[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
HEARING TO REVIEW THE VARIOUS
DEFINITIONS OF RURAL APPLIED UNDER
PROGRAMS OPERATED BY THE U.S. DEPARTMENT OF AGRICULTURE
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON RURAL DEVELOPMENT, RESEARCH, BIOTECHNOLOGY, AND
FOREIGN AGRICULTURE
OF THE
COMMITTEE ON AGRICULTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
FEBRUARY 15, 2011
__________
Serial No. 112-2
Printed for the use of the Committee on Agriculture
agriculture.house.gov
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COMMITTEE ON AGRICULTURE
FRANK D. LUCAS, Oklahoma, Chairman
BOB GOODLATTE, Virginia, COLLIN C. PETERSON, Minnesota,
Vice Chairman Ranking Minority Member
TIMOTHY V. JOHNSON, Illinois TIM HOLDEN, Pennsylvania
STEVE KING, Iowa MIKE McINTYRE, North Carolina
RANDY NEUGEBAUER, Texas LEONARD L. BOSWELL, Iowa
K. MICHAEL CONAWAY, Texas JOE BACA, California
JEFF FORTENBERRY, Nebraska DENNIS A. CARDOZA, California
JEAN SCHMIDT, Ohio DAVID SCOTT, Georgia
GLENN THOMPSON, Pennsylvania HENRY CUELLAR, Texas
THOMAS J. ROONEY, Florida JIM COSTA, California
MARLIN A. STUTZMAN, Indiana TIMOTHY J. WALZ, Minnesota
BOB GIBBS, Ohio KURT SCHRADER, Oregon
AUSTIN SCOTT, Georgia LARRY KISSELL, North Carolina
STEPHEN LEE FINCHER, Tennessee WILLIAM L. OWENS, New York
SCOTT R. TIPTON, Colorado CHELLIE PINGREE, Maine
STEVE SOUTHERLAND II, Florida JOE COURTNEY, Connecticut
ERIC A. ``RICK'' CRAWFORD, Arkansas PETER WELCH, Vermont
MARTHA ROBY, Alabama MARCIA L. FUDGE, Ohio
TIM HUELSKAMP, Kansas GREGORIO KILILI CAMACHO SABLAN,
SCOTT DesJARLAIS, Tennessee Northern Mariana Islands
RENEE L. ELLMERS, North Carolina TERRI A. SEWELL, Alabama
CHRISTOPHER P. GIBSON, New York JAMES P. McGOVERN, Massachusetts
RANDY HULTGREN, Illinois
VICKY HARTZLER, Missouri
ROBERT T. SCHILLING, Illinois
REID J. RIBBLE, Wisconsin
______
Professional Staff
Nicole Scott, Staff Director
Kevin J. Kramp, Chief Counsel
Tamara Hinton, Communications Director
Robert L. Larew, Minority Staff Director
______
Subcommittee on Rural Development, Research, Biotechnology, and Foreign
Agriculture
TIMOTHY V. JOHNSON, Illinois, Chairman
GLENN THOMPSON, Pennsylvania JIM COSTA, California, Ranking
MARLIN A. STUTZMAN, Indiana Minority Member
AUSTIN SCOTT, Georgia HENRY CUELLAR, Texas
RANDY HULTGREN, Illinois PETER WELCH, Vermont
VICKY HARTZLER, Missouri TERRI A. SEWELL, Alabama
ROBERT T. SCHILLING, Illinois LARRY KISSELL, North Carolina
Mike Dunlap, Subcommittee Staff Director
(ii)
C O N T E N T S
----------
Page
Costa, Hon. Jim, a Representative in Congress from California,
opening statement.............................................. 3
Prepared statement........................................... 4
Courtney, Hon. Joe, a Representative in Congress from
Connecticut, submitted letter.................................. 125
Johnson, Hon. Timothy V., a Representative in Congress from
Illinois, opening statement.................................... 1
Prepared statement........................................... 2
Witnesses
Cook, Cheryl, Deputy Under Secretary for Rural Development, U.S.
