State Rural Initiatives: Where the Money Comes From

8/20/2019 State Rural Initiatives: Where the Money Comes From

1/16

Where the Mone y C om es Fr om , page 1

S t a t e R u r a l I n i t i a t i v e s W h e r e t h e M o n e y C o m e s F r o m A Preliminary Report


2/16

Sta te Rura l In i t i a t i v es , page 2

T h e I n v e n t o r y Small Projects, Programs and Initiatives ...........................................................................................4

Agriculture Education and Rural Development ......................................................................... 4Cooperative Development.......................................................................................................... 4Sustainable Rural Communities ................................................................................................. 4Outsourcing State Jobs: Smart Sites ........................................................................................... 5Creating a Rural Development Council...................................................................................... 5Petroleum Storage Tanks............................................................................................................. 5Rural Physician Incentives .......................................................................................................... 5Leadership Tuition Tax Credits ................................................................................................... 5Opportunity Returns: Regional Economic and Community Development ............................... 6Entrepreneurship Centers........................................................................................................... 6Revolving Funds for Rural Health .............................................................................................. 6Support for Entrepreneurship..................................................................................................... 7Rural Medical Residency Training .............................................................................................. 7

Business Development for Disadvantaged Rural Communities................................................... 7Medium Projects, Programs and Initiatives ...................................................................................... 8

Building Entrepreneurial Communities...................................................................................... 8Farms for the Future................................................................................................................... 8Heritage Regions ........................................................................................................................ 8Rural Partner Development Funds ............................................................................................. 8Purdue Center for Regional Development .................................................................................. 9Institute for Rural Entrepreneurship........................................................................................... 9 Water 2030 Initiative.................................................................................................................. 9Funds for Community Foundations ......................................................................................... 10 Agriculture and Resource Based Industry Development............................................................ 10Oce of Rural Community Aairs .......................................................................................... 10

Loan pool for rural healthcare providers ................................................................................... 10Emergency Medical Services ..................................................................................................... 11Regional Development Districts ............................................................................................... 11Small Business Investment Tax Credits ..................................................................................... 11

Large Projects, Programs and Initiatives ......................................................................................... 12Ethanol Production Incentives.................................................................................................. 12Farmland Preservation .............................................................................................................. 12Rural Economic Infrastructure Fund ........................................................................................ 12Oce of Rural Aairs............................................................................................................... 13Keystone Innovation Zones (KIZ) ............................................................................................ 13Rural Renewable Electric Cooperatives..................................................................................... 13Rural Infrastructure Fund......................................................................................................... 14

One Georgia - Georgia ............................................................................................................. 14Volunteer Fire Departments ..................................................................................................... 14“Virginia Works” ...................................................................................................................... 15Broadband Access..................................................................................................................... 15 Job Opportunity Building Zones (JOBZ) - Minnesota ............................................................. 16

A Note on Methods ........................................................................................................................ 16


3/16


In recent years rural issues and concerns have achieved renewed sig-

nicance in the minds of state policy makers. Evidence continues to mountthat policymakers see the need for programs to benet rural communities andcitizens, but in times of tight state budgets and calls for scal restraint, policy-makers wonder if they can aord new programs, projects or initiatives.

is paper represents a preliminary report on research in progress. It isintended to show how states are fnancing rural programs, projects andinitiatives.

e attached inventory contains over 40 programs, projects or initiativesthat are statewide in scope and that were initiated or signicantly expandedin recent years. While we continue to rene and improve the inventory, acouple of conclusions are clear from the information presented.

(1) States are, in fact, responding to rural needs with new or expanded pro-grams, many of which are signicant in scope and cost, and

(2) ey are nancing the eorts by every method known, including generalrevenue appropriations, creation of new revenue sources (taxes and fees),diversion or reallocation of current revenue streams, recombination of exist-ing programs, public bond issues, grants from philanthropic sources, grantsor contracts from public sources (notably the federal government), and in rareinstances, grants from private corporations.

ere are important questions that are beyond the scope of this report: How well are the programs working? Are these programs the wisest and best usesof the funds for rural people? Are there other programs that would yield bet-

ter results?

is research was compiled for the Fourth Annual Agriculture Chairs Summit(2006) by Bobby Gierisch of the Rural Policy Research Institute (RUPRI). Many people contributed, most notably Jonathan Watts Hull of SouthernLegislative Conference and Eric Beverly and Kim White of the Texas Oceof Rural Community Aairs. Portions of the entries for Illinois and NorthCarolina were provided by sta of the rural policy oces in those states, andlegislative and program sta in many states provided necessary information.

Shannon Sneary provided important technical help. We thank everyone for their

contributions.For important information on how the inventory was compiled, including

important caveats, please see “A Note on Methods” at the end of the inventory.


4/16


5/16


e Sustainable Rural Communities Initiative wasdeveloped in response to a University-wide solicita-tion by the OSU Provost for proposals to further theUniversity’s strategic plan. e initiative was one ofsix funded at the level of $300,000 per year for veyears. e funds were generated internally by OSUthrough general budget eciency and other ‘belt-tightening’ measures.

Outsourcing State Jobs: Smart Sitese Smart Sites program was created by S.B. 199 in2004, to promote the development of technology-based industry in rural Utah. It sets up a fund from which state agencies that contract with a “smart siteenterprise” may obtain a refund of up to ten percentof the cost of those contracts. A “smart site enter-prise” means a business or other entity that providesany of a long list of high-tech and nancial services.It must be located in an enterprise zone.

e Smart Sites program is administered by the

Department of Community and Economic Develop-ment and nanced by an appropriation of $40,000from the general revenue fund.

