[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
                      HEARING TO REVIEW INNOVATIVE 
                    APPROACHES TO RURAL DEVELOPMENT 

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

                                HEARING

                               BEFORE THE

                   SUBCOMMITTEE ON RURAL DEVELOPMENT,
                    BIOTECHNOLOGY, SPECIALTY CROPS,
                        AND FOREIGN AGRICULTURE

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 31, 2009

                               __________

                            Serial No. 111-6


          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov

                               ----------
                         U.S. GOVERNMENT PRINTING OFFICE 

52-174 PDF                       WASHINGTON : 2009 

For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
DC area (202) 512-1800 Fax: (202) 512-2250 Mail: Stop SSOP, 
Washington, DC 20402-0001 












                        COMMITTEE ON AGRICULTURE

                COLLIN C. PETERSON, Minnesota, Chairman

TIM HOLDEN, Pennsylvania,            FRANK D. LUCAS, Oklahoma, Ranking 
    Vice Chairman                    Minority Member
MIKE McINTYRE, North Carolina        BOB GOODLATTE, Virginia
LEONARD L. BOSWELL, Iowa             JERRY MORAN, Kansas
JOE BACA, California                 TIMOTHY V. JOHNSON, Illinois
DENNIS A. CARDOZA, California        SAM GRAVES, Missouri
DAVID SCOTT, Georgia                 MIKE ROGERS, Alabama
JIM MARSHALL, Georgia                STEVE KING, Iowa
STEPHANIE HERSETH SANDLIN, South     RANDY NEUGEBAUER, Texas
Dakota                               K. MICHAEL CONAWAY, Texas
HENRY CUELLAR, Texas                 JEFF FORTENBERRY, Nebraska
JIM COSTA, California                JEAN SCHMIDT, Ohio
BRAD ELLSWORTH, Indiana              ADRIAN SMITH, Nebraska
TIMOTHY J. WALZ, Minnesota           ROBERT E. LATTA, Ohio
STEVE KAGEN, Wisconsin               DAVID P. ROE, Tennessee
KURT SCHRADER, Oregon                BLAINE LUETKEMEYER, Missouri
DEBORAH L. HALVORSON, Illinois       GLENN THOMPSON, Pennsylvania
KATHLEEN A. DAHLKEMPER,              BILL CASSIDY, Louisiana
Pennsylvania                         CYNTHIA M. LUMMIS, Wyoming
ERIC J.J. MASSA, New York
BOBBY BRIGHT, Alabama
BETSY MARKEY, Colorado
FRANK KRATOVIL, Jr., Maryland
MARK H. SCHAUER, Michigan
LARRY KISSELL, North Carolina
JOHN A. BOCCIERI, Ohio
EARL POMEROY, North Dakota
TRAVIS W. CHILDERS, Mississippi
WALT MINNICK, Idaho
-- --

                                 ______

                           Professional Staff

                    Robert L. Larew, Chief of Staff

                     Andrew W. Baker, Chief Counsel

                 April Slayton, Communications Director

                 Nicole Scott, Minority Staff Director

                                 ______

Subcommittee on Rural Development, Biotechnology, Specialty Crops, and 
                          Foreign Agriculture

                MIKE McINTYRE, North Carolina, Chairman

BOBBY BRIGHT, Alabama                K. MICHAEL CONAWAY, Texas, Ranking 
JIM MARSHALL, Georgia                Minority Member
HENRY CUELLAR, Texas                 DAVID P. ROE, Tennessee
LARRY KISSELL, North Carolina        GLENN THOMPSON, Pennsylvania
WALT MINNICK, Idaho                  BILL CASSIDY, Louisiana

                Aleta Botts, Subcommittee Staff Director

                                  (ii)










                             C O N T E N T S

                              ----------                              
                                                                   Page
Conaway, Hon. K. Michael, a Representative in Congress from 
  Texas, opening statement.......................................     3
Lucas, Hon. Frank D., a Representative in Congress from Oklahoma, 
  opening statement..............................................     5
    Prepared statement...........................................     6
McIntyre, Hon. Mike, a Representative in Congress from North 
  Carolina, opening statement....................................     1
Peterson, Hon. Collin C., a Representative in Congress from 
  Minnesota, opening statement...................................     4
    Prepared statement...........................................     5

                               Witnesses

Lambe, William, Associate Director, Community and Economic 
  Development Program, University of North Carolina ay Chapel 
  Hill School of Government, Chapel Hill, North Carolina.........     7
    Prepared statement...........................................     8
Dr. Markley, Deborah M., Managing Director and Director of 
  Research, RUPRI Center for Rural Entrepreneurship, Chapel Hill, 
  North Carolina.................................................    12
    Prepared statement...........................................    14
Yost, Jeff, President and CEO, Nebraska Community Foundation, 
  Lincoln, Nebraska..............................................    18
    Prepared statement...........................................    19
    Supplemental material........................................    33
    Supplemental material........................................    55
Thompson, Robert J., Executive Director Of The Androscoggin 
  Valley Council Of Governments and Vice-Chair, Rural Development 
  Task Force of the National Association of Development 
  Organizations (NADO), Auburn, Main.............................    21
    Prepared statement...........................................    23
Smith, Randy, President, Rural Community College Alliance Altus, 
  Oklahoma.......................................................    26
    Prepared statement...........................................    28

                           Submitted Material

Submitted questions..............................................    63


      HEARING TO REVIEW INNOVATIVE APPROACHES TO RURAL DEVELOPMENT

                              ----------                              


                        TUESDAY, MARCH 31, 2009

                  House of Representatives,
                 Subcommittee on Rural Development,
                    Biotechnology, Specialty Crops,
                           and Foreign Agriculture,
                                  Committee on Agriculture,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 1:00 p.m., in 
Room 1300, Longworth House Office Building, Hon. Mike McIntyre 
[Chairman of the Subcommittee] presiding.
    Members Present: Representatives McIntyre, Bright, Minnick, 
Peterson (ex officio), Conaway, Roe, Thompson, Cassidy and 
Lucas (ex officio).
    Staff Present: Aleta Botts, Claiborn Crain, Tyler Jameson, 
John Konya, Rebekah Solem, Kristin Sosanie, Jamie Mitchell, 
Patricia Barr, Mike Dunlap, and Nicole Scott

   STATEMENT OF THE HON. MIKE McINTYRE, A REPRESENTATIVE IN 
           CONGRESS FROM THE STATE OF NORTH CAROLINA

    Mr. McIntyre. This hearing of the Subcommittee on Rural 
Development, Biotechnology, Specialty Crops, and Foreign 
Agriculture to review innovative approaches to rural 
development will now come to order. We want to start on time to 
honor your time and also the unpredictable voting schedule that 
we sometimes have.
    Good afternoon. Welcome to today's hearing. I am 
Congressman Mike McIntyre, Chairman of the Subcommittee from 
North Carolina. Welcome, all of you who are with us today. I 
want to thank all of you for coming here to examine this 
important topic, and I especially thank our witnesses for the 
travel that they have incurred to be able to join us today.
    At the beginning of this year, in this very room, the day 
after our new Congress was sworn in, I had the opportunity to 
convene folks from all over this country to talk about the 
impact of a potential stimulus package, as it was generically 
called and now as it is known as the American Recovery and 
Reinvestment Act. To our great alarm, rural areas were not 
readily included in that stimulus package and as time went on 
after that very important roundtable discussion, I was 
especially concerned about water and wastewater projects and 
other issues that affect rural America. We heard from the 
National Association of Counties that day, from public water 
groups and others. We sounded the alarm. Also my good friend 
Jim Clyburn, the Majority Whip, raised similar issues among the 
leadership. He is from the neighboring State of South Carolina, 
just south of where I actually live, near the North Carolina/
South Carolina border. Indeed, before that package came out and 
was submitted as potential legislation, it did include rural 
areas.
    We realized that folks that live in rural areas are just as 
much taxpaying citizens as people that live in urban and 
suburban areas, and that rural areas should not be 
discriminated against when it comes to opportunities for 
economic advancement and economic development. So we had a 
historic discussion in this room going back to the very first 
full day of the new Congress. Subsequent to that, I have had 
several roundtable discussions in nine different counties back 
home in southeastern North Carolina about that issue. When we 
look at other concerns, such as rural broadband and community 
facilities, we realize how important they are to helping rural 
America not get the short end of the stick.
    In fact, KThe New York Times contacted me before the 
passage of the stimulus package, as it was known at the time, 
and wondered out loud whether rural broadband would ever make 
it, whether it could ever survive in the Senate, whether it was 
worth it, whether there was the infrastructure to support it. 
We had quite an interesting discussion and it made the front 
page of The New York Times the next day. It was an amazing 
story to be on the front page of The New York Times about rural 
broadband.
    Thankfully, the Senate did include it, as you know, and the 
rest became history because, in the final package, we had rural 
broadband. We are excited about the difference that that can 
make in rural America. I still remember when President Clinton 
came to the communities of Brunswick and Whiteville, North 
Carolina, in April of 2000. And here we are 9 years later still 
wanting to, as President Clinton once said, bridge the digital 
divide. It is high time that that be done, and I am very 
thankful that we had rural broadband in the American Recovery 
and Reinvestment Act. Even with this infusion of funds rural 
areas still face a tough struggle as they evaluate how to 
strengthen their local economies, secure and retain employers 
and provide sufficient services for their citizens to ensure 
that rural communities grow and thrive.
    Just last week a report was released from one of the 
entities represented here today, the Rural Policy Research 
Institute entitled, ``Rural America in Deep Downturn.'' As I am 
sure we may hear from one of our witnesses, this report 
indicates the rural economy and I quote, ``is now losing jobs 
at a faster rate than the rest of the nation.'' Data from the 
Bureau of Labor Statistics show that nonmetropolitan counties 
lost 3.4 percent of their jobs in the 12 months ending in 
January of 2009 while metro counties saw a 2.8 percent drop for 
the same period. There are other stark numbers that show what 
many of us have heard as we visit with rural constituents. They 
tell us the heartbreaking stories of employers shutting down, 
jobs leaving their local area and the difficult situation that 
creates, most seriously, in areas without many alternatives for 
employment--just as I discussed with a group of businessmen 
back home in Lumberton, North Carolina, yesterday. We are 
hearing today how rural communities can use this time of 
challenges to work together to increase opportunities, find 
ways to develop homegrown economic drivers that will put jobs 
in these communities and keep them there. While we know rural 
areas have challenges, let no one ever doubt the ingenuity and 
hard work present in our rural areas and the potential for what 
these qualities can bring to our nation.
    I am pleased today to welcome several individuals from the 
Tar Heel state to our witness panel. Mr. Will Lambe is the 
Associate Director of the Community and Economic Development 
program at my alma mater, The University of North Carolina at 
Chapel Hilland, and we wish them well in the Final Four this 
weekend and I am glad the President feels the same way about 
that. Mr. Lambe's most recent publication, called ``Small 
Towns, Big Ideas: Case Studies in Small-Town Economic 
Development,'' was released in 2008. He has also authored 
several studies prior to his work at Chapel Hill relevant to 
our discussion today, including ``Back on Track, Promising 
Practices to Help Dislocated Workers, Businesses, and 
Communities,'' which he wrote for the North Carolina Rural 
Economic Development Center; and also wrote the article, 
``Business Retention and Expansion, Synergizing Service 
Delivery in North Carolina.''
    Based out of Chapel Hill as well, Dr. Deborah Markley is 
Managing Director and Director of Research for the Rural Policy 
Research Institute's Center For Rural Entrepreneurship, a 
national research and policy center that is actually based in 
Missouri. So, I also want to welcome her from Tar Heel land and 
Chapel Hill and I also thank her institute for taking the time 
to focus with us today on the concerns of rural America. Dr. 
Markley's focus with the center is on the best models for 
entrepreneurship development and rural places. Her research has 
also included case studies of entrepreneurial support 
organizations.
    I want to welcome our other witnesses as well, and you will 
be introduced as we get ready to have our panel introduction in 
just a moment.
    Let me encourage all witnesses to use the 5 minutes 
provided for your statements to highlight the most important 
points in your testimony. Do not read your testimony, unless 
you can complete it within the allotted 5 minutes, or if you 
can read the highlights within those 5 minutes.
    Pursuant to our Committee rules, testimony by witnesses 
along with questions and answers by Members of the witnesses, 
will be stopped at 5 minutes. But don't worry, your complete 
written statement will be submitted in its entirety in the 
record.
    At this time, I would like to call upon the Ranking Member, 
Mr. Mike Conaway, for any comments that he might have here at 
the opening.

 STATEMENT OF THE HON. K. MICHAEL CONAWAY, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Conaway. Well, thank you, Mr. Chairman.
    I appreciate you calling this hearing. I also want to thank 
our witnesses for taking the time to be with us today, for the 
work that you are doing throughout rural America, and for your 
willingness to share your insights with our Subcommittee today.
    The 2008 Farm Bill reauthorized programs created to address 
the needs of rural communities. These programs are geared 
toward the creation of new and improved facilities and 
infrastructure, broadband access and developing value-added 
products through grants, loans and technical assistance. It has 
also created new opportunities for small business owners, 
farmers and ranchers to grow and expand their operations in a 
changing economic landscape.
    Rural development programs fall under the jurisdiction of 
several different agencies, which often complicates economic 
development assistance. I hope our panel will be able to 
provide some insight on how the activities and funding of these 
programs can best be coordinated among the relevant areas. 
Increased funding has been provided over the past few months 
that will assist USDA in working through applications for 
community facilities, utilities, business development and 
broadband programs. I am interested to hear how the 
participating communities plan to utilize these Federal funds.
    I would also like comments, if you would, we have a myriad 
of individual programs of varying sizes, comments from the 
witnesses as to what the impact would be to consolidate or 
bring those under a more common umbrella of guidance. Would 
that be valuable? Would we save taxpayer dollars that would 
otherwise be spent? Is that money we could then put back into 
the programs?
    I am looking forward to hearing the testimony of our 
witnesses and learning more about how they believe these 
programs can best be implemented to assist rural America. The 
ideas presented here will be useful as we monitor 
implementation of the farm bill and the stimulus bill. I 
appreciate your time and willingness to share your thoughts 
with us today.
    And I yield back.
    Mr. McIntyre. Thank you very much.
    I would like to now recognize the Chairman of the full 
Committee on Agriculture, Chairman Peterson, for any remarks he 
would like to make.

 STATEMENT OF THE HON. COLLIN C. PETERSON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MINNESOTA

    Mr. Peterson. Thank you, Mr. Chairman; and thank you, 
Ranking Member, for your leadership.
    I want to welcome the witnesses today to the hearing. We 
have a distinguished panel of witnesses who are going to talk 
about their approaches to rural development that have led to 
successes in their areas.
    In farm policy, I know we have recognized the emergence and 
importance of being homegrown, a new market that is being 
developed in that area, also producing domestic renewable 
energy for America. I think we can apply that term to rural 
development as well by assisting local leaders who take 
initiative in their own communities and work together to grow 
and keep jobs in rural America.
    Therefore, I appreciate the Subcommittee's work on this 
issue and look forward to hearing the witnesses' testimony.
    Mr. McIntyre. Thank you, Mr. Chairman.
    We are also pleased to be joined by the Ranking Member of 
the full Committee on Agriculture, Mr. Lucas.
    Any comments you would like to make, sir.
    [The prepared statement of Mr. Peterson follows:]

  Submitted Statement of Hon. Collin C. Peterson, a Representative in 
                        Congress from Minnesota
    Thank you, Chairman McIntyre and Ranking Member Conaway for your 
attention to this issue.
    Today the Subcommittee will look at innovative approaches to rural 
development. Given the challenges that America's rural communities 
face--be it the need for infrastructure, the struggle to provide 
services for citizens, or the current state of the economy, this is an 
important topic and I thank the Chairman for calling this hearing.
    Today we will hear from a distinguished panel of witnesses about 
what approaches to rural development have led to success in communities 
around the country. These authors and researchers have seen first-hand 
how entrepreneurship, cooperation, and education can shore up the 
foundation of rural economies and cause dramatic improvements.
    One thing we often talk about in farm policy is the emergence and 
importance of being home-grown--whether it be in eating locally-grown 
foods or producing a domestic renewable energy supply to fuel America. 
We can apply that term to rural development as well, by assisting local 
leaders who take initiative in their own communities and work together 
to grow and keep jobs in rural America.
    I appreciate the Subcommittee's work on this issue and look forward 
to hearing the witnesses' testimony.

