    [House Hearing, 119 Congress]
    [From the U.S. Government Publishing Office]

    61-954 PDF

                                     2025__

    2025

      USDA'S RURAL DEVELOPMENT: DELIVERING VITAL PROGRAMS AND SERVICES TO
                                     RURAL
                                    AMERICA

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

                                    HEARING

                                   BEFORE THE

         SUBCOMMITTEE ON COMMODITY MARKETS, DIGITAL ASSETS, AND RURAL
                                  DEVELOPMENT

                                     OF THE

                            COMMITTEE ON AGRICULTURE
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED NINETEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                               SEPTEMBER 18, 2025

                                   __________

                               Serial No. 119-16

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

                            COMMITTEE ON AGRICULTURE

                     GLENN THOMPSON, Pennsylvania, Chairman

    FRANK D. LUCAS, Oklahoma             ANGIE CRAIG, Minnesota, Ranking
    AUSTIN SCOTT, Georgia, Vice          Minority Member
    Chairman                             DAVID SCOTT, Georgia
    ERIC A. ``RICK'' CRAWFORD, Arkansas  JIM COSTA, California
    SCOTT DesJARLAIS, Tennessee          JAMES P. McGOVERN, Massachusetts
    DOUG LaMALFA, California             ALMA S. ADAMS, North Carolina
    DAVID ROUZER, North Carolina         JAHANA HAYES, Connecticut
    TRENT KELLY, Mississippi             SHONTEL M. BROWN, Ohio, Vice
    DON BACON, Nebraska                  Ranking Minority Member
    MIKE BOST, Illinois                  SHARICE DAVIDS, Kansas
    DUSTY JOHNSON, South Dakota          ANDREA SALINAS, Oregon
    JAMES R. BAIRD, Indiana              DONALD G. DAVIS, North Carolina
    TRACEY MANN, Kansas                  JILL N. TOKUDA, Hawaii
    RANDY FEENSTRA, Iowa                 NIKKI BUDZINSKI, Illinois
    MARY E. MILLER, Illinois             ERIC SORENSEN, Illinois
    BARRY MOORE, Alabama                 GABE VASQUEZ, New Mexico
    KAT CAMMACK, Florida                 JONATHAN L. JACKSON, Illinois
    BRAD FINSTAD, Minnesota              SHRI THANEDAR, Michigan
    JOHN W. ROSE, Tennessee              ADAM GRAY, California
    RONNY JACKSON, Texas                 KRISTEN McDONALD RIVET, Michigan
    MONICA De La CRUZ, Texas             SHOMARI FIGURES, Alabama
    ZACHARY NUNN, Iowa                   EUGENE SIMON VINDMAN, Virginia
    DERRICK VAN ORDEN, Wisconsin         JOSH RILEY, New York
    DAN NEWHOUSE, Washington             JOHN W. MANNION, New York
    TONY WIED, Wisconsin                 APRIL McCLAIN DELANEY, Maryland
    ROBERT P. BRESNAHAN, Jr.,            CHELLIE PINGREE, Maine
    Pennsylvania                         SALUD O. CARBAJAL, California
    MARK B. MESSMER, Indiana
    MARK HARRIS, North Carolina
    DAVID J. TAYLOR, Ohio

                                     ______

                         Parish Braden, Staff Director

                     Brian Sowyrda, Minority Staff Director

                                     ______

         Subcommittee on Commodity Markets, Digital Assets, and Rural
                                  Development

                     DUSTY JOHNSON, South Dakota, Chairman

    JOHN W. ROSE, Tennessee, Vice Chair  DONALD G. DAVIS, North Carolina,
    FRANK D. LUCAS, Oklahoma             Ranking Minority Member
    AUSTIN SCOTT, Georgia                DAVID SCOTT, Georgia
    DAVID ROUZER, North Carolina         NIKKI BUDZINSKI, Illinois
    TRACEY MANN, Kansas                  JONATHAN L. JACKSON, Illinois
    KAT CAMMACK, Florida                 SHRI THANEDAR, Michigan
    BRAD FINSTAD, Minnesota              ADAM GRAY, California
    ZACHARY NUNN, Iowa                   KRISTEN McDONALD RIVET, Michigan
    ROBERT P. BRESNAHAN, Jr.,            SHOMARI FIGURES, Alabama
    Pennsylvania                         EUGENE SIMON VINDMAN, Virginia,
    MARK B. MESSMER, Indiana             Vice Ranking Minority Member
    DAVID J. TAYLOR, Ohio                JOHN W. MANNION, New York
                                         APRIL McCLAIN DELANEY, Maryland

                                      (ii)
                                 C O N T E N T S

                                  ----------
                                                                       Page
    Craig, Hon. Angie, a Representative in Congress from Minnesota,
      opening statement..............................................     4
        Prepared statement...........................................     6
        Submitted letter on behalf of Bill Broydrick, Executive
          Director, National Rural Lenders' Roundtable...............    90
    Davis, Hon. Donald G., a Representative in Congress from North
      Carolina, opening statement....................................     3
        Prepared statement...........................................     4
    Johnson, Hon. Dusty, a Representative in Congress from South
      Dakota, opening statement......................................     1
        Prepared statement...........................................     2
        Submitted letters on behalf of:
            Lipsetz, David, President and Chief Executive Officer,
              Housing Assistance Council.............................    75
            Waldorf, Jack, Executive Director, Western Governors'
              Association............................................    76
    Thompson, Hon. Glenn, a Representative in Congress from
      Pennsylvania, prepared statement...............................     7
        Submitted statement on behalf of Anthony Pipa, Senior Fellow,
          Center for Sustainable Development, Brookings Institution;
          Brent Orrell, Senior Fellow, American Enterprise Institute.    88

                                   Witnesses

    Brand, Bette, former Deputy Under Secretary, Rural Development,
      U.S. Department of Agriculture; President and Chief Executive
      Officer, Strategic Consulting LLC, Roanoke, VA.................     8
        Prepared statement...........................................     9
    Heimel, Hon. Paul, Commissioner, Potter County, Pennsylvania,
      Cowdersport, PA; on behalf of National Association of Counties.    31
        Prepared statement...........................................    32
    Forbes, J.D., Lynne Keller, President and Chief Executive
      Officer, South Eastern Council of Governments, Sioux Falls, SD;
      on behalf of National Association of Development Organizations.    39
        Prepared statement...........................................    41
    Torres Small, J.D., Hon. Xochitl, former Deputy Secretary, U.S.
      Department of Agriculture; Executive Director, Quivira
      Coalition, Las Cruces, NM......................................    46
        Prepared statement...........................................    48
        Submitted question...........................................    92

      USDA'S RURAL DEVELOPMENT: DELIVERING VITAL PROGRAMS AND SERVICES TO

                                 RURAL AMERICA

                                  ----------

                          THURSDAY, SEPTEMBER 18, 2025

                      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 10:00 a.m., in
    Room 1300, Longworth House Office Building, Hon. Dusty Johnson
    [Chairman of the Subcommittee] presiding.
        Members present: Representatives Johnson, Rose, Lucas,
    Mann, Finstad, Nunn, Bresnahan, Messmer, Taylor, Davis, David
    Scott of Georgia, Figures, Mannion, McClain Delaney, and Craig
    (ex officio).
        Staff present: Laurel Lee Chatham, Austin DeBerry, Sofia
    Jones, Josh Stull, John Konya, Suzie Cavalier, Joshua Lobert,
    Emma Simon, and Jackson Blodgett.

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

        The Chairman. Ladies and gentlemen, the Committee will come
    to order.
        Welcome, and thank you for joining today's hearing
    entitled, USDA's Rural Development: Delivering Vital Programs
    and Services to Rural America. After brief opening remarks,
    Members will receive testimony from our witnesses today, a
    really excellent panel, and then the hearing will be open to
    questions.
        In consultation with the Ranking Member, Mr. Davis, and
    pursuant to Rule XI(e), I want to make Members of the
    Subcommittee aware that Members of the full Committee will be
    joining us today.
        Today, we are going to hear from great rural leaders and
    former USDA Rural Development officials about why the programs
    and services that Rural Development provides to rural America
    are so incredibly important. This builds on a series of rural
    development hearings that this Subcommittee has had in recent
    years. Last Congress, we examined programs that support
    broadband, energy, water systems, rural businesses and
    industry, rural cooperatives, and biomanufacturing. USDA Rural
    Development is uniquely positioned to serve our rural
    communities. Today, we will learn about the various programs
    that provide needed investment in our rural communities,
    essential infrastructure, small businesses, and economic
    development. So, let's just highlight a few so we are all on
    the same page.
        We have the Community Facilities Loan & Grant Programs.
    Those are crucial tools to provide essential community
    infrastructure in rural America. Projects include fire and
    rescue stations, village and town halls, healthcare clinics,
    hospitals, adult and childcare centers, assisted living
    facilities, rehabilitation centers, public buildings, schools,
    libraries, and many other community-based initiatives. Just, it
    is hard to imagine what our rural communities would look like
    without them. The Value-Added Producer Grant program is really
    an unsung hero of the RD programs. Farmers and ranchers are
    eligible for this program that helps them enter value-added
    activities to generate new products, create and expand
    marketing opportunities, and, essentially, increase income. The
    Rural Economic Development Loan and Grant programs provide
    funding for rural projects through local utility organizations.
    USDA RD provides zero-interest loans to local utilities, which
    they, in turn, pass through to local businesses for projects
    that will create and retain employment in rural areas.
        The Rural Business Investment Program promotes economic
    development and creates jobs and wealth opportunities by
    supporting the equity capital investment needs in rural
    America. The Rural Microentrepreneur Assistance Program
    provides loans and grants to micro-enterprise development
    organizations--MDOs--to help micro-enterprises start up and
    grow through a Rural Microloan Revolving Fund and provide
    training and technical assistance to microloan borrowers and
    micro-entrepreneurs. That is lots of acronyms but also a lot of
    good for rural America. Most of these programs were
    reauthorized in the Farm Food and National Security Act of 2024
    (H.R. 8467), and so they have an expiration date. As we move
    forward with reauthorizing expiring USDA RD programs, the
    feedback and the conversations that we are having here today
    will help us improve these vital programs so that we can even
    better serve rural America and the rural communities that all
    of us here represent.
        I want to thank each of our witnesses for your service to
    rural America and for the perspectives you bring today. I have
    a couple of personal friends on the panel, and so I am excited
    about that as well. We will talk about that in a minute. I do
    want to recognize the distinguished Ranking Member for any
    remarks he would like to make. Just as a note, he and I have
    generally run this Subcommittee in a bipartisan manner, both of
    us kind of managing/serving as Chairman of the Subcommittee.
    And so, I don't want anybody to get nervous assuming the
    Minority party has seized control of the dais.
        [Laughter.]
        The Chairman. If Mr. Davis recognizes you, that is just as
    valid as a recognition from Mr. Johnson.
        [The prepared statement of Mr. Johnson follows:]

    Prepared Statement of Hon. Dusty Johnson, a Representative in Congress
                               from South Dakota
        Today, we will hear from rural leaders and former USDA Rural
    Development officials about why the programs and services they provide
    are vital to rural America.
        This builds on the series of rural development hearings this
    Subcommittee has held in recent years. Last Congress, we examined
    programs that support broadband, energy, water systems, rural business
    and industry, rural cooperatives, and biomanufacturing.
        USDA Rural Development is uniquely positioned to serve our rural
    communities. Today we will learn about various programs that provide
    needed investment in our rural communities' essential infrastructure,
    small business, and economic development.
        To highlight a few: the Community Facilities Loan and Grant
    Programs at Rural Development are crucial tools to provide essential
    community infrastructure in rural America. Projects include fire and
    rescue stations, village and town halls, health care clinics,
    hospitals, adult and child-care centers, assisted living facilities,
    rehabilitation centers, public buildings, schools, libraries, and many
    other community-based initiatives.
        The Value-Added Producer Grant Program is the unsung hero of RD
    programs. Farmers and ranchers are eligible for this program that helps
    them enter value-added activities to generate new products, create and
    expand marketing opportunities, and increase income.
        The Rural Economic Development Loan and Grant programs provide
    funding for rural projects through local utility organizations. USDA RD
    provides zero-interest loans to local utilities which they, in turn,
    pass through to local businesses for projects that will create and
    retain employment in rural areas.
        The Rural Business Investment Program promotes economic development
    and creates job and wealth opportunities by supporting the equity
    capital investment needs in rural America.
        The Rural Microentrepreneur Assistance Program provides loans and
    grants to Microenterprise Development Organizations (MDOs) to help
    microenterprises start up and grow through a Rural Microloan Revolving
    Fund and provide training and technical assistance to microloan
    borrowers and micro entrepreneurs.
        Most of these programs were reauthorized in the Farm, Food, and
    National Security Act of 2024, as they have an expiration date. As we
    move forward with reauthorizing expiring USDA RD programs, the feedback
    received here today will help us improve these vital programs that
    serve rural America and the rural communities we represent.
        I want to thank each of our witnesses for your service to rural
    America and for the perspectives you bring today. I am especially
    excited that Ms. Lynn Forbes, my constituent, is here to share hers.

        The Chairman. So, with that, my friend, Mr. Davis.

    OPENING STATEMENT OF HON. DONALD G. DAVIS, A REPRESENTATIVE IN
                      CONGRESS FROM NORTH CAROLINA

        Mr. Davis. Thank you so much, Mr. Chairman. It is truly an
    honor to be on this journey with you. And I must admit, as a
    mayor growing up in Snow Hill, North Carolina and eventually
    making my way to Congress, one of the things I had in my mind
    was rural development, and we realize the importance of Rural
    Development. Rural Development is the heartbeat--it is the
    heartbeat--of many communities across this nation, and
    especially in a district like the 1st Congressional District,
    22 counties. One hundred percent of the counties are rural. So,
    we are here for a really important reason today, and I think
    about the investments that are made, and as these investments
    are made in rural America, it makes a huge difference.
        This past Saturday, I showed up at Nashville Fire
    Department for the ribbon cutting of Fire Station Number 2. It
    could not have happened without rural development. The
    Community Facilities Program granted help for this fire
    station. The Community Facilities Program provides affordable
    funding to build and construct essential rural community
    facilities, such as firehouses, police stations, and community
    centers. Another successful program and that is really
    important to me is the ReConnect Loan and Grant Program. Oh
    god, I can't tell you when I think about living in eastern
    North Carolina and broadband, and the need to make important
    connections.
        So, these are just some of the programs. I could continue
    on, RBDG in terms of the Rural Business Development Grants--
    these programs are essential. So, when we come together as a
    Subcommittee to have meaningful conversations, these
    conversations are dire and critical as we talk about rural
    America. So, with that in mind, Mr. Chairman, I look forward to
    having a wonderful Subcommittee hearing today, and I yield
    back.
        [The prepared statement of Mr. Davis follows:]

        Prepared Statement of Hon. Donald G. Davis, a Representative in
                          Congress from North Carolina
        Thank you so much, Mr. Chairman. It's truly an honor to be on this
    journey with you.
        And I must admit, as a mayor, growing up in Snow Hill, North
    Carolina, and eventually making my way to Congress, one of the things I
    had on mind in my mind was rural development.
        And we realize the importance of rural development.
        Rural development is the heartbeat. It's the heartbeat of many
    communities across this nation, and especially in a district like the
    1st Congressional District, 22 counties, 100 percent of the counties
    are rural.
        So, we're here for a really important reason today. And I think
    about the investments that are made.
        And as these investments are made in rural America, it makes a huge
    difference.
        This past Saturday, I showed up at Nashville Fire Department for
    the ribbon cutting of Fire Station Number 2.
        It could not have happened without rural development.
        The Community Facilities Program grant helped for this fire
    station.
        The Community Facilities Program provides affordable funding to
    build and construct essential rural community facilities such as
    firehouses, police stations and community centers.
        Another successful program, and that's really important to me, is
    the ReConnect Loan and Grant Program.
        Oh, God, I can't tell you when I think about living in eastern
    North Carolina and broadband and the need to make important
    connections.
        So, these are just some of the programs I could continue on, that
    are back in terms of Rural Business Development, Development Grants;
    these programs are essential.
        So when we come together as a Subcommittee to have meaningful
    conversations, these conversations are dire and critical as we talk
    about rural America.
        So, with that in mind, Mr. Chairman, I look forward to having a
    wonderful Subcommittee hearing today, and I yield back.

        The Chairman. Let's recognize my neighbor in Minnesota, the
    Ranking Member of the full Committee, Ms. Craig, for any
    comments she would like to make.