Creating a Rural Development Council With H.B. 5242 (2004) the Connecticut legislatureestablished in law the Connecticut Rural Develop-ment Council in accordance with the Federal FarmSecurity and Rural Investment Act of 2002. eRDC must have a board and membership as requiredby the federal act, and it is to monitor, report andcomment on policies and programs that address or

fail to address the following goals with respect torural areas: (1) Coordination of state, federal, tribaland private sector relationships to increase eciency,eliminate duplication, identify gaps and promote theinterests of rural areas, and (2) promotion of the scalautonomy of rural municipalities.

e newly constituted RDC is funded by an appro-priation from general revenue of $50,000.

Petroleum Storage Tanks Washington’s H.B. 1823 (2005) revises and reinstatesthe Underground Storage Tank Community Assis-

tance Program (USTCAP) for rural, underservedareas. e program helps to cleanup and upgradeolder rural gas stations by providing grants to cer-tain owners or operators who discontinued using anunderground storage tank due to economic hardship. An owner or operator is eligible for a $200,000 grantfor each retailing location if the property:• is located in an underserved rural area • was previously used to provide motor vehicle

fuel, and

• is at least 10 miles from the nearest motor vehi-cle fuel service station.

In consideration of the grant, the owner or operatormust agree to sell petroleum products to the public,maintain the tank site for retail sale of petroleumproducts for at least 15 years, sell to local governmententities on a negotiated cost-plus basis, and comply

with all nancial and environmental responsibilities.From the Pollution Liability Insurance Trust Account,$1 million is designated for the biennium ending June 30, 2007, to carry out the program.

Rural Physician Incentives With H.B. 301 (2003), Idaho created the rural physi-cian incentive fund to be administered by the stateboard of education together with an oversight com-mittee to pay:• e education debts of rural physicians who

practice primary care medicine in medically

underserved areas of the state that demonstratea need for assistance in physician recruitment;and

• e costs of administering the rural physicianincentive program, which are capped at 10 per-cent of the annual fees assessed.

e bill requires the board, through the oversightcommittee, to establish procedures for determiningthe areas of the state that qualify for assistance inphysician recruitment. An eligible area must dem-onstrate that a physician shortage exists or that thearea has been unsuccessful in recruiting physicians by

other mechanisms.e bill authorizes the state board of education toassess a fee to students preparing to be physicians inthe elds of medicine or osteopathic medicine whoare supported by the state pursuant to an interstatecompact for a professional education program inthose elds. e bill prohibits the fee from exceedingan amount equal to four percent (4%) of the annualaverage medicine support fee paid by the state.

Leadership Tuition Tax CreditsIn North Dakota, a new nancial institution tax

credit was created (S.B. 2158, 2004) for making acontribution to fund a tuition scholarship for par-ticipation in the Rural Leadership North DakotaProgram conducted through the North Dakota StateUniversity Extension Service. A contribution maybe earmarked for use by a designated recipient. ecredit is equal to the lesser of (1) fty percent of theaggregate amount of contributions made during thetaxable year, (2) 5.7 percent of the tax before all cred-its, or (3) $2,500.


6/16


Opportunity Returns: RegionalEconomic and Community DevelopmentIn 2003, Illinois Gov. Rod Blagojevich adopted aregional approach to community and economicdevelopment by creating 10 regions through which todeliver services. e approach, dubbed OpportunityReturns (OR), is designed to coordinate service deliv-ery by state agencies to minimize duplication and tobetter tailor services to regional needs. e regionshave full-time managers and assistants who meet with elected ocials and business leaders to identifyconcerns and then work with state agencies to deliverservices to these groups. is decentralized programcan be especially benecial to rural areas because itprovides for dierences between rural and urban as well as recognizing dierences among regions withinIllinois. e OR program builds on eorts in a pre-vious Administration to conduct a 5-year planningstrategy to gather information about priorities in eachregion and implement programs aimed at addressing

the needs.e potential eectiveness of the OR program islimited only by availability of funds for local projectsand initiatives. However a new initiative to fundinfrastructure transportation and education infra-structure is currently being unveiled. at capitalprogram incorporates projects raised as part of theOR initiatives.

Opportunity Returns was funded by a reallocationof general revenue funds already appropriated to theIllinois Department of Commerce and EconomicOpportunity, the lead state economic development

agency. e OR funding is subject to annual appro-priation but is intended to be an on-going program.

Entrepreneurship Centerse Illinois Department of Commerce and EconomicOpportunity funded a set of Entrepreneurship Cen-ters designed to coordinate the delivery of programssuch as the Small Business Development Centers,Procurement Centers, and technology based opera-tions. e 17 Entrepreneurship Centers work withentrepreneurs at all levels from start-up operationsto larger companies seeking to advance to the next

level of operations. e Entrepreneurial Networkhas sucient exibility to create delivery programsdesigned specically for the area in which they arelocated. Common programs include entrepreneur-ship networking sessions, training seminars, businessplan competitions, and related approaches. Mostof the Entrepreneurship Centers are administeredby institutions of higher education which indicatesthe importance attached to the role of education inpreparing entrepreneurs. In some cases, universitieshave been able to acquaint undergraduates or gradu-

ate students with basic business practices and therebyhelp them launch business ventures.

e program is made more complex by the fact thatthe Entrepreneurial Network includes both state andfederally-funded programs. e program has claimedsubstantial successes even in rural areas where reach-ing entrepreneurs can be more dicult and expen-

sive.is program is funded through general appro-priations in the budget of the Illinois Department oCommerce and Economic Opportunity. It is a lineitem in the budget that is subject to annual appro-priation.

Revolving Funds for Rural Health Arkansas has two revolving loan funds targeted spe-cically at improving healthcare access in rural com-munities.

Arkansas’ H.B. 1384 from the 2003 session createdthe Rural Medical Clinic Revolving Loan Funde legislation provided $225,000 for rural medicaclinics, including $205,000 for loans or grants tocommunities and/or physicians to establish medicaclinics in rural areas. e legislation also provided$20,000 for critical needs as determined by theDirector of the Arkansas Department of Health.

