

    Administrator means the RUS Administrator, or the Administrator's 
designee.
    Applicant means an entity requesting funding under this FOA.
    Application means the Applicant's request for federal funding, 
which may be approved in whole or part by RUS.
    Award documents mean, as applicable, all associated grant 
agreements, loan agreements, or loan/grant agreements.
    Award means a grant, loan, or loan/grant combination made under 
this FOA.
    Awardee means a grantee, borrower, or borrower/grantee that has 
applied and been awarded federal assistance under this FOA.
    Broadband loan means, for purposes of this FOA, a loan that has 
been approved or is currently under review by RUS after the beginning 
of Fiscal Year 2000 in the Telecommunications Infrastructure Program, 
Farm Bill Broadband Program, or the Broadband Initiatives Program. 
Loans that were approved and then subsequently fully de-obligated are 
not included in this definition.
    Broadband service means any technology as having the capacity to 
transmit data to enable a subscriber to the service to originate and 
receive high-quality voice, data, graphics and video.
    Business means a commercial or mercantile activity engaged in as a 
means of livelihood. For purposes of this FOA, farms will not be 
counted as businesses for scoring purposes.
    CALEA means the Communications Assistance for Law Enforcement Act, 
47 U.S.C. 1001 et seq.
    Composite economic life means the weighted (by dollar amount of 
each class of facility) average economic life of all classes of 
facilities necessary to complete construction of the broadband 
facilities in the proposed funded service area.
    Critical community facilities means public facilities that provide 
community services essential for supporting the safety, health, and 
well-being of residents, including, but not limited to, emergency 
response and other public safety activities, hospitals and clinics, 
libraries and schools.
    Current ratio means the current assets divided by the current 
liabilities.
    Debt service coverage ratio (DSCR) means (Total Net Income or 
Margins + Interest Expense-Allowance for Funds Used during Construction 
+ Depreciation + Amortization)/(Interest on Funded Debt + Other 
Interest + Principal Payment on Debt and Capital Leases).
    Economic life means the estimated useful service life of an asset 
as determined by RUS.
    Eligible service area means any proposed funded service area where 
90 percent of the households to be served do not have sufficient access 
to broadband. For eligibility purposes, if an applicant is applying for 
multiple proposed funded service areas, each service area will be 
evaluated on a stand-alone basis.
    Equity means total assets minus total liabilities as reflected on 
the Applicant's balance sheet.
    Farm means any establishment from which $1,000 or more of 
agricultural products were sold or would normally be sold during the 
year.
    Forecast period means the five-year period of projections in an 
application, which shall be used by RUS to determine financial and 
technical feasibility of the application.
    GAAP means accounting principles generally accepted in the United 
States of America.
    Grant means any federal assistance in the form of a grant made 
under this FOA.
    Grant agreement means the grant contract and security agreement 
between RUS and the Awardee securing the Grant awarded under this FOA, 
including any amendments thereto, available for review at https://reconnect.usda.gov.
    Loan means any federal assistance in the form of a loan made under 
this FOA.
    Loan agreement means the loan contract and security agreement 
between RUS and the Awardee securing the Loan, including all amendments 
thereto, available for review at https://reconnect.usda.gov.
    Loan/grant means any federal assistance in the form of a loan/grant 
combination made under this FOA.
    Loan/grant agreement means the loan/grant contract and security 
agreement between RUS and the Awardee securing the Loan/grant, 
including all amendments thereto available at https://reconnect.usda.gov.
    Non-funded service area means any area in which the applicant 
offers service or intends to offer service during the forecast period 
but is not a part of its proposed funded service area.
    Pre-application expenses means any reasonable expenses, as 
determined by RUS, incurred after the release of this FOA to prepare an 
Application or to respond to RUS inquiries about the Application.
    Premises means households, farms and businesses.
    Project means all of the work to be performed to bring broadband 
service to all premises in the proposed funded service area under the 
Application, including construction, the purchase and installation of 
equipment, and professional services including engineering and 
accountant/consultant fees, whether funded by federal assistance, 
matching, or other funds.
    Proposed funded service area (PFSA) means the area (whether all or 
part of an existing or new service area) where the applicant is 
requesting funds to provide broadband service. Multiple service areas 
will be treated as separate stand-alone service areas for the purpose 
of determining how much of the proposed funded service area does not 
have sufficient access to broadband. Each service area must meet the 
minimum requirements for the appropriate funding category to be an 
eligible area.
    RE Act means the ``Rural Electrification Act of 1936,'' as amended 
(7 U.S.C. 901 et seq.).
    Rural area means any area which is not located within: (1) A city, 
town, or incorporated area that has a population of greater than 20,000 
inhabitants; or (2) an urbanized area contiguous and adjacent to a city 
or town that has a population of greater than 50,000 inhabitants.
    RUS Accounting Requirements shall mean compliance with U.S. GAAP, 
acceptable to RUS, the system of accounting prescribed by RUS Bulletin 
1770B-1, and the Uniform Administrative Requirements, Cost Principles, 
and Audit Requirements for Federal Awards, found at 2 CFR part 200. For 
all Awardees the term ``grant recipient'' in 2 CFR 200 shall also be 
read to encompass ``loan recipient'' and ``loan/grant recipient'', such 
that 2 CFR 200 shall be applicable to all Awardees under this FOA.
    Sufficient access to broadband means any rural area that has fixed, 
terrestrial broadband service delivering at least 10 Mbps downstream 
and 1 Mbps upstream. Mobile and satellite services will not be 
considered in making the determination that households in the proposed 
funded service area do not have sufficient access to broadband.
    Tangible equity means a measure of a company's capital, which is 
used by financial institutions to evaluate potential losses by 
eliminating intangible assets, goodwill and preferred stock from total 
equity.
    Tangible equity to total assets means tangible equity divided by 
total assets.
    Times interest earned ratio (TIER) means (Total Net Income or 
Margins + Total Interest Expense-Allowance for Funds Used during 
Construction) divided by (Total Interest

[[Page 64317]]

Expense-Allowance for Funds Used during Construction).

III. Substantially Underserved Trust Areas

    A. If the Administrator determines that a community within ``trust 
land'' (as defined in 38 U.S.C. 3765) has a high need for the benefits 
of the ReConnect Program, the Administrator may designate the community 
as a ``substantially underserved trust area'' (as defined in section 
306F of the RE Act).
    B. To receive consideration as a substantially underserved trust 
area, the applicant must submit to the Agency a completed application 
that includes all of the information requested in 7 CFR part 1700, 
subpart D. In addition, the application must identify the discretionary 
authorities within subpart D that it seeks to have applied to its 
application. Note, however, that given the prohibition on funding 
operating expenses in the ReConnect Program, requests for waiver of the 
equity requirements cannot be considered. In addition, due to the 
statutory requirements that established the ReConnect Program, waiver 
of the non-duplication requirements also cannot be considered.

