Late yesterday, USDA’s Rural Development (RD) office released an Administrative Notice (AN 4679) announcing that, “all RD programs will begin using 2010 Decennial Census population data...on March 27, 2013.” The AN also states that, “until that time, and unless specifically directed otherwise, programs are instructed to use the population data from the 2000 Decennial Census.” The 2010 Census data will render ineligible for RD programs many areas that are currently eligible for such programs, including RD Section 502 direct and guaranteed single-family loans and Section 538 multifamily loan guarantees.
Despite efforts to persuade Congress to amend the definition of rural areas and grandfather existing communities to preserve their RD program eligibility if RD applies the 2010 Census data, Congress recessed until after the election without enacting any such language. It is possible that Congress will act on this issue during its post-election lame duck session or early next year, particularly in further FY 2013 appropriations action. Congress recently enacted a six-month Continuing Resolution (CR) appropriating funds for federal programs, including USDA’s rural housing programs, until March 27, 2013. Congress must enact another appropriations bill by that date to keep federal programs operating. Such legislation may be an opportunity to address the rural area eligibility issue, whether such legislation is an individual rural housing and agriculture programs appropriations bill, an omnibus appropriations bill funding many or all federal agencies for the remainder of the year, or another CR.
Congress could also address the rural eligibility issue in legislation outside the appropriations process. Before Congress recessed recently, legislators introduced two bills addressing this issue. Senator Ben Nelson’s (D-NE) legislation, S. 3541, would allow rural areas to be classified based on 1990, 2000, or 2010 Census data and would allow an area to be classified as rural if it was classified as rural at any time between January 1, 2000 and December 31, 2010. Any areas so classified would retain that classification until implementation of 2020 Census data. Nelson’s bill would also raise from 25,000 to 35,000 the maximum population for areas to qualify as rural.
Representative Jeff Fortenberry’s (R-NE) bill, the Rural Housing Preservation Act of 2012, H.R. 6416, would extend until September 30, 2013 the eligibility of rural housing areas so designated on June 30, 2012.