House File 867 S-3196 Amend House File 867, as amended, passed, and reprinted by 1 the House, as follows: 2 1. Page 19, after line 22 by inserting: 3 < DIVISION ___ 4 BROADBAND 5 Sec. ___. Section 8B.1, Code 2021, is amended by adding the 6 following new subsections: 7 NEW SUBSECTION . 2A. “Commission” means the empower rural 8 Iowa broadband grant fund commission created pursuant to 9 section 8B.10A. 10 NEW SUBSECTION . 5A. “Fiberoptic infrastructure” means the 11 physical infrastructure used for the transmission of data using 12 pulses of infrared light. “Fiberoptic infrastructure” includes 13 fiberoptic cable and the pipe, vault, or duct used to enclose 14 fiberoptic cable. 15 Sec. ___. Section 8B.4, subsection 16, Code 2021, is amended 16 by striking the subsection. 17 Sec. ___. Section 8B.9, subsection 5, Code 2021, is amended 18 to read as follows: 19 5. An annual report regarding the status of broadband 20 expansion and coordination , the empower rural Iowa broadband 21 grant program established under section 8B.11 , and the adequacy 22 of the speed set in the definition of targeted service area in 23 section 8B.1 . 24 Sec. ___. NEW SECTION . 8B.10A Empower rural Iowa broadband 25 grant fund —— commission established. 26 1. There is created an empower rural Iowa broadband grant 27 fund commission for the purpose of administering the broadband 28 grant program pursuant to section 8B.11. 29 a. The commission shall consist of seven voting members 30 appointed by the governor, subject to confirmation by the 31 senate. The voting members of the commission shall serve 32 four-year staggered terms. The voting membership of the 33 commission shall be subject to the provisions of sections 34 69.16 and 69.16A, relating to political affiliation and gender 35 -1- HF 867.2287 (3) 89 jda/tm 1/ 13 #1.

balance. 1 b. The commission shall also consist of four nonvoting, ex 2 officio members, including representatives from the office, the 3 utilities board within the utilities division of the department 4 of commerce, the Iowa telecommunications and technology 5 commission, and the state department of transportation. 6 c. The representative of the utilities board shall serve as 7 chairperson of the commission. 8 2. A person shall not serve as a voting member of the 9 commission if the person has an interest in a contract or job 10 of work related to the office, or is engaged in a service to 11 be performed in connection with the office. Any voting member 12 of the commission who accepts employment with or acquires any 13 stock, bonds, or other interest in any company or corporation 14 doing business with the office shall be disqualified from being 15 appointed to or remaining a voting member of the commission. 16 3. Any vacancy in the voting membership of the commission 17 shall be filled in the same manner as regular appointments 18 are made for the unexpired portion of the regular term. In 19 the event the governor fails to make an appointment to fill a 20 vacancy or fails to submit an appointment to the senate for 21 confirmation as required by section 2.32, the senate may make 22 the appointment prior to adjournment of the general assembly. 23 4. Each voting member of the commission shall be compensated 24 at an annual rate of ten thousand dollars. Voting members of 25 the commission shall be allowed their actual and necessary 26 expenses incurred in the performance of their duties. All 27 expenses and salaries shall be paid from the empower rural 28 Iowa broadband grant fund created in section 8B.11, and the 29 commission shall be subject to the budget requirements of 30 chapter 8. 31 5. The commission shall meet at the call of the chairperson 32 or when any four voting members of the commission file a 33 written request with the chairperson for a meeting. Written 34 notice of the time and place of each meeting shall be given to 35 -2- HF 867.2287 (3) 89 jda/tm 2/ 13

