OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
122.40 17
H.B. 2 Final Analysis
134th General Assembly
Click here for H.B. 2’s Fiscal Note
Version: As Passed by the General Assembly
Primary Sponsors: Reps. Carfagna and Stewart
Effective date: Emergency: May 17, 2021
Effective Date:
Kathleen A. Luikart, Research Analyst
SUMMARY
Ohio Residential Broadband Expansion Grant Program
 Creates the Ohio Residential Broadband Expansion Grant Program (grant program)
within the Department of Development (DEV).
 Requires DEV to receive and review applications for program grants and send completed
applications to the Broadband Expansion Program Authority for review and award of
program grant money for eligible projects under the grant program.
 Defines grant program terms, such as:
 “Eligible project” – a project to provide tier two broadband service access to
residences in an unserved area or tier one area of a municipal corporation or
township that is eligible for funding under the act;
 “Tier one service” and “tier two service” – retail wireline or wireless broadband
service delivering internet access at speeds of (1) at least 10 but less than 25
megabits downstream and 1 but less than 3 megabits upstream for tier one service
and (2) at least 25 megabits per second downstream and 3 megabits per second
upstream for tier two service;
 “Tier one area” – an area that has access to tier one broadband service but not tier
two broadband service, including an area where tier one service is being constructed
and is scheduled to be completed within a two-year period.
 “Unserved area” – an area without access to tier one broadband service or tier two
broadband service.
 Requires a broadband provider to construct last mile broadband infrastructure after
receiving a program grant award.
August 20, 2021
Office of Research and Drafting LSC Legislative Budget Office
Broadband Expansion Program Authority
 Creates the Authority within DEV and exempts the Authority from being an agency for
purposes of Ohio’s Agency Sunset Review Law.
 Names as Authority members the Director of Development (DEV Director) and the
Director of InnovateOhio or their designees and three appointed members, to serve
four-year terms with reappointment permitted, with the Speaker of the House, the
Senate President, and the Governor each making one appointment.
 Specifies that appointed Authority members must have broadband infrastructure and
technology expertise, but may not be affiliated with or employed by the broadband
industry or be in a position to benefit from a program grant.
 Requires appointed members to receive compensation in the form of reimbursement of
necessary and actual expenses and a monthly stipend, except that an appointed
member who also serves as a state administrative department head will not receive the
stipend.
 Calculates the monthly stipend such that it qualifies each appointed member for one
year of service credit with the Ohio Public Employees Retirement System (OPERS) for
each year of the appointed member’s four-year term, but specifies that the service
credit may not be considered for determining health care coverage if offered by OPERS.
 Includes requirements for the appointment of the chairperson, vice-chairperson and
designees, filling vacancies, conducting meetings, including conducting meetings
electronically, and voting requirements.
 Requires the Authority to conduct hearings and to do several tasks, including for
example, to monitor the grant program by tracking details for annual applications and
annual program grants and to continually examine, and propose updates to, any
broadband plan enacted by the General Assembly or issued in an Executive Order of the
Governor.
 Requires the Authority to make an annual report by December 1 to the Governor and
General Assembly regarding its hearings, monitoring, examination, review, and various
other duties regarding broadband service in Ohio and to make the report available on
DEV’s website.
Application process for program grants
 Permits a broadband provider to apply to DEV for a program grant for an eligible project
by submitting it in person or by certified mail or email, or uploaded to a designated DEV
website for applications.
 Requires the application form to include a statement informing the applicant that failure
to comply with the grant program or to meet required tier two service proposed in the
application may require the refund of all or a portion of the program grant awarded for
the project.
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 Requires applications to include several items including, for example, the location and a
description of the project, a letter of intent that a broadband provider will provide
access to tier two service, the amount of the broadband funding gap and the state funds
amounts requested, and the broadband speeds planned for the project.
 Makes an application ineligible for a program grant if:
 It proposes to provide tier two service where already available; or
 In the proposed area, construction of tier two service is in progress and (1) is being
constructed without program funding by the broadband provider that submitted the
application or (2) is scheduled to be completed by another provider not later than
two years after the date of a challenge to the application.
 Requires DEV to accept applications for program grants each fiscal year and to fund
program grants until funds for the fiscal year are no longer available.
 Requires applications to be accepted during not more than two 60- to 90-day
submission periods each fiscal year as specified by the Authority.
 After receiving notice from DEV that a broadband provider’s application is incomplete,
permits the provider to complete and refile the application before the end of the
submission period or not more than 14 days after the period ends, if DEV grants an
extension for good cause shown.
Proprietary and trade secret information
 Requires DEV to review information and documents submitted (in an application or
project challenge) by a broadband provider to determine whether it is proprietary or a
trade secret and to keep the information and documents confidential unless DEV finds
that it is not proprietary or a trade secret and therefore is not confidential.
Financial assurance condition for receiving grants
 Permits the Authority to require a broadband provider that is awarded a program grant
to provide a performance bond, letter of credit, or other financial assurance acceptable
to the Authority before construction begins.
DEV application website
 Requires certain grant program and application information, except for denied
applications, to be published on DEV’s website, including, for example, the list of
residential addresses included with completed program applications, all other
information included with applications that is not confidential, and status updates of
applications regarding Authority decisions regarding project challenges.
County-requested solicitations for broadband providers
 Permits a board of county commissioners, by resolution, to request DEV to solicit
applications from broadband providers for program grants for eligible projects in the
municipal corporations and townships of the county.
