U.S. GOVERNMENT PUBLISHING OFFICE

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RURAL DEVELOPMENT 

AND ENERGY PROGRAMS: 

PERSPECTIVES FOR THE 

2018 FARM BILL 

HEARING 

BEFORE THE

COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY 

UNITED STATES SENATE 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

SEPTEMBER 28, 2017 

Printed for the use of the 

Committee on Agriculture, Nutrition, and Forestry 

( 

Available via the World Wide Web: http://www.govinfo.gov/ 
COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY 

PAT ROBERTS, Kansas, Chairman 

THAD COCHRAN, Mississippi 

MITCH MCCONNELL, Kentucky 

JOHN BOOZMAN, Arkansas 

JOHN HOEVEN, North Dakota 

JONI ERNST, Iowa 

CHARLES GRASSLEY, Iowa 

JOHN THUNE, South Dakota 

STEVE DAINES, Montana 

DAVID PERDUE, Georgia 

LUTHER STRANGE, Alabama 

DEBBIE STABENOW, Michigan 

PATRICK J. LEAHY, Vermont 

SHERROD BROWN, Ohio 

AMY KLOBUCHAR, Minnesota 

MICHAEL BENNET, Colorado 

KIRSTEN GILLIBRAND, New York 

JOE DONNELLY, Indiana 

HEIDI HEITKAMP, North Dakota 

ROBERT P. CASEY, JR., Pennsylvania 

CHRIS VAN HOLLEN, Maryland 

JAMES A. GLUECK, JR., MAJORITY STAFF DIRECTOR

DANITA M. MURRAY, MAJORITY CHIEF COUNSEL

JESSICA L. WILLIAMS, CHIEF CLERK

JOSEPH A. SHULTZ, MINORITY STAFF DIRECTOR

MARY BETH SCHULTZ, MINORITY CHIEF COUNSEL

(II) 
(III) 

C O N T E N T S 

Page 

HEARING(S): 

Rural Development and Energy Programs: Perspectives for the 2018 Farm 

Bill ......................................................................................................................... 1

Thursday, September 28, 2017 

STATEMENTS PRESENTED BY SENATORS 

Roberts, Hon. Pat, U.S. Senator from the State of Kansas, Chairman, Committee on Agriculture, Nutrition, and Forestry ................................................. 1 

Stabenow, Hon. Debbie, U.S. Senator from the State of Michigan ..................... 2 

Panel I 

Hazlett, Anne C., Assistant to the Secretary for Rural Development, United 

States Department of Agriculture, Washington, DC ......................................... 6 

Davis, Richard A., Acting Administrator, Rural Housing Service, United 

States Department of Agriculture, Washington, DC ......................................... 7 

Parker, Chadwick, Acting Administrator, Rural Business Service, United 

States Department of Agriculture, Washington, DC ......................................... 8 

McLean, Christopher A., Acting Administrator, Rural Utilities Service, United 

States Department of Agriculture, Washington, DC ......................................... 10 

Panel II 

Botts, Aleta, Executive Director, Kentucky Center for Agriculture and Rural 

Development, Elizabethtown, KY ....................................................................... 29 

Ronnebaum, Elmer, General Manager, Kansas Rural Water Association, Seneca, KS .................................................................................................................. 30 

Stephens, Christopher, President/CEO, Coweta-Fayette EMC, Palmetto, GA .. 31 

Shanks, Brent H., Director, NSF Engineering Research Center for Biorenewable Chemicals, Iowa State University, Ames, IA ............................................. 34 

Law, Denny, CEO, Golden West Telecommunications Cooperative, Wall, SD ... 33 

Olinyk, Mark, President, Harvest Energy Solutions, Jackson, MI ..................... 35 

APPENDIX 

PREPARED STATEMENTS: 

Botts, Aleta ....................................................................................................... 52 

Davis, Richard A. .............................................................................................. 60 

Hazlett, Anne C. ............................................................................................... 64 

Law, Denny ....................................................................................................... 67 

McLean, Christopher A. ................................................................................... 84 

Olinyk, Mark ..................................................................................................... 88 

Parker, Chadwick ............................................................................................. 102 

Ronnebaum, Elmer ........................................................................................... 105 

Shanks, Brent H. .............................................................................................. 111 

Stephens, Christopher ...................................................................................... 114 

QUESTION AND ANSWER: 

Botts, Aleta: 

Written response to questions from Hon. Debbie Stabenow ......................... 122 

Written response to questions from Hon. Patrick J. Leahy .......................... 122 
Page

IV 

Botts, Aleta—Continued 

Written response to questions from Hon. Kirsten Gillibrand ....................... 123 

Davis, Richard A.: 

Written response to questions from Hon. Pat Roberts .................................. 125 

Written response to questions from Hon. John Thune .................................. 148 

Written response to questions from Hon. Patrick J. Leahy .......................... 148 

Hazlett, Anne C.: 

Written response to questions from Hon. Pat Roberts .................................. 152 

Written response to questions from Hon. Debbie Stabenow ......................... 153 

Written response to questions from Hon. John Thune .................................. 160 

Written response to questions from Hon. Patrick J. Leahy .......................... 161 

Written response to questions from Hon. Amy Klobuchar ........................... 168 

Written response to questions from Hon. Kirsten Gillibrand ....................... 169 

Written response to questions from Hon. Heidi Heitkamp ........................... 174 

Law, Denny: 

Written response to questions from Hon. Kirsten Gillibrand ....................... 175 

McLean, Christopher A.: 

Written response to questions from Hon. Pat Roberts .................................. 176 

Written response to questions from Hon. John Thune .................................. 199 

Written response to questions from Hon. Patrick J. Leahy .......................... 200 

Written response to questions from Hon. Kirsten Gillibrand ....................... 208 

Olinyk, Mark: 

Written response to questions from Hon. Debbie Stabenow ......................... 209 

Parker, Chadwick: 

Written response to questions from Hon. Pat Roberts .................................. 211 

Written response to questions from Hon. John Thune .................................. 233 

Written response to questions from Hon. Patrick J. Leahy .......................... 233 

Written response to questions from Hon. Kirsten Gillibrand ....................... 236 

Ronnebaum, Elmer: 

Written response to questions from Hon. Patrick J. Leahy .......................... 238 

Shanks, Brent H.: 

Written response to questions from Hon. Pat Roberts .................................. 241 

Written response to questions from Hon. Debbie Stabenow ......................... 241 

Stephens, Christopher: 

Written response to questions from Hon. Patrick J. Leahy .......................... 243 

Written response to questions from Hon. Kirsten Gillibrand ....................... 245 
(1) 

RURAL DEVELOPMENT 

AND ENERGY PROGRAMS: 

PERSPECTIVES FOR THE 

2018 FARM BILL 

Thursday, September 28, 2017 

UNITED STATES SENATE, 

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY, 

Washington, DC 

The committee met, pursuant to notice, at 9:34 a.m., in room 

216, Hart Senate Office Building, Hon. Pat Roberts, Chairman of 

the committee, presiding. 

Present or submitting a statement: Senators Roberts, Boozman, 

Hoeven, Ernst, Grassley, Thune, Daines, Stabenow, Leahy, Brown, 

Klobuchar, Bennet, Gillibrand, Donnelly, Heitkamp, Casey, and 

Van Hollen. 

STATEMENT OF HON. PAT ROBERTS, U.S. SENATOR FROM THE 

STATE OF KANSAS, CHAIRMAN, U.S. COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY 

Chairman ROBERTS. Good morning, members of the Committee. 

I call this hearing of the Senate Committee on Agriculture, Nutrition, and Forestry to order. 

Today’s hearing marks this Committee’s ninth hearing this year, 

dedicated to listening to our stakeholders from around the country 

on how our authorized programs are currently working or need improvement, as we work towards farm bill reauthorization during 

this Congress. This includes taking a look at spending requests and 

proposals for 39 programs in the farm bill that do not have a budget baseline, and as I have said at each of these hearings, our Committee must be mindful of the very tough budgetary environment 

that we have to face. 

While it is a principal duty of this Committee to ensure the next 

farm bill provides our nation’s agriculture producers with the necessary tools and resources to feed a growing and hungry world, our 

responsibilities and the role of the USDA do not stop there. It is 

also critical the next farm bill works to support rural businesses 

and cooperatives and health clinics and schools, renewable energy, 

and bio-based product manufacturers and other essential service 

providers. They all serve as the backbone of the communities our 

farmers and ranchers call home. 

Earlier this year, at our Committee’s first field hearing in Manhattan, Kansas, home of the ever-optimistic and fighting Wildcats, 

we had the opportunity to hear from a number of stakeholders that 
2 

I believe share much of the same passion and commitment to rural 

America as our witnesses today—and to the witnesses, I apologize 

for the lateness of the hearing. Thank you for being very patient. 

We listened to the manager at the Nemaha-Marshall Electric Cooperative explain how low-interest, utility service electric loans 

make it possible for small cooperatives to provide rural Kansas 

with affordable and reliable energy. A Kansas biofuels producer 

spoke about the important role renewable energy plays in helping 

to create rural jobs and a new market demand for a number of 

commodities important to all of our member states. We heard a 

rural telecom provider discuss daily challenges that she faces in 

working to provide high-speed broadband to an area in western 

Kansas roughly the size of Connecticut and Vermont—the distinguished Ranking Member from the—the Senator from Vermont has 

departed—but with 3 million fewer people. 

I hope today’s hearing will continue that conversation and provide our Committee opportunities to hear a broader perspective of 

the needs throughout farm country. 

On our first panel today we are pleased to have the Assistant to 

the Secretary of Agriculture for Rural Development and the three 

Acting Administrators for the Rural Utility Service, Rural Housing 

Service, and Rural Business Cooperative Service. They will discuss 

Secretary Perdue’s vision for fostering growth and economic prosperity throughout rural America and provide an update on program 

functions within the USDA Rural Development. 

For our second witness of panels—or, pardon me, witnesses—we 

will hear from a broad set of private sector stakeholders, including 

representatives of rural cooperatives who work every day to provide 

essential utility services to farmers, ranchers, and small towns all 

across the country. They include a non-profit organization that provides training and other support for small business development, 

a university professor leading state-of-the-art research in renewable chemical product development, and finally, an entrepreneur 

whose business model is helping farmers and other small businesses save on energy costs through the installation of renewable 

energy systems. 

Again, I look forward to our discussions today regarding the 

rural development and energy titles of the farm bill, and to hearing 

from our witnesses about their recommendations to improve these 

programs and provide our rural communities with the necessary 

economic tools they need to grow and thrive. 

It is my privilege now to present Senator Stabenow for any opening remarks she would like to make. 

STATEMENT OF HON. DEBBIE STABENOW, U.S. SENATOR 

FROM THE STATE OF MICHIGAN 

Senator STABENOW. Well, thank you so much, Mr. Chairman, for 

holding this hearing to discuss issues that are so critically important to small towns and rural communities in Michigan and Kansas, and all across the country. I want to welcome our witnesses 

today. Thank you for your work. 

Earlier this year we held a hearing to examine the state the farm 

and rural economy. There we heard, loudly and clearly, that those 

who live and work in rural America are facing tough economic 
3 

times. But we also learned that there are many opportunities to invest in the future of our small towns and rural communities, create 

good-paying jobs, and help them get back on a good track. 

Rural communities are often the first to feel the effects of an economic downturn and the last to see the impacts of an improving 

economy. As a result, we should be making more investments in 

rural America, not less. 

Looking ahead to the next farm bill, we need to think strategically about how we can achieve long-term economic growth in every 

region of the country. I have always said that the farm bill is a jobs 

bill. The rural development and energy titles that we are discussing today have a wealth of opportunities to provide a bright future for rural America. I grew up in one of those small towns in 

northern Michigan and I know how important it is that we have 

robust economic development efforts, support for agriculture, and 

support for business expansion. So strengthening our rural communities and ensuring a high quality of life that young people will 

want to go home to is very personal for me. 

In order for our communities to thrive they need to be able to 

compete in the 21st century economy. Improving access to highspeed Internet is one of the top ways to make sure that happens. 

USDA provides critical support and capital to expand broadband 

access. We need to strengthen the tools available to extend highspeed Internet to every corner of the country. 

We also need to continue investing in other forms of rural infrastructure. It is unacceptable that there are small towns that cannot 

afford to modernize their water systems to provide clean drinking 

water. 

Small businesses need access to capital as well. Rural business 

loans help entrepreneurs grow their businesses, while also offering 

new employment opportunities for the community at large. We 

need to continue to invest in innovation that will keep driving 

these economies forward. 

In Michigan, agriculture and manufacturing are the heart of our 

economy. We do not have a middle class unless we make things 

and grow things. That is why we created opportunities in the last 

farm bill to support bio-based manufacturing. Instead of using petroleum, companies are creating new products from Americangrown crops. The economic benefit is twofold—new markets for our 

farmers, and new jobs and manufacturing opportunities for our 

businesses. 

Additionally, the farm bill invests in renewable energy which 

also leads to job creation. According to a new report, there are now 

92,000 clean energy jobs in Michigan alone. The popular Rural Energy for America Program, known as REAP, helps producers and 

businesses lower their utility bills through installing renewable energy systems and making energy efficiency upgrades. Innovations 

in advanced biofuels are helping us to become more energy independent and pay less at the pump. 

It is the clear the opportunities we created in the 2014 Farm Bill 

are helping our small towns create jobs and support communities 

where parents want to raise their children. So as we begin work 

on the next farm bill, I look forward to building on that progress 

to help rural America reach its full potential. 
4 

Thank you, Mr. Chairman. 

Chairman ROBERTS. I thank the Senator. 

Senator THUNE. Mr. Chairman. 

Chairman ROBERTS. The distinguished Senator is recognized. 

Senator THUNE. Mr. Chairman, in the event I cannot get back or 

have a witness I would like to introduce, is that possible—that is 

on the second panel? 

Chairman ROBERTS. I think that is certainly possible. 

Senator THUNE. Well, Mr. Chairman, I just want to first off 

thank you and Senator Stabenow for having this hearing. This is 

an important title in the farm bill. I have a panelist today from 

South Dakota, a good friend, Denny Law, a very incredibly capable 

general manager and CEO of Golden West Telecommunications Cooperative, which is headquartered in Wall, South Dakota. 

His company serves my hometown of Murdo, South Dakota, 

where my dad still lives. He will be 98 in December. He spends a 

lot of time watching cable and on the Internet, and he is probably 

one of my most-informed and least-patient constituents, because, 

inevitably, he calls me to complain about whatever it is he is seeing 

that we are doing. 

But Golden West has been around for a long time, since 1916. 

They provided telephone, Internet, and cable services across the 

state, and Denny has a 27-year history in that industry, all in 

South Dakota, serving both East and West River. What makes his 

current job as CEO of Golden West Telecommunications Cooperative so challenging is his company’s location in one of the most 

rural areas of the country, with ranch and farming operations positioned miles apart and often one to two hours from a larger city 

like Rapid City. Yet Denny has managed to meet the rural 

broadband challenges by developing reliable broadband in this 

area, providing access for jobs, education, and health care. Denny 

has helped keep a large part of rural South Dakota in touch with 

the necessities and benefits of the telecommunications industry 

that most of us in other parts of the country take for granted. 

Denny has served as General Manager of Sioux Valley Telephone 

Company and Hills Telephone Company in Dell Rapids, South Dakota. He went on to become the Eastern Region Manager at Golden 

West, and he has served as CEO of Golden West since 2008. He 

has got a bachelor’s degree in science and journalism from South 

Dakota State University, and went on to receive his master’s in administrative studies in human resources from the University of 

South Dakota, which means he is very conflicted when it comes to 

the football season. 

But I want to thank Denny for appearing before this Committee 

and for sharing your recommendations on how this Committee, 

through the next farm bill, can help you and your company improve access to broadband in rural areas. So welcome. I thank you, 

Mr. Chairman, for that indulgence and appreciate having Denny 

Law here today. 

Chairman ROBERTS. Well, thank you, Senator. I know you are 

very busy and urge you to keep working on tax reform as a very 

important member of the Finance Committee, more especially on 

behalf of the Thune-Roberts Amendment, as it is known in South 
5 

Dakota, or the Roberts-Thune Amendment as it is known in Kansas. 

[Laughter.] 

Chairman ROBERTS. We are going to introduce the first panel of 

witnesses today. Ms. Anne Hazlett currently serves as Assistant to 

the Secretary for USDA Rural Development. An Indiana native, 

Anne has worked in agriculture for over 15 years, working in both 

the U.S. House and Senate, and has most recently served as Republican Chief Counsel for the Senate Committee on Agriculture, 

Nutrition, and Forestry, in addition to her public service in Washington. 

