    [House Hearing, 110 Congress]
    [From the U.S. Government Publishing Office]

        THE SOUTHEAST CRESCENT AUTHORITY, THE NORTHERN BORDER ECONOMIC
        DEVELOPMENT COMMISSION, AND SOUTHWEST REGIONAL BORDER AUTHORITY

    =======================================================================

                                    (110-36)

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
        ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS AND EMERGENCY MANAGEMENT

                                     OF THE

                                  COMMITTEE ON
                       TRANSPORTATION AND INFRASTRUCTURE
                            HOUSE OF REPRESENTATIVES

                           ONE HUNDRED TENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                  MAY 3, 2007

                                   __________

                           Printed for the use of the
                 Committee on Transportation and Infrastructure

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                 COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                     JAMES L. OBERSTAR, Minnesota, Chairman

    NICK J. RAHALL, II, West Virginia    JOHN L. MICA, Florida
    PETER A. DeFAZIO, Oregon             DON YOUNG, Alaska
    JERRY F. COSTELLO, Illinois          THOMAS E. PETRI, Wisconsin
    ELEANOR HOLMES NORTON, District of   HOWARD COBLE, North Carolina
    Columbia                             JOHN J. DUNCAN, Jr., Tennessee
    JERROLD NADLER, New York             WAYNE T. GILCHREST, Maryland
    CORRINE BROWN, Florida               VERNON J. EHLERS, Michigan
    BOB FILNER, California               STEVEN C. LaTOURETTE, Ohio
    EDDIE BERNICE JOHNSON, Texas         RICHARD H. BAKER, Louisiana
    GENE TAYLOR, Mississippi             FRANK A. LoBIONDO, New Jersey
    ELIJAH E. CUMMINGS, Maryland         JERRY MORAN, Kansas
    ELLEN O. TAUSCHER, California        GARY G. MILLER, California
    LEONARD L. BOSWELL, Iowa             ROBIN HAYES, North Carolina
    TIM HOLDEN, Pennsylvania             HENRY E. BROWN, Jr., South
    BRIAN BAIRD, Washington              Carolina
    RICK LARSEN, Washington              TIMOTHY V. JOHNSON, Illinois
    MICHAEL E. CAPUANO, Massachusetts    TODD RUSSELL PLATTS, Pennsylvania
    JULIA CARSON, Indiana                SAM GRAVES, Missouri
    TIMOTHY H. BISHOP, New York          BILL SHUSTER, Pennsylvania
    MICHAEL H. MICHAUD, Maine            JOHN BOOZMAN, Arkansas
    BRIAN HIGGINS, New York              SHELLEY MOORE CAPITO, West
    RUSS CARNAHAN, Missouri              Virginia
    JOHN T. SALAZAR, Colorado            JIM GERLACH, Pennsylvania
    GRACE F. NAPOLITANO, California      MARIO DIAZ-BALART, Florida
    DANIEL LIPINSKI, Illinois            CHARLES W. DENT, Pennsylvania
    DORIS O. MATSUI, California          TED POE, Texas
    NICK LAMPSON, Texas                  DAVID G. REICHERT, Washington
    ZACHARY T. SPACE, Ohio               CONNIE MACK, Florida
    MAZIE K. HIRONO, Hawaii              JOHN R. `RANDY' KUHL, Jr., New
    BRUCE L. BRALEY, Iowa                York
    JASON ALTMIRE, Pennsylvania          LYNN A WESTMORELAND, Georgia
    TIMOTHY J. WALZ, Minnesota           CHARLES W. BOUSTANY, Jr.,
    HEATH SHULER, North Carolina         Louisiana
    MICHAEL A. ACURI, New York           JEAN SCHMIDT, Ohio
    HARRY E. MITCHELL, Arizona           CANDICE S. MILLER, Michigan
    CHRISTOPHER P. CARNEY, Pennsylvania  THELMA D. DRAKE, Virginia
    JOHN J. HALL, New York               MARY FALLIN, Oklahoma
    STEVE KAGEN, Wisconsin               VERN BUCHANAN, Florida
    STEVE COHEN, Tennessee
    JERRY McNERNEY, California
    VACANCY

                                      (ii)

     Subcommittee on Economic Development, Public Buildings and Emergency
                                   Management

            ELEANOR HOLMES NORTON, District of Columbia, Chairwoman

    MICHAEL H. MICHAUD, Maine            SAM GRAVES, Missouri
    JASON ALTMIRE, Pennsylvania          BILL SHUSTER, Pennsylvania
    MICHAEL A. ARCURI, New York          SHELLEY MOORE CAPITO, West
    CHRISTOPHER P. CARNEY, Pennsylvania  Virginia
    TIMOTHY J. WALZ, Minnesota           CHARLES W. DENT, Pennsylvania
    STEVE COHEN, Tennessee               JOHN R. `RANDY' KUHL, Jr., New
    JAMES L. OBERSTAR, Minnesota         York
      (Ex Officio)                       JOHN L. MICA, Florida
                                           (Ex Officio)

                                     (iii)

                                    CONTENTS

                                                                       Page

    Summary of Subject Matter........................................    vi

                                   TESTIMONY

    Butterfield, Hon. G.K., a Representative in Congress from the
      State of North Carolina........................................    12
    Cuellar, Hon. Henry, a Representative in Congress from the State
      of Texas.......................................................    21
    Dole, Hon. Elizabeth, Senator from the State of North Carolina in
      the United States Senate.......................................    12
    Filner, Hon. Bob, a Representative in Congress from the State of
      California.....................................................    21
    Hayes, Hon. Robin, a Representative in Congress from the State of
      North Carolina.................................................    12
    Hinojosa, Hon. Ruben, a Representative in Congress from the State
      of Texas.......................................................    21
    Hodes, Hon. Paul W., a Representative in Congress from the State
      of New Hampshire...............................................     5
    McIntyre, Hon. Mike, a Representative in Congress from the State
      of North Carolina..............................................    12
    Reyes, Hon. Silvestre, a Representative in Congress from the
      State of Texas.................................................    21
    Rodriguez, Hon. Ciro D., a Representative in Congress from the
      State of Texas.................................................    21
    Welch, Hon. Peter, a Representative in Congress from the State of
      Vermont........................................................     5

              PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

    Altmire, Hon. Jason, of Pennsylvania.............................    30
    Arcuri, Hon. Michael A., of New York.............................    31
    Butterfield, Hon. G.K., of North Carolina........................    37
    Cohen, Hon. Steve, of Tennessee..................................    33
    Cuellar, Hon. Henry, of Texas....................................    39
    Dole, Senator Elizabeth, of North Carolina.......................    40
    Hayes, Hon. Robin, of North Carolina.............................    43
    Hinojosa, Hon. Ruben, of Texas...................................    44
    Hodes, Hon. Paul, of New Hampshire...............................    46
    McHugh, Hon. John M., of New York................................    60
    McIntyre, Hon. Mike, of North Carolina...........................    63
    Michaud, Hon. Michael H., of Maine...............................    34
    Reyes, Hon. Silvestre, of Texas..................................    66
    Rodriguez, Hon. Ciro D., of Texas................................    68
    Welch, Hon. Peter, of Vermont....................................    70

                           SUBMISSIONS FOR THE RECORD

    Hodes, Hon. Paul W., a Representative in Congress from the State
      of New Hampshire, letter from the Northern Forest Center.......    51

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

       HEARING ON THE SOUTHEAST CRESCENT AUTHORITY, THE NORTHERN BORDER
      ECONOMIC DEVELOPMENT COMMISSION, AND THE SOUTHWEST REGIONAL BORDER
                                   AUTHORITY