      OPENING STATEMENT OF HON. ANGIE CRAIG, A REPRESENTATIVE IN
                        CONGRESS FROM MINNESOTA

        Ms. Craig. Thank you, Mr. Chairman. I am still waiting on
    you to offer that gavel to me, too. We will talk to the
    Chairman about that when he gets here.
        [Laughter.]
        Ms. Craig. Thank you so much, Chairman Johnson and Ranking
    Member Davis, for holding today's hearing, and thank you to our
    witnesses for being here today to discuss one of the most
    pressing issues facing this Committee: uplifting and supporting
    rural America. A special welcome to my former colleague,
    Xochitl Torres Small, a former Under Secretary of USDA. It is
    so good to see you here and back in the building again.
        Rural America is frequently portrayed as a monolith,
    especially by those in D.C. We too often fail to recognize its
    diversity, not just of people, but of industry, opportunity,
    and challenges. Farmers, their families, and their businesses
    are the engines of small towns across Minnesota, but those same
    places are also the home to teachers and nurses, manufacturers,
    and small businesses, and right now, too many of them are
    hurting. If you are a farmer, you are dealing with high cost,
    low prices, and not enough markets. If you are opening a
    business for the first time, you may have no access to high-
    speed internet and face severe workforce shortages. And if you
    are raising a family there or taking care of an aging parent,
    the cost of groceries and healthcare are increasing, and your
    ability to access a childcare center, a daycare, a doctor close
    to home is getting more difficult by the day.
        You know, my colleagues' so-called One Big Beautiful Bill
    (Pub. L. 119-21), in my view, is a direct assault on rural
    healthcare. It slashed Medicaid by nearly $1 trillion. The
    Rural Health Care Fund that my colleagues are touting as a new
    investment does not come close to correcting the damage that
    the bill will do in rural America, both to our health
    infrastructure and other areas. In my home State of Minnesota,
    rural clinics are already closing because of these seismic
    Medicaid changes, forcing people to travel many, many miles
    further to receive medical care. It doesn't end there. This
    week, House Republicans are pushing a government funding bill
    through the House that would increase healthcare premiums by as
    much as 90 percent in many rural areas by allowing the ACA tax
    credits to expire, hitting many rural communities, family
    farmers, right in the pocketbook. There is no reason why we
    can't fix the problem right now.
        These policies do not grow local economies, lower costs, or
    improve access to the critical services that our rural
    communities need. Rural America needs meaningful investments,
    not cuts to hospitals, which are often the largest employers in
    many rural counties. It needs access to reliable high-speed
    internet so that farmers and entrepreneurs can access the
    information and services that they need to thrive. It needs
    adequately-qualified teachers, childcare providers, and
    affordable housing so that rural communities can grow. It needs
    new economic opportunities so that our kids don't leave for
    college in the ``big city'' and never come back. It needs
    vibrant main streets so that rural businesses and communities
    can grow together. It needs trade policy that doesn't undermine
    American agriculture.
        The seeds of those investments start here in this
    Subcommittee. They grow at USDA Rural Development. They bear
    fruit in small towns around this country. I am glad we are
    taking a comprehensive look at what USDA Rural Development
    programs can do. While these programs are beneficial, they do
    not exist in a vacuum. Economic opportunities in rural America
    depend on the basics, like access to healthcare, a good
    education, and jobs, and our discussion cannot lose sight of
    that because on all of those fronts, Republican policies are
    failing. I look forward to hearing from today's panel on how
    USDA Rural Development programs can support rural communities
    during these difficult times. Thank you again, Mr. Chairman,
    for being here, all of our witnesses, and I yield back.
        [The prepared statement of Ms. Craig follows:]

     Prepared Statement of Hon. Angie Craig, a Representative in Congress
                                 from Minnesota
        Thank you, Chairman Johnson and Ranking Member Davis, for holding
    today's hearing, and a thank you to our witnesses for being here today
    to discuss one of the most pressing issues facing this Committee:
    uplifting and supporting rural America.
        Rural America is frequently portrayed as a monolith, especially by
    those in D.C. We too often fail to recognize its diversity, not just of
    people but of industry, opportunity and challenges.
        Farmers, their families and their businesses are the engines of
    small towns across Minnesota--but those same places are also the home
    to teachers and nurses, manufacturers and small businesses. And right
    now, too many of them are hurting.
        If you're a farmer, you're dealing with high costs, low prices, and
    not enough markets.
        If you're opening a business for the first time, you may have no
    access to high-speed internet and face severe workforce shortages.
        And if you're raising a family there or taking care of an aging
    parent, the cost of groceries and health care are increasing and your
    ability to access a doctor close to home is getting more difficult by
    the day.
        Republicans' so-called One Big Beautiful Bill is a direct assault
    on rural health care. It slashed Medicaid by nearly $1 trillion. The
    rural health care fund that Republicans are touting as a new investment
    does not come close to correcting the damage their bill will do rural
    America's health infrastructure. Just the latest attempt to put
    lipstick on this pig.
        In my home state of Minnesota, rural clinics are already closing
    because of these ``seismic Medicaid changes''--forcing people to travel
    miles further to receive medical care.
        It doesn't end there. This week, House Republicans are pushing a
    government funding bill through the House that would increase health
    care premiums by as much as 90 percent in many rural areas by allowing
    ACA tax credits to expire, hitting many rural Americans and farmers
    right in the pocketbook. There is no reason we can't fix that problem
    right now.
        These policies do not grow local economies, lower costs or improve
    access to the critical services rural communities need.
        Rural America needs meaningful investments, not cuts to hospitals,
    which are often the largest employers in many rural counties.
        It needs access to reliable, high-speed internet so that farmers
    and rural entrepreneurs can access the information and services they
    need to thrive.
        It needs adequately qualified teachers, child care providers and
    affordable housing, so that rural families can grow.
        It needs new economic opportunities so that our kids don't leave
    for college in the ``big city'' and never come back.
        It needs vibrant main streets so that rural businesses and
    communities can grow together.
        It needs trade policy that doesn't undermine American agriculture.
        The seeds of those investments start here, in this Subcommittee.
    They grow at USDA Rural Development. They bear fruit in small towns
    across the country.
        I am glad we are finally taking a comprehensive look at what USDA
    Rural Development programs can do. While these programs are beneficial,
    they do not exist in a vacuum. Economic opportunities in rural America
    depend on the basics, like access to health care, a good education and
    jobs, and our discussion cannot lose sight of that. Because on those
    fronts, Republican policies are failing.
        I look forward to hearing from today's panel on how USDA Rural
    Development programs can support rural communities during these
    difficult times.
        Thank you again for being here today, and I yield back.

        The Chairman. The chair would request that other Members
    submit their opening statements for the record so the witnesses
    may begin their testimony to ensure that there is ample time
    for questions.
        [The prepared statement of Mr. Thompson follows:]

    Prepared Statement of Hon. Glenn Thompson, a Representative in Congress
                               from Pennsylvania
        Good morning. Thank you to Chairman Johnson and Ranking Member
    Davis for convening this hearing to discuss the importance of Rural
    Development programs and services at the United States Department of
    Agriculture.
        Our rural communities are the heartbeat of rural America, the
    backbone of our great nation. Investing in these communities through
    USDA Rural Development programs is crucial to keep our rural
    communities strong, including for America's farmers, producers, and
    ranchers.
        We must not leave rural communities behind, and we can help by
    reauthorizing Rural Development programs in Titles VI and IX of the
    farm bill that directly support our rural residents through grants,
    loans, and technical assistance.
        The beauty of USDA's Rural Development is its structure. There are
    three agencies at the national level. Then, there are state-level
    offices led by State Directors, who work with local offices across
    their respective states to implement RD programs and services. The
    State Directors, like Pennsylvania's State Director Mike Cabell, and
    their local staff know their communities better than anyone. They are
    an integral part of their communities. Not every Federal agency can say
    the same. Rural Development programs and services are best housed at
    USDA, where they have long provided specialized services to rural
    communities that other agencies do not understand.
        With that top of mind, I share the principles underlying
    Agriculture Secretary Brooke Rollins' plan for USDA reorganization,
    which at its core is to improve customer service and optimize the use
    of finite taxpayer resources.
        As USDA implements Sec. Rollins' reorganization plan, I look
    forward to working with USDA to ensure these principles for rural
    America are upheld.
        I look forward to hearing from our witnesses today on USDA Rural
    Development programs and services that were not highlighted or covered
    in recent House Agriculture Committee hearings.
        Here are a few examples of vital RD investments in my Congressional
    District of programs that will be highlighted today:

       The Punxsutawney Area Hospital in Jefferson County received
            about $22 million in USDA Community Facilities Direct Loans for
            a renovation and expansion project. I spoke at the
            groundbreaking ceremony in April 2024. The new emergency room
            was just officially opened in June 2025.

       The Cameron County Chamber in Emporium received a Rural
            Business Development Grant of $99,000 for their small business
            incubator. In conjunction with other funding opportunities,
            this will strengthen the local economy and community. I
            recently visited this hotbed for future small businesses.

       Painterland Sisters in Tioga County were awarded a $216,000
            Value-Added Producer Grant to help them create and market new
            products in order to increase farm income. By leveraging this
            program with other funding streams, sisters Stephanie and
            Hayley Painter were able to create a new product: an organic,
            lactose-free, Icelandic-style skyr yogurt. Attendees at my 2025
            Agriculture Summit in Centre County were able to sample
            Painterland Sisters' delicious yogurt.

        These are just a sampling of how USDA's RD programs make a
    difference in my backyard and in countless rural communities all across
    the country.
        Mr. Chairman, thank you again for convening this important hearing.
    I look forward to continuing our work together to strengthen rural
    America.
        I yield back.

        Mr. Davis. Okay. Our first witness today is Ms. Bette
    Brand, who is a former Deputy Under Secretary for Rural
    Development at USDA, and our next witness is the Honorable Paul
    Heimel, who is a County Commissioner for Potter County,
    Pennsylvania Board of Commissioners. Commissioner Heimel is
    testifying on behalf of the National Association of Counties.
        The Chairman. Our third witness has unimpeachable rural
    credentials. She and I served 20 years ago as Board Members on
    the South Dakota Rural Development Council, and she has been
    working ever since then to make rural communities stronger. It
    is my friend, Ms. Lynne Keller Forbes, the Executive Director
    of the Southeastern Council of Governments. Ms. Forbes is
    testifying on behalf of the National Association of Development
    Organizations. And then we also have--oh, they said you get to
    introduce Xochitl. That seems unfair. Okay. We are fighting
    over----
        Mr. Davis. We are fighting over who will introduce you.
        The Chairman. Well, I am going to say a couple sentences,
    and then you can do the real intro.
        [Laughter.]
        The Chairman. When you run for Congress, there are a lot
    of--you think about a lot of the things that winning may help
    you secure. You just don't think about the fact that you are
    going to secure some friends once you get elected to Congress,
    and, indeed, Xochitl Torres Small is a wonderful person and is
    a personal friend, and with that, Mr. Davis, I guess you get
    the honor.
        Mr. Davis. Oh.
        [Laughter.]
        Mr. Davis. Well, let me say to a person that is no stranger
    to Congress and definitely not a stranger to this Committee
    that served our country in so many ways, and a person that
    knows where Wilson, North Carolina is, it is so good to see
    you.
        [Laughter.]
        The Chairman. All right. Very good. Thanks to all our
    witnesses for joining us today. We are 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, at which point
    your time has expired. When you hit zero or, we will kind of
    tap gently like that. It gets increasingly loud, and Mr. Davis
    is particularly heavy handed if you go more than about 15
    seconds over. So, with that, Ms. Brand, please begin when you
    are ready.

             STATEMENT OF BETTE BRAND, FORMER DEPUTY UNDER
     SECRETARY, RURAL DEVELOPMENT, U.S. DEPARTMENT OF AGRICULTURE;
                     PRESIDENT AND CHIEF EXECUTIVE
             OFFICER, STRATEGIC CONSULTING LLC, ROANOKE, VA

        Ms. Brand. Good morning. Chairman Johnson, Ranking Member
    Davis, Vice Chairman Rose, and Members of the Committee, thank
    you for the opportunity to testify today about the critical
    role that USDA Rural Development plays in strengthening rural
    America. My name is Bette Brand, CEO and Founder of Strategic
    Consulting LLC in Roanoke, Virginia. Over my career, including
    more than 35 years in the Farm Credit System and leadership
    roles in USDA Rural Development, my mission has always been the
    same: to help agriculture and rural communities thrive.
        USDA Rural Development manages more than $200 billion in
    loans, guarantees, and grants, delivering over $40 billion each
    year to communities of fewer than 50,000 people. These
    investments finance hospitals, schools, renewable energy,
    broadband, and businesses of every size. Rural Development
    programs don't just provide funding. They transform
    communities. They are the difference between a hospital staying
    open, a small business hiring instead of closing, and a farmer
    finding a new market for their products.
        Earlier this year, the National Rural Lenders Association
    released a landmark assessment of the B&I Loan Guarantee
    Program. The findings confirm what rural communities already
    know, that these programs work. From 2014 to 2022, the B&I
    Program created more than 750,000 jobs in rural America and at
    a Federal cost of just $438 per job. Counties with B&I
    investment saw sustained employment growth, higher wages, a
    stronger GDP per capita for years after the initial investment.
    A one percent increase in B&I investment translates into a .55
    percent increase in state sales tax revenue, a direct return to
    local and state economies.
        These are not abstract numbers. They show that Rural
    Development programs provide one of the highest returns on
    investment of any Federal initiative serving rural America. In
    Virginia, the Maryland-Virginia Milk Producers Cooperative used
    a B&I Guarantee Loan to purchase and upgrade a processing
    facility. Nearly 1,000 dairy farmers benefited, 178 jobs were
    retained, and the region kept a vital market for milk, and it
    is the Maola brand that many of you in this area may recognize.
    In Minnesota, RD financed a $21.6 million public safety
    building, ensuring faster emergency response and improved
    disaster readiness. In Tennessee, Claybrook Farms used a Value-
    Added Producer Grant to launch a branded Angus beef line,
    adding jobs and opening new markets. In South Dakota a $27,000
    microloan launched Wild Ground Coffee, bringing new life to
    main street.
        These are examples of how RD meets communities where they
    are, whether they are helping a century-old cooperative stay
    competitive or giving a startup coffee shop a chance to
    succeed. What makes Rural Development unique is that it
    combines fiscal responsibility with community resilience. Most
    programs leverage private-sector lending, ensuring that
    taxpayers' dollars stretch farther and risks are shared. At the
    same time, Rural Development programs address areas where the
    private market alone cannot carry the full load, like
    healthcare access, renewable energy adoption, and critical
    infrastructure.
        Demand continues to outpace funding. In 2023 and 2024, more
    than 90 percent of the B&I Program budget authority was
    utilized, the highest on record, demonstrating both efficiency
    and an unmet need. Rural Development programs may finance a
    hospital, a meat processing plant, or even a coffee shop, but
    the purpose is the same: expanding opportunity in rural
    America. They have revitalized communities, created and sustain
    jobs, modernized essential services, and give farmers and
    entrepreneurs the chance to compete and succeed. Most
    importantly, they ensure that economic opportunity is not
    defined by ZIP Code.
        Thank you for your time today and your commitment to rural
    America. I look forward to your questions.
        [The prepared statement of Ms. Brand follows:]

    Prepared Statement of Bette Brand, Former Deputy Under Secretary, Rural
       Development, U.S. Department of Agriculture; President and Chief
            Executive Officer, Strategic Consulting LLC, Roanoke, VA
    Introduction
        Chairman Johnson, Ranking Member Davis, Vice Chairman Rose, and
    Members of the Committee, Thank you for allowing me the opportunity to
    provide testimony on rural America and the programs at USDA that help
    improve the economy and quality of life in these important communities.
        My name is Bette Brand, CEO and Founder of Strategic Consulting LLC
    in Roanoke, Virginia. Strategic Consulting helps entrepreneurs and
    business owners access capital for the acquisition or growth of their
    business in rural America. Previously, I served as Deputy Under
    Secretary for USDA Rural Development, Administrator of the Rural
    Business--Cooperative Service, and Acting Administrator of the Rural
    Utilities Service. Before USDA, I spent more than 35 years with the
    Farm Credit System.
        Throughout my career, my focus has been simple: helping agriculture
    and rural communities thrive.
    The Role of Rural Development
        USDA Rural Development (RD) manages more than $200 billion in
    loans, loan guarantees, and grants, delivering over $40 billion
    annually. These investments strengthen communities of fewer than 50,000
    people, helping farmers, families, and entrepreneurs build their future
    in rural America.
        During COVID, RD proved its flexibility by deploying the B&I-CARES
    Act program. This ensured that rural businesses received urgently
    needed capital while protecting program integrity. That success led to
    new efforts such as the Food Supply Chain Program (included in the
    House Agriculture Committee's farm bill with bipartisan support), the
    Timber Production Expansion Guaranteed Loan Program, and other
    initiatives to support rural America.
    Key Programs and Impact
    Guaranteed Loan Programs
        RD does not lend directly in these programs; it guarantees a
    portion of the loan that private/regulated lenders make, sharing the
    risk to unlock credit for viable projects. While this has been advanced
    by the USDA for many years, RD Guaranteed programs were streamlined in
    October 2020 under USDA's OneRD framework. The new rules provided
    lenders with one rulebook, resulting in faster processing, more
    consistency, and greater opportunities for private lenders (most are
    small community banks) to participate, expanding the pool of lenders
    who were willing to extend credit to rural businesses.
        While many of the Guarantee programs below have not had robust
    economic assessments performed on the programs' effectiveness recently,
    their impact overwhelmingly supports rural communities providing
    resources to support critical infrastructure and services that hold a
    community together.
        In fact, all programs noted below are like pieces of rural
    America's puzzle. Each represents a crucial part of the ``jump-start''
    needed to help rural communities thrive. Sometimes one or more pieces
    (RD programs) are needed together for a business or community. Often,
    other Federal programs like SBA 504 and 7A are also included to make
    the project work. In other cases, one piece is needed now, and then the
    business or community grows into the next program.
        Business & Industry Loan Guarantees (B&I)--Supports rural
    businesses by guaranteeing up to 80% of commercial loans in partnership
    with private lenders.
        Earlier this year, the National Rural Lenders Association retained
    Summit. LLC to assess the economic benefits of the Rural Development's
    Business and Industry (B&I) Guaranteed loan Program. Through case
    studies, B&I programmatic data, and macroeconomic summary statistics,
    the report demonstrated many notable positive impacts of the B&I
    program, including:

      a.  From 2014 to 2022, B&I created 757,800 jobs in rural communities.
                Each of these jobs only costs the Federal Government $438
                to create.

      b.  Counties with businesses that utilized the B&I program saw
                employment increases in the short and long term.

      c.  Counties that received B&I investment saw a higher increase in
                their average earnings per worker for nine (9) consecutive
                years after initial investment than similar counties that
                did not receive investment.

      d.  On average, in the years following initial investment, counties
                that received B&I investment had higher GDP per capita than
                similar counties that did not receive investment.

      e.  A 1% increase in B&I investment results in a 0.55% increase in
                state sales tax revenue.

        Generally, Congress has provided significant increases in program
    levels of the B&I program from $1.3 billion in 2016 to the 2024 level
    of $2.2 billion. With each increase, rural communities have deployed
    the capital and sought additional resources with near complete use of
    budget authority in 2023 and 2024 (90.83% and 98.24%, respectively),
    the highest on record.
        In Fiscal Year 2025, The B&I program earned its highest proposed
    budget appropriation in program history ($3.5 billion) while holding
    its second lowest subsidy rate (.02%).
        A direct example of the B&I program at work is in Virginia, where
    Maryland-Virginia Milk Producers Cooperative (in business for over 100
    years) representing nearly 1,000 dairy farmers was able to purchase and
    upgrade a processing facility in November 2023. This allowed them to
    expand their product mix and put more money in the farmer/members'
    pockets. This project retained 178 jobs, sustained regional dairy
    processing, and kept MDVA milk in the market.
        Community Facilities Program (CFP)--Finances essential
    infrastructure such as hospitals, schools, and emergency services. USDA
    reports that between 2005 and 2023, 146 rural hospitals closed or
    stopped providing acute inpatient care. Without hospitals nearby,
    communities lose physicians, equipment ages without replacement, and
    people must travel too far for care. For emergencies, that distance can
    mean the difference between life and death.
        Equally as important as hospitals are emergency services and
    facilities. While firehouses and rescue squads are critical, more
    advanced search and rescue and specialized equipment are often needed
    to properly respond to vehicle and farm accidents.

       In the town of Virginia, Minnesota, RD funded a $21.6
            million public safety building in June of 2024. This ADA
            compliant regional fire/EMS and police headquarters supports
            regional training, disaster operations, and community
            education, improving response times, training, and efficiency.

        Rural Energy for America Program (REAP)--Funds renewable energy and
    efficiency projects for farms and small businesses, often contributing
    to the overall success of a B&I project.

       In 2021, Webb Farm in Tennessee installed a small solar
            panel system, HVAC, and lighting to cut energy costs and boost
            resilience.

       In Minnesota, Four Daughters Vineyard used a $167,500 grant
            to build a solar array, saving $53,000 annually in August 2023.

