[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                    STAKEHOLDER PERSPECTIVES ON USDA'S 
                         RURAL DEVELOPMENT PROGRAMS

     =======================================================================

                                HEARING

                               BEFORE THE

                SUBCOMMITTEE ON COMMODITY MARKETS, DIGITAL 
                       ASSETS, AND RURAL DEVELOPMENT

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 13, 2023

                               __________

                           Serial No. 118-15
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                         
                           

          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov
                         
                               __________

                                
                    U.S. GOVERNMENT PUBLISHING OFFICE                    
53-255 PDF                  WASHINGTON : 2023                    
          
-----------------------------------------------------------------------------------     
                     COMMITTEE ON AGRICULTURE

                 GLENN THOMPSON, Pennsylvania, Chairman

FRANK D. LUCAS, Oklahoma             DAVID SCOTT, Georgia, Ranking 
AUSTIN SCOTT, Georgia, Vice          Minority Member
Chairman                             JIM COSTA, California
ERIC A. ``RICK'' CRAWFORD, Arkansas  JAMES P. McGOVERN, Massachusetts
SCOTT DesJARLAIS, Tennessee          ALMA S. ADAMS, North Carolina
DOUG LaMALFA, California             ABIGAIL DAVIS SPANBERGER, Virginia
DAVID ROUZER, North Carolina         JAHANA HAYES, Connecticut
TRENT KELLY, Mississippi             SHONTEL M. BROWN, Ohio
DON BACON, Nebraska                  SHARICE DAVIDS, Kansas
MIKE BOST, Illinois                  ELISSA SLOTKIN, Michigan
DUSTY JOHNSON, South Dakota          YADIRA CARAVEO, Colorado
JAMES R. BAIRD, Indiana              ANDREA SALINAS, Oregon
TRACEY MANN, Kansas                  MARIE GLUESENKAMP PEREZ, 
RANDY FEENSTRA, Iowa                 Washington
MARY E. MILLER, Illinois             DONALD G. DAVIS, North Carolina, 
BARRY MOORE, Alabama                 Vice Ranking Minority Member
KAT CAMMACK, Florida                 JILL N. TOKUDA, Hawaii
BRAD FINSTAD, Minnesota              NIKKI BUDZINSKI, Illinois
JOHN W. ROSE, Tennessee              ERIC SORENSEN, Illinois
RONNY JACKSON, Texas                 GABE VASQUEZ, New Mexico
MARCUS J. MOLINARO, New York         JASMINE CROCKETT, Texas
MONICA De La CRUZ, Texas             JONATHAN L. JACKSON, Illinois
NICHOLAS A. LANGWORTHY, New York     GREG CASAR, Texas
JOHN S. DUARTE, California           CHELLIE PINGREE, Maine
ZACHARY NUNN, Iowa                   SALUD O. CARBAJAL, California
MARK ALFORD, Missouri                ANGIE CRAIG, Minnesota
DERRICK VAN ORDEN, Wisconsin         DARREN SOTO, Florida
LORI CHAVEZ-DeREMER, Oregon          SANFORD D. BISHOP, Jr., Georgia
MAX L. MILLER, Ohio

                                 ______

                     Parish Braden, Staff Director

                 Anne Simmons, Minority Staff Director

                                 ______

     Subcommittee on Commodity Markets, Digital Assets, and Rural 
                              Development

                 DUSTY JOHNSON, South Dakota, Chairman

FRANK D. LUCAS, Oklahoma             YADIRA CARAVEO, Colorado, Ranking 
AUSTIN SCOTT, Georgia                Minority Member
DAVID ROUZER, North Carolina         DONALD G. DAVIS, North Carolina
DON BACON, Nebraska                  JIM COSTA, California
TRACEY MANN, Kansas                  ANDREA SALINAS, Oregon
JOHN W. ROSE, Tennessee              MARIE GLUESENKAMP PEREZ, 
MARCUS J. MOLINARO, New York         Washington
NICHOLAS A. LANGWORTHY, New York     NIKKI BUDZINSKI, Illinois
ZACHARY NUNN, Iowa                   JONATHAN L. JACKSON, Illinois
LORI CHAVEZ-DeREMER, Oregon          GREG CASAR, Texas
MAX L. MILLER, Ohio                  ANGIE CRAIG, Minnesota
                                     JASMINE CROCKETT, Texas
                                     ------

                                  (ii)
                                  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Caraveo, Hon. Yadira, a Representative in Congress from Colorado, 
  opening statement..............................................     3
Craig, Hon. Angie, a Representative in Congress from Minnesota; 
  on behalf of Bill Broydrick, Executive Director, National Rural 
  Lenders Roundtable, submitted statement........................    69
Johnson, Hon. Dusty, a Representative in Congress from South 
  Dakota, opening statement......................................     1
    Prepared statement...........................................     2
Thompson, Hon. Glenn a Representative in Congress from 
  Pennsylvania, opening statement................................     4
    Prepared statement...........................................     4

                               Witnesses

Nesbitt, Debra, Chair, National Rural Lenders Association, 
  Wilmington, NC.................................................     6
    Prepared statement...........................................     7
    Supplementary material.......................................    70
Bowman, J.D., Jessica S., Executive Director, Plant Based 
  Products Council, Washington, D.C..............................    10
    Prepared statement...........................................    12
Winslow, Joshua L. ``Josh'', General Manager and Chief Executive 
  Officer, Brunswick Electric Membership Corporation, Shallotte, 
  NC.............................................................    14
    Prepared statement...........................................    16
Holmes, Matthew W., Chief Executive Officer, National Rural Water 
  Association, Duncan, OK........................................    20
    Prepared statement...........................................    21
    Supplementary material.......................................    71
Morales-Pate, Olga, Chief Executive Officer, Rural Community 
  Assistance Partnership Incorporated, Washington, D.C...........    26
    Prepared statement...........................................    27
Blanding, Cornelius, Member, Board of Directors, National 
  Cooperative Business Association CLUSA International, East 
  Point, GA......................................................    35
    Prepared statement...........................................    37

                           Submitted Material

CoBank, submitted statement......................................    71

 
     STAKEHOLDER PERSPECTIVES ON USDA'S RURAL DEVELOPMENT PROGRAMS

                              ----------                              


                         TUESDAY, JUNE 13, 2023

                  House of Representatives,
    Subcommittee on Commodity Markets, Digital Assets, and 
                                         Rural Development,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:02 a.m., in 
Room 1300 of the Longworth House Office Building, Hon. Dusty 
Johnson [Chairman of the Subcommittee] presiding.
    Members present: Representatives Johnson, Lucas, Rouzer, 
Bacon, Rose, Molinaro, Langworthy, Nunn, Miller of Ohio, 
Thompson (ex officio), Caraveo, Davis of North Carolina, Costa, 
Salinas, Perez, Budzinski, Jackson of Illinois, Craig, and 
Crockett.
    Staff present: Nick Rockwell, Adele Borne, Wick Dudley, 
Erin Wilson, John Konya, DeShawn Blanding, Emily German, Josh 
Lobert, Ashley Smith, and Dana Sandman.

 OPENING STATEMENT OF HON. DUSTY JOHNSON, A REPRESENTATIVE IN 
                   CONGRESS FROM SOUTH DAKOTA

    The Chairman. All right, the Committee will come to order, 
Subcommittee, rather. Welcome, and thank you to everybody for 
joining today's hearing, which is entitled, Stakeholder 
Perspectives on USDA's Rural Development Programs. After brief 
opening remarks from the Ranking Member and myself, Members 
will receive testimony from our excellent witnesses today, and 
then the hearing will be open to questions, of course.
    I am glad to be joined by Ranking Member Caraveo and the 
rest of the Subcommittee as we talk with stakeholders about 
rural development programs. In the late 1990s, I worked in 
Washington, D.C., within USDA Rural Development, and so this is 
a topic near and dear to my heart. Obviously, there are a lot 
of very important programs that have an impact on rural 
America, and, like many of you, I represent a rural district. I 
would note, as a bit of a flex, that mine is the entirety of 
the state. And although it is not a particularly well populated 
state, it is a state that has a vibrant rural area, and that 
that rural area provides a tremendous amount of food, fiber, 
and fuel that helps to power our national economy. And for 
those communities to continue to do those things, they need 
additional tools.
    And I have spoken with local leaders, business owners, 
farmers, families, and many others in South Dakota, and one 
thing is clear. Although those areas can be robust, of course, 
they face real challenges. Access to capital, reliable energy, 
workforce shortages, aging infrastructure, and, of course, 
rural health care is something we hear about all the time. And 
that is why today's conversation on how the 2023 Farm Bill can 
improve rural development programs is so important.
    Programs offered by USDA Rural Development are crucial in 
helping rural areas develop and attract new economic 
opportunities. I think the 2018 Farm Bill made a lot of good 
progress in those areas. It significantly improved programs by 
establishing new and expanded authorities to help provide 
access to safe drinking water, dependable electricity, to 
repair crucial community infrastructure, to support rural 
employers and employees, and to foster regional economic 
growth. Our Chairman, GT Thompson, has called for building a 
robust, rural economy, and I think the changes in the 2018 Farm 
Bill helped to further that vision.
    Now, before I recognize the distinguished Ranking Member, a 
quick note to folks--those of us on the Subcommittee. I know 
everybody loves broadband. I know people love to talk about 
broadband all the time. And there will come a time when we will 
have an opportunity to have a hearing on broadband. I know the 
Chairman very much wants to give us that opportunity. But today 
I think we will best use our time if we focus on the powerful 
programs within Rural Development, and save the broadband 
conversation for a more robust full Committee hearing to come 
soon.
    I look forward to our conversation today, and I am really 
looking forward to the expert witnesses. This is a great panel. 
And so--help us better understand what we need to do with the 
2023 Farm Bill.
    [The prepared statement of Mr. Johnson follows:]

Prepared Statement of Hon. Dusty Johnson, a Representative in Congress 
                           from South Dakota
    Good morning and thank you to everyone for joining us today. I am 
glad to be joined by Ranking Member Caraveo and the Members of this 
Subcommittee as we talk with stakeholders about rural development 
programs.
    Like many of you, I represent a rural district. Mine just happens 
to be the entire State of South Dakota. While we may not have a large 
population, we do have a robust agricultural economy--one that depends 
on rural communities having the tools they need to grow and thrive.
    I have spoken with local leaders, business owners, farmers, 
families, and many others in South Dakota, and one thing is clear--
rural America continues to face challenges with access to capital and 
reliable energy, workforce shortages, aging infrastructure, and a lack 
of available health care services. That is why today's conversation on 
how the 2023 Farm Bill can improve rural development programs is so 
important.
    Programs offered by the USDA's Rural Development office are crucial 
in helping rural areas develop and attract new economic opportunities. 
In the 2018 Farm Bill, this Committee significantly improved these 
programs by establishing new and expanded authorities to help provide 
access to safe drinking water and dependable electricity, repair 
crucial community infrastructure, support rural employers and 
employees, and foster regional economic growth. These pieces are 
critical components for what Chairman Thompson calls building a 
``robust, rural economy.''
    Before I recognize the distinguished Ranking Member, a quick note 
to folks on this Subcommittee. While we will hear from our panelists 
about an array of USDA Rural Development programs, including those 
under the Rural Utilities Service, we have encouraged today's witnesses 
to focus on rural development services outside of broadband 
connectivity. I'd like to encourage Members to do the same and save the 
topic of bridging the digital divide--which is understandably popular 
on this Subcommittee--for future Committee activity.
    I look forward to our conversation today and hear from our expert 
witnesses on their perspectives on current USDA Rural Development 
programs and ways we can improve them through the 2023 Farm Bill.

    The Chairman. And with that, I would recognize the 
distinguished Ranking Member, the gentlewoman from Colorado, 
Ms. Caraveo.

 OPENING STATEMENT OF HON. YADIRA CARAVEO, A REPRESENTATIVE IN 
                     CONGRESS FROM COLORADO

    Ms. Caraveo. Well, thank you so much, Chairman Johnson, for 
working together to convene today's Subcommittee hearing, the 
first hearing of this Congress focused on USDA rural 
development and energy programs. And I would like to thank our 
distinguished witnesses, who represent a broad range of rural 
development stakeholders. We have an impressive panel of before 
us, and I look forward to hearing your perspectives.
    We spent the beginning of this Congress focused on digital 
assets, but I am excited that we are now having a hearing on 
rural development and energy issues. Today's hearing is an 
important opportunity for Members of this Subcommittee to 
evaluate the effectiveness of rural development programs that 
impact many facets of the lives and livelihoods of our rural 
neighbors. As USDA's Rural Development agency is the only 
Federal agency with the sole focus of serving rural communities 
like the ones I represent, it is critical that we are providing 
these communities with the tools and resources they need to 
enjoy the same quality of life and services that enjoyed by 
families living elsewhere.
    The farm bill is an opportunity to address these issues 
that rural communities face every day and help ensure our rural 
neighbors have access to affordable, high quality health care--
particularly important to me as a pediatrician--economic 
development opportunities, and solid infrastructure that 
delivers clean drinking water. As a pediatrician, I have seen 
firsthand how families struggle when they don't have access to 
resources and supports that they need. Now, as a Member of 
Congress, I am advocating for those hardworking families, 
including on solutions to support mental health in rural 
communities, and ensuring that rural families have more 
reliable access to childcare. Just this week I joined a group 
of my House and Senate colleagues in introducing a bipartisan 
bill that prioritizes childcare in existing rural development 
programs (H.R. 3922/S. 1867).
    Additionally, as the representative for the richest 
agriculture county east of the Rocky Mountains, and the largest 
agriculture-producing county in Colorado, I know the importance 
of investing in the bioeconomy, which relies on our farmers and 
ranchers. The energy title of the farm bill does just that, but 
available funding for these programs has decreased in recent 
farm bills. From chromologic electric and water programs to 
economic development, technical assistance, and energy 
programs, today's diverse set of panelists brings valuable 
knowledge and insight on how rural development programs work on 
the ground, and how they can be improved to better serve our 
rural communities. This everyday experience and insight will be 
foundational to liberate--delivering a farm bill that meets the 
needs of our rural communities and the farmers, ranchers, and 
producers who feed our families.
    Again, to our panelists, thank you for accepting our 
invitation to speak before us today. I look forward to hearing 
your testimony, and having the benefit of your insights to 
better the important programs that many of our communities rely 
on. Thank you, Mr. Chairman.
    The Chairman. I would now ask the Subcommittee to lend 
their attention to the Legend of Howard, Pennsylvania, the 
Chairman of the full Committee, Mr. Thompson.

 OPENING STATEMENT OF HON. GLENN THOMPSON, A REPRESENTATIVE IN 
                   CONGRESS FROM PENNSYLVANIA

    Mr. Thompson. Well, Mr. Chairman, thank you. It is good to 
be a standout among 600 people. Most of them my relatives, so 
they would probably debate the standout part. So, thank you, 
Mr. Chairman, thank you, Ranking Member, for this incredibly 
important Subcommittee hearing, rural development. And good 
morning, everybody, and thank you again to our witnesses for 
sharing your time and your expertise with us today.
    Since the early 1930s, the Federal Government has provided 
much needed technical and financial support to rural families 
and farm households. According to the 2020 U.S. Census, the 
rural population, unfortunately, has declined between 2010 and 
2020, which marked the first decade-long rural population loss 
in history. Using science, technology, and innovation as 
guiding points, the House Agriculture Committee has a great 
opportunity to build upon previous efforts and authorizations 
to restore a robust rural economy through the 2023 Farm Bill.
    To best equip rural America for success, it is critical we 
have thoughtful and well-developed rural development and energy 
titles. These programs are well positioned to make a difference 
for the citizens each of us represents, whether it be providing 
reliable, affordable, and accessible baseload power, supporting 
economic development through loans and grants, or assisting ag 
producers with their own operations. As I often say, rural 
America is essential America, and without our rural producers, 
America would wake up in the cold, dark, and hungry.
    Now, I appreciate the panelists joining us today, and I 
look forward to today's conversation. Thank you, Mr. Chairman, 
and I yield back.
    [The prepared statement of Mr. Thompson follows:]

Prepared Statement of Hon. Glenn Thompson, a Representative in Congress 
                           from Pennsylvania
    Thank you, Mr. Chairman.
    Good morning and thank you again to our witnesses for sharing their 
time and expertise with us today.
    Since the early 1930s, the Federal Government has provided much 
needed technical and financial support to rural families and farm 
households.
    According to the 2020 U.S. Census, the rural population declined 
between 2010 and 2020, which marked the first decade-long rural 
population loss in history.
    Using science, technology, and innovation as guiding points, the 
House Agriculture Committee has the great opportunity to build upon 
previous efforts and authorizations to restore a robust rural economy 
through the 2023 Farm Bill.
    To best equip rural America for success, it is critical we have 
thoughtful and well-developed rural development and energy titles.
    These programs are well-positioned to make a difference for the 
citizens each of us represents, whether it be providing reliable, 
affordable, and accessible baseload power, supporting economic 
development through loans and grants, or assisting ag producers with 
their own operations.
    As I often say, rural America is essential America, and without our 
rural producers, America would wake up in the cold, dark, and hungry.
    I appreciate the panelists joining us and look forward to today's 
conversation.
    Thank you, Mr. Chairman. I yield back.

    The Chairman. Very good. Thank you, sir. The chair would 
request that other Members submit their opening statements for 
the record so the witnesses may begin their testimony, and that 
we have time for questions. So, to introduce our first witness 
today, I am pleased--and actually a couple of witnesses, I 
believe, I am pleased to yield to the gentleman from North 
Carolina, Mr. Rouzer.
    Mr. Rouzer. Well, thank you, Mr. Chairman, and I am not 
worried about them getting it right. I am worried about us 
getting it right. Yes. I have the great privilege to introduce 
a couple of members of our distinguished panel this afternoon.
    First, I am going introduce Ms. Debra Nesbitt to the 
Committee, who is Chair of the National Rural Lenders 
Association, and Vice President for Energy and Infrastructure 
at Live Oak Bank, which is in Wilmington, North Carolina, a 
little place I happen to know something about. Ms. Nesbitt has 
over 30 years of experience in rural economic development, and, 
through her work with Live Oak Bank, has been providing capital 
to small businesses and farm families across rural America as 
part of one of the country's largest--again, largest--USDA 
program lenders, and the largest lender for SBA loans in the 
nation as well.
    Currently, in North Carolina's Seventh Congressional 
District, Live Oak Bank is financing the Brunswick Battery 
Portfolio Project, utilizing the USDA Rural Energy for American 
Program, or REAP, as we know it, and this project comprises 12 
solar sites in Columbus, Brunswick, Bladen Counties, and doing 
a lot of other great work as well.
    The other gentleman I want to introduce today is Josh 
Winslow, who is the CEO and General Manager of Brunswick 
Electric Membership Corporation, a member-owned electric 
cooperative and supply in North Carolina, serving Brunswick 
County, Bladen, Columbus, and Robeson Counties. Since joining 
the company in 2004, he has been involved in engineering, 
system planning, and operations management at Brunswick EMC. 
And I will let him talk more about their work in his testimony, 
but great to have both of these stellar witnesses with us 
today. Thank you, Mr. Chairman. I yield back.
    The Chairman. Very good. Thank you, Mr. Rouzer. Sitting 
between the North Carolinians, and batting second in today's 
lineup is Ms. Jessica Bowman, the Executive Director of the 
Plant Based Products Council. Then in the fourth chair we have 
Mr. Matthew Holmes, Chief Executive Officer of the National 
Rural Water Association. Our fifth witness is Ms. Olga Morales-
Pate, who is the Chief Executive Officer of the Rural Community 
Assistance Partnership. And then sixth, and final, witness is 
Mr. Cornelius Blanding, who is a Board Member of the National 
Cooperative Business Association CLUSA International.
    Thank you to all of our impressive witnesses today. We are 
now going to proceed to your testimony. As you all know, you 
are going to get 5 minutes. The timer in front of you will 
count down to zero. When the red light comes on you will be hit 
with an electric shock as a reminder that we need to keep 
things rolling today. So, Ms. Nesbitt, you are first. Model 
good behavior. You up with your 5 minutes.

   STATEMENT OF DEBRA NESBITT, CHAIR, NATIONAL RURAL LENDERS 
                  ASSOCIATION, WILMINGTON, NC

    Ms. Nesbitt. Thank you. Thank you, Chairman Thompson, 
Chairman Johnson, Ranking Member Caraveo, and Members of the 
Committee. I appreciate you allowing me to testify today. I am 
Chair of the National Rural Lenders Association, and I grew up 
on a dairy farm outside of Ashville, North Carolina. I have 
worked with rural development programs in various capacities 
for over 30 years. Over the life of my career I have seen 
firsthand the benefits of Rural Development's programs to rural 
communities across the country.
    The National Rural Lenders Association was established in 
2014, and now has over 80 members who utilize the Community 
Facilities Program, the Biorefinery Assistance Program, the 
Rural Energy for America Program, the Water on Waste Disposal 
Program, and the Business and Industry Guaranteed Loan Program. 
All provide much needed funds for rural businesses, 
infrastructure projects, essential community services, such as 
fire departments and medical facilities, and for renewable 
energy systems, such as solar and anaerobic digesters.
    The programs mentioned bridge the gap in financing for 
rural communities when a conventional loan may not be a fit. 
With a USDA guaranteed loan, a community or business owner 
understands that they will be a partner in the loan with the 
lender and with Rural Development for the long-term, with no 
surprises on rates or renewals of the loan. Most importantly, 
in difficult economic times, which we believe is the current 
lending environment, many conventional lenders are not able, or 
are unwilling to provide financing to rural businesses. 
Guaranteed loans ensure rural communities have access to 
capital.
    The USDA guaranteed lending programs directly result in job 
creation, business efficiencies, reduced energy consumption, 
clean energy creation, and investments contributing to the 
long-term capital and rural vitality. All of this is done with 
a small investment from the Federal Government. For example, in 
FY 2023, the Business and Industry Guaranteed Loan Program 
provides $47 in lending for every Federal-appropriated $1. 
Today, the $1.8 billion loan authority costs less than $39 
million. For REAP, and Community Facilities, and for the Water 
and Wastewater Program, there is no cost to the Federal 
Government.
    These are many examples of projects that illustrate the 
effectiveness of guaranteed lending. In eastern North Carolina, 
in Congressman Rouzer's district, Live Oak Bank made some of 
the first REAP solar and battery storage loans in the country 
to the local electric membership corporation. These projects 
provide low cost solar energy to the co-op members and compound 
the value by delivering the energy exactly when it is needed. 
Another notable project is the acquisition of a community 
hospital in Maricopa, Arizona. U.S. Eagle Credit Union and 
Madison One provided two B&I loans, totaling $13 million. This 
provided a new micro-hospital with a 24 hour emergency 
department, a digital imaging suite, and inpatient hospital 
beds.
    Shifting to the farm bill, NRLA has several priorities to 
improve the guaranteed loan programs and increase benefits to 
rural communities. Guaranteed loan lender fees should be capped 
at three percent. NRLA believes that fees over three percent 
adversely impact program utilization, and that higher fees are 
too expensive for quality borrowers. Under REAP, we support 
increasing the loan size limit from $25 million to $50 million 
to support newer technologies, such as farm-derived renewable 
natural gas, geothermal, standalone battery storage, renewable 
hydrogen, and refurbished hydroelectric dams. We also support a 
90 percent guarantee for REAP loans under $1 million.
    Separately, financing for standalone battery storage is 
only eligible when it is paired with a renewable energy system, 
and we believe this is a technical oversight, and request a 
correction or enhancement be made to allow financing of 
standalone battery storage in REAP. We also recommend that the 
small business size standard for guaranteed loan be limited to 
the entity filing the application, and that that business be 
limited to 1,000 employees.
    NRLA is dedicated to the long-term prosperity of rural 
America. Many of our member organizations reside in, are close 
to, or have historical ties to rural communities. As we 
continue to offer credit to business and organizations in low 
populated areas, it is our goal to educate communities and work 
with entities to advance public and private services, while 
also helping to diversify and maximize income for businesses 
and our citizens in rural areas. We will continue to work with 
Congress and the USDA to provide opportunities to improve 
public services and grow the economic base of communities while 
creating jobs and opportunities in rural communities throughout 
the United States. Thank you very much.
    [The prepared statement of Ms. Nesbitt follows:]

  Prepared Statement of Debra Nesbitt, Chair, National Rural Lenders 
                      Association, Wilmington, NC
Introduction
    Chairman Johnson, Ranking Member Caraveo, and Members of the 
Committee, thank you for inviting me to testify today.
    My name is Debra Nesbitt, and I am Chair of the National Rural 
Lenders Association (NRLA). I grew up on a dairy farm in a rural 
community outside of Asheville, NC, and began working with USDA 
programs in the late 1980s. In 1993, I went to work for USDA when the 
Farmers Home Administration was transitioned over to Rural Development. 
While having worked in banking for many years, I have also worked for 
nonprofits and state government, and in doing so I have seen firsthand 
the benefits of Rural Development's programs to rural communities 
across the country.
    In addition to being Chair of NRLA I am also the Vice President for 
Energy and Infrastructure at Live Oak Bank whose mission is to become 
America's small business bank. Live Oak, based in Wilmington, NC, has 
been one of the top three USDA lenders for the past several years and 
is the number one SBA lender in the country.
Background
    NRLA was established in 2014 and has grown from 12 original members 
to an organization exceeding 80 members and represents hundreds of 
billions in lending activities. NRLA regards itself as the primary 
association focused on lending advocacy for rural communities and 
specifically for USDA Rural Development and Farm Service Agency 
guaranteed loan programs. Our membership includes banks, credit unions, 
Farm Credit System entities, and non-traditional lenders. NRLA's 
primary goal is to ensure the availability of capital and business 
opportunities for rural communities throughout the country.
    NRLA members participate in all of Rural Development's guaranteed 
loan programs including the Community Facilities Guaranteed Loan 
Program, Biorefinery Assistance, Rural Energy for America Program 
(REAP) Loan Guarantees, Water and Waste Disposal Loan Guarantees, and 
the Business and Industry Loan Guaranteed program (B&I). These programs 
provide much needed loans to rural businesses; loans for infrastructure 
projects such as water and wastewater systems; loans for essential 
community services such as fire departments and medical facilities; and 
loans for renewable energy systems such as solar and anaerobic 
digesters.
Services Lenders Provide to Rural Communities Through Guaranteed Loans
    The above-mentioned programs bridge the gap in financing for rural 
communities when a conventional loan may not fit. Many rural businesses 
are specialized and face obstacles in obtaining financing. The USDA 
guaranteed loan programs allow for longer loan terms that are fully 
amortizing and have no calls or balloons. With a guaranteed loan a 
community or business owner understands that they will be a partner in 
the loan with the lender and Rural Development for the long-term, with 
no surprises on rates or renewals of the loan. Most importantly, in 
difficult economic times many conventional lenders are not able or are 
unwilling to provide financing for rural business and the types of 
projects that are targeted for rural communities. In these cases, loan 
guarantee programs are essential to ensuring rural communities have 
access to capital. Eligible entities for the loans include nonprofits, 
for-profits, Tribal entities, and local governments.
    In addition to providing credit for rural businesses, USDA 
guaranteed loans directly result in job creation, business 
efficiencies, reduced energy consumption, clean energy creation, and 
general investments that contribute to the long-term vitality of rural 
communities. All of this is done with a small investment from the 
Federal Government. Along with up-front guarantee fees and annual 
renewal fees on each loan, the Federal Government invests a small 
amount of dollars in the operation or execution of these programs. For 
example, in the current fiscal year the B&I program provides nearly $47 
in lending for every one federally appropriated dollar. Today, the $1.8 
billion loan authority that invests in rural communities' costs less 
than $39 million. Alternatively, the REAP program, the Community 
Facilities program, and the Water and Wastewater program today cost no 
Federal dollars to operate while supporting rural energy projects and 
bolstering essential local services.
    To further illustrate the effectiveness of the program, below are a 
few examples of projects our members have funded:

          North Avenue Capital provided a $25 million B&I guaranteed 
        loan in Ashland, KY, for a mining company to refinance debt, 
        purchase new equipment and provide working capital. The company 
        has 70 employees, and with the new loan added 30 more full-time 
        employees.
          Compeer Financial provided a Community Facilities guaranteed 
        loan for a new nonprofit hospital located in Cumberland, WI. 
        The project cost around $40 million and was a collaboration 
        between local banks, USDA financing programs, and Farm Credit 
        institutions. The original hospital was outdated and did not 
        have capacity to provide modern health care and limited use of 
        new technology like CT and MRI machines. The new 96,000 square 
        feet facility has provided positive and immediate impacts on 
        the economy of the local communities.
          U.S. Eagle Federal Credit Union and Madison One Credit Union 
        Services Organization provided two B&I loans totaling $13 
        million to finance the acquisition of a community hospital in 
        Maricopa, AZ. This provided a new micro hospital in the 
        community with a 24 hour emergency department, a digital 
        imaging suite, and inpatient hospital beds.
          Live Oak Bank made a Water/Wastewater guaranteed loan in 
        Orangefield, TX to a nonprofit water supply corporation in the 
        amount of $8.9 million to provide wastewater services to 900 
        additional customers. The system upgrades support the 
        development of the community, reduced water contamination, and 
        improved the quality of life for families.
          A $2.1 million REAP loan in Cologne, MN, for a 1 megawatt 
        solar farm that features active sheep grazing below the solar 
        panels. This was a win because it created a partnership between 
        the solar company and the sheep farm, as well as an additional 
        revenue for the sheep farm. The sheep grazing also removes the 
        need to mow at the solar site, with the financing provided by 
        Live Oak Bank.

