To bridge the digital divide in rural areas.

January 4, 2005

Mr. MCHUGH introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

To bridge the digital divide in rural areas.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Rural America Digital Accessibility Act'.

SEC. 2. GRANTS TO FACILITATE DEPLOYMENT OF BROADBAND TELECOMMUNICATIONS CAPABILITIES TO UNDERSERVED RURAL AREAS.

(a) In General- In order to facilitate the deployment by the private sector of broadband telecommunications networks and capabilities (including wireless and satellite networks and capabilities) to underserved rural areas, the Secretary of Commerce (in this section, referred to as the `Secretary') may--

(1) make grants to eligible recipients for that purpose;

(2) guarantee loans, either whole or in part, of eligible recipients the proceeds of which are to be used for that purpose; or

(3) carry out activities under both paragraphs (1) and (2).

(b) Eligible Recipients- For purposes of this section, an eligible recipient of a grant or loan guarantee under subsection (a) is any person or entity selected by the Secretary in accordance with such procedures as the Secretary shall establish.

(c) Underserved Rural Areas- The Secretary shall identify the areas that constitute underserved rural areas for purposes of this section.

(d) Emphasis on Particular Capabilities- In selecting a person or entity as an eligible recipient of a grant or loan guarantee under subsection (a), the Secretary shall give particular emphasis to persons or entities that propose to use the grant or the proceeds of the loan guaranteed, as the case may be, to leverage non-Federal resources to do one or more of the following:

(1) Provide underserved rural areas with access to Internet service by local telephone.

(2) Demonstrate new models or emerging technologies to bring broadband telecommunications services to underserved rural areas on a cost-effective basis.

(3) Use broadband telecommunications services to stimulate economic development, such as providing connections between and among industrial parks located in such areas and providing high-speed telecommunications service links to small business incubators.

(e) Consultation- The Secretary may consult with the Federal Communications Commission in carrying out activities under this section.

(f) Limitation on Amount- The amount of any grants made under this section, and the cost (as defined in section 502(5) of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)) of any loans guaranteed under this section, may not, in the aggregate, exceed $100,000,000.

(g) Authorization of Appropriations- There is authorized to be appropriated for the Department of Commerce for purposes of grants and loan guarantees under this section $100,000,000 for fiscal year 2005, and such sums as are necessary for each fiscal year thereafter.

SEC. 3. RESEARCH ON ENHANCEMENT OF BROADBAND TELECOMMUNICATIONS SERVICES.

(a) In General- The Director of the National Science Foundation (in this section, referred to as the `Director') shall carry out research on the following:

(1) Means of enhancing or facilitating the availability of broadband telecommunications services in rural areas and other remote areas.

(2) Means of facilitating or enhancing access to the Internet through broadband telecommunications services.

(b) Scope of Authority- The Director may carry out research under subsection (a) within the National Science Foundation or pursuant to such grants, agreements, or other arrangements as the Director considers appropriate.

(c) Results of Research- The Director shall make available to the public, in such manner as the Director considers appropriate, the results of any research carried out under this section.

(d) Authorization of Appropriations- There is authorized to be appropriated for the National Science Foundation for purposes of activities under this section $25,000,000 for fiscal year 2005, and such sums as are necessary for each fiscal year thereafter.

SEC. 4. TAX CREDIT TO HOLDERS OF QUALIFIED TECHNOLOGY BONDS.

(a) In General- Part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to credits against tax) is amended by adding at the end the following new subpart:

`Subpart H--Nonrefundable Credit for Holders of Qualified Technology Bonds

`Sec. 54. Credit to holders of qualified technology bonds.

`SEC. 54. CREDIT TO HOLDERS OF QUALIFIED TECHNOLOGY BONDS.

`(a) Allowance of Credit- In the case of a taxpayer who holds a qualified technology bond on a credit allowance date of such bond which occurs during the taxable year, there shall be allowed as a credit against the tax imposed by this chapter for such taxable year the amount determined under subsection (b).

`(b) Amount of Credit-

`(1) IN GENERAL- The amount of the credit determined under this subsection with respect to any qualified technology bond is the amount equal to the product of--

`(A) the credit rate determined by the Secretary under paragraph (2) for the month in which such bond was issued, multiplied by

`(B) the face amount of the bond held by the taxpayer on the credit allowance date.