                                  ----------

                             Thursday, May 3, 2007

                      House of Representatives,
        Committee on Transportation and Infrastructure,
    Subcommittee on Economic Development, Public Buildings and
                                          Emergency Management,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 10:13 a.m., in
    Room 2167, Rayburn House Office Building, the Honorable Eleanor
    Holmes Norton [chairwoman of the subcommittee] presiding.
        Ms. Norton. I want to welcome today's witnesses and say
    good morning to all of you. It is my privilege to welcome
    Members of Congress to testify before the Subcommittee this
    morning on economic development and the elimination of poverty.
    I have only brief opening remarks because the Subcommittee
    appreciates and values the additional information and the very
    valuable time of the Members who will provide testimony
    following our own hearing on this very issue in July, 2006,
    concerning regional economic development initiatives.
        I especially want to acknowledge the efforts of Mr.
    Michaud, Mr. Hodes, and Mr. McIntyre and to commend you for
    your perseverance and dedication to pursue legislation you
    believe is vital and necessary for your region. We appreciate
    the time and energy you have invested in efforts to address
    poverty in your regions. For the Members new to the effort, we
    welcome your participation and will draw on your insights to
    help move these initiatives forward.
        In these times of severe budget constraints, we are mindful
    of the need to avoid redundancy and duplication in programs,
    and of the importance of targeting scarce resources in areas
    that will bring the highest investment return. We are very
    interested in hearing from Members about how your initiative
    fits into these concerns as well.
        We thank each of you for coming this morning, and we offer
    a special welcome to Senator Elizabeth Dole, who we believe
    will join us later. We look forward to hearing testimony from
    all of today's witnesses. I am pleased to say to the Ranking
    Member, everybody take note, the Ranking Member has been
    totally feminized here, we appreciate that Mrs. Capito has come
    in for Mr. Graves, whose grandmother died. I know he would have
    wanted to be here to hear the Members. We very much appreciate
    her coming in his stead.
        Mrs. Capito.
        Mrs. Capito. Thank you, Madam Chair. I wish to extend my
    condolences to Mr. Graves on the death of his grandmother. I
    know that he wishes he could be here today to hear the
    testimony.
        I just briefly want to thank you for holding the hearing.
    And I also want to thank the distinguished panels of witnesses
    for taking the time out of their very busy schedules today. You
    will be providing testimony on the proposed regional economic
    development initiatives for the southeast, southwest, and
    northern border. Areas in these regions have high unemployment,
    low per capita income, and lack necessary infrastructure.
        Over the past couple of years, there has been increasing
    interest in creating regional economic development authorities
    to spur economic development in these areas. As a Member of
    Congress from West Virginia, I have great experience with one
    such commission, that being the Appalachian Regional
    Commission, which covers all 55 counties of my State of West
    Virginia. Interestingly enough, during the past five years,
    three counties of my 18 counties have been removed from the
    ARC's list of economically distressed counties, and one has
    jumped to the competitive category.
        I have seen first-hand what the ARC has done in my
    district, what it has done for the region, and it has had a
    long-standing history of success and great help for local
    economic development authorities. So I am very familiar with
    that.
        I look forward to everybody's testimony. I thank the
    gentlemen for coming today. Thank you.
        Ms. Norton. Other members who have statements to make? Mr.
    Michaud.
        Mr. Michaud. Thank you very much, Madam Chairwoman. I want
    to thank both you and the Ranking Member for holding this
    hearing. Chairwoman Norton, you have been an incredible
    advocate for economic development and for helping regions that
    are struggling, and on behalf of one such region, I want to
    thank you very much.
        I also want to recognize our colleagues here today. Mr.
    Hodes, Mr. Welch, and Mr. McHugh, who will not be able to make
    it today but I would ask, Madam Chair, that we ask unanimous
    consent that Mr. McHugh's testimony be inserted in the record.
        Ms. Norton. Without objection, so ordered.
        Mr. Michaud. The work of these colleagues and the work of
    their staffs has been invaluable in developing this
    legislation. They are truly dedicated to helping improve the
    economy in our region.
        I first lead a group of bipartisan cosponsors three years
    ago in developing this bill, and I especially want to commend
    Mr. Hodes, who has shown extraordinary leadership in heading up
    our group on this legislation in this Congress, as well as Mr.
    Welch.
        Madam Chairwoman, for 40 years the ARC has shown us an
    effective way to address regional economic distress. A small
    Federal investment in that region is going a long way towards
    creating jobs, infrastructure, business opportunities, and hope
    for the future.
        In the northern border region, we have seen a clear,
    persistent pattern of economic distress, with a lost of natural
    resource-based industries, the loss of jobs, and aging and
    crumbling infrastructure. If you look at the 28 counties in
    this bill that lie on the border or right next to the border
    between Maine and New York, you will find poverty above the
    national average, median household income that is $7500 below
    the national average, persistent unemployment that is
    consistently higher than the rest of the country, and most
    striking of all, a loss of almost 1 percent of the population
    between 1990 and 2000, compared to 13 percent growth nationally
    over the same period.
        Clearly, this region has a compelling need for new
    investment.
        As we have heard in testimony before in this Subcommittee,
    most recently on January 23rd of this year, the regional
    commissions are an extremely valuable tool for promoting
    economic development. They can help us address the unique
    challenges of different regions without duplicating other
    Federal programs. I think the testimony we will hear today, and
    that we did hear on July 10th of last year, will show that the
    northern border region has a real need and that a regional
    commission can help us tremendously. A regional commission can
    help us invest in transportation, health care, agriculture,
    broadband, and alternative energy. It can help us create jobs
    for the long term.
        Our region has all of the ingredients we need to face our
    challenges head-on and make ourselves an economic engine. A
    regional commission would bring us the resources and leadership
    we need to make a fundamental change in our future.
        In closing, Madame Chairwoman, I can say from personal
    experience that this commission is sorely needed. Like my
    father and my grandfather before me, I worked at Great Northern
    Paper Company in East Millinocket. Two days after I was elected
    and sworn in to Congress, the mill filed bankruptcy and closed
    its doors. It devastated the community. The story that I tell
    is not unfamiliar to other areas in the State of Maine that
    have had this happen to them as well. That is why this bill has
    the strong bipartisan support of our group of cosponsors. It
    also has the united support of economic development district
    directors, local NGOs, and major conservation groups.
        We need the kind of leadership and investment that a
    regional commission can bring, to make sure that instead of
    more mills closing, we can get onto a path of new jobs, new
    industry, where young people can stay, build, and live in the
    region where they were born.
        I look forward to hearing the testimony of the witnesses
    and to moving forward with this legislation to improve the
    lives of the people who live in the northern border region.
    With that, I yield back, Madam Chairwoman.
        Ms. Norton. Thank you, Mr. Michaud.
        Are there any other opening statements? Mr. Arcuri.
        Mr. Arcuri. Thank you, Madam Chair. I would like to thank
    the Chairwoman and the Ranking Member for holding this hearing.
    Also, Mr. Hodes, Mr. Welch, thank you very much for your
    leadership, and Mr. Michaud, thank you very much for your
    leadership on this bill as well. It is a very important piece
    of legislation that I think will greatly benefit the region.
        I am proud to join the chorus of supporters here today as
    an original cosponsor of H.R. 1548, the Northern Border
    Economic Development Commission Act of 2007. This bipartisan
    legislation would be incredibly beneficial to the region by
    assessing and addressing the very specific needs, assets, and
    challenges of the region as a whole. The commission would
    create a Federal-State partnership where local development
    districts and other non-profits bring projects, ideas, and
    priorities to the commission from the local level to promote
    economic development through the planning, technical
    assistance, and funding of projects aimed at encouraging
    economic prosperity, specifically by providing grants for local
    transportation, infrastructure projects, broadband development,
    alternative energy projects, agricultural development, and
    health care facilities.
        Most importantly, this legislation is modeled after the
    very successful Appalachian Regional Commission approach, an
    idea conceived by the distinguished full Committee Chair, Mr.
    Oberstar, when he was a staffer on this very Committee over 40
    years ago. Simply put, the numbers speak for themselves. Since
    its creation, the ARC has reduced the number of distressed
    counties in its region from 210 to 100, cut the poverty rate
    from 31 percent to 15 percent, and helped 1,400 businesses
    create 2,600 new jobs.
        Speaking from personal experience, six counties in my
    upstate New York district have experienced similar success. The
    Village of Sherburne, New York, in Chenango County is a great
    example of how a small ARC award granted to them was extremely
    helpful in leveraging additional funds from State, local, and
    private sources for economic development initiatives that
    create jobs. A $200,000 grant from ARC for the enhancement of
    aging water infrastructure in Sherburne, a problem that is
    plaguing many of the States in the northeast, was able to
    leverage close to $4 million dollars in State, local, community
    investment. By providing enhanced infrastructure capabilities,
    Sherburne, New York, has become a home for a number of new
    businesses in the area and continues to attract new investment.
        The Northern Border Economic Development Commission not
    only will extend similar benefits to economically distressed
    counties in Maine, New Hampshire, and Vermont, but will also
    allow upstate New York counties like Oneida, Herkimer, Cayuga,
    and Seneca to enjoy the same benefits their neighboring
    counties in the southern tier of New York enjoy under the
    Appalachian Regional Commission.
        Over the last several decades, upstate New York has had a
    consistent pattern of economic distress as a result of
    substantial losses in the manufacturing sector coupled with the
    aging infrastructure and lack of opportunities for a skilled
    workforce. My district alone has seen a staggering loss of more
    than 14,000 manufacturing jobs between 2000 and 2005. This has
    been devastating to our local communities. However, this is not
    an anomaly, it is extremely characteristic of several States in
    the northeast. A targeted regional approach like the one
    created by this bill can help bring economic vitality to a
    region in dire need.
        Madam Chair, I look forward to working together with my
    colleagues on both sides of the aisle to expedite the
    consideration of this bill before the Subcommittee and the full
    Committee. I thank you, and I yield back the balance of my
    time.
        Ms. Norton. I want to thank both of these members. Your
    remarks I think have been tantamount to testimony that helps
    the Committee to understand why this bill and these regions are
    so important because of the kind of approach we have taken
    through this effort. We are fortunate to have with us the
    architect of all of this. I am very pleased that the Chairman
    of the Committee has joined us and would ask him if he would
    say a few words of opening remarks at this time.
        Mr. Oberstar. Madam Chair, your opening statement is right
    on target. You have framed the issue. We need to proceed with
    this hearing. We need to proceed with this legislation. It has
    broad bipartisan support. This is legislation that is in the
    best tradition of what we do on this Committee, and that is
    provide jobs, growth, mobility, economic development.
        But as we enter this hearing and move toward reporting this
    legislation from Committee in the near future, I am reminded of
    the report of the Chair and Co-Chair of the Appalachian
    Regional Commission about 20 years ago. It said, ``Halfway home
    and a long way to go.'' You cannot overturn 100 years of
    decline in 5, 10, 15, or 20 years. It takes long-term
    investment and partnerships, and that is what this legislation
    creates the opportunity to do, as we have done with the
    Appalachian Regional Commission, to deal with the
    underpinnings--the need for infrastructure investment, the
    backbone road system, water and sewer and sewage treatment
    facilities, and then move to the vocational education centers,
    and then to the health clinics, and then to the industrial
    parks, and then the airports, the rail sidings. All that are
    needed to create the underpinnings for growth. ``If the public
    sector does its part,'' as Adam Smith said 200 years ago,
    ``then the private sector can do its part.'' Thank you.
        Ms. Norton. Thank you very much, Mr. Chairman.
        I am very pleased to welcome the first two Members who will
    testify. Representative Paul Hodes of New Hampshire's District
    2, and Representative Peter Welch, a Vermont Member at Large.
    Which of you would like to proceed first?
        Mr. Hodes. I am happy to begin, Madam Chair.
        Ms. Norton. Are you both new Members of Congress?
        Mr. Hodes. We are both.
        Ms. Norton. See, I will not even ask you about seniority.
    No, I knew you were both new. Please go ahead, Mr. Hodes.

