View the NADO power point presentation.

Representing NADO and the National Association of Counties (NACo), McCauley focused his remarks on three key rural development areas:

• The mission area of USDA Rural Development is a critical piece to the overall competitiveness of rural regions as we work to foster job growth, regional innovation, and economic prosperity.  This includes basic yet essential investments for infrastructure and utilities, housing and community facilities, and access to capital and entrepreneurial development.  In today’s era of intense budget pressures and growing local needs, it is important that we make more strategic investments that strengthen regional and local competitive advantages and coordinate our public sector resources.

• With rural regions facing increasingly global competition and opportunities, we need to ensure USDA Rural Development has the tools, resources and flexibility to assist rural communities and regions with cutting-edge, asset-based regional innovation strategies and investments.  To be successful in the modern economy, rural entrepreneurs and communities must be connected to global and domestic markets—digitally, institutionally, and physically.  This will take a new level of sophistication and capacity within our rural regions and at USDA Rural Development.  It will also mean improving federal interagency collaboration, fostering stronger public-private-nonprofit partnerships, and leveraging existing strategy processes, such as the U.S. Economic Development Administration’s Comprehensive Economic Development Strategy (CEDS) framework.

• USDA Rural Development applications, policies, and reporting requirements should be streamlined and broadened to reflect the scale of rural investments, emerging needs and opportunities of rural regions, and capacity of local organizations.  While retaining necessary financial and performance accountability standards, Congress should ensure USDA Rural Development has a modern set of policies, programs, and incentives to help all rural communities pursue community and economic development growth.

View the full NADO-NACo rural development statement.

View the hearing video and hearing statements.

The surface transportation finance bill is a companion piece to the Moving Ahead for Progress for the 21st Century Act (MAP-21 – S. 1813) passed by the Senate Environment and Public Works Committee. If favorably reported by the Finance Committee, it will be folded into the larger transportation bill for Senate debate. According to the Finance Committee, amendments will be available online at http://finance.senate.gov/legislation/.

Summary of the Highway Investment, Job Creation and Economic Growth Act of 2012

Committee Note: The Chairman’s Mark is intended to fully fund the transportation trust funds as provided by the authorization bills (from Environment and Public Works, Commerce and Banking) with a total of $9.6 billion in offsets.  The Senate Finance Committee staff is reviewing additional offsets that have been discussed with Member staffs but have not seen final scores or specificity. The Chairman intends to provide these offsets in a modification and will notify Members as soon as possible.

Extension of Revenues and Trust Funds

Extension of Highway-Related Taxes.  Six separate excise taxes are imposed to finance the Federal Highway Trust Fund program.  Three of these taxes are imposed on highway motor fuels. The remaining three are a retail sales tax on heavy highway vehicles, a manufacturers’ excise tax on heavy vehicle tires and an annual use tax on heavy vehicles.  The annual use tax on heavy vehicles expires October 1, 2012. Except for 4.3 cents per gallon of the Highway Trust Fund fuels tax rates (which is permanent), the remaining taxes are scheduled to expire after March 31, 2012.  This provision would extend the motor fuel taxes and all three non-fuel excise taxes at their current rates through September 30, 2015.

Extension of Highway Trust Fund Expenditure Authority. Under present law, revenues from the highway excise taxes, as imposed through March 31, 2012, generally are dedicated to the Highway Trust Fund.  Dedication of excise tax revenues to the Highway Trust Fund are governed by the Internal Revenue Code (IRC). The IRC authorizes expenditures (subject to appropriations) from the Highway Trust Fund through March 31, 2012.  This provision would extend the expenditure authority for the Highway Trust Fund through September 30, 2013.

Revenue Provisions

Leaking Underground Storage Tank Trust Fund.  The Leaking Underground Storage Tank (LUST) Trust Fund was established in 1986 to support States and the Environmental Protection Agency in efforts to remediate leaks from underground storage tanks.  On every gallon of taxable motor fuel, 0.1 cents is deposited in the LUST Trust Fund. These revenues have consistently been greater than outlays and the fund has accumulated a balance of $3.745 billion as of the end of fiscal year 2011.  The total revenue into the fund including interest is over $300 million per year while outlays are just over $100 million per year. This provision would transfer $3 billion from the LUST Trust Fund to the Highway Trust Fund as of the date of enactment.  In addition, this provision would direct 0.066 cents-per-gallon of each gallon of taxable motor fuel to the LUST Trust Fund in order to better match revenues to the fund and outlays from the fund.  Revenue estimate for this provision to be provided by the Congressional Budget Office.

