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USDA Rural Development
Subcommittee Boosts Funding for USDA Programs
July 2, 2008 --On June 19, the House Agriculture Appropriations Subcommittee approved a $97.4 billion FY2009 spending proposal (currently unnumbered) that will fund the Agriculture Department (USDA), Food and Drug Administration and Commodity Futures Trading Commission.
The draft bill includes $20.6 billion in total discretionary spending, $1.9 billion above the President’s request and $2.5 billion over FY2008 funding. According to a subcommittee press release, the majority of the bill’s funding increase goes “simply to restoring the President’s proposed drastic cuts and program terminations.”
According to subcommittee documents, the bill provides $18.4 billion for the Department of Agriculture, $1.6 billion above the budget request. USDA spending includes the following funding:
- Section 502 Single Family Housing Direct Loans: $75 million, $30 million less than current funding. The President’s budget request included no funding for this program.
- Section 515 Rental Housing Direct Loans: $28.6 million, $1 million less than current spending. The President did not request any funding for this program.
- Mutual and Self-help Housing Grants: $38.7 million, level with current program funding. The President didn’t request any funding for this program.
- Community Facility Loans and Grants: $54 million, $14.5 million less than current funding and $30.2 million over the FY2009 budget request.
- Broadband Loans and Grants: $19.6 million, $8 million over the budget request but $9.4 million less than current spending.
- Rural Business Loans and Grants: $125.7 million, $76.7 million over the budget request but $47.5 million less than current funding. This includes funding for Rural Business Enterprise Grants and Rural Business Opportunity Grants.
- Resource Conservation and Development (RC&D): $50.7 million, level with current program funding. The President did not include RC&D funding in his budget proposal
The full House Appropriations Committee was scheduled to mark up the bill on June 26, but that meeting was unexpectedly adjourned due to a disagreement over the Interior-Environment spending bill. (See article "FY2009 Appropriations Slow-Going"). The Senate has yet to take up its version of the bill. For more information, contact NADO Legislative Representative Amy Linehan at 202.624.8177 or alinehan@nado.org.
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Farm Bill: Take Two
June 5, 2008 --On June 5, the Senate cleared a new, complete version of the Farm Bill (HR 6124), setting up an expected replay of last month’s Presidential veto and congressional override.
The Senate’s vote will enable Congress to correct a problem that occurred last month, when according to the House Agriculture Committee, the 35-page Trade Title was mistakenly omitted from the official copy of the bill (HR 2419) sent to the White House for presidential review. This resulted in the President vetoing an incomplete Farm Bill.
Both the House and Senate subsequently voted to override Bush’s veto and enact the 14 included titles, but because Congress is required to provide exact copies of the bills it passes for the President to sign or veto, it was decided that the most constitutional way to correct the omission was to enact a new, complete version of the legislation. The new legislation is identical to the conference report on the Farm Bill that lawmakers approved on May 15. The House passed the replacement bill on May 22.
There was some speculation that Bush might quietly let the new bill become law without his signature, but a White House spokesman has indicated that “the president will veto it.” Congress will then have a second override vote, which is expected to succeed.
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Farm Bill Ready for White House
May 20, 2008 --On May 15, the House and the Senate adopted the Farm Bill conference report (HR 2419, H Report 110-627) by an overwhelming majority (318-106 and 81-15, respectively), enough to defeat a threatened White House veto.
The $289 billion five-year measure is primarily focused on income and commodity price supports but also includes funding for important trade, conservation, forestry, nutrition and rural development programs.
A total of $150 million in mandatory funding is provided for programs within the Rural Development Title. This includes $120 million to address the $2 billion backlog of USDA water and waste water loan/grant applications.
An additional $15 million in mandatory funding is provided for the new Rural Entrepreneur Assistance Program. The initiative will provide low- and moderate-income individuals loans of $50,000 or less to establish new small businesses in rural areas. The bill also contains language championed by NADO to include “public” nonprofit entities, such as most regional development organizations and councils of government, as eligible organizations to serve as regional and local intermediaries and technical assistance providers.