Department of Agriculture, Washington, D.C..................... 5
Prepared statement........................................... 7
Submitted questions.......................................... 128
Larson, Hon. Donald, Commissioner, Brookings County, South
Dakota; Chairman, Agriculture and Rural Affairs Steering
Committee, National Association of Counties, Brookings, SD; on
behalf of National Association of Development Organizations.... 82
Prepared statement........................................... 83
Collins, Ph.D., Timothy, Assistant Director, Illinois Institute
for Rural Affairs, Western Illinois University, Bushnell, IL... 87
Prepared statement........................................... 89
Fluharty, Charles W., President and CEO, Rural Policy Research
Institute, Truman School of Public Affairs, University of
Missouri-Columbia, Columbia, MO................................ 97
Prepared statement........................................... 98
Dozier, Mike, Director, Office of Community and Economic
Development, California State University, Fresno, Fresno, CA... 103
Prepared statement........................................... 105
HEARING TO REVIEW THE VARIOUS
DEFINITIONS OF RURAL APPLIED UNDER
PROGRAMS OPERATED BY THE U.S. DEPARTMENT OF AGRICULTURE
----------
TUESDAY, FEBRUARY 15, 2011
House of Representatives,
Subcommittee on Rural Development, Research,
Biotechnology, and Foreign Agriculture,
Committee on Agriculture,
Washington, D.C.
The Subcommittee met, pursuant to call, at 10:00 a.m., in
Room 1300, Longworth House Office Building, Hon. Timothy V.
Johnson [Chairman of the Subcommittee] presiding.
Members present: Representatives Johnson, Thompson, Scott,
Hultgren, Schilling, Costa, Sewell, Kissell, and Courtney.
Staff present: Mike Dunlap, Patricia Barr, Tamara Hinton,
Debbie Smith, Scott Kuschmider, Liz Friedlander, and Jamie
Mitchell.
OPENING STATEMENT OF HON. TIMOTHY V. JOHNSON, A REPRESENTATIVE
IN CONGRESS FROM ILLINOIS
The Chairman. This hearing of the Subcommittee on Rural
Development, Research, Biotechnology, and Foreign Agriculture
to review the various definitions of rural applied under the
programs operated by the USDA will now come to order. I would
ask leave of the Committee that my opening statement be
submitted and incorporated in the record rather than taking the
Committee's and audience's time reading a relatively lengthy
statement verbatim, I would ask leave of the Committee to
submit that.
The statement is ordered incorporated in the record.
As everybody here is aware, both the Members of the
Committee and the audience, the purpose of this bill is to deal
with questions of rural under relative provisions of Federal
law, in particular, the 2008 Farm Bill. There are concerns that
have been evidenced and voiced over some period of time that
because of too expansive a definition and/or because of failure
of various Administration agencies to narrow in and report the
underlying purpose of the bill, could be undermined and that
spurring rural competitiveness in the global market through
infrastructure, investment and business lending and assistance
might be impaired, and that is a good part of the reason why we
are here.
Let me also point out that the gentleman from Connecticut,
my friend, Mr. Courtney, not a Member of the Subcommittee, has
joined us today. Ranking Member, Mr. Costa, and I have
consulted and we are pleased to welcome him to join us in the
questioning of witnesses, unless there is any objection.
Hearing none, leave is granted. Mr. Courtney, we are pleased to
have you with us.
[The prepared statement of Mr. Johnson follows:]
Prepared Statement of Hon. Timothy V. Johnson, a Representative in
Congress from Illinois
Good morning, and welcome. In the coming months this Subcommittee
will be conducting a full review of the activities under its
jurisdiction, including agricultural research, extension services,
biotechnology, trade promotion, and our topic today, rural development.
We will also be reviewing the status of programs specifically
authorized in the 2008 Farm Bill, and how USDA has utilized these
authorities.
The farm bill provided for a number of programs intended to spur
rural economic development. Through infrastructure investments,
business lending, and assistance for community facilities, rural
development programs are designed with the purpose of helping our rural
communities compete in a global market. As the agency responsible for
implementing these programs USDA is charged with ensuring rules are
written in a timely manner so that rural America can receive the
greatest benefit possible.
Members of this Subcommittee understand that assisting small, rural
communities carries with it a great many challenges. Not the least of
which is ensuring that the limited funds available are targeting only
rural communities and not diverted to urban areas.
While we appreciate the USDA's commitment to bringing assistance to
rural communities, there are several areas that concern me and the
Subcommittee that the responsibilities laid out by Congress in the 2008
Farm Bill are not being met. Furthermore, after repeated assurances
that adequate staff was available to complete work on rural broadband
and loan programs, despite an influx of funds from the stimulus, I fear
these funds have been administered to the detriment rural communities.
