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Getting to know the Broadband Infrastructure Fund

Mitrah Avini, Policy Analyst

The session’s most important legislation addressing broadband internet expansion to underserved areas of the state has passed the Legislature and is awaiting the governor’s signature.

Here’s what you need to know about House Bill 9 and House Joint Resolution 125.

HB 9 establishes the constitutionally dedicated Broadband Infrastructure Fund (BIF). An accompanying constitutional amendment authorizing the fund (HJR 125) goes before the voters this November. Should those pieces of legislation receive the necessary approval, $1.5 billion will be appropriated in fiscal year 2024 to the Comptroller for implementation of the legislation.

The BIF could be used for the following purposes:

  • Administration of grants through the Broadband Development Office, updating the Texas Broadband Development Map, or other purposes described by Chapter 490I of Texas statute.
  • Funding 9-1-1 and Next Generation 9-1-1 services under Chapter 771 of the Health and Safety Code. The bill authorizes a one-time transfer of $155.2 million from the BIF to the next generation 9-1-1 services fund.
  • Supporting the Texas Broadband Pole Replacement Program. The bill authorizes a one-time transfer from the BIF to the broadband pole replacement program.
  • Expanding broadband access in economically distressed communities.
  • Providing matching funds for the federal Broadband Equity, Access, and Deployment (BEAD) Program.

Drawing down federal matching dollars

The bill adds language ensuring the Comptroller takes a grant applicant’s contribution toward matching funds for the BEAD program into consideration and may only provide state matching funds where such a contribution is necessary “for the economic feasibility of a proposed project.”

The BIF would exist as a constitutionally dedicated fund outside the General Revenue fund, which would exempt it from constitutional spending limits. Senate Finance Chair Joan Huffman said the fund “will represent a sizable investment by the state, but it will also and very importantly allow the state to pull down billions of additional dollars through the federal BEAD program.”

The BEAD program was authorized by the 2021 Infrastructure Investment and Jobs Act (IIJA) and was designed to help expand high-speed internet access across the country with a focus on unserved and underserved areas of the country. It provides matching funds to states’ efforts on a 4:1 basis.

A key to gain access to the new economy

Virtual education, online job opportunities, and remote healthcare appointments, to name a few, are a regular feature of the 21st century digital economy but are outside the reach of the millions of Texas households that lack access to broadband internet service.

State funding to expand broadband infrastructure and close the digital divide is a welcome investment in the potential of the Texas worker. In particular, funding that allows Texas to leverage the maximum amount in federal BEAD dollars is ideal.

Texas could receive up to $4 billion in federal matching dollars on a 25% match from the state or subgrantees such as internet service providers. The federal government will release final funding amounts June 30.

In a February poll, Texas 2036 found that 88% of Texas voters support maximizing the state’s drawdown of federal broadband funds, suggesting that voters approve of actions by the state toward that goal.

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