TITLE III—RURAL BROADBAND
ENHANCEMENT
SEC. 301. FEDERAL COMMUNICATIONS COMMISSION TO
PROVIDE SUPPORT FROM UNIVERSAL SERV-
ICE FUND.
Section 254(e) of the Communications Act of 1934
(47 U.S.C. 254(e)) is amended—
(1) by redesignating so much of the text of such
subsection as follows ‘‘(e) UNIVERSAL SERVICE SUP-
PORT.—’’ as paragraph (1);
(2) by inserting before ‘‘After’’ the following
heading: ‘‘(1) IN GENERAL.—’’; and
(3) by adding at the end the following:
‘‘(2) RURAL AREA BROADBAND SUPPORT.—In
addition to any other support provided under para-
graph (1), the Commission shall, within 90 days
after the date of enactment of the Rural Broadband
Enhancement Act, initiate a proceeding to provide
Federal universal service support for the deployment
of broadband service (as defined in section 156(e)(1)
of the National Telecommunications and Informa-
tion Administration Organization Act) to eligible
rural communities (as defined in section 156(e)(2)
of that Act). The proceeding shall be completed
within 240 days. Federal universal service support
provided as a result of that proceeding shall be de-
termined without cost averaging of any above-aver-
age cost areas with any lower cost areas, such as
would occur in statewide or study averaging, and
may be used for the deployment of—
‘‘(A) loop treatments and digital subscriber
line access multiplexers;
‘‘(B) cable modems;
‘‘(C) wireless technology; and
‘‘(D) satellite technology.’’.
SEC. 302. RURAL UTILITIES SERVICE LOAN PROGRAM.
Part C of title I of the National Telecommunications
and Information Administration Organization Act (47
U.S.C. 901 et seq.) is amended by adding at the end there-
of the following:
‘‘SEC. 156. BROADBAND TELECOMMUNICATIONS SERVICES.
‘‘(a) IN GENERAL.—The Rural Utilities Service of
the Department of Agriculture, after consultation with the
NTIA, shall make loans or other extensions of credit to
companies certified as eligible telecommunications carriers
providers, or that accept the obligations of an eligible tele-
communications carrier, in accordance with the provisions
of this section to finance the deployment of broadband
telecommunications services to eligible rural communities.
‘‘(b) ELIGIBILITY REQUIREMENTS.—To be eligible
for a loan or other extension of credit under this section,
a project shall—
‘‘(1) be capable of delivering broadband service;
‘‘(2) be for the purpose of making access to
broadband service available to an eligible rural com-
munity where broadband service is not otherwise
generally available throughout that community; and
‘‘(3) be subject to the standards for service and
area wide coverage applicable to other projects ad-
ministered by the Rural Utilities Service.
‘‘(c) TERMS AND CONDITIONS.—Loans made under
this section—
‘‘(1) shall be made available in accordance with
the requirements of the Federal Credit Reform Act
of 1990 (2 U.S.C. 661);
‘‘(2) shall bear interest at an annual rate of not
more than 2 percent per annum; and
‘‘(3) shall be made for the longer of—
‘‘(A) a term of 30 years; or
‘‘(B) the useful life of the assets con-
structed, reconstructed, or acquired.
‘‘(d) LIMITATIONS.—
‘‘(1) TECHNOLOGY
NEUTRALITY.—In making
loans under this section, the Rural Utilities Service
may not take into consideration the technology pro-
posed to be employed.
‘‘(2) SECURITY INTEREST.—The Rural Utilities
Service may take a security interest in assets or rev-
enue streams, in connection with a loan or other ex-
tension of credit made under this section, of not
more than the amount sufficient to cover the assets
financed by that loan or extension of credit.
‘‘(e) DEFINITIONS.—In this section:
‘‘(1) 
BROADBAND
SERVICE.—The 
term
‘broadband service’ includes, without regard to any
particular transmission medium or technology, high-
speed, switched, broadband telecommunications ca-
pable of delivering not less than 1.0 megabits of
data per second to the user and 0.5 megabits of
data per second from the user that enables users to
originate and receive high-quality voice, data, graph-
ics, and video telecommunications. The Commission
shall, from time-to-time as circumstances warrant,
revise the rate-of-data-transmission criteria stated in
the preceding sentence upward to reflect techno-
logical advances, and the criteria, as so revised, shall
be applied under the preceding sentence in lieu of
the rate-of-data-transmission criteria stated or pre-
viously revised by the Commission under this sen-
tence.
