Bill Analysis — HB 2414 Concerning digital equity, Washington State House of Representatives (Hearing 1/17/20)

Summary

A House Bill Analysis of HB 2414, Concerning digital equity, from the Washington State House of Representatives Office of Program Research for the Innovation, Technology & Economic Development Committee, with a hearing date of 1/17/20. The brief summary says the bill establishes the Digital Equity Capacity Grant Program and Digital Equity Competitive Grant Program under the Department of Commerce, and requires local jurisdictions seeking capacity grants to develop a Digital Equity Plan. The analysis also covers the administering entity, planning grants, termination of a grant and reporting requirements, and states that the bill takes effect on July 1, 2021.

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Washington State                   BILL
House of Representatives
Office of Program Research     ANALYSIS
Innovation, Technology & Economic
Development Committee
                                         HB 2414
Brief Description: Concerning digital equity.

Sponsors: Representatives Gregerson, Hudgins, Callan, Frame, Peterson, Santos, Wylie, Doglio
   and Morgan.


                                      Brief Summary of Bill
      Ÿ Establishes and sets forth requirements for the Digital Equity Capacity Grant
        Program and Digital Equity Competitive Grant Program under the Department of
        Commerce (Department).
      Ÿ Specifies parameters and eligibility criteria for selecting entities to administer each
        grant program.
      Ÿ Requires local jurisdictions seeking capacity grants to develop a Digital Equity Plan
        (Plan) that identifies the barriers to digital equity faced by covered populations.
      Ÿ Provides that the Department shall award capacity grants to support the
        implementation of the Plan and digital inclusion activities in those local jurisdictions.
      Ÿ Provides that the Department shall award competitive grants to support efforts to
        achieve digital equity, promote digital inclusion activities, and spur greater adoption
        of broadband among covered populations.
      Ÿ Requires Commerce to conduct evaluations of the activities carried out under covered
        programs and to submit an annual report of its finding to the Legislature.


Hearing Date: 1/17/20

Staff: Kyle Raymond (786-7190).

Background:


––––––––––––––––––––––
    This analysis was prepared by non-partisan legislative staff for the use of legislative
    members in their deliberations. This analysis is not a part of the legislation nor does it
    constitute a statement of legislative intent.

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The Department of Commerce (Department) is responsible for growing and improving jobs, as
well as facilitating innovation in the state. The Department provides business assistance and
economic development services primarily through sector-based and cluster-based regional
organizations to: (1) generate greater local capacity to respond to economic growth and
environmental challenges; (2) promote partnerships and the use of intermediaries to achieve the
Department's goals; and (3) leverage state resources.

The Department is responsible for promoting community and economic development statewide
by: (1) assisting communities to increase economic vitality and the quality of citizens' lives; and
(2) assisting the state's businesses to maintain and increase economic competitiveness while
maintaining a healthy environment. The Department's community and economic development
efforts include managing growth through local planning, fostering the development of minority
and women-owned businesses, facilitating technology development, and providing community
services and advocacy for low-income persons.

Broadband Office.
The Governor's Statewide Broadband Office (SBO) was established in 2019 to serve as the
central broadband planning body for the state. The SBO Director is appointed by the Governor,
and the SBO may employ necessary staff to carry out the SBO duties.

The SBO powers and duties include: (1) coordinating with relevant parties to develop strategies
and plans for deployment of broadband infrastructure; (2) reviewing existing broadband
initiatives; (3) developing and implementing a statewide plan to encourage cost-effective
broadband access and increased usage; (4) and encouraging public-private partnerships to
increase deployment and adoption of broadband services and applications.

Universal Communications Services Program.
The Universal Communications Services (UCS) program was established in 2014 to provide
temporary direct support to Washington's smaller incumbent communications service providers
during certain changes in federal funding. In 2019, the purpose of the UCS program was
expanded to include the provision, enhancement, and maintenance of broadband services.

Public Works Board.
The Public Works Board within the Department administers the Public Works Assistance
Account and provides financial and technical assistance to local governments in addressing local
infrastructure and public works projects by making loans, grants, financing guarantees, and
technical assistance available to local government for these projects.

