003.19.20 Ark. Code R. 017
The Director of the Arkansas Economic Development Commission ("Director") issues this Rule to respond to urgent, telecommunication needs in this State for communities impacted to the COVID-19 pandemic. On or about February 21, 2020, the Director issued the Arkansas Rural Connect Broadband Rule (hereafter, the "Broadband Rule") to implement the Arkansas Rural Connect Program (hereafter, "Arkansas Rural Connect," or "Arkansas Rural Connect Program," or "ARC"). This Broadband Rule was promulgated prior to the issuance of State and Federal public health guidelines responding to the COVID-19 pandemic.
The COVID-19 pandemic has severely impacted the citizens of this State. New public health guidelines encourage, and, in some cases require, citizens to practice "social distancing," staying at least six (6) feet away from other people as much as possible. In light of these restrictions, COVID-19 has brought about an urgent and immediate need for broadband internet access. Normal day to day activities can no longer be done safely. Broadband enables workers to telework, patients to use telemedicine services, K-12 and college students and unemployed workers in need of reskilling to participate in distance education, religious people to participate in online worship services, and all citizens to shop online, interact with friends through Skype and other video chat tools, and keep up with the latest news and public health guidelines.
While the COVID-19 pandemic has negatively impacted the state's economy, the federal government has instituted a major relief effort under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act provides substantial allocations of funding to states for coronavirus response, broadly defined. Guidance provided by the US Treasury describes allowable uses of CARES Act funding. In general, CARES Act money cannot be used for regular budget support, and must be used for coronavirus response, but this includes both public health related measures and economic relief to address the "second-order effects" of the crisis. All CARES Act funds must be spent by December 31, 2021.
The Arkansas Rural Connect program promotes broadband deployment in rural areas of Arkansas that lacks meaningful and efficient broadband services. The ARC program and its purposes align with allowable uses of CARES Act funds. However, Arkansas Rural Connect is designed as a medium- to longer-term investment program, requiring deployment only by late in 2022, which lies well outside the CARES Act spending window.
Due to the urgent need for broadband for distance learning, telemedicine and the need for social distancing, necessitated by the COVID-19 pandemic, there is a need to issue the ARC Coronavirus Rule to disperse funds immediately and to accelerate deployment of broadband to address these needs to the extent possible.
This Rule is authorized to be issued by the Director of the Arkansas Economic Development Commission ("AEDC") under Ark. Code Ann. § 15-4-209(b) (5) which provides that AEDC may promulgate rules necessary to implement the programs and services offered by AEDC. On or about August 9, 2019, Governor Asa Hutchinson authorized a transfer of funding for the implementation and administration of the ARC Program to AEDC. Pursuant to Ark. Code Ann. § 15-4-209(a)(l), AEDC is authorized to administer grants to assist with the economic development in the State. The ARC Program is therefore authorized to administer the ARC grant and authorized to issue administrative rules under Ark. Code Ann. § 15-4-209(b) (5) as a service offered by AEDC. This rule is also authorized to be issued under Ark. Code Ann. § 25-15-204(c). The Director finds that imminent peril to the public health, safety, or welfare or compliance with a federal law or regulation requires adoption of a rule upon less than thirty (30) days' notice.
The Director finds that a public emergency exists for promulgation of this Rule as an Emergency Rule. Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act funds have to be expended under this Act by the State by December 31, 2021 in order to be used by the State. Deploying broadband structures is a time consuming process, and the State needs as much time as possible for funding the various projects before the end of the year deadline.
Due to COVID-19, approved projects will immediately receive disbursement of funds up to the maximum amount of funding allowable under the ARC program. Depending on the project, the Broadband Manager, with the approval of the Secretary of Commerce, may increase the maximum amount of funding per project under the ARC program. This funding mechanism contrasts with the usual fiscal rules of the Arkansas Rural Connect program and helps to ensure that projects will not be delayed by cash flow constraints on the part of awardees. In other respects, including submittal of receipts and payment of penalties for non-performance or early termination of service, awardee ISPs shall be subject to the same obligations as other ARC participants. The Broadband Manager makes grant award recommendations to the Secretary of Commerce or his designee. The Secretary, or his designee, has final authority on who is awarded a grant. Funds may be distributed before August 15, 2020, when the original application window closes, upon project evaluation and approval.
Applicants which accept funding under this Rule shall follow all the requirements under the ARC rules. This includes these rules for monitoring deployment and use of funds until the conclusion of the project. Applicants receiving funds under this rule are subject to the right of the Broadband Office or its designee to conduct quarterly audits. The Broadband Manager, or his designee, with the permission of the Secretary of Commerce, may make random audits in addition to quarterly audits. This right to conduct audits does not eliminate the responsibility of grant awardees to submit timely receipts and documentation of quarterly expenditures. Grant recipients, upon receipt of these funds, shall follow these monitoring rules until the conclusion of deployment. Deployment will not end until an evaluation of the project is made by the Broadband Office or its designee.
The Broadband Office or its designee will be assigned to monitoring of implementation of broadband infrastructure construction awarded to approved applicants.
The Broadband Office or its designee will strategically review guidelines for the ARC broadband implementation projects within each region and awarded ISP network and shall report to the Broadband Office/Arkansas Department of Commerce should areas fall into noncompliance. This manner of compliance verification shall be achieved by, but not limited to, the following 3 stages:
Initial Stage:
Mid Stage:
Final Project Compliance:
The Broadband Office or its designee, upon occurrences of non-compliance, will report its findings to the Arkansas Department of Economic Development, who will require awardees to take appropriate remedial measures to return the project to compliance.
Funds must be used in the most efficient manner during deployment efforts. Any discovery of misappropriated or misapplied funds must be reimbursed by the awardees and applied appropriately to the project, as intended. Supporting documents shall be required from awardees demonstrating this was done. Nothing in this rule shall be construed as waiving the State's sovereign immunity.
Each project deployment shall be completed by the date specified by the Broadband Office, but in any event, each project funded with CARES Act funds shall be completed no later than December 31, 2021.
This Rule is effective upon approval under § 10-3-309 and shall be in effect for 120 days unless later replaced by a permanent rule.
003.19.20 Ark. Code R. 017