    In 2020, USDA Rural Development streamlined their guaranteed loan 
programs. This action has increased private investment in rural 
communities with more participation from lenders. Guaranteed loan 
programs now have a common application which reduces customer burden 
and adds ease and clarity to the loan process. We are also appreciative 
of changes to the last farm bill that made the definition of a rural 
area consistent across all Rural Development programs. Also, the local 
staff at RD area and state offices are vital to the success of the 
programs, and we appreciate our partnership with the area, state and 
national RD offices.
NRLA Farm Bill Priorities
    Turning to the upcoming farm bill, NRLA has several priorities that 
would improve the delivery of guaranteed loan programs and increase 
benefits to rural communities.
    We recommend that guaranteed loan lender fees for guaranteed loan 
programs be capped at three percent. Each year since the 2018 Farm 
Bill, NRLA has advocated for limits on the Secretary of Agriculture's 
discretion regarding lender fees at no more than three percent in 
annual appropriation measures. NRLA believes that fees in excess of 
three percent would adversely impact program utilization. A higher fee 
would cause the program to be too expensive for quality borrowers.
    For guaranteed loans under the Rural Energy for America Program, we 
support increasing the loan size limit from $25 million to $50 million 
except for solar and wind projects. There is a shortage of financing 
for newer technologies such as farm-derived renewable natural gas, 
geothermal, standalone battery storage, renewable hydrogen, and 
refurbished hydroelectric dams. To fully support these technologies in 
rural communities, NRLA supports increasing the loan size limit to $50 
million. This will directly benefit farming operations and other rural 
businesses.
    We also support giving USDA the authority to provide a 90 percent 
guarantee for Rural Energy for America Program loans under $1 million. 
Increasing smaller loans to a 90 percent guarantee would assist smaller 
borrowers and boost lender participation. It would also help with 
emerging and more novel technologies.
    Under current REAP authorities, financing for standalone battery 
storage is only eligible when it is paired with a renewable energy 
system. We believe this is a technical oversight and request that a 
correction or enhancement be made to allow financing of standalone 
battery storage in the REAP guaranteed loan program.
    As a final recommendation for REAP, we request that the small 
business size standard for guaranteed loans be limited to the entity 
filing the application. Legislative authority for the REAP program does 
not include a definition for small business entities and USDA has 
mandated the small business definition criteria as established by SBA. 
SBA's definition includes both the entity making application for the 
program and any affiliated organizations, including parent companies. 
This structure has limited both customer use and the deployment of 
available dollars within the program. Additionally, companies who do 
not meet the SBA definition make application to other guaranteed loan 
programs that do not have the lending authority to support large 
numbers of energy projects. NRLA recommends a threshold of 1,000 
employees for an entity making application for guaranteed loans under 
the REAP program.
    The Biorefinery, Renewable Chemical, and Biobased Product 
Manufacturing Assistance Program provides loan guarantees up to $250 
million to assist in the development, construction, and retrofitting of 
new and emerging technologies for advanced biofuels, renewable 
chemicals, and biobased products. NRLA believes some improvements 
during reviews for these loans could improve participation in the 
program, and we urge Congress to have USDA provide clearer and detailed 
review criteria during the Phase 2 reviews for commercial technologies. 
The current process gives limited feedback from USDA technical staff 
and contributes to confusion and delayed actions. The Part 2 
application process for each project should be customized to reflect 
detailed information on review criteria based on the technologies that 
are being used in the project.
    Last, prior to the passage of the Fiscal Responsibility Act (FRA), 
we recommended that USDA revise their standard and flexibility 
regarding the application of the National Environmental Policy Act 
(NEPA) for all guaranteed loan programs. Borrowers, lenders, and 
agencies spend considerable financial and personnel resources on NEPA 
analyses and documentation. This environmental review has been, in 
application, duplicative of city, state, and U.S. Corp of Engineers 
review of projects. With the signing of the FRA and its inclusion of 
language that guaranteed loans are not a major Federal action, we 
believe this reduces the duplicative nature of NEPA regarding 
guaranteed loans. It is our hope that USDA will quickly issue a 
rulemaking consistent with FRA.
Conclusion
    NRLA is dedicated to the long-term prosperity of rural America. 
Many NRLA member organizations reside in, are close to, or have 
historical ties to rural living and communities. As we continue to 
offer credit to businesses and organizations in low populated areas, it 
is our goal to educate communities and work with entities to advance 
public and private services while also helping to diversify and 
maximize centers of income for businesses and secure prosperity for our 
fellow citizens who live in rural areas. To that end, we will continue 
to work with Congress and USDA to provide opportunities for business 
and nonprofit organizations to improve public services and grow the 
economic base of communities while creating job and job opportunities 
in rural towns throughout the U.S.
    Thank you for the opportunity to provide testimony and I am happy 
to respond to any questions.

    The Chairman. Well done, Ms. Nesbitt. Ms. Bowman, you have 
5 minutes.

        STATEMENT OF JESSICA S. BOWMAN, J.D., EXECUTIVE 
            DIRECTOR, PLANT BASED PRODUCTS COUNCIL, 
                        WASHINGTON, D.C.

    Ms. Bowman. Thank you. Good morning, Chairman Johnson, 
Ranking Member Caraveo, Members of the Subcommittee, and 
Chairman Thompson. Thank you for the opportunity to share the 
Plant Based Products Council's perspective on USDA's Rural 
Development programs.
    PBPC's members use agricultural feedstocks, like corn, soy, 
and hemp, to make many of the products that we use every day, 
from plastics, to personal care products, to building 
materials. Biobased products bring at least $470 billion in 
value to the U.S. economy and support 4.6 million American jobs 
that range from manufacturing to STEM. But the overall U.S. 
bioeconomy accounts for less than 2\1/2\ percent of American 
economic activity, and we are falling behind other global 
markets. Now is the time to seize on a crucial opportunity to 
develop our rural economies, strengthen domestic supply chains, 
and address numerous environmental challenges.
    PBPC is also a founding member of the Ag Bioeconomy 
Coalition, which includes 12 leading agricultural organizations 
who all support the advancement of Federal policy initiatives 
that foster growth of our nation's ag bioeconomy. Paramount to 
these priorities is the modernization of the farm bill's energy 
title and recommended improvements to key USDA Rural 
Development programs, including BioPreferred and the 
Biorefinery Assistance Program.
    USDA's BioPreferred Program aims to spur economic 
development, create new jobs, and provide new markets for farm 
commodities by developing and expanding markets for biobased 
products through mandatory Federal procurement and a voluntary 
labeling initiative. But the program has not reached its full 
potential in part due to inadequate tracking, reporting, and 
compliance with Federal procurement requirements, and flat 
funding that has long remained at $3 million, failing to 
account for inflation and the program's growing needs.
    Through modernization and robust funding, the program can 
maximize its ability to spotlight the broad array of biobased 
products for government procurement and for use by businesses 
and consumers. So some recommended improvements include 
establishing minimum requirements for biobased only procurement 
contracts, improving compliance, reporting, and data collection 
across the Federal Government, regular updates to product 
categories and biobased content requirements, and updating 
funding levels to help ensure that the U.S. will remain 
competitive globally.
    The upcoming farm bill should also ensure that bioeconomy 
related North American Industry Classification System codes, or 
NAICS codes, are developed for inclusion in the 2027 NAICS 
updates. Such codes are key to the future success of the 
bioeconomy because they allow for accurate tracking and 
analysis of the industry's economic impact and help inform 
where investment and policy support is needed. In addition, 
Federal leadership is needed to harmonize basic biobased 
product terminology. Some relevant terms are already defined in 
the farm bill's energy title, but taking additional steps to 
harmonize relevant terminology definitions within the Federal 
Government and among states, including preemptively, when 
necessary, would create clarity for consumers and a consistent 
marketplace.
    Now moving on to the Biorefinery Assistance Program. So one 
of the most significant challenges to growing the U.S. 
bioeconomy is the lack of pilot and demonstration-scale 
infrastructure that is essential to de-risking investment in 
newer innovations that are aiming for full-scale commercial 
production. Today U.S. innovators are often forced to go 
overseas to access the infrastructure that is needed to bridge 
that proverbial Valley of Death. Many mid-scale biorefineries 
are based at public universities because of the expertise, the 
research, and the workforce development opportunities that they 
provide.
    But, unfortunately, universities can't access commercial 
loans that would provide the capital that is needed to develop 
pilot and demonstration-scale facilities. Importantly, Congress 
can help by providing funding support for additional mid-scale 
infrastructure to help de-risk and accelerate the 
commercialization of new and emerging bioproducts here in the 
U.S. USDA's Biorefinery Assistance Program presents an 
opportunity to deliver the resources that are needed to 
alleviate this bottleneck.
    The program currently provides loan guarantees up to $250 
million for the development, construction, and retrofitting of 
commercial-scale biorefinery facilities that use eligible 
technology to convert renewable biomass into advanced biofuels, 
renewable chemicals, and biobased products. But specifically, 
we recommend expanding the program to include cost-sharing 
grants for pilot and demonstration-scale plants that are 
necessary to scale commercial breakthroughs.
    Thank you again for the opportunity to share our 
perspective. We look forward to continuing to work with the 
Committee to make sure the farm bill provides the support that 
is needed to bolster the U.S. bioeconomy.
    [The prepared statement of Ms. Bowman follows:]

  Prepared Statement of Jessica S. Bowman, J.D., Executive Director, 
             Plant Based Products Council, Washington, D.C.
    Good morning, Chairman Johnson, Ranking Member Caraveo, and Members 
of the Subcommittee. My name is Jessica Bowman, and I'm Executive 
Director of the Plant Based Products Council, which is an association 
representing a broad range of companies that support Federal policies 
to facilitate greater adoption of products and materials made from 
renewable, plant-based inputs.
    Thank you for the opportunity to share our perspective on USDA's 
rural development initiatives and their role in the growth of the U.S. 
agriculture bioeconomy.
    Members of the Plant Based Products Council use agricultural 
feedstocks, like corn, soy, hemp, and more, to make many of the 
products we use every day--from plastics to textiles, personal care 
products to building materials. These plant-based products play a 
critical role in our nation's bioeconomy, delivering $470 billion in 
value to the U.S. economy and supporting 4.6 million American jobs that 
range from manufacturing to STEM.\1\ Whether large or small, businesses 
involved in the manufacturing of plant-based products prefer to locate 
their operations in rural communities to be near the source of their 
feedstock and support the local economies in which these products are 
grown. That means the plant-based products industry represents a 
tremendous growth opportunity for ag-based manufacturing in rural areas 
across the country.
---------------------------------------------------------------------------
    \1\ USDA, An Economic Impact Analysis of the U.S. Biobased Products 
Industry (2019), https://www.rd.usda.gov/sites/default/files/
usda_rd_economic_impact_analysis_us_biobased_products_
industry.pdf.
---------------------------------------------------------------------------
    While the American ag bioeconomy is growing at a steady clip, other 
countries are growing at a faster rate that outpaces the U.S. due to 
more significant coordination between the public and private sectors 
and greater investment of resources to support critical infrastructure 
needs. As an example, North America currently houses 18.9% of global 
bioplastic production capacity, but that percentage is expected to drop 
to 10.8% by 2027. In comparison, Asia is expected to grow its 
percentage of bioplastic production capacity from 41.4% to 62.9% by 
2027.\2\ The overall U.S. bioeconomy accounts for less than 2.5% of our 
nation's economic activity. We are missing out on a crucial opportunity 
to develop rural economies, strengthen domestic supply chains, and 
address numerous environmental challenges.
---------------------------------------------------------------------------
    \2\ European Bioplastics, https://www.european-bioplastics.org/
market/.
---------------------------------------------------------------------------
    PBPC is not alone in recognizing the potential for American 
agriculture to position the U.S. to be a global leader in biobased 
innovation and the bioeconomy. Plant-based products are part of the 
broader ag bioeconomy in the U.S., which includes renewable chemicals, 
materials, fuels, and nonfood consumer products. PBPC is a founding 
member of the Ag Bioeconomy Coalition, which includes twelve leading 
agriculture organizations that represent bioeconomy stakeholders in 
every state across the country.\3\ The Coalition members all support 
the advancement of Federal policy initiatives that will foster the 
growth of our nation's ag bioeconomy, including expansion of bioeconomy 
markets and infrastructure, creating market transparency and 
visibility, and promoting bioeconomy research and development. 
Paramount to these priorities is the modernization of the farm bill's 
energy title and recommended enhancements to key USDA rural development 
programs, including USDA's BioPreferred Program and the Biorefinery, 
Renewable Chemical, and Biobased Product Manufacturing Assistance 
Program.
---------------------------------------------------------------------------
    \3\ Ag Bioeconomy Coalition members include American Farm Bureau 
Federation, American Soybean Association, Clean Fuels Alliance America, 
Corn Refiners Association, Growth Energy, National Association of State 
Departments of Agriculture, National Corn Growers Association, National 
Farmers Union, National Hemp Association, National Industrial Hemp 
Council of America, Plant Based Products Council, and Renewable Fuels 
Association.
---------------------------------------------------------------------------
Modernization of BioPreferred
    Last year marked the 20th anniversary of USDA's BioPreferred 
Program. The Program aims to spur economic development, create new 
jobs, and provide new markets for farm commodities by developing and 
expanding markets for biobased products through mandatory Federal 
purchasing of biobased products and a voluntary labeling scheme to 
enhance awareness of BioPreferred products in both the public- and 
private-sectors.
    The Program's impact has not reached its full potential, however, 
in part due to inadequate tracking, reporting, and compliance with 
Federal procurement requirements and flat funding that has remained at 
$3M since the program's inception, failing to account for inflation and 
economic growth, along with meeting the program's fundamental resource 
needs. For comparison, EPA's Energy Star Program, a well-known green 
purchasing program, receives over ten times the funding of BioPreferred 
at $30M-$50M annually.
    PBPC and the ABC firmly believe that through modernization and 
robust funding, Congress can help the program maximize its ability to 
spotlight the broad array of biobased products for government 
procurement and use by businesses and consumers. Recommended 
improvements include:

   Establishing minimum requirements for biobased-only 
        procurement contracts;

   Defining minimum price differentials that dictate when 
        biobased products should be chosen;

   Improving compliance, reporting, and data collection across 
        the Federal Government;

   Expanding promotion of biobased products within the Federal 
        Government and to the public;

   Regular updates to product categories and biobased content 
        requirements; and

   Updating funding levels to ensure the U.S. will remain 
        competitive in the global economy.

    Two additional recommendations that can help advance the goals of 
BioPreferred include:
Biobased Product Manufacturing NAICS Codes
    It is critical that this farm bill reauthorization follows through 
on the 2018 Farm Bill directive that required USDA and Department of 
Commerce to establish North American Industry Classification System 
(NAICS) codes for biobased product manufacturing. New biobased products 
NAICS codes would greatly enhance the ability of firms and researchers 
to track the industry, and will empower our government, policymakers, 
and other stakeholders to be fully informed when participating in 
future regulatory and policy decision-making processes. Such codes are 
key to the future success of the bioeconomy because they allow for 
accurate and effective tracking and analysis of the economic activity 
and growth of the industry and help inform where investment is needed. 
Without dedicated NAICS codes, there is no way to assess the success of 
public policies aimed at promoting the industry, such as measuring 
positive growth in key economic criteria like jobs and average wages.
    While work is currently underway by an Interagency Technical 
Working Group (ITWG) to develop these codes pursuant to Executive Order 
14081, it is critical to ensure that work is carried forward to the 
next updates to the NAICS in 2027. Through the 2023 Farm Bill, Congress 
should codify the ITWG, under the direction of USDA, to ensure the 
bioeconomy-related NAICS code revisions are up to date for inclusion in 
the 2027 updates. The ITWG should also be tasked with regularly 
reviewing and recommending bioeconomy-related NAICS/NAPCS changes 
needed in the future to accommodate this quickly growing industry.
Biobased Product Terminology
    There are many terms commonly used when discussing products in the 
bioeconomy, including ``plant-based'', ``biobased'', ``biodegradable'', 
and ``compostable''. Many of these terms are not well known to 
stakeholders and the general public, are used inappropriately, and/or 
are not well defined. In addition, state and local jurisdictions have 
taken varying approaches to defining and using relevant terms, creating 
further confusion and challenges to interstate business and marketing. 
This lack of harmonized terminology frequently leads to confusion in 
the marketplace or to a mistaken belief that biobased products are a 
greenwashing effort. Misuse of these terms by manufacturers of 
``counterfeit'' products creates further mistrust, and risks 
undermining congressional intent, as well as the good work happening in 
the U.S. private-sector.
    Federal Government leadership is needed to harmonize basic biobased 
product terminology to promote common consumer understanding and 
confidence in the growing bioeconomy. Some key terms are already 
defined under the farm bill energy title. Taking additional steps to 
harmonize relevant definitions within the Federal Government and among 
the states, including preemptively when necessary, would create clarity 
for consumers and a consistent marketplace, while also expanding market 
demand for biobased products and supporting streamlined Federal 
procurement efforts.
Bioproduct Pilot and Demonstration Facility Grants in the Biorefinery 
        Assistance Program
    One of the most significant challenges to growing the U.S. 
bioeconomy is the lack of scale-up infrastructure that is essential to 
de-risking investment in newer innovations aiming for full-scale 
commercial production. For example, limited pilot and demonstration 
scale fermentation capacity in the U.S. is creating a bottleneck in the 
development and launch of American-made bioproducts. Today, U.S. 
innovators often have no other choice but to go to Europe or elsewhere 
overseas in order to access the infrastructure needed to bridge the 
``valley of death.''
    Many mid-scale biorefineries are based at public universities 
because of the expertise, research, and workforce development 
opportunities they provide. Unfortunately, as a result of being 
university-based, these institutes often cannot access commercial loans 
for the capital necessary to further develop pilot and demonstration 
scale facilities.
    Importantly, Congress can help these public institutions by 
providing funding support for additional bench scale and semi-
commercial scale infrastructure to help de-risk and accelerate the 
commercialization of new and emerging bioproducts.
    USDA's Biorefinery, Renewable Chemical, and Biobased Product 
Manufacturing Assistance Program (Section 9003 of the farm bill) 
presents an opportunity to deliver the resources needed to alleviate 
this bottleneck. This program was established by the 2008 Farm Bill. It 
currently provides loan guarantees of up to $250 million for the 
development, construction, and retrofitting of commercial-scale 
biorefinery facilities that uses eligible technology to convert 
renewable biomass into advanced biofuels, renewable chemicals, and 
biobased products.
    Specifically, PBPC recommends expanding the program to include 
cost-sharing grants for pilot and demonstration scale plants. Such 
grants would support the U.S. bioeconomy in accessing the scalability 
necessary for commercial breakthroughs. By further growing the domestic 
bioeconomy, the 2023 Farm Bill can play an important role in keeping 
American innovation in the U.S.
          * * * * *
    Thank you again for the opportunity to share PBPC's perspective. We 
look forward to continuing to work with the Committee to ensure this 
farm bill reauthorization is designed to bolster the U.S. bioeconomy, 
supporting America's agricultural producers and further developing our 
nation's rural economies, all while addressing critical environmental 
imperatives.

    The Chairman. Thank you, Ms. Bowman. Mr. Winslow, your 5 
minutes begins now.

       STATEMENT OF JOSHUA L. ``JOSH'' WINSLOW, GENERAL 
    MANAGER AND CHIEF EXECUTIVE OFFICER, BRUNSWICK ELECTRIC 
             MEMBERSHIP CORPORATION, SHALLOTTE, NC

    Mr. Winslow. Good morning, Chairman Johnson, Ranking Member 
Caraveo, Members of the Committee, and Chairman Thompson. Thank 
you for the opportunity to testify today. On behalf of 
Brunswick Electric's nearly 100,000 member consumers, we 
sincerely appreciate the Committee's interest in energy and in 
rural development issues. Brunswick Electric's distribution 
electric cooperative, in its 84th year of operation, providing 
affordable, reliable electricity to southeastern North Carolina 
homes, farms, and businesses.
    As a cooperative, we are member-owned and controlled, 
returning any profits back to our member-owners. Around the 
country, nearly 900 electric cooperatives deliver power to one 
in eight Americans, including 92 percent of America's 
persistent poverty counties. As the Committee considers the 
upcoming farm bill, I would like to highlight three critical 
issues to electric cooperatives that I respectfully request 
that you consider as you write a new farm bill. First, RUS 
programs are critical to reliable, affordable electric service 
for rural communities. Second, policymakers should approach 
energy policies with a focus on maintaining electric grid 
reliability and meeting future demand. Last, the toolbox of 
USDA Rural Development programs helps electric cooperatives 
provide benefits to our rural communities beyond 
electrification.
    Electric cooperatives are committed to keeping the lights 
on across rural America at a cost that families can afford. As 
a distribution cooperative, Brunswick Electric ensures delivery 
of electricity, and manages the distribution and transmission 
infrastructure needed to safely do so. The consumer-members 
living on our lines expect the lights to come on when they flip 
the switch, regardless of hurricanes, power supply challenges, 
or other external factors.
    In December, when North Carolina faced unusually low 
temperatures and increased demand during the holidays, electric 
cooperatives were either subject to rolling outages, or forced 
to ask our consumer-members to conserve energy around peak 
times to avoid them. To avoid similar situations, we must keep 
reliability at top of mind, because a failure to do so could 
have serious humanitarian and financial consequences.
    To ensure we can meet demand, Brunswick Electric takes an 
all of the above approach to power supply. We rely on a mix of 
always available resources, like nuclear and natural gas, along 
with intermittent renewable energy resources, and meeting 
future demand will require more base load, more dispatchable 
generation, along with renewable resources. Other factors that 
jeopardize reliability include new EPA power plant regulations 
and current supply chain issues, leading to lengthy lead times 
for critical infrastructure, like transformers.
    As the Committee knows, rural electric cooperatives were 
built by, and belong to, the communities that we serve. We 
pride ourselves on being much more than just poles and wires 
companies. We have a long history of partnering with the USDA 
to improve the quality of life for rural communities. Through 
the Rural Economic Development Loan and Grant Program, or 
REDL&G, as we refer to it, Brunswick Electric has identified 
needs in the community, and we work with USDA to help address 
them. This includes security loans for weatherization projects, 
local emergency vehicles, and more.
    At Brunswick Electric, we continuously look for and 
implement ways to leverage new technologies for member benefit. 
As an example, we offer our members the option to participate 
in a smart thermostat program to decrease energy use during 
peak times, when electricity is the most expensive. To be 
eligible, members must have broadband. Expansion of broadband 
to rural areas is imperative for rural Americans to benefit 
from new technology and innovative energy programs.
    In closing, Brunswick Electric is dedicated to delivering 
affordable, reliable electric service to the households, 
businesses, farms, and communities in North Carolina. Nearly 
900 electric cooperatives across the country have similar 
community-focused missions for the areas that they serve. As 
the Committee works on the next farm bill, we look forward to 
continuing to work with you on our shared goal of improving 
life in rural America. Thank you.
    [The prepared statement of Mr. Winslow follows:]

 Prepared Statement of Joshua L. ``Josh'' Winslow, General Manager and 
  Chief Executive Officer, Brunswick Electric Membership Corporation, 
                             Shallotte, NC
Introduction
    Chairman Johnson, Ranking Member Caraveo, and Members of the 
Committee, thank you for the opportunity to testify today. On behalf of 
the Brunswick Electric Membership Corporation (BEMC) and our consumer-
members, we are grateful for the opportunity to share our perspective 
and we thank the Committee for their keen interest in the issues facing 
rural communities across America.
    My name is Josh Winslow and I am the Chief Executive Officer and 
General Manager of BEMC. BEMC's story begins in 1939 when a few local 
citizens came together to build a member-owned electric company to 
serve southeastern North Carolina. BEMC started with just 138 miles of 
line bringing power to 600 farms and homes in Brunswick, Columbus, 
Bladen, and Robeson counties. Our service territory is now one of the 
fastest growing in the country. With more than 7,000 miles of line 
serving close to 100,000 consumer-members, our commitment to provide 
affordable, reliable electric service remains the same. Our cooperative 
belongs to the members we serve and we strive to be accountable, 
service-driven, and provide benefits to our community beyond 
electrification. Cooperatives like BEMC are thriving companies, 
delivering superior value to electric consumers, and positioned to lead 
an industry in transition.
    Also, I am grateful to be here to share the community-focused 
perspective of the nearly 900 electric cooperatives across the country. 
Electric cooperatives deliver power to one in eight Americans in 48 
states and serve 92% of our nation's persistent poverty counties. We 
are owned by the people that we serve and we deliver power to our 
consumer-members at cost without a profit. As utilities serving 56% of 
the landmass in the United States, we share in the mission to provide 
reliable, affordable energy to rural America.
    As the Committee considers the upcoming farm bill, there are three 
key points we respectfully request you consider as you work to 
reauthorize United States Department of Agriculture (USDA) programs:

   Rural Utilities Service (RUS) programs are critical to 
        reliable, affordable electric service for rural communities.

   Policymakers should approach energy policies with a focus on 
        maintaining electric grid reliability and meeting future 
        demand.

