[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3964 Introduced in House (IH)]

<DOC>






118th CONGRESS
  1st Session
                                H. R. 3964

 To increase access to broadband telecommunications services in rural 
  areas, to increase minimum broadband speeds in rural areas, and to 
provide grants, loans, and loan guarantees to finance the costs of the 
construction, improvement, and acquisition of facilities and equipment 
       for broadband service in rural areas, and other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              June 9, 2023

Mr. Feenstra (for himself, Mrs. Miller-Meeks, Mr. Bost, and Mr. Bowman) 
 introduced the following bill; which was referred to the Committee on 
 Agriculture, and in addition to the Committee on Energy and Commerce, 
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

_______________________________________________________________________

                                 A BILL


 
 To increase access to broadband telecommunications services in rural 
  areas, to increase minimum broadband speeds in rural areas, and to 
provide grants, loans, and loan guarantees to finance the costs of the 
construction, improvement, and acquisition of facilities and equipment 
       for broadband service in rural areas, and other purposes.

    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 Broadband Modernization Act''.

SEC. 2. RURAL BROADBAND MODERNIZATION.

    (a) In General.--Section 601 of the Rural Electrification Act of 
1936 (7 U.S.C. 950bb) is amended to read as follows:

``SEC. 601. ACCESS TO BROADBAND TELECOMMUNICATIONS SERVICES IN RURAL 
              AREAS.

