Report - 2022 01 13 A29379 D237182 Bill Report 5586 Sbr Bfst Ta 22

Summary

A Senate Bill Report on SB 5586, concerning the authority of the Community Economic Revitalization Board (CERB) with respect to broadband loans and grants, prepared by staff of the Senate Committee on Business, Financial Services & Trade and dated as of January 11, 2022. It lists Senator Frockt as sponsor. The background describes CERB and its Rural Broadband Program, including $10 million provided in 2018 and $25 million in the 2021 capital budget. The bill would create an appropriated loan and grant program under CERB for broadband infrastructure projects by local governments and federally recognized tribes, with grants limited to 50 percent of the award. The report also summarizes public testimony in support and other testimony raising concerns about coordination with the Broadband Office.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

                            SENATE BILL REPORT
                                  SB 5586

                                      As of January 11, 2022

Title: An act relating to the authority of the community economic revitalization board with
     respect to loans and grants to political subdivisions and federally recognized Indian tribes
     for broadband.

Brief Description: Concerning the authority of the community economic revitalization board.

Sponsors: Senator Frockt.

Brief History:
     Committee Activity: Business, Financial Services & Trade: 1/11/22.


                                     Brief Summary of Bill
           • Establishes an appropriated loan and grant program for financing
             broadband infrastructure projects under the authority of the Community
             Economic Revitalization Board.


SENATE COMMITTEE ON BUSINESS, FINANCIAL SERVICES & TRADE

     Staff: Kellee Gunn

     Background: Community Economic Revitalization Board. The Community Economic
     Revitalization Board (CERB) was formed in 1982 to respond to local economic
     development in Washington communities. CERB provides funding in the form of low-
     interest loans and grants to local governments and federally recognized tribes for public
     infrastructure projects supporting private sector development.

     CERB consists of 20 members, four of which are state legislators, representing private and
     public sectors from across the state. CERB sets policy and selects projects to receive
     financing assistance. The Department of Commerce provides administrative support.




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

Senate Bill Report                              -1-                                             SB 5586
     Community Economic Revitalization Board Rural Broadband Program. In 2018, the
     Legislature provided $10 million to CERB to administer grants and loans for infrastructure
     for high-speed, open-access broadband service with a minimum of 25 megabits per second
     download speed in rural and underserved counties and communities for the purpose of
     economic development or community development. The following biennium, the 2019-
     2021 capital budget provided $3.45 million to continue broadband projects funded from the
     2017–2019 appropriations. Most recently, the 2021 capital budget provided $25 million to
     CERB to finance projects to provide high speed, open access broadband to rural and
     underserved communities.

     Besides the requirement that the project be in a rural and underserved community, the loan
     is limited to $2 million per project. Grants are available up to 50 percent of the total award,
     determined by the underwriting process and debt service coverage ratio.

     Rural Broadband Program projects cannot result in retail development; gambling; job
     displacement from one part of the state to another; be located outside the jurisdiction of the
     applicant; the deployment of publicly owned telecommunication network infrastructure
     solely for its sake; or for certain equipment or facilities which the entity is not currently
     authorized by statute to provide.

     Summary of Bill: An appropriated loan and grant program is created under the authority
     of CERB for financing broadband infrastructure projects.

     Local governments and federally recognized tribes may apply to CERB for financing to
     build infrastructure for high speed, open-access broadband service. To qualify for
     financing, a project's purpose must be economic or community development. Each
     application must be approved by the local government and supported by the local associate
     development organization, the local workforce council, or by the governing body of the
     federally recognized tribe before being considered. Grants cannot make up more than 50
     percent of the award.

     Approved projects for CERB's broadband infrastructure program must:
        • drive job creation, promote innovation, and expand markets for local businesses; or
        • serve the ongoing and growing needs of local education systems, public safety
          systems, industries, businesses, government operations, and citizens.

     Projects will not be approved if they promote or facilitate gambling and the deployment of a
     publicly owned telecommunications infrastructure network, or backbone, solely for the sake
     of creating a competitive, publicly owned telecommunications infrastructure network.

     When evaluating and prioritizing each project, CERB must consider the following:
       • value to the community, including evidence of support from affected local business
         and government;
       • feasibility;


Senate Bill Report                              -2-                                         SB 5586
         • commitment of local matching resources and participation;
         • whether a technology-neutral approach is used to expand access at the lowest cost;
         • inclusion in a capital facilities plan, comprehensive plan, or local economic
           development plan consistent with applicable state planning requirements; and
         • readiness to proceed.

     Every local government and federally recognized tribe seeking financial assistance must
     demonstrate that no other timely source of funding is available at similar cost.

     Appropriation: None.

     Fiscal Note: Requested on January 4, 2022.

     Creates Committee/Commission/Task Force that includes Legislative members: No.

     Effective Date: Ninety days after adjournment of session in which bill is passed.

     Staff Summary of Public Testimony: PRO: This program is important. There is a
     wonderful pipeline of projects coming. Internet service providers are very responsive to the
     CERB model. As chair of the board, CERB has been investing in broadband for over 4
     years. Becoming involved in broadband has allowed small communities to partner with
     ISPs, resulting in lower costs. CERB gets stuff done. All the $37.5 million CERB has
     received has gone out the door. Of the broadband projects, 95% of the connections are high-
     speed, robust connections.

     When our tribe went out to look for funding, we found CERB was the best partner; the
     process was less cumbersome and brought the best product to the community. From
     starting the application, to getting the fiber, it was about 13 months. CERB really helps
     bring open access broadband to a community at the lowest cost.

     As a telecommunication director at Kitsap PUD, I have worked with CERB. Because we
     are not a distressed county, we could not work with the public works board. And we didn't
     qualify for other programs because rural and unserved areas are often prioritized. CERB is
     a right time, right project model. Without CERB, we would not have been able to serve our
     community because of the nature of our county. Broadband is a vital tool for the future.
     The flexibility of the program and professional staff at CERB has allowed us to partner with
     telecommunications providers and meet the needs of our county.

     OTHER: CERB has been a wonderful partner. Our concerns are that CERB does not
     provide funding to private businesses. Private providers can provide these public goods.
     Having multiple state programs providing broadband funding is confusing. And the State
     needs to look at projections and ensure that there is no over-building. Currently there is no
     public facing coordination between CERB and the Broadband Office. AWB shares the goal
     of bridging the digital divide. We supported the bill that created the Broadband Office and


Senate Bill Report                             -3-                                        SB 5586
     would rather see them oversee broadband funding. Centralizing oversight makes sense and
     will be a more coordinated, and less expensive, approach.

     Persons Testifying: PRO: Senator David Frockt, Prime Sponsor; Randy Hayden, CERB -
     Community Economic Revitalization Board; Michael Echanove, CERB - Community
     Economic Revitalization Board; Mike Mason, CERB - Community Economic
     Revitalization Board; Angela Bennink, Kitsap Public Utility District; Joe Poire, Port of
     Whitman County.

     OTHER: Betty Buckley, 14534 S Hwy 21; Mike Ennis, Association of Washington
     Business.

     Persons Signed In To Testify But Not Testifying: No one.




Senate Bill Report                          -4-                                      SB 5586


File and source

File

2022-01-13_a29379_d237182_bill-report-5586-sbr-bfst-ta-22.pdf

Size

11,226 bytes

SHA-256

a0e4b5ba3e5972e09aef57cde52280ee017037b831814a7bb2e02be56eaac6bc

Our copy

2022-01-13_a29379_d237182_bill-report-5586-sbr-bfst-ta-22.pdf

Original

app.leg.wa.gov