[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]





 
  BUILDING PROSPERITY: EDA'S ROLE IN ECONOMIC DEVELOPMENT AND RECOVERY

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

                                (116-11)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
    ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 9, 2019

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure
             
             
             
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                U.S. GOVERNMENT PUBLISHING OFFICE
                   
 37-094 PDF             WASHINGTON : 2019                        
 
                             
                             
                             
                             
             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                    PETER A. DeFAZIO, Oregon, Chair
ELEANOR HOLMES NORTON,               SAM GRAVES, Missouri
  District of Columbia               DON YOUNG, Alaska
EDDIE BERNICE JOHNSON, Texas         ERIC A. ``RICK'' CRAWFORD, 
ELIJAH E. CUMMINGS, Maryland             Arkansas
RICK LARSEN, Washington              BOB GIBBS, Ohio
GRACE F. NAPOLITANO, California      DANIEL WEBSTER, Florida
DANIEL LIPINSKI, Illinois            THOMAS MASSIE, Kentucky
STEVE COHEN, Tennessee               MARK MEADOWS, North Carolina
ALBIO SIRES, New Jersey              SCOTT PERRY, Pennsylvania
JOHN GARAMENDI, California           RODNEY DAVIS, Illinois
HENRY C. ``HANK'' JOHNSON, Jr.,      ROB WOODALL, Georgia
    Georgia                          JOHN KATKO, New York
ANDRE CARSON, Indiana                BRIAN BABIN, Texas
DINA TITUS, Nevada                   GARRET GRAVES, Louisiana
SEAN PATRICK MALONEY, New York       DAVID ROUZER, North Carolina
JARED HUFFMAN, California            MIKE BOST, Illinois
JULIA BROWNLEY, California           RANDY K. WEBER, Sr., Texas
FREDERICA S. WILSON, Florida         DOUG LaMALFA, California
DONALD M. PAYNE, Jr., New Jersey     BRUCE WESTERMAN, Arkansas
ALAN S. LOWENTHAL, California        LLOYD SMUCKER, Pennsylvania
MARK DeSAULNIER, California          PAUL MITCHELL, Michigan
STACEY E. PLASKETT, Virgin Islands   BRIAN J. MAST, Florida
STEPHEN F. LYNCH, Massachusetts      MIKE GALLAGHER, Wisconsin
SALUD O. CARBAJAL, California, Vice  GARY J. PALMER, Alabama
    Chair                            BRIAN K. FITZPATRICK, Pennsylvania
ANTHONY G. BROWN, Maryland           JENNIFFER GONZALEZ-COLON,
ADRIANO ESPAILLAT, New York            Puerto Rico
TOM MALINOWSKI, New Jersey           TROY BALDERSON, Ohio
GREG STANTON, Arizona                ROSS SPANO, Florida
DEBBIE MUCARSEL-POWELL, Florida      PETE STAUBER, Minnesota
LIZZIE FLETCHER, Texas               CAROL D. MILLER, West Virginia
COLIN Z. ALLRED, Texas               GREG PENCE, Indiana
SHARICE DAVIDS, Kansas
ABBY FINKENAUER, Iowa
JESUS G. ``CHUY'' GARCIA, Illinois
ANTONIO DELGADO, New York
CHRIS PAPPAS, New Hampshire
ANGIE CRAIG, Minnesota
HARLEY ROUDA, California
                                ------                                

 Subcommittee on Economic Development, Public Buildings, and Emergency 
                               Management

                       DINA TITUS, Nevada, Chair
DEBBIE MUCARSEL-POWELL, Florida      MARK MEADOWS, North Carolina
SHARICE DAVIDS, Kansas               GARY J. PALMER, Alabama
ELEANOR HOLMES NORTON,               JENNIFFER GONZALEZ-COLON,
  District of Columbia                 Puerto Rico
HENRY C. ``HANK'' JOHNSON, Jr.,      CAROL D. MILLER, West Virginia
    Georgia                          GREG PENCE, Indiana
JOHN GARAMENDI, California           SAM GRAVES, Missouri (Ex Officio)
ANTHONY G. BROWN, Maryland
LIZZIE FLETCHER, Texas, Vice Chair
PETER A. DeFAZIO, Oregon (Ex 
    Officio)
                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    iv

                   STATEMENTS OF MEMBERS OF CONGRESS

Hon. Dina Titus, a Representative in Congress from the State of 
  Nevada, and Chair, Subcommittee on Economic Development, Public 
  Buildings, and Emergency Management:

    Opening statement............................................     1
    Prepared statement...........................................     3
Hon. Mark Meadows, a Representative in Congress from the State of 
  North Carolina, and Ranking Member, Subcommittee on Economic 
  Development, Public Buildings, and Emergency Management:

    Opening statement............................................     4
    Prepared statement...........................................     6
Hon. Peter A. DeFazio, a Representative in Congress from the 
  State of Oregon, and Chair, Committee on Transportation and 
  Infrastructure:

    Opening statement............................................     7
    Prepared statement...........................................     8

                               WITNESSES
                                Panel 1

Hon. John C. Fleming, M.D., Assistant Secretary of Commerce for 
  Economic Development, Economic Development Administration, U.S. 
  Department of Commerce:

    Oral statement...............................................     9
    Prepared statement...........................................    10

                                Panel 2

Kevin Byrd, Executive Director, New River Valley Regional 
  Commission, on behalf of the National Association of 
  Development Organizations:

    Oral statement...............................................    27
    Prepared statement...........................................    29
Hon. John Messner, Vice Chairperson, District 1 Commissioner, 
  Gunnison County, Colorado, Board of Commissioners, on behalf of 
  the National Association of Counties:

    Oral statement...............................................    32
    Prepared statement...........................................    33
Mark Muro, Policy Director and Senior Fellow, Brookings 
  Institution:

    Oral statement...............................................    36
    Prepared statement...........................................    38
Rodrick T. Miller, Chief Executive Officer, Invest Puerto Rico, 
  on behalf of the International Economic Development Council:

    Oral statement...............................................    47
    Prepared statement...........................................    49

                                APPENDIX

Questions from Hon. Peter A. DeFazio for Hon. John C. Fleming, 
  M.D., Assistant Secretary of Commerce for Economic Development, 
  Economic Development Administration, U.S. Department of 
  Commerce.......................................................    57
  
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                             April 4, 2019

    SUMMARY OF SUBJECT MATTER

    TO:       Members, Committee on Transportation and 
Infrastructure
    FROM:   Staff, Subcommittee on Economic Development, Public 
Buildings, and Emergency Management
    RE:       Subcommittee Hearing on ``Building Prosperity: 
EDA's Role in Economic Development and Recovery''
                              ----------                              

    The Subcommittee on Economic Development, Public Buildings, 
and Emergency Management will meet on Tuesday, April 9, 2019, 
at 2:00 p.m., in room 2253 of the Rayburn House Office Building 
to hold a hearing titled, ``Building Prosperity: EDA's Role in 
Economic Development and Recovery.''
    The purpose of the hearing is to hear from stakeholders on 
the importance of reauthorizing the Economic Development 
Administration (EDA), its programs and activities supporting 
economic growth in distressed communities, and the role EDA 
plays in disaster recovery. The Subcommittee will hear 
testimony from the Economic Development Administration, New 
River Valley (VA) Regional Commission, Gunnison County (CO) 
Commission, the Brookings Institution, and Invest Puerto Rico.

