TITLE 34. PUBLIC FINANCE

PART 1. COMPTROLLER OF PUBLIC ACCOUNTS

CHAPTER 16. BROADBAND DEVELOPMENT

SUBCHAPTER A. BROADBAND POLE REPLACEMENT PROGRAM

34 TAC §§16.1 - 16.17

The Comptroller of Public Accounts proposes new §§16.1, concerning definitions; 16.2, concerning grant funds distribution methods; 16.3, concerning notice and applications; 16.4, concerning eligible applicants; 16.5, concerning authorized officials; 16.6, concerning federal funding; 16.7, concerning preferences; 16.8, concerning reimbursement awards; 16.9, concerning payment; 16.10, concerning requirements; 16.11, concerning reports; 16.12, concerning noncompliance; 16.13, concerning grant reduction or termination; 16.14, concerning records retention; 16.15, concerning request for records and audit; 16.16, concerning conflict with laws, rules, regulations, or guidance; and 16.17, concerning references. The new sections will be located in new Chapter 16 (Broadband Development), Subchapter A (Broadband Pole Replacement Program).

The new sections are proposed to comply with House Bill 1505, §1 and §4, 87th Legislature, 2021, R.S., which establish the broadband pole replacement fund and the Texas broadband pole replacement program, and require the comptroller to prescribe rules for the program.

Section 16.1 provides definitions.

Section 16.2 describes methods that the Broadband Development Office (office) may use to distribute grant funds.

Section 16.3 sets forth notice and application requirements.

Section 16.4 provides grant eligibility requirements.

Section 16.5 sets forth requirements for designating an applicant's authorized official.

Section 16.6 authorizes the office to establish eligibility and program requirements and preferences, and make award decisions, based upon any criteria required by federal law, regulation, or guidance applicable to the type of funding used to make a reimbursement award, if federal funding is used to make the reimbursement award.

Section 16.7 provides preferences that the office may use to make reimbursement award decisions.

Section 16.8 describes reimbursement award requirements.

Section 16.9 sets forth the time period within which a reimbursement award must be paid to a grantee after a notice of a reimbursement award is issued.

Section 16.10 sets forth requirements for the administration and use of a reimbursement award.

Section 16.11 provides requirements for the submission of reports and documentation by a grantee.

Section 16.12 describes the process for addressing a grantee's noncompliance with any term or condition of a reimbursement award or any applicable laws, rules, regulations, or guidance relating to the reimbursement award, and the remedies that could result from such noncompliance.

Section 16.13 sets forth requirements for reducing or terminating a reimbursement award.

Section 16.14 provides records retention requirements.

Section 16.15 describes requirements for providing records, documentation, or other information required by the office and authorizes the office, upon reasonable notice, to audit the activities of a grantee as necessary to ensure that grant funds are used for the intended purpose of the reimbursement award and that the grantee has complied with the terms, conditions, and requirements of the reimbursement award.

Section 16.16 requires that a state or federal law, rule, regulation, or guidance applicable to the type of funding used to make a reimbursement award prevails over this subchapter to the extent necessary to avoid a conflict between the relevant law, rule, regulation, or guidance and this subchapter.

Section 16.17 identifies the legislation that enacted the statutory provisions that apply to these rules so that it is clear which provisions apply because the legislature recently enacted two sets of statutory provisions that have the same numbers and are included in subchapters that have the same title ("Subchapter R").

Brad Reynolds, Chief Revenue Estimator, has determined that during the first five years that the proposed new rules are in effect, the rules: will not create or eliminate a government program; will not require the creation or elimination of employee positions; will not require an increase or decrease in future legislative appropriations to the agency; will not require an increase or decrease in fees paid to the agency; will not increase or decrease the number of individuals subject to the rules' applicability; and will not positively or adversely affect this state's economy.