     TESTIMONY OF THE HONORABLE PAUL W. HODES, A REPRESENTATIVE IN
     CONGRESS FROM THE STATE OF NEW HAMPSHIRE; THE HONORABLE PETER
     WELCH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF VERMONT

        Mr. Hodes. Madam Chairwoman and Ranking Member Capito, I
    want to thank you for giving my colleague Peter Welch and me
    the opportunity to present testimony before the Transportation
    and Infrastructure Subcommittee on Economic Development, Public
    Buildings, and Emergency Management today. I also thank the
    distinguished panel for attending. And I join with you in
    expressing condolences to the Ranking Member, Mr. Graves.
        As you know, I am Paul Hodes. I represent New Hampshire's
    2nd congressional district. I come before you today to offer my
    strong support for H.R. 1548, the Northern Border Economic
    Development Commission Act of 2007.
        My home State of New Hampshire is a unique State, blessed
    with incredible beauty, an abundance of natural resources, and
    a citizenry that values hard work, community, and fiscal
    restraint. But we are also facing our share of significant
    challenges. Parts of our State, specifically the northern
    region, have taken an economic beating are struggling to
    recover. A staggering number of jobs, and especially
    manufacturing jobs, have been lost. New Hampshire, and
    especially northern New Hampshire, has seen plants close and
    young people disappear to places that offer more opportunity.
    Parts of New Hampshire are economically stricken and for the
    people there it is getting harder and harder to get by.
        While running for office, I spent a lot of time in the
    North country and I spoke with countless people who had great
    pride of place, pride in their community, they had the drive to
    work hard and to improve their neighborhoods, but they felt
    their communities had been ignored for years, and especially by
    the Federal Government. Despite this neglect, there is a
    compelling case for coordinated Federal investment in northern
    New Hampshire. In fact, for the entire northern border region,
    which you can see here on the chart we have brought, which
    includes the northernmost counties of Maine, New Hampshire,
    Vermont, and New York, that region has higher unemployment, a
    higher percentage of people living in poverty, and lower
    household income than the rest of the Nation.k
        In northern New Hampshire, as I was campaigning, I will
    just point out one example that comes to mind, campaigning in
    the city of Berlin, the largest metropolitan area, if you will
    call it that, in my State north of Franconia Notch, is a city
    that was built on paper. Generations of people worked in the
    paper mills--fathers, sons, members of families. And entire
    culture was built on paper. As I campaigned this past summer in
    Berlin, while the paper mill had been bought and there were
    jobs there, the pulp mill had been closed down--300 jobs lost,
    moved out of the county. People were walking the streets at the
    annual summer festival for the first time in their lives
    without jobs, without prospects, ready to work but without the
    infrastructure and the help to do it.
        When I was first elected to serve in Congress this past
    November, I was very proud to work closely with other Members
    of Congress, along with my staff, and especially Mr. Michaud,
    from the border region to put together a plan to bring much
    needed economic development to the area. The Northern Border
    Economic Development Commission Act will help create jobs and
    kick-start local economies in northern New Hampshire and in the
    entire northern border region.
        The commission enforces the notion that if you are willing
    to work hard and play by the rules, we are here to help you get
    ahead. The people in the area this bill targets deserve a
    Government that works for them and with them. The Northern
    Border Economic Development Commission is an important step
    towards providing good paying jobs and economic opportunity in
    an area that needs and deserves it.
        The commission this bill would create would be charged with
    investing Federal resources for economic development and job
    creation in the most distressed counties of the northern border
    region. I am proud to say that a number of Representatives from
    both sides of the aisle have signed on as cosponsors to show
    their support. Among them is my colleague from New Hampshire,
    Carol Shay Porter, Maine Representatives Michael Michaud, who
    is with the panel today, and Tom Allen; New York
    Representatives John McHugh and Michael Arcuri, who is on this
    panel today; and my colleague, At Large Representative Peter
    Welch of Vermont, who you will hear from.
        By design and purpose, this bill follows the innovative
    Appalachian Regional Commission model drafted by Chairman
    Oberstar, who is also with us today, and I thank him for his
    extraordinary leadership in fashioning the notion and
    implementing commissions that show the great results that can
    be achieved. Based on this model, the commission we propose
    today would create a unique Federal-State partnership charged
    with promoting developing through regional planning, technical
    assistance, and funding of projects aimed at encouraging
    economic prosperity. Community development groups and other
    non-profits are encouraged to bring project ideas and
    priorities to the commission from the local level. This is very
    important in New Hampshire because we value public-private
    partnerships and grassroots initiatives. In fact, I am already
    working with local groups to prioritize funding needs.
        This bottom-up approach ensures that actions reflect both
    local needs and regional economic development goals. It also
    ensures that States have a deciding voice in what investment is
    made within their borders.
        I would like to bring to the Committee's attention the
    Northern Forest Center, which has submitted a letter of support
    which, with the Chair's permission, I would submit for the
    record.
        Ms. Norton. So ordered.
        Mr. Hodes. Thank you very much. This letter you will see
    points to a 2006 sustainable economic initiative in the
    northern border region which will work in close harmony I think
    with the commission we create.
        With its proposed budget of $40 million per year, the
    Northern Border Economic Development Commission can help meet a
    range of local needs. Whether the need is agricultural
    development, land and forestry conservation to maintain
    productive traditional uses, investment in transportation
    infrastructure, cyber infrastructure, alternative and renewable
    energy, or health care, this commission will play a key role in
    investing in the Nation's economy.
        If this bill is passed, it will provide a much-needed boost
    for our northern communities. The people who live in this
    region that might be called the ``ice belt'' are hard-working,
    taxpaying, caring citizens. Their plight deserves our
    consideration. Working together, we can improve life in these
    distressed communities and build a better future not only for
    the region but for our entire country.
        I thank you for your time. Thank you for allowing me to
    testify before this distinguished Subcommittee. I look forward
    to working with you as we move ahead. Thank you very much.
        Ms. Norton. Thank you very much, Mr. Hodes.
        Mr. Welch.
        Mr. Welch. Thank you very much. I have a certain amount of
    modesty appearing before this Committee because the Members who
    have already given opening statements and have long experience
    have forgotten more about this than I will ever know. But I
    want to say, Mr. Michaud, you have laid out what is the
    challenge for these economically depressed areas, and that is
    what this is all about.
        Across the northern tier in New York, Vermont, New
    Hampshire, and Maine, we have those challenges. The idea here,
    Mrs. Capito, you have described exactly what the model is. I
    gather it is not a bad idea to do again, follow a model that
    has worked successfully in one place and transport it to
    another. That is essentially what it is that we are doing. I
    think Mr. Arcuri, Mr. Hodes, and I are very grateful that there
    is this model that has been successful, and we are grateful to
    you, Mr. Michaud, that you have encouraged us to come forward
    and try to provide this in a cooperative way to the northern
    tier.
        Vermont, in Franklin County, Orleans County, and Essex
    County, are all on the northern tier and have many of the
    problems that my colleague Mr. Hodes described and you did as
    well. This would have a very significant impact on that region
    of Vermont. These counties share similar struggles--
    infrastructure, high unemployment, youth who are leaving for
    better opportunities elsewhere. The northern border regions of
    Vermont, New York, and New Hampshire share those similar
    challenges. And what I think is great about this commission is
    it allows us as a region to work together and to try to
    leverage our assets into opportunity across that entire tier.
        Many community and economic development organizations work
    in this region in Vermont to promote higher quality of life and
    good paying jobs, I was very alarmed when I learned that there
    is no single economic development entity that is focused on the
    overall needs of the northeast border region as a whole. We do
    believe that we have to partner with our fellow States in order
    to best provide for the future opportunities for our citizens.
        I invite any of you here to come up sometime to Franklin
    County or the northeast kingdom. It is great biking, Mr.
    Chairman, some hills, if you can handle that. But if you did
    come, you would find some wonderful people--entrepreneurial,
    hard-working, and incredible natural resources, wonderful
    towns, but high unemployment, low wages, $10,000 below the
    national median. People are struggling and doing their best to
    get from here to there and pay their bills. They would like to
    be able to do what all of us would like to be able to do, and
    that is live in the communities we grew up in.
        The creation of this commission is going to give us a
    chance to face and tackle the challenges of rural economic
    development together. I thank this Committee for inviting us,
    and for your work and for your commitment to helping all of us
    across this country. Thank you.
        Ms. Norton. I thank you both for your insights and this
    testimony. Let me just ask a couple of questions.
        We had a hearing on economic development and the Economic
    Development Act and the important advances that have been made
    in other regions, leveraging a very small amount of funds,
    drawing in industry in quite extraordinary ways, many times
    Federal investment. We began with areas where poverty had been
    endemic despite the industrial revolution, despite all that has
    happened to make this country an economic powerhouse. Now we
    are to the point where we better watch out about stereotyping