Summary of Bill:

Digital Equity Capacity Grant Program.
The Digital Equity Capacity Grant Program (Capacity Grant Program) is established under the
Department of Commerce (Department). The Capacity Grant Program requires the Department
to make grants to local jurisdictions to promote the achievement of digital equity, support digital
inclusion activities, and build capacity for local jurisdictions relating to broadband adoption.

In establishing the Capacity Grant Program, the Department is required to consult with
representatives from certain specified state agencies, including the Office of Minority and

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Women's Business Enterprises, the Department of Veterans Affairs, the Office of Financial
Management, Consolidated Technology Services, and agencies related to the provision of
broadband.

The Department is directed to ensure the Capacity Grant Program complements, and does not
conflict with, other broadband initiatives and programs. The Department may adopt rules as
necessary to carry out the Capacity Grant Program.

Administering Entity. A local jurisdiction that wishes to be awarded a grant must select an
administering entity to receive and administer any grant awarded to the local jurisdiction. In
addition, the administering entity must manage the completion of the Digital Equity Plan,
provide sub-grants to key stakeholders, and advocate for digital equity policy and digital
inclusion activities, and serve as a repository of best practice materials regarding the policies and
activities of the Capacity Grant Program.

The entities eligible to serve as the administering entity include the following entities or any
partnership between the entities:
     Ÿ the local jurisdiction, a political subdivision, agency, or other municipal or
       quasimunicipal corporation of the local jurisdiction, or an Indian tribe located in the local
       jurisdiction;
     Ÿ a foundation, corporation, institution, association, or coalition that is a not-for-profit
       entity, located in the local jurisdiction and not a school;
     Ÿ a community anchor institution, other than a school, that is located in the local
       jurisdiction;
     Ÿ a local educational agency that is located in the local jurisdiction;
     Ÿ an entity located in the local jurisdiction that carries out a workforce development
       program;
     Ÿ an agency of the local jurisdiction that is responsible for administering or supervising
       adult education and literacy activities in the local jurisdiction; and
     Ÿ a public housing authority that is located in the local jurisdiction.

Digital Equity Plan. To be eligible for a capacity grant, the local jurisdiction must develop a
Digital Equity Plan (Plan) that identifies the barriers to digital equity faced by covered
populations in the local jurisdiction to be eligible for a capacity grant. The Department shall
award planning grants to local jurisdictions for the purpose of developing the Plans of those local
jurisdictions beginning July 1, 2022.

The Plan must include certain specified measurable objectives related to broadband accessibility
and availability, digital literacy, privacy, and cybersecurity among covered populations. This
must include an assessment of how the objectives will impact and interact with the local
jurisdiction, and a description of how the local jurisdiction plans to collaborate with specified
key stakeholders to achieve the objectives.

The administering entity is required to make the Plan available for public comment for a
minimum of 30 days before submitting the state capacity grant application to the Department.
The administering entity must also consider all comments received and make any changes to the
Plan that the entity determines to be worthwhile. When submitting the application, the


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administering entity must describe any changes made in response to comments and include a
written response to each comment received.

Digital Equity Planning Grants. A local jurisdiction that wishes to be awarded a planning grant
must submit an application to the Department within 60 days of the funding availability notice.
The application must contain a description of the local jurisdiction's administering entity, a
certification to submit a Plan to the Department within one year, and agree to the assurances
required under the Act.

Planning grants are awarded to an eligible local jurisdiction according to the grant award
formula. The local jurisdiction must expend the grant funds within one year of the receipt of the
grant award, which may be extended for up to 180 days. Eligible local jurisdictions may appeal
or challenge the amount of the grant awarded to the Department in a timely fashion.

The planning grant funds can be used to develop the Plan of the local jurisdiction, or to provide
sub-grants to assist in the development of the Plan of the local jurisdiction.

Capacity Grants. The Department shall, not later than two years after beginning to award
planning grants, award annual capacity grants to eligible local jurisdictions. The capacity grants
support the implementation of the Plan and digital inclusion activities in those local jurisdictions.