Mr. Reynolds also has determined that the proposed new rules would have no fiscal impact on the state government, units of local government, or individuals. The proposed new rules would benefit the public by implementing the new program. There would be no anticipated significant economic cost to the public. The proposed new rules would have no significant fiscal impact on small businesses or rural communities.

Comments on the proposal may be submitted to Greg Conte, Director, Texas Broadband Development Office, Data Analysis and Transparency Division, at broadband@cpa.texas.gov or at P.O. Box 13528, Austin, Texas 78711. Comments must be received no later than 30 days from the date of publication of the proposal in the Texas Register.

The new sections are proposed under Government Code, §403.503(c), as added by 87th Legislature, 2021, R.S., Chapter 659 (House Bill 1505), §1 and §4, which require the comptroller to prescribe rules for the Texas broadband pole replacement program.

The new sections implement Government Code, Subchapter R, as added by 87th Legislature, 2021, R.S., Chapter 659 (House Bill 1505), §1, concerning infrastructure and broadband funding.

§16.1.Definitions.

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Applicant--A person that has submitted an application for a reimbursement award under this subchapter.

(2) CCPF--The Coronavirus Capital Projects Fund (42 U.S.C. §804), established by §604 of the Social Security Act, as added by §9901 of the American Rescue Plan Act of 2021, Pub. L. No. 117-2.

(3) Eligible broadband facility--Has the meaning assigned by Government Code, §403.503(a)(1).

(4) Eligible pole replacement cost--Has the meaning assigned by Government Code, §403.503(a)(2).

(5) Grantee--An applicant that receives a reimbursement award under this subchapter.

(6) Grant funds--Monies in the pole replacement fund.

(7) NOFA--Notice of Funding Availability.

(8) Office--The Broadband Development Office established within the comptroller's office under Government Code, Chapter 490I.

(9) Pole--Has the meaning assigned by Government Code, §403.503(a)(5).

(10) Pole owner--Has the meaning assigned by Government Code, §403.503(a)(6).

(11) Pole replacement fund--Has the meaning assigned by Government Code, §403.501(1).

(12) Pole replacement program--Has the meaning assigned by Government Code, §403.501(2).

(13) Qualifying broadband service--Has the meaning assigned by Government Code, §403.503(a)(3).

(14) Unserved area--Has the meaning assigned by Government Code, §403.503(a)(4).

§16.2.Grant Funds Distribution Method.

To ensure that grant funds are used to maximize the deployment of broadband services to the greatest number of unserved areas, the office may:

(1) distribute the funds by geographic location; and

(2) issue a NOFA for less than the amount available in the pole replacement fund.

§16.3.Notice and Applications.

(a) The office may, as necessary, publish a NOFA in the Texas Register or the Electronic Business Daily, and on the comptroller's website.

(b) The notice may include:

(1) the total amount of grant funds available for reimbursement awards;

(2) the minimum and maximum amount of grant funds available for each applicant;

(3) limitations on the geographic distribution of grant funds;

(4) eligibility requirements;

(5) application requirements;

(6) reimbursement award and evaluation criteria;

(7) the date by which applications must be submitted to the office;

(8) the anticipated date of reimbursement awards;

(9) pricing data related to the broadband service to be enabled through pole replacement; and

(10) any other information necessary for awarding the reimbursement as determined by the office.

(c) All applications for a reimbursement award submitted under this subchapter must comply with the requirements of Government Code, §403.503(g), and any requirements contained in a NOFA published by the office.

(d) Applicants must apply for a reimbursement award using the procedures, forms, and certifications prescribed by the office.

(e) The office may require applicants to submit preliminary information to the office prior to submitting a completed application for a reimbursement award to enable the office to determine each applicant's eligibility to apply for a reimbursement award and to compile aggregate information that applicants may use in determining whether to complete the application process.

(f) During the review of an application, an applicant may be instructed to submit to the office additional information necessary to complete the review. Such requests for information do not serve as notice that the office intends to fund an application.

§16.4.Eligible Applicants.