    where such needs are because the global economy has shuffled
    the deck. You, of course, come from New England and this was
    the strong manufacturing sector. People are moving from New
    England in part because it is cold and in part because of the
    loss of that manufacturing job base.
        In the testimony that we had before us previously, people
    have often focused on the difference between the investments
    made in the early years of the Act in traditional public works
    and toward new investments in technology, the information
    highway, if you will, instead of the concrete highway. I do not
    know that this is the only wave of the future, but any insights
    you could give us on whether or not that or other entirely new
    kinds of activities--you mentioned some of them--would take
    easily in the New England area where this has now become an
    endemic problem?
        Mr. Hodes. Sure. Let us focus for a moment on the existing
    natural resources. In the norther border region there is an
    abundance of wood. This country faces a crisis in our energy
    policy, for example. The possibility of a new vision for the
    northern border region where the natural resources are used as
    biomass alternative fuels to create new industries, new jobs
    out of existing facilities and using the workforce in place is
    a great opportunity. For instance, there is a possibility, I
    talked about the pulp mill in Berlin that is now closed, there
    is a great opportunity to transform that potentially into an
    alternative fuel electricity-generating facility. We then would
    have the need for infrastructure in terms of moving that
    alternative energy out of the region into the grid. So that
    involves the basic infrastructure of electric transmission
    lines and other transportation facilities.
        So along with other initiatives, there is the possibility I
    think of a transformation and a new vision for the northern
    border region which this commission can play a key part in
    helping to create, first, with the appropriate studies, then
    with the appropriate investments that I think would transform
    the region. I see the possibility, being parochial for a
    moment, that New England and the northern border region can
    lead this Nation towards a new 21st century energy policy that
    will not only transform the lives of the people here, but
    throughout the country, and then we can lead the world in
    alternative energy. That is just one example of the way this
    commission could work to create a new kind of infrastructure
    than that which traditionally was focused on with other
    commissions.
        Ms. Norton. Mr. Welch?
        Mr. Welch. Madam Chair, it is a great question, but in
    Vermont we are creating jobs mainly from small companies.
    Oftentimes it is folks who live in urban areas, have an idea,
    and they prefer the lifestyle, and some of you from urban areas
    may not believe this, but there are actually folks who like
    living in the country and they want to come up and live there,
    they think it is a great place to raise their kids. They need
    infrastructure and they need a trained workforce.
        We are creating jobs in some of these northern areas but
    they are literally because somebody has an idea, they have a
    company, but they need an infrastructure and they need a
    workforce. Broadband is a big deal. We do not have it
    everywhere in Vermont. What has happened where there have been
    successful partnerships is we have had these development
    agencies that want to get to yes, what are the practical
    problems that a new business faces in order to get started.
    There is a location that these entrepreneurs can go to and get
    practical answers to there questions of people who want to help
    them succeed. We have got to have jobs, we know that, but we
    really need them in these poorer, lower income areas of
    Vermont.
        Ms. Norton. I would like to ask the Ranking Member, Mrs.
    Capito, if she has any questions for these witnesses.
        Mrs. Capito. I do not really have a question. I would like
    to make a comment just as a person who lives in the ARC and has
    enjoyed the benefits I spoke about earlier. And thank you to
    Chairman Oberstar for his leadership those many years ago. We
    still have a lot of work to do and we are going to continue to
    do that, and he knows that.
        My comment is really centered on resources. The ARC, every
    year we fight to get the funding into the budget to be able to
    keep viable projects within the ARC. Certainly, as you create
    new regional commissions, it becomes again a question of
    resources. So I would hope if this is the direction that we go
    that we would all join together and make sure that to provide
    resources for a commission such as this and maintain our ARC
    resources it is not divide by half, it is multiply by two. With
    that, I yield back my time.
        Ms. Norton. I would like to ask the Chairman if he has any
    questions to these witnesses?
        Mr. Oberstar. Thank you, Madam Chair, and I thank Mrs.
    Capito. I have been in West Virginia on numerous occasions,
    going back to the very origins of the ARC.
        Mr. Hodes, your predecessor some years removed, a member of
    this Committee, Congressman Jim Cleveland did not vote for much
    in the way of social programs funded by the Federal Government.
    The things he did support, the Federal Aid Highway Program, the
    Appalachian Regional Commission, and the Federal Economic
    Development Administration programs. He was a strong,
    articulate, and persistent advocate. And because he had such
    staunch views on other issues, when he spoke favorably on EDA
    and ARC people on his side of the aisle listened. We had a
    great partnership. He served with my predecessor and then I
    served with him.
        Creating this kind of regional economic development crosses
    over; it is not Democratic or Republican, it is people, it is
    needs. And we see this all throughout the country where
    resource-dependent areas have been depleted. The need to create
    new economic opportunities that are not natural resource-based
    is a huge, steep challenge.
        New England was the birthplace of industrial revolution in
    America. But it was also the first to be hurt by long-term
    economic decline. First, the leather goods industry moved out,
    and then the needle trades moved out, and then wood fiber moved
    out as the lowly southern yellow pine was perfected for
    scientists to find a way to take the resin out and cure it to
    create straight two-by-fours instead of curvy ones and use that
    wood chip in pulp production, as I am sure Mr. Michaud very
    painfully knows. This is competition within the United States,
    however.
        So, creating an entity for economic development, but
    regional economic development. We know that problems do not
    start or stop at political boundaries, they cross over.
        I want to see more of an emphasis on regional initiatives
    in the legislation. As I have read through this, I think there
    are some refinements that I would suggest to my colleagues on
    shaping this and the other commissions to prioritize projects
    that truly are regional. I had an experience with the Upper
    Great Lakes Regional Commission in my district where all too
    often projects masqueraded under the name of regional but they
    were intensely local. You have to build coalitions across
    borders.
        I would suggest one of the priorities to be development of
    a natural resource research center. We established such an
    entity in Duluth for northern Minnesota, northern Wisconsin, it
    benefits the Upper Peninsula of Michigan. We do not have a
    regional commission any longer, it was dissolved many years
    ago, and I also want to take the lessons of failure of that
    commission to benefit the new commissions that we are creating
    here. But the establishment of a natural resource research
    institute that does some of the basic research on new product
    development. For example, they initiated hybrid poplar that
    grows to an eight inch, ten inch round wood in eight years.
    They harvest it just like any other crop on a farm. It can grow
    on those lands that we have taken out of production of corn or
    wheat or other grains, and you do not need the fertilizer or
    the limestone or the other to mend the soil. Those are the
    kinds of initiatives that really cross over boundaries, cross
    jurisdictions, and come back to the resource base of the area
    to benefit and create new job opportunities.
        So I encourage you to stimulate the regionality of your
    approach. And there are many others, we need not go into all of
    the parameters. But for that, and the southeast, and the other
    commissions that are created, those are the kinds of
    initiatives I think create justification for regional
    commission development, including backbone highway development
    where we can accelerate the movement of goods as well as
    people, both for travel and tourism and for goods movement.
    Thank you, Madam Chair. I thank our colleagues for their
    comments.
        Mr. Hodes. Madam Chair, may I just briefly respond?
        Ms. Norton. By all means, Mr. Hodes.
        Mr. Hodes. Thank you, Mr. Oberstar, for those insightful
    comments. It is very helpful for you to focus the work of this
    commission regionally. I hesitate of course to speak for Mr.
    Cleveland, but I recognize his good work in this area and it is
    because he recognized the I think genius in these commissions
    of the bottom-up grassroots approach and the public-private
    partnership.
        I would commend to you, Mr. Oberstar, the letter from the
    Northern Forest Center which I think addresses your thoughts
    very directly, because it talks about the cooperation here
    between New Hampshire, Vermont, Maine, New York, and the
    governors of those States. This letter has appended to it a
    list of all the members of the Sustainable Economic Initiative.
    I think you will see that this work that has begun lays the
    kind of foundation you suggest is important and that this
    commission would then be instrumental in working with this
    initiative that has begun to focus regionally in exactly the
    way you suggest. I have submitted this for the record, as the
    Chairwoman has allowed me to do, but I commend it to your
    attention. Thank you very much.
        Ms. Norton. I am going to move on because we have Senator
    Dole here and we have promised her that we would take her right
    away because she has such a narrow window. So we are finished
    with this panel. We very much appreciate their testimony, very
    appropriate testimony to open this hearing.
        Ms. Norton. We appreciate that Senator Dole has walked all
    the way across from the other side to be with us. I am told
    that our Members from North Carolina will appear on the same
    panel with Senator Dole. Therefore, I am pleased to welcome
    Representative Mike McIntyre, Representative Robin Hayes, and
    Representative G.K. Butterfield as well to this panel. Thank
    you very much.
        Senator Dole, you may proceed.