                            I. INTRODUCTION

    The Subcommittee has jurisdiction over economic development 
issues and federal agencies created to promote economic 
development in communities suffering economic distress. 
Specifically, the Subcommittee has jurisdiction over EDA (an 
agency within the Department of Commerce). A Senate-confirmed 
Assistant Secretary for Economic Development heads the EDA. The 
United States Senate confirmed Dr. John Fleming, a former 
Member of Congress from Louisiana's 4th congressional district, 
to that position on March 7, 2019.
    In its Fiscal Year (FY) 2020 budget request, the 
Administration proposed to eliminate almost all funding for the 
EDA as part of a 6-year agency closure plan. In each of the 
past three budgets, the Administration has proposed elimination 
of the EDA, although Congress has continued to provide 
appropriations to fund EDA programs.

 
                         FY19 enacted                FY20 proposed
 
 
EDA programs------$304 million----------------$30 million---------------
 


                      II. OVERVIEW OF THE PROGRAMS

    The EDA was established in 1965 upon enactment of the 
Public Works and Economic Development Act (P.L. 89-136) to 
alleviate conditions of substantial and persistent unemployment 
in economically distressed areas. The current mission of EDA is 
``to lead the federal economic development agenda by promoting 
innovation and competitiveness, preparing American regions for 
growth and success in the worldwide economy.'' In particular, 
EDA programs are intended to help local communities attract 
private sector investment to maximize job creation primarily by 
leveraging non-Federal investments. For example, EDA's public 
works program often provides the remaining infrastructure 
funding needed for a local community to attract a manufacturing 
facility to its area. As a result, EDA's grants are used in 
conjunction with private and local dollars to generate economic 
growth and create jobs. In fact, EDA requires substantial local 
match--oftentimes 50% or greater--for most grant recipients.
    The EDA provides grants for projects through a variety of 
programs, including planning, technical assistance, public 
works, economic adjustment, trade adjustment assistance, and 
research and evaluation. Projects funded by EDA are generally 
located in areas exhibiting economic distress. In addition, all 
public works and economic adjustment projects must be 
consistent with an EDA-approved Comprehensive Economic 
Development Strategy (CEDS).
    Between FY2012 and FY2017, EDA invested nearly $1.6 billion 
in 4,058 projects. Of that total, 789 projects, totaling $975.4 
million, are expected to create and/or retain 277,163 jobs and 
attract over $39 billion in private investment.\1\ 
Historically, about two-thirds of EDA funding has been awarded 
to rural areas and one-third to urban areas.
---------------------------------------------------------------------------
    \1\ EDA Performance Measurement and Program Evaluation, Website, 
Accessed April 1, 2019, https://www.eda.gov/performance/.
---------------------------------------------------------------------------
    EDA administers its programs through six regional offices 
located in Atlanta, Austin, Chicago, Denver, Philadelphia, and 
Seattle. The Atlantic Territories of Puerto Rico and the U.S. 
Virgin Islands are administered through the Philadelphia 
Regional Office. The Pacific Territories of American Samoa, 
Guam, Marshall Islands, Micronesia, Republic of Palau, and the 
Northern Mariana Islands are administered through the Seattle 
Regional Office. A map of EDA regional offices is included as 
Appendix 1.

1. KEY GRANT PROGRAMS

    Planning grants: Planning grants support the design and 
implementation of effective economic development policies and 
plans by local organizations.
    Public works: Public works grants provide for 
infrastructure projects that foster the establishment or 
expansion of industrial and commercial businesses in 
communities experiencing high unemployment, underemployment, 
low per-capita income, or out-migration.
    Economic Adjustment: Economic adjustment investments 
provide various types of assistance, including planning, 
technical assistance, revolving loan funds and infrastructure 
development, to help communities experiencing either a gradual 
erosion of or a sudden dislocation of local industry caused by 
natural disasters, international trade competition, or major 
plant closings.
    Trade Adjustment: Trade adjustment assistance provides 
technical assistance, through a national network of 12 Trade 
Adjustment Assistance Centers, to certify U.S. manufacturing 
firms and industries economically injured as the result of 
international trade competition.
    Disaster Recovery: When funded for this purpose, EDA 
facilitates delivery of Federal economic development assistance 
to local governments for long-term community economic recovery 
planning, reconstruction, redevelopment and resiliency after a 
disaster.

2. EDA AUTHORIZATION HISTORY

    The first authorization of EDA in 1965 expired in 1970. 
From 1970 through 1980, EDA continued to operate without an 
authorization, although Congress provided funding, including $6 
billion for public works projects in 1976 and 1977. In 1980, 
EDA's programs were reauthorized; however, that authorization 
expired in 1982, and until 1998, EDA continued without an 
authorization.
    The Economic Development Administration and Appalachian 
Regional Development Reform Act of 1998 (P.L. 105-393) 
reauthorized EDA for a period of five years, and authorized 
funding levels that progressively declined from an initial 
amount of $398 million for fiscal year FY1999 to $335 million 
in FY2003. Additionally, this reauthorization put into place a 
number of management and administrative reforms, including 
efforts to target the most distressed areas. The Economic 
Development Administration Reauthorization Act of 2004 (P.L. 
108-373) reauthorized EDA for a period of five years, through 
FY 2008. Since that time, Congress has not reauthorized the 
EDA.

3. STUDIES OF EDA PROGRAMS

    In 2008, EDA contracted with Grant Thornton to study the 
costs and economic impact of EDA's construction investments. 
This study was similar in content to a study conducted by 
Rutgers University in 1997. The Grant Thornton study surveyed 
over 40 Federal programs and concluded that EDA investments in 
rural areas have a significant impact on employment levels, 
generating between 2.2 and 5.0 jobs per $10,000 in EDA funding, 
at a cost per job of between $2,001 and $4,611. The study 
further concluded that EDA's investment in business incubators 
was worthwhile and generated significant impacts in communities 
where the investment was made.\2\
---------------------------------------------------------------------------
    \2\ Arena, P., Adams, J.A., Noyes, K., Rhody, S. & Noonan, M. 
(2008). Construction Grants Program Impact Assessment Report: Volume 1 
Report on Investigation and Results. Grant Thornton research report 
with ASR Analytics
---------------------------------------------------------------------------

4. EDA DISASTER RESPONSE

    The Bipartisan Budget Act of 2018 (P.L. 115-123) 
appropriated $600 million in funding to the EDA for additional 
Economic Adjustment Assistance Program activities. These 
resources are designated for disaster relief and recovery 
following Hurricanes Harvey, Irma, and Maria, as well as 
wildfires and other calendar year 2017 disasters. Eligible 
entities impacted by a federal-declared disaster occurring in 
calendar year 2017 can apply for funding under a Notice of 
Funding Opportunity issued on April 10, 2018.\3\
---------------------------------------------------------------------------
    \3\ EDA-2018-Disaster: FY 2018 EDA Disaster Supplemental, Website, 
Accessed April 1, 2019, https://www.grants.gov/web/grants/view-
opportunity.html?oppId=302953.
---------------------------------------------------------------------------
    Funding was distributed across the six regional offices 
based on a multi-factor calculation including impact and 
distress. To date, $153.6 million of the $587 million made 
available has been obligated with more awards to be announced 
in the near future. EDA has also reserved two percent of 
appropriated resources to cover salaries and expenses related 
to program administration and oversight.

