[Senate Hearing 111-1192]
[From the U.S. Government Publishing Office]




                                                      S. Hrg. 111-1192

                            OVERSIGHT OF THE
                  ECONOMIC DEVELOPMENT ADMINISTRATION

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

                                HEARING

                               before the

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 21, 2009

                               __________

  Printed for the use of the Committee on Environment and Public Works



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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                     ONE HUNDRED ELEVENTH CONGRESS
                             FIRST SESSION

                  BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana                  JAMES M. INHOFE, Oklahoma
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
FRANK R. LAUTENBERG, New Jersey      DAVID VITTER, Louisiana
BENJAMIN L. CARDIN, Maryland         JOHN BARRASSO, Wyoming
BERNARD SANDERS, Vermont             MIKE CRAPO, Idaho
AMY KLOBUCHAR, Minnesota             CHRISTOPHER S. BOND, Missouri
SHELDON WHITEHOUSE, Rhode Island     LAMAR ALEXANDER, Tennessee
TOM UDALL, New Mexico
JEFF MERKLEY, Oregon
KIRSTEN GILLIBRAND, New York
ARLEN SPECTER, Pennsylvania

                    Bettina Poirier, Staff Director
                 Ruth Van Mark, Minority Staff Director

































                            C O N T E N T S

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                                                                   Page

                              MAY 21, 2009
                           OPENING STATEMENTS

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     1
Boxer, Hon. Barbara, U.S. Senator from the State of California...     3
Bond, Hon. Christopher S., U.S. Senator from the State of 
  Missouri, prepared statement...................................   133

                               WITNESSES

Walters, Sandra R., Chief Financial Officer, Chief Administrative 
  Officer, Acting Assistant Secretary of Commerce for Economic 
  Development, Economic Development Administration...............     4
    Prepared statement...........................................     6
    Responses to additional questions from Senator Boxer.........    14
    Response to an additional question from Senator Merkley......    17
    Responses to additional questions from Senator Inhofe........    17
Kennedy, Hon. James, Commissioner, Butler County, Pennsylvania, 
  on behalf of the National Association of Regional Councils.....    19
    Prepared statement...........................................    21
    Responses to additional questions from Senator Inhofe........    56
Phillips, LaVern W., President, Woodward Industrial Foundation...    82
    Prepared statement...........................................    84
    Response to an additional question from Senator Inhofe.......    87
Mazer, Leanne, Executive Director of the Tri-County Council for 
  Western Maryland...............................................    89
    Prepared statement...........................................    91
    Responses to additional questions from Senator Inhofe........   105

 
          OVERSIGHT OF THE ECONOMIC DEVELOPMENT ADMINISTRATION

                              ----------                              


                         THURSDAY, MAY 21, 2009

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.
    The full Committee met, pursuant to notice, at 10 a.m. in 
room 406, Dirksen Senate Office Building, Hon. Barbara Boxer 
(chairman of the full Committee) presiding.
    Present: Senators Boxer, Inhofe, Cardin, Klobuchar, Udall, 
and Merkley.
    Senator Boxer. If everyone would kindly take their seats. 
We are so grateful to you all for being here this morning.
    We will start right away. Senator Inhofe has a competing 
hearing on Armed Services, very urgent, that he has to go to. 
So I am going to do something different today. I am going to 
give him the opportunity to open it up. Senator Inhofe, please.

          OPENING STATEMENT OF HON. JAMES M. INHOFE, 
            U.S. SENATOR FROM THE STATE OF OKLAHOMA

    Senator Inhofe. Thank you, Madam Chairman. Thanks for 
having this hearing today.
    I am hoping that this will precipitate that this will get 
us into the reauthorization. That is something that I have been 
trying to do now for quite some time. I thought we were going 
to get it done last year, but there were some problems, not 
with this Committee but on the House side.
    I want to welcome all of our witnesses, particularly LaVern 
Phillips, the guy with the green tie, most appropriately, and 
you would expect that. He is the President of the Woodward 
Industrial Foundation. I was actually in his town to visit with 
him 3 days ago and he was not there. But they have done some 
wonderful things in Woodward and I am very, very proud of it.
    I have had the pleasure of working with the State and local 
interests to begin to address some of the infrastructural 
problems in Northwest Oklahoma and the Panhandle. For example, 
the WRDA 2007 authorized water and waste water treatment 
related infrastructure, including $1.5 million for Woodward and 
$16 million for Guymon. I also went to Guymon on the same day, 
on Monday, LaVern.
    Anyway, one of my trips to Woodward was last August. It was 
for a $1 million EDA check presentation that will help build 
the Woodward Community Campus. And when you look at the 
successes that we have had in Oklahoma, and I think other 
States have, too, the leverage is so impressive. We had a 
total, I believe, in this last authorization of some $26 
million and that was leveraged into $556 million. If we had 
released all that stuff that we wasted on the bank bailouts in 
programs like this, it sure would be worthwhile.
    This is a program where liberals and conservatives get 
together and say, this is what Government should be doing. I 
think that the successes we have had in Oklahoma are very 
similar to successes all around the Country.
    The EDA's authorization expired on September 30th of last 
year and I am concerned that the lapse in authorization may 
leave the agency vulnerable to funding cuts during the 
appropriations cycle and more generally result in uncertainty 
for the agency as well as the struggling communities.
    We have a lot of struggling communities, Madam Chairman, in 
my State of Oklahoma. I have so many examples all over the 
State. One thing is the EDA grant that we did down in Elgin, 
Oklahoma. Mr. Phillips precipitated the building of a 150,000 
square foot building in Laverne, Oklahoma which has a 
population of 300. It shows you that things can be done and 
that was all done with a very small EDA grant.
    So, I am hoping this will lead to authorization, Madam 
Chairman.
    [The prepared statement of Senator Inhofe follows:]

            Statement of Hon. James M. Inhofe, U.S. Senator 
                       from the State of Oklahoma

    Thank you, Chairman Boxer, for holding this hearing on the 
Economic Development Administration. Oversight is an important 
function of our Committee, and with reauthorization of the 
agency several months overdue, as well as a more than tripling 
of funding over the past year through regular appropriations, 
disaster-related supplemental funding and stimulus bill 
funding, an oversight hearing now is very timely.
    I would like to welcome our witnesses, especially LaVern 
Phillips, President of the Woodward Industrial Foundation in 
Oklahoma. I visited the city many times, including just last 
week. I also want to note that I understand that Mr. Phillips 
and the rest of Woodward will be welcoming former President 
George W. Bush to the city to celebrate the 4th of July this 
year.
    I've had the pleasure of working with State and local 
interests to begin to address several infrastructure needs for 
Northwest Oklahoma and the Panhandle. For example, WRDA 2007 
authorized water and waste water treatment related 
infrastructure, including $1.5 million for Woodward, $16 
million for Guymon and $275,000 for Oklahoma Panhandle State 
University. We were able to secure funding for transportation 
improvements as well, including $6.4 million to construct a 
viaduct on U.S. Highway 270 over the railroad tracks in 
Woodward and $1 million to widen U.S. Highway 54 from north of 
Optima to the Kansas State line. I intend to continue working 
with dedicated professionals like Mr. Phillips to improve the 
infrastructure, and therefore the economic viability and 
quality of life, of this area.
    One of my trips to Woodward was last August for a $1 
million EDA check presentation that will help build the 
Woodward Community Campus. I will let Mr. Phillips talk more 
about the details of the project, but I would like to mention 
that I very much support this project and was pleased to see it 
recognized for funding by EDA.
    The Woodward project is one recent in a long line of smart 
and incredibly beneficial investments EDA has made in Oklahoma. 
In fact, over the past 6 years, EDA grants awarded in my home 
State have resulted in more than 9,000 jobs being created or 
saved. With an investment of about $26 million, we have 
leveraged another 30 million in State and local dollars and 
more than 558 million in private sector dollars.
    That's real economic development with real jobs. I only 
wish more of the so-called ``stimulus'' bill had been dedicated 
to programs like EDA that are truly successful at spurring 
economic development.
    My belief in EDA's success is not just anecdotal either. 
Studies show that EDA uses Federal dollars efficiently and 
effectively, creating and retaining long-term jobs at an 
average cost that is among the lowest in Government. Today's 
hearing gives us an opportunity to discuss possible tools to 
improve performance even further during the reauthorization 
process.
    The EDA's authorization expired on September 30, 2008. I am 
concerned that the lapse in authorization may leave the agency 
vulnerable to funding cuts during this appropriations cycle and 
more generally result in uncertainty for the agency as well as 
the struggling communities that depend on its assistance.
    I had introduced a reauthorization bill in July 2008, and 
this Committee reported a bipartisan bill in September. 
Unfortunately the bill was never enacted. In February of this 
year, I again introduced a bill to reauthorize and improve 
EDA's programs.
    Madam Chairman, I hope that this hearing is the first step 
in our Committee again reporting an EDA reauthorization bill 
and this time seeing it through to enactment. I look forward to 
working with you and our colleagues to accomplish that task as 
soon as possible. Thank you.