   STATEMENT OF THE HON. FRANK D. LUCAS, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF OKLAHOMA

    Mr. Lucas. Thank you, Mr. Chairman, for holding this 
hearing today.
    First, I would like to welcome Dr. Randy Smith from Altus, 
Oklahoma. I am glad he is here today representing not only the 
Third District of Oklahoma but also rural community colleges in 
his role as President of the Rural Community College Alliance, 
a national organization of rural colleges with over 150 members 
in the U.S. Those insights will provide a great benefit to many 
across the country.
    I appreciate the timeliness of this hearing, as USDA works 
to implement the 2008 Farm Bill, including several new rural 
development programs. I look forward to hearing from 
individuals, businesses, associations and community colleges as 
to how they are working to bring new opportunities to small 
communities across the country. Every town and city has before 
them the task of developing economic opportunities in the face 
of a global downturn.
    For rural communities, this task is especially challenging, 
even in prosperous times. But in the circumstances we are in 
right now, with lower commodity prices combined with higher 
input costs, rural areas have less with which to provide 
critical services and to reinvest in their communities.
    In addition, the shift in populations to urban areas means 
fewer people to remain to operate the farms and services and to 
start small businesses. These are the challenges rural America 
faces, and it is why I take very seriously our charge to create 
programs that will give rural communities the tools and 
resources they need to expand economic opportunities.
    Again, I want to thank Dr. Smith, as well as our other 
panel witnesses for their time and insights today. And I am 
pleased we have an opportunity to learn more about how we can 
improve economic opportunities in small towns and rural 
communities.
    Thank you, Mr. Chairman.
    Thank you, Mr. Ranking Member.
    [The prepared statement of Mr. Scott follows:]

 Submitted Statement of Hon. Frank Lucas, a Representative in Congress 
                             from Oklahoma
    Good afternoon, and welcome to today's hearing to review innovative 
approaches to rural development. I want to thank all of you for being 
here as we examine this important topic, and I want to especially thank 
our witnesses who will be testifying before us today.
    A couple of months ago in this very hearing room I held a 
roundtable to discuss the needs of rural areas. At this roundtable, 
several organizations working with rural communities pointed out the 
significant infrastructure needs faced by these communities and how 
rural areas were faring in the current difficult economic environment. 
Fortunately, we were able to secure funds within the stimulus package 
to address some of the needs for rural water systems, rural broadband, 
and essential community facilities. Later this year, once USDA has had 
an opportunity to implement these programs, we will be holding hearings 
to evaluate the effects of that funding.
    Even with this infusion of funds, however, rural areas still face a 
tough struggle as they evaluate how to shore up their local economies, 
secure and retain employers, and provide sufficient services for their 
citizens to ensure that their rural communities grow and thrive. Just 
last week, a report was released from one of the entities represented 
here today, the Rural Policy Research Institute (RUPRI), entitled 
``Rural America in Deep Downturn.'' The report indicates that ``The 
rural economy is now losing jobs at a faster rate than the rest of the 
nation.'' Data from the Bureau of Labor Statistics show that 
nonmetropolitan counties lost 3.4 percent of their jobs in the 12 
months ending January 2009 while metro countries saw a 2.8 percent drop 
for the same period. This report shows in stark numbers what many of us 
have been hearing as we visit with rural constituents who tell us 
heart-breaking stories of employers shutting down, jobs leaving their 
local area, and the difficult situation that creates most seriously in 
areas without many alternatives for employment.
    We are having this hearing today to hear how rural communities can 
use this time of challenges to work together to increase opportunities 
and find ways to develop homegrown economic drivers that will put jobs 
in these communities and keep them there. While rural areas have 
challenges, let no one ever doubt the ingenuity and hard work present 
in our rural areas and the potential for what those qualities can bring 
our nation.
    I am pleased to welcome individuals from North Carolina to our 
witness list today.
    Mr. Will Lambe is the Associate Director of the Community and 
Economic Development Program at the University of North Carolina at 
Chapel Hill. His most recent publication, Small Towns, Big Ideas: Case 
Studies in Small Town Economic Development, was released in 2008. He 
has also authored several studies prior to his work at Chapel Hill 
relevant to our discussion today, including ``Back on Track: Promising 
Practices to Help Dislocated Workers, Businesses and Communities'' for 
the North Carolina Rural Economic Development Center and ``Business 
Retention and Expansion: Synergizing Service Delivery in North 
Carolina.''
    While based out of Chapel Hill as well, Dr. Deborah Markley is 
Managing Director and Director of Research for the Rural Policy 
Research Institute's Center for Rural Entrepreneurship, a national 
research and policy center based in Missouri. Her focus within the 
Center is evaluation of best models for entrepreneurship development in 
rural places. Her research has also included case studies of 
entrepreneurial support organizations.

    Mr. McIntyre. Thank you so much, Mr. Lucas.
    The Chair would request that other Members submit their 
opening statements for the record so that witnesses would be 
able to begin their testimony and we are sure there is ample 
time for questions.
    We have also, obviously, been called to votes.
    Let me mention this, we have already described and welcomed 
Mr. Lambe, Dr. Markley, and now Dr. Smith. Our other two 
panelists are Mr. Jeff Yost, president and CEO of Nebraska 
Community Foundation from Lincoln, Nebraska.
    We welcome you today.
    We also have with us Robert J. Thompson, Executive Director 
of Androscoggin Valley Council of Governments and Vice Chairman 
of the Rural Development Task Force of the National Association 
of Development Organizations, known as NADO.
    Thank you for the great work that you all do and continue 
to do with councils of government and regional planning groups 
throughout the nation.
    Mr. Thompson is from Auburn, Maine.
    In addition, we want to make sure that our witnesses are 
prepared to proceed with testimony as soon as we return.
    We have three votes, and when we come back, we will begin 
with you, Mr. Lambe.
    So, right now, the Committee will be in recess for the 
duration of these votes, and then we will resume immediately 
following.
    [Recess.]
    Mr. McIntyre. We will now come back into session and start 
with our panel of witnesses.
    Mr. Lambe.

 STATEMENT OF WILLIAM LAMBE, ASSOCIATE DIRECTOR, COMMUNITY AND 
 ECONOMIC DEVELOPMENT PROGRAM, UNIVERSITY OF NORTH CAROLINA AT 
 CHAPEL HILL SCHOOL OF GOVERNMENT, CHAPEL HILL, NORTH CAROLINA

    Mr. Lambe. Thank you, Mr. Chairman and Members of the 
Subcommittee, for this opportunity to speak with you today 
about innovation in rural development.
    My name is Will Lambe, and I am from the University of 
North Carolina at Chapel Hill, where I am the Associate 
Director for Community and Economic Development at our school 
of government. My job involves working with public officials in 
North Carolina on issues related to community and economic 
development. And I recently completed a book entitled, ``Small 
Towns, Big Ideas.'' The book profiles 45 small towns from 
across the country that are surviving and thriving in today's 
economy. It includes detailed case studies of small communities 
that are planning and implementing community and economic 
development strategies with fewer than 10,000 people in their 
jurisdictions.
    My testimony today draws from that experience, visiting, 
studying and writing about innovative small communities having 
some success in economic development. Innovation, in my view, 
in rural development is really a moving target because an 
innovative or a new practice in one place may not be innovative 
in another. There are, however, I think several general 
characteristics of rural innovation that I discovered in my 
experience studying small towns. These characteristics, which 
address more the process than the substance of innovation, 
might be considered what I call local ingredients for rural 
innovation.
    Rural innovation is more likely to occur when a community 
has proactive and future-oriented leaders who will embrace 
change and assume risk. Rural innovation is more likely to 
occur when a community has a widely-shared vision for 
development and a plan to achieve results. Rural innovation is 
more likely to occur, in my view, when a community has a broad 
understanding of its assets and opportunities.
    Mr. Chairman, these are the general characteristics of 
innovation, and there are others in my written testimony that 
are under the control of local officials and civic leaders in 
rural communities. And my experience studying small towns leads 
me to conclude that a majority of the responsibility really for 
initiating innovative practices in rural development lies 
squarely in the hands of those local leaders. They know their 
circumstances, and they are really the ones who are best 
equipped to make those strategic decisions about development in 
their communities. But in my view, the Federal institutions 
have an equally important role in terms of encouraging, 
incenting, or seeding innovation at the local level.
    My colleague, Al Delia, from North Carolina, who was before 
a Subcommittee of this Chamber 2 years ago said that, in those 
parts of the rural South, where resources and opportunities 
converge, we have seen economic success emerge. However, in too 
many places, we continue to lack the resources to take full 
advantage of the opportunities.
    The stories in my book are about exactly those places. I 
had the opportunity to tell the story of places where resources 
and opportunities converge.
    The flip side of that is this, Mr. Chairman, what about 
those rural communities, like far too many in eastern North 
Carolina, where persistent poverty handicaps rural innovation? 
The untold story of my experience is that far too few success 
stories of rural innovation come from the persistent poverty 
communities stretching from southeastern Virginia through 
eastern North Carolina, South Carolina, Georgia, and along into 
Mississippi. The southeastern crescent region is quite 
underrepresented in my sample of success stories.
    I am not trying to imply that good things aren't happening 
in pockets. There are absolutely success stories in this part 
of the country. Scotland Neck, for example, in Halifax County, 
eastern North Carolina, has had some success in terms of 
attracting tourists through outdoor recreational activities and 
a spruced up Main Street with outdoor guide services, 
restaurants and retailers.
    With Federal support for tourism planning and program 
development in the southeast, more persistent poverty 
communities might have the opportunity to innovate like 
Scotland Neck. I appreciate the opportunity to speak with you 
today. I have other examples of rural innovation in my written 
testimony. And I would be glad to answer any questions from the 
Subcommittee.
    [The prepared statement of Mr. Lambe follows:]

Prepared Statement of William Lambe, Associate Director, Community and 
 Economic Development Program, University of North Carolina at Chapel 
         Hill School of Government, Chapel Hill, North Carolina
    Mr. Chairman, thank you for the opportunity to address the 
Subcommittee on Rural Development, Biotechnology, Specialty Crops, and 
Foreign Agriculture. My name is William Lambe and I am the Associate 
Director for the Community and Economic Development Program at the 
School of Government, University of North Carolina at Chapel Hill.
    My job involves working with public officials in North Carolina on 
issues related to community and economic development. I also direct 
several programs designed to focus our University's faculty, student 
and staff resources on the challenges facing economically distressed 
communities in North Carolina.
    I recently completed a book, ``Small Towns, Big Ideas: Case Studies 
in Small Town Community and Economic Development''. The book profiles 
forty-five small towns from across the country that are surviving, and 
in many cases thriving, in today's economy. It includes detailed case 
studies about planning and implementing economic development strategies 
in small towns with fewer than 10,000 residents. The project took me to 
dozens of rural communities that are responding to the challenges 
associated with globalization, geographic isolation, urban sprawl, 
aging populations and natural disasters. The case studies cover a wide 
variety of economic development strategies, including industrial 
development, tourism, downtown development, entrepreneurship, and 
arts--and cluster-based development. They also describe a range of 
strategies for building local capacity for economic development: 
organizational structures, partnerships, leadership development, and 
more.
    My testimony today, which will focus on innovation in rural 
development, will draw from my experience visiting and writing about a 
national sample of small towns implementing innovative or distinctive 
development practices. I will describe briefly six characteristics of 
innovation in rural development that I discovered in my work and I will 
provide several examples to illustrate each characteristic. I will 
conclude with some general comments about encouraging and incenting 
innovation in rural development.
Local Ingredients for Rural Innovation
    Innovation in rural development is a moving target. An innovative 
(or new) practice in one place may not be innovative in another. For 
example, the widespread use of local philanthropy to finance economic 
development--a tool in the strategic portfolio of many communities 
across Nebraska and other Midwestern states-would be considered quite 
innovative in Eastern North Carolina. What makes a particular approach 
to development innovative depends on the context in which the practice 
is being implemented. There are, however, several general 
characteristics of rural innovation that I discovered in my experience 
studying small towns. These characteristics, which address more the 
process than the substance of innovation, might be considered ``local 
ingredients for rural innovation.''
Proactive and future-oriented leaders who will embrace change and 
        assume risk
    Leaders in rural communities are the facilitators of, or the 
barriers to, innovation. Without local leaders to push and implement 
new ways of doing things, innovative practices, in whatever form they 
take, will fall short. These characteristics of innovative leadership 
in rural communities-proactive, future oriented and risk-taking--
perhaps relate to the fact that innovation often results when 
communities ``hit the bottom,'' forcing local leaders to try new things 
and take new risks.
    For example, consider Helena, Ark., where the community's 
collective sense of hitting bottom presented local leaders with an 
opportunity to step up, to initiate a new way of planning and 
implementing development efforts and to convince local residents to 
participate in the process. Similarly, in Scotland Neck, N.C., 
difficult economic and civic circumstances in the late 1990s presented 
an opportunity for a strong mayor and other civic leaders to look 
inward for new ideas and angles on old problems.
    Being proactive (as opposed to reactive) can be measured by a 
community's willingness and ability to act on a particular challenge 
before it becomes a problem. In Tennessee, for example, Etowah's 
proactive approach to building and occupying its industrial park, as 
opposed to reacting to trolling industries, has paid major dividends in 
terms of maintaining a diverse array of living wage jobs in town. In 
Ord, Neb., proactive meant preparing the community's residents and 
institutions for unknown opportunities in the future. Ord's economic 
development leaders tackled a number of small-scale challenges in the 
community and, in the process, seeded the roots of teamwork around 
development activities. In 2003, when a major economic development 
project arrived from state developers, Ord was prepared to act.
    Embracing change and assuming risk is another characteristic of 
innovative leadership in rural communities. For example, Fairfield, 
Iowa, has taken an approach to development in which the entire strategy 
of building an entrepreneurial culture is based on the natural business 
cycle of success and failure. According to a local leader, ``there was 
a lot of trial and error and failures to get to where we are today, but 
the failures of some companies have provided cheap space, office 
furniture and equipment for another round of start-ups. Failure has 
freed up talented people who again ask what new concepts and companies 
can we start here in Fairfield.''
Widely shared local vision
    Innovative rural communities establish and maintain a broadly held 
vision, including goals for all manner of development activities with 
measurable objectives. In rural development people (as opposed to money 
or other resources) are the one absolutely necessary ingredient to 
implementing and sustaining innovative practices. A committed group of 
local residents who are willing to work hard to support the community's 
vision can change the fate of an otherwise hopeless community. A widely 
shared vision provides local innovators with a common understanding of 
the road ahead.
    This idea is perhaps illustrated most dramatically by Helena, Ark., 
where the inclusiveness of the community's planning and visioning 
process was crucial. In this case, the process included representatives 
from government, community organizations, for-profit and nonprofit 
interests, resource providers and average citizens of the community. In 
fact, anybody could join the effort, and this perception of an 
inclusive and open-door process was widespread across Helena.
    Similarly in Ord, Neb., a significant amount of the momentum for 
economic development comes from one-on-one conversations. In Ord, local 
leaders take the time to meet individually with members of the 
community, sometimes going door to door, to ensure that opposition to 
development efforts does not take root for lack of understanding the 
larger vision that drives local development. In terms of maintaining 
momentum behind a community's vision, Douglas, Ga., demonstrates how a 
local Chamber of Commerce can take responsibility for calling 
stakeholders together on a regular basis to recommit themselves to the 
community's shared vision.
Broad definition of assets and opportunities
    In most communities shell buildings, low tax rates, limited 
regulation, and access to trained workers, highways, railroads, or 
professional services are considered economic development assets and 
justifiably so. Innovative rural communities, however, define economic 
development assets in a much broader framework.
    For example, Allendale, S.C., capitalized on a regional university 
to create a local leadership development program that, in turn, trained 
new economic development leaders for the entire region. Brevard, N.C., 
demonstrates that retirees within a community can be economic 
development assets. The Retiree Resource Network is a group of retirees 
with private sector experience who mentor local entrepreneurs. In 
Columbia, N.C., local leaders recognized that their region's natural 
beauty was an asset that could drive an ecotourism strategy. In an 
ironic twist on small town development, the arrival of Wal-Mart became 
an asset for the small community of Oakland, M.D., when local leaders 
took the opportunity to help Main Street retailers diversify their 
product lines. Assets for innovative rural development might include 
individual people, nonprofit organizations, businesses, open space, 
farms, parks, landfills (biomass), museums, schools, historic 
architecture, local attitudes, or any number of other things.
    Another trend in innovative rural development is the recognition of 
rural assets in terms of environment-friendly development or clean 
energy. In Dillsboro, N.C., the town turned an environmental challenge, 
in this case methane gas migrating from the community landfill, into an 
opportunity to create jobs and provide space for entrepreneurs. The 
Jackson County Clean Energy Park (in Dillsboro) is using methane gas 
from a nearby landfill to power the studios of local artisans. In Cape 
Charles, Va., the town's investment in an eco-friendly industrial park 
was an innovative strategy to bridge the dual challenges of 
environmental degradation and job creation. And, in the most extreme 
case, Reynolds, Ind., is capitalizing on latent energy contained 
agricultural waste from 150,000 hogs to become BioTown, USA, the 
nation's first energy-independent community.
Creative regional governance, partnerships, and organizations
    Historically, development in rural communities has been practiced 
as a zero--sum game. If one jurisdiction successfully attracted an 
investment or new employer, the implication has been that the other 
jurisdiction (perhaps a neighbor) lost. Innovative rural communities 
move beyond this notion to a regional or collaborative approach. Cross-
jurisdictional partnerships can help rural communities to pool 
resources toward shared development objectives.
    Strategies in Ord, Neb., and in Davidson, Oxford, and Hillsborough, 
N.C., each involve commitments to interlocal revenue--and 
responsibility-sharing among varying jurisdictions. Davidson and Oxford 
are partnering with neighboring communities in industrial development 
efforts, while Hillsborough is partnering with the county to manage 
growth beyond the town's municipal boundaries. Ord joined with the 
county and the Chamber of Commerce to share costs and revenues from a 
wide range of development activities.
    In addition to regional partnerships and opportunities, innovative 
rural communities tend to have local leaders who connect with higher-
level policy makers and business leaders. The mayor in Scotland Neck, 
N.C., and several key leaders in Helena, Ark., made explicit efforts to 
link the interests of their individual communities to policy makers in 
their respective state capitals. Further, as demonstrated by Douglas, 
Ga., leaders in small towns must forge partnerships with state-level 
developers, bankers, and power companies, each a critical player in 
state economic development. Innovative rural development is pursued 
through dense networks of personal contacts.
    Finally, public-private (including not-for-profit) partnerships are 
emerging as the prominent organizational model for innovative rural 
development. In Siler City, N.C., for example, the successful 
establishment of an incubator was the product of a partnership among 
the community college, local government, and a state-level nonprofit 
organization. In Spruce Pine, N.C., the town's approach to supporting 
local entrepreneurs requires that the Chamber of Commerce and the craft 
community work closely together for the first time, to ensure 
successful marketing and branding.
Measuring progress and evaluating success
    Given the long-term nature of rural development, and the fact that 
measurable results from a particular project may be decades in the 
making, leaders in rural communities must repeatedly make the case for 
the importance of their efforts. Making the case is important to 
maintain momentum, invigorate volunteers and donors, to convince 
skeptics and, most importantly, to keep the focus of development on the 
vision or the goals established in a community's strategic plan. 
Innovative rural communities recognize that making the case is an 
ongoing and continuous effort.
    For example, in Ord, Neb., impacts of the community's development 
programs are monitored and have become useful for both external and 
internal audiences. Data are used to attract additional investment from 
outside sources. Moreover, by demonstrating a reasonable return on 
investment, these data also may be used to convince a community's 
naysayers to join the efforts. In Hollandale, Miss., an analysis of 
local data helped the community to convince outside grant-makers that a 
rural transportation network was a smart investment. In addition, it 
helped to convince policy-makers that rural transportation was a viable 
(if incremental) strategy for alleviating a range of economic 
challenges.
Comprehensive approach to development
    Successful rural development is always multi-faceted. There is no 
universally applicable formula for determining the right way or the 
most innovative way to do rural development. Innovation is context-
specific, and rural communities should take nothing off the table in 
selecting strategies to pursue. Decisions about what to do and why to 
do it must be based on local conditions, context, and capacity. 
Successful communities tend to have evolved to the point where they 
have a comprehensive approach that is aligned with the core assets, 
challenges, and opportunities within their regional context.
Encouraging Innovation in Rural Development
    My experience studying innovative rural communities leads me to 
conclude that a majority of the responsibility for initiating 
innovative practices in rural development lies squarely in the hands of 
local leadership. Leaders in municipal, county, and multi-
jurisdictional institutions at the local level know their circumstances 
and are best equipped to make strategic decisions about development.
    However, given the ingredients for rural innovation described 
above, state and federal institutions have an important role in terms 
of encouraging or incenting innovation at the local level. For example, 
state and federal grant programs could be designed to require multi-
jurisdictional partnerships as a criterion for funding. Research on 
rural innovation and program evaluation, including best practice case 
studies, could be ramped up and consolidated in a federal data 
clearinghouse. Additional resources could be made available to colleges 
and universities for rural leadership development. These are a few 
examples of the types of policies or programs that could encourage 
rural innovation.
    Determining the specific design and structure of policy incentives, 
as well as the responsibility for testing new ideas and evaluating 
their impact is an important role for research institutions in North 
Carolina and elsewhere; and it is one that we take very seriously at 
UNC. In December, I joined researchers from North Carolina, South 
Carolina and from RTI International, as well as local, state and 
federal leaders in Chapel Hill to discuss the growing interest in the 
Southeast Crescent, the coastal plain of the South, and how the 
research community can support the proposed Southeastern Crescent 
Regional Commission. A research agenda to support the commission is 
being developed.
    In addition, the UNC System President and the Chancellor at UNC-
Chapel Hill have made firm commitments to testing new ways of focusing 
university resources on the challenges facing our state's most 
economically distressed communities. Next month, UNC-Chapel Hill will 
roll out our Community-Campus Partnership for Tomorrow (CCPT) 
initiative to form long-term partnerships with rural communities in our 
state in which faculty, staff, and students from Carolina will work 
closely with local community leaders to help with their most pressing 
challenges and opportunities.
    We at the University of North Carolina are committed to 
discovering, testing and evaluating innovative development practices in 
rural communities--and doing so in close partnership with local 
leaders.
    Thank you again for the opportunity to testify. I would be glad to 
answer questions.