 
                     Region                                     FY 18 Disaster Funding Allocation
 
 
Atlanta Regional Office--------------------------$147,362,000---------------------------------------------------
Austin Regional Office                           $129,119,000
Chicago Regional Office                          $8,005,000
Denver Regional Office                           $17,435,000
Philadelphia Regional Office                     $191,269,000
Seattle Regional Office                          $93,810,000
 


                              WITNESS LIST

PANEL I

      The Honorable (Dr.) John Fleming, Assistant 
Secretary of Commerce for Economic Development, U.S. Department 
of Commerce

PANEL II

      Mr. Kevin Byrd, Executive Director, New River 
Valley Regional Commission, On Behalf of the National 
Association of Development Organizations
      The Honorable John Messner, Vice-Chairperson, 
District 1 Commissioner, Gunnison County, Colorado Board of 
Commissioners, On Behalf of the National Association of 
Counties
      Mr. Mark Muro, Policy Director and Senior Fellow, 
Brookings Institution
      Mr. Rodrick T. Miller, Chief Executive Officer, 
Invest Puerto Rico, On Behalf of the International Economic 
Development Council

                    Appendix 1: EDA Regional Offices

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


              Source: Economic Development Administration


  BUILDING PROSPERITY: EDA'S ROLE IN ECONOMIC DEVELOPMENT AND RECOVERY

                              ----------                              


                         TUESDAY, APRIL 9, 2019

                  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 3:19 p.m., in 
room 2253, Rayburn House Office Building, Hon. Dina Titus 
(Chairwoman of the subcommittee) presiding.
    Ms. Titus. The subcommittee will come to order.
    First, let me thank you for your patience. I know we were 
supposed to have started about an hour ago, and voting and 
other things came in the way. So thank you for bearing with us 
and waiting because we really do want to hear your testimony.
    I will start with an opening statement, and then we will 
recognize the ranking member, and then the chairman of the full 
committee is with us here today.
    The hearing today is entitled ``Building Prosperity: EDA's 
Role in Economic Development and Recovery.'' I want to extend a 
warm welcome to our ranking member, even though he was a little 
late, Mr. Meadows, and the new members of the subcommittee. I 
am very optimistic about working with Ranking Member Meadows 
and Members on both sides of the aisle on the many issues that 
we have before this subcommittee.
    Additionally, I want to acknowledge Dr. John Fleming, 
Assistant Secretary of Commerce for Economic Development.
    Dr. Fleming, congratulations on your recent confirmation, 
and welcome to the EDA [Economic Development Administration] 
and back to the House. I am glad to have you on board. We are 
looking forward to working with you.
    Today's hearing will take a closer look into kind of a 
little known and underrecognized and appreciated Federal agency 
that delivers one of the greatest returns on investment to the 
American taxpayer, and that is the Economic Development 
Administration. Our witnesses today are going to highlight some 
local examples of how EDA's grant programs have facilitated 
large-scale economic revitalization and transition in 
communities that have been in distress. Further, we will 
explore EDA's important role in disaster recovery and look 
ahead to how EDA can respond to emerging technological changes 
in our country's workforce.
    Created in 1965 by the Public Works and Economic 
Development Act, EDA has for the last 54 years been the only 
Federal agency specifically dedicated to local and regional 
economic development. It serves as a clearinghouse for economic 
development in the Federal Government and plays a critical role 
in coordinating Federal economic development programs.
    With a wide variety of grant programs, including planning, 
public works, trade assistance, economic adjustment and 
innovation, EDA provides needed funding to economically 
distressed communities to strengthen their local business 
environment, ensure job creation, and fuel sustainable economic 
growth.
    In both its application process and the annual reports to 
Congress, EDA prioritizes job retention and creation, as well 
as private-sector leveraging, to ensure the greatest return on 
investment to the American taxpayer.
    Despite a comparatively small, $300 million annual budget, 
EDA has helped create and retain more than 275,000 private-
sector jobs and attracted more than $39 billion in private 
investment in the last 6 years alone. I want to repeat that. A 
$300 million investment has resulted in $39 billion from the 
private sector.
    These grants, which are awarded only to communities facing 
significant economic distress, are a lifeline, and they 
oftentimes are the only source of economic development funding 
that is available. EDA grants provide additional capacity, 
technical and strategic expertise, and targeted infrastructure 
investments that are guaranteed to preserve or attract new 
jobs.
    EDA has been front and center in responding to massive 
economic changes brought on by industry failure, trade 
competition, and persistent unemployment.
    With funds specifically dedicated to help coal communities, 
for example, transition their economies, EDA has helped to 
bring new hope to communities devastated by the loss of mines 
that has provided generations of residents with stable and 
well-paying jobs that are no longer there.
    Through its Trade Adjustment Assistance for Firms program, 
EDA works with U.S. manufacturing, production, and service 
firms to help modernize work practices or business models to 
stay competitive in global markets.
    Public works grants help communities make targeted 
infrastructure investments like sewer or water access, rail 
spurs, and roadways to prepare sites for new industry or 
expanded industry operations.
    In addition to its foundational economic development 
mission, EDA also plays an integral role in helping communities 
recover from disasters. Fires, floods, hurricanes, and winter 
storms are enormously disruptive events that continue to have 
an impact well after the storm has passed and the debris has 
been cleared.
    Congress, realizing the EDA's record of success in spurring 
revitalization and economic recovery, has routinely provided 
sizeable appropriations to EDA for disaster recovery. Most 
recently, Congress appropriated $600 million in disaster 
recovery funding in the 2018 disaster supplemental to respond 
to Hurricanes Harvey, Irma, and Maria, as well as for wildfires 
and other disasters in 2017.
    These resources provide some of the only critical economic 
development disaster funding that is available. After the first 
responders have left, EDA is still there.
    So if you look at their website, you can see countless 
stories about EDA's success. Every disaster is different, but 
they are there to bring prosperity and recovery to communities 
hardest hit. Their disaster role is central to their new 
mission that is continually being challenged.
    I hope after today's hearing you will all agree with me in 
seeing the vitality and importance of the EDA, as it promotes 
our country's efforts to have prosperity.
    I intend to advance an EDA reauthorization bill, and I hope 
that you will help me in doing that in a way that will make the 
program work even better. So I look forward to the discussion.
    And I would now recognize the ranking member, Mr. Meadows.
    [Ms. Titus's prepared statement follows:]