An applicant is eligible to apply to the office for a reimbursement award under this subchapter if the applicant:

(1) is a pole owner or a provider of qualifying broadband service; and

(2) pays or incurs eligible pole replacement costs of removing and replacing an existing pole in an unserved area for the purpose of accommodating the attachment of an eligible broadband facility.

§16.5.Authorized Officials.

(a) Each applicant/grantee must designate an authorized official to act on its behalf and the applicant/grantee must provide the office with:

(1) the authorized official's name, title, mailing address, telephone number, and email address; and

(2) the applicant's/grantee's physical address.

(b) An applicant/grantee shall notify the office as soon as practicable of any change in the information provided by it under subsection (a) of this section.

§16.6.Federal Funding.

If CCPF or any other federal funding is used to make a reimbursement award, the office may establish eligibility and program requirements and preferences, and make award decisions, based upon any criteria required by federal law, regulation, or guidance applicable to the type of funding used to make the reimbursement award.

§16.7.Preferences.

The office may give preference to applications and make awards decisions based upon the following factors:

(1) cost effectiveness and overall impact;

(2) geographic location;

(3) the latest state or federal broadband data;

(4) the number of households or businesses that will be served due to the reimbursement being requested;

(5) involvement of broadband networks owned, operated by, or affiliated with local governments, non-profits, or cooperatives;

(6) completion of the pole replacement and payment of all costs of the pole replacement;

(7) investments in fiber-optic infrastructure;

(8) achievement of last-mile connections or middle-mile projects that have commitments in place to support new or improved last-mile service;

(9) affordability of broadband services in a target area;

(10) participation in federal programs that provide low-income consumers with subsidies for broadband internet access services;

(11) documentation of existing broadband internet service performance;

(12) download speeds and upload speeds, including user speed tests resulting from completion of the pole replacement;

(13) community involvement in the pole replacement planning process, including feedback from community members, community organizations, and business owners;

(14) business practices and workforce information, including the following:

(A) the applicant's workforce meets high safety and training standards;

(B) the applicant prioritizes the hiring of local workers or workers from historically disadvantaged communities;

(C) the applicant ensures that its contractors and subcontractors meet high labor standards; and

(D) the applicant has no recent violations of federal and state labor and employment laws; and

(15) any additional factors listed in a NOFA published by the office.

§16.8.Reimbursement Awards.

(a) The office must provide a notice of a reimbursement award or a notice of denial to an applicant, in writing, not later than 60 calendar days after the date that the office receives a completed application from the applicant. An application will not be considered complete for purposes of this section unless an applicant has provided all the information necessary for the office to review the application, including any additional information requested by the office to complete the review.

(b) All grant funding decisions made by the office are final and are not subject to appeal.

(c) The approval of a reimbursement award shall not obligate the office to make any additional, supplemental, or other reimbursement award.

§16.9.Payment.

A reimbursement award must be paid to a grantee not later than 30 calendar days after the date the office issues a notice of a reimbursement award under §16.8(a) of this subchapter.

§16.10.Requirements.

(a) The administration and use of a reimbursement award are subject to:

(1) the terms and conditions of the reimbursement award;

(2) the requirements of Government Code, Chapter 403, Subchapter R; and

(3) any other state or federal law, rule, regulation, or guidance applicable to the type of funding used to make the reimbursement award.

(b) Grant funds may be used only for the purpose of supporting the pole replacement program, including the costs of program administration and operation.

(c) A grantee is the entity legally and financially responsible for compliance with state and federal laws, rules, regulations, and guidance applicable to the reimbursement award.

§16.11.Reports.

(a) A grantee shall submit reports and documentation as may be required by the office to substantiate that grant funds awarded were used for the intended purpose of the reimbursement award and that the grantee has complied with the terms, conditions, and requirements set forth in §16.10 of this subchapter.

(b) A grantee must submit reports and documentation to the office in the office-prescribed format no later than the office-designated deadlines for their submission.

§16.12.Noncompliance.

