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



                       PROPOSED FISCAL YEAR 2011
                          BUDGETS FOR REGIONAL
                   ECONOMIC DEVELOPMENT COMMISSIONS,
                       PRIORITIES AND IMPACTS ON
                           REGIONAL ECONOMICS
                             AND EMPLOYMENT

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

                               (111-108)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
    ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             April 29, 2010

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure









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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                 JAMES L. OBERSTAR, Minnesota, Chairman

NICK J. RAHALL, II, West Virginia,   JOHN L. MICA, Florida
Vice Chair                           DON YOUNG, Alaska
PETER A. DeFAZIO, Oregon             THOMAS E. PETRI, Wisconsin
JERRY F. COSTELLO, Illinois          HOWARD COBLE, North Carolina
ELEANOR HOLMES NORTON, District of   JOHN J. DUNCAN, Jr., Tennessee
Columbia                             VERNON J. EHLERS, Michigan
JERROLD NADLER, New York             FRANK A. LoBIONDO, New Jersey
CORRINE BROWN, Florida               JERRY MORAN, Kansas
BOB FILNER, California               GARY G. MILLER, California
EDDIE BERNICE JOHNSON, Texas         HENRY E. BROWN, Jr., South 
GENE TAYLOR, Mississippi             Carolina
ELIJAH E. CUMMINGS, Maryland         TIMOTHY V. JOHNSON, Illinois
ELLEN O. TAUSCHER, California        TODD RUSSELL PLATTS, Pennsylvania
LEONARD L. BOSWELL, Iowa             SAM GRAVES, Missouri
TIM HOLDEN, Pennsylvania             BILL SHUSTER, Pennsylvania
BRIAN BAIRD, Washington              JOHN BOOZMAN, Arkansas
RICK LARSEN, Washington              SHELLEY MOORE CAPITO, West 
MICHAEL E. CAPUANO, Massachusetts    Virginia
TIMOTHY H. BISHOP, New York          JIM GERLACH, Pennsylvania
MICHAEL H. MICHAUD, Maine            MARIO DIAZ-BALART, Florida
RUSS CARNAHAN, Missouri              CHARLES W. DENT, Pennsylvania
GRACE F. NAPOLITANO, California      CONNIE MACK, Florida
DANIEL LIPINSKI, Illinois            LYNN A WESTMORELAND, Georgia
MAZIE K. HIRONO, Hawaii              JEAN SCHMIDT, Ohio
JASON ALTMIRE, Pennsylvania          CANDICE S. MILLER, Michigan
TIMOTHY J. WALZ, Minnesota           MARY FALLIN, Oklahoma
HEATH SHULER, North Carolina         VERN BUCHANAN, Florida
MICHAEL A. ARCURI, New York          BRETT GUTHRIE, Kentucky
HARRY E. MITCHELL, Arizona           ANH ``JOSEPH'' CAO, Louisiana
CHRISTOPHER P. CARNEY, Pennsylvania  AARON SCHOCK, Illinois
JOHN J. HALL, New York               PETE OLSON, Texas
STEVE KAGEN, Wisconsin               VACANCY
STEVE COHEN, Tennessee
LAURA A. RICHARDSON, California
ALBIO SIRES, New Jersey
DONNA F. EDWARDS, Maryland
SOLOMON P. ORTIZ, Texas
PHIL HARE, Illinois
JOHN A. BOCCIERI, Ohio
MARK H. SCHAUER, Michigan
BETSY MARKEY, Colorado
MICHAEL E. McMAHON, New York
THOMAS S. P. PERRIELLO, Virginia
DINA TITUS, Nevada
HARRY TEAGUE, New Mexico
JOHN GARAMENDI, California
VACANCY

                                  (ii)






 Subcommittee on Economic Development, Public Buildings, and Emergency 
                               Management

           ELEANOR HOLMES NORTON, District of Columbia, Chair

BETSY MARKEY, Colorado               MARIO DIAZ-BALART, Florida
MICHAEL H. MICHAUD, Maine            TIMOTHY V. JOHNSON, Illinois
HEATH SHULER, North Carolina         SAM GRAVES, Missouri
RUSS CARNAHAN, Missouri              SHELLEY MOORE CAPITO, West 
TIMOTHY J. WALZ, Minnesota           Virginia
MICHAEL A. ARCURI, New York          MARY FALLIN, Oklahoma
CHRISTOPHER P. CARNEY, Pennsylvania  BRETT GUTHRIE, Kentucky
DONNA F. EDWARDS, Maryland           ANH ``JOSEPH'' CAO, Louisiana
THOMAS S. P. PERRIELLO, Virginia,    PETE OLSON, Texas
Vice Chair                           VACANCY
JAMES L. OBERSTAR, Minnesota
  (Ex Officio)
VACANCY

                                 (iii)

                                CONTENTS

                                                                   Page

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

                               TESTIMONY

Gohl, Earl F., Federal Co-Chair, Appalachian Regional Commission.     5
Groves, Dr. Cecil, President, Southwestern Community College.....    27
Johnson, Pete, Federal Co-Chair, Delta Regional Authority........     5
Neimeyer, Joel, Federal Co-Chair, Denali Commission..............     5
Norton, Michael, Executive Director, Northwest Arkansas Economic 
  Development District, Inc......................................    27
Winchester, Leonard, Manager, Western North Carolina Education 
  Network........................................................    27

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Carnahan. Hon. Russ, of Missouri.................................    39
Norton, Hon. Eleanor Holmes, of the District of Columbia.........    40
Oberstar, Hon. James L., of Minnesota............................    43

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Gohl, Earl F.....................................................    47
Groves, Dr. Cecil................................................    55
Johnson, Pete....................................................    60
Neimeyer, Joel...................................................    79
Norton, Michael..................................................    89
Winchester, Leonard..............................................    97

                       SUBMISSIONS FOR THE RECORD

Johnson, Pete, Federal Co-Chair, Delta Regional Authority:.......
      Responses to questions from the Subcommittee...............    64
      ``An Action Plan for Projects and Programs to Improve 
        Health in the Delta''....................................    66
Norton, Michael, Executive Director, Northwest Arkansas Economic 
  Development District, Inc., responses to questions from the 
  Subcommittee...................................................    95






 
  PROPOSED FISCAL YEAR 2011 BUDGETS FOR REGIONAL ECONOMIC DEVELOPMENT 
     COMMISSIONS, PRIORITIES AND IMPACTS ON REGIONAL ECONOMICS AND 
                               EMPLOYMENT

                              ----------                              


                        Thursday, April 29, 2010

                  House of Representatives,
      Subcommittee on Economic Development, Public 
                Buildings and Emergency Management,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 2:10 p.m., in 
Room 2167, Rayburn House Office Building, Hon. Eleanor Holmes 
Norton [chairwoman of the subcommittee] presiding.
    Ms. Norton of the District of Columbia.. The ranking member 
is delayed but has indicated we should proceed so as not to 
delay the hearing.
    Good afternoon and welcome to today's hearing entitled 
"Proposed Fiscal Year 2011 Budgets for Regional Economic 
Development Commissions, Priorities and Impacts on Regional 
Economies and Employment." That is a mouthful, but it really 
does say what we are trying to do here.
    Today, we are doing important oversight for the first time 
on three newly created Federal, regional economic development 
commissions, as well as, on the floor, established regional 
economic development commissions, to evaluate the start-up of 
the new commissions.
    Economic development was not a specific mission of the 
Federal Government until Congress passed the Public Works and 
Economic Development Act in 1965 and established the Economic 
Development Administration. EDA was created to alleviate 
conditions of substantial and persistent unemployment in 
economically distressed areas and regions.
    The mission of EDA today remains much the same as it was 
when it was originally founded. EDA has stated that to fulfill 
its mission it must, quote, be guided by the principle that 
established communities must be empowered to develop and 
implement their own economic development and revitalization 
strategies.
    As our hearings have documented, the act has been 
enormously successful, particularly in using modest Federal 
funds to attract and leverage considerably more in private 
sector funds. The success of EDA has created the impetus for 
the regional economic development commissions that we will hear 
from today.
    Last Congress, the House of Representatives passed the 
Regional Economic and Infrastructure Development Act of 2007. 
The bill organized five regional economic development 
commissions under a common framework, providing a more uniform 
method for distributing economic development funds to 
distressed areas throughout the regions most in need of such 
assistance. The five commissions were the Northern Border 
Economic Development Commission, the Southeast Crescent 
Regional Commission, the Southwest Border Regional Commission, 
the Delta Regional Commission, and the Northern Great Plains 
Regional Commission.
    Eventually, all the regional economic development 
commissions were passed as part of the Food Conservation and 
Energy Act of 2008. The Northern Border Economic Development 
Commission, the Southeast Crescent Regional Commission and the 
Southwest Border Regional Commission were created by Public Law 
110-246 in our design to address the problems of systemic 
poverty and underdevelopment in those particular regions.
    Public Law 110-246 also reauthorized the Delta Regional 
Commission and the Northern Great Plains Commission. The 
administrative and management procedures for these regional 
economic development commissions are all modeled after the 
successful Appalachian Regional Commission, the first of the 
regional economic development commissions.
    The Denali Commission is currently the only regional 
economic development commission under this subcommittee's 
jurisdiction that does not have the same administrative 
structure, in addition to not being under the same 
authorization schedule as the rest of the regional economic 
development commissions. We are planning to remedy this 
discrepancy in the next authorization. We will need to bring 
these programs in alignment in order to properly assess their 
role in economic development and to help them to enhance their 
missions.
    Our intent in creating these commissions was to provide 
additional funding for projects that stimulate regional 
economic development and to promote the character and 
industries of the regions, without supplanting existing 
institutions and programs that provide funding.
    In these times of severe budget constraints, we do need to 
be mindful not to duplicate programs and to target scarce 
resources in areas that will bring the highest investment 
return, while addressing the needs of our most distressed 
communities. The subcommittee is interested in hearing from the 
witnesses about how their regional economic development 
commissions fit into this premise.
    Although unemployment is still high, there is reason for 
optimism that the U.S. economy is beginning to emerge from the 
so-called "Great Recession." It will be important to leverage 
scarce Federal resources to help maintain gains as they emerge, 
and to focus on long-term growth strategies to buffer the 
American economy from further sustained disruption.
    We are especially interested in the strategies for economic 
development in areas that suffer chronic unemployment and high 
rates of poverty, as I said earlier. Even within my own 
district where there are many high-income and middle-income 
communities, there are also severely distressed communities. 
For example, Ward 8 reported unemployment as high as 28.5 
percent just a few months ago, and a poverty rate for 
individuals under 30 percent.
    Given such daunting statistics, Ward 8, for example, would 
benefit from coordinated assistance similar to that received by 
many counties, including in these newly established regional 
economic development commissions. Such distressed areas benefit 
from sustained planning efforts and the leverage that Federal 
investments can provide for private investment.
    The work of these regional economic commissions is part of 
a coordinated Federal effort to enhance economic opportunity 
nationwide by increasing the overall productivity of 
economically distressed and poor communities and, thus, their 
share of the country's general prosperity.
    We look forward to hearing testimony from our distinguished 
witnesses about the status of these commissions and their work 
with local partners and their progress in carrying out their 
mission.
    And as we thought, our ranking member Mr. Diaz-Balart has 
arrived, and I am pleased to hear any comments from him at this 
time.
    Mr. Diaz-Balart. Thank you very much, Madam Chairwoman. I 
want to thank you first for holding this hearing on the fiscal 
year 2011 budgets for the regional economic development 
commissions. I also want to recognize the work and dedication 
of Congressman Don Young, who might be able to get away from 
what he is doing and hopefully spend some time with us today. 
He knows these issues well, having served as chairman of this 
committee, and being a tireless advocate for his home State of 
Alaska.
    Congress established the regional commissions to focus 
investment in the areas of distress in our Nation. And, 
unfortunately, there are many areas of our Nation that have 
chronic unemployment, high poverty rates, lack of 
infrastructure and other resources to spur private investment, 
private investment in their communities, and obviously private 
investment is key. So these commissions were created to help 
spur economic development and job creation in these 
communities.
    Now, included among these commissions are the Appalachian 
Regional Commission, the Denali Commission and the Delta 
Regional Authority.
    More recently, Madam Chairwoman, as you were mentioning, 
Congress created the others, including the Northern Great 
Plains Regional Authority, the Southeast Crescent Regional 
Commission, the Southwest Border Regional Commission and the 
Northern Border Regional Commission.
    Today this subcommittee is examining the proposed fiscal 
year 2011 budgets of these commissions and also their 
priorities for the coming year. These regional commissions are 
Federal and State partnerships and focused to help chronically 
distressed communities to generate sustainable economic 
development for those areas.
    The commissions have, as I am sure we all know, relatively 
small budgets. And those represented here are requesting level 
fundings for the fiscal year 2011. Now, generally these 
commissions have really been very effective in leveraging tax 
dollars, public dollars, with private investment in order to 
spur job growth. In 2007 a report on ARC Infrastructure and 
Public Works Projects, a sampling of just a quarter of ARC's 
projects reveal that more than 17,000 new jobs were created. 
This is one of the success stories. These projects expanded the 
annual personnel income by $1.3 billion. And of the 78 projects 
reviewed in the report, $1.7 billion of private investment was 
leveraged.
    Now, think about that. That is a ratio of $75 to $1 of ARC 
investment. Those are pretty impressive investments under any 
standards.
    And since it was created in 2000, the DRA has invested $75 
million in 510 projects, attracting $1.5 billion investment of 
private investments; so, $75 million to attract $1.5 billion in 
private investment. That is a pretty impressive number.
    And DRA, as highlighted in a hearing earlier this year, 
uses participation agreements for its grants, and it requires 
guarantees to meet certain job creation goals. And if you 
remember, Madam Chairwoman, as we heard in this committee, if 
those goals are not met, the grantee must refund a pro rata 
share of the grant monies, something that is not done very 
often.
    These are just a couple of examples of how tax dollars can 
be leveraged to spur private investment to ensure that jobs are 
created and that those jobs will last.
    As I had mentioned in previous hearings, the Recovery Act 
of the stimulus bill should have included provisions that 
ensured similar returns on investment to the taxpayers. 
Unfortunately, obviously, they did not.
    As we review the budgets and the priorities of these 
commissions, I believe it is really, really important that we 
ensure funding is leveraged effectively and job creation 
remains a priority for these distressed areas, something that I 
have been hounding and jumping on and talking about every 
single time that I had the opportunity to do so. So I look 
forward to hearing from the witnesses on these and other 
issues.
    And I want to thank you, Madam Chairwoman, for once again 
your leadership, your active leadership in this issue. Thank 
you very much.
    Ms. Norton of the District of Columbia. Thank you very 
much, Mr. Diaz-Balart.
    Ms. Norton of the District of Columbia. Representative Walz 
of Minnesota, have you an opening statement.
    Mr. Walz. Just a brief one Madam Chair.
    Again, thank you to you and the ranking member, and I very 
much appreciate the opportunity to our witnesses here. A very 
important hearing. I certainly wish more of my colleagues would 
be here to listen to this because I do think it is important.
    I think the ranking member was exactly right in trying to 
figure out how to best leverage some very limited budget and 
see the return on taxpayer dollars.
    And these regional economic development commissions tend to 
hit rural areas which, in any economic downturn, tend to feel 
it more more so because of the lack of diversity in the 
economy. If one sector is hit, we see it more so. And I think 
that is really important.
    Also what I have seen, and I am very appreciative of it, 
and while we are new in the northern border regions we are 
witnessing across the country squeezing more efficiencies out 
of these partnerships, maximizing it, as the chairwoman said, 
making sure we are not duplicating. So this discussion of your 
budgets and the budgets for the commissions are incredibly 
important because they are not just a reflection on fiscal 
priorities, they are a reflection of our moral values as a 
country. What we do for some of these rural areas.
    And I am appreciative of you being here and look forward to 
the testimony. I yield back.
    Ms. Norton of the District of Columbia. If there are no 
more opening statements, we will proceed to our witnesses: Pete 
Johnson, the Federal Co-Chair of the Delta Regional Authority; 
Earl Gohl, the Federal Co-Chair of the Appalachian Regional 
Commission; and Joel Neimeyer, Federal Co-Chair, Denali 
Commission.