‘‘(2) ELIGIBLE RURAL COMMUNITY.—The term
‘eligible rural community’ means any incorporated or
unincorporated place that is not located in an area
designated as a Metropolitan Area by the Office of
Management and Budget.’’.
SEC. 303. FUNDING.
There are authorized to be appropriated to the Sec-
retary of Agriculture to carry out the provisions of section
156 of the National Telecommunications and Information
Administration Organization Act $3,000,000,000 for fis-
cal years 2001, 2002, 2003, 2004, through 2005, such
amount to remain available until expended.
TITLE IV—OFFICE OF RURAL
TECHNOLOGY.
SEC. 401. ESTABLISHMENT.
(a) ESTABLISHMENT.—The Secretary of Agriculture
shall establish in the Department of Agriculture the Office
of Rural Technology, which shall have the functions de-
scribed in subsection (b).
(b) FUNCTIONS.—Within 6 months after the date of
the enactment of this Act, the Secretary of Agriculture
shall ensure that the Office of Rural Technology can per-
form the following functions:
(1) Act as a centralized repository of informa-
tion about all public and private programs that offer
technology assistance to entities in rural areas.
(2) Make such information available and easily
accessible to the public.
(3) Inform the public of the existence and pur-
pose of, and how to obtain information from, the Of-
fice of Rural Technology.
(c) TECHNOLOGY ASSISTANCE DEFINED.—In this
section, the term ‘‘technology assistance’’ includes finan-
cial assistance of any kind to enable an entity to create,
modify, or use electronic information or electronic devices.
TITLE V—TAX CREDIT FOR
HIRING IN RURAL AREAS
SEC. 501. CREDIT TO HIGH-TECH EMPLOYERS WHO HIRE
EMPLOYEES RESIDING IN RURAL AREAS.
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to business-related credits) is amended by
adding at the end the following new section:
‘‘SEC. 45G. HIGH-TECH EMPLOYERS WHO HIRE EMPLOYEES
RESIDING IN RURAL AREAS.
‘‘(a) ALLOWANCE OF CREDIT.—
‘‘(1) IN GENERAL.—For purposes of section 38,
in the case of a employer, the rural high-tech em-
ployment credit determined under this section for
such taxable year is an amount equal to 20 percent
of the qualified rural wages paid or incurred during
the calendar year which ends with or within such
taxable year.
‘‘(b) QUALIFIED RURAL WAGES.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘qualified rural wages’ means any
wages paid or incurred by an employer for services
performed by an employee while such employee is a
qualified rural employee.
‘‘(2) ONLY FIRST $15,000 OF WAGES PER YEAR
TAKEN INTO ACCOUNT.—With respect to each quali-
fied rural employee, the amount of qualified zone
wages which may be taken into account for a cal-
endar year shall not exceed $15,000.
‘‘(3) COORDINATION
WITH
OTHER
EMPLOY-
MENT CREDITS.—
‘‘(A) IN
GENERAL.—The term ‘qualified
rural wages’ shall not include wages taken into
account in determining the credit under section
51 or 1396.
‘‘(B) COORDINATION
WITH
PARAGRAPH
(2).—The $15,000 amount in paragraph (2)
shall be reduced for any calendar year by the
amount of wages paid or incurred during such
year which are taken into account in deter-
mining the credit under section 51 or 1396.
‘‘(c) QUALIFIED RURAL EMPLOYEE.—For purposes
of this section—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, the term ‘qualified rural
employee’ means, with respect to any period, any
employee of an employer if—
‘‘(A) substantially all of the services per-
formed during such period by such employee for
such employer are information or communica-
tion technology services and are performed
within a rural area in a high-tech trade or busi-
ness of the employer, and
‘‘(B) the principal place of abode of such
employee while performing such services is
within a rural area.