           OPENING STATEMENT OF HON. BARBARA BOXER, 
           U.S. SENATOR FROM THE STATE OF CALIFORNIA

    Senator Boxer. Senator Inhofe, my Ranking Member, I could 
not agree with you more. We need to move on this soon. 
Regardless of whom the Administration names, I feel we need to 
get ahead of the curve here. I have talked to Gary Locke about 
this. He is very supportive and excited about this.
    I am going to put my statement on the record, but I am 
going to through it just in about 2 minutes.
    [The referenced material was not received at time of 
print.]
    We know the EDA has a long history of helping economically 
distressed communities and, as my colleague has said, 
leveraging funds in magnificent ways. This program was created 
during the Johnson administration, so it certainly has been 
proven. I bet some of you in this audience were born well after 
that. Oh, but if could say that about myself.
    [Laughter.]
    Senator Boxer. As Senator Inhofe has said, from providing 
money for water and sewer improvements to helping manufacturers 
become more competitive in the global marketplace, the EDA 
provides valuable assistance to communities across the Nation. 
It is cost effective. It has a very important role to play in 
economically challenging times.
    I went out to Sacramento to an area that has just made a 
proposal for EDA funding. It is like the perfect place. It is a 
redevelopment area. They built a stadium there, a ballpark for 
the farm team. It is the biggest field there. And they really 
are just getting ready now to add housing and so on and so 
forth. It is just the perfect place to leverage those types of 
funds.
    When the former Deputy Assistant Secretary of Commerce for 
Economic Development testified before us in September, he 
stated that from Fiscal Year 2004 to 2008, EDA awarded over 
$1.29 billion in investments which are expected to create 
392,000 jobs at an average cost of only $2,500 per job. Now I 
would put that up against almost anything else that we do.
    We know that Federal dollars spur large amounts of private 
sector investment and it is estimated that for every dollar in 
Federal funding, $33 in private sector investment was created. 
This is really a great success story.
    Congress recognized EDA's unique role in job creation in 
the American Recovery and Reinvestment Act, our stimulus bill, 
and I worked hard to get this $150 million. Boy, I had to work 
hard to get it. But we did get it. And I want to thank Bettina 
Poirier and her staff on that one because that was a climb.
    But I do look forward today to hearing how those funds have 
been distributed. It may be that they are still being 
distributed. We want to know about that and how those funds are 
helping our communities across the Nation.
    We also provided EDA with a total of $500 million in 
natural disaster assistance through supplemental appropriations 
in 2008 and 2009 and I would love to hear about how those funds 
are being used to support long-term post-disaster economic 
recovery in response to hurricanes, floods and other disasters.
    So, as was stated by my Ranking Member, EDA's authorization 
expired at the end of September 2008, but the agency has been 
able to continue operating through the appropriation of funds. 
We do need to reauthorize and I intend to do it. So does 
Senator Inhofe. And when the two of us get our mind to 
something, we do it. Right, Ruthie? And so, we are going to do 
it because we have got to push on this. This is a win-win.
    I am going to get this going and then, Paul, will you tell 
me when there is like 5 minutes left to go?
    So, Sandra Walters, Acting Assistant Secretary of Economic 
Development, accompanied by Dennis Alvord, we will start with 
you.

STATEMENT OF SANDRA R. WALTERS, CHIEF FINANCIAL OFFICER, CHIEF 
ADMINISTRATIVE OFFICER, ACTING ASSISTANT SECRETARY OF COMMERCE 
 FOR ECONOMIC DEVELOPMENT, ECONOMIC DEVELOPMENT ADMINISTRATION

    Ms. Walters. Chairman Boxer, Ranking Member Inhofe and 
members of the Committee, thank you for this opportunity to 
testify on behalf of the Economic Development Administration.
    EDA's mission is to lead the Federal economic development 
agenda by promoting innovation and competitiveness, preparing 
American regions for growth and success in the worldwide 
economy. EDA's achievements have two major goals: attracting 
private capital investment and creating higher skill, higher 
wage jobs. EDA's achievements are a reflection of our policy 
priorities: to encourage collaborative regional economic 
development, to promote competitiveness and innovation, to 
cultivate entrepreneurship, and to spur our economic 
development partners to take advantage of the opportunities of 
the worldwide marketplace.
    As part of its 2010 budget request, the Administration has 
emphasized two priority areas for EDA: regional innovation 
clusters and business incubator networks. EDA is encouraged by 
this focus and finds it consistent with the results of recent 
EDA research, as well as best practice in the economic 
development field overall.
    EDA has a history of investing in regional innovation 
clusters and business incubator projects, such as a $2.2 
million investment to JumpStart in Northeast Ohio, which has 
helped its clients create 650 new jobs and raise $43 million in 
private sector investments, and a $1.25 million investment in 
the Bio-Innovations Center in the New Orleans Medical District 
which is assisting in the development of biotechnology-related 
companies looking to commercialize technologies from the 
greater New Orleans area universities and research 
institutions.
    Another critical element to our success is our focus on 
planning, which research shows is essential for successful 
economic development. EDA is pleased that Congress recently 
provided the first funding increase in the planning program's 
contemporary history.
    At the direction of Congress, EDA established the Global 
Climate Change Mitigation Incentive Fund in 2008 to advance the 
connections between economic competitiveness and environmental 
quality. By using the U.S. Green Building Council's Leadership 
in Energy and Environmental Design, EDA is able to verify that 
each fund-related investment effectively contributes to 
sustainability and mitigates associated environmental impacts.
    EDA is pleased that the President's 2010 budget request 
provides for $16.5 million, which represents a $1.8 million 
increase.
    Another key area for EDA is responding to sudden and severe 
economic dislocations. For example, EDA is on the front line in 
assisting communities following natural disasters. Last year, 
Congress allocated $500 million in two supplemental 
appropriations to EDA in response to natural disasters that 
severely impacted communities across the Nation. To date, EDA 
has $411.3 million in projects in various stages of the 
application process.
    Additionally, EDA received $150 million as part of the 
American Recovery and Reinvestment Act of 2009 to respond to 
sudden and severe economic dislocation and job loss due to 
corporate restructuring. We are ahead of the curve in 
implementation, having published a Federal Funding Opportunity 
notice on March 11th, 2009. We allocated funds to each of our 
six regional offices to initiate the process of disbursing 
funds quickly to assist communities.
    To date, EDA has $100.3 million in projects in various 
stages of the application process.
    Chairman Boxer, Ranking Member Inhofe and members of the 
Committee, thank you for your time today and for inviting me to 
give an overview of EDA's programs. With me today is Dennis 
Alvord, the Acting Deputy Assistant Secretary of Commerce for 
Economic Development, who oversees EDA's six regional offices. 
We look forward to answering any questions you may have and 
working with the Committee on legislation to reauthorize the 
agency.
    [The prepared statement of Ms. Walters follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
    Senator Boxer. Thank you so much. Can I ask Dennis if he 
could raise his hand so I know--great. Great. And when I get to 
my questions, I am going to ask you for examples of some of 
these projects that you are working on through the stimulus and 
through the emergency. So be prepared to give us a couple of 
examples. Not right now, when I get to questions.
    Now we are going to hear from the Honorable James Kennedy. 
He is the Commissioner, Butler County, Pennsylvania, on behalf 
of the National Association of Regional Councils. After you 
finish, I am going to go vote. If Senator Inhofe does get back, 
I will ask him to convene and he can convene with Mr. Phillips 
because I know he has a special interest in that. And then I 
will come right back and we will continue.
    So go ahead, Mr. Kennedy.