  TESTIMONY OF PETE JOHNSON, FEDERAL CO-CHAIR, DELTA REGIONAL 
AUTHORITY; EARL F. GOHL, FEDERAL CO-CHAIR; APPALACHIAN REGIONAL 
    COMMISSION; AND JOEL NEIMEYER, FEDERAL CO-CHAIR, DENALI 
                           COMMISSION

    Ms. Norton of the District of Columbia. Mr. Johnson, then 
we will go right across the line.
    Mr. Johnson of Illinois. Good morning--good afternoon, 
rather. Good afternoon, Chairwoman Norton and Ranking Member 
Diaz-Balart, thank you for allowing me to be here today, and 
all the subcommittee members. We appreciate this opportunity to 
come before you today for me to talk about the Delta Regional 
Authority, which I started myself some 8 years ago. And I can't 
tell you how difficult it is to get dot-gov when you start up 
in your organization. But we started this at ground zero. And I 
want to publicly thank our friends at the Appalachian Regional 
Commission who were invaluable in helping us get this 
organization started, the Authority's fiscal year 2011 proposed 
budget priorities and also our impacts on development and 
employment in our region. And while we were also invited to 
speak to our needs, the Authority currently has no authorizing 
needs to request today, and we are grateful that the Congress 
recently remedied two of our pressing issues.
    The Authority was reauthorized through 2012 and the 2008 
Farm Bill, and in 2009 our voting structure was extended for 
perpetuity. To better substantiate my statement, I would like 
to share with you some highlights from the March 2010 research 
report published by the Economic Research Service of the U.S. 
Department of Agriculture, where in its report, Impacts on the 
Regional Approaches to Rural Development: Initial Evidence on 
the Delta Regional Authority, the ERS made this statement: We 
find that per-capita income and transfer payments grew more 
rapidly in DRA counties than similar nonDRA counties, and these 
impacts are larger in counties where DRA's spending was larger. 
Each additional dollar of DRA spending per capita is associated 
with an increase of $15 of personal income per capita between 
2002 and 2007, including an increase of $8 in earnings and $5 
in transfer payments.
    Clearly the impact on DRA's Federal grant program is being 
felt, and that impact is in the poorest region in this Nation. 
Income growth is a function of job growth, and that is 
especially true in these harsh economic times.
    And I would like to provide some additional facts on both 
jobs and development our Federal grant program has had during 
this period of time and it is already funded to have in the 
years to come.
    The Federal grant program is probably one of the smallest 
things that we do, but it is the most politically sensitive 
thing that we do. And so we want to make sure that it runs very 
well and the way that the Congress would have it run. 
Specifically, to date, through the DRA's Federal grant program 
and the work of its partners--and I might pause to say that 
through our local development districts we are able to achieve 
these results--almost 11,000 jobs have been created or retained 
through those projects that we have completed. Almost 12,000 
families have received new water and/or sewer. And more than 
3,000 individuals have been trained for jobs in their job 
areas.
    One of the requirements we have in our job training is that 
there must be a letter from an employer that the individual who 
is being trained will be employed when they get out. Over the 
years we have seen programs like this that were more designed 
for the instructors than they were for the students.
    Additionally, we project even stronger outcomes from our 
other projects which are already funded and underway, and 
projects by DRA's participation agreements, which were 
mentioned a little bit earlier. More than 24,000 will be--
24,000 jobs will be created and retained, and more than 23,000 
families will have new water and sewer, and almost 600 more 
individuals will be trained for those jobs.
    Without our strong partner of USDA and our being able to 
leverage those funds, we would not be able to achieve many of 
those results. Please remember, DRA's participation agreements 
bind the grantees to an outcome level, which, if not met, 
requires the grantee to pay back the prorated share of the 
outcome shortfall.
    Quite simply, either the outcomes will be realized or the 
DRA will recapture that level of funding, and we have done that 
on occasion.
    Our budget priorities are evolving and are changing 
primarily as functions of the administration's priorities, such 
as green economies, regional centers of innovation and livable 
communities, and from our own research.
    In our most recent regional development plan, "Rethinking 
the Delta," released in 2008, we learned that the most 
important investment we can make to grow our region's 
employment is through improved health outcomes. Succinctly, for 
every 1 percent improvement in our community's health outcomes' 
life expectancy, we estimate a 4.6 percent increase in 
employment. Accordingly, the Authority is providing greater 
support for community and subregional health-care initiatives.
    Let me quickly provide you some context and also enumerate 
some ongoing programs, and then briefly describe our major new 
initiative. Throughout our region, we know that among working 
adults our community's average double-digit levels of Type 2 
diabetes is enormous. And that prevalence worsens every year 
and at every cohort of age, gender and race, particularly 
African Americans. Obviously, workers who are sick cannot be as 
productive as they want to be, nor will they enjoy the life 
they deserve to have. And a child who is sick, even a 
toothache, cannot learn.
    Toward that end, we have partnered with USDA to create our 
pilot diabetes management centers, which are proving to be very 
effective in improving people's health and productivity. A 
fantastic example of best practice is what this is. We have one 
underway in Helena, Arkansas. And we are about to begin two 
more sites, one in southeast Missouri and one in northwest 
Tennessee.
    Additionally, the Authority has two other ongoing programs 
to increase accessibility to affordable quality health care. 
Delta Doctors, which is a DRA J1 visa program, has brought more 
than 100 physicians in the practice areas in the region that 
are underserved.
    Innovative Readiness Training Program, which is the 
Authority's partnership with the Pentagon, where more than 
1,200 people in our region have received free quality health 
care, and by the summer of 2012 that number will grow to more 
than 7,000.
    Our new $1.5 million initiative is "Growing a Healthy 
Workforce in the Delta, an Action Plan," a very bottom-up 
approach to improving health outcomes. In this initiative, we 
will better align resources through better information, 
technological assistance and our grant program. We will improve 
local efforts, determination and outcomes, while increasing 
accountability to greater monitoring and transparency.
    To save time, I ask that the plan's executive summary be 
entered into the record as an appendix, Madam Chairwoman.
    Ms. Norton of the District of Columbia. So ordered.
    Mr. Johnson of Illinois. And I have it with me. Thank you 
for the time.
    Ms. Norton of the District of Columbia. Thank you very much 
Mr. Johnson.
    Mr. Gohl, am I pronouncing your name right?
    Mr. Gohl. Yes, you are.
    Ms. Norton of the District of Columbia. You may proceed.
    Mr. Gohl. Thank you very much. Madam Chair, members of the 
subcommittee, I am pleased to come before you this afternoon to 
discuss the President's budget request for the Appalachia 
Regional Commission. The administration is requesting $76 
million for ARC's nonhighway work. This is level funding with 
the fiscal year 2010 appropriation and reflects the 
administration's strong commitment to Appalachia. The budget 
will continue ARC's traditional focus on equipping communities 
with the basic building blocks of community and economic 
development.
    At the same time, we will help communities diversify their 
economies, helping them take full advantage of the emerging 
recovery to create vibrant, sustainable, local economies.
    ARC is a Federal-State partnership serving all of West 
Virginia and 12 other States from--parts of 12 other States 
from the southern tier of New York to northeast Mississippi. 
Our mission is to help the region reach socioeconomic parity 
with the rest of the Nation.
    Appalachia is marked by mountainous terrain and dispersed 
population, serious environmental issues, and insufficient 
financial and human resources. The challenges have resulted in 
widespread poverty, unemployment and underinvestment.
    Appalachia has come a long way since 1965 when the ARC was 
established. The number of high poverty counties has been 
reduced--has declined from 223 to 82. Infant mortality rate has 
declined by two-thirds. And the region's high school graduation 
rate now nears the national rate--the national average.
    Despite these gains, Appalachia still lags behind on 
several key economic indicators. Per-capita income was 20 
percent lower in Appalachia than the rest of the Nation in 
2007. Roughly 20 percent of Appalachia households are not 
served by public water systems, compared to 10 percent in the 
rest of the country. And there is a widening gap between 
Appalachia and the rest of the Nation in terms of the 
percentage of high school students who go on to college.
    Appalachia suffers economic distress in part because the 
economy has been heavily dependent upon manufacturing, tobacco, 
steel and extractive industries. These are obviously sectors of 
the economy that have not grown over the last two decades. The 
region lost 423,000 manufacturing jobs from 2000 to 2007, and 
that was before the economic downturn. The fourth quarter of 
last year, nearly two-thirds of Appalachian counties had 
unemployment rates higher than the national rate.
    To address these challenges ARC's work falls within two 
broad areas: First, the 3,090-mile highway system which is 
funded through SAFETEA-LU; and second is the area development 
program.
    ARC's activities are organized along four broad goals that 
are included in our strategic plan. First, to increase job 
opportunities and increase per-capita income. Second is to 
strengthen the capacity of local families to compete in the 
global economy. The third is to improve the infrastructure of 
the region so it is more competitive. And fourth is to build 
the Appalachia Development Highway System so the area is not so 
isolated. The highway system has been the linchpin of the ARC 
development strategy. Almost 85 percent of the system is now 
open to traffic, but some of the most challenging and most 
expensive parts of the highway remain to be built. A 2008 study 
showed that completing the ADHS will produce an estimated 
return for the Nation as a whole of $3 for every dollar 
invested in the system.
    While highways are critical to regional growth, they are 
not by themselves sufficient. As a result, ARC's area 
development program provides economic and community development 
resources that range from basic infrastructure, workforce 
development, entrepreneurship, health care and local leadership 
development. ARC emphasizes a bottom-up approach, relying 
heavily on the network of 73 development districts to identify 
local priorities. These multicounty planning agencies help set 
the agenda for ARC.
    Private investment also plays a critical role in economic 
development in Appalachia. In 2009 ARC's job-creating projects 
attracted $8.75 of private investment for every $1 of ARC 
funds. Creating sustainable local economies requires the 
diversification of the region's economic base. Coal will 
continue to be a part of the Appalachian economy, but the 
region's renewable energy assets can help broaden the economic 
base. Energy efficiency also has a significant contribution to 
make in job creation in the region.
    These opportunities can yield a substantial green economy 
in Appalachia. Creating a stronger, more diversified economy is 
the goal of the special interagency effort currently ongoing 
which is focused on Appalachia. Drawing together more than a 
dozen departments and agencies, this initiative expects to 
identify ways Federal programs can be better tailored and 
coordinated to achieve greater impact in Appalachia.
    ARC believes that a regional place-based approach to 
economic development offers the best prospect for sustainable 
growth. It employs strategies that are tailored to the needs of 
the region and take advantage of the region's unique assets.
    We appreciate the support that this subcommittee has given 
us throughout the years, and we look forward to working with 
you in the common mission of ensuring Appalachia to achieve the 
socioeconomic parity with the rest of the Nation. Thanks so 
much Madam Chairman.
    Ms. Norton of the District of Columbia. Thank you, Mr. 
Gohl.
    Ms. Norton of the District of Columbia. Mr. Neimeyer.
    Mr. Neimeyer. Thank you, Madam Chair and the congressional 
subcommittee members. As noted, I am here to discuss the 
proposed fiscal year 2011 budgets for regional economic 
development commissions, and specifically the Denali Commission 
in Alaska.
    Like the Delta Regional Authority, we thank the Appalachia 
Regional Commission during our start-up years. The 
administration's fiscal year 2011 proposed program funding of 
nearly $16 million is directly connected to improving essential 
life, health, and safety conditions and promoting lasting 
sustainability for rural Alaskan communities.
    The barriers in Alaska created by size, geography, and lack 
of basic infrastructure still cause significant portion of our 
rural population to live without basic public facilities and 
endure lower health standards. The Denali Commission is proud 
to be in alignment with President Obama's place-based focus, 
and we are pleased to present to you today on this important 
organization.
    The Commission has impacted many lives in our State and 
continues to improve the lives of all Alaskans. Congress 
created the Commission 12 years ago with a vision to deliver 
