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Farm Security and Rural Investment Act of 2002

Title VI Rural Development

SEC. 6202. RURAL ELECTRONIC COMMERCE EXTENSION PROGRAM. (pages 297-299)
Subtitle H of title XVI of the Food, Agriculture, Conservation, and Trade Act of 1990 is amended by inserting after section 1669 (7 U.S.C. 5922) the following:

‘‘SEC. 1670. RURAL ELECTRONIC COMMERCE EXTENSION PROGRAM.

‘‘(a) DEFINITIONS.—In this section:

‘‘(1) DEVELOPMENT CENTER.—The term ‘development center’ means—
‘‘(A) the North Central Regional Center for Rural Development;
‘‘(B) the Northeast Regional Center for Rural Development or its designee;
‘‘(C) the Southern Rural Development Center; and
‘‘(D) the Western Rural Development Center or its designee.

‘‘(2) EXTENSION PROGRAM.—The term ‘extension program’ means the rural electronic commerce extension program established under subsection (b).

‘‘(3) MICROENTERPRISE.—The term ‘microenterprise’ means a commercial enterprise that has 5 or fewer employees, 1 or more of whom own the enterprise.

‘‘(4) SECRETARY.—The term ‘Secretary’ means the Secretary of Agriculture, acting through the Administrator of the Cooperative State Research, Education, and Extension Service.

‘‘(5) SMALL BUSINESS.—The term ‘small business’ has the meaning given the term ‘small-business concern’ by section 3(a) of the Small Business Act (15 U.S.C. 632(a)).

‘‘(b) ESTABLISHMENT.—The Secretary shall establish a rural electronic commerce extension program to expand and enhance electronic commerce practices and technology to be used by small businesses and microenterprises in rural areas.

‘‘(c) GRANTS.—

‘‘(1) IN GENERAL.—The Secretary shall carry out the program established under subsection (b) by making—
‘‘(A) grants to each of the development centers; and
‘‘(B) competitive grants to land-grant colleges and universities (or consortia of land-grant colleges and universities) and to colleges and universities (including community colleges) with agricultural or rural development programs—
    ‘‘(i) to develop and facilitate innovative rural electronic commerce business strategies; and
    ‘‘(ii) to assist small businesses and microenterprises in identifying, adapting, implementing, and using electronic commerce business practices and technologies.

‘‘(2) ELIGIBILITY.—The selection criteria established for grants awarded under paragraph (1)(B) shall include—
‘‘(A) the ability of an applicant to provide training and education on best practices, technology transfer, adoption, and use of electronic commerce in rural communities by small businesses and microenterprises;
‘‘(B) the extent and geographic diversity of the area served by the proposed project or activity under the extension program;
‘‘(C) in the case of a land-grant college or university, the extent of participation of the land-grant college or university in the extension program (including any economic benefits that would result from that participation);
‘‘(D) the percentage of funding and in-kind commitments from non-Federal sources that would be needed by and available for a proposed project or activity under the extension program; and
‘‘(E) the extent of participation of low-income and minority businesses or microenterprises in a proposed project or activity under the extension program.

‘‘(3) NON-FEDERAL SHARE.
‘‘(A) IN GENERAL.—As a condition of the receipt of funds under this section, a development center or grant applicant shall agree to obtain from non-Federal sources (including State, local, nonprofit, or private sector sources) contributions of an amount equal to 50 percent of the grant amount.
‘‘(B) FORM.—The non-Federal share required under subparagraph (A) may be provided in the form of in-kind contributions.
‘‘(C) EXCEPTION.—The non-Federal share required under subparagraph (A) may be reduced to 25 percent if the grant recipient serves low-income or minority-owned businesses or microenterprises, as determined by the Secretary.

‘‘(d) REPORT.—Not later than 2 years after the date of enactment of this section, the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes—

‘‘(1) the policies, practices, and procedures used to assist rural communities in efforts to adopt and use electronic commerce techniques; and

‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this section $60,000,000 for each of fiscal years 2002 through 2007, of which not less than 1.3 of the amount made available for each fiscal year shall be used to carry out activities under subsection (c)(1)(A).’’.

