USDA Rural Development

USDA Revises RMAP Program Eligibility

July 27, 2010 --On May 28, USDA Rural Business-Cooperative Service published an Interim Rule in the Federal Register to implement its new Rural Microentrepreneur Assistance Program (RMAP). Under the rule, financial assistance for microenterprise development organizations was restricted to “a private entity chartered as a nonprofit entity under state law.” However, using this definition restricted public nonprofits from being eligible applicants. It was not the intention of USDA to restrict eligible nonprofits. Therefore, on July 19, USDA published a correction to delete the word “private” from the definition of a nonprofit entity. For more information, go to http://edocket.access.gpo.gov/2010/2010-17480.htm.

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Senate Committee Holds Farm Bill Hearing

July 27, 2010 --On July 21, the Senate Agriculture Committee held a hearing to examine energy and rural development programs in advance of the 2012 Farm Bill.

Hearing witnesses included Dallas Tonsager, USDA Undersecretary for Rural Development; Dave Tenny, President of the National Alliance of Forest Owners; Glenn English, Chief Executive Officer of the National Rural Electric Cooperative Association; and Eric Zuber, a New York dairy producer.

During the hearing, Committee Chair Blanche Lincoln (D-AR) questioned the witnesses on the success of current farm bill energy and rural development programs and discussed ways to improve the programs. For more information, go to http://ag.senate.gov/site/news.html.

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USDA Appropriations Moves Through Senate

July 27, 2010 --On July 15, the Senate Appropriations Committee approved a $22.8 billion discretionary spending bill (S.3606) for programs within the Department of Agriculture (USDA), the Food and Drug Administration (FDA) and the Commodity Futures Trading Commission. The bill’s total discretionary spending limit is $296 million over current funding, $27 million below the president’s request and $200 million less than spending approved by the House Agriculture Appropriations subcommittee.

Within USDA, the Senate bill provides $2.7 billion in discretionary budget authority for Rural Development programs, $168 million below current spending but $85 million over the request.

Rural Housing Service

Within the Rural Housing Service (RHS) the bill provides $971.5 million for the Rental Assistance Program, $8.5 million less than current funding but $6 million over the budget request. Mutual and Self Help Housing Grants are funded at $41.8 million, level with current funding and $4.8 million over the budget request, and Rural Housing Assistance Grants receive $41.5 million, $4 million less than current funding but $1.1 million over the budget request.

For the Community Facilities program, the bill provides $56.5 million in budget authority, $1.5 million over current funding and $14.8 million over the request. Budget authority will support $295 million in community facility direct loans, $206 million guaranteed loans and $20 million in grants.

An additional $14 million is provided for Economic Impact Initiative grants and $6.2 million is provided for the Rural Community Development Initiative. The budget request did not provide funding for these two accounts.

Rural Business Cooperative Service

The bill provides $87 million for the Rural Business Program Account, $10.1 million less than current funding but $5.5 million over the budget request. Program funding includes $42.5 million in budget authority to support $993 million in Business and Industry Guaranteed loans, $39 million for Business Enterprise Grants and $2.4 million for Rural Business Opportunity Grants. The bill also maintains a $3 million set-aside for the Delta Regional Authority. General provisions are included in the bill giving USDA the authority to assess a one-time fee for any guaranteed business and industry loan "in an amount that does not exceed three percent of the guaranteed loan principal."

The Intermediary Relending Program is provided with $18 million in budget authority to support $33.5 million in direct loans.

The bill also recommends $35.5 million for the Rural Cooperative Development Grant program, $5 million below the budget request and just $500,000 above current funding. Of this funding, $2.8 million is allocated for the Appropriate Technology Transfer program and $20.3 million is allocated for value-added agricultural market development grants. The committee also inserted language instructing that no more than $3.4 million of cooperative funding can be available for cooperatives whose primary focus is to provide assistance to small, minority producers.

The bill does not include any discretionary funding for the Biorefinery Assistance Program. The president’s budget included $17 million to support $50 million in guaranteed loans for these facilities. According to committee report language, the 2008 Farm Bill provided $75 million in FY2009 mandatory funding and $245 million in FY2010 mandatory funding. Little of this funding has been obligated and the bulk will be carried over and remain available in FY2011.

Finally, the bill provides $40 million in budget authority for the Rural Energy for America Program, level with current funding and the administration’s request. This funding will support $11.5 million in guaranteed loans and $34 million in grants.

Rural Utilities Service

Within the Rural Utilities Service (RUS), the bill provides $582 million in budget authority for the Water and Waste Disposal Account, $14 million over funding and $48 million over the budget request. This funding will support $1 billion in direct loans, $75 million in guaranteed loans and $469 million in grants.

The Committee recommendation includes a general provision authorizing a pilot program for the construction of three facilities for the generation of electricity in rural America. This pilot program will help rural electric customers acquire an adequate supply of electricity at reasonable rates which will otherwise rise to unsustainable levels, particularly when compared to non-rural areas where investor owned utilities provide options not available in rural areas.