 STATEMENT OF HON. JAMES KENNEDY, COMMISSIONER, BUTLER COUNTY, 
PENNSYLVANIA, ON BEHALF OF THE NATIONAL ASSOCIATION OF REGIONAL 
                            COUNCILS

    Mr. Kennedy. Good morning and thank you, Chairman Boxer, 
and Ranking Member Inhofe and the distinguished members of the 
Committee. I am honored to be before you today to testify on 
the Economic Development Administration, the EDA, and its 
reauthorization, economic stimulus and the idea of sustainable 
and livable communities.
    I am James Kennedy, a Commissioner from Butler County, PA. 
I sit on the Board of Directors of Southwestern Pennsylvania 
Commission, SPC. I am also an elected Board Member and Past 
President of the National Association of Regional Councils, 
NARC, and President of the County Commissioners Association of 
Pennsylvania. I am also a lifelong resident of Butler County 
and serve proudly as a Commissioner, an avid regionalist and a 
dairy and grain farmer.
    On behalf of NARC and SPC, I am here to stress the 
importance of the EDA programs, funding and activities, the 
need for immediate reauthorization, SPC's successes and 
challenges with EDA, and how EDA can revitalize to meet the 
growing needs of our communities and regions.
    NARC advocates multi-jurisdictional cooperation as the most 
effective way to address community planning and development. 
NARC is governed by the local elected officials, like me, and 
represents regional planning organizations such as SPC that 
work to improve America's communities, large, small, urban and 
rural. Regional planning organizations are important to our 
communities and for their delivery of funding and programs, 
providing support and technical assistance, especially during 
the economic crisis.
    My regional council, SPC, represents the greater Pittsburgh 
region, a 10-county area with diverse urban and rural make up 
of 2.6 million people and 7,000 square miles. SPC is the MPO, 
the LDD and the EDD, and is responsible for regional economic 
development priorities with a wide range of public services 
including the development and implementing of the region's 
Comprehensive Economic Strategy, which brings critical funding 
to our region for improved infrastructure, job opportunities 
and resources.
    In a time of softening economy, declining Federal and State 
funding, rising unemployment, and the clear need for 
substantial investments in the Country's infrastructure, we 
must revive our Federal commitment to EDA's core mission, and 
bring about more comprehensive regional planning activities.
    For SPC, EDA recently provided $150,000 to Pittsburgh Life 
Sciences for the expansion of the Executive-in-Residence 
Program, which provides capital investments, customized company 
formation and business growth services in the region of life 
sciences, one of my region's largest targeted industrial 
clusters. The investment part of the $300,000 project was 
recently profiled in Science Progress as an innovative way to 
create jobs and maintain long-term economic competitiveness.
    Another EDA-supported project in our region is the 
Armstrong County Industrial Development Council in Kittanning, 
Pennsylvania which received $2 million to construct the 
Northpointe Technology Center to house advanced technology 
firms. This is part of the $4.4 million project that will 
generate $20 million in private investment to help create 60 
jobs, a typical return on investment for EDA funds.
    Based on my experience as a local elected official, I 
believe that the Federal Government should be reestablishing a 
strong role in urban and rural economic development and support 
local and regional efforts like those I mentioned, while 
providing sustained local and regional authority and increased 
funding to support these levels.
    In order to accomplish NARC's recommendation, EDA would be 
authorized a minimum of $500 million to sufficiently provide 
funding operations for all levels of agencies, including 
increased funding for flexibility and the EDA's core programs, 
which should be the primary focus of EDA. EDDs have received 
the same $52,000 per year in planning grants for the last 25 
years and must be increased. The grants are vital to local 
governments to address the economic development.
    EDA funding is critical in my region, particularly as we 
face 75 percent State funding cuts this year. We need to 
leverage as much Federal funds and State and local funding as 
possible in order to work regionally in order to get the 
biggest return on our investment.
    For Federal economic stimulus, my region conveyed stimulus 
funding opportunities to potential applicants through public 
participation panels.
    Senator Boxer. Sir, I am going to have to interrupt because 
your 5 minutes is up and I just ran out of time to vote. So we 
will put the rest of your statement into the record. But I get 
your message loud and clear and I am with you. We are going to 
do this.
    [The prepared statement of Mr. Kennedy follows:]
   
   [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
   
    [Recess.]
    Senator Boxer. Well, I think that what probably happened is 
that Senator Inhofe's colleagues on Armed Services nabbed him 
away. We will see what happens. In any case, we have had two 
excellent statements. We will place the full statement in the 
record, Mr. Kennedy, and we will move to Mr. Phillips now. 
Should we move to Mr. Phillips now? OK.
    We move to LaVern Phillips, President, Woodward Industrial 
Foundation. Welcome, sir.