IV. Funding Opportunity Descriptions

A. Funding Categories

1. 100 Percent Loan
    The interest rate for a 100 percent loan will be set at a fixed 2 
percent. The proposed funded service area for this category must be in 
an area where 90 percent of the households do not have sufficient 
access to broadband. Applicants must propose to build a network that is 
capable of providing service to every premise in the proposed funded 
service area at a speed of 25 Mbps downstream and 3 Mbps upstream. 
Tangible equity to total assets must be at least 20 percent at the end 
of the calendar year starting in the third year of the forecast period 
through the remainder of the forecast period.
    The Agency anticipates that applications will be accepted on a 
rolling basis ending June 28, 2019. In the event two loan applications 
are received for the same proposed funded service area the application 
to arrive first will be considered first. The agency reserves the right 
to make funding offers or seek consultations to resolve partially 
overlapping applications. RUS may contact the applicant for additional 
information during the review process. If additional information is 
requested, the applicant will have up to 30 calendar days to submit the 
information. If such information is not timely submitted, RUS may 
reject the application. Once all funds for this category have been 
expended for the ReConnect program, all remaining applications will be 
returned.
2. 50 Percent Loan/50 Percent Grant Combination
    The interest rate for the 50 percent loan component will be set at 
the Treasury rate for the remaining amortization period at the time of 
each advance of funds. The proposed funded service area for this 
category must be in an area where 90 percent of the households do not 
have sufficient access to broadband. Applicants must propose to build a 
network that is capable of providing service to every premises in the 
proposed funded service area at a speed of 25 Mbps downstream and 3 
Mbps upstream. Applicants may propose substituting cash for the loan 
component at the time of application.
    The Agency anticipates that applications will be accepted ending 
May 29, 2019. All eligible applications will be scored and, subject to 
Section V(C)(5)(b)(i) (overlapping applications) applications with the 
highest score will receive an award offer until all funds are expended 
for this category. RUS reserves the right to request additional 
information which would not affect scoring. If RUS requests additional 
information the applicant will have 30 calendar days to submit such 
information. If the information is not submitted, RUS may reject the 
application.
3. 100 Percent Grant
    The proposed funded service area for this category must be in an 
area where 100 percent of the households do not have sufficient access 
to broadband. Applicants must propose to build a network that is 
capable of providing service to every premise in the proposed funded 
service area at a speed of 25 Mbps downstream and 3 Mbps upstream. 
Applicants must provide a matching contribution equal to 25 percent of 
the cost of the overall project. The matching contribution can only be 
used for eligible purposes.
    The Agency anticipates that applications will be accepted ending 
April 29, 2019. All eligible applications will be scored, and subject 
to Section V(C)(5)(b)(i) (overlapping applications) applications with 
the highest score will receive an award offer until all funds are 
expended for this category. RUS reserves the right to request 
additional information which would not affect scoring. If RUS requests 
additional information the applicant will have 30 calendar days to 
submit such information. If the information is not submitted, RUS may 
reject the application.

B. Available Funds

1. General
    Approximately $560,000,000 in funding has been set aside for 
funding opportunities under this FOA.
2. Funding Limits
    Award amounts under this FOA will be limited as follows:
    a. 100 Percent Loan. Up to $200,000,000 is available for loans. The 
maximum amount that can be requested in an application is $50,000,000.
    b. 50 Percent Loan--50 Percent Grant. Up to $200,000,000 is 
available for loan/grant combinations. The maximum amount that can be 
requested in an application is $25,000,000 for the loan and $25,000,000 
for the grant. Loan and grant amounts will always be equal.
    c. 100 Percent Grant. Up to $200,000,000 is available for grants. 
The maximum amount that can be requested in an application is 
$25,000,000.
    d. Reserve. Additional budget authority is available for a reserve, 
which may be used for loans or grants under this FOA, or may be 
included in additional FOAs. The agency reserves the right to increase 
funding utilizing the application queue under this FOA should 
additional appropriations become available for the same purposes.
3. Repooling
    RUS retains the discretion to divert funds from one funding 
category to another.
4. Award Period
    Awards can be made until all funds have been expended in any given 
funding category. While the completion time will vary depending on the 
complexity of the project, award recipients must complete their 
projects within 5 years from the date funds are first made available.
5. Type of Funding Instrument
    The funding instruments will be grants, loans, and loan/grant 
combinations.

V. Eligibility Information

A. General

    Applicants must satisfy the following eligibility requirements to 
qualify for funding.

B. Eligible Entities

    The following entities are eligible to apply for assistance:

[[Page 64318]]

    1. States, local governments, or any agency, subdivision, 
instrumentality, or political subdivision thereof;
    2. A territory or possession of the United States;
    3. An Indian tribe (as defined in section 4 of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450b));
    4. Non-profit entities;
    5. For-profit corporations;
    6. Limited liability companies; and
    7. Cooperative or mutual organizations.