Close Black Liquor Loophole.  As part of the kraft process for making paper, a byproduct called black liquor is created.  This process has been used for seventy years to manufacture paper.  Black liquor qualified for the alternative fuel mixture tax credit and the cellulosic biofuels tax credit.  Congress never intended for black liquor to qualify for these credits and, in 2010, prohibited the credit for black liquor sold or used on or after January 1, 2010. This provision would prohibit taxpayers from claiming the alternative mixture credit or the cellulosic biofuels credit on any new or amended returns made on or after February 3, 2012.  This provision is estimated to raise $2.786 billion over ten years.

Dedicate Gas Guzzler Tax to Highway Trust Fund.  Under current law, a tax is imposed on automobiles that are manufactured primarily for use on public streets, roads, and highways and that are rated at 6,000 pounds unloaded gross vehicle weight or less and fails to meet the current 22.5 miles per gallon fuel economy standard. This provision requires that amounts equivalent to the gas guzzler taxes received in the Treasury be transferred to the Highway Trust Fund.  An exemption applies to non-passenger vehicles.  The provision is estimated to provide $697 million to the Highway Trust Fund over ten years.

Revoke Passport of Individuals Owing More Than $50,000 in Back Taxes.  Currently the Federal government revokes passports and denies new passports to individuals who owe more than $2,500 in child support payments.  Similarly, this provision would authorize the government to deny the application for a new passport or renewal of an existing passport when the individual has $50,000 or more (indexed for inflation) of unpaid federal taxes which the IRS is collecting through enforcement action.  It would also permit the Federal government to revoke a passport upon reentry into the United States for such individuals. This provision is estimated to raise $743 million over ten years.

Increase Levy Authority on Payments to Medicare Providers with Delinquent Tax Debt.  Under current law, the Internal Revenue Service (IRS) may impose a levy of up to 15 percent against Medicare service providers with tax delinquencies.  This provision will permit the IRS to impose a levy of up to 100 percent on tax delinquent Medicare service providers.  This provision is estimated to raise $841 million over ten years.

Transfer to the Highway Fund Proceeds on Certain Imported Tariffs.  This provision would appropriate to the Highway Trust Fund amounts equivalent to amounts received in the general fund on articles classified under subheadings 8703.22.00 and 8703.24.00 of Chapter 87.  The provision provides $2.475 billion to the Highway Trust Fund between fiscal years 2012 and 2014.

As part of the SAFETEA-LU rewrite process, the Senate is pursuing a two-year, $109 billion package (S. 1813) that maintains most programs at current levels plus inflation. In the Senate, the Environment and Public Works Committee handles the highway title, the Banking Committee has oversight of the transit title, and the Commerce Committee is responsible for safety and research.

• Senate MAP-21 Highway Committee Summary
• Senate MAP-21 Highway Title (S. 1813)
• Senate MAP-21 Highway Title – Manager’s Amendment
• Senate MAP-21 Highway Title – En Bloc Amendments
• Senate Banking  Transit Title
• Senate Banking Transit Committee Summary
• Senate Amendment Combining Transit, Freight, and Finance Titles

The House Transportation and Infrastructure Committee is pushing a $262.9 billion, five-year bill, known as the American Energy and Infrastructure Jobs Act of 2012 (H.R. 7). The SAFETEA-LU law provided $286.6 billion over six years, averaging $47.7 billion per year over the FY2004-2009 period.  The House Republican proposal would average a total of $52.6 billion per year during the FY2012-2016 period while the Senate EPW bill totals around $54 billion each year.

• Text of House Reauthorization Bill to be considered by the full House (H.R. 7)
• Updated list of House Highway and Transit AMENDMENTS
• Committee Summary of House Bill (H.R. 7)
• Text of House Revenue Title (H.R. 3864)
• Comprehensive analysis by the Congressional Research Service (CRS) of surface transportation reauthorization in the 112th Congress

• In Wisconsin, the Northwest Regional Planning Commission and the West Central Wisconsin Regional Planning Commission have worked with the state to consolidate HUD CDBG loan programs into more productive regional lending pools, resulting in reduced administrative barriers, increased capacity, and streamlined processes to achieve efficiencies.  More importantly, they have increased business lending activity for technology companies, manufacturing firms and other area businesses.
• The Southern Oregon Regional Economic Development Inc . (SOREDI), based in Oregon, helps small businesses and entrepreneurs through the Jefferson Grapevine innovation network that provides technical assistance and resources to businesses, and  connects them to potential investors. SOREDI also assists businesses through the Southern Oregon Angel Investment Network, a group of accredited investors seeking equity investments in early-stage companies.
• In Colorado, the Region 9 Economic Development District promotes business growth through a partnership program called the Growth Company Initiative.
• In Texas, the Southern Plains Association of Governments manages a number of federal small business loan funds to have a big impact on the 15-county region.