Arkansas also has a Rural Health Services Revolving Fund to strengthen rural health care systems andservice at the local level. Established by the Genera Assembly in 1989, through S.B. 75, the legislationgives the Arkansas Department of Health resourcesto help rural communities retain basic medical ser-vices and implement new, innovative approaches tohealth and health care. e program provides matching funds (up to $200,000 per applicant) in eligiblecounties, localities, commercial and non-prot opera-tions. e program oers two levels of match, 50/50and 25/75, depending upon the applicant’s comple-tion of a community health needs assessment.

e original legislation approved an appropriation of$3.3 million to the revolving loan fund, $3 million of which was to be disbursed as grants to localities, withthe balance provided to the Department of Health

(now the Department of Health and Human Services)to administer the program. For the current scal yearthe fund has a roughly $1.3 million balance.

Funding for the revolving loan fund is from generarevenue appropriations.

Support for Entrepreneurshipe Georgia Entrepreneur and Small BusinessCoordinating Network was established by Gover-nor Sonny Perdue in 2004, to improve the support


7/16


of minority business start-ups, rural and agriculturefocused entrepreneurs, entrepreneurial education inthe state’s school systems, and community small busi-ness assistance. e initiative was originally champi-oned by the Economic Development and TechnologyVentures, which worked very closely with sta fromthe state Department of Economic Development toestablish a regional network of sta to assist com-

munities in becoming better environments for newand expanding businesses. Originally called E-Net,the program is now called the Entrepreneur FriendlyInitiative to reect its focus on preparing communi-ties to support their local entrepreneurs.

e initiative, which is now operated exclusively bythe Department, works with both rural and urbancommunities around the state to help them identifylocal leadership groups and champions; increase com-munity awareness of and support for strategies, needsand resources; enhance relationships with state andfederal resources; and map local assets, among other

activities. Communities completing a series of stepscan become certied as “entrepreneur ready” by thestate.

Funding for the program, including the small sta in Atlanta and the regional sta throughout the state,has come entirely from existing resources representingless than $1 million in general revenue funds.

Rural Medical Residency TrainingIn 2005 the Utah legislature approved S.B. 119authorizing the Medical Education Council toestablish a pilot program to place physicians in ruralresidency training programs. e goal of the programis to improve the recruitment and retention of physi-cians in rural counties.

e program is authorized for ten years with anappropriation from general revenue of $300,000 peryear, subject to future budget constraints.

Business Development forDisadvantaged Rural CommunitiesS.B. 57 sets up a fund for infrastructure projects topromote economic development in distressed areasof Utah’s rural counties. e bill creates a board toreceive competitive proposals from rural countiesfor improvements to public properties, and to makeloans or grants up to $75,000 per project. Projectsshould be located within disadvantaged communitiesas reected in per capita income, property and salestax revenues, unemployment levels, and similar fac-tors, and projects should result in economic develop-ment.

S.B. 57 appropriates $250,000 for scal year 2005-2006 from general revenue to fund the businessdevelopment program.


8/16


Building Entrepreneurial CommunitiesNebraska’s L.B. 90 (2005), e Building Entrepre-neurial Communities Act, is a package of measurescreating one new program and re-funding two others.(L.B. 90 also includes funding for ethanol incentives,listed elsewhere in this inventory.)• e Building Entrepreneurial Communities Act

provides grants to collaborating municipal orcounty governments for projects to create com-munity capacity to generate and retain wealth inthe community and region. Grants may be fortwo years and up to $25,000; at least one of thecollaborating municipalities or counties musthave chronic economic distress.

• e Agricultural Opportunities and Value- Added Partnership Act is designed to promote

small business formation and economic oppor-tunity in rural areas through innovative part-nerships among farms, ranches, communitiesand businesses. Grants are available to farms,ranches and a variety of public and private enti-ties for a maximum of $75,000 per year, renew-able for up to three years.

• e Nebraska Rural Development Commission was established in the early 1990’s, but its fund-ing was eliminated in the budget crises of thelate 1990’s. As a result of L.B. 90, funding wasrestored.

All of the above measures are funded from generalrevenue funds. e Building Entrepreneurial Com-munities Act is funded at $250,000 per year; e Agricultural and Value-Added Partnership Act isfunded at $850,000 per year; and the Rural Develop-ment Commission is funded at $150,000 per year.e rst two programs expire in 2011.

Farms for the FutureFarms for the Future is a two-step program institutedin 2001 to help Maine farmers increase the long-termviability of their farms. In Phase 1, farmers apply toreceive a package of services worth up to $10,000 to

work with skilled professionals to develop a detailedbusiness plan.

ose who complete a Phase 1 business plan mayapply for a competitive grant to implement the plan.Successful applicants get a Phase 2 cash grant for 25percent of the cost of their plan, up to a maximum of$25,000. e remaining 75 percent is the responsi-bility of the farmer and may include cash, low-interestloans, other grants, and in-kind services. Addition-ally, successful applicants must sign a non-develop-

ment covenant in which they agree to maintain theirproperty in agricultural use for ten years. Farmers canbuy back the covenant at any time by repaying the

full amount of the grant.Farms for the Future was implemented as a pilotprogram in 2000 with an appropriation from generarevenue of $200,000. In 2002 the legislature andthe voters approved a $2 million bond issue to fullyimplement the program. ese funds were matchedby $200,000 from the contractor that administers theprogram for the Maine Department of AgricultureFood and Rural Resources.

Heritage RegionsIn 1989 Pennsylvania initiated the Heritage Regions

program to capitalize on the Commonwealth’s richindustrial and agricultural history. Currently thereare 12 heritage regions, encompassing 36 of theCommonwealth’s 48 rural counties. Each regiontells a dierent story of Pennsylvania’s past, withthemes like oil, lumber, and steel production along with transportation, and agriculture. Collectivelythe Heritage Regions strive to generate economicdevelopment through tourism, foster partnershipsand promote cultural conservation, recreation, openspace, and education and interpretation.

