Proposed Substitute Bill Memorandum - HB 1263, Rural Infrastructure (January 26, 2021)

Summary

Proposed Substitute Bill Memorandum to Members of the Community & Economic Development Committee, from Kyle Raymond, Research Analyst, regarding Proposed Substitute HB 1263 (H-0459.1), Rural Infrastructure, sponsored by Representative Boehnke, dated January 26, 2021. It states that HB 1263 requires the Department of Commerce to establish a competitive grant program for local governments located in rural counties for public facilities. The proposed substitute requires the Public Works Board, rather than the Department, to establish and administer the program. The bill text that follows is an act relating to rural infrastructure that adds new sections to chapter 43.155 RCW.

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PROPOSED SUBSTITUTE BILL MEMORANDUM

To:              Members of the Community & Economic Development Committee

From:            Kyle Raymond, Research Analyst

Re:              Proposed Substitute HB 1263 (H–0459.1) - Rural Infrastructure

                 Sponsored by Representative Boehnke

Date:            January 26, 2021



A brief summary of HB 1263:

      •   Requires the Department of Commerce (Department) to establish a competitive grant
          program to award funding to local governments located in rural counties for public
          facilities.
      •   Requires the Department to prioritize applications according to specified factors.
      •   Establishes funding limits for projects according to specified criteria.
      •   Establishes additional procedures for applications requesting funding for broadband
          infrastructure, including a process for existing entities providing broadband service in the
          proposed project area to object to the proposed broadband project.
      •   Requires the Department to report on the rural infrastructure grant program to OFM and
          the appropriate legislative fiscal committees.


The proposed substitute (H-0459.1) makes the following changes to HB 1263:

      •   Requires the Public Works Board (Board), rather than the Department, to establish and
          administer the rural infrastructure competitive grant program.
      •   Provides that the Board may consult with local governments, port districts, associate
          development organizations, and economic development councils located within the
          applicant's jurisdiction during the application review process.




                                                                                                    1
1        AN ACT Relating to rural infrastructure; and adding new sections
2    to chapter to 43.155 RCW.


3    BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:


 4       NEW SECTION.    Sec. 1.    The definitions in this section apply
 5   throughout this section and sections 2 through 4 of this act unless
 6   the context clearly requires otherwise.
 7       (1) "Broadband infrastructure" means networks of deployed
 8   telecommunications equipment and technologies necessary to provide
 9   high-speed internet access and other advanced telecommunications
10   services to end users.
11       (2) "Broadband office" means the governor's statewide broadband
12   office established in RCW 43.330.532.
13       (3) "Public facilities" means a project of a local government or
14   port district for the planning, acquisition, construction, repair,
15   reconstruction,   replacement,   rehabilitation,   or  improvement   of
16   domestic and industrial water systems, storm and sanitary sewage
17   systems, solid waste facilities, including recycling facilities,
18   telecommunications    and    broadband    infrastructure,    electrical
19   transmission facilities, natural gas facilities, and port facilities.
20       (4) "Rural county" means a county with a population density of
21   fewer than 100 persons per square mile or a county smaller than 225
     Code Rev/KS:jlb                   1                        H-0459.1/21
1    square miles, as determined by the office of financial management and
2    published each year by the board for the period from July 1st to June
3    30th.


 4       NEW SECTION.     Sec. 2.     The rural infrastructure assistance
 5   account is created in the state treasury. All receipts from
 6   appropriations by the legislature, the proceeds of bond sales when
 7   authorized by the legislature, or any other source must be deposited
 8   into the account. Moneys in the account may be spent only after
 9   appropriation. Expenditures from the account may be used only for
10   grants to local governments and port districts located in rural
11   counties for public facilities, including costs incurred by the board
12   to administer the grant program.