    Mr. McIntyre. Thank you very much, Mr. Lambe. And we look 
forward to that.
    Dr. Markley.

           STATEMENT OF DEBORAH M. MARKLEY, MANAGING 
  DIRECTOR AND DIRECTOR OF RESEARCH, RUPRI, CENTER FOR RURAL 
                        ENTREPRENEURSHIP

    Mr. Markley. Chairman McIntyre, Ranking Member Conaway and 
Members of the Subcommittee, it is an honor to appear before 
you today.
    I am Deborah Markley. I am Managing Director of the RUPRI 
Center for Rural Entrepreneurship. Our work over the past 7 
years has taken us to communities and regions across rural 
America where we have witnessed a wave of innovation in rural 
development that is by its very nature entrepreneurial. I 
provide more detailed information on the work of the center and 
what we have learned about entrepreneurship development in my 
written testimony.
    I want to use my time here now to highlight a few of the 
lessons we have learned from our work and some of the policy 
recommendations that we really see as imperative. We believe 
that entrepreneurship development is the most promising 
strategy for rural places, and there is evidence that 
entrepreneurship is working, helping entrepreneurs start and 
grow their businesses and create jobs and wealth.
    There are four key lessons that we see for successful 
entrepreneurship development. The first, which echoes some of 
Will's comments, is the necessity for entrepreneurial 
leadership. Successful entrepreneurship development is rooted 
in leaders who recognize opportunities and can identify the 
resources needed to create a supportive environment for 
entrepreneurs. Those leaders come from many different 
organizations, universities, community colleges, nonprofit 
organizations, private companies. But what they have in common 
is a strong commitment to place and to building an 
entrepreneurial environment that in turn creates a sustainable, 
economically viable region with high quality of life.
    Lesson number two is the importance of regional and 
organizational collaboration. Innovative practices are 
intentionally regional in nature like the outstanding work that 
is happening in northeastern Minnesota. They also reach out to 
organizations that serve diverse populations, like the work of 
Oweesta in working with Native Americans. The power of their 
collaboration rests in bringing together a much broader and 
more diverse set of resources than any single community or 
organization could provide.
    The third lesson is the value of a systems approach. The 
truly pioneering feature of the innovative entrepreneurship 
development work that is going on is people recognizing that 
this work is about more than just focusing services on 
entrepreneurs. It is also about engaging communities in 
building an entrepreneurial environment and creating a systems 
approach that brings the various service providers together in 
a coordinated and seamless way. We refer to that as connecting 
the dots.
    The final lesson is the importance of recognizing and 
building on assets, again, a similar theme to one that Will 
mentioned. Whether we are talking about the regional 
entrepreneurship development efforts in eastern North Carolina 
or the heritage-based efforts in the Arkansas Delta, 
entrepreneurship development begins with an assessment of those 
assets both unique and commonplace and builds on those assets 
to create a systems approach.
    The innovation we found working across rural America is 
worthy of support by the Federal Government. And I would like 
to offer a few policy recommendations. While not the purview of 
this Subcommittee, I would be remiss if I did not suggest three 
issues that impact entrepreneurs across rural America. Lack of 
access to affordable health care; inadequate infrastructure, 
particularly broadband; and the lack of capacity on the part of 
small communities to effectively engage in development efforts.
    Attention to these issues really gets at the heart of 
policy change that can impact the ability of entrepreneurs to 
grow their businesses and in turn create the economic 
opportunities and wealth that can drive rural development.
    But there are four recommendations that are closer to the 
heart of this Subcommittee's work. One, as Federal resources 
flow to the newly created regional authorities and commissions, 
entrepreneurship should be a part of their strategic plans. The 
lessons from the Appalachian Regional Commission's 
entrepreneurship and other innovative entrepreneurial 
development demonstrate the value of this approach and also can 
be a guide to the process.
    Two, the lessons from entrepreneurship development should 
be emphasized in the design of entrepreneurship initiatives 
that seek funding from USDA's Rural Development Programs as 
well as other Federal agencies. Funding to support 
collaborative processes, one of the lessons that we have 
learned through the vehicle of the Rural Collaborative 
Investment Program would help to ensure that these lessons are 
built into future entrepreneurship development initiatives.
    Three, USDA Rural Development Programs should put greater 
emphasis on the design and implementation of stronger 
measurement systems at the beginning of the funding process so 
that grantees gather appropriate measures to be able to assess 
and report on their performance.
    And finally, continued support for programs that really 
build the support infrastructure for rural entrepreneurs, 
programs like the Rural Microenterprise Assistance Program and 
the Rural Business Enterprise Grant Program among them, are 
critical. These programs provide the seed capital for 
entrepreneurs as well as their communities.
    In closing, the center remains committed to learning from 
key rural innovators and sharing this learning with leaders 
across rural America. We are happy to serve as a resource to 
the Subcommittee and to connect you with this growing body of 
innovation and research.
    I welcome your questions and comments.
    I thank you again, Mr. Chairman and Members of the 
Subcommittee for the opportunity to testify before you today. 
Your continued leadership in bringing the lessons from those 
who are at the forefront of rural development innovation to the 
rural policymaking process is really critical. Thank you.
    [The prepared statement of Ms. Markley follows:]

  Prepared Statement of Dr. Deborah M. Markley, Managing Director and 
     Director of Research, RUPRI Center for Rural Entrepreneurship

    Chairman McIntyre, Ranking Member Conaway, and members of the 
Subcommittee, it is an honor to appear before you today. I applaud your 
leadership in shining light on innovative approaches to rural 
development that are providing communities and regions across rural 
America with new economic opportunities and hope for a better future.
Background
    I am Deborah Markley, Managing Director and Director of Research 
for the RUPRI Center for Rural Entrepreneurship in Chapel Hill, NC. In 
2001, the RUPRI Center for Rural Entrepreneurship was established with 
founding support from the Kauffman Foundation and the Rural Policy 
Research Institute (RUPRI). The Center strives to be the source of 
information and learning about the practice of entrepreneurship in 
rural America. Our work includes practice-driven evaluation of 
innovations in entrepreneurship development, the development and 
sharing of tools and training to help leaders build more effective 
development strategies, and on-the-ground engagement in communities and 
regions that are ready and committed to moving forward with 
entrepreneurship development.
    The Center's work over the past seven years has taken us to 
communities and regions in all parts of rural America. We have had the 
opportunity to witness first hand the economic challenges that rural 
leaders face every day--failure of past strategies and the loss of 
economic mainstays, like the textile mills and tobacco farms in my home 
state of North Carolina; resource and infrastructure constraints; an 
erosion of leadership; and isolation from markets and necessary 
services.
    At the same time, we are witnessing a wave of innovation in rural 
development that is by its very nature entrepreneurial. Rural America 
is recognizing new opportunities associated with the development of 
alternative energy, new generation agriculture, and asset-based 
entrepreneurship. Rural community and regional leaders are embracing a 
new approach to economic development. Creating a supportive environment 
for entrepreneurs is viewed as the foundation that must be in place for 
more traditional economic development activities like industrial 
recruitment and retention and expansion of existing industry to occur.
    Communities and regions across the country are figuring out ways to 
provide more support for existing entrepreneurs and to encourage the 
business creation dreams of community residents, young and old. These 
strategies are generating positive results, rebuilding economies and 
hope in communities that have lost factories, people and even community 
institutions like schools.
    Our experience has informed three core beliefs that guide our 
vision for the future of rural America:

      Entrepreneurship development is a necessary component of 
rural economic development--it may be the most promising strategy for 
rural places.

      Creating an entrepreneurial environment requires culture 
change--replacing ``waiting to be saved'' with ``growing our own'' 
mentality in rural communities across the country.

      Entrepreneurship development requires a systems 
approach--a collaborative, regional approach of ``connecting the dots'' 
among resource providers, within the public, private and non-profit 
sectors, between communities and schools, and from practitioners to 
policy makers.

    These core beliefs have been upheld by a growing body of both 
research and innovative entrepreneurship development practice. In 1997, 
the Appalachian Regional Commission (ARC) began an innovative multi-
year initiative to invest in projects designed to build entrepreneurial 
economies across the region--the Entrepreneurship Initiative. Through 
2005, ARC had invested almost $43 million in various entrepreneurship 
development projects that created jobs and businesses, supported 
partnerships and collaborations, and helped leaders at the community 
and state levels recognize the value of entrepreneurship as an economic 
development strategy. The Center, along with several partners, 
completed an evaluation of this significant federal investment in 
entrepreneurship development in 2007--Creating an Entrepreneurial 
Region: Findings and Lessons from an Evaluation of the Appalachian 
Regional Commission's Entrepreneurship Initiative 1997-2005.
    In 2003, CFED (Corporation for Enterprise Development), with 
funding from the W.K. Kellogg Foundation, completed Mapping Rural 
Entrepreneurship, a study of the current practice and context for 
entrepreneurship in rural America. This groundbreaking study served as 
the foundation for a significant effort on the part of the Kellogg 
Foundation to support innovation in entrepreneurship development -- the 
Rural Entrepreneurship Development Systems initiative launched in 2004. 
With investments in six demonstration collaboratives across rural 
America, the Foundation supported efforts to build systems of support 
for entrepreneurs -- through a focus on entrepreneurship education, 
technical assistance, and financial capital -- and to create a culture 
of entrepreneurship and supportive policy that would sustain these 
efforts into the future. The key learning from this effort has been 
recently published by The Aspen Institute's FIELD program--Revitalizing 
Rural Economies through Entrepreneurship Development Systems.
    At the same time, the Center completed a series of case studies of 
innovative entrepreneurship practice in the northwest region, with 
funding from the Northwest Area Foundation--Innovative Approaches to 
Entrepreneurial Development in the Northwest Region.
Lessons from Innovative Entrepreneurship Development Strategies
    I provide this background information to suggest to members of the 
Subcommittee that there is a wealth of innovative entrepreneurship 
development practice across rural America and a concerted effort on the 
part of the Center and many partner organizations to capture what is 
working well and what has been achieved in rural communities and 
regions as a result of this innovative work. At the same time, these 
formal investigations do not begin to capture the entrepreneurial 
energy being applied to rural development strategies in all corners of 
rural America.
    The body of work referenced above shows that entrepreneurship 
development is working. Our work in the Appalachian region found that 
ARC's Entrepreneurship Initiative had an impact by creating more 
entrepreneurs in the pipeline, better informed and better skilled 
entrepreneurs, and stronger, more job-creating businesses (ARC study, 
p. 1). The collaboratives involved in the Kellogg  funded initiative 
have created systems that use entrepreneurial coaching and networking, 
for example, to build the skills of entrepreneurs who are, in turn, 
creating new businesses and jobs (FIELD study, p. 19). Both of these 
efforts also resulted in a wide range of qualitative impacts, such as 
elevating the importance of entrepreneurship and engaging more youth in 
the process. While we can point to these impacts, organizations 
committed to understanding entrepreneurship development, and the 
organizations and funders supporting the implementation of these 
innovative approaches, must do a better job of measuring the outcomes 
of these efforts and communicating the value of entrepreneurship 
development to a broader audience of economic development 
practitioners, local and state elected officials, and policy makers at 
all levels of government.
    What we have taken from this collective work and experience is a 
set of themes or lessons that can inform future efforts of rural 
development practitioners to design and implement entrepreneurship 
strategies on the ground and of policymakers at the local, state and 
federal levels who are designing policies in support of 
entrepreneurship as a core rural economic development strategy.
Lesson #1 -- Necessity of Entrepreneurial Leadership
    Successful entrepreneurship development practice is rooted in 
entrepreneurial leadership--leaders who recognize opportunities to take 
a different economic development approach and identify the resources 
needed to create an environment that is supportive of entrepreneurial 
development. These leaders come from different organizations--private 
companies, educational institutions, nonprofit service providers--but 
they all have entrepreneurial and leadership skills that are used in 
the service of economic development. They are as diverse as an 
entrepreneur in Fairfield Iowa, the president of a non-profit 
enterprise development organization in northeastern Minnesota, the 
mayor of Hertford North Carolina, and the leader of a collaborative in 
New Mexico. These civic entrepreneurs also have a strong commitment to 
place and to building an entrepreneurial environment that, in turn, 
creates a sustainable, economically viable region with a high quality 
of life.
Lesson #2 -- Importance of Regional and Organizational Collaboration
    Individual leadership is not sufficient to create successful 
practice. Examples of innovative practices demonstrate the importance 
of collaboration across diverse organizations and communities. The 
collaborative partners engaged in entrepreneurship development include 
service providers, higher education institutions, local units of 
government, traditional economic development organizations, social 
service organizations, individual entrepreneurs, foundations, K-12 
educational institutions, state agencies and others. Successful 
entrepreneurship development activities are focused on more than an 
individual community. They are intentionally regional efforts and also 
reach out to diverse communities such as Native Americans, limited 
resource entrepreneurs, immigrant populations and more remote rural 
communities. The power of their collaboration rests in bringing 
together a broader and more diverse set of resources than any one 
organization or community could provide, and in creating a dynamic 
assistance network for service providers and entrepreneurs.
Lesson #3 -- Value of a Systems Approach
    Many organizations across rural America are engaged in some way in 
supporting entrepreneurs. The truly pioneering feature of the most 
innovative efforts is the recognition that entrepreneurship development 
requires more than focusing services on entrepreneurs. Engaging 
communities in building an entrepreneurial environment--one with a 
supportive cultural and policy milieu--and creating a systems approach 
that organizes services in a more effective and seamless way are both 
essential.
Lesson #4 -- Recognizing and Building on Assets
    A community's or region's assets come in many different forms. 
Innovative approaches to entrepreneurship development are built on 
identification and recognition of local assets, and the development of 
the system components that best complement those assets. In North 
Carolina, the strong capacity and convening power of the North Carolina 
Rural Center is serving as a catalyst for entrepreneurship development 
in regions across the state. In Northeast Minnesota, the well-networked 
and collaborative economic development organizations provide the 
foundation on which a system is being built. In northern Iowa, the 
existing infrastructure created by philanthropist Pappajohn is the 
springboard for additional efforts to transform the regional economy. 
In the Arkansas Delta, the preservation of iconic assets and the 
identification of entrepreneurial opportunities is being encouraged and 
supported by a regional collaborative with support from the National 
Trust for Historic Preservation. In all cases, entrepreneurship 
development is proceeding from an assessment of assets, both unique and 
more commonplace, and from calculated efforts to build on those assets 
to create an entrepreneurship development system.
Two Sets of Recommendations
    The work of the Center and a wide range of partner organizations 
suggests several areas where Federal policy can be broadly supportive 
of entrepreneurship development. These recommendations get at the heart 
of policy change that can impact the ability of entrepreneurs to create 
and grow businesses and, in turn, create the economic opportunities and 
wealth that can drive the development of rural communities.
Recommendations for Building a Foundation for Entrepreneurship

      Entrepreneurs across rural America continue to be 
constrained by inadequate infrastructure, particularly access to 
Broadband. While in theory many entrepreneurs can locate or build their 
businesses anywhere, that location decision is often predicated on high 
speed Internet access that remains elusive in many parts of rural 
America. Federal investment in rural Broadband remains a priority for 
rural entrepreneurship development.