   The toolbox of USDA-Rural Development programs helps 
        electric cooperatives provide benefits to our rural communities 
        beyond electrification.
Rural Utilities Service (RUS) Programs for Electric Cooperatives
    As urban areas began to electrify in the early 1900s, rural areas 
were being left behind. Rural community members recognized that the 
economics of the electric business were not working in their favor, so 
communities banded together to form electric cooperatives with the goal 
of powering rural homes, farms, and businesses. Using low-cost loans 
from the Rural Electrification Administration (REA), cooperatives 
successfully electrified rural America and now provide reliable, 
affordable power to 42 million consumer-members in 48 states.
Rural Utilities Service (RUS) Electric Loan Program
    It would be difficult to overstate the importance of low-cost Rural 
Electrification Administration (REA) loans to electric cooperatives 
during rural electrification 80 years ago. The fact of the matter is 
that today these loans, now administered by RUS, are just as important 
as they were back then. For electric cooperatives, RUS provides more 
than just financing, it provides the certainty that the Federal 
Government is committed to basic needs in rural America. From a 
reliability perspective, it is critical that cooperatives know that RUS 
will continue to be a trusted lender for baseload capacity as well as 
intermittent energy sources.
    Through the RUS Electric Program, electric cooperatives across the 
country obtain financing for important electrical infrastructure 
projects of all sizes. Too often, RUS loan approvals for projects are 
needlessly lengthened by environmental reviews and delays. Uncertain 
environmental review timelines and challenging construction timeframes 
due to weather and other factors can lead to cost increases and 
significant project delays for RUS borrowers.
    Reforms to the permitting process included in the Fiscal 
Responsibility Act (FRA), including firm timelines on permitting 
decisions from the Federal Government and greater involvement with 
project developers, will help speed up the process. Electric co-ops 
around the country are grateful to Congress for including these 
important reforms. To meet our nation's growing electricity needs, 
Congress should consider additional reforms, including limiting costly 
litigation that can delay projects indefinitely and streamlining small 
projects we already know have minimal environmental impacts.
New Empowering Rural America (ERA) Program
    In addition to traditional electric infrastructure financing 
provided through the RUS Electric Program, RUS is in the process of 
implementing a new carbon emissions reduction program for electric 
cooperatives. This voluntary program is designed to help reduce 
greenhouse gas emissions while maintaining reliable, affordable 
electric service in rural America. Electric co-ops have flexibility to 
design projects specifically for the communities we serve with eligible 
uses including carbon capture, energy storage, nuclear, renewable 
energy, and generation and transmission efficiency improvements. 
Importantly, participation in this program is not conditioned on 
closure of critical baseload resources. Around the country, electric 
cooperatives are allocating resources toward participating in this 
program and electric co-ops look forward to providing the Committee 
with feedback as the program is implemented.
Maintaining Reliability and Meeting Future Demand
    Electric cooperatives are committed to keeping the lights on across 
rural America at a cost families can afford. Electric co-ops rely on a 
diverse energy mix to meet the demands of our consumer-members. As a 
distribution cooperative, BEMC ensures delivery of electricity and 
manages the infrastructure needed to safely do so. BEMC is a member-
owner of North Carolina Electric Membership Corporation (NCEMC), a 
generation and transmission cooperative that provides electricity to 
BEMC along with other electric cooperatives in North Carolina. NCEMC 
owns power generation assets, purchases electricity through contracts, 
invests in innovative energy projects, and coordinates transmission 
resources for North Carolina cooperatives.
BEMC Resource Mix


    Electric cooperatives around the country get their power from a 
diverse mix of energy resources depending on each cooperative's 
location and community needs. To ensure we can meet demand, BEMC relies 
on a mix of always available resources, like nuclear and natural gas, 
along with intermittent renewable resources. Additionally, BEMC's 
resource portfolio includes 4.8MW of roof-top solar, 10MW of utility 
scale solar and battery, and 15MW of controllable loads. As we work to 
integrate more renewable power sources into our portfolio, it is 
critical they are complemented by dispatchable resources to ensure 
reliability. Meeting future demand will require more baseload, 
dispatchable generation and more intermittent resources.
Reliability Assessments and Severe Weather
    Our members and local economies depend on reliable, affordable, and 
safe electricity. It is vital to the health and well-being of the 
communities we serve. We saw this firsthand in December, when North 
Carolina faced unusually low temperatures and increased demand during 
the holidays. Across the state, electric cooperatives were either 
subject to rolling-outages or forced to ask our consumer-members to 
conserve energy around peak times to avoid them. To avoid similar 
situations, we must keep reliability top-of-mind for electric 
cooperatives because a failure of the electric grid could have serious 
humanitarian and financial consequences.
    The 2023 Summer Reliability Assessment issued last month by the 
North American Electric Reliability Corporation (NERC) found that this 
year more regions of the U.S. face elevated risk of electricity 
shortfalls than in 2022. This assessment is just the last in a series 
of alarming reminders from other electric sector regulators and 
stakeholders that meeting future demand is in jeopardy. This comes as 
more sectors of our economy, including transportation and agriculture, 
look to the electric sector to play a larger role. To maintain 
reliability and meet future demand, America will need to substantially 
increase dispatchable electric generation and expand transmission 
infrastructure. Federal policies should be designed to reflect these 
needs. We can't afford to get this wrong. Today's energy decisions 
determine if there are enough resources for the lights to come on 
tomorrow.
Proposed Environmental Protection Agency (EPA) Regulations
    Last month, the EPA released a proposed rule to further regulate 
power plant emissions. This proposal will further strain America's 
electric grid and undermine decades of work to reliably keep the lights 
on across the nation. Across the country, supply of electricity is 
decreasing due to the disorderly retirement of generation assets with 
insufficient replacement while demand for electricity is increasing as 
more sectors of the economy are electrified. This concerning pattern 
will be greatly compounded by the EPA power plant rule.
Supply Chain Issues
    Meeting our community's energy needs is of utmost importance and 
electric utilities are facing unprecedented challenges procuring basic 
equipment. Over the past 3 years, we have seen a significant increase 
in demand for equipment paired with labor issues that have led to 
lengthy wait times for delivering materials vital to maintaining 
critical infrastructure. Our partner company, Tarheel Electric 
Membership Association (TEMA), acquires and distributes materials, 
equipment, and supplies to meet electric cooperative needs. TEMA works 
smartly to secure these materials ahead of time which has put North 
Carolina electric co-ops in a much better position. Even with TEMA, 
electric cooperatives are still experiencing long wait times, with the 
wait time for some materials spanning over a year for materials 
including transformers, meter bases, rubber goods, elbows, and 
junctions. These wait times are especially concerning for BEMC given 
the threats we face from hurricanes and tropical storms.
    BEMC installed over 5,000 electrical services and 160 miles of line 
in 2022 and is on track to exceed those numbers in 2023. We are 
currently installing infrastructure in over 70 individual residential 
and commercial development projects, 800 apartment units and 6,500 
homes, along with several capital projects to extend lines and add 
capacity for the additions in load. That involves the immediate need 
for 840 pad mount transformers and 2,500 elbows--both of which are 
scarcely available. Although we are accustomed to the planning and 
execution requirements for high growth, breaks in the supply chain are 
straining our schedules and threatening reliability.
USDA Toolbox for Rural Electric Utilities
    Rural electric cooperatives were built by and belong to the 
communities we serve. Electric co-ops pride ourselves on being more 
than just poles and wires companies and have a long history of 
partnering with USDA to improve quality of life in rural communities.
Rural Economic Development Loan and Grant Program (REDL&G)
    Owned by our consumer-members, electric cooperatives have a vested 
interest in the success and safety of our people and places. Programs 
like REDL&G allow for us to stretch our reach in the community with 
benefits beyond electrification. Through REDL&G, cooperatives identify 
certain community needs and opportunities like public services or small 
businesses and partner with the USDA to offer low interest loans 
through the electric cooperative. This program helps cooperatives fill 
some of the investment gaps we many times see hinder development in 
rural communities.
    There is ample evidence of REDL&G's role in filling these 
investment gaps both at a statewide and local level. Across North 
Carolina, $88 million in grants and loans were awarded, which resulted 
in $1 billion in new capital investments as well as the creation of 
6,000 new jobs in rural North Carolina. This program has also shown 
great success locally at BEMC. Since 2014, REDL&G has funded four 
projects with five awards totaling $3,689,210. These projects include 
necessary renovations and investments for local Real Estate and 
Consumer Services corporations, weatherization projects, emergency 
vehicles, and business incubators. The positive effects of this 
program, both immediate and downstream, are felt throughout our 
communities. The reauthorization of REDL&G and similar programs would 
greatly aid in expanding these positive effects for rural communities.
Energy Efficiency
    The Rural Energy Savings Program (RESP) is another farm bill 
program for rural energy providers to finance energy efficiency 
upgrades in rural homes using zero-interest loans from USDA. This 
program was created by the 2014 Farm Bill and is a mutually beneficial 
program used to lower energy bills for rural Americans, reduce energy 
use, and smartly leverage USDA resources. As a zero-interest loan 
program, this program yields strong return on Federal investment as 
each dollar of appropriations for RESP facilitates about $20 worth of 
zero-interest loans for energy efficiency projects. Participation in 
RESP can be a large administrative undertaking for a cooperative. As 
the Committee considers reauthorization of this program, consideration 
of a grant component like similar programs at USDA, would help ease the 
burden on electric cooperatives.
Community Solar
    The Rural Energy for America Program (REAP) provides loans and 
grants to develop renewable energy systems and implement energy 
efficiency measures to benefit rural economies. Electric cooperatives 
have used REAP grants to partially finance community solar projects.
    With the help of REAP, the North Carolina Electric Cooperatives 
have been able to install 2,160 kW of Community Solar capacity. Loans 
and grants provided by REAP have been a great help for rural 
communities moving towards renewable energy and would further benefit 
them if it were to be reauthorized.
Grid Innovation
    Increasingly, electric cooperatives across the country are 
deploying fiber optic infrastructure as part of their electric network 
build. A fiber connection enables a high bandwidth, low-latency 
internal communications system to support utility operations, allowing 
for a real-time monitoring of systems, improved response times to 
outages, and better management of utility resources. It allows us to 
improve the redundancy and resiliency of our electric network while 
also improving efficiency and lowering costs for our consumers.
    Fiber networks also enable electric cooperatives to deploy advanced 
metering infrastructure as well as enable distributed energy resources 
and expanded electric vehicle access. These smart grid features require 
real-time communication for electric utility management and reduce 
overall costs while improving response times in the event of an outage.
    At BEMC, we continuously look for ways to leverage new technologies 
for member benefit. As an example, we offer our members the option to 
participate in the Connect-to-Save program deployed in partnership with 
NCEMC. Members must have broadband to participate in this program so 
broadband expansion is imperative for rural areas to benefit from new 
technology and innovative energy programs. Through this voluntary 
program, our members use smart thermostats that can be briefly raised 
or lowered during peak times when the demand for electricity is 
greatest and therefore the most expensive. This helps to reduce demand 
and stress on the electric network while improving reliability for all 
BEMC members.
Conclusion
    In closing, I would like to thank the Chairman and Ranking Member 
for allowing me to share the perspective of BEMC. Nearly 900 electric 
cooperatives across the country have similar community-focused 
missions. 84 years ago, our community banded together to bring electric 
service to homes and farms with the help of the REA. 84 years later, 
the USDA remains a critical partner in our mission to provide reliable, 
affordable electric service to southeastern North Carolina households, 
businesses, farms, and communities.
    As the Committee considers the upcoming farm bill, we look forward 
to working together in our shared goal of powering and improving the 
lives of rural Americans. I am happy to answer any questions you may 
have.

    Ms. Caraveo. Thank you, Mr. Winslow. Mr. Holmes, you are 
now recognized for 5 minutes.

        STATEMENT OF MATTHEW W. HOLMES, CHIEF EXECUTIVE 
     OFFICER, NATIONAL RURAL WATER ASSOCIATION, DUNCAN, OK

    Mr. Holmes. Good morning. Chairman Johnson, Ranking Member 
Caraveo, and Members of this Committee, Mr. Chairman, it is an 
honor to testify before you today on Rural Development's water 
and wastewater programs. NRWA has grown from the grassroots to 
become a federation of 50 state associations with over 31,000 
members. NRWA was established in 1976 by rural Americans in 
rural Oklahoma to address two critical needs, to get away from 
unsafe water sources by building new water systems with funding 
from the Farmers' Home Administration, and to help rural 
communities comply with then brand new Safe Drinking Water Act 
(Pub. L. 93-523).
    Since inception, we have been trusted by rural communities. 
NRWA and our state associations are governed by volunteers that 
manage and operate rural systems. Our field staff works with 
operators and system managers, solves real problems, and does 
not leave until the job is done. This pool of expertise 
provides access to resources that would otherwise be 
unaffordable for small communities.
    Through billions of dollars of financial assistance from 
Rural Development over 80 years, the standard of living in 
rural America has improved greatly. Unfortunately, these 
advancements are often taken for granted. The health and 
economic benefits made possible through this Committee are 
immeasurable, and on behalf of every rural utility we 
represent, thank you. I will now outline our members' top 
priorities for your consideration in drafting the farm bill.
    The most successful approach for overcoming water 
challenges in rural America is the Circuit Rider Program, 
created by this Committee in 1980. Circuit riders are full-time 
water experts that provide on-site, peer-to-peer assistance. 
The simple fact is, even with new technology rural America 
needs hands-on help. Last year circuit riders helped protect 
the health and safety of nearly 25 million people, 41 percent 
of rural America. In the long run, this assistance saves money 
and protects the government's investments by fostering 
efficient and sustainable practices. We respectfully ask this 
Committee to reauthorize this program.
    State Rural Water Associations have been helping water 
utilities with on-site disaster response and recovery for 
decades. However, there are statutory and administrative 
barriers that limit the effectiveness of help to impacted 
areas. We request this Committee consider expanding existing 
authorities to include preparedness, response, and recovery. 
These recommendations come directly from our field staff, with 
extensive experience in disaster recovery.
    Protecting small and rural water systems from cyber-attack 
has been a top priority also for us. Unfortunately, given the 
scope and complexity of cyber threats, the reality is most 
rural utilities lack the resources and in-house expertise to 
defend themselves. We suggest this Committee consider providing 
funding for cybersecurity specialists to help rural systems 
protect their utility, and the public health of their 
residents.
    NRWA recommends modernizing the Rural Development water and 
wastewater programs to better address current needs, with 
additional affordable financing and servicing options. This 
should include zero and one percent loans to disadvantaged or 
economically distressed communities. EPA and the Rural Housing 
Service already have similar authorities. We also suggest 
advancing voluntary consolidation of rural utilities by 
allowing a contiguous system to apply for grant loan on behalf 
of a neighboring underserved community. We believe this 
authority should be narrow and ensure that the additional 
subsidy is targeted entirely to the community in need.
    Replacing our aging workforce is one of our top concerns. 
Data shows that up to 50 percent of operators will retire in 
the next 10 years. Our nation needs a pipeline of skilled 
workers to help ensure clean and safe water for the public. For 
these reasons, we established a National Registered 
Apprenticeship Program, recognized by the Department of Labor, 
and have successfully created hundreds of quality jobs in rural 
America. As proud as we are of this program, it is only a drop 
in the bucket of the workforce needs that we face. We suggest 
including financial resources and policy in the farm bill to 
provide utility, mentorship, and training.
    In conclusion, Rural Development's water and environmental 
programs are critical to keeping user rates in small town 
America affordable. With a $4.26 billion backlog, the demand 
for this program is high. Technical assistance protects the 
Federal Government's investment, and helps communities provide 
safe, sustainable, and affordable water and wastewater 
services. NRWA is proud to stand as a partner with USDA Rural 
Development and this Committee. Please consider our entire 
organization at your disposal as a resource as you draft the 
2023 Farm Bill.
    I would also like to say it has been a pleasure to work 
with the Committee staff. As you all know, they are extremely 
professional and knowledgeable, and thank you for the 
opportunity to participate today.
    [The prepared statement of Mr. Holmes follows:]

   Prepared Statement of Matthew W. Holmes, Chief Executive Officer, 
              National Rural Water Association, Duncan, OK
    Good morning, Chairman Johnson, Ranking Member Caraveo, and Members 
of the Committee. It is an honor to testify before this Committee on 
the Department of Agriculture's Rural Water and Wastewater programs and 
the associated technical assistance initiatives. These programs work 
together to help small and rural communities provide safe and 
affordable drinking water and sanitation services. As you are well 
aware, these continued investments protect the health and safety of 
rural Americans and keep our communities economically viable.
History of the National Rural Water Association
    The National Rural Water Association (NRWA) has grown from the 
grassroots to become a federation of 50 State Rural Water Associations, 
with a membership of over 31,000 small, rural, and Tribal water systems 
in all fifty states and Puerto Rico. NRWA was established in 1976 by 
rural Americans, in rural America, to address two critical needs:

  1.  To get their neighbors away from drinking from unsafe shallow 
            wells and contaminated surface water sources by building 
            water systems modest in design, size, and cost with funding 
            from the Farmer's Home Administration, and

  2.  To help rural communities comply with regulations recently 
            established by the new Safe Drinking Water Act.

    Since its inception, NRWA has been a trusted partner for rural 
communities. NRWA and its member State Associations are governed by 
over 350 volunteer directors elected by the systems we serve across the 
nation. Rural Water currently has a field staff of more than 750 
technical experts that directly assist small and rural communities 
every single day. By providing this pool of expertise, small and rural 
communities can access resources that would otherwise be unaffordable. 
NRWA provides peer-to-peer assistance that works with water system 
staff, solves real problems (like broken mains and bacteriological 
contamination), and does not leave until the job is done.
    Our members are facing more challenges than ever before, and NRWA 
has expanded our mission and focus to address these unmet needs. This 
includes expanding our on-the-ground emergency response and recovery 
assistance, protecting source water, managing water system assets to 
enhance financial sustainability, establishing nationally recognized 
Registered Apprenticeship programs in 37 states, and leading the 
industry with partners to respond to critical issues like PFAS and 
cybersecurity.
History of USDA Water Assistance to Rural Communities
    The Department of Agriculture has a long and impressive history 
providing direct water financing to rural communit[i]es for over 80 
years. Through billions of dollars in financial assistance from USDA 
Rural Development, our nation has made great advancements in the 
standard of living in rural America. Millions of rural Americans now 
have access to safe drinking water that their parents did not have. 
Thousands of rural communities now have modern wastewater systems that 
have eliminated millions of failing septic tanks, cesspools, straight 
pipes into rivers and streams, and worse. The majority of this water 
and wastewater infrastructure was established by Rural Development's 
predecessor agency, the Farmer's Home Administration.
    Unfortunately, the public tends to take these successes for granted 
and has little understanding of the magnitude of the improvements that 
have been made to the health and safety of millions of Americans in a 
relatively short period of time. In an era where problems and division 
receive most of the attention, our Association would like to recognize 
the tremendous success and impact these programs have provided in rural 
communities within every state and territory of this nation. The health 
and economic benefits that you and your predecessors have made possible 
through this Committee's work and vision are immeasurable and on behalf 
of the National Rural Water Association and every single rural utility 
we represent, we thank you.
    Rural Development will continue to play a vital role in 
modernizing, preserving, and protecting this infrastructure. In 
addition, it is an unfortunate fact that there are still many 
underserved areas without adequate, affordable water and sanitation 
service. As you are aware, USDA Rural Development is also the only 
Federal agency created by Congress to specifically serve rural America. 
The needs are still great--currently, 91% of the country's water 
systems \1\ serve communities with fewer than 10,000 persons, and 54% 
serve \2\ less than five hundred. These communities are the heart of 
Rural Development's Water and Environmental Programs portfolio, and the 
sole focus of our technical assistance programs.
---------------------------------------------------------------------------
    \1\ Out of 49,416 total community water systems, 44,924 water 
systems serve less than 10,000 population.
    \2\ 26,682 water systems serve less than 500 population--EPA ECHO 
Database 9/9/2023.
---------------------------------------------------------------------------
    These programs have been the proven solution and are responsible 
for the success story of safe drinking water and sanitation in almost 
every corner of rural America.
NRWA Partnership with USDA
    NRWA's founders started the Association with a shared mission with 
Rural Development, and that mission is to provide safe, affordable, and 
financially sustainable water and wastewater services to rural 
communities. In the past 2 decades, the Rural Development field staff 
and the total number of field offices have been reduced dramatically. 
You know better than I that this was driven by many factors including 
advancements in technology, consolidation of business functions, and 
available Federal resources.
    NRWA is not in competition with the Rural Development field staff 
but serves as an extension of their work and as an additional resource 
for the rural communities they serve. We also share a key attribute 
with Rural Development, and that is established experience and trust. I 
would argue that this experience and trust are the essential components 
to accessing and successfully serving small and rural utilities.
    NRWA has a track record of partnership with Rural Development to 
advance agency priorities. For example, State Rural Water Associations 
are currently providing direct technical support to communities in the 
Closing America's Wastewater Access Gap Community Initiative in 
Alabama, North Carolina, and Kentucky. Next week, NRWA is hosting a 
training conference with all field staff and Association leadership to 
discuss ways to effectively engage with the Rural Partners Network. We 
have successfully piloted many programs with Rural Development, 
including the agency's streamlined electronic application process RD 
Apply, energy efficiency assessments, workforce development, 
sustainability planning, and direct assistance for manufactured housing 
communities.
NRWA Suggestions for Consideration in the 2023 Farm Bill
    Many of our small and rural systems operate on a thin margin and 
must have the ability to modernize their water infrastructure, much of 
which is approaching or past its design life. In addition, rural 
utilities are facing more challenges than ever before, and therefore 
need access to USDA Rural Development funding programs that are more 
affordable, flexible, streamlined, and responsive. Additional barriers 
include the cost of increased regulatory compliance with PFAS and the 
Lead and Copper rule, the impact of inflation, and ongoing disruptions 
in the supply chain.
    I will now outline the areas our members have asked us to advance 
to this Committee for consideration as you draft the 2023 Farm Bill, 
including the need for enhanced disaster assistance, incentives for 
regionalization and consolidation efforts to increase sustainability, 
protecting small and rural water systems from cyberattacks, and the 
ability to attract and train a professional workforce to replace aging 
operators.
Circuit Riders
    Our flagship initiative and most successful approach for overcoming 
past and current challenges in rural America has been the ``Circuit 
Rider'' concept, created by this Committee in 1980. This program 
provides a nationwide pool, presently 132 full-time water experts, to 
provide peer-to-peer direct assistance to help rural systems manage and 
operate their utility. Circuit Riders are rural America 's boots on the 
ground for troubleshooting issues and solving problems at water 
systems. Technology has improved the ability to operate and manage 
systems at a distance, but our industry still requires direct on-the-
ground assistance to accomplish the job.
    The low default and delinquency rate of USDA water programs has 
been attributed to the training and assistance provided by the Circuit 
Rider Program, by providing a pool of expertise that is otherwise 
unaffordable for rural communities.
    Last year, Circuit Riders directly helped to protect the health and 
safety of 24,780,065 people--41% of rural America. Circuit Riders 
provide hands-on training, certification licensing, financial 
management, environmental compliance, disaster assistance, governance, 
and on-site technical assistance necessary to ensure that facilities 
operate at the highest level possible. This assistance actually saves 
money and protects the community's and government's investments by 
ensuring efficient and sustainable practices are followed. This 
training and education empowers operators, board members, elected 
officials and communities with the support and knowledge they need to 
understand every aspect of their responsibilities to properly manage 
their systems and serve their customers.
    I hear daily from rural communities in need of assistance: whether 
the need is design and construction of new systems, repair and 
maintenance of existing systems, or response to emergencies. In all 
these areas, Rural Water is there. Our sole focus of the Circuit Rider 
Program is to restore and improve the public health, environment and 
sustainability of these small communities, or in other words, to give 
them a level playing field with our urban counterparts so rural 
Americans have the opportunity to live the lives they want. We 
respectively ask this Committee to reauthorize this program.
Emergency Preparedness and Response Technical Assistance Program
    NRWA and other State Rural Water Associations have been helping 
water and wastewater utilities with on-site disaster response and 
recovery though the USDA Circuit Rider Program for decades. We have 
enhanced these activities on a national level and provide annual on-
site and classroom training available to all our State Associations, 
that includes deploying new technologies and equipment and creating new 
strategies from lessons learned.
    Currently, there are statutory and administrative burdens that 
limit the full effectiveness of this service to impacted areas. The 
Circuit Riders can only provide limited recovery activities to restore 
service. Additionally, on many occasions, State Associations are forced 
to absorb the financial costs incurred to provide long-term recovery 
and response activities.
    NRWA requests this Committee consider expanding existing 
authorities including disaster preparedness, response, and recovery 
activities to enhance the ability of the Circuit Riders to further 
protect the public health and the utilities' assets. Suggested 
expansion of services includes increasing coordination with statewide 
emergency response networks, development of action plans, 
recommendations to improve resiliency and mitigation, vulnerability 
assessments and geographic information mapping of the systems. Post 
disaster suggestions include long-term assistance including application 
and reporting requirements for state and Federal agencies.
    These recommendations are directly derived from our field staff 
with extensive experience in disaster recovery.
Rural Water and Wastewater Cyber Security Circuit Rider Program
    Protecting small and rural water systems from cyberattacks has been 
a top priority for NRWA. Unfortunately, given the scope and complexity 
of cyberthreats to critical water infrastructure, the reality is most 
rural utilities lack the financial resources and in-house expertise to 
defend themselves.
    Previous actions from Congress required all systems over 3,300 
population to complete a cyber/physical assessment by December 31, 
2021. Smaller systems under the 3,300 populations with limited 
financial and human resources need direct assistance to comply. 
Additionally, EPA and Rural Development are beginning to require 
cybersecurity measures prior to any new obligations.
    We suggest this Committee consider providing a cadre of ``Circuit 
Rider'' cybersecurity specialists to help rural water systems protect 
their utility and the public health of the residents. This program 
should target this assistance to the rural utilities that lack the 
resources necessary or expertise to meet these Federal requirements. 
Activities should include rapidly assessing the utilities on efficacy 
in protecting their cyberinfrastructure and public health, developing 
reasonable protocols to enhance protection, and providing assistance to 
any inadequate cyber protection plan.
Modernization of Rural Development Water & Environmental Programs
    NRWA recommends modernizing the Rural Development Water and 
Wastewater programs to better address current needs with additional 
affordable financial and servicing options. Congress has modernized 
other infrastructure programs including the EPA State Revolving Loan 
Fund programs. EPA currently has the authority to provide ``additional 
subsidization'' to include principal forgiveness, zero and/or negative 
interest loans or a combination of these tools. Loan terms were also 
recently extended.
    NRWA has supported current and past Congressional efforts that 
would provide Rural Development additional affordable financing and 
servicing tools. New affordable financing options should include the 
ability for Rural Development to offer zero and one percent loans to 
disadvantaged or economically distressed communities. This should be a 
limited authority targeted to lower-income communities to ensure 
affordable water and wastewater services to those residents. Regarding 
the servicing options, Rural Development should be provided with the 
ability to financially stabilize a current borrower within communities 
where their customers have been suffering an economic downturn at no 
fault of their own. EPA and the USDA Rural Housing Service have similar 
authorities.
    Rural Development is the only Federal agency created by Congress 
specifically to serve rural communities. The sole focus of their Water 
and Environmental Programs is to serve communities under 10,000 
population. These rural systems operate on small margins of revenue 
over expenses, coupled with a lack of economies-of-scale, increasing 
the challenges to provide affordable rates for lower-income residents.
    NRWA requests that this Committee consider providing these 
additional affordable financing and servicing options.
Regionalization and Consolidation for Rural Water Utilities
    States and regions vary on how they define regionalization or 
consolidation in policy. Given the previously mentioned large number of 
small community water systems in the country, regionalization and 
consolidation of water and wastewater services and facilities across 
rural America is a natural ongoing process in areas where it is 
financially feasible.
    We suggest the Committee consider additional measures to further 
advance sustainability for rural utilities by specifically targeting 
assistance to lower-income communities without adequate water or 
wastewater service. These communities often lack financial and 
managerial capacity and the will to operate independently and sustain 
affordable service. Our recommendation is to provide a financial 
incentive by allowing a high performing, local or contiguous system to 
apply for a grant/loan on behalf of the underserved community.
    Currently, most rural utilities and their boards want to assist 
their neighbors but have no financial basis to proceed. Boards do not 
want to negatively impact their existing customers, raising their rates 
to take on inadequate infrastructure and new customers outside their 
original service area. NRWA believes a fair financial incentive will 
alleviate these concerns and promote the mission to adequately serve 
rural residents with affordable and financially sustainable services.
    The authority should be narrow while ensuring the additional 
subsidy is targeted entirely to the community in need. EPA maintains a 
list of significant non-compliant utilities, and Rural Development 
labels many of the same utilities as high risk. We believe this effort 
will directly reduce that list and potentially save Federal resources 
in the future.
Workforce Development
    As previously mentioned, replacing our aging workforce is one of 
the leading concerns, with employment data indicating up to 50% of this 
workforce will leave the water industry within the next 10 years. Rural 
water and wastewater utility owners and operators need a pipeline of 
skilled workers to help ensure clean and safe water for the public and 
to maintain the water infrastructure necessary to keep rural service 
areas economically viable.
    For those reasons, NRWA, State Rural Water Associations, rural 
water utilities, USDA, DOL, and private partners like CoBank, 
collaborated to successfully to establish the first nationally 
recognized Guideline Standards for Registered Apprenticeship for water 
and wastewater system operators, and have successfully created quality 
jobs in rural America.
    The vast majority of the country's small community water systems 
have very limited staff, sometimes only employing one part-time or one 
full-time paid operator. Unfortunately, the limited economies of scale 
and technical expertise in rural water utilities are compounded by the 
scarcity of qualified operators. This challenge increases the 
difficulty small and rural communities have complying with complicated 
Federal mandates and providing safe/affordable drinking water and 
sanitation.
    The growing and successful NRWA Apprenticeship Program model is 
unfortunately hindered in very small communities because there is no 
capacity to hire or provide on-the-job training to an apprentice. This 
challenge is unique to these communities and is a significant barrier 
to attracting, training, and retaining qualified staff. This stark 
reality also prevents these communities' access to many resources 
available through the Department of Labor's workforce system that 
larger systems utilize almost exclusively.
    NRWA suggests that the Committee consider including financial 
resources and policy in the 2023 Farm Bill to provide mentorship and 
training to address these workforce challenges specific to Rural 
Development borrowers and potential borrowers. A long-term solution is 
critically needed to enhance water workforce participation and 
retention in small and rural communities, protect the significant 
Federal investment in rural America's water and wastewater systems, and 
improve these vital services and basic civic necessities on which our 
customers depend.
1926(b)--Curtailment or Limitation of Service
    Protecting the service area of a rural utility with a Rural 
Development debt is a priority for our membership. This provision, what 
is commonly referred to as the 1926(b) protection clause (7 U.S.C. 
1926(b)), was designed by Congress with two goals in mind:

  (1)  Congress wanted to ensure the USDA Federal debt held by 
            borrowers was protected and would be repaid, and

  (2)  Congress wanted to promote the development of rural water 
            systems for rural residents and ensure they are economical 
            and safe.

