House committee substitute replaces the 2nd edition in its entirety with the following. Changes the act's titles.

Section 1.1

Establishes the Broadband, Equity, Access and Deployment (BEAD) grant program. Contains 22 defined terms, including Broadband Serviceable Location (BSL: a location where broadband service is or could be installed, as identified by the Federal Communications Commission for purposes of its Broadband DATA Maps), NTIA (National Telecommunications and Information Administration of the US Department of Commerce), and IIJA (Infrastructure Investment and Jobs Act).

Specifies if there’s any conflict between the act and the IIJA, the IIJA takes precedence. Requires the Department of Information Technology (Department) to report to the specified NCGA committee any actions to conform to federal law if an actual conflict arises. Prevents the Broadband Infrastructure Office in the Department of Information Technology (Office) from prescribing the rates of service which applicants may deliver, nor can the Office indirectly regulate the rates of service which applicants may deliver by affording any preference or differentiated scoring weight based on the specific rate of service which an applicant may deliver.

Establishes the Growing Rural Economies with Access to Technology for Broadband Equity, Access, and Deployment Fund (GREAT 3.0 Fund) as a special revenue fund in the Department for infrastructure costs associated with an eligible project. Specifies that if the Department has entered into grant agreements for deployment of service to all unserved and underserved locations in the State, it may use any remaining funds in the GREAT 3.0 Fund for digital literacy and awareness or other purposes consistent with nondeployment activities described in the BEAD notice of funding opportunity.  

Requires the Office to prioritize projects proposed to address the following in order: (1) unserved BSL’s; (2) underserved BSL’s and (3) community anchor institutions.  Provides for a process for project proposals. Provides for a formal challenge process developed by the Office. Requires Office to develop a prequalification process to identify potential grantees with the financial, managerial, operational, and technical capacity to complete an eligible project. Sets forth ten required pieces of information that an applicant must include in a grant application to the Office. Provides for a competitive selection process with a scoring system that conforms with the published regulations and guidelines under the IIJA. Provides for priority to applications with the most number of new unserved and underserved areas in case of a tie based on points. Provides for an award agreement with the Office. Requires the Office to monitor each project to ensure: (1) that the grantee is making adequate progress towards project completion by the required deadline; (2) compliance with all relevant and applicable  federal, State, and local laws, rules, and regulations, and (3) compliance with all NTIA  guidelines for the BEAD Program and any guidelines developed by the Office. Requires the Office to require a letter of credit or an alternative form of satisfactory performance security, such as a performance bond, from the grantee to secure the grantee's performance of its obligations under the grant contract consistent with the federal requirements. Requires the Department to submit an annual report to the specified NCGA committees upon completion of each funding round containing at least six listed prongs of information, including the number of grant applied for and awarded, a summary of areas receiving the grants, any breach of agreements or grant fund forfeitures or reductions in funding. After two rounds of selection requires the Department to submit a progress report to the specified NCGA committee and the Fiscal Research Division containing four required pieces of information, including the remaining number of unserved and underserved areas of the State, remaining funds in the GREAT 3.0 program, and the estimated amount of funding needed to award projects serving the remaining unfunded and underfunded areas of the State.  Allows the Department to retain up to two percent of allocated BEAD grant funds for planning and administrative purposes.

Removes the December 31, 2024, expiration date to the changes made in Sections 38.10(b) through (k) of SL 2021-180 (2021 appropriations act).

Requires the State Controller to establish a BEAD Reserve (Reserve) in the General Fund to maintain federal funds received from the IIJ. Directs the State Controller to transfer funds  into the GREAT 3.0 program  fund only as needed to meet the appropriations set out in subsequent legislation. Specifies that funds reserved in the Reserve do not constitute an "appropriation made by law," as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution.

Section 2.1

Specifies that of the funds appropriated to the Department from the State Fiscal Recovery Fund and the Coronavirus Capital Projects Fund for projects under the Completing Access to Broadband grant program (Program) in GS 143B-1373.1, the Department must utilize up to $190 million to provide the county project cost responsibility required in GS 143B-1373.1(e) and the State project cost responsibility for the 37 counties that have committed to the Department to participate in the Program and provide the county match as of May 1, 2024. Allows a county to decline to accept any portion of the county project cost responsibility funding from the Department by notifying the Department within 30 days of the effective date of the act (July 1, 2024).

Amends GS 143B-1373.1 as follows. Changes the amount that a broadband service provider must (was, may) provide for a project from up to 30% of the project to at least 30% of the project. Increases the Office’s required (was discretionary) contribution amount of up to 70% of the project (was, 35%). Removes language requiring a county to provide a certain amount from funds received from the American Rescue Plan Act. Makes technical and conforming changes. Effective July 1, 2024, and applies to grant funding requests submitted on or after that date.

Section 3.1

Effective June 30, 2024, specifies that the directed grant in the sum of $35 million in in nonrecurring funds for the 2022-2023 fiscal year to be provided by the Office of State Budget and Management – Special Appropriations to Dare County to construct affordable housing will not be used for that purpose but will instead revert to the Housing Trust Fund on June 30, 2024.

Section 4.1

Sets forth general effective date of July 1, 2024 for the act, unless otherwise provided.