STATEMENT OF LaVERN W. PHILLIPS, PRESIDENT, WOODWARD INDUSTRIAL 
                           FOUNDATION

    Mr. Phillips. Thank you, Chairman Boxer, Ranking Member 
Inhofe and members of the Committee for the opportunity to 
testify today.
    I am here today to urge the Senate to reauthorize the 
Economic Development Administration and to increase funding to 
this critical Federal agency.
    My name is LaVern W. Phillips. As President of the Woodward 
Industrial Foundation in Woodward, Oklahoma, I am an economic 
and community development specialist for Woodward and Northwest 
Oklahoma. I previously served as Chairman of the Governor's 
Economic Development Team for the State of Oklahoma.
    The EDA supports important economic projects affecting the 
citizens of the U.S. It also provides funding for the Economic 
Development Districts that plan economic strategies for their 
areas. Many small, rural communities simply cannot afford to 
develop their own economic development plans.
    The EDA supports a professional planner at the Oklahoma 
Economic Development Authority who brings the region together 
behind development of a comprehensive economic development 
strategy. In my position with the Woodward Industrial 
foundation, I work directly with the EDA district on this 
regional plan.
    Madam Chairman, we know how important it is to preserve our 
rural American society and the EDA is an essential funding 
resource and partner for rural communities in that endeavor. 
Our experience in Northwest Oklahoma is a good example.
    Woodward is the regional hub of Northwest Oklahoma and 
community leaders have worked hard to expand and diversify 
financial opportunity for residents, especially our young 
people. Their diligence has paid off, and our region has 
reversed the loss of population common in many rural areas. Now 
we are taking the next step by providing easier access to 
higher education.
    Intensive studies in 2000 and 2004, sponsored by the city 
of Woodward and coordinated by the Oklahoma Community 
Institute, identified the need for a multi-purpose education 
and conference center campus. The initiative is now called the 
Woodward Community Campus Project.
    Within the next few months, the city of Woodward will begin 
construction on a 36,000 square foot multipurpose conference 
and educational center on 40 acres of prime land within the 
city limits adjacent to the USDA Southern Plains Range Research 
Station. Next door, Northwestern Oklahoma State University has 
just completed construction of a 22,000 square foot Woodward 
branch to provide higher education opportunities for full-time 
students and young married students working to support their 
families.
    These two facilities will be linked together via 
interactive television and video conferencing with Northwestern 
Oklahoma State University's main campus in Alva. The Woodward 
Community Campus will offer academic, entrepreneurial, work 
force and economic development programs to address problems 
facing rural communities. The facilities will open up career 
options so people can remain in rural Northwest Oklahoma.
    The EDA is providing $1 million for the construction of 
public infrastructure needed by the Woodward Community Campus. 
This is only 15.5 percent of the cost of the conference and 
education center, with the city of Woodward committing the 
remaining 84.5 percent or $5.4 million.
    But this is the main point I want to make today: That 
relatively small percentage of EDA funding was essential to the 
success of the project. Without EDA's help, the Woodward 
Community Campus, and the creation of good, new jobs, simply 
would not happen.
    So let me use this forum today to thank EDA and to tell of 
the positive experience I had working with the agency. The EDA 
Austin Regional Office Staff and their Director, Pedro Garza, 
are true professionals dedicated to job creation and preserving 
rural America.
    I respectfully urge this Committee to fully fund the U.S. 
Economic Development Administration and to adopt a 5-year 
authorization bill that provides stability and policy direction 
for the agency.
    Thank you, Madam Chairman, Senator Inhofe and members of 
the Committee for the opportunity to testify, and I welcome 
your questions.
    [The prepared statement of Mr. Phillips follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Boxer. Thanks so much, Mr. Phillips. And our last, 
but not least, speaker, is Leanne Mazer, Executive, Tri-County 
Council for Western Maryland, on behalf of the National 
Association of Development Organizations. Welcome.

STATEMENT OF LEANNE MAZER, EXECUTIVE DIRECTOR OF THE TRI-COUNTY 
                  COUNCIL FOR WESTERN MARYLAND

    Ms. Mazer. Good morning Chairman Boxer, Senator Inhofe and 
members of the Committee.
    My name is Leanne Mazer. I currently serve as Immediate 
Past President of the National Association of Development 
Organizations and Executive Director of the Tri-County Council 
for Western Maryland, an EDA-designated economic development 
district serving the three western-most counties in the State.
    Thank you for the opportunity to testify in support of a 
multi-year reauthorization bill for the Economic Development 
Administration, as well as discussing the agency's role in 
post-disaster and stimulus recovery efforts. I will limit my 
oral remarks to four main points.
    First, EDA has a proven track record in helping its local 
partners create and retain high-quality jobs in distressed 
areas, including those suffering from chronic poverty and those 
suffering from economic dislocations caused by plant closures 
or downsizing, natural disasters or changes in global trade.
    In reauthorizing the agency, we encourage the Committee to 
restore the local match rates for distressed communities to at 
least the pre-2005 agency rule changes. This is one of the most 
important legislative fixes needed to help the agency serve 
distressed areas.
    Senator Boxer. Could you repeat that sentence again?
    Ms. Mazer. Absolutely. In reauthorizing the agency, we 
would encourage the Committee to restore the local match rates 
for distressed communities to at least the pre-2005 agency rule 
changes. This is one of the most important legislative fixes 
needed to help the agency serve distressed areas.
    Second, Madam Chair, we would urge Congress to strengthen 
local control of EDA's Revolving Loan Fund Program. The RLF 
Program is a proven economic development tool for addressing 
the credit needs in under-served areas. RLFs are managed by 
public and private nonprofit organizations to further local 
economic development goals by lending their capital and then 
re-lending funds as payments are made on the initial loans.
    Locally managed RLFs have provided business capital to 
thousands of new and existing companies that have difficulty 
securing conventional financing. Over the years, EDA has 
provided grants to nearly 600 RLFs with net assets approaching 
$850 million.
    EDA's RLF Program has the unique distinction of being one 
of the only Federal grant programs that never loses its Federal 
identity. The initial RLF grant, and any income or interest 
derived from it, is considered Federal property forever. RLF 
operators are forced to continually comply with expensive and 
burdensome reporting requirements, even those dating back to 
the late 1970s. Ownership of EDA RLFs should be fully 
transferred to local intermediaries once all of the initial 
funds have been loaned out, repaid and fully revolved.
    Third, NATO and its members respectfully urge Congress to 
increase the minimum funding level for EDA's partnership 
planning program from $27 million to $34 million. This small 
yet highly effective program provides essential seed capital 
and matching funds for 378 economic development districts, 
numerous Tribal planning partners, and other State and local 
entities. With an average grant of only $54,000, the EDA 
planning program provides matching funds to multi-county 
organizations, such as Tri-County Council for Western Maryland, 
to help local governments and others work together on a 
regional basis to develop solutions, partnerships and 
strategies for addressing area-wide economic development 
issues.
    EDA's on time project completion rate, high rates of 
leveraging private sector investment, and impressive job 
creation statistics are tied directly to the groundwork and 
planning that proceeds project development and implementation. 
With the growing complexities of the growing economy, increased 
mandates by EDA, and mounting local economic pressures, a 
modest increase in the annual EDA planning grants for economic 
development districts would make a significant difference.
    Finally, Madam Chair, there is a need to provide broader 
incentives to foster regional collaboration and partnerships 
among local governments, along with the private sector, 
educational and nonprofit institutions. While the EDA 
reauthorization bill established two new performance award 
programs, these incentives are very limited in scope and have 
demonstrated little impact. EPA would benefit from much broader 
and more aggressive policy incentives and approaches related to 
regional economic collaboration and cooperation.
    Congress is urged to build upon the existing set of multi-
jurisdictional EDDs to encourage and facilitate regional 
development activities including increasing the EDA's share in 
projects with significant regional impact and collaboration.
    Madam Chair and members of the Committee, thank you again 
for the opportunity to testify today, and I would welcome any 
questions.
    [The prepared statement of Ms. Mazer follows:]
    