(a) If the office has reason to believe that a grantee has violated any term or condition of a reimbursement award or any applicable laws, rules, regulations, or guidance relating to the reimbursement award, the office shall provide written notice of the allegations to the grantee and provide the grantee with an opportunity to respond to the allegations.

(b) If the office finds on substantial evidence that a grantee has materially violated the requirements of Government Code, §403.503, with respect to reimbursements or portions of reimbursements, the office may direct the grantee to refund the reimbursement or a portion of the reimbursement with interest at the applicable federal funds rate as specified by Business and Commerce Code, §4A.506(b).

(c) If the office finds that a grantee has failed to comply with any term or condition of a reimbursement award, or any applicable laws, rules, regulations, or guidance relating to the reimbursement award, other than the requirements described in subsection (b) of this section, the office may:

(1) direct the grantee to refund the reimbursement award or a portion of the reimbursement award;

(2) withhold reimbursement award amounts to a grantee under this subchapter pending correction of the deficiency;

(3) disallow all or part of the cost of the activity or action that is not in compliance;

(4) terminate the reimbursement award in whole or in part;

(5) prohibit the grantee from being eligible for future reimbursement awards under the pole replacement program; or

(6) exercise any other legal remedies available at law.

§16.13.Grant Reduction or Termination.

(a) If a grantee seeks to terminate any approved reimbursement award, it must notify the office immediately.

(b) The office may reduce or terminate any reimbursement award when circumstances require reduction or termination, including when:

(1) a grantee is found to be noncompliant under §16.12(c) of this subchapter;

(2) the grantee and the office agree to the reduction or termination of a reimbursement award;

(3) grant funds are no longer available to the office; or

(4) conditions exist that make it unlikely that objectives of the reimbursement award will be accomplished.

(5) If a reimbursement award is reduced or terminated by the office, the office shall notify the grantee in writing.

§16.14.Records Retention.

(a) A grantee must maintain all financial records, supporting documents, and all other records pertinent to the reimbursement award for at least four years following the submission of a final report.

(b) If any litigation, claim, or audit is started, or any open records request is received, before the expiration of the four-year records retention period, a grantee must retain the records related to the litigation, claim, audit, or open records request until the completion of the litigation, claim, audit, or open records request and resolution of all issues which arise from it or until the end of the regular four-year records retention period, whichever is later.

(c) A grantee may retain records in an electronic format.

§16.15.Request for Records and Audit.

(a) A grantee shall, upon written request from the office or its designee, provide any records, documentation, or other information required by the office to verify that the grantee has complied with the terms, conditions, and requirements set forth in §16.10 of this subchapter. The office or its designee may make such a written request at any time before the end of the four-year records retention period set forth in §16.14 of this subchapter. If the office or its designee requests records, documentation, or other information from the grantee in writing, the grantee must submit the requested information within 30 calendar days.

(b) The office or its designee may, before the end of the four-year records retention period set forth in §16.14 of this subchapter, audit a grantee to ensure that grant funds are used for the intended purpose of the reimbursement award and that the grantee has complied with the terms, conditions, and requirements set forth in §16.10 of this subchapter.

§16.16.Conflict with Laws, Rules, Regulations, or Guidance.

If a state or federal law, rule, regulation, or guidance applicable to the type of funding used to make the reimbursement award conflicts with this subchapter, the state or federal law, rule, regulation, or guidance applicable to the type of funding used to make the reimbursement award prevails over this subchapter to the extent necessary to avoid the conflict.

§16.17.References.

All references in this subchapter to statutory provisions in Government Code, Chapter 403, Subchapter R, refer to the provisions added by 87th Legislature, 2021, R.S., Chapter 659 (House Bill 1505), §1.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 20, 2021.

TRD-202105183

Victoria North

General Counsel for Fiscal and Agency Affairs

Comptroller of Public Accounts

Earliest possible date of adoption: January 30, 2022

For further information, please call: (512) 475-2220