      Rural entrepreneurs--often small, perhaps self-employed--
are constrained in starting or growing their businesses because of the 
lack of access to affordable health care. Making progress on health 
care reform could serve as a stimulus to entrepreneurial development 
across rural America.

      Finding leaders and building capacity to engage in 
entrepreneurship development remains a constraint for many small rural 
communities and even regions. Providing the means to build this 
capacity and to encourage multi-community collaboration across rural 
regions is one way that Federal support could help more rural 
communities learn from and embrace the lessons learned from the 
innovative entrepreneurship development practices underway across the 
country.

    In addition to these broad recommendations, there are a number of 
specific recommendations that directly relate to the programs of 
interest to this Subcommittee. These recommendations are designed to 
bring the lessons of innovative entrepreneurship development reflected 
in this testimony to bear on rural development policy going forward.
Recommendations Specific to Rural Development Programs

      Following the successful lead of the Appalachian Regional 
Commission, entrepreneurship development should be a priority for the 
newly established regional authorities and commissions. The ten year 
history of investment demonstrated by ARC provides important evidence 
of the impact on the region, in terms of job and business creation, 
attracting private sector investment, and beginning to create a more 
supportive culture of entrepreneurship in the region. As new Federal 
resources flow to these regional organizations, the lessons from ARC 
and other innovative entrepreneurship development initiatives should be 
used to guide the development of strategic plans around 
entrepreneurship development.

      The set of common lessons from entrepreneurship 
development should be incorporated into the guidelines for USDA Rural 
Development programs, and those of other agencies. These lessons from 
effective practice, such as the importance of cross-organizational and 
cross-regional collaborations, should be emphasized in the design of 
entrepreneurship initiatives that seek Federal Rural Development 
funding, and effective partnerships should be rewarded as part of the 
funding process. In addition, providing funding to support the 
development of these collaborative processes, through the vehicle of 
the Rural Collaborative Investment Program, would help to ensure that 
these lessons are built into the design of future entrepreneurship 
initiatives.

      Performance measurement should be viewed as an integral 
part of program development from the perspective of Federal funding 
agencies like USDA's Rural Development. One of the first steps in any 
entrepreneurship development initiative needs to be an articulation of 
program goals--what are you trying to achieve--followed by 
identification of how success or performance will be measured. Rural 
Development programs should put greater emphasis on the design and 
implementation of strong measurement systems from the start so that 
grantees gather appropriate measures to report on the performance of 
their initiatives. These efforts could then be linked, for example, 
with the pioneering work being done at the University of Missouri to 
assess the socio-economic benefits of Federal investments in rural 
development.

      Continued support for programs that are used to help 
build the support infrastructure for rural entrepreneurs, such as the 
Rural Microenterprise Assistance Program and the Rural Business 
Enterprise Grant program among others, is also critical. These programs 
provide the seed capital both for rural entrepreneurs who are starting 
or growing their businesses and for rural communities that have 
developed and are implementing innovative approaches to entrepreneurial 
development.

Closing
    The Center remains passionately committed to learning from the key 
innovators in the field of entrepreneurship development and sharing 
this learning with rural leaders across the country who are searching 
for new, more effective approaches to economic development. We are also 
committed to building strong partnerships with other regional and 
national organizations with a focus on entrepreneurship and rural 
development so that we can bring stronger and broader capacity to our 
work. We are happy to serve as a resource to members of this 
Subcommittee and to connect you with this growing body of innovative 
practice and research. I welcome your questions and comments. I thank 
you, again, Mr. Chairman and members of the Subcommittee, for the 
opportunity to testify before you today. Your continuing leadership in 
bringing the lessons from those who are at the forefront of rural 
development innovation to the rural policy making process is critical, 
and we look forward to working with you in the future.

    Mr. McIntyre. Thank you, Dr. Markley.
    Mr. Yost.

 STATEMENT OF JEFF YOST, PRESIDENT AND CEO, NEBRASKA COMMUNITY 
                           FOUNDATION

    Mr. Yost. Mr. Chairman, Members of the Subcommittee, my 
name is Jeff Yost. I am President and CEO of the Nebraska 
Community Foundation. In addition to my testimony, I am 
supplying the Committee Members with two reports which should 
be in your packet of materials.
    The Nebraska Community Foundation is a community 
development institution that uses philanthropy as a tool. We 
are not a charity. We are a decentralized system of 200 
affiliated funds located in 71 of Nebraska's 93 counties. I get 
many requests from people across the nation who want to learn 
about the innovative nature of our work. Actually, what we are 
doing is overlaying a framework, one that has been used in 
countless urban neighborhoods and our rural environment. It is 
a bottoms-up approach that builds on community strengths by 
identifying local assets rather than focussing on deficiencies.
    In struggling rural communities, local assets can be hard 
to find. For decades, consolidation has destroyed the diversity 
of our rural economy. Out-migration of middle-class youth has 
crippled communities and shrunk the local tax base. The result 
is fewer career opportunities and severe underemployment.
    Despite these trends, NCF has identified an enormous asset 
in our rural communities that our rural communities can build 
on. In land-rich, cash-poor Nebraska, that asset is the 
transfer of wealth. In 2002, we completed a county-by-county 
analysis of how much wealth will transfer from one generation 
to the next during the first half of this century. We estimate 
that $94 billion will transfer in rural Nebraska alone. That is 
about $125,000 per person.
    More important is the timing. Because of our aging 
population, most rural counties are experiencing their peak 
years of transfer now or in the next three decades. If out-
migration continues, most of that wealth will pass to heirs who 
no longer live where the wealth was built.
    Our goal is ambitious. We ask our affiliated fund leaders 
to build permanent unrestricted endowment funds equal to 5 
percent of the projected 10&ar transfer of wealth in their 
community. We coach these community leaders to send out a clear 
message to their family and friends, ``When you plan for the 
future, consider your hometown as another child.''
    Now, in rural Nebraska, you don't talk about how many acres 
somebody owns or how many cattle they have. So the thought of 
speaking directly to a potential benefactor about leaving a 
legacy gift is beyond imagination for most of our new 
affiliated fund leaders. But they are learning.
    Today 88 community-based affiliated funds have raised $38 
million in endowed assets and planed gifts, most of this in the 
past 5 years. Over 2,000 residents are leading these affiliated 
funds. Last year, NCF and its affiliated funds received over 
8,000 individual gifts; 49 of these funds already have $100,000 
in endowed assets and planned gifts.
    Capitalizing community endowments, however, is just a tool 
for achieving our ultimate goal, which is building communities 
where young people will choose to live, work, and raise their 
families. Building endowments creates local funding streams to 
leverage the kind of community investments required to attract 
young families back to their rural roots. This is a leap of 
faith for people who are used to giving their kids luggage for 
graduation.
    Today young people can choose to live and work wherever 
they want. What surprises many adults is that, in surveys we 
have conducted with over 5,000 rural youth, more than half of 
the young people say they would prefer to return home to raise 
their families if career opportunities were available. More 
than 40 percent say they would be interested in taking an 
entrepreneurship class or owning their own business some day. 
Only 12 percent say their community is too small.
    We are combining this youth optimism and the transfer-of-
wealth opportunity to catalyze a development framework called 
Hometown Competitiveness or HTC. HTC is an intensive community 
intervention based on four strategies we call pillars: Building 
local leadership; energizing entrepreneurship; engaging young 
people; and capitalizing community endowments to support these 
capacity-building efforts.
    Every community no matter how small has some potential for 
these four core capacities. Because it is locally driven, HTC 
evolves differently in each of the 16 multi-community sites 
located in Nebraska and in the other 14 states where HTC is 
underway. But similar impacts are occurring: more business 
expansions and transitions; more jobs created or retained; 
increasing diversity in new leadership; and more young people 
returning home.
    The Nebraska Community Foundation and HTC are steeped in 
the principle that communities can only be built from the 
inside out. No outside expert, no one industry, no government 
program, for that matter, can sustain a community. It takes 
local leadership and locally controlled assets to develop and 
move communities to prosperity. The role of all external 
forces, including the Federal Government, is to provide 
technical assistance and flexible funding streams to empower 
local leaders to take advantage of these unprecedented 
opportunities.
    Thank you. I would be happy to take questions.
    [The prepared statement of Mr. Yost follows:]

Prepared Statement of Jeff Yost, President and CEO, Nebraska Community 
                               Foundation
Re: Innovative approaches to rural development
    Chairman McIntyre and Members of the Subcommittee, my name is Jeff 
Yost. I am President and CEO of the Nebraska Community Foundation. In 
addition to this testimony, I am supplying the Subcommittee with these 
two reports for the hearing record.
    The Nebraska Community Foundation is a community development 
institution that uses philanthropy as a tool; we are not a charity. We 
are a decentralized system of 200 affiliated funds located in 71 of 
Nebraska's 93 counties.
    I get many requests from people across the nation who want to learn 
about the innovative nature of our work. Actually, what we are doing is 
overlaying a framework--one that has been used in countless urban 
neighborhoods--in our rural environment. It's a bottoms-up approach 
that builds on community strengths by identifying local assets rather 
than focusing on deficiencies.
    In struggling rural communities, local assets can be hard to find.
    For decades, consolidation has destroyed the diversity of our rural 
economy. Out-migration of middle-class youth has crippled communities 
and shrunk the local tax base. The result is fewer career opportunities 
and severe underemployment.
    Despite these trends, NCF has identified an enormous asset that our 
rural communities can build on. In land-rich, cash-poor Nebraska, that 
asset is the transfer of wealth. In 2002 we completed a county by 
county analysis of how much wealth will transfer from one generation to 
the next during the first half of this century.
    We estimate that $94 billion will transfer in rural Nebraska alone; 
about $125,000 per person. More important is the timing: Because of our 
aging population, most rural counties are experiencing their peak years 
of transfer now or in the next three decades. If out-migration 
continues, most of that wealth will pass to heirs who no longer live 
where the wealth was built.
    Our goal is ambitious. We ask our affiliated fund leaders to build 
permanent unrestricted community endowments equal to five percent of 
the projected 10&ar transfer of wealth for their community. We coach 
these community leaders to send out a clear message to their family and 
friends. ``When you plan for the future, consider your hometown as 
another child!''
    Now in rural Nebraska, you don't talk about how many acres somebody 
owns or how many cattle they have. So the thought of speaking directly 
to a potential benefactor about leaving a legacy gift is beyond 
imagination for most of our new affiliated fund leaders.
    But they are learning.
    Today 88 community-based funds have raised $38 million in endowed 
assets and planned gifts, most of it in the past five years. Over 2,000 
local residents are leading these affiliated funds. Last year NCF and 
its affiliated funds received over 8,000 gifts. Forty-nine of these 
funds already have over $100,000 in endowed assets and planned gifts.
    Capitalizing community endowments, however, is just a tool for 
achieving our ultimate goal, which is building communities where young 
people will choose to live, work and raise their families. Building 
endowments creates local funding streams to leverage the kind of 
community investments required to attract young families back to their 
rural roots.
    This is a leap of faith for people who are used to giving their 
kids luggage for graduation.
    Today, young people can choose to live and work wherever they want. 
What surprises many adults is that in surveys we've conducted with over 
5,000 rural youth, more than half of the young people say they would 
prefer to return home to raise their families if career opportunities 
were available. More than 40 percent say they're interested in taking 
an entrepreneurship class and owning their own business someday. Only 
12 percent say that their community is ``too small.''
    We're combining this youth optimism and the transfer of wealth 
opportunity to catalyze a development framework called Hometown 
Competitiveness, or HTC. HTC is an intensive community intervention 
based on four strategies we call ``pillars.'' They are:

      Building Local Leadership,

      Energizing Entrepreneurship,

      Engaging Young People, and

      Capitalizing Community Endowments to support these 
capacity-building efforts.

    Every community, no matter how small, has some level of potential 
in these four core capacities.
    Because it is locally driven, HTC evolves differently in each of 
the 16 multi-community sites located in Nebraska, and in the 14 other 
states where HTC is underway. But similar impacts are occurring. More 
business expansions and transitions; more jobs created or retained; 
increasing diversity in new leadership; and more young people returning 
home.
    The Nebraska Community Foundation and HTC are steeped in the 
principle that communities can only be built from the inside out. No 
outside expert, no one industry--no government program, for that 
matter, can sustain a community. It takes local leadership and locally-
controlled assets to develop and move communities to prosperity.
    The role of all external forces, including the federal government, 
is to provide technical assistance and flexible funding streams to 
empower local leaders to take advantage of these unprecedented 
opportunities.
    Thank you. I would be happy to answer any questions you may have.

    Mr. McIntyre. Thank you Mr. Yost.
    Mr. Thompson.

          STATEMENT OF ROBERT J. THOMPSON, EXECUTIVE 
DIRECTOR OF THE ANDROSCOGGIN VALLEY COUNCIL OF GOVERNMENTS, AND 
   VICE CHAIR, RURAL DEVELOPMENT TASK FORCE OF THE NATIONAL 
         ASSOCIATION OF DEVELOPMENT ORGANIZATIONS, NADO

    Mr. Thompson. Good afternoon, Chairman McIntyre, Ranking 
Member Conaway and Members of the Subcommittee.
    My name is Bob Thompson. I serve as the Executive Director 
for the Androscoggin Valley Council of Governments, the 
regional planning and development district in the western parts 
of the State of Maine. I also serve as a Board Member on the 
National Association of Development Organizations. Thank you 
for the opportunity to testify today on U.S. rural development 
programs and the assistance that they provide to rural 
entrepreneurs and businesses.
    But before I begin, let me first thank the Subcommittee for 
your leadership and your support of the Rural Development 
Programs as part of the 2008 Farm Bill.
    And Chairman McIntyre, the members of NADO are also 
appreciative of your persistence and vision on the issue of the 
Federal-state-regional commissions, such as the Northern Border 
Commission, the Southeast Regional Commission and Southwest 
Border Regional Commission.
    First, USDA Rural Development is an essential partner and 
funding source for rural regions and communities as they work 
to develop the fundamental building blocks for community and 
economic competitiveness. With USDA's assistance, rural 
communities across the nation are now in a better position to 
pursue innovative development strategies that are resulting in 
new jobs and wealth-generating opportunities.
    Fifty years ago, one out of every two jobs in Maine was 
concentrated in the manufacturing sector. By comparison, that 
figure is now 1 in 10. In the past year, the western Maine 
region has seen its unemployment rate double from 5 to 10 
percent. This mass exodus of the state's manufacturing sector 
has left behind large and small industrial complexes and a very 
aging infrastructure. The flexible nature of the USDA Rural 
Development Programs has been vital to our ability to respond 
to the evolving nature of our region's economy.
    Second, the USDA's Rural Development Business Enterprise 
Grant Program, RBEG, and the Intermediary Relending Program, 
IRP, are highly effective resources that allow intermediaries 
such as ours to assist rural entrepreneurs, business leaders 
and local officials as they pursue innovative development 
strategies and business opportunities. Early in the 1990s, my 
board recognized that our dependence on major employers in 
rural communities was a risk factor that we could no longer 
tolerate. As a result, an aggressive effort was initiated to 
establish lending and technical assistance resources, 
particularly for small--and medium-sized businesses.
    In 1995, we secured a USDA Rural Business Enterprise Grant 
of $500,000. As one of the smaller USDA initiatives, the RBEG 
program is often overlooked. However, we found it to be broad, 
flexible in nature, and it makes the program an indispensable 
tool. To date we have lent over $900,000 from that program, and 
we have leveraged an additional $14.8 million in owner equity 
and private funds, and we have helped to create or retain 350 
jobs in our rural area.
    USDA's Rural Intermediary Relending Program is another 
valuable tool. We have been awarded three IRP loans totaling 
$3.5 million. In total, we have lent now $8.4 million from that 
pool and have leveraged $43.7 million in additional capital 
investment from private and other equity sources.
    As we gained success with these programs and our lending, 
it became evident that we could have additional community 
impact in our rural communities, and we decided to put a 
portion of our IRP pool into a Community Reinvestment Program. 
We decided to make the funds available at reduced interest 
rates and flexible terms to encourage private-sector 
investment.
    We have made three such incentive deals to date, including 
the Bass Wilson Mill, which is an example. In 1998, G.H. Bass 
announced its intention to halt shoe production in Maine. The 
Wilson mill was vacated. Bass offered the building to the town. 
Local leaders turned to AVCOG and our business lending programs 
for assistance. We worked with the community, assisted in 
soliciting a proposal to rehabilitate the property, and 
ultimately the property was transferred to a private developer, 
and we lent $250,000 from our IRP community program. This is 
just one example of the innovative nature of the USDA Rural 
Development Business Programs.
    Before tapping into our technical assistance capacity along 
with the successful USDA loan portfolio, the Town of Wilton 
lacked the staff and the financial resources to accomplish this 
deal. Today the property is fully renovated, has five 
businesses, and 100 employees.
    Finally, Mr. Chairman, I would like to discuss the 
innovative asset-based rural development strategy that the 
economic development districts in Maine are working on. This is 
a collaborative model that we feel will fit the goals of the 
Regional Collaborative Investment Program, and it calls for a 
new public-private partnership, a new statewide effort that 
will be called Mobilize Maine.
    The initiative changes the model for rural economic 
development in Maine by addressing our disconnected and 
fragmented system. It focuses our work on producing results and 
improving the personal income of Maine workers.
    In closing, I urge your continued support of USDA Rural 
Development Programs. Rural development is an essential partner 
and funding source for our rural regions, a vital tool for 
organizations such as AVCOG, and we strive to provide 
assistance and build capacity in communities. Thank you again 
for the time and the opportunity. And I will welcome any 
questions.
    [The prepared statement of Mr. Thompson follows:]

  Prepared Statement of Robert J.Thompson, Executive Director Of The 
   Androscoggin Valley Council Of Governments and Vice-Chair, Rural 
   Development Task Force Of The National Association Of Development 
                          Organizations (NADO)
    Thank you, Chairman McIntyre, Ranking Member Conaway and members of 
the Subcommittee, for the opportunity to testify today on USDA Rural 
Development programs and the important role they play in helping 
regional and local organizations provide financial and technical 
assistance to rural entrepreneurs and businesses.
    My name is Bob Thompson. I serve as the Executive Director of the 
Androscoggin Valley Council of Governments (AVCOG), a multi-
disciplinary regional planning and development organization serving 56 
organized communities, and numerous townships and plantations in 
Western Maine. We are the Economic Development District (EDD) 
designated by the U.S. Economic Development Administration for our 
region. In addition, we provide the primary management and staffing 
support for the Maine Lakes and Mountains Tourism Council, the 
Androscoggin Transportation Resource Center, a federally-designated 
Metropolitan Planning Organization (MPO) serving the urbanized area in 
and around our central cities of Lewiston and Auburn, and a Rural 
Transportation Planning Organization.
    I also serve as a Board Member of the National Association of 
Development Organizations (NADO) and Vice-Chair of the NADO Rural 
Development Task Force.
    Before I begin, let me first thank the Subcommittee for your 
leadership and support of rural development programs as part of the 
2008 Farm Bill. The broad portfolio of USDA Rural Development programs 
for business development, infrastructure, value-added agriculture 
production and marketing, regional strategic planning and broadband 
deployment are essential to the long-term economic competitiveness of 
our nation's small urban and rural communities.
    Chairman McIntyre, the members of NADO are also very appreciative 
of your persistence and vision on the issue of federal-state regional 
commissions, such as the Northern Border Regional Commission, the 
Southeast Crescent Regional Commission and the Southwest Border 
Regional Commission authorized in the 2008 Farm Bill. These federal-
state entities, which are targeted at multi-state, rural regions 
suffering from persistent poverty, are structured to be complementary 
partners with existing programs such as USDA Rural Development and the 
U.S. Economic Development Administration. We strongly believe that the 
successful implementation of the Northern Border Regional Commission 
will help address the community and economic development needs of the 
most severely distressed portions of the Northeastern United States.
    This afternoon, Mr. Chairman, I will focus my remarks on three key 
areas:
    1. USDA Rural Development is an essential partner and funding 
        source for rural regions as they work to develop the 
        fundamental building blocks for community and economic 
        competitiveness. These include resources for basic 
        infrastructure, as well as business development finance tools 
        for entrepreneurs and businesses to create new employment and 
        wealth opportunities in rural areas.