I hope that USDA can provide the Subcommittee with solid evidence that
rural America will benefit from the program before those authorities
expire.
It is the purview of Congress to determine how the money entrusted
to the Federal Government is spent, and where that money is targeted.
Today we will be looking at a key aspect of how funds are targeted
through the various rural development programs operated by USDA. In an
effort to properly target communities, decision makers rely on the
definition of `rural'. However, defining rural continues to be a
challenge for policy makers at all levels.
It is our understanding that USDA has used their waiver authority
under section 6018 of the Farm Bill to fund projects in areas the Under
Secretary for Rural Development deemed to be `rural in character.' We
look forward to an update on how many of the 146 eligible areas were
awarded funds for rural development projects.
There are 16 Federal agencies operating 88 rural development
programs. Virtually none of these programs have identical definitions
of what it means to be rural. In most cases, the definitions reflect
the specific nature of the program.
With so many agencies and programs targeting rural development,
coordination is important. I hope that our witnesses today can provide
some insight as to where greater coordination should be sought among
the various agencies, and whether efficiencies might be gained.
The 2008 Farm Bill required USDA to submit a report to Congress
that would review the various definitions of rural, describe the
effects that the variations in those definitions have on those
programs, make recommendations for ways to better target funds through
rural development programs, and determine the effect of the changes to
definitions of rural on the level of rural development funding and
participation in those programs in each state.
Unfortunately, USDA has not yet completed their work due last
summer. Today's hearing will provide an opportunity for USDA to update
the Committee on how the revised definitions of rural have affected our
programs. We hope that USDA will also be able to provide an assurance
of when their report will be forthcoming.
We are pleased that USDA is with us this morning to give an update
on these issues. In addition to USDA's testimony, we are pleased to
have a panel of distinguished individuals with tremendous expertise in
economic development. We appreciate the time and effort each of them
has put into preparing their testimony and traveling to be with us this
morning and we look forward to their remarks.
Finally, it is clearly within the jurisdiction of the Congress, the
full Committee, and this Subcommittee to propose changes in the law
that would better address these issues and our overarching goal of
serving the needs of rural America. I appreciate the ongoing
relationship with USDA and the Subcommittee on Rural Development, and
want to work together to achieve mutual goals. However, there should be
no question that it is the Congress, and not unelected administrative
agencies, who will set the policy for the United States.
The Chairman. For his preliminary remarks I would turn the
microphone over to my friend, the distinguished Ranking Member
from California, Mr. Costa.
OPENING STATEMENT OF HON. JIM COSTA, A REPRESENTATIVE IN
CONGRESS FROM CALIFORNIA
Mr. Costa. Thank you very much, Mr. Chairman. Good morning
to all who are here this day, Members of the Subcommittee, on a
bipartisan basis. I know we look forward to working together as
we deal with many of the challenges of the subject matter that
this Subcommittee has jurisdiction over, from rural development
to research, biotechnology and foreign agriculture. All of us,
in one way or another, are touched by the impacts of our
agricultural districts. The importance of agriculture to
America's ability not only to maintain its tremendous ability
to feed itself, but to export our agricultural products
throughout the world.
I like to say nobody does it better than we do in terms of
food, fiber and the quality and the yield of those food and
fibers, and also using cutting-edge technology.
Mr. Chairman, today's hearing is very important, and I am
pleased that you took the time to focus on this, and to have
our testimony from not only the USDA, but also our witnesses on
our second panel, the focus on statutory and regulatory
definitions of rural as they are applied to the United States
Department of Agriculture in the various programs as to whether
or not we qualify in our respective states as to that rural
definition.
Many of us, Chairman Johnson, you and I and others, worked
very hard on the 2008 Farm Bill to ensure that it reflected and
represented the needs of U.S. agriculture, and on a bipartisan
basis we did a pretty good job. It was the only bill--for the
new Members--that actually in that Congress followed regular
order in both Houses and actually was vetoed by the President.
And on a bipartisan basis, we overrode the veto.
So, it is important to note the history of the 2008 Farm
Bill as we focus on reauthorization in 2012. But this morning's
hearing is very important, I believe, and I again want to thank
you. We have many areas in the nation, take mine as an example,
that are rural, that have tremendous agricultural production,
that are in the top ten agricultural counties in the nation,
agricultural counties in terms of farm output on the farm gate.