the services of the Federal Government in the most cost-
effective manner to rural Alaska. This small independent 
Federal agency is charged to move quickly to tackle systemic 
issues of rural development by listening to rural Alaskans' 
concerns and working with the State of Alaska, local 
communities and tribes, to build basic community infrastructure 
in sustained rural economies.
    The Commission's infrastructure projects throughout the 
State proceed in an efficient, transparent manner with the 
involvement of the people they serve. Over 2,000 projects have 
been funded to date by the Commission, in almost every 
community of the State, in numerous program areas including 
energy, health facilities, training, transportation and 
economic development.
    Most of our communities cannot be reached by road. Mountain 
ranges, waterways and sheer distance make a statewide electric 
system prohibitively expensive. The majority of rural villages 
are not connected to a major power grid. Many communities still 
lack basic indoor plumbing.
    Driving to another community to meet basic needs is not an 
option to most Alaskan communities. Commissioners of the Denali 
Commission rely on well-established guiding principles: 
sustainability, accountability, inclusiveness, respect for 
people and cultures, and catalyst for positive change to meet 
the basic infrastructure needs so many in the lower 48 States 
may take for granted.
    Having participated in the development of these guiding 
principles during the Commission's first year, I can attest to 
the directional value they provide for the staff, our program 
partners, and our stakeholders. In 2009 the Commission had over 
700 active projects on the books, and to date the Commission 
has funded over 2,000 projects.
    The Commission's two legacy programs, energy and health, 
continue to evolve and succeed through partnerships with 
strategic entities and are making a lasting impact for rural 
Alaska. Partnerships with the Commission have resulted in the 
completion of 93 community bulk-fuel tank farms, 48 rural power 
system upgrades, 95 community clinics, 33 road projects, 30 
waterfront projects, and many other community projects. More 
infrastructure projects are in the process of design and 
construction, and the Commission's training in economic 
development programs continue to contribute to improving rural 
economies.
    The creation of the Denali Commission was to address the 
disparities in social and economic conditions that exist in 
Alaska. Someday I would like to come back to this committee and 
report to you that the job is complete. Today is not that day. 
In fact, there is much more work to be done and this work is 
urgent and imperative.
    In closing, I would like to share with you all, that I was 
appointed to serve as the head of the Denali Commission in 
January 2010. I am extremely proud to serve in this important 
role. I would like to also share with you that I am the first 
Alaskan native to lead the efforts of the Denali Commission. I 
can tell you with certainty that the Commission impacts the 
lives of all Alaskans, rural and urban.
    Thank you for your time and the invitation to address this 
subcommittee.
    Ms. Norton of the District of Columbia. Thank you very 
much, Mr. Neimeyer.
    Now, it was of some interest to the subcommittee to note 
that all three of you, as Federal co-chairs in one way or the 
other, have mentioned the impact of health-care availability as 
a leading factor in economic development in your respective 
regions.
    Have you at this time--and I realize how preliminary this 
must be--we are trying to get ahold of this bill ourselves and 
some of it, of course, goes into effect immediately--have you 
any at least broad notions of the effects that the recently 
passed legislation may have on alleviating the conditions of 
health-care availability in your regions? And I also would be 
interested in whether you think there is job-creating potential 
in your regions from the health-care bill. Whoever wants to 
shout out first, go ahead.
    Mr. Johnson of Illinois. I am going to try to respond. When 
we started this, the Delta Regional Authority up, as we began 
to look at how we best solve the problems of the poverty that 
has been a part of it for 100 years, it became apparent that 
unless we addressed the chronic health problems of the region 
that we were not going to improve the economy.
    Ms. Norton of the District of Columbia. In other words, if 
you want businesses or economic development entities to come to 
a region that is full of diabetes and health habits that mean 
greater insurance costs, greater absences, and the rest of it, 
they are likely to pass over you and go somewhere else where 
the health care at least seems under greater control; is that 
the case?
    Mr. Johnson of Illinois. It is the case. In the Delta 
region, I can tell you that most of our people wait until they 
are deathly ill and then go into an emergency room, and the 
cost escalates then. Easy access to affordable health care is 
essential to our turning the region around.
    Mr. Gohl. One of the facts of life in low-income areas is 
that many people in our jurisdictions----
    Ms. Norton of the District of Columbia. Speak up, Mr. Gohl, 
please.
    Mr. Gohl. We have higher use of Medicaid and Medicare in 
many of our low-income counties than other areas of the Nation. 
And so at least many of our--high numbers of our low-income 
folks do have access to a public system, to a public option. 
But it is pretty clear that the health-care demands and the 
ability to create jobs through the health-care system, there 
really are great opportunities.
    The first grant that I signed off on was about $400,000 for 
a request from Governor Barber for a hospital in Tupelo, 
Mississippi. So there are great demands on our system to help 
support the development of the public health-care structure. 
But, really, there are great opportunities. It is very 
difficult at this point to project out what the impacts are. 
But I think it is pretty clear to us that we have great demands 
all across the board, whether it is diabetes, whether it is 
drug abuse, whether it is pediatric, dental care, or black 
lung. I mean all the issues are there, and they are very 
expensive and they are very demanding.
    Ms. Norton of the District of Columbia. And Mr. Gohl you 
certainly have my condolences and, I know, the condolences of 
the committee and the Congress, for the recent tragedy in the 
coal mines in your State.
    Mr. Neimeyer.
    Mr. Neimeyer. Yes ma'am. The primary purpose of the health 
program of the Denali Commission was about health disparities 
and less about economic development. Most of the projects serve 
rural Alaska. And the approach that the tribal health system 
and the community health system strove in the past decade is to 
drive health care out to the villages, out to the smaller 
communities. In so doing, we could presume that with better 
primary care services we have better health outcomes and less 
likelihood leading to chronic and severe health issues. So that 
has been the focus.
    With regard to the question of what impact does the recent 
health-care bill have with us, I have had a specific discussion 
with representatives with the tribal health system. They are 
now analyzing it. Part of the health bill included 
reauthorization of the Indian Health Service, and so there is a 
significant amount of legislation in there that they are 
looking at, and then we are planning on talking with them.
    Part of the way we do business, we have five advisory 
bodies. One of the advisory bodies is our health steering 
committee. And we are teeing this question up this summer to 
talk about what does the new health-care bill mean to the way 
we do business. At this point I can't tell you what that is, 
but we are working on it.
    Ms. Norton of the District of Columbia. Well, it is very 
interesting to note how all three of you have linked health 
care to economic development. And in that way, I think in some 
ways you are pioneers; that people proceed in areas that 
conceive of themselves as better off, often without 
understanding the link. They don't understand how people, how 
companies, look at particular regions and jurisdictions when 
deciding whether to go there or not, and how many factors are 
on the table in making that decision.
    Now, the cost of health care is, as everyone knows, the 
greatest escalating cost of all in our economy. This is very 
important for us to hear. I am just going to ask one question 
peculiar to each of you, and then I am going to go to the 
ranking member and the other members.
    Mr. Johnson, we need to know more about this notion that 
there has to be some payback if those with whom you contract do 
not meet the goals set for job development--how that would 
work--because it is interesting enough to us to note whether it 
ought to be replicated in the other commissions.
    Mr. Johnson of Illinois. Yes ma'am. Well, I bring to the 
table an encumbrance that I was a former State auditor from 
Mississippi, and being in that position, an understanding that 
I am a steward of tax dollars. When we began to look at these 
programs we were getting statements made to influence the 
Governors to recommend a particular grant. And they would 
overstate the number of jobs that they were going to create. 
And then when it would come down to it, they would state 150 
jobs, they may create 25. And so we wanted them to understand 
that we needed some truth in this.
    So we looked at a number of States and put together a 
provision that says that if you do not meet the standard that 
you said, if you do not employ the 150 people and you only 
employ 100 people within the timeframe that you say you will do 
it, then you will pay back a certain amount of that money.
    One instance in particular is Textron, which is located 
there in Greenville, Mississippi. I think the grant was around 
$387,000. They were there 4 months and left, and they paid back 
$340-something thousand. And so it is working.
    Initially there was a lot of acrimony. They were chafing. 
They didn't want to have it. They didn't want us to hold their 
feet to the fire. But this is not my money, it is the 
taxpayers' money. And we were able to put that money back into 
the system and to get it to people who would keep their 
commitment.
    Ms. Norton of the District of Columbia. Now, this has not 
deterred people or businesses or investors from coming forward 
because they think they may have to pay back some money if they 
don't meet their goals?
    Mr. Johnson of Illinois. It has not been a deterrent at 
all. As a matter of fact, they are very pleased to do that. And 
we have clauses in there if there are economic conditions. 
There are some escape clauses that are reasonable.
    Ms. Norton of the District of Columbia. Just like Katrina, 
you don't expect people to produce, then.
    Mr. Johnson of Illinois. Yes. Something that is totally 
unexpected that they have no control over, like the tornado 
that went through Mississippi recently. Then, of course, there 
are escape clauses in there, and we work with them on that. 
There is no drop-dead clause in there.
    Ms. Norton of the District of Columbia. Do either of the 
other two of you see any issues with respect to such a clause? 
I mean, it has become a racket in this country. If you want to 
get some fancy company to move, let's forget our regions, our 
economic development commissions for a moment, they outbid one 
another. There goes the taxpayers' money. And I am not even 
sure there is follow-up. All that is necessary is to get this 
company in your jurisdiction.
    I want to ask the other two Federal co-chairs, would you 
object to something similar in your own region, or do you think 
it wouldn't work in your region?
    Mr. Gohl. I wouldn't object to it. But the real trick to 
this is asking the hard questions up front and being able to 
say no up front. Because an ounce of prevention in reviewing 
and asking the tough questions and pushing back is so much 
easier than down the road trying to fix something that someone 
has misled you about. I mean, that is the first key to this of 
not, you know, not taking in, being able to say no, asking the 
hard questions and not, you know, listening to all the fancy 
talk that you get when people first walk into your office with 
a project.
    But going back and being able to hold people accountable, I 
think that Mr. Johnson said it best, this isn't our money, this 
is the taxpayers' money, and you have to have a great deal of 
respect for that and understand their hard work when people 
have made a contribution to their tax system to pay for these 
programs, and it is our obligation to hold individuals 
accountable.
    Ms. Norton of the District of Columbia. Mr. Neimeyer.
    Mr. Neimeyer. I would be very supportive of it. In this 
year's fiscal year 2011 proposed budget is language that 
requires the cost-share match, which is the first that we have 
seen. And when representatives from OMB asked me about it, I 
was very supportive. We believe that there should be skin in 
the game in projects. And I think this is just another example 
of skin in the game. Whether it is up front or even after the 
fact, I think it is important that the agencies and the 
nonprofit organizations we work with know that we want serious 
work done.
    Ms. Norton of the District of Columbia. The subcommittee is 
going to have to take this testimony into account, particularly 
since I think it may be unique in Federal spending, frankly, 
Mr. Johnson. It may have to be taken into account way outside 
of the commissions, because it seems to have worked so well 
there.
    I am going to go to the Appalachian Commission with a 
question, and then to the Denali Commission.
    I was interested, Mr. Gohl, in your listening session with 
the U.S. Department of Agriculture where you seem to be looking 
for greater coordination among Federal programs and agencies, 
and that we really want to get on top of. Why did you find it 
necessary to have the listening session? Have you been working 
with the Economic Development Administration on this issue? Are 