    Previous attempts to modify this existing provision have been 
rightly rejected by this Committee. This provision has been litigated 
numerous times since inception. NRWA is concerned that any modification 
of the existing statute would have to be relitigated at a tremendous 
cost to the rural utilities and could potentially reduce their service 
area and repayment ability to Rural Development.
Conclusion
    In summary, the USDA Rural Development Loan and Grant programs and 
policy for water and wastewater systems is critical to maintain the 
affordability of user rates in many communities in rural and small town 
America. With a $4.26 billion backlog, the demand for this program 
remains high. The accompanying direct technical assistance provides the 
capacity and experience to protect the Federal Government's investment 
and enhances the community's mission to provide safe, sustainable, and 
affordable water and wastewater services. NRWA is proud to stand as a 
partner with USDA Rural Development and this Committee. Please consider 
our entire organization at your disposal as a resource as you draft the 
2023 Fa[r]m Bill.
    Thank you for the opportunity to participate today and I stand 
ready to take any questions that you may have at this time.

    The Chairman. Thank you, sir. Mrs. Morales-Pate, you are 
up.

        STATEMENT OF OLGA MORALES-PATE, CHIEF EXECUTIVE 
 OFFICER, RURAL COMMUNITY ASSISTANCE PARTNERSHIP INCORPORATED, 
                        WASHINGTON, D.C.

    Mrs. Morales-Pate. Thank you, good morning. Buenos dias. It 
is an opportunity that--very much appreciate. Thank you for the 
opportunity to be here and to speak to you, Chairman Johnson, 
Ranking Member Caraveo, and Members of the Subcommittee. It is 
important for us to discuss how rural communities are impacted 
by the work that this Committee does, and the agency--the 
Department of Agriculture. RCAP is a national nonprofit 
organization that has been working and providing technical 
assistance in all 50 states for over 50 years. We have over 350 
technical assistance providers that work across the country, 
the Territories, Tribal lands, and in Colonias.
    Our approach to the work we do is grounded in long-term 
trust and relationship with communities to help them develop 
and advance them through the phase of infrastructure. So we 
work with communities from the pre-development phase all the 
way to the construction and beyond to make sure that the 
Federal dollars invested are utilized as they are intended to. 
We work directly in partnership with Rural Development. Part of 
the work that we do in the field is work with the field staff 
to make sure that projects are advanced, that they are intend--
that they intend--or that they address, rather, what they are 
intended to address, so it is an honor and an opportunity.
    Last year we served 3.5 million rural and Tribal 
communities--residents, I am sorry, and more than 1,600 
communities across the country. The average population was 
1,500, and we--a medium household income of less than 75 
percent. We served over 300,000 individuals in indigenous 
communities. In addition, we served a one--more than one 
million people of color.
    All of this work wouldn't be possible without some of the 
very critical programs that we have been receiving funding for 
technical assistance from USDA over the years. With that, we 
stand in support of the reauthorization of the Water and 
Wastewater Disposal Technical Assistance and Training Grant 
Program, because it makes all of this possible. In addition to 
the funding and--that we leverage to USDA, we also are able to 
leverage funding from other sources to be able to further the 
work that we do.
    Through the partnership that we have with USDA, on average 
we leverage $400 million in infrastructure, and provide about 
140 trainings, serving about 1,300 systems. Now, it sounds like 
a lot, but at the same time, this country has over 85,000 
community water systems, small water systems, population under 
10,000, so it is a drop in a bucket of need. The need is much 
greater than any of us can provide, so it is very important to 
work together, and regionalization, or consolidation, voluntary 
consolidation, is one way to farther our efforts.
    The aging infrastructure, the inability to retain operators 
or workforce, the inability to qualify for funding, is becoming 
a challenge for small communities, so it is important that we 
keep in mind ways that can help us think and do beyond, and be 
able to maximize economies-of-scale to be able to make sure 
that those communities remain healthy and thriving, and so that 
is one way that we have been doing, and we have research 
document, and we have many cases that document the process.
    On the solid waste side, that is another program that is 
very critical, and we have been able to advance a number of 
communities over the years. It is a small program, but it is 
still very important to communities where solid waste service 
is not available to them. A program that I would also like to 
mention briefly is very--is the Technical Assistance--the 
Community Facilities Technical Assistance Program, and the 
reason for it is because it takes more than water and 
wastewater for communities to be sustainable. They have needs, 
and health, and fire, and education, and so many other areas, 
and that are very, very important, and so we stand in support 
of the Community Facilities Program.
    We also stand in support of the Rural Investment 
Initiative, because it takes more than Federal dollars to do 
what we do, and to develop the capacity and sustainability of 
our communities. So it takes many, many partners to make sure 
that the communities are sustainable, and that we are able to 
see a thriving rural America. So thank you for the opportunity.
    [The prepared statement of Mrs. Morales-Pate follows:]

Prepared Statement of Olga Morales-Pate, Chief Executive Officer, Rural 
    Community Assistance Partnership Incorporated, Washington, D.C.
Introduction & About RCAP
    Thank you, Chairman Johnson, Ranking Member Caraveo, and Members of 
the Subcommittee for this opportunity to discuss the importance of the 
U.S. Department of Agriculture's Rural Development (USDA-RD) suite of 
programs and services in fostering rural economic development and 
prosperity. USDA-RD is the only Federal agency dedicated solely to 
rural America and plays a key role in improving access to capital while 
working alongside trusted partners to ensure rural areas remain great 
places to live and thrive. I also want to thank the Committee for their 
work on writing the next farm bill.
    My name is Olga Morales-Pate, and I am the CEO of the Rural 
Community Assistance Partnership (RCAP). RCAP is a national network of 
nonprofit partners working to provide technical assistance (TA), 
training, and resources to rural and Tribal communities in every state, 
territory and on Tribal lands and Colonias. Through our regional 
partners, more than 350 technical assistance providers build capacity 
that leads to sustainable and resilient infrastructure and strengthens 
rural economies. Our approach is grounded in long-term, trusted 
relationships with thousands of rural and Tribal communities across the 
country.
    For 50 years, the RCAP network has partnered with multiple Federal 
agencies including USDA-RD to bridge the gap between Federal programs 
and the communities they serve. RCAP assists rural communities with 
funding applications and every phase of the project planning and 
development process, as well as providing training and technical 
assistance. We help communities understand how to properly manage and 
operate their infrastructure in a fiscally sustainable manner and 
ensure that Federal borrowers meet the terms of their loans.
    USDA Rural Development has over 4,000 professional staff members in 
the field across the country to directly assist these communities. This 
field structure is especially helpful to communities and utilities that 
lack the human and financial capacity to access and administer 
available funding. RCAP works in partnership with Rural Development to 
directly assist unserved and underserved rural communities including 
access to the Tribal and Colonias funding set-asides.
    Last year, RCAP served more than 3.5 million rural and Tribal 
residents in more than 1,650 of the smallest, most distressed 
communities. The average population of the communities we served was 
1,520, with a Median Household Income (MHI) of less than \2/3\ the 
national MHI. We served almost 300,000 individuals from Indigenous 
communities. In addition, we served more than one million people of 
color.
    The RCAP network is the sum of six regional partners across the 
U.S. that collectively cover every state and territory, including 
Tribal lands and Colonias:

   Communities Unlimited (CU)--The Southern RCAP

     Serving Alabama, Arkansas, Louisiana, Mississippi, 
            Oklahoma, Tennessee, and, Texas.

   Great Lakes Community Action Partnership (GLCAP)--The Great 
        Lakes RCAP

     Serving Illinois, Indiana, Kentucky, Michigan, Ohio, 
            West Virginia, and Wisconsin.

   Midwest Assistance Program (MAP)--The Midwest RCAP

     Serving Iowa, Kansas, Minnesota, Missouri, Montana, 
            Nebraska, North Dakota, South Dakota, and Wyoming.

   Rural Community Assistance Corporation (RCAC)--The Western 
        RCAP

     Serving Alaska, Arizona, California, Colorado, Hawaii, 
            Idaho, Nevada, New Mexico, Oregon, Utah, and Washington.

   RCAP Solutions (RSOL)--The Northeastern and Caribbean RCAP

     Serving all six New England states, New York, New 
            Jersey, Pennsylvania, Puerto Rico, and the U.S. Virgin 
            Islands

   Southeast Rural Community Assistance Project (SERCAP)--The 
        Southeastern RCAP

     Serving Delaware, Florida, Georgia, Maryland, North 
            Carolina, South Carolina, and Virginia.

    In line with RCAP's mission of even further expanding its impact in 
rural communities in the years to come, laid out in the sections below 
are some of RCAP's key recommendations for the 2023 Farm Bill. Also 
included are some relevant case study examples of RCAP's work in these 
areas.
Rural Utilities Service Water and Environmental Programs (WEP)
    RCAP Water and Environmental Programs Farm Bill Recommendations:

   Reauthorize the Water & Waste Disposal Technical Assistance 
        & Training Grant Program to the maximum amount (Section 
        306(a)(14)(A) of the Consolidated Farm and Rural Development 
        Act 7 U.S.C. 1921 et seq.), set-aside no less than 10% of 
        funding for expanded technical assistance and capacity 
        building. RCAP also requests additional language for emergency 
        response technical assistance to meet the growing need in 
        assisting rural communities recover and rebuild post natural 
        disasters.

   Reauthorize the Water & Waste Disposal Loan & Grant Program 
        (Section 306 of the Consolidated Farm and Rural Development 
        Act).

   Reauthorize the Solid Waste Management Grant Program 
        (Section 310B of the Consolidated Farm and Rural Development 
        Act) at $20 million a year over 5 years.

    RCAP has been providing on-the-ground technical assistance and 
training to small and rural water and waste systems for 50 years in all 
50 states and territories. Through our partnership with USDA-RD, RCAP 
and our regions in 1 year alone helped rural and Tribal communities 
from across the country leverage approximately $400 million in 
infrastructure funding from a variety of Federal, state, local, and 
private funding sources. Through these programs we also conducted 140 
trainings, serving more than 1,300 systems, and reaching about 2,500 
participants.
Water & Waste Technical Assistance
    RCAP has been a leader in the water system regionalization space, 
especially when it comes to sustainable solutions for small, rural, and 
Tribal communities. In addition to intensive technical assistance and 
training work as a neutral third-party facilitator helping communities 
navigate what is often a complicated undertaking, RCAP developed a 
process to help guide both TA providers and communities through the ins 
and outs of regional collaboration. RCAP also developed two helpful 
research products, one outlining ten lessons learned from communities 
across the country who have participated in activities across the 
regionalization spectrum and another outlining local, state, and 
Federal policy recommendations that would help incentivize and ease the 
pathway to sustainable and resilient regional solutions. 
Regionalization is not a silver bullet, but we believe it should always 
be on the table for consideration, especially as the water workforce 
dwindles, regulations become more stringent and disasters more intense 
and frequent--no one must go it alone.
    Across the United States, I see firsthand communities facing 
threats to their drinking water from several harmful contaminants, such 
as lead and PFAS. As we are all well too aware, rural communities have 
historically been overlooked by Federal investments when it comes to 
addressing water challenges, especially the nearly 23 million 
households who rely exclusively on groundwater delivered through 
private wells for their drinking water.
    Beyond those on small water systems and private wells, we also know 
that many communities are hauling water by hand as a practice in Tribal 
areas and the Colonias. Lack of access to water and sanitation, a 
result of both historical and geographical factors, is most prevalent 
in Alaska, the Dakotas and northern New England, but there are 
additional pockets of this issue throughout the U.S.
    A report from DigDeep and the U.S. Water Alliance shows that 
gradual improvements are being made in this space, but that the rate of 
progress is declining. The population without complete plumbing in the 
United States was reduced from 1.6 million people in 2000 to 1.4 
million in 2014. For comparison, those lacking complete plumbing 
dropped from 27 percent in 1950 to 5.9 percent in 1970. This data 
suggests that communities making up the remaining access gap face 
particularly entrenched challenges. (Closing the Water Access Gap in 
the United States by Dig Deep and U.S. Water Alliance).
    One solution to help drive positive public health benefits for 
millions of rural Americans is The Healthy H2O Act, introduced by Rep. 
David Rouzer, who serves on this Subcommittee, and Rep. Chellie 
Pingree. This bipartisan legislation would improve quality of life in 
the communities we serve by having the USDA provide direct assistance 
to households and licensed childcare centers on private wells in low-
income, rural communities to test drinking water for contaminants and 
fund filtration technology for proper remediation.
    Additionally, RCAP has been providing solid waste management 
services to low-income small, rural, and Tribal communities for 
decades. Since 2014, with funding from the USDA-RD, RCAP has assisted 
more than 160 rural communities (26 of which were Tribal), serving more 
than one million rural residents in 30 states and the U.S. territories 
in the Caribbean. Of those served, 28% were low-income and 45% were 
people of color. RCAP has more than 20 highly experienced staff who 
provide solid waste management technical assistance and support.
    As you know, USDA water, wastewater, and solid waste grant and loan 
programs and their associated technical assistance programs directly 
benefit small, rural, and Tribal communities with safe and affordable 
drinking water and sanitation services. Additionally, these programs 
are important to the health and safety of rural Americans, and the 
economic vitality of their communities. RCAP supports robust 
reauthorizations of the Water and Environmental Programs in the next 
farm bill.
Solid Waste
    On the Cheyenne River Reservation in South Dakota, the Cheyenne 
River Sioux Tribe operates a landfill for the benefit of the 
individuals residing on the reservation and in surrounding areas, with 
approximately half of the population served residing in or near the 
community of Eagle Butte, SD, and the other half distributed in more 
sparsely populated rural areas.
    The landfill lacked engineering design as described in CFR 40 
258.27 Surface Water Requirements, CFR 40 258.28 Liquids Restrictions 
and CFR 40 258.51 Ground-water monitoring systems. Important issues 
included the lack of a health and safety plan for the program. Open 
dumping--the unsanitary disposal of solid waste--is a common practice 
in communities across the Reservation including La Plant, Red Scaffold 
and Cherry Creek.
    To build capacity and address this issue, any new facility would 
have to be designed, constructed and operated in compliance with the 
Tribe's solid waste management code (Ordinance No. 91-01xb) and Title 
40 CFR Subchapter I--Solid Wastes. Constructing a new 10 acre landfill 
cell that is compliant with RCRA and closure of the existing open dump 
landfill is considered to the best alternative. At the request of 
Indian Health Services (IHS) and Cheyenne River Sioux Tribe (CRST), 
Midwest Assistance Program (MAP) developed an up-to-date Solid Waste 
Management Report for Cheyenne River Economic Development Corporation 
(CREDCO).
    MAP assisted CREDCO by developing a current Solid Waste Management 
Plan for the future landfill development and associated equipment. With 
great assistance from CREDCO and some obstacles in other financial 
areas that we were able to overcome, this task was completed in a 
timely manner. With the availability of USDA-RD Solid Waste Funding, 
MAP was able to develop this important document for the Tribe. The 
availability of this funding was critical in ensuring the health and 
safety of the landfill, solid waste and the people of the Cheyenne 
River Sioux Tribe and surrounding area.
Rural Housing Service Community Facilities Programs
    RCAP Community Facilities Programs Farm Bill Recommendations:

   Reauthorize the Community Facilities Technical Assistance 
        and Training Program (Section 306(a)(26) of the Consolidated 
        Farm and Rural Development Act), set-aside no less than 10% of 
        funding for national multi-state technical assistance and 
        capacity building and to create additional flexibility under 
        the program by removing caps on funding.

   Reauthorize the Community Facilities Direct Loan & Grant 
        Program (Sec. 306(a)(19) of the Consolidated Farm and Rural 
        Development Act).

   Authorize a Community Facilities Connect Program to provide 
        5 year direct community facilities technical assistance in each 
        state and territory to help underserved rural areas access the 
        Community Facilities Direct Loan and Grant Program plus other 
        funding sources.

    One of RCAP's most recent initiatives was through a Community 
Facilities (CF) Technical Assistance Cooperative Agreement with USDA-
RD. Community Facilities Technical [Assistance] consists of enriching 
resources and leveraging funding to improve, expand, or build necessary 
community facilities, such as healthcare facilities, city halls, fire 
stations, schools etc. Over a 2 year pilot period, RCAP actively worked 
with 42 communities in 22 states, reaching eligible rural areas with an 
average population of 4,461 people and a median household income 
significantly below the national median. With $400,000 in funding 
through this cooperative agreement, RCAP was able to leverage an 
additional $51 million in funding for communities from USDA and other 
sources for these projects.
    Under the pilot program, RCAP was able to assist The Pinal Hispanic 
Council, which operates five nonprofit health centers in southern 
Arizona with their CF funding application and preplanning to expand and 
upgrade their facilities to serve the growing demand for health and 
wellness services and to address the ongoing opioid crisis. As a 
result, the project is moving forward after years of being tabled due 
to a lack of funding and capacity.
    Additionally, RCAP was able to provide disaster recovery technical 
assistance under the Community Facilities Technical Assistance and 
Training Program (CF-TAT), which was authorized in the 2014 Farm Bill. 
Over the course of the project, RCAP provided technical assistance to 
29 federally-declared disaster impacted communities in five states and 
one Territory. RCAP had the ability to scale to more states and 
impacted communities but was limited due to funding constraints under 
the program. The eligible rural communities had an average population 
of 2,389 people and a median household income around half of the 
national median. RCAP unlocked and leveraged $1 million from USDA and 
other funding sources for six communities with direct disaster funding 
application assistance through TA.
    RCAP's expertise, on-the-ground networks, and long-standing 
relationships make us a valuable resource for rural and Tribal 
communities trying to access USDA Community Facility financing by 
providing technical assistance and support at every step of the 
process, from planning to implementation and leveraged funding. RCAP 
works with communities to integrate disaster resilience and mitigation 
strategies into their projects. RCAP also targets rural low-income 
communities and persistent poverty communities, addressing barriers to 
accessing and utilizing Federal funds.
    Currently, RCAP does not have any CF-TAT funding to meet the on-
the-ground rural community need in this area. Program changes through 
the next farm bill and increased dedicated funding would directly allow 
RCAP and other qualified organizations to provide much needed technical 
assistance in multiple states and to model CF technical assistance 
programs after other successful programs at USDA-RD.
Rural Investment Initiative
    RCAP Community Facilities Programs Farm Bill Recommendations:

   Authorize a Rural Investment Initiative with dedicated 
        resources in the rural development title to support locally 
        driven capacity building and financing for small towns and 
        rural communities across all mission areas of USDA-RD.

    Last, RCAP supports the authorization of a Rural Investment 
Initiative (RII), which, if enacted would be a locally-driven, flexible 
capacity building and financing program to support all mission areas of 
Rural Development: utilities, housing, and businesses. Many USDA-RD 
programs that help unlock private investment are difficult for rural 
towns and organizations to access. Local governments and nonprofit 
organizations often lack the staff and technical expertise to apply for 
grants. It is also exceptionally challenging for often part-time local 
government officials and their limited staff to track and advocate for 
their community's fair share of funds from states or apply for Federal 
grants. The RII would match rural communities and their needs to a 
cohort of local, regional, and national technical assistance providers, 
making it easier for communities to access technical assistance and 
ensuring better access to all USDA-RD programs, financing, and 
services. The RII would be designed to provide financial capital 
directly to communities and strengthen human capital to unlock new 
investment, including public private partnerships, that would improve 
the capacity, economic health, and overall well-being of local 
communities.
    RCAP is in support of the Administration's Rural Partners Network 
(RPN) concept but believes Congress should further codify and shape RPN 
to make lasting policy changes in the next farm bill. The RII could 
accomplish this, as much can and should be done to help with low USDA 
staffing levels and agency technical upgrades. Strong USDA-RD 
authorizations with dedicated resources through the next farm bill will 
ensure the agency's ability to deliver timely services, staffing, and 
financing to rural America while making it easier for communities to 
apply and access funding.
Closing
    I would like to thank the Committee for their work to reauthorize 
critical USDA-RD programs in the next farm bill. RCAP looks forward to 
working with each of you to ensure USDA-RD and rural communities have 
the tools they need to promote improved quality of life for rural 
America. On a national level, RCAP is on the steering committee of two 
advocacy coalitions working together on policy solutions geared towards 
lasting change in rural--The Rural Network and the Reimagining Rural 
Assistance Network. Both coalitions stand ready to work with you on a 
strong Rural Development Title that works for all rural places and 
people.
    RCAP works with communities and partners across the country to 
advocate for and generate economic opportunities for rural areas. The 
services provided through these programs deliver critical assistance in 
the small and disadvantaged communities where it is most needed. I 
thank the Committee for inviting me to testify today, and I look 
forward to working with you and your colleagues to ensure rural people 
and places have the resources they need to be successful.
                              [Attachment]









    The Chairman. Thank you very much, ma'am. Mr. Blanding, you 
have 5 minutes.

 STATEMENT OF CORNELIUS BLANDING, MEMBER, BOARD OF DIRECTORS, 
                 NATIONAL COOPERATIVE BUSINESS 
        ASSOCIATION CLUSA INTERNATIONAL, EAST POINT, GA

    Mr. Blanding. Chairman Johnson, Ranking Member Caraveo, 
other Members of the Subcommittee, and Chairman Thompson, thank 
you for the opportunity to testify today and highlight the 
critical role that cooperatives play within rural development 
through USDA programs. My name is Cornelius Blanding, and I am 
testifying today in my capacity as an elected board member for 
the National Cooperative Business Association CLUSA 
International, NCBA CLUSA. We are the apex trade association 
for cooperatives across all sectors that are crucial for our 
local economies. In my day to day I serve as Executive Director 
for the Federation of Southern Cooperatives. Since 1916, NCBA 
CLUSA has served as the primary voice for cooperatives across 
all sectors. Our members include not only individual 
businesses, but also the largest sectoral associations, like 
the NRECA and Federation of Southern Cooperatives, which is the 
largest Black farmer-owned and -serving institution in the 
country.
    One in three Americans are members of nearly 65,000 
cooperative establishments, with over 130 million members, co-
ops, and credit unions are found in every corner of our nation. 
As Congress works to reauthorize the farm bill, NCBA CLUSA 
recommends the following legislative improvements. First, in 
the farm bill increase flexibility within the Rural Cooperative 
Development Grant, and other rural development programs, by 
modifying burdensome matching requirements, allowing for 
larger, regional, and multi-year grants, and incentivizing and 
facilitating regional collaboration.
    Second, provide robust investment in expertise and capacity 
for rural places, especially historically underserved 
communities, to plan, implement, and measure the impact of 
locally led strategies. And third, invest in rural 
infrastructure, including electric, community facilities, 
water, and housing. Cooperatives of rural and local economies 
are more resilient during economic downturns. The democratic 
governance structure allows the member-owners of a cooperative 
to make business decisions that are people-centric.
    Programs like Rural Development--programs across Rural 
Development, like the Rural Cooperative Development Grant, the 
Value-Added Producers' Grant, Rural Energy Savings Program, and 
others, support local economies. Rural areas are 
overrepresented in key economic indicators, such as persistent 
poverty, disadvantaged communities, and lower economic growth 
with an aging workforce.
    Ultimately, rural places have been left behind by Federal 
policy initiatives meant to spur national development. The next 
farm bill presents an opportunity to change this. The RCDG 
Program provides grants for technical assistance, training, 
education, and outreach to cooperatives. Since the last farm 
bill, RCDG funds have created 300 new businesses and helped 
create over and save thousands of rural jobs.
    The Federation of Southern Cooperatives provides a good 
example of this. As a 13 year recipient of RCDG funds, the 
Federation has worked with rural African American communities 
to spur economic growth through cooperative economic 
development and land retention strategies. Through RCDG, the 
Federation has also built regional capacity by allocating staff 
that provided technical assistance to farmers on production, 
quality control, storage, and transportation methods that 
ultimately increase the marketability of their produce, and in 
turn, their profits.
    As part of the multiplying effect of co-ops, members are 
also assisting--assisted in accessing other Rural Development 
programs, such as the 504 Home Repair and Multi-Family Housing 
Rental Assistance Program. These examples are just for one RCDG 
recipient, but you will hear similar--you have heard similar 
stories across the board. However, one of the challenges with 
existing RD programs is the break in momentum to simply apply 
for funding.
    Each year organizations must slow down, or even pause, the 
work on the ground to create a competitive proposal. Moreover, 
it is difficult to demonstrate notable changes simply because 
significant economic development doesn't occur in such short 
timespans. To truly transform the circumstances of rural and 
socially disadvantaged communities requires years of effort. 
So, again, NCBA CLUSA recommends the following legislative 
improvements. First, increase flexibility. Second, improve the 
RD policies so that underserved populations can access and 
build capacity. And third, infrastructure investments to 
encourage sustainable, long-term rural development.
    To materialize these recommendations, Congress should 
invest in expertise and capacity for local-led strategies. NCBA 
CLUSA aims to serve as a resource for this Subcommittee, and 
all Members of Congress, by helping to lead a broad coalition 
of rural development stakeholders that support these principles 
and is ready to work with you. We encourage you to support the 
programs and improve upon their success in the next farm bill. 
The assistance we provide helps rural businesses develop and 
grow beyond economic benefits. By addressing barriers to access 
these programs, as well as fully unlocking the potential of 
rural development programs, we will create a more resilient and 
prosperous rural America.
    Thank you for the opportunity to testify before this 
Subcommittee this morning on behalf of NCBA CLUSA. I have 
submitted my full testimony and stand ready to answer any 
questions from this Committee. Thank you, and I will stop here 
to prevent any further shock.
    [The prepared statement of Mr. Blanding follows:]