For Distance Learning and Telemedicine (DLT) grants, the bill provides $38 million, level with current funding and $8 million over the administration’s request. The bill also includes $39 million in budget authority to support $400 million in broadband direct loans and $18 million in broadband grants. Similar to the budget request, no funding is provided for DLT loans.

The bill also supports the implementation of the administration’s Regional Innovation Initiative. Bill provisions instruct that USDA may reserve up to five percent of funding available for twelve Rural Development programs to fund projects in areas that are “engaged in regional strategic development planning." Programs eligible for this carve out are business and industry guaranteed loans; rural development loan fund; rural business enterprise grants; rural business opportunity grants; rural economic development program; rural microenterprise program; biorefinery assistance program; rural energy for America program; value-added producer grants; broadband program; water and waste program; and rural community facilities program.

Finally, Resource Conservation and Development (RC&D) receives $50.7 million, level with current funding; the budget did not include RC&D funding.

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NADO Board Member Testifies in Support of USDA Rural Business Programs

July 20, 2010 --On July 20, Thomas Higginbotham, a member of the Board of Directors of the National Association of Development Organizations (NADO) and Executive Director of the Northeast Nebraska Economic Development District (Norfolk, NE), testified on behalf of NADO during a hearing convened by the House Agriculture Subcommittee on Rural Development, Biotechnology, Specialty Crops, and Foreign Agriculture examining rural business programs.

Higginbotham provided concrete examples from his region and around the country illustrating the effectiveness of USDA’s rural business programs. He encouraged Congress to support enhanced funding for these programs and the newly proposed Regional Innovation Initiative, which will make the Department of Agriculture’s (USDA) infrastructure investments more efficient and effective by rewarding regional strategic approaches to rural development.

Higginbotham stressed, “USDA’s business loan, grant and technical assistance programs provided through the Rural Business and Cooperative Service are essential resources for rural communities as they strive to create economic opportunities and improve the quality of life for their citizens. With USDA’s assistance, rural communities across the nation are now in a better position to pursue new job-and wealth-generating opportunities, whether in traditional sectors such as agriculture and natural resource based industries or emerging science and technology fields."

"USDA Rural Development programs are critical to the economic health of our nation’s rural communities,” Higginbotham continued. "NADO's testimony provided an excellent opportunity to remind Congress of the key role regional development organizations play in developing and implementing rural development programs and strategies.”

To access Higginbotham’s full statement, go to http://www.nado.org/legaffair/higginbotham.pdf. Additional witness testimony is available at http://agriculture.house.gov/hearings/statements.html.

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Subcommittee Approves Funding for New Regional Initiative

July 2, 2010 --On June 30, the House Agriculture Appropriations Subcommittee approved a $23.1 billion discretionary spending bill (unnumbered) for the Department of Agriculture (USDA), the Food and Drug Administration (FDA) and the Commodity Futures Trading Commission. The bill’s total discretionary spending is $204 million less than FY2010 levels and $27 million less than the administration’s request.

According to subcommittee press information, the draft bill includes $20.26 billion for USDA ($81.7 million below the request). Total USDA spending includes $1.3 billion in budget authority to support Rural Housing Service Loans and Grants, $157 million in budget authority to support Rural Business Service loans and grants, and $645 million in budget authority to support Rural Utilities Service loans and grants.

The draft bill also includes $176 million for the administration’s proposed Regional Innovation Initiative. The new initiative, which is focused on the planning and coordination of USDA and other federal sources of assistance for rural communities, will fund projects that are part of a regional strategy. USDA Rural Development is expected to lead the initiative, with several other USDA agencies playing a participatory role.

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USDA Announces Funding Availability for RMAP Program

June 3, 2010 --On June 3, USDA Rural Business-Cooperative Service (RBS) announced the availability of $45.1 million in loan and grant funding for its Rural Microentrepreneur Assistance Program (RMAP). The RMAP program provides direct loans and technical assistance grants to microdevelopment organizations to support the rural microentrepreneurs and microenterprises. Applications for assistance will be accepted on an ongoing basis with awards being made on a quarterly basis. For FY2010, $36.2 million of the total funding will be available for loans and $7.6 million will be available for grants. Please note, under a recent USDA ruling only "private non-profit entities" are eilible to apply as Microenterprise Development Organizations. For more information regarding eligibility and application submission, go to http://edocket.access.gpo.gov/2010/pdf/2010-13380.pdf or contact NADO Legislative Representative Amy Linehan at 202.624.8177 or alinehan@nado.org.

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House Panel Holds Second Farm Bill Hearing

May 14, 2010 --On May 13, the House Agriculture Committee held its second full committee hearing to discuss U.S. agriculture policy in advance of the 2012 Farm Bill.

During the hearing, eight noted academics and economists provided testimony about the trends and emerging issues facing agriculture programs. While the majority of witness testimony focused on the role of farm, conservation and nutrition programs, a number of committee members expressed concern about the overall role of, and availability of resources for USDA Rural Development programs.