you finding that there is ready and good cooperation when you 
need it from other Federal agencies?
    Mr. Gohl. Well, to answer your last question first, we have 
great cooperation with the other Federal agencies. We work very 
closely with EDA and also USDA on a number of projects, as well 
as Transportation. In fact, they manage our construction 
projects. I mean the reason why we can have a small staff and 
do infrastructure and construction and highways is because we 
use other agencies to manage those contracts.
    But in terms of the listening sessions, there were two 
reasons for the listening sessions. The first is that this year 
we are required to rewrite--to review our strategic plan. And 
so part of the listening sessions were to go out and talk to 
our constituents about our goals, our mission in the 
development of our strategic plan.
    The second element is that about 6 months ago the 
environmental quality folks at the White House brought together 
a group of agencies to work and to examine ways that they can 
work together to strengthen the Appalachian economy more 
towards a transitional green economy than the current structure 
as it is now. And part of that process----
    Ms. Norton of the District of Columbia. Could you talk more 
into the microphone, Mr. Gohl?
    Mr. Gohl. Part of that process of working with the 
interagency group was to go out and do these listening 
sessions. And we have done five of them in Alabama, North 
Carolina, Kentucky, West Virginia and Nanticoke, Pennsylvania. 
And a number of Federal agencies have gone with us, as well as 
nonprofit groups from throughout the region, representatives of 
State and local government, and they really had the opportunity 
to sit down and work through some of the critical development 
issues and the long-term planning issues of particular regions. 
And we hope that coming out of that will be a number of ideas 
and direction on where we should be going the next 5 years with 
our strategic plan.
    Ms. Norton of the District of Columbia. Mr. Gohl, this is 
another idea. With Mr. Johnson, we have the idea of true 
accountability: Pay us. Pay back. The notion of these listening 
sessions, which you apparently have taken throughout your 
region, does seem to us to be very beneficial and an idea 
perhaps that should be spread to other commissions, considering 
that many of them are multi-State or all of them are multi-
State, except for Alaska, of course.
    Mr. Gohl. And this is one of the strengths of the small 
agencies, that we are not stuck in the basement of a big 
agency, captured by a big bureaucracy, but we have the ability 
to move quickly, to respond and to be creative in the things 
that we do without a lot of bureaucracy that begins to hold us 
back.
    Ms. Norton of the District of Columbia. Thank you very 
much.
    Now, Mr. Neimeyer, you are really unique, you are 
different, because you don't cover a number of States, you 
cover one State, and I must tell you, you don't have a 
population much bigger than the District of Columbia. But you 
are an extraordinary territory of land in our country, a very 
valuable territory of land, with some miserably poor people. 
Many of them, of course, are Native Americans. And you have got 
to somehow bring all of this together. And it could just as 
well be multi-State because I can see your challenges.
    There have been some concerns about this Commission. And I 
wonder if you think this Commission would benefit from some of 
the administrative structure of the other commissions that have 
not had some of the difficulties that the Denali Commission 
have had; a similar structure to the kind that, for example, is 
typical of these commissions. Do you think that would be 
useful?
    Mr. Neimeyer. Yes, ma'am, I do. We have had active 
discussions recently with the commissioners on this, and we 
talked with the delegation and with representatives of the 
Office and Management Budget. We do know that the way the act 
was written, it has created some initial administrative 
problems, and it is something that we should address.
    Having said that, I do need to note that we don't have 
counties, we have 200 tribes; and the structure of the other 
commissions are set up in a different manner. And so if we go 
through the process of trying to look like the other 
commissions, which we are supportive of that, we do have to 
take note that we don't lose that voice, that tribal voice. 
That is, a significant amount of our work is done in tribal 
areas, and so we want to make sure that they have that 
opportunity to participate in the process.
    Ms. Norton of the District of Columbia. It could not be a 
more important point, Mr. Neimeyer. You may not be Multi-State 
but in some ways you are more complex even than the States. And 
we are very pleased you are opening to whatever--you can call 
it whatever you want to--the reforms that would bring you into 
some kind of administrative structure. We don't like to see any 
of our commissions ever attacked for any reason when we know 
what excellent work goes on in those commissions. And if it 
would take some change of the administrative structure, let's 
just get that out of the way, because you have a huge and 
glorious mission that you must do.
    Your notion about tailoring could not be more important. 
Yeah, we got these other structures; Appalachian; the ARC, of 
course, is a longtime structure. But I think you will find that 
each of the commissions has been tailored more easily perhaps 
to meet the structure that conformed to the particular 
commission's mission.
    I am going to ask Mr. Diaz-Balart if he has questions at 
this time.
    Mr. Diaz-Balart. Thank you, Madam Chairwoman. If it would 
be all right, I would like to ask unanimous consent to have the 
Honorable Mr. Young from the State of Alaska, former chairman 
of the full committee, to please be able to sit on the 
committee.
    Ms. Norton of the District of Columbia. Always a pleasure 
to have my good friend here with us.
    Mr. Diaz-Balart. What I would like to do also, Madam 
Chairwoman, if that is all right, I would like to give him the 
time that I have at this moment.
    Ms. Norton of the District of Columbia. So ordered.
    Mr. Diaz-Balart. Thank you, Madam Chairwoman.
    Mr. Young. Thank you, Mr. minority member, and thank the 
chairman for having these hearings. My interest here, of 
course, is all three commissions, believe it or not, and 
especially the Denali Commission. And, Madam Chairman, this has 
been an outstanding example of success. I recognize that there 
has been some question about how they operate. But as Mr. 
Neimeyer said, we are a little bit different.
    All due respect, there is more land east of the 
Mississippi, and that is Alaska. We have over 227 tribes in the 
State, and of course we have other communities within the 
State. And I am proud of what has been done with all the 
commissions.
    And Mr. Gohl, you said it rightly. Unfortunately, we have a 
lot of agencies that just don't seem to function too well and 
jobs don't get done, and the Commission stepped into that place 
in that arena. So I am quite happy with that.
    We have a unique thing in Alaska because of the high cost 
of fuel, Madam Chairman, that we have a migration problem now 
that is occurring into Anchorage and Fairbanks by Alaska native 
people because they can't afford to live in the rural areas. 
And the Commission is probably the only way we can solve this 
by, quite frankly, improving living conditions, making sure 
that there are fuel tanks that have passed the EPA requirements 
and all the other requirements which have been very successful; 
building clinics so that they can have health care. And you 
have been quite successful in those. So this is overall a 
successful unit, and I want to compliment the whole Commission.
    I will say that I have had some worries about the 
Commission over the years because you are out in the open. In 
this Congress we have a tendency to attack that person. The 
single bull is the one that usually gets shot, not the one that 
is in the herd, so we have to consider that as we go through 
this business.
    But I have three questions, Madam Chairman, if I can, to 
Mr. Neimeyer. Does the Denali Commission complement but does 
not duplicate the work of other Federal Government agencies?
    Mr. Neimeyer. Yes, sir. When I applied for the position, to 
me that was the most exciting part about what the Commission 
can do. Mr. Johnson talked about the grant-making with Delta 
Regional Authority. The grant-making is very important, but it 
is that aspect of working with the State and Federal agencies, 
with the regional corporations, in fulfilling village and local 
community needs. I think it is an important thing from my 
experience.
    I served 25 years as an engineer mostly in rural Alaska, 
serving rural Alaska projects. If you don't get that community 
voice, projects are not well-maintained thereafter and they may 
not be well thought out. And I think that is where the 
Commission can serve best, to ensure that the community voice 
is heard.
    So what I would like to see is that we work with agencies 
to hear that community voice and develop projects. Specific to 
complementing but not duplicating, the State of Alaska--this is 
an example--recently passed legislation for $300 million worth 
of weatherization upgrades to residential housing all across 
the State. A lot of the housing work, a lot of those energy 
efficiency projects that are being done are done by 
construction crews that have received training dollars from the 
Denali Commission. So the Denali Commission can't take credit 
for the State's good work of that $300 million. But what we can 
say is that $300 million has gone farther because those crews 
are trained.
    It is those kind of opportunities we need to look for how 
we can complement but not duplicate the other agencies that I 
look forward to working on.
    Mr. Young. This is a follow-up question, and you partially 
answered it. The Commission's programs that resulted in 
economic development, job creation, and growth-- and you just 
hit upon some of that because you tied in with the State in 
their weatherization program by using some of your dollars to 
train the people to go ahead and do the work. So this has been 
a benefit not just for projects, but actually for their future 
employment.
    Mr. Neimeyer. Yes, sir. One of the things that--the 
training program that we had in the very beginning, we targeted 
opportunities for projects that we funded. In other words, if 
we are building a rural bulk-fuel project, we provided training 
for welders and so on and so forth. Now, those are short 
duration jobs. They may last the length of the project. But 
what we are hopeful for is that those individuals who receive 
that training then have the skill sets when other construction 
projects come in their town that they would be successful in 
competing for those jobs.
    The other part of it is there are some projects, especially 
the clinic projects, where you are not dealing with a commodity 
such as storing fuel or electricity; you are actually dealing 
about people; you know people are providing the service. And so 
we have a very successful program with the University of Alaska 
to provide training for allied health careers for individuals 
to serve in those small community clinics.
    Mr. Young. Madam Chairman, if I could, I hope that you in 
the position of the chair would take and request from the 
Speaker an airplane--and maybe you can come to the State of 
Alaska and not only visit the grandiose mountains but go out 
and see some of the challenges my people have in an area that 
is huge. There are no highways. It is all air travel, boat 
travel, and adverse conditions, and how they have adapted; but 
how well the Commission has done their work and the benefits 
from it which wouldn't have been done if the Commission didn't 
exist.
    And if you haven't been up there, I would urge you to set 
up a trip. And I am not on the committee but maybe I can show 
you around. If you don't want me, you can go on your own, but 
come to my State. I get to see your area all the time so you 
owe me one. Thank you, Madam Chairman.
    Ms. Norton of the District of Columbia. I would say to my 
good friend that I would love to come, especially if your wife 
will help guide me, who is also a good friend who knows these 
areas very well. And I have been to Alaska only once, and saw 
Alaska when it was a different time of day and night there than 
it was anywhere else in the world. But I have never been to 
some of--of course, I was to the part of Alaska, the capital, 
which is not unlike other capital cities in some respects. But 
I am impressed with what you speak of, the need to get an 
understanding--you know, there is poverty and there is 
isolation and then there is Alaska, where you have tribes who 
most Americans know nothing about, know nothing of their way of 
life or their particular challenges.
    Talking about tailoring, if we want to be helpful here, 
because we are not trying to wean people from their way of 
life, we are simply trying to bring them some of what they are 
entitled to as Americans. So I do think that in this committee, 
perhaps even a site hearing at some point might be in order, 
considering how very different Alaska is.
    Now, before I go any further, and I know it would revert to 
me, but I am going to ask Mr. Cao if he has any questions.
    Mr. Cao. Thank you, Madam Chair. And all of my questions 
will focus on Mr. Johnson.
    Mr. Johnson, in your 2009 annual report, the report states 
three goals that you have for Louisiana: advance the 
productivity and economic competitiveness of the Louisiana 
workforce; strengthen Louisiana's physical and digital 
connections to the global economy; create critical mass within 
Louisiana communities.
    My question is, what programs have you implemented in 
Louisiana to achieve these goals and what is the status of 
these programs?
    Mr. Johnson of Illinois. Well, first of all, thank you and 
let me say I am a native Louisianian. I was in Cheneyville last 
week, and my relatives established the first church west of the 