    2. USDA's Rural Business Enterprise Grant (RBEG) program and 
        Intermediary Relending Program (IRP) are highly effective 
        resources that allow intermediaries, such as AVCOG, to assist 
        rural entrepreneurs, business leaders and local officials as 
        they pursue innovative development strategies and business 
        opportunities.

    3. USDA Rural Development should provide new and more aggressive 
        incentives, rewards and flexibility for rural communities to 
        work together on a regional basis to pursue innovative regional 
        development strategies, as envisioned in the 2008 Farm Bill's 
        Regional Collaborative Investment Program (RCIP). This is 
        essential for rural communities to compete in today's global 
        marketplace where we need the economies of scale, knowledge 
        clusters, and physical and human infrastructure necessary to 
        remain competitive. In Maine, the statewide network of Economic 
        Development Districts have begun working with state and local 
        officials, private sector leaders and nonprofit partners on an 
        exciting and innovative asset-based rural development strategy 
        that offers a great case study on the potential of USDA Rural 
        Development's RCIP program.

    First, Mr. Chairman, USDA Rural Development is an essential partner 
and funding source for rural regions and communities as they work to 
develop the fundamental building blocks for community and economic 
competitiveness. With USDA's assistance, rural communities across the 
nation are now in a better position to pursue innovative development 
strategies that are resulting in new job and wealth--generating 
opportunities, whether in traditional sectors such as agriculture and 
natural-resource based industries or emerging science and technology 
fields.
    Fifty years ago, one out of every two jobs in Maine was 
concentrated in the manufacturing sector. By comparison, approximately 
one in ten jobs is tied to manufacturing today. During the 1990's, 
Western Maine was still very highly concentrated in the traditional, 
manufacturing industries such as leather, textiles, apparel and wood 
products, with 25 -35 percent of our job base in these very industries 
being hardest hit by global competition. In the past year, our 
unemployment rate has doubled, increasing from approximately 5 to 10 
percent.
    Western Maine exhibits many of the same characteristics as other 
areas along the Canadian border from New York to Maine. We are faced 
with poverty rates above the national average, median household incomes 
nearly $7,500 below the national average, and stagnant or declining 
populations. We also have many communities and areas of our region with 
persistent unemployment problems.
    The mass exodus of the state's manufacturing sector has left behind 
large and small industrial complexes that often dominate our rural and 
small urban centers. It has also left behind aging and decaying 
infrastructure systems--primarily water and sewer systems that now need 
costly upgrades, yet we have a dwindling tax and employment base to 
finance these essential investments. The flexible nature of USDA Rural 
Development infrastructure and community facility programs, combined 
with the agency's continued support of small towns and rural areas, has 
been vital to our ability to respond to the evolving nature of our 
region's economy.
    Second, Mr. Chairman, USDA Rural Development's Rural Business 
Enterprise Grant (RBEG) program and Intermediary Relending Program 
(IRP) are highly effective resources that allow intermediaries, such as 
AVCOG, to assist rural entrepreneurs, business leaders and local 
officials as they pursue innovative development strategies and business 
opportunities. We encourage the committee to look at ways to increase 
funding resources for these small yet invaluable programs.
    Androscoggin Valley COG's region covers over 4,200 square miles of 
forested mountains and fields carved by pristine lakes and rivers. The 
majority of our region's population of 188,000 is scattered over 75 
small towns, townships, plantations and unorganized territories. Our 
two largest cities, Lewiston and Auburn, are located in the southern 
portion of the region, sharing a combined population of only 58,893 
residents. Early in the 1990s, AVCOG's policy board of local elected 
officials and community leaders recognized that our dependence upon 
major employers was a risk factor that could not be sustained.
    As a result, an aggressive effort was initiated to establish 
lending and technical assistance resources to help in the retention and 
development of small-- to medium-sized businesses. Our strategy was not 
simply to retain our existing entrepreneurs and firms, but to help them 
grow and prosper. This required us to develop the lending capacity and 
technical assistance resources needed to assist start-up companies and 
existing firms with seed capital, gap financing and business planning.
    In 1995, we secured a USDA Rural Business Enterprise Grant of 
$500,000. Of this total, $425,000 was for microlending and $75,000 was 
dedicated for technical assistance. As one of the smaller USDA 
initiatives, the RBEG program is often overlooked. However, we have 
found that the broad, flexible nature of RBEG assistance, combined with 
its focus on small business development, makes the program an 
indispensable tool in our region.
    To date, we have lent over $900,000 that has leveraged an 
additional $14.8 million in owner equity and private funds. The average 
RBEG loan amount is approximately $27,000, and the program has helped 
AVCOG and its partners create or retain 350 jobs in our rural region.
    In addition, we used approximately $75,000 in earnings from our 
RBEG investments to access an additional $1.15 million in Small 
Business Administration (SBA) funds. Utilizing the SBA assistance, we 
have generated over $1.3 million in loans that have leveraged nearly 
$700,000 in additional capital investment and created or retained 275 
jobs.
    Ultimately, the initial $500,000 RBEG investment has enabled us to 
create a lending pool of approximately $1.58 million that has generated 
over $2.2 million in loans and leveraged an additional $15.5 million in 
business capital. More importantly, these investments have helped 
create or retain 631 jobs with a highly efficient cost ratio between 
$2,500 -$4,500 per job.
    USDA Rural Development's Intermediary Relending Program (IRP) is 
another invaluable and often overlooked resource for rural regions. 
This program was created with the primary intent of providing gap 
financing to enable our regional and local banks to write debt in 
conformance with national standards.
    Our organization has been awarded three IRP loans for a total of 
$3.5 million. To date, the AVCOG IRP program has lent nearly $8.4 
million that has leveraged over $43.7 million in other capital 
investment. Of the $43.7 million total, $3.6 million is in owner 
equity, $33.3 million is in bank debt and $6.8 million is in other 
public funds. Our loan loss rate is currently 3.2 percent.
    As we gained success and impact with our lending it became evident 
that additional community impact could be created if we utilized a 
portion of the IRP funding to invest in private, qualified, community-
sponsored redevelopment projects. We decided to make funds available 
with reduced interests rates and flexible terms to encourage 
reinvestment by the private sector into our downtowns and village 
centers. To date, we have made three such incentive deals, including 
the Bass Wilson Mill project.
    The Bass Wilson Mill, located in the heart of Wilton, a town of 
4,100 people in Southwest Maine, is the original G. H. Bass Shoe 
production facility. It is an imposing four-story, wood-frame structure 
that dominates a small picturesque community of one--and two-story 
shops and homes.
    In 1998, as G. H. Bass announced its intention to halt shoe 
production in Maine in favor of off-shore operations, the Wilson Mill 
was vacated. Bass offered the building to the Town of Wilton for a 
minimal amount, along with a commitment to mitigate any environmental 
issues.
    When faced with the prospect of a vacant, deteriorating wood frame 
structure in the center of the community, the Town of Wilton was 
initially at a loss on how to proceed. Local leaders turned to AVCOG 
and our business lending programs for assistance. AVCOG staff worked 
with the community, and it was determined the best course of action was 
to re-establish the local development corporation to take on the 
project. AVCOG staff assisted in soliciting a proposal for a master 
development agreement to rehabilitate the property. Ultimately, the 
property was transferred to a private developer for one dollar, and we 
lent $250,000 from our IRP community reinvestment pool to the 
developer.
    Initial private investment was also $250,000 and the pool funds 
were lent at 5 percent, interest-only accrued, for the rehabilitation 
period. The term was 60 months with the conversion of any remaining 
balance to 8 percent for a new five&ar term. The intent was to ease 
costs during the rent-up period and to create incentives for repayment 
at the end of the initial term to replenish our lending pool. In fact, 
this was the result.
    This is just one example of the innovative nature of USDA Rural 
Development business programs and their potential impact in rural and 
small urban communities. Before tapping into the technical capacity of 
AVCOG, along with our successful USDA loan portfolio, the town of 
Wilton lacked the staff and financial resources to accomplish this 
deal. Today, the Bass Wilson Mill property is fully renovated, houses 
five businesses with 100 employees and pays $14,200 in taxes each year. 
In addition, community leaders have secured financing for facade 
rehabilitation and off-street parking to complement the mill 
renovation.
    The success of the project also gave community leaders the 
confidence to repeat this deal structure when G. H. Bass proposed 
turning over its primary production facility, a 300,000 square-foot 
property composed of several connected buildings on the edge of the 
village. This project, another AVCOG/IRP investment, is progressing 
quickly with the hopes of becoming a commercially viable deal in the 
near future.
    Finally, Mr. Chairman, I would like to briefly discuss an exciting 
and innovative asset-based rural development strategy that the Economic 
Development Districts (EDDs) in Maine are working on with state and 
local officials, private sector leaders and nonprofit partners that 
could be a model for USDA Rural Development's Regional Collaborative 
Investment Program (RCIP).
    In 2006, following a thorough assessment of Maine's economy, the 
Brookings Institution published An Action Plan for Promoting 
Sustainable Prosperity and Quality Places. Our Governor embraced many 
of the report findings and, with additional recommendations from 
Governor-appointed task forces, has called for a new public-private 
partnership that will help refocus our economic development activities 
through regionally led, asset-based development.
    The new statewide effort, Mobilize Maine, will be launched next 
month and is funded jointly by the private, public and nonprofit 
sectors throughout Maine. It is organized at the grassroots level 
through the leadership of Maine's six EDDs, providing the first 
systematic and consistent approach to planning statewide economic 
development.
    Most prominently, the initiative changes the model for rural 
economic development in Maine by addressing our disconnected, 
fragmented and, often times, ineffective system. It focuses our work on 
producing results that improve the personal income of Maine workers.
    It acknowledges that the quality, size and availability of our 
workforce must be improved even in the context of our state's 
challenging demographics. It acknowledges that Maine's quality of place 
is our most significant competitive asset in the global competition for 
skill-based employment and workers. It also attempts to change the way 
we think about producing positive changes to our economy by leveraging 
the elements that make our regions unique-our assets.
    In the first year, this initiative aims to accomplish two broad 
goals. First, our partners will engage collaborative private, public 
and nonprofit sector investors and leaders who are committed to 
continuous development and implementation of community and economic 
development strategies and action plans that rise above political 
administrations. Second, we will create a sense of urgency at the 
regional and state level for the need to transform Maine's economic 
performance as a foundation for sustainable economic growth.
    In closing, I urge your continued support of USDA Rural Development 
programs, especially vital business lending and regional innovation 
programs such as IRP, RBEG and RCIP. USDA Rural Development is an 
essential partner and funding source for rural regions. It is also a 
vital tool for regional development organizations, such as AVCOG, as we 
strive to provide assistance and build capacity for the rural 
communities that rely on us for expertise and assistance.
    Thank you again, Mr. Chairman and members of the Subcommittee, for 
the opportunity to testify today. I would welcome any questions.

    Mr. McIntyre. Thank you, Mr. Thompson.
    Dr. Smith.

 STATEMENT OF RANDY SMITH, PRESIDENT, RURAL COMMUNITY COLLEGE 
                   ALLIANCE, ALTUS, OKLAHOMA

    Mr. Smith. Good afternoon, Chairman McIntyre, Ranking 
Member Conaway and Members of the Subcommittee.
    I am Randy Smith from Altus, Oklahoma. I am president of 
the Rural Community College Alliance, an affiliated council of 
the American Association of Community Colleges.
    The American Association of Community Colleges serves as a 
national voice for the country's nearly 1,200 community 
colleges. These colleges enroll more than 11.6 million students 
annually. More than half of the nation's 2&ar colleges are 
rural-serving with a combined enrollment of over 3.2 million 
students annually.
    The Rural Community College Alliance represents 150 rural-
serving colleges in four States, including all the nation's 
tribal colleges. Rural 2&ar colleges have the ability to 
respond quickly to the needs of the communities they serve. 
When a new or existing business needs a trained workforce, they 
turn to their local 2&ar college for assistance.
    Rural colleges are on the frontline of workforce 
development. They make a daily impact on the development of the 
services in their service area and regions. Due to time 
constraints, I am going to summarize my written testimony and 
touch on four key areas of economic development: energy, 
biotechnology, rural health, and emergency services.
    Rural community and technical colleges are stepping up to 
provide workforce training to the energy industry. Many of the 
industry jobs are high-skilled high-wage positions. Bismarck 
State College in North Dakota, Somerset Community College in 
Kentucky and many others work closely with industry to train 
individuals in the field of electrical transmission system 
technology, training a much needed workforce contributing to 
the overall economic health of their regions.
    The Kentucky Coal Academy is comprised of four community 
and technical colleges located throughout Kentucky. Since the 
creation of the academy in 2005, these colleges have trained 
25,000 students and incumbent workers in the mining profession. 
These jobs accounted for $1.34 billion in wages in the State of 
Kentucky in 2006.
    Numerous other community colleges have developed programs 
in renewable and alternative energy sources.
    Mr. Chairman, as you know, biotechnology has become a 
growing field in your home state, and rural 2&ar colleges are 
leading the way in this important industry. Southeastern 
Community College in North Carolina has the distinction of 
being the first agricultural biotechnology associate degree 
program in the U.S. Their program concentrates on the 
propagation of plants using tissue culture techniques. This 
allows trained technicians to produce a large quantity of 
plants from a very small amount of mother stock, resulting in 
plants that are pest--and disease-free.
    Access to quality health care is essential for attracting 
and retaining businesses and prospective workers to a 
community. Rural community colleges educate more than half of 
the nurses and the majority of other allied health care 
professionals nationally. The cost of educating and training 
students in these disciplines is high.
    Indian Hills Community College in Iowa recently looked at 
ways to increase the number of health occupation graduates and 
to address the shortage of health care workers in the region. 
They organized a rural health care education partnership to 
address the issue. The education and industry partnership 
recommended things such as technology and more distance 
education to increase the number of graduates. They have since 
implemented these ideas and have seen their enrollment in many 
of their health occupation programs double in size. They have 
successfully addressed the shortage of health care workers in 
their rural area through partnerships and the use of 
technology.
    Nationally, 80 percent of law enforcement officers, fire 
fighters and EMS professionals are educated at community 
colleges. In February of 2008, a refinery in Big Spring, Texas, 
suffered a major explosion. The resulting massive damage to 
both the refinery itself and the business operation required 
first responders from within the area to arrive on the scene. 
There was a huge fire to fight, hazardous conditions to monitor 
and a major interstate diversion to address. Emergency workers 
trained by Howard Community College were on hand to protect 
life and property and assist during the cleanup and rebuilding 
process.
    Alabama Southern, East Central Mississippi, and Meridian 
Mississippi Community Colleges have joined forces to form the 
Mississippi Entrepreneurial Alliance and promote 
entrepreneurship in rural communities. This partnership of 
rural colleges has successfully assisted many businesses to 
start and grow in the two state rural areas of this region.
    In summary, the examples I have spoken of are just a few of 
the hundreds of innovative economic development projects 
currently underway at America's rural 2 year colleges. Our 
rural colleges are a critical component to the economic 
development and strength of their regions. Rural 2&ar colleges 
are all about training people for jobs and growing the local 
economy in collaboration with a wide variety of partners. 
Truly, rural community colleges create an opportunity in place.
    Chairman McIntyre, Ranking Member Conaway and Members of 
the Committee, I thank you for the opportunity to testify 
before the Subcommittee and share with you the vital and 
outstanding work that our rural community colleges are doing.
    Thank you.
    [The prepared statement of Mr. Smith follows:]