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    Senator Boxer. Thank you so much.
    Ms. Walters, I am not going to ask you to respond to these 
ideas that Ms. Mazer put out. But could you be sure that you 
and your staff could, first of all, tell us if any of her ideas 
are ideas that you are thinking about and, if not, would you be 
willing to write us, and let us know in writing, how you would 
feel about her recommendations? Should we call on Mr. Alvord?
    Mr. Alvord. Yes, Senator, in fact these are ideas that we 
are considering internally and we are certainly open to 
exploring them further.
    Senator Boxer. OK, excellent. For Senator Inhofe and me, we 
would love to get your feedback from the Administration, and as 
well from Mr. Kennedy and Mr. Phillips. If they could take some 
time to look at these ideas and give us feedback, we would 
appreciate it. If there are a few that are consensus ideas, I 
would like to include them in the new approach.
    So, Dennis Alvord, I have asked you, given the needs in 
this Country and we know what they are, we have got credit 
problems, we have got jobless problems, are there any barriers 
that will impact EDA's efforts to fully distribute the stimulus 
funds. Now, we had a report, it looked like a lot of them were 
already in the works, but do you have any concerns that you may 
not be able to get all of those out?
    Mr. Alvord. No. I think that we are quite confident that we 
will be able to get the money out and obligated and we are 
working to do that as diligently and quickly as we can.
    We have been hampered in that, up until this fiscal year, 
we had not received any additional salary and expense resources 
to support the administration of that funding, both the awards 
of the grants and then the administration and oversight of them 
having made the awards. This fiscal year, we were grateful that 
Congress recognized those needs and provided us some additional 
funding in the form of $3 million as part of the Bureau's RLF 
allocation as well as $4 million from its EDAP allocation that 
can be directed to meeting some of these needs.
    As a result, we are in the process of advertising and 
filling a number of term positions that will help us meeting 
those needs. In the interim, our regional office staff has 
really been doing yeoman's work to get these grants queued up 
and awarded and I am very pleased with the progress that they 
have been making.
    Senator Boxer. Good. So, you feel that you will be able to 
send out that stimulus, you will be able to spend out?
    Mr. Alvord. I have complete confidence. In fact, we have 
set an internal stretch goal to have our $150 million in 
stimulus funding full obligated by the end of this fiscal year, 
a full year in advance of the expiration of those funds.
    Senator Boxer. Well, I think that it shows what a great 
program this is. Despite the fact that there is a credit crunch 
and other problems, it is still doing what Mr. Phillips so 
eloquently said. It stimulates. It is a small amount but it 
gets things really started. It is really, I think, a great 
program.
    Could you give us one or two examples, off the top of your 
head, of some stimulus programs that you have funded? I do not 
care which State, just to give us a sense of it.
    Mr. Alvord. Absolutely. Well, I would say that I am pleased 
to report that EDA investments related to the Recovery Act 
really run the gamut. You know, they are targeting to 
supporting near-term recovery and they range from traditional 
brick and mortar type investments of rail spurs, water and 
sewer type investments, infrastructure to support port 
improvements, to really more cutting edge and leading edge 
economic development investments and things like business 
incubators, science and technology parks, green buildings and 
other activities.
    The focus is on investments that we can get started quickly 
and that are going to be----
    Senator Boxer. Could you give me an example of one or two?
    Mr. Alvord. Sure. They run the range of things like 
capitalization----
    Senator Boxer. Just give me an example of a real program, 
not just they run the range. In Oklahoma you did this, in 
California you did this. Just give me a couple.
    Mr. Alvord. Sure. In the Western United States we are 
looking at capitalizing a revolving loan fund to assist with a 
region that has been impacted by natural resource depletion. 
That is going to help that industry to have the capital that it 
needs in this time of credit crunch to reform that----
    Senator Boxer. What States are those?
    Mr. Alvord. There is one in the State of Montana that we 
are looking at right now as a prospective investment.
    Senator Boxer. Can you give me an example of something that 
you already did?
    Mr. Alvord. Well, we have not yet made an award related to 
ARRA. We are on the very cusp of being able to make an award.
    Senator Boxer. OK.
    Mr. Alvord. We have a pipeline that represents about $100 
million of the $150 million----
    Senator Boxer. Will you please do us a favor? Will you 
please give us a report of, let us say, your first 10 grants? 
Would you do that for Senator Inhofe and I? Send it to us, and 
we will inform the Committee. Would you do that?
    Mr. Alvord. I would be happy to do so.
    Senator Boxer. OK. Very good. Senator Inhofe.
    Senator Inhofe. Thank you. Madam Chairman, I was a little 
confused as to your line of questioning there when you say, 
give us an example of the grants. Were you talking about----
    Senator Boxer. From the stimulus.
    Senator Inhofe. From the stimulus. Part of the $150 
million?
    Senator Boxer. Yes. I am just trying to understand.
    Senator Inhofe. OK. All right. Well, first of all, Ms. 
Mazer, you mentioned something about stronger incentives to 
reward regional collaboration. Could you expand on what you 
mean? What do you have in mind? Do you want to advise us as to 
something that we should have that would promote the regional 
concept?
    Ms. Mazer. Yes, Senator, thank you. Research has shown 
that, to be competitive in the global economy, we have to work 
regionally. NATO would actually just like to work with the 
Committee to explore some ideas to use match rates and maybe 
apply other types of incentives to reward those projects that 
create a real regional significant impact.
    Senator Inhofe. Good, good. Mr. Phillips, you know, we 
could have had any number of people from Oklahoma. I am glad we 
had you. You are very articulate and we made great progress. I 
think that the example that he gave is as good an example as 
you can have. In the example in my opening statement, in 
talking about what $2.25 million did down there. That actually 
has opened up a half-billion dollars down in that part of the 
State, that is the Southwestern part of Oklahoma as opposed to 
the Northwestern part.
    For the knowledge of our members up here, Woodward is kind 
of the gate of the Panhandle of Oklahoma. It is an area that is 
very much like Colorado. It is very sparsely populated. I have 
used your example, LaVern, several times as to the success of 
this kind of a program.
    Is there anything else that you would like to say? Because 
I want to make sure you get all the time possible on examples 
that we have done and that you are familiar with in Northwest 
Oklahoma.
    Mr. Phillips. Well, thank you, Senator.
    Senator Inhofe. In your opening statement, I got in halfway 
through, did you cover all the windmills and the other stuff 
that we have?
    Mr. Phillips. No, I have not.
    Senator Inhofe. I will give you that opportunity. I want to 
make sure the Chairman knows that we are leading the way of all 
50 States right now. I want everyone to know that, in terms of 
our wind generation.
    Senator Boxer. I did not know that.
    Senator Inhofe. And it's all right where he is.
    Mr. Phillips. Thank you, Senator. We are very pleased. I 
like to say that we are definitely and oil and gas community, 
and agriculture, and those two entities have their ups and 
downs and now we are leading the State and the region in wind 
power development. Right now, we have about 300 towers in our 
immediate area and I think before too long we will be kind of 
like Sweetwater, Texas is: we will be the epicenter for wind 
power. One of the things, it does not replace oil and gas. It 
is kind of like T. Boone Pickens says, which is that we need to 
quit buying fuel, or crude, from people that do not like us. 
And we are doing that as a Nation, importing over 75 percent of 
our fuel right now.
    I think we can help, in our part of the State, solve this 
Nation's energy crisis by the natural resource that we have 
which is wind, and it is huge investment by those companies 
that are coming in. But when you do a wind farm of 80 turbines, 
you are talking about $160 million in investment. It helps the 
landowner. It helps the public education by the ad valorem 
taxes. So, it is a real benefit, Senator, and we are excited 
about being able to contribute to the Nation's energy crisis.
    Senator Inhofe. That's true. Of course, there is some 
disagreement at this table. But I think, my position, I have 
always said we want all of the above. And certainly Oklahoma is 
known, not just for oil and gas, but also coal. But people are 
not aware of what we are doing right now. The fact that OG&E 
right now is the major contractor and is using wind power and 
we are leading the way there. I like to use Northwestern 
Oklahoma as an example of how we can wean ourselves off the 
obligations we have, as you termed so accurately, from people 
who do not like us.
    Mr. Kennedy, could you be more specific about the stimulus 
funding issue raised in your testimony? I do not really think 
you had a chance to elaborate on that.
    Mr. Kennedy. Our comments on the testimony reflected SPC's 
support in the establishment and success of the coordinated 
regional process that SPC goes through for the EDA projects and 
recommendations for funding. We know that the coordination of 
these types of things between the locals and the regional 
organizations and Federal agencies works.
    We believe that is a better conduct of consultation of EDA 
and the applicant grants and SPC's established regional 
economic development committees which are composed of 
practitioners and local elected officials and businesses and 
ensure the projects are coordinated with the regional approved 
economic development plan.
    What happens over time is, in the practice of grant 
seeking, it has been done through direct contact through the 
www.grants.gov. Our preference to best ensure consistency in 
the public transparency process is for EDA project submissions 
or applicants to go first through the regional economic 