Mississippi in Evergreat, Louisiana at Bayou Chico. So I have a 
special place in my heart since I went to high school there.
    The programs that we have implemented, and in particular 
where we think it will have the greatest impact, is through our 
I-Delta program. Three years ago we recognized the digital 
divide that was going on in the rest of the country and the 
need to provide high-speed broadband to rural areas. We started 
getting applications in, and I deemed those applications as 
falling within basic public infrastructure. So in particular, 
those efforts are underway throughout Louisiana.
    Mr. Johnson. [Continuing.] We have all but I think about 
eight of Louisiana's parishes in our region. And Louisiana, the 
way that the dollars that are appropriated come into the Delta 
Regional Authority, Louisiana gets the lion's share of those 
dollars. We have worked very closely with each of them.
    Mr. Cao. When you say the lion's share, based on your 2010 
budget, it was appropriated $13 million. How much of that would 
go to Louisiana?
    Mr. Johnson. Well, I would have to say I believe Louisiana 
gets about 17 percent of the dollars that come in, if I 
remember correctly. It is a complicated formula that takes into 
consideration land mass, it takes into consideration the number 
of people unemployed, the total population, and the number of 
parishes that you have. And for that reason, Louisiana will get 
more money than any of the other States.
    Mr. Cao. And I am just looking ahead with respect to the 
oil spill in the Gulf Coast. Obviously, one of the most 
distressed communities in Louisiana would have to be the 
shrimping communities along the Louisiana coast, Plaquemines 
Parish, I think St. Bernard. And I am just thinking about the 
potential devastation to these communities because of the oil 
spill.
    Have you looked into possibly programs to help these 
communities?
    Mr. Johnson. We are limited by congressional mandate in our 
legislation as to what we can invest dollars in. And we do set 
aside money each year, it is a nominal amount, to meet 
unexpected events that might happen. But we are limited to 
investing a portion of our dollars in basic public 
infrastructure, transportation infrastructure, workforce 
development, and business development. And so to meet an 
emergency need outside of those, we are limited by Federal law, 
and we would be unable to address any of the economic impacts 
unless it affected the infrastructure.
    Mr. Cao. Now, when you are looking at economic development 
initiatives and you say that you are bound by the letter of the 
law to see what you can venture into, who makes the final 
decision with respect to what can or cannot be done?
    Mr. Johnson. I do.
    Mr. Cao. Okay. And I am pretty sure we can be very creative 
in looking at ways to help distressed communities. Can't we?
    Mr. Johnson. Well, that has been a real challenge as I have 
dealt with governments of the eight States. They have wanted to 
venture outside of that. And I think one of the reasons that 
the Delta Regional Authority enjoys the credibility that it 
does is because we have followed the law very carefully to make 
sure that we met congressional intent. And for that reason, you 
have graced us with more money to be able to invest.
    Mr. Cao. Right. And you have to understand my frustration 
with interpretations of the law. For example, for the past year 
and a half I have been fighting FEMA for the recovery of New 
Orleans and the Second District, and they have interpreted the 
Stafford Act much more rigidly and narrowly than I would 
interpret the act. And those are some of my concerns, because, 
obviously, when you read a law or an act of Congress, different 
people might have different interpretations. That is why we 
have the court system. And I am just wondering whether or not 
some of these plans, some of these initiatives that you say 
cannot be done cannot be interpreted otherwise.
    Mr. Johnson. Before we make decisions that are outside of 
those that we previously made, we consult with the Office of 
Management and Budget to ensure that it is consistent with the 
administration's interpretation of the law. And so we work 
through that process. It is not a one-man show.
    Mr. Cao. Just one last question. With respect to the fiscal 
year 2011 budget, what other initiatives do you seek to 
implement in Louisiana, especially? And do you have any 
programs in the New Orleans Metropolitan Area?
    Mr. Johnson. We have no specific programs in the New 
Orleans Metropolitan Area. We respond to local development 
districts and to the mayors and the Governor in particular as 
to the projects that they want to fund.
    And I might comment that that is a challenge, and I think 
was alluded to a little earlier, that because of the amount of 
the dollars that come through our agencies, they don't 
generally get the kind of attention that you would hope they 
would from the Governors themselves. And oftentimes you will 
have someone, who is not next to the Governor and directly 
involved in the process, they look oftentimes more toward the 
grants program than they do what we can do to improve the 
overall economy of Louisiana.
    And with regard to ongoing programs, our Delta program is 
huge and will transform Louisiana, as will our highway program 
that we hope that the Congress will consider implementing that 
is similar to and mirrored after the very successful 
Appalachian highway program. And we think that will transform 
much of Louisiana.
    Our program with health and affordable health care and 
access to affordable health care is another part of what we 
hope will help Louisiana.
    Mr. Cao. Well, if my Governor is not interested, I am very 
interested. So all of your money can go through me.
    Thank you very much. I yield back the balance of my time.
    Mr. Johnson. Thank you, sir.
    Ms. Norton of the District of Columbia. All right, Mr. Cao.
    Let me try to put on the record a few more answers from 
you. I am interested in knowing whether your programs, whether 
the Recovery Act, the so-called stimulus funding, has helped 
your communities through your programs in any way that you 
could tell us about.
    Mr. Neimeyer. I will begin. About 6 years ago, the 
Commission funded the planning and design, in essence, the 
preconstruction activities for the proposed Indian Health 
Service Nome Hospital, and I think it was about $15 million. 
What happened was, is over the course of 5 years the 
organization, the Norton Sound Health Corporation with the 
Indian Health Service, moved that project forward so that it 
was effectively construction ready, shovel ready. And when the 
stimulus package came through, it was one of two hospitals 
across the country that was picked for the Indian Health 
Service for funding. So $160 million of stimulus money went 
into the project.
    What is really a fun part of the story is that I have been 
informed there was a town in Montana that does steel 
fabrication, and the company was about to go out of business 
until they got this pretty sizeable order for this Nome 
Hospital. So the town was impacted by stimulus money from 
Alaska. And then the story continues. There was a steel foundry 
town, I understand, in Arkansas that also provided the steel.
    Ms. Norton of the District of Columbia. Mr. Neimeyer, you 
are having effects well beyond Alaska then.
    Mr. Neimeyer. Yes. And I think the interesting part of that 
story is the Commission had no hand in the stimulus money at 
all. All we did is we served as an agent to help bring the 
players together to develop the Nome Hospital.
    Ms. Norton of the District of Columbia. You had the shovel-
ready hospital.
    Mr. Neimeyer. It was to the point where it was shovel-
ready. And so when the stimulus money was there, it moved.
    Ms. Norton of the District of Columbia. And so the 
materials needed to get it started, to get it going.
    Mr. Neimeyer. Are there, and they are under construction 
now.
    Ms. Norton of the District of Columbia. And those came from 
several other States.
    Mr. Neimeyer. Right.
    Ms. Norton. So the stimulus funding reached Alaska because 
you were shovel ready. And then you were able to reach to, is 
it Wyoming?
    Mr. Neimeyer. Montana and Arkansas.
    Ms. Norton of the District of Columbia. This is a classic 
stimulus tale, and we need to put on the record more about that 
and how it happened. But that is the kind of example that makes 
us understand what has happened, because it is sometimes hard 
to trace when you have got money. But here, we have traced 
money not only to a commission activity, but beyond it to what 
it takes to get that activity going. And it takes materiels and 
all that goes along with that.
    Do any of the other two of you have examples?
    Mr. Gohl. Madam Chairman, last week I was in Magoffin 
County, Kentucky, which is a small eastern Kentucky community, 
about 15,000, extremely low income. And over the last number of 
years, Magoffin County has been working to be able to have a 
new building for its health department. Now, the health 
department in Magoffin County is more than a health department. 
It is everything. It is health, it is environmental permits, it 
is basic services. And over a period of years, ARC was able to 
provide funds to the point where they were able to build their 
building with local funds, our funds, and other Federal 
support. And as the building was coming together and was 
getting to the point of being completed in terms of 
construction, the stimulus program showed up and they were able 
to receive $100,000 for equipment to equip the center, so that 
as they moved into the center they were able to have state-of-
the-art equipment to go into this new facility to provide 
services to this county that doesn't have a hospital and 
doesn't have a lot of services. And it serves a very, very low 
income population.
    Ms. Norton of the District of Columbia. That is another 
extraordinary example, Mr. Gohl.
    Mr. Johnson.
    Mr. Johnson. We have seen a significant impact primarily in 
improving access to markets with the paving of highways that 
have gone that were almost untenable and roads within 
communities. And our central office is located in Clarksdale, 
Mississippi, and our mayor was able to make infrastructure 
improvements that were dilapidated and the town was falling 
apart. Thanks to this stimulus money, we have seen a 
substantial number of roads paved and people put to work as a 
result of it. And I might comment that Clarksdale is the home 
of the blues and Morgan Freeman. We would love to have this 
committee come join us, and I am sure he would be delighted to 
be there when you come.
    But we have seen it have a huge impact over the region. And 
it took a while for it to take effect, and there was a great 
deal of frustration and people calling in wanting to know why 
it hadn't hit and blaming us for it and so on. But when it 
started to literally hit the road in our region, they began to 
see the effect of it, and we are grateful for it.
    Ms. Norton of the District of Columbia. It is interesting 
how roads continue to be such a factor in whether or not 
investment will occur in the region.
    Let me quickly ask, Mr. Johnson, you had the misfortune to 
have Hurricane Katrina in part of your Commission's area. Have 
you seen progress in the Katrina-impacted counties as a result 
of your programs in particular? I realize huge amounts of money 
have had to come into two States. But when you look at your 
programs, whether or not you were able to leverage any of that 
and work with any of that or to be stimulated through any of 
that.
    Mr. Johnson. We have seen some effect of that. And probably 
the best example--and to talk about what Mr. Neimeyer and Mr. 
Gohl have talked about with our being small and the effect that 
we have. Shortly after Katrina, Congressman Melancon called me, 
and there was an application pending in the Polian bill for a 
water line to go out to the construction crew that would help 
rebuild that parish. And it was pending and he needed it very 
quickly.
    I called the Governors of the eight States together on a 
conference call the next morning, got them to approve the 
grant. The next day I was down there with the check, and they 
got the water going. We are able to turn on a dime.
    I must say that, because of the limited dollars that we 
have had and that the Governors have had to work with us, that 
we did not see an inordinate amount put into directly Katrina-
related projects. We did see some water systems improve because 
they were overloaded overnight. In Waterproof, Louisiana, the 
population went from 400 to 1,200 people overnight, and they 
could only run their water for a few hours during the day to 
give the water tower time to fill back up. So we came in and 
helped with that as we have in other areas. But because of the 
limited dollars that we have had, we haven't been able to see 
the huge effect. And I must say that, in this instance, because 
of our ability to leverage--and DRA dollars are the only 
dollars in this region that can be used to leverage other 
Federal dollars. And so these economically distressed areas, 
that they may be able to apply for a USDA grant but they don't 
have the money for the matching money. Well, our dollars can be 
used for that matching money, and it has changed people's 
lives.
    Ms. Norton of the District of Columbia. A very important 
point you make, Mr. Johnson, that leverage--the Federal dollars 
for the commissions can leverage the Federal dollars. The 
impacts are very, very significant here, and you make a very 
good point. To ration money here while letting money go through 
other normal kind of State match prisms fails to understand the 
enormous leveraging effect, including leveraging Federal 
dollars, in communities that couldn't possibly apply for 
Federal funds at all without a commission.
    So over and over again, we are seeing that penny wise and 
pound foolish does not pay when it comes to these commissions. 
If you really want to fund--and we have put gazillions of 
dollars into these States without the kind of leverage to the 