Anne was Director of Agriculture for her home state where she 

managed the Indiana State Department of Agriculture and was an 

advisor to the governor at that time, Governor Mitch Daniels, on 

agriculture and also rural issues. Outside of public service, Anne 

was in private law practice where she advised clients on agricultural and environmental regulatory matters. She is a graduate of 

Kansas State University, graduating magna cum laude with a 

bachelor of science degree in agriculture communications. In addition, she holds a law degree from Indiana University and a master’s degree in agriculture law from the University of Arkansas. 

Anne, we are delighted to have you before our Committee today. 

Welcome back. 

The next witness is Mr. Rich Davis. Rich has been serving as the 

Deputy Administrator for Community Programs and Rural Development since August of 2010. The community programs provide direct and guaranteed loans and grants to help our rural communities develop or improve their essential community facilities for 

public use in rural areas. These facilities include health care, 

schools, public safety, and a variety of other project types. 

Sir, we thank you for your service and thank you for being here 

today. 

Joining us next is Mr. Chad Parker. Mr. Parker currently serves 

as Deputy Administrator for Cooperative Programs and has worked 

in the Department of Agriculture Rural Development for more than 

26 years. In his current capacity, Mr. Parker manages a team that 

provides assistance to rural communities in the areas of cooperative development, research and education, cooperative statistics, regional strategic planning, and place-based initiatives. That is quite 

a list. It is hard to pronounce all of those things with the T’s in 

them. 

Thank you for your service, sir. 

Our last witness on this panel is Mr. Christopher McLean. Mr. 

McLean is the Acting Director of the Rural Utility Service, RUS. 

He oversees the operations of the planning, policy, and finance 

agency, focused on rural electric, telecommunications, broadband, 

water, and sewer systems. 

Thanks to all the witnesses for being here today. 

Anne, why don’t you kick off? 
6 

STATEMENT OF ANNE HAZLETT, ASSISTANT TO THE SECRETARY FOR RURAL DEVELOPMENT, UNITED STATES DEPARTMENT OF AGRICULTURE, WASHINGTON, DC 

Ms. HAZLETT. Good morning, Chairman Roberts, Ranking Member Stabenow, and members of the Committee. I am truly honored 

with this opportunity to discuss prosperity in rural America, a passion that I know that I share with each of you here today and a 

topic that is of critical importance as you write the next farm bill. 

Growing up in Indiana, agriculture and small towns have been 

my life’s calling. Starting in the 4–H program as a young girl, I followed my love of farming and rural places through college and into 

law school, so I could be an advocate for rural America. Over the 

course of my career I have been blessed to serve as counsel to both 

the House and Senate Agriculture Committees during drafting of 

the 2002, 2008, and 2014 Farm Bills. I have also had a chance to 

represent the rural interest in my home state as Director of Agriculture. 

In each of these chapters I have developed a sincere appreciation 

for the role of policy and partnerships in assisting rural communities craft and execute a vision for their future. I also have a deep 

respect for each of you as chief advocates for the rural interests of 

your state, and an understanding of the monumental challenges 

that you face in writing a single bill that will meet so many different needs. 

As you prepare to begin writing the next farm bill, I will start 

with what you already know from many of the states that you represent, which is the fact that conditions in many rural communities 

are incredibly challenging. Today, 85 percent of the poorest counties in America are in rural areas. When kids get older and look 

to begin their careers, very few come home to the towns in which 

they grew up, and in many small towns there is simply not the access to critical infrastructure that folks need to stay connected to 

a modern economy. 

When we look at these challenges, whether in Kansas or Michigan, North Dakota or Indiana, we are asking, what can we, at 

USDA, do to make a difference to help build prosperity in these 

treasured places? In answering that important question, I have 

found that the best answers come from the ground outside of D.C. 

Just last week I made a visit to Olivia, Minnesota, which is a 

small city that has recently built a daycare facility. Asking how the 

town had come to make this forward-looking investment, I was told 

by a local official that the reason was simple. When any site selector comes to visit their town, they are always looking for four 

things, he told me: daycare, high-speed Internet, good roads, and 

rail access. 

At USDA Rural Development, we want to be a partner to communities like Olivia, in building prosperity. Through the farm bill, 

Congress has provided tools to assist in many of these needs. As 

we look to enhance the use of these resources, Secretary Perdue 

has set several priorities for our team at USDA. 

First, we are focused on partnerships and coordination. Secretary 

Perdue is leading a task force on Agriculture and Rural Prosperity 

that has brought together the many federal agencies and departments that impact rural communities. In this effort, we are devel-
7 

oping action-based solutions for four key issues that are impacting 

rural America: quality of life, the rural workforce, innovation, and 

economic development. With these federal resources, we will then 

be looking to work in strong collaboration with our many partners 

at the state and local level who are on the front lines making difference in these communities. 

Second, we are tackling infrastructure needs that I know are a 

key issue in many of your states. Put simply, robust, modern infrastructure is a necessity, not an amenity, for rural America. With 

that, the administration has proposed the creation of a new infrastructure fund that would offer a more flexible source of investment tools to respond to the needs of rural America, such as 

broadband connectivity. 

Finally, we are focused on innovation, finding new ways to assist 

rural communities in addressing the many challenges and opportunities they face. Earlier this month, Secretary Perdue announced 

his intention to create a Rural Development Innovation Center. 

Led by an innovation officer, this team will house several important functions such as data policy and trend analysis. We hope, 

with this addition, that the Center will help our agency become 

more forward-focused and better equipped to assist communities in 

developing effective grass-roots solutions. 

In closing, I want to extend a heartfelt thank you for what you 

do each day to be a strong voice for rural America. As you move 

forward in writing this next farm bill, Secretary Perdue and I are 

committed to working with each of you to ensure that rural America is a place of prosperity for generations to come. 

Thank you. 

[The prepared statement of Ms. Hazlett can be found on page 64 

in the appendix.] 

Chairman ROBERTS. Thank you, Anne. 

Mr. Davis. 

STATEMENT OF RICHARD DAVIS, ACTING ADMINISTRATOR, 

RURAL HOUSING SERVICE, UNITED STATES DEPARTMENT 

OF AGRICULTURE, WASHINGTON, DC 

Mr. DAVIS. Good morning. Chairman Roberts, Ranking Member 

Stabenow, and members of the Committee, I appreciate this opportunity to testify before you today. 

Let me begin by thanking Congress for its ongoing support of 

rural communities. With your support, the Rural Housing Service, 

or RHS, has made significant and transformative investments to 

strengthen the nation’s small towns and rural communities. 

Rural Development’s fundamental mission is to increase economic opportunity and improve the quality of life in rural America. 

A Community Facilities program, a key part of the RHS portfolio, 

supports this mission by investing in critically needed community 

infrastructure. Our program provides rural America with access to 

much-needed capital, where financial options are limited or non-existent. 

In recent years, demand for the low-cost, long-term financing has 

surged, and the direct program has experienced a nine-fold increase in funding level. Community Facilities expects to utilize 100 
8 

percent of all of its appropriated funds this fiscal year, and continues to maintain a strong pipeline of projects for next year. 

Currently, the total portfolio of Community Facilities invest- ments is $8.8 billion, with the majority invested in the rural health 

care sector, educational facilities, public buildings, and public safety infrastructure. The financial health of our portfolio remains 

strong, and the direct loan program will have a negative credit subsidy rate in Fiscal Year ’18. 

The unique flexibility of Community Facilities also lends itself 

well to addressing current issues and challenges facing rural America. As you know, rural towns and communities have been hit hard 

by the opioid crisis. RHS can play an important role in mitigating 

the impact of the opioid crisis in rural America by strengthening 

investment in mental and behavioral health care and other facilities that provide treatment, prevention, and recovery support. 

Community Facilities also continues to prioritize investment in 

the future of rural America’s children by supporting a wide range 

of daycare and educational facilities, including charter schools. A 

positive start will provide rural children with opportunities to further education and achievement. Building on this foundation, this 

program also strongly supports rural higher education institutions 

to meet critical regional industry needs and physician and other 

skilled professional shortages across rural America. 

In recent years, as the size and complexity of our projects has 

grown, Community Facilities has taken a leadership role in facilitating public-private partnerships to leverage critical financial, 

project management, technical expertise, and innovation to leverage large, complex, community infrastructure projects. Public-private partnerships enable our programs to serve more rural communities and assist more rural residents with economic growth, job 

creation, and access to critical services. As we move forward, RHS 

is confident that it will successfully implement the programs needed for a thriving rural America. 

Thank you again for this opportunity to share with you how RHS 

expands economic opportunity in rural America through improving 

the quality of life for rural residents every day. Thank you. 

[The prepared statement of Mr. Davis can be found on page 60 

in the appendix.] 

Chairman ROBERTS. We thank you, Mr. Davis, especially for 

being on time. 

Mr. Parker. 

STATEMENT OF CHADWICK PARKER, ACTING ADMINISTRATOR, RURAL BUSINESS–COOPERATIVE SERVICE, UNITED 

STATES DEPARTMENT OF AGRICULTURE, WASHINGTON, DC 

Mr. PARKER. Good morning. 

Chairman ROBERTS. Good morning. 

Mr. PARKER. Chairman Roberts and members of the Committee, 

thank you for this opportunity to discuss our programs at the 

Rural Business-Cooperative Service. Rural Development has consistently been the leading advocate for strengthening our nation’s 

rural economies through increasing access to capital in rural areas, 

and expanding the bioeconomy, including supporting opportunities 

for biofuels and renewable energy. 
9 

Rural Development’s programs and services, in partnership with 

other public and private sector funding, are at the forefront of improving the lives of rural Americans. Our programs not only promote rural business employment opportunities, they keep jobs in 

rural America and help rural economies compete in the global marketplace. 

To date, in Fiscal Year 2017, the Rural Business-Cooperative 

Service has successfully delivered approximately $1.7 billion in 

funding to rural Americans, that help 12,500 businesses create or 

save about 55,000 jobs. Our path forward is to focus on our ability 

to efficiently and responsibly provide government services that 

meet the needs of rural Americans. 

Rural Business-Cooperative Service remains committed to revitalizing rural communities by expanding economic opportunities, 

creating jobs, improving rural infrastructure, and expanding markets for existing rural businesses in order to ensure a vibrant economy. We administer numerous direct loan, guaranteed loan, and 

grant programs that not only directly make capital available but, 

more importantly, attract investment capital to rural areas that 

might not otherwise see such investments. 

Rural Business-Cooperative Service continues to be a leader in 

helping ensure America’s independence and security, promoting the 

creation and expansion of renewable energy projects and jobs in 

rural America. We currently administer a suite of programs that 

promote a more sustainable energy future. 

The Rural Energy for America Program, or REAP, is our most 

successful and competitive renewable energy program. REAP promote energy efficiency and renewable energy development for agricultural producers and rural small businesses. In Fiscal Year 2017 

alone, REAP will provide funding for over 1,200 projects, with total 

project costs over $1 billion, and leverage nearly 18 times the 

amount of REAP budget authority provided for the year. 

Cooperatives are an important business model and the cornerstone for business development in many rural communities. Cooperatives provide rural residents with job opportunities, enhanced 

educational and health care services, and products that enable 

them to compete in the global economy. Cooperatives create local 

job opportunities and cooperative revenues are maintained and recirculated locally. 

One of the largest and most popular opportunities for cooperatives is the Value Added Producer Grant Program. The Value 

Added Producer Grant Program provides grants to agricultural cooperatives and producers. The grant funds may be used for planning activities and for working capital for marketing value-added 

agricultural products and for farm-based renewable energy, enabling America’s producers to compete in the global economy. 

The Rural Business-Cooperative Service is committed to promoting economic prosperity in rural communities through improved 

access to capital and economic development on a regional scale. As 

we move forward in the new fiscal year, we continue to examine 

our operations and look for opportunities to create efficiencies and 

seek opportunities to target and leverage resources for the greatest 

impact. 
10 

Thank you for the time, Mr. Chairman and members of the Committee. It is truly an honor to be here today and I hope my testimony proves to be informative. 

[The prepared statement of Mr. Parker can be found on page 102 

in the appendix.] 

Chairman ROBERTS. I am sure it will. Thank you, Mr. Parker. 

Thank you for your 26 years. 

Mr. McLean. 

STATEMENT OF CHRISTOPHER McLEAN, ACTING ADMINISTRATOR, RURAL UTILITIES SERVICE, UNITED STATES DEPARTMENT OF AGRICULTURE, WASHINGTON, DC 

Mr. MCLEAN. Chairman Roberts, members of the Committee, 

thank you for the opportunity to testify today and thank you for 

your support for rural electric, water, telecommunications, and 

broadband infrastructure investment through the Rural Utilities 

Service. 

The recent storms of this season remind us how important basic 

utility infrastructure is to the quality of our lives. The heroic response of legions of rural utility workers helping damaged systems 

restore power, communications, and water illustrates the true spirit of rural America and the long-term success of the public-private 

partnership that has been nurtured by this Committee and the 

USDA. 

The USDA investments in basic infrastructure help deliver reliable and affordable electricity, faster Internet service, and clean, 

safe water, to help healthy rural communities grow and prosper. 

Today our rural utilities portfolio of loans outstanding is nearly $60 billion. Our annual program level is approximately $9 billion. 

In our electric program, RUS funding is helping utilities strengthen 

rural electric infrastructure. Our electric partners are replacing 

aging plants, investing in smart grid technologies to increase efficiency, expanding transmission capacity, and hardening the grid 

against natural and manmade disaster. 

This fiscal year, RUS expects to obligate over $4 billion in improvements in every element of the electric grid, as well as new investments in energy efficiency and renewable energy. 

Our telecommunications program finances broadband and advanced telecommunications services. Data shows that nearly 40 

percent of rural Americans lack access to robust, reliable, modern 

broadband service. During Fiscal Year ’17, RUS expects to obligate 

over $427 million for state-of-the-art telecommunications and 

broadband technologies in some of the nation’s more remote areas. 

These investments connect communities to the information age and 

the world to rural America’s talents, services, and products. 

The RUS Community Connect and Distance Learning grant programs are making profound differences in the communities they 

serve. So far this year, RUS has obligated nearly $6 million to fund 

first-time broadband service in some of the most under-served communities, and $24 million for distance learning and telemedicine 

projects. 

In our water and environmental programs, RUS works to maximize limited loan and grant funds to support water and wastewater projects, often serving some of the most financially needy 
11 

communities in our nation. We are focused on helping communities 

provide the quality water and wastewater services that are essential to the health, safety, and economic future of those who live and 

work in and around small-town America. For Fiscal Year ’17, the 

water program expects to use over $1.7 billion to build or improve 

water and waste facilities. 

For our entire agency, RUS continues to work to streamline our 

procedures, better coordinate our efforts, and automate where we 

can. For example, our new RDApply system is allowing borrowers 

and the agency to reduce paper, speed approval, and enhance efficiency. We continue to work to improve the customer experience as 

well as make sound decisions that deliver value to the American 

taxpayer. 

Thank you again for the opportunity to discuss how RUS works 

to support increased economic opportunity and the quality of life in 

rural America. Thank you. 

[The prepared statement of Mr. McLean can be found on page 84 

in the appendix.] 

Chairman ROBERTS. Thank you, Mr. McLean, and thanks to all 

of the witnesses. Anne, let us start off with you. 

Share with us your vision under Secretary Perdue’s leadership— 

this is new—for the Rural Development Innovation Center. Is there 

a particular example you could tell us about regarding how the 

Center would improve the assistance provided to our rural communities? 

Ms. HAZLETT. Thank you for that question, Chairman Roberts. 

Secretary Perdue’s vision is that we use our resources at Rural Development, both our programs and people, to partner with rural 

communities in rural prosperity, and one of the ways that we want 

to do that is through innovation. I mentioned this Innovation Center that he has announced his intention to create. This is a team 

that is going to work alongside the three agency administrators 

and carry out a number of important activities, such as data analysis and program outcomes measurement. We are also looking to 

drive some other activity from the Center that would be designed 

to foster capacity building and partnership development. 

A specific example I think that I can give is in the area of trend 

analysis and partnerships. When we think about communities in 

rural America, and some of the challenges that they face, whether 

it is the loss of a particular sector of its economy or the rise of a 

new health challenge such as the opioid epidemic, we hope that a 

team of folks devoted to innovation can help those communities by 

identifying best practices that have been successful in other communities addressing that same issue and link them, where appropriate, to other program tools or other partnerships. 

I have a specific example I guess I can share recently from Kansas. I had an opportunity to visit on rural health care with Secretary Jackie McClaskey as well as Mr. Holdren from the Kansas 

Farm Bureau. They were interested in the challenge of recruiting 

doctors to rural communities. We had a discussion about best practices and pilot initiatives that could be driven, and I think that is 

a specific example of an issue that is in many other states as well, 

that the innovation team could help with. 