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 Requires a solicitation request to identify, to the extent possible, the residential
addresses in unserved or tier one areas of the county, provide a point of contact for the
county, municipal corporations, and townships where the addresses are located, and
include any helpful relevant information, documents, or materials for the application.
 Requires DEV to solicit applications for program grants if a county makes a request and
not later than seven days after receiving a request, to make it and the accompanying
information available for review on DEV’s website for up to two years.
 Specifies that an application for a program grant made in response to a county request
must fully comply with all grant program requirements and that nothing in the county
request provides relief from compliance with any grant program requirement.
 Specifies that DEV is not responsible for a broadband provider’s failure to respond to a
county-requested solicitation made by DEV or to submit an application.
Project application challenge process
 After a completed application is published on the DEV website, permits a challenging
provider to challenge, in writing, all or part of a completed application for a program
grant not later than 65 days after the close of the submission period or 14-day extension
period if one is granted.
 Defines “challenging provider” as a (1) broadband provider that provides tier two
service within or directly adjacent to an eligible project or (2) municipal electric utility
that provides tier two service to an area within the eligible project that is within the
geographic area served by the utility.
 Requires the challenging provider to provide, by certified mail, a written copy of the
challenge to the broadband provider that submitted the application (applicant provider)
and the Authority.
 Specifies that for a challenge to succeed, a challenging provider must provide sufficient
evidence to DEV demonstrating that all or part of a project under the application is
ineligible for a grant by:
 Disputing that the eligible project contains unserved or tier one areas; and
 Attesting to the challenging provider’s existing or planned offering of tier two service
to all or part of the eligible project.
 Permits a challenging provider to demonstrate that all or part of a project under an
application is ineligible for a program grant, by presenting shapefile data, residential
addresses, maps, or similar geographic details, but not census block or census tract level
data.
 Permits the Authority to suspend all or part of a challenged application or reject the
challenge and approve the application, and requires the Authority to notify the
applicant provider and the challenging provider of its decisions by providing a copy of
the decision by certified mail or email.
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 Requires the Authority to allow an applicant provider 14 days (unless another 14-day
extension is granted for good cause shown) to revise and resubmit its application, if the
Authority upholds all or part of a challenge and to provide a copy of the revised
application to the Authority and challenging provider by certified mail or email or by
uploading it to DEV’s website.
 Specifies that an application is considered to be withdrawn if an applicant provider fails
to respond to an Authority notification or to revise an application to the Authority’s
satisfaction.
 Requires the Authority to review a revised application and decide whether to accept the
application or uphold the challenge within 14 days of receiving the revised application.
Scoring system for application review
 Requires DEV, in consultation with the Authority, to establish a weighted scorning
system to evaluate and select applications for program grants and make it available on
DEV’s website at least 30 days prior to the beginning of the application submission
period.
 Specifies that the scoring system must prioritize applications according to certain factors
listed in order from highest to lowest and, as an example, lists the highest two factors as
(1) eligible projects for unserved areas, rather than tier one areas and (2) eligible
projects located in distressed areas.
 Allows the Authority to consider, after the weighted factors, any other factors it
determines reasonable, appropriate, and consistent with facilitating the economic
deployment of tier two service to unserved or tier one areas.
 Prohibits the Authority, when awarding program grants, from considering:
 Proposed project conditions that require open access networks or that establish a
specific rate, service, or other obligation not specified in the grant program; or
 Factors that would constrain the broadband provider from offering or providing tier
two service as it is offered by other broadband providers in Ohio without grant
program funding.
Program grant awards
 Requires the Authority to award program grants after reviewing applications sent by
DEV, considering all regulatory obligations under the law, and basing the awards on the
scoring system and to notify the broadband providers that submitted applications upon
making the awards.
Funding for program grants
 Creates the Ohio Residential Broadband Expansion Grant Program Fund in the state
treasury to be used by DEV exclusively for program grants awarded by the Authority.
 Requires the Authority to award program grants using money from the fund and other
appropriations made by the General Assembly.
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 Requires the transfer of $20 million from the Facilities Establishment Fund in DEV to the
Ohio Residential Broadband Expansion Grant Program Fund on May 17, 2021, or as soon
as possible thereafter, and appropriates the transferred amount for FY 2021.
Funding from video service providers (VSPs)
 Permits a broadband provider to enter into an arrangement to designate video service
provider (VSP) fees remitted by the provider for contribution towards an eligible
project’s broadband funding gap if:
 The provider is a VSP that collects and remits VSP fees to one or more legislative
authorities in which an eligible project is located; and
 The arrangement is entered into by mutual consent with the legislative authorities.
 Specifies that, under the alternate payment term arrangements made with a VSP, unless
otherwise negotiated, the participating legislative authorities in which the eligible
project is located must assume all financial responsibility for all of the eligible project
costs incurred by the broadband provider prior to completion of the project or award of
a program grant.
Funding from special assessments
 Permits a municipal corporation, county, or township to fund a portion of the
broadband funding gap for an eligible project through a property tax assessment made
by the municipal corporation, county, or township and permits the applicable taxing
district to issue securities in anticipation of the levy or collection of the assessment.
Distribution of grant funds
 Requires up to 30% of the program grant to be disbursed before project construction
begins, up to 60% of the program grant to be disbursed periodically over the course of
the project construction according to DEV rules, and the remaining portion to be
disbursed not later than 60 days after notification that construction is complete.
Speed verification
 Permits DEV, through an independent third party, to conduct speed verification tests of
an eligible project that receives a program grant.
 Requires