‘‘(2) CERTAIN INDIVIDUALS NOT ELIGIBLE.—
The term ‘qualified rural employee’ shall not
include—
‘‘(A) any individual described in subpara-
graph (A), (B), or (C) of section 51(i)(1),
‘‘(B) any 5-percent owner (as defined in
section 416(i)(1)(B),
‘‘(C) any individual employed by the em-
ployer for less than 90 days,
‘‘(D) any individual employed by the em-
ployer at any facility described in section
144(c)(6)(B), and
‘‘(E) any individual employed by the em-
ployer in a trade or business the principal activ-
ity of which is farming (within the meaning of
subparagraphs 
(A) 
or 
(B) 
of 
section
2032A(e)(5)), but only if, as of the close of the
taxable year, the sum of—
‘‘(i) the aggregate unadjusted bases
(or, if greater, the fair market value) of
the assets owned by the employer which
are used in such a trade or business, and
‘‘(ii) the aggregate value of assets
leased by the employer which are used in
such a trade or business (as determined
under regulations prescribed by the Sec-
retary),
exceeds $500,000.
‘‘(3) SPECIAL
RULES
RELATED
TO
TERMI-
NATION OF EMPLOYMENT.—
‘‘(A) IN
GENERAL.—Paragraph (2)(C)
shall not apply to—
‘‘(i) a termination of employment of
an individual who before the close of the
period referred to in paragraph (2)(C) be-
comes disabled to perform the services of
such employment unless such disability is
removed before the close of such period
and the taxpayer fails to offer reemploy-
ment to such individual, or
‘‘(ii) a termination of employment of
an individual if it is determined under the
applicable State unemployment compensa-
tion law that the termination was due to
the misconduct of such individual.
‘‘(B) CHANGES IN FORM OF BUSINESS.—
For purposes of paragraph (2)(C), the employ-
ment relationship between the taxpayer and an
employee shall not be treated as terminated—
‘‘(i) by a transaction to which section
381(a) applies if the employee continues to
be employed by the acquiring corporation,
or
‘‘(ii) by reason of a mere change in
the form of conducting the trade or busi-
ness of the taxpayer if the employee con-
tinues to be employed in such trade or
business and the taxpayer retains a sub-
stantial interest in such trade or business.
‘‘(d) HIGH-TECH.—For purposes of this section, the
term ‘high-tech’ means, with respect to services or a trade
or business, the latest developments and advances within
the area of information and communication technology
services.
‘‘(e) WAGES.—For purposes of this section—
‘‘(1) IN GENERAL.—The term ‘wages’ has the
same meaning as when used in section 51.
‘‘(2) CERTAIN
TRAINING
AND
EDUCATIONAL
BENEFITS.—
‘‘(A) 
IN
GENERAL.—The 
following
amounts shall be treated as wages paid to an
employee:
‘‘(i) Any amount paid or incurred by
an employer which is excludable from the
gross income of an employee under section
127, but only to the extent paid or in-
curred to a person not related to the em-
ployer.
‘‘(ii) In the case of an employee who
has not attained the age of 19, any
amount paid or incurred by an employer
for any youth training program operated
by such employer in conjunction with local
education officials.
‘‘(B) RELATED PERSON.—A person is re-
lated to any other person if the person bears a
relationship to such other person specified in
section 267(b) or 707(b)(1), or such person and
such other person are engaged in trades or
businesses under common control (within the
meaning of subsections (a) and (b) of section
52). For purposes of the preceding sentence, in
applying section 267(b) or 707(b)(1), ‘10 per-
cent’ shall be substituted for ‘50 percent’.
‘‘(f) CONTROLLED GROUPS.—For purposes of this
section.—
‘‘(1) all employers treated as a single employer
under subsection (a) or (b) of section 52 shall be
treated as a single employer for purposes of this sec-
tion, and
‘‘(2) the credit (if any) determined under this
section with respect to each such employer shall be
its proportionate share of the wages giving rise to
such credit.
‘‘(g) CERTAIN OTHER RULES MADE APPLICABLE.—
For purposes of this section, rules similar to the rules of
section 51(k) and subsections (c), (d), and (e) of section
52 shall apply.’’
(b) CREDIT MADE PART OF GENERAL BUSINESS
CREDIT.—
(1) IN GENERAL.—Subsection (b) of section 38
of such Code is amended by striking ‘‘plus’’ at the
end of paragraph (14), by striking the period at the
end of paragraph (15) and inserting ‘‘, plus’’, and
by adding at the end the following new paragraph:
‘‘(16) the rural high-tech employment credit de-
termined under section 45G(a).’’.