13       NEW SECTION.     Sec. 3.     (1) The board shall establish a
14   competitive grant program to award funding to local governments and
15   port districts located in rural counties for public facilities.
16       (2)(a)   The  board   shall   develop  administrative   procedures
17   governing the application and award process. The board shall act as
18   fiscal agent for the program and is responsible for receiving and
19   reviewing applications and awarding funds under this section.
20       (b) At least 60 days prior to the first day applications may be
21   submitted each fiscal year, the board must publish on its website the
22   specific criteria and any quantitative weighting scheme or scoring
23   system that the board will use to evaluate or rank applications and
24   award funding.
25       (c) The board may maintain separate accounting in the rural
26   infrastructure account created in section 2 of this act as the board
27   deems necessary to carry out the purposes of this section.
28       (3) The board must develop a process to prioritize applications
29   and funding of grants for public facilities submitted by local
30   governments and port districts located in rural counties. The board
31   must consider, at a minimum and in any order, the following factors
32   in prioritizing projects:
33       (a) Whether the project is critical in nature and would affect
34   the health and safety of many people;
35       (b) The extent to which the project leverages other funds;
36       (c) The extent to which the project is ready to proceed to
37   construction;


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 1       (d) Whether the project is located in a distressed area as
 2   defined in RCW 43.168.020;
 3        (e) Whether the project promotes the sustainable use of resources
 4   and environmental quality, as applicable;
 5        (f) Whether the project consolidates or regionalizes systems;
 6        (g) Whether the project encourages economic development through
 7   mixed-use and mixed-income development consistent with chapter 36.70A
 8   RCW;
 9        (h) Whether the facility is being well managed in the present and
10   for long-term sustainability;
11       (i) Achieving equitable distribution of funds by geography and
12   population;
13        (j) The extent to which the project meets the following state
14   policy objectives:
15       (i) Efficient use of state resources;
16       (ii) Preservation and enhancement of health and safety;
17       (iii) Abatement of pollution and protection of the environment;
18       (iv) Creation of new, family-wage jobs, and avoidance of shifting
19   existing jobs from one Washington state community to another;
20       (v) Fostering economic development consistent with chapter 36.70A
21   RCW;
22        (vi)  Efficiency   in  delivery   of   goods  and   services  and
23   transportation; and
24       (vii) Reduction of the overall cost of public infrastructure;
25       (k) Whether the applicant sought or is seeking funding for the
26   project from other sources;
27       (l) Whether the completion of the project will directly or
28   indirectly achieve net negative greenhouse gas emissions; and
29       (m) Whether the project will increase the opportunity for
30   individuals to work from home thereby reducing commute times to work
31   and indirectly achieve net negative greenhouse gas emissions.
32       (4) During the application review process, the board may consult
33   with local governments, port districts, associate development
34   organizations,   and   economic   development   councils   within  the
35   applicant's jurisdiction.
36       (5)(a) No funds awarded under this section may fund more than 75
37   percent of the total cost of the project, except the board may fund
38   up to 90 percent of the total cost of the project located in a
39   distressed area as defined in RCW 43.168.020.