In other words, they are what we count in terms of gross
receipts. My counties, Fresno County, and Kern County have been
number one and number three, respectively, for decades. Fresno
County is the largest agricultural county in the nation. Kern
County is number three. Tulare County represented by
Congressman Nunes is number two, the largest dairy county in
the nation, yet none of those counties in the whole region
qualify under the rural definition.
I would love to invite you. I know my other colleagues
would love to invite you to the San Joaquin Valley, the
heartland of California's farm breadbasket. We don't fit under
the rural definitions, and I would submit to you that having
farmed there myself and my family for 3 decades, we are pretty
rural, yet under the USDA's definitions we don't qualify. And
it is like our tax dollars come here to Washington, but they
don't come back to the areas I represent. You will see the maps
and our witnesses will demonstrate that in their testimony,
there are a host of areas throughout the United States that
fall in that same category.
I don't know if it is possible to establish a nationwide
definition for rural as we continue to deal with the
challenges, not only like mine, but elsewhere in the country.
But, I think everyone here, the USDA included, would be hard-
pressed to come up with a singular definition as to what it
means to be rural in each state in the nation.
So I am looking forward to the testimony, Mr. Chairman, as
we wrestle with this effort, as we try to ensure that our
communities throughout the country are able to participate in
the farm bill as we hoped and intended it to be when we passed
it on a bipartisan basis in 2008.
So I thank you, and I look forward to listening to the
testimony and I will submit the rest of my comments for the
record.
[The prepared statement of Mr. Costa follows:]
Prepared Statement of Hon. Jim Costa, a Representative in Congress from
California
Good morning, Chairman Johnson. Thank you for calling today's
hearing and I congratulate you on being named Chairman to this
Subcommittee for the 112th Congress. I look forward to working with you
and all the Members on both sides of the aisle on the many issues under
our jurisdiction. I am proud of what this Committee has accomplished in
a bipartisan fashion during my time in Congress and I hope we can
continue down that road for the next 2 years.
Today's hearing is an important one, because the various statutory
and regulatory definitions of `rural' applied to USDA Rural Development
programs have a significant effect on rural communities in my district
and home state. California continues to struggle with eligibility for
these programs, whether it is rural housing, health, or essential
community facilities, largely because of the criteria used to define
rural communities.
The use of rural definitions as basic eligibility criteria has
created a separate set of problems. On the one hand, the establishment
of different criteria for what is rural depending on the program has
created a great deal of confusion, even among economic development
professionals who in many cases are familiar with RD programs.
Another problem is the nationwide application of a given rural
definition. I think everyone here, USDA included, would be hard-pressed
to come up with a singular definition that accurately portrays what it
means to be rural in each and every state. Unfortunately, these
definitions do apply and often exclude communities and their residents
from financing essential infrastructure like housing, basic utilities,
and health facilities.
Definitions based on population or distances from urbanized areas
also do not take into account other socioeconomic factors that could
elevate communities to be ideal candidates for RD programs. Migration
flows have caused some cities to grow above the population cutoff
without the accompanying increased economic development and diversified
economies that many people associate with urban areas. But they are
rapidly losing their eligibility for rural programs that aim to meet
these goals. The Central Valley of California has seen this play out
time and time again.
Recent farm bills have made tweaks to the definition of rural, so I
look forward to hearing from both panels on whether or not a new
approach is needed. It's no secret that Rural Development is under the
budget microscope, even with nearly all of their programs being
oversubscribed. If more rural communities can be better served with a
different set of criteria or a different regionally-based approach to
development, then that is something this Committee should consider for
the next farm bill. I hope USDA will be able to provide this Committee
with some suggestions from the lessons it has learned from the
administration of awards not just in annual appropriations, but the
Recovery Act funds to certain RD programs that aimed to bolster
essential infrastructure.
Once again, I welcome today's witnesses and I look forward to their
testimony. I yield back my time.
The Chairman. Thank you, Mr. Costa. I would like to remind
Members that after at the conclusion of each panel, that they
will be recognized for questioning in the order of seniority
for Members who were here at the start of the meeting. That is
fairly traditional and common in each Committee. After that,
Members will be recognized in order of arrival. I appreciate
your understanding and the clerk will be supplying me that list
as we progress through the testimony.
Our first panel consists of one member. I would like to
welcome our first witness to the table, specifically Ms. Cheryl
Cook, Deputy Under Secretary for Rural Development, U.S.
