Title VI: Rural Development

Authorized $360 million of CCC funds for a 1-time reduction in backlog of qualified, pending applications for water and waste disposal grants and loans and emergency community water assistance. These funds were used in FY 2002.

Authorizes $120 million in CCC funds for same purpose. Priority for this funding goes first to water systems and next to waste disposal systems.

Ties interest rates for new intermediate and poverty-rate water and waste-disposal loans to current market rate. Change increases subsidy on such loans.

Amended Emergency Community Water Assistance Program, allowing grants aimed at forestalling imminent decline in water quality and quantity. Program helped very small rural communities comply with water pollution and drinking water regulations.

Authorizes appropriations for FY 2008-12.

Authorized creation of SEARCH (Special Evaluation Assistance for Rural Communities and Households) Grants program to help small communities (under 3,000) prepare feasibility and environmental studies required to meet environmental standards. Program was not subsequently funded.

Limits eligibility to communities that have populations of no more than 2,500 and are subject to financial distress. Funding is limited to 4% of money available for water and waste-disposal and essential community facilities programs. Grants fund up to 100% of project costs and they are subject to minimal documentation requirements.

Authorized program that assisted homeowner water well systems.

Continues homeowner water well-systems program, increasing amount that can be spent on each well from $8,000 to $11,000.

Creates new program to provide grants to nonprofit organizations, with aim of expanding job opportunities for individuals with disabilities who live in rural areas.

Authorized Rural Water Circuit Rider Program, based on a preexisting contract program, to provide technical assistance for daily operations of rural water systems.

Extends Circuit Rider Program, and increases authorization for appropriations to $25 million/year for FY 2008-12.

Set asides had been targeted to specific places, including Alaskan and Native American projects. 2002 Farm Act authorized creation of more formal program providing grants for water systems in Alaskan villages and for water and waste facilities in Native American communities.

Extends aid to rural and native villages in Alaska.

Authorizes funding for Denali Commission to give out grants for solid-waste disposal systems that lessen solid-waste contamination of water.

Authorized creation of several new programs focusing on specific types of community services and facilities and specific places:

• Rural Firefighters and Emergency Medical Personnel Training Program
• Historic Barn Preservation Grants
• Community Facilities Grants to Tribal Colleges and Universities

Only Tribal program was funded.

Extends authorizations for these programs for FY 2008-12.

For the rural firefighters/emergency medical assistance program, changes eligibility to exclude for-profit entities, redefines program purposes, and reduces amount of allowable administrative expenses.

Changes qualifications for Historic Barn Preservation Grants to emphasize projects that identify, document, research, and review evaluation methods and best practices.

Changes Tribal College and University Essential Community Facilities program to prohibit Secretary from requiring more than 5% of funding from non-Federal sources.

Authorizes Secretary of Housing and Urban Development to provide financial assistance to Housing Assistance Council (HAC) to support community-based housing development organizations' community development and affordable housing projects and programs in rural areas.

Reauthorized Telemedicine and Distance Learning Program. USDA made grants and loans to assist rural communities with construction of facilities that provide distance learning and telemedicine services.

Authorized funding of $100 million annually. More than $170 million in grants have been awarded since 2002.

Reauthorizes program through FY 2012.

Creates new program to improve technical infrastructure of rural health care facilities. Creates new grant program aimed at improving information technology in rural hospitals and other health centers.

Specifically authorizes assistance to public libraries in rural areas, in addition to existing coverage for telemedicine and distance learning.

Authorized grants, loans, and loan guarantees for improving access to broadband telecommunications services in rural areas. Funds would be for construction, improvement, and purchase of equipment and facilities for rural broadband service in eligible communities (no more than 20,000 inhabitants).

Since 2002, $1.22 billion in loans have been approved covering 1,263 communities with total 582,000 household subscribers in 40 States.

Reauthorizes program while making several changes that redefine eligibility and prioritization. Authorizes appropriation of $25 million annually for FY 2008-12.

Directs Secretary to develop a national rural broadband strategy.

Authorizes a National Center for Rural Telecommunications Assessment.

Authorized $80 million in loan guarantees for delivery of local broadcast television station signals to satellite television subscribers in unserved and underserved local television markets. Funds were available until Dec 31, 2006.