   Prepared Statement of Dr. Randy Smith, President, Rural Community 
                    College Alliance Altus, Oklahoma
    Good afternoon, Chairman McIntyre, Ranking Member Conaway, and 
members of the Subcommittee on Rural Development, Biotechnology, 
Specialty Crops, and Foreign Agriculture. It is an honor and privilege 
to testify before your Subcommittee today. My name is Randy Smith, and 
I am President of the Rural Community College Alliance, an affiliated 
council of the American Association of Community Colleges.The American 
Association of Community Colleges serves as the national voice for the 
country's nearly 1,200 community colleges. Community colleges enroll 
more than 11.6 million students annually. Forty-four percent of all 
U.S. undergraduates attend community colleges. The colleges enroll a 
higher percentage of minority students than any other sector of higher 
education. 52% of Hispanic, 43% of Black, 45% of Asian/Pacific 
Islander, and 52% of the country's Native American undergraduates are 
attending community colleges, where the average student age is 29.
    More than half of the nation's 2&ar colleges are rural-serving, 
with an estimated combined enrollment of 3.2 million students annually. 
The Rural Community College Alliance (RCCA) represents more than 150 
rural-serving colleges in 34 states.
    Rural community colleges, like their suburban and urban 
counterparts, rely on state and local funding to maintain low tuition 
and open-door access for individuals seeking postsecondary education 
and workforce training. The average annual tuition and fees for a full-
time student at public community colleges is about $2,400, which is 
considerably less than that of 4&ar public colleges or private 
universities. The majority (60%) of students who enroll at community 
colleges, however, are part-time students. Most of these students are 
employed at least part-time and many juggle work and family 
responsibilities while attending college.
    America's rural community and tribal colleges offer an affordable, 
quality education that assists students in meeting their immediate and 
long-term educational and career goals. Their comprehensive missions, 
coupled with open admissions, provide a wide variety of opportunities 
for both students and businesses to access services and educational 
programs designed to help secure their future success. In addition to 
direct academic programs, community colleges play an important role in 
economic development, especially in rural areas.
    Community colleges share two primary missions. First, they are 
dedicated to serving their students through excellent teaching and 
learning. Community colleges excel in delivering instruction and 
technical training. Second, community colleges exist to help their 
communities with economic development. They serve as the local catalyst 
for job training and development. Community colleges have the ability 
to respond quickly to the needs of the communities they serve. When a 
new or existing business needs a trained workforce, they often turn to 
their local two-year college for assistance. Rural community colleges 
truly create opportunities in place for their students, for their 
communities, and for local and regional business and industry.
    Rural community colleges help their communities with economic 
development by:

      Providing expert faculty to educate, train or re-train 
workers.

      Providing technology assistance and training to new and 
established businesses to help them reduce costs and improve 
productivity.

      Partnering with city and county authorities to help 
recruit new industries.

      Teaching students on the latest high-tech equipment used 
by industry and offering flexible schedules and curricula beneficial to 
employers.

      Offering both short-term and long-term training for 
multiple shifts and on the job site, if needed.

      Providing temporary space for new companies interested in 
moving to the community, while facilities are under construction.

      Providing space for start-up businesses, i.e., business 
incubators.

      Providing online training opportunities for employees 
seeking to upgrade their skills.

      Providing entrepreneurship certificates and degrees.

      Providing specialized courses in a modular format 
designed to meet the specific needs of a particular industry.

      Creating training programs to upgrade technical skills 
for potential employees required by a specific industry.

      Administering State and regional incentive programs to 
maximize economic development opportunities for new and existing 
business and industry.

    Community colleges are on the frontline of workforce development. 
Some specific examples of rural-serving community colleges making an 
impact on the economic development of their communities are listed 
below.
Alternative, Renewable, and Traditional Energy
    Community colleges have an important role in helping people qualify 
for ``green jobs.'' Rural America continues to provide much of the 
energy for the rest of the nation, whether it is petroleum, coal, or 
one of the newer energy sources. As the demand for alternative and 
renewable energy increases, the need for more skilled workers grows. 
Community colleges produce highly qualified energy technicians that 
help with the fabrication, installation, and maintenance of turbines, 
solar panels, and other key elements needed for wind, solar, 
geothermal, and biomass energy sources.
    A few examples of the many community colleges providing training 
for alternative and renewable energy technicians include Columbia Gorge 
Community College (OR), Iowa Lakes Community College (IA), Mesalands 
Community College (NM), and Lane Community College (OR).
    Community colleges such as Bismarck State College (ND) work closely 
with industry to train individuals in the field of electrical 
transmission systems technology. With funding from the National Science 
Foundation's Advanced Technological Education (ATE) program, Bismarck 
State College and its industry partners created an associate degree 
program for electrical transmission system operators.
    The Kentucky Coal Academy (KCA), comprised of four community and 
technical colleges located in the eastern and western Kentucky 
coalfields, provides career and technical education and training for 
students interested in mining careers. The colleges ---- Big Sandy 
Community and Technical College, Hazard Community and Technical 
College, Madisonville Community College, and Southeast Kentucky 
Community and Technical College ---- through the Kentucky Coal Academy 
have trained more than 25,000 students and incumbent workers in the 
mining profession since KCA's creation in 2005. These jobs accounted 
for $1,034,834,951 in wages in the state of Kentucky in 2006. The $4.97 
billion in receipts from coal produced and processed in Kentucky in 
2006 generated additional economic activity totaling $588 billion and 
accounted for 55,301 jobs in 2006.
    Somerset Community College in rural Kentucky has been successful in 
establishing a lineman training program to prepare new employees for 
the energy industry. The college partnered with the local rural 
electric cooperative, the area economic development district, and city 
and county officials to create this needed program. To date, 42 linemen 
have graduated from the program, supplying a much needed technical 
worker to the local industry. Through extensive partnerships the 
college has been the catalyst for establishing an important workforce 
training program to provide technical workers who will earn a high wage 
and contribute to the local economic base.
Agriculture
    Community colleges in rural America have a longstanding role in 
agriculture, educating future farmers and providing technical training 
for those interested in learning the latest farming technologies. 
Several colleges have launched new viticulture programs, including 
Northeast Iowa Community College (IA), Shawnee Community College (IL), 
and Redlands Community College (OK). Faculty members from these 
community colleges have a program, the Viticulture and Enology Science 
and Technology Alliance (VESTA), which utilizes Missouri State 
University's expertise in grape research and education. Using distance 
education as well as classroom instruction and hands-on experience in 
the vineyards, VESTA's program provides students and employees in the 
wine industry with the latest industry-validated programs.
Biotechnology
    In addition to partnering with industry, community colleges often 
work with consortia of colleges and universities to deliver high-tech 
programs to meet the needs of their students and communities. For 
example, the Robeson Regional Biotech Education Consortium (RRBEC) 
promotes agricultural biotechnology in southeastern North Carolina. 
Robeson Community College in Lumberton, NC, has an articulation 
agreement with the University of North Carolina to provide 
biotechnology courses and works with local public schools and industry 
partners to provide educational programs to spur economic growth for 
the region.
    Southeastern Community College in North Carolina has the 
distinction of being the first agricultural biotechnology associate 
degree program in the United States. SCC's program concentrates on the 
propagation of plants using tissue culture techniques (micro-
propagation). This allows a technician to produce large quantities of 
plants from a very small amount of mother stock resulting in plants 
that are pest and disease free.
Rural Health
    Access to good health care is essential for attracting and 
retaining businesses and prospective workers to a community. Community 
colleges educate more than half (59%) of the new nurses and the 
majority of other new health-care workers nationally. For rural 
communities, educating and retaining skilled nurses, dental hygienists, 
lab technicians, respiratory therapists, radiology technicians, 
paramedics, and other health care providers is particularly 
challenging. The cost of educating and training individuals in these 
disciplines is high. The cost of specialized equipment, laboratories 
and clinical facilities, and expert faculty members is daunting. 
Retention of skilled health care personnel is also challenging, 
especially given the higher salaries offered in large urban medical 
centers.
    Western Oklahoma State College has been successful in educating a 
higher number of nurses in a very rural area through the use of 
technology. Through the use of interactive television and on-line 
courses, Western has been able to open three additional sites where 
nurses are trained. These rural communities would have continued to 
have a shortage of nurses had it not been for the innovative use of 
technology in order to deliver curriculum to several satellite sites at 
one time. The use of technology has allowed Western to double its 
number of nursing program graduates in just five years.
    Approximately six years ago, the faculty in the Health Occupations 
Department along with college administration at Indian Hills Community 
College in Iowa identified a need for a stronger relationship between 
the health care facilities and the education programs that were 
preparing future workers. An initial survey of future workforce needs 
resulted in the creation of the Rural Health Education Partnership 
(RHEP). This organization is focused on delivering easily accessible 
high-quality programming to meet the ongoing educational needs of the 
health care professionals and first responders in the ten county area 
served by the college. Currently the RHEP has 79 members. The 
membership includes critical access hospitals, long term care 
facilities, emergency medical services and fire departments.
    Indian Hills Community College is located in rural southeast Iowa. 
Discussions with members of the RHEP revealed a critical need for 
health care workers coupled with the difficulty of attracting and 
keeping health care professionals in this rural area. It became clear 
that the best solution was to ``grow our own''. The college had a 
variety of education programs available. One of the challenges was 
getting place-bound individuals to education programs. This has become 
more critical as transportation costs have increased. In 2004 a 
decision was made to take the programs to the students via the 
Internet. By 2005 the Health Information Technology Program had been 
reinvented in an online format. In the next two years the remaining 
programs in the Health Informatics Cluster--Medical Transcription, 
Medical Insurance Coding and Health Unit Coordinator were redesigned 
for online learning. Enrollment in these programs more than doubled. As 
a result of the success of the Health Informatics programs, the 
Associate Degree Nursing Completion and Pharmacy Technology Programs 
are being revised for delivery using web based technology.
Emergency Services
    Nationally, close to 80% of law enforcement, fire fighters, and EMS 
professionals are educated at community colleges.
    On February 18, 2008, a refinery in Big Spring, Texas, located 
along I-20 suffered a major explosion that received national news 
coverage. The explosion resulted in massive damage to both the refinery 
itself and the business operation. First responders from the community 
and the region were on-site within minutes. Miraculously, there were no 
deaths and a low number of injuries suffered. There was a huge fire to 
fight, hazardous conditions to monitor and a major interstate diversion 
to address. Emergency workers trained at rural community colleges were 
on hand to protect life and property.
    The possible death of a major business was at stake and the 
resultant economic loss to a community weighed heavily on the area. The 
battle with the explosion was won. Next the battle to recover would 
begin. From the first responders to the recovery process, partnerships 
and the relationship between the refinery and Howard College in Big 
Spring, Texas, would factor into the success of the company to resume 
its business operations by summer and to celebrate its 80th anniversary 
on February 18, 2009.
Partnerships / Entrepreneurial Pursuits
    Alabama Southern Community College, East Central Mississippi 
Community College, and Meridian Mississippi Community College secured a 
WIRED grant which is now in its final stages. The Mississippi 
Entrepreneurial Alliance (MEA) was formed to promote entrepreneurism in 
rural communities. This group of rural community colleges has been 
striving to identify and empower local champions to promote small 
businesses to start and grow in the rural areas of the two-state 
region.
    Miles Community College in Montana is facilitating a community 
vision-building project with the area economic development council and 
the chamber of commerce. This program will determine what the citizens 
and business community want their area to look like in the year 2015. 
Through the use of focus groups which include high school students, 
senior citizens, church groups, area ranchers and business owners, 
specific goals will be identified and implemented. The college will 
host a series of meetings where community members can vote on the 
activities they want to see implemented.
    North Iowa Area Community College (NIACC) located in rural North 
Iowa has been instrumental in developing an economic development 
strategic plan for the region. NIACC has been nationally recognized for 
its John Pappajohn Entrepreneurial Center (JPEC) and additional 
regional economic development efforts. NIACC underwrites the cost of 
supporting economic development through its Lean Training (companies 
reported over $273 million in savings or increased profits as a 
result).
    The NIACC JPEC has been recognized nationally for its exceptional 
efforts in business start up, growth and retention efforts. Through its 
programs, over 290 new businesses have been started and over 70% of 
those are still in business at the end of 2008, attesting to the value 
of the initial and ongoing services provided. The NIACC JPEC supports 
business from birth to rebirth, and was instrumental in an 80+ person 
company making a transition that enabled it to remain in the rural 
community and retain the jobs there. The NIACC JPEC has the mission of 
entrepreneurial education (traditional and nontraditional), business 
support, and partnerships to stimulate entrepreneurship. More than $100 
million in capital and loans have been generated through this project 
to help fund 12 businesses. This helps drive rural economic development 
in North Iowa through investing in new and expanding businesses.
Summary
    The examples listed in this document are just a few of the hundreds 
of economic development projects currently underway at America's rural 
community and tribal colleges. Rural community colleges are a major 
contributor to the economic development of the communities they serve.
    Rural community colleges are providing innovative strategies all 
across the nation to spur and enhance economic development. Community 
colleges often serve as the catalyst for this important development, 
and they are a vital component to the economic prosperity of the 
regions they serve, as evidenced by the many examples listed above.
    Please consider the importance of rural community colleges as a 
major contributor to the overall economic health of rural communities. 
Community colleges are all about training people for jobs and growing 
the local economy in collaboration with a wide variety of partners. 
Truly, rural community colleges create opportunities in place.
    Chairman McIntyre, Ranking Member Conaway, members of the 
Subcommittee, I thank you for the opportunity to testify before the 
Subcommittee on Rural Development, Biotechnology, Specialty Crops, and 
Foreign Agriculture today.

    Mr. McIntyre. Thank you.
    Thanks to each of you for excellent testimony. The 
Committee will suspend for just a moment. We have a set of 
votes we are trying to deal with.
    Given the fact that we have once again been interrupted by 
votes, as afternoon hearings are prone to have happen, and in 
an effort not to unduly tie up the witnesses and others who are 
involved in today's hearing and to allow for other commitments 
that I know many of you have, we are going to ask the Members 
of the panel to submit their questions in writing and to ask 
the members of our panel to submit them to the testifying 
panel.
    Members of the Subcommittee, in other words, please submit 
your questions in writing to the panel. Panel, once you have 
received those questions, if you would respond, please, 
immediately, no later than 10 calendar days after you receive 
them, so that we can complete our record.
    Also, I would like to remind the witnesses today that the 
record will remain open 10 days from today for any additional 
testimony you might like to submit or any other supplementary 
material that you would like to forward to us.
    We thank each of you for attending today. In closing, I 
would like to ask Mr. Lambe, if he considers the Southeast 
Crescent Regional Economic Commission, which you spoke about 
persistent poverty, how such regional commissions can help 
local communities innovate. If you would please go ahead think 
about preparing a response to that question.
    In addition, Dr. Markley, also the rural 
microentrepreneurial assistance program that you referenced and 
that this Subcommittee included in the farm bill, as that 
program is getting ready to be implemented for the first time 
by USDA, we would ask for your advice as to what would ensure 
that we are able to assist the most microentrepreneurs in rural 
areas.
    Those two questions, if you all would take under 
consideration. All remaining questions will be submitted in 
writing to you, and we do ask for your response within 10 days.
    With that, we want to thank each of you for your testimony 
today.
    I want to thank the Subcommittee Members for their patience 
in light of the unusual circumstances.
    And this hearing now of the Subcommittee on Rural 
Development, Biotechnology, Specialty Crops, and Foreign 
Agriculture is adjourned.
    God bless you all. Godspeed in your travels.
    [Whereupon, at 2:30 p.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
   Supplemental Material Submitted By Jeff Yost, President and CEO, 
           Nebraska Community Foundation, Lincoln, Nebraska 

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Question 1. You mention ``creative regional governance, 
partnerships, and organizations'' as an essential characteristic for 
success for rural communities. We were successful in including the 
creation of several new regional commissions, including the Southeast 
Crescent Authority, in the 2008 Farm Bill. How do such regional 
commissions help local communities innovate?
    Answer. I think the key is to provide flexible and strategic 
resources aimed at building the capacity of rural communities. As I 
mentioned in my testimony, in order for these rural communities to 
innovate, there has to be a certain level of capacity within the local 
community. Helping to build that local capacity through leadership 
development, workforce training and assistance, accurate data for 
community leaders on their particular opportunities and most 
importantly, through flexible investments in promising ideas will go a 
long way toward helping local communities innovate.

