[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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35-918 PDF                 WASHINGTON DC:  2007
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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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