C. Application Eligibility Factors

    The following requirements must be met by all applications to be 
eligible for an award. Applications failing to comply with these 
requirements will be rejected.
1. Audited Financial Statement
    Applicants must submit unqualified, audited financial statements 
for the two previous years from the date the application is submitted. 
If an application is submitted in the first quarter of the calendar 
year and the most recent yearend audit has not been completed, the 
applicant can submit the two previous unqualified audits that have been 
completed. If qualified audits or audits containing a disclaimer or 
adverse opinion are submitted, the application will not be considered;
2. Fully Completed Application
    Applicants must submit a complete application and provide all 
supporting documentation required for the application.
3. Timely Buildout Completion
    A project is eligible only if the application demonstrates that the 
project can be completely built out within 5 years from the date funds 
are first made available.
4. Technical Feasibility
    Only projects that RUS determines to be technically feasible will 
be eligible for an award. Applicants will be required to submit a 
network design, network diagram, project costs and a buildout timeline, 
all certified by a professional engineer. The certification from the 
professional engineer must state that the proposed network can deliver 
broadband service at the required level of service to all premises in 
the proposed funded service area.
5. Service Areas
a. Eligible Service Areas
    i. Applicants must propose to provide broadband service directly to 
the premises in the proposed funded service area that do not have 
sufficient access to broadband.
    ii. If part or parts of the applicant's proposed funded service 
area are ineligible, RUS, in its sole discretion, may request that an 
applicant modify its application, if RUS believes the modification is 
feasible. Otherwise, RUS will reject the application.
b. Ineligible Service Areas
i. Overlapping Service Areas
    RUS will not fund more than one project that serves any one given 
geographic area. Invariably, however, applicants will propose service 
areas that overlap, varying from small de minimus areas of the 
territory, but which may be significant with respect to households 
involved, to larger areas of the service territory, but which may 
contain few households or businesses, if any. As a result, devising a 
procedure which will cover every overlap circumstance cannot be done. 
Nevertheless, it is the agency's intent to make as many eligible 
applications viable for consideration as possible. That may mean the 
agency may: (1) Determine the overlap to be so insignificant that no 
agency action is necessary; (2) request one or more applications to be 
revised to eliminate the overlapping territory; (3) choose one 
application over another given the amount of assistance requested, the 
number of awards already chosen in the area or State, or the need for 
the project in the specific area due to other factors; or (4) simply 
choose the project that scores higher or in the judgement of the agency 
is more financially feasible.
ii. Prior Funded Service Areas
    (A) RUS Broadband Loans. Service areas of borrowers that have RUS 
broadband loans, as defined in this FOA, are ineligible for all other 
applicants, and can be found at https://reconnect.usda.gov. However, 
RUS broadband borrowers that received funding to provide service in an 
area where the borrower is not currently providing sufficient access to 
broadband pursuant to this FOA would be eligible to apply for funding 
for these service areas if they have not defaulted on, and have 
materially complied with, in the sole discretion of RUS, their prior 
broadband loan requirements.
    (B) RUS Community Connect Grants. Service areas that received 
grants under the RUS Community Connect Grant Program are eligible if 
they do not have sufficient access to broadband, except for those 
grants still under construction. Service areas still under construction 
can be found at https://reconnect.usda.gov.
    (C) RUS BIP Grants. Service areas that received a 100 percent grant 
under the RUS Broadband Initiatives Program (BIP) are eligible if they 
do not have sufficient access to broadband. However, if the applicant 
is the same BIP grantee, then the applicant may only request a 100 
percent loan.
    (D) State-funded Areas. Areas that received State funding to deploy 
broadband at a speed of at least 10 Mbps downstream and 1 Mbps upstream 
are ineligible areas under this FOA. Applicants must provide a map of 
the proposed funded service area to the appropriate State government 
office and the State government office must certify that either funds 
have or have not been allotted for the area. Applicants must submit the 
map and the State certification as part of the application for funding. 
For applications that are proposing to provide service in multiple 
States, a map and certification will be required for each State. If the 
map(s) and certification(s) are not submitted, RUS may reject the 
application.
    (E) Connect America Fund Phase II Auction--Auction 903 (CAF II).
    Funding for service areas of CAF II recipients can only be 
requested by the entity that is receiving the CAF II support, and such 
funding is limited to a 100% loan. The CAF II service areas can be 
found at https://reconnect.usda.gov and may also be found on the FCC 
web page.
6. Fully Funded
    A project is eligible only if, all project costs can be fully 
funded or accounted for in the application. To demonstrate this, 
applications must include evidence of all funding, other than the RUS 
award, necessary to support the project, such as bank account 
statements, firm letters of commitment from equity participants, or 
outside loans, which must evidence the timely availability of funds. If 
outside loans are used, they may only be secured by assets other than 
those used for collateral under this FOA. Equity partners that are not 
specifically identified by name will not be considered in the financial 
analysis of the application.
7. Financial Feasibility and Sustainability
    Only projects that RUS determines to be financially feasible and 
sustainable will be eligible for an award under this FOA. A project is 
financially feasible when the applicant demonstrates to the 
satisfaction of RUS that it will be able to generate sufficient 
revenues to cover expenses; will have sufficient cash flow

[[Page 64319]]

to service all debts and obligations as they come due; will have a 
positive ending cash balance as reflected on the cash flow statement 
for each year of the forecast period; and, by the end of the forecast 
period, will meet at least two of the following requirements: A minimum 
TIER requirement of 1.2, a minimum DSCR requirement of 1.2, and a 
minimum current ratio of 1.2. In addition, applicants must demonstrate 
positive cash flow from operations at the end of the forecast period.
    If an applicant has no existing debt, is not proposing to borrow 
funds during the forecast period, and is applying only for grant funds, 
only the current ratio will be applied and not the TIER or DSCR. For 
this situation, applicants must meet the minimum current ratio 
requirement.
8. Service Requirements
    Facilities funded with grant funds must provide broadband service 
proposed in the application for the composite economic life of the 
facilities, as approved by RUS, or as provided in the Award Documents.
9. Application Transparency
    a. Pre-award Public Notice. To ensure transparency for the 
ReConnect Program, the Agency's mapping tool will include the following 
information from each application and be displayed for the public: (i) 
The identity of the applicant; (ii) the areas to be served; (iii) the 
type of funding requested; (iv) the status of the application; (v) the 
number of households without sufficient access to broadband; and (vi) a 
list of the census blocks to be served.
    b. Post-award Public Notice. For all approved applications, the 
agency will post on its website: The name of the company receiving 
funding, the type of funding received, the location of the proposed 
funded service area and the purposes of the funding.
    c. Post-award Reporting. Awardees will be required to submit semi-
annual reports for three years after the completion of construction on 
the following information:
    (i) The number and location of residences and businesses that will 
receive service at or greater than the requirement for the appropriate 
funding category.
    (ii) the types of facilities constructed and installed;
    (iii) the speed of the data services being delivered;
    (iv) the average price of the data services being delivered in each 
proposed service area; and
    (v) the broadband adoption rate for each proposed service 
territory, including the number of new subscribers generated from the 
facilities funded.
    This information will be used to analyze the effectiveness of the 
funding provided and will allow the Agency to track adoption rates as 
new and improved broadband services are being provided.