Department of Agriculture, in Washington. Ms. Cook, please
begin when you are ready. I don't want to preempt in any way
what you choose to do. If you want to summarize from your
statement, which we have in full, we would be more than happy
to give you more time to actually respond to questions and
articulate the points you want to make, but that is entirely up
to you. Proceed.
STATEMENT OF CHERYL COOK, DEPUTY UNDER SECRETARY FOR RURAL
DEVELOPMENT, U.S. DEPARTMENT OF
AGRICULTURE, WASHINGTON, D.C.
Ms. Cook. Thank you, Mr. Chairman. Good morning to you and
to Ranking Member Costa, and to other Members of the
Subcommittee. It is my pleasure to be here today to discuss the
issue that perhaps more than any other caused me to leave a
perfectly good job in the Pennsylvania Department of
Agriculture that I enjoyed very much to come back to USDA. We
simply have to do something about how we account for rural
resources. In the interest of time, I would like to just submit
my statement for the record, make a few brief opening comments
and get right to your questions.
My written statement includes a complete listing of all of
our statutory definitions with respect to what is an eligible
rural area. While there are variations among them, one thing
they have in common is that they serve as a basic test of
eligibility. They are gates, if you will. If you don't meet the
standard, we don't even take your application; a gate does not
open.
The other thing our several eligibility standards have in
common is that they rely almost entirely on the total
population as the definition of rural. That leaves out other
obvious characteristics of a rural area compared to a
metropolitan area, including some that might be of use to this
Committee as well as to USDA in targeting resources to the
areas of greatest need and best opportunity.
Every state and territory has areas that are more rural
than others, certainly based on total population, but also
based on other factors like population density, the presence of
natural assets like lakes and forests, whether zoning exists
and the types of land uses that are authorized in that zoning,
the prominence of production agriculture, as Congressman Costa
was explaining, and the role that agriculture plays in the
local domestic product and its workforce.
There are many, many definitions, among them, whether the
community is large enough to get its own share of Community
Development Block Grant funds from HUD, or Community Services
Block Grant funds from HHS.
Once that basic eligibility is determined, though, and the
gate opens, both our several statutes and agency regulations do
provide additional tools to USDA Rural Development staff for
targeting resources, particularly grant funds to communities
that have the smallest population and the lowest median income.
USDA's Economic Research Service has done extensive work on
how to best target resources to rural areas. And I am pleased
to tell you that tomorrow they will be releasing an interactive
atlas online that will give all of us a handy tool for mapping
the characteristics that I have described, and others, that can
help us all literally see where rural America is. As the new
Census rolls out, that becomes more important. I am sure ERS
would be happy to come do a demonstration of their new atlas
tool for Subcommittee Members and staff.
The need to apply a single nationwide standard in each
program, along with the variety of standards that exist under
current law--everything from 10,000 in the case of the Water
and Waste Disposal program, to no rural area requirement at all
in some other cases--has been challenging for Rural Development
staff and exasperating for our customers.
I can give you examples of these challenges from my past
life as State Director for Rural Development in Pennsylvania. I
also know many of you can, and some of you already have, given
me examples that you are dealing with every day as your
constituents call you in frustration.
In addition, it would appear that Congress has some
frustration around this too. In 2008, the farm bill did give us
some authority for what is called the ``rural in character''
exception to recognize that rapidly urbanizing areas may still
contain pockets of communities that are essentially still rural
in character. This is a start in flexibility but doesn't quite
do the whole job.
In addition, every year, Members of Congress add general
provisions to our appropriations law declaring that for
whatever program a certain community that is otherwise not
eligible, because its population is over that single nationwide
standard, is nonetheless deemed to be rural until the next
decennial Census comes out. Of course, that is going to happen
between now and when Congress writes the next farm bill. And so
we are going to have communities that think they are safe,
because they have had a general provision that no longer will
be in effect. We will also have communities as the Census data
rolls out that have been eligible and won't be anymore.
And finally, we will have some communities that have not
been eligible, but due to population loss, will become so. I am
reminded of the 2000 Census. The City of Harrisburg, which is
the state capital of Pennsylvania, dipped below 50,000
population, and for the first time became eligible for the
Business and Industry Loan Guarantee program. This opened up
the whole of south central Pennsylvania to that program for the
first time.
We are often asked in Rural Development, why do you have
housing and business and energy programs? Why do you do health
clinics? There are whole departments of the Federal Government
that do these things, so why do you do them too? And the answer
we give is that Rural Development has a unique role in the
Federal family. We alone have the field structure, 47 state
offices, 500 area offices where our staff can work shoulder to
shoulder with rural communities to help them identify all of
the resources that are out there, ours and other agencies, get
them through the application process and help them succeed.