The report includes information about each programs financing, successes and challenges, impact, and more.

Download the report.

The report is a product of the NADO Research Foundation’s work with the Small Business Administration (SBAHQ-10-I-0317) and should not be construed as an endorsement of any products, opinions or services.  All SBA-funded projects are extended to the public on a non-discriminatory basis.

As noted by Governor Branstad, “Iowa’s Councils of Governments (COGs) are important partners and problem solvers in driving positive change across the state.  They are trusted, accountable and proven stewards of public resources.  Most importantly, Iowa’s COGs are focused on creating high quality jobs and improving the lives of our state’s people while also saving taxpayer money and improving government efficiency.”

In recent years, the members of IARC have:

• Helped private sector partners create and retain over 5,800 jobs in the past five years through more than 250 business start-up and expansion loans totaling $52 million in COG investment, leveraging an additional $181 million in private investment
• Collaborated with state and local officials to identify and program over $915 million in federal funding for over 1,200 transportation improvement projects since 2005
• Offered transportation mobility options by providing more than 1.6 million rides each year through public transit systems, including for employees, elderly, and disabled
• Increased access to safe and affordable housing including homeownership financingfor 445 families and rehabilitation upgrades for over 2,300 homes
• Secured $93.8 million for 2008 disaster flood recovery and administered $66.6 million in federal and state recovery funding, impacting the livelihoods of 704 businesses and the well-being of 1,855 households directly impacted by the floods
• Assisted communities in securing and managing nearly $215 million for water and sewer infrastructure projects in the past five years. An additional $28 million has been raised by our COGs for various cultural and recreational projects.

Through IARC and individually, our COGs are constantly looking for opportunities to improve our state, regions and local communities.  Examples include:

• To spur economic growth through regional purchasing, a COG created a Buyer Supplier program to connect companies with area products and services,keeping more money locally rather than fl owing outside the state or country
• To assist with economic loss due to the closing of partner plants during the 2008 flood, AlphaGen Materials Technology, Inc. received a $60,000 COG loan for equipment, inventory, and operating expenses, helping retain quality jobs within the region
• To help employees have affordable and reliable transportation connections to work, a COG launched a two-route van service, JobJet, which has provided nearly 11,000 rides since 2010—a majority of the riders are employees of Tyson Foods
• To enable redevelopment of a brownfield site, a COG administered a $750,000 award to clear the site of contaminants. This resulted in new jobs and a $6 million expansion investment by Cystal Distribution Services
• To reduce waste from landfi lls, three COGs partner on the Iowa Waste Exchange. By matching materials to businesses for reuse, the program has diverted 192,000 tons of waste and saved partners more than $6 million in disposal costs in the past two years
• In partnership with the Iowa Department of Transportation, IARC’s Statewide Mobility Manager coordinates with local mobility managers to improve transportation access and connections for the general public, with an emphasis on the elderly, low-income persons, and persons with disabilities
• IARC members are partnering with the Iowa Department
  of Public Health and selected pilot communities and schools
  to increase the health of the state’s youth, adults, and
  communities through the Iowans Fit For Life initiative.

Public Sector Financial and Performance Accountability

One of the hallmarks of IARC and its network of COGs is the shared commitment to public accountability, transparency,and customer service. Recognizing the group’s proven history in this arena, the Iowa Finance Authority selected IARC to provide monitoring services for the agency’s Homelessness Prevention and Rapid Re-housing program. The goal of the initiative is to ensure taxpayer resources are spent efficiently, cost-effectively, and with the intended goals and purposes of each individual grantee.

View the new IARC publication.

View the NADO federal policy, politics and budget presentation.

View the AMI-KARDO Presentation on Regional Innovation in Rural America.

The event was held at K-State Innovation Campus which is part of the new facility, the International Animal Health and Food Safety Institute, in Olathe, Kansas.

