What is the Section 9006 Program?
The Farm Security and Rural Investment Act of 2002 (the Farm Bill) established the Renewable Energy Systems and Energy Efficiency Improvements Program under Title IX, Section 9006. This section directs the Secretary of Agriculture to make loans, loan guarantees, and grants to farmers, ranchers and rural small businesses to purchase renewable energy systems and make energy efficiency improvements. Congress provided nearly $23 million to fund the program in each of fiscal years 2003-2006. The Secretary of Agriculture delegated the responsibility for this program to the Business and Cooperative Programs within the Rural Development Mission area of U.S. Department of Agriculture. The USDA anticipates that this program will help farmers, ranchers and rural small businesses reduce energy costs and consumption and help the nation meet its energy needs. The program will also help support and stimulate rural economic development by helping agricultural producers and rural small businesses create new sources of income, to create new jobs, and to create new uses for agricultural products and wastes. Some key provisions of the program are: Applicants may qualify for a grant, a guaranteed loan, or a combination of both. Grant request must not exceed 25 percent of the eligible project costs. Renewable energy grants can range from $2,500 to $500,000. Energy efficiency grants can range from $1,500 to $250,000. Projects under $200,000 total project costs qualify for a simplified application process. Loan guarantees can be for up to 50% of total eligible project costs. Guarantees can range from $5,000 to $10,000,000 per project. Projects can qualify for combined grant and loan guarantee, but the grant portion is still subject to the above limits and combined funding assistance cannot exceed 50% of total eligible project costs. In the first three years of the 9006 program, USDA has awarded a total of 435 grants totaling $66.7 million to agricultural producers and rural small businesses in 36 states. In addition, the first two loan guarantees were awarded at the end of fiscal year 2005 for $10,100,000. USDA published the final rule for this program, 7 CFR Part 4280, on July 18, 2005.
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