    ``(a) Purpose.--The purpose of this section is to provide grants, 
provide loans, and provide loan guarantees to provide funds for the 
costs of the construction, improvement, and acquisition of facilities 
and equipment for broadband service in rural areas.
    ``(b) Definitions.--In this section:
            ``(1) Broadband service.--The term `broadband service' 
        means any technology identified by the Secretary as having the 
        capacity to transmit data to enable a subscriber to the service 
        to originate and receive high-quality voice, data, graphics, 
        and video.
            ``(2) Rural area.--
                    ``(A) In general.--The term `rural area' means any 
                area other than--
                            ``(i) an area described in clause (i) or 
                        (ii) of section 343(a)(13)(A) of the 
                        Consolidated Farm and Rural Development Act (7 
                        U.S.C. 1991(a)(13)(A)); and
                            ``(ii) in the case of a grant or direct 
                        loan, a city, town, or incorporated area that 
                        has a population of greater than 20,000 
                        inhabitants.
                    ``(B) Urban area growth.--The Secretary may, by 
                regulation only, consider an area described in section 
                343(a)(13)(F)(i)(I) of such Act to not be a rural area 
                for purposes of this section.
                    ``(C) Exclusion of certain populations.--The term 
                does not include any population described in 
                subparagraph (H) or (I) of section 343(a)(13) of such 
                Act (7 U.S.C. 1991(a)(13)).
    ``(c) Grants, Loans, and Loan Guarantees.--
            ``(1) In general.--The Secretary shall make grants, shall 
        make loans, and shall guarantee loans to eligible entities 
        described in subsection (d) to provide funds for the 
        construction, improvement, or acquisition of facilities and 
        equipment for the provision of broadband service in rural areas 
        that, at a minimum, delivers 100 Mbps (or such greater rate as 
        the Secretary may establish) symmetrical throughput for each 
        rural household in the proposed service area.
            ``(2) Applications.--The Secretary shall establish an 
        application process for grants under this section that--
                    ``(A) permits a single application for a grant and 
                a loan under title I, II, or this title that is 
                associated with the grant;
                    ``(B) provides a single decision to award such a 
                grant and loan; and
                    ``(C) ensures timely consideration of applications 
                by approving or denying applications within 30 days 
                after submission.
            ``(3) Priority.--
                    ``(A) In general.--In making grants, making loans, 
                and guaranteeing loans under paragraph (1), the 
                Secretary shall--
                            ``(i) give the highest priority to 
                        applications for projects to provide broadband 
                        service to unserved rural communities that do 
                        not have any residential broadband service of 
                        at least--
                                    ``(I) a 25-Mbps downstream 
                                transmission capacity; and
                                    ``(II) a 3-Mbps upstream 
                                transmission capacity;
                            ``(ii) give priority to applications for 
                        projects to provide the maximum level of 
                        broadband service to the greatest proportion of 
                        rural households in the proposed service area 
                        identified in the application;
                            ``(iii) give priority to eligible entities 
                        that have provided broadband service or utility 
                        service in rural areas for at least 5 years in 
                        the State for which an award is sought;
                            ``(iv) provide equal consideration to all 
                        eligible entities, based on organizational 
                        form; and
                            ``(v) with respect to 2 or more 
                        applications that are given the same priority 
                        under clause (i), give priority to an 
                        application that requests less grant funding 
                        than loan funding.
                    ``(B) Other.--After giving priority to the 
                applications described in clauses (i) through (iii) of 
                subparagraph (A), the Secretary shall give priority to 
                applications--
                            ``(i) for projects to provide broadband 
                        service to rural communities--
                                    ``(I) with a population of less 
                                than 10,000 permanent residents;
                                    ``(II) that are experiencing 
                                outmigration and have adopted a 
                                strategic community investment plan 
                                under section 379H(d) of the 
                                Consoldiated Farm and Rural Development 
                                Act that includes considerations for 
                                improving and expanding broadband 
                                service;
                                    ``(III) with a high percentage of 
                                low income families or persons (as 
                                defined in section 501(b) of the 
                                Housing Act of 1949 (42 U.S.C. 
                                1471(b)));
                                    ``(IV) that are isolated from other 
                                significant population centers; or
                                    ``(V) that provide rapid and 
                                expanded deployment of fixed and mobile 
                                broadband on cropland and ranchland 
                                within a service territory for use in 
                                various applications of precision 
                                agriculture; and
                            ``(ii) that were developed with the 
                        participation of, and will receive a 
                        substantial portion of the funding for the 
                        project from, 2 or more stakeholders, 
                        including--
                                    ``(I) State, local, and tribal 
                                governments;
                                    ``(II) nonprofit institutions; that 