D. Eligible Cost Purposes

1. General
    Award and matching funds must be used only to pay for eligible 
costs incurred post award, except for approved pre-application 
expenses. Eligible costs must be consistent with the cost principles 
identified in 2 CFR 200, Subpart E, Cost Principles. In addition, costs 
must be reasonable, allocable, and necessary to the project. Any 
application that proposes to use any portion of the award or matching 
funds for any ineligible cost may be rejected.
2. Eligible and Ineligible Costs
a. Eligible Award Costs
    Award funds may be used to pay for the following costs:
    (i) To fund the construction or improvement of facilities, 
including buildings and land, required to provide broadband service, 
including facilities required for providing other services over the 
same facilities, such as equipment required to comply with CALEA;
    (ii) To fund reasonable pre-application expenses in an amount not 
to exceed five percent of the award. Pre-application expenses may be 
reimbursed only if they are incurred after the publication date of this 
FOA, and properly documented. Pre-application expenses must be included 
in the first request for award funds, and will be funded with either 
grant or loan funds. If the funding category applied for has a grant 
component, then grant funds will be used for this purpose;
    (iii) To fund the acquisition of an existing system that does not 
currently provide sufficient access to broadband for upgrading that 
system to meet the requirements of this FOA. The cost of the 
acquisition is limited to 40 percent of the amount requested. 
Acquisitions can only be considered in the 100 percent loan category; 
and
    (iv) To fund terrestrial-based facilities for satellite broadband 
service, provided the applicant clearly identifies the PFSA, 
demonstrates the ability to provide 25 Mbps downstream and 3 Mbps 
upstream simultaneously to every premise in the PFSA, and offers 
subscribers reasonable service plans that do not cap bandwidth usage.
(b) Ineligible Award Costs
    Award funds may not be used for any of the following purposes:
    (i) To fund operating expenses of the Awardee;
    (ii) To fund costs incurred prior to the date on which the 
application was submitted, and with respect to eligible pre-application 
expenses, those costs incurred prior to the date of the publication 
date of this FOA;
    (iii) To fund an acquisition of an affiliate, or the purchase or 
acquisition of any facilities or equipment of an affiliate. Note that 
if affiliated transactions are contemplated in the application, 
approval of the application does not constitute approval to enter into 
affiliated transactions, nor acceptance of the affiliated arrangements 
that conflict with the obligations under the award documents;
    (iv) To fund the acquisition of a system previously funded by RUS;
    (v) To fund the purchase or lease of any vehicle other than those 
used primarily in construction or system improvements;
    (vi) To fund broadband facilities leased under the terms of an 
operating lease or an indefeasible right of use (IRU) agreement;
    (vii) To fund the merger or consolidation of entities;
    (viii) To fund costs incurred in acquiring spectrum as part of an 
FCC auction or in a secondary market acquisition. Spectrum that is part 
of an acquisition may be considered for loan funding;
    (ix) To fund facilities that provide mobile services;
    (x) To fund the acquisition of a system that is providing 
sufficient access to broadband; nor
    (x) To refinance outstanding debt.

VI. Application and Submission Information

A. Online Application System

    All applications under this FOA must be submitted through the RUS 
Online Application System to be located through https://reconnect.usda.gov. Additional information can be found in the 
Application Guidelines found at the above location. This website will 
be updated regularly.

B. Registration

1. Dun and Bradstreet Universal Numbering System (DUNS) Number
    All applicants must register for a DUNS number as part of the 
application. The applicant can obtain

[[Page 64320]]

the DUNS number free of charge by calling Dun and Bradstreet. Go to 
https://fedgov.dnb.com/webform for more information on assignment of a 
DUNS number or confirmation.
2. System for Award Management (SAM)
    Prior to submitting an application, the applicant must also 
register in SAM at https://www.sam.gov/portal/SAM/#1 and supply a 
Commercial and Government Entity (CAGE) Code number as part of the 
application. SAM registration must be active with current data at all 
times, from the application review throughout the active Federal award 
funding period. To maintain active SAM registration, the applicant must 
review and update the information in the SAM database annually from the 
date of initial registration or from the date of the last update. The 
applicant must ensure that the information in the database is current, 
accurate, and complete.

C. Contents of the Application

1. Requirements for the Applications
    Given the varying expected closing dates for each funding type, and 
the inability of the agency to announce awards for a funding window 
while applicants have other applications in more than one funding type, 
applicants will be limited to ONE application for this FOA. A complete 
application will include the following information as requested in the 
RUS Online Application System:
    a. General information on the applicant and the project including:
    (i) A description of the project that will be made public 
consistent with the requirements herein and
    (ii) The estimated dollar amount of the funding request.
    b. An executive summary of the proposed project. This summary shall 
include, but not be limited to, a detailed description of existing 
operations, discussion about key management, description of the 
workforce, description of interactions between any parent, affiliated 
or subsidiary operation and a detailed description of the proposed 
project.
    c. A description of the proposed funded service area including the 
number of premises passed.
    d. Subscriber projections including the number of subscribers for 
broadband, video and voice services and any other service that may be 
offered; A description of the proposed service offerings, and the 
associated pricing plan that the applicant proposes to offer; and an 
explanation of how the proposed service offerings are affordable.
    e. A map, utilizing the RUS mapping tool located at https://reconnect.usda.gov of the proposed funded service areas identifying the 
areas without sufficient access to broadband and any non-funded service 
areas of the applicant.
    f. A description of the advertised prices of service offerings by 
competitors in the same area.
    g. A network design which includes a description of the proposed 
technology used to deliver the broadband service demonstrating that all 
premises in the proposed funded service area can be offered broadband 
service, a network diagram, a buildout timeline and milestones for 
implementation of the project, and a capital investment schedule 
showing that the system can be built within 5 years, all of which must 
be certified by a professional engineer who is certified in at least 
one of the states where there is project construction. The 
certification from the professional engineer must clearly state that 
the proposed network can deliver the broadband service to all premises 
in the proposed funded service area at the minimum required service 
level. In addition, if the applicant is requesting the points for 
providing a 100 Mbps upstream and 100 Mbps downstream, the 
certification must also state that the proposed system is capable of 
delivering this service to all premises; a list of all required 
licenses and regulatory approvals needed for the proposed project and 
how much the applicant will rely on contractors or vendors to deploy 
the network facilities. Note that in preparing budget costs for 
equipment and materials, RUS' Buy American requirements apply.
    h. Resumes of key management personnel, a description of the 
organization's readiness to manage a broadband services network, and an 
organizational chart showing all parent organizations and/or holding 
companies (including parents of parents, etc.), and all subsidiaries 
and affiliates.
    i. A legal opinion that: (1) Addresses the applicant's ability to 
enter into the award documents; (2) describes all material pending 
litigation matters; (3) addresses the applicant's ability to pledge 
security as required by the award documents and (4) addresses the 
applicant's ability to provide broadband service under state law.
    j. Summary and itemized budgets of the infrastructure costs of the 
proposed project, including if applicable, the ratio of loans to 
grants, and any other sources of outside funding.
    k. A detailed description of working capital requirements and the 
source of these funds.
    l. Historical financial statements for the last four years 
consisting of a balance sheet, income statement, and cash flow 
statement. If an entity has not been operating for four years, 
historical statements for the period of time the entity has been 
operating.
    m. Audited financial statements for the previous two calendar 
years. For governmental entities financial statements must be 
accompanied with certifications as to unrestricted cash that may be 
available on a yearly basis to the applicant. For startup operations 
formed from partnerships of existing utility providers, audited 
financial statements are required for the two previous years from each 
of the partners. In addition, the partners must guarantee any loan 
component of the requested funding.
    n. Pro Forma financial analysis, prepared in conformity with U.S. 
GAAP and the Agency's guidance on grant accounting found at https://www.rd.usda.gov/files/AccountingGuidance10.pdf. The Pro Forma should 
validate the sustainability of the project by including subscriber 
estimates related to all proposed service offerings; annual financial 
projections with balance sheets, income statements, and cash flow 
statements; supporting assumptions for a five-year forecast period and 
a depreciation schedule for existing facilities and those funded with 
federal assistance, matching, and other funds. This pro forma should 
indicate the committed sources of capital funding and include a bridge 
year prior to the start of the forecast period. This bridge year shall 
be used as a buffer between the historical financial information and 
the forecast period and is the year in which the application is 
submitted.
    o. All attachments required in the RUS Online application system;
    p. A scoring sheet, analyzing the scoring criteria set forth in 
this FOA;
    q. A list of all the applicant's outstanding and contingent 
obligations, including copies of existing notes, loan and security 
agreements, guarantees, any existing management or service agreements, 
and any other agreements with parents, subsidiaries and affiliates, 
including but not limited to debt instruments that use the applicant's 
assets, revenues or stock as collateral;
    r. All environmental information required to certify that the 
proposed construction meets the requirements of the National 
Environmental Policy Act of 1969, as amended (42 U.S.C. 4321 et seq.) 
(NEPA), the National Historic Preservation Act of 1966, as amended (16 
U.S.C. 470 et seq.) (NHPA), and the Endangered Species Act of 1973, as 
amended (16 U.S.C. 1534 et seq.) (ESA)