Rural Development also plays a somewhat unique role within
USDA. We are not unmindful that we do what we do within the
Department of Agriculture. I want to congratulate my fellow
Pennsylvanian Congressman Thompson for his Subcommittee
chairmanship on the conservation side.
The definition we have for eligible rural area in business
programs includes every place except communities greater than
50,000 and adjacent urbanized areas. What that does is drive us
out of the adjacent urbanized areas into open space and farm
land. In states that have been experiencing rapid sprawl----
The Chairman. If the gentlelady could bring your remarks to
a close, our time has expired.
Ms. Cook. Sure. I would be happy to do that.
For states that have experienced urban sprawl, that makes
it particularly challenging to balance the priorities of USDA.
Finally, Mr. Chairman, there are a few instances in which
current law does provide the ability to go into urban areas
quite directly. That includes the energy title of the farm
bill, it includes programs that can benefit food deserts, and
it include renewable energy from the Rural Utilities Service
both in rural and non-rural areas.
And with that, I will stop and address any questions you
have.
[The prepared statement of Ms. Cook follows:]
Prepared Statement of Cheryl Cook, Deputy Under Secretary for Rural
Development, U.S. Department of Agriculture, Washington, D.C.
Chairman Johnson, Ranking Member Costa and Members of Subcommittee,
it is my pleasure to be with you today to discuss one of the most
fundamental, and vexing questions we face in USDA Rural Development--
how ``rural'' is defined, and what role rurality should play in how we
function on behalf of the U.S. Department of Agriculture.
These are fundamental questions for USDA , as we exist to provide
economic and community development to overcome obstacles based on
rurality. Rural areas have experienced economic stress from long-term
poverty and decades of population decline. Federal assistance from USDA
is essential to these communities as they often don't have access to
private capital markets and have limited access to assistance from
other departments in the Federal Government. Moreover, they do not have
the total population to support repayment of a bond to finance critical
infrastructure needs or their population is so widespread that such a
system would be prohibitively expensive.
These questions are vexing because, under current law, rurality is
used to determine a project's basic eligibility for most of our
programs and is defined almost solely in terms of total population
thresholds. As a result, a single standard for program eligibility is
applied equally in New Jersey and New Mexico, in Alabama and Alaska, in
Virginia and the Virgin Islands. Given that each state has the right to
determine its own municipal structures, a single standard that may
sound simple in theory can be difficult to apply in practice. For
example, Congress added language in the 2002 Farm Bill limiting the
universe of eligible applicants for the Water and Waste Disposal
program of Rural Utilities Service (RUS) and the Community Facilities
program of Rural Housing Service (RHS) to ``cities, towns, and
unincorporated areas'' whose populations did not exceed the previously
established population limits. Such language does not properly account
for the variety of local forms of government including townships,
boroughs, and other municipalities that in many states describe the
very less-populated municipalities those programs are intended to
reach. It also overlooks some of the structural uniqueness of several
of the original colonies--in the role of a town and the status of a
village, for example--dating back to the original Plymouth settlement
in the 17th Century.
Further, relying almost solely on total population as the
definition of rural leaves out other obvious characteristics of a rural
area compared to a metropolitan area. Those characteristics might help
direct USDA Rural Development's resources to areas of greatest need and
opportunity. Every state and territory have areas that are more rural
than others, certainly based on total population, but also based on
other factors such as population density, the presence of natural
assets like lakes and forests, zoning regulations and land uses that
might be covered in local ordinances, the prevalence of production
agriculture and its infrastructure in the area's gross domestic product
and workforce, whether a community qualifies for its own share of
Community Development Block Grant funds from the Department of Housing
and Urban Development or Community Services Block Grant funds from the
Department of Health and Human Services or has to compete for some of
the remainder after urban centers have taken their share, and so forth.
USDA's Economic Research Service (ERS) has done extensive work on
rurality, as have the other witnesses you will hear from today. Much of
ERS' work is available on-line through virtual briefing rooms found at
http://www.ers.usda.gov/Briefing/. ERS also is about to release a new
interactive atlas looking at many characteristics of rural areas. I
believe it will be a very useful tool for Congress, USDA, and our
private sector partners in rural economic and community development.