                                 
  Prepared Statement of Hon. Dina Titus, a Representative in Congress 
     from the State of Nevada, and Chair, Subcommittee on Economic 
        Development, Public Buildings, and Emergency Management
    Good afternoon. I want to welcome everyone to the first hearing of 
the Economic Development, Public Buildings, and Emergency Management 
Subcommittee in the 116th Congress. This hearing is entitled: 
``Building Prosperity: EDA's Role in Economic Development and 
Recovery''.
    I want to recognize the ranking member, Mark Meadows, and the 
welcome all the new members of the subcommittee. I look forward to 
working with Ranking Member Meadows and members on both sides of the 
aisle on the many issues we have before this subcommittee.
    Additionally, I want to welcome back Dr. John Fleming, Assistant 
Secretary of Commerce for Economic Development. Dr. Fleming served in 
this body and I want to congratulate you on your recent confirmation 
and welcome to the EDA.
    Today's hearing will take a closer look at a federal agency that 
delivers one of the greatest returns on investment to the American 
taxpayer: the Economic Development Administration.
    Our witnesses today will highlight some local examples of how EDA's 
grant programs have facilitated large-scale economic revitalization and 
transition in communities that have been in distress. Further, we will 
explore EDA's important role in disaster recovery and look ahead to how 
EDA can respond to emerging changes in our country's workforce.
    Created in 1965 by the Public Works and Economic Development Act, 
the EDA has, for the last 54 years, been the only federal agency 
specifically dedicated to local and regional economic development.
    The EDA serves as a clearinghouse for economic development in the 
federal government and plays a critical role in coordinating federal 
economic development programs.
    With a wide variety of grant programs including planning, public 
works, trade assistance, economic adjustment, and innovation, EDA 
provides needed funding to economically distressed communities to 
strengthen their local business environment, ensure job creation, and 
fuel sustainable economic growth.
    In both its application process and annual reports to Congress, EDA 
prioritizes job retention and creation as well as private sector 
leveraging to ensure the greatest return on investment to the American 
taxpayer.
    Despite a comparatively small $300 million annual budget, EDA has 
helped create or retain more than 275,000 private sector jobs and 
attract more than $39 billion in private investment in the past six 
years alone.
    These grants, which are awarded only to communities facing 
significant economic distress, are a lifeline and oftentimes the only 
source of economic development funding available. EDA grants provide 
additional capacity, technical and strategic expertise, and targeted 
infrastructure investments that are guaranteed to preserve or attract 
new jobs.
    EDA has been front and center in responding to massive economic 
changes brought on by industry failure, trade competition, and 
persistent unemployment.
    Through its trade adjustment assistance for firms program, EDA 
works with U.S. manufacturing, production, and service firms to help 
modernize work practices or business models to stay competitive in 
global markets.
    Public Works grants help communities make targeted infrastructure 
investments like sewer or water access, rail spurs, and roadways to 
prepare sites for new industry or expanded industry operations.
    In addition to its foundational economic development mission, EDA 
plays an integral role in helping communities recover from disasters. 
Fires, floods, hurricanes, and winter storms are enormously disruptive 
events that continue to have an impact well after the storm has passed 
and debris has been cleared.
    Congress, realizing the EDA's record of success in spurring 
revitalization and economic recovery, has routinely provided sizable 
appropriations to EDA for disaster recovery. Most recently, Congress 
appropriated $600 million in disaster recovery funding in the 2018 
Disaster Supplemental to respond to Hurricanes Harvey, Irma, and Maria 
as well as wildfires and other federally declared disasters in 2017.
    These resources provide some of the only economic development 
focused disaster assistance and are crucial to helping communities 
return to normal after a major event.
    After the first responders have left, EDA stays on the ground to 
help put together the pieces of an economy fractured by natural or 
other disasters. It helps create economic development plans, provides 
revolving loans, and fortifies infrastructure to ensure that companies 
wiped out by disaster return to their communities and are resilient to 
future disaster events.
    Each disaster is different and the needs following disasters are 
equally diverse. Fortunately, EDA funds are flexible enough within 
their mission driven purpose to apply to the unique circumstances each 
community has faced.
    Whether it is protecting a manufacturing facility from flooding, 
creating a small business development center in a fire-ravaged town, or 
rebuilding a boat manufacturer following a tornado, EDA grants have 
brought prosperity and recovery to communities hardest hit by natural 
disasters.
    The disaster recovery role, while funded through sporadic 
appropriations, is just as central to the EDA's mission as its 
continually-appropriated programs.
    I hope that after today's hearing, you will join me in seeing the 
vitality and importance of the Economic Development Administration in 
our country's efforts to promote prosperity.
    Despite its sterling record of accomplishment, the EDA has been 
operating for the last eleven years on expired authorization. Even 
worse, this Administration has proposed in each of its last three 
budgets to eliminate the EDA altogether.
    Congress' failure to reauthorize the EDA means we have missed the 
opportunity to strengthen programs, increase funding to better meet 
needs, and expand EDA's mission to respond to a changing economy.
    This Congress, I intend to advance an EDA reauthorization that will 
provide certainty to the communities we are elected to serve that the 
federal government will remain a committed partner in the pursuit of 
economic growth.
    I look forward to furthering that discussion in today's hearing and 
learning from our witnesses. I now recognize the ranking member, Mr. 
Meadows, for an opening statement.

    Mr. Meadows. Thank you, Madam Chair, and congratulations on 
this new position. And I want to just start out by saying thank 
you for being very inclusive in not only our agenda as we have 
laid it out, but it has been so refreshing to work with you and 
your staff in a way that I would love to say is my expertise, 
but it is actually my staff director's expertise. But as we 
work together, I look forward to advancing this.
    And since you mentioned it, in terms of a reauthorization, 
I know sometimes Presidential budgets set out a particular 
direction, and yet Congress certainly has its own agenda. And 
so in doing that, we are not trying to put you between what may 
be in the President's budget and where we are in Congress.
    But I would agree with the chairwoman that we do need to 
look at reauthorization with reforms and how we can make sure 
that the American taxpayers' dollars actually get and do the 
best that we can. And so we look forward to working with you in 
a bipartisan manner and advancing that.
    I would like to welcome my good friend, Dr. Fleming. It is 
interesting, on this particular subject, I have probably 
learned more about it from him than I knew, and the passion 
that he had, not just in serving in this capacity, but really 
the passion for communities that can best utilize the 
assistance of this particular program.
    So, welcome. Having been sworn in just a month ago, I know 
some things--well, there are two ways things happen in 
Washington, DC--slow and never. And so for you, it was just 
slow. And we are glad that you are here, and certainly look 
forward to working with you and this committee as we look to 
examine the role of the EDA in the Federal economic development 
programs.
    Today there are dozens of economic development programs 
scattered throughout the Federal Government. And for me, one of 
the things I would love to do--and I am sure that the chairman 
of the full committee would agree--as we start to consolidate 
and reform, let's make sure that we are most effective with 
that. And this is one of those programs where I think that we 
can put really the greatest emphasis on the target and how we 
actually help communities, both urban and rural communities, 
with Federal assistance.
    So as we look to examine that, I look forward to hearing 
your testimony, not just from this panel, but from the second 
panel. But ensuring that Federal funds are strategically 
targeted--and I want to stress strategically targeted--and 
effectively used is not just critical for the taxpayers, but 
for those distressed communities as well.
    One of the big frustrations that we have found is that when 
Chair Titus and I find that bipartisan sweet spot where we vote 
for something and actually appropriate it, and then to have 
those Federal dollars sit there and not be deployed, or not to 
be deployed effectively, it is just extremely frustrating.
    And so, as we look at that, I think that we can do a whole 
lot. Just left the House floor where I was talking with someone 
from the other side of the aisle on other areas that we can 
streamline and work with the chairwoman on that particular 
issue as well.
    So as we look at this in conducting proper oversight, we 
are going to count on you to help us with that oversight and 
making sure that we are effective with those programs.
    Also, what I would love to see is a matrix, where we can 
look at that matrix and say, we are being effective here, here 
is how we know. You don't know whether you are getting an ``A'' 
unless you have something to measure it by.
    And so as we work together to set that up, I am hopeful 
that we can have, really, a dashboard that gives you the way to 
say, all right, here is how we know we are doing a good job. 
What it does is that becomes our ability to actually share it 
with this administration and future administrations as we work 
to try to show how we are helping communities.
    And the chairwoman actually mentioned about the role in 
disaster recovery, but it is not just there. EDA serves as a 
coordinating agency on behalf of the Department of Commerce for 
FEMA's economic recovery support function. And when you are 
doing that, what we need is one set of questions that actually 
coordinate where you don't have communities having to fill out 
questionnaires and answer different questions.
    We have had two hurricanes that have hit the eastern part 
of our State, and the big frustration I have had is I will get 
calls from local city council people that have filled out 
paperwork, only to find out that they have got to fill it out 
again and again and again. And I know the chairwoman has worked 
with us in advancing legislation already that hopefully will 
start to streamline that.
    As was mentioned last year, the EDA received $600 million 
in supplemental funding for the 2017 disasters, and while there 
is often a focus, rightfully so, on ensuring disaster survivors 
can rebuild their homes and communities, a critical part of 
recovery is also bringing back those jobs and making sure that 
the communities have those jobs and the infrastructure there. 
Because sometimes manufacturing and other businesses, once a 
disaster hits, they just leave, instead of coming back to the 
very community where they long served a vibrant part of those 
communities.
    So the effective management of those funds and coordination 
is really what I look forward to. I look forward to hearing 
from our witnesses.
    And I yield back the balance of my time.
    [Mr. Meadows's prepared statement follows:]