private sector, not to mention the Federal sector that your 
testimony has revealed.
    I am going next to the Appalachian Commission, because Mr. 
Gohl has mentioned outbound migration as still a significant 
problem in terms of long-term viability of the region.
    In deciding to make investments, how do you assure that you 
have not invested in a region or part of a region that in 10 or 
15 years may be significantly depopulated? You know, it may be 
poor. But don't you have to make sure that you are dealing at 
least in some kind of, I won't say long-term, but some basis to 
believe that you are not simply throwing money in a region 
where all of the incentives--or parts of the region, excuse 
me--are to leave, for whatever reason, making it very difficult 
for the small amounts of money that you have at your command to 
reverse such a large trend?
    Mr. Gohl. Well, there are a couple things. First of all, in 
the awarding of dollars, every project that comes to us is 
something that a Governor wants to do, and it has been through 
a process, a review, an analysis, and a lot of questions asked. 
And we also have that responsibility. I am someone who often is 
overly skeptical about proposals. But last week, I learned a 
couple of things. We were in Pikeville, Kentucky, and we were 
walking down the street. And a person we were with pointed out 
to me a retaining wall that the agency had helped fund. And I 
said, a retaining wall? Well, the retaining wall was put in 
place and, as a result, they were able to provide about 30 or 
40 new low-income housing units along a street that had been 
devastated. There had been a series of a variety of problems in 
terms of deterioration and blight to the community, and also 
helped create and stimulate development of the Pikeville 
College. So it was obviously a long discussion and a lot of 
planning about that retaining wall, something that I would be 
inclined not to fund, in all honesty, if you just came to me 
about a retaining wall. But it was because there was planning, 
there was buy-in by the local community, and there was a plan 
for how to move ahead and how to create investment.
    So I think the answer to your question is a little long, 
but it is about the involvement of the partnership and the 
plan, and the commitment of the local officials and the local 
community to, this is what their idea is and this is what their 
dream is, and this is how they plan to get it.
    Ms. Norton of the District of Columbia. It wasn't long at 
all, but it was very informative. And it is just the way these 
commissions are meant to operate, not in isolation. You are 
dealing with economic development in a State or a region, going 
through various parts of the matrix to make sure that what you 
are doing here has an effect on you and the region or the 
State. Very important to know that you don't just sit there and 
say eenie meenie miney moe, this is what we need. But you are 
working within the larger regional context, and these are 
regional commissions. Except, Mr. Neimeyer, this is a State 
commission.
    And, Mr. Neimeyer, I have got one or two questions for you, 
because for reasons known to Alaska you have gone from a peak, 
an enviable peak of something over $140 million in Federal 
funding in fiscal year 2006 to a fraction of that for fiscal 
year 2011, $15.9 million. I would like to know what effect from 
140 plus million down to 15.9 million, I would like to know 
what effect this decreased funding has had, and have you seen 
an increase in applications for grant funding or how--how is 
this Commission able to operate when they are seeing a matter 
of only a few years such a takedown of funds I suppose it had 
become used to?
    Mr. Neimeyer. Well, on a number of fronts we are 
responding. The first thing we are doing is, like I said, we 
had five advisory bodies. We are teeing up a question to each 
and every one of them: How do we start winding down our 
programs? And what does that mean? Because the way that I look 
at it is the Federal Government invested almost $1 billion over 
the course of 12 years for the Commission to develop very 
significant relationships, very significant working 
relationships with a number of partners. So I think that the 
Commission continues to add value based upon those 
relationships that have been built.
    I don't know what the right number is that would continue 
that, but I do know that we continue to add value, and we have 
to look for those opportunities where we leverage other 
dollars. And we are starting to see other partners step up 
saying, well, the Commission doesn't have money. We need to 
start moving forward ourselves.
    So what we are doing is we are trying to explore the niche 
of what we can do with less dollars.
    Earlier this week, I was in Fairbanks at a statewide energy 
conference, and that was one of the questions we were 
discussing: What are some of the things we can do? And it is 
not decided, but a lot of the stakeholder groups are saying you 
need to be investing in planning and community development. And 
those opportunities to reduce energy consumption, not by 50 
percent, but 10, 15 percent here and then 10, 15 percent there, 
and then as you start doing so, it starts adding up. But I 
think, even with reduced funding, we will continue to add value 
based upon the historic relationships that have been built.
    Ms. Norton of the District of Columbia. We will be watching 
the Denali Commission very closely given the strains that 
obviously has been put on you, to see--most commissions used to 
rising a little bit at a time and not to this kind of takedown 
of money, especially where that money is so necessary.
    But you mentioned energy and energy conservation, which has 
been of course one of the most significant focuses of the 
Commission, and particularly in some of Alaska's most isolated 
communities. Now, there was a 2007 request for information 
indicating a need for 185 projects, energy projects, totaling 
$2 billion. Now, with no conceivable way to fund this kind of 
need in the near future, how do you plan to address this need? 
Or is that just off the table?
    Mr. Neimeyer. No, ma'am, I wouldn't say it is off the 
table. A lot of what you are looking at is that we have power 
plants that have not been replaced that we do need to replace, 
older technology, the transmission systems may be of older 
technology and may not be as efficient. So if you are thinking 
about it as an airplane, we have got a lot of 707s out there 
and we don't have 737s in play. So that is a lot of what the $2 
billion is about. And so what it results in is a higher cost, 
unit cost kilowatt hour to the residents. And so it is a matter 
of changing out those systems so that the costs are reduced.
    We have been particularly struck hard by energy costs. We 
are paying double, triple what we were just paying years ago. 
And it is very hard on our communities.
    Ms. Norton of the District of Columbia. Well, I can 
understand why you gave it such priority and the crying need in 
this industry rich State as it turns out.
    I am going to ask the ranking member if he has any 
questions.
    Mr. Diaz-Balart. Thank you, Madam Chairwoman. Actually, 
just one, going back to an issue that I mentioned before to Mr. 
Johnson.
    Earlier this year, we received testimony that the DRA uses 
participation agreements for its Federal grant program. And as 
you highlighted in your testimony, that if the specific 
outcomes do not take place, do not materialize, that the 
grantee is required to return a pro rata share of its funding. 
We appreciate, by the way, the follow-up that we received from 
that hearing on the issue and I want to thank you for that. Are 
these agreements working? And do you have examples of when 
funds may have been needed to be recouped? If you could just 
kind of give us a little bit of some thoughts on that.
    Thank you.
    Mr. Johnson. Well, I must say, when we first implemented 
the program, that it was met with a great deal of resistance. 
And we were tested only once. We audit these projects while 
they are in progress. Our local development districts help us 
audit them, and then our staff will go into the field and work 
with our local development district representatives to audit 
them to make sure that they are achieving. We actually go into 
their books and look at their books to see that these are 
legitimate employees, and we don't just walk around and see how 
many people are working. So we audit their books to make sure 
that they are achieving these levels.
    The initial resistance came in the application process. And 
once they realized that we were serious about it, we really 
haven't had much difficulty in recovering any funds.
    I can tell you that we are watching a couple of projects 
very closely because we just are very skeptical as to whether 
or not they were being truthful and whether or not they were 
telling their Governor the truth. And so we are following them 
very carefully. We hope that they will be able to achieve the 
levels that they said they would; but if they don't, we will 
get the money back.
    I mentioned earlier that the example that jumps out at us 
first and is one of the biggest was with Techtron, and when 
they did not employ the number of people that they said they 
would for as long as they said they would. There is a time 
factor in here that they are able to ramp up to that employment 
level that they tell us and so that they can achieve it within 
a reasonable period of time.
    It is not an unreasonable document at all. It is very fair. 
It says the only thing we are asking you to do is we ask you to 
do what you tell us you are going to do. And if you don't do 
it, then pay us back a reasonable amount of that money that 
would be fair. And we think it works very well for us.
    Mr. Diaz-Balart. If I may, Madam Chair, just to follow up. 
Do you think the fact that you have that language in there, the 
capability of going back and getting some of those funds if 
they don't do what they said they are going to do, do you think 
that is part of the reason that you are not having to go back 
and get some money, because of the leverage?
    Mr. Johnson. Yes, sir, I do. I think that is a big part of 
it. I mentioned earlier, I was the Mississippi State auditor 
and I conducted over 1,100 investigative audits and 3,500 
routine audits and I put a number of people in jail. So they 
knew that I was serious when I said that I was going to come 
and get that money. And I think that had an impact on it. It 
didn't take long for them to realize that we were going to get 
our money back. Yes, sir.
    Mr. Diaz-Balart. Thank you, Madam Chairwoman.
    I just want to commend you for your efforts. And people 
have a hard time coming up with money, and we have a 
responsibility to make sure it is well spent. And I have rarely 
heard of an example as specific, concrete, and as effective as 
what you are doing. I know it is easier to just ignore it, but 
I want to thank you for it. Thank you.
    Ms. Norton of the District of Columbia. Thank you very 
much, Mr. Diaz-Balart. You see, Mr. Diaz-Balart is just as 
interested as I am in the notion of a rebate of some kind. And, 
of course, we have for the record that there is no objection of 
the others for such a provision. We are, of course, looking at 
the next reauthorization as well when we have these budget 
hearings. And after consultation with the commissions, based on 
what appears to be a quite successful procedure used in the 
Delta Commission, we would certainly like any reauthorized bill 
to authorize other commissions to employ such procedures.
    And what Mr. Johnson said about auditing is so important. 
You know, if you work with people all along, you don't get to 
the atom bomb. You know, you don't need the nuclear remedy if 
you help them all along and they know you are watching. If they 
think you are not watching, that is a license to walk away with 
the taxpayers' money and just say, look, that is the best I 
could do. So we not only are looking at your model for possible 
use by the other commissions; we are also looking at it in the 
larger context of Federal spending in the same way and we 
recognize the uniqueness in many ways of Alaska. But the notion 
of making sure that the kind of coordination you are getting, 
Mr. Gohl, is endemic in the way these commissions operate.
    The notion of these listening sessions, going to parts of 
the States which may not even think about having communications 
with Federal agencies that may have the greatest impact on the 
particular jurisdiction, and USDA or the Department of 
Agriculture is a classic one for many of these commissions. But 
the whole notion of actually having a conversation with the 
Federal agencies when you are a small community may seem to be 
well beyond you. Well, it shouldn't. They are there to serve 
the smallest along with the ones you hear about all the time, 
the big cities which have staffs who can speak for them and 
keep in regular touch with them.
    So we are also interested as we look to reauthorizing the 
bill to greater coordination and empowering and suggesting and 
authorizing commissions to engage Federal agencies directly 
with smaller communities that may never have had a direct 
communication, and we ought to start it right up through these 
commissions.
    I want to thank each of you for this testimony. It has been 
very informative. You have educated us. We don't have hearings 
just to find out what is happening out there. We have hearings 
essentially as problem-solving hearings. We can't solve the 
problems sitting up here in Washington, but you have certainly 
helped us to solve problems for the greater good of the 
commissions that we are now beginning to proliferate across the 
United States. And thank you very much.
    And I am going to call the final panel as I dismiss this 
panel.
    Michael Norton, no relation. We are pleased to have Michael 
Norton of the Northwest Arkansas Economic Development District. 
Leonard Winchester, Western North Carolina Education Network. 
And Cecil Groves, President, Southwestern Community College. 
And if we begin with Mr. Norton, we would be pleased to receive 
testimony from all of you now.