                                provide community development or 
                                assistance services;
                                    ``(III) community anchor 
                                institutions, such as--
                                            ``(aa) public libraries;
                                            ``(bb) elementary schools 
                                        and secondary schools (as 
                                        defined in section 8101 of the 
                                        Elementary and Secondary 
                                        Education Act of 1965 (20 
                                        U.S.C. 7801));
                                            ``(cc) institutions of 
                                        higher education; and
                                            ``(dd) health care 
                                        facilities;
                                    ``(IV) private entities; and
                                    ``(V) philanthropic organizations.
            ``(4) Grant amounts.--
                    ``(A) Maximum.--Except as provided in subparagraph 
                (B), the amount of any grant made under this section 
                shall not exceed 75 percent of the total project cost.
                    ``(B) Secretarial authority to adjust.--
                            ``(i) In general.--The Secretary may make 
                        grants of 100 percent of the development costs 
                        of the project for which the grant is provided 
                        to an eligible entity if the Secretary 
                        determines that the project serves an area of 
                        rural households where the population density 
                        is fewer than 7 households per square mile.
                            ``(ii) Definition of development costs.--In 
                        this paragraph, the term `development costs' 
                        means costs of--
                                    ``(I) construction, including labor 
                                and materials;
                                    ``(II) project applications; and
                                    ``(III) other development 
                                activities, as determined by the 
                                Secretary.
                            ``(iii) Density determinations.--In 
                        determining population density under this 
                        section, the Secretary shall prescribe a 
                        calculation method which--
                                    ``(I) utilizes publicly available 
                                data; and
                                    ``(II) includes only those areas in 
                                which the applicant is able to meet the 
                                service requirements under this 
                                section, as determined by the 
                                Secretary.
            ``(5) Fees.--In the case of loan guarantees issued or 
        modified under this section, the Secretary shall charge and 
        collect from the lender fees in such amounts as to reduce the 
        costs of subsidies for guaranteed loans, except that the amount 
        of the fees shall be determined so as to not act as a bar to 
        participation in the programs and to not be inconsistent with 
        current practices in the marketplace.
    ``(d) Eligibility.--
            ``(1) Eligible entities.--
                    ``(A) In general.--To be eligible to obtain a 
                grant, loan, or loan guarantee under this section, an 
                entity shall--
                            ``(i) demonstrate the ability to furnish or 
                        improve service in order to meet the broadband 
                        buildout requirements established under 
                        subsection (e)(3) in all or part of an unserved 
                        rural area;
                            ``(ii) submit to the Secretary an 
                        application at such time, in such manner, and 
                        containing such information as the Secretary 
                        may require; and
                            ``(iii) agree to complete buildout of the 
                        broadband infrastructure described in the 
                        application by not later than 5 years after the 
                        initial date on which the application is 
                        approved and the initial funds pursuant to that 
                        award are received by the applicant.
                    ``(B) Limitation.--The Secretary may not provide to 
                an eligible entity that provides telecommunications or 
                broadband service to at least 20 percent of the 
                households in the United States, funds under this 
                section for a fiscal year in excess of 15 percent of 
                the funds made available under subsection (j) for the 
                fiscal year.
            ``(2) Eligible projects.--
                    ``(A) Grant.--To be eligible for a grant under this 
                section, a project shall--
                            ``(i) be carried out in a proposed service 
                        territory in which not less than 90 percent of 
                        the households are unserved by terrestrial 
                        wireline or licensed wireless broadband service 
                        speeds of at least 100 Mbps downstream 
                        transmission capacity and 20 Mbps upstream 
                        transmission capacity, or such higher speed 
                        thresholds as the Secretary may determine 
                        constitute an unserved rural area pursuant to 
                        subsection (e)(2); and
                            ``(ii) not concurrently receive any other 
                        broadband grant administered by the Rural 
                        Utilities Service, the Department of the 
                        Treasury, the National Telecommunications and 
                        Information Administration, or a State grant 
                        program.
                    ``(B) Loan or loan guarantee.--A borrower may use a 
                loan or loan guarantee provided under this section to 
                carry out a project in a proposed service territory 
                only if, as of the date on which the application for 
                the loan or loan guarantee is submitted, not less than 
                50 percent of the locations in the proposed service 
                territory are unserved or have service levels below the 
                minimum acceptable level of fixed terrestrial broadband 
                service, whether wireline or licensed wireless, 
                established under subsection (e).