                                 
 Prepared Statement of Hon. Mark Meadows, a Representative in Congress 
 from the State of North Carolina, and Ranking Member, Subcommittee on 
    Economic Development, Public Buildings, and Emergency Management
    Today is our first subcommittee hearing this Congress. I look 
forward to working with the chairwoman on critical issues within our 
subcommittee and continuing the tradition of this subcommittee's 
ability to work in a bipartisan fashion.
    I also want to thank my good friend and former colleague Dr. 
Fleming and the other witnesses here with us today. Dr. Fleming was 
sworn in as Assistant Secretary of Commerce for Economic Development 
just last month. I look forward to working with him as we examine the 
role of the EDA and federal economic development programs.
    Today, there are dozens of economic development programs scattered 
across the federal government. It is important as we examine EDA's role 
to also evaluate any overlaps and ensure there is coordination, 
accountability, and transparency.
    Ensuring that federal funds are strategically targeted and 
effectively used is critical not just for the federal taxpayer but for 
the distressed communities for which these programs were created. As we 
conduct oversight and consider potential legislation, we should look at 
what reforms may be needed to improve and streamline these programs. 
And, we should identify the best metrics to evaluate the effectiveness 
of these programs.
    EDA also has a role in disaster recovery. EDA serves as the 
Coordinating Agency on behalf of the Department of Commerce for FEMA's 
Economic Recovery Support Function. In that function, EDA not only has 
the responsibility to manage its own activities and funds, but to 
ensure coordination with other departments and agencies with related 
programs.
    Last year, EDA received $600 million in supplemental funding to 
help in the economic recovery from the 2017 disasters. While there is 
often focus--and rightfully so--on ensuring disaster survivors can 
rebuild their homes and communities--a critical part of recovery is 
bringing back jobs and businesses. Effective management of these funds 
and coordination across agencies is critical to helping communities 
recover from disasters.
    I look forward to hearing from our witnesses today on these and 
other issues.

    Ms. Titus. Well, thank you, and thank the ranking member.
    And we would now like to recognize Mr. DeFazio, who is the 
chair of the Transportation and Infrastructure Committee.
    Mr. DeFazio. Madam Chair [handing Congresswoman Titus a 
box].
    Ms. Titus. Oh, thank you. How nice. It is not even my 
birthday. Wow.
    Mr. DeFazio. This would be her first official--this is the 
first time the subcommittee's met with you as chair?
    Ms. Titus. Yes, it is.
    Mr. DeFazio. It is. OK. That is what I thought. It is a 
little commemorative gavel.
    Ms. Titus. How nice. Well, thank you, Mr. Chairman.
    Mr. DeFazio. Yes. I mean, this one is more effective, but 
yeah.
    Ms. Titus. This is great. Thank you.
    Mr. DeFazio. I am pleased to be here to support the EDA. 
You know, there are certainly many programs of the Federal 
Government that impact or try to incent economic development 
from the private sector. But EDA is the only Government agency 
focused solely on economic development.
    And they have a key role. We have already heard about--
Representative Meadows talks about disasters. There are other--
foreign competition, communities devastated in that way, 
factory closures, military base closings, natural resource 
depletion, prolonged unemployment, natural disaster.
    It is really a critical agency. And I will use one example 
because I like to localize things. There is a city called Coos 
Bay in my district. It has been, because of cutbacks in the 
logging industry and the loss of paper mills to China, just 
north of town, and some other things, it has been economically 
devastated.
    And we will have a curtailed fishing season this year 
because of problems originating in California. We are just far 
enough north that we get restricted on certain kinds of fish 
when they have problems down there.
    So it is a community that wants to do better, wants to keep 
their kids home, but most kids end up moving somewhere else 
after they graduate school, because there is not a lot of 
opportunity.
    And in one particular area there is a looming, as there is 
in many places in America, but even worse there, a looming 
crisis in healthcare. We have a great community college, and 
they have a very small nursing program. And people will apply 4 
years in a row to try and get in the program--who are totally 
qualified--because the program is so limited by local 
circumstances.
    So back in 2013 they began a very ambitious program to 
build a new health technology center and dramatically increase 
the size of the nursing program, something that they need, 
something my State needs, something the country needs. And 
they, in a depressed area, raised an impressive amount of 
money, but they are coming up a little short. And it was a lot 
of questions about, OK, how can we get more money, how can we 
move forward? And they got a $3 million EDA grant, and the 
project is going forward.
    So that is just one very concrete example of the benefits 
of this program leveraging charitable donations in a depressed 
community to make a very needed investment and create jobs.
    Generally, EDA creates around three to four jobs per 
$10,000 in funding. That is a pretty darn good investment and 
better than a lot of other ways that we spend money, I will 
tell you. So I look forward to the reauthorization process and 
working with the chair and the ranking member.
    With that, I yield back the balance of my time.
    [Mr. DeFazio's prepared statement follows:]