Chairman ROBERTS. I appreciate that very much. 
12 

Mr. Davis, I co-sponsored a bill earlier this year which would 

prioritize community facility funding for the construction of, or improvements to, addiction treatment facilities, as mentioned by 

Anne. Could you comment on the demand your agency has seen 

over the past couple of years for projects focused on addiction treatment? I think we have a big problem out there. 

Mr. DAVIS. Yes, sir. Thank you for that question, Chairman Roberts. I agree. We have seen an uptick in the interest in these facilities. In the past fiscal year, checking our numbers, we have invested in $300 million of substance abuse, substance use disorder 

type facilities to treat folks with those issues, and currently we are 

seeing a pipeline going into Fiscal Year ’18 of about $400 million 

in these—in the needs for these facilities. So I would say yes, we 

are seeing that need and thank you for the funding we have received to help invest in those types of facilities. 

Chairman ROBERTS. I appreciate that very much. 

Mr. Parker, you oversee a wide variety, to say the least, of programs that assist rural businesses. Can you discuss how the particular programs currently within your purview are geared towards 

stimulating rural economies in a targeted way? 

Mr. PARKER. Thank you for the question, Chairman Roberts. Yes, 

our Rural Business Cooperative Service programs provide loans, 

grants, and guarantees, but they also do numerous other targeted 

ways to improve rural America and rural business lives. 

Some of the ways are we provide, one, by having that field staff 

working in each of our rural communities. They can work with the 

business organizations. They can work with the local lenders to 

make sure there is access to capital and that they understand how 

to reach those pieces of capital. 

Some of our programs allow community lenders, banks and other 

types of lenders, to—because we put a guarantee on those loans 

they are able to sell portions of those loans out to the secondary 

market, allowing them to continue to lend in their community beyond what their normal lending limit would be. 

We also have programs that reduce energy cost, for the ag producers and rural small businesses, through energy efficiency and 

renewable energy, allowing those businesses to prosper and be 

more viable in the rural economy. We have programs that help create new markets for our ag producers, allowing them to gain the 

revenues from value-added products. We have programs that allow 

farm credit institutions to gather funds and invest in a strategic 

manner through investment funds into rural communities. 

We have ways that provide resources and activities around the 

development of cooperatives and the development of new businesses, providing funding to organizations that assist in those 

ways. We have programs that provide technical assistance, job 

training, and feasibility studies, so that our rural businesses are 

not wasting the capital that they go in and invest. 

Thank you, sir. 

Chairman ROBERTS. Thank you. I have one real quick question 

for you. Mr. McLean—and this was for the entire panel but time 

does not permit me to ask this one question to all of you. 
13 

Mr. McLean, what would be the key challenge that you face administering rural development programs that are authorized in the 

farm bill? Can you name me—give me your key challenge. 

Mr. MCLEAN. Thank you, Senator. I would say that the key issue 

for RUS, we have a passion for broadband deployment. We are anxious to be able to connect all of rural America. Our primary tool 

that we have available to us are loan dollars, and those loans depend significantly on revenue streams that are under the jurisdiction of the Federal Communications Commission. 

The key challenge for us is to be able to make long-term lending, 

based on the promise of the Telecom Act of 1996, of specific, predictable, and sufficient universal service support, and where we see 

stability in those support levels we see growth in demand for our 

loan products. Where we have uncertainty of the predictability 

there is a hesitancy of the private sector to be able to invest in telecommunications in rural areas. 

The good news is, in Kansas, they are figuring it out. We have 

some of our finest borrowers and great examples. In fact, we recently approved a Kraw-Can Kansas loan in our Senior Loan Committee and we have RTC in western Kansas that is doing wonderful things there. But it is a big, big challenge and it depends very 

much on revenue sources that are beyond the control of the service 

provider and beyond the control of the agency. 

Chairman ROBERTS. Thank you very much. Senator Stabenow. 

Senator STABENOW. Thank you, Mr. Chairman, and welcome 

again to all of you and I appreciate your work. 

Ms. Hazlett, first of all, welcome back to the Committee. It is 

wonderful to have you with us. Broadly, before getting into specifics, I know that you said in your testimony that the USDA Rural 

Development, thanks, in part, to the farm bill, is the only agency 

in the Federal Government that has the distinct mission of creating 

jobs in rural areas by supporting small businesses, basic infrastructure, and providing access to high-speed Internet. 

That is why I was very concerned—I know you were not there 

at the time—when the President released his budget that targeted 

cuts in all of those areas at USDA. I wonder if you could speak to, 

in broad measures where you see us going on rural development 

and if you think we need more resources to support rural development programs or less? 

Ms. HAZLETT. Thank you, Ranking Member Stabenow, for raising 

that important concern. I would simply respond that I understand 

that rural is different, that no two rural communities are the same, 

and while they may face similar challenges they may need different 

resources to address that challenge. I am committed to serving the 

needs of rural America and to being a partner in rural prosperity. 

I am committed to working with you and the members of this Committee to meet the needs of your rural constituents, and lastly, I 

am committed to making effective and efficient use of the resources 

that Congress provides to meet those needs. 

Senator STABENOW. Thank you very much. I look forward to 

working with you on that as well, and I would just say, from our 

side, there is bipartisan concern about making sure we are not cutting back on significant things like rural water infrastructure or 
14 

small business, and so on. I look forward to working with you on 

that. 

I would like to talk about broadband, which is a passion of mine, 

and, Mr. McLean, you were talking about that being a passion of 

yours and your agency’s as well. When we think about how we 

move forward quality of life in small towns, whether it is the small 

businesses I have talked to that want to sell their products around 

the world but still be in northern Michigan, looking at the Great 

Lakes and enjoying the beautiful quality of life that we have in 

Michigan. Whether it is our hospitals that want to be able to connect and provide the highest quality medical care, or it is the 

connectivity of rural schools, and so on, we know that this is the 

piece—at least I believe it is the piece. I would like you to speak 

to this and would welcome each of the panelists to speak about the 

priority right now of making sure that we are connecting and not 

leaving rural America behind, as technology is advancing so fast. 

I would also like to know your comments further about rural 

broadband, high-speed Internet, and whether or not you will commit to using every tool at your disposal to expand high-speed Internet to small towns and rural communities in Michigan, as well as 

all across the country. 

Mr. McLean. 

Mr. MCLEAN. Well, thank you very much. Absolutely, we are taking a by-any-means-necessary approach in the Rural Utility Service, using every tool that we do have available to us. My colleague, 

Keith Adams, who heads the telecom program, works with other 

federal agencies to coordinate our efforts. In our electric program 

we are seeing rural electric cooperatives deploy smart-grid technologies using fiber assets, which then can be leveraged in partnership with local telcos or the co-ops themselves, to be able to provide 

consumer-based broadband services. 

We are seeing some amazing projects come before our loan committee where we have reliable revenues and reliable levels of universal service support, where we are seeing fiber to the home. We 

just recently approved a batch of loans in South Dakota that are 

some of the more remote areas that are bringing fiber to the home 

technology. 

So it is possible to be able to do this, but there are segments of 

the rural market that the story is still being written as to what levels of support will be available. There is a major proceeding at the 

Federal Communications Commission to address those rural areas 

of large telecom providers that need levels of support, and we are 

watching very, very closely and, where appropriate, providing advice on how those new support mechanisms will reveal themselves 

and inspire investors, rural electric cooperatives, local telco cooperatives, small-town telecom companies, and new providers to be 

able to invest in broadband services in those underserved areas. 

Senator STABENOW. Thank you. I know my time is up, but would 

anyone else like to speak from their perspective? 

Ms. Hazlett. 

Ms. HAZLETT. Thank you, Ranking Member Stabenow. I would 

add, just stepping out from the program side for a second, I would 

just raise the opportunity for collaboration here. I mentioned the 

Agriculture and Rural Prosperity Task Force that Secretary Perdue 
15 

is leading. I think a lot of this, from his perspective, also comes 

down to leadership and just needing to see the different federal 

agencies that play a role in this important issue, working together. 

I know that he and Chairman Pai are in close contact and looking 

at how our policies can be driving towards that common goal. 

Senator STABENOW. I would just say, I think this is the issue of 

the moment. At one point, it was connecting the farmhouse at the 

end of the road with a phone, and with electricity, and now it is 

high-speed Internet. If we do not fix that we are not going to see 

the quality of life that we want in our rural communities. Thank 

you. 

Chairman ROBERTS. Senator Boozman. 

Senator BOOZMAN. Well, it is interesting. This, really—I just echo 

what the Ranking Member just said. This is so, so very important. 

I think, in Arkansas, 84 percent--we are not doing as well as Kansas, evidently, so I need to visit with the Chairman about that. But 

84 percent, lack access to quality broadband, which is 30 percent, 

higher than the national average. So it is something that really is 

very, very important. 

I guess the question I would have, Ms. Hazlett and Mr. McLean, 

is we are getting ready to write the farm bill. You know, what policies do we need to change? What do we need to do differently to 

make it such that it is easier, to get these things done? 

Ms. HAZLETT. Thank you, Senator Boozman, for that question, 

and thank you for your leadership on this issue. 

As we look at the importance of broadband infrastructure and 

the tool, the lifeline it is for quality of life and economic prosperity, 

we are really looking at this at USDA from three different pieces. 

I mentioned looking at the different agencies that were working on 

this topic at the federal level and making sure there is better collaboration there, also looking at how to increase innovation in the 

deployment of this technology, and then the third piece is what you 

are touching on. What are those internal processes and programs 

that we have at USDA and how can we make our tools easier to 

use, easier to apply for? We look forward to working with the Committee in the coming months, as you are writing this bill, to offer 

specific improvements to the farm bill broadband programs. 

Mr. MCLEAN. I would say that the key issue is bringing revenues 

up and stable, whether it is through the customer base or state and 

federal universal support mechanisms, and bringing costs down, 

and one of the ways that we can help here in Rural Utility Service, 

is bringing costs down, is by providing affordable finance and longterm finance to those that do invest, and then looking for opportunities for partnership and leveraging. If we can find multiple uses 

for the same infrastructure it brings the cost down for all of those 

users. 

So we are seeing synergies between smart grid and broadband. 

We are seeing synergies between public safety and broadband deployment. When rural providers deploy broadband, we are also seeing wireless providers take advantage of that capacity along the 

highway. 

So it is finding multiple uses for the same infrastructure to bring 

the cost of the infrastructure down and having a reliable source of 
16 

financing and revenues for those who are actually putting—those 

investors who are putting their dollars at stake. 

Senator BOOZMAN. Good. Very good. Well, I know that--I know 

you all are committed. I know the Secretary, Secretary Perdue is 

committed and understands the importance of this. As you are 

hearing from the Committee, it is something that is our minds, the 

minds of our constituents. You simply cannot go forward in this 

day and age that we live without having that ability. 

I would like to switch gears a little bit. Ms. Hazlett, as you know, 

RUS’s water and wastewater loans and grants are very important 

to rural America, including rural Arkansas. Earlier this year, in a 

Water, Fisheries, and Wildlife EPW Subcommittee hearing that I 

chaired, one of my constituents testified about his struggles with 

a lack of running water. However, with the assistance of a USDA 

grant they were able to drill wells to bring fresh, reliable drinking 

water to their home and the homes of their neighbors. 

As we look to write legislation to address our nation’s crumbling 

infrastructure and write the next farm bill, these two are not mutually exclusive. Can you, or Mr. McLean, talk about USDA’s water 

and wastewater programs and what more can be done to ensure 

that rural America has access to safe, reliable water? 

Ms. HAZLETT. Thank you for—Senator Boozman, for raising this 

important issue. I understand that the water resources in rural 

communities are great. I have seen it in my own travels. We will 

certainly steward the resources that you provide to meet these 

challenges. If you provide funding, we will build infrastructure 

with the dollars that are provided. 

Certainly there is always opportunity for improvement in our 

programs and I would allow Administrator McLean to elaborate on 

some specific opportunities that we might have to make this program even stronger. 

Senator BOOZMAN. It is interesting. This gentleman that I referenced was right outside of Fayetteville, which you know very, 

very well. 

Ms. HAZLETT. I do. 

Senator BOOZMAN. Yes, sir. 

Mr. MCLEAN. Yes. Well, thank you very much, and this year alone the Rural Utilities Service has obligated about $35 million of 

investments in rural water in the state of Arkansas, and we are 

very, very proud of that. 

Senator BOOZMAN. We appreciate that very much. 

Mr. MCLEAN. Very, very innovative municipalities that are bringing water and sewer systems to their communities. But it is hard. 

It is tough. 

Our loan and grant programs are focused on communities of 

10,000 or less, and we have to mix that loan and grant combination 

in order to try to target the grant dollars to those areas that need 

it the most. There is always more demand for resources than we 

have available, and we just—we work really hard to be able to 

spend down to the very last penny in order to invest those resources wisely. 

Senator BOOZMAN. Yes. Thank you and thank you, Mr. Chairman. 

Chairman ROBERTS. Senator Leahy. 
17 

Senator LEAHY. Thank you, Mr. Chairman, and I thank the panelists. As I mentioned, we have a Judiciary Committee meeting 

going on two doors away and I am trying to be at both of them. 

But I am always concerned on rural development matters. It is one 

of the reasons I have stayed on this Committee all these years. 

Coming from as rural a state as you are going to find, we have an 

opioid epidemic that is devastating our communities, including 

rural areas in Vermont. 

Chairman Roberts and Senator Donnelly, to their credit, have introduced a bill requiring USDA to make a priority of community 

facility direct loans and grants for substance abuse disorder treatment services, including telemedicine facilities and so on. I think 

we should make a priority for substance abuse disorder treatment. 

However, we also have to find new resources to combat it. We need 

to find a way, in the farm bill, to increase funding for community 

facilities to combat opioid addiction. 

Ms. Hazlett, I know you are looking at this very closely and I 

will ask you this. Will you support efforts not only to prioritize 

grants that will combat the opioid epidemic but to increase our investment in community facilities, direct loans and grants to continue serving communities, as loans and grants do now, and what 

can the Department do to strengthen and improve rural development programs to help those struggling with opioid addiction? I 

mean, it has become, in some places, an epidemic, and this is not 

a Democratic or a Republican issue. It is something that I think 

it is fair to say every single Senator on this panel worries about. 

Ms. HAZLETT. Thank you, Senator Leahy, for raising this important issue, and thank you for your leadership. 

Secretary Perdue recently held a listening session in New Hampshire where he heard from various stakeholders about this crisis, 

and we had an opportunity to see some of the things that are working in the Northeast very well to address this issue. 

I think USDA’s role in this topic, we certainly have that—the immediate, short-term programs for communities to access, as they 

are helping build that immediate response. Our Community Facilities Program is certainly one of them. We also have the Distance 

Learning Program as well as some prevention grant resources. 

I think another significant opportunity for USDA really is that 

longer horizon. However, we are well positioned to be a strong 

partner in addressing some of the root challenges that are often at 

the heart of this issue. 

Senator LEAHY. But you are going to need more money in these 

programs to do that. Is that correct? 

Ms. HAZLETT. Certainly resources will be needed. 

Senator LEAHY. Are you going to push for those resources? 

Ms. HAZLETT. You have my commitment to steward whatever resources are provided. 

Senator LEAHY. Are you going to push for us providing those resources? 

Ms. HAZLETT. You have—— 

Senator LEAHY. I am wearing my hat as the Vice Chairman of 

the Appropriations Committee now. 

Ms. HAZLETT. You have my commitment to steward the resources 

that are provided. 
18 

Senator LEAHY. Well, I would say to steward them you are going 

to have to get them, and I realize the restraints. You know, I have 

talked with Secretary Perdue about this too, but you have got to 

ask for the money and you have got to push for the money. 

Chairman ROBERTS. Senator, I am sure that you and I will receive a call from Anne, if not the Secretary, for adequate funding 

on this most important topic, and we are united in that effort. 

Senator LEAHY. Yes. This is not a Republican or Democratic 

issue. We are all concerned. 

We also have our forest economy. You know, Vermont depends 

on a $1.4 billion forest-based economy every year, which is a lot of 

money in a small state like ours. We have some really nice wealthy 

forests. But in Vermont, and across New England, we are struggling with the recent loss of important markets for low-grade wood, 

due to the closure of several pulp and biomass mills. We need a 

market, of course, for high-grade wood. We see that in construction 

and furniture and everything else. We also need a market for lowgrade wood. We have to have both if we are going to really manage 

our forests. If you have non-existent or poor forest management, we 

all know that fire is going to occur. 

So how can rural development programs in our existing farm bill 

help to expand our forest products market and support a strong 

forest products industry? I mean, we talk a lot about our agricultural crops that we are all used to seeing benefit from these rural 

development programs, but forests are also an important part of 

that rural economy, are they not? 