 Prepared Statement of Cornelius Blanding, Member, Board of Directors, 
  National Cooperative Business Association CLUSA International, East 
                               Point, GA
    Chairman Johnson, Ranking Member Caraveo, and other Members of the 
Subcommittee. Thank you for the opportunity to testify today and 
highlight the critical importance of the role that cooperatives play 
within Rural Economic and Workforce Development. My name is Cornelius 
Blanding, and I am testifying today in my capacity as an elected board 
member for the National Cooperative Business Association CLUSA 
International, or NCBA CLUSA, the apex trade association for 
cooperatives across all sectors that are crucial for our local 
economies. In my day-to-day, I serve as Executive Director for the 
Federation of Southern Cooperatives.
    Founded in 1916, NCBA CLUSA has served as the primary voice for the 
cooperatives across all sectors--including farmer co-ops, rural 
electric co-ops, credit unions, food co-ops, worker co-ops, cooperative 
lenders and cooperative development organizations. NCBA CLUSA's members 
include not only individual co-ops, but also the larger sectoral 
associations like the association of my fellow witness from the 
National Rural Electric Cooperative Association and the Federation of 
Southern Cooperatives, the largest Black Farmer owned and serving 
institution founded out of the Civil Rights movement in 1967. With 
nearly 65,000 cooperative establishments and over 130 million members, 
cooperatives and credit unions are found in every corner of the United 
States. Approximately one in three Americans is a member of at least 
one cooperative. These cooperatives range from small, neighborhood 
businesses to multibillion-dollar business trading in international 
markets on behalf of their members.
    As this Subcommittee and full Agriculture Committee works to 
reauthorize the farm bill, NCBA CLUSA recommends the following 
legislative improvements. First, the farm bill should increase 
flexibility within the Rural Cooperative Development Grant (RCDG) and 
other RD programs by modifying burdensome matching requirements, 
allowing for larger, regional, and multi-year grants, and incentivizing 
and facilitating regional collaboration. Second, robust investment in 
the expertise and capacity for rural places, and especially 
historically underserved communities, to plan, implement, and measure 
the impact of locally-led community economic development strategies. 
And third, robust investments in rural infrastructure including 
broadband, electric, community facilities, water, and housing. Federal 
programs should be flexible and provide consistent support to meet the 
needs of communities.
    Cooperatives are formed for many reasons--whether to access 
critical markets and services, address community needs or create 
competition, the democratically-owned and governed structure of a 
cooperative requires it to be responsive to its member-owners and in 
turn the local community. Cooperatives are crucial for rural economies 
with more than \1/2\ of all farmers as owners of the businesses that 
provide them inputs and market their products, and over 40 million 
households and businesses who own and control their own electric 
utility. Without cooperatives, rural people would not be able to fully 
participate in the modern economy. Within the various sectors, co-ops 
are rooted in local economies with food co-ops sourcing five times more 
of their products locally than conventional stores. Or in the care 
economy, worker-owned home-care cooperatives demonstrating an almost 
25% less turnover rate during the pandemic while providing six times 
higher wage increases at a time when most businesses were forced to lay 
off workers when our aging population, particularly in rural areas, 
needed these services most. Cooperatives are more resilient than other 
types of business models as was demonstrated in 2020 when only 20% of 
worker cooperatives, businesses owned by their employees, experienced 
losses of more than 50% in revenue. In comparison, nearly 30% of all 
small businesses experienced losses greater than 50% in revenue. The 
democratic governance structure allows the member-owners of a 
cooperative to make business decisions that better serve the community 
and remain people-centric.
    Across the Rural Development mission area, programs like Rural 
Cooperative Development Grant (RCDG), Socially Disadvantaged Groups 
Grant (SDGG), Value Added Producers Grant (VAPG), Business and Industry 
(B&I) Guaranteed Loan Program, Rural Energy for America Program (REAP) 
and Rural Energy Savings Program (RESP) all work to support rural 
communities despite the persistent disinvestment in allowing these 
places to thrive and fully recover from the disproportionate economic 
impact of global events like the [COVID]-19 pandemic or the Great 
Recession. Bureau of Economic Analysis data from 2020 demonstrate that 
in the decade following the great recession, rural areas experienced 
almost 5% less growth in local GDP than urban areas along with an aging 
workforce.\1\ And we see this trend continue today with the Economic 
Research Service finding that 86% of persistent poverty counties 
classified as rural or non-metro. Meanwhile 20% of rural census tracts 
are also considered disadvantaged communities,\2\ which is considered a 
predictor of vulnerability to natural disasters. Ultimately, rural 
communities have far too often been left behind by Federal policy 
initiatives meant to spur national economic and workforce development 
initiatives despite the fact that nearly 70% of our nation's 3,069 
counties are rural.
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    \1\ https://equitablegrowth.org/gaps-in-u-s-rural-and-urban-
economic-growth-widened-in-the-post-great-recession-economy-with-
implications-amid-the-coronavirus-recession/.
    \2\ CEQ Climate and Economic Justice Screening Tool.
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    As rural leaders, we know the dynamics that serve as barriers to 
rural communities. In addition to the statistics that I have cited 
around economic growth and poverty trends, rural communities are most 
susceptible to climate disasters while simultaneously serving as our 
first line of defense. Namely, research on indicators of social 
vulnerability and flood exposure has shown rural areas are particularly 
at risk for flood hazards,\3\ and over the last 2 decades, 68% of U.S. 
counties experiencing persistent drought were rural. The rural 
development title of the next farm bill presents the best opportunity 
to set a national rural policy to improve resilience and allow local 
leaders to unlock the communities' potential and drive future growth 
for our nation.
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    \3\ Eric Tate and others, ``Flood exposure and social vulnerability 
in the United States''.
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    We also know that small businesses across sectors are the backbone 
for thriving communities, yet we are in the middle of a watershed 
moment that could further devastate main street America. According to 
the U.S. Census Bureau, over the next 10 years 40% of the U.S. 
population will reach retirement age and over half of small businesses 
are owned by this demographic. While some owners may choose to simply 
close their business, a better option--for the owner, the workers, and 
the community--is to convert the ownership of the business to a worker 
or consumer cooperative. Converting to a cooperative business ensures 
that not only the owner earns the profits of their hard work but 
ensures that the goods and services provided by this business are still 
available to the community.
    The cooperative business model provides a time-tested approach to 
addressing the challenges of rural communities by serving as local 
anchors, promoting growth through increased business profitability, 
access to affordable quality products and markets for their member-
owners, and an opportunity to build wealth and drive a more equitable 
economy through the multiplier effects of community investment, jobs 
and local procurement. According to the University of Wisconsin's 
Center for Cooperatives, over the last 10 years, approximately 21% of 
newly incorporated cooperative businesses were in rural areas tracking 
with the national rural population percentage. These numbers are only 
an estimate due to a patchwork approach to cooperative statutes that 
has different frameworks in every state, sometimes these statutes can 
be limited to just one or two sectors of the economy making it 
difficult to track the concrete number of new cooperatives. New Census 
Bureau Data from the 5 year economic business Census collected 
beginning in 2017 will provide more information on just how much 
cooperatives are contributing to each of your state and local 
economies. Yet without the targeted resources for Rural Development, 
groups like the Interagency Working Group on Cooperative Development 
are unable to analyze or publish the data to truly see how these 
Federal investments are materializing on the ground.
    Within Rural Development Programs, the rural cooperative 
ecosystem's foundation begins with the Rural Cooperative Development 
Grant (RCDG) Program. Authorized through the rural development title of 
the farm bill, the RCDG program provides grants to Cooperative 
Development Organizations to provide technical assistance, training, 
education and outreach to cooperatives.
    These nonprofit organizations, sometimes affiliated with 
universities, provide on the ground expertise to help support or start 
rural cooperatively owned businesses. Since the 2018 Farm Bill, the 
RCDG program has created 300 new businesses and helped create or save 
thousands of rural jobs. The Federation of Southern Cooperatives, with 
whom I work, provides a good example. As a 13 year RCDG recipient the 
Federation has worked with rural African American communities to 
utilize rural development resources to spur economic growth through 
cooperative development. With resources provided by the RCDG program, 
we have provided technical assistance to rural families interested in 
developing cooperatively owned housing and healthcare facilities. 
Additionally, we have strengthened rural cooperative capacity by 
providing cooperative education regionally through our Regional 
Conference called CoopEcon and by restarting our Regional Loan Fund as 
a tool to support local business development and land retention.
    As awardees for the RCDG program, the support has allowed the 
Federation of Southern Cooperatives to deepen Regional Marketing 
Capacity for the cooperatives that we serve. SoCo or Southern 
Cooperative is the name of the commodity aggregate that we helped 
develop for its member-owners. Through this cooperative, the farmer-
owners have been able to maximize the marketing volume of their 
products, increase income, and meet the increased demand from northeast 
markets, in particular. The invaluable resources provided through RD 
helped make it possible for our Cooperative Development center to 
allocate staff that provided technical assistance to the newly formed 
cooperative member-owners on growing, quality control, storage, and 
transportation methods that ultimately increased the marketability of 
their produce to exceed customer expectations.
    As part of the multiplier effect of cooperatives, the Federation 
has also assisted our members in gaining access to other RD programs 
through education and even direct technical assistance such as the 504 
Home Repair Program and the Multifamily Housing Rental Assistance 
Program administered through the Rural Housing Service.
    One of the challenges we and other RCDG recipients have faced is 
the persistent hurdle of lengthy and complex applications for the grant 
program that we must go through on an annual basis. As many of you may 
know, rural communities face continuous challenges in navigating RD 
programs and the application process. We have heard far too often how 
our oftentimes most rural and under-resourced communities are left with 
limited options but to hire a grant writer, which can cost upwards of 
thousands of dollars--resources that these communities simply do not 
have. Nor should they have to make these investments to access the 
programs that are intended to serve them. We deeply appreciate our 
continued partnership with Rural Development and the Rural Cooperative 
Services Branch and encourage them to limit the cumbersome and 
redundant reporting requirements from the application process 
throughout award compliance. Additional barriers to access include the 
matching requirement for many of these programs and a lack of 
flexibility that does not meet the unique needs of our communities.
    Support from Rural Development has been important for the 
cooperatives and cooperative development organizations that primarily 
serve underserved communities as we do at the federation; however, 
there have been challenges as well. One of the challenges with 
accessing programs is the break in momentum that has to occur simply to 
apply for funding due to the lengthy and incredibly complex application 
process. In our experience with RCDG for example, each year we have to 
slow down or even pause the work that we are doing on the ground in 
order for staff to dedicate the time and effort needed in writing a 
high-quality report and competitive proposal. Moreover, the annual 
cycle of renewal makes it difficult to describe significant changes 
simply because significant economic development typically does not 
occur in such short time horizons. To truly transform the circumstance 
of Rural and Socially Disadvantaged communities requires years of 
effort.
    To help address the challenges faced by rural America, NCBA CLUSA 
recommends the following legislative improvements. First, the farm bill 
should increase flexibility within RD programs, including by modifying 
burdensome matching requirements (especially for highly distressed 
communities), allowing for larger, multi-year and regional grants, and 
incentivizing and facilitating regional collaboration. Within the RCDG 
program, explicit congressional intent for USDA to level the playing 
field for organizations that simply meet the cost-share and enact 
multi-year grants would be a significant boost for Cooperative 
Development Organizations like the Federation of Southern Cooperatives 
to not only increase our effectiveness in program implementation but 
expand our capacity to better implement our multi-state strategy and 
serve more rural communities.
    Second, improve Rural Development policies so that underserved and 
unserved rural populations can access and utilize the programs. NCBA 
CLUSA has advocated alongside the Federation of Southern Cooperatives 
and scores of other rural organizations for much more robust funding 
for rural organizations so that all rural people, and especially those 
that have been historically underserved, have access and are able to 
use the Federal community economic development programs. Federal 
programs should be flexible so that they serve the community--and not 
vice versa. Programs should offer multi-year, consistent support that 
builds the human and institutional capacity of communities.
    Addressing the match requirement and multi-year grants for 
underserved communities, even providing exemptions in some cases like 
1890s institutions, would go a long way in reducing the barriers to 
access rural development programs, and Federal programs more broadly, 
for our underserved communities. Another challenge we face is the 
fragmentation of our efforts by a process that requires each of our 
member states to apply for resources separately. The Federation, as 
with most organizations works best when we have the latitude to 
cooperate and consolidate our efforts. Our states don't operate in 
silos. Moreover, individual farmers, landowners and cooperatives often 
cross state lines to collaborate because they recognize their common 
interest and have identified common needs. We believe that Rural 
Development should support this kind of interconnectivity with regional 
frameworks for support.
    Third, robust investments in rural infrastructure to create 
enabling environments that encourage sustainable, long-term rural 
economic and workforce development. Such Federal investment would 
leverage other good work occurring across rural communities. For 
example, through our work with Tribal Communities in partnership with 
the Native American Agriculture Fund (NAAF), NCBA CLUSA has is working 
with Tribal Communities to build their capacity to use cooperatives as 
they seek to build a more secure food system. In another example, the 
Robert Wood Johnson Foundation is working with the Cooperative 
Development Foundation and NCBA CLUSA on an Affordable Housing 
Initiative that seeks to improve the housing development environment 
for limited equity housing cooperatives and other types of shared 
ownership. In the spirit of cooperation, NCBA CLUSA works with the 
Federation of Southern Cooperatives and others in helping historically 
underserved farmers build out a cooperative development ecosystem, work 
supported by USDA.
    To materialize these recommendations, Congress should prioritize 
robust investment in the expertise and capacity for rural places to 
plan, implement, and measure the impact of locally-led strategies. One 
example that members can look to is the Rural Partners Network through 
which USDA has placed boots on the ground in the pilot communities to 
truly embody and bolster local capacity.
    NCBA CLUSA aims to serve as a resource for this Subcommittee and 
all Members of Congress by helping to lead a broad coalition of rural 
development stakeholders that support these principles and are ready to 
work with you. Rural Development Under Secretary and NCBA CLUSA's 2022 
Co-op Champion, Xochitl Torres Small often says, ``if you've been to 
one rural community, you've been to one rural community''. Recognizing 
the diversity in population, economies and relying on the local 
expertise of leaders who best know what their needs are is the best 
approach to building local capacity and equipping folks with the tools 
to be more resilient across the board.
    As Congress works to reauthorize the farm bill, we encourage you to 
support the dream and hopes of rural entrepreneurs working tirelessly 
to realize their dreams of economic prosperity by supporting these 
programs and improving upon their success. The assistance we provide to 
help rural businesses develop and grow is critical and goes beyond the 
economic benefits but affects the social and cultural fabric of our 
society through the cooperative model. By addressing the barriers to 
access and fully unlocking the potential of Rural Development programs, 
we will create a more resilient and prosperous rural America. Thank you 
for the opportunity to testify before the Subcommittee this morning on 
behalf of NCBA CLUSA.