Each region develops a vision and a plan that includes

appropriate projects and priorities. e Common wealth supports Heritage Regions with three kindof grants:• A at grant of $100,000 per region for manage

ment and personnel services• Various planning grants that require a loca

match (25/75 local/state)• Implementation grants for acquisitions and

buildings, a 50/50 match

In recent years state funding for the program has beenapproximately $3 million per year, appropriated fromgeneral revenue.

Rural Partner Development FundsIn 2001 the Indiana general assembly passed S.B. 160charging the Indiana Rural Development Counci(IRDC) with developing a rural economic devel-opment strategy. e strategy included goals andrecommendations concerning a variety of issues and was delivered to the legislature to inform members othe needs of rural Indiana and to assist in monitoringissues and responding to the needs of rural residents.

Medium Projects, Programs and Initiatives(Generally costing $1-10 million per year)


9/16


In response to the IRDC report, the 2003 generalassembly created two new rural funds: e RuralDevelopment Council Fund and e Rural Develop-ment Administration Fund.

e Rural Development Administration Fundprovides grants to local, regional or state groups topursue innovative projects in the areas of economic/

community development, planning, leadership,infrastructure, health, telecommunication/education, workforce development and agriculture.

e Rural Development Council Fund supports theoperational needs of the IRDC and provides fundingfor the creation of new regional rural developmentgroups and the operations of existing rural develop-ment groups.

e general assembly appropriated $3.6 million peryear from general revenue to support the IRDCfunds.

Purdue Center for RegionalDevelopment At the behest of President Martin Jischke, PurdueUniversity established a Center for Regional Devel-opment in 2005. e Center will include approxi-mately 7 full-time sta plus support, and its mainfunctions include: • creating regional proles of economic, demo-

graphic and social characteristics; • conducting survey research and analysis; • benchmarking; • facilitating discussions of regional issues;

• organizing and facilitating regional initiatives;and • developing regional leadership.

While the Center’s mission is not solely rural , its goalis to help Indiana become the nation’s leader in sup-porting creative, regional approaches to development- with special attention to rural areas as signicantcomponents of those regions.

Core funding is provided by the University, and inits rst 10 months of operation, the Center securedmore than $1.5 million in grants. e two largest arefrom the U. S. Economic Development Administra-

tion, one for $492,000 over three years and the otherfor $425,500.

Institute for Rural EntrepreneurshipIn 2003, the North Carolina Rural EconomicDevelopment Center established the Institute forRural Entrepreneurship to stimulate and support thedevelopment of small- and medium-size enterprisesin North Carolina’s 85 rural counties. Since its cre-ation, the institute has developed a statewide alliance

of business service providers that now includes nearly60 organizations; developed a 100-county databaseof North Carolina businesses; created and distrib-uted business development tools for entrepreneursand community leaders; trained hundreds of localleaders in entrepreneurship development; and, in2005, secured a $2 million grant from the KelloggFoundation to build a comprehensive entrepreneur-

ship development system for rural North Carolina bymid-2007.

Funding for the program comes from a variety ofsources, including:• An annual appropriation of $144,000 from

the North Carolina General Assembly for basicoperations

• $24,000 from the community college system foran ongoing program to help qualifying laid o workers go into business for themselves

• A $2 million grant from the Kellogg Foundationto build a “seamless” entrepreneurship develop-

ment system in the state. e grant is dividedamong several organizations, with the RuralCenter serving as the lead.

• $500,000 from the Community DevelopmentBlock Grant program to support 10 communitysmall business demonstration programs (admin-istered by North Carolina Department of Com-merce)

• Contributions from local organizations andcorporations for scholarships to local trainingprograms and for statewide summits and confer-ences

Water 2030 InitiativeIn March 2004, the North Carolina Rural Centerlaunched the Water 2030 Initiative to determineNorth Carolina’s water resource needs for the next25 years and to explore choices that will ensure thatNorth Carolinians, in every part of the state, will haveaccess to ample supplies of clean water for years tocome.

e primary activities of the initiative include: 1) anupdate of the state’s water and sewer database, expand-ing it to include storm water and ood hazard data;2) the creation of a state water supply and demandassessment, with projections for 2005 through 2030;3) an aggressive public education and outreach eortto build understanding of water resources among allcitizens of the state; and 4) a set of recommendationsfor state and local action.

Funding for the project has come from the followingsources:


10/16

Sta te Rura l In i t i a t i v es , page 1 0

• A general revenue appropriation of $400,000over four years from the North Carolina General Assembly

• $1.2 million from the Environmental Protec-tion Agency, with help from the North CarolinaCongressional delegation

• $500,000 from the North Carolina Clean WaterManagement Trust Fund

• $300,000 from existing Rural Center resources

Funds for Community Foundations As one part of a large economic growth program, in2003 the Iowa legislature enacted a law to encourageindividuals, businesses and organizations to invest incommunity foundations (H.F. 692, 2003). Begin-ning in 2004, an amount equal to 20 percent of anindividual or entity’s endowment gift to a commu-nity foundation could be taken as a credit against thepayment of state income taxes. Under supplementallegislation in 2005 (HF 868) the amount of all tax

credits may not exceed $2 million annually, and thetax credits may not be awarded after December 31,2008.

is program is not limited to rural areas, but com-munity foundations are an increasingly popular wayto nance local community improvements.

Agriculture and Resource BasedIndustry Developmente Maryland Agriculture and Resource BasedIndustry Development Corporation (MARBIDCO) was established by the Maryland General Assembly

in 2004 with S.B. 589. e Corporation is a pub-lic entity that provides nancing to agricultural andresource-based businesses. e state’s purpose increating MARBIDCO was to:• develop agricultural industries and markets• support appropriate commercialization of agri-

cultural processes and technology • alleviate the shortage of nontraditional capital

credit available at aordable interest rates forinvestment in agriculture

• provide assistance to young farmers in landacquisition through the purchase of develop-ment rights on farmland.

e state has yet to fund MARBIDCO, though prog-ress has been made in establishing a basis for funding.For example, legislation in 2005 (H.B. 1594) estab-lished certain funding targets and mechanisms.

e Rural Maryland Council has received a $20,000USDA Rural Business Enterprise Grant for start-upcosts. e General Assembly believes a capitalizationof approximately $45 million is necessary for theCorporation to be successful, and the state Depart-ment of Agriculture has projected the total cost for

sta, operating expenses, and grants for 2007 at$700,000.