Mr. Chairman, I'm sure that my colleagues in ERS would gladly do a
demonstration of the new atlas for Subcommittee Members and staff.
Applying a single standard to determine rural eligibility along
with the variety of standards that exist in current law has been
challenging for Rural Development staff and exasperating for applicants
and lenders.
Apparently, it also has been a source of frustration for Members of
Congress. In recognition of the problems created by the rural area
definitions, the 2008 Farm Bill provided the Under Secretary with
limited authority to determine areas that do not meet the rural area
definition as ``rural in character'' and thus an eligible rural area.
While helpful, this authority has proven far too limited to fix the
problems with the current definitions of rural area. In addition, each
year Congress adds a series of general provisions to the agriculture
appropriations legislation declaring that a certain municipality is
deemed to be rural even though its population exceeds the statutory
eligibility standard for that program.
Given that those general provisions largely expire with the release
of new decennial Census data, the timing of today's hearing is even
more important. Many communities that have been eligible by reason of a
general provision will not be after the new 2010 Census data is
released. Further, the Census data will show that other communities no
longer are eligible rural areas for certain programs, while still
others that have experienced population loss might become eligible for
the first time in decades. Now is an incredibly important time to
review rurality and begin determining the best way to achieve our
shared objectives of helping to create economic opportunities for rural
citizens and helping them improve their quality of life. Mr. Chairman,
I congratulate you and the other Members of the Committee for digging
into these questions now.
USDA Rural Development administers over 40 different programs
through its three agencies--Rural Utilities Service, Rural Housing
Service, and Rural Business-Cooperative Service--delivered through 47
Rural Development state offices and nearly 500 area offices. These
programs were authorized by several different laws. A complete set of
all of our statutory ``rural area'' definitions is attached to my
testimony as Appendix 1. I would like to focus the balance of my
testimony today on three of those laws: the Consolidated Farm and Rural
Development Act, or CONACT; the Rural Electrification Act; and the Farm
Security and Rural Investment Act, which was amended by the Energy
title of the 2008 Farm Bill.
Section 343(a)(13) of the CONACT defines ``rural'' and ``rural
area'' for programs of USDA Rural Development authorized therein,
principally business programs and community-based programs. In general,
the Act provides a definition of ``rural'' or ``rural area'' that is,
``any area other than--(i) a city or town that has a population of
greater than 50,000 inhabitants; and (ii) any urbanized area contiguous
and adjacent to a city or town described in clause (i)''. This
definition would act as a default definition for new CONACT programs,
and is historically the definition applied to the business programs of
Rural Business-Cooperative Service (RBCS).
The CONACT provides separate definitions for two additional program
areas. For the Water and Waste Disposal direct loans, guaranteed loans,
and grants of Rural Utilities Service, the Act defines ``rural'' and
``rural area'' as a, ``city, town, or unincorporated area that has a
population of not more than 10,000 inhabitants''. For the Community
Facilities direct loans, loan guarantees, and grants of Rural Housing
Service, the Act defines ``rural'' and ``rural area'' as a, ``city,
town, or unincorporated area that has a population of not more than
20,000 inhabitants''.
The Rural Electrification Act's definition of eligible ``rural
area'' for Rural Utilities Service's electric loan and loan guarantee
programs was changed in the 2008 Farm Bill from ``any area of the
United States not included within the boundaries of any city, village,
or borough having a population exceeding 1,500'', to instead align with
the Community Facilities program definition in Rural Housing Service,
i.e., municipalities with a total population not more than 20,000.
However, those Rural Electric Cooperatives which still had an
outstanding loan with RUS at the time and had been eligible under the
prior definition retained their eligibility--once rural, always rural.
With the exception of Section 9007, the Rural Energy for America
Program, the portions of Title IX of Farm Security and Rural Investment
Act of 2002 assigned to Rural Development do not have a statutory
requirement that projects be financed in a rural area. Proposed rules
nonetheless including a ``rural area'' eligibility requirement
comparable to other business programs were published by Rural Business-
Cooperative Service (RBCS) for the Biorefinery Assistance Program (
9003), the Repowering Assistance Program ( 9004), and the Bioenergy
Program for Advanced Biofuels ( 9005) on April 16, 2010 with a 60 day
public comment period. Our intent was to have these programs mirror
other types of business financing programs available from RBCS. Interim
final rules for all three programs have been published.
Rural Development staff administering these loans, loan guarantees,
and grants must