    The Chairman. Very good, Mr. Blanding. Okay, everybody 
understands the drill from here on out. Members will be 
recognized for 5 minutes in order of seniority, alternating 
between the Majority and the Minority, and then in the order of 
their arrival, if they came after the gavel. So we will start 
with the Chairman of the full Committee, Mr. Thompson.
    Mr. Thompson. Well, Mr. Chairman, thank you. Thanks to all 
of our witnesses for great testimony on a critically important 
title of the farm bill. Mr. Blanding, we continue to see a 
decrease in the availability of good, high paying jobs in rural 
communities as businesses close due to the lack of available 
personnel. Can you talk about how NCBA CLUSA helps expand 
workforce opportunities in the communities you serve?
    Mr. Blanding. Yes, sir. Thank you for the question, 
Chairman Thompson. So NCBA--the primary role of NCBA CLUSA is 
cooperative economic development, and so is the--many of the 
members of NCBA, and so developing cooperatives where 
communities can own and control their futures and 
infrastructure. We think it is important for the Committee, for 
Congress, to actually invest in infrastructure in these rural 
communities, infrastructures that can be controlled and owned 
by the people themselves in their communities and investing in 
local-led strategies.
    Mr. Thompson. What initiatives should we consider for the 
2023 Farm Bill to bring high quality, in-demand jobs to rural 
America?
    Mr. Blanding. So, Mr. Chairman, I think there are a lot of 
things already underway. Congress, USDA, has been talking about 
infrastructure like beef processing facilities and others, so 
we think it is important to look at the anchor in rural 
communities, which is always based around agriculture. And in 
that, you are talking about many small farmers. Many small 
farmers who don't have the capacity or the size to go at it 
alone, and so really putting those kind of buildings and 
infrastructure in those communities, but, again, more 
importantly, making sure that there is ability for people to 
organize cooperatives, and control that infrastructure, and 
work cooperatively together.
    Mr. Thompson. Well, thank you. Mr. Holmes, as you know, 
more than 90 percent of the United States water systems' 
service communities with fewer than 10,000 persons. How do the 
USDA RD water and environmental programs provide communities in 
rural America access to safe, affordable, and financially 
sustainable water and wastewater services?
    Mr. Holmes. Thank you for the question, Mr. Chairman. As 
you know, Rural Development WEP Program is 100 percent 
dedicated to communities under 10,000. That is the purpose of 
the program. They understand rural America, and they are 
trusted by rural America. Many changes have impacted our sector 
recently, supply chain, emerging contaminants like PFAS, 
regulatory burdens like the lead and copper rule. So this 
agency is critical to act as a partner so rural communities can 
address these challenges.
    The EPA is also making a historic amount of funding 
available through the SRFs (State Revolving Funds), but, as you 
likely know, most of that funding goes to large metropolitan 
systems. So that makes the WEP Program essential for rural 
America to level the playing field and keep them a competitive 
lender.
    Mr. Costa. Would the gentleman yield?
    Mr. Thompson. Sure.
    Mr. Costa. You asked a very good question. For the small 
communities that aren't incorporated that have these water 
issues, the--they don't have the resources to--I mean, we have 
the new $55 billion for clean drinking water, but how can these 
communities of 1,000, 2,000 people finance the infrastructure? 
I mean, the--this is the part that I don't understand.
    Mr. Holmes. Good question, Congressman.
    Mr. Costa. Thank you to the gentleman for yielding.
    Mr. Holmes. Mr. Chairman, the technical assistance is 
essential to that, as well the consultants and engineers that 
put these projects together. Again, this is why Rural 
Development, an agency that understands these communities, and 
has a field staff, that is why the field staff and the core 
programs are so essential, because they can reach out, and work 
in these communities, and help them put these applications 
together. That is what is really going to move the needle to 
make all these investments that you all have made available 
work for rural America.
    Mr. Thompson. Yes, maybe I am wrong, but that Circuit Rider 
Program has been instrumental in bringing the pieces together 
for the rural communities. Why do you believe, or what ideas do 
you have to modernize these programs?
    Mr. Holmes. So the WEP Program is a lifeline program for 
these communities, as I mentioned. However, with these changes, 
that--people moving in and out of rural America, unprecedented 
population growth changes, industries moving in and out, that 
program needs to stay competitive. SRFs have put a historic 
amount of money available, and consultants are going after that 
money, right? They see opportunities, and I don't blame them. I 
would do the same thing. I would go after that. But that does 
not leave a large pool of engineers and project development 
resources for rural America. I believe the Department needs 
maximum flexibility in making the tools available in order to 
make these programs work financially, frankly, for the 
consultants.
    Mr. Thompson. Very good. Thank you very much. Thank you, 
Mr. Chairman.
    The Chairman. The Ranking Member is recognized for 5 
minutes.
    Ms. Caraveo. Thank you, Mr. Chairman. Mr. Blanding, in your 
testimony you mentioned the healthcare economy, and how 
cooperatives played an essential role not only in providing 
critical services during the pandemic, but also strong--a 
strong workforce with less turnover and higher wages. Within my 
practice as a doctor, I have seen the importance of 
strengthening healthcare services. Rural areas have 20 percent 
fewer primary care providers than urban areas, and 65 percent 
of rural counties don't have a psychiatrist, which, with our 
mental health crisis, is a real problem. This is why a priority 
of mine will continue to be increasing access to health 
resources, including mental health, for our rural areas.
    Over the past 10 years we have seen over 130 hospital 
closures across rural communities, and the pandemic further 
exposed and underscored the healthcare disparity, as rural 
Americans faced a mortality roughly 37 percent higher than 
urban Americans over the last 3 years and were more vulnerable 
to serious infection and death from COVID-19. So can you speak 
to how cooperatives are filling this health accessibility gap, 
and what we should do in the 2023 Farm Bill to ensure rural 
Americans have sufficient access to healthcare services?
    Mr. Blanding. Thank you for that question. So this is a 
real example. We work in rural communities, and I will give one 
specific example in Alabama. Very rural population, where our 
organization, the Federation of Southern Cooperatives, is the 
largest employer with ten employees, and so it talks about what 
that community looks like. There are no rural hospitals within 
a 50 mile radius, and everybody has to go to the next city, 
again, 50--at least 50 miles to get healthcare. One of the 
solutions was to provide health services through a cooperative 
structure in something called the Gainesville Health and 
Wellness Center.
    So it gives people the ability to aggregate, to organize, 
to own their own health, to get the infrastructure--so again we 
talk about infrastructure here. How do you provide 
infrastructure where communities can control that 
infrastructure, and they can call in the people they need? I 
think the Chairman talked about broadband as an important issue 
in the beginning, and so there is telehealth.
    There are so many forms that we can connect the broadband 
and the physical infrastructure to provide telehealth and 
provide access to doctors, to psychologists, to whatever a 
community needs. But that community should lead those 
strategies, give them the opportunity to have that 
infrastructure, and to build that out where they can control 
and bring in the kind of healthcare that they need, regardless 
of what it looks like.
    Ms. Caraveo. You brought up what my follow-up question was, 
Mr. Blanding, and really I will open this up to the rest of the 
panel. Treading carefully on the area of broadband, of course, 
does anybody have any thoughts on what else can be done in the 
farm bill to improve rural health access overall, in particular 
expanding access to telehealth services? And if not, that is--
go ahead, Mr. Blanding. It looks like you have an answer.
    Mr. Blanding. I will--I gladly jump back in here again. So, 
again, not only--I talked about the infrastructure, but, again 
there is so much critical infrastructure and resources. 
Flexibility in these programs is the key, I think. Flexibility, 
and making multi-year programs available, so that people can 
look at their challenges, and especially healthcare over the 
long-term. How do you build that, and then how do you make sure 
that communities are able to collaborate with each other? There 
are a number of rural doctors out there who are willing to 
travel and move from community to community, if they had 
support, and they know that there are programs that could 
support that kind of moving around.
    I think we just have to make sure the ability through that 
flexibility, through that increased funding, and through, 
really, being intentional about connecting communities. Not 
just broadband, but just, again, infrastructure, and folks 
having the flexibility to build their own solutions.
    Ms. Caraveo. Thank you very much. Mr. Holmes, you made some 
really great points around technical assistance. I just wanted 
to open that up for the rest of the panel, if anybody has any 
additional ideas about how these rural communities can--how we 
can improve the process so that they can apply for programs. 
That is something that I have heard a lot from the people in my 
community, so just really quick, with those last 45 seconds.
    Mrs. Morales-Pate. Thank you for the opportunity. What I 
would like to add is, once again, emphasizing the flexibility. 
I think one of the things that I can--I will--been a technical 
assistance provider for many years. I was one of the people on 
the ground advancing these projects, and I will say that the 
shift in the last 10 years, a community that I could bring to 
USDA 10 years, with under 1,000 population, I would be able to 
qualify them, I cannot do the same thing for that community 
today. The challenges that we have, the limited debt capacity, 
all the requirements, is just an instrument--an amount--a 
significant number of complexities that keep communities from 
accessing funding.
    Ms. Caraveo. Thank you. I yield back.
    The Chairman. Rather than recognize myself for 5 minutes, I 
will just push myself a little further down the list. We have 
Mr. Rouzer and Mr. Davis, have been here and attentive since 
the beginning of the hearing, as has Ms. Budzinski, so we will 
work some of them in. Mr. Rouzer, you are recognized for 5 
minutes.
    Mr. Rouzer. Thank you, Mr. Chairman, and whenever I see 
panelists who are lined up to talk about rural development 
programs, my life kind of flashes before my eyes. Back in 2002, 
working on that farm bill, some of these programs we are 
talking about today are ones that I was heavily involved in, in 
crafting. And then later, a few years later, ended up managing 
some of them as Associate Administrator of the Rural Business--
Cooperative Service, and also served as Director of Legislative 
and Public Affairs at the time. Of course, they didn't pay me 
for both jobs. They only paid me for one. I don't know, I--who 
is the idiot here?
    So question for you--I am going to start with Mr. Winslow. 
Let us assume--a hypothetical. This isn't going to happen, but 
just for a hypothetical, let us assume all the RUS programs are 
wiped out. What happens? What--how does that change your 
business model?
    Mr. Winslow. Wow. Appreciate your appreciation for the RUS 
Program.
    Mr. Rouzer. I like to give the extremes here so we know 
where we need to land.
    Mr. Winslow. Yes.
    So, as you can imagine, electric cooperatives that serve 
three meters a mile, five meters a mile, ten meters a mile, 
they are low density, as compared to some of the bigger RUs in 
urban areas. The cost of capital is very important to keeping 
the cost of electric service low, so a part of our 
responsibility for reliability is looking out into the future, 
making investments today for the demand that we are going to 
see in the future, and a stable financial outlook is important 
to not pass costs along to our member-owners. So the RUS 
program provides that stability. It has been in place for a 
long time. We feel it will be in place for a long time in the 
future, and it kind of takes the complexity of looking at--
competing in the financial markets with other borrowers out of 
the equation.
    Mr. Rouzer. Ms. Nesbitt, I am going to move to you. You had 
specific recommendations--excuse me, pardon me--in your 
testimony. Can you kind of give the reasoning for those 
recommendations, and are there things that need to be 
harmonized between our programs at Rural Development?
    Ms. Nesbitt. Thank you. Is this--yes. Regarding the REAP 
size standards, we think that a lot more renewable energy 
projects would be able to be financed if that affiliate rule 
was dropped. USDA uses the small business size standards as a 
default. It wasn't specified in the farm bill. So some projects 
have affiliate companies, and that kicks them over the 
threshold of the number of employees, so we think a lot more 
renewable energy projects could be funded if that threshold was 
changed to 1,000 employees, and the affiliates were not 
considered.
    Also, talking about NEPA, we recommend that, as was enacted 
in the recent debt ceiling legislation, that NEPA--that--sorry, 
guaranteed loans are not Federal action, so we believe that 
NEPA does not have to be complied with for guaranteed loans. 
Banks, lenders are responsible for the environment. We follow 
state, Federal, and local laws. We don't think this additional 
layer of environmental review is needed.
    We also--as far as our farm bill priorities, we support 
increasing the loan limits for REAP from $25 to $50 million. A 
lot of these projects are expensive now, these renewable energy 
projects, so allowing that larger loan limit would be helpful 
to do larger projects, with the cost of materials and whatnot. 
We could do newer technologies that way. We also support 
standalone battery storage as eligible for REAP. There is--
battery storage and other types of energy storage are very 
important now, so we think REAP should be allowed to have those 
types of projects as eligible entities.
    Mr. Rouzer. Thank you. Mr. Holmes, I am going to move to 
you real quick. Obviously, PFAS is a big issue in my neck of 
the woods, and around the country. But a more fundamental 
question, what is the average age of water and sewer in these 
rural areas?
    Mr. Holmes. Good question, Congressman Rouzer. I--in our 
Apprenticeship Program, which is supposed to take young people, 
and be a pipeline of workers into the industry, is 47. I think, 
if you look at the utilities themselves, it is upper 50, mid-
50s or upper 50s, and we are training 90 year old operators out 
there still.
    Mr. Rouzer. Yes. So obviously a lot of upgrades need to be 
made. There is only so much money to go around. Real quickly, 
are there things that can be done, in addition to dollars, that 
would be helpful on that front?
    Mr. Holmes. I think yes. Training into high schools, 
getting and establishing that pipeline in high schools is 
critical to get young people involved, and create this--to 
create a career path, and make this a profession, an honorable 
profession that is recognized in America.
    Mr. Rouzer. My time has expired.
    The Chairman. Mr. Davis, you are recognized for 5 minutes.
    Mr. Davis of North Carolina. Thank you so much, Mr. 
Chairman, and to the Ranking Member. And, Chairman Thompson, 
while you are here, and to the witnesses, I do want to let you 
know that Chairman Johnson, shocker, also applies for Members 
too, okay? Glad to have you here, and especially our North 
Carolina witnesses today. I am just going to move briefly down 
the line, if I may, starting with Ms. Nesbitt.
    Ms. Nesbitt, I have had so many requests, prior to coming 
to Washington, since I have been in Washington, community 
project funds, fire departments. What would you say--especially 
these rural fire departments, that are doing just amazing 
service in these communities. What is the greatest challenge 
you have seen to lending, access to capital?
    Ms. Nesbitt. Well, access to reasonable funding is 
definitely a challenge for rural fire communities. These 
programs are essential. The direct loan programs, as well as 
the guaranteed loan programs, provide that capital. USDA is a 
partner with lenders, and with the communities, to provide 
long-term financing with fixed rates or adjustable rates, 
longer terms that they could get with conventional loans. It is 
very important--have--this--these programs available.
    Mr. Davis of North Carolina. Yes. Thank you. Mr. Winslow, 
glad to see you here as well today. You mentioned earlier in 
your testimony about the rolling blackouts that we saw in North 
Carolina back in December. Based on your experiences, what 
would you say is the greatest takeaway?
    Mr. Winslow. The greatest takeaway, Congressman--appreciate 
the question--is that we had an unanticipated failure of our 
power system in North Carolina, and we haven't seen anything 
like that in a very long time. So I would say that we do need 
to focus on reliability and capacity for the future. It needs 
to be a top priority.
    Mr. Davis of North Carolina. Okay. Thank you so much. I 
want to shift gears. Mr. Holmes--so recently we have done some 
work around the Cybersecurity for Rural Water Systems Act of 
2023 (H.R. 3809). And I just would love to hear from you, how 
would this bill help rural communities and water systems, in 
your opinion?
    Mr. Holmes. Thank you, Congressman, for your leadership in 
this area. It is--it is critically important. Our systems are 
just not prepared for cyberattacks. Small rural--and I would 
argue many sectors are not, but small rural systems have so 
much on their plate. They are volunteer Boards of Directors. 
Sometimes there is one operator, or two staff people. They are 
not--they don't have that expertise to prepare against 
cyberattack. So your bill, what that will do, is expand the 
Circuit Rider Program to create a cadre of experienced 
cybersecurity specialists that can go on site and help these 
systems assess the threat and provide a plan to fix it.
    Mr. Davis of North Carolina. Thank you so much. And then my 
last question I would like to direct to Mr. Blanding. Mr. 
Blanding, you have mentioned quite a bit about technical 
assistance. Based on your experience, I am just curious, what 
would you say if you could group or categorize the type of 
technical assistance that is most needed, based on your 
experiences, to help those in particular in disadvantaged 
communities?
    Mr. Blanding. Thank you for the question, Congressman 
Davis. So, again, this work is much bigger. Your job, as 
Congress, is to protect our air, our water, and our soil in 
this country, and we all--all citizens have to work together to 
do that. But so many times people in rural communities don't 
have that training, that capacity, those resources to build--
the expertise to do them things for themselves. This problem 
won't be solved by anybody swooping in doing anything. It will 
be about people in communities left with the ability, with the 
expertise, to do things for themselves.
    So it is about capacity-building around training the 
trainers, making sure that a community can identify the things 
that they need, and then get the training to do the things that 
they need. So capacity building, it ranges--that technical 
assistance ranges, but it is centered around capacity building 
so the expertise needed in every community is left in that 
community.
    Mr. Davis of North Carolina. Okay. Thank you so much to all 
the witnesses for your answers today. We moved along. Mr. 
Chairman, I yield back to avoid the shock.
    The Chairman. Yes. The chair will be recognized for 5 
minutes. Thereafter, Ms. Budzinski will have 5 minutes, and 
then she will be followed by a gentleman who looks as striking 
and gallant as his portrait on the wall, Mr. Lucas.
    So, I will start with Mr. Winslow. I observe, sir, that 
D.C. is a town that too often is excited about things that are 
sexy, even if they are not important. Reliability is decidedly 
something that is important, even if it is not sexy. And 
certainly, as a former state utility regulator, I observe that 
people did not focus enough on reliability. In response to Mr. 
Davis's question, you noted how important it is, but go just a 
little bit deeper. Within the Rural Utilities Service, are we 
focusing enough, whether by culture, or procedures, or by 
rules, on making sure the dollars flow toward projects that do 
indeed improve the reliability of our grid?
    Mr. Winslow. So, I appreciate the question, Congressman. I 
will say, short answer to the latter part, no, I don't think we 
are focused enough on reliability. And, to the extent that an 
electric co-op is accountable to its members--so Brunswick 
Electric is accountable to our member-owners for reliable 
service--there are threats to that. It is not--we are not able 
to just sit and silently observe the conversation on resource. 
Obviously, we need to be part of it. And I think that is pretty 
acceptable to our country. Everyone can agree that reliability 
is important.
    So, to that extent, the technologies of the future will not 
be the technologies of the past, but we are all on a path to 
keep reliability in this country, and I think that we should 
support those that are in the long game to provide that, 
including electric cooperatives, those are tasked and 
accountable to the member-owners to provide it.
    The Chairman. And for so many of us who live in rural 
America, we understand--particularly in the northern states, we 
understand--although I guess southern states get hit by ice 
storms too. I mean, you can have major weather events that can 
bring down a lot of distribution lines, and that is disruptive. 
And, God love the linemen who go out and work in really 
inhospitable conditions. But I think if you move further up the 
delivery system, and you start to get to some transmission 
lines, if you don't invest in those kind of reliability assets, 
you can have much, much larger disruptions. Am I wrong about 
that? I mean, give us a little more color commentary on how big 
these problems can be if we under-invest.
    Mr. Winslow. Sure. So, speaking about replacement--and let 
us talk about replacement of our resources to those that will 
be the technologies of the future. It is important that when 
you replace, you replace things with the same characteristics. 
Otherwise, it is a substitution. So if we have characteristics 
with some of our conventional generation sources that are 
reliable, we need to look at replacing them with reliable 
resources. And that does include transmission. As the grid 
becomes less centralized, and spread out over the systems, a 
reliable transmission backbone is also critical to reliability.
    The Chairman. So, Mr. Holmes shifting to you, you mentioned 
in your testimony the importance of having programs that 
support and value regionalization and consolidation. I want 
to--one of our recommendations was allowing strong systems to 
apply for dollars to serve areas outside of their system that 
are maybe not particularly well-served with infrastructure. How 
do we think that supports the idea of regionalization and 
consolidation? I am concerned that, if not deployed right, it 
could actually do the reverse, which is--rather than have 
systems voluntarily come together, it would create tools that 
would stand in the way of that cooperation. Am I wrong?
    Mr. Holmes. Thank you for the question, Mr. Chairman, and 
no, you are not wrong. I think the devil is in the details with 
this, which, in the written testimony, we have laid out some of 
those. The keys to our recommendation--this is voluntary on 
behalf of the underserved community. Really, the problem that 
it is trying to address is a Board of Directors that is running 
a well-run utility, and is looking to take on substandard 
infrastructure. That is sort of against their fiduciary 
responsibility. That is going to add a burden to their existing 
rate payers. So our proposal is to provide a financial 
incentive for that better-run utility to, essentially, get a 
grant/loan combination only to benefit the new customers that 
are being brought in. It is a financial incentive.
    The Chairman. Yes. I see. So this would be as part of a 
transition into a cooperation/consolidation/regionalization 
plan. That makes a ton more sense. Thank you very much. With 
that, I would yield back, and Ms. Budzinski, you are 
recognized.
    Ms. Budzinski. Thank you, Mr. Chairman, and thank you to 
the Ranking Member, and it is great to have all of you 
panelists with us here today. Since I joined Congress, I have 
really made rural development one of my top priorities, I know, 
with a lot of my colleagues serving on this Subcommittee. And I 
am looking forward to exploring a range of topics with you 
today. First I would love to start with RESP, if I could direct 
this question to Mr. Winslow?
    The Rural Energy Savings Program, RESP, provides zero-
interest loans for energy efficiency upgrades to rural houses. 
The benefits of this program are numerous, from providing 
welcome upgrades to our rural infrastructure, reducing energy 
usage, to lowering energy bills for our residents, which I know 
is a very important issue for the constituents I represent.
    Just last week, alongside Assistant Leader Clyburn and 
Senators Murkowski and Welch, we introduced the Rural Energy 
Savings Act (H.R. 3849), which would increase the grant 
components of this program and authorize RESP for the next farm 
bill. I speak with the Illinois co-ops in my state regularly 
about the importance of these additional resources for rural 
communities. And so, Mr. Winslow, can you briefly explain how 
funding is administered through this program, and why a grant 
component may be a necessary addition as this bill that was 
just introduced last week proposes?
    Mr. Winslow. Sure. Thank you, Congresswoman.
    Ms. Budzinski. Yes.
    Mr. Winslow. So, co-op staffs across the country are fairly 
small, and there is really no economic return or incentive for 
cooperatives to take on some of these programs for the 
cooperative itself. We see the connections, we facilitate the 
connections, and then we see the benefit to the communities. 
Therefore, RESP, as well as any of the other programs, have an 
administrative burden, and a lot of times there are 
applications, and re-applications, and it takes a lot of time. 
So I would say 100 percent support for a grant portion to help 
the--those administrative burdens, and kind of offer some more 
resources to the co-op to get the funding.
    Ms. Budzinski. Okay. Thank you. My next question is for Ms. 
Bowman. Turning now to the bioeconomy, my district produces the 
most amount of biofuels in the State of Illinois. In your view, 
what needs to be done to ensure rural communities benefit from 
the growth and investment in our domestic bioeconomy? Are there 
gaps in U.S. biomanufacturing that can be addressed over these 
next 5 years?
    Ms. Bowman. Yes. Thank you for your question. And there is 
a significant challenge that the bioeconomy is facing in the 
lack of pilot and demonstration-scale facilities. There is an 
amazing pilot facility in your district at the University of 
Illinois, but their schedule is full. And there is increasing 
demand for that facility, and other facilities like that, and 
it is just not available here in the U.S.
    And then the further challenge is, once a startup has gone 
through the sort of pilot phase, they want to move up to the 
next scale demonstration phase, and there is a real significant 
lack of that infrastructure, which is forcing companies to go 
to Europe, or elsewhere, where they have invested in their 
infrastructure. Though--so those facilities are available. So 
we are now putting at risk that American innovation not coming 
back to the U.S., or that company not being able to sort of 
hang on, to go to Europe, and that company doesn't go anywhere. 
So there is a real need for more facilities like IBRL 
(Integrated Bioprocessing Research Laboratory) and--around the 
country, along with the next sort of phase up in demonstration 
scale.
    Ms. Budzinski. Thank you very much. And I have one 
additional question, and this last question is for Mrs. 
Morales-Pate. I would be remiss if I didn't mention that I am 
currently working with Senator Gillibrand on reintroducing the 
Rebuild Rural America Act of 2023 (S. 2155/H.R. 4239), which 
was--which would fundamentally transform how we assist rural 
communities and prioritize revitalization. One of the biggest 
changes we have been making is an effort to really beef up 
technical assistance, which we have been talking about today, 
and capacity building. Your testimony covered the need for more 
robust national, multi-state technical assistance, and I think 
you have touched on this a little further. Can you tell us more 
about why this is so important again, and why it is needed?
    Mrs. Morales-Pate. The multi-year technical assistance is 
very important because the majority of the work that we do in 
assisting communities developing projects are multi-years. And 
so it is very important that we stay with the communities for 
the duration of these projects. You have to keep in mind that 
average community that we work with is--population under 1,000. 
More often than not, we work with volunteer members, and so 
that consistency, it is very important, the consistency through 
the duration of the project.
    Ms. Budzinski. Thank you so much. I yield back. Thanks.
    The Chairman. After Mr. Lucas, Ms. Gluesenkamp Perez will 
be recognized. Sir, you have 5 minutes.
    Mr. Lucas. Thank you, Mr. Chairman. Over the years the 
inefficiency in Federal permitting process have slowed down, 
and in some cases completely halted infrastructure investments 
and improvements across the country. These lengthy 
environmental reviews increase the overall cost of any projects 
and cause significant project delays. Congress responded to 
those concerns by including language aimed at streamlining the 
NEPA permitting process in the recently passed Fiscal 
Responsibility Act (Pub. L. 118-5). So I turn to you, Mr. 
Wilson. Can you speak to how these reforms will benefit 
electric cooperatives across the country?
    Mr. Winslow. Sure. The reforms that modernize or streamline 
this permitting process as it changes hands through different 
departments cuts down on delays. And, of course, cutting down 
on delays, and the resources needed to push projects through 
that process, are also costly. So, as a cost-saving measure, we 
would definitely support reforms to that process.
    Mr. Lucas. But you have found the present system, prior to 
attempts at reforms--which have not been fully implemented yet, 
but you found those things to make your process much more 
complicated, correct?
    Mr. Winslow. Correct.
    Mr. Lucas. Okay. Ms. Nesbitt, how will these reforms impact 
your industry? And I would also welcome any thoughts from--the 
rest of the panel may have about how USDA should implement the 
recently passed provisions.
    Ms. Nesbitt. Thank you for the question. We do think that 
it will improve the process of getting these loans and the 
capital out to rural communities. It is a very lengthy 
environmental review process, sometimes can take over a year, 
and you have a small business owner, or a local government, a 
Tribe, waiting for this money, and it is being held up due to 
the environmental review. And as I mentioned earlier, our banks 
do comply with local, state, and Federal environmental rules, 
and this NEPA process is just an extra layer.
    Mr. Lucas. And, again, to the rest of the panel, I would 
address, the goal is not to do away with NEPA, but to try and 
speed the process up to provide some additional certainty. 
Would anyone else care to touch on that, how it is impacting 
your part of this equation?
    Mr. Holmes. Congressman, I think it is essential for the 
water sector. The supply chain issues, the cost of pipe, and 
chemicals, and projects, it is just changing so rapidly that if 
the process is delayed, those costs aren't even--the project 
has to be re-bid. So some of these projects are not being 
developed because of those delays.
    Mrs. Morales-Pate. Congressman, I would like to add to that 
that, right now, we probably have 90 percent or higher projects 
that have a shortfall--a significant shortfall, and a lot of it 
has to do with the permitting process, and all of those things, 
so that is impacting the ability for communities to be able to 
benefit from those projects. In addition to that, the costs of 
projects are escalating, which means that sometimes we have to 
come back and restart the process, or fund--or find a bridge 
loan, or some other type of supplemental funding, to be able to 
complete a project, and so it is having a tremendous impact, 
especially in small communities, where we have already met the 
debt capacity.
    Mr. Lucas. Yes. I guess continuing with you, Mr. Holmes, 
the Circuit Rider Program has been beneficial to many rural 
communities since its creation in the 1980s. In your testimony 
you talk about expanding the authority under this program to 
better respond to modern problems. Could you provide us with 
some examples of why these additional authorities are needed?
    Mr. Holmes. Yes, sir. Thank you for the question. We 
briefly discussed cyberthreats earlier, and just--small rural 
systems in Oklahoma are simply not prepared for this. The 
current circuit rider workforce is an excellent, boots on the 
ground workforce, but they do not have that expertise. We have 
partnered with organizations that are doing education and 
awareness training for both our members and the circuit riders, 
but you really need some dedicated individuals who both 
understand water utilities and cyberthreats, because you know 
that water utilities are all unique. They are all built--
unlike, unfortunately, some of the other industries here, if 
you have seen one water utility, you have seen one water 
utility, and there are 50,000 of them.
    The emergency response provisions that are in there for the 
Circuit Rider Program, and my written testimony too, is 
something our circuit riders are good at, and work on now, but 
there are burdens and barriers to provide the kind of ongoing 
support to truly respond and recover from disasters.
    Mr. Lucas. And once again, just for a moment, reinforce for 
the benefit of all of us here, most water districts are, as you 
said, voluntary boards, very limited staff. These circuit 
riders are expertise people who go around to a variety of water 
districts on a rotating basis to provide information, correct?
    Mr. Holmes. Yes, sir.
    Mr. Lucas. With that I yield back, Mr. Chairman.
    The Chairman. After the gentlewoman from Washington it will 
be Mr. Nunn from Iowa. Ms. Gluesenkamp Perez, you are 
recognized for 5 minutes.
    Ms. Perez. Thank you, Mr. Chairman. I got some really good 
advice, meeting with community members, and they said do 
something about water and sewer costs. It is something that 
touches every family in my district. These are fees that are 
sometimes reaching $170 a month, which is really profound in 
working families. And so, when I was reviewing requests for 
Congressional funding projects, I really put a focus on 
municipal water programs.
    And over and over what we are seeing and hearing from 
people operating these is that they are often past the 
recommended lifespan. They are undersized, they are on the 
brink of collapse. And, really, this failing infrastructure is 
endangering the health--I mean, listen, like, hepatitis is 
real, you--and it is something that we could be dealing with. 
So these municipalities are forced to implement band-aid 
solutions, or take out huge loans they cannot service, and 
communities are facing real health risks as a consequence.
    One complicating factor is that I am in southwest 
Washington, so that is all along the Columbia River, and the 
ocean--the Pacific Ocean, so the water table is very, very 
high. There is a lot of artesian wells, and deeply complicates, 
there is not a one-size fixes all approach here. So, Mr. 
Holmes, from your perspective, are the available Rural 
Development water programs sufficiently flexible to account for 
these kinds of regional differences?
    Mr. Holmes. Thank you for the question, Congresswoman. You 
just made our case more eloquently than I could. They do the 
best with what they have, and it has been an excellent, 
longstanding program. But, again, we are dealing with so many 
new challenges in the water sector. It has changed out there in 
rural America, and these folks are struggling, with the small 
resources they have, to adapt to these changes.
    That is an excellent example that you brought up with the 
shallow water table, that engineers are dealing with unique 
situations all across the country, and it is costly to do these 
things. That is why our modernization of RD programs, RD tools, 
recommendations we have in our testimony, we believe is 
critical, because those--financing--affordable financing 
options, and additional servicing options will help address the 
exact issue you raise of affordability.
    Ms. Perez. Thank you. I would also like to talk a little 
bit about the workforce challenges you all are facing. I was 
excited to hear about the apprenticeship model you developed 
for water and wastewater systems operators. These types of 
programs are essential to building strong economies, resilient 
economies, especially in our rural communities. In addition to 
the financial resources you mentioned, what kind of long-term 
investments can we make to help you, and others who are 
developing these programs, be successful in small and rural 
communities?
    Mr. Holmes. Thank you for that question. The--raising the 
level of the workforce--I mentioned it earlier. We are trying 
to provide a career pathway, but we are also trying to make 
safe water professionals and clean water professionals a 
recognizable career for America. It is not there. They are not 
being paid close to what they should be paid. They are the most 
important, one could argue, public health official in these 
rural communities because what they do touches the public 
health of every single resident every single day.
    So I think even just raising that recognition, and 
advancing that conversation, is critical. We are trying to do 
that through the apprenticeship program. This is a long view. 
We are looking at this as a 20 year model to take where we are 
now, and there are many, many things that the Committee could 
help in order to advance this over the coming years.
    Ms. Perez. Well, I want to sincerely thank all of you for 
the work that you are doing, keeping the wheels on the bus, 
keeping our--many of our rural communities intact and thriving, 
so thank you, sincerely. I would also like to take a quick 
minute to talk about how Rural Development programs can better 
support childcare in rural communities. It is almost impossible 
in many rural communities--my husband and I drive almost 4 
hours a day to get our child to daycare, and before coming to 
Congress, we actually brought our child to the auto shop with 
us, which is whole--another can of worms.
    But I recently introduced a bill expanding childcare in 
rural America, which directs the USDA Rural Development to 
prioritize projects under six RD programs that address the 
availability, the quality, and the cost of childcare, so I 
would love to talk to any colleagues who might be interested in 
pursuing some of these solutions with me. Mr. Chairman, I yield 
back. Thank you so much.
    The Chairman. I had just announced earlier that Mr. Nunn 
could go next, so, Mr. Nunn, you are up, and Mr. Langworthy, my 
apologies for getting Mr. Nunn's hopes up before your arrival. 
Mr. Nunn, you are recognized for 5 minutes, and, Ms. Crockett, 
you will be thereafter.
    Mr. Nunn. Anytime I can share the clock with a man from the 
Empire State is a privilege, so thank you, Mr. Chairman. Mr. 
Chairman, compliments, we are dealing with everything from 
commodities markets, digital assets, to rural development. 
There is a lot to get through here in 5 minutes, so we are 
going to jump right into this.
    Mr. Holmes, appreciate everything you have highlighted. You 
have seen one water system, there are 50,000 out there that you 
have not seen. Challenge that we have, with a background in 
cybersecurity, hackers accessed the California water treatment 
plant's computer system recently and deleted critical 
information. Just 1 week later a second water treatment plant 
in Florida was hacked. In this case, the hacker accessed the 
plant's software program, and drastically increased the amount 
of sodium hydroxide from 100 parts per million to over 11,000 
parts per million.
    Now, this type of attack not only is very dangerous, it 
could be deadly, and in our rural communities, the Circuit 
Rider Program is set up to help address a number of the 
concerns. Talk to me specifically what can happen to a rural 
water plant, how it can decimate particularly our rural 
community if a cyberattack occurs.
    Mr. Holmes. Thank you, Congressman, and thank you for your 
leadership on the cyber issue. That--rural communities are 
vulnerable. We mentioned earlier they are simply not prepared 
to address cyber threats. We believe that this should be a 
shared responsibility. Consulting engineers, and folks that are 
building these systems, frankly, are installing SCADA 
(supervisory control and data acquisition) and remote system 
controls that are not cyber-prepared. However, all of that 
responsibility falls on one person, often, in these utilities. 
Fortunately, in the case in Florida, that one person noticed, 
finally, that those controls had been changed, but if they had 
not, that would have been a dramatic threat that would have 
impacted public health.
    Mr. Nunn. I think you absolutely nail it on the head, and 
this is why Representative Don Davis, my colleague from North 
Carolina, a Democrat, and myself, as a Republican, on this side 
of the aisle, have said this is a bipartisan issue, it is 
something we need to tackle. And the hope here is that, with 
this type of legislation, that one person isn't on the hook for 
trying to identify everything. They can reach back into a 
system that can be provided so that you have the expertise at 
the time of the emergency to truly go after and address these. 
I appreciate your leadership in helping craft that legislation. 
Hopefully that is something see move forward.
    Mr. Wilson, I want to talk a little bit on the electric 
grid here. We talk a lot about uncertainty in this Committee, 
largely since that is the nature of agriculture. One cause for 
concern here is the reliability of our electric grid. In your 
testimony you explained how the Rural Utilities Service 
programs are providing reliable and affordable electric 
services, particularly to my folks on Rural Route 1. Moving 
forward, how can we best prepare for future demands of a robust 
electric grid?
    Mr. Winslow. Great question, Congressman. The RUS program 
is fundamental to infrastructure investment for cooperatives in 
rural America. Aside from that, any tools in the toolbox that 
gives us accessibility and flexibility to funds that can 
diversify our power supply mix into the future, and meet our 
demand, our important as well. At Brunswick Electric, we rely 
on firm, dispatchable resources, those being nuclear and 
natural gas, but the technologies of tomorrow might not 
necessarily be the ones of today, and we are looking to be 
diverse, and minimize our risk, in terms of financial risk, or 
reliability risk into the future.
    Mr. Nunn. Very good. One of the things in my State of Iowa 
that is so important is rural infrastructure. It is that farm 
to market road, it is the bridge, it is the investment that my 
concrete guy is making, it is the investment that farmer is 
making on building a new facility. With that, I am also from a 
little place called Des Moines, which has one of the largest 
financial institutions in the world. Doesn't matter whether you 
are a community bank or a local credit union. One of the 
obstacles they have shared with me time and time again is the 
time it takes for a loan to be approved.
    Now, Ms. Nesbitt, one of the things I would like to ask you 
is--farmers have experienced inconsistent loan approvals from 
state to state. Does the National Rural Lenders Association 
share these concerns, and if so, what impact is it having on 
borrowers right now for building those core things that we 
need?
    Ms. Nesbitt. Thank you for the question. We do share those 
concerns, just throughout the Federal Government. USDA Rural 
Development has attrition programs, retirement, experienced 
people who are no longer with the agency. So there are many 
states and local offices who do a wonderful job processing 
applications. If some of those best practices could be 
replicated in other states, and working on operational 
efficiencies while taking on new programs is also a concern. 
But we stand ready to help in any way we can to suggest 
solutions for that.
    Mr. Nunn. I appreciate that. I also want to thank you in 
particular here. Some of the program and flexibility you have 
incorporated into the Biorefinery Assistance Program, hugely 
helpful for my soy and corn growers back in the great State of 
Iowa. Thank you, Mr. Chairman. With that, I yield my time.
    The Chairman. After we hear from the gentlewoman from 
Texas, we will hear from the previously slighted Mr. 
Langworthy. Ms. Crockett, you have 5 minutes.
    Ms. Crockett. Thank you, Mr. Chairman, and thanks to all 
the witnesses for your time today. I am glad we are finally 
coming around to rural development. And most people don't 
realize, because I currently serve Dallas, that I actually 
lived in east Texas, so I know a little bit of something about 
rural America, specifically rural Texas. I was living outside 
of Texarkana, where I would wake up, and I could smell the 
paper mill. Not something you want to smell when you are waking 
up, let me tell you. Nevertheless, there are so many issues in 
here that really are a matter of life or death for our rural 
communities. I am particularly concerned about food deserts, 
broadband access and economic development and rural 
communities, and look forward to working with my colleagues to 
