CATEGORY TWO BUDGETS

BUDGET BASICS

Applicants receiving Category Two funding support are subject to a fixed five year pre-discount budget for Category Two products and services.

The pre-discount cost of the products and services approved for E-rate discounts is charged against the Category Two budget.

The following only applies to Category Two. Category One services are not limited in cost or subject to a budget as long as they are cost-effective.

HOW BUDGETS CAN BE SPENT

Category Two budgets run on a fixed five-year cycle.

An applicant’s entire budget can be spent in one funding year or spread across any or all of the five funding years.

If the funding request in the first year is less than the total five-year budget amount, the applicant can apply in the subsequent years for the remainder of their budget.

Funding commitments must be spent in the funding year in which they are awarded.

Products and services ordered in excess of an entity’s Category Two budget will not receive E-rate discounts.

FY2021 - FY2025

Budget Rules:

  • All applicant budgets will be rest beginning in FY2021
  • All applicants will begin a new fixed five-year budget cycle and may submit applications in any funding year during the five-year cycle
  • The five-year cycle is the same for all applicants regardless of the first year in the cycle that they receive funding
  • Budget calculations will be system-wide rather than at the branch level and the library system will have the flexibility to allocate Category 2 funding among its branches as necessary
  • All libraries will have $4.50/sq. ft. as the budget multiplier, including urban libraries that previously qualified for more funding
  • Budget floor will be $25,000 pre-discount for libraries below 5,555 square feet

FY2026 - FY2030

This period represents a new fixed five-year budget term. The same program rules indicated for FY2021 – FY2025 term apply, and any unused Category 2 budget from that term will not rollover to this term. A one-time adjustment for inflation to both the funding floor and the budget multiplier will be announced at least 60 days prior to the five-year cycle.

HOW TO RETURN CATEGORY 2 COMMITMENTS

USAC assumes that, if a commitment has been made on a Category 2 request, that the pre-discount amount of that request should be charged against the Category 2 budget.

Applicants can file an FCC Form 500 to return unused Category 2 funds. Unless funding is returned via the FCC Form 500, USAC assumes that the applicant is using the entire Category 2 funding that has been committed (not the amount disbursed via BEAR or SPI), and the full pre-discount amount of the committed funding request will remain charged against the entity’s budget.