Finally, the Value-Added Agricultural Market Development Program receives $15 million in mandatory funding.
The Rural Collaborative Investment Program (RCIP) supported by Senate Agriculture Committee Chairman Tom Harkin (D-IA) does not receive the mandatory funding as originally contained in the Senate’s version of the Farm Bill, but the innovative new program is included in the final bill with an authorization of $135 million in discretionary funding over five years.
Under the new program, up to $150,000 will be provided to help self-defining, sub-state regions develop regional collaborative investment strategies. An additional $6 million is provided for regions to implement specific projects identified in their strategies.
Most importantly, the bill specifically calls for regional development organizations to serve as fiscal managers within their region, providing technical, administrative and financial support.
The Rural Development Title also authorizes funding for several new and existing regional authorities. First, the focus of the Northern Great Plains Regional Authority (NGPRA) is expanded to include renewable energy. The bill also includes language allowing NGPRA to operate without a federal co-chair if one is not confirmed by the Senate 180 days after the final bill’s enactment.
After a long negotiation process, NADO ensure that local development districts (LDDs) will remain the lead local delivery mechanism for NGPRA activities and programs. Previous versions of the legislation stripped LDDs of this duty.
The bill also reauthorizes the Delta Regional Authority (DRA) at $30 million annually through 2012. No significant changes are made to operations of DRA.
Finally, the bill includes authorizations for the Northern Border Regional Economic Development Commission (covering the states of Maine, Vermont, New Hampshire and New York), the Southeast Crescent Regional Commission (covering counties in Alabama, Georgia, Florida, Mississippi, North Carolina, South Carolina and Virginia not already served by the Appalachian Regional Commission or the DRA); and the Southwest Border Regional Commission (covering the states of Arizona, California, New Mexico and Texas).
The authorities will focus on basic business development and job skill services, infrastructure development and transportation improvements. Each of the new commissions is authorized at $30 million annually through 2012 and establishes EDA-designated economic development districts as the local delivery mechanism for commission activities and programs.
In the coming weeks, NADO will provide a comprehensive analysis of the final bill. For more information, contact NADO Legislative Representative Amy Linehan at 202.624.8177 or alinehan@nado.org.
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NADO Joins Rural Development Coalition Letter
April 15, 2008 --On April 7, NADO joined with 11 other national organizations and members of the Campaign for a Renewed Rural Development (a national campaign spearheaded by NADO) to urge members of the House and Senate Agriculture, Ways and Means and Finance Committees to provide mandatory funding for the Rural Development Title in the 2008 Farm Bill.
The letter states that it is vital the federal government renew its commitment to partnering with the array of public, private, nonprofit, civic, education, philanthropic and other organizations working tirelessly to improve the nation's rural economies and communities.
Organizations signing the letter include the National Association of Counties, the American Public Works Association, Center for Rural Affairs, Council of State Governments, National League of Cities and the Rural Community Assistance Partnership.
For a copy of the letter, contact NADO Legislative Representative Amy Linehan at 202.624.8177 or alinehan@nado.org.
For additional information on the Campaign for a Renewed Rural Development, visit www.ruralcampaign.org.
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Rural Development Grants Limited Under Budget Proposal
February 11, 2008 --The President's budget proposal includes $97 billion in fiscal 2009 funding for the Department of Agriculture (USDA), a 5 percent increase over the fiscal 2008 total. This includes $20.8 billion in discretionary spending, a reduction of $1.1 billion.
President Bush is proposing to terminate or reduce 33 USDA programs, which according to the White House will save $2.3 billion in fiscal 2009. The proposal includes $2.1 billion for USDA Rural Development programs, a reduction of nearly $300 million.
Within Rural Development, the administration continues to move away from providing direct grant and loan assistance to relying heavily on loan guarantee programs. As a result, a number of grant programs and direct loans are slated for elimination or reduction while program support for loan guarantees generally increases.