Authorizes funding to assist public TV stations in their transition to digital broadcasting.

Amended rules for Rural Business and Industry Loan Guarantee program and Rural Business Enterprise Grants to allow greater program participation for producers, firms, and cooperatives that produce value-added agricultural goods.

Broadened eligibility to include more types of renewable-energy systems, such as wind energy and anaerobic digesters.

Gives priority to loans and loan guarantees for locally or regionally produced food projects with components benefiting underserved communities. At least 5% of program funds must be reserved until April 1 each year for projects promoting locally or regionally produced agricultural products.

Authorized Value-Added Agricultural Product Marketing Development Grants, with expanded eligibility.

Funded new Agriculture Innovation Center Demonstration Program to provide technical assistance, business and marketing planning, and other nonfinancial assistance to value-added businesses.

Mandatory funding of $15 million available on Oct 1, 2008 from Commodity Credit Corporation (CCC) for use until expended. Establishes priority for socially disadvantaged and new farmers. 10% of funding shall be reserved for projects benefiting beginning or socially disadvantaged farmers and ranchers, and 10% shall be reserved for projects developing mid-tier value chains.

Authorizes appropriations for Agriculture Innovation Center Demonstration Program.

Existing program funded a nonprofit organization that provided information and technical assistance to farmers on a variety of sustainable agricultural practices.

Makes permanent existing program, with modifications focusing on reduced input costs, conserving energy resources, diversifying through new energy crops and generation facilities, and expanding agricultural commodity markets for producers using practices that enhance environment, natural resource base, and quality of life. Defines several specific characteristics of organization to provide assistance to farmers.

No similar provision.

Mandates study by Departments of Transportation and Agriculture to examine importance of freight transportation (railroad, barge, and truck) for agriculture products, renewable fuels, and electricity, and to address other transportation issues important for rural community and economic development. Requires report to Congress 1 year after date of enactment.

Provided low interest loans or grants for construction and improvement of housing for farm labor.

Broadens eligibility for farm labor housing program to include projects for low-income individuals who receive a substantial portion of income from processing agricultural or aquacultural commodities.

Rural Utility Service (RUS) authorized to guarantee loans made by Federal Financing Bank for its electrification and telephone programs.

Clarifies that loans can be made for energy efficiency purposes. Redefines eligible renewable energy sources as energy conversion systems fueled from solar, wind, hydropower, biomass, or geothermal sources. Authorizes deferment of principal and interest payments on existing loans so that borrowers can make loans to residential, commercial, and industrial consumers to install energy-efficient measures or devices that reduce demand on electric systems for 60 months.

Allows direct lending from U.S. Department of Treasury as an alternative to financing through Federal Financing Bank.

Allows loans to be made for projects that resell electricity generated by renewable energy to both rural and non-rural residents.

Allows RUS to make loans to rural electric cooperatives for electric generation from renewable energy sources.

See Title IX, Rural Energy for America Program and Rural Energy Self Sufficiency Initiative for related program information.

Rising cost of labor and materials for major electric generation and transmission projects led to higher costs of Surety and Performance Bonds, keeping some contractors from bidding on projects and detracting from program performance.

Authorizes Secretary to review bonding requirements for all RUS Rural Electric Act programs to assure Federal interests are protected by product warrantees and costs do not exceed benefits of bonds.

No similar provision.

Mandates study on electric power generation needs of rural areas, looking at rural electric cooperatives' issues, financing issues, impact of electricity costs on consumers and local economic development, and ability of fuel feedstock technology to meet regulatory requirements, such as carbon capture and sequestration.

As of FY 2007, Business Industry Loan Guarantee Program was the largest of USDA's general-business programs authorized to grant loans to assist rural businesses.

These programs, aiding a wide variety of rural businesses, were reauthorized in 2002 Farm Act.

See previous section for changes in Business and Industry program.

Modifies Rural Cooperative Development Grants rules to lead to more networking and multi-State/multi-organization approaches, while reserving up to 20 percent of appropriated funds for organizations that serve the socially disadvantaged. Provides authority to award multi-year grants.

Continues authorization of appropriations for several business programs.

