H.R. 7609 — Rural Development Modernization Act

This section increases the population threshold for defining rural areas to 25,000 inhabitants (from 2,500, 5,000, 10,000, or 20,000) under multiple USDA programs, including (1) the Distance Learning, Telemedicine, and Broadband Program; (2) rural telephone service loans; (3) loan guarantees reserved for water, wastewater, and essential community facilities in areas lacking other credit; (4) emergency and imminent community water assistance grants; and (5) rural housing programs under Title V of the Housing Act of 1949 (i.e., section 8 loans and grants for housing services and section 523/524 self-help housing). (Thus, more communities qualify as rural for infrastructure loans, grants, and housing assistance lacking in credit or services.) It also (1) eliminates lower population thresholds (i.e., subparagraphs (B) and (C)) in the general rural definition under the Consolidated Farm and Rural Development Act; (2) removes the 1,500-person cap on excluding military base populations from such determinations; and (3) requires disregarding incarcerated persons and military base populations when assessing whether part of an area is rural in character.

This section increases the population threshold defining eligible rural areas under section 609 of the Public Utility Regulatory Policies Act of 1978 (i.e., Department of Energy grants for energy efficiency and conservation services to low-income rural residential consumers) to 25,000 inhabitants (from 10,000), excluding populations described in subparagraphs (F) and (G) of 7 U.S.C. 1991(a)(13) (i.e., correctional facilities and military installations).

This section amends the Reclamation Rural Water Supply Act of 2006 to harmonize rural eligibility criteria with the Consolidated Farm and Rural Development Act (7 U.S.C. 1991 et seq.) by (1) expanding the definition of rural water supply project in section 102(9)(C) to include any project designed to serve an area described in 7 U.S.C. 1991(a)(13)(F) or (G) (i.e., certain rural areas eligible for USDA water and waste disposal programs); and (2) expanding eligible projects under section 202(6) to include (B) any rural water project or supply project—whether or not qualifying under section 102(9)—authorized under section 1110 of division FF of the Consolidated Appropriations Act, 2021 (Public Law 116-260) or any other federal statute; and (C) any project authorized for an Indian tribe under part III of subtitle A of title X of the Omnibus Public Land Management Act of 2009 (Public Law 111-11).

This section clarifies and expands eligibility for U.S. territories, possessions, and freely associated states (i.e., Republic of the Marshall Islands, Federated States of Micronesia, and Republic of Palau) in multiple rural development and housing programs through the following amendments: (1) in the Rural Electrification Act of 1936, includes such communities and entities in broadband, telemedicine, distance learning, and community connect grant programs; (2) in the Consolidated Farm and Rural Development Act, adds the Commonwealth of the Northern Mariana Islands to rural cooperative development grants and replaces outdated "Trust Territory of the Pacific Islands" references with the specified freely associated states; and (3) in Title V of the Housing Act of 1949 (i.e., rural housing loans for low- and moderate-income families), updates section 501 to cover "any territory or other possession of the United States," removes "Trust Territory of the Pacific Islands" references in sections 501 and 502, eliminates the population cap of 20,000 in section 520, and increases the population threshold to below 25,000 (from below 10,000) in section 533(d)(3)(C).

This section makes technical and conforming amendments to multiple statutes, including (1) the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2002; (2) the Rural Electrification Act of 1936; (3) the Consolidated Farm and Rural Development Act; (4) the Housing Act of 1949, including transferring and redesignating a paragraph in section 501; and (5) the Reclamation Rural Water Supply Act of 2006.

This section requires the Secretary of Agriculture to annually reassess and, if necessary, adjust the numerical population threshold used to determine whether an area qualifies as rural for purposes of the provisions of law amended by this Act. The reassessment must consider population level and density trends from the Bureau of the Census, metropolitan or non-metropolitan classifications from the Office of Management and Budget, Rural-Urban Commuting Area codes from the Economic Research Service (as appropriate), and regional differences.