each member of the commission. A majority of the commission 1 members shall constitute a quorum. 2 6. Any voting member of the commission may be removed for 3 any of the causes and in the manner provided in chapter 66 and 4 such removal shall not be in lieu of any other punishment that 5 may be prescribed by the laws of this state. 6 7. The office, the utilities board, the Iowa 7 telecommunications and technology commission, and the 8 state department of transportation shall provide staff services 9 to the commission. 10 8. The commission shall prepare a comprehensive strategic 11 plan of specific goals, objectives, policies, performance 12 measures, and benchmarks for the expansion of fiberoptic 13 infrastructure in the state. The commission shall update the 14 strategic plan on an annual basis. Beginning December 31, 15 2021, and continuing on July 1 of each year until the final 16 strategic plan is submitted on July 1, 2025, the commission 17 shall submit the strategic plan to the governor and to the 18 members of the general assembly. 19 9. By July 1, annually, the commission shall provide a 20 report regarding the empower rural Iowa broadband grant program 21 established under section 8B.11 to the governor and the members 22 of the general assembly. 23 Sec. ___. Section 8B.11, Code 2021, as amended by 2021 Iowa 24 Acts, House file 848, section 3, is amended to read as follows: 25 8B.11 Empower rural Iowa —— broadband grants —— fund. 26 1. The office commission shall administer a broadband 27 grant program designed to reduce or eliminate unserved and 28 underserved areas in the state, leveraging federal funds and 29 public and private partnerships where possible, by awarding 30 grants to communications service providers that reduce or 31 eliminate targeted service areas by installing broadband 32 infrastructure that facilitates broadband service in accordance 33 with the following: 34 a. The broadband infrastructure facilitates broadband 35 -3- HF 867.2287 (3) 89 jda/tm 3/ 13 #9.

service that provides a minimum download speed of one hundred 1 megabits per second and a minimum upload speed of one hundred 2 megabits per second in a targeted service area within which no 3 communications service provider offers or facilitates broadband 4 service that provides download and upload speeds less than or 5 equal to the tier 1 download and upload speeds specified in the 6 definition of targeted service area in section 8B.1. 7 b. The broadband infrastructure facilitates broadband 8 service that provides a minimum download speed of one hundred 9 megabits per second and a minimum upload speed of one hundred 10 megabits per second in a targeted service area within which no 11 communications service provider offers or facilitates broadband 12 service that provides any of the following: 13 (1) Download speeds less than or equal to the tier 2 14 download speed specified in the definition of targeted service 15 area in section 8B.1. 16 (2) Download speeds less than or equal to the tier 3 17 download speed specified in the definition of targeted service 18 area in section 8B.1. 19 2. a. An empower rural Iowa broadband grant fund is 20 established in the state treasury under the authority of the 21 office commission . The fund shall consist of moneys available 22 to and obtained or accepted by the office commission . Moneys 23 in the fund are appropriated to the office commission to be 24 used for the grant program, including for broadband mapping and 25 the administration and operation of the grant program, and for 26 the fiberoptic network conduit installation program established 27 in section 8B.25 , and for credit enhancement as specified in 28 section 16.201, subsection 5 . 29 b. The office commission shall use moneys in the fund to 30 provide grants to communications service providers pursuant to 31 this section , and to lead and coordinate the fiberoptic network 32 conduit installation program pursuant to section 8B.25 , and for 33 credit enhancement as specified in section 16.201, subsection 34 5 . The office may use not more than two and one-half percent of 35 -4- HF 867.2287 (3) 89 jda/tm 4/ 13

the moneys in the fund at the beginning of the fiscal year to 1 pay the costs and expenses associated with the administration 2 and operation of the grant program and the fiberoptic network 3 conduit installation program. The office commission shall use 4 moneys in the fund to leverage available federal moneys if 5 possible. 6 c. Notwithstanding section 8.33 , moneys in the fund 7 that remain unencumbered or unobligated at the close of the 8 fiscal year shall not revert but shall remain available for 9 expenditure for the purposes designated until three years 10 following the last day of the fiscal year in which the funds 11 were originally appropriated. 12 d. Notwithstanding paragraph “c” or any provision to the 13 contrary, moneys in the fund that have been awarded but not 14 paid to a communications service provider shall not revert but 15 shall remain available to the office commission for purposes of 16 administering the award in a manner consistent with the terms 17 and conditions of any corresponding contract or grant agreement 18 governing the administration of the award. 19 3. Communications service providers may apply to the 20 office commission for a grant pursuant to this section for 21 the installation of broadband infrastructure that facilitates 22 broadband service in targeted service areas. The office 23 commission shall make available a public internet site 24 identifying all publicly available information contained in the 25 applications and any results of performance testing conducted 26 after the project is completed. The office commission 27 shall devote one full-time equivalent position to evaluate 28 applications submitted under this section and provide technical 29 assistance to communications service providers in completing 30 applications for federal funds, or any other funds from any 31 public or private sources, related to improving broadband 32 infrastructure. 33 4. a. The office commission shall award grants on 34 a competitive basis for the installation of broadband 35 -5- HF 867.2287 (3) 89 jda/tm 5/ 13

