Rural Broadband Access Loans and Loan Guarantees

To assure that people in eligible rural communities have access to broadband service comparable in reliability and quality to the rest of the Nation.



Agency - Department of Agriculture

Established in 1862, the Department of Agriculture serves all Americans through anti-hunger efforts, stewardship of nearly 200 million acres of national forest and rangelands, and through product safety and conservation efforts. The USDA opens markets for American farmers and ranchers and provides food for needy people around the world.




Program Accomplishments

Fiscal Year 2016: Two loans awarded for $19,439,000. Fiscal Year 2017: $27,000,000 available should be awarded in FY17 pending future approvals of loan applications. Fiscal Year 2018: No Current Data Available

Uses and Use Restrictions

Funds can be used for the costs of the construction, improvement, or acquisition of facilities and equipment for the provision of broadband service in rural areas.

Additional restrictions may apply to projects depending on the availability of existing broadband service.

A direct loan shall bear interest at an annual rate either (1) equivalent to the cost of borrowing to the Department of the Treasury for obligations of comparable maturity or (2) 4 percent.

A guaranteed loan shall bear interest at an annual rate equivalent to the current applicable market rate for a loan of comparable maturity.

Funds must be used for broadband facilities in eligible rural areas.

Funds are appropriate and made available annually.

Direct and or guaranteed loans.

Eligibility Requirements

Applicant Eligibility

(a) To be eligible for a broadband loan, an applicant may be either a nonprofit or for-profit organization, and must take one of the following forms: (1) Corporation; (2) Limited liability company (LLC); (3) Cooperative or mutual organization; (4) Indian tribe or tribal organization as defined in 25 U.S.C.

450b; or (5) State or local government, including any agency, subdivision, or instrumentality thereof. (b) To be eligible for a broadband loan, the applicant must: (1) Submit a loan application which meets the requirements set forth the regulation; (2) Agree to complete the build-out of the broadband system described in the loan application within three years from the day the applicant is notified that loan funds are available.

The loan application must demonstrate that all proposed construction be completed within this three year period with the exception of CPE.

CPE can be funded throughout the forecast period; (3) Demonstrate an ability to furnish, improve, or extend broadband facilities to provide service at the broadband lending speed in rural areas; (4) Demonstrate an equity position equal to at least 10 percent of the amount of the loan requested in the application; and (5) Provide additional security if it is necessary to ensure financial feasibility as determined by the Administrator. An eligible entity that provides telecommunications or broadband service to at least 20 percent of the households in the United States may not receive a total amount of loans or guarantees for a fiscal year in excess of 15 percent of the funds authorized and appropriated for that fiscal year.

Beneficiary Eligibility

Residents and businesses of eligible rural areas.

Credentials/Documentation

No Credentials or documentation are required. This program is excluded from coverage under 2 CFR 200, Subpart E - Cost Principles.

Aplication and Award Process

Preapplication Coordination

Applicants must supply environmental impact information to determine whether an environmental assessment or an environmental impact statement will be required.

Additional information regarding environmental requirements can be found in 7 C.F.R.

Part 1794.

Environmental impact information is not required for this program.

This program is excluded from coverage under E.O.

12372.

Application Procedures

2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards applies to this program. New regulations will implement the changes authorized by the 2014 Farm Bill. For further information on submitting an application, please contact RUS and visit our website: http://www.rd.usda.gov/programs-services/farm-bill-broadband-loans-loan-guarantees

Award Procedures

The RUS Administrator makes the final decision on approval of the loan or loan guarantee. There must be a finding that the project is economically feasible, capable of delivering service at the Broadband Lending Speed, and serves the purposes of the program. Borrowers and member of Congress are notified directly of the approval of a loan or loan guarantee.

Deadlines

Not Applicable.

Authorization

Rural Electrification Act of 1936, as amended, Title VI; 7 U.S.C. 950bb.

Range of Approval/Disapproval Time

> 180 Days. Normal processing time is four to five months.

Appeals

Not Applicable.

Renewals

Not Applicable.

Assistance Considerations

Formula and Matching Requirements

This program has no statutory formula. This program has no matching requirements. The loan application must demonstrate an equity position equal to at least 10 percent of the amount of the loan requested in the application. MOE requirements are not applicable to this program.

Length and Time Phasing of Assistance

Unless requested to be shorter by the applicant, broadband 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 assets to be financed, as determined by the Agency based upon acceptable depreciation rates. The borrower must begin construction within six months from the date the Agency notifies the applicant that loan funds are available. . If the borrower fails to begin construction, the Agency may cancel the loan. The build-out must be complete within three years from the day the Agency notifies the applicant that loan funds are 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 borrower is ready to support the activation and commissioning of individual customers to the new system. See the following for information on how assistance is awarded/released: New regulations will implement the changes authorized by the 2014 Farm Bill. See the following for information on how assistance is awarded/released: Once the loan is closed and funds are made available, the borrower submits advance request on an as needed and funds are advanced over a five year period.

Post Assistance Requirements

Reports

RUS borrowers must submit to the Rural Utilities Service quarterly operating reports showing financial condition and operating progress.

No cash reports are required.

Annual progress reports are required.

The form that is used to request the advance of funds is also an expenditure reports.

The form is called a Financial Requirement Statement and tracks individual construction projects.

Performance monitoring is completed by the RUS National and Field offices.

Audits

In accordance with the provisions of 2 CFR 200, Subpart F - Audit Requirements, non-Federal entities that expend financial assistance of $750,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Non-Federal entities that expend less than $750,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in 2 CFR 200.503. In accordance with the provisions of 2 CFR 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements, Subpart F, Audit Requirements (Revised, December 26, 2013) nonfederal entities that expend financial assistance of $750,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Nonfederal entities that expend less than $750,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in Subpart F. Entities which do not meet the criteria for applicability in 2 CFR 200 will have an audit prepared in accordance with 7 CFR 1773, Policy on Audits of RUS Borrowers and Grantees.

Records

No Data Available.

Financial Information

Account Identification

12-1232-0-1-452.

Obigations

(Direct Loans) FY 16 $0; FY 17 est $0; and FY 18 est $0 - Four (4) Percent Loans. (Direct Loans) FY 16 $19,439,000; FY 17 est $27,000,000; and FY 18 est $20,000,000 - Cost of Money Loans. (Guaranteed/Insured Loans) FY 16 $0; FY 17 est $0; and FY 18 est $0

Range and Average of Financial Assistance

Minimum and maximum amounts of the loans are determined at the time a Notice of Funding Availability is published in the Federal Register.

Regulations, Guidelines, and Literature

See the Final Rule published in the Federal Register on June 9, 2016. 81 FR 37121 (111)

Information Contacts

Regional or Local Office

None.

Headquarters Office

Assistant Administrator, Telecommunications Program, Rural Utilities Service, 1400 Independence Avenue, S.W., STOP 1590, Washington, District of Columbia 20250 Phone: (202) 720-9564.

Criteria for Selecting Proposals

Not Applicable.



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