(2) LIMITATION
ON
CARRYBACK.—Subsection
(d) of section 39 of such Code is amended by adding
at the end the following new paragraph:
‘‘(11) NO CARRYBACK OF RURAL HIGH-TECH
EMPLOYMENT CREDIT BEFORE JANUARY 1, 2001.—
No portion of the unused business credit for any
taxable year which is attributable to the credit under
section 45G may be carried back to a taxable year
ending before January 1, 2001.’’.
(c) DEDUCTION FOR UNUSED CREDIT.—Subsection
(c) of section 196 of such Code is amended by striking
‘‘and’’ at the end of paragraph (9), by striking the period
at the end of paragraph (10) and inserting ‘‘, and’’, and
by adding at the end the following new paragraph:
‘‘(11) the rural high-tech employment credit de-
termined under section 45G(a).’’.
(d) CLERICAL AMENDMENT.—The table of sections
for subpart D of part IV of subchapter A of chapter 1
of such Code is amended by adding at the end the fol-
lowing new item:
‘‘Sec. 45G. Employers who hire high-tech employees residing in
rural areas.’’.
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to individuals who begin work for
the employer after the date of the enactment of this Act.
TITLE VI—RURAL TECHNOLOGY
EDUCATION PROGRAM.
SEC. 601. ESTABLISHMENT OF PROGRAM.
The Higher Education Act of 1965 is amended by
adding after title VII (20 U.S.C. 1134 et seq.) the fol-
lowing new title:
‘‘TITLE VIII—RURAL
TECHNOLOGY EDUCATION
‘‘SEC. 801. PROGRAM AUTHORIZED.
‘‘From the funds appropriated under section 805, the
Secretary is authorized to make competitive grants to eli-
gible recipients to support the expansion of opportunities
in rural areas for instruction in high technology fields and
enterprises.
‘‘SEC. 802. ELIGIBLE RECIPIENTS.
‘‘The Secretary may make grants under this title to
the following eligible recipients:
‘‘(1) an institution of higher education located
in a rural area;
‘‘(2) a State educational agency, or other agen-
cy of a State, that provides educational services in
rural areas;
‘‘(3) a private nonprofit entity that the Sec-
retary of education certifies is eligible for purposes
of this title; and
‘‘(4) a consortium composed of two or more of
the institutions, agencies, or entities described in
paragraphs (1), (2), and (3).
‘‘SEC. 803. SELECTION OF GRANT RECIPIENTS.
‘‘In selecting eligible recipients for the award of a
grant under this title, the Secretary shall award grants
to those eligible recipients whose grant applications dem-
onstrate the greatest promise of placing graduating stu-
dents from rural areas in occupations in high technology
fields and enterprises.
‘‘SEC. 804. APPLICATIONS.
‘‘An eligible recipient that desires to obtain a grant
under this title shall submit to the Secretary an applica-
tion at such time, in such manner, and containing or ac-
companied by such information and assurances as the Sec-
retary may require to carry out the purposes of this title.
Such application shall contain—
‘‘(1) a description of the uses to be made of the
funds provided under title, which may include sala-
ries, equipment, software, course development ex-
penses, and staff training;
‘‘(2) assurances that the applicant will provide
a follow-up evaluation and report within 6 months
after the end of the period covered by the grant
award; and
‘‘(3) such other information as the Secretary
requires to carry out this title.
‘‘SEC. 805. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to make
grants under this title $100,000,000 for each of the fiscal
years 2002 through 2006.
‘‘SEC. 806. DEFINITIONS.
‘‘For purposes of this title:
‘‘(1) RURAL
AREAS.—The term ‘rural areas’
any incorporated or unincorporated place—
‘‘(A) that has not more than 35,000 inhab-
itants, based on the most recent available popu-
lation statistics of the Bureau of the Census;
and
‘‘(B) that is not located in an area des-
ignated as a Metropolitan Area by the Office of
Management and Budget.
‘‘(2) HIGH TECHNOLOGY FIELDS AND ENTER-
PRISES.—The term ‘high technology fields and en-
terprises’ means fields and enterprises related to the
use and development of the Internet, telecommuni-
cations and computer technology, and any other field
or enterprise designated by regulation for the pur-
poses of this title by the Secretary.’’.
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