                                 
   Prepared Statement of Hon. Peter A. DeFazio, a Representative in 
      Congress from the State of Oregon, and Chair, Committee on 
                   Transportation and Infrastructure
    Thank you Chairwoman Titus. This is the first time in several years 
that this committee has met to look specifically at the Economic 
Development Administration (EDA), and I believe it is long overdue. EDA 
is the only agency in the federal government focused exclusively on 
economic development, but it is often unheralded for the important work 
that it does.
    Operating in communities devastated by foreign competition, factory 
closure, military base closure, natural resource depletion, prolonged 
unemployment, or natural disaster, the EDA is truly an economic 
lifeline. This is particularly true for the city of Coos Bay in my 
district.
    The loss of the logging industry on federal forestland and 
declining fishery stocks have plagued large swaths of my southwestern 
Oregon district. Once thriving towns are struggling to hold on, and 
young people who can get out are leaving their childhood homes. Aging 
populations with few options are stuck in place, largely isolated from 
the urban centers in the northern Willamette Valley.
    Consequently, an emerging crisis on the southern Oregon coast is a 
nursing and doctor shortage. Nearly one in three health care workers in 
Coos and adjoining Curry counties are over the age of 55, and there are 
limited training programs in the area.
    Southwest Oregon Community College in Coos Bay has a nursing 
program, but its growth and modernization has been limited by 
antiquated and undersized facilities lacking modern lab space and room 
to grow.
    In 2013, the college began fundraising and planning for a new 
science and health technology center that will allow it to increase its 
enrollment by nearly 50% immediately and eventually nearly triple the 
program size over time.
    The college spent several years fundraising and received more 
private donations than anyone expected possible in such a small and 
economically distressed community. However, despite their best efforts, 
the college still did not have enough funding to build its new health 
and technology center. Just as administrators were preparing to give 
up, the EDA awarded the college a $3 million grant to get the project 
over the finish line.
    The EDA grant provided the absolute last dollars needed to fund the 
project that had been fundraising for six years. Without this funding, 
the college was unsure if or how the project would move forward and the 
residents of Coos County would suffer the consequences.
    This story is exemplary of the work that EDA does. They come into 
communities that are barely hanging on and provide a lifeline to help 
turn the local economy around. EDA provides hope where there has 
otherwise been little cause for optimism. Much of EDA's work occurs in 
rural areas. In fact, historically, about two-thirds of EDA funding has 
been awarded to rural areas.
    For this reason, I find it perplexing that the Trump Administration 
proposed in each of its last three budgets to eliminate the EDA. It is 
unfathomable to me that the President would want to eliminate the only 
federal agency that is specifically focused on local and regional 
economic development. Moreover, EDA grants and loans produce a great 
return on investment. EDA investments generate between 2.2 and 5 jobs 
per $10,000 in funding.
    Cutting the EDA is counterproductive and disproportionately hurts 
private sector job growth and small, rural communities. Instead, we 
should be working to reauthorize and provide more funding for the 
agency.
    That is why I look forward to working with Chair Titus and my 
colleagues across the aisle on a comprehensive reauthorization of the 
EDA.
    I thank our witnesses for taking time out of their busy schedules 
to appear before our committee to discuss this often over looked, but 
promising agency. I yield back the balance of my time.

    Ms. Titus. Thank you very much, Mr. Chairman. Thank you for 
your comments, and thank you very much for the gavel.
    At this time, I would like to welcome our first witness for 
this panel, the Honorable Dr. John Fleming, who is Assistant 
Secretary of Commerce for Economic Development.
    We want to thank you for being here today. We look forward 
to hearing from you.
    Without objection, our witness' full statement will be 
included in the record.
    Since your written testimony has been made a part of the 
record, the subcommittee requests that you limit your oral 
testimony to 5 minutes, and we look forward to hearing from 
you. You may proceed.

TESTIMONY OF HON. JOHN C. FLEMING, M.D., ASSISTANT SECRETARY OF 
    COMMERCE FOR ECONOMIC DEVELOPMENT, ECONOMIC DEVELOPMENT 
          ADMINISTRATION, U.S. DEPARTMENT OF COMMERCE

    Dr. Fleming. Well, thank you, Madam Chairwoman, and thank 
you so much for inviting me here today, and certainly the 
ranking member, my good friend, Mark Meadows, and Chairman 
DeFazio.
    And, in fact, it is good to be here with my current 
friends, but my former colleagues. And as I was telling someone 
a little earlier, it is very nostalgic. I spent my last 2 years 
here in this very building, and many fond memories of those 
days. And so it is just great to be able to be back here once 
again.
    Chairwoman Titus, Ranking Member Meadows, and members of 
the subcommittee, it is a pleasure and a privilege to appear 
before you today to testify on behalf of the Economic 
Development Administration, which is in the Department of 
Commerce. EDA welcomes this hearing as an opportunity to 
discuss the role of the Department and the Federal Government 
in supporting economic development in economically distressed 
areas of this country.
    President Trump has made restoring economic prosperity to 
all parts of this great Nation a priority, and under his 
direction, we have seen manufacturing jobs return and 
employment increase to levels not seen in decades.
    A strong economy is critical to helping communities hit by 
natural disasters get back on their feet, and the President's 
policies on trade, tax reform, and regulatory streamlining are 
helpful and are helping to ensure that the economic outlook 
continues to improve.
    As I embrace the role of Assistant Secretary, I am proud of 
the agency's reputation of fostering sustainable economic 
growth, cultivating job creation, and encouraging innovative 
solutions that improve local and regional economic development 
outcomes.
    EDA facilitates long-term growth strategies for communities 
and businesses through collaboration, providing a framework for 
discussion among all stakeholders. This collaboration helps 
regions assess their competitive strengths, design a strategy 
to bring together the technology, the human capital, and the 
financial capital it will take to compete and provide seed 
money for turning a region's unique strategy into reality.
    EDA's role in disaster recovery is to facilitate the timely 
and effective delivery of Federal economic development, 
assistance to support long-term community economic recovery 
planning, and project implementation, redevelopment, and 
resiliency.
    In fiscal year 2018, EDA made $587 million available to 
eligible grantees, communities where a Presidential declaration 
was issued due to natural disasters in 2017.
    One of the administration's key areas of focus that EDA 
helps support are Opportunity Zones, which were created as part 
of the Tax Cuts and Jobs Act. Opportunity Zones are a powerful 
vehicle for bringing economic growth and development creation 
to the American communities that need them the most.
    Recognizing the importance of this powerful new economic 
development tool, EDA was quick to act and made it as easy as 
possible for applicants within qualified Opportunity Zones to 
apply for EDA funding.
    As a result, EDA has already seen communities across the 
country utilize the eligibility category when applying for EDA 
grants. Since fiscal year 2018, EDA invested close to $7.3 
million in 16 projects in Opportunity Zones to help communities 
and regions build the capacity for economic development.
    One of EDA's key investment priorities under this 
administration is projects that support the planning and 
implementation of infrastructure for skills training and 
related facilities that address the hiring needs of the 
business community, particularly in the manufacturing sector. 
This focus leads to investments in job training facilities and 
innovation centers in areas experiencing rapid economic 
transition in their economies, such as coal-impacted 
communities.
    Finally, I want to highlight EDA's Regional Innovation 
Strategies program. This program helps build regional capacity 
to translate ideas and inventions into products, services, and 
companies, as well as jobs, through increased access to capital 
and entrepreneurial support, ultimately increasing a region's 
economic competitiveness.
    To date, RIS has awarded $78 million in Federal funds and 
attracted an additional $89 million in local matching funds 
across 180 projects in 5 grant competitions.
    Members of the subcommittee, thank you for the opportunity 
to address EDA's efforts to enhance the global competitiveness 
of America's regions. I look forward to answering any questions 
you may have today.
    [Dr. Fleming's prepared statement follows:]

