Title VI:
Rural Development

Highlights

Title VI
Rural Development

Provides funding for rural areas to undertake strategic planning, feasibility assessments, and coordination activities with other local, State, and Federal officials. Provides funding for the backlog of pending applications for water and wastewater programs as well as new funding for broadband Internet services, value-added agricultural programs, rural business investments, and training for rural emergency personnel.

Provisions

1996-2001 farm legislation

2002 Farm Bill

Rural Community Advancement Program

The 1996 Farm Act streamlined and consolidated programs to provide a more focused Federal effort and encouraged additional decisionmaking at the State level. The new Rural Community Advancement Program (RCAP) became a vehicle for coordinating and implementing USDA rural development funding in 3 main areas: 1) community facilities, 2) water and waste facilities, and 3) business assistance.

RCAP continues, but the account structure, including the national reserve account, is eliminated.

Provisions

1996-2001 farm legislation

2002 Farm Bill

Comprehensive and strategic regional development planning and implementation

Encouraged on a relatively small scale through the development of State strategic plans, the Empowerment Zone/Enterprise Community Program, the Rural Economic Area Partnership Initiative, and the Rural Community Development Initiative.

A Rural Strategic Investment Program is authorized to fund regional investment boards. The boards plan and implement comprehensive regional rural development strategies. Funding for this program is to come from the Commodity Credit Corporation (CCC).This provision also calls for a national conference on rural America.

A Multijurisdictional Regional Planning Organizations Program is authorized to fund regional organizations that provide assistance to local governments and organizations involved in local development.

Regional authorities

New regional authorities were established in rural Alaska (the Denali Commission) in 1999 and in the Lower Mississippi Delta (the Delta Regional Authority) in 2000 to plan and fund development strategies in these regions.

The Northern Great Plains Regional Authority is authorized to plan and fund development strategies in that region.

The Delta Regional Authority is reauthorized.

Provisions

1996-2001 farm legislation

2002 Farm Bill

Water and waste facilities

The authorization for water and waste facility grants was increased to $590 million per year in 1996 Farm Act.

The $590-million upper limit on the annual amount of water and waste facility grants is eliminated.

Use of $360 million of CCC funds is authorized for a one-time reduction in the backlog of qualified, pending applications for grants and loans for water and waste disposal and emergency community water assistance.

A provision allows for guaranteeing of bond-financed loans for water and waste disposal facilities, if permitted by modifications in the Internal Revenue Service code.

For very small communities

The Emergency Community Water Assistance Grant Program for Small Communities program was also authorized to spend $35 million in fiscal years 1996-2002. At least 50 percent of available funds were to be allocated to very small communities (under 3,000 population).

Changes are made affecting the Emergency Community Water Assistance Program, allowing grants to forestall imminent decline in water quality and quantity.

Search grants are authorized for $51 million per year to assist very small communities (under 3,000 population) in preparing feasibility and environmental studies required to meet water and waste environmental standards.

For nonprofit organizations

Nonprofit organizations have been eligible to receive grants to provide technical assistance and training to rural communities.

Newly authorized programs include grants to nonprofits to capitalize revolving loans for water and waste disposal facilities; and grants to nonprofit organizations to finance homeowners' water well systems.

Circuit Rider Program

USDA's Rural Utilities Service has an existing program with the National Rural Water Association to provide Rural Water Circuit Rider Technical Assistance for operations of rural water systems.

Authorizes establishment of a Rural Water Circuit Rider Program, based on the current contract program, to provide technical assistance for daily operations of rural water systems.

For Alaskan and Native American communities

Direct loans and grants for water and waste facilities have been set aside for targeted communities, including rural Alaskan villages and Native American projects.

Grant programs are authorized for water systems for rural and native villages in Alaska, and for water and waste facilities for Native American communities.

Provisions

1996-2001 farm legislation

2002 Farm Bill

Telecommunications programs

The Telemedicine and Distance Learning Program was reauthorized and streamlined in the 1996 Farm Act. Under this program, the Secretary could make grants and loans to assist rural communities with construction of facilities and services to provide distance learning and telemedicine services. Funding was authorized at $100 million annually.

The Telemedicine and Distance Learning Program was reauthorized without changes in substance or funding.

Broadband programs

Amendments to the Telemedicine and Distance Learning Program in 2001 authorized a Broadband Pilot Loan Program to provide funding for construction of facilities and systems providing broadband transmission services to rural consumers. $2 million in funding was provided from the Telemedicine and Distance Learning Program budget.

Grants, loans, and loan guarantees are authorized for the purpose of improving access to broadband telecommunications services in rural areas. The funds would be for construction, improvement, and purchase of equipment and facilities for rural broadband service in eligible communities. Eligible rural communities have no more than 20,000 inhabitants. The definition of broadband service would be reviewed regularly to take into account changes in technology. A total of $100 million of CCC funds is authorized to provide loans and loan guarantees to cover fiscal years (FY) 2002-07.