Ofce of Rural Community AffairsIn 2001 the Texas legislature created the

Oce oRural Community Aairs (ORCA) (H.B. 7) to pro-vide research, strategic thinking and policy guidanceon a long-term, institutionalized basis. e Oce was created because of the perception that many ruraprograms would be more ecient with better coordi-nation and with leadership to establish strategic direc-tion based on sound research.

Texas’ large non-entitlement Community Develop-ment Block Grant (CDBG) program and a numberof rural health programs that were administered bythe state Center for Rural Health Initiatives werecombined in ORCA. Additionally, ORCA was givennew duties to:• develop a rural policy for the state• work with other agencies and ocials to

improve the results and eectiveness of existingprograms

• improve the leadership capacity of rural com-munity leaders

• monitor developments and compile an annuareport describing and evaluating the conditionof rural communities

• perform research to determine the most ben-ecial and cost-eective ways to improve the welfare of rural communities;

In addition to the funding already provided for theexisting programs, general revenue funds of $500,000

per year were provided to support the “new” func-tions relating to policy, research, coordination, etc.

Loan Pool for Rural HealthcareProvidersIn 2005 Nevada passed legislation (A.B. 103) thatmakes an appropriation to the Department of Administration for allocation to Nevada Rural Hospital Partners to create a pool for loans for rural healthcare providers. e bill sets forth reporting andaudit requirements. For the program “rural” meanany area in a county whose population is less than

100,000 and portions of other counties that are des-ignated as such by the Nevada Oce of Rural Healthof the University of Nevada School of Medicine.

e bill makes a $1,000,000 appropriation from thestate general fund.


11/16

Where t he Mone y Com es Fr om , page 11

Emergency Medical Services With passage of S.B. 2690 (2004) the State of Hawaiirecognized the vital need to provide adequate emer-gency medical care to residents of rural areas, particu-larly on the neighbor islands. S.B. 2690 nds thatrapid response of emergency medical services is criti-cal for positive patient outcomes and that current userfees for emergency medical services are not adequate.

S.B. 2690 establishes within the state treasury aspecial fund to be known as the emergency medi-cal services special fund. e bill increases the statevehicle and motor vehicle registration fee from $20to $25 and directs the $5 increase to the emergencymedical services special fund. e state appropriated$2,205,000 out of the general revenues for scalyear 2004-2005, to be deposited into the emergencymedical services special fund.

Regional Development DistrictsNevada’s S.B. 328 (2003) authorizes the establish-ment of regional development districts to work withand on behalf of governmental units to develop plansor implement programs to address economic, social,physical and governmental concerns of each regionof the state.

e bill requires a regional development district toserve as a regional resource center and provide plan-ning, community and economic development, andtechnical assistance to local governments that aremembers of the district. It authorizes a district toprovide assistance to industrial development organi-zations, tourism promotion organizations, commu-

nity development groups and similar organizations.

Any combination of counties and cities representinga majority of the population of the region for which

a district is proposed may petition the Governor byformal resolution setting forth their desire to establishand the need for the establishment of a regional devel-opment district. e bill provides that the proposeddistrict must consist of two or more contiguous coun-ties and membership in a district is voluntary.

Each county and city within the development region

must pay membership dues. e bill requires theGovernor to designate a state agency to be responsiblefor making grants to regional development districts.e bill species the manner in which nancial assis-tance provided from the State General Fund must bedistributed.

Small Business Investment Tax Credits Arizona’s S.B. 1335 (2005) establishes a state incometax credit for individuals investing in a qualied smallbusiness. e program is overseen by the Depart-ment of Commerce.

e credit, apportioned over a three-year period, isequal to 35% of a person’s equity investment in aqualied small business engaged in bioscience activi-ties or located in a rural county; otherwise the creditis 30% of the investment. Among the requirementsfor this credit, investments must be certied by the Arizona Department of Commerce, investors mustinvest at least $25,000 but no more than $250,000in any calendar year, the recipient of the investmentmay not have assets worth over $2 million (excludingqualied investments) and may not receive an aggre-gate of more than $2 million in qualied investmentsfor all taxable years.

e program’s scal impact to the General Fund is$20 million total for taxable years beginning January,2007, through December, 2014.


12/16


Ethanol Production IncentivesIn the early 1990’s Nebraska established a system ofincentives to promote production of ethanol. esystem provides ethanol producers with transferable,

non-refundable fuel tax credit coupons. e couponsare sold (at a small discount from face value) to fuelusers, who then use the coupons to satisfy fuel taxobligations. is provides a subsidy from the state’sfuel tax revenues to ethanol producers, but it also cre-ates a deciency in the state’s highway trust fund. Inrecent years additional ethanol plants and productionhave resulted in the need to expand the nancingfrom prior levels. L.B. 90 (2005) provides for theexpanded nancing.

e additional funds for the ethanol incentive pro-gram come from two sources. e excise tax (or

“check-o”) is increased from three-quarters to seven-eighths cents per bushel for corn and per cwt for grainsorghum. is measure will yield an estimated $8.75million per year in total check-o funding, a $1.45million increase over the prior check-o level.

In addition, there has been a transfer of $1.5 millionper year from the general revenue fund. is amountis increased to $4 million per year for the next twoyears, then to $5.5 million for one year, and nally to$2.5 million per year for the next three years.