development coordinating committee structure that works within 
our region and many others. This would expedite project 
approval, funding and implementation and ensure the 
consideration for these consistencies.
    Senator Inhofe. Thank you, Mr. Kennedy, and for the benefit 
of the rest of our Committee here I just want to make sure I am 
on record as saying that we are very anxious, I think the 
Chairman and I are both anxious, to get this thing reauthorized 
and get it done because it is one of the things where 
conservatives and liberals alike can really serve well. I am 
very proud of what we have done in Oklahoma. So, maybe we can 
get some deadlines and get the House lined up and get this 
done.
    Senator Boxer. Yes.
    Senator Inhofe. And I am going to go to my second round of 
questions at Armed Services now.
    Senator Boxer. Thank you, Senator Inhofe, so much. I look 
forward to marking this bill up in the very near future.
    Senator Merkley. And we will go Merkley, Udall and Cardin 
in order of arrival. Senator Merkley.
    Senator Merkley. Thank you very much, Madam Chair.
    I just want say to Senator Walters and Dennis Alvord that 
when my staff reached out to our folks in Oregon, they had 
nothing but praise for your regional staff and the cooperation 
you have demonstrated with the grants underway. Anytime that 
type of robust praise gets expressed, I want to feed it back. 
Apparently, you are doing some things very, very well.
    One of those partners is Vernon Jorgen [phonetically], 
which had devastating floods and they received a grant to help 
with a topographic study to try to avoid rebuilding in a manner 
that endangers them again and they wanted to note that these 
funds are incredibly important since, especially during this 
economic crisis, local funds and State funds are very hard to 
obtain.
    In that light, they mentioned that at some time in the 
past, the match rate was one local dollar to three grant 
dollars, and that it had been changed to a one to one ratio. 
And that was extremely difficult for them to come up with under 
the current circumstances.
    I thought maybe I would just ask you all to give a little 
bit of history of when that changed and why it changed and 
whether it is under consideration for economically distressed 
communities to change that ratio back.
    Mr. Alvord. First of all, thank you very much for the kind 
words. It is always good to hear feedback about the good work 
that I know our regions are doing out in the field.
    With regards to the match rates, I think that there was a 
change in the grant rate structure that occurred during EDA's 
last reauthorization in 2004. That change was driven, I think, 
largely by the economic conditions at the time and the amount 
of appropriations that EDA had and the need to do as much as it 
could with the available resources at its disposal. EDA is 
certainly cognizant of the very pressing economic conditions 
that we are facing nationally today and we do have a fair 
amount of flexibility under PUEDA [phonetically] to address 
grant rate issues.
    In fact, while the standard matching rate is 50 percent 
Federal to 50 percent local, we do have the authority, under 
statute, to go to an 80 percent Federal share on a sliding 
scale based on the economic distress in the region. And in some 
exigent circumstances, we can go in fact beyond that up to 100 
percent if the local community can demonstrate an exhaustion of 
taxing and borrowing authority.
    We have taken great pains to ensure that we get out to our 
regions maximum flexibility with regard to dealing with these 
issues and we have well-established procedures and can 
certainly work with them on grant rate issues as they arise.
    Senator Merkley. Thank you very much for clarifying that. 
Had you not already had that flexibility, I was going to 
suggest that might be appropriate. So you are way ahead.
    And a second issue has come up with the university partners 
in Oregon. Those partners now participate in a competitive 
grant program started under the Bush administration and the 
feedback from the universities was that this pits very types of 
programs against each other in a single grant competition, 
something like apples and oranges, one stimulating 
manufacturing in one place versus development of tourism in 
another.
    So the universities thought they were doing a tremendous 
amount more effort to do applications in a setting that really 
is very hard to score between these, and whether or not we 
should revisit the competitive nature of the university grant 
program. Any thoughts or insights on that?
    Mr. Alvord. Yes. I think that is absolutely correct. 
Several years ago, EDA did make a shift to a competitive 
university center competition. We think that this has been very 
beneficial to the program, that is has really helped us to 
reinvigorate the program. I am certainly sensitive to the 
issues that you mention in that there is a very diverse mix of 
applicants for this program. We have smaller learning 
institutions, large, major research universities and really 
everything between.
    We have tried to craft a Federal funding opportunity and 
notice that it allows for those different types of institutions 
to compete on a level playing field and to recognize that there 
are certainly significant economic differences across the 
Country. The needs of one part of the Country may be very 
different from another. So, an emphasis on manufacturing in one 
section of the Country may need to be addressed by the 
university center applicant whereas service industries or some 
other type of economic issue might need to be addressed in 
another.
    In crafting the program, we have tried to provide the 
maximum amount of flexibility available. It is a program for 
which the demand outstretches the resources. We think the 
competition has been beneficial in getting us the best possible 
applicants. We are certainly open to continuing to look at the 
criteria that we use in making those selections.
    Senator Merkley. Thank you very much. I appreciate that. My 
staff will follow up with you with one more question but I am 
going to hold it for now so that we can get on to some 
questions from my colleagues.
    Senator Boxer. Thank you so much, Senator Merkley. Senator 
Udall.
    Senator Udall. Thank you, Madam Chair. I thank all of the 
witnesses for being here today.
    Let me revisit one of the topics that I believe our Chair 
brought up earlier on the issues of increasing cost share. I am 
going to focus on a little bit different issue, but I am also 
interested in what she mentioned.
    When, and I understand your desire to stretch your limited 
budget, and this question is really directed to Mr. Alvord and 
Ms. Walters, I understand your desire to stretch your limited 
budget at far as you can, but high cost shares can be an 
obstacle when we are dealing with economically distressed 
areas. I am particularly worried about the ability of small, 
rural communities and tribal communities to meet their cost 
shares to achieve positive economic development in New Mexico.
    Has there been any study on the impact of these higher cost 
share requirements on small communities or tribal communities? 
Have you heard any complaints that they are not able to meet 
these?
    Mr. Alvord. I am not aware that there has been a study per 
se, either an internal study or an academic study of any kind. 
I am aware, anecdotally, you know, I have heard from regional 
office staff and practitioners in the field, about the 
challenges that they are confronting in meeting these cost 
shares. We have tried to be very responsive to meeting those 
needs by utilizing the flexibility that we have under statute 
to provide additional Federal share whenever we can. In fact, 
in rolling out our national disaster supplemental 
appropriations and our Recovery Act supplemental 
appropriations, we put specific internal guidance in place 
giving greater flexibility to our regional offices to make 
determinations about the appropriate level of cost share based 
on the conditions on the ground for those communities that met 
a certain threshold level of distress or showed a certain level 
of demonstration that they were not able to meet that share.
    Senator Udall. You are willing to work with them if they 
come in and make the case that they are not able to meet the 
cost share?
    Mr. Alvord. We absolutely are. I think part of what makes 
our program so strong is that we have looked at every 
prospective grant application on a case by case basis. We 
evaluate the distress and the particular nature of the 
investment, and we try to account for that and work with 
grantees to the best of our ability.
    Senator Udall. Now, you have also raised the issue of the 
American Reinvestment and Recovery Act moneys that are out 
there. I wanted to follow up on that because New Mexico is in 
the Austin Region and, the way you allocated money, raises some 
questions, I think. New Mexico has the second lowest total of 
$13 million, just above the Denver Region at $9 million, and 
both are less than half of what has been allocated to the four 
other regions.
    So, I am wondering, what were the economic and demographic 
criteria that were used to derive the formula for distributing 
the funding to the six regional offices?
    Mr. Alvord. Well, EDA has different allocation algorithms 
that it uses for all of its different sources of funding. So, 
for our regular economic development assistance programs, we 
have different allocations that we use for, say, public works, 
economic adjustment, planning, technical assistance, those are 
all based on different criteria. Likewise, when we received the 
disaster supplemental funding, we developed an allegation 
algorithm that was particular to the circumstances on the 
ground there. In that case, we are responding to counties that 
have had some type of natural disaster designation by FEMA.
    In the case of the Recovery Act funding, the Act charged 
EDA to respond to sudden and severe economic dislocation and 
job loss as a result of corporate restructuring. While we think 
that EDA's regular allocation formula for our public works and 
economic adjustment programs do a pretty good job at getting at 
that, they do in fact have what we think of as somewhat lagging 
indicators in that they look at a 24-month unemployment and 
they look at poverty levels as among the different elements in 
that allocation.
    So, for the purposes of the Recovery Act, we thought that 
it would be prudent to really try to target those areas of the 
Country that have the most acute economic distress at this 
time. As a result, we decided to utilize the most contemporary 
snapshot of unemployment that we could capture and we fell back 