infrastructure that facilitates broadband service as provided 1 in subsection 3 in targeted service areas after considering the 2 following: 3 (1) The relative need for broadband infrastructure in the 4 area and the existing broadband service speeds, including 5 whether the project serves a rural area or areas. 6 (2) The applicant’s total proposed budget for the project, 7 including all of the following: 8 (a) The amount or percentage of local or federal matching 9 funds, if any, and any funding obligations shared between 10 public and private entities. 11 (b) The percentage of funding provided directly from the 12 applicant, including whether the applicant requested from the 13 office commission an amount less than the maximum amount the 14 office commission could award pursuant to subsection 5 and, if 15 so, the percentage of the project cost that the applicant is 16 requesting. 17 (c) The total amount of the applicant’s investments in 18 the five years before the submission of the application in 19 fiberoptic infrastructure and broadband infrastructure that 20 meet all of the following criteria: 21 (i) Serves targeted service areas that are adjacent to the 22 area. 23 (ii) Provides a minimum download speed of one hundred 24 megabits per second and a minimum upload speed of one hundred 25 megabits per second. 26 (iii) Directly benefits or provides broadband service to 27 the area. 28 (3) The relative download and upload speeds of proposed 29 projects for all applicants. 30 (4) The specific product attributes resulting from the 31 proposed project, including technologies that provide higher 32 qualities of service, such as service levels, latency, 33 and other service attributes as determined by the office 34 commission . 35 -6- HF 867.2287 (3) 89 jda/tm 6/ 13

(5) The percentage of the homes, farms, schools, and 1 businesses in the targeted service area that will be provided 2 access to broadband service. 3 (6) The proportion of proposed projects that will result 4 in the installation of broadband infrastructure in a targeted 5 service area within which the only broadband service available 6 provides the tier 1 download and upload speeds specified in the 7 definition of targeted service area in section 8B.1. 8 (7) The applicant’s ability to complete the proposed 9 project in a timely manner and within the applicant’s total 10 proposed budget. 11 (8) The applicant’s market gap and demand studies, 12 independently reviewed business viability modeling, regional 13 planning, and other cost-effective methods and operations the 14 applicant will use to provide broadband service in the area. 15 (9) The rates the applicant will charge to customers of its 16 broadband service in the area. 17 (10) Whether the applicant will give preference to 18 purchasing Iowa products and purchases from Iowa-based 19 businesses in conjunction with the installation of broadband 20 infrastructure for the proposed project. 21 (7) (11) Other factors the office commission deems 22 relevant. 23 b. In considering the factors listed in paragraph “a” for 24 awarding grants pursuant to this section , the office commission 25 shall afford the greatest weight to the factors described in 26 paragraph “a” , subparagraphs (1) through (3), and subparagraph 27 subparagraphs (6) and (10) . 28 5. The total amount of the grants the office commission 29 awards from the empower rural Iowa broadband grant fund 30 pursuant to this section shall not exceed any of the following 31 amounts: 32 a. Seventy-five percent of a communications service 33 provider’s project costs for projects that will result in the 34 installation of broadband infrastructure in a targeted service 35 -7- HF 867.2287 (3) 89 jda/tm 7/ 13