  TESTIMONY OF MICHAEL NORTON, EXECUTIVE DIRECTOR, NORTHWEST 
     ARKANSAS ECONOMIC DEVELOPMENT DISTRICT, INC.; LEONARD 
WINCHESTER, MANAGER, WESTERN NORTH CAROLINA EDUCATION NETWORK; 
AND DR. CECIL GROVES, PRESIDENT, SOUTHWESTERN COMMUNITY COLLEGE

    Mr. Norton. Chairwoman Norton, Ranking Member Diaz-Balart, 
and members of the subcommittee, thank you for the opportunity 
to testify today on behalf of the activities of the Federal-
State Regional Commissions. My name is Michael Norton, and I 
serve as the Executive Director of the Northwest Arkansas 
Economic Development District in Harrison, Arkansas. I also 
currently serve as President of the National Association of 
Development Organizations.
    There are four points I would like to briefly mention from 
written testimony. One, the existing and emerging Federal 
Regional Commissions need consistent Federal support to 
capitalize on the unique intergovernmental partnership model.
    Two, a key element of the successful regional commission 
model is the link made at the local level by the network of 
multi-county local development districts.
    Three, given current economic conditions, the Federal 
Regional Commissions are uniquely positioned to provide 
distressed regions of the country with the resources and 
attention needed to overcome persistent economic distress.
    And fourth, the Federal Regional Commissions are not 
intended to replace or duplicate other Federal programs.
    I would like to focus my oral remarks on a success story 
that was made possible through the support of the Delta 
Regional Authority.
    Often characterized as a one-stoplight county that is too 
small for a McDonald's or Wal-Mart, Searcy County has a poverty 
rate that is among the highest in the State of Arkansas and 
almost twice the national average. In Searcy County, the City 
of Marshall water and wastewater system were in need of 
significant improvements, specifically within the commercial 
and business area of the city along the U.S. Highway 65, which 
runs near the Searcy County airport and industrial park. Our 
organization worked with community leaders to secure a $257,000 
grant from DRA for water and wastewater improvements. During 
this time, funds were also provided from the Arkansas 
Department of Economic Development to construct a new health 
unit that was to be located in the industrial park.
    Petit Jean Electric Cooperative, which is the local 
electric service provider, was also looking for a site to 
construct a new work facility. However, the Searcy County 
industrial park's wastewater service was considered unusable 
for such a facility and was almost passed over until the DRA 
provided funds to make the necessary improvements. As a result 
of DRA's investment, Petit Jean purchased a site in the park 
and then donated land back to the county in which to locate the 
Searcy County Health Unit.
    In addition, as a result of the improved infrastructure in 
the park, the Highland Court Rehabilitation and Resident Care 
Facility decided to also locate in the industrial park. It is a 
78-bed, 30,000 square foot physical therapy center that was 
completed in 2008.
    The seed funding provided by DRA allowed more than $10 
million in additional public and private sector funding to be 
leveraged and generate more than 80 jobs in the rural community 
with a population of roughly 8,000 people. The project would 
have represented a lost opportunity were it not for the 
targeted assistance provided by DRA.
    Thank you. And I would like to welcome any questions.
    Ms. Norton of the District of Columbia. Thank you, Mr. 
Norton.
    Leonard Winchester, Manager, Western North Carolina 
Education Network.
    Mr. Winchester. Thank you for this opportunity to share 
with you some of the details of a model project funded 
partially with ARC funds.
    WNC EdNET, Western North Carolina Educational Network, 
involved connecting all of the public and charter schools in a 
six-county area in western North Carolina and the Cherokee 
Indian Reservation. It is a cradle-to-the-grave-type project, 
built on the foundation of communication, collaboration, and 
cooperation. We operate with the unanimous consent of our 
member institutions.
    On this foundation then followed the construction 
contracts, equipment acquisition, installation, configuration, 
training, staff development, and, today, widespread use. A 
success story.
    This required approximately 500 miles of fiber in the rural 
area involving some of the most difficult terrain you will find 
anywhere. Much of this was new construction. This summer, we 
will complete the last school and end up within budget of just 
over $6 million. The pricing that we got from Balsam West 
FiberNET was much lower than the market price.
    Through this low pricing and volume pricing agreements that 
we negotiated with other vendors, many of the schools did 
things outside of the scope of our project. They connected bus 
garages, maintenance facilities, offices, and acquired a lot of 
additional equipment. WNC EdNET connected each school to a 
central hub. The State of North Carolina leveraging e-rate 
funds connected the hubs to a State network and, in turn, to 
the rest of the world.
    We have today a world-class fiber-optic network operating 
in western North Carolina. It is currently serving over 20,000 
students. One example is that this year we had 1,175 students 
taking online courses. Prior to WNC EdNET, this could not have 
been done. Student teachers can remotely observe model teachers 
in distant locations. This knowledge and expertise sharing is 
easily done with this technology. The applications are endless.
    In a sister project, we also connected Graham County 
governmental facilities, providing them with additional fiber 
marketable for economic development.
    "If you build it, they will come" may not always be true, 
but if you don't build it, they can't come. A major tech 
company could come to our mountains now, set up a company, and 
get direct access to 56 Marietta. I call 56 Marietta our 
connecting point. Like Silicon Valley, it is a major connecting 
point in the Southeast.
    This is transportation infrastructure. It transports 
information. Its uses are unlimited, both good and bad. The 
same highway that someone builds may provide a bank robber with 
a quick getaway, but it also provides a doctor with a quick 
trip to the hospital that saves somebody's life. We don't want 
an emergency situation where the only resources are the few 
people who happen to be standing right in front of us. We want 
immediate access to the knowledge, skills, and resources as the 
rest of the world. We also believe that we have knowledge, 
skills, and resources to offer the rest of the world. This 
information transportation infrastructure can't be accomplished 
without Federal help and Federal intervention.
    In asking you for continued support, I offer you this. WNC 
EdNET is a model project, a poster child-type project. When you 
have taxpayers say, show me what we get for our money, send 
them to see me. We will show them some good old-fashioned 
southern hospitality and an infrastructure project that will 
knock their socks off.
    Thank you, Madam Chair.
    Ms. Norton of the District of Columbia. Thank you, Mr. 
Winchester.
    Finally, Dr. Cecil Groves, President of Southwestern 
Community College.
    Mr. Groves. Madam Chair, thank you very much, members of 
the committee, pleased to be here and support also the 
testimony of Mr. Winchester.
    Our story--and I do have a document, as I said today and 
will comment today, but also another document that relates and 
reflects also to the same subject.
    Ms. Norton of the District of Columbia. We will accept that 
for the record, Dr. Groves.
    Mr. Groves. Thank you very much. This is an extraordinary 
achievement. It is a success story of how planning, integrated 
with support, can lead to great outcomes.
    In 1999, Southwestern Community College was faced with a 
problem of what to do about an infrastructure to where we were 
required to go to a digital-related infrastructure to continue 
our interactive television program. We found out at that moment 
in time we simply could not afford the costs associated with 
doing that, and we would have to cancel the program or find 
alternative sources.
    We went to the Appalachian Regional Commission and said, we 
have a problem, but so does all of far western North Carolina: 
We can't get digital access. We don't know what the process is. 
We went to the State and others in trying to get explanations 
of what the cause of these problems were, and we really 
couldn't find out. And Appalachian Regional Commission, along 
with matching funds from the State and other independent 
providers, provided Southwestern Community College roughly 
$1,500,000 to do a detailed study of what was the issue 
associated with lack of access to rural Internet access for 
broadband resources.
    This project took 3 years in study. We went to numerous 
businesses, industries throughout our region. We studied this 
from the legal point of view, from the political point of view, 
from the technology point of view, understanding the business 
cases associated with this. We looked at various access of 
strategic partners who could work with us. What could we do to 
solve a problem that was enormous in our region that would 
limit any future development unless it was resolved? We learned 
some critical lessons.
    First, it was confirmed that the digital divide, given our 
rugged terrain, our mountainous region and sparse population, 
was a tremendous limitation for any telecommunication provider 
to come into that region.
    Second, we learned that the more traditional economic 
demand model used classically was simply not going to work in 
favor of our region.
    Third was, as most of the proposed funding models that had 
State funds involved exclusively or Federal, were all short-
term. They didn't allow for a long-term resolution to the 
issue, particularly for our isolated region.
    Finally, by doing this project we learned and gained 
sufficient technical, legal, regulatory, financial knowledge 
that was required in doing this how to do a fiber-optic 
deployment in our region on our own.
    So armed with that information made available by the study 
we did, funded and supported by the Appalachian Regional 
Commission, we decided in our far western region to solve our 
own problem and do what it took to get fiber-optic network 
high-speed into our region, understanding the demands that was 
possible.
    So we went to two primary providers--persons of interest. 
One was a company located in Franklin, North Carolina, Drake 
Enterprises, that had a very large operation providing 
financial products to various accounting firms, tax accounting 
firms, and the Eastern Band of the Cherokee, located in 
Cherokee, North Carolina.
    The college had our needs to try and upgrade our system to 
a digital base, and we gathered together and said, how can we 
resolve this problem? Is there enough mutual interest here to 
find a solution that helps the people of our region?
    Fortunately, Drake Enterprises, privately owned, was a very 
beneficent organization. It had supported the region with that 
family owning that going back five generations living in the 
region. The Eastern Band of the Cherokee, resulting from 
resources that they had received, also interested in remodeling 
and redoing their economic base, said we are interested. And 
the college, we were trying to tie together our campuses. And, 
with that, we decided to take on a project of building a fiber-
optic network throughout six westernmost North Carolina 
counties, including the adjacent counties of Tennessee and 
Georgia.
    We were told when we started this project: It can't be 
done. You can't build fiber-optic backbone through a mountain. 
It is just too difficult and simply too expensive. We were told 
that at the State level and nearly all levels that it is just 
not possible.
    Well, thanks to Appalachian Regional Commission funding, we 
now have over 300-plus miles of fiber-optic backbone throughout 
the mountains of North Carolina. Not only that, that has now 
been extended another 150 miles, and it is all placed 
underground, and in the most safe, secure processes, along with 
electronics, with it. And it was built by a local company and 
local labor.
    Second, it was said, assuming you could build it through 
the mountains, who would pay for such a costly venture? Where 
would you even get the money to consider it? Fortunately, Drake 
Enterprises and Eastern Band of the Cherokee, understanding 
their needs and a willingness to commit to serve the 
communities, what we call patient capital, to understand the 
investment that is going to take place to keep the money in the 
region, said: We will put the money up, and they put up $15 
million. We built then that fiber-optic network through those 
mountains and made it operational.
    This now represents 10 years since this project started. It 
has now been in operation and business itself now 4 years. It 
forms the backbone that allowed the public schools to organize 
and tie their communities together electronically.
    Then, incidentally--I need to add a couple things. There 
was no way, we were told, that you could get a private company 
to work with a sovereign nation, the Eastern Band of the 
Cherokee. How could you form a business enterprise between two 
such diverse organizations? We did. And we did it because it 
served a mutual public good. And I would say, when public good 
can be served through a private sustainable endeavor, you have 
the best of both worlds. Everybody had a common need in mind to 
serve the people and serve the community in here.
    Finally, the most difficult part, I might say, was not the 
technology, it was the politics, the issues of putting that 
together and the legal issues associated with it. We were able 
to work through that process, again thanks to Appalachian 
Regional Commission's funding, to understand the business of 
the telecommunication business and put our plan together.
    Today, over 300 miles of fiber in place, 50 more miles of 
that comes through metro areas, 113,000 fiber miles, 600 
conduit miles, operating at technology levels equivalent to any 
major telco in this country. It meets OC-192 speed, one of the 
highest speeds you could find.
    Our goal when we started was to provide the people in rural 
North Carolina with the lowest possible cost, accessible, 
comparable to what they would pay if they were in the urban 
areas, at the same quality level of service as if they lived in 
urban areas. That process has been in place, it is in place 
now. We serve our hospitals, our public agencies, our public 
schools, and we serve as the backbone of connectivity for our 
public schools throughout the region.
    And one classic example of the importance of this. Before 
we started this project, if you had had a car wreck and you 
were taken to one or more of the local hospitals and you had to 
have an x-ray, it was faster to drive the x-ray once it was 
done to the neighboring doctor's office than it was to transmit 
it electronically. It saves lives, it saves money, it saves 
resources, and it is a classic example again where proper 
planning supported by public dollars to private investments of 
funds in a situation that everybody said you couldn't do.
    Rural America has capacities and capabilities if given the 
opportunity often to resolve issues. Fortunately, we had two 
great enterprises, Drake Enterprise and Eastern Band of 
Cherokee, who looked at this process, looked at our study, 
looked at the materials put together, and said: We will invest 
in this, and it is important. There is no public funds or State 
or local in the building of this network.
    Thank you.
    Ms. Norton of the District of Columbia. Having heard from 
all three of you, I say, wow, because the testimony has been 
quite instructive. For example, Mr. Groves, your commission 
starts out with only--I use that word advisedly--a study. In 
effect, what you did was the marketing study, the feasibility 
study for Drake. Now, normally Drake and similar companies 
would have to care enough or have the funds enough to want to 
expend that themselves to see whether they ought to do it.
    You speak of all of the barriers. They are extraordinary. 
Did your study show that Drake could turn a profit within a 
certain amount of time?
    Mr. Groves. Yes. What we looked at with the studies, Drake 
knew full well, as did the Cherokee, the length of time it 
would take for them to return. We call that patient capital. 
They said, We will invest. It is good for our company. They 
understood the financial world; that was their business. But it 
is good for the people of North Carolina and it is good for the 
people especially of western North Carolina, and we will return 
the profit that we need. We may not do it in 1 year, but we 
will do it within 3 years. Today, that operation is profitable 
and it works.
    Ms. Norton of the District of Columbia. Today it is 
profitable?
    Mr. Groves. Yes. We are expanding very rapidly and meeting 
the needs of our area.
    Ms. Norton of the District of Columbia. And normally when 
broadband or new technology comes in, there is a--pardon me--
stickup of the local jurisdiction or the State to say, okay, 
you put in some money and then maybe the company will put in 
some money.
    You say this is--there was no Federal or there was no State 
funds?
    Mr. Groves. Madam Chair, in the building of the fiber, no. 