            ``(3) Equity and market survey requirements.--
                    ``(A) In general.--The Secretary may require an 
                entity to provide matching funds under this section in 
                an amount not to exceed 10 percent of the amount of the 
                grant, loan, or loan guarantee requested in the 
                application of the entity, unless the Secretary 
                determines that a higher percentage is required for 
                financial feasibility.
                    ``(B) Market survey.--
                            ``(i) In general.--The Secretary may 
                        require an entity that proposes to have a 
                        subscriber projection of more than 20 percent 
                        of the broadband service market in a rural area 
                        to submit to the Secretary a market survey.
                            ``(ii) Less than 20 percent.--The Secretary 
                        may not require an entity that proposes to have 
                        a subscriber projection of less than 20 percent 
                        of the broadband service market in a rural area 
                        to submit a market survey under clause (i).
                            ``(iii) Information.--Information submitted 
                        under this subparagraph shall be--
                                    ``(I) certified by the affected 
                                community, city, county, or designee; 
                                or
                                    ``(II) demonstrated on--
                                            ``(aa) the broadband map of 
                                        the affected State if the map 
                                        contains address-level data; or
                                            ``(bb) the National 
                                        Broadband Map if address-level 
                                        data is unavailable.
            ``(4) State and local governments and indian tribes.--
        Subject to paragraph (1), a State or local government 
        (including any agency, subdivision, or instrumentality thereof 
        (including consortia thereof)) and an Indian tribe shall be 
        eligible for assistance under this section to provide broadband 
        services to a rural area.
            ``(5) Technical assistance and training.--
                    ``(A) In general.--The Secretary may provide to any 
                eligible entity described in paragraph (1) of this 
                subsection that is applying for assistance under this 
                section for a project described in subsection 
                (c)(3)(A)(i) technical assistance and training--
                            ``(i) to prepare reports and surveys 
                        necessary to request grants, loans, and loan 
                        guarantees under this section for broadband 
                        deployment;
                            ``(ii) to improve management, including 
                        financial management, relating to the proposed 
                        broadband deployment;
                            ``(iii) to prepare applications for grants, 
                        loans, and loan guarantees under this section; 
                        or
                            ``(iv) to assist with other areas of need 
                        identified by the Secretary.
                    ``(B) Funding.--Not less than 3 percent and not 
                more than 5 percent of the amounts appropriated to 
                carry out this section for a fiscal year shall be used 
                for technical assistance and training under this 
                paragraph.
    ``(e) Broadband Service.--
            ``(1) In general.--Subject to paragraph (2), for purposes 
        of this section, the minimum acceptable level of broadband 
        service for a rural area to be deemed served for purposes of 
        this section shall be via terrestrial wireline or licensed 
        wireless networks with at least--
                    ``(A) a 100-Mbps downstream transmission capacity; 
                and
                    ``(B) a 20-Mbps upstream transmission capacity.
            ``(2) Adjustments.--At least once every 2 years and more 
        frequently as the Secretary deems necessary and appropriate, 
        the Secretary shall review, and may adjust through notice 
        published in the Federal Register--
                    ``(A) the minimum acceptable level of broadband 
                service established under paragraph (1) for an area to 
                be deemed unserved and thus eligible for an award under 
                this section; and
                    ``(B) the broadband buildout requirements under 
                paragraph (3), to ensure that high quality, cost-
                effective broadband service is provided to rural areas.
            ``(3) Broadband buildout requirements.--
                    ``(A) In general.--The term `broadband buildout 
                requirement' means the level of broadband service an 
                applicant receiving assistance under this section must 
                agree, at the time the application is finalized, to 
                provide for the duration of any project-related 
                agreement between the applicant and the Secretary.
                    ``(B) Minimum requirement.--The broadband buildout 
                requirement shall, at a minimum, deliver 100 Mbps 
                symmetrical throughout for each rural household in the 
                proposed service area. The Secretary may increase this 
                minimum requirement for the performance broadband 
                service in considering new applications.
                    ``(C) Substitute service standards for unique 
                service territories.--If an applicant shows that it 
                would be cost prohibitive to meet the broadband 
                buildout requirements established under this paragraph 
                for the entirety of a proposed service territory due to 
                the unique characteristics of the proposed service 
                territory, the Secretary and the applicant may agree to 
                utilize substitute standards for any unserved portion 
                of the project that should continue to consider the 
                best technology available to meet the needs of the 
                residents in the unserved area.
    ``(f) Technological Neutrality.--For purposes of determining 
whether to provide assistance for a project under this section, the 
Secretary shall use criteria that are technologically neutral and 
criteria that ensures the technology can meet program broadband 
buildout requirements and the evolving needs of rural households and 
businesses, including precision agriculture.
    ``(g) Terms and Conditions for Loans and Loan Guarantees.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, a loan or loan guarantee under this section shall--