      TESTIMONY OF THE HONORABLE ELIZABETH DOLE, SENATOR FROM THE
       STATE OF NORTH CAROLINA IN THE UNITED STATES SENATE; THE
     HONORABLE MIKE MCINTYRE, MEMBER OF THE UNITED STATES HOUSE OF
    REPRESENTATIVES FROM THE STATE OF NORTH CAROLINA; THE HONORABLE
           ROBIN HAYES, MEMBER OF THE UNITED STATES HOUSE OF
    REPRESENTATIVES FROM THE STATE OF NORTH CAROLINA; THE HONORABLE
       G.K. BUTTERFIELD, A MEMBER OF THE UNITED STATES HOUSE OF
            REPRESENTATIVES FROM THE STATE OF NORTH CAROLINA

        Senator Dole. Thank you very much, Chairwoman Norton,
    Congresswoman Capito, members. I thank you very much for
    holding this hearing today and I welcome the opportunity to
    address the SouthEast Crescent Authority Act, SECA.
        This important legislation, which is identical to a
    companion bill I introduced in the Senate, would improve the
    lives of people in economically distressed communities across
    the southeastern United States. I sincerely appreciate the hard
    work of my friend Congressman Mike McIntyre on this issue, and
    I am grateful for the work that Congressmen Hayes and
    Butterfield are doing to help get this legislation passed by
    the House of Representatives.
        Broadly speaking, economically distressed hardly seems to
    describe my home State of North Carolina. Our statewide
    unemployment rate is a low 4.5 percent. Our economy is growing
    and adding new jobs. In fact, it was reported last month that
    7,600 new tech jobs have been filled in just one year. North
    Carolina is home to 25 of the Fortune 500 companies, many of
    which are in Charlotte, the second largest financial center in
    the United States.
        But if you travel beyond the glittering skyline of the
    queen city, the thriving research and university campuses of
    the Raleigh-Durham-Chapel Hill triangle, the bustling main
    streets and commerce centers of the Piedmont triad and our
    other cities, and the picturesque storefronts of our small
    towns, or if you just head down the road from the sprawling
    ocean front and mountainside vacation homes, you find a vastly
    different North Carolina. It is largely rural and it is
    significantly poorer.
        It is in these parts of North Carolina where educational
    attainment tends to be lower, unemployment rates tend to be
    higher. The challenges of globalization have landed smack on
    the shoulders of the region's textile mill towns, tobacco
    producing areas, and furniture manufacturing communities. It is
    also in these parts of North Carolina where the rates of health
    problems such as cardiovascular disease, diabetes, and obesity
    are well above average. Just consider this. If the region east
    of Interstate 95 in North Carolina were its own State, it would
    rank fiftieth in terms of premature mortality.
        Madam Chairwoman, my aim is certainly not to paint a
    depressing picture of rural North Carolina. Rather, I describe
    this all too often overlooked part of my State so that this
    Subcommittee understands the tremendous opportunity that SECA
    holds for certain areas in North Carolina and across the
    southeast, areas that while distressed still hold great
    promise.
        SECA would provide the assistance to enable communities to
    leverage existing resources, update infrastructure, improve
    educational opportunities, and attract economic development.
    Proof positive is what the Appalachian Regional Commission, on
    which SECA is modelled, has done for parts of western North
    Carolina. According to the ARC, the percentage of Appalachian
    adults with a high school education has doubled over the past
    30 years--doubled. Many residents now have access to adequate
    health care for the first time. And more than 840,000
    Appalachian adults now have clean water and sanitation
    facilities.
        While 29 of our counties in western North Carolina have
    benefitted from the Appalachian Regional Commission, there is
    no Federal partnership to help our 71 counties to the east,
    counties that could desperately use a helping hand. For
    example, one community that would greatly benefit from SECA is
    located in rural Washington County. Approximately 30 families
    there live in serious poverty, 8 miles away from the closest
    public sewer system.
        Because these families do not have indoor plumbing, they
    are forced to rely on wellwater and outhouses. This is totally
    unacceptable in this day and age. Washington County has a
    modest operating budget of only $13 million per year, and
    three-quarters of these funds are allocated to State and
    federally-mandated programs such as health care, social
    services, and public safety. The county is financially unable
    to provide public sewer service to these families due to the
    lack of available programs at the State and Federal levels.
    This is just one example of where SECA could be a tremendous
    help.
        Another place that would benefit from SECA is the town of
    Ahoskie, a small community of approximately 4,500 residents in
    rural Hertford County. Hertford County is classified as Tier I;
    meaning, it is among North Carolina's most economically
    deprived communities. According to the National Association of
    Development Organizations, Ahoskie's wastewater treatment plant
    has reached full capacity, placing a tremendous burden on the
    town's ability to grow and prosper. Under current estimates,
    the Town of Ahoskie must finance a $15.9 million project to
    expand the treatment plant. But it has only been able to secure
    $6.5 million in grant funding. In order to make up the over $9
    million difference, the town will have to raise average sewer
    rates from $19 to $58 per household. This more than 200 percent
    rate increase will result in Ahoskie, one of the most
    economically depressed towns in the State, having the highest
    sewer fees in North Carolina.
        Last year my friend Al Delia, the former director of
    Federal Relations at East Carolina University, testified before
    this Subcommittee about SECA. In his testimony, Al mentioned a
    conversation he had with former Appalachian Regional Commission
    national chair, who said, and I will quote Al: ``ARC rarely
    puts in the most money to a project, but it often puts the
    first or the last money into a project. In effect, the ARC
    money is the glue that holds projects together.''
        Let me underscore, communities across North Carolina and
    throughout the southeast need this glue. These areas are
    hurting. And we have seen with ARC and similar development
    commissions that SECA would make that positive difference. I am
    proud to support this legislation because SECA is not just
    about trying to provide opportunity, SECA is about not missing
    out on the tremendous opportunity that is just within the
    region's grasp. Thank you very much for this opportunity to
    share my views this morning.
        Ms. Norton. Thank you, Senator Dole.
        The way I am going to proceed is I am going to ask one
    question of Senator, and I am going to ask the three Members to
    go vote and then come back. Before I ask Senator Dole a
    question, I am going to ask any of those Members who are
    privileged to vote on the House floor whether they have a
    question first for the Senator because you now have a vote.
        Mr. Oberstar?
        Mr. Oberstar. Madam Chair, may I join you in welcoming
    Senator Dole.
        Senator Dole. Thank you very much.
        Mr. Oberstar. It is wonderful to have our colleagues from
    the other body make the long journey.
        [Laughter.]
        Senator Dole. Thank you. I appreciate that.
        Mr. Oberstar. When Members from this side try to make the
    journey to the other side, there are more whitened bones along
    the 200 meters than along the old Chisholm Trail. But when they
    come from the other side over here, it is wonderful.
        We have a partnership and we intend to work together, and
    we have a great delegation in your State with strong advocates
    on both sides of the aisle. And I said earlier, I am a strong
    advocate of regional economic development initiatives and
    probably have one of the pens that Lyndon Johnson used to sign
    into law the Economic Development Act of 1965 and the
    Appalachian Regional Commission Act. I was on the staff with my
    predecessor over there in the corner, John Blotnik, when that
    legislation was created and drafted much of the language and
    the Committee Report on the bill. So all those years I have
    followed ARC and supported other regional economic development
    initiatives.
        But I will say to this panel as I said to the previous one,
    in looking in over the draft and the proposed bill, I want to
    see more emphasis on regionality of projects. I also seek to
    develop kind of an umbrella entity for the regional commissions
    so that regionality really means something.
        We had some very unfortunate experiences in the Upper Great
    Lakes Regional Commission of Minnesota, Wisconsin, Michigan
    that caused its collapse and I want to avoid such failures for
    other commissions going forward. I think an important way to do
    that is to ensure that in the mix you have projects that are
    truly regional in nature, that cross over boundaries, because
    geography determines your economics, not the political
    boundaries. And whether it is development of roadways, regional
    rail systems, or emphasis on wood fiber resource development,
    and I need not go any further than that, we should stimulate
    and provide incentives for and increased grant support for
    projects that truly are regional in nature.
        Senator Dole. Thank you very much. I appreciate those
    comments. And as we move forward together, we will certainly be
    looking at all aspects of this and understand exactly the
    message that you are conveying. Thank you very much.
        Mr. Oberstar. Thank you, Senator.
        Ms. Norton. Before I ask my question, let me ask again if
    any member has a question? Mr. Coble, we are pleased to have
    you. I ask unanimous consent that Mr. Coble be welcomed to sit
    on the panel. He is not a member of the Subcommittee. Hearing
    no objection, Mr. Coble, you may speak.
        Mr. Coble. Thank you, Madam Chair. I just wanted to welcome
    my friends, particularly Senator Dole, to this side of the
    Hill. I may have to stay on the floor, Madam Chairman, and may
    not get to come back. But I am fully supportive. My six
    counties probably will not directly benefit but certainly will
    indirectly benefit, as will the entire State. Thank you, Madam
    Chairman.
        Ms. Norton. Yes, indeed. The members should go to vote.
        I just have one question for the Senator--the bell does not
    toll for her, at least over here--and that is, I think people
    might be surprised to hear you talk about wellwater and
    outhouses in a part of North Carolina which we now associate
    with the New South and all that sort of thing and the Research
    Triangle. Again, the Chairman talked about how geography
    determines this. One side of the State is ``in the Appalachian
    Region'' because of where the Appalachian Mountains flow, and
    the other side equally poor and does not have the same benefit.
    Do you think that the focus should be first on clean water and
    sewer treatment with some Federal money leveraging state money
    to make the area seem like an area where businesses of various
    kinds would want to locate?
        Senator Dole. Certainly, that is a very important aspect.
    But I think there are many issues--education, economic
    opportunity, health care access, infrastructure. All of these
    are aspects where grants would be provided. So many parts of
    the rural south just fall below the national average with
    regard to these areas. And I think that, you know, as I have
    said, east of I-95, yes, it is almost like two different States
    in terms of these areas that are economically depressed that
    really have no economic base off which they can build. So we
    have got to provide the basics, and certainly infrastructure is
    very important. The Town of Ahoskie cannot grow, it cannot
    prosper when the treatment plant is at full capacity. And to
    think that a town, one of the most depressed economically,
    people suffering in Ahoskie from this situation, that their
    water rates would go from $19 to $58 and they would be paying
    the highest sewer rates of any town in North Carolina, and yet
    they are one of the most economically depressed.
        So I think we are on target to try to make the difference,
    to work this through carefully. I look forward to working with
    my colleagues to get this done in this session of Congress
    because it will make a tremendous difference to these areas of
    North Carolina and other parts of the southeast.
        Ms. Norton. I very much appreciate your coming, Senator
    Dole. And I want to say, one of the first things we say is if
    we did anything will the Senate reciprocate. So I am very
    pleased to have you here and to note your interest.
        I am now going to call a recess until----
        Mr. Butterfield. Madam Chairman.
        Ms. Norton. Yes, sir?
        Mr. Butterfield. May I ask unanimous consent to enter my
    strong statement of support into the record in case I cannot
    get back?
        Ms. Norton. Indeed, sir.
        Sorry for this bell, but I know I have held you already.
        Senator Dole. Thank you again for the opportunity to work
    together to get this done. Thank you.
        Ms. Norton. Thank you, Senator.
        We will resume in about 20 minutes.
        [Recess.]
        Ms. Norton. Mr. McIntyre, rather than hold you, and I am
    not sure if the other members are coming back, I understand Mr.
    Hayes has indicated that he wanted his remarks in the record, I
    would be happy to receive your testimony at this time.
        Mr. McIntyre. Thank you so much, Madam Chairman. And you
    are correct, Representative Hayes told me he was doubtful he
    would be able to make it back. So I am happy to proceed. Thank
    you for your kindness.
        Madam Chairwoman, many thanks to you for agreeing to hold
    this important hearing on legislation that I have introduced,
    H.R. 66, a bill to create the SouthEast Crescent Authority. And
    thanks also to Chairman Oberstar, who I know was here earlier,
    and to all the Subcommittee members.
        This is a measure that I have introduced, as you may
    recall, every Congress since the 107th Congress. It has
    continued to receive bipartisan support and cosponsorship from
    Members from States throughout the Union, including several
    southern States. I want to also thank Senator Dole and my
    colleagues Representatives Hayes and Butterfield, who are
    appearing on this panel as well today and for their presence