Ms. HAZLETT. Thank you, Senator Leahy, for raising an important sector of the Northeast economy. I had an opportunity to travel with Secretary Perdue to the Northeast earlier this month and 

certainly saw firsthand the importance of this industry in the region. 

I am committed to preserving and enhancing the diverse rural 

economy through Rural Development’s many programs. I will let 

Acting Administrator, Mr. Parker, elaborate on some of the business tools that might be there to help that sector. 

Senator LEAHY. Well, and my last question, Mr. Chairman, I was 

disappointed when I saw that the President’s budget proposed to 

eliminate rural housing service grant programs, including Section 

502, 504, and 515. These provide essential affordable housing in 

rural America. Will you—I am asking Ms. Hazlett, you and Mr. 

Davis—will you work with the Secretary and this Committee, because we all have rural areas that are affected, to find out how we 

can create a sustainable housing strategy for rural America, that 

is sustainable in both affordability and access? 

Ms. HAZLETT. Thank you, Senator Leahy. I appreciate the importance of that issue in rural communities and we will work with you 

ensure innovation and that we leverage the resources provided. 

Senator LEAHY. Mr. Davis? Mr. Davis, will you work with us too? 

Mr. DAVIS. Absolutely, sir. 

Senator LEAHY. Yes, I kind of expected that answer. I just wanted to hear it. 

Mr. DAVIS. Well, no, we would be most interested in working 

with you. It is an important segment of rural America, of the rural 
19 

economy, and important to the success of rural America. So absolutely. 

Senator LEAHY. Thank you. 

Chairman ROBERTS. Senator, I noted that Mr. Davis nodded his 

head up and down vigorously. 

Senator LEAHY. So can you say on the record it was a vigorous 

nod. 

Chairman ROBERTS. That is correct. Senator Daines. 

Senator DAINES. Chairman Roberts and Ranking Member Stabenow, thanks for holding this hearing. You know, I spent decades 

in the private sector before entering public service. In fact, I got to 

be part of building a world-class cloud computing company in my 

hometown of Bozeman, Montana. I certainly know the impact that 

technology has in our communities and how access to broadband 

can break down geographical barriers. 

As we say back home, technology has removed geography as a 

constraint. With connectivity, a family in rural Montana can start 

up their own small businesses and have access to global markets. 

When Oracle acquired our company several years ago, as they were 

building out their global cloud computing structure, think about 

this. They have three cloud command centers around the world for 

their 365, 24 by 7 cloud operations. For the seventh-largest cloud 

computing company in the world, which is now Oracle, they have 

three cloud command centers. For Europe, Middle East, and Africa, 

it is London. For Asia Pacific it is Bangalore. For the Americas it 

is Bozeman, Montana. So it demonstrates the fact we are not talking about just backwaters players now. This is NBA-level, firststring companies in the technology sector. 

But this is going to be impossible to keep moving forward unless 

we close this rural-urban gap, the gap between high speeds that 

urban residents have access to and the lack of any speeds that 

rural residents have. I always find it interesting. Sometimes I hear 

about that we have got to get from 4G to 5G in some of these 

areas. There are places in Montana that have not even found the 

alphabet yet. We are not talking about G. 

It is one of the reasons I am hosting a tech summit, in fact, a 

Montana Tech Summit, in Missoula in early October. We are going 

to bring industry and government leaders together to talk about 

how technology can continue to help rural communities grow. 

Additionally, programs like the Farm Bill Broadband Loans and 

Community Connect grants are important to rural areas across the 

country. However, they only work when they are applied correctly 

and efficiently in communities that truly have need. 

Administrator McLean, RUS broadband loans and grants have 

helped many rural communities in the United States. However, the 

impact of some programs like the Community Connect Grant initiative have been limited in my home state of Montana. For example, 

Montana has not yet received a Community Connect Grant during 

the program’s 15-year tenure. 

Could you help explain the criteria for this and similar grants 

and loans, and how Montana communities and businesses can be 

better utilizers of this important program? 

Mr. MCLEAN. Sure. Thank you. I would be delighted to. First of 

all, Montana has some of the finest rural telecom companies in 
20 

America, including Lincoln Telephone recently secured an RUS 

loan in telecom infrastructure, and so we are really proud of that 

partnership. 

The challenge in the Community Connect program is it is small 

in number of dollars and highly, highly competitive. The focus on 

our grant programs, in general, whether it is in telecommunications, electric, or water, are to focus the limited grant dollars on 

those areas that have the highest need. So the scoring criteria will 

favor the most remote, the most poor, the most underserved. Community Connect is focused on communities that have zero 

broadband, no broadband availability at all. 

We are able to do right around 10 or so grants a year, based on 

the dollars that are appropriated. Some years it has been significantly less. A couple of years we have been able to shake out the 

cushions and get a few extra dollars and make it a little bit more. 

But it has been typically right around $10 million and we do about 

10 grants, and they are just very, very, very competitive. 

We are delighted to work with communities, and we do webinars, 

and would be happy to help advise community groups on how to 

apply, and we look forward to working with you and your staff to 

find ways to improve the success rate. 

Senator DAINES. Thank you. I want to shift gears for a moment 

in the time I have left to talk about tribal broadband issues. Montana is home to 12 federally recognized tribes the state recognized, 

the Little Shell. We know that access to broadband opens up new 

possibilities, opportunities truly for our tribal communities. 

Unfortunately, according to the FCC’s 2016 Fixed Broadband Report, 65 percent of the population on tribal lands lack access to 

fixed telecommunications services, 65 percent. Many small companies in Montana have stepped up to bring wireless and broadband 

access—we are grateful for that—including Nemont Wireless and 

Tribal Communications, but I think the Federal Government does 

play a role in this. 

A question to Mr. McLean, what is RUS doing to expand access 

to tribal communities? 

Mr. MCLEAN. Thank you very much. Tribal communities are a 

key focus of our outreach. We are in frequent contact with tribal 

organizations and working with the FCC and the NTIA to be able 

to provide outreach and explain how our programs work. 

One of the challenges that we do face in tribal communities are, 

frankly, rights-of-way where the ownership of land is often a checkerboard. Some land is privately held, some land is held in trust, 

and some land is held by families that are dispersed, maybe not 

even aware of their ownership of the land. I actually worked on a— 

there was a major project in Montana that ran right up against 

that problem and it was not able to be completed because there 

was inability to be able to get consensus on how the rights-of-way 

would be managed. 

Senator DAINES. Yes, thank you. I know I am out of time here. 

We are good at playing checkers in Montana with the nature of 

land ownership, that is for sure. So, anyway, thanks for the comments. Thank you. 

Chairman ROBERTS. Senator Donnelly. 
21 

Senator DONNELLY. Thank you, Mr. Chairman, and I would like 

to thank Anne Hazlett. Thank you so much for your service. It is 

always great to see a fellow Hoosier here on the Committee. Before 

we get into the questions, I want to thank you for your service to 

the people of Indiana and to the country. I am sure you will make 

all of us proud in your new position at USDA. 

I want to ask you, also, about an issue that is dear to your heart 

and mine, and to many Hoosiers and to all of us. I know you are 

aware of the difficulties that many of our communities are having 

when responding to the challenges of addiction. I have been working with a number of members on the Committee in trying to assure that USDA has the resources it needs to help our rural communities respond more effectively. 

I have been fortunate to introduce a pair of bills with Chairman 

Roberts and Senator Strange, and I want to thank them both for 

their partnership, to help provide rural communities with what is 

needed. 

Opioids and substance abuse impact every community but accessing treatment is even more of a challenge in some of our rural 

areas, as you know, across our state too. Can you discuss how 

USDA’s community facilities and telemedicine programs will help 

rural families and rural communities address the crisis? 

Ms. HAZLETT. Thank you, Senator Donnelly, for raising this important issue and for your leadership on it. Both of the programs 

that you highlight are certainly being used well right now to address both providing treatment facilities in communities as well as 

using innovation through telemedicine to access those services that 

might not be located in the immediate town. Certainly Mr. Davis 

can go into specific numbers that we have with those programs. 

I think one of the things I would like to circle back to that I am 

excited about, I mentioned in my beginning remarks, the Innovation Center that Secretary Perdue intends to create. I think this is 

a good example of an issue that, for communities that are finding 

themselves in the crosshair for the first time and want to know 

what has worked well in other places, whether it is through treatment resources or some of the other ways that a rural community 

might have a unique asset that can be leveraged to address this 

challenge, that is a great example of where best practices are something that the Innovation Center can then disseminate so that communities do not feel alone. 

Senator STABENOW. Ms. Hazlett, also, I am sure we both agree 

that substance abuse and addiction education and prevention programs are really critical to ensure we are not only treating the 

symptoms but also working to prevent it from occurring in the first 

place. A program you are aware of, Purdue Extension, which has 

great reach into our rural communities around the state, they offer 

family substance abuse prevention programs like Strengthening 

Families program, which has been shown to lower levels of substance abuse in younger people. 

Can you discuss how important for rural communities programs 

like these are for their families? 

Ms. HAZLETT. Absolutely. I have actually had an opportunity to 

see that program firsthand, on the ground, in Scott County, Indiana, and I think one of the great strengths of a program like that 
22 

is that it is looking at some of the underlying causes that lead, for 

many of these situations, lead families into many of these situations. When we look at those types of programs, I think we are not 

just changing that immediate situation but we are potentially 

changing a generation and we are having a broader community 

conversation about factors that need to be addressed to have prosperity and quality of life in these areas, things like public transportation, food security, literacy rates. It becomes a catalyst for a 

broader conversation that will result in stronger communities and 

a stronger rural America for the future. 

Senator DONNELLY. Thank you, Ms. Hazlett. Thank you, Mr. 

Chairman. 

Chairman ROBERTS. Senator Casey. 

Senator CASEY. Thank you, Mr. Chairman. I wanted to start with 

a question for Ms. Hazlett on a Pennsylvania initiative that has 

been replicated in other states, but I want to make two brief comments, first, the broadband focus of this hearing and the, I think, 

bipartisan concern about that is significant, and I think the problem is urgent. 

I spent a lot of time, in August, going to counties in our state 

that are substantially rural. We have got 67 counties but 48 are 

rural counties, and I was in counties where 50 percent—Juniata 

County, 52 percent of the folks that live in that county do not have 

high-speed Internet. Sullivan County, 69 percent, Susquehanna, 

66. Counties all across the state that have 40, 50, 60 percent without broadband. So it is a major impediment for small businesses, 

kids in school, and the like, so we are grateful that there is a focus 

on it. We have got to do a lot more. 

Secondly, I am hoping that history repeats itself in the appropriations process, where the administration unfortunately made a 

series of proposals in the budget which would eliminate water and 

wastewater program, eliminating the rural business program, 

eliminating interest payments to electronic and telecom utilities, 

eliminate Rural Economic Development Program, on and on and 

on. 

The appropriators chose to do otherwise. I am grateful for that. 

I hope history repeats itself, though, when it comes to the administration’s proposal with regard to the farm bill, which is to say it 

is outrageous and obnoxious does not get to the heart of it. Cutting 

the Supplemental Nutrition Assistance Program by, I think it was 

$193 billion over 10 years. So we are hoping that this Committee 

will be in bipartisan opposition to those kinds of cuts. 

There are my comments. I wanted to ask you about, though, the 

Fresh Food Financing Initiative, which is a success story from 

Pennsylvania replicated in a number of states around the country. 

Pennsylvania’s program created over 5,000 jobs—or created or retained, I should say—$190 million of investment, just from that 

one initiative, by putting down just $30 million. So put down 30, 

get 190 in investment. It has helped in food deserts and it is also 

a program where there is a substantial personal investment up 

front, but it has worked out well in a lot of states. 

My question is, how do you see that initiative in the Department 

of Agriculture going forward, because it has been battle-tested or 

road-tested and I want to get your sense of it. 
23 

Ms. HAZLETT. Thank you, Senator Casey, for raising an important issue. Food insecurity and hunger in rural communities is certainly a piece of quality of life as well as economic opportunity and 

prosperity. 

When we look at the Healthy Food Financing Initiative, I think 

you see an exciting model of a public-private partnership, not only 

a public-private partnership but an innovative way in looking at 

solving a long-standing challenge in many communities. Rural 

America is certainly not immune from that. 

We are looking forward to working with the national fund manager that has been designated for this program, as they move forward with implementation, really as an opportunity to learn from 

their experience and to leverage some of the relationships that they 

have working in this sector, to enhance further investments in this 

area, particularly in low-income rural communities. 

Senator CASEY. Well, I hope as we go forward if there are things 

that are priorities, funding or otherwise, that the Committee can 

help with, I hope you alert us to that. 

I just had one more question for you, and I know you can probably amplify this in writing, but the Value Added Producer Grant 

is a valuable resource to assist small businesses and new and beginning veteran farmers with the development in marketing of new 

products to increase income. In our states, these grants have been 

awarded to custom beef processing, to create processed milk products, and finished and bottled wines. 

Can you elaborate more on the program and how this program 

can be expanded to reach new audiences? 

Ms. HAZLETT. Thank you. This program really touches everything from jam to lotion to everything in between. It has really 

opened doors to new business opportunities for a broad range of agriculture producers, allowing them to bring new products to market. 

As Congress looks to improve the program in the next farm bill, 

we would be pleased to work with the Committee for any thoughts 

you have about changes to make to improve its effectiveness. 

Senator CASEY. Great. Thanks very much. Thank you, Mr. Chairman. 

Chairman ROBERTS. A vote has been called. In the interest of bipartisanship, which is a very strong element of this Committee, I 

am now yielding the gavel to the distinguished Senator from Michigan, on a temporary basis. 

[Laughter.] 

Senator STABENOW. I do not know, Mr. Chairman. I may not give 

it back. 

Chairman ROBERTS. There is always that worry. 

Senator STABENOW. [Presiding.] Thank you, Mr. Chairman. 

While you vote and then when you come back I will go do the 

same. So thank you very much. I think next up we have Senator 

Bennet. 

Senator BENNET. Thank you. Thank you, Mr. Chairman. Thank 

you, Madam Chair. Thank you for your service, all of you. 

I want to express my gratitude to the Secretary of Agriculture, 

Secretary Perdue, for hosting a meeting earlier this week with Senators that are concerned about the fire borrowing issue, which I 
24 

know is not the topic of this hearing. But I just want to say to my 

colleagues, this is something that—solving this is long overdue. 

There is strong bipartisan support. The Secretary of Agriculture, 

much to his credit, is following up on commitments that he made 

during the confirmation process and I hope that we will come together and finally solve this issue for our states—not just our 

Western states but states all over the country. 

Ms. Hazlett, I just wanted to ask you, actually, a somewhat related question. I have been around Colorado all this year, as I am 

every year, from La Junta to Alamosa, and everywhere around the 

state, and it is clear that rural communities, as they are in America, continue to struggle with this challenging commodity environment, farm incomes decreasing, but also, in our part of the world, 

with prolonged drought and limited access to affordable land and 

water. At the same time, scientists estimate that new technologies 

could sequester 30 to 50 percent of carbon emissions across the 

economy while enhancing soil health and farm resilience, meaning 

there is additional value in our farmland that is not being taken 

into account. 

I was pleased to hear Mr. Censky last week discuss his commitment to prioritize climate change in the interest of future generations. I agree with his assessment of that as well, and I think Colorado’s producers do, as well. We have a unique opportunity to use 

USDA programs to improve the livelihoods of the next generation 

through addressing climate change and diversifying economic opportunities for farmers and ranchers. 

So I wanted to ask you, Ms. Hazlett, whether you are willing to 

work with the Committee and our team to identify opportunities to 

decrease the amount of carbon pollution in our atmosphere while 

also enhancing farm incomes. 

Ms. HAZLETT. Thank you, Senator Bennet, for raising this issue. 

You know, at USDA, for many years, our motto has been committed to the future of rural communities. Our programs have 

adapted and adjusted to issues that have been important at the 

time, and that will not change. Thank you. 

Senator BENNET. I am glad to hear that, and I know, in some 

ways we are on the cutting edge here, but it is so important for 

us to plan for the future, to be resilient for the future, and where 

there is the possibility of adding new streams of income to our 

farmers’ and ranchers’ operations I think it is critical for us to consider what those look like. 

Is there anybody else who would like to say anything about that? 

Okay. 

I wanted to talk about water infrastructure as well, and let me 

also say, Madam Chair, that I think that the concern about 

broadband is one that everybody on this Committee shares, and 

our communities definitely share. When we say that one community can have broadband and another community cannot have 

broadband, it is tantamount to say one group of students can have 

textbooks this year and another group of students cannot have 

textbooks this year. It is entirely unacceptable from the standpoint 

of rural children in my state, and I know in yours as well. So we 

have got to stay focused on it. 
25 

I also just wanted to talk a little bit about water infrastructure. 