                                 
 Prepared Statement of Hon. John C. Fleming, M.D., Assistant Secretary 
      of Commerce for Economic Development, Economic Development 
              Administration, U.S. Department of Commerce
    Chairwoman Titus, Ranking Member Meadows, and members of the 
Subcommittee, it is a pleasure and a privilege to appear before you 
today to testify on behalf of the Economic Development Administration 
(EDA) in the Department of Commerce. EDA welcomes this hearing as an 
opportunity to discuss the role of the Department and the Federal 
Government in supporting economic development in economically 
distressed areas of this country.
    President Trump has made restoring economic prosperity to all parts 
of this great Nation a priority, and under his direction we have seen 
manufacturing jobs return and employment increase to levels not seen in 
decades. A strong economy is critical to helping communities hit by 
natural disasters get back on their feet, and the President's policies 
on trade, tax reform, and regulatory streamlining are helping to ensure 
that economic outlook continues to improve. However, even with a strong 
economy the Federal budget is not unlimited, and every administration 
is faced with difficult decisions about how to address the numerous 
spending demands presented each year. To present a responsible budget 
that addresses the highest priorities, the President has recommended 
the elimination of numerous programs and a reduction in funding for 
others. As you all know, one of the programs recommended for 
elimination is the EDA, and I am confident that the Administration can 
continue to provide necessary Federal support for communities through 
other federal agencies and in conjunction with State agencies.
    However, EDA is presently operating under funding provided by 
Congress for the remainder of this fiscal year. As I embrace the role 
of Assistant Secretary, I am proud of the agency's reputation of 
fostering sustainable economic growth, cultivating job creation and 
encouraging innovative solutions that improve local and regional 
economic development outcomes. My focus as Assistant Secretary will be 
the continued fostering of economic growth by supporting job creation 
efforts, harnessing innovation and increasing capital investments in 
economically distressed areas, and preparing the agency to wind down 
operations and transition of its authorities within the Department of 
Commerce when the President's budget is approved.
                eda's response to trends and priorities
    EDA has been an integral part of the Administration's efforts to 
implement a new national innovation policy. We facilitate long-term 
growth strategies for communities and businesses through collaboration, 
providing a framework for discussion among all stakeholders. This 
collaboration will help regions assess their competitive strengths, 
design a strategy to bring together the technology, the human capital, 
and the financial capital it will take to compete, and to provide seed 
money for turning a region's unique strategy into reality. To highlight 
this work, the following program areas are our focus:
Disaster Recovery
    EDA's role in disaster recovery is to facilitate the timely and 
effective delivery of Federal economic development assistance to 
support long-term community economic recovery planning and project 
implementation, redevelopment and resiliency. EDA coordinates regional 
disaster recovery efforts in partnership with an extensive network of 
391 Economic Development Districts (EDDs), 52 Tribal Partnership 
Planning organizations, University Centers, institutions of higher 
education and other partners in designated impact areas. In FY 2018, 
EDA made $587 million available to eligible grantees in communities 
where a Presidential declaration of a major disaster was issued under 
the Stafford Act as a result of Hurricanes Harvey, Irma, and Maria, 
wildfires and other natural disasters in 2017. Towards that end, EDA 
has awarded over 71 grants totaling $162.8 million to communities 
across the country that have been impacted by natural disasters. EDA 
continues to expeditiously evaluate proposals of qualifying 
communities.
    Building off its key integration role, EDA, on behalf of the 
Department, also plays a crucial role as the designated Coordinating 
Agency of the Economic Recovery Support Function (ERSF) under the 
Federal Government's Natural Disaster Recovery Framework. In this 
capacity, EDA provides leadership and coordination for primary and 
support agencies, all of which share a role in the provision of grants, 
loans, training and other forms of assistance to support economic 
recovery efforts in disaster-impacted communities and regions.
Opportunity Zones
    One of the Administration's key areas of focus that EDA helps 
support are Opportunity Zones, which were created as part of the Tax 
Cuts and Jobs Act. The Opportunity Zone incentive is designed to 
support new and small businesses, the development of blighted 
properties, investment in key local infrastructure projects, financing 
for facility construction or refurbishment, and a number of other 
activities. Opportunity Zones are a powerful vehicle for bringing 
economic growth and job creation to the American communities that need 
them the most. Secretary of the Treasury Steven T. Mnuchin has stated 
that it is anticipated that $100 billion in private capital will be 
dedicated towards creating jobs and economic development in Opportunity 
Zones.
    Recognizing the importance of this powerful new economic 
development tool, EDA was quick to act and made it as easy as possible 
for applicants within qualified Opportunity Zones to apply for EDA 
funding. As a result, EDA has already seen communities across the 
country utilize this eligibility category when applying for EDA grants. 
EDA's grants serve a critical function in Opportunity Zones, ensuring 
that communities have plans in place to direct investments 
strategically and facilitating the conditions that lead to economic 
success by building the basic infrastructure (e.g., sewer, water, road, 
broadband) that must be present before a company locates new jobs in 
the community. Since FY 2018, EDA invested close to $7.3 million in 16 
projects in Opportunity Zones to help communities and regions build the 
capacity for economic development. These included $794,420 in three 
projects that, according to recipient estimates, are expected to create 
400 jobs and attract $19.6 million in private investment.
Advanced Manufacturing and Workforce Development
    One of EDA's key investment priorities under this Administration is 
projects that support the planning and implementation of infrastructure 
for skills-training and related facilities that address the hiring 
needs of the business community--particularly in the manufacturing 
sector. This focus leads to investments in job-training facilities and 
innovations centers, particularly in areas experiencing rapid economic 
transition in their economies, such as coal-impacted communities. EDA 
also is focusing attention on emerging areas such as space commerce by 
building the basic infrastructure and skills-base that these industries 
need to thrive.
Regional Innovation Strategies
    Finally, understanding that innovation is the backbone of our 
economy and that all citizens should be empowered to pursue the dream 
of entrepreneurship and be enabled to carve their own paths to 
prosperity, I want to end by mentioning EDA's Regional Innovation 
Strategies (RIS) program. This program allows EDA to award funds to a 
broad range of communities and entities to develop and strengthen high-
growth, innovation-based regional economies. The program helps build 
regional capacity to translate ideas and inventions into products, 
services, companies, and jobs, through increased access to capital and 
entrepreneurial support, ultimately increasing regions' economic 
competitiveness. To date, RIS has awarded $78 million in Federal funds 
and attracted an additional $89 million in local matching funds across 
180 projects in five grant competitions. As of March 2018, RIS projects 
have created or retained more than 8,200 jobs and attracted more than 
$1 billion in follow-on startup capital.
                               conclusion
    Members of the Subcommittee, thank you for the opportunity to 
address EDA's efforts to enhance the global competitiveness of 
America's regions. I am proud of the agency's long history and its 
critical role in supporting communities needing to make long-term 
investments following natural disasters. I look forward to answering 
any questions you may have.