Event participants included:

• Doug O’Brien, Senior Policy Advisor to USDA Secretary Vilsack
• Tom Guevara, EDA Deputy Assistant Secretary for Regional Affairs
• Patty Clark, USDA State Director for Rural Development (Kansas)
  

• Combined file of all forum presentations
• Mid America Regional Council Case Study
  

FEDERAL OFFICIAL PARTICIPANTS 

Sports fans in the DC area have become all too accustomed to defeatist attitudes with respect to local coverage of our professional sports franchises.  Now we must all deal with similar dooms day reports about our nation’s fiscal and economic future:  “House GOP Study Caucus Offers $2.5 Trillion in Cuts.”  “CBO Projects Historic Deficit Level of $1.48 Billion in FY2011.” “President Obama Plans Freeze on Discretionary Spending.” “National Unemployment Stays Above 9.0 Percent.” “China Emerges as World’s Second Largest Economy.”

On Tuesday night, President Obama called the nation to action during his State of the Union address.  The President is correct.  The drive to sustain and advance America’s ingenuity and innovation must be at the forefront of a bipartisan federal policy agenda.  We all share in the outcome—Red and Blue states, Urban and Rural, and Republicans and Democrats. Essentially, we’re talking about the need for a “One America” policy that recognizes we stand and fall together in today’s fast-paced and shifting global marketplace.

Hours before the President’s address, I was honored to talk with USDA Secretary Tom Vilsack about the leadership role that rural America is, and should continue, to play in our nation’s competitiveness agenda.  While far too many pundits and think tanks have pounded the drum about rural America’s reliance on commodity subsidies, health care entitlements and other transfer payments, the fact remains that small town and rural America has real assets and unlimited value for keeping the United States at the top of the world’s economic pecking order.

As Secretary Vilsack noted, one of our nation’s most innovative, internationally competitive and export driven sectors is agriculture.  During recent decades, America’s agricultural community—private companies, farmer cooperatives, research institutions, equipment manufacturers and others—has achieved impressive gains in efficiency, product innovation and commercialization of research into the marketplace.  It is essential that we continue to maintain a highly competitive and robust domestic agricultural sector, including for international trade and domestic consumption.

However, as we have witnessed during the current economic downturn, intense global competition and technological advancements, combined with severe economic recessions, typically results in a “pattern of creative destruction” that runs counter to the public sector’s desire for job growth.  Rural America is all too familiar with this reality.  For example, the number of farmers will most likely continue to decline and the percentage of farmers who rely on off-farm income to survive will continue to accelerate.  The same can be said for manufacturing and natural resource industries across rural America where the drive for innovation, cost cutting and cheaper labor are necessary to compete with emerging markets.

The next Farm Bill offers a unique opportunity for federal policymakers to start testing and pursuing new federal policies for rural development.  This means that longstanding programs and policies anchored within the USDA Rural Development mission area will need to be examined and evolved.  As rural advocates, we can no longer afford to defend the dozens of stove piped programs within USDA Rural Development.  Rather than making isolated, project specific investments, we need to be thinking more about advantaging regional assets, promoting value-added uses of commodities and positioning rural America to participate in the knowledge economy.

Earlier this month, NADO sponsored a regional innovation forum with 25 practitioners from across the nation.  We learned that rural development organizations and their private, public and nonprofit sector partners are already pursuing new and creative strategies at the regional and statewide levels.  Many of these new approaches cut across federal agency silos, including community development, economic development, housing, transportation and workforce development.

While Secretary Vilsack and his team at USDA are providing substantial intellectual horsepower to the national debate on regional innovation and economic competitiveness, their hands are too often tied when it comes to investing resources and seed capital for rural entrepreneurs, firms and communities.  If we want our farmers, rural businesses and youth to compete globally, think about trading beyond local boundaries and create wealth and jobs regionally, we need more flexible, responsive and strategic programs within USDA Rural Development.

First, we should continue to invest in policies and resources for value-added initiatives.  Rather than just serve as a source for commodity and resource extraction, we should be working to retain more value and processing of our crops and natural resources regionally.  Second, USDA Rural Development should have additional resources and tools to help local officials, private sector leaders and nonprofit entities join together to develop and implement regional strategies that leverage regional assets and opportunities.  Third, we need to strike a better balance between assisting with the basic physical and community infrastructure needs of rural America with the demands of today’s knowledge economy.

In future Agripulse blog posts, we’ll highlight how regional initiatives like Kansas State University’s Advanced Manufacturing Institute and the North Central Regional Planning Commission (Kansas), Mobilize Maine with the Eastern Maine Development Corporation and the Eastern Idaho Entrepreneurship Center are paving the way for new thinking about rural development.  We should be taking the lessons learned from these highly successful initiatives and bringing them to scale across the rural landscape.