I was in Cuba, meeting with the Minister of Agriculture, who 

pointed out to me that they do not have a tractor in Cuba that is 

newer than 50 years old, and that seemed like a great opportunity 

for us. But then I left and I thought to myself, well, we do not have 

water infrastructure that is less than 50 years old, in a lot of parts 

of rural America, and including in Colorado. 

The USDA’s Rural Utility Service has a significant backlog, as 

has been discussed, of applications for loans and grants to repair 

and rehabilitate rural water infrastructure. Last year, in Colorado, 

this program provided 13 loans and 6 grants, all to communities 

of fewer than 5,000 people, yet there is nearly a $30 million backlog, in Colorado alone. Despite this, the President’s budget proposal 

zeroed out the water infrastructure program. 

Mr. McLean, I would like to ask you what you view as the biggest hurdle to reducing this backlog in the program. 

Mr. MCLEAN. Well, we execute the laws that Congress 

passes—— 

Senator BENNET. Yes. 

Mr. MCLEAN. —and the appropriations that Congress provides, 

and so to our greatest extent possible we try to focus our resources 

where they can be the most helpful. We typically allocate water 

funding to our state Offices of Rural Development, and then, at the 

end of the year, if individual states do not use those dollars, we 

pool them on the federal level and then target them towards highpriority projects. But at any given time, I do have projects that are 

awaiting funding, and the ingenuity and creativity of our staff and 

the rural water and sewer authorities across the country take those 

resources and leverage them, and we look for every opportunity to 

be able to stretch those dollars. 

Senator BENNET. So would you say the backlog is that there is 

not enough money? 

Mr. MCLEAN. Right. The backlog is projects awaiting funding. 

Senator BENNET. Right. So here is another place where we are 

failing to invest, and I think we have to find a way, because we 

have to recognize there are budget constraints. We have to find a 

way to have a more creative approach to financing projects as well. 

But I think the idea that they would zero out this particular part 

in the budget is just entirely unacceptable, I would say, to Democrats and Republicans on this panel, and we are going to have to 

figure out a different solution. 

Thank you, Madam Chair, and I thank my colleagues. 

Senator STABENOW. Thank you very much, and I would underscore your comments as well, Senator Bennet. 

Senator Van Hollen, welcome, and it is your turn. 

Senator VAN HOLLEN. Thank you, Madam Chair, and thank all 

of you for your testimony. 

I just want to pick up on the broadband deployment point. I 

heard, as Senator Bennet was talking, or I saw most of you nodding your heads saying that broadband deployment was essential 

to economic development in rural areas. Do you all agree with 

that? 

Mr. MCLEAN. Absolutely. 
26 

Senator VAN HOLLEN. Would you all agree that we have still got 

a lot of work to do to make sure that we have adequate deployment 

to meet the economic needs of rural America? 

Mr. MCLEAN. Yes, sir. 

Senator VAN HOLLEN. So I wanted to raise with you the issue 

that is pending right now before the FCC. They have a 706 inquiry. 

Are you familiar with that inquiry? 

Mr. MCLEAN. Yes, sir, I am. 

Senator VAN HOLLEN. Because I have been hearing a lot about 

this from rural parts of my state, and just that inquiry is whether 

or not, for the purposes of determining whether we have adequate 

broadband deployment in rural areas, or any area, we can say that 

wireless deployment is good enough and that we do not also have 

to look at the deployment of fixed broadband. Are you familiar with 

that? 

Mr. MCLEAN. Yes, sir. 

Senator VAN HOLLEN. Okay. The national Rural Electric Cooperative Association is one of many that have filed comments in that 

case, and on page 2 of their filing they just state, flat out, ‘‘The 

Commission’’—meaning the FCC—‘‘should continue to assess fixed 

and mobile broadband separately in determining whether advanced 

communications capabilities are being deployed to all Americans in 

a reasonable and timely fashion.’’ 

Do you agree with that statement? 

Mr. MCLEAN. Yes. 

Senator VAN HOLLEN. You do. So my question now is whether or 

not the Department of Agriculture has weighed in or commented 

as well, before the FCC, with respect to the proposal that is pending, the 706 inquiry. 

Mr. MCLEAN. So I will defer to Ms. Hazlett, who—to give the answer. 

Ms. HAZLETT. Thank you, Senator Van Hollen. I am not aware 

of this issue but will certainly be happy to follow up today. Secretary Perdue has placed a top priority on broadband deployment 

and connectivity in America, and we will be happy to get you that 

information. 

Senator VAN HOLLEN.. Well, let me—— 

Mr. MCLEAN. Senator—— 

Senator VAN HOLLEN. —okay, I—— 

Mr. MCLEAN. —Senator—— 

Senator VAN HOLLEN. —yes. 

Mr. MCLEAN. —let me, if I may, address that point. We have not 

filed as a petitioner with the FCC. We have an ongoing dialog with 

the FCC, and the Secretary of Agriculture is chairing the Agriculture and Rural Prosperity Task Force, which the Chairman of 

the FCC is a member. They—I can report that broadband is a key 

focus of that effort, and that dialog, although not proceeding as a 

formal petition, is ongoing between the Executive branch agencies. 

Senator VAN HOLLEN. Okay. Well, I would just say—and I took 

the Secretary at his word as well that he is engaged in these 

issues—but if he is not fully aware and engaged with what is happening at the FCC, the grants that are provided by the Department 

of Agriculture, the rural communication loans and the rural 

broadband loans and grants, they are all very important. But what 
27 

is happening in the FCC could have an even bigger impact on the 

deployment of broadband in rural areas, and that is why you have 

got the National Rural Electric Cooperative Association and all others weighing in. 

So I am going to ask you whether or not the Department of Agriculture will weigh in with the FCC and let them know that the position of the Department of Agriculture is to not count wireless deployment as a total substitute for fixed deployment. There are huge 

differences between the two in terms of the capabilities and the 

costs. 

So I know you cannot answer that today but I would like the Department of Agriculture to get back to us, to get back to me and 

let me know if you are willing to weigh in formally on this issue, 

because everyone says, and I believe you, that you care about 

broadband deployment. This action before the FCC is going to have 

a really big impact on the future of broadband deployment in rural 

areas. Thank you. 

Senator STABENOW. Thank you very much for those important 

questions, and Senator Grassley. 

Senator GRASSLEY. Senator Stabenow, I am waiting for the second panel to ask questions, so I do not have any. 

Senator STABENOW. All right. Very good. Well, I think at this moment then we will thank each of you for being with us on the first 

panel and move to the second panel. We would ask those folks to 

come up and we will proceed. 

[Pause.] 

Senator STABENOW. As we switch, I am going to recess for just 

a moment so that I can vote before the time runs out. Chairman 

Roberts, will be back in just a moment. Thank you. 

[Recess.] 

Chairman ROBERTS. [Presiding.] I call the Committee back to 

order. Thanks to the first panel, and we appreciate your testimony. 

I would now like to welcome our second panel of witnesses before 

the Committee. 

First we have Ms. Aleta Botts. Ms. Botts is the Executive Director of the Kentucky Center for Agriculture and Rural Development, 

a position to which she was named in 2013. She has over 15 years 

of experience working on agriculture and rural development policy 

issues and helping individuals in our rural areas understand issues 

relating to policy and financing. You could be of help to individual 

Senators, I would imagine. 

Before returning to Kentucky to work for KCARD, Aleta spent 

almost 10 years working on agriculture and other issues at the federal level as a policy staffer in the U.S. House of Representatives. 

She grew up on a farm in Menifee County, Kentucky, received her 

BS and MS in agricultural economics from the University of Kentucky. She currently lives on a small farm in Menifee County with 

her husband and two children. 

Welcome to you, ma’am. We look forward to your testimony. 

The second witness is Mr. Elmer Ronnebaum, General Manager 

Kansas Rural Water Association in Seneca, Kansas, America, 

where he is the General Manager. 

Mr. Ronnebaum’s career has spanned five decades, and has been 

focused on working to ensure all of Kansas’s rural communities 
28 

have access to safe and affordable water. First as a Program Director and then as General Manager of the Kansas Rural Water Association, Elmer has been critical to the development and facilitation 

of many training venues for public water systems. Furthermore, 

under his leadership, the Kansas Rural Water Association has developed a statewide water GPS mapping program, and the popular 

self-help program called KAN STEP, which has been responsible 

for the construction of nearly 90 community facilities using local 

volunteer labor services. He and his wife, Kathleen, hail from 

Baileyville, Kansas. 

Elmer, I am glad you are here to join us today. 

Our next witness is Mr. Christopher Stephens. Mr. Stephens is 

President and CEO of Coweta—I think I am doing that right—— 

Mr. STEPHENS. Coweta. 

Chairman ROBERTS. —Fayette Electric Membership Corporation, 

headquartered in Palmetto, Georgia. Mr. Stephens graduated from 

Newnan High School in 1987 and attended the Georgia Institute of 

Technology where he graduated with a bachelor of electrical engineering degree back in ’91, and earned his professional engineering 

certification in 1998. 

Once out of college, he worked as a design engineer for Ritz Instrument Transformers in Waynesboro, Georgia, and then Utility 

Consultants in Atlanta, before becoming Supervisor of Engineering 

at Coweta-Fayette EMC in 1996. Mr. Stephens is a native of 

Newnan, Georgia, where he lives with Lori, his wife, and their two 

children. We look forward to your testimony, sir. 

Senator Thune has already given a marvelous introduction to 

you, Denny, so we will let that stand for the record, but welcome, 

we really appreciate your coming and we look forward to your testimony. 

Our next witness is Mr. Brent Shanks, who is the Director of the 

NSF Engineering Research Center for Biorenewable Chemicals, 

from Iowa State University, home of the Fighting Cyclones, in 

Ames, Iowa. I now turn to Senator Grassley for this introduction. 

Senator GRASSLEY. It is my honor, and I have had a chance to 

just have a short conversation with Dr. Shanks. He is the Mike and 

Jean Steffeson Chair of Chemical and Biological Engineering at 

Iowa State University. Dr. Shanks is the Director of the National 

Science Foundation Engineering Research Center for Biorenewable 

Chemicals and an Anson Marston Distinguished Professor in Engineering. He has been on the faculty of Iowa State since 1999, 

where he has focused on converting biomass feed stocks into chemicals and fuels. 

We welcome you, Dr. Shanks. 

Chairman ROBERTS. I was going to turn to the Ranking Member 

to introduce our final witness but again, in the spirit of bipartisanship, I am delighted to introduce you, sir. 

Our last witness is Mr. Mark Olinyk. Mr. Olinyk is Chief Executive Officer of the Harvest Energy Solutions and one of its cofounders. Mark is responsible for developing Harvest’s operating 

strategies and all external advisor relationships. 

He holds a BBA degree from Michigan State University—obviously why the Ranking Member wanted to introduce you, with the 

green and white. The distinguished Ranking Member had me deco-
29 

rated in green and white when we had our hearing up there, so I 

just want you to know that. When you come to Kansas you can 

wear purple—and an MBA from the University of Michigan. 

I thank you for joining us today, Mr. Olinyk. 

Mr. Botts, if you could start off with your testimony—Ms. Botts. 

Pardon me. 

STATEMENT OF ALETA BOTTS, EXECUTIVE DIRECTOR, KENTUCKY CENTER FOR AGRICULTURE AND RURAL DEVELOPMENT, ELIZABETHTOWN, KENTUCKY 

Ms. BOTTS. Thank you. Chairman Roberts, Ranking Member Stabenow, and members of the Committee, thank you for the opportunity to testify here today on rural development issues and thank 

you for having this hearing. The programs being discussed today 

touch every person living in rural America. 

The Kentucky Center for Agriculture and Rural Development, 

known as KCARD, has been providing technical assistance services 

for agricultural producers, organizations, co-ops, and businesses for 

16 years in the Commonwealth of Kentucky. Through this work, we 

see firsthand the conditions facing ag producers as they start new 

businesses, seek to add value to their commodities to capture more 

of that food dollar, and face significant challenges to their bottom 

line. In Kentucky, this work means that we help businesses developed by ag producers at all stages of development. 

This work would not be possible without the support of the federal Rural Cooperative Development Grant program. This program, 

authorized in the farm bill, provides support for KCARD to be the 

resource for the development of co-ops in Kentucky. By forming cooperatives, farmers are able to achieve gains that would be out of 

reach if they were facing the market alone. In Kentucky in just the 

past few years, KCARD has worked with an organic feed mill coop, a small sweet potato co-op, a grain elevator co-op, and multiple 

farmers’ markets, and right now we are working with a group of 

producers seeking to purchase a portion of a large agribusiness 

that serves them, creating continuity for that agribusiness and its 

owners and creating a way for the producers to gain a stake in a 

business directly serving them. 

The RCDG program has delivered results nationwide, as centers 

like KCARD have developed over 300 co-ops and 350 non-co-op 

businesses and created or saved over 10,000 jobs in just a documented eight-year timespan. It deserves to be reauthorized in the 

farm bill and funded at the highest possible level in annual appropriation bills. 

Through the combined resources of RCDG and the Kentucky Ag 

Development Fund, KCARD addresses complicated ag business situations every day. Through KCARD’s work with businesses, we see 

at the ground level their experiences with various federal grant 

and loan programs. We have worked with the vast majority of 

Value Added Producer Grant recipients in Kentucky in the past 

five years, so we have seen the applications, the record-keeping required, and the paperwork challenges. 

This program is important because the funds go to producers and 

producer groups themselves to advance the goal of producers, securing a greater percentage of that food dollar. The program is a 
30 

good investment for the Federal Government. It accomplishes this 

through submission of business plans, financial projections, estimates of customer growth, and pricing calculations. 

I have elaborated in my written testimony on ways to improve 

the program but just to quickly summarize, the business plans are 

important. We should consider a rolling application process for 

planning grants, we need to maintain producer eligibility restrictions, and we need to recognize that rural development is uniquely 

suited to run this program, due to the assets they have on the 

ground. 

RCDG and VAPG are just two rural development programs critically important to fostering job creation, and RCDG is critical to 

VAPG’s success, providing the support that VAPG-eligible businesses need to launch and thrive. 

Rural development programs respond to a need driven by the notion that economies of scale are harder to achieve in rural areas, 

that services are harder to provide because of that, and that people 

living in these rural areas deserve the same access to services and 

opportunity as those living in metro areas. 

KCARD staff works with farmers and rural businesses every day 

to help them survive and thrive. I live in a rural area on a rural 

water system, I use rural broadband provided by a rural telecom 

co-op to do my work, I buy my electricity from a rural co-op, and 

I can, unequivocally, say that these programs are critical to the 

health of our rural areas. If we want our rural areas to be strong, 

we have to support all of these programs working together to deliver needed infrastructure, foster job creation, and provide a high 

quality of life for our rural citizens. 

Thank you. 

[The prepared statement of Ms. Botts can be found on page 52 

in the appendix.] 

Chairman ROBERTS. We appreciate your testimony. 

Mr. Ronnebaum. 

STATEMENT OF ELMER RONNEBAUM, GENERAL MANAGER, 

KANSAS RURAL WATER ASSOCIATION, SENECA, KANSAS 

Mr. RONNEBAUM. Chairman Roberts and Ranking Member Stabenow, members of the Committee, my name is Elmer Ronnebaum. 

I am General Manager of the Kansas Rural Water Association and 

I appreciate the opportunity to speak to you today. 

My experience with rural water goes back to the early 1970s 

when I was elected to a steering committee and then subsequently 

served for 14 years on the Board of Directors as we formed and developed and constructed a large regional water supply in Nemaha 

and Marshall counties. It went on to serve some 700 rural residents and farmsteads in the two communities of Centralia and Corning. That first project was funded with a loan only from the then 

Farmers Home Administration. 

About 10 years later, we needed to expand the capacity due to 

the needs of that water system. We obtained a second loan from 

then Farmers Home Administration, again another loan only. 

I am here today to ask you for your support to continue the funding for that program, which is today known as the Water and 
31 

Wastewater Loan Program, operated under USDA Rural Development. 

The public water supply systems in the United States number 

more than 50,000. I represent the Kansas Rural Water Association 

but also the other 44 state associations that make up the National 

Rural Water Association, and their membership of some 31,000 

member utilities. Ninety-two percent of those public water supply 

systems serve populations less than 10,000, and 80 percent of the 

16,000 wastewater utilities in the nation serve populations less 

than 10,000. In Kansas, there are 786 of the 855 public water supply systems that serve fewer than 3,000. 

The issue of affordability of drinking water is a major concern for 

those public water supply systems across the United States. The 

Rural Development Program is critical to addressing that effort. 

The USDA program provides help to citizens to have more affordable rates because of the provision for longer-term financing than 

the EPA-funded state revolving loan funds, or that commercial 

credit can offer. 