    Ms. Titus. Well, thank you, Mr. Secretary.
    We will now move to questions from the Members. Each Member 
will be recognized for 5 minutes to ask the Secretary 
questions, and I will begin by recognizing myself.
    We might as well just get right to it, Dr. Fleming. In your 
previous service as a Member of Congress, you voted to 
eliminate the EDA. Furthermore, the President, though, as you 
mentioned, is encouraging development, he has proposed 
eliminating the agency in his 2020 budget.
    I wonder if your opinion about the agency has changed, why 
has it changed, and what assurances can you give us that you 
really are making this a priority.
    Dr. Fleming. Madam Chairwoman, thank you for that question. 
You are not the first to ask that question, by the way.
    Ms. Titus. I can imagine.
    Dr. Fleming. Certainly, in my confirmation hearings, I got 
that question as well.
    I actually voted twice against the EDA, not because I had 
certainly anything against EDA, but I was sent by my 
constituents to Washington to cut spending, with a concern 
about a deficit, which, as you know, still has not come under 
control.
    I do support the President's priorities, I support his 
budget, and that does include the elimination of EDA.
    Having said that, however, I have become a huge supporter 
in terms of the work done and accomplished, a fan, in fact, of 
the many good things that EDA has done since 1965 and what it 
continues to do in terms of being, I think it has already been 
said today, the only agency that is committed to local economic 
development.
    And what is really so effective about it is the return on 
investment, the fact that for every Federal dollar spent, we 
get $15 of private investment in turn.
    So for that reason, as I say, I have become very 
enthusiastic. And in answer to your question, I am fully 
committed to supporting all the work and the mission of EDA as 
long as it remains in existence.
    Ms. Titus. Have you shared that with the President?
    Dr. Fleming. Madam Chairwoman, I have not had a 
conversation with the President on this or anything else, but I 
do appreciate the suggestion.
    Ms. Titus. Thank you.
    I also want to ask you about Opportunity Zones. You said in 
the testimony that EDA has made it as easy as possible for 
applicants with qualified Opportunity Zones to apply for EDA 
funding, this is a big part of the tax bill. You describe it as 
an eligibility category. Well, can you tell us under what 
authority the EDA has to include this as an eligibility 
category?
    Dr. Fleming. Sure.
    Ms. Titus. It is not that they would be excluded, but I 
want to make sure they are not getting special treatment, 
because in the statute, as originally written, Opportunity 
Zones are not considered part of eligibility.
    Dr. Fleming. Yes, that is correct, Madam Chairwoman.
    First of all, we have basically three areas that we are 
able to consider eligible. One is areas of significant or 
substantial economic distress, communities that are in that 
category.
    The other is where unemployment is quite high. And we have 
our own internal criteria for that, which we can get into at 
some point if you like.
    But then there is a third, is a special category, which 
would include, for instance, Tribal communities that may be 
under severe distress, and certainly disaster recovery, which 
has already been mentioned, $600 million.
    But we have been able to include Opportunity Zones, over, I 
think, 8,700 of them now that have been declared, as also 
eligible. Now, that does not mean that that is the lone 
criteria, because in some cases it may not be competitive with 
the distress in other areas. However, a census tract that is 
identified as a qualified Opportunity Zone is eligible for 
application for economic assistance.
    Ms. Titus. I think that is fine. I think they should be 
eligible. But I don't think they should be their own category 
and have preferential treatment, because if you look at some of 
those zones--I know in Nevada, some meet the need criteria, 
others don't.
    Dr. Fleming. Right. If I could, I would like to point out 
that the advantage of this is that because of the tax-favored 
treatment of that capital, the ability to go from a 15-to-1 
return on investment can actually go much higher, many times 
higher, a force multiplier effect, because remember that 
Opportunity Zones bring in, by way of delay and deference of 
capital gains tax, will bring in private investors' private 
capital, which will make what we do multiply many times over.
    But as you point out, just because a census tract is an 
Opportunity Zone does not mean that it automatically gets 
funding through the EDA.
    Ms. Titus. Thank you.
    I want to come back to some staffing questions, but my time 
is up, and I will do that later.
    We would now turn to the Ranking Member Meadows, but he has 
allowed Mrs. Miller to ask questions next.
    Mrs. Miller. Thank you, Dr. Fleming, for being here today.
    In 2017, the Economic Development Administration awarded 
over $11 million in funding in West Virginia. Given the closure 
of so many mines since 2009, promoting access to new 
opportunities for my constituents is key.
    Funding from public-private partnerships is crucial to 
fostering a market within my State. The EDA is one of the 
economic development agencies that provides oversight and 
service.
    I would like to focus on how we can improve economic 
programs across Government. How can we focus on fine-tuning 
these critical programs to remove redundancies and best promote 
best practices?
    Dr. Fleming. Yes. Well, thank you for that question, 
Congresswoman.
    The coal communities across 15 States have been hit very 
hard, as you say. For the last 2 fiscal years, we have been 
appropriated $30 million per year to provide assistance, job 
training assistance, to companies and communities to retool 
towards some other type of business concerns that may develop 
there. And we are committed to supporting our coal communities, 
which are in transition, as you point out, and certainly need 
assistance wherever possible.
    Mrs. Miller. Again, I was wondering about programs, how we 
can improve them so that we aren't redundant, so that we can 
use our money wisely.
    Dr. Fleming. Oh, I am sorry. So your question really has to 
do more with redundancy, overlapping, and that concern.
    Mrs. Miller. Yes.
    Dr. Fleming. There has been a concern about that. The GAO 
looked into that, issued a report in 2012, and there was not 
duplication, but some overlap.
    And so the OMB actually gave authority to EDA to create the 
EDI, which is Economic Development Integration, which is now a 
part of our agency. And not only do we have members on board 
within our office here in DC, but we have one in each district 
that serves in that office as well.
    That person has the responsibility to integrate, to make 
sure there isn't overlapping and duplication, and they are in 
contact with our sister agencies outside of our department, 
which is HUD and USDA and others. So that has been improved.
    However, I will also note for you that in the President's 
21st-century reorganization plan, it is recommended that we 
should consider something else that would be under the 
Department of Commerce, which would be the Bureau of Economic 
Growth, which would actually continue the grant 
responsibilities that we have today, but pull other grantors 
from other agencies, such again as HUD, USDA, and so forth.
    So we have already been identified as the integrator for 
these services, but we also see the potential that we could 
actually achieve more economies of scale, if you will, where we 
could do more with what we have in place, perhaps with a slight 
step up in staffing and so forth, to accommodate many more 
grant activities, if Congress chooses to do that.
    And then I would add to that, remember that, apart from our 
300-or-so million dollars per year that we are appropriated, in 
2018 we had a disaster supplemental of $600 million, and we 
have 2 percent of that which is dedicated towards salaries and 
expenses. We are able to scale up to that very easily and 
accommodate that pipeline even though that is essentially 
doubling the amount of grants that we normally have.
    So our capacity to develop into this Bureau of Economic 
Growth, if that is what is chosen by the administration or 
Congress, is really we are quite well positioned. We have the 
backbone, the back office, and the expertise that can do this 
very quickly and very easily.
    Mrs. Miller. