DELIVERY OF CERTAIN RURAL DEVELOPMENT PROGRAMS.

SEC. 2316. DELIVERY OF CERTAIN RURAL DEVELOPMENT PROGRAMS. (a) In General.— The Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.) is amended by adding after the section added by section 2301(a)(1) of this Act the following new sections: “SEC. 365. SYSTEM FOR DELIVERY OF CERTAIN RURAL DEVELOPMENT PROGRAMS. In General.— “(1) Assistance in eligible states.— Assistance under each designated rural development program shall be provided in eligible States to qualified projects in accordance with this section. “(2) No assistance in other states.— The Secretary shall not provide assistance under any designated rural development program in any State that is not an eligible State. “(b) Definitions.— As used in this section and section 366: “(1) Area plan.— The term ‘area plan’ means, with respect to a local or regional area in a State, the long-range rural development plan developed for the area. Each area plan shall identify the geographical boundaries of the area and include— “(A) an overall development plan for the area with goals, including business development and infrastructure development goals, and time lines based on a realistic assessment of the area, including, but not limited to— “(i) the number and types of businesses in the area that are growing or declining, and a list of the types of businesses that the area could potentially support; “(ii) the outstanding need for water and waste and other public services or facilities in the area; “(iii) the realistic possibilities for industrial recruitment in the area; “(iv) the potential for the development of tourism in the area; “(v) the potential for the generation of employment in the area through the creation of small businesses and the expansion of existing businesses; and “(vi) the potential for the production of value-added agricultural products in the area; “(B) an inventory and assessment of the human resources of the area, including, but not limited to— “(i) a current list of organizations in the area and their special interests; “(ii) the current level of participation of area residents in rural development activities and the level of participation required for successful implementation of the plan; “(iii) the availability of general and specialized job training in the area and the extent to which the needs of the area for such training are not being met; “(iv) a list of area residents with special skills which could be useful in developing and implementing the plan; and “(v) an analysis of the human needs of the area, the resources in the area available to meet those needs, and104 STAT. 4001 the manner in which the plan, if implemented, would increase the resources available to meet those needs; “(C) the current degree of intergovernmental cooperation in the area and the degree of such cooperation needed for the successful implementation of the plan; “(D) the ability and willingness of governments and citizens in the area to become involved in developing and implementing the plan; “(E) a description of how the governments in the area will apply budget and fiscal control processes to the plan; and “(F) the extent to which public services and facilities need to be improved to achieve the economic development and quality of life goals of the plan, taking into consideration, at a minimum— “(i) law enforcement; . “(ii) fire protection; “(iii) water and solid waste management; “(iv) education; “(v) health care; “(vi) transportation; “(vii) housing; “(viii) communications; and “(ix) the availability of, and capability to generate, electric power. “(2) Designated rural development program.— The term ‘designated rural development program’ means a program carried out under section 304(b), 306(a), or subsections (a) through (f) and (h) of section 310B of this Act, or under section 1323 of the Food Security Act of 1985, for which funds are available at any time during the fiscal year under such section. “(3) Eligible state.— “(A) Requirements.— The term ‘eligible State’ means, with respect to a fiscal year, a State to which this section is made applicable under section 2310(b)(2) of the Rural Economic Development Act of 1990, and with respect to which all of the following apply not later than the first day of the fiscal year: “(i) Established rural economic development review panel.— The State has established an advisory rural economic development review panel that meets the requirements of section 366. “(ii) Appointed state coordinator.— The Governor of the State has appointed an officer or employee of the State government to— “(I) manage, operate, and carry out the instructions of, the panel described in clause (i); “(II) serve as a liaison between the panel and the Federal and State agencies involved in rural development, including transmitting to the Secretary any list transmitted to the State coordinator pursuant to section 366(b)(6); “(III) ensure that all rural residents in the State are informed about the manner in which assistance under designated rural development programs is to be provided to the State pursuant to this section and section 366; 104 STAT. 4002 “(IV) provide information to State residents, on request, about the manner in which assistance under designated rural development programs is to be provided to the State pursuant to this section and section 366; and “(V) coordinate the efforts of interested rural residents with the State rural economic development review panel. “(iii) Designated agency to provide administrative support to panel.— The State has designated an agency to provide the panel and the State coordinator with support for the daily operation of the panel described in clause (i). “(B) Good faith exception.— Notwithstanding the requirements of subparagraph (A), the Secretary of Agriculture may determine, no later than the first day of the fiscal year, a State to be an eligible State under this paragraph for the fiscal year if the Secretary determines that the State has made a good faith effort to meet, and has substantially met, such requirements. “(4) Qualified project.— The term ‘qualified project’ means any project— “(A) for which the agency described in paragraph (3)(C) of the State has identified— “(i) the alternative Federal, State, local, or private sources of assistance; and “(ii) the related activities in the State; and “(B) to which the Secretary is required by subsection (c)(4) to provide assistance. “(5) State coordinator.