    earlier this morning.
        In fact, the first time this bill was introduced, the first
    time, back in the 107th Congress, and subsequently, we have not
    only been warmly received, but the first time it received
    unanimous bipartisan support. My hope is that this Subcommittee
    will once again endorse this bill and perhaps this legislative
    session we can move it to full Committee and hopefully
    ultimately to the floor.
        A Chapel Hill, North Carolina think tank that has studied
    changes in the south for almost 40 years, including in its
    State of the South Report for the year 2007, had information
    and statistics that examine the job and population growth,
    education systems, racial gaps, and economy of all the southern
    States. This report states: ``As a result of the national
    economic slowdown of the early part of this decade, job growth
    stagnated in much of the south between the years 2000 and
    2004.'' The report continues to state: ``The slowdown
    illuminated the restructuring of the south's economy.''
        I can tell you well, as many of my friends in my
    neighborhood, my church, friends I grew up with in school,
    friends of our family, jobs in the textiles in our area and in
    furniture-making factories in other areas of North Carolina,
    those jobs are gone, they have fled, while jobs in services,
    retail, and the professions have come in. And as a Member that
    represents a district from one of these southern States, the
    7th District of North Carolina, as discussed in this 2007
    report, I understand the conventional wisdom that low-wage
    manufacturing jobs are being exchanged for even lower-wage
    service and retail jobs. However, this conventional wisdom only
    goes so far. And it is apparent that, as the 2007 report
    states, ``A more high-tech, globally competitive economy has
    introduced new employment opportunities for southerners but,''
    it says, ``it has also destroyed jobs held by mature adults who
    have had prospects, very few, for shifting into jobs with
    comparable pay.''
        I know factories in my own hometown of Lumberton and in
    Robeson County and in adjoining counties particularly in
    southeast North Carolina where folks who had worked at factory
    jobs for the last 25 to 35 years, went straight out of high
    school, they got off the tobacco farms, were told that your
    future will not be in the tobacco farms, it will be in the
    factories, go work in the factories, then those children grew
    up, many of whom are my age now, and have been working in those
    factories literally for the last 25 to 35 years and now find
    themselves without a job and having to go back for worker
    retraining or trying to find the kind of opportunity at
    community colleges and other places so that they can find other
    jobs that may have somewhere that they hope they can get
    comparable pay.
        Madam Chairman, the time is now in this situation and this
    atmosphere to work to change this pattern and ensure those
    individuals, whether they worked in textiles, tobacco, or
    manufacturing, and those communities that have been affected
    are not left behind. I am confident that the SouthEast Crescent
    Authority will do just that. The southeastern portion of our
    country, encompassing the States of Virginia, North Carolina,
    South Carolina, Georgia, Alabama, Mississippi, and Florida, is
    an area that has seen poverty rates well above the national
    average, unfortunately coupled with record unemployment. In
    fact, the Census Bureau found that in the calculation of
    poverty rates for 2003 to 2005 ten southern States exceeded the
    national average poverty rate of 12.6. And unfortunately, the
    educational gaps contribute to the economic gap, causing
    southerners to have even a harder time finding work that pays
    an above average wage that does not require education beyond
    high school.
        The seven States in the SouthEastern Crescent Region also
    experience natural disasters at a rate two to three times
    greater than any other region of the U.S. I can tell you during
    my first four years in office we had six hurricanes alone
    strike North Carolina in our district. We know of the other
    tragedies and unfortunate situations with storms, floods, the
    effect of nor'easters and hurricanes, as mentioned, tornadoes,
    that the south is affected at a rate two to three times greater
    than other regions and this vulnerability to natural disasters
    only further exacerbates the ability to recover from economic
    distress.
        This legislation is modeled primarily after the successful
    Appalachian Regional Commission, to which Mr. Oberstar referred
    earlier when Ms. Dole was testifying. It puts together a local-
    Federal-State partnership to lift our citizens out of poverty
    and to create jobs. Unfortunately, we have been hit by the
    double whammy with the high record levels of unemployment and
    poverty, the highest in the Nation over several of these years.
    We want to help. And that is what SECA would do, with
    infrastructure, education and job training, an emphasis on
    health care, entrepreneurship, small business development, and
    leadership development. The communities with the greatest need
    would be targeted and grants would be made according to the
    degree of distress.
        Madam Chairwoman, the southeastern United States is one of
    the last vast areas of our country not to have a Federal focus
    on dealing with economic development and ending poverty and
    strengthening these communities. We know that the other various
    economic commissions all serve great areas, but the south has
    had no such entity. We have many projects, as I am sure we
    could discuss for a long time, where Federal funding like SECA
    could help make those projects a reality and help leverage the
    Federal funds into much greater return. This is just the final
    component that is missing to help the south truly have a chance
    to move ahead.
        Madam Chairwoman, thank you for this opportunity to
    testify. SECA will be a valuable tool to assist local and
    county officials to work with regional officials. I know the
    Chairman, Mr. Oberstar, raised that issue with Ms. Dole
    earlier. We are focusing on working with councils of
    governments, which by definition serve regions that have a
    multi-county area, that can focus on those pockets of economic
    distress and that could leverage additional funds to allow our
    citizens to reach their economic potential. I am pleased we
    will have the opportunity to continue to hear from others from
    the affected region. We all share the same excitement to help
    this area of our country that, unfortunately, has been too
    often overlooked. This will be that opportunity to bring those
    new resources. This will be that final chance we have to access
    Federal monies to help clean up the distress left in the wake
    of unemployment, poverty, drop-outs, and poor health care
    delivery.
        Thank you so much for your willingness to hold this
    hearing. I look forward to working with you, Madam Chairwoman,
    the members of the Subcommittee, and, Lord willing, the full
    Committee so that we can move this to the floor. It is the
    least we can do to act now and to help the least of these who
    have suffered enough to help bolster economic progress and help
    them, indeed, fulfill their opportunity for the American dream.
    Thank you so much, and may God bless you as you consider this
    and deliberate upon it.
        Ms. Norton. Thank you very much, Mr. McIntyre. This is very
    interesting testimony. You indicated that the region, the
    SouthEast Crescent Region, those three, four, five States----
        Mr. McIntyre. Seven States.
        Ms. Norton. Seven States.
        Mr. McIntyre. Yes, ma'am.
        Ms. Norton. That region has had flat or only a slight
    increase in job creation. You know, what happened to the New
    South? What is the biggest impediment? Why has job growth,
    which in past decades spurted in this area, are slowed?
        Mr. McIntyre. Thank you for asking that. That is why I
    would be happy to provide to the Committee in much more detail
    that State of the South Report, to which I referred, that has
    all the demographics and statistics. But let me say in more
    general terms, yes, there have been great opportunities, as
    Mrs. Dole indicated in her testimony. We know that banking and
    commerce are tremendous particularly in the Charlotte area,
    that runs right up to the South Carolina line from North
    Carolina. We know that the Research Triangle Park has been the
    cutting edge in terms of high-tech opportunity in the Raleigh-
    Durham-Chapel Hill-Cary area. We know Atlanta has taken off.
    And there are other certain areas that we can point to as
    beacons of progress, thankfully. But move beyond those areas
    and we are in great distress.
        Madam Chairwoman, I can tell you as the Chairman of the
    Subcommittee on Rural Development over on the Agriculture
    Committee, we just had testimony two days ago on rural
    broadband access and the great distress that is suffered now
    because a lot of these areas do not even have broadband access
    to telemedicine, health care delivery, business opportunity,
    educational opportunity. In the Subcommittee that I Chair on
    Rural Development, this was a very vicious problem in terms of
    allowing any economic progress. For instance, in North Carolina
    85 our 100 counties, which makes the math easy, therefore 85
    percent of our counties in North Carolina are considered by
    definition rural. So, yes, we have 15 counties we are very
    proud of and that you regularly hear about as part of the New
    South, the other 85, including nearly all the ones except for
    one that I represent, are all involved in a dire situation with
    regard to poverty, with regard to high school drop-outs, with
    regard to worker retraining.
        Let me say also another reason is, I mentioned earlier I
    grew up and I live on tobacco road, we all know the changes
    that have occurred with regard to tobacco production. It was
    the last, and a lot of people still do not realize this, when
    we did the tobacco buy-out, that I helped co-author a couple of
    sessions ago, that was the last Federal farm program in America
    from the Depression Era that the farmers were still living
    under in eastern North Carolina and South Carolina and
    Virginia, down into Georgia and northern Florida. They are just
    coming out of that, just from the last two to three years, of
    living under a Depression Era federally-mandated farm program.
    And as they make the transition out of the tobacco economy,
    then we are hit with the whammy of the textile mills closing,
    which was to support farm families. Those are gone now with
    some the trade agreements that have occurred, that are a matter
    of record, and that has affected textiles and furniture,
    particularly in North Carolina.
        I remember when President Clinton used to talk about how
    the trade agreements would positively affect America. We have
    had some positive benefits, as we know, but he also would say
    there would be pockets of distress. And yes, that is what this
    is targeted at is those pockets of distress, to use President
    Clinton's phrase, the economically distressed counties that are
    still way far behind the curve and that are still suffering
    from high unemployment levels because of the economic downturn
    they have suffered.
        Ms. Norton. Mr. Capito, do you have any questions for Mr.
    McIntyre?
        Mrs. Capito. I want to thank the gentleman for his
    testimony. I appreciate the analysis that you made.
        Mr. McIntyre. Thank you.
        Mrs. Capito. I just have one quick question. Senator Dole
    in her comments mentioned that parts of North Carolina are part
    of the Appalachian Regional Commission.
        Mr. McIntyre. Right.
        Mrs. Capito. And I guess parts of the SouthEast Crescent
    Authority are also part of the Delta Regional Commission. Is
    that correct?
        Mr. McIntyre. Not exactly. What we have tried to do, and
    Dr. Al Delia, who was with East Carolina University, and we
    have a representative from ECU today that is here on their
    behalf, did was to make sure there is no overlap. This covers
    counties that have not been helped. For instance, in North
    Carolina, yes, we have some counties way up in the western part
    of the State in the mountains that are part of the, thankfully,
    very successful Appalachian Regional Commission. I live five
    hours from the mountains because I am down from I-95, which I
    am sure you all are familiar with, and East to the coast. And
    it is that eastern part of I-95, as Senator Dole mentioned,
    that is the most severely affected by poverty and drop-outs and
    economic downturn.
        We live on Tobacco Road, as I referred to earlier, and
    where the textile mills have closed. This is where we have some
    of the most impoverished counties actually in America, and
    these counties are not covered now at all in our State because
    we are so far East away from the mountains. This legislation
    covers eastern and central Virginia, the Carolinas, down to
    Georgia, northern Florida and over. This does not touch
    anywhere near the mountain areas, barely runs into the piedmont
    areas, which are the rolling hills between the mountains and
    the coastal plain.
        Mrs. Capito. I thank you. I was just wondering about any
    kind of duplication. I know a lot of the coordination has to go
    through the governors' offices. They are on the commissions and
    they do a lot of the detail work and the research work. I am
    sure it could be worked out. Anyway, thank you very much.
        Mr. McIntyre. Thank you. In fact, if anything, the
    governor's office, for instance, could use ARC in the western
    part of our State, they would not have to reinvent the wheel,
    they could use it as an example for the counties down East, as
    we say, who are literally five hours away, 250 miles East of
    the mountains, that are still in this unfortunate poverty cycle
    that we are in.
        Mrs. Capito. Thank you. I yield back.
        Ms. Norton. Thank you very much, Mrs. Capito. And I very
    much thank you, Mr. McIntyre, for coming and offering us this
    very helpful testimony.
        Mr. McIntyre. Thank you, Ms. Norton. I appreciate your
    consideration. God bless you all in your work.
        Ms. Norton. I would like to ask what looks like a Texas
    delegation to come forward now. Mr. Cuellar, Mr. Reyes, Mr.
    Filner from California, Mr. Hinojosa, and Mr. Rodriguez, from
    Texas as well.
        Mr. Cuellar, we will have begin. You said you had to be out
    of here by a time certain.

