Rural Development

Rural Development: Title VI

Provides for rural community and economic development program planning, coordination, and implementation; covers rural broadband investments, including distance learning and telemedicine; water and waste water treatment facilities; collaborative organizations, including community colleges and regional authorities such as the Delta Regional Authority; value-added agricultural activities, including renewable energy and locally and regionally produced agricultural products; general business assistance; chronically underserved rural communities; National Oceanic and Atmospheric Administration weather radio transmitter grants; and financing for essential community facilities, including schools, hospitals, and public safety.

Highlights

  • Extends most rural development programs, but with generally reduced funding authorization levels; provides limited mandatory funds, and increases funding authorization for some programs.
  • Extends rural electrification and telephone loan programs, with minor changes.  
  • Introduces or replaces a number of programs in rural business development, energy, and broadband Internet.  Broader use of the Internet in rural communities is encouraged via funding for integration of Internet processes into specific business practices.
  • Provides new authority to prioritize applications and projects that are more integrated into long-term regional development strategies; addresses the effectiveness of existing programs through streamlining application processes and better data collection. 
  • Makes minor eligibility changes in some programs, including refinements in the definition of rural for some programs.

New Programs and Provisions

Value-Added Agricultural Product Market Development Grants—Program is extended with mandatory funding increased from $15 million to $63 million per fiscal year. Identifies veteran farmers and ranchers as eligible for priority and requires the Secretary to give priority to projects that best contribute to creating or increasing marketing opportunities for certain operators, farmers, and ranchers.

Access to rural broadband telecommunication services—Programs are extended with new instructions and definitions covering eligibility requirements for loans, follow-up on loans granted, data collection metrics, and studies of loan program effectiveness. Broadband is redefined as transmission capacities of 4-Mbps downstream and 1-Mbps upstream. The new Rural Gigabit Network Pilot Program aims to bring ultra-high-speed Internet service to rural areas.

Integration of information technologies (Internet)—Funding is authorized in some programs for integrating Internet processes into specific business practices. The Rural Business Development Grants program, for instance, may be used directly for establishing centers to provide training to rural businesses in interactive technology. The program may also be used to back projects that support the development of enterprises, where those projects facilitate the operation of rural distance learning networks and the development of rural learning programs.

Rural Energy Savings Program—Program is created to help families and small businesses in rural areas achieve cost-effective energy efficiency. Funding is authorized at $75 million per fiscal year.

Rural Business Development Grants—Program is authorized at $65 million per fiscal year and replaces the Rural Business Enterprise Grant program, which had been authorized at $50 million per fiscal year and the Rural Business Opportunity Grant program, which was limited to $1.5 million per fiscal year.

Rural Microentrepreneur Assistance Program—Program is extended with mandatory funding of $3 million per fiscal year, versus $10 million over the 5 years of the previous farm bill (funds were available until expended).

Accessibility, accountability, and effectiveness of existing programs—Provisions are designed to make it easier for program participants, improve the selection process, and increase integration of programs into designated service areas. These provisions include simplifying application forms for program participants, prioritizing applications that meet strategic eligibility requirements within some existing programs, and developing a coordinated rural college strategy to meet local needs when making investments in community and technical colleges. The Secretary of Agriculture is directed to collect data on economic activities created through rural development grants and loan programs. Data are to be collected from recipients both during the award period and for 2 years after the award period has ended.

Rural transportation issues—The Secretaries of Agriculture and Transportation are mandated to complete within 1 year an updated study on rural transportation issues (freight transportation of agricultural products, renewable fuels, and other issues of importance to rural community economies).

Eligibility for Rural Housing Service programs authorized under the 1949 Housing Act—Title VI modifies eligibility for certain Rural Housing Service programs so that eligibility is consistent through the 2020 Census.

User fee for baseload generation—An upfront fee can now be charged for baseload generation. The fee will offset the risk from the subsidy rate set under USDA Rural Development’s Electric Program, allowing the program to finance new baseload generation. 

Economic Implications

The 2014 Farm Act reduces authorized funding for many Title VI programs, including:

  • Rural Water Circuit Rider Program—reduced from $25 million to $20 million per fiscal year.
  • Solid Waste Management Grant—limited to $10 million per fiscal year; previous authorization did not set a limit.
  • Household Water Well System—reduced from $10 million to $5 million per fiscal year.
  • Rural Cooperative Development Grant—reduced from $50 million to $40 million per fiscal year.
  • Rural Business Investment Program—reduced from $50 million to $20 million per fiscal year.
  • Distance Learning and Telemedicine Program—reduced from $100 million to $75 million per fiscal year.
  • Agriculture Innovation Center Demonstration Program—reduced from $6 million to $1 million per fiscal year.

In addition, programs that remain at the same nominal funding level have, effectively, less money in real dollars. As many programs had not received appropriations at fully authorized funding levels, the effect of these real and nominal cuts in authorized funding may be mitigated. In addition, Title VI refinements in requirements and reportage may result in greater efficiency in the use of funds.

Specific to the rural development program area is the inclusion of the digital economy, or broadband technology use, in new and existing programs. These provisions are aimed at improving the economic effect of the programs and should help mitigate the impact of funding decreases. They all may improve individual enterprise viability and encourage best practices.

The new Rural Gigabit Network Pilot Program provides $10 million per fiscal year for ultra-high-speed Internet service in rural areas. While its geographic scope will be very small out of necessity, the pilot program will elicit new data on the need for, and the economic effect of, ultra-high-speed Internet technologies in rural settings.

USDA, Rural Utilities Service’s Rural Broadband Loan Program continues as an ongoing source of funding for rural broadband networks, with improved reporting and data collection requirements.