area within which no communications service provider offers or 1 facilitates broadband service that provides download and upload 2 speeds less than or equal to the tier 1 download and upload 3 speeds specified in the definition of targeted service area in 4 section 8B.1. 5 b. Fifty percent of a communications service provider’s 6 project costs for projects that will result in the installation 7 of broadband infrastructure in a targeted service area within 8 which no communications service provider offers or facilitates 9 broadband service that provides download and upload speeds 10 less than or equal to the tier 2 download and upload speeds 11 specified in the definition of targeted service area in section 12 8B.1. 13 c. Thirty-five percent of a communications service 14 provider’s project costs for projects that will result in the 15 installation of broadband infrastructure in a targeted service 16 area within which no communications service provider offers or 17 facilitates broadband service that provides download speeds 18 less than or equal to the tier 3 download speed specified in 19 the definition of targeted service area in section 8B.1. 20 6. Notwithstanding subsections 3 and 5, communications 21 service providers may apply to the office commission for 22 a grant pursuant to this section for the installation of 23 broadband infrastructure that facilitates broadband service 24 providing a minimum download speed of one hundred megabits per 25 second and a minimum upload speed of twenty megabits per second 26 in targeted service areas pursuant to this subsection. The 27 office commission shall make available a public internet site 28 identifying all publicly available information contained in the 29 applications and any results of performance testing conducted 30 after the project is completed. 31 a. The office commission shall award grants under this 32 subsection on a competitive basis after considering the factors 33 provided in subsection 4 and affording weight to the factors 34 pursuant to subsection 4, paragraph “b” . 35 -8- HF 867.2287 (3) 89 jda/tm 8/ 13

b. The total amount of the grants the office commission 1 shall award pursuant to this subsection shall not exceed fifty 2 percent of a communications service provider’s project costs 3 for projects that will result in the installation of broadband 4 infrastructure in a targeted service area within which no 5 communications service provider offers or facilitates broadband 6 service that provides download and upload speeds less than or 7 equal to the tier 1 download and upload speeds specified in the 8 definition of targeted service area in section 8B.1. 9 7. Notwithstanding subsections 5 and 6, at least twenty 10 percent of the total amount of the grants the office commission 11 awards from the empower rural Iowa broadband grant fund 12 pursuant to this section shall be allocated to projects that 13 will result in the installation of broadband infrastructure 14 in difficult to serve targeted service areas within which no 15 communications service provider offers or facilitates broadband 16 service that provides download and upload speeds less than 17 or equal to the tier 1 download and upload speeds specified 18 in the definition of targeted service area in section 8B.1. 19 For purposes of this subsection, a targeted service area is 20 difficult to serve if the soil conditions, topography, or 21 other local conditions make the installation of broadband 22 infrastructure in the targeted service area more time-consuming 23 or labor-intensive compared to other areas of the state. 24 8. The office commission shall provide public notice 25 regarding the application process and receipt of funding. 26 9. The terms of a grant awarded under this section 27 shall contain, at a minimum, a provision that requires the 28 repayment of the grant by a communications service provider 29 if the communications service provider does not meet any 30 of the requirements of the grant award or if the broadband 31 infrastructure installed by the communications service provider 32 does not facilitate broadband service as provided in subsection 33 3. The repayment of moneys awarded pursuant to this subsection 34 shall be considered a tax payment due and payable to the 35 -9- HF 867.2287 (3) 89 jda/tm 9/ 13

department of revenue by any taxpayer who has received such 1 moneys, and the failure to make such a repayment shall be 2 treated by the department of revenue in the same manner as a 3 failure to pay the tax shown due or required to be shown due 4 with the filing of a return or deposit form. 5 9. 10. The office commission may adopt rules pursuant 6 to chapter 17A interpreting this chapter or necessary for 7 administering this chapter , including but not limited to rules 8 relating to the broadband grant program process, management, 9 and measurements as deemed necessary by the office commission . 10 10. 11. The office commission shall adopt rules 11 establishing procedures to allow aggrieved applicants an 12 opportunity to challenge the office’s commission’s award of 13 grants under this section . 14 Sec. ___. Section 8B.25, subsections 2 and 3, Code 2021, are 15 amended to read as follows: 16 2. The office commission shall lead and coordinate a program 17 to provide for the installation of fiberoptic network conduit 18 where such conduit does not exist. The chief information 19 officer commission shall consult and coordinate with applicable 20 agencies and entities as determined appropriate to ensure 21 that the opportunity is provided to lay or install fiberoptic 22 network conduit wherever a state-funded construction project 23 involves trenching, boring, a bridge, a roadway, or opening of 24 the ground, or alongside any state-owned infrastructure. 25 3. Contingent upon the provision of funding for such 26 purposes by the general assembly, the office commission may 27 contract with a nongovernmental third party to manage, lease, 28 install, or otherwise provide fiberoptic network conduit 29 access for projects described in this section . This section 30 does not require coordination with or approval from the 31 office commission pursuant to this program or installation of 32 fiberoptic conduit as required by this section for construction 33 projects not using public funding. 34 Sec. ___. NEW SECTION . 16.300 Broadband infrastructure and 35 -10- HF 867.2287 (3) 89 jda/tm 10/ 13