Farmland Preservation

e Pennsylvania Agricultural Conservation Ease-ment Purchase Program was developed in 1988 tohelp slow the loss of prime farmland to non-agri-cultural uses. e program enables state, countyand local governments to purchase conservationeasements (sometimes called development rights)from owners of quality farmland. e rst easements were purchased in 1989. Counties participating inthe program have appointed agricultural land pres-ervation boards with a state board created to overseethis program. e state board is responsible for dis-tribution of state funds, approval and monitoring ofcounty programs and specic easement purchases.

Since 1989 conservation easements totaling $685million have been purchased to preserve 2,746 farmstotaling 314,719 acres. Under the program, each par-ticipating county determines the amount it will spendon easement purchases. e state makes a grant toeach county, then provides a match for any countyfunds used. e county grants and matching fundsare formula-driven.

e state nances its share of the Farmland Preserva-tion program through a number of funding mecha-

nisms, and these have changed from time to timeduring the life of the program. e state programhas generally been in the range of $20-$50 millionin recent years, but thanks to a large infusion from a

recent bond issue, it is expected to have between $80and $100 million available for 2006.

e principal method of nance has been a dedica-tion of $20.485 million per year from the state’scigarette tax. From 1999-2004, the program had aninfusion of $100 million from a voter-approved bondissue known as Growing Greener I. In 2005 a portion of the state’s landll tipping fee was transferredto the program, expected to generated $8-13 millionper year. And beginning in 2006, a second bondissue, Growing Greener II, will provide $80 millionto be spread over two or more years.

Rural Economic Infrastructure Funde North Carolina Rural Economic DevelopmentCenter was established in 1987, to lead the state’seorts to restore economic vitality in the state’s 85rural counties. e center was created through thecontributions of private foundations and corporationsin 1986, then received its rst appropriation from theNorth Carolina General Assembly in the summer of1987. Since that time, the General Assembly hasbeen a critical partner, providing partial funding forRural Center operations and support for a range ofrural development programs, including rural water

and sewer development, business nance programsand minority community development programs With legislative funds as its base, the Rural Centerhas been able to leverage additional funds from stateand national foundations, the corporate sector andfederal agencies.

A new milestone was reached in 2004, when the leg-islature appropriated to the Rural Center $20 millionfrom general revenue for establishment of the NorthCarolina Economic Infrastructure Fund, designed tostimulate business growth and job creation in ruraland low-wealth communities. At the end of the year

the Rural Center had made grant awards for over 90 water and sewer, technology, building reuse and economic innovation projects that will create or expandnearly 250 businesses and create or save more than10,000 jobs. Based on the success of the fund in therst year, the General Assembly made the appropria-tion recurring in the 2005 legislative session.

In addition to continuing the programs begun in2004, the Rural Center is using the fund to launch a$10.5 million Small Towns Initiative, whose purpose

Large Projects, Programs and Initiatives(Generally costing more than $10 million per year)


13/16


is to bring greater prosperity and improved quality oflife to North Carolina’s small towns, especially thoseexperiencing hardship posed by business closings andlayos, devastation from natural disasters or persis-tent poverty.

Ofce of Rural AffairsIn 2005 the Indiana general assembly, in cooperation with the governor’s oce, passed H.B. 1008 reorga-nizing a number of existing state oces and creatingan Oce of Rural Aairs (ORA) and a Departmentof Agriculture. Lt. Governor Becky Skillman servesas the Secretary of Agriculture and Rural Develop-ment.

e ORA consists of the following programs:• Community development block grant program

(CDBG)• High-Speed communications• Indiana Rural Development Council• Indiana Main Street program

• Leadership development• Regional partnering • Grant services

ORA participates in strategic partnerships on ruralhealth and grants management (assistance).

In addition to administering these programs the ORAis leading a statewide eort involving all rural stake-holders to develop a strategic initiative to improve theeconomic competitiveness and quality of life in all ofIndiana’s rural regions. ORA will adapt its functionsand role in accordance with the state plan.

While the ORA is a large rural aairs oce withbroad functionality, it was created without additionalstate nancial resources by combining existing pro-grams, including their budgets and personnel. (eDepartment of Agriculture was also created by com-bining many existing programs, but our research onit is incomplete at this time.)

Keystone Innovation Zones (KIZ)KIZs are designated zones in communities that hostinstitutions of higher education – colleges, universi-ties, and associate degree technical schools. While

not limited to rural areas, in 2005, forty-one ofPennsylvania’s 181 public and private colleges anduniversities were located in rural counties. esezones are designed to foster innovation and createentrepreneurial opportunities by creating partner-ships among educational institutions, private busi-nesses, business support organizations, commerciallending institutions, venture capital networks, andfoundations (KIZ partners).

e Commonwealth supports KIZs through operat-ing grants that can be used for Zone coordination,strategic planning, personnel costs, hiring of consul-tants and administration. ese grants can be up to$250,000 in the rst year, declining each year for upto three years. ey require a 50-50 cash match.

In 2006, companies located in KIZs that have been

in operation less than 8 years and fall under the zone’sindustry sector focus (life science, information tech-nology, nanotechnology etc.) are eligible to apply forcredits against certain state business taxes. Tax creditsavailable for all businesses in all zones is $25 millionper year.

Finally, grants may be provided to institutions ofhigher education to facilitate technology transfer,including such things as patent lings, technologylicensing, intellectual property and royalty agree-ments. e initial grant can be up to $250,000, andall grants awarded to all applicants may not exceed

$10 million. Grants must be matched dollar-for-dol-lar with non-state funds.

e KIZ program was one of several created underGovernor Rendell’s economic stimulus package, andit began operations in 2004. Funding for the pro-gram comes from state general funds appropriated tothe Ben Franklin Technology Development Author-ity, the state’s principal technology promotion oce,as well as the tax credits mentioned above.