The budget also retains a change enacted last year to the method in which funds under the former Rural Community Advancement Program (RCAP) are appropriated. Funds for rural community facilities, water and sewer, and business cooperatives are no longer combined under a single RCAP account. Funds for these programs are appropriated under separate accounts within the Rural Housing, Rural Business Cooperative and Rural Utility services.
The proposed budget for the Rural Housing Service (RHS) reflects a shift from direct housing loans to an increased reliance on loan guarantees. Section 502 Single Family Guaranteed Loans are funded at $4.8 billion, $500 million less than current spending, but no funding is provided for direct loans under this program. The budget proposes to increase the guarantee fee for homebuyers using Section 502 guaranteed loans from two percent to three percent.
The budget provides $300 million for Section 538 Multi-Family Housing guaranteed loans, an increase of $170 million, but provides no funding for Section 515 direct loans.
The budget does provide increases for two RHS grant programs: $43.5 million for Rural Housing Assistance Grants, a $4.5 million increase, and $997 million for the Rental Assistance Program, a $515 million increase.
Within the Rental Assistance Program, the administration is proposing to set aside $100 million for a "pilot voucher program" for eligible Rental Assistance Program tenants. They will "be used in place of project based rent on a portion of section 515 rural housing projects." The budget also proposes to require every tenant receiving Rental Assistance or a voucher to pay a minimum $50 monthly rent.
No funds are provided for Mutual and Self Help Housing Grants or the Rural Community Development Initiative. The budget includes $23.7 million for rural community facility loans and loan guarantees, $39.2 million less than current funding. This will support $302 million in direct loans and $210 million in guaranteed loans but will provide no community facility grant funding.
According to USDA budget documents, no community facility grant funding is included because "most projects can be funded by loans and loan guarantees."
Under the Rural Business Service (RBS), Rural Cooperative Development Grants are provided $4.4 million, $23.5 million less than current funding. Of this funding, $1.5 million is for grants to assist disadvantaged producers. The Intermediary Relending Program remains flat at $33.7 million.
The proposal reduces the Rural Business Program account by $57.2 million to $30.4 million. This funding will support $700 million for Business and Industry guaranteed loans, down from over $1 billion. No funding is included for Rural Business Opportunity Grants, Rural Business Enterprise Grants, Rural EZ/EC Grants or the Delta Regional Authority.
The administration eliminates funding for Rural Economic Development loans or grants, Renewable Energy guaranteed loans or grants and Value-Added Market Development grants.
The budget recommends no funding for Rural Utility Service (RUS) broadband grants but proposes $300 million for broadband loans, level with current funding. Grants for distance learning and telemedicine would decline by $15 million to $20 million and no funding is included for distance learning and telemedicine loans or high cost energy grants.
Within RUS, $269 million is provided to support guaranteed loans, direct loans and grants within a new Water and Waste Disposal Account, $293.6 million less than current funding. Under this program, direct loan support will increase to $1.3 billion, grant funding will drop by $249 million to $220 million and funding for guaranteed loans remains level at $75million. The interest rate for water and wastewater direct loans rate remains at 4.5 percent.
No funding is proposed for the Resource Conservation and Development (RC&D) Program. The administration indicates the program, which received $51 million in fiscal 2008, duplicates other programs.
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Senate Approves Farm Bill
December 18, 2007 On December 14, after four days of debate, the Senate passed its $288 billion version of the 2007 Farm Bill reauthorization (HR 2419). The House passed its version of the bill in July. The Senate’s approval of the bill clears the way for a House-Senate conference.
The five-year bill includes a new subsidy allowing farmers to choose between the current form of countercyclical payments, which kick in when the price of a crop falls below a government-set target, and payments based on state per-acre revenue. In the House bill, the choice is between the current program and a national revenue target program.
The measure also bars farmers making more than $750,000 a year from collecting subsidies. Under the House bill, the cutoff is at $1 million. Direct annual payments are capped at $40,000 and counter-cyclical payments are capped at $60,000 annually.