address these issues.
    Just to make sure we are all on the same page, nine out of 
ten food deserts are in rural counties. But what does that 
mean? If you live in a food desert, you have to travel 
unreasonably far to access fresh, healthy foods, and so many 
people just don't and can't. The result is that people living 
in food deserts are 30 percent more likely to suffer from 
obesity, more likely to suffer from chronic illnesses, and are 
14 percent more likely to wind up in a hospital. So I think we 
can all agree that we have to do something to get rid of the 
food deserts.
    We have to act because large stores aren't opening in these 
communities because they can't maintain their profit margins, 
and small stores don't have the money needed to build and open 
a new place. So, in my mind, there are two ways we can address 
this in the farm bill. Either we should allow grocery stores to 
apply for Federal loans to build these critical community 
facilities, or we should increase the delivery options people 
in these places have to get healthy foods brought to them. So, 
Mr. Blanding, if we were to consider expanding the community 
facilities loans, would that allow grocery store co-ops to 
start bringing food into food deserts?
    Mr. Blanding. Thank you for that question, Congresswoman. 
And I am originally from Alabama, in Montgomery, Alabama, right 
down the road from Prattville, where there was also a paper 
mill, and I woke up to that smell also, but unlike you, we 
enjoyed it. We knew there was something going on when we 
smelled that. So I think one of the biggest options, in terms 
of these food deserts, is cooperatives. Giving people the 
ability to access resources to build their own grocery stores. 
Because what we know is that food deserts are not just food 
deserts. They are also health deserts.
    Ms. Crockett. Yes.
    Mr. Blanding. They are also educational deserts, they are 
income deserts.
    Ms. Crockett. Yes.
    Mr. Blanding. They are just deserts overall. And making 
sure that we connect all those issues together, and, again, 
giving people the ability to build the solutions to those 
problems. Again, that is what we talk about when we talk about 
investing in infrastructure.
    The Congresswoman--the Congressman talked about these 
reliability assets, from a standpoint, but when we look at 
reliability assets, we have to look at people as a part of that 
also and really building the capacity of people.
    Ms. Crockett. Yes.
    Mr. Blanding. People getting the kind of education and 
training back to that TA that the original question was about. 
People building their capacity to address their own issues. And 
we think cooperatives are the number one way to do that, where 
people can aggregate where they have limited resources, limited 
talent, or limited whatever, to build that power to do that. So 
investing in infrastructure, but investing in people, investing 
in the ability for people to develop cooperatives to address 
every issue in their community, including the food desert 
issue.
    Ms. Crockett. I appreciate that, and I appreciate you 
connecting the dots, because you are absolutely right. It is 
not just going to be limited to the food. It affects the 
health, which is why I brought up the health outcomes, as well 
as the economic opportunities and so forth. So--another issue 
that we have, though, is broadband access in rural America, and 
so--this limits farmers' access to precision agriculture 
technology that would improve crop yields, and protect our 
environment, and limits the ability of researchers at our land-
grant universities to do their jobs, and that is--isn't even 
the half of it. so, Mrs. Morales-Pate, could you expound on the 
need for additional investment in rural broadband?
    Mrs. Morales-Pate. I don't really--RCAP doesn't really move 
in the rural broadband space. We don't have as much work there. 
But I can say--and we were told that we were not going to have 
a lot of conversation around this topic, but I will say that it 
certainly makes a big difference for our communities to be able 
to access broadband, to be able to connect, to be able to have 
jobs. One of the things that we see in our communities, our 
rural communities, is that they are dormitory communities. They 
are dorm communities. That means that people are commuting to 
the larger urban centers to work.
    Ms. Crockett. Yes.
    Mrs. Morales-Pate. Broadband gives them the ability to stay 
in their communities and work from them, minimizing impact to 
infrastructure, and things like that. It also allows the 
opportunity grow more jobs in rural spaces, which is one of the 
things that we need to do more of. We are seeing the migration 
in--across the country since COVID, and we would like to be 
able to keep advantage of that.
    Ms. Crockett. Thank you so much, Mr. Chairman. I will yield 
back.
    The Chairman. Mr. Langworthy will be recognized for 5 
minutes, and will be followed by the gentleman from the First 
District of Illinois.
    Mr. Langworthy. Thank you, Mr. Chairman, and Ranking 
Member. I think every Member of this Committee has seen 
firsthand how tight the current labor market is, particularly 
in rural communities, with too many vacancies and too few 
applicants. Meanwhile, many individuals have taken out 
thousands of dollars in student loans for 4 year degrees. But 
too often the degrees don't have the return-on-investment that 
was expected. I appreciate the focus today on the potential to 
expand workforce development under Title VI, and I believe it 
is vital that we change the paradigm on what it means to 
develop our nation's workforce, particularly in our rural 
communities.
    And with that, Mr. Blanding, as it relates to rural 
economic workforce development, I want to talk about the Rural 
Cooperative Development Grant Program, the RCDG. Since its 
inclusion in the previous farm bill, from 2018 to 2022 this 
program has created over 3,000 jobs, and has saved almost 5,000 
jobs, and has created 300 new businesses. How can we, as 
policymakers, improve upon programs like the Rural Cooperative 
Development Grant Program, and continue to support workforce 
development, and preserve our rural businesses?
    Mr. Blanding. Thank you for that question, Congressman, and 
I think that is the crux of the matter. And, again, we talk 
about really looking at rural communities, where you--whether 
the--you can bring the community together to really identify 
the gaps in that community, but more importantly the asset. In 
these rural communities, they are really the lifeline of our 
nation. One asset for this country is forestry, as one example, 
and a lot of trees are in these rural communities.
    And if you just look at that, there is a lot of opportunity 
for people to have workforce development around that, around 
looking at the forestry industry, agriculture. But every part 
of that community, really understanding the assets in it, 
building the labor force around that, educating our folks so 
they understand the community as an asset, as opposed to a 
liability. So I think investments in those communities, where 
we look at the community, what is in it now, and build the 
infrastructure around that. And so I will give you a real 
example.
    Right now too in Alabama we are working with a--with youth 
to really learn how to operate machinery to harvest trees in 
their community, to build--to continue to build part of that 
agroforestry industry that is already there, but they are just 
not participating in it. In Texas, in a--in a--right on the 
coast, fishermen coming together to really build their own 
docks to control their catch and build income around that.
    There are so many opportunities if people are able to be 
part of the infrastructure, to be able to aggregate as 
cooperatives, as one example, because, again, when you look in 
these rural communities, you are looking at small land ownage. 
You are looking at limited resource folks, and cooperatives 
give them the greatest tool to aggregate, but to build business 
around what is already there, create income, and look at the 
job growth market from that standpoint.
    Mr. Langworthy. Thank you. Now, Mr. Holmes, we are 
constantly hearing about shortage of qualified workers in 
several industry sectors, particularly in rural America. In 
your testimony you mentioned that, according to employment 
data, 50 percent of individuals in the water industry will 
leave the workforce in the next 10 years. This gives all of us 
some cause for concern, as these systems remain vitally 
essentially for rural communities. While I know NRWA's 
Apprenticeship Program has proven to be successful and has 
provided some relief in educating and upscaling individuals for 
water and waste job opportunities, I know there has been some 
concern about its ability to be flexible and meet the needs of 
certain rural communities. Can you describe these drawbacks for 
this program, and what can Congress do to ensure that it meets 
the workforce challenges in rural America?
    Mr. Holmes. Thank you for the question, Congressman. As you 
know, the vast majority of the country's small community water 
systems are small, have very limited staff, sometimes only 
employing one full time, or even part time, paid operator. 
These limited economies-of-scale and technical expertise are 
compounded by the workforce issues, the scarcity of operators 
wanting to work in these areas, increases the difficulty of 
them to comply with the Safe Drinking Water Act, and serve safe 
and clean water.
    Unfortunately, our apprenticeship model is hindered by this 
because there is no capacity at these systems to provide on the 
job training or mentoring for these folks. They really can't 
even take on somebody to--on a part time or a full time basis 
to transfer their knowledge for the next generation. It is kind 
of unique to these communities because, unlike other folks 
here, our folks are so small, and they are doing so much with 
so little. It also prevents their access to the workforce 
system, the workforce funds. So what I think Congress could do 
is provide additional resources for training and mentorship 
outside of the Apprenticeship Program for these communities.
    Mr. Langworthy. Thank you very much, and my time is little, 
so I will yield back.
    The Chairman. Thank you. We will have Jackson, followed by 
Rose. Sir, you are recognized for 5 minutes.
    Mr. Jackson of Illinois. Thank you very much. I am a big 
advocate of your work, Mr. Blanding. Thank you for your 
service. I would like to thank all of the Members and all the 
persons that have come out today to give your testimony and 
share your experiences. Mr. Blanding, two things I would like 
to bring to your attention. In your testimony you highlighted 
the need to invest in historically underserved communities. Let 
me be more specific. As it relates to the African American 
farmers, they have been excluded, denied, locked out, left 
behind. What can we do, as Members of Congress, to help 
ameliorate this bridge, make things better going forward? We 
can't relitigate everything in the past, but what are the 
impediments that we can focus on now that, after we have many 
good intentions, we will still have some hurdles and blockage 
that we need to overcome?
    Mr. Blanding. Congressman Jackson, thanks for that 
question. There is a historical issue when it comes to 
underserved communities, and particularly Black communities. 
That was shown in the Pigford class action lawsuit, where USDA 
was shown to have been discriminating against Black farmers for 
years. But there are repercussions that have happened to that 
for years, and many of those things are still happening, and 
even when they are not happening, the perceived issue around 
that is real.
    So these communities have been under-invested in for 
centuries, so I think there is going to have to be real 
investment in all of our underserved communities, and 
particularly in Black communities, where it comes to the lack 
of access of credit, and the impacts of--even when there was 
bad credit decisions made, in terms of how lenders have 
approached those communities. So really looking at debt relief 
issues, looking at targeted investments in these communities, 
whether it is infrastructure, whether it is capacity building. 
But, again, I--understanding that community has dealt with a 
number of issues historically, and many of them have been 
proven, and making targeted investments in that, and making 
sure there is a part.
    But more importantly, looking at this as a bigger issue, 
again, we think about this from the standpoint of our nation. 
Our nation is only as strong as its weakest citizens, and 
really making sure that we make the kind of investments in 
every part of our country, and particularly those counties are 
the weakest, that have been disadvantaged for years, to make 
that there is equity, and getting them on par so that they can 
be a part of the solution. Whether it is healthcare, whether it 
is climate change, whether it is energy independence, whatever 
the issue is in our nation, every community, every part of the 
population has to be a part of the solution, and the only way 
they are is to reinvest in every part of it. And some parts of 
it, including the Black community, need the investment to get 
on par, need extra investment.
    Mr. Jackson of Illinois. Thank you so much. The second 
thing is regarding the outlook of automation. Automation is 
coming through many of these belts at a furious pace now, and 
we are going to look at a huge displacement of workers in the 
next 6 to 7 years, by 2030. Any thoughts, recommendations, you 
would have for us?
    Mr. Blanding. Yes, and thanks again for that question, 
Congressman. And so--this issue is making sure that many of our 
communities, especially rural communities and underserved 
communities, are not left behind as automation, or any 
technology comes forward. And we have to, again, always look at 
the profile of many of our folks. And I will use Black farms as 
one example, because I know that best. You are talking about 
the majority--80 percent of them in the South. You are talking 
about 90 percent of them who are farming on less than 100 
acres. And so in the--access technology, or any automation, you 
have to have scale. And, again, that brings the opportunity to 
look at cooperatives.
    So, again, I want to stress the importance of the ability 
of cooperatives to be a part of the solution in our country as 
it comes to any issue, and especially automation. And so how do 
we make sure we move co-op development in every part of the 
rural development--the farm bill titles, and especially rural 
development, but also make sure it permeates beyond that? So 
making sure that we really look at the profile of our 
communities, and the potential of them being left behind, and 
what are some of the solutions? Again, we think one of the 
major ones is the ability to organize cooperatives.
    Mr. Jackson of Illinois. And, for the record, I would like 
people to know that these are current cases that are being 
settled on discrimination in Mississippi from last year, for 
2022. Can you elaborate on that, please, of the most recent 
cases of discrimination with African American farmers?
    Mr. Blanding. Well, Congressman, it is an ongoing issue, 
and it is an issue that is currently being addressed in--as 
part of--that was being addressed by the American Rescue Plan, 
and now the Inflation Reduction Act. Right now issues are 
dealing around Section 22006 and Section 22007 of the Inflation 
Reduction Act, where we are looking at discrimination in all of 
our communities wherever they exist to make sure that people 
are being--that these issues are being addressed. So they are 
being addressed all over our nation as part of the current 
legislation.
    Mr. Jackson of Illinois. I look forward to working with 
you. I yield back my time. Thank you, Mr. Chairman.
    Mr. Blanding. Thank you, sir.
    The Chairman. To our witnesses, you have been at it for, 
like, an hour and 45 minutes. You are doing great. I know it 
feels like the baton death march of sitting here and being 
pummeled with questions, but so far nobody has embarrassed 
themselves or their associations, so congratulations. We will 
go to Mr. Rose, and thereafter the gentlewoman from Oregon.
    Mr. Rose. Thank you, Chairman Johnson, and Ranking Member 
Caraveo, for holding the Committee, and thank you as well to 
our witnesses for being here. Mr. Winslow, in your written 
testimony you talk about the fact that Brunswick Electric 
Membership Corporation is working to: ``integrate more 
renewable power sources.'' In your opinion, is there any way 
for electric co-ops to drastically increase their use of 
renewable power resources without ultimately relying on 
increased use of nuclear power?
    Mr. Winslow. Thanks for the question, Congressman. So I 
think there is an important distinction between resources that 
are energy-based and those that provide capacity, and base load 
generation. And there is no good or bad to any of the--those 
sources. They all have their place in the power supply 
portfolio. When it comes to the replacement of base load 
generation, an important part of replacement is that the 
characteristics of the new technology match those of the old 
technology, in terms of reliability. So, in that test, some of 
the renewable sources are intermittent. They are good energy 
resources, so they can replace some fuel, but they did not 
provide the base load that some of the more firm and 
dispatchable resources provide.
    Mr. Rose. And in your electric co-op today, what percentage 
of the power that you distribute comes from nuclear sources?
    Mr. Winslow. It is about--over 50 percent, 55 percent.
    Mr. Rose. Interesting. And have you explored the new 
nuclear, the small modular reactors, using generation three 
technology? Is that something that you are looking at, or your 
suppliers?
    Mr. Winslow. So further up the chain, in our fully 
integrated part of the country, there--there is a lot of 
discussion about advanced nuclear and small modular reactors in 
the industry. And, in my personal opinion, from being involved 
in a lot of those conversations, is that we will see those 
technologies merge within the next 10 years.
    Mr. Rose. In fact, do you think it is possible to achieve 
the carbon goals that some have without depending on nuclear 
energy, greater reliance on nuclear energy?
    Mr. Winslow. Well, I will reflect, what we, as a trade 
organization, believe is an approach that involves all 
resources is necessary. And that varies greatly across the 
country and is pretty much a function of geography. So, in our 
part of the country, we are very heavy in nuclear. Other parts 
of the country, they don't have the ability to rely on nuclear 
like we do.
    Mr. Rose. Thank you. Mr. Holmes, the 2018 Farm Bill 
expanded the eligibility for guaranteed loans through the Water 
and Waste Program to communities of less than 50,000. Have you 
seen an uptick in newly eligible communities taking advantage 
of the program?
    Mr. Holmes. Thank you for the question, Congressman, and 
Mr. Chairman, I will endeavor not to screw this up. This 
program is underutilized, historically. As you know, I think 
last year, FY 2022, they--only eight loans were made under the 
water programs, under the $50 million loan authority. One 
alteration that was attempted almost 2 decades ago was to amend 
the Tax Code to allow USDA to guarantee tax-exempt financing. 
That is prohibited by current law. Certainly that change would 
score. However, this is the only modification that we are aware 
of that will significantly increase the Water and Waste 
Disposal Guaranteed Program, especially for larger communities.
    Mr. Rose. Okay. Any other ideas about how we could ensure 
communities take advantage of the program, and maintain viable 
waste and water systems?
    Mr. Holmes. For the guaranteed, no, and we have been having 
extensive discussions, including with Committee staff, in order 
to do that. It is just--and we will continue to do so.
    Mr. Rose. And in the remaining seconds we have left, Mr. 
Holmes, Mr. Nesbitt, in one of my communities back in 
Tennessee, I saw the unfortunate situation where USDA Rural 
Development financed two water treatment facilities in the same 
community. And as that advanced, there was a fair amount of 
political discussion around it, as you can imagine. But I am 
just wondering, do we need to revise the criteria that is 
applied? Clearly commercial lenders would not finance two 
competing facilities that would more than supply a community, 
and yet in this case that happened. And we are out of time, so 
I don't want to ask the Committee for their indulgence, but you 
might respond to that, if there are changes that need to be 
made.* Thank you, Mr. Chairman. I yield back.
---------------------------------------------------------------------------
    * Editor's note: the responses to the information referred to are 
located: for Ms. Nesbitt, p. 70; Mr. Holmes, p. 71.
---------------------------------------------------------------------------
    The Chairman. Very good. Ms. Salinas, and thereafter the 
gentleman from Ohio, who informs me he is kind of a big deal, 
will be recognized. So, ma'am, you have 5 minutes.
    Ms. Salinas. Thank you, and I thank the Chairman, and the 
Ranking Member, for today's hearing. And I know some of my 
colleagues have already gone over the technical assistance 
issue, but I just want to revisit this. As we all know, the 
farm bill provides critical resources for economic development, 
climate resilience, and infrastructure projects in our rural 
and underserved communities. However, the requirements for 
accessing funds, raising matching funds, and navigating the 
complex web of programs pose significant barriers to our 
smaller communities.
    And many rural communities have limited staff, expertise, 
and networks to apply for and actually receive grants, or to 
even know about the potential Federal opportunities in the 
first place. And then, when they do compliance on the back-end, 
is then an issue. Small farm towns in Oregon often don't have 
grant writers, city managers, or attorneys on retainer, and 
they remind me consistently of that fact during our listening 
sessions.
    So, in my view, this upcoming farm bill should make badly 
needed investments in capacity building and technical 
assistance programs that would help rural communities do two 
things. One, identify, and then two, leverage those Rural 
Development grants, and other Federal opportunities, including 
the loans we were just talking about. So my first question, or 
Mr. Blanding, is can you talk a bit about the capacity 
challenges that rural communities face, as well as potential 
solutions like the Rural Partners Network?
    Mr. Blanding. Yes. Thank you for that question, 
Congresswoman. So we think the Rural Network is a model that 
needs to be built upon. Again, at the core of this, how do we 
make sure that the community is a critical part of it? The 
community is best equipped to identify the challenges, the 
needs, in their own community, but more importantly to build 
upon the current assets that are already there. So really 
giving people an opportunity to be a part of these 
conversations where they can help drive change, so when other 
folks go, the capacity is left behind.
    Many times this isn't an issue about just capacity. It is 
about the--it is a numbers game. And so in these communities, 
in these organizations you have limited resources, limited 
people, limited staff. In our case, the Federation of Southern 
Cooperatives, as one member of NCBA, our organization has been 
doing this for 56 years. But it is a staff of 65 folks working 
in seven states, and so usually the people who have to do the 
proposals are the people who are out doing the work.
    And when--and every year, when you have requirements where 
people have to come in and do another application, they are 
spending 3 months doing the proposal and gathering information, 
as opposed to the work. And so this is about really making sure 
that they have a partner with--like the Rural Network and 
others to do this. And I think one important thing to do is to 
really look at the expertise, the capacity, experience of 
folks. In our case, as an example, if you know we have been 
doing the work for 50 years, why the constant applications? So 
why--you can get in and see the results.
    This goes back to, again, making sure that folks have the 
capacity to not only implement the programs, but to also 
measure the impact so that Congress has the information to see 
what is working, what is not working. But, again, it is all--it 
all has to be locally led, so no matter solutions--that are put 
forth, they have to have a local component, and people who are 
part of that community have to be part of addressing the issue, 
and a part of the solutions, and the ability for them to 
aggregate and to collaborate across regions.
    Ms. Salinas. Thank you.
    Mr. Blanding. Yes.
    Ms. Salinas. And now, Mrs. Morales-Pate, can you weigh in 
on the issues is--the--similar issues as well, and further 
discuss your organization's idea to create a rural investment 
initiative?
    Mrs. Morales-Pate. Thank you for the question, 
Representative Salinas. The--we have been working in rural 
communities for 50 years, and we continue to run into the same 
challenges when it comes to developing infrastructure projects. 
For example, the funding that you get through USDA, you 
actually don't see the money until you close, at the time of 
closing. So between the pre-development and that design piece, 
there is a lot of pre-development funding that is necessary to 
advance those projects, and it can take up to 2 years.
    The size of communities that we work in do not have the 
cash flow or the ability to be able to move through that 
process, what is being proposed through the Rural Investment 
Initiative is to be able to help communities to be able to have 
that, because it takes additional resources to look for that 
funding, or projects get stalled. As I said before, I have been 
a technical assistance provider for many years, and, 
unfortunately, I have seen projects that have had to be de-
obligated because we are not able to get them to the closing, 
and so it is very important to think, beyond the existing 
program, what else can be done to supplement, and to make sure 
that the Federal dollars are making it to small communities?
    Ms. Salinas. Thank you. My time has expired. I yield back. 
Thank you.
    The Chairman. After the gentleman from Ohio, Ms. Caraveo 
and I will be prepared to close. Sir, you are recognized for 5 
minutes.
    Mr. Miller of Ohio. Thank you, Chairman Johnson and Ranking 
Member Caraveo, for holding this important hearing as we work 
to strengthen and foster the economic viability of our rural 
communities.
    The U.S. Department of Agriculture Rural Development 
mission supports rural economic security in Ohio, and 
throughout the nation, by partnering to improve essential 
community facilities, such as critical infrastructure, 
including water and waste treatment systems. Its operations 
also boost rural economic development by funding technical 
assistance for agriculture and small business operations, and 
by helping to address pressing supply chain issues in northeast 
Ohio, and across the country.
    USDA's Rural Development bioenergy programs also provide a 
valuable opportunity to support America's farmers, and the 
larger agricultural sector, to increase domestic energy 
security and create new markets for America's farmers. Such key 
initiatives, including providing renewable energy development 
assistance, and the production of biofuels, which benefits 
American farmers and our fuel supply. As roughly 40 percent of 
my state's corn crop is used in ethanol, creating new market 
opportunities for biofuels is absolutely key. Toward this end, 
I look forward to exploring more fully the potential of 
opportunities of a sustainable aviation fuels, or Farm to Fly 
Program, within USDA's bioenergy programs to foster alternative 
biofuels in national aviation, expand the fuel supply, and 
support U.S. agriculture.
    To any of our witnesses, can you please share how USDA's 
biofuel programs, including the Biorefinery, Renewable 
Chemical, and Biobased Product Manufacturing Assistance 
Program, the Biomass Crop Assistance Program, and the Bioenergy 
Program for Advanced Biofuels can serve to increase domestic 
energy security, support the agricultural sector, and foster 
the farm economy in the United States? To anyone who would like 
to answer. Thank you.
    Ms. Bowman. Sure, thank you for the question. I will jump 
in a little bit, although I can't speak to the fuels as much, 
but certainly to opportunities to provide new markets for 
farmers more generally, which is an opportunity that we see the 
BioPreferred Program providing, along with the Biorefinery 
Assistance Program. The BioPreferred Program, it is intended to 
increase market demand for biobased products that are made from 
corn, soy, hemp, all those different agricultural feedstocks. 
And there are some opportunities to really help grow that 
program, through the next farm bill, to help increase that 
market demand, and create those new markets for farmers.
    And then we see opportunities with the Biorefinery Program, 
with adding in, as I talked about earlier, a grant program that 
would help that--increase access to mid-size biorefinery 
facilities to help increase the production of bioproducts, get 
those products to scale--to commercial scale, so help increase, 
again, some demand to--for those products from farmers to help 
increase bioproducts.
    Mr. Miller of Ohio. Thank you. I appreciate that. Rural 
economies and consumers have become acutely aware of supply 
chain issues over the past several years, and challenges in 
creating a more resilient and secure United States food supply 
chain. Just last week I heard from a small cattle processing 
operator near my Congressional district, E.R. Boliantz Packing 
Company, on their barriers to increasing processing capacity.
    For this reason, I am working with my colleague from Ohio, 
who also sits on this Committee, Congresswoman Brown, to 
introduce legislation (H.R. 4873, Food Supply Chain Capacity 
and Resiliency Act) to reauthorize critical funds through 
USDA's Food Supply Chain Guaranteed Loan Program to support 
investments in infrastructure for processing, manufacturing, 
transportation, and distribution toward a stronger and more 
secure U.S. food supply chain. This program is already on the 
ground and working, including through a recent effort to 
increase access to processing equipment to provide food 
services to schools, daycare facilities, and seniors throughout 
northeastern Ohio, among other initiatives across the country.
    Once again, to any of the witnesses, can you please share 
how USDA Rural Development's Food Supply Chain Guaranteed Loan 
Program can assist middle of the food supply chain activities, 
such as processing, storage, transportation, distribution of 
food, to increase capacity, and more effectively get food from 
our farmers to American consumers?
    Mr. Blanding. I will take a quick stab at that, 
Congressman. Thanks for that question. I think that question is 
very similar to your original question about biomass, and other 
energy-type questions. There are significant--there are major 
things that are going on now. In USDA there is a climate-smart 
ag initiative going on to look at just those things you 
mentioned, with biomass and other things, and we are exploring 
those opportunities now. And with this food supply issue, there 
are things in reference to putting beef production facilities 
in certain areas.
    But, again, the issue is around the flexibility of the 
program, and making sure that the community only control it. 
Because the challenge, historically, has been bringing in 
corporations or companies to put those things there, and they 
don't usually last if the community is not engaged. so, again, 
there are a number of things that are happening now, from 
climate-smart ag, to production facilities, but the question is 
making sure that they are flexible enough that folks can access 
them in the communities, and the communities can lead them. 
As--and again, I bring back this point about cooperatives, 
giving people the ability to aggregate, where they can own 
those as--companies as cooperative businesses.
    Mr. Miller of Ohio. Thank you. I just want to thank the 
witnesses, and for your patience, thank you, Chairman and 
Ranking Member. I yield back.
    The Chairman. But wait, there is more. Mr. Molinaro, you 
are recognized for 5 minutes.
    Mr. Molinaro. Is the best or last, or not really, just 
last? Fair enough--that is the second time in 3 weeks that the 
Chairman has insulted me in public, but it is quite all right. 
I accept it. Don't----
    The Chairman. I am glad you are not keeping track of the in 
private.
    Mr. Molinaro. I am--well, that is true. Thank you, Mr. 
Chairman. I want to continue on that very theme. I know that it 
has been covered a few times. The lack of flexibility, and 
the--either redundancy, or complexities of navigating the 
different funding streams. Now, I think you all already talked 
about this, and, of course, it was just mentioned, rural 
development funding is often a big challenge for small 
communities. I know this firsthand.
    As a village mayor 25 years ago, navigating USDA and Rural 
Development dollars was always a big challenge for small 
communities like ours. I saw it as a county executive, 20 
towns, eight villages, in two cities, all trying to navigate 
through the funding streams. The applications are a burden. The 
soft costs are too often too great to even allow smaller 
communities to access those grant dollars, and then the lack of 
flexibility.
    So, Mr. Blanding, I think I will carry on where you left 
off. You touch on some of this. You talked a little bit about 
it just a moment ago, about the highly targeted nature and the 
lack of flexibility within many of the loan programs that the 
USDA administers. It is a challenge. Cities, urban centers, get 
the benefit in particular of Community Development Block Grant 
funding. I understand the value of having targeted grant 
programs, because rural communities look different--differently 
all across the country, but what specific ideas have you either 
discussed, or would you offer to consolidate and streamline 
access to those programs to address this issue of flexibility, 
and to really draw--drive down the overwhelming nature of 
accessing USDA dollars?
    Mr. Blanding. Thank you, Congressman, for that question. 
I--and first of all, I would like to say thanks, because there 
are significant things that this Congress, that USDA and the 
Secretary has done recently to really start moving toward that. 
FPAC is one example. They have really started to consolidate 
things. I am not sure if we know the results of that yet, but 
there are intentions, as my point. So I think really looking at 
this issue from a rural perspective, and understanding every 
piece and how they connect together, whether it is childcare, 
whether it is housing, whether it is energy, agriculture, all 
of those things, and really trying to solve the problem, make 
sure that we talk about all of those in one system.
    Mr. Molinaro. Yes.
    Mr. Blanding. We were talking about water, and water waste 
systems, and things of that nature--as an example. But the 
issues sometime away from that. I remember clearly in 2016, I 
think it was, in Toledo, Ohio, when it was the largest 
catastrophe, if you will, where there was a--I don't know what 
you call it. The issue where some pesticides ran off a farm and 
created this toxic algae bloom.
    And it is happening in every state in our Union, and so 
this--we have to deal with this issue even before we get to the 
water treatment plants, and we deal with that issue by dealing 
with our rural community, dealing with producers, small to 
large, and making sure that we connect all these programs, and 
that we understand what is going on. I think that will----
    Mr. Molinaro. Do you think--despite the specific nature of 
the grants, do you think a consolidated application, or a 
single point of access for rural communities, would be of 
value?
    Mr. Blanding. I do think so.
    Mr. Molinaro. And specifically I know that the USDA 
launched the Rural Partners Network, and, of course, it is in 
its infancy. Has NCBA interacted with--what have you done to 
interact with the Rural Partner Network, and what 
recommendations might you have to expand and build on what is 
supposed to be that collaborative approach?
    Mr. Blanding. Yes. Nothing yet, but I think it is a--I 
think there is great intent there. We are looking for an 
opportunity to do so. But, again--I think consolidating this is 
great, but, again, we--but every agency within USDA is 
different, so I--but we can't take power from different 
agencies, because they operate differently. Just got to figure 
out a way where we can all talk together.
    But, again--so Congressman, I am going to be very careful 
in answering that question, because consolidation can mean a 
number of things. And so it is without taking power from 
different agencies, because they all bring different value, but 
how do they all talk together and figure out how to solve the 
problems collectively or cohesively?
    Mr. Molinaro. Yes, I think coordinated application and then 
individual review is the way to make the process a little bit 
easier. My last 25 seconds, and I won't ask for an answer, I 
just want to address that the USDA addressing, within rural 
energy programming, the consumption of active farmland for 
solar field development is--it should be a priority for us in 
the development of the farm bill.
    We want to accelerate and support renewable energy. We want 
to diversify America's energy production, but I--we have seen 
valuable soils in active farmland being consumed really out of 
desperation instead of design. Mr. Chairman, I yield back.
    The Chairman. Thank you, Mr. Molinaro. And, Madam Ranking 
Member, if you have closing comments, we are eager to hear 
them.
    Mr. Caraveo. Thank you, Mr. Chairman. Growing up, my 
parents always taught me the importance of building a strong 
community and family, of hard work, of caring for others. I 
think these are values that are absolutely foundational to our 
rural community, certainly in Colorado, and across the country. 
I think, as we have heard many times today, these communities 
know best, how and where to invest resources, and it is 
incumbent on us to ensure that they have what they need to 
support hard working rural families.
    Again, thank you so much to your witnesses. Really 
appreciate your testimony. Look forward to continuing to work 
with you as we face the farm bill reauthorization. Thank you, 
Mr. Chairman.
    The Chairman. Thank you, Ms. Caraveo. I have lived in a 
couple of different big cities over my life, and I don't have 
anything against the big city, of course, but my wife and I 
choose to live in rural America. We choose to raise our three 
sons there. It is just a remarkable--rural America is just a 
remarkable place. And I think there is no limit, almost no 
limit, to what rural America can accomplish if they have access 
to basic tools and support. The kinds of tools and supports 
that we see across the rest of the country: technical 
expertise, quality infrastructure, access to capital.
    And so I want to thank all of our panelists today for 
talking about how the 2023 Farm Bill provides us another great 
opportunity to make sure that those supports, and that those 
tools, can be available to rural America, consistent with what 
we see across the rest of the country. So thank you, you have 
done an excellent job today.
    Under the Rules of the Committee, the record of today's 
hearing will remain open for 10 calendar days to receive 
additional material and supplementary written responses from 
the witnesses to any questions that were posed by any Member. 
And, unless there is any further business to come before the 
Subcommittee, and I see none, this hearing is adjourned.
    [Whereupon, at 12:09 p.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
 Submitted Statement by Hon. Angie Craig, a Representative in Congress 
   from Minnesota; on Behalf of Bill Broydrick, Executive Director, 
                  National Rural Lenders Roundtable *
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    * Editor's note: the statement was submitted via Broydrick and 
Associates.
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    The National Rural Lenders Association is a trade association of 
stakeholders in the rural guaranteed lenders space that growth 
increased capital deployment in rural America.
    These are our three priorities in the farm bill and we ask that you 
submit these to the record on our behalf.
I. Fiscal Responsibility Act Language
    First, we are asking for clarification on the language in the 
Fiscal Responsibility Act of 2023 which suggests that loan and loan 
guarantees such as those from USDA are now excluded from being defined 
as a major Federal action, and therefore no longer requires NEPA 
review.
a. Current NEPA Rules
    The current rules are convoluted, complex, time consuming and 
expensive. The Council on Environmental Quality, which oversees NEPA 
regulations, said in 2018 that the average environmental impact 
statement took 4.5 years to complete, with 25% taking more than 6 
years.\1\
---------------------------------------------------------------------------
    \1\ Congressional Quarterly House Action Report, Fact Sheet, 20 
(May 30, 2023).
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    Currently  102 of the National Environmental Policy Act requires 
agencies to include an environmental report in proposals for any `major 
Federal action.' Specifically, all Federal agencies are to prepare 
detailed statements assessing the environmental impact of and 
alternatives to major Federal actions significantly affecting the 
environment. These statements are commonly referred to as Environmental 
Impact Statements (EIS) and Environmental Assessments (EA). The 
requirements for these environmental reports have changed under the new 
language of The Fiscal Responsibility Act of 2023 (H.R. 3746).
    H.R. 3746 was passed in the house on 5/31/23 and in the Senate on 
6/1/23. The language in this Bill adds a new definition of what is a 
major Federal action, and has a list of actions that are automatically 
excluded from being defined as a `major Federal action.' The agreement 
limits what is considered a major Federal action under NEPA to an 
action that the agency determines is subject to ``substantial Federal 
control and responsibility.'' \2\ It specifically excludes, ``loans, 
loan guarantees, or other forms of financial assistance where a Federal 
agency does not exercise sufficient control and responsibility over the 
subsequent use of such financial assistance or the effect of the 
action'' from being defined as a `major Federal action.' ( 
111(10)(B)(iii)) It adds new language to  106 `Procedures for 
Determination of Level of Review' of NEPA.  106(a)(2) of the Bill 
states that, ``an agency is not required to prepare an environmental 
document with respect to a proposed agency action if it is excluded 
pursuant to one of the agencies categorical exclusions.''  106(b)(2) 
states the same in regards to environmental impact assessments. From 
our understanding, this new definition of a major Federal action that 
specifically excludes Federal loans and loan guarantees from 
qualifying, there is no longer a requirement for a NEPA review.
---------------------------------------------------------------------------
    \2\ Id. at 21.
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II. REAP Limited to Small Businesses
    Second, REAP is currently limited to rural small businesses and 
agricultural producers. (7 CFR  4280.112(a)[1] *) We are 
asking for all businesses to be eligible for this program.
---------------------------------------------------------------------------
    \[1]\ https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XLII/
part-4280#sp7.15.4280.b.
    * Editor's note: references annotated with  are retained in 
Committee file.
---------------------------------------------------------------------------
    A rural small business is defined as, ``a small business that is 
located in a rural area or that can demonstrate the proposed project 
for which assistance is being applied for under this part is located in 
a rural area.'' (7 CFR  4280.103). Further, to qualify as a small 
business the ``net worth is not in excess of $15 million and average 
net income (excluding carry-over losses) for the preceding two 
completed fiscal years is not in excess of $5.0 million; or the size of 
the concern does not exceed the Small Business Administration (SBA) 
size standard thresholds designated for the industry in which it is 
primarily engaged, as measured by number of employees or annual 
receipts.'' (7 CFR  4280.103)
    The Inflation Reduction Act increases the amount of money available 
for REAP in order to promote the act's climate focus.\3\ ``The IRA 
appropriated $820.25 million for REAP through fiscal year (FY) 2031,'' 
\4\ and there is $980,160,928 remaining for funding. Further, The 
maximum grant size was increased from $250,000 to $500,000 for energy 
efficiency projects and from $500,000 to $1 million for renewable 
energy systems.'' \5\ So, there is money available and there is a high 
demand from larger businesses to take advantage of these programs and 
update their systems to be more climate friendly.
---------------------------------------------------------------------------
    \3\ National Sustainable Agriculture Coalition, Funding for Rural 
Energy for America Program Now Available, https://
sustainableagriculture.net/blog/funding-for-rural-energy-for-america-
program-now-available/ (April 12, 2023).
    \4\ Id.
    \5\ USDA, REAP in the Inflation Reduction Act: What's New, https:/
/www.rd.usda.gov/inflation-reduction-act/rural-energy-america-program-
reap.
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III. REAP $25 Million Loan Limit
    Third, REAP currently has a $25 million limit on loan guarantees. 
(7 CFR  5001.406(c)[2]) We are asking for this loan limit 
to be increased to $50 million. There are very large projects that are 
not eligible for this funding because they do not qualify as a rural 
small business, but would in fact have a positive effect on the 
Administration's priorities regarding climate change such as renewable 
energy projects. The IRA's grant of money to REAP was just one way it 
is working to promote its climate change goals and supporting new jobs.
---------------------------------------------------------------------------
    \[2]\ https://www.ecfr.gov/current/title-7/subtitle-B/chapter-L/
part-5001/subpart-E/subject-group-ECFRde6690202c21592/section-
5001.406.
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                                 ______
                                 