Local television access

The Launching Our Communities' Access to Local Television Act provided for a guaranteed loan program intended to facilitate access, on a technologically neutral basis, to signals of local television stations for households located in nonserved areas and underserved areas.

Authorizes $80 million in loan guarantees for the delivery of local broadcast television station signals to satellite television subscribers in unserved and underserved local television markets. The funds are available until December 31, 2006, without fiscal year limitation.

Rural telework

No similar provisions in previous legislation.

A new program would pay the Federal share of the cost of establishing and operating a national rural telework institute. Each grant may be up to $500,000. Authorizes $30 million for each fiscal year.

Rural E-Commerce Extension

No similar provisions in previous legislation.

A Rural Electronic Commerce Extension Program will be established. The program's goal is to expand and enhance e-commerce practices and technology to be used by rural small businesses and enterprises. Funding is authorized at $60 million per year.

Provisions

1996-2001 farm legislation

2002 Farm Bill

General business assistance programs

The Rural Business-Cooperative Service operates several business assistance programs. As of FY 2002, the largest in terms of budget authority were the Business and Industry Loan Program, the Intermediary Relending Program, Rural Business Enterprise Grants, Rural Economic Development Loans and Grants, Rural Business Opportunity Grants, and Rural Cooperative Development Grants.

The authorization level for Rural Business Opportunity Grants was increased from $7.5 million to $15 million per year. Rural Business Enterprise Grants, Rural Development Loans and Grants, and Rural Cooperative Development Grants are continued with minor modifications.

Rural Business Investment Program

No similar provisions in previous legislation.

A new Rural Business Investment Program is authorized to guarantee the funds raised by companies that make equity investments in rural businesses, with an emphasis on smaller businesses. This program also authorizes grants to pay for operational assistance to participating businesses. The program is authorized to receive $100 million through the CCC.

Venture Capital Demonstration Program

The 1996 Farm Act authorized a Rural Venture Capital Demonstration Program to guarantee loans made to rural businesses.

The Rural Venture Capital Demonstration Program was not extended.

Provisions

1996-2001 farm legislation

2002 Farm Bill

Promoting value-added agriculture

Existing USDA business loan programs provide financial assistance to various kinds of businesses, including value-added agricultural enterprises.

Rules were liberalized to allow value-added producers, firms, and cooperatives greater participation in the Rural Business and Industry Loan Program. Business and industry loans and guarantees will be allowed for more types of renewable energy systems, such as wind energy systems and anaerobic digesters. Value-added agriculture businesses would also be allowed to receive Rural Business Enterprise Grants.

Value-Added Agricultural Product Marketing Development

Value-Added Agricultural Product Marketing Development Grants Pilot Program received $20 million in FY 2001 but got no additional funding in FY 2002 to expand the market for value-added agricultural products.

In 2001, an Agricultural Marketing Resource Center was created. It received $5 million to collect and disseminate information to value-added producers.

Value-Added Agricultural Product Marketing Development Grants were authorized to receive $40 million per year from the CCC, with eligibility liberalized to increase participation in the program. Using money authorized under this program, a new Agriculture Innovation Center Demonstration Program will be created to provide technical assistance, business and marketing planning, and other nonfinancial assistance to value-added businesses.

Alternative Agricultural Research and Commercialization

The Alternative Agricultural Research and Commercialization Corporation's revolving loan fund was established to help finance new industrial uses for agricultural products, but it received no appropriations after FY 1999.

Authorization is repealed for the Alternative Agricultural Research and Commercialization Corporation.

Farmworker training

No similar program in previous legislation.

A new program to train farmworkers in new technologies required for higher value crops is authorized for $10 million per year.

Delta region assistance

Special funding had been authorized to assist value-added business activity in the Delta region.

The Delta region is reauthorized to receive $7 million per year for animal nutrition technology development and value-added manufacturing.

Provisions

1996-2001 farm legislation

2002 Farm Bill

Community facilities and related programs

As of 2002, the community programs administered by the Rural Housing Service included Community Facilities grants and loans/guarantees.

Authorizes several new programs: the Rural Firefighters and Emergency Medical Personnel Training Program; Historic Barn Preservation grants to help States identify and preserve historic barns; and Community Facilities Grants to Tribal Colleges and Universities. New rules would reserve 10 percent of Community Facilities funds for child care until April 1 of each fiscal year. In addition, loan guarantees are allowed for bond-financed community facilities loans, if permitted by modifications in the Internal Revenue Service code.

National Rural Development Partnership

The National Rural Development Partnership and its State Rural Development Councils (which have operated without authorization since the early 1990s) assisted the coordination of USDA's rural development programs with other Federal and State programs affecting rural development.

Establishes the National Rural Development Partnership as a Federal program, setting new rules on how the partnership is run, and authorizing it for $10 million per year.

Fund for Rural America

Established the Fund for Rural America to augment existing resources for agricultural research and rural development. Funding was authorized for $100 million per year.

Not extended, but projects already funded will be completed.

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