                    ``(A) bear interest at an annual rate of, as 
                determined by the Secretary--
                            ``(i) in the case of a direct loan, a rate 
                        equivalent to--
                                    ``(I) the cost of borrowing to the 
                                Department of the Treasury for 
                                obligations of comparable maturity; or
                                    ``(II) 4 percent; and
                            ``(ii) in the case of a guaranteed loan, 
                        the current applicable market rate for a loan 
                        of comparable maturity; and
                    ``(B) have a term of such length, not exceeding 35 
                years, as the borrower may request, if the Secretary 
                determines that the loan is adequately secured.
            ``(2) Recurring revenue.--The Secretary shall consider the 
        recurring revenues of the entity at the time of application in 
        determining an adequate level of credit support.
    ``(h) Adequacy of Security.--
            ``(1) In general.--The Secretary shall ensure that the type 
        and amount of, and method of security used to secure, any loan 
        or loan guarantee under this section is commensurate to the 
        risk involved with the loan or loan guarantee, particularly in 
        any case in which the loan or loan guarantee is issued to a 
        financially strong and stable entity, as determined by the 
        Secretary.
            ``(2) Determination of amount and method of security.--In 
        determining the amount of, and method of security used to 
        secure, a loan or loan guarantee under this section, the 
        Secretary shall consider reducing the security in a rural area 
        that does not have broadband service.
    ``(i) Payment Assistance for Certain Loan and Grant Recipients.--
            ``(1) Use of grant funds.--The Secretary may use the funds 
        appropriated for a grant under this title for the cost (as 
        defined by section 502 of the Congressional Budget Act of 1974) 
        of providing assistance under paragraph (2) of this subsection.
            ``(2) Payment assistance.--When providing a grant under 
        this title, the Secretary, at the sole discretion of the 
        Secretary, may make--
                    ``(A) a subsidized loan, which shall bear a reduced 
                interest rate at such a rate as the Secretary 
                determines appropriate to meet the objectives of the 
                program; or
                    ``(B) a payment assistance loan, which shall--
                            ``(i) require no interest and principal 
                        payments while the borrower is--
                                    ``(I) in material compliance with 
                                the loan agreement; and
                                    ``(II) meeting the milestones and 
                                objectives of the project agreed to 
                                under paragraph (3); and
                            ``(ii) require such nominal periodic 
                        payments as the Secretary determines to be 
                        appropriate.
            ``(3) Agreement on milestones and objectives.--With respect 
        to payment assistance provided under paragraph (2), before 
        entering into the agreement under which the payment assistance 
        will be provided, the applicant and the Secretary shall agree 
        to milestones and objectives of the project.
            ``(4) Amendment of milestones and objectives.--The 
        Secretary and the applicant may jointly agree to amend the 
        milestones and objectives agreed to under paragraph (3).
            ``(5) Considerations.--In deciding to utilize the payment 
        assistance authority under paragraph (2), the Secretary shall 
        consider whether or not the payment assistance will--
                    ``(A) improve the compliance of the grantee with 
                any commitments made through the grant agreement;
                    ``(B) promote the completion of the broadband 
                project;
                    ``(C) protect taxpayer resources; and
                    ``(D) support the integrity of the broadband 
                programs administered by the Secretary.
            ``(6) Limitations on payment assistance.--The Secretary may 
        not make a payment assistance loan under paragraph (2)(B) to an 
        entity receiving a grant under this section that is a recipient 
        of a loan under title I or II that is associated with the 
        grant.
    ``(j) Funding.--
            ``(1) Limitations on authorization of appropriations.--
        There is authorized to be appropriated to the Secretary to 
        carry out this section not more than $500,000,000 for each of 
        fiscal years 2024 through 2028, to remain available until 
        expended.
            ``(2) Allocation of funds.--
                    ``(A) In general.--From amounts made available for 
                each fiscal year under this subsection, the Secretary 
                shall--
                            ``(i) establish a national reserve for 
                        loans and loan guarantees to eligible entities 
                        in States under this section; and
                            ``(ii) allocate amounts in the reserve to 
                        each State for each fiscal year for loans and 
                        loan guarantees to eligible entities in the 
                        State.
                    ``(B) Amount.--The amount of an allocation made to 
                a State for a fiscal year under subparagraph (A) shall 
                bear the same ratio to the amount of allocations made 
                for all States for the fiscal year as--
                            ``(i) the number of communities with a 
                        population of 2,500 or fewer inhabitants in the 
                        State; bears to
                            ``(ii) the number of communities with a 
                        population of 2,500 or fewer inhabitants in all 
                        States.
                    ``(C) Unobligated amounts.--Any amounts in the 
                reserve established for a State for a fiscal year under 
                subparagraph (B) that are not obligated by April 1 of 
                the fiscal year shall be available to the Secretary to 
                make loans and loan guarantees under this section to 
                eligible entities in any State, as determined by the 
                Secretary.
    ``(k) Termination of Authority.--No grant, or loan, or loan 
guarantee may be made under this section after September 30, 2028.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on October 1, 2023.
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