Rural Renewable Electric CooperativesColorado’s S.B. 04-168 (2004) establishes that it is

the policy of the state of Colorado to encourage localownership of renewable energy generation facilities toimprove the nancial stability of rural communities.e bill authorizes the organization of renewableenergy cooperatives to:• promote electric energy eciency technologies

to its members;• generate electricity from renewable resources

and technologies; and• transmit and sell the electricity at wholesale.

e bill authorizes renewable energy cooperatives togenerate electricity from renewable resources or tech-

nologies and transmit and sell electricity at wholesale.It prohibits a renewable energy cooperative from sell-ing electricity at retail or having a certicated territoryin the state except as allowed for its own service orpursuant to public utility law or other legal authority.e bill requires electric utilities to interconnect withrenewable energy cooperatives.

e bill provides authority to issue revenue bondsin amounts sucient to pay the following describedcosts of construction, upgrading, and acquisition,


14/16


including any required interest, the costs of bondissuance, and any required reserves on the bonds:• Construction of renewable energy generation

facilities• Construction or upgrading of electric transmis-

sion lines• Acquisition of right-of-way generation and

transmission

• Construction or upgrading electric distributionlines to connect renewable resources or tech-nologies to transmission lines

e bill requires revenue bonds, and interest thereonto be payable from revenues derived from use ofthe renewable energy generation facilities or electrictransmission lines constructed, upgraded, or acquiredthrough the use of bond proceeds. e bill prohibitsrevenue bonds, including refunding revenue bonds,from constituting an indebtedness of the state. Rev-enue bonds are exempt from all state, county, andmunicipal taxation in the state, except Colorado

estate taxes.

Rural Infrastructure FundIn the 2003 session, the Mississippi Legislatureapproved H.B. 1335 which established the Mis-sissippi Rural Impact Fund. e Fund providesassistance in the form of loans and grants to ruralcommunities and loan guarantees on behalf of ruralbusinesses to assist them in completing projects. Among the projects allowed are construction, reha-bilitation, or repair of buildings; sewer systems andtransportation directly aecting the site of proposed

rural businesses; and sewer facilities, acquisition anddevelopment of property for new or expanded busi-nesses in rural areas. e Fund is administered by theMississippi Development Authority.

e Fund was created through the issuance of $10million in state bonds in 2003. A second issuancefor $5 million was approved in 2004. To date theprogram has approved 58 projects valued at an esti-mated $11 million. e majority of these approvalshave been grants. Loan revenues are returned to theFund as capital.

One Georgia - Georgiae Georgia General Assembly established the OneGeorgia Authority during the 1999 session throughH.B. 1313. One Georgia is an instrumentality ofthe state attached to the Department of Community Aairs (until 2002, the Department of Industry,Trade and Tourism). e Authority oers a broadarray of services to rural communities to assist them with their economic development. ese include:

• e Economic Development, Growth andExpansion Fund for communities to use whencompeting for business relocations

• e Equity Fund to provide nancing to com-munities for infrastructure related to economicdevelopment

• e E-911 Fund to help counties throughoutthe state establish 911 emergency telephone

services• e Entrepreneur and Small Business Develop-

ment Loan Guarantee Program which extendsthe availability of conventional credit to indi-viduals and businesses in at-risk counties

• e Georgia Grown Business Loans -- shared-risk loans through accredited Georgia nanciainstitutions ranging from $35,000 to $250,000at competitive interest rates to qualied borrowers located in one of Georgia’s 112 designatedrural counties

Funding for the One Georgia Authority is from one-

third of the state’s Master Tobacco Settlement, whichvaries from year to year. e amounts for the pastwo scal years has been approximately $47 millione program receives no other funding from thestate. While most of the Authority’s activities operateas grants, the Equity Fund also has a revolving loancomponent, with the revenues from loans reverting tothe One Georgia Authority.

Volunteer Fire DepartmentsIn Texas fund-raisers and donations have long beena primary source of funds for volunteer re depart-

ments - they generally receive less than $5,000 peryear from county government. Although many othe 1,800 re departments in the state operate withlittle or no reserve personnel funds, they respond toover 90 percent of the state’s wild land res. In 2001H.B. 2604 created a new stream of revenue to assistvolunteer re departments in paying for equipmentand training personnel.

e Rural Volunteer Fire Department Assistance Pro-gram is administered by the Texas Forest Service ofe Texas A&M University System.

e bill requires the comptroller of public accounts to

assess all insurers in an amount that totals $15 millionfor each 12-month period. Each insurer is assessedin proportion to its net direct premiums in the statee insurer is authorized to recover an assessmenteither by reecting it as an expense in a required rateling or (with prior notice) by charging policy hold-ers. e program expires in 2011.

Another measure adopted in 2001, HB 3667imposed a two percent tax on the sale of reworks tohelp rural volunteer re departments to pay for work-


15/16


ers’ compensation and accidental death and disabilityinsurance.

“Virginia Works”e Virginia Works initiative of 2005 is a set ofcomplementary approaches to rural economic devel-opment to help rural Virginia’s existing industries,promote the creation of new industry and strengthencommunities hardest hit by changing economies.e package of measures is extensive, including thefollowing:• For existing businesses, Virginia Works will pro-

vide two grants to regional partnerships amongthe business community, local community col-leges and economic development agencies thatsuccessfully identify better ways to respond tobusiness realities through more responsive work-force development activities.

• e Governor, with the approval of a board ofexecutive and legislative appointees, may pro-

vide up to $5 million to assist a major regionalemployer in extraordinary circumstances or toattract economic development prospects that would have a major impact on distressed com-munities.

• New businesses benet from investments intourism, including a 350-mile rails-to-trails network, and an initiative to help Virginia artisansthrough the establishment of two retail centersin western Virginia and an extensive supportnetwork for regional artists.

• Existing advanced manufacturing companiesenjoy increased support, including the extension

of export assistance currently available only tolarger businesses.

• e state is investing in research and develop-ment of high-value specialty agricultural pro-duction.