Joint Explanatory Statement of the committee of Conference

Title VI Rural Development

(77) Rural Electronic Commerce Extension Program (pages 184-186)
The Senate amendment adds a new section 1670 to the FACT Act providing an authorization for a Rural Electronic Commerce Extension Program. The Secretary would be required to establish within CSREES an Office of Rural Electronic Commerce to carry out this program. The purposes of the program are: (1) to expand and enhance electronic commerce practices and technology to be used by small businesses and microenterprises in rural areas; (2) disseminate information and expertise through a cooperative extension service clearinghouse in rural areas; (3) disseminate management, scientific, engineering, and technical information to small businesses in rural areas through the extension program; and (4) use, when appropriate, the expertise, technology, and capabilities of other organizations, including State and local governments, Federal agencies, institutions of higher education, nonprofit organizations, small businesses and microenterprises that have experience in electronic commerce practice and technology, and the development centers established under this section. In carrying out this program, the Secretary shall: (1) provide leadership, support, and coordination for the program; (2) establish policies, practices, and procedures to assist rural communities in the adoption and use of electronic commerce techniques; (3) identify and strengthen existing mechanisms designed to assist rural areas in the adoption and use of electronic commerce techniques; (4) provide grants to fund projects and activities under the program; and (5) establish a clearinghouse system for States, communities, and businesses to obtain information on best practices, technology transfer, training, education, adoption, and use of electronic commerce in rural areas.

The Secretary shall make grants to the North Central Regional Center for Rural Development, the Northeast Regional Center for Development, the Southern Rural Development Center, and a development center in the Western Region, as determined by the State Extension Program Directors in the Western Region, to (1) assemble regional expertise, and develop innovative education programs, that may be adapted and refined by State extension programs; (2) train State-based cooperative extension agents to deliver rural electronic commerce education programs; and establish networks among universities, local governments, and private industries to focus on regional economic issues.

The Secretary also is authorized to make competitive grants to cooperative extension programs at land-grant institutions, or consortia of such institutions), to develop and facilitate nationally innovative rural electronic commerce business strategies, and to assist small businesses and microenterprises in identifying, adapting, implementing, and using electronic commerce business practices and technologies. The provision also includes selection criteria for grant awards. As a condition of funding, during the years of funding under a grant the recipient must provide from non-Federal sources 50 percent (25 percent if the grant recipient serves low-income or minority-owned businesses or microenterprises of the estimated capital and annual operating and maintenance costs of the extension program, and after expiration of the grant funding period the recipient must provide 100 percent of such costs from non-Federal sources. Awards are limited to $900,000 for an individual land-grant institution, either individually or as a member of a consortium, and funds awarded to a consortium must be shared equally among its members. The provision also establishes an evaluation panel and process to evaluate projects and activities funded under the program beginning one year after grant award. The Secretary is required to report to the Agriculture Committees on activities under this section 2 years after the date of enactment.

The program is authorized at $60,000,000 each fiscal year through 2006, with $20,000,000 of that set aside for funding the regional development centers. The Secretary is authorized to use up to 2 percent of funds made available for administrative costs to carry out this section. (Section 733)

The House bill contains no comparable provision.

The Conference substitute adopts the Senate provision with an amendment clarifying the Senate provision and expanding the eligibility for grants to include colleges and universities with agricultural or rural development programs. (Section 6202)

The Committee authorizes $60 million to establish a Rural Electronic Commerce Extension Program within the Cooperative State Research, Education, and Extension Service. Electronic commerce represents an opportunity for small businesses and micro enterprises in the domestic and international market, but there is currently no mechanism available in rural areas to enable individuals or organizations to both learn and take advantage of innovative technologies and business practices. The United States has a strong interest in ensuring that small businesses and micro enterprises in rural areas participate in electronic commerce as it will promote productivity and economic growth throughout the United States. The specific objectives of the program are: 1) expand and enhance electronic commerce practices and technology to be used by small businesses and micro enterprises in rural areas; 2) disseminate information and expertise through a cooperative extension service clearinghouse; 3) disseminate management, scientific, and technical information to small businesses and micro enterprises in rural areas through the extension program, and 4) use, when appropriate, the expertise, technology, and capabilities of other institutions and organizations – examples being state and local governments, Federal departments and agencies, institutions of higher education, non-profit organizations, small businesses and micro enterprises with previous experience in this area, and regional development centers – to achieve the stated objectives. The program will be competitive and merit-based, with grants being provided to cooperative extension service programs at land-grant colleges and universities (or consortia of land-grant colleges and universities) and to colleges and universities with agriculture or rural development programs. Using language in the legislation as guidelines, the Cooperative State Research, Education, and Extension Service shall establish appropriate criteria for the submission, evaluation, and funding of applications for grants to implement projects and activities for the program and shall be responsible for evaluating, ranking, and selecting grant applications.