    Question 2. You mention in your testimony the importance of 
evaluating success while also acknowledging that measurable results 
from a project may be decades in the making. What advice would you give 
to rural leaders attempting to collect the data that will show whether 
or not a particular project is succeeding? Who in the community usually 
takes on that role?
    Answer. The notion of success in rural development is a slippery 
one. Success in the mind of a local elected official might not be the 
same as success in mind of the local preacher. The first and most 
important thing about evaluating success is to decide, up front, what 
success looks like and to ensure that the key stakeholders in the 
community agree. Once there is broad agreement on what success looks 
like, then I would advise rural leaders to seek assistance from 
community colleges, universities, colleges, regional Councils of 
Government, state or federal agencies, or other institutions to help 
come up with realistic metrics for evaluating progress. The first step 
is to reach local consensus on a vision of success. The second step is 
to seek expert assistance on the development of metrics. Good 
evaluation experts will help community leaders come up with ways to 
measure and assess short--, medium--, and long-term outcomes. As for 
the organization or institution within the community that usually 
assumes this role, I would say it varies. In some cases it's the 
chamber of commerce, in others it's the local government, in others 
it's the local community college. The most important thing is that 
somebody does assume the responsibility and that they have the 
resources and expertise to continually monitor success and communicate 
progress to the community's decision-makers.
Questions Submitted by Hon. K. Michael Conaway a Representative in 
        Congress from Texas
    Question 1. More than 88 programs administered by 16 different 
federal agencies target rural economic development. USDA Rural 
Development administers most of these programs and is designated as the 
lead federal agency. In your experience, does this divided approach 
among so many agencies present additional challenges and would it be 
more effective to consolidate the leadership and funding into just a 
few major programs under USDA?
    Answer. In my experience, the confusing nature of federal programs 
for rural development does cause confusion at the local level. It is a 
daunting task to negotiate opportunities among so many agencies and 
programs and rural communities rarely have the staff capacity and 
expertise to take on the task.
Questions Submitted by Hon. William ``Bill'' Cassidy a Representative 
        in Congress from Louisiana
    Question 1. By your testimony we hear each community is unique in 
its challenges and available resources. What are the core, critical 
resources necessary for small, rural communities to succeed in economic 
development? Or, if resources tend to vary widely among communities, 
then how can a community effectively determine its strongest resources? 
Do you have a metric to predict results with a given set of resources?
    Answer.As I mentioned in my testimony, I believe that the critical 
ingredients for ``success'' in rural development are leadership, local 
vision, a broad understanding of local assets, creative governance, 
measures to evaluate progress and a comprehensive notion of 
development. I understand that none of those ingredients speak to a 
specific resource, but in my experience there is not a core critical 
resource that's absolutely necessary across rural communities. Some 
communities have figured out ways to thrive on pig waste, others on 
oil, others on community theater, and others on a combination of 
resources. The second part of the question, in terms of how a community 
can determine its strongest resources, is I think the key here. There 
are lots of ways to assess assets and opportunities, but what's most 
important is that the assessment is done with an open mind. I've seen 
this done best when somebody or an organization from outside the 
community facilitates the process with a fresh perspective on the 
community's opportunities. I do not have a metric to predict results 
with a given set of resources. In my experience, there are far too many 
context specific circumstances to predict results generically.
Response from Dr. Deborah M. Markley, Managing Director and Director of 
        Research, RUPRI Center for Rural Entrepreneurship
Questions Submitted by Hon. Mike McIntyre a Representative in Congress 
        from North Carolina
    Question 1. The Rural Microentrepreneur Assistance Program is also 
a new rural development program established in the 2008 Farm Bill. As 
USDA prepares to implement this program for the first time, what advice 
would you give them to ensure that we are able to assist the most 
microentrepreneurs in rural areas?
    Answer. Reaching as many microentrepreneurs as possible in rural 
America regarding the new USDA Rural Microentrepreneur Assistance 
Program can happen through a number of channels. For 20+ years, the 
U.S. field of microenterprise practitioners has brought technical 
assistance and access to capital to entrepreneurs throughout the land. 
Over half of these are dedicated in whole or in part to serving rural 
regions. Such practitioner organizations predominantly offer technical 
assistance--assisting startup and emerging (potential for growth) 
entrepreneurs with feasibility studies, business plan development, 
strategic market analysis and access, human resource management, and 
more. Some couple this help with access to hard-to-find capital through 
a wide range of revolving loan funds, often funded by US Department of 
Agriculture, Small Business Administration, or Community Development 
Block Grant monies.
    Newer model technical assistance techniques that are gaining good 
results include entrepreneurial coaching, access-to-market strategies, 
entrepreneurial networks, regional flavor, economic gardening, and 
HomeTown Competitiveness, to name a few. Each focuses on building an 
entrepreneurship development system of supports and connections for 
entrepreneurs based on their skill set levels, the life stage of their 
businesses, the best market intelligence that can be provided, and the 
assets of the surrounding community. Deploying these new USDA 
microenterprise funds primarily for technical assistance services could 
result in assisting thousands of very small business owners and their 
families each year. The microenterprise field has had a long-term need 
for technical assistance funding, especially in rural areas, and this 
type of allocation will be a significant benefit to many.
Recommendations
    Rural Practitioner Task Force. In short order, convene a task force 
of ``consumers'' --rural microenterprise practitioners--in order to 
advise on the design of a program that is the most responsive to rural 
microentrepreneurs' needs, with a strong focus on encompassing 
technical assistance approaches. Practitioners can be identified 
through the organizations identified below in the Communications 
recommendation. The task force could also be utilized in creating and 
monitoring an evaluation system to identify the most effective ways in 
which this funding is being deployed.
    Broad Dissemination of Information about the Program. The targeted 
dissemination of information about the USDA Rural Microentrepreneur 
Assistance Program and its related Request for Proposals will be 
essential to widespread participation in this effort. This could be 
shared through the RUPRI Center for Rural Entrepreneurship's 
newsletter, as well as on its website 
(www.energizingentrepreneurs.org). Its newsletter circulation is 
greater than 4,000 and is read by a variety of rural practitioners who 
are working with entrepreneurs throughout the countryside. As well, the 
news from the e-newsletter is picked up by several other newsletters 
and listservs to further extend its rural reach. In addition, the 
Center would collaborate with other rural organizations (both national 
and regional) to make sure that the announcement of the program was 
widely broadcast through their websites and newsletters.
    Secondly, there is a directory of microenterprise practitioners 
that has been created by FIELD at the Economic Opportunities Program of 
the Aspen Institute. The directory could be used to supply every 
microenterprise practitioner with the knowledge to utilize the program 
with its rural clients. Over 550 practitioner programs are listed in 
the 2002 Directory of Microenterprise Programs, and at least half of 
them have served rural areas in some part. The directory can be found 
at http://fieldus.org/Publications/index.html#2002Dir.
    Third, there are networks for microenterprise development in about 
25 states. These are statewide coalitions that concern themselves with 
helping startup and existing microenterprises to thrive, and all of 
them address the rural areas of their states. Most are memberships 
composed of microenterprise practitioner organizations that work 
directly with the entrepreneurs, and thus provide the most direct route 
for getting services from the new rural program to the end user. There 
is a Statewide Microenterprise Association (SMA) that is managed by 
CFED, and connections to the various statewide coalitions can be made 
by going to http://www.cfed.org/focus.m?parentid=32&siteid=40&id=40 or 
contacting Kimberly Pate, Vice President for Strategic and Public 
Partnerships, [REDACTED].
    Finally, the national trade association for microenterprise, while 
not specializing in rural microenterprise, has the ability to broadcast 
information about new programs to its 300+ members through its website, 
www.microenterpriseworks.org, or via teleconferences and webinars. A 
former Rural Committee composed of member practitioner organizations 
followed the development of this program closely and is poised to 
assist in its implementation as called upon.
Questions Submitted by Hon. K. Michael Conaway a Representative in 
        Congress from Texas
    Question 1. More than 88 programs administered by 16 different 
federal agencies target rural economic development. USDA Rural 
Development administers most of these programs and is designated as the 
lead federal agency. In your experience, does this divided approach 
among so many agencies present additional challenges and would it be 
more effective to consolidate the leadership and funding into just a 
few major programs under USDA?
    Answer. Rural America faces a variety of challenges, including lack 
of trained health care professionals, lack of access to Broadband, 
lower rates of college enrollment, more limited access to business 
support services. All of these challenges make rural economic 
development more difficult for rural communities and regions. And, the 
challenges offered here can be most effectively addressed by different 
agencies of the Federal government--Health and Human Services, 
Agriculture, Commerce, Education. However, to be most effective, these 
various agencies should be guided by a common vision for rural 
development. This vision should address several questions. Why do we 
allocate funds to rural development? What goals are we trying to 
achieve? How can we move, at the Federal level, from a rural 
development strategy that focuses on spending in rural regions to one 
that emphasizes investing in rural regions?
    What is most critical for rural economic development is not 
consolidation but coordination of Federal programs. In a recent speech 
before the Rural Community Economic Development Conference sponsored by 
the Illinois Institute for Rural Affairs at Western Illinois 
University, Dr. Sam Cordes, Associate Vice Provost for Engagement, Co-
Director of the Center for Regional Development, and Assistant Director 
of the Cooperative Extension Service, suggested the need for a White 
House Office of Rural Policy that would work in a similar fashion to 
the White House Office of Urban Affairs established by Executive Order 
on February 20, 2009. Such an office could provide leadership for rural 
policy and help to coordinate the economic development efforts of 
agencies throughout the Federal government. The suggestion of a White 
House Office is not a new concept and is not the only approach to 
achieving the desired level of coordination. Another option would be to 
create an inter-departmental working group, at the secretary level, 
that works to align departmental investments in support of the unified 
rural development strategy or vision described above.
    The Regional Collaborative Investment Program (RCIP) also plays an 
important role in support of a more coordinated Federal response to 
rural development challenges. RCIP provides a mechanism for regions to 
build a more collaborative approach to rural development--an approach 
that moves from a focus on program spending to a focus on investing in 
innovation. If RCIP guidelines are tied to a more collaborative and 
coordinated approach to making Federal investments in rural 
development, rural regions would have an opportunity to develop their 
competitive advantages in a way that is comparable to the regional 
approach taken in most urban and suburban areas. RCIP can be a tool for 
identifying appropriate investments in rural regions that can be most 
effective in creating this competitive advantage.
Questions Submitted by Hon. Glenn Thompson a Representative in Congress 
        from Pennsylvania
    Question 1. You talked about how energy-related jobs could 
significantly contribute to rural economic development. I couldn't 
agree more. Oil and gas has been the dominant economic force in the 
northwestern part of my district for over 150 years. However, large 
areas of my rural district have gone further into recession as oil and 
gas production has declined -- and I would not hesitate to blame 
overregulation as one of the reasons for this decline. How do you view 
the role of traditional energy sources as a way to rejuvenate rural 
America?
    AnswerRural America is well positioned to participate in the 
country's drive toward energy independence. Traditional energy sources 
will continue to play a role in some parts of rural America--the Center 
is working in western North Dakota where a boom in traditional energy 
production is protecting that region and many of its residents from the 
harshest effects of the current economic downturn. However, to the 
extent that traditional energy resources are non-renewable, a rural 
economic development strategy built solely around these supplies is not 
likely to produce sustained rural growth. Rural communities and regions 
are likely to benefit from development strategies that capture a 
broader range of energy opportunities including renewable fuels such as 
wind, solar, and biofuels. These alternatives also represent fertile 
ground for rural entrepreneurs who can create business opportunities by 
building on regional energy assets.
    Entrepreneurial support organizations are rising to this challenge 
and creating new products and services to support entrepreneurs in 
``green'' and renewable energy fields. For example, Appalachian 
Community Enterprises, a microenterprise program in northern Georgia, 
has launched a Green Loan program to support the capital and technical 
assistance needs of entrepreneurs (http://www.georgiagreenloanfund.org/
).

    Question 2. For a several reasons, there are areas within my 
district that have inadequate access to high speed internet and cell 
phone coverage. Dr. Markley, do you have any advice on how communities 
without broadband and inadequate cell phone service can adapt?
    Answer. Inadequate access to high speed Internet and cell phone 
coverage presents a number of significant challenges to rural 
communities. Internet and cell service are basic elements of the 
infrastructure necessary for rural communities to be competitive in a 
global economy and to provide a high quality of life. Without these 
services, rural school children are at a disadvantage in accessing web-
based learning, rural entrepreneurs cannot reach distant markets, rural 
doctors cannot use telemedicine to benefit their patients and rural 
youth migrate to more tech-savvy communities.
    This infrastructure challenge, however, is not insurmountable. 
There are examples of communities and states that have made investments 
in this vital infrastructure, recognizing that overcoming the rural 
differential in Internet access was necessary to successful rural 
economic development. North Carolina's e-NC Authority was established 
by the legislature in 2000 (originally named the Rural Internet Access 
Authority) as an effort to link all rural communities in the state to 
the Internet. The initiative has focused on advocacy for private sector 
expansion of service into rural communities and has helped to build 
dedicated telecenters to bring services into rural communities, if not 
into every rural home. e-NC represents one model for state level action 
to advance rural Internet access (www.e-nc.org).
    Northern Minnesota provides an example of a community or regional 
response to the lack of Internet access. Boreal Access is a 
cooperatively-owned, non-profit Internet Service Provider established 
in northeast Minnesota to provide community residents and businesses 
with access to the Internet as well as a ``community commons'' for 
sharing information about events and issues in the region. Boreal also 
offers services to businesses that allow them to become e-commerce 
capable. Over its 13 year history, the provider has built its capacity 
to serve residents, first in the more populous parts of the region 
(www.boreal.org).
    The Rural Policy Research Institute (RUPRI) has provided input into 
the rural Broadband discussion consistently in the past, including 
early work on the Universal Service Fund and the work of its 
Telecommunications panel. Two recent reports focus specifically on the 
Broadband challenge in rural America--Rural Broadband--A RUPRI Policy 
Brief (Dabson and Keller, 2008, www.rupri.org) and comments to the US 
Department of Commerce and US Department of Agriculture on the American 
Recovery and Reinvestment Act of 2009 Broadband initiatives prepared by 
RUPRI President and CEO, Brian Dabson, in April 2009 
(www.ntia.doc.gov).
Questions Submitted by Hon. William ``Bill'' Cassidy a Representative 
        in Congress from Louisiana
    Question 1.By your testimony we hear each community is unique in 
its challenges and available resources. What are the core, critical 
resources necessary for small, rural communities to succeed in economic 
development? Or, if resources tend to vary widely among communities, 
then how can a community effectively determine its strongest resources? 
Do you have a metric to predict results with a given set of resources?
    Answer. There is tremendous diversity in rural America and no two 
rural communities or regions bring the same set of assets to economic 
development. There is no single economic development approach that will 
work best in all rural places. In recent work done in partnership with 
the American Farm Bureau Federation and the Kansas Farm Bureau, the 
Center produced a white paper entitled 21st Century Rural Development. 
In that paper, we identify five keys to success for rural communities 
engaged in designing and implementing an economic development strategy, 
based on our work with rural communities across the country:

      Starting with the ``right'' game plan--Rural communities 
need to recognize that the opportunities for doing things the way they 
have done in the past, i.e., focusing on industrial recruitment and 
emphasizing cheap, low cost resources, have diminished or disappeared. 
Rural communities need to take an asset-based approach to development--
focusing on the resources and entrepreneurs that are located in rural 
regions already. The Center (among others) have developed tools that 
community and regional leaders can use to identify the assets that can 
serve as the foundation for economic development 
(www.energizingentrepreneurs.org).

      Investing in developmentToo many rural communities try to 
conduct the business of economic development with limited resources and 
volunteers. To be most successful, rural communities need to invest in 
their economic development capacity--staff and resources devoted to 
designing and implementing a strategy for development. For example, 
rural communities using the HomeTown Competitiveness framework 
developed by the RUPRI Center for Rural Entrepreneurship, the Nebraska 
Community Foundation and the Heartland Center for Leadership 
Development, voted for local option sales taxes to raise funds 
dedicated to economic development (www.htccommunity.org). These same 
communities are also building community foundations to endow economic 
development efforts into the future (a topic addressed in great detail 
by Jeff Yost, President, Nebraska Community Foundation, at the 
Subcommittee hearing on March 31, 2009.)

      Taking a systems approach-- To be successful, rural 
communities must recognize that economic development is a shared 
responsibility. It takes the efforts of organizations and leaders in 
the public, private and non-profit sectors. It requires bringing 
together key players in economic development so that they can align the 
work of their separate organizations with a broader vision for rural 
development. The northern Minnesota region has been taking this systems 
approach for some time--bringing together individual public and private 
economic development organizations into a Regional Economic Development 
group. This history of working together has translated into a new 
initiative to create a systems approach to entrepreneurship development 
in the region (www.greenstonegroup.org).

      Reaching scale through regionalism and collaboration-- 
Scale does matter in our globally competitive economy. But, the 
solution is not for rural communities to get big, but rather to partner 
with neighboring communities and to reach out to regional development 
organizations that can tap a broader set of resources than any one 
community can tap on its own. A recent report on the outcomes of the 
Kellogg Foundation's multi-year effort to support collaborative rural 
entrepreneurship development systems provides some important lessons 
learned about the challenges, costs, and benefits of regional 
collaboration (http://fieldus.org/Publications/EDS2008.html).

      Valuing heritage-- A key to successful rural development 
is to embrace a new path for economic development while maintaining a 
strong sense of the heritage and culture that makes rural places 
unique. One of the most innovative approaches to rural development that 
exemplifies this key is Regional Flavor Strategies. These regional 
development efforts focus on identifying the unique ``flavor'' of a 
region and creating a brand based on the unique assets in the region. 
The primary resource for learning more about Regional Flavor is Natalie 
Woodroofe [REDACTED].

