THE WHITE HOUSE
Office of the Vice President
VICE PRESIDENT AL GORE ANNOUNCES $132 MILLION FOR RURAL BUSINESS DEVELOPMENT
Effort Supports President Clinton's New Markets Initiative with 2,600 Jobs
Washington, DC -- Vice President Al Gore announced today a series of actions that will result in the U.S. government investing more than $132 million for the creation or expansion of rural businesses across the United States. These investments in rural business should create or save more than 2,600 rural jobs, most of them in areas of high unemployment.
"As the 20th century nears its end, our nation is enjoying near-record low unemployment levels and all-time high homeownership rates," Vice President Gore said. "But we need to ensure that we extend that prosperity to all sectors of our economy. That is why today, I am pleased to announce our government is targeting rural development programs to our nation's depressed rural communities to help them create or save jobs."
The business assistance package includes $65.5 million in loans being made to 27 rural businesses through USDA's Business and Industry Guaranteed Loan Program. Under this program, a rural business seeking start-up or expansion capital first secures financing from a local lender, who in turn secures a guarantee for up to 90 percent of the loan from USDA Rural Development.
"This program not only reduces the lenders' risk, it also allows them to help more rural businesses, thereby stimulating rural America's economy," Agriculture Secretary Dan Glickman said.
The largest USDA loan guarantee announced today is for $20 million loaned to the Pacific Northwest Sugar Co., a cooperative owned by about 65 sugar beet growers. The co-op will use the loan as working capital to operate a sugar processing plant at Moses Lake, Wash., which it refurbished last year. The plant employs 300 people in a town where employment levels have never recovered from the closure of the sugar plant nearly 20 years ago.
In addition to the guaranteed loans, USDA is also making $3.3 million in direct Business and Industry Program loans to support rural business.
The Vice President also announced an expanded pilot program under USDA's Intermediary Relending Program, which should result in an additional $50 million for rural business development. Through this program, USDA supports the development of rural businesses and community development projects by providing funds to intermediaries -- which include public bodies, nonprofit corporations, cooperatives and Indian tribes. The intermediaries use the funds to operate revolving loan funds that provide money to local businesses.
Under the expanded pilot program, intermediaries will be eligible to sell the intermediary loan securities to third parties. This will enable them to recapitalize their revolving loan fund so that additional financial assistance can be made to other business projects.
"This pilot program fully supports our reinventing government initiative, in that it will provide more economic opportunity without requiring new federal budget outlays," said Vice President Gore. "This change will generate at least $50 million in additional business development funds for rural projects without any additional cost to taxpayers."
The Vice President also announced that 31 Rural Business Enterprise Grants worth $2.7 million have been awarded to public bodies, nonprofit corporations and Indian tribes to support development of small business in rural areas. One of the larger grants is $199,000 awarded to the Kentucky Highlands Investment Corp., which will use the money to create a revolving loan fund to support business development in an area that includes a rural Enterprise Zone.
A total of $8.4 million in loans and grants under various USDA Rural Development programs are being invested to support the Pacific Northwest/Alaska Tongass National Forest Initiative, which is aimed at creating new business and jobs in portions of Washington, Oregon, Alaska and Northern California negatively impacted by restrictions on logging. Oregon received one of the larger grants, $199,000 to help the Wallowa Band Nez Perce Indians develop a tribal interpretive center as part of its homelands development effort, which tribal leaders hope will stimulate economic development around Wallowa, Ore.
USDA also is providing $4 million in zero-interest loans and grants to rural utility cooperatives under its Rural Economic Development Loan and Grant program. Utility co-ops will in turn use the money to finance rural business and community development in their service areas. Every dollar loaned by USDA for the program leverages an additional $5 to $6 from other public or private sources.
Among the 8 grants issued under this program is $330,000 awarded to the Three Notch Electric Membership Corporation in Donalsonville, Ga., which will, in turn, loan the money to help renovate an emergency room in the Miller County Hospital in Colquitt, Ga. Among the four loan recipients is Carteret-Craven Electric Membership Corp. in Morehead City, N.C. The electric co-op received $450,000, which it will lend to Parker Marine Enterprises Inc. to expand a boat manufacturing plant in Beaufort, N.C. The addition will allow the firm to roughly double production, to about 1,200 boats annually, and will add 15 to 20 new jobs to the current workforce of 112.