[[Page 64321]]

as applicable and any other information requested by the Agency. 
Information will be submitted in two parts. Applicants must submit all 
information that is requested in the Agency's on-line applications 
system as well as provide any information requested by the Agency after 
applications are submitted.
    s. Certification from the applicant that agreements with, or 
obligations to, investors do not breach the obligations to the 
government under the draft Award Documents, especially distribution 
requirements, and that any such agreements will be amended so that such 
obligations are made contingent to compliance with the Award Documents. 
Such certification should also specifically identify which, if any, 
provisions would need to be amended; and
    t. If service is being proposed on tribal land, a certification 
from the proper tribal official that they are in support of the project 
and will allow construction to take place on tribal land. The 
certification must: (1) Include a description of the land proposed for 
use as part of the proposed project; (2) identify whether the land is 
owned, held in Trust, land held in fee simple by the Tribe, or land 
under a long-term lease by the Tribe; (3) if owned, identify the land 
owner; and (4) provide a commitment in writing from the land owner 
authorizing the applicant's use of that land for the proposed project. 
If no certification is provided, then this area will be ineligible for 
funding.
    u. Any other information requested in the online application 
system.

D. Material Representations

    The application, including certifications, and all forms submitted 
as part of the application will be treated as material representations 
upon which RUS will rely in awarding grants and loans.

VII. Application Evaluation Criteria

A. Evaluation Criteria

    Applications in the same funding category will be scored and ranked 
against the following criteria, and not against each other. However, 
applications for 50/50 loan/grant combos and 100 percent grants that 
cover the same proposed service area will be evaluated as described in 
Section V(C)(5)(b)(i) above.
1. Rurality of Proposed Funded Service Area (25 Points)
    Points will be awarded for serving the least dense rural areas as 
measured by the population of the area per square mile. If multiple 
service areas are proposed, the density calculation will be made on the 
combined areas as if they were a single area, and not the average 
densities. For population densities of 6 or less, 25 points will be 
awarded.
2. Farms Served (20 Points)
    Applicants will receive 1 point for each farm that pre-subscribes 
for broadband service up to a maximum of 20 points. Applicants must 
have the head of the farm sign the pre-subscription form provided in 
the application system and submit them as part of their application.
3. Performance of the Offered Service (20 Points)
    For projects that are proposing to build a network that is capable 
of providing at least 100 Mbps symmetrical service to all premises, 20 
points will be awarded. The certification from the Professional 
Engineer must certify that the proposed system can deliver these speeds 
to every premises in the proposed funded service area.
4. Businesses (15 Points)
    Applicants will receive 1 point for each business that pre-
subscribes for broadband service up to a maximum of 15 points. 
Applicants must have the owner of the business sign the pre-
subscription form provided in the application system and submit them as 
part of their application.
5. Healthcare Centers (15 Points)
    For every healthcare center served 1 point will be awarded up to a 
maximum of 15 points. Healthcare centers will be counted using the GIS 
layer located in the RUS mapping tool at https://reconnect.usda.gov.
6. Educational Facilities (15 Points)
    For every school served 1 point will be awarded up to a maximum of 
15 points. Schools will be counted using the GIS layer provided in the 
RUS mapping tool located at https://reconnect.usda.gov.
7. Critical Community Facilities (15 Points)
    For every critical community facility served 1 point will be 
awarded up to a maximum of 15 points. Critical community facilities 
will be counted using the GIS layer located in the RUS mapping tool at 
https://reconnect.usda.gov.
8. Tribal Lands (5 Points)
    For applications where, at a minimum, 50 percent of the 
geographical area of the proposed funded service area(s) is to provide 
service on tribal lands, 5 points shall be awarded. Tribal lands will 
be analyzed using the GIS layer located at https://www.census.gov/geo/maps-data/data/cbf/cbf_aiannh.html. This layer is included in the RUS 
mapping tool.
9. State Broadband Activity (20 Points)
    For projects that are in a State that has a broadband plan that has 
been updated within five years of the date of publication of this FOA, 
10 points will be awarded. An additional 5 points will be awarded for 
projects located in states that do not restrict utilities from 
delivering broadband service, and 5 more points for projects located in 
states that expedite right-of-way and environmental requirements.
    Applicants will be required to submit evidence from the appropriate 
State official that a broadband plan has been implemented and updated, 
that there are no restrictions on utilities providing broadband 
service, and that procedures are in place for expediting right-of-way 
and environmental requirements. If service is proposed in multiple 
states, then evidence must be submitted from each state to get the 
appropriate points.

VIII. Notice of Proposed Funded Service Areas

A. The Agency Will Publish a Public Notice of Each Application

    The application must provide a summary of the information required 
for such public notice including the following:
    1. The identity of the applicant;
    2. A map of each proposed funded service area showing the rural 
area boundaries and the areas without sufficient access to broadband 
using the Agency's Mapping Tool;
    3. The amount and type of support requested;
    4. The status of the review of the application;
    5. The estimated number of households without sufficient access to 
broadband in each service area exclusive of satellite and mobile 
broadband service; and
    6. A description of all the types of services that the applicant 
proposes to offer in each service area.

B. Notification After the Application Has Been Received

    The Agency will publish the public notice on an Agency web page 
after the application has been submitted through the online application 
system and will remain on the web page for a period of 30 calendar 
days.