Written testimony provided by the witnesses is available at http://agriculture.house.gov/hearings/index.html. A full transcript of the hearing will be available at a later date.

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House Agriculture Committee Holds First 2012 Farm Bill Hearing

May 5, 2010 --On April 21, Agriculture Secretary Tom Vilsack appeared before the House Agriculture Committee to discuss the status of the current Farm Bill and the upcoming 2012 Farm Bill. The current bill was signed into law in 2008 and many of the provisions in the bill will expire in September 2012.

Secretary Vilsack’s testimony focused on a set of five priorities for rural America: broadband access, renewable energy and bio-fuels, regional food systems and supply chains, forest restoration and private land conservation and ecosystem market incentives. A copy of the Secretary’s testimony is available at http://agriculture.house.gov/testimony/111/h042110.

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Administration Kicks off Rural Tour

July 13, 2009 --On June 30, President Obama announced the launch of his administration’s Rural Tour. Over the course of the next few months, top administration officials will hold a series of discussions on how communities, states, and the federal government can work together to help strengthen rural America.

These events, will serve as listening sessions to focus on such issues as rural health, economic development, infrastructure, education, energy, natural resources and agriculture. Events will be held in Alaska, Louisiana, Nebraska, New Mexico, North Carolina, Ohio, Pennsylvania, Virginia and Wisconsin.

NADO members are encouraged to attend events in their region to stress the need for regional community and economic development resources and support for small metro and rural areas. Additional information is available at www.whitehouse.gov.

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USDA Releases First Wave of Stimulus Funding

March 13, 2009 --On March 9, U.S. Agriculture Secretary Tom Vilsack announced the agency’s first round of action to distribute roughly $28 billion in funding provided to USDA as part of the American Recovery and Reinvestment Act (ARRA), including the availability of $1.1 billion in loan guarantees through the Section 502 housing program and $400 million in water and wastewater grants. To access USDA’s recovery Web site and for additional information, visit www.usda.gov/wps/portal/?navid=USDA_ARRA.

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Recovery Bill Provides Needed Infrastructure Funding

February 2009 --The American Recovery and Reinvestment Act (AARA)+ allocates $67 million in budget authority to support $1 billion in Section 502 direct loans and $133 billion in budget authority to support $10.47 billion in guaranteed housing loans. By comparison, fiscal 2008 funding for the Section 502 direct and guaranteed loan funding included $156.2 million in budget authority to support $5.3 billion in loans and loan guarantees.

For community facility loans and grants, the bill provides $130 million in budget authority. According to the conference agreement, this amount will support $1.17 billion in community facility direct loans and $63 million in grants. No funding is provided for guaranteed loans. At least ten percent of this funding must be allocated for assistance in persistent rural poverty counties. The bill defines a persistent poverty county as one that has had 20 percent or more of its population living in poverty over the past 30 years (as measured by the 1980, 1990 and 2000 censuses).

The conference agreement includes $130 million in budget authority to support $2.99 billion in guaranteed business and industry loans and another $20 million in rural business enterprise grants. At least ten percent of this funding must be allocated for assistance in persistent rural poverty counties.

For water and waste disposal loans and grants, the bill includes $1.38 billion in budget authority to support $3.79 billion in loans and grants. Of this amount, $2.82 billion is for direct loans and $968 million is for grants. At least ten percent of this funding must be allocated for assistance in persistent rural poverty counties. By comparison, fiscal 2008 funding included $469 million for grants and $562 million in budget authority to support $1.02 billion in direct loans.

The bill provides $2.5 billion for rural broadband loans, loan guarantees and grants. The bill requires that at least 75 percent of the area that is served by a project that receives grant or loan funding is in a “rural area without significant access to high speed broadband service to facilitate rural economic development.” The bill stipulates that if an applicant uses the USDA broadband program, they become ineligible to apply for the revised NTIA Broadband Technologies Opportunities Program.

No funding is provided for the Rural Energy for America or the Biorefinery Assistance Programs, as proposed by the Senate.

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USDA Proposes to Combine Rural Development Loans

December 17, 2008 --On December 17, the Department of Agriculture (USDA) Office of Rural Development issued an interim rule revising the regulations for four existing Rural Development guaranteed loan programs to consolidate them under one new delivery and application platform. Loans affected by this rule include community facilities, water and waste disposal, business and industry and the renewable energy program.

Under the interim rule, USDA establishes broad applicant and project eligibility criteria that each applicant must meet (in addition to individual program criteria), a set of rolling deadlines for each loan and a new application review process. According to USDA, the new platform will reduce the application burden to applicants, increase the delivery efficiency of the programs and improve USDA program monitoring. This consolidation is the first phase of an effort by USDA to consolidate all the Rural Development guaranteed loans under one rule and application process.

In the coming weeks, NADO will provide a complete analysis of the specific changes made to each loan program. Comments are due February 17, 2009. For more information, contact Michael Foore at Michael.Foore@wdc.usda.gov or 202.690.4730.

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