Within the Rural Development Title, the measure extends a number of existing programs, including Water and Waste Disposal Grants, Rural Business Opportunity Grants, the Delta Regional Authority, Emergency Water Assistance Program and Rural Cooperative Development Grants.
A total of $135 million in new mandatory funding is provided for the Rural Collaborative Investment Program (RCIP) to support the development and implementation of regional and local competitiveness strategies.
The RCIP initiative establishes Regional Collaborative Investment Boards that will be composed of representatives of local units of government, non-profit community-based development organizations, regional development organizations, private businesses and other rural community and economic development stakeholders within a self-defined area.
The regional boards will develop and implement a regional collaborative investment strategy. The bill authorizes up to $150,000 for the development and maintenance of individual strategies. Once a board develops an approved regional strategy, it will be eligible for project implementation grants. In addition, each regional board will be required to select a non-federal entity to serve as fiscal manager and to provide administrative and technical support to the regional boards.
Additional mandatory funding includes $40 million for a new entrepreneurship grant, loan and technical assistance program; $40 million for child day care facility loans, loan guarantees and grants; $50 million for rural hospital loans and loan guarantees; and $135 million to fund the backlog of pending water and sewer grant and loan applications.
The bill includes a five-year reauthorization of the Northern Great Plains Regional Authority (NGPRA) and amends the structure of NGPRA by allowing it to organize if the Federal Co-Chair is not confirmed by the Senate within 180 days of enactment of the measure. Assistance is provided to address multi-state economic issues, including renewable energy development and transmission, transportation planning, information technology and conservation land management.
The bill makes a number of changes shifting the Authority’s focus away from distressed and isolated areas. It reduces from 75 to 50 percent the minimum amount of funds that the Authority is required to allocate to “distressed counties” (defined as counties that are the most severely and persistently distressed and underdeveloped and have high rates of poverty, unemployment, or outmigration) and eliminates the prohibition of providing funds to “non-distressed counties.”
An amendment to the bill, offered by Agriculture Committee Chairman Tom Harkin (D-IA), authorizes $40 million annually through 2012 for the Northern Border Economic Development Commission (NBEDC). The new federal-state regional commission covers selected counties in Maine, New Hampshire, New York and Vermont. Funding can be used for a variety of economic and community development activities, including resource conservation activities and the development of renewable fuels. Under the amendment, EDA-designated economic development districts are established as the local delivery mechanism.
Finally, the measure amends the Rural Broadband program by limiting eligibility to applicants serving rural areas where at least 25 percent of households are not currently offered broadband service and stipulates that loans or loan guarantees may not be provided to those proposing service in an area with three or more existing service providers.
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House Approves Farm Bill
July 28, 2007 --On July 28, the House passed a $286 billion five-year Farm Bill (HR 2419). The bill faces a veto threat from the administration over a tax provision to offset the cost of $4 billion in additional nutrition spending. The administration has also expressed concern about the subsidy levels in the bill. The Senate is expected to start debating its version of the legislation after the August recess.
A centerpiece of the bill is language barring farmers who make more than $1 million in annual adjusted gross income from collecting government subsidies. Currently, farmers with income exceeding $2.5 million annually are ineligible for subsidy payments. According to House Agriculture Committee Chair Colin Peterson (D-MN), the changes save $226 million over five years.
Within the Energy title, the bill authorizes $2 billion in loan guarantees to finance the cost of developing and constructing bio-refineries and bio-fuel production plants. The measure increases funding for the Renewable Energy and Energy Efficiency Improvements Program, which provides loans, loan guarantees and grants to farmers, ranchers and rural small businesses to purchase and install renewable energy systems and to make energy efficiency improvements. Under the bill, the loan guarantee level would increase from $10 million to $25 million.
The bill's Conservation title includes an extension of the Conservation Reserve Program (CRP), the Wetlands Reserve Program and the Environmental Quality Incentives Program (EQIP) though 2012. The bill authorizes $60 million annually for a new Regional Water Enhancement Program (RWEP). The program would provide funding for cooperative agreements between USDA and agriculture producers or non-federal governmental entities to improve regional water quality or quantity in priority areas.