[[Page 64322]]

    The notice will ask existing service providers to submit to the 
Agency, within this notice period, the following information:
    1. The number of residential and business customers within the 
applicant's service area currently purchasing broadband service, 
defined as at a minimum speed of 10 Mbps downstream and 1 Mbps 
upstream, 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; and
    3. A map showing where the existing service provider's services 
coincide with the applicant's service area using the Agency's Mapping 
Tool.

C. Agency Determination of Sufficient Access to Broadband in Proposed 
Funded Service Area

    The Agency will use the information submitted to determine if there 
is sufficient access to broadband in any part of the proposed funded 
service area. Notwithstanding non-responses by actual and potential 
providers, the Agency will use all information available in evaluating 
the feasibility of the project.

D. Treatment of Submitted Information

    The information submitted by an existing service provider will be 
treated as proprietary and confidential to the extent permitted under 
applicable law.

E. Notice of Application Is Approved

    If an application is approved, an additional notice will be 
published on the agency's website that will include the following 
information:
    1. The name of the entity receiving the financial assistance;
    2. The type of assistance being received;
    3. The purpose of the assistance and the location of the proposed 
funded service area; and
    4. The semiannual reports submitted under Section X(B)(6)e of this 
FOA.

IX. Evaluation and Processing Procedures

A. Review of Application

    Applications will be evaluated using the criteria stated in Section 
V.C of this FOA. Public comments received with respect to an 
application's proposed funded service area will be reviewed and 
evaluated. Eligibility of proposed funded service areas will be 
verified by the Agency.
    RUS also reserves the right to ask applicants for clarifying 
information and additional verification of assertions in the 
application. For those applications that RUS has selected for funding, 
RUS will send award documents.

B. Review of Awardee Operations

1. Entities That Receive Funding Under This FOA
    For all entities that receive funding under this FOA, RUS may send 
a team to the awardee's facilities to complete a Management Analysis 
Profile (MAP) of the entire operation. MAPs are used by RUS as a means 
of evaluating an Awardee's strengths and weaknesses and ensuring that 
awardees are prepared to fulfil the terms of the award. Once an 
applicant accepts an award offer, RUS may schedule a site visit as soon 
as possible.
2. Agency Right Not To Advance Funds
    RUS reserves the right not to advance funds until the MAP has been 
completed. If the MAP identifies issues that can affect the operation 
and completion of the project, those issues must be addressed to the 
satisfaction of RUS before funds can be advanced. Funding may be 
rescinded if following a MAP the agency determines that the awardee 
will be unable to meet the requirements of the award.

X. Award Administration Information

A. Award Notices

    Successful applicants will receive an offer letter and award 
documents from RUS following award notification. Applicants may view 
sample award documents at https://reconnect.usda.gov.

B. Administrative Requirements

1. Pre-Award Conditions
    No funds will be disbursed under this program until all other 
sources of funding have been obtained and any other pre-award 
conditions have been met. Failure to obtain one or more sources of 
funding committed to in the Application or to fulfill any other pre-
award condition within 90 days of award announcement may result in 
withdrawal of the award.
2. Failure To Comply With Award Requirements
    If an Awardee fails to comply with the terms of the award as 
specified in the award documents, RUS may exercise rights and remedies.
3. Advance Procedures
    RUS loan and grant advances are made at the request of the Awardee 
according to the procedures stipulated in the Award Documents. ALL 
MATCHING FUNDS OR CASH PROVIDED IN LIEU OF LOAN FUNDS MUST BE EXPENDED 
FIRST, FOLLOWED BY LOAN FUNDS, AND THEN BY GRANT FUNDS, EXCEPT FOR RUS 
APPROVED PRE-APPLICATION EXPENSES. Grant funds, if any, will be used 
for eligible pre-application expenses only on the first advance 
request. Accordingly, applications that do not account for such advance 
procedures in the Pro Forma five-year forecast may be rejected.
4. Construction
    a. All project assets must comply with 7 CFR part 1788, and 7 CFR 
part 1970 located at https://www.rd.usda.gov/publications/regulations-guidelines/regulations, the ReConnect Program Construction Procedures 
located at https://reconnect.usda.gov, any successor regulations found 
on the agency's website, and any other guidance from the Agency.
    b. The build-out of the project must be completed within five years 
from the date funds are made available. Build-out is considered 
complete when the network design has been fully implemented, the 
service operations and management systems infrastructure is 
operational, and the awardee is ready to support the activation and 
commissioning of individual customers to the new system.
5. Servicing
    a. Awardees must make payments on the loan as required in the note 
and Award Documents.
    b. Awardees must comply with all terms, conditions, affirmative 
covenants, and negative covenants contained in the Award Documents.
    c. In the event of default of the Award Documents:
    (i) A late charge may be charged on any payment not made in 
accordance with the terms of the loan.
    (ii) The Agency may exercise any and all remedies provided in the 
Award Documents.
6. Accounting, Monitoring, and Reporting Requirements
    a. Awardees must adopt a system of accounts for maintaining 
financial records acceptable to the Agency, as described in 7 CFR part 
1770, subpart B.
    b. Awardees must submit annual comparable audited financial 
statements along with a report on compliance and

[[Page 64323]]

