86R25162 JXC-D
  By: Anderson, King of Uvalde, Nevárez, Price, H.B. No. 2423
  Substitute the following for H.B. No. 2423:
  By:  Phelan C.S.H.B. No. 2423
  relating to the creation of the broadband office within the Public
  Utility Commission of Texas and the establishment of a broadband
  service investment grant program.
         SECTION 1.  Subtitle A, Title 2, Utilities Code, is amended
  by adding Chapter 18 to read as follows:
         Sec. 18.0101.  DEFINITIONS. In this chapter:
               (1)  "Account" means the broadband investment account.
               (2)  "Broadband service" means Internet service with
  the capability of providing:
                     (A)  a download speed of 25 megabits per second or
  faster; and
                     (B)  an upload speed of three megabits per second
  or faster.
               (3)  "Grant program" means the program established by
  the broadband office under Section 18.0105.
               (4)  "Rural community" means a municipality with a
  population of less than 50,000 or a county with a population of less
  than 200,000.
               (5)  "Unserved area" means a census block that is not
  served by wireline or fixed wireless broadband service, according
  to publicly available maps and data sets.
         Sec. 18.0102.  APPLICABILITY.  This chapter applies only to
  broadband service provided by a private sector provider.
         Sec. 18.0103.  OFFICE. (a) The broadband office is an
  office within the commission.
         (b)  The commission may employ additional employees
  necessary for the discharge of the duties of the broadband office.
         Sec. 18.0104.  POWERS AND DUTIES. (a)  The broadband office
               (1)  facilitate and coordinate the efforts of state
  agencies, hospitals, schools, and local units of government,
  including regional planning commissions, in connection with
  broadband service projects;
               (2)  develop proposals for broadband service
  investment and deployment strategies for unserved areas in rural
  communities and other areas of this state;
               (3)  promote and coordinate public sector and private
  sector broadband service solutions in support of statewide
  broadband service development goals;
               (4)  assist and promote local and regional broadband
  service planning;
               (5)  pursue and obtain federal sources of broadband
  service funding;
               (6)  develop a framework to measure broadband service
  access in this state and designate unserved areas of this state;
               (7)  develop statewide goals for broadband service
  deployment in unserved areas in rural communities and other
  unserved areas designated under Subdivision (6);
               (8)  manage and award funds allocated to the broadband
  office for broadband service projects; and
               (9)  serve as an information clearinghouse in relation
  to federal programs providing assistance to local entities with
  respect to broadband service.
         (b)  This chapter does not:
               (1)  grant the commission authority to regulate
  broadband services or broadband service providers or, except as
  required of a grant applicant or recipient under Section 18.0105,
  to require broadband service providers to submit information to the
  commission; or
               (2)  require or authorize the commission to require a
  broadband service provider or telecommunications provider to
  participate in any broadband service planning, activities, or
  initiatives conducted by the broadband office or the commission.
         Sec. 18.0105.  BROADBAND GRANT PROGRAM. (a)  The broadband
  office shall establish a grant program to provide grants to
  applicants for the expansion of access to broadband service in
  areas that are unserved in relation to broadband services.  The
  broadband office may provide a grant under this section only for a
  project to provide broadband service in an unserved area.
         (b)  The broadband office shall establish and publish
  eligibility criteria for grant recipients. The criteria must
  require that a grant applicant may be only:
               (1)  an organization operated for profit or not for
  profit, including a cooperative;
               (2)  a telecommunications provider; or
               (3)  a facilities-based broadband service provider,
  including a wireless provider.
         (c)  A grant application must include:
               (1)  a description of the type of broadband service
  infrastructure to be deployed; 
               (2)  a description of the proposed project territory
  and the number of homes, farms, schools, public facilities,
  hospitals, and businesses that would be served by the project;
               (3)  evidence that the proposed project territory
  includes only unserved areas;
               (4)  evidence that the applicant provided the notice
  required by Subsection (d);
               (5)  the total cost of the proposed project and an
  estimated time frame for completion; and
               (6)  any sources of money that would supplement the
  grant for that project, such as a federal grant.
         (d)  Before submitting a grant application, an entity must
  provide notice of the entity's intent to submit an application to:
               (1)  all political subdivisions and hospitals that
  provide services in or adjacent to the proposed project territory;
               (2)  any broadband service providers that provide
  broadband service adjacent to the proposed project territory.
         (e)  The broadband office may not:
               (1)  deny an application solely because the deployment
  project has additional sources of funding or other grants that can
  be used for the project;
               (2)  favor a particular technology in awarding grants;
               (3)  except as otherwise provided by this section,
  evaluate applications based on information about the applicant that
  is not included in the application.