        In 2020, Rural Development took on a huge task to finally unify and
    streamline processes across all guaranteed loan programs. This effort
    eliminated duplicative processes and introduced a common loan note
    guarantee application for four of the largest guaranteed programs
    included in this testimony above. This process also standardized
    eligibility, origination and servicing provisions, concurrently
    improving efficiency, and enhancing customer service.
        This process also expanded lender participation by allowing
    approval for regulated lenders in good standing to participate in all
    the guaranteed programs rather than applying to be an approved lender
    in each individual program. The OneRD Rule gives more flexible
    collateral and equity requirements that are more in line with standard
    lending practices, more flexible loan terms, and clearer Secondary
    Market sale requirements.
        Additionally, there are now enhanced refinancing options and a
    standardized increased guaranty percentage, providing greater
    consistency for the lenders. This pushes the lender and the RD credit
    committee to have a more critical eye on the project itself rather than
    arbitrarily reducing the guarantee amount at the detriment of the
    credit.
    RD Grant Programs
        In addition to the Guaranteed loan programs, the grant programs
    often complement the needs of a farmer, small business, or a community
    to make the project possible. In other cases, Rural Development Grant
    programs give farmer producers or rural communities the boost to get
    started. Once their project expands, they often utilize a Guaranteed
    loan program.
        Value-Added Producer Grants (VAPG)--Helps farmers capture more
    income by processing or branding their products with greater value.
    Some examples include further processing of milk for a local creamery
    or producing lavender lotions and soaps from lavender grown on the
    farm. This value-added enterprise usually generates a higher return,
    extends the production season, and develops Brand loyalty, all of which
    brings more income to the producers.

       In Tennessee, Claybrook Farms used a $250,000 grant to
            launch a branded Angus beef line, adding 8-10 jobs and opening
            new markets.

       In South Dakota, a $49,750 grant launched the state's only
            on-farm milk bottling line, giving producers direct access to
            consumers.

        Rural Innovation Stronger Economy (RISE) Grants--Spur high-wage job
    creation and regional clusters and builds on the strength of community
    collaboration and cooperation.

       In Michigan, a $2.1 million RISE award created a multi-
            county workforce hub for advanced manufacturing, leading to 125
            new jobs and retention of 425 more.

        Rural Economic Development Loans and Grants (REDLG)--Provide zero-
    interest loans through local utilities who operate in the rural
    communities and often see opportunities to improve the quality of life
    for residents.

       In Minnesota, Redhead Creamery used a $1.5 million loan
            through Stearns Electric Association to expand cheese
            production and build MN's first whey-based distillery and
            tasting room, adding six full-time jobs and new agri-tourism
            opportunities in August 2023.

       In Tennessee, a $2 million loan financed a USDA-inspected
            regional meat processing facility, strengthening livestock
            markets and producer incomes.

        Cooperative Development Grants--Strengthen farmer co-ops and
    marketing alliances. Cooperatives have saved many industries/
    communities when private businesses consolidate or move away, leaving
    poultry producers, forestry and timber producers, or service providers
    without an option to operate.

       In Virginia, FAIRS (Foundation for Agriculture, Innovation
            and Rural Sustainability) received multi-year support to grow
            cooperative marketing across the state.
    RD Business Development Assistance
        Rural Microentrepreneur Assistance Program (RMAP)--Provides
    microloans and technical assistance delivered by local entities to give
    a boost to small or start-up businesses.

       In Sisseton, South Dakota, a modest $27,000 microloan in
            August 2024, through GROW South Dakota helped launch Wild
            Grounds Coffee, bringing life back to main street.

        Rural Business Investment Program (RBIP)--Provides a license to a
    newly formed developmental capital organization to help meet the equity
    capital needed in rural communities. The equity raised by these
    licensed funds then makes venture capital investments to eligible rural
    enterprises or start-ups.

       In Virginia, Soli Organic scaled its indoor agriculture
            operations with RBIP-backed investment. Recently, Soli Organic
            and 80 Acres Farms--both USDA-supported--merged to create one
            of the largest indoor farming networks in the world.

       In Tennessee, the Innova Ag Innovation Fund II is investing
            $31 million to commercialize ag-tech across the Mid-South,
            supporting up to 2,000 high-wage jobs.
    Conclusion
        Rural Development programs may look different--financing a
    hospital, building a meat processing facility, or helping a coffee shop
    get off the ground--but they all share one purpose: expanding
    opportunity in rural America. They revitalize communities, create and
    sustain jobs, build critical infrastructure, and provide farmers and
    entrepreneurs with the tools needed to succeed. Most importantly, they
    ensure that quality of life and economic opportunity are not defined by
    ZIP Code.
        Thank you for your time, and I look forward to your questions.
                                   Attachment

    USDA B&I Guaranteed Loan Program: Economic Assessment, 2025
    Prepared by: Summit, LLC 777 6th St. NW, Suite 520 Washington, DC 20001
    D www.summitllc.us

    Table of Contents
    Executive Summary
    Program Overview

        Introduction to USDA Rural Development
        USDA's B&I Guaranteed Loan Program
        One Rural Development Guaranteed Loan Initiative
        Private-sector participation in the B&I Loan Guarantee Program

    Case Studies

        Champagne Energy and Environmental Solutions: Local business growth
        Commongrounds Cooperative: Building community in Traverse City
        Secure Semiconductor Manufacturing: Returning semiconductor
    manufacturing jobs to rural America
        The Inn at Bellefield: Integrating community and hospitality

    B&I Programmatic Data

        B&I program funding overview
        B&I concentration by sector
        Geographic distribution of loan guarantees
        Program financials: Allotments, obligations, and subsidy rates

    Macroeconomic Summary Statistics

        Employment rises in both the short run and long run
        Counties that receive investment see a positive effect on earnings
        Counties that receive investment see a positive effect on GDP
        State-level analysis: Positive impact of B&I on sales and taxes

    Assessment Methodology: Brief Overview
    List of tables
        Table 1: Core B&I NAICS Industry snapshot: Fiscal Years 2019, 2023,
    and 2024
        Table 2: 2015-2024 core B&I Program: Top ten states by total
    obligation amount
        Table 3: State comparison: Obligation percentage by sector, 2015-
    2024
        Table 4: Congressional district comparison: Obligation percentage
    by sector, 2015-2024
        Table 5: Allotments, obligations, and use rates, 2015-2025
        Table 6: Estimated number of jobs created
        Table 7: Summary of jobs created
        Table 8: Job created: cost to the government
        Table 9: Summary of cost to the government
        Table 10: Overview of assessment methodologies
    List of figures
        Figure 1: B&I program loan performance overview 2015-2024
        Figure 2: Total project costs of core B&I projects from Fiscal
    Years 2005-2024
        Figure 3: 2015-2024 core B&I investment amount by NAICS industry
        Figure 4: State B&I loan guarantee obligation amount per capita
        Figure 5: B&I program loans in zip codes containing Opportunity
    Zones are increasing
        Figure 6: B&I loan program subsidy recent history
        Figure 7: Average earnings per worker for counties that received
    investment and matched counties that did not receive investment
        Figure 8: Average GDP per capita for counties that received
    investment and matched counties that did not receive investment
        Figure 9: Average GDP for counties that received investment and
    matched counties that did not receive investment
        Figure 10: Log of state sales income tax collected plotted against
    log of B&I investment
    Executive Summary
        Summit was retained by the National Rural Lenders Association
    (NRLA) to assess the economic benefits of the U.S. Department of
    Agriculture (USDA) Rural Development's Business and Industry (B&I)
    Guaranteed Loan Program. The B&I program aims to increase business
    capital access through loan guarantees and improve economic prospects
    in rural communities. While the government's subsidy cost is known,
    NRLA aimed to define the program's economic benefits and establish
    return on investment.
        Summit conducted over 20 interviews with subject-matter experts,
    lenders, packagers, borrowers, and Federal credit managers and
    leadership; conducted a wide literature review; and employed
    qualitative and quantitative (econometrics) research methods to assess
    program outcomes and impacts. At the most granular level (project case
    studies), B&I programmatic level, and macroeconomic level, we find a
    program with positive momentum and impact, as well as versatility to
    meet Administration priorities.
        Case studies. In the first section, we highlight four projects
    across the country and in different asset classes, which contain tried-
    and-true results before and after loan origination. We find that the
    B&I program incentivizes projects that would not otherwise be built
    with traditional commercial credit. B&I rates, terms, and conditions
    were not only attractive but also necessary to encourage business
    innovation and expansion with outsize impacts on rural America.
    ``Tombstone data,'' or credit memo intentions, are proven in economic
    measures such as jobs, wages, and companies' financial growth.
        Programmatic data. Next, we display USDA Rural Development B&I-
    specific programmatic data over the past decade. We find a program on
    the move, running increasingly more efficient and easily customizable
    to meet manufacturing, agricultural, and other industry business needs
    across rural America. In Fiscal Year 2025, the B&I program earned its
    highest allotment in program history ($3.5 billion) while holding its
    second lowest subsidy rate (0.2%). Other highlights include:

       B&I loans in Opportunity Zones have increased 59.29% from
            2018 to 2025.

       From 2005 through 2024, B&I leveraged an additional $12.4
            billion in other capital, such as commercial debt, private
            equity, and tax credits.

       Total core B&I loans increased from 2015 to 2024 by 108%.

       Total B&I allotment use in 2023 and 2024 was 90.83% and
            98.24%, respectively, the highest on record.

        Macroeconomic statistics. Finally, we cite the findings of our
    macroeconomic analysis, focusing on jobs, earnings, gross domestic
    product (GDP), and tax benefits. For example, the B&I program created
    more than 750,000 jobs from 2012 to 2022, costing the Federal
    Government $438 per job. We also find a positive correlation between
    B&I investment and other economic outputs:

       Counties that receive B&I loans have higher GDP per capita
            and GDP than those without.

       Counties that receive B&I loans earn more per worker than
            counties that do not.

       A 1% increase in B&I loans results in a 0.55% increase in
            sales tax revenue for the average state in the long run.

        Based on historical evidence and predicated on persistent funding
    levels we would expect to see similar positive economic impacts of the
    B&I program moving forward.
    Program Overview

         What is the USDA Business and Industry Guaranteed Loan Program?
    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
        8Business and Industry loan guarantees improve the economic health
     of rural communities by increasing business capital access and enabling
     affordable financing for rural businesses.0
    ------------------------------------------------------------------------
        Rural businesses can use the loans to pay for:

         Enlarging, repairing, modernizing, or developing
         businesses;

         Purchasing and developing land, buildings, and associated
         infrastructure;

         Purchasing and installing machinery, equipment, supplies,
         or inventory;

         Refinancing debt when refinancing improves cash-flow and
         creates jobs; and

         Acquiring businesses to maintain business operations and
         create or save jobs.
    ------------------------------------------------------------------------
        8Eligible lenders:0                  6Eligible borrowers:0

         8Federal and state-         6For-profit and
         chartered banks0                    nonprofit businesses0
         8Savings and loan           6Cooperatives0
         institutions0
         8Farm Credit Banks          6Federally recognized
         with direct lending authority0      Tribes0
                                             6Public bodies0
         8Credit unions0             6Individuals engaged or
         8Nonregulated lenders       planning to engage in a
         may be approved under the           business0
         OneRD Guaranteed Loan               6Individual borrowers
         Initiative regulation0              must be U.S. citizens or
                                             legally admitted permanent
                                             residents0
    ------------------------------------
     Lenders can be located anywhere in      6Private-entity
             the United States               borrowers must ensure loan
                                             funds stay within the U.S. and
                                             that financed facilities
                                             primarily create or retain
                                             rural jobs0
    ------------------------------------------------------------------------
        Eligible areas:

         Rural areas outside cities or towns with populations of
         50,000 or less

         Borrower headquarters can be in a larger city if funded
         project is in an eligible rural area.
    ------------------------------------------------------------------------
        6Loan details:0
        4Rates0                              4Negotiated between
                                             lender and borrower0
                                             4Can be fixed or
                                             variable0
        6Terms0                              6Cannot exceed 40
                                             years0
                                             6Determined by lender
                                             and USDA based on loan purpose,
                                             asset life, and repayment
                                             ability0
        4Guarantee amount0                   4Guarantee percentages
                                             are published annually in the
                                             Federal Register0
                                             4FY 2025: 80%
                                             guarantee0
        6Fees0                               6Initial guarantee fee:
                                             3% of guaranteed loan amount0
                                             6Annual renewal fee:
                                             0.55% of guaranteed portion of
                                             outstanding balance0
                                             6Reasonable loan
                                             origination fees negotiated
                                             between lender and borrower0
                                             6Some qualifying
                                             projects may receive a reduced
                                             fee of 1%0
        4Benefits0                           4Offers loan amounts
                                             exceeding $5 million for large
                                             rural business needs0
                                             4Provides fully
                                             amortized terms with no balloon
                                             payments for stable cash-flow0
                                             4Allows flexible use of
                                             proceeds, including real
                                             estate, equipment, working
                                             capital, and refinancing0
                                             4Government guaranteed
                                             loan provides creditability and
                                             project momentum0
    ------------------------------------------------------------------------

    Introduction to USDA Rural Development
        USDA's Rural Development (RD) plays a pivotal role in fostering
    opportunity and economic security in rural America and improves the
    quality of life in rural communities across the United States. Through
    a variety of loan, grant, and guarantee programs, USDA RD facilitates
    access to capital for rural enterprises that may otherwise struggle to
    secure financing from traditional lending institutions. RD is committed
    to strengthening rural economies through business financing and
    technical assistance; expanding access to critical infrastructure such
    as broadband, energy, water, and healthcare; promoting sustainable
    agricultural and nonagricultural business ventures to diversify rural
    economies; and supporting job retention and creation to reduce economic
    disparities in rural communities.
        The Business and Industry (B&I) Guaranteed Loan Program was
    introduced in 1972 to provide credit enhancements for rural businesses
    through private lenders. In 1994, USDA lending and grant programs were
    consolidated under the new RD mission area, integrating business,
    housing, and utility programs. From 2008 to 2020, RD initiatives
    further expanded to include vertically integrated agriculture,
    renewable energy financing, mixed use development (so long as primary
    purpose is commercial), and targeted efforts to address economic
    distress in under-served rural areas. This reflects a shift from direct
    government lending toward credit enhancement mechanisms, encouraging
    private lender participation.
        USDA RD administers a variety of loan and grant programs, including
    Rural Energy for America, Rural Business Development Grants, Community
    Facilities Loans and Grants, and Water & Environmental Programs. The
    B&I program is the flagship in the Rural Business--Cooperative Service
    (RBCS), making up roughly 50% of loan/grant obligation amounts in
    dollars.
    USDA's B&I Guaranteed Loan Program
        The B&I program is designed to stimulate economic growth in rural
    communities by improving access to private capital and mitigating
    lending risks. Established under the farm bill and periodically
    reauthorized, the program supports rural businesses, nonprofits,
    cooperatives, Tribal organizations, and some publicly owned entities.
    Eligible loan purposes include business acquisition, expansion,
    equipment purchases, working capital, and debt refinancing across a
    wide expanse of sectors (and subsectors)--e.g., battery energy storage
    systems (aiding electric power generation fed by both renewable and
    fossil fuels), timber products (e.g., mass timber and other engineered
    wood), and skilled trade schools (e.g., pipe welding). To qualify, the
    project must be in a rural area with a population under 50,000.
        The program offers advantages including reduced lender risk through
    the loan guarantee, greater investment in undercapitalized rural
    markets, and economic stability during downturns. Borrowers benefit
    from more favorable loan terms than conventional financing, with fully
    amortized loans and no balloon payments. Loan amounts range from
    $200,000 to $25 million, with up to 80% guaranteed. Interest rates are
    fixed or variable (adjustable no more than quarterly), and fees include
    a 3% initial guarantee fee and a 0.5% annual retention fee on the
    outstanding guaranteed balance.
        Collateral must be sufficient to protect the interests of both the
    lender and USDA, with appropriate valuation and hazard insurance.
    Lenders are responsible for credit evaluations to address any credit
    risks and demonstrate that loan terms support full repayment.
    Compliance requirements include regular financial and performance
    reporting by borrowers, while lenders monitor active borrowers.
    One Rural Development Guaranteed Loan Initiative
        In 2021, the One Rural Development (OneRD) Guaranteed Loan
    Initiative unified all of RD's guaranteed loan programs. As part of
    this effort, RD implemented fewer and more streamlined application
    forms and standardized processes and credit reviews with the promise of
    faster approval timelines. To expand the impact of loan guarantee
    programs, RD enhanced lender participation incentives and expanded
    outreach efforts to institutions serving under-served communities.
        The OneRD Guaranteed Loan Initiative introduced the following
    featured benefits and policy changes:

       A single standardized regulation for USDA RD programs: B&I,
            Community Facilities Programs, Rural Energy for America
            Program, and Water and Environmental Programs.

       Single-point lender approval, certification options, and
            secondary sale/purchase guidance.

       Standardized forms and annual notices with program terms at
            the start of each fiscal year.

       Possibility of guarantee issuance prior to construction and
            ability to use funds for refinancing.

       Establishment of consistent population limits across B&I
            programs.

        The OneRD initiative also included several changes to the B&I
    program terms, increasing the guaranteed amount to 80% as the standard
    for all loan sizes, including emerging industries such as rural
    technology businesses, enhancing creditworthiness evaluation criteria,
    and adjusting terms based on recessionary trends or inflationary
    pressures. OneRD has also led to increased analysis of the USDA loan
    guarantee portfolio; the Rural Data Gateway provides insight into B&I
    loan guarantee obligations from 2012 through 2024.
    Private-Sector Participation in the B&I Guaranteed Loan Program
        The success of the B&I program hinges on participation from
    private-sector lenders, who originate and service the loans. Lenders
    engaging in the program range from small community-based banks to large
    regional banks and nontraditional lenders. Community banks and regional
    banks in rural and small-town markets are among the most active
    participants, as they have local business customers who need credit.
        Lenders are drawn to the B&I program by its risk mitigation. The
    guarantee significantly reduces credit risk by covering most losses,
    allowing banks to make loans that would otherwise exceed internal
    lending limits or risk tolerance. The program can help lenders serve
    their communities and meet Community Reinvestment Act goals, as loans
    to rural businesses under a Federal guarantee can qualify as supporting
    economic development. The presence of an active secondary market is
    another incentive: lenders often sell the guaranteed portion of the
    loan to investors, which provides immediate income and frees up capital
    to make more loans. The guaranteed portions are fully backed by the
    government and therefore carry a zero-risk weighting for bank capital
    purposes, making them attractive assets to hold or sell.
        While B&I loan guarantee activity has increased, the number of
    participating lenders has decreased, which may lead to geographic
    risks. USDA should continue to educate financial institutions about
    program benefits for borrowers and institutions, to ensure rural
    businesses have access to financing.
    Case Studies
    Champagne Energy and Environmental Solutions: Local Business Growth
              i  Founder Robert Champagne describes the B&I loan as ``a
            hand up, not a handout.''

        A hand up for growth. Champagne Energy and Environmental Solutions
    (CEES) is a subsea construction company working in the Gulf of America.
    With the B&I loan program, CEES' revenue has grown from $1.8 million in
    2008 to $110 million today. The loan's low amortization enabled CEES to
    offer a competitive day rate and purchase new vessels, which reduced
    long-term maintenance costs.
        Ensuring future market competitiveness. CEES lays oil and gas
    pipelines, removes decommissioned pipelines, and lays power cables for
    offshore windmills. The company is now considering expanding to support
    companies building subsea data storage facilities. As founder Robert
    Champagne says, ``I don't care who's in [Federal] office. Whatever you
    want to do, I can adapt. We can make it work.''
        Keeping jobs local. As one of only two American companies that can
    do shallow-water work in the Gulf, CEES is fending off international
    competitors and keeping jobs in the U.S. With B&I support, CEES has
    doubled wages and the number of local jobs between 2016 and 2025. The
    loan also enabled CEES to maintain its long-standing relationship with
    United Community Bank.
        The company has more than doubled jobs and average wages from 2016
    (97 total jobs and $14.50 average hourly wages) to today (300 total
    jobs and $30 average hourly wages).