    While these keys focus on building capacity for economic 
development, it is also important to recognize that rural development 
is place based and, as a result, the assets and health of rural 
communities and regions is important for economic success. Investing in 
strong rural schools (K&12), rural community colleges, and regional 
universities is an important prerequisite for economic development. 
Economic development is also advanced by ensuring that rural 
communities are ``healthy communities'' through appropriate investments 
in health and human services. Better coordination and collaboration 
across Federal agencies, such as between US Department of Agriculture 
and US Department of Health and Human Services, would reflect the 
multi-dimensional nature of economic development in rural America and 
create greater alignment of investments that help rural communities and 
regions more effectively engage in economic development.
Response from Jeff Yost, President and CEO, Nebraska Community 
        Foundation
    Chairman McIntyre and Members of the Subcommittee:
    Thank you again for the opportunity to provide testimony on March 
31 re: the Nebraska Community Foundation, our HomeTown Competitiveness 
(HTC) framework and the extraordinary opportunities available to 
enhance and sustain rural America.
Questions Submitted by Hon. Mike McIntyre a Representative in Congress 
        from North Carolina
    Question 1. In your testimony you mention that the Federal 
government can play a role by providing technical assistance and 
funding streams to empower local leaders, can you specify what types of 
technical assistance and funding streams are most helpful?
    Answer. We must appreciate that almost all other developed nations 
(especially in Europe), whose regions are now our primary competitors 
in the global marketplace, provide at least 3% of all federal funds to 
support technical assistance and community asset building. This funding 
ensures that local leaders are empowered with important decision 
support mechanisms to increase the potential for successful outcomes 
from federal investments.
    The purpose of the Rural Collaborative Investment Program (RCIP) is 
to help provide this type of customized technical assistance to build 
local capacity. RCIP combines flexible, locally-controlled funding for 
communities to work together to enhance their capacity for common 
action and to achieve their desired futures.
    In addition to flexible funding, it is also critical to focus on 
what assistance is provided. A primary outcome should be to strengthen 
community controlled, federally funded regional development 
organizations (such as Rural Conservation and Development Districts, 
Small Business Development Centers, Council's of Government, Economic 
Development Districts, etc.). Many rural communities are too small and 
have too little individual capacity to effectively access and use 
external assistance. Regional development organizations can provide 
coordination and facilitation to help small communities build both 
economies of scale and economies of function to build greater place-
based opportunity.
    Strengthening regional development organizations should occur in 
two ways. First, federal funding should leverage state funding to 
create super-regional organizations whereby different entities serving 
the same region move towards integration and shared management and 
governance. Second, efforts to build and sustain community capacity 
should be robustly supported at the federal level.
    Finally, if local funding streams can be built (such as community 
endowments) these can be used to leverage state and federal investment 
to build and sustain the locally-created, locally-driven community 
economic development agenda.
Questions Submitted by Hon. K. Michael Conaway a Representative in 
        Congress from Texas
    Question 1. More than 88 programs administered by 16 different 
federal agencies target rural economic development. USDA Rural 
Development administers most of these programs and is designated as the 
lead federal agency. In your experience, does this divided approach 
among so many agencies present additional challenges and would it be 
more effective to consolidate the leadership and funding into just a 
few major programs under USDA?
    Answer. The federal government has many rural development programs, 
but no all-encompassing vision for rural development. Why are we 
allocating federal funds: Are they simply transfer payments or are they 
long-term strategic investments? In most developed nations, there is a 
deeply articulated rural development strategy for federal investments 
in rural regions. Building such an approach provides an opportunity for 
various departments to actively align investments, programs, and 
evaluations.
    At a minimum, better coordination of effort and investment is 
critical. Most rural policy analysts, for at least two decades, have 
recognized the importance of and requested establishment of a White 
House Office of Rural Affairs. Or, if establishment of such an office 
is not achievable, some type of interdepartmental rural coordinating 
council could be established and given real authority to rationalize 
the system. Such an entity, actually implemented, coupled with an 
intentional effort to strengthen community owned and controlled 
regional development organizations, would be a huge step forward.
Questions Submitted by Hon. Glenn Thompson a Representative in Congress 
        from Pennsylvania
    Question 1. Mr. Yost mentioned that only a small number of young 
adults do not consider returning to their hometown after college. This 
very issue has been a reality in my district for many years. In your 
view, what can rural areas do to provide greater economic development 
in order to nurture local jobs?
    Answer. With information technology and broadband available nearly 
everywhere (or soon will be) in the U.S., many professionals can live 
and work wherever they want. Therefore, place, and the quality of life, 
amenities and culture of that place, are of paramount importance.
    In most instances, new economic opportunity in rural America is not 
going to occur through attraction or relocation of existing businesses 
or industries. We believe that new economic opportunity in rural 
America will primarily be driven by place-based entrepreneurs seeking 
to balance their desire to build a business with their desire to live 
in a particular community.
    Therefore, rural communities and regions need to build a robust 
programmatic support infrastructure to assist entrepreneurs in building 
and evolving their businesses.
    We believe our HomeTown Competitiveness (HTC) framework, referenced 
in my testimony, clearly addresses all of the key issues in building 
local capacity to allow entrepreneurs to thrive in place and allow 
communities the opportunity to build out new leadership capacity, 
opportunity capital and a positive self-fulfilling prophecy that will 
encourage entrepreneurs to build their businesses at home.
Questions Submitted by Hon. William ``Bill'' Cassidy a Representative 
        in Congress from Louisiana
    Question 1. By your testimony we hear each community is unique in 
its challenges and available resources. What are the core, critical 
resources necessary for small, rural communities to succeed in economic 
development? Or, if resources tend to vary widely among communities, 
then how can a community effectively determine its strongest resources? 
Do you have a metric to predict results with a given set of resources?
    Answer. The most important resource any community can have is a 
cadre of leadership committed to the long-term health and prosperity of 
everyone in their community. This cadre of leadership must be inclusive 
and be continually evolving itself to remain motivated and connected to 
community needs and opportunities.
    NCF and HTC have several assessment tools we use to determine 
readiness to engage in a range of community economic development 
activities, ranging from business development services to youth 
engagement to building a community foundation.
    The most important actions this cadre of community leaders can take 
are to identify their regional competitive advantage and build a plan 
for mobilizing community assets to realize this opportunity. 
Historically, regional competitive advantage was expressed solely in 
terms of access to natural resources (timber, minerals, waterways, 
farmland, etc.). But today, community leadership must assess all of 
their assets (leadership, natural amenities, arts and culture, 
entrepreneurial spirit) to determine how they can build an 
interconnected community that people will want to live in.
    Thank you again for the opportunity to provide testimony and to 
respond to your questions.
Dr. Response from Randy Smith, President, Rural Community College 
        Alliance Altus, Oklahoma
Questions Submitted by Hon. Mike McIntyre a Representative in Congress 
        from North Carolina
    Question 1. The need for greater collaboration among rural 
communities is a constant theme. How do community colleges collaborate 
with other educational institutions for the purposes of enhancing rural 
development?
    Answer. Representative McIntyre, I am pleased to report that rural 
community colleges typically do an excellent job of collaboration and 
partnership with other educational institutions. This includes two-year 
colleges partnering with four-year universities, two-year colleges 
partnering with small business development centers, and partnerships 
with local chambers of commerce, technology centers, and local business 
and industry. Rural community colleges realize the importance of these 
partnerships to their students and to the communities they serve. It is 
through these partnerships that the strengths of several organizations 
are maximized for the benefit of an area's economic development.
    In order to encourage these important partnerships, federal 
agencies may want to consider awarding grants to partnerships and 
consortiums instead of to single agencies. Community colleges should be 
a part of any rural consortium that is involved in economic development 
due to their important role in workforce development, expertise in 
instruction, community resources and their existing connections with a 
community. Federal agencies may want to consider providing incentives 
for organizations that seek to collaborate.
    Rural community colleges have long recognized the importance of 
partnering with local hospitals and healthcare facilities in order to 
effectively educate nurses and allied health care professionals. These 
partnerships are a key component to successfully educating a quality 
healthcare workforce. These collaborations often provide the necessary 
clinical resources, equipment resources, and other means to educate and 
grow the number of graduates from these important programs.
    Many technical programs not only collaborate with other educational 
institutions, but they organize advisory committees of local and 
regional professionals who work directly in the industry. These 
advisory committees provide valuable input on curriculum, trends in the 
industry, and up-to-date training equipment.
    The partnerships and collaboration discussed above provide a means 
for rural communities to ``grow their own'' trained professionals. 
Shortages of allied healthcare workers and skilled technical workers in 
rural areas abound. Successful rural education programs and 
partnerships as discussed above can be used to address the shortage of 
a specialized workforce.
Questions Submitted by Hon. K. Michael Conaway a Representative in 
        Congress from Texas
    Question 1. More than 88 programs administered by 16 different 
federal agencies target rural economic development. USDA Rural 
Development administers most of these programs and is designated as the 
lead federal agency. In your experience, does this divided approach 
among so many agencies present additional challenges and would it be 
more effective to consolidate the leadership and funding into just a 
few major programs under USDA?
    Answer. Representative Conaway, thank you for your question and in 
a word, the answer would be ``yes!'' Rural community colleges have 
limited resources to search for, and write grants. It is difficult to 
find, and be aware of, grant opportunities and it presents a challenge 
when differing agencies have different requirements and may or may not 
support the same goals. Administrative rules are particularly difficult 
and burdensome. The bureaucracy can, at times, be daunting for colleges 
with limited resources; and dedicating an employee to search for and 
complete a grant application is often not feasible. Simply knowing 
about the grant possibilities is often a challenge, as there are 
multiple agencies that administer rural economic development grants. A 
coordinated approach to ``rural'' would be a welcome change. A single 
place to search for rural grants, and a streamlined application process 
would allow more rural colleges to participate in the process, untimely 
allowing them to more effectively serve their stakeholders. Community 
colleges have business offices that can serve as fiscal agents, their 
service areas are regional, and they have the necessary infrastructure 
to track the use of funds and the results of the programs the funds 
created.
Questions Submitted by Hon. William ``Bill'' Cassidy a Representative 
        in Congress from Louisiana
    Question 1. By your testimony we hear each community is unique in 
its challenges and available resources. What are the core, critical 
resources necessary for small, rural communities to succeed in economic 
development? Or, if resources tend to vary widely among communities, 
then how can a community effectively determine its strongest resources? 
Do you have a metric to predict results with a given set of resources?
    Answer. Representative Cassidy, thank you for this important 
question. You are correct that rural communities do vary widely. Often, 
the core component rural communities need in order to become involved 
in economic development is an office or person empowered with the 
responsibility of leading and coordinating these efforts. Frequently, 
this type of office is hosted and operated by the local community 
college. Colleges have the infrastructure and facilities as well as a 
staff that is usually already involved in the region's economic 
development. Communities that do not have a rural community college can 
partner with one in a neighboring community. Rural community colleges 
can and will lead the effort to spur economic development in the 
communities they serve. Local government agencies and businesses should 
communicate and partner with the college that serves their community.
    The core critical resources would be: the community college, local 
government, business and industry, and the local chamber of commerce. 
All of these groups should work together for the economic development 
of a community. All of the partners discussed above are critical to the 
success of any project. The best metric to predict results is the 
consortium or partnership that was formed to address the economic 
development project. Partnerships are far more effective than are 
single entities. Although rural communities are very different, nearly 
all will be served by a community college (even if not in the 
community) and will have a chamber of commerce, as well as having local 
elected representatives who are committed to economic development. 
Rural community colleges can lead this effort as one of their main 
missions is the support of local economic development. There is no need 
to create another type of system. Collaborative groups could be 
organized and empowered with some direct funding. A goal would be to 
have a ``one-stop shop'' for an entire region when it comes to economic 
development services. Working with each community is a necessity and it 
is something that community colleges already do. New business starts, 
their resultant jobs, and staying power are the things that community 
colleges can track along with other metrics that predict local economic 
development.
Questions Submitted by Hon. Glenn Thompson a Representative in Congress 
        from Pennsylvania
    Question 1. Mr. Smith, you talked about how energy related jobs 
could significantly contribute to rural economic development. I 
couldn't agree more. Oil and gas has been the dominant economic force 
in the northwestern part of my district for over 150 years. However, 
large areas of my rural district have gone further into recession as 
oil and gas production has declined--and I would not hesitate to blame 
overregulation as one of the reasons for this decline. How do you view 
the role of traditional energy sources as a way to rejuvenate rural 
America?
    Answer. Representative Thompson, thank you for your question on 
energy. You are absolutely correct; the ``boom and bust'' phenomenon 
has been, and will continue to be, an issue for rural communities. 
Rural communities and their colleges have faced this issue in several 
states. One thing colleges have done to deal with the ``boom and bust'' 
scenario is planning during the times of boom for the times of a 
slowdown which will eventually occur. When the economy is strong and 
employment is strong, rural communities and their colleges must prepare 
for the predictable downturn, often not knowing when such a turn might 
hit. This includes investing in additional or different types of 
workforce and academic training programs, including renewable energy 
programs. Workforce development in traditional energy production is 
still a large training program at many rural community colleges and the 
need for trained traditional energy workers is still great.
    New energy jobs that rural community colleges should consider 
preparing workers for are in renewable energy and energy efficiency. 
The technology is here now and many two-year colleges across the nation 
are offering programs in renewable energy. Wind energy technician 
programs are being created in many areas. Rural America is where wind 
farms are established. Rural America is where wind turbine 
manufacturers are locating. Decentralized solar water heating and solar 
technicians are growing industries that require a trained workforce. 
Also, the demand for a commercial and residential energy auditing 
workforce is enormous in both urban and rural areas. Several two-year 
colleges are now offering programs in this specialized area as well.
    As you know the need for trained workers in the traditional energy 
field still exists, and rural community colleges are meeting this need 
in many areas. However, rural communities and their colleges need to 
consider new education programs in renewable energy as the demand for 
these trained workers is high and industry experts predict that this 
demand will continue well into the future.
Dr. Response from Robert J.Thompson, Executive Director Of The 
        Androscoggin Valley Council Of Governments
Questions Submitted by Hon. Mike McIntyre a Representative in Congress 
        from North Carolina
    Question 1. In your testimony, you focus on the USDA Rural 
Development programs, but mention other programs such as the Economic 
Development Administration (EDA), Community Development Block Grants 
(CDBG), and federal-state regional commissions. There is always a push 
in Washington, DC not to have programs that appear to overlap in 
mission and function. How does your experience reflect on the overlap 
of these programs? Do they complement each other, overlap or interfere, 
or meet different needs?
    Answer. My experience with these programs is that they tend to be 
targeted to a specific recipient base, problem or need. The programs 
seldom overlap and are often very complimentary when one is 
knowledgeable enough about the programs to maximize opportunity.
    However, when there is the opportunity to mix and match programs 
from various agencies, specific grant guidelines may rule out many 
practical approaches.
    For example, Community Development Block Grant (CDBG) funds may to 
be used as local match for federal funds. In contrast, the CDBG Small 
Cities Programs are typically state administered on a competitive basis 
and funds may or may not be available to serve as required match, or as 
a complimentary program to defray or eliminate costs for new or 
upgraded service entrances, for eligible households, in combination 
with a water system expansion or upgrade funded in part through USDA.
    The real issue many rural regions face is the availability of 
knowledgeable staff able to provide technical assistance to the 
community or region to ensure the most suitable grant and loan options 
are being pursued.
Questions Submitted by Hon. K. Michael Conaway a Representative in 
        Congress from Texas
    Question 1. More than 88 programs administered by 16 different 
federal agencies target rural economic development. USDA Rural 
Development administers most of these programs and is designated as the 
lead federal agency. In your experience, does this divided approach 
among so many agencies present additional challenges and would it be 
more effective to consolidate the leadership and funding into just a 
few major programs under USDA?
    Answer. My immediate reaction would be simpler is better; less 
programs to keep track of, fewer variations in application and 
compliance regulations. Upon further reflection, I would be concerned 
that in an effort to simplify or consolidate programs we could lose 
more than we have gained.
    To ensure resources address a variety of challenges, needs and 
opportunities, I believe we need to have some degree of targeting. 
Legitimate planning at the local or regional level cannot be 
appropriately carried out without some expectation of funding 
availability.
    A specific example is the USDA Rural Water and Wastewater Loan and 
Grant program. Because the annual demand for these funds typically 
exceeds available resources, project priority lists and multi-year 
investment strategies are developed with the expectation that 
additional funds will be available in subsequent years. Consolidated 
programs may or may not preserve these individual funding streams.
    It is also important to note that a consolidation or streamlining 
effort at the federal level will not change the fact many rural 
communities lack the staff capacity to navigate the bureaucracy of the 
federal grant system. Without assistance from local and regional 
technical assistance entities, such as regional development 
organizations, many communities are simply unable to access rural 
development funding--not matter what the program structure.
Dr. Response from Robert J.Thompson, Executive Director Of The 
        Androscoggin Valley Council Of Governments and Vice-Chair, 
        Rural Development Task Force of the national Association of 
        Development Organizations (NADO), Auburn, Main
    Question 1. On the same subject, my district has a long history 
with timber harvesting, where it remains a major job source in rural 
Pennsylvania. It seems to me that we talk a lot about advancing 
renewable energy, but don't do enough to push the most abundant form--
biomass. In your view, what kinds of steps can we take to increase and 
encourage our use of timber for biomass?
    Answer. I am a firm believer in the Forest Service and the role it 
plays in providing stewardship and assistance in the management of our 
forest resource base. I am also aware the parceling of this resource 
deletes acreage from commercially manageable units.
    The initial findings of work done in Maine indicates that meeting 
the possible demand for potential forms of biomass for an alternative 
energy supply would require expanded management to increase yield. We 
would need to more aggressively manage current lands and bring other 
lands back into active management. In addition, the Forest Service 
would need to play a significant role in non-commercial landowner 
assistance.
    If the utilization of biomass for energy is not properly matched to 
the sustainable yield and cost efficient harvesting, there could be an 
unfavorable shift in the cost of supply to traditional consumers of the 
forest resource. Biomass is currently part of the Maine energy plan and 
it can be a more significant portion in future, but it will not replace 
our need to have other energy supplies and to aggressively pursue 
conservation.
Questions Submitted by Hon. William ``Bill'' Cassidy a Representative 
        in Congress from Louisiana
    Question 1. By your testimony we hear each community is unique in 
its challenges and available resources. What are the core, critical 
resources necessary for small, rural communities to succeed in economic 
development? Or, if resources tend to vary widely among communities, 
then how can a community effectively determine its strongest resources? 
Do you have a metric to predict results with a given set of resources?
    Answer. The core need for most small rural communities is access to 
local and regional planning and development technical assistance. 
Consultants can be hired to develop plans and strategies and lead in 
implementation activities, but do not replace the long term value of 
having access to local and regional expertise with an established 
working relationship with local decision makers.
    Indigenous resources and assets do vary widely among rural 
communities, but our task is to recognize those assets and effectively 
utilize them to produce positive change for our communities and 
regions. In my testimony I reference a new innovative asset-based rural 
development strategy that the Economic Development Districts (EDDs) in 
Maine are working with state and local officials, private sector 
leaders and nonprofit partners. This model will identify the assets and 
strengths of a region and help implement plans to leverage those 
assets. Additional details can be provided upon request.

                                   &&