I tried to put the issue of affordability into some perspective. In 

reviewing the costs that were incurred by a new public wholesale 

district in Strong City, Cottonwood Falls, and the little Chase 

Rural Water District in Kansas, without USDA Rural Development 

funding of loans and grants, and a small portion from the Community Development Block Grant, the citizens in Strong City, Kansas 

would have had their water rates quadruple to $25 per 1,000, making 5,000 gallons of water cost $167, a $42.50 minimum, and 

roughly $25 per 1,000, for a total of $167 for 5,000 gallons. That 

is absolutely not affordable in most communities. 

Strictly relying on commercial credit and the EPA loan program, 

which addresses compliance, is not adequate. The USDA Rural Development Program varies from that because it takes affordability 

as a primary factor in the consideration of these loans. We compliment the agency for developing an online program for the application process. RDApply has helped the borrowers and it certainly 

has helped the agency. 

Thank you, Chairman Roberts, for the opportunity to comment. 

I would be happy to take any questions later. 

[The prepared statement of Mr. Ronnebaum can be found on 

page 105 in the appendix.] 

Chairman ROBERTS. We thank you, Elmer. Thank you for your 

long service on behalf of Kansas. I do not know about Centralia. 

Centralia used to beat up on the Holton Wildcats all the time. I 

just did not think that was right. 

Strong City has a great rodeo and obviously you cannot afford 

water at those kinds of prices. Excellent example. Thank you so 

much. 

Mr. Stephens. 

STATEMENT OF CHRISTOPHER STEPHENS, PRESIDENT AND 

CEO, COWETA–FAYETTE EMC, PALMETTO, GEORGIA 

Mr. STEPHENS. Thank you, Chairman Roberts, Ranking Member 

Stabenow, and members of the Committee for inviting me to testify. I am the President and CEO of Coweta-Fayette Electric Membership Cooperation, a not-for-profit electric cooperative in Georgia. 
32 

We provide electricity to nearly 70,000 members, operate over 

6,000 miles of line, and employ around 200 people. 

The farm bill is essential to co-ops because it contains tools we 

use to keep the lights on in rural America, generate and distribute 

electricity from renewable sources, modernize the grid, and promote economic development in the communities we serve. For decades, the Rural Utilities Electric Loan Program has been our foundation, providing low-cost financing to co-ops for installing and 

maintaining the grid. It has been the most important rural development tool in this country’s history. 

Today co-ops are adapting to changes in consumer demand, accommodating and evolving generation mix, and protecting against 

cyber threats. The farm bill helps us fund essential projects to 

make our systems more modern, efficient, and secure. 

We have enjoyed strong support for robust RUS funding because 

we are such a good investment for the Federal Government, providing valuable service to our communities and reliably paying 

back our loans. We ask that you help us maintain that support in 

the farm bill. 

In the 21st century, robust communications infrastructure is just 

as important to our businesses as our traditional assets like poles, 

wire, and power plants. My co-op is currently conducting an economic study to determine the feasibility of building out a 

broadband network. Our main motivation is to take care of internal 

operational needs to make our system more efficient and secure. 

However, once this foundation is in place there are lots of things 

we can do with it. One option could be facilitating the connection 

of our members’ homes and businesses to broadband Internet. 

Some people in our region do not have access to reliable Internet, 

and that puts our consumers, schools, hospitals, and employers at 

a disadvantage. 

Another part of modernizing the grid is deploying new energy 

sources for helping our customers save money, by managing their 

own energy better. Coweta-Fayette EMC is a founding member of 

Green Power EMC, which sources renewable energy from low-impact hydro plants, biomass landfill gas, and solar. At the end of 

last year, Green Power EMC projects were generating 270 

megawatts of electricity, enough power to serve over 200,000 

homes, and that will nearly double by the year 2020. 

We also sponsor separate efforts to bring solar installations to 

schools and to help our consumers finance money-saving home energy efficiency projects. We urge the committee to reauthorize programs like Rural Energy for America program, and the Rural Energy Savings Program to ensure that electric co-ops can continue 

to meet the evolving demands by our member owners. 

In addition to our electrification work, cooperatives play a vital 

economic development role in the communities we serve. Since 

2009, Georgia co-ops have funded around $10 million through the 

Rural Economic Development Loan and Grant Program, also 

known as REDLG. These projects include the renovation of a hospital and construction of a new cattle feed operation to support 

local agribusiness. We believe the REDLG program is a valuable 

tool in offsetting population flight and job losses in rural America 

and around the country. We urge the Committee to work with us 
33 

to ensure ample funding for REDLG throughout the next farm bill 

and beyond. 

Lastly, allow me to mention an issue of vital importance to the 

health of electric co-ops in Georgia, specifically. Plant Vogtle is a 

nuclear power plant partially owned by Oglethorpe Power, our generation co-op. Currently construction is underway to add two reactors at Plant Vogtle. However, the unforeseen bankruptcy of the 

project’s general contractor has put this project in jeopardy. Congress must extend existing nuclear production tax credits in order 

to make this project’s completion viable. 

Most of our country’s food, minerals, energy, and manufactured 

goods still come from rural areas. That is why the health of rural 

America should be of interest to all members of Congress and all 

Americans. You have a great opportunity in the farm bill to make 

needed investments that will address our unique challenges. 

Again, thank you for the time to testify. 

[The prepared statement of Mr. Stephens can be found on page 

114 in the appendix.] 

Chairman ROBERTS. Mr. Law. 

STATEMENT OF DENNY LAW, CEO, GOLDEN WEST TELECOMMUNICATIONS COOPERATIVE, WALL, SOUTH DAKOTA 

Mr. LAW. Thank you. Chairman Roberts, Ranking Member Stabenow, and members of the Committee, good morning and thank 

you for this opportunity to testify on promoting the deployment and 

sustainability of broadband in rural America. 

My name is Denny Law. I am the CEO of Golden West Telecommunications, based in Wall, South Dakota. My remarks today 

are on behalf of Golden West and NTCA, the rural broadband association, which represents approximately 850 community-based providers of advanced telecommunications services in the very most 

rural parts of this country. 

Golden West began operations in 1916, and today we provide 

broadband Internet service, cable television, and voice telecommunications services. Golden West serves customers across 

24,500 square miles in South Dakota. That is an area larger than 

the states of Maryland, New Jersey, Connecticut, and Delaware, 

combined. 

Golden West has been an RUS borrower since the early 1950s, 

and just last week we received approval for our most recent loan. 

USDA’s Telecom Lending Programs have stimulated billions of dollars in private capital investment in rural telecommunications infrastructure around this country. 

Despite the tremendous success of the USDA Telecom Program, 

rural broadband deployment would not be possible without the 

Universal Service Fund High Cost program as well. The USF program helps rural carriers make the business case for network deployment through use of private capital and/or securing loans from 

the Rural Utility Service and the limited number of other private 

lenders committed and willing to finance broadband-capable plant 

in rural America. 

Unfortunately, while USDA programs promote, and the USF 

rules are designed to support robust networks, the High Cost USF 

budget is not. A hard cap and resulting budget shortfall is now 
34 

driving consumer rates higher, deterring rural broadband investment, and even cutting USF support for investments that have already been made. In fact, in the nearly 40 percent of the U.S. land 

mass that is served by rural carriers, the artificially low High Cost 

budget is now the greatest barrier to rural broadband investment 

that carriers face right now. Because of this limit, tens of thousands of rural consumers will see lower speeds or no broadband at 

all, precisely what recent reforms were intended to alleviate. 

We are requesting Congress to help press for a fix to this problem and we urge the FCC to take action as promptly as possible 

to address this budget shortfall. 

The permitting approval and review process for deployment of 

networks across federal and state land-owning agencies must also 

be addressed in any holistic plan to promote and sustain infrastructure investment. The best-funded, best-planned networks may 

never deliver fully on their promise if they are caught in regulatory 

red tape and needless delay. 

Robust broadband must be available, affordable, and sustainable 

for rural America to realize the economic, health care, education, 

and public safety benefits that advanced connectivity offers. Therefore, the rural broadband industry is eager to close the rural 

broadband gap by working with Congress and the administration 

on public policy that helps to build and sustain broadband in rural 

markets. 

Golden West and NTCA member companies thank the Committee for its leadership and its interest on all of these issues, and 

we look forward to working with you on behalf of the hundreds of 

small operator members of NTCA and the millions of rural Americans that we serve. 

Thank you for your time and I look forward to your questions 

later. 

[The prepared statement of Mr. Law can be found on page 67 in 

the appendix.] 

Chairman ROBERTS. Thank you, Mr. Law. 

Dr. Shanks. 

STATEMENT OF BRENT SHANKS, Ph.D., DIRECTOR, NSF ENGINEERING RESEARCH CENTER FOR BIORENEWABLE CHEMICALS, IOWA STATE UNIVERSITY, AMES, IOWA 

Mr. SHANKS. Chairman Roberts and Ranking Member Stabenow 

and Committee members, I thank you very much for this opportunity to testify, particularly about biomass utilization, clearly, 

near and dear to the state of Iowa but also broadly to the country. 

But I think what is important about this area relative to some of 

the other testimonials that we have heard today is this is one that 

not only impacts farm security, rural infrastructure, but also a 

broader impact on society. So it is a case where we can see that 

rural America really has a strong impact on the greater society, 

and I think that is an important thing to always keep front and 

center. 

Title IX has a very important aspirational goal of producing advanced biofuels from biomass, and this is a wonderful aspirational 

goal. Underneath that we have established the concept of a biorefinery which would not only produce advanced biofuels but also 
35 

co-products of renewable chemicals and biobased products. Importantly, the way this title is constructed is it looks at the challenge 

of that aspirational goal, which includes technological challenges, 

market challenges, and infrastructure challenges, and says, how do 

we build actions—authorize actions underneath it to address those 

challenges? That is a very important way to look at the problem. 

But I would argue, or I would suggest there is another way, a complementary way to look at it, which is how do we take advanced 

biomanufacturing to judiciously produce renewable chemicals and 

biobased products that can actually enable us on the pathway to 

that grand vision that we have? 

What do I mean by ‘‘judiciously’’? We can develop technologies 

that, in the nearer term, can produce renewable chemicals, but 

then as they mature can be leveraged into advanced biofuels. We 

can develop markets in renewable chemicals that will then be in 

place for when we are ready with all those pieces in the biorefinery 

to make it work. We can do incremental investment on existing infrastructure to make sure that when we come to the biorefinery, 

which will require a large capital infrastructure, we can lower that 

hurdle for that capital infrastructure. 

It is my opinion that if we utilize advanced biomanufacturing to 

produce renewable chemicals, what we can do is create successes 

on the way to the pathway of what we ultimately want, which is 

advanced biofuels. The analogy I think of with this is when you 

think of NASA. NASA creates a vision and says, ‘‘We are going to 

Mars.’’ What we do is establish technologies along the way to that. 

But those technologies have value in their own right, and NASA 

does a wonderful job of articulating the value of that. 

I think we need to do the same thing in biomass utilization. We 

have a wonderful objective to create advanced biofuels but we also 

have the ability to create successes on the way to that ultimate 

success. 

Thank you very much for your time. 

[The prepared statement of Mr. Shanks can be found on page 111 

in the appendix.] 

Chairman ROBERTS. Mr. Olinyk. Thank you very much, Doctor. 

STATEMENT OF MARK OLINYK, PRESIDENT, HARVEST 

ENERGY SOLUTIONS, JACKSON, MICHIGAN 

Mr. OLINYK. Thank you, Chairman Roberts, Ranking Member 

Stabenow, and distinguished members of the Committee for inviting me to speak with you today. 

My name is Mark Olinyk. I am the President and CEO of Harvest Energy Solutions. We are a solar energy design, sales, and installation company based in Jackson, Michigan. I have been in and 

out of the agricultural sector most all my life. I was raised on a 

farm, I farmed on my own for a while, I was the farm manager for 

the largest farm in the state of Michigan in the early 1980s. I 

owned a grain elevator where we warehoused over 11 million bushels of grain for the USDA. After that, I got into manufacturing, but 

I missed the farmers and I missed the people of agriculture, and 

I was looking for a way to reconnect with them. 

In 2006, I was approached to work in the renewable arena and 

thought this was my way back to working with farmers in the Mid-
36 

west. We started a company called Harvest Energy Solutions. Over 

the past few years, we have grown from a two-men-in-a-truck operation to over 50 professionals, and growing. Our main focus is 

farmers and rural customers in the states of Iowa, Illinois, Indiana, 

Michigan, Ohio, Kentucky, Tennessee, Missouri, Wisconsin, and 

Pennsylvania. Our agricultural customers include dairy, poultry, 

hog, grain, greenhouse, hop, fruit and vegetable farms, as well as 

wineries and breweries and food processors. 

We were pleased to be joined by you, Ranking Member Stabenow, in 2015, at a ribbon-cutting ceremony for a solar installation 

at a winery in northern Michigan. That project, like so many others 

in this space, was made possible by the USDA’s REAP initiative. 

REAP grants are available through the USDA to assist farmers 

and rural business owners to invest in renewable energy systems 

or make energy-efficient improvements. 

Harvest Energy has been successful, in part, because of the 

smart federal investments in rural communities like REAP. REAP 

has been a component of 25 to 30 percent of our sales. Allow me 

to give you a quick example of the immediate effect that REAP has 

on a solar investment. 

Typically our customers will see a seven-year payback when they 

purchase solar for their farm or business, after which the electricity from that investment is virtually free. With a REAP grant 

award, the same farmer or business owner will see an approximately four-year return on investment. Many times the REAP 

grant is the determining factor of their buying decision. 

There are typically three times more REAP grant applications 

than available funding in a given year. I would strongly recommend to this panel not only to reauthorize the program in the 

upcoming farm bill but consider increasing the mandatory funding 

associated with it. That means more clean, renewable energy, more 

jobs and economic growth in our struggling rural communities. I 

know that this Committee has a lot of big decisions to make, but 

please know that Harvest and others like us deal with REAP conversations on a daily basis. 

I want to thank the Committee again for inviting me to 

Washington, DC, to share my perspective and the perspective of 

countless farmers and small rural business owners throughout the 

country. I look forward to your questions. 

[The prepared statement of Mr. Olinyk can be found on page 88 

in the appendix.] 

Chairman ROBERTS. We thank you, Mark. 

Senator Grassley. 

Senator GRASSLEY. Thank you, Mr. Chairman, for your courtesy, 

letting me go out of turn. 

Dr. Shanks, given your research experience in biorenwables, 

what lessons learned or specific effective practices do you feel 

should be included in the energy title of the farm bill in order to 

for the U.S. to continue being a global leader is biorenewables? 

Mr. SHANKS. Thank you for that question, Senator Grassley. 

I think always one of the challenges is how do you pose a problem and then when the agency carries out that, how they respond 

to the language. As I mentioned in my testimony, the way we have 

currently set up is a vision of a biorefinery, and so most of the op-
37 

portunities are set up around how do we impact the production of 

advanced biofuels. I think there is opportunity to say we need successes along the way. Let us consider technologies that maybe are 

not ready for advanced biofuels but can produce renewable chemicals that still have great value and get us on that path. 

I think these are some of the things that we need to consider in 

terms of how do we get from where we are to where we want to 

go. 

Senator GRASSLEY. Yes. Next, for you, Dr. Shanks, what are the 

prospects for advanced biofuels given the current crude oil price of 

about $50 a barrel? Because I think you indicated, in what I read 

of your testimony, that certainty of petroleum product pricing 

would be beneficial, but if you are in a free market environment 

I do not think you can expect that to be something Congress is 

going to decide. 

Mr. SHANKS. That is exactly right. So I worked for Shell Oil 

Company, actually, before, so I have worked on both sides, both the 

oil side and the renewable side, and that is absolutely correct. This 

is one of the challenges when the target is primarily just a fuel, 

which is going to be very tightly controlled relative to the price of 

crude oil. 

There are opportunities with renewable chemicals, biobased 

products, that actually have advantaged and unique performance 

properties that create value proposition so that you can decouple 

them, to some degree, from the price of fossil carbon, and that is 

a tremendously important part of the path forward, in my opinion. 

Senator GRASSLEY. Why do you—also for you—why do you characterize renewable chemicals as ‘‘ancillary’’ in the current biorefinery strategy? 

Mr. SHANKS. So, again, when we look at the objective of a biorefinery, which is to make advanced biofuels, there is now an acknowledgement that there is an important role for bio-based products and renewable chemicals with that. However, the language 

that always comes out is how do we take the byproduct stream? 

How do we take the side streams that are not being used for advanced biofuels? This is really limiting innovation and limiting our 

ability to make progress, technologically, on the way to that goal. 