    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Impacts            Jobs: 97 in 2016;  Wages: $14.50/hr  Revenue: $1.8
                        265 in 2025        (avg) in 2016;    million in
                                           $30/hr (avg) in   2008; $110
                                           2025              million in 2024
    ------------------------------------------------------------------------

    Commongrounds Cooperative: Building community in Traverse City
        An innovative, community-owned center. Commongrounds Cooperative is
    a community-owned, mixed-use community center in Traverse City,
    Michigan. Supported by over 1,100 community owners, the cooperative
    brings together affordable workforce housing, mission-driven
    organizations, and common areas. The emphasis on local community-
    building is clear in co-executive director Kate Redman's message to
    community owners: ``Don't just invest in Wall Street, invest in 8th
    Street.''
        The B&I loan guarantee was the solution to a complex funding stack.
    Commongrounds relied on investment crowdfunding to raise project equity
    for construction, which created a complex funding structure. The $8
    million loan was too risky for local credit unions, and no investor
    could guarantee the loan. Redman describes navigating the financial
    structure as the most challenging aspect of development. Ultimately,
    the B&I loan guarantee was critical in bringing Commongrounds to life.

              i  Co-executive director Kate Redman says the B&I loan
            guarantee was ``critical to our project being . . . possible.''

        A focus on community needs. From the beginning, Commongrounds has
    focused on the community. Early community input emphasized the
    importance of central social infrastructure, leading to the inclusion
    of affordable workforce housing near the city center, a teaching
    kitchen offering health-focused cooking classes, and a popular
    performing arts venue.

    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Impacts            100% occupied      7 commercial or   25% of housing
                                           nonprofit         priced at 60%
                                           tenants           AMI
    ------------------------------------------------------------------------

    Secure Semiconductor Manufacturing: Returning semiconductor
            manufacturing jobs to rural America
              i  ``We're now [going to] produce much, much, much more than
            we ever dreamed we could . . .''

        Financing rapid growth in semiconductor manufacturing. Secure
    Semiconductor Manufacturing, LLC (SSM) is a semiconductor manufacturer
    in rural Coffey County, Kansas. Created to meet U.S.-based secure
    electronics production needs, SSM saw an opportunity with the B&I
    Guaranteed Loan Program to grow larger than planned. The B&I program
    supported the purchase of large manufacturing equipment; new
    capabilities are coming online soon and SSM already has a waiting list
    of customers.
        Good, local jobs in rural Kansas. As staffing needs grow, SSM
    maintains an emphasis on hiring locally in rural Neodesha, Kansas. As
    CEO Bart Massey says, it's just good business sense: ``I told them I'd
    work them until their fingers bled before I hired anybody else . . .
    We're hiring people for longevity.'' SSM jobs offer paid training and
    immediate benefits, and aims to double staff by the end of 2025.
        Repatriating semiconductor manufacturing to the U.S. As Massey
    notes, the number of chip manufacturers in the U.S. has fallen to a few
    hundred, from a high of over 4,000 in the 1980s. SSM emphasizes
    American-made, with no components sent to China or other countries for
    production, meeting Federal and private customer needs for a more
    secure, American-only production standard.

    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Impacts            Leverages 45% in   Doubling staff    100% American
                        other capital      by 2026           investment
    ------------------------------------------------------------------------

    The Inn at Bellefield: Integrating community and hospitality
        Financing a promising hotel venture. The Inn at Bellefield in
    historic Hyde Park, New York, offers a premium hotel experience. The
    Shaner Hotel Group saw great potential in the town's historic charm.
    Development challenges included the building of a wastewater treatment
    facility and the cost of aligning with local historic design
    guidelines. The B&I loan guarantee covered nearly half of the over $50
    million project costs, enabling development of a hotel that integrates
    local design, food, beverage, and art.
        Marriott-branded, locally owned. As a flagship Marriott hotel, the
    Inn at Bellefield enjoys the benefits of the Marriott brand name while
    remaining locally owned and operated. This allows the inn to leverage
    Marriott's reservation system and extensive network of over 200 million
    reward members. While the branded name helps drives customers to the
    hotel, Shaner's Derrick Skillings says, ``When you walk into the lobby,
    you would not know this is a Residence Inn.'' The bar, crafted from a
    200 year old sycamore tree on the property, underscores the local
    connection at the heart of the hotel.

              i  ``How many Residence Inns have an executive chef?''

        A community multiplier. The hotel design ``[ties] back to the
    regional history and agriculture of Hyde Park.'' The executive chef
    sources food and beverages from local vendors, while local wines and
    products are showcased in the lobby. The full-service restaurant means
    the hotel employs 40 to 50 staff; higher than the typical 30. The hotel
    also has a multiplier effect on the community by hosting events like
    conferences and weddings, bringing in business for caterers, florists,
    and other business owners. This integration of local elements supports
    the community and enhances the guest experience.

    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Impacts            12-15 local        40-50 employees   2025
                        vendors                              Forecasting:
                                                             55,000+ guests;
                                                             $7M+ revenue
    ------------------------------------------------------------------------

    B&I Programmatic Data
    B&I program Funding Overview
              i  Total core B&I obligations increased from 2015 to 2024 by
            108%. $1.81 billion, $1.60 billion, $1.86 billion, and $1.80
            billion in obligations were made in 2021, 2022, 2023 and 2024,
            respectively, the four highest core B&I obligation amounts in
            program history.

        B&I loan obligations have totaled $13.4 billion from Fiscal Years
    2015 through 2024. Figure 1 below includes core 1% and 3% B&I program
    obligations and omits American Recovery and Reinvestment Act,
    coronavirus relief, and other one-off B&I programs. Sixty percent of
    the total B&I obligations in the period have occurred in the past 5
    years. The average loan size has also increased significantly during
    the past 5 years, with a $2.75 million loan guarantee amount per loan
    in 2015, growing to a $8.1 million average loan amount in 2024.
    Figure 1: B&I program loan performance overview 2015-2024

              i  From 2005 through 2024, the B&I program has leveraged an
            additional $12.4 billion to complement B&I financing such as
            commercial debt, private equity, and tax credits.

        Figure 2 below shows a longer timeline, Fiscal Years 2005 through
    2024, of core B&I financing and the total project amounts funded by the
    loan guarantees. During this period, obligation amounts have increased
    significantly. B&I projects have totaled over $33.9 billion, with $21.5
    billion funded by B&I loans. Applicants have successfully leveraged
    credit, private equity, and even other Federal programs such as the New
    Market Tax Credits, Rural Energy for America, and Rural Energy Savings
    funding. For example, Aviva Health, a nonprofit Federally Qualified
    Health Center, utilized B&I funding and New Market Tax Credits together
    to expand their Umpqua, Oregon facility to accommodate a new medical
    residency program. Overall, the B&I program is not only critical to
    business growth in rural America, but also a catalyst of investment
    into rural businesses and communities.
    Figure 2: Total project costs of core B&I projects from Fiscal Years
            2005-2024

    B&I Concentration by Sector
        The B&I program serves businesses across a broad spectrum of
    industries, reflecting the diverse rural economy. Analyzing the
    portfolio by sector reveals which industries have been the primary
    beneficiaries of the guarantees. Traditionally, accommodations and food
    services and manufacturing received a substantial share of B&I loan
    dollars. Rural B&I-eligible areas are well suited for tourism and
    recreation, so many borrowers have successfully financed hotel
    projects--which enhance access to rural America's recreational assets--
    and restaurant projects with B&I financing. Investments in
    accommodations and food services and manufacturing represent a
    significant share of total financing from 2015 to 2024, totaling nearly
    $4 billion and $2.3 billion, respectively.

              i  B&I loans have been obligated across 21 NAICS sectors and
            90 unique subsectors, highlighting the program's broad industry
            reach.

        A closer look at year-over-year shifts in other sectors illustrates
    the flexibility of the program. B&I obligations for utilities totaled
    $992 million from 2015 to 2024, with $603 million obligated from 2020
    to 2024, including peak obligations of $170 million in 2021. Mining,
    quarry, and oil and gas businesses received $294 million in 2023,
    representing 38% of the sector's $772 million in total obligations from
    2015 to 2024. Rural manufacturing plants, whether producing auto parts,
    machinery, building materials, or food products, often require
    significant capital for facilities and equipment, which the B&I program
    has been instrumental in financing.
        Numerous food and agriculture processing projects have used B&I
    guarantees (such as grain milling operations, meat processing
    facilities, and dairy production plants), aligning with USDA's emphasis
    on adding value to agricultural commodities locally. The healthcare
    sector is another significant area: rural hospitals, clinics, and
    eldercare facilities (nursing homes, assisted living) have obtained
    B&I-guaranteed financing, particularly when other USDA Community
    Facilities funds were not available or when the project had a private
    ownership structure. These healthcare projects can be critical for
    rural community viability and often have sizable loan needs such as
    construction of new clinics or hospital expansions.
    Figure 3: 2015-2024 core B&I investment amount by NAICS industry

        The B&I Guaranteed Loan Program is well positioned to adapt and
    change based on Administration priorities. Table 1 below shows a
    snapshot of percentage loan levels in years 2019, 2023, and 2024. The
    snapshot shows significant year-over-year variability in the utilities;
    the mining, quarrying, and oil and gas extraction; and agriculture,
    forestry, fishing, and hunting sectors. A notable example of B&I impact
    in a manufacturing subsector, distilleries, is Jackson Purchase
    Distillery LLC in Fulton, Kentucky, which received multiple B&I loans
    in 2023 and 2024 to expand its contract distilling operations through
    new rick houses, a still, fermenter building, and grain handling
    systems, creating an estimated 25 jobs in a designated Persistent
    Poverty area. Obligations outlined below can be further classified into
    distinct subsectors, such as agriculture, forestry, fishing, and
    hunting, which includes the subsectors of animal production and
    aquaculture; crop production; fishing, hunting, and trapping; forestry
    and logging; and support activities for agriculture and forestry,
    showing the program's broad and diverse economic impact.

     Table 1: Core B&I NAICS Industry snapshot: Fiscal Years 2019, 2023, and
                                      2024
    ------------------------------------------------------------------------
                  Sector                   2019         2023         2024
    ------------------------------------------------------------------------
    Accommodation and food services         35.48%       36.54%       32.06%
    Manufacturing                           20.37%       15.15%       18.48%
    Utilities                                9.05%        3.44%       10.54%
    Health care and social assistance        5.55%        5.70%        6.73%
    Real estate and rental and               8.25%        5.47%        3.28%
     leasing
    Mining, quarrying, and oil and           5.00%       15.76%        5.66%
     gas extraction
    Agriculture, forestry, fishing,          0.65%        4.63%        4.88%
     and hunting
    Retail trade                             2.98%        3.54%        3.03%
    All other sectors                       12.68%        9.78%       15.35%
    ------------------------------------------------------------------------

    Geographic Distribution of Loan Guarantees
        The administration of B&I funds across the United States is
    geographically broad, reaching virtually every state and territory with
    eligible rural areas. Regional patterns in program usage have emerged
    given the prevalence of rural industries and the presence of
    participating lenders. Table 2 shows the top ten states by loan
    guarantee obligation amount for core B&I programs from 2015 to 2024.
    Leading B&I states include those with one or more of the following:
    high populations, significant proportion of population in rural areas,
    or substantial levels of business activity including tourism, oil and
    gas, manufacturing, and agriculture.

     Table 2: 2015-2024 core B&I Program: Top ten states by total obligation
                                     amount
    ------------------------------------------------------------------------
                                                          Number of Loan
              State              Obligation Amount          Guarantees
    ------------------------------------------------------------------------
       North Carolina                    $957 M                     200
                     Louisiana           $926 M                     122
                Texas                    $838 M                      97
              Florida                    $762 M                     143
             Oklahoma                    $665 M                     130
           California                    $658 M                     133
              Arizona                    $485 M                      83
             Missouri                    $481 M                     269
             Kentucky                    $470 M                      74
               Oregon                    $438 M                     108
    ------------------------------------------------------------------------

        B&I financing has had a higher per capita impact in rural states
    with lower population density and high amounts of business activity,
    including in oil and gas, energy exploration, and manufacturing.
    Alaska, Wyoming, and Louisiana lead states in B&I loan guarantee amount
    per capita. The bottom per capita states include more urban and
    suburban areas, primarily in the northeastern corridor and New England,
    including New Jersey, Connecticut, and Massachusetts. Figure 4 shows
    the per capita B&I obligation amount from 2015-2024. The top and bottom
    five states for per capita investment during this period include labels
    and per capita amounts.
    Figure 4: State B&I loan guarantee obligation amount per capita

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        Businesses have used B&I loan financing across a broad spectrum of
    sectors and industries. By examining B&I loan guarantee percentage by
    sector across states and Congressional districts, we can see the
    program is adaptable to regional economic priorities. USDA uses B&I as
    a flexible intervention for economic development in rural areas. In
    addition, USDA can designate creditworthy and economically stimulating
    projects as high priority through its application scoring system. Each
    Administration can use the program to fund sectors that will most
    benefit rural America. Table 3 and Table 4 below show the differing
    sector utilization of the B&I program across states and Congressional
    districts from Fiscal Years 2015 through 2024. Michigan and
    Pennsylvania's Congressional district 15, a north-central district in
    the state, have used B&I financing in hotels, motels, resorts, bed and
    breakfasts, campgrounds, restaurants, cafes, and bars. Alabama and
    North Carolina's Congressional district 1 (CD1), an inland district in
    the northeast portion of the state, received the most B&I financing in
    manufacturing and utilities sectors, respectively. Both Alabama and
    North Carolina's CD1 also show significant investment in health care.

              i  Sector concentration of B&I investments can vary
            significantly across states and Congressional districts,
            meeting the customized business needs of specific rural
            populations across the United States.

      Table 3: State comparison: Obligation percentage by sector, 2015-2024
    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
                  Michigan                Alabama
    ------------------------------------------------------------------------
    Accommodation and food       58.57%   Manufacturing               26.93%
     services
    Real estate and rental       15.68%   Health care and             18.82%
     and leasing                           social assistance
    Arts, entertainment,          6.09%   Agriculture,                18.42%
     and recreation                        forestry, fishing
                                           and hunting
    Manufacturing                 5.83%   Information                  9.91%
    Retail trade                  3.61%   Real estate and              9.56%
                                           rental and leasing
    Other sectors                10.22%   Other sectors               16.35%
    ------------------------------------------------------------------------

      Table 4: Congressional district comparison: Obligation percentage by
                                sector, 2015-2024
    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Pennsylvania--CongressionalNorth Carolina--Congressional
                     15                  District 1
    ------------------------------------------------------------------------
    Accommodation and food       40.47%   Utilities                   52.10%
     services
    Agriculture, forestry,       26.43%   Health care and             24.02%
     fishing, and hunting                  social assistance
    Manufacturing                21.59%   Manufacturing               12.40%
    Other sectors                11.51%   Other sectors               11.48%
    ------------------------------------------------------------------------

              i  Overall B&I investment into [ZIP Codes] containing
            Qualified Opportunity Zone census tracts have increased 59.29%
            from 2018 to 2025.

        Opportunity Zones were created under the Tax Cuts and Jobs Act of
    2017, an economic development tool that allows for increased
    investments in distressed areas by providing tax benefits to investors.
    The [A]ct designated 8,764 low-income communities and certain
    contiguous communities, tracked at the Census tract level, as Qualified
    Opportunity Zones. From 2018 onward, the B&I program has shown
    increased investment in Opportunity Zones. As of 2018, approximately
    31.3 million people in the 50 states, not including U.S. territories,
    lived in areas designated as Opportunity Zones. Figure 5 shows the
    percentage of total B&I obligations, including COVID-related B&I
    programs, that have been made in [ZIP Codes] containing census tracts
    designated as Qualified Opportunity Zones. A significant proportion of
    investments have been made in areas that may benefit low-income
    populations directly via increased employment, or indirectly through
    increased economic activity.
    Figure 5: B&I program loans in [ZIP Codes] containing Opportunity Zones
            are increasing

    Program Financials: Allotments, Obligations, and Subsidy Rates
              i  Usage of total B&I allotments in 2023 and 2024 were 90.83%
            and 98.24%, the highest on record. Usage of Total B&I
            allotments increased from 53.99% in 2020 to 98.24% in 2024.

        On an annual basis, Congress provides budget authority for USDA RD,
    which determines how many loans can be made for the budget year. This
    is often set in appropriation acts or via the authorized amount in the
    farm bill, subject to annual budget decisions. Given that B&I is a
    guaranteed program, the budget authority primarily covers the credit
    subsidy amount of the loan guarantees and program administration. The
    B&I program historically has the largest appropriations and highest
    utilization rate amongst RD guaranteed programs.
        The percentage usage of total B&I allotments increased steadily
    from 2020 through 2024. In fact, the B&I program would have used 100%
    of allocations in 2024, if not for the recapture of de-obligated funds
    at fiscal year-end. The B&I program allotments were $1.77 billion,
    $2.05 billion, and $1.83 billion for Fiscal Years 2022, 2023, and 2024,
    respectively. The program was appropriated $3.5 billion in Fiscal Year
    2025, the highest ever when adjusted for inflation.

                               Table 5: Allotments, obligations, and use rates, 2015-2025
    ----------------------------------------------------------------------------------------------------------------
          Fiscal Year         2015     2016     2017     2018     2019     2020     2021     2022     2023     2024
    ----------------------------------------------------------------------------------------------------------------
    Allotments (in           $1,232   $1,778   $1,502   $1,224   $1,374   $2,530   $2,737   $1,778   $2,050   $1,831
     millions)
    Total B&I obligations      $864   $1,060   $1,177   $1,054   $1,116   $1,366   $2,307   $1,598   $1,862   $1,799
     (in millions)
    Core B&I obligations       $864   $1,052   $1,177   $1,053   $1,116   $1,058   $1,807   $1,598   $1,862   $1,799
     (in millions)
    Total usage              70.16%   59.60%   78.39%   86.15%   81.26%   53.99%   84.28%   89.89%   90.83%   98.24%
    Core B&I usage           70.12%   59.15%   78.33%   86.07%   81.26%   41.82%   66.01%   89.89%   90.83%   98.24%
    ----------------------------------------------------------------------------------------------------------------

              i  The overall subsidy rate for the B&I loan guarantee
            program has decreased significantly during the past decade,
            with the 2025 subsidy rate being the second lowest on record at
            0.2%. In other words, It costs the government 20 for every
            $100 of lending.

        The subsidy rate is a critical financial aspect of any Federal loan
    guarantee program, as it measures the estimated cost to the government
    of extending the guarantees. For the B&I program, USDA and the Office
    of Management and Budget calculate this rate based on the projected
    long-term losses (defaults net of recoveries) and expenses, minus any
    fees collected. In formulaic terms, the subsidy cost considers the
    probability of default on guaranteed loans, the portion of each loan
    that will be lost given default (after collateral liquidation), the
    timing of these defaults, the discount rate (interest rate) used to
    calculate estimate present value costs, and the fee income (initial and
    annual fees) that the government receives. Recent revision of program
    fees under OneRD, diligent underwriting processes, and strong portfolio
    risk management practices have contributed to the reduction of total
    B&I subsidy rate over time. Figure 6 shows the default subsidy cost,
    fee subsidy offset, and total subsidy of the B&I program from 2015
    through 2025.
    Figure 6: B&I loan program subsidy recent history

        Between Fiscal Years 2015 and 2024, the USDA paid approximately
    $501.6 million in loan losses under the core B&I program. The bulk of
    losses are concentrated in loans likely obligated between pre-2012,
    2013 and 2015, underscoring the long tail of loss exposure from those
    cohorts. While obligation year attribution for some older losses is
    incomplete, the claim data still highlight a general pattern: losses
    from newer cohorts have steadily declined in recent years, with average
    annual losses from 2021 to 2024 totaling just under $30 million,
    compared to peak years like 2016 and 2018, which each saw over $70
    million in losses. The large share of losses linked to suspected pre-
    2012 obligations underscores the program's momentum and attention to
    sound underwriting practices.

              i  The B&I program was appropriated $3.5 billion in FY 2025,
            the highest in program history. Combined with its second lowest
            subsidy rate, the program is well positioned to benefit rural
            American businesses.

        Overall, the B&I program has seen a significant reduction in
    program total subsidy rate, driven primarily by reduced default
    assumptions in the program's annual modeling. The B&I program is well
    positioned to make a significant impact in rural America with a lower
    cost of financing to the taxpayer.
    Macroeconomic Summary Statistics
              i  Counties that received USDA B&I investment experienced
            employment growth over several years. It cost the Federal
            Government an estimated $438 per job created by the B&I program
            from 2012 to 2022.

        To quantify the economic impact of the B&I program on a macro
    level, we assessed the impact of B&I investment on employment,
    earnings, gross domestic product (GDP), and taxes. We find that the
    USDA B&I Guaranteed Loan Program has had a positive impact on all four
    key macroeconomic variables and that the impact extends past the year
    of investment. There are also differential impacts across states and
    counties; based on certain conditions, the impact grows progressively
    over time. Based on regression analysis, counties that receive B&I
    investment saw employment gains of approximately 200,000 in the short
    run (same year as investment), and approximately 750,000 in the long
    run (first 3 years after investment) in our sample. Conditioning on GDP
    per capita, we find that counties that receive B&I investment also
    observe a rise in both earnings and GDP. At the state level, we find
    that a 1% increase in B&I investment increases taxes collected by 0.55%
    in the long run.
        We use a variety of econometric and statistical techniques to
    quantify the economic impact of the USDA B&I Guaranteed Loan Program.
    For employment, we want to highlight the short-run and long-run
    implications over a 3 year period of the program, and we use regression
    techniques to quantify these effects. For earnings and GDP, mapping
    counties that receive B&I investment with counties with similar GDP per
    capita that did not receive B&I investment allows us to determine how
    earnings and GDP for counties that receive B&I investment have risen
    over time. Finally, to quantify the impact on tax revenue, we perform
    econometric analysis at the state level (as opposed to county level),
    as this is the lowest level of aggregation for which comparable sales
    tax data is available for the United States.
    Employment Rises in Both the Short-Run and Long-Run
        We obtained county-level annual employment data for 2001 through
    2022 from the U.S. Bureau of Economic Analysis \1\ (BEA) and loan-level
    B&I investment data for 2012 through 2022 from the USDA Rural Data
    Gateway portal.\2\ Loan amounts are aggregated to obtain the total
    amount invested into each county for each year. This is merged with
    employment data at the county level, and employment growth rates are
    annualized. The data are filtered to include only counties that
    received investment at least once between 2012 and 2022.
    ---------------------------------------------------------------------------
        \1\ https://www.bea.gov/itable.
        \2\ https://www.rd.usda.gov/rural-data-gateway.
    ---------------------------------------------------------------------------
        We then estimate an ordinary least squares regression with annual
    employment growth as the dependent variable and the investment amount
    in the current year, the previous year, and 2 years prior as the key
    independent variables. We include time-fixed effects to account for
    year-specific factors that could affect employment growth independent
    of investment; events in 2019 related to the Taper Tantrum, for
    example, would be captured by the 2019-specific time-fixed effect, and
    the time-fixed effects as a group would capture business cycle dynamics
    throughout the estimation horizon. The results of this regression allow
    us to see both the short-run and long-run impacts of investment on
    annual employment growth at the county level. While the short run
    measures the contemporaneous (same-year) impact of B&I investment, the
    long-run impact looks at employment growth over a 3 year period after
    investment. In what follows, we focus on the long-run implications for
    employment as the macroeconomic effects of investment tend to have
    persistent effects on the macroeconomy.

              i  An estimated 750,000 jobs were created from the B&I
            investment made between 2012 and 2022.

        Table 6 illustrates the long-run impact of B&I investment on county
    employment growth. The long-run impact is estimated to be a 0.0917
    percentage point increase in annual employment growth for every million
    dollars invested. This aggregates the estimated impact of investment on
    employment growth over a 3 year period.\3\ The dependent variable is
    employment growth: to convert this number into an estimate for jobs
    created, one needs a base level on which to apply this growth. The base
    level is the average numbers of jobs per county. Given the average
    number of jobs per county, we can then compute the jobs that would be
    created from 1% of jobs growth, e.g., 1% growth of the 73,560 jobs in
    2014 would be 735.6 jobs. Multiplying the long-run impact (0.0917
    percentage points of growth per million invested) by the number of
    millions of investment dollars for each year then yields the expected
    number of percentage points increase in annual jobs growth. Multiplying
    this by the number of jobs produced for a 1% increase in annual jobs
    growth will then give us the estimated number of jobs created
    specifically by the B&I investment that year. Summing across the years
    included in our dataset, we find that the B&I program produced 757,800
    jobs from 2014 to 2022.
    ---------------------------------------------------------------------------
        \3\ Please see the appendix for the justification of this
    calculation.

                                        Table 6: Estimated number of jobs created
    ----------------------------------------------------------------------------------------------------------------
                                                                                      Change in
                                                                                     employment      Estimated jobs
           Year           Total investment   Average number of     Jobs for 1%      growth for $1      created by
                         (in  millions) \4\   jobs per  county       growth          Million of        investment
                                                                                     investment
    ----------------------------------------------------------------------------------------------------------------
              2014                 $874              73,560                736             .0917            58,914
    \4\ For regression
     analysis,
     investment into
     U.S. territories
     is not
     considered.
              2015                 $846              75,226                752             .0917            58,348
              2016               $1,032              76,476                765             .0917            72,327
              2017               $1,152              77,849                778             .0917            82,166
              2018               $1,044              79,547                795             .0917            76,090
              2019               $1,097              80,237                802             .0917            80,692
              2020               $1,046              78,102                781             .0917            74,865
              2021               $1,765              81,306                813             .0917           131,553
              2022               $1,573              85,209                852             .0917           122,845
                       ---------------------                                                       -----------------
      Total...........          $10,429                                                                    757,800
    ----------------------------------------------------------------------------------------------------------------

                        Table 7: Summary of jobs created
    ------------------------------------------------------------------------
                    Topic                                Value
    ------------------------------------------------------------------------
    Total amount invested (in millions)                   $10,429
    Estimated number of jobs created                      757,800
    ------------------------------------------------------------------------

        From the information above, we can estimate how much investment is
    needed in the average county to create one additional job. The total
    amount invested is not what it costs the government to create these
    jobs; rather it is actual losses which depend on delinquencies and
    defaults. If the loans are paid back in full, there is no cost to the
    government; the government only incurs a cost when loans are not
    repaid, and this is reflected in the credit subsidy or delinquency
    rate. Therefore, the cost to the government is the product of the
    subsidy rate with the total investment amount. Given that the subsidy
    rate has changed over time, we can multiply the subsidy rate with the
    total investment amount by year to get the annual cost to the
    government. We then sum across years to get the total cost to the
    government of $331,552,052 for the period from 2014 to 2022. Given that
    757,800 jobs were created during this period, this translates to the
    cost per job in the long run of $438.

                  Table 8: Job created: cost to the government
    ------------------------------------------------------------------------
                                                                 Cost to the
                         Total      Jobs created                 government
         Year       investment (in       by       Subsidy rate       (in
                     millions) \5\   investment                   millions)
    ------------------------------------------------------------------------
            2014             $874         58,914         6.99%           $61
    \5\ For
     regression
     analysis,
     investment
     into U.S.
     territories
     is not
     considered.
            2015             $846         58,348         5.11%           $43
            2016           $1,032         72,327         3.88%           $40
            2017           $1,152         82,166         4.01%           $46
            2018           $1,044         76,090         4.06%           $42
            2019           $1,097         80,692         2.32%           $25
            2020           $1,046         74,865         2.05%           $21
            2021           $1,765        131,553         1.14%           $20
            2022           $1,573        122,845         2.01%           $32
                   ------------------------------              -------------
      Total.......        $10,429        757,800                        $332
    ------------------------------------------------------------------------

                   Table 9: Summary of cost to the government
    ------------------------------------------------------------------------
                Cost category                            Value
    ------------------------------------------------------------------------
      Total Amount Invested                       $10,428,680,246
    Total Estimated Jobs Created                          757,800
    Total Cost to Government                         $331,552,052
    Cost to Government per Job Created                       $438
    ------------------------------------------------------------------------

    Counties that Receive Investment See a Positive Effect on Earnings
        To evaluate the impact that investment had on earnings, we looked
    at county pairs; counties that received investment were paired with the
    most similar county that did not receive investment in terms of
    earnings per worker in the year of investment. This was done for all
    counties that first received investment between 2013 and 2021. The
    earnings data were obtained from BEA, which, combined with the
    employment data mentioned above, produces earnings per worker variable
    that we examine. By averaging the earnings per worker each year for
    these two sets of counties (those with investment and their
    counterparts without investment), we can see the positive impact
    investment has on earnings over time.

              i  Counties that received B&I investment saw a higher
            increase in their average earnings per worker for 9 consecutive
            years after initial investment than similar counties that did
            not receive investment.

        Figure 7 shows average earnings per worker for counties that
    received investment (blue line) and the matched counties that did not
    (black line). The x-axis shows years relative to the first investment
    (time = 0), with up to 9 years before investment (time = ^9 for
    counties with first investment in 2021) and up to 9 years after (time =
    9 for counties with first investment in 2013). The blue bars illustrate
    the difference between the average earnings per worker of the counties
    that received investment versus the matched counties that did not (blue
    minus black).
    Figure 7: Average earnings per worker for counties that received
            investment and matched counties that did not receive investment

        Before initial investment (i.e., to the left of zero on the graph),
    counties that received investment had lower earnings for worker on
    average when compared with counties that did not receive investment. A
    few years post-investment, however, there is an inflection point where
    earnings per worker for counties that receive investment start to
    outpace earnings per worker for counties that did not receive
    investment. This suggests that counties that receive B&I investment
    earn more per worker than counties that do not, and that this
    difference grows over time: B&I investment is thus directly correlated
    with a persistently positive impact on earnings per worker at the
    county level.
    Counties that Receive Investment See a Positive Effect on GDP
        Similarly, to evaluate GDP, counties with investment were again
    matched to the most similar counties without investment by GDP per
    capita (Figure 8) and GDP (Figure 9). The GDP and population data are
    obtained from BEA. By aggregating over these two sets of counties
    (those with investment and their counterparts without investment), we
    can see the positive impact investment had on GDP per capita and GDP
    over time.

              i  On average, in the years following initial investment,
            counties that received B&I investment had higher GDP per capita
            and GDP than similar counties that did not receive investment.

        Figure 8 below shows the average GDP per capita for counties that
    received investment (blue) and the matched counties that did not
    (black). Data from 2012 through 2022 are used. The x-axis shows years
    relative to the first investment (time = 0), with up to 9 years before
    investment (time = ^9 for counties with first investment in 2021) and
    up to 9 years after (time = 9 for counties with first investment in
    2013). The blue bars illustrate the difference between the average GDP
    per capita of the counties that received investment versus the matched
    counties that did not (blue minus black).
    Figure 8: Average GDP per capita for counties that received investment
            and matched counties that did not receive investment

        The same graph is produced for GDP, and we see similar trends and
    results in Figure 9.
    Figure 9: Average GDP for counties that received investment and matched
            counties that did not receive investment

        Both graphs show a similar trend with counties that received
    investment having higher GDP per capita and GDP than those without
    investment. Furthermore, the difference between the two series tends to
    increase over time. B&I investment is thus directly correlated with a
    persistently positive impact on GDP and GDP per capita at the county
    level.
    State-Level Analysis: Positive Impact of B&I on Sales and Taxes
        Finally, we investigated the impact B&I investment had on the
    amount of sales tax each state collected. State tax data are obtained
    from the U.S. Census Bureau, which conducts an Annual Survey of State
    Government Tax Collections. To evaluate the impact of the B&I program
    on taxes at the state level, we start by aggregating B&I investments
    between 2012 and 2022. When performing regression analysis, tax revenue
    should be modeled differently than the employment data. Unlike
    employment data, tax revenue from 2014 should not be treated the same
    as tax revenue from 2022. This is due to inflation over time (as taxes
    are a nominal quality) and because taxes are inherently more volatile
    then employment data. For these reasons, we focus on the impact of B&I
    investment on the percentage of state taxes as opposed to the level,
    given that percentages are unit-less (and hence time-invariant). To
    determine the expected percent change of sales tax collected based on a
    1% increase in B&I investment made to that state, we estimate a log-log
    ordinary least squares model; the logarithms on both sides of the
    regression ensure that the units are in percentages when interpreting
    the results from the model. Figure 10 shows a scatterplot of log of B&I
    investment against the log of sales tax collected for all 50 states
    from 2012 to 2022 (when investment was not equal to zero). There is a
    strong positive correlation between these two transformed variables.
    Figure 10: Log of state sales income tax collected plotted against log
            of B&I investment
    Scatter Plot of Investment vs. Sales Tax Per Capita

              i  A 1% increase in B&I investment results in a 0.55%
            increase in sales tax revenue for the average state in the long
            run.

        To determine the long-run impact of investment, we then estimate a
    regression model where the logarithm of state sales tax is the
    dependent variable, and the independent variable is the logarithm of
    the aggregated investment amount of the current year and the 2 previous
    years. This model also controls for the year the investment was made.
    The dataset thus includes observations from all 50 states with nonzero
    investment for 3 consecutive years in which the last of the 3 years was
    between 2014 and 2022. The results indicate that for every 1% increase
    in B&I investment into a state, we expect to see a 0.55% increase in
    state sales tax collected over a 3 year period.
    Assessment Methodology: Brief Overview
        For more information on this study, contact us at
    contracts@summitllc.us.

                 Table 10: Overview of assessment methodologies
    ------------------------------------------------------------------------
                             Methodology description
    -------------------------------------------------------------------------
                                  Case studies
    ------------------------------------------------------------------------
     Loan selection: Identified B&I programmatic loans for potential
     inclusion, based on the following characteristics of interest:

         Project started around the time of OneRD (2021)

         Geographic diversity

         Industry diversity

         Funded project at or near completion, to capture loan impacts

     Interviews: Conducted 45-60 minute interviews with lenders and
     borrowers to gather data on loan details, how the loan helped their
     business grow, and challenges faced before obtaining the loan.

     Data analysis and summarization: Identified key themes in each
     case study and developed a one-page infographic for each.
    ------------------------------------------------------------------------
                              B&I programmatic data
    ------------------------------------------------------------------------
     Submitted a comprehensive FOIA data request to the USDA Rural
     Development Innovation Center covering the B&I Guaranteed Loan Program
     from FY 2000 through FY 2024.

     Data included annual program allotments, obligated amounts, and
     full loan-level details such as borrower type, industry codes, lender
     names, and project-specific funding indicators.

     Included identifiers geographic (e.g., county, ZIP [C]ode,
     Congressional district), loan performance metrics (e.g., delinquencies,
     losses), and program structure indicators (e.g., OneRD vs. Pre-OneRD,
     ARRA vs. Non-ARRA).

     Loan-level data received was validated against publicly
     available records from USDA's Rural Data Gateway to ensure consistency
     and completeness.
    ------------------------------------------------------------------------
                        Macroeconomics summary statistics
    ------------------------------------------------------------------------
     Econometric analysis of employment, earnings, GDP and tax data.

     Employment, earnings, and GDP analysis are at county level, tax
     analysis at state level.

     Regression techniques allow for estimation of short-term and
     long-term impacts.

     Matching allows for identification of macroeconomic effects of
     the RD program by grouping observations with similar characteristics
     and probability of receiving an investment.
    ------------------------------------------------------------------------
        Summit is a specialized analytics firm that drives decision-making
     through data analytics. We bring expertise in economics, statistics,
     predictive modeling, and analytics to implement solutions for a wide
     range of clients. Our mission is centered on delivering data-driven
     solutions to help make government efficient and cost-effective.

          Contact Us: Anthony Curcio, Senior Partner, 202-407-8309 Tel, 509-
       984-8943 Fax, contracts@summitllc.us
    ------------------------------------------------------------------------

        The Chairman. Thank you, ma'am. Commissioner, you are
    recognized.

      STATEMENT OF HON. PAUL HEIMEL, COMMISSIONER, POTTER COUNTY,
         PENNSYLVANIA, COWDERSPORT, PA; ON BEHALF OF NATIONAL
                        ASSOCIATION OF COUNTIES

        Mr. Heimel. Well, Chairman Johnson, Ranking Member Davis,
    and distinguished Members of the Subcommittee, I want to thank
    you for holding today's hearing. I would like to share some
    ideas to strengthen the partnership between counties and our
    Federal partners to try to better serve rural America. My name
    is Paul Heimel, and I am a Commissioner in Potter County,
    Pennsylvania. I am here on behalf of the National Association
    of Counties, but I want to point out that our county has a
    grand total of less than 16,000 residents countywide, so we are
    truly rural. County governments, though, are on the front-lines
    in rural America, providing essential services that make it
    possible for our residents to stay, work, and thrive in our
    communities. Given our limited staff, our tight budgets, we
    rely on strong Federal partnerships to get the job done.
        Now, USDA Rural Development is our most important Federal
    partner in this work. This year alone, the RD has invested $26
    billion in 60,000 projects across rural America. In Potter
    County, dating back to 2015, USDA RD has helped fund 95
    projects supporting our energy systems, our community
    facilities, our small businesses, and affordable housing for
    working families. Without this backing, these projects would
    have been out of reach for our local communities, but too
    often, the communities that need USDA RD the most are the ones
    that are least able to access it. That is why I am here today
    to urge Congress to modernize, streamline, and expand USDA RD
    programs so that all rural counties have the tools we need to
    build stronger, more resilient communities. I am going to put
    forward four practical reforms for Congress to modernize the RD
    programs and empower rural counties like ours.
        First is a fast-track pathway for small-dollar projects.
    Congress should direct USDA RD to develop a simplified
    application and approval process, allowing those of us with
    limited local resources to quickly secure funding for time-
    sensitive local needs. Second, make pre-development costs
    eligible across RD programs. Counties often pay up front for
    site selection, feasibility studies, environmental review, and
    more before we can use the funding awards, and that creates
    steep barriers to entry. Congress should consider allowing
    these pre-development costs as eligible expenses under RD grant
    and loan awards to support this early-stage development. Third,
    build a single online portal. Applicants could check
    eligibility, they could track applications and get real-time
    support. That one-stop system would cut the red tape, improve
    transparency, and better serve communities like ours with such
    limited staff. And finally, invest in rural capacity building
    in the next farm bill. Local governments can't leverage Federal
    resources without staff, planning capacity, and partnerships.
    We face in our rural county an individual who might be tasked
    with three or four major responsibilities. In larger counties,
    they could have four or five people doing those three or four
    responsibilities. It is simply impossible to navigate the
    bureaucratic process sometimes when you are not properly
    staffed, and we can only afford so much staffing.
        We also ask the Committee to conduct oversight over USDA's
    internal reorganization efforts. Counties support the
    Department's goals of improving efficiency, but any
    reorganization must preserve the USDA RD's field-based network
    and staff capacity. This is very important. Field staff are
    trusted partners. They have been that way for decades. Their
    knowledge, their relationships cannot be replaced by
    consolidation. We must preserve what makes USDA effective: its
    field offices, its local partnerships, and its deep
    understanding of rural America.
        Now, Chairman Johnson and Ranking Member Davis, counties
    stand ready to do our part. With a strong USDA RD backed by a
    new, modernized farm bill, we can ensure that every county, no
    matter its size or capacity, has a fair shot at success. Thank
    you, and I look forward to your questions.
        [The prepared statement of Mr. Heimel follows:]

     Prepared Statement of Hon. Paul Heimel, Commissioner, Potter County,
      Pennsylvania, Cowdersport, PA; on Behalf of National Association of
                                    Counties
        Chairman Johnson, Ranking Member Davis, and Members of the
    Subcommittee, thank you for the opportunity to testify on behalf of the
    National Association of Counties (NACo) and the nation's 3,069
    counties, parishes and boroughs. NACo represents nearly 40,000 county
    elected officials and 3.6 million county employees working every day to
    deliver essential services that support our residents. We appreciate
    the chance to work toward our shared goal of fostering stronger, more
    resilient rural communities
        My name is Paul Heimel, and I am honored to serve as a County
    Commissioner in Potter County, Pennsylvania, home to roughly 16,000
    residents across one of the most rural and beautiful regions of the
    Commonwealth. Before my time in county government, I served as third-
    generation editor of the local weekly newspaper for 2 decades; took a
    detour to work in corporate communications and public relations for
    several years, and was then elected to a seat on the Potter County
    Board of Commissioners, where I have served for nearly 18 years.
        As a commissioner, I've been a strong advocate for rural counties,
    leading efforts to expand services for military veterans, implement
    criminal justice reforms and support a wide range of local initiatives.
    I also serve in leadership roles with the County Commissioners
    Association of Pennsylvania, and I remain actively involved with the
    National Association of Counties.
        The U.S. Department of Agriculture's Rural Development mission area
    (USDA RD) is an indispensable Federal partner for counties like mine.
    Through community facilities financing, entrepreneurial capital and
    technical support, USDA RD programs help local governments, our
    partners and residents build and sustain thriving rural communities.
        Today, I will highlight the following items:

       The role counties play in rural development.

       The critical need for USDA RD programs to address local
            needs and support county-led growth.

       Practical improvements to modernize and scale USDA RD tools
            so rural Americans can access them.

       Impacts of USDA's departmental reorganization as it relates
            to preserving the vital role USDA RD plays in our communities.

        By shaping policy to match rural governance, we can ensure that
    every community, regardless of size, location or capacity, has a fair
    shot at success.
    County Governments Play a Critical Role in Rural America, but Face
            Persistent Structural Challenges
        Rural America is home to 20 percent of the nation's population and
    spans more than 70 percent of its land mass. In these communities,
    county governments are the connective tissue that holds rural life
    together. Counties provide the public safety, emergency response and
    law enforcement residents count on in moments of crisis. We build and
    maintain the roads, bridges and water systems that keep people and
    goods moving. We plan and permit development, support local businesses,
    run elections and invest in education. In partnership with state and
    Federal agencies, we deliver the everyday human services that make it
    possible for people to live and work in rural areas even when budgets
    are tight and staff are stretched thin.
        Despite the vital role counties play, the challenges we face are
    deep and persistent. Rural residents are among the most under-served in
    the country. The poverty rate in rural America (14.4 percent) is 2.5
    percentage points higher than the national average (11.9 percent). Of
    the 353 counties experiencing persistent poverty, 85 percent are rural.
    One in five rural census tracts is considered a disadvantaged
    community, a key indicator of vulnerability to shocks like economic
    downturns and natural disasters.
        Potter County is extremely rural, with a population that has fallen
    below 16,000 for the first time since 1920. Meanwhile, the median age
    has been steadily rising to nearly 50 years; nationally it's 38.7. Each
    year, we have more deaths than births and we continue to see a serious
    out-migration of teens and young adults.
        Rural counties face unique challenges in meeting local needs. With
    limited staff and funding, many lack the capacity, defined as the
    personnel, expertise and capital, to deliver services and pursue
    external funding. These gaps can make it difficult to apply for or
    manage state and Federal programs, especially those with complex
    requirements, reporting burdens or match obligations. As a result, the
    communities most in need of investment are often least able to access
    it.
    In Light of These Challenges, USDA RD Is Our Most Important Federal
            Partner
        USDA RD is often the only source of support that can move a project
    from an idea to a reality. Each year, USDA RD finances tens of billions
    of dollars in rural infrastructure, housing and business investments
    across tens of thousands of projects. USDA RD programs have invested
    over $26 billion across nearly 60,000 projects in FY 2025 alone. The
    value of USDA RD is not only capital it can provide, but also its
    delivery model. USDA deploys a field-based workforce that places
    experienced staff in or near the communities they serve. In many rural
    areas, the USDA field office is the front door to the Federal
    Government. That local presence helps projects take root and succeed.
        I've seen firsthand what USDA RD means for rural counties like
    mine. In Potter County, we have been proud and frequent partners with
    USDA RD going back to the 1980s. We have seen $8.23 million in 95
    different USDA RD investments since FY 2015, including $3.86 million in
    loans and $4.37 million in grants. These investments have touched
    nearly every corner of community life: housing, public works, emergency
    services and more. We have leveraged USDA RD loans and grants to
    acquire and improve water systems in places like Roulette Township,
    helped our local ambulance association purchase lifesaving equipment
    and built housing that our seniors and working families can actually
    afford. USDA RD programs have enabled low-income residents to buy their
    first homes and stay in them through critical home repair financing.
        These kinds of projects are often out of reach for counties like
    ours without Federal help. With one of the lowest median incomes in
    Pennsylvania and a real estate tax base undercut by the 44 percent of
    land in our county that is state-owned and tax exempt, we simply cannot
    do it alone. Environmental compliance, prevailing wage and other
    important standards often come with price tags we can't meet without
    outside support. USDA RD has been that support, and when called upon,
    we have always stepped up and met the local match.
        These needs are not going away. If anything, they are growing more
    urgent. Rural health care in our region is approaching a full-blown
    crisis. Just 3 months ago, the maternity ward at our local UPMC
    hospital closed, leaving behind a seven-county maternity desert across
    the northern tier of Pennsylvania. More recently, the same hospital
    closed its skilled care unit, a service it had provided for more than
    50 years. Our communities are losing essential care, and with each
    closure, our families are left with fewer and fewer options. We are
    trying to respond the way rural communities always do: with creativity,
    collaboration and a commitment to taking care of our own. However, we
    know we cannot reach our full potential without strong Federal
    partnerships.
        That is why USDA RD matters to counties like mine. Not just because
    of what it has helped us build in the past, but because of the role it
    must continue to play as we face the challenges ahead. Our track record
    shows that counties like Potter are ready to do our part, but we need
    USDA RD to have the resources and flexibility to meet us there.
    USDA RD Programs Are Vital Tools for County-Led Growth
        For county leaders, USDA RD programs are some of the most powerful
    tools we have at our disposal to grow local economies, support small
    businesses and provide essential services in rural communities. I want
    to speak today from both experience and observation: what's worked, and
    where small changes would go a long way. The following is a breakdown
    of major programs in USDA RD's portfolio under consideration by the
    Subcommittee at today's hearing, along with recommendations our
    Congressional partners can consider to improve outcomes from these
    resources.
    Programs with Direct County Eligibility
        The Community Facilities Program (CFP) is the backbone of rural
    infrastructure finance. Counties use it to build, equip and renovate
    EMS facilities, 911 dispatch centers, rural health clinics,
    courthouses, jails, community centers and more. These are the assets
    that keep our towns functioning. They are often owned and operated by
    the county for decades. In Potter County, an additional CFP-financed
    ambulance can mean the difference between life and death on a snowy
    night when there's only one crew on duty.
        Counties also see the catalytic potential of CFP dollars to advance
    rural food systems and entrepreneurship. In neighboring Cameron County,
    a former restaurant has been transformed into a certified production
    facility for locally sourced food products. This Innovation Center is
    the only commercial kitchen available across our region of northern
    Pennsylvania. Thanks to a $345,000 USDA Community Facilities grant, the
    space now serves as a shared-use kitchen where food entrepreneurs can
    produce sauces, soups and baked goods that meet USDA food safety
    standards. These producers can then sell to local retailers, online
    customers, farm markets and community events, thereby creating new
    revenue streams rooted in our community.
        But the project is about more than equipment. It has become a hub
    for rural workforce development and community revitalization. Penn
    State Extension now uses the space to host ServSafe certification
    courses and small business classes. Northern Pennsylvania Regional
    College offers culinary training for local students. CareerLink has
    plans to use the site for job readiness programming. The Chamber of
    Commerce and Artisan Center relocated to the facility, strengthening
    local tourism and creating a visible front door for the county's
    creative economy. The project even spurred a $65,000 follow-on grant
    from the local electric utility to purchase energy-efficient kitchen
    equipment. This is the kind of rural innovation that USDA programs make
    possible, and it shows how even modest Federal dollars, when paired
    with strong local vision, can spark durable, multifaceted benefits for
    rural communities.
        CFP's strength lies in its ability to finance right-sized projects
    tailored to rural service areas, but matching requirements, a lack of
    planning support and a rigid cost structure limit participation.
    Congress should expand access to predevelopment funds, waive match
    requirements for fiscally constrained counties and prioritize small-
    scale, low-overhead projects that stretch taxpayer dollars further.
    Structuring CFP with these rural realities in mind would unlock
    hundreds of essential projects across the country.
        The Rural Business Development Grants (RBDG) Program is one of the
    most flexible tools available to rural counties for small business
    development. Counties have used it to create shared-use kitchens,
    support rural tourism corridors, provide microloans through local
    revolving funds and help workers form cooperatives in the absence of
    local employers. RBDG is a program we turn to when we want to breathe
    life into our town centers--not through big-ticket incentives but by
    seeding practical investments block-by-block. The grant is accessible
    to counties but constrained by modest funding levels and a 1 year award
    structure that makes incorporating RBDG program funding into long-term
    planning difficult. Administrative requirements can also be burdensome
    for counties with only limited access to economic development staff.
    Congress can improve RBDG by increasing award caps, enabling multi-year
    grants and expanding eligible uses to include site development,
    community branding and marketing. A small increase in flexibility and
    funding would yield outsized returns.
        Rural Innovation Stronger Economy (RISE) grants support a critical
    but often out-of-reach goal for counties: building regional innovation
    infrastructure. The program funds hubs that combine entrepreneurship,
    workforce development and industry support tailored to local strengths.
    In rural Pennsylvania and nearby New York, counties are using RISE to
    grow sectors like forest products, sustainable building materials and
    outdoor recreation manufacturing. These efforts create durable, locally
    rooted jobs and expand economic opportunity for our residents.
        RISE makes these projects possible by financing the facilities and
    training needed to launch them. However, the program's complexity makes
    it hard for smaller counties--especially those without planning staff
    or anchor institutions--to apply. Without dedicated technical
    assistance, it's difficult to form the required consortium or develop a
    competitive business plan. USDA should create a smaller-scale tier for
    early-stage applicants, fund regional TA providers to help form
    partnerships and expand eligible activities to include convening and
    planning. The program's design is strong. It just needs to reach the
    communities it was built to serve.
        The Meat and Poultry Intermediary Lending Program (MPILP) helps
    counties address a key gap in rural agricultural economies: local
    processing capacity. The program provides flexible capital to
    intermediaries, who then relend to small- and mid-size processors.
    Counties can serve as intermediaries or partner with them to finance
    equipment like cut-and-wrap rooms, cold storage, refrigerated trucks,
    wastewater pretreatment and food safety upgrades. In places like Potter
    County, this support can keep a regional plant open or add a mobile
    unit so producers don't have to haul livestock long distances. These
    investments keep more value in the community and strengthen local
    supply chains.
        Still, MPILP's structure can be burdensome. It requires detailed
    planning, long timelines and documentation that small counties and
    processors often can't manage alone. USDA should issue county-specific
    guidance, allow smaller relending deals and permit bundled projects
    that combine equipment, food safety compliance and distribution needs.
    Eligible uses should include regional cold storage and last-mile
    delivery. USDA should also pair financing with technical assistance for
    business planning and food safety and align loan terms with the
    seasonal nature of cash flow. The program's intent is strong. With
    simpler access and right-sized tools, MPILP can better reach the
    communities it was built to support.
    Programs Where Counties Access Support Through Key Partnerships
        The Rural Economic Development Loan and Grant (REDLG) Program
    demonstrates how much can be accomplished when Federal capital flows
    through trusted local institutions. In many rural regions, the most
    capable financial intermediary is the electric cooperative or telecom
    provider. These institutions know the community, understand rural
    credit and are willing to provide capital that may otherwise be
    unavailable through private-sector sources. Counties frequently
    collaborate with these co-ops to finance fire stations, broadband
    deployment, health clinic, main street revitalization projects and
    more. But REDLG's structure limits the county role. Only eligible USDA
    borrowers--typically utilities--can apply directly, and county access
    depends entirely on informal partnerships. USDA provides limited
    guidance on how these partnerships should be structured. Congress can
    make REDLG more accessible by allowing counties to serve as co-
    applicants, expanding eligible uses to include housing and
    infrastructure planning and streamlining USDA's review process to
    ensure timely deployment. Rural counties are ready to lead projects.
    However, we need a clearer and more direct pathway to the capital.
        Although counties cannot apply directly for Value-Added Producer
    Grants (VAPG), we often play an indirect but essential role in helping
    rural producers access support through the VAPG program. These grants
    keep more agricultural wealth in rural communities--for example, by
    helping a dairy farm start an on-site cheese operation or a grain co-op
    launch a branded flour line. That added value builds resilience and
    supports the supply chain that rural counties rely on to sustain our
    local economies. However, the smallest producers often don't have time
    or expertise to prepare a full VAPG application. VAPG is designed for
    independent producers and ag-based business ventures. Grants require a
    1:1 match and a detailed business plan. Smaller producers struggle to
    meet those requirements, and counties are currently unable to serve as
    fiscal agents or technical assistance providers under the program.
    Counties could help by coordinating producer groups, offering matching
    funds or providing technical assistance, but the program doesn't
    currently make space for us. USDA should allow counties or regional
    entities to serve as administrative partners, fiscal sponsors or TA
    providers for small producer groups. Template business plans and
    streamlined application pathways would also help. If we want to grow
    rural wealth from the ground up, we need tools that empower the people
    and institutions already doing that work.
        The Rural Business Investment Program (RBIP) is USDA's effort to
    bring equity capital to rural communities, something many rural
    businesses find elusive. Counties indirectly benefit from RBIP when
    approved investment funds (RBICs) support firms located in their
    communities. But RBICs often overlook smaller or more remote counties,
    and many rural businesses are not investment-ready. Counties can help
    identify promising local firms or sites, but the program offers no
    formal mechanism for engagement or coordination. RBIP can work better
    for rural counties if USDA requires RBICs to engage with local
    governments when evaluating investments, provides technical assistance
    to help firms become investment-ready and expands capital structures
    beyond equity. For example, supporting mezzanine or revenue-based
    financing models that better match rural growth trajectories. If USDA
    wants private capital to align with rural economic development,
    counties need a seat at the table.
        The Rural Microentrepreneur Assistance Program (RMAP) recognizes
    that the most important businesses in rural counties are sometimes the
    smallest. From mobile mechanics to home health aides, these
    entrepreneurs don't need millions. They need a few thousand dollars and
    guidance on bookkeeping, business planning and compliance. RMAP is one
    of the few programs designed to meet these needs, pairing small loans
    with hands-on coaching from local intermediaries. Where those
    intermediaries exist, counties often partner by making referrals,
    sharing space or helping meet match requirements. But in places without
    intermediaries, counties have no clear way to fill the gap. RMAP
    currently excludes counties from eligibility. Congress should expand
    eligibility to allow counties and county-led economic development
    agencies to serve as intermediaries or partners. USDA should also offer
    multi-year funding for strong-performing Microenterprise Development
    Organizations and streamline re-advances to avoid service disruptions.
    This is one of USDA's most effective programs. It just needs to be
    easier to deliver and grow where it's needed most.
    The Upcoming Farm Bill Presents a Critical Opportunity To Expand Access
            and Modernize Delivery of USDA RD Programs and Resources
        USDA RD programs are among the most powerful levers the Federal
    Government has to support infrastructure, small business growth and
    community vitality in rural America. But far too often, these programs
    are out of reach for the counties they are meant to serve, not because
    the needs aren't real, but because the systems around those programs
    are too complex, too slow or too disconnected from rural reality.
        The House Agriculture Committee has a chance to change that. By
    including commonsense reforms and new investments in the next farm
    bill, the Committee can ensure that USDA RD remains not only well-
    resourced, but also responsive, accessible and effective for rural
    counties. These are the types of improvements that will not make
    headlines, but they will make a difference. They will ensure that USDA
    RD programs reach the counties they were designed to serve, and that
    rural America is not just included in the farm bill but fully empowered
    by it.
    Counties Urge Members of the Committee To Consider the Following
            Recommendations In Any Future Action on USDA RD Programs
        Simplify access for small-dollar projects: USDA should establish a
    streamlined application track for modest but essential investments
    under Community Facilities and RBDG. These micro-projects such as
    acquiring new ambulances, HVAC replacements at senior centers or code-
    compliant restrooms in childcare facilities, deliver high value but
    often face disproportionate administrative hurdles. For these
    applications, USDA should reduce narrative requirements, allow a single
    unified budget narrative and waive documentation not required by
    statute.
        Pre-development activities like feasibility studies, site selection
    and environmental review should be explicitly eligible uses under USDA
    RD programs. These expenses often fall to county general funds and are
    a major barrier to participation for rural jurisdictions.
        USDA should standardize core application components across CF,
    RBDG, RMAP and REDLG to the extent permitted by statute, and pilot a
    common core form. Pilot regional bundling of small projects with a
    single review. Where NEPA scopes and lead-agency determinations align,
    allow a single environmental record across RD programs. Applicants
    could then reuse project narratives, budget forms and attachments,
    reducing duplication and cutting down on application time for
    applicants and administrative review for USDA RD staff.
        Improve program sequencing and coordination: Federal resources are
    most effective when local staff can align them with real-world
    timelines. USDA should open rolling concept submission windows and
    adopt quarterly award cycles to allow counties to coordinate with board
    calendars, permitting processes and legislative sessions.
        To support early-stage applicants, USDA should publish a plain-
    language eligibility matrix listing allowable uses, matching
    requirements and unique criteria for each RD program. This should be
    paired with a living repository of sample projects--for example, ``fire
    hall expansion'' under Community Facilities Program or ``shared-use
    commercial kitchen'' under the Rural Business Development Grant and
    Loan Program--informed by regular field office feedback and updated to
    align with programmatic and statutory changes.
        Where National Environmental Policy Act (NEPA) scopes are similar,
    USDA should allow a single environmental record to satisfy requirements
    across programs. This would save consultant costs and staff time while
    maintaining environmental protections.
        Strengthen field-based delivery: In many rural counties, the USDA
    field office is not just the point of access for RD programs--it is the
    only Federal office in the region and a front door to the Federal
    Government for rural residents. The success of USDA's local delivery
    model depends on having enough staff with enough time and expertise to
    provide real support to rural customers. USDA should prioritize
    backfilling vacancies and limiting individual caseloads, particularly
    in high-demand states and persistent poverty counties.
        USDA should also establish standing virtual and in-person office
    hours at the state level, where county staff and regional development
    partners can schedule brief consultations to review project concepts
    and get questions answered. These consultations should be available at
    least biweekly and staffed by specialists trained in multiple program
    areas.
        In addition, USDA should provide resources for circuit-rider TA
    teams or technical assistance (TA) vouchers that counties can use with
    trusted nonprofit partners, regional councils or local economic
    development organizations to build capital stacks and navigate post-
    award compliance. USDA's Community Facilities Technical Assistance and
    Training and Rural Community Development Initiative programs provide a
    potential model for this approach, but funding should be scaled up and
    targeted specifically at pre-application support.
        Make rural-scale financing work: Rural projects often stall not
    because they lack merit but because funding sources cannot be aligned
    in time. USDA should offer conditional commitments or letters of
    interest across programs to help counties demonstrate intent to fund
    when applying for state appropriations or private match. These tools
    exist in CF loans and Single-Family Housing and should be extended
    across RD programs.
        USDA should clarify that reasonable interest on interim financing
    is an eligible project cost under CF and RBDG. Counties often rely on
    bridge loans while awaiting obligation. Clear guidance would ease cash
    flow constraints without increasing risk. Counties and regional
    entities should also be allowed to bundle small projects into a single
    coordinated application to reduce transaction costs and achieve scale.
        Modernize USDA RD technology to improve rural access: Counties urge
    USDA RD to consider building a single web-based ``front door'' for its
    programs. This portal should include:

       A program matching tool based on project need and location

       Application status tracking for pre- and post-award stages

       Email and text alerts for deadlines, missing items and
            decisions

       Save-and-reuse functionality for standard forms

       A geospatial eligibility checker that overlays maps with
            population data and priority designations

       Published service standards including average review times,
            common deficiencies and FAQs

        USDA's existing tools, like RDApply and the Rural Data Gateway,
    offer a foundation, but functionality must be expanded. Portals should
    be mobile-friendly and usable in low-bandwidth settings to accommodate
    rural connectivity gaps.
        Invest in rural capacity building: To ensure USDA RD programs reach
    the communities they're intended to serve, the 2025 Farm Bill must
    include dedicated investments in rural capacity building. Counties face
    persistent barriers to accessing Federal resources not because of lack
    of need or readiness, but because of limited staffing, grant-writing
    expertise and technical support.
        The 2025 Farm Bill presents a key opportunity to address this
    challenge. Counties support the inclusion of new rural capacity-
    building initiatives that would provide multiyear, flexible grants to
    local stakeholders to plan, implement and coordinate community
    development strategies across rural America. This would help counties
    overcome longstanding barriers to accessing Federal funds by investing
    in the staff, partnerships and tools needed to move local priorities
    forward and level the playing field for rural communities. We also
    support devoting mandatory funding to rural development programs.
    Consistent funding is essential to ensure capacity-building support is
    not subject to year-by-year appropriations, especially in communities
    that need the most help in reaching Federal resources.
        These recommendations are not radical departures from current law.
    They are practical, bipartisan adjustments that build on USDA's own
    successful models, expand access for the smallest and most under-served
    counties and ensure that Federal dollars are deployed more efficiently.
    By making these changes in the next farm bill, the House Agriculture
    Committee can bring USDA RD into closer alignment with the realities of
    rural governance.

        As Congress considers the future of USDA programs through the
    upcoming farm bill, it is equally important to ensure that USDA's
    internal reorganization strengthens, rather than weakens, the
    Department's ability to deliver on-the-ground results in rural
    communities.

        Counties support USDA's goal of improving operational efficiency
    and ensuring taxpayer dollars are used effectively. At the same time,
    we urge the House Agriculture Committee to exercise strong oversight
    and ensure that USDA's reorganization builds on the Department's
    greatest strength: its field-based presence and local relationships.
        In many rural counties, USDA field staff are more than program
    administrators. They are neighbors, partners and in many cases the only
    visible Federal officials available to residents. Counties collaborate
    with USDA every day to implement conservation projects, expand
    broadband, deliver nutrition assistance, respond to disasters and build
    affordable housing and infrastructure. These are practical, place-based
    partnerships that depend on trust, continuity and local expertise. As
    the reorganization moves forward, the Committee has a critical
    opportunity to ensure that USDA remains rooted in the communities it
    serves and continues to deliver on the ground.
        To that end, counties offer the following recommendations for
    strengthening USDA's service delivery model through the reorganization
    process:

      1.  Maintain and Strengthen USDA's Field-Based Workforce: USDA field
                offices are instrumental in helping counties navigate
                complex programs, tailor projects to local needs and
                deliver timely support during emergencies. These personnel
                are not interchangeable with centralized systems. They
                offer institutional knowledge and community trust that
                cannot be replicated through regional hubs alone. USDA
                should prioritize backfilling vacancies, empowering field
                offices and ensuring staff have the time and flexibility to
                support small and first-time applicants. In states where
                counties administer SNAP and other safety net programs,
                these staff will be especially important as local
                governments implement changes included in H.R. 1.

      2.  Engage Local Governments and Partners Early and Often: Counties
                are key intergovernmental partners in serving USDA's rural
                customer base. USDA should establish regular stakeholder
                consultation mechanisms, including listening sessions,
                rulemaking comment opportunities and continued cooperating
                agency status for counties. Structural changes that affect
                how counties interact with USDA should never be implemented
                without meaningful local input.

      3.  Ensure Continuity of Operations During Reorganization: Counties
                rely on USDA to support housing, infrastructure, nutrition
                and economic development projects. Delays caused by
                staffing gaps or administrative restructuring could
                threaten local timelines, funding drawdowns, or compliance.
                USDA should publish clear continuity protocols and
                designate points of contact for impacted programs to help
                local governments and grantees stay on track during
                transitions.

      4.  Clarify the Role of Regional Hubs: While there may be cost-
                efficiencies in relocating some functions, regionalization
                must not come at the expense of responsiveness. USDA should
                define the responsibilities and decision-making authority
                of regional offices, protect local office autonomy for
                project-specific decisions, and assess how hub structures
                affect applicant experience in rural communities.

      5.  Preserve USDA RD Within USDA's Jurisdiction: USDA should continue
                to lead the Federal rural development mission. No other
                agency offers the same blend of local delivery, sector-
                specific expertise, and cross-program coordination. USDA
                should continue to build on this capacity, not transfer it
                elsewhere.

      6.  Prioritize Cross-Mission Area Integration and Interagency
                Coordination Without Losing Local Responsiveness: USDA
                should seek to better integrate operations across mission
                areas without sacrificing specialized expertise or local
                responsiveness. Streamlining is welcome where it reduces
                redundancy and improves access. But integration must not
                result in one-size-fits-all programming or diminish the
                availability of subject-matter experts in state and local
                offices. USDA should retain flexible, agency-specific TA
                resources and ensure integration efforts remain responsive
                to local context.

        As the House Agriculture Committee considers USDA's proposed
    reorganization alongside farm bill reauthorization, we encourage
    Members to protect the principles that have made USDA such a vital
    partner to rural counties: proximity, partnership and place-based
    problem-solving. USDA's footprint in rural America is not a relic. It
    is a modern and necessary foundation for effective service delivery.
    With the right safeguards and stakeholder engagement, this
    reorganization can strengthen USDA's ability to deliver on its mission
    and help ensure that no county is left behind.
    Conclusion
        Chairman Johnson and Ranking Member Davis, on behalf of NACo and
    rural counties across the country, thank you for your attention to
    these tools and to the people who rely on them. We stand ready to work
    with this Subcommittee to preserve these programs and to modernize and
    streamline them so that every county, regardless of size or staff
    capacity, can put them to work to build stronger more resilient
    communities across rural America.

        Mr. Davis. Thank you, Commissioner Heimel. At this time, we
    are going to recognize Executive Director Lynne Keller Forbes
    for 5 minutes.

      STATEMENT OF LYNNE KELLER FORBES, J.D., PRESIDENT AND CHIEF
    EXECUTIVE OFFICER, SOUTH EASTERN COUNCIL OF GOVERNMENTS, SIOUX
                        FALLS, SD; ON BEHALF OF
                  NATIONAL ASSOCIATION OF DEVELOPMENT
                             ORGANIZATIONS

        Ms. Forbes. Chairman Johnson, Ranking Member Davis, and
    distinguished Members of the Subcommittee, I want to thank you
    for the opportunity to appear before you this morning on this
    important topic. I am Lynne Keller Forbes. I am the President
    and the CEO of the South Eastern Council of Governments and the
    South Eastern Development Foundation in Sioux Falls, South
    Dakota, and I am honored to testify on behalf of the National
    Association of Development Organizations, known as NADO.
        I grew up on the Cheyenne River Indian Reservation in South
    Dakota, where my parents operated a farm and ranch. When I was
    young, we hauled our water until rural water was finally
    expanded. Rural water was a game changer, not only for our
    family, but for our livestock. We didn't have a telephone until
    I was in the second grade and the lines were finally expanded
    to reach us. Both of these events were only possible because of
    the Federal Government's investment in rural America, so my
    love for rural America and the advocacy for a strong farm bill
    runs deep.
        For the past 25 years, I have worked with rural communities
    and businesses across southeastern South Dakota, helping them
    plan, finance, and implement development projects that improve
    infrastructure, expand access to capital, and support long-term
    economic growth. Our mission is simple: we want to ensure that
    even the smallest communities and businesses have a trusted
    partner in building economic resilience and prosperity to help
    sustain rural America. One of our most vital partners in this
    work is USDA's Rural Development mission area, known as RD.
    Today, I want to highlight the critical role regional
    development organizations, or RDOs, play in supporting rural
    communities and offer some practical recommendations to
    strengthen RD's programs and services.
        RDOs, also known a councils of governments, planning
    districts, and regional planning councils, are multi-
    jurisdictional entities that serve as trusted intermediaries
    for rural counties, cities, towns, and businesses. We help
    communities and businesses access Federal resources, deliver
    essential services, and plan for long-term success. In many
    cases, RDOs are the lead applicants or technical assistance
    provider for RD's programs. We conduct feasibility studies, we
    write grant applications, manage complex projects from start to
    finish, help develop housing, and provide financing for
    businesses that would not otherwise be considered bankable.
        Rural America faces unique challenges. Nearly one in seven
    Americans live in rural areas, which span \3/4\ of the nation's
    landmass. These communities often struggle with limited
    infrastructure, higher poverty rates, fewer job opportunities,
    and reduced access to broadband, healthcare, and housing.
    Despite these challenges, RDOs help rural communities and
    businesses navigate Federal systems and unlock funding for
    transformative projects. We work closely with RD to deliver
    programs, like the Water & Waste Disposal Program, the
    Community Facilities Program, the Rural Business Development
    Grant Program, and the Intermediary Relending Program. These
    programs are not just financial tools, they are lifelines. Let
    me share a few examples.
        In Dolton, South Dakota, a community of less than 100
    people, we helped TM Rural Water secure a grant through the
    Water & Waste Disposal Program to rehabilitate lime-drying beds
    that were damaged by a derecho storm. Across the country, RDOs
    are making similar impacts. In New York, a NADO member used RD
    funds to launch a small business technical assistance program.
    In Louisiana, another member received funding to develop a
    strategic growth model along the I-49 corridor, and in Montana,
    an RDO led a coalition securing $10 million through the MPILP
    Program to strengthen local processing capacity and expand
    economic development opportunities. These examples show how
    RD's flexible, place-based approach empowers communities to
    structure investments around local needs, often filling gaps
    the private-sector cannot or will not address.
        As Congress considers reauthorization of the farm bill, I
    urge you to prioritize the core programs that create jobs,
    improve infrastructure, and support small businesses.
    Specifically, we recommend you protect key programs that rural
    communities have come to rely on; improve access and
    flexibility to empower rural communities to fully participate
    in the programs by removing unnecessary barriers; strengthen
    the capacity of field offices and regional partners, like RDOs,
    to ensure that support services are responsive and tailored to
    rural needs; preserve USDA's local footprint. As USDA
    reorganizes, maintaining field staff and communities is
    essential. RDOs can extend RD's reach, but we urge Congress to
    invest in these partnerships. De-federalizing IRP: our B&IGs
    and EDA funds have been de-federalized with reduced USDA staff
    and limited resources. Now is the time to discuss de-
    federalizing IRP funding as well. RD's programs are more than
    infrastructure investments. They level the playing field for
    communities and businesses that often lack access to capital,
    capacity, and partnerships.
        As you renegotiate the farm bill, I encourage you to
    prioritize the tools that enable rural America to grow and
    succeed. Rural communities have never lacked vision or
    determination. What they need is a sustained Federal
    partnership to build strong, resilient economies that support
    families, attract investment, and ensure future generations can
    thrive. Thank you again for the opportunity to testify. I look
    forward to your questions.
        [The prepared statement of Ms. Forbes follows:]