— The term ‘State coordinator’ means the individual appointed by the Governor of the State to carry out the activities described in paragraph (3)(B). “(6) State rural economic development review panel.— The term ‘State rural economic development review panel’ or ‘panel’ means an advisory panel that meets the requirements of section 366. “(c) Duties of the Secretary.— The Secretary shall, with respect to each eligible State— “(1) review the list, if any, transmitted pursuant to subsection 366(b)(6) by any State coordinator; “(2) determine whether each project described in an application in the list meets the requirements of the rural development program under which the application seeks assistance; “(3) remove from the list any application for a project that does not meet the requirements; “(4) provide assistance, subject to available funds, to the projects in the applications remaining in the list after the list has (if necessary) been modified pursuant to paragraph (3), giving consideration to the order in which the applications for such projects are ranked by the respective State panel, and, if assistance is provided to any project without providing assistance to all projects ranked higher in priority by the panel than such project, report to the panel, the Committee on Agriculture of the House of Representatives, and the Committee on Agriculture, Nutrition, and Forestry of the Senate within ten days of determining to fund such lower ranked project on the reasons for that determination; 104 STAT. 4003 “(5) within thirty days after the date of the enactment of any Act providing appropriations for any designated rural development program for any fiscal year, notify each State of the amounts to be made available to such State under such program for such fiscal year, and the aggregate for such fiscal year of such amounts under all the designated rural development programs; “(6) pay per diem or otherwise reimburse each full-time officer or employee of the United States who is a member of a State rural economic development review panel for expenses incurred each day (including travel time) during which the officer or employee is engaged in the actual performance of a duty of the panel; “(7) from amounts appropriated for grants under any provision of section 306(a), make grants not to exceed $100,000 annually to each eligible State for the administrative costs associated with the State rural economic development review panel meeting the requirements of section 366; and “(8) appoint a member to the State rural economic development review panel as provided under section 366(c)(1)(P). “(d) Official Information.— The Secretary may appoint as nonvoting members, temporarily and for specific purposes, personnel from any department or agency of the United States, with the consent of the head of such department or agency, with expertise not available among the members of any State rural economic development review panel as may be necessary to enable the panel to perform a duty described in section 366(b). “(e) Allocation of Appropriated Funds.— “(1) Initial allocation.— The Secretary shall allocate the sums appropriated for direct loans, loan guarantees, or grants for any designated rural development program made available to any eligible State under such program for any fiscal year to the projects specified in subsection (c)(4) giving great weight to the order in which the applications for such projects are ranked on the list specified in subsection (c)(1). “(2) Equitable reallocation of unobligated funds.— Notwithstanding paragraph (1), the Secretary shall, on July 15 of each year, and from time to time thereafter during the fiscal year as the Secretary determines appropriate, pool from among the eligible States any unobligated funds appropriated for direct loans, loan guarantees, or grants for each designated rural development program and reallocate such funds among the eligible States according to need, as determined by the Secretary. “(f) Inapplicability of Federal Advisory Committee Act.— The Federal Advisory Committee Act shall not apply to any State rural economic development review panel. “(g) No Liability of Members of State Rural Economic Development Review Panels.— The members of a State rural economic development review panel shall not be liable to any person with respect to any determination made by the panel. “(h) Eligibility for Water and Waste Facility Loans.— “(1) Rural electrification program borrowers.— Notwithstanding any other provision of law, a borrower under title III of the Rural Electrification Act of 1936 shall be eligible to receive loans and grants under section 306 on an equal basis with any other applicant for such assistance, and the terms and condi-104 STAT. 4004tions, rules, criteria and other provisions of section 306 shall apply to such a borrower. In the case of applications from such a borrower, the Administrator of the Rural Electrification Administration shall provide technical assistance with respect to water and waste facilities and loans and grants for such facilities. “(2) Prohibition on restricting water and waste facility services to electric customers.— The Secretary shall establish rules and procedures that prohibit borrowers under title III of the Rural Electrification Act of 1936 from conditioning or limiting access to, or the use of, water and waste facility services financed under the Consolidated Farm and Rural Development Act if such conditioning or limiting is based on whether individuals or entities in the area served or proposed to be served by such facility receive, or will accept, electric service from such borrower. “SEC. 366. STATE RURAL ECONOMIC DEVELOPMENT REVIEW PANEL. “(a) In General.— In order for a State to become or remain an eligible State, the State must have a State rural economic development review panel that meets all of the requirements of this section. “(b) Duties.— The panel must be required to advise the Secretary on the desirability of funding applications for funding from designated rural development programs, and, in developing such advice, the panel must have the following duties: “(1) Review rural development plans of local areas.