     TESTIMONY OF THE HONORABLE HENRY CUELLAR, A REPRESENTATIVE IN
       CONGRESS FROM THE STATE OF TEXAS; THE HONORABLE SILVESTRE
     REYES, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS;
    THE HONORABLE BOB FILNER, A REPRESENTATIVE IN CONGRESS FROM THE
         STATE OF CALIFORNIA; THE HONORABLE RUBEN HINOJOSA, A
        REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS; THE
    HONORABLE CIRO D. RODRIGUEZ, A REPRESENTATIVE IN CONGRESS FROM
                           THE STATE OF TEXAS

        Mr. Cuellar. Thank you, Madam Chair. [Remarks made off
    mic.] First of all I want to thank Chairman Reyes. The Chairman
    is the elite sponsor and I want to thank Chairman Reyes for the
    leadership that he has taken.
        I am honored to join Congressman Reyes as one of the
    cosponsors of H.R. 2068, the Southwest Regional Border
    Authority Act. This legislation strives to reverse the economic
    hardship facing our communities along the border. What I want
    to focus on, Madam Chair and members of the Committee, is the
    hundreds of thousands of citizens that live in the unique
    communities called colonias. I think Congressman Filner and
    Congressman Rodriguez know about the colonias. These are
    unincorporated communities that are composed of families with
    very low income and usually lack the basic services. They do
    not have water, they do not have sewage, they do not have sewer
    systems, they do not have the basic utilities that we take for
    granted.
        As a former Texas Secretary of State, I can tell you that
    there are about 400,000 people living in more than 2,000
    colonias in Texas alone. When you look, for example, at my
    congressional district, the average household income is about
    $28,866, which is about 31.3 percent below the national
    average. When you look at the people who live in the colonias,
    their average income is usually around $10,800 a year. So you
    are talking about people who have incomes of $10,800 a year,
    you are talking about people who do not have water and sewers,
    you are talking about people that do not have the roads, and it
    affects them in so many ways. It is not only the physical
    infrastructure that is not available for them, but it is also
    what I call the social infrastructure, because they do not have
    access to health care and the other things that we take for
    granted.
        I am in support of this legislation because it is one way
    that the Federal Government can join the States along the
    southwest border. I know in the State of Texas as a former
    legislator, and I believe I passed probably the landmark
    legislation that we had in Texas at the State level dealing
    with colonias, but also as a former Secretary of State, I can
    tell you that when you talk about 400,000 people that live in
    the colonias just in Texas, and Mr. Filner can talk about
    California also, you are talking about 2,000 colonias that are
    basically ``people that live in Third World conditions.'' I
    certainly would invite you all to come in. I think once you
    walk out of one of the colonias you will see that we are not
    exaggerating. We are talking about people that really are
    living in very difficult areas.
        I will close at this time, Madam Chair. I want to thank
    you. I have to go introduce the Tejano, I think means Texan, of
    the Year for the Speaker; I think the Members are going to join
    me. But I want to thank you, and I certainly want to thank
    Chairman Reyes, Mr. Filner, and Mr. Rodriguez, but especially
    Mr. Reyes for taking the lead on this. Thank you.
        Ms. Norton. Thank you. Obviously, the notion of such
    primitive conditions should make us understand there is a lot
    of work to be done on this issue. We appreciate your testimony.
    Thank you very much for coming.
        Mr. Reyes.
        Mr. Reyes. Good morning, Madam Chair and Ranking Member
    Capito. Thank you very much for holding this hearing and for
    allowing me to testify on H.R. 2068, the Southwest Regional
    Border Authority Act. I would also like to thank Chairman
    Oberstar for his vision in helping me with this issue, and also
    to thank all my colleagues here from the U.S.-Mexico border
    region for their support in creation of this very important
    piece of legislation.
        Members of the Subcommittee, I am here today to talk about
    the conditions that exist in many places along the border and
    to give you I think a better understanding of the great need
    for the creation of a regional economic development authority
    for the southwest border region of the United States. It was
    because of this need in places like my congressional district
    of El Paso, Texas, that I introduced H.R. 2068. I just want the
    members to understand that I have introduced this particular
    legislation for the past three congresses. I would greatly
    appreciate your support to move this legislation very important
    to our border region in this the 110th Congress.
        The southwest border region, as defined in H.R. 2068,
    includes all counties within 150 miles of the U.S.-Mexico
    border. This region contains 11 counties in New Mexico, 65
    counties in Texas, 10 counties in Arizona, and 7 counties in
    California, for a combined population of approximately 29
    million people. According to research compiled by the
    Interagency Task Force on Economic Development of the Southwest
    Border, 20 percent of the residents in this region of the
    Nation live below the poverty level. Unemployment rates often
    reach as high as five times the national unemployment rate. And
    a lack of adequate access to capital has created economic
    disparities and has made it very difficulty for businesses to
    start up and to remain in business in this border region.
    Border communities have long endured a depressed economy and
    very low paying jobs.
        Our economic challenges partly stem from our position as a
    border community. Economic development in border communities is
    difficult to stimulate without assistance from the Government,
    private sector, and community non-profits. H.R. 2068 would help
    foster planning to encourage infrastructure development,
    technology development, and deployment of that technology,
    education and workforce development, and community development
    through entrepreneurship.
        Modeled in part after the Appalachian Regional Commission,
    the Southwest Border Region Authority would be successful
    because of four guiding principles:
        First, the Authority would fund proposals designed at the
    local level, followed by approval at the State level, in order
    to meet regional economic development goals.
        Second, these projects would lead to the creation of a
    diversified regional economy to be prioritized. Currently,
    States and counties often are forced to compete against each
    other for the very limited funding that is available.
        Third, the Authority would be an independent agency. Having
    the Authority set up in this manner would keep it from having
    to attempt to satisfy another Federal agency's mission
    requirements when determining which projects are to be funded.
        And finally, the Authority would be comprised of one Senate
    confirmed Federal representative and the governors of the
    States of Texas, New Mexico, Arizona, and California. The
    proposed structure would allow equal representation by each
    State and a liaison back to the Federal agencies.
        For too long, Madam Chair, the needs of the southwest
    border region have been either ignored or overlooked and
    certainly underfunded. We need to recognize all of the
    challenges facing this potentially vibrant border and to help
    the region make the most of its many, many assets. One
    important part of that effort would be to establish a new
    economic development opportunity in the southwest through an
    authority created by H.R. 2068, the Southwest Border Regional
    Authority Act.
        Madam Chair, I want to thank you and Ranking Member for
    allowing me to speak on behalf of this very important
    legislation. I would be glad to answer any questions you might
    have. Thank you very much.
        Ms. Norton. Thank you very much, Representative Reyes, for
    this testimony on this terrible poverty in the southwest
    region. Again, that is not what people think of when they think
    of Texas. And so you have brought to light an important problem
    somehow or the other we are going to have to deal with.
        Mr. Filner.
        Mr. Filner. Thank you, Madam Chair. Thank you for holding
    this hearing. We thank Mr. Reyes for the legislation. And I
    accept your apology for lumping me in with the Texans.
        [Laughter.]
        Ms. Norton. Well, I do not know what rich California is
    doing here in the first place.
        [Laughter.]
        Mr. Filner. Well let me tell you. I represent the entire
    Mexico-California border. The issue I think for us is that
    because of the border, which impacts every aspect of life in
    our community, what happens there is a result of national
    policy and yet the local communities are expected to bear the
    brunt of that. And I just want to give you a few examples.
        Interestingly enough, Madam Chair, 300,000 people per day
    go back and forth across the border in my district, legally,
    300,000 a day. That is an incredible movement. That is a major
    city going back and forth. When we built the border crossings
    which handle this incredible volume of traffic, the local
    infrastructure was not considered. When NAFTA, for example,
    lead to an increase of trucks from, say, 1500 to 3000 a day,
    there was no road envisioned, planned, or built to take that
    traffic to the Interstate Highway System. Local roads had to
    handle it. Those roads are now the most dangerous roads in
    America because of this heavy international truck traffic. Yet
    the Federal Government, whose policy resulted in the traffic,
    did nothing to help ameliorate it.
        I am probably the only Congressman in America who can say
    that 50 million gallons of raw sewage flows daily through my
    district. That is because the rivers that come from south of
    the border in Tijuana and other parts of Baja flow north, the
    Tijuana River in one part of my district, the New River and
    Alamo River in another part, flow through my district, one of
    them into the Pacific Ocean. Because Tijuana has no sewage
    facilities for more than half of its population of two or three
    million, that raw sewage, which gets dumped in back gullies and
    flows into a river, comes through my district. It is an
    international problem.
        The local community cannot afford to build a waste
    treatment plant to cover that. It took us two decades to
    finally get one built at the border and it was obsolete the day
    it opened. That took two decades to get Federal funding for
    that infrastructure. And everybody in America is entitled to
    waste treatment, and yet we at the border did not have that.
    Mexico could not handle it. We had to do it to protect the
    health of our own citizens, and yet the local community has to
    bear the brunt.
        One of my counties at the border is a nonattainment area
    for a particulate matter. The Mexican city of Mexicali in fact
    produces much of the pollution that U.S. citizens have to deal
    with. And yet we are required under the law to mitigate that
    pollution. It is not pollution coming from our Nation, and so
    how can our communities be burdened with the expense of that.
        We can go on and on. Local hospitals have closed in my area
    because of the impact of having to provide medical care for
    poor and also undocumented workers. In every aspect, whether
    you talk about health, transportation, environmental
    protection, highways, other means of infrastructure, the border
    impacts the local communities. The mechanism that Mr. Reyes
    envisions in this bill will help us get support for doing the
    work that has to be done just for the quality of life that
    everybody else in America enjoys but because of the border
    pressures we cannot afford.
        So we are looking forward to the passage of this bill and
    to these mechanisms to help us deal with these very crucial
    problems. Thank you, Madam Chair.
        Ms. Norton. Thank you very much, Mr. Filner.
        Mr. Rodriguez.
        Mr. Rodriguez. Thank you, Madam Chair. Thank you very much
    for allowing us this opportunity to present to you some of our
    concerns and ask for your support on this important
    legislation. Let me also take this opportunity to thank
    Congressman Silvestre Reyes for introducing this legislation
    that is drastically needed. Let me also indicate to you that
    there is a real serious situation on the border and the
    Southwest Regional Border Authority Act provides the
    opportunity for many communities along the border to receive
    the assistance and resources they have long needed in order for
    them to develop their infrastructure and economic prosperity.
        Madam Chair, I represent an extensive district that spans
    from El Paso County, far West Texas, to Dimmit County, close to
    700 miles along the Mexican border, and also up 150 miles to
    San Antonio. This district encompasses one of the largest
    stretches of border of any other that is contiguous in the
    United States. I have represented this district for the last
    five months. But as I have travelled through the 20 counties
    which I represent in the 23rd Congressional District, I have
    seen some of the poorest counties in the entire country. The
    Southwest Regional Border Authority Act brings the Federal
    Government to the border and this particular legislation can
    help enhance that community.
        I would like to share with the Committee a situation in a
    community in my district that we are facing. They are a small
    rural community that was in great need of a wastewater
    treatment plant, and I have several that fit this description.
    The current wastewater plant was built years ago on a flood
    plain, and with the annual rains came the overflow of waste.
    The State environmental agency had threatened to fine this
    particular community. The community applied and received