• Rural Virginia communities will have increasedaccess to investment capital through a new com-munity development bank serving borrowers who do not typically qualify for conventionalcredit.

e program’s investments exceed $11 million in newor reassigned funds. Funding is from general tax rev-

enue. Among the largest allocations in the programare $3.1 for the creation of the artisan center, $1.5million for two regional consortium grants, and $2million for brownelds redevelopment. Much ofthe funding for this program represents one-timeexpenditures for construction or infrastructure, withreduced sums needed for ongoing support of theprogram.

Broadband Accesse mission of the e-NC Authority is to provide ruralNorth Carolinians with access to aordable, highspeed Internet service. Since its creation in 2000, theauthority has helped expand Internet service in ruralareas – more than 75 percent of rural households nowhave high-speed access; developed business and tech-nology centers in the most economically distressed

areas of the state; invested in public access sites anddigital literacy programs; created an e-communitieseort to galvanize local support for Internet use andaccess; sponsored a “Leg Up” program to improvecitizen access to government services; and convenedforums focused on advanced technologies and publicpolicy.

Since 2001 funding for the programs of the authorityhas come from the following sources:• $30 million from technology think-tank

MCNC (formerly the Microelectronics Centerof North Carolina).

• A $700,000 multi-year grant from the U.S.Department of Commerce Technology Oppor-tunities Program for e-NC’s local e-governmentprogram.

• $200,000 from the Appalachian Regional Com-mission for connectivity projects in WesternNorth Carolina.

• $2 million from the Golden LEAF Foundationfor the APEC Eastern North Carolina Technol-ogy Initiative. is funding pays for connectiv-ity to the schools.

• $30,000 from the Z. Smith Reynolds Founda-tion for a cross border study, identifying impedi-ments to economic development specic tocounties that border other states.

• In 2004 e-NC received its rst state funds,$1,992,500 for technology purposes, includ-ing establishment of Business and TechnologyTelecenters.

• $50,000 from Microsoft Corporation as partof its Unlimited Potential program, for fundingfor e-NC’s Business and Technology Telecenterprogram.

• $150,000 from the Golden LEAF Foundationfor the TEE-OFF project, highlighting technol-

ogy in entrepreneurship training.• $500,000 a year, for two years, from the NorthCarolina General Assembly for general support.

• $100,000 from the General Assembly forcompletion of a study on regional educationnetworks across the state, as part of the Lt.Governor’s BETA program.

• From 2000 to 2006, e-NC has received cash orin-kind contributions from more than 80 orga-nizations across the state and nation.


16/16

S R l I i i i 1 6

Job Opportunity Building Zones (JOBZ)- Minnesotae JOBZ Program was established by the Min-nesota Legislature and began operating in January2004. e program provides very generous tax ben-ets to spur job creation and capital investment inrural areas deemed to be economically disadvantaged.In order to participate, counties must work together

to establish multi-county ‘zones’. Within the zones‘subzones’ are the areas targeted for new job creationand it is within the subzones that tax benets apply.

e subzones are administered by local economicdevelopers. A business seeking tax benets mustsign an agreement that clearly spells out the numberof new jobs being created, the average wage of thenew jobs, and the capital investment. e agreementmust be approved by the local governing authority;typically the city council and nally approved by thestate.

e tax benets are far-ranging and include exemp-tions for up to 12 years from:• Property taxes on physical structures (not land)• Sales tax on those goods and inputs used in the

zone• Motor vehicle sales taxes• Corporate income tax for income created in the

zone

• An additional tax credit for high-wage jobs inthe zone

By the end of 2005 over 200 business subsidy agree-ments are expected to be signed, almost 3000 new jobs created, and $200 million in capital committed While a small number of agreements contemplatehundreds of jobs, the majority are for 5 or fewer jobs.

Costs of the program are in the form of tax creditsand accrue slowly as businesses start up or expand While such costs will be substantial (and much of it

will be borne by local governments) they have yet tobe calculated by the Department of Revenue.

1 e NCSL database is Internet accessible at: http://www.ncsl.org/programs/econ/ruraldev.cfm

A Note on Methodse inventory of projects was compiled by a variety of methods. e database of rural legislation maintained by NCSL1

was searched for rural bills enacted in calendar years 2003, 2004 and 2005. In addition, several experts and practitionersin rural policy were asked about initiatives undertaken by state governments in the past 3-5 years. Some “older” projects

were also included.

e reader should be aware of a number of caveats.

(1) e inventory is neither exhaustive nor statistically representative of state rural projects. It is eclectic, with projectsselected to provide variation in size of the project (measured by cost), subject matter or sector of the project (e.g.,agriculture, health care, community development, energy, business development, etc.), and geography. We attemptedto include large, medium and small projects across a number of subject areas and from states all across the nation. Wehoped, in this way, to capture a variety of nancing methods.

(2) e inventory is not intended to be a list of great projects or even of “best practices.” e principal goal was to seehow projects are nanced . A secondary goal was include projects that appeared to be innovative, unusual or interesting,but no attempt was made to evaluate the quality of the project or the means of nancing it. at would have gone farbeyond the capacities of our current project. us, this inventory does not constitute a recommendation of the projects

included, but rather, a way to see how states are nancing the projects and programs they choose to institute.

(3) is paper reports on work in progress. e research was compiled in a very short period of time (less than 30 days)by several colleagues working informally. Information was gathered from the legislative measures themselves, agencyand other websites, and calls to legislative, budget or agency sta familiar with the bills and programs. However, ourknowledge is, for the most part, summary only. While we have strived to present accurate information, the likelihood oferrors and omissions remains.

We hope to rene and deepen this inventory as well as our understanding of the individual projects so that we mayproduce a true best practices document in the near future.

Date post:	07-Aug-2018
Category:	Documents
Upload:	the-council-of-state-governments
View:	215 times
Download:	0 times

State Rural Initiatives: Where the Money Comes From

Documents