Senator GRASSLEY. Mr. Hazlett—I should nt say—I am sorry. I 

have got one more question for you. In your testimony, you stated 

that the U.S. chemical market is over $200 billion in annual sales. 

What percent of the $200 billion do renewable chemicals currently 

account for? Additionally, are there any projections for where renewable chemicals might reasonably be in 10 years? 

Mr. SHANKS. Yes. So this is always a challenging question and 

there is complete—there are chemical consulting companies that 

make their business to project what that is. I am certainly not in 

the position to be as definitive or as forward-looking as some of 

them. But we are less than 1 percent. You can envision that 10 

percent of that market is a reasonable capture strategy. Clearly, 

there are a number of things that have to be advanced to get to 

that point. 

To put it in a more concrete term, the state of Iowa passed a renewable chemical production tax credit. This is the first year that 

is in place. It is 5 cents per pound of produced building-block chem-
38 

ical from renewable products. Already there are 15 companies looking at applying for that credit, which would be for production for 

this year, that they will officially apply for in January. 

So the answer is there is a lot of opportunity out there, and a 

lot of innovation out there, so I think there is—that 10 percent is 

not an unreasonable objective. 

Senator GRASSLEY. Thank you, Mr. Chairman. 

Chairman ROBERTS. Senator Heitkamp. 

Senator HEITKAMP. Thank you, Mr. Chairman. This is an issue 

that is near and dear to my heart. My colleague, Senator Hoeven, 

and I represent one of the most rural states in America, and we 

appreciate and understand how critically important the rural development piece of this is. In fact, I have two tests on whether I 

think a rural area will survive. First is do we have rural water, 

which is absolutely critical going forward for many, many families, 

to make sure that the water is pure and clean. The other test is 

can they stream Netflix, right, because if you cannot stream 

Netflix, if you cannot get access to broadband, it is going to be increasingly more difficult, not only to keep our agriculture economy 

in these rural areas thriving but to build out and develop valueadded opportunities that will keep our children at home. 

We are very, very interested in making sure that the historic 

commitment that the Federal Government has made to rural development, which has paid off either repayment of loans, but absolutely producing the highest quality food source in the world, making it possible for us to continue to do what we do in rural America, 

none of that would be possible if we had not electrified, if we have 

not--now looking at broadband, if we had not made these investments. 

I want to thank you all for the roles that all of you play in doing 

exactly that. 

I want to talk a little bit about what would happen if, in fact— 

you probably all saw the budget that the administration advanced—what would—and we will start down at the end, and welcome, it is good to see you again. She used to work for Earl Pomeroy so I had to give her a shout-out. You know, let us just ask all 

of you what you think the consequences would be if we adopted 

this administration’s budget as it relates to rural development. We 

will start on that end. 

Ms. BOTTS. Thank you, Senator. Well, certainly we have to recognize that the rural development programs that are in place have 

no rival in Federal Government. They are not duplicative to other 

programs, and we have to dedicate enough resources for these programs to do what they are designed to do, which is help these rural 

communities survive and thrive. 

We would say that any effort to reduce the resources to these 

programs will be detrimental to rural areas. 

Mr. RONNEBAUM. Senator, when it comes to rural water, if the 

funding from USDA Rural Development is not available, many of 

those projects will simply not be built. 

Senator HEITKAMP. If I could just take a minute, what will happen to operation and maintenance and the opportunity not only to 

build new facilities but maintain what you currently have? 
39 

Mr. RONNEBAUM. The USDA Rural Development finances circuit 

rider programs and we provide, through our association, as a technical assistance provider, daily operation maintenance and technical funding application assistance to those communities. The 

communities in Kansas, and many across the Midwest, have a declining capital—human capital. We typically have 25 percent turnover of operators annually in the state of Kansas. These field techs 

are essential to maintaining critical services. Miltonvale, Kansas, 

yesterday lost two operators and one of our people is in there 

today, and was already yesterday afternoon, helping that town 

maintain service. 

Senator HEITKAMP. Thank you. Mr. Stephens? 

Mr. STEPHENS. Thank you, Senator. I certainly appreciate this 

opportunity and we really want to continue supporting the electric 

utilities and building out the basic infrastructure, but we also see 

a need in continuing to support the Rural Energy for America 

REAP Program, the Rural Energy Savings Program, and also 

REDLG which helps promote economic development in our communities. 

Senator HEITKAMP. Thank you. Mr. Law? 

Mr. LAW. Thank you, Senator. We would continue to support robust funding for broadband efforts, including the Rural Utility 

Service Broadband Development programs as well as the various 

grant programs that are available, as well as the traditional infrastructure program. It is my understanding that the budget proposed for that is relatively stable at that time, but certainly as the 

process evolves we will continue to advocate for strong funding. 

Senator HEITKAMP. If I can just make a point there, stable budget is going to maintain and help us keep what we have got. We desperately need to expand rural broadband, which, along with Shelly 

Capito, we are working very hard in my office. 

If I can just get two more questions? Thank you, Mr. Chairman. 

Mr. SHANKS. There is no question that infrastructure is tremendously important, and even when we get into manufacturing of 

some of these products we need to have that infrastructure. 

I would say what is also important is actually creating value in 

these communities, and a great example of that is three years ago 

there was a $148 million facility built in Osage, Iowa, called Valent 

BioSciences, to make biobased products. So there is great opportunity here as well. 

Senator HEITKAMP. Thank you. 

Mr. OLINYK. If the REAP grant initiative was disbanded, for 

whatever reason, it would make it very difficult for many farmers 

to dip their toe into renewables. We sell to farmers because, typically, they have space and they have friendly townships. We look 

forward to working with this group, and as I talk to hundreds, or 

maybe thousands of farmers at different trade shows that we attend, they bring up REAP, and they bring it up more and more all 

the time. So the momentum is growing, and to pull the rug out 

from under a program like this would be detrimental. 

Senator HEITKAMP. Thank you. Thank you, Mr. Chairman. 

Chairman ROBERTS. Thank you, Senator. Senator Hoeven. 

Senator HOEVEN. Thank you, Mr. Chairman. Thanks to the witnesses for being here. Somewhat along the same lines. What are 
40 

your priorities in the farm bill? I mean, as you look at small businesses, businesses throughout rural America, what are your priorities in the farm bill, like one, two three, for each of you? 

Ms. BOTTS. Certainly, the reauthorization of the Rural Cooperative Development Grant program is critical to providing resources 

for rural businesses, developing in rural areas, and North Dakota 

has some excellent rural co-ops that have developed through this 

program. So reauthorization of Rural Cooperative Development 

Grant. 

The reauthorization of the Value Added Producer Grant and 

maintaining a strong business focus for that program, having applicants put together strong applications that include financial projections and estimates of customer base, those are two key pieces for 

what would be necessary in the next farm bill. 

But certainly, looking at all the programs together to see how we 

can—how the programs work together to provide resources for 

rural development and how that can be done more cooperatively 

would be something that we would encourage. Thank you. 

Mr. RONNEBAUM. Senator, I am not intimately familiar with all 

aspects of the farm bill, but I do know about the Rural Development’s Water and Wastewater Loan and Grant Program, and there 

are many more applications and funding needs than funding is 

presently available, and that is a critical component to making 

water and wastewater services available in underserved and lowincome, particularly, rural communities. 

Mr. STEPHENS. Senator, I think for us it is definitely continuing 

to meet the growth of our communities and providing funds to meet 

their electric service needs. Also, providing innovative solutions 

like we have utilized for AMI and making a smarter grid, which 

could include some form of broadband, and continuing to promote 

economic development by reauthorizing REDLG. 

Mr. LAW. Senator, we would strongly support continued full authorization for the Broadband Loan Program and the Traditional 

Telecom Loan opportunities that rural telecommunications providers can take advantage of for affordable financing of expensive 

broadband networks in very rural areas, and as many dollars are 

available for those types of applications to further that mission 

would be our number one, number two, and number three. 

Mr. SHANKS. I certainly cannot claim the expertise on the broad 

aspects of the farm bill, as a number of these experts, but I would 

say that I think an important aspect of a strategy for farm security 

and rural investment is making sure that we actually have products that are valuable. We think that biomass-derived products are 

tremendously important in the mix of how to help rural economy. 

Senator HOEVEN. What is most helpful to you there? 

Mr. SHANKS. Pardon me? 

Senator HOEVEN. What is most helpful to you in developing those 

biomass products? 

Mr. SHANKS. I think the key process there is to make sure we 

synergistically use our federal dollars. The Department of Energy 

has a very clear mission on energy. USDA, I think, has a much 

more of a mission on rural infrastructure, value to the rural society. I think that does not require that energy be the main feature 

of it. It means how do we create value from the biomass. I think 
41 

it is important that those programs complement each other rather 

than just reinforce one direction. 

Senator HOEVEN. It is still a little arcane for me. 

Mr. SHANKS. Okay. So a lot of what we do in the biomass area 

is absolutely related to making advanced biofuels, and that is a 

view across—— 

Senator HOEVEN. Are you talking about the biofuel programs—— 

Mr. SHANKS. —across multiple agencies, yes, yes, and I think 

those are important. However, USDA, in the farm bill, I think has 

a unique niche in there that what we care most about is how do 

we create value from the biomass products. Energy is not the absolute only end game that we would be interested in. We are interested in value-added products, and I think value-added products 

are a shorter-term advantage and success story potential than advanced biofuels. 

Senator HOEVEN. So like making a biomass coffee cup for the 

Chairman of the Ag Committee? 

Mr. SHANKS. Yes. 

Mr. OLINYK. I guess I would suggest jobs be one of the—my biggest concerns. Our young people are leaving the communities. They 

are coming to big cities. In order to create some of those jobs I am 

back to renewable energy. Renewable energy produces jobs in those 

small communities. It reduces the cost of electricity for the farmer, 

allowing them to expand their business and potentially hire more 

people, as well as the guaranteed loan program. 

But there is something here that I am learning today that I am 

certainly not equipped to speak on, and that is the opioid condition 

we have in our rural communities. I think we all need to pay a lot 

of attention to that. It is real, and it is a big concern. Thank you. 

Senator HOEVEN. Thank you. 

Chairman ROBERTS. Senator Stabenow. 

Senator STABENOW. Thank you very much, Mr. Chairman. Thank 

you to each of you for your excellent testimony. Mr. Olinyk, it is 

wonderful to see you again and I appreciate the great work that 

you are doing. I wondered if you could talk a little bit more about 

the REAP program, and the fact that it is consistently oversubscribed. There is more interest than there is funding, to be able to 

move these opportunities forward for farmers and others. We 

fought hard in the 2014 farm bill to secure permanent funding for 

the program. 

I wonder if you might talk broadly about the demand for rural 

renewable energy projects, what you are seeing in the field, and 

what would happen in terms of jobs, jobs for your business, as one 

example, if we were to increase the funding for REAP. 

Mr. OLINYK. Thank you, Senator, for the question. The more 

available REAP money, the more benefit to farmers and businesses, period. It produces jobs. I will talk—I will be greedy for a 

second and talk about my company. I mentioned that 25 or 30 percent of our growth has been directly related to the REAP grant. We 

not only sell and design and install solar panels, but we have a 

manufacturing sector. We manufacture the structure beneath the 

solar panels. So there would be increase in manufacturing, design, 

installation, sales, administrative, and these are professional jobs. 

They are not minimum wage jobs. 
42 

Also, on the agricultural side, as we educate these farmers, one 

at a time, it seems like, and they invest in renewables, it frees up 

money for them to expand their business. When they expand their 

business, more jobs are had. 

Our business has doubled in about the last three years. I expect 

it to double again in the next three years, or faster, certainly with 

an enhanced REAP program. 

I have got a quick story. It has to do with Kentucky. About six 

years ago, I wanted to show that somebody from Michigan can go 

sell someone from Kentucky a product, so I, myself, went down 

there and I was introduced to a young farmer, and we hit it off, 

and he ended up buying a solar array from us. During that conversation, his neighbor was there. I thought I gave the first guy a 

really good deal, but we found out that that good deal spread and 

spread and spread, and they all got a pretty good deal. 

Long story short, they almost all applied for a REAP grant. 

Within five or six counties, we sold approximately 100 installations 

of solar. In those five or six counties, almost all applied for a REAP 

grant, and I would say half got the REAP grant and half did not. 

But I would say that we could have had another 50 sales or so, 

meaning more employment there, more employment for us, had we 

had more funding for REAP. 

Senator HEITKAMP. Thank you very much. Mr. Ronnebaum, I 

want to talk a bit more about rural water. You highlighted the affordability of drinking water and the importance of USDA’s Rural 

Development Water and Wastewater Loan and Grant Program, in 

Kansas as well as across the country. We have certainly had a lot 

of challenges in Michigan, from Flint, Michigan, with the lead in 

water, to McCone County, where there was a big sinkhole where 

the road just collapsed, and underneath it we saw pipes that—I do 

not know what you call a pipe made out of wood, but that is what 

we saw, just extraordinarily old infrastructure. 

According to the EPA’s most recent Drinking Water Infrastruc- ture Needs Survey, $64.5 billion is needed to maintain and upgrade 

small water systems around the country. As our nation’s infrastructure continues to age, can you describe the role that USDA 

Rural Development Programs have in ensuring communities—I 

know you have talked about this, but I wonder if you would talk 

about what is being done to provide access to clean, affordable 

drinking water, and any suggestions that you have in terms of 

USDA being able to help finance more drinking water projects or 

provide technical assistance in a more robust way? 

Mr. RONNEBAUM. Thank you, Senator Stabenow. The EPA-funded water supply loan funds and programs in various states focus 

primarily on compliance. In Kansas, as an example, when the state 

ranks the projects for funding by the regulatory agency, they apply 

35 points to compliance or consolidation. Affordability gets 5 points. 

Affordability is at the bottom of their list, whereas the USDA program puts affordability very much to the top. So those programs 

are not duplicitous. 

Simply put, the focus is completely different. The USDA program 

replaces, expands, and extends services into unserved areas. The 

EPA program cannot do that. 

Senator STABENOW. Thank you much. Thank you, Mr. Chairman. 
43 

Chairman ROBERTS. Senator Klobuchar, we have a vote at 12:15 

and another one at 1:45. I am going to try to make this as brief 

as I can because I know that you have pertinent questions. 

Ms. Botts, in your testimony—we had a new arrangement here, 

Amy, where the last shall be first—— 

Senator KLOBUCHAR. No problem. 

Chairman ROBERTS. —and the first shall be last. But, at any 

rate, in your testimony, ma’am, you highlighted important requirements of the Value Added Producer Grant Program, specifically 

that applicants provide a business plan and basic financial statements. Do you believe it makes sense to consider requiring this 

type of financial information for all USDA grant and loan businessbased programs to ensure that projects being funded are actually 

viable? 

Ms. BOTTS. I do. I think if the program is delivered to recipients 

who are private businesses, it only makes sense to have documentation that the business has thought through the very difficult 

questions they have to think through to do a business plan, and 

that they do have basic financial statements, such as a good profitloss statement, so that the agency and the reviewers for the grant 

program can look at that and see that it is a viable, going business. 

Chairman ROBERTS. Thank you for that. If you see Earl Pomeroy 

in the near future, tell the loquacious Mr. Pomeroy that I miss the 

dialog back and forth between he and I when we were on the 

House Ag Committee. 

Ms. BOTTS. I will do that. 

Chairman ROBERTS. This is for Denny. As you noted in your testimony, Rural Development administers a number of different loan 

and grant programs to encourage deployment of broadband all 

throughout rural America. These programs have various definitions 

of what speeds actually constitute broadband. Do you think it 

makes sense to have a common definition of broadband, and, if so, 

what speeds would you recommend a borrower commits to build 

out in order to qualify for a grant or loan? 

Mr. LAW. Thank you for your chair—or your question, Chairman 

Roberts. I do believe that there should be some type of coalescence 

around a consistent speed designation for what constitutes 

broadband, not just in rural America, but, quite frankly, America 

in general. In terms of speed standards, there are a variety in place 

today. In terms of the rural utility service there are also a variety 

of speed standards used by the Federal Communications Commission as well. 

I would strongly urge, if at all possible, there be some type of 

meeting of the minds, so to speak, between those two entities to try 

to see what type of agreement or broad guidelines could be put in 

place for a consistent broadband speed standard. 

In regards to a specific speed, Mr. Chairman, it is difficult—I will 

answer your question but I would like to preface it first by saying 

that will be an ever-evolving question that I am confident this 

Committee and others will ask for many years to come. The needs 

or desires of a particular network capability will evolve in years to 

come. Whatever number I tell you today, by the next month, next 

year, or five years, while we are all still building network, that 

number could be sub-performance. 
44 

From a company perspective in my organization, and I think 

many in the rural telecommunications, I think a minimum 

broadband speed should start in the 25/3 territory, so 25 meg 

broadband downloads and 3 meg up minimums, would be my personal recommendation, but that is written in sand, because a year 

from now it should be higher, and so on. 