`(2) DETERMINATION- During each calendar month, the Secretary shall determine a credit rate which shall apply to bonds issued during the following calendar month. The credit rate for any month is the percentage which the Secretary estimates will permit the issuance of qualified technology bonds without discount and without interest cost to the issuer.

`(c) Limitation Based on Amount of Tax- The credit allowed under subsection (a) for any taxable year shall not exceed the excess of--

`(1) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over

`(2) the sum of the credits allowable under this part (other than this subpart and subpart C).

`(d) Qualified Technology Bond- For purposes of this part--

`(1) IN GENERAL- The term `qualified technology bond' means any bond issued as part of an issue if--

`(A) 95 percent of more of the proceeds of such issue are to be used for any (or a series of) qualified projects,

`(B) the bond is issued by a State or local government within the jurisdiction of which such project is located,

`(C) the issuer designates such bond for purposes of this section,

`(D) the issuer certifies that it has obtained the written approval of the Secretary of Commerce for such project, and

`(E) the term of each bond which is part of such issue does not exceed 15 years.

`(2) QUALIFIED PROJECT-

`(A) IN GENERAL- The term `qualified project' means a project--

`(i) to expand broadband telecommunications services in an area within the jurisdiction of a State or local government,

`(ii) which is nominated by such State or local government for a designation as a qualified project, and

`(iii) which the Secretary of Commerce, after consultation with the Secretary of Housing and Urban Development, designates as a qualified project or a series of qualified projects.

`(B) DESIGNATION PREFERENCES- With respect to designations under this section, preferences shall be given to--

`(i) nominations of projects involving underserved urban or rural areas lacking access to high-speed Internet connections, and

`(ii) nominations reflecting partnerships and comprehensive planning between State and local governments and the private sector.

`(e) Limitation on Amount of Bonds Designated-

`(1) NATIONAL LIMITATION- There is a national technology bond limitation for each calendar year. Such limitation is $100,000,000 for 2005, 2006, 2007, 2008, and 2009, and, except as provided in paragraph (4), zero thereafter.

`(2) ALLOCATION OF LIMITATION- The national technology bond limitation for a calendar year shall be allocated by the Secretary among the qualified projects designated for such year.

`(3) DESIGNATION SUBJECT TO LIMITATION AMOUNT- The maximum aggregate face amount of bonds issued during any calendar year which may be designated under subsection (d)(1) with respect to any qualified project shall not exceed the limitation amount allocated to such project under paragraph (2) for such calendar year.

`(4) CARRYOVER OF UNUSED LIMITATION- If for any calendar year--

`(A) the national technology limitation amount, exceeds

`(B) the amount of bonds issued during such year which are designated under subsection (d)(1) with respect to qualified projects,

the national technology limitation amount for the following calendar year shall be increased by the amount of such excess.

`(f) Other Definitions- For purposes of this subpart--

`(1) BOND- The term `bond' includes any obligation.

`(2) CREDIT ALLOWANCE DATE- The term `credit allowance date' means, with respect to any issue, the last day of the 1-year period beginning on the date of issuance of such issue and the last day of each successive 1-year period thereafter.

`(3) STATE- The term `State' means the several States and the District of Columbia.

`(g) Credit Included in Gross Income- Gross income includes the amount of the credit allowed to the taxpayer under this section (determined without regard to subsection (c)) and the amount so included shall be treated as interest income.

`(h) Other Special Rules-

`(1) PARTNERSHIP; S CORPORATION; AND OTHER PASS-THRU ENTITIES- Under regulations prescribed by the Secretary, in the case of a partnership, trust, S corporation, or other pass-thru entity, rules similar to the rules of section 41(g) shall apply with respect to the credit allowable under subsection (a).

`(2) BONDS HELD BY REGULATED INVESTMENT COMPANIES- If any qualified technology bond is held by a regulated investment company, the credit determined under subsection (a) shall be allowed to shareholders of such company under procedures prescribed by the Secretary.

`(3) TREATMENT FOR ESTIMATED TAX PURPOSES- Solely for purposes of sections 6654 and 6655, the credit allowed by this section to a taxpayer by reason of holding a qualified technology bond on a credit allowance date shall be treated as if it were a payment of estimated tax made by the taxpayer on such date.

`(4) REPORTING- Issuers of qualified technology bonds shall submit reports similar to the reports required under section 149(e).'.