— To review each area plan submitted by a local or regional area. “(2) Evaluate area plans and applications for assistance.— (A) Area plans.— To evaluate, pursuant to a written policy and criteria, each area plan submitted by a local or regional area and either— “(i) accept any area plan that is technically and economically adequate, feasible, and likely to succeed in meeting the stated goals of the plan, unless the plan is incompatible with any other area plan for that area that has been accepted by the panel; or “(ii) return any plan that is technically or economically inadequate, infeasible, unlikely to be successful, or incompatible with any other area plan for that area that has been accepted by the panel, with an explanation of the reasons for the return with suggested alternative proposals. In evaluating area plans under this subparagraph, the panel must give great weight to the area plans or other comments submitted by intergovernmental development councils, or similar organizations made up of local elected officials, charged with the responsibility for rural or regional development. “(B) Applications for assistance.— To evaluate each application for assistance to determine whether the project to be carried out in any area is compatible with the area plan for the area in which the project described in the application is proposed, and either— “(i) accept any application that the panel determines to be compatible with such area plan; or “(ii) return to the Rural Development Administration any application that the panel determines to be incompatible with such area plan. 104 STAT. 4005 “(3) Review and rank applications for assistance under designated rural development programs from areas with accepted area plans.— To review applications for assistance, that have been accepted pursuant to paragraph (2)(B), for g rejects to be carried out in any area the area plan for which as been accepted pursuant to paragraph (2)(A), taking into account the sources of assistance and related activities identified pursuant to section 365(b)(4)(A), and to rank such applications, subject to paragraphs (4) and (5), pursuant to a written policy and criteria, in an order that takes into account— “(A) in the case of business projects described in the application— “(i) the extent to which a project would— “(I) stimulate rural development by creating new jobs of a permanent nature or retaining existing jobs by enabling new small businesses to be started, or existing businesses to be expanded by local or regional area residents who own and operate the businesses, “(II) contribute to the enhancement and the diversification of the local or regional area economy, “(III) generate or retain jobs for local or regional area residents, “(IV) be carried out by persons with sufficient managerial capability, “(V) be likely to become financially viable, and “(VI) assist a local or regional area in overcoming severe economic distress; “(ii) the distribution of assistance to projects in as many areas as possible in the State, with sensitivity to geographical distribution; “(iii) the technical aspect of the projects; “(iv) the market potential and marketing arrangements for the projects; and “(v) the potential of such project to promote the growth of a rural community by improving the ability of the community to increase the number of persons residing therein and by improving the quality of life of such persons; and “(B) in the case of infrastructure and community facility projects described in the applications the extent to which a project would— “(i) have the potential to promote the growth of a rural community by improving the quality of life for local or regional area residents; “(ii) affect the health and safety of local or regional area residents; “(iii) affect business productivity and efficiency; “(iv) enhance commercial business activity; “(v) have the potential to promote long-term growth, including by increasing the number of persons residing in a rural community; “(vi) address a severe loss or lack of water quality or quantity; “(vii) bring a community into compliance with Federal or State water or waste water standards; and 104 STAT. 4006 “(viii) consolidate water and waste systems and utilize management efficiencies in new systems. “(4) Priority ranking for projects addressing health emergencies.— To give priority in reviewing and ranking, notwithstanding the criteria established in paragraph (3), to applications for projects designed to address a health emergency declared to be such by the appropriate Federal or State government agency. “(5) Priority based on need.— If in ranking applications pursuant to paragraphs (3) and (4), 2 or more applications are determined to have comparable strengths in their feasibility and potential for growth, to give priority to the applications for projects for which there is the greatest need. “(6) Transmit list of ranked applications.— To transmit to the State coordinator a list of all applications received and indicate on the list— “(A) for all applications accepted, the rank of such applications in accordance with paragraphs (3), (4) and (5); and “(B) for all applications returned, the fact that the application was returned pursuant to paragraph (2) and instruct the State coordinator to transmit the list to the Secretary. “(7) Availability of list of ranked applications.— To make available to the public the list of ranked applications submitted under paragraph (6) and to provide a brief explanation and justification of why the project applications received their prioritization. “(8) Establishment and review of written policy and criteria for evaluating and ranking applications.— To establish and annually review the written policy and criteria used by the panel in evaluating and ranking applications in accordance with this subsection to ensure that the policy and criteria are consistent with current rural developmental needs, and to provide for public input during the development of the initial policy and criteria. “(c) Membership.— “(1) Voting members.