fiberoptic infrastructure. 1 1. As used in this section, unless the context otherwise 2 requires: 3 a. “Broadband” means the same as defined in section 8B.1. 4 b. “Broadband infrastructure” means the same as defined in 5 section 8B.1. 6 c. “Commission” means the same as defined in section 8B.1. 7 d. “Communications service provider” means the same as 8 defined in section 8B.1. 9 e. “Fiberoptic infrastructure” means the same as defined in 10 section 8B.1. 11 2. The authority may issue a maximum of two hundred fifty 12 million dollars of its bonds and notes annually and loan the 13 proceeds of the bonds and notes to a communications service 14 provider that has received a grant from the empower rural Iowa 15 broadband grant fund pursuant to section 8B.11 for the purpose 16 of financing the installation of broadband infrastructure or 17 fiberoptic infrastructure. 18 3. The authority may enter into a loan agreement with a 19 communications service provider for the purpose of financing 20 the installation of broadband infrastructure or fiberoptic 21 infrastructure and shall provide for payment of the loan and 22 security for the loan as the authority deems advisable. The 23 loan may be secured by any of the following: 24 a. The communications service provider’s revenue that is 25 generated by the provision of broadband service. 26 b. The fiberoptic infrastructure installed by the 27 communications service provider. 28 4. In the resolution authorizing the issuance of the 29 bonds or notes pursuant to this section, the authority may 30 provide that the related principal and interest are limited 31 obligations payable solely out of the revenues derived from 32 the debt obligation, collateral, or other security furnished 33 by or on behalf of the communications service provider, and 34 the principal or interest does not constitute an indebtedness 35 -11- HF 867.2287 (3) 89 jda/tm 11/ 13

of the authority or a charge against the authority’s general 1 credit or general fund. 2 5. The commission shall provide credit enhancement to the 3 authority’s annual issuance of bonds or notes pursuant to 4 subsection 2 through any of the following methods: 5 a. Establishing an escrow account and transferring fifty 6 millions dollars from the empower rural Iowa broadband grant 7 fund into the escrow account. 8 b. Pledging payment of fifty million dollars of the bonds 9 or notes for the first ten years of their issuance from the 10 empower rural Iowa broadband grant fund. 11 6. The authority shall establish an escrow account and 12 transfer ten percent of the amount loaned to a communications 13 service provider pursuant to a loan agreement to the escrow 14 account to be held in reserve for debt service for five years 15 after the date of the loan agreement. 16 7. A communications service provider that has entered 17 into a loan agreement pursuant to this section shall impose, 18 collect, and increase, if necessary, user charges, taxes, or 19 other dedicated revenue sources in order to maintain annual net 20 revenues at a level equal to at least one hundred ten percent 21 of the amount necessary to pay debt service on all obligations 22 during the next fiscal year. 23 8. The powers granted the authority under this section are 24 in addition to the authority’s other powers under this chapter. 25 All other provisions of this chapter, except section 16.28, 26 subsection 4, apply to bonds or notes issued pursuant to, and 27 powers granted to the authority under this section, except to 28 the extent the provisions are inconsistent with this section. 29 9. The authority shall adopt rules pursuant to chapter 17A 30 to administer and interpret this section. > 31 2. By renumbering as necessary. 32 -12- HF 867.2287 (3) 89 jda/tm 12/ 13