    approval from the USDA Rural Development Loan Grant Program.
    They were approved and the award was granted, an 80 percent
    loan, 20 percent grant. This posed a significant problem for
    this particular community. They have very little resources and
    could not afford the payment on the loan to be able to make
    that happen. These rural communities have a very small tax base
    and most of the individuals go at this time of year to the
    north to work in the fields, then come back to the community.
    These are communities that as they go they build their own
    homes, without any insurance, and have very little resources.
        The community ended up accepting the award, but other
    communities have not always been that fortunate. Now they find
    themselves having to double and in some cases triple the amount
    that they charge for water in order to pay for that loan. The
    Southwest Regional Border Authority Act could help in future
    situations such as this. It includes a section intended to
    supplement Federal grant programs. Section 206 of this bill
    provides opportunities for the communities who are unable to
    take advantage of current Federal grant programs because they
    do not have the required State or local match funds that are
    needed in order for them to be able to access those loans.
        Madam Chair, this is just one example of the situation that
    we find ourselves in along the border. As I traveled through
    all of the 20 of my counties, what I heard over and over again
    was Congressman, please help us help ourselves. I believe this
    bill does that.
        Let me also share one thing that is seldom understood.
    Every single community, and I will mention Eagle Pass, Texas,
    that just got hit with a tornado, a very small community, about
    34,000, 35,000, 7 people were killed, and finally after seven
    days the Administration is there to help out--but the Mexican
    border side has over 300,000 people. Each community, when you
    look at El Paso, Juarez is approximately, what, over a million
    people, 2 million people.
        As Congressman Filner indicated, the communities on the
    other side are usually ten times larger than our communities,
    they continually come and use our infrastructure, they use our
    access to health care, they use all of our facilities, and
    those burdens usually have to be carried by the local
    individuals there, such as law enforcement and other
    facilities. That is one of the areas that is often overlooked
    and not understood, that individuals come over and purchase on
    our side and go back, but they use our infrastructure. So we
    ask for your help and your assistance.
        I will close by sharing with you. I have had this district
    for just five months. I went to one of the communities when I
    was campaigning and afterwards they asked me for an all-weather
    road so the Border Patrol could go through there for checking.
    And I felt like telling them, my God, you need an all-weather
    road on all your existing roads. We have some communities that
    are on the U.S. side and they almost look like, this sounds
    very bad, but it looks like we are in a Third World country in
    some of those communities, and I am talking about on the U.S.
    side. So I would ask for your help and your assistance in this
    area. It is an area that, as we look at trade with NAFTA, these
    are the areas that need infrastructure in order to allow those
    18-wheelers to go up north to Chicago through Eagle Pass, and
    Del Rio, and some of my communities, Presidio. So I ask for
    your help and your assistance in making this happen. Thank you
    very much, Madam Chair.
        Ms. Norton. I thank all three of you for your testimony. I
    think most Americans have no idea about the grinding poverty
    you are talking about. That is just not the image we have of
    our country. And as to California and Texas, you appear to
    share more than a border. And, yes, importantly, your Southwest
    Border Regional Authority would cross State lines. These appear
    to be all border towns. They are the first towns that would
    receive immigration, legal and illegal. It is as if when
    emigrants came in the 19th century, the very first place they
    settled, they settled right in New York, New Jersey, in the
    first places they hit. Of course, the difference was that they
    came because there was an overwhelming need for work. So nobody
    would have thought you needed some kind of economic
    development. They needed jobs and that was the economic
    development. The conditions were not the best, but then we
    rectified that.
        I would like to know, would your Southwest Border Authority
    bill set up the first network for working together in these two
    States on the impact of immigration from a poorer country to
    our country? Is there any existing network, or would you in
    effect be creating it?
        Mr. Reyes. Our legislation, as I said, models the
    legislation from Appalachia. What we are trying to do with this
    legislation is provide an economic development engine for
    border counties. We are not only America's first line of
    defense, we are also America's best economic opportunity,
    because trade and commerce, since the passage of the North
    American Free Trade Agreement, comes through all of our
    respective communities. There are four major trade routes
    coming into the United States from Mexico, and by extension
    from Latin America. They come through these four States.
        So this is an opportunity to provide one authority that
    would take into account all four States. It would be working
    under a coordinated effort, also in conjunction with the State
    governments, the governor would have an appointee on this
    board. So we feel that it does three very important things:
    first, it is a coordinated effort; secondly, it addresses the
    biggest problem in terms of the economies of our border region,
    and that is giving our communities an economic development
    engine; and third, it also provides under this coordinated
    effort an opportunity for States to work together. But more
    than that, it provides a vehicle where we hope we can use it as
    a springboard to bring Mexico into the equation. In other
    words, everything on our border we feel strongly, I am not
    speaking for the other Members, but having heard them speak
    before, we all feel very strongly that Mexico needs to be
    looked at as a partner. Whether it is dealing with issues in
    border enforcement, economic opportunity, trade, commerce,
    tourism, our communities are interlaced or interlocked. And
    this authority would give us a great springboard for that.
        Mr. Filner. Ms. Norton, if I may add.
        Ms. Norton. Yes, Mr. Filner.
        Mr. Filner. You hit upon a very good question. There is no
    institutional mechanism that unites us. This would be the
    first. We have informal alliances. We have a border caucus in
    Congress; the governors have a border governors conference; and
    the counties have a border counties caucus. So we have these
    attempts to work together informally, but there is no
    institutionalized mechanism and this would be a credible step
    forward.
        Ms. Norton. Yes, Mr. Rodriguez?
        Mr. Rodriguez. Let me just reinforce the fact that this is
    essential and critical. I have always said that this would be a
    good way for us also to communicate with each other. I have
    always felt real strongly that in order to protect our country,
    we also need to be well aware in terms of what is happening in
    Mexico and for us to have good relationships. And what better
    way than to be working on projects together. I think this
    legislation allows that to begin to occur. So I ask for your
    serious consideration.
        Ms. Norton. Well thank you very much. Formalizing this
    border relationship across States will be very important. If
    one State works by itself on reducing poverty and economic
    development, you just simply end up exchanging poor people.
    Well, poor people will go to where the economic development
    appears and where there are jobs, and you do not get anywhere
    that way. This is one value of being the United States; we can
    work across borders.
        I must say what is most intriguing to me about your
    testimony is this opportunity for the several States to work
    together now not only on border protection issues, which
    obviously is already occurring, that is a Federal issue, but on
    issues on which we are deeply implicated but issues of poverty
    which come to you because of where you happen to be located.
        I am going to ask the Ranking Member, Mrs. Capito, if she
    has any questions for the panel.
        Mrs. Capito. Thank you Madam Chair. I do not really have a
    question. Well, I guess I do have a question. Since your region
    is so vastly different than my region, which is a part of the
    Appalachian Regional Commission, and I mentioned to the panel
    before this that we are always struggling to fund the ARC and
    have been for decades now to keep the funding source and stream
    going. But in realizing that, the monies there are monies that
    are supplemental to what you are already doing in Texas and in
    California to help I am sure alleviate some of the problems
    that you have described.
        I am kind of curious to know how a commission created by
    States would be able to interact with Mexico. I am sure that is
    something that could be worked out and I am certain that it is
    necessary as you move through the process. But I am just
    interested to know, in each of your two States, what kind of
    efforts the States are doing right now to try to alleviate
    this. And how do you think a commission like this would come
    in, as an overseer, or as a supplementer, or as a replacement?
        Mr. Reyes. Thank you for that question. It is a great
    question and gives us an opportunity to let the Committee know
    that there are already organizations such as the Border Health
    Commission that takes that into account. Because when we look
    at the border region, as my colleague Mr. Filner mentioned,
    there is no way to keep out pollution from Mexico, or vice
    versa. Although the international boundary exists, it is an
    imaginary line. So issues of pollution, contamination, as Mr.
    Filner said, the problems that they have with sewer treatment,
    affect both sides of the border.
        We have the Border Health Commission, the Border Economic
    Commission, and we have the Pan American Health Organization.
    There are a number of organizations that have been in place
    already that serve as models for what we think will spring from
    this authority, and that is to help address the number one
    issue of the border region in terms of poverty, unemployment
    and even underemployment, because underemployment is a huge
    issue along the border region. So we would be very happy to
    provide you additional information because in this short period
    of time it is impossible to really fully cover it but I think
    it would be worthwhile for the Committee to consider.
        Mr. Filner. Just briefly. You raise a really important
    issue. Obviously, the Federal governments have the policy and
    the authority at the border areas, and yet both Washington and
    Mexico City do not really understand the border. The
    relationships have been built around local relationships. I
    mean, it is a truly binational community--families, jobs,
    education, everybody going back and forth all the time.
    Families have relationships, mayors have relationships, the
    governors have tried in recent years, but the Federal
    governments do not come as an integrative force from either
    country. Obviously, the policies affect what is going on but
    there is no attempt at the federal level to really integrate
    with the things at that local level. So we need this kind of
    organization, we need others. Right now we try to survive with
    local relationships when it is the two Federal governments that
    have the power and have not used that power to really aid our
    border communities in a realistic way.
        Mrs. Capito. Thank you. I yield back.
        Mr. Rodriguez. I just want to add. Our problem right now,
    and I would say especially with Mexico but also probably with
    Canada, we need new institutions that allow us to begin to
    dialogue together, and this allows that and it allows an
    opportunity to create those new institutions. I am sure there
    are others that are needed and that are lacking there. To give
    an example, the tornado hit and I went and visited both Piedras
    Negras and they got hit harder.
        They are very different the way they operate. They cut to
    the chase, they were out there cleaning up. After five days
    they were offering help to us. I told the county judge there,
    go in and take it, and so they came over and started helping
    us. I went across and the reason I went across is because
    during Katrina we had 20,000 people in San Antonio, the Mexican
    army came into San Antonio and they just came in and set up and
    they did not ask for anything, they just started to feed
    people, and they fed people there for about 20 days or so. And
    so I went over there to pay my respects and because they also
    had lost three lives with the tornado, we lost seven.
        And so I think this will allow us to begin to create those
    institutions that might be needed. Maybe later on there might
    be some changes that we might have to make. But I think this is
    an essential institution that would help us dialogue together
    and make some things happen that are positive for both side.
        Ms. Norton. Again, I want to thank all three of you from
    the now California/Texas delegation for coming to testify here.
    It has been very, very informative and very helpful to us as we
    try to see if we can find some way to be of assistance to you.
    Again, thank you very much for your testimony this morning.
        Mr. Reyes. Thank you, Madam Chair. We will provide that
    additional information for the record.
        Ms. Norton. Thank you very much.
        The hearing is now adjourned.
        [Whereupon, at 12:25 p.m., the committee was adjourned.]

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