Within the Rural Development title, the bill reauthorizes a number of programs that were established in the 2002 Farm Bill, including public water and waste disposal grants, the Rural Business Opportunity Grant (RBOG) program, the Rural Cooperative Development Grant program, expansion of 911 access, Rural Firefighters and Emergency Medical Service Assistance and the Distance Learning and Telemedicine program.
The bill renews the Northern Great Plains Regional Authority (NGPRA) at $30 million each year through 2012 and makes a number of programmatic changes. The Delta Regional Authority (DRA) is also reauthorized at $30 million per year.
The Rural Strategic Investment Program (RSIP) is reauthorized at $25 million each year through 2012. Unlike the previous measure, the funding is discretionary and would be subject to the annual appropriations process. The Senate Agriculture Committee is developing a similar program that would consist of mandatory funding.
The bill also makes changes to the existing USDA broadband program to ensure a greater focus on rural areas and reduce the level of loans going to areas already served by existing broadband providers.
Finally, the measure establishes a new entrepreneurship grant, loan and technical assistance program within USDA Rural Development. Under language negotiated by NADO staff, program eligibility is expanded to include all nonprofit entities. Prior provisions limited eligibility to "private nonprofits," a term that would block many regional development organizations from utilizing the program.
With the Senate pushing activity back until early September, it is unlikely Congress will be able to complete its Farm Bill negotiations before the current measure expires on September 30. It appears that enactment of a short-term extension will be necessary.
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NADO Past President Kelley Outlines Association's Rural Development Vision for 2007 Farm Bill
February 13 - Vernon R. Kelley, Past President of the National Association of Development Organizations (NADO) and Executive Director of the Three Rivers Planning and Development District (MS) testified today before the Senate Agriculture Committee on the community and economic development challenges and opportunities facing small town and rural America. (View the full NADO statement.)
The committee, led by Chairman Tom Harkin (D-IA), is holding a series of hearings to explore issues related to the reauthorization of the 2002 Farm Bill, which is set to expire on September 30, 2007.
NADO Past President Randy Kelley outlined three pressing rural development policy issues. He also expressed NADO's general support of the concept and goals of the Rural Strategic Investment Program (RSIP), a new regional community and economic development program created in the 2002 Farm Bill but never implemented by Congress and the administration. The major points of Kelley's testimony included:
- Federal rural development policies and programs must be reshaped to promote and reward regional approaches and local cooperation among governmental entities at all levels, nonprofits, economic development organizations, educational institutions and other key community leaders. This reflects the reality of today's marketplace where rural communities are not only competing statewide and nationally, but most likely internationally.
- Infrastructure development (including advanced technology deployment and applications) remains one of the most significant roadblocks to economic development in small town and rural America. Entrepreneurs, small business leaders and private sector industries drive our nation's innovation, competitiveness and job growth. These individuals and entities also rely, expect and demand that public entities such as local governments provide and maintain basic public infrastructure services, especially costly water and sewer systems, that are essential building blocks for economic and community development. Unfortunately, the current USDA Rural Development portfolio for infrastructure, broadband and community facility projects is so heavily focused on direct loan and loan guarantee programs that most rural communities still cannot afford to tap into these programs.
- Rural economic and community development is an exhaustive and lengthy process that takes organizational capacity, partnerships and sustainability, especially in today's rapidly shifting global marketplace. It demands regional strategic planning, cooperation among public and private sector officials at all levels, regional institutional knowledge and capacity, and the ability to package and leverage various funding sources. The national network of 542 regional planning and development organizations, such as the Three Rivers PDD, are uniquely positioned to serve as the regional facilitators, technical resource providers and project coordinators needed to compete on a national and global scale.
For a complete copy of the NADO statement, visit www.nado.org/legaffair/issupdate/senaterd.pdf.
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