Senators Coleman, Pryor, Grahmam, DeWine, and Nelson Introduce Bipartisan Rural Renaissance II

SENATORS COLEMAN, PRYOR, GRAHAM, DEWINE, AND NELSON INTRODUCE BIPARTISAN RURAL RENAISSANCE II

Modified Rural Renaissance Establishes Private-Public Partnership to Provide Low Interest Loans and Grants for Rural Infrastructure Projects

Senators Norm Coleman (R-MN) and Mark Pryor (D-AR) today announced the introduction of the bipartisan "Rural Renaissance II Act" which would establish a private-public partnership to provide low interest loans and grants to critical rural infrastructure projects. Rural Renaissance II, which is based on legislation the senators introduced earlier, would authorize the issuance of bonds to raise capital to provide for low interest loans and grants. Senators Lindsey Graham (R-SC), Mike DeWine (R-OH), and Bill Nelson (D-FL) joined Senators Pryor and Coleman in this effort.

Under the legislation, low interest loans and grants would be made available to communities of 50,000 persons or fewer, including for water and waste facilities; affordable housing; community facilities, including hospitals, fire and police stations, and nursing and assisted living facilities; farmer owned value-added agriculture or renewable energy projects, including ethanol, biodiesel, and wind; distance learning and telemedicine; high speed internet access; and rural teleworks projects.

Rural Renaissance II modifies the original legislation by utilizing a private-public partnership with rural electric cooperatives, allowing them to issue bonds to raise the necessary capital to provide low interest loans for critical rural development projects. In turn, the cooperatives would contribute to a fund that would make grants for the same rural infrastructure purposes. It is estimated that for each $1 billion in bonds issued, $27 million in grants would be made available to rural communities in need of infrastructure projects.

"Every community across this country and certainly Minnesota will tell you how absolutely essential it is that they receive help with critical infrastructure funding if they are going to keep moms and dads working, living, and raising families in rural America," said Coleman. "If this bill were passed, we could more than double the amount of rural infrastructure grants now available under current federal programs in the first year alone, and far surpass that increase in low interest loans. I believe we are now situated to be able to move this bill forward, at least incrementally, through the legislative process."

"In Arkansas and throughout the country, families are leaving rural communities for cities with infrastructure already in place and a better standard of living," Pryor said. "This bill will help reverse this trend by infusing small rural communities with the resources necessary to meet basic infrastructure needs and attract new businesses."

The original Rural Renaissance Act established a Rural Renaissance Corporation to issue the bonds and make low interest loans and grants. This would have allowed the federal government to make rural infrastructure investments and spread the cost out over the life of the projects in order to leverage more dollars and fund more projects. When anachronistic federal budgeting rules slowed progress on federal bonding, senators developed a private-public partnership with rural electric cooperatives which would issue the bonds, and in turn make low interest loans and grants. Bondholders would receive a federal tax credit instead of interest and the cost of the tax credit would be the only cost to the U.S. government. Rural electrics would access low cost money in order to make low interest loans to rural communities, and contribute to a fund in order to make grants for the same purposes.

"Investing in rural infrastructure is among my top priorities, and this bill holds the potential and hope that many of our communities desperately need," Pryor said. "I am particularly pleased that the new legislation incorporates the Delta Regional Authority, and I hope that this approach can target much needed capitol to the areas where it can be put to immediate use."

"Whether it's the Energy Bill as a vehicle for this kind of bonding to support wind, biodiesel, and ethanol projects, or tax legislation down the road this year for other important projects like water and waste, I see opportunity for movement of this vital legislation for rural Minnesota," Coleman said.

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