  Supplementary Material Submitted by Debra Nesbitt, Chair, National 
                       Rural Lenders Association
Insert
          Mr. Rose. . . . Mr. Holmes, Mr. Nesbitt, in one of my 
        communities back in Tennessee, I saw the unfortunate situation 
        where USDA Rural Development financed two water treatment 
        facilities in the same community. And as that advanced, there 
        was a fair amount of political discussion around it, as you can 
        imagine. But I am just wondering, do we need to revise the 
        criteria that is applied? Clearly commercial lenders would not 
        finance two competing facilities that would more than supply a 
        community, and yet in this case that happened. And we are out 
        of time, so I don't want to ask the Committee for their 
        indulgence, but you might respond to that, if there are changes 
        that need to be made. Thank you, Mr. Chairman. I yield back.

    Thank you Congressman Rose for the question about two water 
treatment facilities financed in the same community. It is my 
understanding that these were direct USDA Water/Wastewater loans but I 
am not familiar with the specifics of the projects. Typically utility 
service areas are regulated by state utility commissions but I am not 
sure if that is the case in Tennessee. Many state utility commissions 
issue Certificates of Convenience and Necessity (CCN) that give a 
utility the exclusive right to provide retail water or sewer service to 
an identified geographic area. You are correct that it is unlikely a 
lender would approve two competing loans, so I am uncertain why the 
Agency would approve two competing loans that serve the same area.
    The following excerpts from the regulation detail the required 
consultation,  1780.1(h) ``RUS financed facility will be in compliance 
with any current development plans of state, multijurisdictional areas, 
counties, or municipalities in which the proposed project is located.'' 
 1780.7 Eligibility. (c)(3) ``Projects must be necessary for orderly 
community development and consistent with a current comprehensive 
community water, waste disposal, or other current development plan for 
the rural area.'' Again, thank you for the opportunity to respond and 
please let me know if I can provide further assistance.

Debra Nesbitt.
                                 ______
                                 
Supplementary Material Submitted by Matthew W. Holmes, Chief Executive 
               Officer, National Rural Water Association
Insert
          Mr. Rose. . . . Mr. Holmes, Mr. Nesbitt, in one of my 
        communities back in Tennessee, I saw the unfortunate situation 
        where USDA Rural Development financed two water treatment 
        facilities in the same community. And as that advanced, there 
        was a fair amount of political discussion around it, as you can 
        imagine. But I am just wondering, do we need to revise the 
        criteria that is applied? Clearly commercial lenders would not 
        finance two competing facilities that would more than supply a 
        community, and yet in this case that happened. And we are out 
        of time, so I don't want to ask the Committee for their 
        indulgence, but you might respond to that, if there are changes 
        that need to be made. Thank you, Mr. Chairman. I yield back.

    Congressman Rose, I cannot speak on behalf of Rural Development's 
decision to finance these two water treatment facilities, the service 
areas or other details contained within those applications. Service 
areas are also defined differently in each state. Our mission is to 
serve all rural communities. We can work with the Agency to address 
this issue within the existing regulations and policy to provide 
further clarification.
    We understand and respect an individual community's desire to 
produce, operate and manage their own water and wastewater utilities 
when it is economically feasible and possess managerial capacity. There 
is also a natural ongoing process for regionalization and consolidation 
activities around the nation. Considering that 91% (44,924) of the 
country's water systems are serving communities under 10,000 
population, you can see why this is occurring where it is financially 
feasible.
    States and regions also vary on how they define regionalization or 
consolidation. We have suggested the Committee consider additional 
incentive measures to further advance sustainably services provided by 
rural utilities. The target population should be lower-income 
communities without adequate water or wastewater service. These 
communities often lack financial and managerial capacity and the desire 
to operate independently and sustain affordable services. Our 
recommendation is to provide a financial incentive by allowing a high 
performing, local or contiguous system to apply for a grant/loan on 
behalf of the underserved community.
    Presently, most rural utilities and their governing boards want to 
provide service to their neighbors but have no financial basis to 
proceed. Boards do not want to absorb new service areas while 
negatively impacting their existing customers, raising their rates, or 
taking on inadequate infrastructure. NRWA believes a limited and fair 
financial incentive will alleviate these concerns and serve rural 
residents with affordable and financially sustainable services. The 
authority should be narrow while ensuring the additional subsidy is 
targeted entirely to the community in need.
                                 ______
                                 
                     Submitted Statement by CoBank
    The time for reauthorizing the farm bill is here. The farm bill is 
the most significant piece of Federal policy focused on enhancing the 
lives of rural residents and communities. The Rural Development Title 
authorizes dozens of programs and provides no mandatory resources for 
those communities to access loan or grant programs. While CoBank does 
not directly benefit from the success of most programs authorized at 
the United States Department of Agriculture (USDA), we all benefit when 
the communities we both serve have access to reliable sources of 
capital.
    CoBank provides loans, leases, export financing and other financial 
services to agribusinesses and rural power, water and communications 
providers in all 50 states. CoBank is a member of the Farm Credit 
System, a nationwide network of banks and cooperatively owned retail 
lending associations chartered to support the borrowing needs of U.S. 
agriculture and the nation's rural economy. In addition to serving our 
direct retail borrowers, we also provide wholesale loans and other 
financial services to our 17 affiliated Farm Credit Associations across 
23 states, serving approximately 76,000 farmers, ranchers, and other 
rural businesses.
    The mission of CoBank includes serving ``as a dependable provider 
of credit and other value-added financial services to agriculture and 
rural infrastructure providers in order to serve rural America.'' The 
mission of USDA's Rural Development office is to ``promote economic 
development by supporting loans to businesses through banks, credit 
unions and community-managed lending pools. We offer technical 
assistance and information to help agricultural producers and 
cooperatives get started and improve the effectiveness of their 
operations.'' It is clear from these statements our two entities are 
naturally complementary. We take pride in working together with USDA to 
serve the same entities to better the same communities for the same 
purpose, and to improve the lives of rural Americans.
    Access to affordable, reliable credit for rural towns, villages, 
townships, and communities is the only way these entities survive. The 
Rural Development Title of the farm bill was created as an avenue to 
enhance peoples' lives where agricultural producers, cooperatives, and 
their families live, so that the heart of the country will not have to 
leave in order to live. The opportunities in the Rural Development 
Title of the farm bill can address critical issues that seek to promote 
a prosperous rural economy supporting business creation, human capital 
concerns, rural poverty issues, adequate medical care, and 
infrastructure needed to serve these communities.
    In partnership with CoBank, the University of Missouri released a 
study to discuss the trends and realities of today's rural America last 
year.\1\ Rural populations and job opportunities continue to decline. 
Improvements and enhancements in these areas are needed now more than 
ever in rural America. The report highlighted that service jobs, such 
as retail, professional services, healthcare and restaurants have been 
replacing agriculture and manufacturing jobs increasingly over the last 
several decades. Off-farm income is critical to the income of farm-
dependent rural residents. By 2018, over half of rural residents and 
farmers traveled outside their county for work, up ten percent from 
just 2 decades prior. This number just continues to increase. The 
questions we need to answer are: How do we get people to go back to 
rural America? How do we keep them there? How do we help rural America 
thrive and put rural citizens in a position to compete in the global 
market place? When we answer these questions, we put our communities in 
a better position to grow and thrive.
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    \1\ https://www.cobank.com/web/cobank/knowledge-exchange/general/
the-importance-of-off-farm-income-to-the-agricultural-economy.
    * Editor's note: the report entitled, The Importance of Off-Farm 
Income to the Agricultural Economy, is retained in Committee file.
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    A strong Rural Development Title is necessary to reduce the divide 
that rural communities face with regard to economics, education, and 
quality of life compared to their urban counterparts. As individuals 
leave the farm for urban life, what is left is sometimes forgotten. The 
deteriorating infrastructure in our small and local communities is 
unsustainable. The idea that water treatment facilities have not been 
replaced in over 60 years is hard to comprehend. Water quality issues 
are prevalent throughout the country, just as we have seen in Jackson, 
Mississippi, Las Vegas, New Mexico and Flint, Michigan. We also need to 
address this issue in our collective rural backyard. The Rural 
Development Title of the farm bill--when funded adequately and 
administered efficiently--has the ability to address many of the issues 
that strike the core of small underserved rural communities. Without 
the programs of this Title, basic human and economic needs often go 
unmet, such as financing local water treatment facilities, accessing 
broadband to teleconference with a doctor hours away, or being able to 
further one's education taking college courses online. Many rural 
Americans do not want to leave their communities, but may have no other 
option when needs go unmet. When their life needs are met, people stay 
and communities thrive. This also draws new businesses and 
opportunities, creating jobs and long-term economic growth. Each of 
these improve the quality of life for everyone who lives there.
    Several programs to highlight are:
Water and Waste Disposal Loan Program
    The Water and Waste Disposal Loan Program is vital to the health 
and well-being of any rural community. Without clean water, a community 
will not exist. The program extends affordable access to clean and 
reliable water for households and businesses in rural areas. The 
National Rural Water Association will tell you the infrastructure in 
these communities has exceeded its projected lifespan and the 
deterioration of these facilities is hurting communities. We know the 
Environmental Protection Agency (EPA) is afforded a substantive number 
of dollars to address water safety and affordability measures, but USDA 
needs the same resources to properly serve rural water systems. Most of 
the water systems in the country are rural water systems and the 
resources needed to maintain these facilities continue to be 
overlooked. Rural water systems are consolidating because of rising 
costs and a retiring workforce. After this consolidation communities 
served by a system that exceed 10,000 in population are no longer 
eligible for portions of the water and waste disposal program dollars.
    Most funding from EPA is absorbed by larger metropolitan areas and 
fails to reach communities that are ``rural in character.'' For this 
reason, we encourage the Committee to consider modifications to the 
current program to allow for changing rural water systems to be able to 
continue to access rural development dollars and to be able to continue 
to access financing from CoBank.
    In the 2018 Farm Bill, the Water and Waste Disposal Loan Guarantee 
Program authorized increasing the population cap for the rural water 
and waste disposal guaranteed loan program to 50,000. All lenders could 
continue to help USDA execute this program, except for CoBank, which 
remains capped at serving communities of 20,000. We encourage 
harmonizing the cap on our work in this space to be consistent with all 
other rural lenders.
    CoBank derives its lending authority from the Farm Credit Act, 
which was designed to help enhance the mission of the Rural Utility 
Service at USDA. While we are not the ``lender of last resort'' like 
USDA, we encourage the Committee to consider measures that would allow 
CoBank to leverage the investment and harmonize efforts of this 
program, just as the 2018 Farm Bill did for other rural utility 
providers.
Community Facilities Loan Program
    The Community Facilities Loan Guarantee Program allows private 
lenders to assist rural communities in building facilities that are 
essential to the lives of their community. This program supports 
purchase, construction, and improvements to equipment or necessary 
facilities. Historically, CoBank has engaged in this program and 
partnered with local Farm Credit associations, community organizations, 
community banks and credit unions to make improvements in rural 
healthcare facilities and for other public safety facilities. Due to 
regulatory burdens imposed by the Farm Credit Administration (FCA), our 
engagement in this program has diminished in recent years. Rural 
communities are being limited by arbitrary requirements of our 
regulator, rather than listening to the intent of the program as 
authorized by Congress. By clarifying the authorizing statute, we can 
continue to meet our shared mission of serving rural communities and 
facilitate investments in essential services and infrastructure like 
childcare facilities, schools, and hospitals. We hope to work with this 
Committee to improve the existing structure and expand our capacity to 
assist rural constituents who, without this program, may not be able to 
receive necessary healthcare treatments or benefit from essential 
public safety measures.
Rural Business Investment Program
    Since the 2002 Farm Bill, the Rural Business Investment Program 
(RBIP) has stimulated a great source of capital to innovators in 
agricultural and rural businesses. The 2018 Farm Bill brought 
significant changes to RBIP, allowing Farm Credit System participants 
to invest in up to 50 percent of a fund, before the fund must only 
invest in Farm Credit eligible activities. With more capital needed in 
rural America, and to encourage more innovation in the agricultural 
space, we believe that the funds should not be hindered by Farm Credit 
authority limitations. CoBank and the greater Farm Credit System 
support ways to encourage more investors to participate in the program, 
and to expand the cap of Farm Credit System investors to 75 percent. We 
believe that as a reliable partner in the program, we can continue to 
attract interested investors to bring more capital into rural America. 
We look forward to working with the Committee on ways to enhance 
investors' investment in rural America.
    Since 2013, CoBank has committed $254.5 million in 15 private 
equity funds in concert with Farm Credit institutions and other 
institutional investors: Midwest Growth Partners, Midwest Growth 
Partners II, and Midwest Growth Partners III, West Des Moines, Iowa; 
Advantage Capital Ag Partners, St. Louis, Missouri; Innova Ag 
Innovation Fund IV and Innova Ag Innovation Fund VI, Memphis, 
Tennessee; Open Prairie Rural Opportunities Fund, Effingham, Illinois; 
Blue Highway Growth Capital Fund, Boston, Massachusetts and 
Philadelphia, Pennsylvania; Pharos Capital Partners Fund IV-A, 
Nashville, Tennessee and Dallas, Texas; Lewis & Clark RBIC Fund II, St. 
Louis, Missouri; Rural American Fund III RBIC, Chicago, Illinois; 
Azalea Capital RBIC Fund, Greenville, South Carolina; AGR Partners RBIC 
Fund, Davis, California; RuralWorks Impact Partners 1, Cornwall, 
Vermont and Minneapolis, Minnesota; Generation Food Rural Partners I, 
New York, New York. Each of these funds has a slightly different focus 
to meet different needs of a diverse rural economy. Today, over 110 
rural businesses have received investments from these funds.
    While these are significant achievements, we believe that 
enhancements to RBIP will further address the investment needs of rural 
entrepreneurs so that more people can start and grow their businesses 
in rural communities.
Business & Industry Loan Guarantees
    The Business & Industry Loan Guarantees (B&I Loans) allow for Farm 
Credit institutions, like CoBank, to participate. This partnership 
allows entities participating in the loan to extend more credit than 
they typically would be able to, all with the mission to bring 
investment in to rural America. Over the past several years, we have 
seen a dramatic deterioration of interest of the B&I program. Many of 
our customers have started to engage with the Small Business 
Administration because their loan programs offer a higher guarantee and 
don't require the expensive fees, like the B&I program. During the 
pandemic, we worked with USDA to try to engage customers on applying 
for the B&I program, but we did not see a dramatic increase in 
participation. It is worth considering enhancements to the program, as 
this program has the opportunity to fulfill a great need for 
entrepreneurial innovation in the agriculture and rural spaces.
Rural Cooperative Development Grants
    For more than 20 years, USDA has depended on the services and 
expertise of cooperative development centers to support economic needs 
of rural communities through cooperatives. These centers are nonprofit 
organizations or centers housed within institutions of higher education 
that provide technical assistance unavailable directly from USDA or 
through programs offered by the SBA. Rural Cooperative Development 
Grants (RCDG) support the startup, expansion and innovation of 
cooperatively owned businesses and benefit from the program's 
flexibility to address a wide variety of economic needs. Co-ops 
including child- and elder-care, housing, meat processing, grocery, and 
other businesses are just a few examples. Increasingly, businesses and 
communities have sought to use these funds to prevent the closure of 
existing mom-and-pop businesses and converting the business to a 
cooperative owned by the community or the workers themselves. This 
program has been largely successful despite little attention. We urge 
the Committee to work with cooperative development centers to usher 
modest changes to the RCDG program that will improve its effectiveness 
for rural cooperatives.
    CoBank is a proud partner of this network of cooperative 
development centers. In 2012, CoBank launched the Co-op Start program 
to compliment the growing need seen by cooperative development centers. 
Co-op Start provides patient financing to early stage farmer-owned 
processing and marketing cooperatives that are working with RCDG 
grantees. By specifically targeting entities considered low-resource 
and not fully creditworthy under traditional credit metrics, CoBank 
helps to advance these entities to the next stage of development when 
they can qualify for conventional financing. Recognizing the challenges 
many startup entities face in raising equity, CoBank introduced a Rural 
Impact Equity Match Grant Program in 2020, primarily for farmer 
cooperatives, but entities with other structures that demonstrate a 
meaningfully positive impact on rural America are also eligible. As 
part of these grant awards, CoBank also provides additional technical 
assistance funding to cooperative development centers to support this 
work. To date, CoBank has provided over $3 million in innovative loans, 
leases, and grants to 28 start-ups and five cooperative development 
centers through the Co-op Start program. In just three grant cycles, 
the Rural Impact Equity Match has injected $350,000 in startups in 
amounts up to $50,000.
    CoBank will continue to support cooperative development 
opportunities at USDA. Along with our cooperative colleagues, we will 
advocate for more Federal cooperative development resources in order to 
partner in an effective way to multiply our impact.
In Conclusion
    The farm bill provides food assistance and food security to low-
resource individuals, investment opportunities for emerging 
agricultural research, security for livestock and crop producers and 
financial access for rural communities. Too often, it is this last 
piece--access to affordable, reliable financial tools--that is 
overlooked. It is easy for many to take for granted the people who grow 
our food and the communities where they live and work; easy to ignore 
the infrastructure needed for producers to transport commodities, and 
for livestock and food products to reach our dining tables and global 
markets; easy to forget land-grant universities are anchoring 
institutions and create employment opportunities for many rural 
residents and answering research questions that can help agriculture 
solve emerging challenges; and it is easy for some to forget what it 
takes to access safe drinking water when they have never gone without. 
Each of these essential activities requires access to a program 
supported by Rural Development and the USDA.
    It is our mission to serve hard-working individuals, companies, 
producers, and customers in rural America. We prioritize those who have 
been overlooked. CoBank will continue to advocate for a strong and 
robust Rural Development Title. Improvements are always possible, but 
maintaining the foundation in which USDA has built and working to 
enhance any program to improve rural America is of the utmost 
importance to the customers we both serve. More resources are needed in 
rural communities and with no new funding expected for this farm bill, 
we hope the Committee will consider proposals from partners who are 
willing to put time and resources behind the proposals in which we 
suggest. We appreciate the Committee's consideration of our comments 
and look forward to working with you towards a successful 2023 Farm 
Bill.

                                  [all]