         (f)  The broadband office shall:
               (1)  divide the state into at least five regions;
               (2)  award grants as equitably across regions as
  possible; and
               (3)  prioritize applications for projects for unserved
  areas in counties with a population of less than 10,000 when
         (g)  The broadband office shall award grants on a competitive
  basis and only after considering the following:
               (1)  the relative need for broadband service
  infrastructure and existing Internet service speeds in the proposed
  project territory;
               (2)  the percentage of the homes, farms, schools,
  public facilities, hospitals, and businesses in the proposed
  project territory that will be provided access to broadband service
  by the project;
               (3)  the geographic diversity of the proposed projects
  of all applicants under consideration;
               (4)  the potential economic effects of granting an
  application for the territory of a proposed project;
               (5)  the applicant's total proposed budget for the
  proposed project, including the amount or percentage of matching
  money, if any;
               (6)  local support for the proposed project, including
  any documentation or evidence that the applicant has coordinated
  with the local community to be served or notified the local
  community to be served of the applicant's proposed project;
               (7)  the ability of the proposed broadband service
  provider to maintain broadband service quality while increasing
  parameters relating to the size of the provider's network, such as
  the number of users, the number of network nodes, the number of
  services provided, or the network's geographic spread;
               (8)  whether the proposed project will delay the
  provision of broadband service to any neighboring areas; and
               (9)  any other factors the broadband office determines
  are relevant to the proposed project.
         (h)  The broadband office is not required to approve any
  grant applications.
         (i)  The broadband office shall:
               (1)  post on the commission's Internet website
  information about the application process and the receipt of
  funding and shall update that information as necessary; and
               (2)  make each application available on the
  commission's Internet website for a period of at least 30 days
  before the office makes a decision on the application.
         (j)  During the 30-day posting period described by
  Subsection (i) for an application, the broadband office shall
  accept from any interested party a written protest of the
  application relating to whether the applicant or project is
  eligible for a grant or should not receive a grant based on the
  criteria prescribed by the office. The broadband office:
               (1)  shall provide a copy of the protest to the
               (2)  may request additional information from the
  applicant relating to the protest;
               (3)  shall, if the office intends to deny any part of
  the application based on a protest regarding the proposed project
  territory or budget:
                     (A)  notify the applicant; and 
                     (B)  allow the applicant not more than seven days
  to amend the territory or budget in response to the protest; and
               (4)  shall, if the office intends to grant the
  application, issue a written notice of that intent to the protestor
  not later than the 15th day before the date the office grants the
         (k)  A single grant:
               (1)  may not exceed $250,000; and
               (2)  may fund not more than 30 percent of the total cost
  of the proposed project.
         (l)  The broadband office may require an applicant to
  consolidate multiple projects in a single census block into one
  grant application.
         (m)  The broadband office may provide a grant in conditional
  installments to ensure that a grant recipient complies with any
  grant program requirements.
         (n)  The commission by rule shall adopt minimum service
  standards for broadband service provided by a grant recipient in
  the project territory. The commission shall consider standards used
  by the Federal Communications Commission for recipients of money
  from the Connect America Fund. The standards must require that
  during the three-year period following the completion of a project,
  the grant recipient:
               (1)  must provide broadband service in the project
  territory at rates reasonably comparable to rates for comparable
  services in urban areas; and
               (2)  may not establish a cap on data usage in the
  project territory.
         (o)  Before awarding a grant under this section, the
  broadband office shall enter into a written agreement with the
  entity to be awarded the grant money specifying that:
               (1)  if the commission finds that the grant recipient
  has not complied with minimum service standards adopted under
  Subsection (n) or any other applicable rules or standards of the
  commission adopted under this section:
                     (A)  the recipient shall repay the grant or a
  prorated portion of the grant to the state at an agreed rate and on
  agreed terms; and
                     (B)  the broadband office will not distribute to
  the recipient any grant money that remains to be distributed to the
  recipient; and
               (2)  if, as of a date provided in the agreement, the
  grant recipient has not used grant money awarded under this section
  for the purposes for which the grant was intended, the recipient
  shall repay that amount to the state at an agreed rate and on agreed
         (p)  A grant recipient shall: 
               (1)  notify the broadband office when the project is
  complete; and
               (2)  provide annual reports to the broadband office
  during the three-year period following the completion of the
  project on the recipient's compliance with the requirements of this
         (q)  The broadband office may request information from a
  grant recipient to verify the completion of a project and shall make
  reports submitted under Subsection (p) publicly available. 
         (r)  The broadband office shall provide a report to the
  legislature not later than December 1 of each even-numbered year
  that includes:
               (1)  the amount of money granted under this section
  during the reporting period;
               (2)  any amount of money approved under this section
  during the reporting period but not yet disbursed;
               (3)  for each grant awarded during the reporting
  period, the name of the grantee and the location and a description
  of the project;
               (4)  a progress report on ongoing projects; and
               (5)  a report on all projects completed during the
  reporting period.
         Sec. 18.0106.  BROADBAND INVESTMENT ACCOUNT. (a) The
  broadband investment account is an account in the general revenue
         (b)  The account consists of:
               (1)  appropriations of money to the account by the
               (2)  gifts, grants, including federal grants, and other
  donations received under Section 18.0107; and
               (3)  interest earned on the investment of money in the
         (c)  Money in the account may be appropriated only to the
  broadband office for purposes of the grant program.
         (d)  The account is exempt from the application of Section
  404.071, Government Code.
         Sec. 18.0107.  GIFTS, GRANTS, AND DONATIONS. The broadband
  office may accept gifts, grants, and donations from any source that
  are made for the purposes of the grant program. The broadband
  office shall deposit to the credit of the account money received
  under this section.
         Sec. 18.0108.  RULEMAKING. The commission by rule shall
  implement and administer the grant program.
         SECTION 2.  This Act takes effect September 1, 2019.