(b) Reporting- Subsection (d) of section 6049 of the Internal Revenue Code of 1986 (relating to returns regarding payments of interest) is amended by adding at the end the following new paragraph:

`(8) REPORTING OF CREDIT ON QUALIFIED TECHNOLOGY BONDS-

`(A) IN GENERAL- For purposes of subsection (a), the term `interest' includes amounts includible in gross income under section 54(g) and such amounts shall be treated as paid on the credit allowance date (as defined in section 54(f)(2)).

`(B) REPORTING TO CORPORATIONS, ETC- Except as otherwise provided in regulations, in the case of any interest described in subparagraph (A) of this paragraph, subsection (b)(4) of this section shall be applied without regard to subparagraphs (A), (H), (I), (J), (K), and (L)(i).

`(C) REGULATORY AUTHORITY- The Secretary may prescribe such regulations as are necessary or appropriate to carry out the purposes of this paragraph, including regulations which require more frequent or more detailed reporting.'.

(c) Clerical Amendments-

(1) The table of subparts for part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:

`SUBPART H. NONREFUNDABLE CREDIT FOR HOLDERS OF QUALIFIED TECHNOLOGY BONDS'.

(2) Section 6401(b)(1) of such Code is amended by striking `and G' and inserting `G, and H'.

(d) Effective Date- The amendments made by this section shall apply to obligations issued after December 31, 2004.

SEC. 5. GRANTS FOR TECHNOLOGY EXTENSION.

(a) Purpose- It is the purpose of this section--

(1) to encourage meaningful use of the most advanced available technologies by small businesses and medium-sized businesses to the maximum extent possible to improve the productivity of those businesses and thereby to promote economic growth; and

(2) to promote regional partnerships between educational institutions and businesses to develop such technologies and products in the surrounding areas.

(b) Grant Program- To achieve the purpose of this section, the Secretary of Commerce (in this section, referred to as the `Secretary') shall carry out a program to provide, through grants, financial assistance for the establishment and support of regional centers for the commercial use of advanced technologies by small businesses and medium-sized businesses.

(c) Eligibility- An entity is eligible to receive a grant as a regional center under this section if the entity--

(1) is affiliated with a United States-based institution or organization that is operated on a not-for-profit basis, or any combination of two or more of such institutions or organizations;

(2) offers to enter into an agreement with the Secretary to function as a regional center for the commercial use of advanced technologies for the purpose of this section within a region determined appropriate by the Secretary; and

(3) demonstrates that it has the capabilities necessary to achieve the purpose of this section through its operations as a center within that region.

(d) Selection of Applicants-

(1) COMPETITIVE PROCESS- The Secretary shall use a competitive process for the awarding of grants under this section and, under that process, select recipients of the grants on the basis of merit, with priority given to underserved areas.

(2) APPLICATIONS FOR GRANTS- The Secretary shall prescribe the form and content of applications required for grants under this section.

(e) Specific Activities of Regional Centers- A regional center may use the proceeds of a grant under this section for any activity that carries out the purpose of this section, including such activities as the following:

(1) Assist small businesses and medium-sized businesses to address their most critical needs for the application of the latest technology, improvement of infrastructure, and use of best business practices.

(2) In conjunction with institutions of higher education and laboratories located in the region, transfer technologies to small businesses and medium-sized businesses located in such region to create jobs and increase production in surrounding areas.

(f) Additional Administrative Authorities-

(1) COST-SHARING- The Secretary may require the recipient of a grant to defray, out of funds available from sources other than the Federal Government, a specific level of the operating expenses of the regional center for which the grant is made.

(2) ADDITIONAL TERMS AND CONDITIONS- The Secretary, in awarding a grant, may impose any other terms and conditions for the use of the proceeds of the grant that the Secretary determines appropriate for carrying out the purposes of this section and to protect the interests of the United States.

(g) Definitions of Small Business and Medium-Sized Business-

(1) SECRETARY TO PRESCRIBE- The Secretary shall prescribe the definitions of the terms `small business' and `medium-sized business' for the purpose of this section.

(2) SMALL BUSINESS STANDARDS- In defining the term `small business', the Secretary shall apply the standards applicable for the definition of the term `small-business concern' under section 3 of the Small Business Act (15 U.S.C. 632).

(h) Regulations- The Secretary shall prescribe regulations for the grant program administered under this section.

(i) Authorization of Appropriations- There is authorized to be appropriated for the Department of Commerce for carrying out this section $125,000,000 for fiscal year 2005, and such sums as are necessary for each fiscal year thereafter.

END