on utilization of 3 month unemployment levels for the 
allocation of that funding. We think that resulted in a good 
distribution across our six regional offices relative to 
economic distress. I should say that, in comparing that to the 
standard EDA allocation, there is not a significant difference 
in the way that funding would have gone out had we utilized the 
standard formula. It is really rather small tweaks around the 
edges. It is certainly not order of magnitude differences in 
the allocation.
    Senator Udall. OK, well, I would like my staff to follow up 
with you because I think on the unemployment front, I mean, we 
have three counties in New Mexico that have significantly 
higher unemployment than the national average. So, we have high 
unemployment and then the poverty is, well, the entire State 
would qualify for EDA assistance since our per capita income is 
80 percent of the national level. So, I think there is a real 
argument for looking at the way you develop the criteria to do 
that, especially if we are going to do another round of this.
    So, thank you very much. And thank you, Madam Chair.
    Senator Boxer. Senator Udall, I just wanted to let you and 
Senator Cardin know that before you got here this panel gave 
very strong support for EDA reauthorization and some ideas from 
Ms. Mazer about how we can make it better along the lines of 
your questioning, Senator Udall, and Senator Merkley's.
    Senator Inhofe and I are very anxious to get this done. 
There is very strong bipartisan support, which is great. So 
what I would urge you to do is, if you have, and you and your 
staff want to make sure you communicate with my staff and 
Senator Inhofe's staff as we go about the reauthorization 
because I would like to get it right. I think the other thing 
is they also reported that they have got about 100 million, am 
I right, of applications in the pipeline for the stimulus and 
they have not awarded anything yet but they are going to send 
us their first 10 awards so that we can keep up with what is 
happening.
    But this is an example of a great program that is working 
now when bank lending is so tight. We need the jobs and it is 
very important. So that is why Senator Inhofe and I want to 
move quickly. So please, all of you are so helpful to us, let 
us get your advice in their now so that we do not have to face 
amendments and we can just get everything in the bill.
    Senator Cardin.
    Senator Cardin. Well, Madam Chair, thank you for having 
this hearing. I appreciate your commitment on the EDA program 
and trying to have it reauthorized in the right way and to get 
the funding levels working with the appropriators so that we 
can get the funding levels appropriate for the mission.
    I want to particularly welcome Leanne Mazer to the panel. 
All of you, I welcome, but Leanne is my constituent and does a 
great job in the Western part of our State with the Tri-County 
Council. I know she is here for NATO this morning, to talk on 
behalf of the organization. But we are very proud of the work 
that you do with the tri-county areas.
    EDA programs become particularly important in the Western 
part of our State. The economic challenges are very difficult, 
to bring in jobs. It is not in a major population center and we 
are trying to create new job opportunities. A State like 
Maryland, many times people think you are the Baltimore-
Washington Corridor. It is where most people live. That is 
where jobs are created. But we have a major priority to create 
opportunities in all parts of our State, and the Tri-County 
Council has done a fabulous job.
    And the EDA program has been a valuable tool, Madam Chair, 
for that part of our State. For all of Maryland, it has been 
very valuable. We have had, in a 2-year period in Maryland, 14 
projects that have created 1,800-plus jobs, leveraging $160 
million in investments. So, it is a huge issue.
    I saw in your testimony about the cost benefit ratios, 
which are very, very impressive, $2,000 to $4,000 for creation 
of a job that will double in a short period of time. That is an 
impressive number as far as the work.
    I really do urge us to get the recovery money out quickly. 
I understand the responsibility that we have to make sure it is 
spent appropriately and all the requirements are met. But our 
effort right now is to create jobs. And the EDA program can 
create jobs, particularly in those parts of our community where 
it is difficult to get investments made. I would just urge us, 
consistent with the requirements of Federal law, to do 
everything we can to expedite the process so that we can get 
the benefits of the Recovery Act.
    Ms. Mazer, I just want to ask you, there has been a lot of 
conversation about the match requirements or what the locals 
have to come in with in order to be able to qualify for an EDA 
and it is your testimony that there has been a change in 
attitudes in the agencies in the last several years that has 
made it even more difficult for distressed communities to be 
able to come up with the match. Senator Udall has already 
talked about the need to modify. Can you be more specific as to 
what you would like to see in the Reauthorization Act, as it 
relates to, particularly, in distressed communities, their 
needs to match or to come up with a share of the EDA grant?
    Ms. Mazer. Absolutely. Thank you. And thank you for the 
kind words, Senator.
    The match rates changed, actually, during the 2005 
rulemaking process. It was not the intent of Congress to change 
the match rates. That was part of the rulemaking process that 
followed.
    Particularly given the current economic environment where 
the economy changes so quickly, we have mentioned the 24-month 
period where we look at those characteristics of distress. I 
think it would be our request just to roll back EDA's match 
requirements to those pre-2005 levels, which would still 
maintain the flexibility that EDA has to go beyond that.
    Senator Cardin. I should ask EDA that. The reason for 
change by regulation in 2005?
    Mr. Alvord. I believe, Senator, that the change was made as 
a result of recognition of the current economic conditions and 
EDA's appropriation levels at that time. The desire to extend 
the EDA funding as far as we possibly could, and address as 
many communities and areas as we could, with the acknowledgment 
that we do have the flexibility under statute to fund on a 
sliding scale, between 50 and 80 percent based on the level of 
economic distress. It was to really target that funding to 
those areas that had the most acute economic distress. That was 
the rationale, I believe, at the time that was done. I was not 
involved in that decisionmaking process.
    Senator Cardin. It seems like the change in 2005 made it 
more difficult for all communities, including distressed 
communities. They may be in a position on the discretionary 
provisions, but they overall requirements make it more 
difficult. And, of course, this economic recession makes it 
even more problematic for communities to come up with the 
matches. It is not unusual for us to waive, totally, the 
matches during these types of periods.
    Mr. Alvord. We agree, and are trying to be as flexible as 
we can in addressing match rates with the discretion that we 
have.
    Senator Cardin. Well, we might have to help you a little 
bit there.
    Thank you, Madam Chair.
    Senator Boxer. Mr. Kennedy, I thought maybe you could, I 
wanted to hear a specific project, if you could, of how EDA has 
helped Southwestern Pennsylvania. Can you give us an idea, like 
Mr. Phillips did, of a specific project?
    Mr. Kennedy. On EDA projects that have been specific to the 
Pittsburgh region, a Pittsburgh science facility was awarded 
some money and we did do that in order to make sure that we 
would get that money flowing within that sector. It was a 
recognized project in the community----
    Senator Boxer. Science Center?
    Mr. Kennedy. Pittsburgh Life Sciences Greenhouse. We can 
respond better and give you other investments that we have 
made. We would be glad to do that in writing.
    Senator Boxer. I would so appreciate that.
    Well, let me just thank the panel. You know, this is not 
one of those issues that everybody comes in the door and is 
banging down the door to hear about. But it is such a quiet 
success story, the work that you do. And I know it because, 
when I go around my State, my State is suffering mightily from 
economic downturn and high unemployment and pockets of 
unemployment of 15 percent, 25 percent. There is one particular 
county that just told me about EDA about a year ago, that it 
just came in and just saved the community. It rallied around, 
they leveraged the funds, and it was fantastic.
    I would like to know, under the rulemaking, what type of 
discretion you do have? If you could get back to me in writing, 
because, to the extent that we will do our reauthorization, we 
want to know if you need more discretion, if the way to do it 
is to give you full discretion in a high unemployment area, a 
distressed area, so let us know.
    But again, the fact that we did not have a lot of 
penetrating questions from Democrats and Republicans shows me 
that this is a project program that they really, really 
support.
    So, we thank you very much, EDA folks, for your, as 
President Obama likes to say, your empathy, your understanding, 
what your job is, what your role is, and I think you can hear, 
from the folks on the ground, that it is working.
    So, this reauthorization is a priority for me, it is a 
priority for Senator Inhofe and I think it is very key. We are 
not worried about the program being zeroed out or anything. But 
it certainly is better to have an authorization. Otherwise, 
there is no guidance and it is just not going to be viewed as a 
priority.
    We commit that we are going to get this done. And we look 
forward to hearing from all of you specific examples from your 
region, and then from Mr. Alvord and Ms. Walters the first 10 
grants that are made. I really need to know because I want to 
highlight those. So, we are waiting for that. Do you think it 
will be in the next 30 days that you will do that funding?
    Mr. Alvord. I suspect that it will, yes.
    Senator Boxer. If you are saying that you are getting it 
out the door, you know, then you probably have to start getting 
it out the door. So, we are very excited to hear about those.
    Is there anything else? Oh, I would ask unanimous consent 
that statements from the International Economic Development 
Council and Educational Associate of Universities be inserted 
in the record and since I am the only one here, I see that 
there is no objection to that. So, we will do that.
    [The referenced documents follow:]
   