     Code Rev/KS:jlb                   3                       H-0459.1/21
 1       (b) The maximum amount of total funding that the board may
 2   provide for any jurisdiction is $10,000,000 per biennium.
 3       (c) The maximum amount of funding that the board may provide for
 4   preconstruction activities to any jurisdiction is $50,000 per
 5   biennium, except there is no maximum amount for:
 6       (i) Preconstruction activities located in a distressed area as
 7   defined in RCW 43.168.020; or
 8       (ii) Preconstruction activities necessary to determine whether
 9   the completion of the project will directly or indirectly achieve net
10   negative greenhouse gas emissions.
11       (6) The board may not sign contracts or otherwise financially
12   obligate funds from the rural infrastructure assistance account
13   before the legislature has appropriated funds to the board for the
14   purpose of funding public facilities under sections 1 through 4 of
15   this act.
16       (7) To ensure a grant under this section primarily serves the
17   public interest and benefits the public, contracts for grants
18   authorized under this section must include provisions that the asset
19   or infrastructure to be developed will be maintained for public use
20   for a period of at least 15 years. If the grantee is found to be out
21   of compliance with provisions of the contract, the grantee shall
22   repay to the state general fund the principal amount of the grant
23   plus interest calculated at the rate of interest on state of
24   Washington general obligation bonds issued most closely to the date
25   of authorization of the grant.
26       (8)   For   applications    requesting   funding   for  broadband
27   infrastructure, the board must implement the following:
28       (a) The board must require the applicant to provide documentation
29   that no later than six weeks before submission of the application,
30   the applicant contacted, in writing, all entities providing broadband
31   service near the proposed project area to ask each broadband service
32   provider's plan to upgrade broadband service in the project area to
33   speeds that meet or exceed the state's definition for broadband
34   service as defined in RCW 43.330.530, within the time frame specified
35   in the proposed grant activities; and if applicable, the broadband
36   service providers' written responses to the inquiry.
37       (b)(i) Within 30 days of the close of the grant application
38   process, the board shall publish on its website the proposed
39   geographic broadband service area and the proposed broadband speeds
40   for each application submitted.
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 1       (ii) Any existing broadband service provider near the proposed
 2   project area may, within 30 days of publication of the information
 3   under this subsection (8)(b), submit in writing to the board an
 4   objection to an application. Objections submitted to the board must
 5   be certified by affidavit and must contain information demonstrating
 6   that:
 7       (A) The project would result in overbuild, meaning that the
 8   objecting provider currently provides, or has begun construction to
 9   provide, broadband service to end users in the proposed project area
10   at speeds equal to or greater than the state speed goals contained in
11   RCW 43.330.536; or
12       (B) The objecting provider commits to complete construction of
13   broadband infrastructure and provide broadband service to end users
14   in the proposed project area at speeds equal to or greater than the
15   state speed goals contained in RCW 43.330.536, no later than 24
16   months after the date awards are made under this section for the
17   grant cycle under which the application was submitted.
18       (c) The board must evaluate the information submitted by the
19   objecting provider and must consider it in making a determination on
20   the application objected to. The board may request clarification or
21   additional information. The board may choose to not fund a project if
22   the board determines that the objecting provider's commitment to
23   provide broadband service in the proposed project area is credible.
24   In assessing the commitment, the board may consider whether the
25   objecting provider has or will provide a bond, letter of credit, or
26   other indicia of financial commitment guaranteeing the project's
27   completion.
28       (d) If the board denies funding to an applicant as a result of a
29   broadband service provider's objection made under this section, and
30   the broadband service provider does not fulfill its commitment to
31   provide broadband service in the project area, then for the following
32   two grant cycles, the board is prohibited from denying funding to an
33   applicant on the basis of a challenge by the same broadband service
34   provider, unless the board determines that the broadband service
35   provider's failure to fulfill the provider's commitment was the
36   result of factors beyond the broadband service provider's control.
37   The board is not prohibited from denying funding to an applicant for
38   reasons other than an objection by the same broadband service
39   provider.


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 1       (e) An applicant or broadband service provider that objected to
 2   the application may request a debriefing conference regarding the
 3   board's decision on the application. Requests for debriefing must be
 4   coordinated by the broadband office and must be submitted in writing
 5   in accordance with procedures specified by the broadband office.
 6       (f) Confidential business and financial information submitted by
 7   an objecting provider under this subsection (8) is exempt from
 8   disclosure under chapter 42.56 RCW.
 9       (g) The board, in collaboration with the broadband office, may
10   adopt rules for a voluntary nonbinding mediation between incumbent
11   providers and applicants to the grant program created in this
12   section.
13       (h) Prior to awarding funds under this section, the board must
14   consult with the Washington utilities and transportation commission.
15   The commission must provide to the board an assessment of the
16   technical feasibility of a proposed application. The board must
17   consider the commission's assessment as part of its evaluation of a
18   proposed application.


19       NEW SECTION.   Sec. 4.   (1) By November 1, 2022, and each year
20   thereafter, the board must develop and submit a report regarding the
21   rural infrastructure grant program to the office of financial
22   management and appropriate fiscal committees of the senate and house
23   of representatives. The report must include:
24       (a) The total number of applications and amount of funding
25   requested for public facilities;
26       (b) A list and description of projects approved in the preceding
27   fiscal year with project scores against the board's prioritization
28   criteria;
29       (c) The total amount of grant disbursements made in the preceding
30   fiscal year;
31       (d) The total amount of funds obligated and timing of when the
32   funds were obligated in the preceding fiscal year; and
33       (e) For projects funded in the prior biennium, the outcomes
34   achieved by the approved projects, including the reduction to net
35   negative greenhouse gas emissions, where applicable.
36       (2) The board may gather data from the local governments and port
37   districts awarded the grant funding in order to develop the report.



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1       NEW SECTION. Sec. 5. Sections 1 through 4 of this act are each
2   added to chapter 43.155 RCW.

                               --- END ---




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