on internal control over financial reporting, and management letter in 
accordance with the requirements of 7 CFR part 1773. The Certified 
Public Accountant (CPA) conducting the annual audit is selected by the 
borrower and must be satisfactory to RUS as set forth in 7 CFR 1773 
Subpart B--RUS Audit Requirements.
    c. Awardees must comply with all reasonable Agency requests to 
support ongoing monitoring efforts. The Awardee shall afford RUS, 
through its representatives, reasonable opportunity, at all times 
during business hours and upon prior notice, to have access to and the 
right to inspect: The Broadband System, any other property encumbered 
by the Award Documents, any and all books, records, accounts, invoices, 
contracts, leases, payrolls, timesheets, cancelled checks, statements, 
and other documents, electronic or paper of every kind belonging to or 
in the possession of the Awardee or in any way pertaining to its 
property or business, including its subsidiaries, if any, and to make 
copies or extracts therefore.
    d. Awardee records shall be retained and preserved in accordance 
with the provisions of 7 CFR part 1770, subpart A.
    e. Awardees must submit semiannual reports for 3 years after 
completion of the project, which must include the following:
    (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);
    (2) The progress towards fulfilling the objectives for which the 
assistance was granted, including:
    (i) The number of residences and businesses that will receive 
service equal to or greater than the speed required for the appropriate 
funding category;
    (ii) The types of facilities constructed and installed;
    (iii) The speed of the broadband services being delivered;
    (iv) The average price of the broadband services being delivered in 
each proposed service area;
    (v) The broadband adoption rate for each proposed service 
territory, including the number of new subscribers generated from the 
facilities funded; and
7. Assistance Instruments
    a. Terms and conditions of loans, grants, or loan/grant 
combinations are set forth in the non-negotiable standard loan, grant, 
or loan/grant agreements and the corresponding note, and/or mortgage, 
if applicable, which may be found at https://reconnect.usda.gov.
    b. Award Documents must be executed prior to any advance of funds.
    c. Sample Award Documents can be found at https://reconnect.usda.gov.
8. Loan and Loan/Grant Terms and Conditions
    Among others, the following terms shall apply to the loans:
    a. Interest Rate
    If an applicant is applying for a 100% loan, the interest rate 
shall be fixed at 2%. If an applicant is applying for a 50/50 loan/
grant combination, the loan shall bear interest at a rate equal to the 
cost of borrowing to the Department of Treasury for obligations, as 
determined by the government, of comparable maturity. The applicable 
interest rate will be set at the time of each advance.
    b. Repayment Period
    Unless the Applicant requests a shorter repayment period, loans 
must be repaid with interest within a period that, rounded to the 
nearest whole year, is equal to the expected Composite Economic Life of 
the project assets, as determined by RUS based upon acceptable 
depreciation rates, plus three years. Acceptable depreciation rates can 
be found in the ReConnect Program Constructions Procedures found at 
https://reconnect.usda.gov.
    c. Amortization Period
    Interest begins accruing on the date of each loan advance. All 
interest and principle payments will be deferred for a three-year 
period starting when funds are made available to be drawn by the 
Awardee. At the end of the three-year deferral period, accrued interest 
will be capitalized and added to the outstanding principal, and monthly 
payments will be established in an amount that amortizes the 
outstanding balance in equal payments over the remaining term of the 
loan.
    d. Build-out Period
    All proposed construction (including construction with matching and 
other funds) and all advance of funds must be completed no later than 
five years from the time funds are made available.
    e. Fidelity Bonding
    Applicants must agree to obtain a fidelity bond for 15 percent of 
the award amount. The fidelity bond must be obtained as a condition of 
award closing. RUS may reduce the percentage required if it determines 
that 15 percent is not commensurate with the risk involved.
    f. Loan Security. The loan portion of the award must be adequately 
secured, as determined by RUS.
    (i) For Corporations and LLC's, the loan and loan/grant 
combinations must be secured by all assets of the Awardee. RUS must be 
given an exclusive first lien, in form and substance satisfactory to 
RUS, on all assets of the Awardee, including all revenues. RUS may 
share its first lien position with one or more lenders on a pari passu 
basis, except with respect to grant funds, if security arrangements are 
acceptable to RUS. Applicants must submit a certification that their 
prior lender or lienholder on any Awardee assets has already agreed to 
sign the RUS' standard intercreditor agreement or co-mortgage found at 
https://reconnect.usda.gov. Note that RUS will not consider sharing 
assets with any related party or affiliate of the Awardee. Moreover, 
given that RUS cannot renegotiate these standard agreements, Awardees 
that are unable to obtain sign-off on the security arrangements may 
have their awards rescinded within 60 days of the date the Awardee is 
made aware of the approval of its application.
    (ii) For Tribal entities and municipalities, RUS will develop 
appropriate security arrangements.
    (iii) Unless otherwise approved by RUS in writing, all property and 
facilities purchased with award funds must be owned by the Awardee.
    g. Grant Security. The grant portion of the award must also be 
adequately secured, as determined by RUS.
    (i) The government must be provided an exclusive first lien on all 
grant assets during the service obligation of the grant, and thereafter 
any sale or disposition of grant assets must comply with the Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements 
for Federal Awards, codified in 2 CFR part 200. Note that this part 
will apply to ALL grant funds of an Awardee, regardless of the entity 
status or type of organization.
    (ii) All Awardees must repay the grant if the project is sold or 
transferred without RUS approval during the service obligation of the 
grant.
9. Award Terms and Conditions
    a. Scope
    Awardees are required to comply with the requirements established 
herein. Any obligation that applies to the Awardee shall extend for the 
life of the award-funded facilities.
    b. Sale or Lease of Project Assets

[[Page 64324]]

    The sale or lease of any portion of the Awardee's facilities must 
be approved in writing by RUS.
    c. Certifications
    (i) The Applicant must certify that it is authorized to submit the 
application on behalf of the eligible entity(ies) listed in the 
Application; that the Applicant has examined the Application; that all 
information in the Application, including certifications and forms 
submitted, are, at the time furnished, true and correct in all material 
respects; that the entity requesting funding will comply with the 
terms, conditions, purposes, and federal requirements of the program; 
that no kickbacks were paid; and that a false, fictitious, or fradulent 
statement or claim on the Application is grounds for denial or 
termination of an award, and/or possible punishment by a fine or 
imprisonment as provided in 18 U.S.C. Sec.  1001 and civil violations 
of the False Claims Act (31 U.S.C. 3729 et seq.);
    (ii) The Applicant must certify that it will comply with all 
applicable federal, tribal, state, and local laws, rules, regulations, 
ordinances, codes, orders, and programmatic rules and requirements 
relating to the project, and acknowledges that failure to do so may 
result in rejection or de-obligation of the award, as well as civil or 
criminal prosecution, if applicable, by the appropriate law enforcement 
authorities.
10. Financial and Compliance Reporting Requirements
    Awardees must submit to RUS 30 calendar days after the end of each 
calendar year quarter, balance sheets, income statements, statements of 
cash flow, rate package summaries, and the number of customers taking 
broadband service on a per community basis utilizing RUS' on-line 
reporting system. These reports must be submitted throughout the loan 
amortization period or for the economic life of the facilities funded 
with a 100 percent grant.
    In addition, Awardees will be required to submit annually updated 
service area maps through the RUS mapping tool showing the areas where 
construction has been completed and premises are receiving service 
until the entire proposed funded service area can receive the broadband 
service.
    At the end of the project, Awardees must submit a service area map 
indicating that all construction has been completed as proposed in the 
application. If parts of the proposed funded service area have not been 
constructed, RUS may require a portion of the award to be rescinded or 
paid back.

XI. Other Information

A. Discretionary Awards

    The government is not obligated to make any award as a result of 
this announcement and will fund only projects that are deemed likely to 
achieve the program's goals and for which funds are available.