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    Senator Boxer. We stand adjourned. We will work together 
with you on the reauthorization.
    [Whereupon, at 11:15 a.m., the committee was adjourned.]
    [An additional statement submitted for the record follows:]

          Statement of Hon. Christopher S. Bond, U.S. Senator 
                       from the State of Missouri

    First, thank you, Chairman Boxer and Ranking Member Inhofe. 
I am pleased to be here to discuss a subject vital to the State 
of Missouri and the Country, the reauthorization and oversight 
of the Economic Development Administration.
    In addition, I appreciate all the witnesses appearing 
before us today. Your experiences with this issue and this 
agency are important to understanding the economic impact the 
EDA has across the country and how best to craft a 
reauthorization that improves EDA in order to make the United 
States more efficient and competitive during this difficult 
economic time.
    The Economic Development Administration was established 
nearly 45 years ago under the Public Works and Economic 
Development Act of 1965. During those years, our economy has 
enjoyed significant economic growth and has weathered through 
some tough times.
    This hearing couldn't come at a more pertinent time as we 
face another period of economic challenge. At this time, it is 
important to maximize the utility of all our economic tools to 
better equip our country to address the problems we face today. 
A properly formed and funded EDA reauthorization can be one of 
those tools.
    The EDA is the only Federal agency that concentrates on 
private sector economic sustainability. While other agencies 
play an important role in helping communities in times of 
crises, it is EDA that can provide long-term economic 
stability.
    It is important to reauthorize EDA in order for it to keep 
pace with the changing economic climate and to enable the EDA 
to continue to fulfill its mission of leading ``the Federal 
economic development agenda by promoting innovation and 
competitiveness, preparing American regions for growth and 
success in the world economy.''
    The EDA investment in economic development initiatives 
across Missouri has worked to diversify our job base by 
focusing on high-tech, high-growth industries. This refocusing 
has allowed Missouri to compete globally for the private 
investment that attracts and maintain higher paying jobs in the 
area.
    For example, EDA awarded a $2.9 million grant as seed 
capital for the Center of Research, Technology and 
Entrepreneurial Expertise (CORTEX) in St. Louis. The Federal 
funds helped immediately leverage over $30 million to create a 
life science research and commercialization district that 
focuses on transforming scientific innovation into new 
companies to create jobs in the St. Louis urban core. In the 
long run, this research center is expected to encourage over 
$400 million in investment by concentrating the essential life 
science resources.
    Recently, the EDA also provided $1.7 million for the 
development of a Midwest-China Air Cargo Hub in the St. Louis 
area. The development of this trade route will put St. Louis at 
the center of Chinese U.S. commerce. By doing so, it will 
increase access for our U.S. exports, cultivate commercial 
opportunities, generate new jobs and provide sustainable 
economic development in a community that suffered the economic 
distress of a natural disaster.
    In the past, the symbol for economic growth and development 
was embodied in the bricks and mortar of buildings. They 
represented a place where people went to work and where 
business got done. However, while that ideal remains partially 
true, we are beginning to see a shift.
    The economic promise of this country is no longer 
encapsulated in a building; it is in the promise of ideas. It 
is in the patents being developed across the country in this 
nation's incubators and laboratories. It is the recognition and 
development of potential new trade routes.
    By supporting these ideas, we will be investing in the job 
creation of tomorrow. We must provide EDA with the ability to 
empower these ideas in order to grow our economy and offset the 
economic strain of disaster.
    As we move forward, there are many issues that need to be 
addressed in reauthorization include altering local match 
levels during this time of economic hardship, more attention 
paid to the economic development needs in rural communities and 
EDA staffing in local offices. In addition, I want to see EDA 
refocus on the basics with more attention and funding going to 
public works, flexible economic adjustment assistance and an 
efficient revolving loan fund.
    We must build a reauthorization that provides the tools 
necessary to generate good jobs in the areas that need them the 
most to keep the United States competitive.
    Again, I thank Senators Boxer and Inhofe and the witnesses 
for their hard work. I look forward to your testimony and 
working together to ensure that the EDA continues to be a vital 
tool to help empower economic development.

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