     Prepared Statement of Lynne Keller Forbes, J.D., President and Chief
     Executive Officer, South Eastern Council of Governments, Sioux Falls,
       SD; on Behalf of National Association of Development Organizations
    Introduction
        Chairman Johnson, Ranking Member Davis, and distinguished Members
    of the Subcommittee, thank you for the opportunity to testify today on
    behalf of the National Association of Development Organizations (NADO)
    and the national network of Regional Development Organizations (RDOs).
    NADO empowers RDOs through advocacy, education, and training to advance
    collaborative, place-based strategies that strengthen rural quality of
    life and economic competitiveness. We are grateful for the opportunity
    to join you today to share our perspective.
        My name is Lynne Keller Forbes, and for the past 25 years, I have
    served as President and CEO of the South Eastern Council of Governments
    (SECOG), a Regional Development Organization serving over 315,000
    residents across six counties and 40 municipalities in southeastern
    South Dakota. In addition to leading SECOG, I also serve as President
    and CEO of the South Eastern Development Foundation and Dakota BUSINESS
    Finance, two affiliated entities we established to expand access to
    capital and support economic development throughout the region.
        Through these roles, I have the privilege of working closely with
    rural communities across my region to provide coordinated support in
    planning, financing, and development. By aligning resources and
    expertise, we help local governments and small businesses secure
    funding, implement infrastructure projects, and pursue sustainable
    growth. Our collaborative approach ensures that even the smallest
    communities have a trusted partner in building long-term resilience and
    prosperity.
        One of our most essential partnerships in delivering impactful
    programs and services to rural South Dakotans in our region is with the
    U.S. Department of Agriculture's Rural Development mission area (USDA
    RD). In my testimony today, I will outline the critical role RDOs play
    in supporting rural communities, including programmatic level examples,
    and offer practical recommendations to modernize and expand these tools
    so they are more accessible to those who need them most. I will also
    address USDA's recent departmental reorganization and its implications
    for maintaining the central role USDA RD plays in our regions.
    About the South Eastern Council of Governments
        The South Eastern Council of Governments is a regional planning and
    development district serving six counties in southeastern South
    Dakota--Clay, Lincoln, McCook, Minnehaha, Turner, and Union--and the
    municipalities within them. Established in 1970 by executive order,
    SECOG was created to provide staff support to local governments and
    promote regional cooperation. Its mission centers on helping rural
    communities plan for growth, improve infrastructure, and enhance
    overall quality of life through strategic development initiatives.
        With four of the six counties we serve having populations under
    20,000, SECOG offers a wide range of services tailored to the needs of
    rural communities. These services include land use planning, geographic
    information systems (GIS), and pre-disaster mitigation planning. A key
    component of SECOG's work involves assisting its members in accessing
    Federal resources--particularly through the USDA RD programs. SECOG
    helps local governments apply for USDA grants and loans such as the
    Community Facilities Direct Loan and Grant Program and the Water and
    Waste Disposal Loan and Grant Program, which support essential
    infrastructure like water systems, public buildings, and waste
    management. Through these efforts, SECOG plays a vital role in
    strengthening rural South Dakota's capacity to grow and thrive.
    How Regional Development Organizations Assist Rural America
        RDOs are the backbone of Rural America. This simple truth
    underscores the critical role that RDOs--also known as Councils of
    Government (COGs), Planning and Development Districts (PDDs), Area
    Development Districts (ADDs), Local Development Districts (LDDs), and
    Regional Planning Councils (RPCs)--play in supporting rural
    communities. These multi-jurisdictional, quasi-governmental entities
    serve as trusted regional intermediaries, working on behalf of rural
    counties, cities, and towns to deliver essential services, secure
    resources, and plan for long-term prosperity.
        To understand the value of RDOs, it's important to first understand
    the current rural landscape. Rural America is home to nearly one in
    seven Americans--just over 46 million people--yet it spans nearly \3/4\
    of the nation's landmass. This vast geographic footprint, paired with a
    relatively small and dispersed population, makes it inherently
    challenging to maintain infrastructure, deliver services, and build
    resilient economies. While some rural counties are beginning to grow
    again, the challenges remain deep-rooted. Poverty rates are
    consistently higher in rural areas than in urban ones, particularly in
    regions that have experienced persistent poverty for generations.
    Incomes remain lower, job opportunities more limited, and essential
    services--like broadband, health care, and affordable housing--are
    harder to access. Many rural economies are also heavily dependent on
    industries like agriculture, manufacturing, and natural resource
    extraction, which remain highly susceptible to market swings and policy
    shifts.
        Despite the challenges facing rural communities, RDOs play an
    essential role in advancing the mission of USDA RD by helping them
    plan, access, and implement thoughtful Federal investments tailored to
    their unique local needs. RDOs work closely with USDA RD to deliver
    essential infrastructure, housing, broadband, and community facilities
    programs, especially in places with limited local capacity. In many
    communities, RDOs serve as the lead applicant or technical assistance
    provider for USDA RD programs, conducting feasibility studies, writing
    grant and loan applications, and managing complex multi-agency projects
    from start to finish.
        This partnership is especially vital in rural areas that lack in-
    house planning or grant-writing staff. RDOs help bridge that gap by
    guiding communities through the process of identifying resources and
    applying for USDA RD programs such as: the Water and Waste Disposal
    Loan and Grant Program; the Community Facilities Direct Loan & Grant
    Program; the Rural Economic Development Loan & Grant Program; the
    Intermediary Relending Program; the ReConnect Loan and Grant Program;
    and the Rural Business Development Grant Program, among many others.
    The expertise of RDOs helps ensure that these resources are effectively
    targeted and deployed in the places that need them most.
        In addition to their work with USDA, RDOs are often designated as
    Economic Development Districts by the U.S. Economic Development
    Administration (EDA), where they lead the development of Comprehensive
    Economic Development Strategies (CEDS)--planning documents that align
    with USDA RD investments and are key to leveraging additional Federal
    and state funding. Many also serve as Rural Planning Organizations
    (RPOs) for state transportation departments, ensuring rural priorities
    like road repairs and transit access are included in long-term
    infrastructure plans.
        RDOs further support rural resilience by partnering on disaster
    recovery and hazard mitigation efforts with FEMA and state emergency
    agencies. Some also assist in regional workforce development, often
    serving as conveners or operators of local workforce development boards
    and sector-based training initiatives.
        Beyond direct project delivery, RDOs are strategic conveners. They
    bring together local governments, nonprofits, businesses, and state and
    Federal partners to align efforts, share resources, and speak with one
    voice. By supporting USDA RD's mission at the regional level, RDOs help
    ensure rural communities don't just access Federal programs--they
    succeed with them.
        Despite the support RDOs provide to rural communities, the
    structural challenges they face remain profound and persistent. Limited
    fiscal capacity, aging populations, geographic isolation, and decades
    of disinvestment have left many communities without the basic
    infrastructure and services their urban counterparts take for granted.
    RDOs are a vital part of the solution helping rural areas overcome
    barriers that no single town or county can address alone, though we are
    not a silver bullet. Targeted, sustained Federal investment isn't just
    helpful, it's essential to provide economic prosperity and security in
    rural communities.
    USDA RD Is a Vital Resource for Rural America
        USDA RD is often the most important Federal partner for rural
    America--not only because of the scale of its investments, but because
    of its deeply place-based approach, its on-the-ground presence, and its
    unmatched ability to deliver tailored, community-driven solutions where
    they're needed most. Through a national network of state and field
    offices, USDA RD staff work directly with local governments,
    nonprofits, and community leaders to identify priorities, navigate
    complex Federal systems, and unlock funding for projects that are
    critical to community well-being.
        What sets USDA RD apart is its ability to meet rural communities
    where they are. With a flexible toolkit of grants, direct loans, and
    loan guarantees, USDA RD empowers communities to structure investments
    around local needs and capacity. Whether it's helping a small town
    build a health clinic, financing a rural business incubator, or
    partnering with one of the nearly 500 RDOs to launch a revolving loan
    fund, USDA RD is often the first--and sometimes the only--Federal
    partner equipped to respond to the unique realities of rural life.
        Since FY 2012, USDA RD has invested over $400 billion in nearly two
    million projects across the country. These are not one-size-fits-all
    programs--they're strategic, high-impact investments that often fill
    gaps the private sector cannot or will not address due to low
    population density, limited tax bases, or lack of short-term return. In
    many cases, RD is the linchpin that makes transformative rural
    development possible.
        A powerful example is USDA RD's partnership with SECOG to support
    the town of Centerville, where local leaders needed help funding a new
    water treatment facility. With RD's support, they were able to complete
    a vital infrastructure upgrade that not only improved public health and
    environmental safety, but that also positioned the town to attract new
    business and housing development. This is what USDA RD does best--
    helping rural communities solve urgent challenges today while laying
    the foundation for long-term economic growth and resilience.
    Recommendations for the Rural Development Title for a Farm Bill
            Reauthorization
        For years, USDA RD programs have had more demand than funding,
    showing just how much rural America needs steady Federal support. Even
    though 85 percent of the country's persistently poor counties are
    rural, these communities are often forced to carry an unfair share of
    the costs just to keep basic services running. Without reliable Federal
    help, they're stuck making tough choices--cutting back on things like
    infrastructure, healthcare, schools, or public safety just to balance
    the budget. These services aren't luxuries--they're essential for the
    farmers, ranchers, foresters, and families who keep rural areas going.
    USDA RD is one of the few Federal programs that can really meet these
    needs, and its support is more important now than ever.
        A reauthorized farm bill is more than a routine policy update--it
    represents a strategic investment in the future of rural America. It
    provides for an opportunity for Congress to emphasize rural development
    programs and strategies that will create opportunities for all rural
    Americans. As Congress begins negotiations on the farm bill, we support
    several key priorities in the farm bill that will boost rural
    economies, create jobs, and improve the quality of life in rural
    America:
    Protect Key Rural Development Programs
        Community Facilities Programs (CFP): This flexible funding program
    provides grants and low-interest loans to communities with populations
    under 20,000 for the purchase, construction, or improvement of
    essential community infrastructure. Since its inception, small
    communities have depended on its funding to build and sustain critical
    infrastructure--such as health clinics, fire stations, schools, and
    libraries--that not only improve quality of life for residents, but
    also foster economic resilience and long-term development.
        RDOs support local governments in understanding eligibility
    requirements and apply for funding through the CFP program. For
    example, in my region, SECOG helped secure over $2 million for the TM
    Rural Water District to rehabilitate its Lime Drying Beds near Dolton,
    SD. These beds, part of a Lime Softening Water Treatment Plant
    constructed in 2008, were originally lined with a 6" clay barrier to
    prevent groundwater infiltration and enable proper drying of lime
    slurry for environmentally responsible land application. Over time, the
    liner deteriorated, leading to significant infiltration issues. The
    derecho event of May 12, 2022, further exacerbated the damage, causing
    erosion from high winds, flooding, and wave action. This grant helped
    restore the integrity of the beds and protect water quality for the
    surrounding communities.
        Rural Business Development Grants Program (RDBG): RDBG is another
    critical program that helps RDOs support rural economic vitality by
    supporting technical assistance, entrepreneurial training, market
    research, feasibility studies, revolving micro-funds, among other
    activities aimed at providing hands-on assistance to local small
    businesses.
        In New York, the Lake Champlain-Lake George Regional Planning
    Board, with help from the RBDG program, launched the ``Small Business
    Technical Assistance Program'' in 2023. Through this program, they have
    been providing free technical assistance to existing and start-up
    business within the region.
        In Louisiana, the Acadiana Planning Commission received a $30,000
    RBDG for their I-49 Midway Corridor Strategic Growth Initiative, which
    will help produce a performance-based land use model to help create
    opportunities and spur sustainable economic growth along the corridor.
    This corridor, which is halfway between New Orleans and Shreveport,
    will help unlock significant economic growth for the region by making
    the communities along it more competitive for commercial investments
    and business expansion projects.
        Intermediary Relending Program (IRP): USDA's IRP is another
    critical resource for RDOs, providing low-interest loans to local
    intermediaries who use the funds to create or expand Revolving Loan
    Funds (RLFs). These RLFs then support small rural businesses with
    fixed-rate, term financing for working capital, equipment, and lines of
    credit--often one of the few sources available. The IRP helps build
    long-term economic resilience by creating a sustainable cycle of
    lending: over a 30 year loan term, intermediaries typically revolve IRP
    funds three times, meaning every Federal dollar results in
    approximately $3 lent to rural businesses. This model reduces Federal
    financial burden while driving local growth.
        The South Central Tennessee Development District, which represents
    35 municipal and 13 county governments in south middle Tennessee,
    received an initial capitalization of nearly $1.9 million in 1991 for
    their RLF. Since then, more than $8 million has been loaned to over 125
    small businesses. Additionally, these funds leveraged more than $30
    million in private investments, leading to the creation of nearly 500
    new jobs and the retention of hundreds more.
        Rural Innovation Stronger Economy (RISE): RISE addresses a critical
    need for Federal support of job accelerator partnerships that drive
    private investment in regional economies. Its flexibility allows
    recipients to support new and existing industries, establish innovation
    centers, and provide workforce development and training. These grants
    help rural communities compete by creating high-wage jobs, while
    building more diversified regional economies.
        Meat and Poultry Intermediary Lending Program (MPILP): Designed to
    counter industry consolidation by empowering smaller, independent meat
    and poultry processors, MPILP provides grant funding to intermediary
    lenders, who then offer affordable loans to businesses for starting,
    expanding, or modernizing processing facilities, equipment, and
    infrastructure. By increasing local processing capacity, MPILP
    strengthens the resilience and diversity of the U.S. food supply chain,
    ensuring more competition and consumer choice. This program is vital
    for rural economies, helping producers thrive in a global marketplace
    while lowering food costs and reinforcing national food security.
        The Bear Paw Development Corporation led a coalition of five
    Montana Economic Development Districts to secure a $10 million MPILP
    grant, aimed at strengthening local meat processing operations. The
    coalition established a revolving loan fund to support Montana-owned
    facilities with capital improvements, equipment upgrades, and USDA
    certification efforts. By leveraging existing relationships, staff
    expertise, and interregional collaboration, the program has already
    deployed millions in funding and is expanding economic opportunities
    across 26 rural counties. This initiative demonstrates how regional
    partnerships can translate national priorities into impactful, locally
    driven economic development activities.
        Rural Economic Development Loan and Grant Program (RED-LG): Though
    RDOs are not directly eligible, RED-LG has a proven track record of
    strengthening rural businesses and economies by providing more than
    $330 million to communities through both loans and grants.
        Value-Added Producer Grants (VAPG): Although RDOs are not eligible
    for VAPG funding, we recognize that it is a vital program that supports
    agricultural producers transform raw commodities into higher-value
    products. Strengthening this program will continue to allow small- and
    mid-sized farms diversify income streams, access new markets and stay
    competitive amid industry shifts.
        Rural Business Investment Program (RBIP): RBIP is an important
    initiative that helps bridge the capital gap in rural America by
    licensing Rural Business Investment Companies (RBICs) to channel
    private equity into under-served communities. Rural areas often lack
    access to traditional venture capital and face declining numbers of
    community banks, making it difficult for entrepreneurs to secure
    funding. RBIP addresses this by leveraging public support to attract
    private investment, enabling scalable startups and small businesses to
    grow, innovate, and create jobs locally. By treating rural regions as
    emerging markets, the program fosters economic diversification and
    resilience--making it essential to preserve and strengthen during
    reauthorization efforts.
        Rural Microentrepreneur Assistance Program (RMAP): RMAP empowers
    rural small businesses by providing critical access to capital and
    technical support through local nonprofit lenders. It offers microloans
    up to $50,000 and grants for training, helping entrepreneurs who often
    lack traditional financing due to limited credit or business
    experience. By supporting startups and expansions, RMAP strengthens
    local economies, creates jobs, and fosters innovation in areas
    typically under-served by mainstream financial institutions. For rural
    small businesses, this program is a lifeline that turns ideas into
    sustainable enterprises and revitalizes communities from the ground up.
        In New York, the Mohawk Valley Economic Development District
    (MVEDD) received a RMAP grant to support rural small businesses. This
    funding will enable MVEDD to offer hybrid workshops and one-on-one
    consulting focused on financial planning, grant access, and business
    growth strategies. The initiative aims to strengthen rural
    entrepreneurship across the Mohawk Valley by providing practical tools
    and guidance.
        Water and Wastewater Disposal Loan and Grant Program: This program
    is essential to communities within the SECOG service area, and across
    the nation, because it helps rural communities access safe drinking
    water and effective waste management systems--which are critical for
    public health, environmental protection, and economic development.
        These types of infrastructure projects are often cost-prohibitive
    for small communities, which typically lack the tax base or financial
    resources to fund them independently. Without Federal support, many of
    these areas would be unable to build or upgrade the systems needed to
    ensure long-term sustainability and attract new investment. By offering
    affordable financing and grants, the program reduces the financial
    burden on the local government while improving quality of life and
    resilience in under-served regions.
    Improve Access and Flexibility for Grantees
        Congress should prioritize enhancing access to Federal support for
    rural communities by addressing structural barriers in current grant
    programs. Many existing Federal grant structures inadvertently exclude
    or disadvantage rural areas due to rigid requirements that fail to
    account for the unique financial and administrative challenges these
    communities face.
        For example, local match requirements--which often mandate that
    communities contribute a set percentage of project costs--can be
    prohibitive for communities with limited tax bases. Some grants require
    up-front spending by the applicant, with reimbursement coming only
    after the fact. This model assumes a level of fiscal flexibility that
    many rural communities simply do not have. In contrast, allowing in-
    kind contributions, to count toward match requirements would provide
    more equitable opportunities for participation. This is particularly
    important for projects like community childcare centers, where
    community engagement and non-cash resources are often more readily
    available than liquid funds.
        Similarly, short grant timelines tend to favor projects that are
    easier and faster to implement, even if they offer less long-term
    benefit. Rural communities may lack the staff or consultants to quickly
    produce shovel-ready proposals, pushing them toward low-impact projects
    they can execute quickly rather than transformative initiatives like
    broadband expansion, which require extended planning, permitting, and
    coordination. Extending grant implementation periods would allow rural
    areas the time needed to pursue these complex, high-impact investments
    that are critical to long-term economic development.
        Another pressing issue is the complexity of the grant application
    process itself. Many small local governments have only one or two staff
    members--or rely entirely on volunteers--and lack dedicated grant
    writers. Highly technical application forms, excessive documentation
    requirements, and poorly designed online portals can discourage or
    prevent these communities from applying altogether. Simplifying the
    application process, it would lower the barrier to entry and help
    ensure that communities with the greatest need are not left behind.
    Invest in Capacity Building and Technical Assistance
        There is a strong need for increased investments in technical
    assistance and capacity building at the USDA to better support the full
    spectrum of rural businesses and economic development initiatives.
    Technical assistance can help bridge this gap by providing the guidance
    and expertise needed to navigate USDA programs, secure funding, and
    build sustainable operations. At the same time, strengthening the
    internal capacity of USDA field offices, local and regional development
    organizations, and partner institutions ensures that support services
    are more accessible, responsive, and tailored to the unique challenges
    of rural economies. With targeted investments in training, outreach,
    and organizational development, USDA can play a more effective role in
    fostering innovation, job creation, and long-term economic vitality
    across rural America.
    USDA Reorganization Efforts Must Compliment Congress' Efforts To
            Strengthen, Not Weaken, Program Delivery and Quality of
            Services for Rural Communities
        As the Administration pursues its goal of restructuring and
    reorganizing USDA, with the stated goals of improving operational
    efficiency and protecting taxpayer dollars, I urge Congress to provide
    oversight and guidance to ensure that USDA remains a catalyst for rural
    prosperity. In particular, it is essential to maintain a robust
    footprint of local and regional USDA staff that are embedded in local
    communities across the country. Local and regional USDA field staff are
    the mechanism that ensures service--delivery and connectivity to our
    communities. USDA field staff serve as a ``front door'' to the Federal
    Government--these individuals are a tangible human connection point
    that helps our communities access and navigate the complexities of
    Federal funding. These staffers help us determine whether funding
    sources fit our local needs, provide guidance on proper administration
    of Federal funds, and help us problem-solve. Without a working
    relationship with these individuals, most communities' only connection
    to the Federal Government is through overwhelmingly extensive and
    technical documents such as Notices of Funding Opportunity (NOFOs)
    which are far from being user-friendly. Indeed, the process of applying
    for Federal funds can be so daunting for rural and capacity-constrained
    communities that many smaller towns and villages and rural places would
    simply be left out or locked out of the process entirely, if not for
    the presence of field staff who help make these processes approachable.
        Similarly, as the Administration has indicated its intent to reduce
    the overall volume of Federal USDA staff, I encourage USDA leadership
    to work in an increasingly close and coordinated manner with locally-
    based Regional Development Organizations which can, and often already
    do, essentially serve as extensions of USDA staff at the local level.
    RDOs have existed for decades and, similarly to agency field staff, RDO
    staff members typically have extensive knowledge of Federal programs,
    are expert grant writers, and help other local stakeholders apply for
    Federal funding opportunities and administer Federal awards. I would
    encourage Congress and agency officials to prioritize and invest in
    regional entities like RDOs that work with local stakeholders to
    identify and elevate local priorities and projects; conduct regional
    planning processes; bring local stakeholders together; and weave
    together competitive applications for Federal funding. As the volume of
    Federal agency staff continues to be reduced nationally, partnerships
    with local partners like RDOs that have deep expertise accessing
    Federal programs will be increasingly vital.
    Conclusion
        Chairman Johnson, Ranking Member Davis, and distinguished Members
    of the Subcommittee, thank you again for the opportunity to testify
    today. USDA RD's programs are not just investments in infrastructure or
    financing tools--they are lifelines for rural communities working to
    build a more secure, prosperous future. These programs help level the
    playing field for small towns and rural regions that too often lack
    access to the capital, capacity, and partnerships needed to thrive.
        As you continue negotiations on the farm bill, I encourage you to
    prioritize the tools that enable rural communities to grow and succeed.
    Rural America has never lacked vision or determination--what it needs
    is sustained Federal partnership to continue building strong, resilient
    economies that support families, attract investment, and ensure future
    generations can thrive in the communities they call home.

        The Chairman. Thank you, and to the 15th USDA Deputy
    Secretary Torres Small, 5 minutes.

      STATEMENT OF HON. XOCHITL TORRES SMALL, J.D., FORMER DEPUTY
    SECRETARY, U.S. DEPARTMENT OF AGRICULTURE; EXECUTIVE DIRECTOR,
                   QUIVIRA COALITION, LAS CRUCES, NM

        Ms. Torres Small. Chairman Johnson, Ranking Member Davis,
    Ranking Member Craig, and Members of the Subcommittee, it is an
    absolute joy to be back here with you. Whether it is supporting
    local meat processors through the ups and downs of cattle
    cycles in South Dakota, or working with chicken farmers on
    innovative energy solutions to power towns in North Carolina, I
    have witnessed how you put Rural Development into practice with
    the people you serve. You know that local know-how needs to be
    in the driver's seat, and the government's job is to support
    that vision. You have also seen how vital USDA staff are to
    that work.
        Rural Development is the only agency in D.C. with a focus
    on rural America. That experience matters. I have worked with
    staff whose early experience providing housing or water loans
    in rural places has made them more able to stretch
    flexibilities in the midst of a disaster or save thousands of
    dollars on applications and reporting for rural people. But
    DOGE cuts and oversights and recent staff departure incentives
    hobble an already struggling mission. While I know this
    Subcommittee isn't responsible for staff funding, your
    oversight is invaluable. Many state and field offices are
    currently operating at half capacity. In some places, it is
    worse, like Mississippi, where 90 percent of Rural Development
    staff were cut last year. Nationally, only 16 engineers remain
    the RD state system. Vital projects are sitting on desks
    waiting for approval. Phone calls are going unanswered for
    months. That is not serving rural people. Let me be clear: the
    problem I am raising here today isn't simply that Federal
    staffing was cut. The problem is that those cuts happened
    without consulting the very people they affect. Rural Americans
    are more than willing to tell us what is working and what isn't
    if only we take the time to listen, and that brings me to my
    second point.
        When I talk with people working to make a difference for
    the places they live, they ask for straightforward applications
    to programs that fit their vision. People often ask what I have
    seen in other places that might inform how they can solve the
    challenges they face. In the long-term, we need to pivot from a
    ``there is a program for that'' or all of the acronyms, as
    Chairman Johnson mentioned, to ``we will invest in your
    strategy, here are some people who found success with similar
    efforts, and we will be with you every step of the way.''
        When it comes to straightforward investments, we need to
    resist the temptation o