Chairman ROBERTS. I appreciate that. A lot of things are written 

in sand around here. 

Elmer, in your written testimony you include a number of policy 

recommendations for the 2018 farm bill. One recommendation includes removing water and waste disposal technical assistance and 

training grants from the strategic economic community development set-aside. Can you expand on why you think this recommendation is the right way to go, why it makes sense, whether 

you believe there are other grant or loan programs where the 

multi-jurisdictional approach is not working as intended? 

Mr. RONNEBAUM. Senator, that program, as I understand, takes 

10 percent—a 10 percent set-aside, at the national level. Whether 

or not that makes sense in the program, it would seem that each 

state could take its allocation and deal with the full 100 percent. 

But as it is presently written, it reduces the wastewater tech assistance program by 10 percent. 

We have one staff member who covers the entire state of Kansas. 

He measures lots of sludge in lagoons. I could give you some 

harrowing stories about getting high-centered in a lagoon in a 

sludge boat, but we do not need that now. 

It would curtail services if those programs were reduced by 10 

percent to many communities who need that assistance. 

Chairman ROBERTS. I appreciate it. Thank you. If we have time 

afterwards here, and I do not have to go to vote, I will ask you 

about the governor stating that there is evidence now that the recharge for the Ogallala Reservoir actually is in a better situation 

than we thought, and I know you are from the eastern part of Kansas but we have that reservoir out there. Thank you very much. 

Mark, have any of the REAP awardees you have worked with 

over years been agriculture producers located in non-rural areas? 

I am asking this because the program currently allows urban farmers—sounds like the movie—to qualify for funding? But as you 

noted in your testimony, this program is highly over-subscribed 

every year. This might be a little controversial but what are your 

thoughts regarding tightening eligibility requirements for Rural 

Energy for America Program awards to focus these dollars on providing benefits directly to agriculture producers in our rural communities? 

Mr. OLINYK. I guess I am not sure I totally understand the question. 

Chairman ROBERTS. Well, there is money, or funding, going to 

urban producers under a program that is for Rural Energy for 

American Program awards, to focus dollars on rural. 

Mr. OLINYK. Okay. I understand. It is my understand--and let 

me make sure I understand the question—it is for farmers and 

small businesses in rural communities. But when they describe a 

farmer, they also—that farmer can also be closer to the urban area. 

That is my understanding of the rule. So if someone is farming to-
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bacco outside of Murray, Kentucky, and they are very close to the 

city, then I—well, that is not a very good example because Murray 

is not that big—Louisville, and it is closer to the city, and encompassed in an area that is too large or larger than a 50,000 population, the farmers are exempt from that and they can still get a 

loan or a grant. That is my understanding. 

Chairman ROBERTS. Or just keep them outside of the city limits. 

Mr. OLINYK. I am good with that too. 

Chairman ROBERTS. All right. I appreciate that very much. Let 

us see if I—Senator Klobuchar, why do not you close out. 

Senator KLOBUCHAR. Okay. Very good. Thank you, all of you, and 

I am co-chair of the Senate Broadband Caucus so I am going to 

start with that, and I focused on, of course, our rural connectivity 

and what is going on, and we still, in this day and age, have way 

too many people that cannot get broadband, including farmers, 

business people, who go to the McDonald’s parking lot to do their 

work. 

So, Mr. Stephens and Mr. Law, what steps do we need to take 

to help deploy broadband, and how can we overcome the unique 

challenges that we have there? 

Mr. STEPHENS. Thank you for the question, Senator, and I will 

start. At Coweta-Fayette EMC we are currently in the process of 

completing a feasibility study to determine the benefit of building 

out a broadband network specifically for operational needs first. 

But our idea and our focus is to see how we can potentially partner 

with others to expand that to the unserved areas. We see that it 

is not necessarily one size fits all. There are some co-ops who are 

building that last mile, and there are some who are not really focused on that and do not have any interest at this time. 

But what we see and what we believe is making sure there is 

ample funding for those co-ops, and electric co-ops who are serving 

and building these networks. 

Senator KLOBUCHAR. Okay. Thanks. 

Mr. LAW. Thank you, Senator Klobuchar, for your question. I 

think it is a combination of a couple of things. First is for the rural 

telecommunications providers that are already in the business of 

providing broadband, or trying to provide broadband across rural 

expanses, is an effort to stabilize both the forms of revenue sources 

that rural carriers rely on, specifically the Universal Service Fund. 

In the first panel, Acting Administrator McLean referenced the stability of the fund impacts our ability to make investments, our ability to keeps rates affordable, our ability to provide comparable 

services, our ability to get loan funds from your rural utility services. All of those things cascade into impacting our ability to provide these services in a very difficult economic situation in rural 

America. 

The second thing I would briefly say is to ensure that we create 

the proper incentives to focus broadband providers to invest in 

rural America with the economic challenges. 

Senator KLOBUCHAR. Okay. Thank you. Mr. Olinyk, I know that 

Senator Stabenow asked you about the rural energy part of the 

farm bill, and I am going to ask a related question. You talked 

about how REAP allows your clients to save electricity and money 

while making their operations more stable and profitable. How do 
46 

you take advantage of the opportunities of the energy program, and 

as someone who works with REAP, what improvements do you 

think we could make so that it is more effective for rural users? 

Mr. OLINYK. Thank you for the question, Senator. One of the 

things that we have noticed with this—with the reprogram—and I 

am going to give an example—is that the maximum REAP loan, or 

REAP grant is up to $500,000. Most all of the sates typically do 

not even have REAP opportunity of $500,000. 

I will give you an example again. The state of Michigan, in 2017, we had an allocation of $909,000. Well, one award was $500,000. 

That leaves $409,000 for all the other applicants. I suggest, maybe, 

that we should consider maybe a 20 percent maximum of the total 

allocation for the state, so this $500,000 recipient, who took 55 percent of the total, would have received $181,000—still a nice grant— 

but leaving $727,000 to be shared by smaller projects. 

In addition to that, the current legislation calls for a 20 percent funding for projects of less than $20,000. This is called restricted 

funding. I would increase the set-aside to 40 percent for those 

smaller farmers and small businesses, therefore spreading the 

wealth over more people and more farmers. 

Senator KLOBUCHAR. Okay. Very good. Well, I thank all of you. 

I will put some other questions on the record, so, I know we have 

to go to the vote, and the Chairman has been very patient, so I am 

going to end. Thank you. 

Chairman ROBERTS. Well, Coop, it is high noon. 

Senator THUNE. It is high noon. I almost missed my window, Mr. 

Chairman. 

Chairman ROBERTS. Yes, sir. 

Senator THUNE. Thank you. I appreciate the input from all of 

you. Thank you for your participation. As I said earlier, when we 

look at farm bills we look not only at, obviously, the programs that 

benefit directly production agriculture, but also those things that 

can enhance quality of life in our rural communities, and the discussion today certainly contributes to that. 

So, Mr. Law, you—we talked a little bit about this, but what can 

be provided by rural development agencies or other that would enable your co-op to provide broadband to your very widely dispersed 

customers, at competitive rates? 

Mr. LAW. Thank you, Senator Thune, for the question. The funding sources for any rural telecommunications provider is really 

kind of, I will say, a three-legged mechanism. There are the revenues we receive from customers, there are the revenues we receive 

from those who use our network, in other words, other carriers who 

may desire capacity or need to use our network to transport their 

services. Then the third item, for rural telecommunications providers, is the support received from the federal Universal Service 

Fund. 

Customer revenues, and comparable and affordable, certainly I 

think we pushed the upper bounds of that today for most rural subscribers, who are paying more for broadband and related telecommunications services than their urban counterparts. In terms of 

the prices charged or the ability to generate revenue from third 

parties who use our network, that has been greatly diminished 

over the last years. So now you are left with customer revenues 
47 

and Universal Service funding. With Universal Service funding 

being dramatically reduced and cut for many companies, including 

my own, it does not leave many choices for where are the future 

funds for the deployment of broadband networks. So it will be a 

combination of customer increases, hopefully stabilization of the 

Universal Service Fund, and potentially restoral of amounts that 

have been cut over the last 18 months. 

Senator THUNE. How do your rates for the services you provide 

your customers compare to those in, say, for example, Rapid City 

or Sioux Falls? 

Mr. LAW. Sure. For a Golden West customer, in order to—because we operate in a high-cost market—in order for Golden West 

to even receive Universal Service support at the present time, our 

customers not only have to subscribe to—for broadband, they also 

have to subscribe for voice telephone service, and it is not optional, 

because if we forego the voice telephone service, there is a revenue 

from the voice service itself. But, more importantly, we also, at this 

point, Golden West would forfeit any Universal Service funding. So 

it is really kind of a double edge from the funding side. 

To answer your question, Senator, what happens is, for our customers to receive broadband they have to subscribe to voice service 

and broadband service, and so that is a $100 charge, plus we still 

receive some USF for that. Customers in a more urban market, in 

the surrounding areas and I think probably for most of the Committee members, in your urban markets, I think a standalone 

broadband rate is probably much closer to $50 to $75. Ours begins 

at $100 and goes up from there. 

Senator THUNE. Yes, and issues that we need to litigate with the 

FCC, in addition to the other the agencies we are talking about 

today. 

You spoke of farm bill considerations for this Committee. Is it 

fair to say that in your opinion the programs directly—that rural 

broadband, that benefit rural broadband need increased funding 

rather than any major modifications? I mean, what is the—— 

Mr. LAW. I would strongly support that, Senator. I think that, as 

the Committee has heard, there is a demand for rural broadband. 

There is a willingness by rural broadband providers to deploy 

more, and I believe if there was more funding mechanisms available, whether that was in the form of low-interest loans, in the 

form of various grants, or perhaps grant-loan combinations, I believe there would be business cases that could be made for further 

expansion of broadband. 

Senator THUNE. Yes. Mr. Chairman, I think that is—well, I have 

got one here. Let me ask this of Ms. Botts. 

In your testimony, you spoke highly of the Value Added Producer 

Grant Program, that you indicated that the planning grants are too 

long a turnaround time for many businesses, and you recommended a rolling application process for those planning grants, 

with approval done on an expedited basis. Is this expedited process, 

in your opinion, something that Rural Development can enact administratively, or is there something this Committee needs to do to 

clear the path for Rural Development to do this? 

Ms. BOTTS. I thank you for the question. My thoughts would be 

that you would probably need to make a statutory change to allow 
48 

them to consider planning grants separately from working capital 

applications. I do not know that for a fact but I think that would 

probably be necessary, because it would be a fundamental change 

to how they consider these applications. 

The reason I include it, though, even though it will be a challenge for them, administratively, is because if you are a business 

and you are wanting to do a feasibility study on a project, you do 

not want to wait for a full grant cycle. So we have many businesses 

that are agriculture-producer started, businesses owned by ag producers, that would be excellent Value Added Producer Grant candidates for planning grants. They want to get started on their feasibility study as soon as possible, and so we would be able to do 

a lot more of those if we were able to do it on a rolling basis. I do 

think you would probably have to consider some sort of change. 

Senator THUNE. What is a fair turnaround time for an expedited 

approval process? 

Ms. BOTTS. I think it would have to be two to three months. 

Senator THUNE. Okay, good. Mr. Chairman, thank you. Panel, 

thank you very much for your input. 

Chairman ROBERTS. Thank you. We are going to conclude here 

pretty quick, but Mr. Olinyk, Mark, you tweaked my interest on 

jobs, jobs, jobs for our rural areas, opportunities for our young people. Everybody knows here, on the Committee, and all of you know 

that is a serious problem. 

In southeast Kansas I was able, during the recent break, to visit 

three manufacturing plants. All three are similar from the standpoint that these jobs are somewhat technical but they have a training program. The pay is significant. Very quickly, any applicant 

that is accepted and works on the job can get over $20 an hour. 

Plants range in size 100 to 500. They actually go out and try to 

recruit workers. Elmer talked about this a little bit with regards 

to people who change or leave and you have to come in with a substitute here, with regard to all that you are involved with. 

What I am trying to get at is that they tell me that in recruiting 

the whole area—high schools, community colleges, et cetera, et 

cetera—one in five actually they can accept, one in five. I asked, 

‘‘What is going on here?’’ Well, you have to fill out a written form, 

number one; number two, you have to have a personal interview; 

and number three, you have to take a drug test. If you are only 

accepting one in five because of what I would think to be a basic 

requirement here, we are in a world of trouble. 

I am asking about the work ethic. They also indicate that they 

may pass—they go through the training, they are on the job for 

maybe a month or two, and then they quit. I think that is very 

troubling. You can also apply that to the United States Marine 

Corps. It is one in ten that walk through a recruiter’s office door 

who are actually—fit the requirement eye, would admit that the 

criteria, or I am very proud to say the criteria is pretty high there. 

I am worried about this generation’s work ethic, with regards to 

jobs that are available but the people simply do not want to do 

that. There is a health program here. There is a retirement program here. You get to stay in your hometown, or—and I would 

think if you can find a job you like and you can make a living, well, 

you are in a small town area it is the best place you can do, or be. 
49 

Would you like to comment on that? 

Mr. OLINYK. Your sentiments are exactly the same as mine. We 

have, between my wife and myself we have six kids. One lives in 

Ann Arbor, one lives in New York City, one lives in San Francisco, 

one lives in North Carolina, and two are local, and they are all 

educated. But the people that we hire and that we try to hire are 

from all over the area. You are right—I would say one in five, for 

our area, might be doing well. 

Part of our company, we are afraid to even drug test. We might 

lose half the people. That is common. That is common in our area. 

It is probably common in your area, even thought you might not 

know it. So it is a serious problem. As far as the work ethic goes, 

it is tough. I do not see the generation wanting to come in on weekends. But sometimes we will offer a day off without pay, and they 

will take it, as opposed to working over the weekend. 

So it is very difficult and we are all involved at the rural community, but it is a serious problem. They are leaving if they are educated, and they are struggling to want to work if they are less educated. 

Chairman ROBERTS. Elmer, do you want to comment on that? 

Mr. RONNEBAUM. My wife taught gifted education in school for 

30-some years. There are many societal pressures on families. I am 

not familiar with the drug issues personally. I know that it is a 

real problem. There are local manufacturers, local hometown boys 

like Don Landoll in Marysville who have done very well, and manufacturing companies in Sabetha, Kansas, and Seneca, Kansas. 

They struggle to have manufacturing-type jobs that pay and can attract a quality work force. But I agree with the sentiments that 

there is a less-and-less worth ethic. 

The Community Facilities Programs that we have operated use 

self-help. They were volunteer services to just build a new community building or a library, a fire station, and in some cases we repaired water systems. We used local volunteers. It was a sweat equity program. We supervised the projects. 

There has to be more stakeholder involvement in local communities so that they feel that they have an ownership and that they 

have a value and that they have contributed to something to maintain and improve their local quality of life. 

Chairman ROBERTS. My staff is informing me that this vote will 

be over with at 12:15. We do not want to—I do not want to miss 

that. 

Anybody else would like to contribute? I raised that issue simply 

because Mark brought up jobs, and I got to thinking about it. I did 

not realize—I knew we had a problem but I did not realize we had 

that big a problem with regards to one in five. For jobs that are 

good jobs, and it was not so much that the jobs were not available. 

This goes from county to county. You mentioned Sabetha. I am always amazed we have a traffic jam in Sabetha, Kansas, because of 

the manufacturing there. Home of the Fighting Blue Jays, as you 

know. 

Anybody else want to comment on this? 

Senator BROWN. Just to echo what has been said. The businesses 

with whom we work are constantly struggling to find labor. It is 
50 

a constant struggle. We answer more questions on that, and how 

to deal with labor issues, than probably any other issue. 

Chairman ROBERTS. So now we have to find a way. 

That is going to conclude our hearing. I did not mean to end it 

on a down note, but I think it is a very serious problem. 

Thanks to each of our witnesses for taking time to share your 

views on the rural development programs under the farm bill. 

Your testimony was extremely valuable to use and it was certainly necessary for the Committee to hear firsthand. For those in 

the audience who want to provide additional thoughts on the farm 

bill and these subjects, we have set up an address on the Senate 

Ag Committee’s website to collect your input. Please go to 

ag.senate.gov, click on the Farm Bill Hearing Box on the left-hand 

side of the screen. That link will be open for five business days following today’s hearing. 

To my fellow members we would ask that any additional questions you may have for the record be submitted to the Committee 

Clerk no later than five business days from today, or 5:00 p.m. next 

Thursday, on October 5th. 

The Committee stands adjourned. Thank you. 

[Whereupon, at 12:24 p.m., the committee was adjourned.] 
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