The local jurisdiction must submit an application to the Department within 60 days of the
funding availability notice. The application materials must include a description of the local
jurisdiction's administering entity, the local jurisdiction's Plan with any Plan amendments
included, a certification to implement the Plan, and the assurances required under the Act.

The amount of a capacity grant awarded to an eligible local jurisdiction in a fiscal year shall be
not less than one-half of one of the total amount made available to award grants to eligible local
jurisdictions for that fiscal year.

After awarding planning grants and capacity grants to eligible local jurisdictions in a fiscal year,
the Department must distribute any remaining amounts existing grantees for that fiscal year.

Capacity grant awardees must expend grant funds during the five-year period after receiving
grant funds, and grant awardees may appeal or challenge the amount of the grant awarded to the
Department in a timely fashion.

The administering entity for an eligible local jurisdiction use the capacity grant funds for the
following purposes:
     Ÿ To update or maintain the digital equity plan of the local jurisdiction, up to 20 percent of
       the total grant amount.
     Ÿ To implement the Plan of the local jurisdiction.
     Ÿ To award a grant eligible entities located in the local jurisdiction in order to assist in the
       implementation of the Plan, pursue digital inclusion activities consistent with the Plan,
       and report digital inclusion activities of the entity to the local jurisdiction.
     Ÿ To evaluate the efficacy of the efforts funded by grants, up to 5 percent of the total grant
       amount.
     Ÿ For the administrative costs incurred, up to 3 percent.

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The administering entity must require the entity to which the grant is awarded to certify that the
receipt of the grant shall not result in unjust enrichment of the entity and must cooperate with
any evaluation carried out by the administering entity or the Department.

Termination of Grant. The Department may terminate a grant awarded if the Department: (1)
clearly demonstrates the grant funds are not contributing to the development or execution of the
Plan; (2) finds the local jurisdiction is not upholding assurances; or (3) determines the grant is no
longer necessary. The Department must provide notice and an opportunity for a hearing to the
local jurisdiction.

The Department must distribute any terminated grant funds to existing grantees for that fiscal
year.

Reporting, Information, and Disclosure Requirements. The Department must require any entity
that is awarded a planning or capacity grant to annually report the use of that grant, progress
towards achieving the objective of the grant, and the implementation of the Plan.

The Department is required to establish mechanisms to ensure grants are used in an appropriate
manner that complies with the terms of the grant.

The Department is required to create and maintain a fully searchable database that: (1) contains
the application of each local jurisdiction that has applied for a grant; (2) the status of each
application; (3) each report submitted by an entity; (4) a record of public comments made of the
Plan; (5) any written responses to or actions taken as a result of those comments; (6) any other
information that is sufficient to allow the public to understand and monitor grants awarded under
this section. The database must be made accessible on the internet at no cost to the public.

Digital Equity Competitive Grant Program.
The Digital Equity Competitive Grant Program (Competitive Grant Program) is established
under the Department. Under the Competitive Grant Program, the Department awards grants to
certain entities to support efforts to achieve digital equity, promote digital inclusion activities,
and spur greater adoption of broadband among covered populations.

The Department is required to consult with representatives from certain specified state agencies,
including the Office of Minority and Women's Business Enterprises, the Department of Veterans
Affairs, the Office of Financial Management, Consolidated Technology Services, and agencies
related to the provision of broadband. The Department may also consult with local jurisdictions
to identify covered populations located in that local jurisdiction and allocate grant funds for
projects within that local jurisdiction.

The Department is directed to ensure the Competitive Grant Program complements, and does not
conflict with, other broadband initiatives and programs. The Department may adopt rules as
necessary to carry out the Competitive Grant Program.

Program Eligibility. The Department may award a grant to any of the following entities, or any
partnerships between the entities:


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     Ÿ a political subdivision, agency, or other municipal or quasi-municipal corporation of the
       local jurisdiction, including an agency that is responsible for administering or supervising
       adult education and literacy activities in the local jurisdiction;
     Ÿ an Indian tribe;
     Ÿ a foundation, corporation, institution, or association that is a not-for-profit entity; a
       community anchor institution;
     Ÿ a local educational agency; and an entity that carries out a workforce development
       program.

