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| <title> - HEARING TO REVIEW THE VARIOUS DEFINITIONS OF RURAL APPLIED UNDER PROGRAMS OPERATED BY THE U.S. DEPARTMENT OF AGRICULTURE</title> | |
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| [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 | |
| U.S. GOVERNMENT PRINTING OFFICE | |
| 64-688 WASHINGTON : 2011 | |
| ----------------------------------------------------------------------- | |
| For sale by the Superintendent of Documents, U.S. Government Printing | |
| Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC | |
| area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC | |
| 20402-0001 | |
| 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 | |
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