2002 Act authorized creation of a new venture capital program, Rural Business Investment Program (RBIP), to license and provide seed capital to companies making equity investments in rural businesses, with emphasis on smaller businesses. This program, operated by Small Business Administration, licensed its first rural business investment company in 2006. Funding was rescinded at end of FY 2006.

Modifies fee structure for Rural Business Investment Program.

Authorizes Rural Microentrepreneur Assistance Program to offer grants and loans to qualified microenterprise-development organizations providing technical assistance, training, grants, and small loans to rural microentrepreneurs. Provides $15 million in CCC mandatory funding ($4 million annually for FY 2009-11 and $3 million for FY 2012).

USDA has operated several small-scale rural development programs that are regional (or multi-county) in nature, including Empowerment Zone/Enterprise Community program (EZ/EC), Rural Economic Area Partnership (REAP) Initiative, and Rural Community Development Initiative (RCDI).

2002 Farm Act authorized two new nationwide programs:

• Rural Strategic Investment Program (RSIP) to fund regional investment boards that plan and implement comprehensive regional development strategies
• Multijurisdictional Regional Planning Organizations Program to fund regional organizations to assist local governments and organizations involved in local development

Neither program was funded.

Continues authorization for existing Rural Economic Area Partnerships (REAPs) in New York, North Dakota, and Vermont, through FY 2012. No new REAPs are authorized.

Makes no provisions for empowerment zones or Rural Community Development Initiative.

Replaces RSIP with Rural Collaborative Investment Program (RCIP). RCIP funds a "National Institute" to provide technical assistance in administering program. Adds rural heritage to program goals.

Makes no provision for multijurisdictional planning program.

Creates new health-care-services grants aimed at consortiums of regional institutions to allow them to develop health-related services, education, and training programs, and public health facilities in Mississippi Delta region.

2002 Farm Act made NRDP a Federal program, but no money was appropriated for it. NRDP continued to operate and relied on other funding sources, as it has since the 1990s.

Extends authority to appropriate funds for NRDP for FY 2008-12.

Reauthorized Delta Regional Authority (DRA). DRA continued operating with Federal funding.

Extends and expands DRA, adding new counties to region.

Authorized creation of new regional authority covering Northern Great Plains region. Northern Great Plains Regional Authority (NGPRA) was unable to spend Federal funds received because a Federal Co-Chair was not appointed.

Continues authorization for NGPRA, with provisions to expedite authority's startup if Federal and Indian representatives are not confirmed quickly. Promotes assistance for NGPRA on particular regional economic issues, such as renewable energy, transportation, land management, higher education, and information technology. Grants could go to both local and multi-State entities. Adds some Missouri counties to region.

USDA's rural development programs employed various measures of rurality, which were used to determine program eligibility status. These definitions varied from program to program. They are important because they affect geographic distribution of USDA's rural development program assistance.

Retains standard definition of "rural" used for business and some other programs that excludes cities of 50,000 or more and any urbanized area contiguous and adjacent to city of 50,000 or more. Exceptions are made for narrow strips of urbanized areas and Honolulu and Puerto Rico.

Treats as rural certain fringe areas in urbanized areas.

Gives USDA Under Secretary for Rural Development ability to determine if urbanized area is rural in character

For rural electrification assistance programs, rural areas are defined as excluding city or town of 20,000 or more, or are within service area of borrower who has an outstanding loan made under Titles I through V of Rural Electric Act.

Eligibility for water and waste disposal loans and grants and community facilities programs is unchanged. Retains definition of rural for community facilities program by excluding cities or towns in excess of 20,000. Gives Secretary authority to also exclude areas excluded by the business programs definition. Gives Secretary power to exclude from the definition of rural certain areas of urban sprawl.

Requires that USDA produce a report in 2 years to clarify USDA's "rural" and "rural area" definitions, effects on USDA programs, and recommendations on how better to target funds for rural development.

Various RUS programs gave priority to substantially underserved areas when awarding grants and loans for infrastructure.

Defines "substantially underserved trust areas" as Native American trust lands where more than 20% of population does not have electric, telecommunications, broadband, or water service. Secretary may offer such areas lower interest rate loans and waive nonduplication of service requirements.