B. Environmental and National Historic Preservation Requirements

    Federal Agencies are required to analyze the potential 
environmental impacts, as required by the NEPA and the NHPA for 
Applicant projects or proposals seeking funding. All Applicants are 
required to complete an Environmental Questionnaire, provide a 
description of program activities and to submit all other required 
environmental documentation as requested in the application system or 
by the Agency after the application is submitted.
    It is the Applicant's responsibility to obtain all necessary 
federal, tribal, state, and local governmental permits and approvals 
necessary for the proposed work to be conducted. Applicants are 
expected to design their projects so that they minimize the potential 
for adverse impacts to the environment. Applicants also will be 
required to cooperate with the granting agencies in identifying 
feasible measures to reduce or avoid any identified adverse 
environmental impacts of their proposed projects. The failure to do so 
may be grounds for not making an award.
    Applications will be reviewed to ensure that they contain 
sufficient information to allow Agency staff to conduct a NEPA analysis 
so that appropriate NEPA documentation can be submitted to the 
appropriate federal and state agencies, along with the recommendation 
that the proposal is in compliance with applicable environmental and 
historic preservations laws. Applicants proposing activities that 
cannot be covered by existing environmental compliance procedures will 
be informed after the technical review stage whether NEPA compliance 
and other environmental requirements can otherwise be expeditiously met 
so that a project can proceed within the timeframes anticipated under 
the ReConnect Program.
    If additional information is required after an application is 
accepted for funding, funds can be withheld by the agency under a 
special award condition requiring the Awardee to submit additional 
environmental compliance information sufficient for the Agency to 
assess any impacts that a project may have on the environment.

C. De-Obligation

    The RUS reserves the right to de-obligate awards to Awardees under 
this FOA that demonstrate an insufficient level of performance, 
wasteful or fraudulent spending, or noncompliance with environmental 
and historic preservation requirements.

D. Confidentiality of Applicant Information

    Applicants are encouraged to identify and label any confidential 
and proprietary information contained in their applications. The Agency 
will protect confidential and proprietary information from public 
disclosure to the fullest extent authorized by applicable law, 
including the Freedom of Information Act, as amended (5 U.S.C. 552), 
the Trade Secrets Act, as amended (18 U.S.C. 1905), the Economic 
Espionage Act of 1996 (18 U.S.C. 1831 et seq.), and CALEA (47 U.S.C. 
1001 et seq.). Applicants should be aware, however, that the 
Consolidated Appropriations Act requires substantial transparency. For 
example, RUS is required to make publicly available on the internet a 
list of each entity that has applied for a loan or grant, a description 
of each application, the status of each application, the name of each 
entity receiving funds, and the purpose for which the entity is 
receiving the funds.

E. Compliance With Applicable Laws

    Any recipient of funds under this FOA shall be required to comply 
with all applicable federal, tribal and state laws, including but not 
limited to:
    1. The nondiscrimination and equal employment opportunity 
requirements of Title VI of the Civil Rights Act of 1964, as amended 
(42 U.S.C. 2000e et seq., 7 CFR pt. 15);
    2. Section 504 of the Rehabilitation Act (29 U.S.C. 794 et seq.; 7 
CFR pt. 15b);
    3. The Age Discrimination Act of 1975, as amended (42 U.S.C. 6101 
et seq.; 45 CFR pt. 90);
    4. Executive Order 11375, amending Executive Order 11246, Relating 
to Equal Employment Opportunity (3 CFR pt. 102). See 7 CFR pts. 15 and 
15b and 45 CFR pt. 90, RUS Bulletin 1790-1 (``Nondiscrimination among 
Beneficiaries of RUS Programs''), and RUS Bulletin 20-15:320-15 
(``Equal Employment Opportunity in Construction Financed with RUS 
Loans'');
    5. The Architectural Barriers Act of 1968, as amended (42 U.S.C. 
4151 et seq.);

[[Page 64325]]

    6. The Uniform Federal Accessibility Standards (UFAS) (Appendix A 
to 41 CFR subpart 101-19.6); and
    7. The Council on Environmental Quality Regulations for 
Implementing the Procedural Provisions of NEPA and certain related 
federal environmental laws, statutes, regulations, and Executive Orders 
found in 7 CFR 1970.
    A more complete list of such requirements can be found in the 
applicable Award Documents.

F. Communications Laws

    Awardees will be required to comply with all applicable federal, 
tribal and state communications laws and regulations, including, for 
example, the Communications Act of 1934, as amended, (47 U.S.C. 151 et 
seq.) the Telecommunications Act of 1996, as amended (Pub. L. 104-104, 
110 Stat. 56 (1996), and CALEA. For further information, see https://www.fcc.gov.

G. Executive Order 13132

    It has been determined that this notice does not contain policies 
with federalism implications as that term is defined in Executive Order 
13132.

H. Authorized Signatories

    Only authorized grant and loan officers can bind the Government to 
the expenditure of funds.

I. Paperwork Reduction Act and Recordkeeping Requirements

    Copies of all forms, regulations, and instructions referenced in 
this FOA may be obtained from RUS. Data furnished by the Applicants 
will be used to determine eligibility for program benefits. Furnishing 
the data is voluntary; however, the failure to provide data could 
result in program benefits being withheld or denied.
    The Information Collection and Recordkeeping requirements contained 
in this FOA have been approved by an emergency clearance under OMB 
Control Number 0572-0152. In accordance with the Paperwork Reduction 
Act of 1995 (44 U.S.C. chapter 35), RUS invites comments on this 
information collection for which the Agency intends to request approval 
from the Office of Management and Budget (OMB).
    Comments on this notice must be received by February 12, 2019. 
Comments are invited on (a) whether the collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility; (b) the 
accuracy of the agency's estimate of burden including the validity of 
the methodology and assumption used; (c) ways to enhance the quality, 
utility and clarity of the information to be collected; and (d) ways to 
minimize the burden of the collection of information on those who are 
to respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology.
    Comments may be sent to Michele Brooks, Team Lead, Rural 
Development Innovation Center--Regulations Management Team, U.S. 
Department of Agriculture, 1400 Independence Ave. SW, Stop 1522, Room 
5162 South Building, Washington, DC 20250-1522.
    Title: Rural eConnectivity Pilot Program (ReConnect Program).
    Type of Request: New collection.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 6.77 hours per response.
    Respondents: Businesses and other for-profits.
    Estimated Number of Respondents: 2000.
    Estimated Number of Responses per Respondent: 34.96.
    Estimated Total Annual Burden and Record Keeping Hours on 
Respondents: 477,820 hours.
    Copies of this information collection can be obtained from MaryPat 
Daskal, Rural Development Innovation Center--Regulations Management 
Team, at (202) 720-7853 or email: [email protected].
    All responses to this information collection and recordkeeping 
notice will be summarized and included in the request for OMB approval. 
All comments will also become a matter of public record.

    Dated: December 6, 2018.
Christopher A. McLean,
Acting Administrator, Rural Utilities Service.
[FR Doc. 2018-27038 Filed 12-13-18; 4:15 pm]
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