That is wholly owned by Eastern Band of the Cherokee and Drake 
Enterprises. They put up all the money. The Federal dollars 
were the Appalachian regional dollars, matched by--it came out 
to $1.5 million, allowed us to do the study that took 3 years 
that laid the predicate to do all this.
    Ms. Norton of the District of Columbia. $1.5 million has 
leveraged--and give us the figure at the moment. Has leveraged 
what? In terms of dollars.
    Mr. Groves. It leveraged a hard asset, a dollar value of 
$15 million put in and asset value far more than that.
    Ms. Norton of the District of Columbia. And growing. I must 
say, when you say the hardest thing was the politics, wow. I 
can't imagine politics would be hard. If a company wants to do 
this on its own dime and in a locale which presents nothing but 
barriers, geographic barriers and, I might add, some 
demographic barriers, who in the world was against this? I 
mean, how could anyone be against it?
    Mr. Groves. A lot of people didn't understand what we were 
doing and didn't think we could do it. It was impossible. And I 
think there is always that uncertainty. And then there was some 
control issues, too. It was, actually, if we could do it, maybe 
others might, too.
    Ms. Norton of the District of Columbia. And apparently 
there wasn't much risk, because the risk was going to be with 
the company, and the Federal Government had already funded the 
study, saving the company and the private sector that, and 
leveraging what was apparently an extraordinary study, if it 
could make people spend money the way you made Drake feel it 
should.
    Let me ask, Mr. Norton, beginning with you. Here we find 
our regional commissions in a worse turndown than every other 
part of the United States, 50 States, all the Territories and 
the District of Columbia all went out at the same time.
    Could you give me some notion of the impact on programs 
operated by regional commissions you, who are I believe the 
chairman of the commission representing NATO and president of 
the board of directors representing these commissions. They 
find themselves in the middle of this catastrophe that we 
called the Great Recession. Here, they are trying to just move 
where the rest of the country is.
    How do you keep going when you find yourself doubly and 
triply disadvantaged by having perhaps what you have, the 
progress you have already made retracted? And have you found 
that that has occurred? What is your view of how these 
commissions have been able to continue to operate? Have they 
been able to continue to make progress not withstanding this 
economy?
    Mr. Norton. Well, you are exactly right, Madam Chair. These 
regional commissions were created to serve the most poor 
counties in our Nation. In our case, and the Delta Regional 
Authority is an example. It affects many States up and down the 
Mississippi and 42 counties in Arkansas alone, many more in 
Louisiana and Mississippi. And you are exactly right, that 
these programs help bring together planning on the part of 
those commissions.
    One of the important issues to always remember is these 
dollars can be used to match other Federal dollars and leverage 
those dollars. So that is a very important factor among these 
regions.
    Although there were disaster money in Louisiana, 
Mississippi, and Arkansas, and those who received catastrophic 
and Federal designation, the congressional requirements to meet 
those programs did not change at all. But, by a result of the 
regional dollars through the Delta Regional Authority, you 
could use those to match some of those Federal dollars, so that 
was very important, and provide them.
    And you are right. For some of these communities, you are 
merely trying to open the door to the economic development. If 
businesses were knocking at their door, there might not be a 
need. But, again, you are trying to serve amongst the needy. 
And they don't have the dollars. Those who are in the greatest 
need do not have the matching money to meet many of these 
Federal programs. So this program leverages Federal dollars 
that comes to their region.
    Ms. Norton of the District of Columbia. And of course, the 
commissions are known for doing what Dr. Groves has described, 
doing the homework for the investor. And you are so right, Mr. 
Norton. They are not going to come knocking at your door and 
say, What have you got for me that maybe I can invest in now? 
We find through our committee that even at the top realm of, 
for example, developers, they are having trouble getting money 
themselves. And these are people who usually find it very easy 
to get money. So the notion of being able to continue to make 
progress even if not in actually doing what you were doing, let 
us say, 5 years ago, would seem to me to be most important.
    Do you, Mr. Winchester, and you, Mr. Groves, find that 
there are ways to keep moving forward in this climate when 
investors can't get funding themselves from the banks? Is there 
a way for--that studies or other things you can do to make sure 
you don't suffer a setback even if you can't move ahead to do 
some of the things with the private sector you would otherwise 
have done? Can you make preparations, in other words, for what 
will surely be, we are already seeing, a turnaround in the 
economy?
    Mr. Winchester. Yes, Madam Chairman, there are things you 
can do. But probably the biggest thing that you can do is very 
simple, and that is just not to give up. A lot of times you 
don't know what the next step is going to be. You do not know 
right now four years from now what door will open financially.
    When we were working on the planning on this there was not 
a Balsam West FiberNET. This company they created. You know we 
knew what we needed, but we did not know where it was going to 
come from or how we were going to pay for it. And then we 
didn't know too that when Phil Drake and the tribe formed this 
company that was one business enterprise. They had their fiber 
network they wanted to bill for their business case. The 
schools wanted a fiber network. When we put that out for bid, 
this company, their bid was like a factor of 10 under any of 
the other bids we got. That is returning something to the 
community. The difference between two companies bidding on a 
project like this is how much they mark it up. Because both 
companies subcontract to someone else to actually do the 
construction and those costs are pretty constant. So by this 
group offering to build our network at the very low price that 
they did, it wasn't free, but we will never see prices like 
that again on fiber construction.
    Ms. Norton of the District Columbia. Just a point you make. 
As we sit in this committee tracking the stimulus funds, the 
first thing we say is for goodness sake, build it now, when 
everybody is looking to make a buck and hard to make a buck, so 
you get prices you will never get again. And your notion about 
opportunities, Mr. Winchester, you know, they don't come 
knocking at the door anyway, you got to have a lookout. 
Opportunities present themselves. They can pass you on by while 
you are stuck in some notion about what the opportunity has to 
be. That is how the private sector operates, and it looks like 
that is how the Commission operates as well, given your 
testimony, the testimony we have heard from all three of you.
    Mr. Groves--Dr. Groves.
    Mr. Groves. Madam Chair, one of the things that sometimes 
penalizes rural areas is the inability to collaborate our work 
in unison, our work together. That is where the Appalachia 
Regional Commission comes in. Oftentimes in a rural area it is 
hard to have one party come forward to bring a common picture. 
And when you look at areas one county by itself may look very 
poor, but combined with six, seven, eight, nine or 10 counties 
together in collaboration you get some wonderful things done. 
Oftentimes it takes a third-party outside in formation who can 
create that energy, can create that conversation, can bring the 
folks together and can focus very narrowly on what are the core 
issues.
    Balsam West results from a core problem; that is, we knew 
the future was going to be based on access to very high speed 
technologies available for business, industry, schools, 
hospitals. And we said that is the core infrastructure problem 
for western North Carolina for at least the first part of the 
21st century. Once that is settled in everybody said this has 
got to happen, then the issue is how do you make it happen, and 
you get a unified approach to it. That is one of the hard 
things to do. And again, the ARC was very, very helpful in 
helping us paint the picture, put the details together and then 
understand the business. Otherwise we would not have had a 
chance to understand how the business worked. Once we 
understood how it worked and what happened we felt we could do 
this, and we sure did.
    Ms. Norton of the District Columbia. Well, the ARC was 
helpful in that. There is a lot to be shared in all of this. 
And certainly your experience, certainly you, Dr. Groves and 
Dr. Winchester, does show we can't keep ourselves mired in the 
20th century. You understood that broadband might be more 
important than, you know, a new road through those mountains, 
because the new road is broadband and it opens up instantly 
roads that were unheard of.
    I have one more question for you. I am so impressed by what 
I have learned as chair of this subcommittee from the 
commissions that I would like to understand what the regional 
commissions could do to benefit nonrural communities. For 
instance, I mentioned that you have in this Nation's capital, 
it is only a medium-size city, but you have got some of the 
same things you will find in, let us say, a State like New York 
State. In one end of the State, you have some of the richest 
people in the United States and the world. In other parts of 
the State you have a huge thriving middle class. And then you 
have parts of New York State that look exactly like Appalachia. 
Well, in a real sense, unable to pass up analogies, as I am, I 
look at my own city with some of the highest income people, and 
by the way, the city has one of the highest education levels in 
the United States, and you can understand that with the Federal 
Government located here, it has a large black middle class, a 
large white middle class, and then it has got on the other side 
of the river, if this were divided into counties the, two 
wards, as we call them, on the other side of the river that 
look a whole lot like what we find in the Southeast Crescent, 
further into rural Virginia and going on down, 28 percent 
unemployment, 30 percent poverty rate, right alongside or on 
the other side of the river from more prosperous communities.
    How might a regional community benefit even a portion of a 
more urbanized community that has had systemic poverty? Are 
there lessons to be learned from rural communities by these 
impoverished communities often alongside rural communities, 
suffer the same fate, but because they are seen as some other 
model, city model for example, they don't have the same 
enterprising approaches that we see in the commissions. Do you 
think they could be adapted to urban areas, parts of urban 
areas it would be, that suffer from the self-same statistics 
and poverty levels?
    Mr. Norton. Well, as a local development district or 
regional development district----
    Ms. Norton of the District Columbia. I can't hear you, Mr. 
Norton.
    Mr. Norton. Sorry. I will try to get this a little closer a 
little bit.
    As a regional development organization in the local DD, as 
they are called among the regional development like DRA, in the 
Appalachian region they use the local development districts to 
implement. My district is a good example. I have nine counties 
in northwest Arkansas. At one end of my district is the 
corporate headquarters of Wal-Mart, Incorporated, Tyson's Food, 
J.B. Hunt, and other Fortune 500 companies. The other end of my 
district is Searcy County, the example that I gave you, which 
is one of the most rural and impoverished counties in our 
State, that falls in the Dealt Regional Authority.
    But working through this, it is important to keep it all in 
perspective among the business communities and working 
together, as Dr. Groves said. Transportation is important 
because those people living in those impoverished counties 
commute to and work in micropolitan areas and other regions. 
But they have to be part of the plan, that has to be a part of 
the overall planning. And the districts can serve as a liaison 
between the State and local governments, nonprofit 
organizations and the private sector working together to 
accomplish much of this.
    Other things we do are conducting outreach activities among 
those local governments, making them aware of what these 
regional development commissions provide, and then working with 
them to develop the projects.
    So yes, working as a region I think you can work through 
these things as the examples that both of my colleagues here 
today mentioned. People can work out of their house if they 
have broadband. What they could sell among their neighbors as a 
seamstress, for an example, they can now sell around the world 
to Hong Kong, Japan, and be an international market. So all of 
that is very important that we plan and look at our regions.
    Mr. Winchester. Madam Chairman, I am sorry but I have zero 
experience in urban situations and would not dare offer 
suggestions or criticisms in that area.
    Mr. Groves. Madam Chair, I have worked in some urban 
settings. Oftentimes I think the difficulty is you have 
multiple variables, more than you have in rural areas, to cope 
with. And your question was about organizations like ARC and 
others and how they would work with that. I think one of the 
factors that is important is somehow be a convening group of 
information and a verification of information. Often what 
occurs in settings like that, my experience, is that 
information is not trusted. And it is hard to build coalitions 
on data or information where there is no trust. That is where 
some communities, urban I have seen, have had oftentimes set up 
almost research groups outside the university sector on its own 
to verify certain things the community wants to do; studies 
that have some validity to it, or at least believed to have 
validity sufficient to organize and bring people together.
    I think commissions like ARC can help facilitate that, to 
bring that sort of veracity, knowledge, information into what 
is considered a neutral way to build coalitions of people and 
cause conversations to take place that otherwise might not 
happen. I think that is probably one of the best things. And 
out of that you would hope then some models could emerge which 
they could be shared against such commissions as to how you 
might approach some of these problems, some workable problems, 
and best case solutions.
    Ms. Norton of the District Columbia. Thank you. Indeed, the 
notion of the studies, going from the studies that you have 
done in rural areas that have been so credible that they have 
impressed the private sector, using universities and others 
outside of the normal governmental apparatus, is very 
intriguing. Because obviously the city or State wants it and 
now trusted by the investor, I am not so sure they are always 
trusted by the population to be benefited. But the notion of 
having a study that you can rely upon, that you can verify 
might in itself, if nothing else, be of some value in urban 
areas. And I don't think that any such thing occurs in urban 
areas.
    Indeed, one of the most important things that these 
commissions have done is to harness the university sector. 
Extraordinarily useful. We want to spread that throughout 
anything we do, especially with the new commissions.
    Finally, let me say we are very concerned that given what 
these commissions can mean that we have not been able to secure 
funding for them yet, there is some funding for the Southwest 
Crescent, some initial funding there, we are going to work very 
hard using an appeal for funding from everybody who wants some 
money, which is always the case. And the Federal Government is 
the granddaddy of funds and so you know people's eyes glaze 
over.
    What you have done in offering your testimony is to give us 
documentation for the benefit to the Federal Government and the 
Federal dollar, the many times leverage of the Federal dollar, 
even for something as inexpensive as a study, we simply cannot 
be beat by anything we do.
    All we do is hand out money. We are glad to do it where the 
necessity is there, but without anything like the rigor, the 
accountability and the bottom-up involvement of communities 
that has produced the success you are able to report.
    So you enjoy the greatest respect from our subcommittee and 
the committee.
    The full chairman of the committee was an originator of the 
idea even before he came as a member of the staff. I think this 
is his very favorite part of his many jurisdictions which 
involve some of the most colossal ones like roads and trains 
and the rest.
    So you do have great respect and great advocacy from this 
committee and this subcommittee. And may I say how very much I 
have appreciated your very informative testimony and that, like 
the testimony of those who preceded you, they will help us in 
the next reauthorized bill.
    Thank you very much for coming to Washington. This 
committee is adjourned.
    [Whereupon, at 4:20 p.m., the subcommittee was adjourned.]



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