— The panel must be composed of not more than sixteen voting members who are representatives of rural areas— “(A) one of whom is the Governor of the State or the person designated by the Governor to serve on the panel on behalf of the Governor for that year; “(B) one of whom is the director of the State agency responsible for economic and community development or the person designated by the director to serve on the panel on behalf of the director for that year; “(C) one of whom is appointed by a statewide association of banking organizations; “(D) one of whom is appointed by a statewide association of investor-owned utilities; “(E) one of whom is appointed by a statewide association of rural telephone cooperatives; “(F) one of whom is appointed by a statewide association of noncooperative telephone companies; “(G) one of whom is appointed by a statewide association of rural electric cooperatives; 104 STAT. 4007 “(H) one of whom is appointed by a statewide association of health care organizations; “(I) one of whom is appointed by a statewide association of existing local government-based planning and development organizations; “(J) one of whom is appointed by the Governor of the State from either a statewide rural development organization or a statewide association of publicly-owned electric utilities, neither of which is described in any of subparagraphs (C) through (I); “(K) one of whom is appointed by a statewide association of counties; “(L) one of whom is appointed by a statewide association of towns and townships, or by a statewide association of municipal leagues, as determined by the Governor; “(M) one of whom is appointed by a statewide association of rural water districts; “(N) the State director of the Federal small business development center (or, if there is no small business development center in place with respect to the State, the director of the State office of the Small Business Administration); “(O) the representative for that State of the Economic Development Administration of the Department of Commerce; and “(P) one of whom is appointed by the Secretary from among the officers and employees of the Federal Government. “(2) Nonvoting members.— The panel must have not more than four nonvoting members who must serve in an advisory capacity and are representatives of rural areas— “(A) one of whom is appointed by the Governor, from names submitted by the dean, or the equivalent official, of each school or college of business of the colleges and universities in the State; “(B) one of whom is appointed by the Governor, from names submitted by the dean, or the equivalent official, of each school or college of engineering of the colleges and universities in the State; “(C) one of whom is appointed by the Governor, from names submitted by the dean, or the equivalent official, of each school or college of agriculture of the colleges or universities in the State; and “(D) the director of the State agency responsible for extension services for the State. “(3) Appointment of representatives of statewide organizations by the governor in certain cases.— “(A) No statewide organization.— If there is no state-wide association or organization described in subparagraph (C), (D), (E), (F), (G), (H), (I), (K), (L), or (M) of paragraph (1) of the entities described in such subparagraph, the Governor of the State will appoint an individual to fill the position or positions, as the case may be, described in the applicable subparagraph from among nominations submitted by local groups of such entities. “(B) Multiple statewide organizations.— If there is more than one of the statewide associations or organize-104 STAT. 4008tions described in subparagraph (C), (D), (E), (F), (G), (H), (I), (K), (L), or (M) of paragraph (1) of the entities described in such subparagraph, the Governor must select which organization is to name a member. The Governor must rotate such selection among such associations or organizations such that a representative of the selected association or organization serves no more than two years before another such association or organization is selected by the Governor. “(4) Failure to appoint panel members.— The failure of the Governor, the Secretary of Agriculture, or an association or organization described in subparagraph (C), (D), (E), (F), (G), (H), (I), (K), (L), or (M) of paragraph (1) to appoint a member to the panel as required under this subsection shall not prevent a State from being determined to be an eligible State. “(d) Notification.— Each statewide organization that selects an individual to represent the organization on the panel must have notified the Governor of the State of the selection. “(e) Qualifications of Panel Members Appointed by the Governor.— Each individual appointed to the panel by the Governor of the State will be specially qualified to serve on the panel by virtue of the individual’s technical expertise in business and community development. “(f) Vacancies.— A vacancy on the panel must be filled in the manner in which the original appointment was made. “(g) Chairperson and Vice Chairperson.— The panel must have selected two members of the panel who are not officers or employees of the United States to serve as the chairperson and vice chairperson of the panel for a term of one year. “(h) No Compensation for Federal Members.— Except as provided in section 365(c)(6), each member of the panel who is an officer or employee of the Federal Government may not receive any compensation or benefits, in addition to that which such officer or employee receives for performance of such officer or employee’s regular employment, by reason of service on the panel. “(i) Rules Governing Panel Meetings.— “(1) Quorum.— A majority of the members of the panel must constitute a quorum for the purpose of conducting business of the panel. “(2) Frequency of meetings.— The panel must meet not less frequently than quarterly. “(3) First meeting.— The State coordinator must schedule the first panel meeting. “(4) Records of meetings.— The panel must keep records of the minutes of the meetings, deliberations, and evaluations of the panel, in sufficient detail to enable the panel to provide to interested persons the reasons for its actions.”. (b) Conforming Amendment.— Section 306(a)(3) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)(3)) is amended by striking “and not inconsistent” and all that follows through “undertaken for the area”.