Competitive Grant Application. An entity that wishes to be awarded a grant under the program
shall submit to the Department an application that:
     Ÿ provides a detailed explanation of how the entity will use any grant amounts awarded
        under the program to carry out the purposes of the program in an efficient and
        expeditious manner;
     Ÿ identifies the period in which the applicant will expend the grant funds awarded under the
        program;
     Ÿ includes a justification for the amount of the grant that the applicant is requesting and an
        annual budget for the activities that the grant funds will support;
     Ÿ discloses to the Department the source and amount of other funding sources received
        related to the to the application; and
     Ÿ provides the assurances required under the Act.

The application materials must also demonstrate, to the satisfaction of the Department, that the
entity is capable of carrying out the project, meeting the state share requirement, and lawfully
carrying out the applicable reporting requirements.

Awarding Competitive Grants. In deciding whether to award a grant under the Competitive
Grant Program, the Department shall, to the extent practicable, consider whether the application
would:
    Ÿ increase internet access and the adoption of broadband among covered populations to be
       served by the applicant;
    Ÿ not result in unjust enrichment;
    Ÿ contract or subcontract with a socially and economically disadvantaged small business
       concern; and
    Ÿ differ in geographic diversity in relation to other eligible applications; and duplicate or
       conflict with another program.

An entity to which the Department awards a grant must use the grant amounts to support at least
one of the following activities:
     Ÿ to develop and implement digital inclusion activities that benefit covered populations;
     Ÿ to facilitate the adoption of broadband by covered populations in order to provide
        educational and employment opportunities to those populations;
     Ÿ to implement workforce development programs or other training programs for covered
        populations that cover basic, advanced, and applied skills;
     Ÿ to make available equipment, instrumentation, networking capability, hardware and
        software, or digital network technology for broadband services to covered populations at
        low or no cost;


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     Ÿ to construct, upgrade, expend, or operate new or existing public access computing centers
       for covered populations through community anchor institutions; or
     Ÿ to undertake any other project and activity that the Department finds to be consistent with
       the purposes for which the Competitive Grant Program is established.

No more than 10 percent of the grant amounts may be used for administrative costs in carrying
out any of the above activities.

No more than 10 percent of the grant amounts may be used to measure and evaluate the activities
supported with the grant. An annual report of the measure and evaluate the activities must be
submitted to the Department.

An entity awarded a grant under this subsection shall expend the grant amounts during the four-
year period beginning on the date on which the entity is awarded the grant amounts.

A grant or sub-grant awarded under this section shall supplement, not supplant, other federal or
state funds that have been made available to carry out activities described in this section.

State Share. The state share of any project for which the Department awards a grant under the
Competitive Grant Program may not exceed 90 percent. The Department may grant a waiver to
this limit if the applicant with respect to the project petitions the department for the waiver and
the Department determines that the applicant petition demonstrates financial need.

Termination of Grant. The Department may de-obligate or terminate a competitive grant
awarded if the Department clearly demonstrates: (1) grant funds are not being used in a manner
that is consistent with the application; (2) the entity is not upholding assurances; or (3) the grant
is no longer necessary to achieve the original purpose.

The Department must provide notice of any grant de-obligation or termination to the applicable
entity and provide an opportunity for a hearing.

The Department may competitively award de-obligated or terminated grant funds to another
applicant in accordance with the grant award formula.

Reporting, Information, and Disclosure Requirements. The Department must require any entity
that is awarded a capacity grant to annually report the amount and use of that grant, and the
progress towards achieving the objective of the grant.

The Department is required to establish mechanisms to ensure grants are used in an appropriate
manner that complies with all terms with respect to the use of the grant amounts.

The Department is required to create and maintain a fully searchable database that contains a list
of each entity that has applied for a grant, the status of each application, each report submitted by
an entity, and any other information that is sufficient to allow the public to understand and
monitor grants awarded. The database must be made accessible on the internet at no cost to the
public.

Grant Award Formula.

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The Department must calculate the amount of a total grant awarded to an eligible local
jurisdiction in accordance with the following criteria:
     Ÿ 50 percent based on the population of the eligible local jurisdiction in proportion to the
        total population of all eligible local jurisdictions;
     Ÿ 25 percent based on the number of individuals in the eligible local jurisdiction who are
        covered populations in proportion to the total number of individuals in all eligible local
        jurisdictions who are covered populations; and
     Ÿ 25 percent of the total grant amount shall be based on the comparative lack of availability
        and adoption of broadband in the eligible local jurisdiction in proportion to the lack of
        availability and adoption of broadband of all eligible local jurisdictions.

The comparative lack of availability and adoption of broadband which must be determined
according to data collected from the Federal Communications Commission, the American
Community Survey or other Census data, the Internet and Computer Use Supplement to the
Current Population Survey, and any other source the Department, after appropriate notice and
opportunity for public comment, determines to be appropriate.

Grant Assurances.
When applying for a any grant under this act, an entity must include certain assurances in the
application to provide that the entity will:
     Ÿ use any grant funds in accordance with any applicable statute, regulation, and application
       procedure to the extent required under applicable law;
     Ÿ cooperate with any grant related program evaluation by or for the Department or another
       state official;
     Ÿ adopt and use proper methods of administering any grant that the entity is awarded;
     Ÿ use fiscal control and fund accounting procedures that ensure the proper disbursement of,
       and accounting for, any state funds;
     Ÿ submit to the Department any reports that may be necessary to enable the Department to
       perform the duties of the department under the applicable program; and
     Ÿ maintain any records and provide any information to the Department, including those
       records that the Department determines is necessary to enable the Department to perform
       the duties of the Department under the applicable program.

Proper methods of administering grants includes enforcing legal obligations, correcting any
grantee program operation deficiencies, and adopting written procedures for the receipt and
resolution of complaints alleging a violation of law with respect to a program to which the grant
relates.

Policy Research, Data Collection, Analysis and Modeling, Evaluation, and Dissemination.
Evaluation Requirement. The Department must conduct evaluations of the activities carried out
under the covered programs. Not later than one year after the date on which the Department
begins awarding capacity grants, and annually thereafter, the Department must submit to the
appropriate committees of the Legislature a report that documents the findings of each
evaluation.

The Department shall make each report submitted available in an online format that facilitates
access and ease of use, is searchable, and is accessible including to individuals with disabilities
and in languages other than English.

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Contracting. The Department may award grants and enter into contracts, cooperative
agreements, and other arrangements with state agencies, public and private organizations, and
other entities with expertise that the Department determines appropriate in order to:
     Ÿ evaluate the impact and efficacy of activities supported by grants awarded under the
        covered programs; and
     Ÿ develop, catalog, disseminate, and promote the exchange of best practices, both with
        respect to an independent of the covered programs, in order to achieve digital equity.

Ongoing Collaboration. The Department shall conduct ongoing collaboration and consultation
with: (1) certain state agencies and local jurisdiction officials; (2) entities serving as
administering entities; (3) national, state, tribal, and local organizations that provide digital
inclusion, digital equity, or digital literacy services; (4) researchers, academics, and philanthropic
organizations; (5) and other agencies, organizations, entities, and community stakeholders, as
determined appropriate by the Department.

Technological Support and Assistance. The Department shall provide technical support and
assistance, assistance to entities to prepare the applications of those entities with respect to grants
awarded under the covered programs, and other resources, to the extent practicable, to ensure
consistency in data reporting and to meet certain specified objectives.

Additional Provisions.
The programs in this Act must be carried out in a manner that is consistent with Chapter 49.60
RCW, and no individual may, on the basis of actual or perceived race, color, religion, national
origin, sex, gender identity, sexual orientation, age, or disability, be excluded from participation
in, be denied the benefits of, or be subjected to discrimination under this Act.

A grant or sub-grant shall supplement, not supplant, other federal or state funds that have been
made available for this purpose.

The Department shall, to the extent practicable, carry out the Act in a technologically neutral
manner.

Appropriation: None.

Fiscal Note: Available.

Effective Date: The bill takes effect on July 1, 2021.




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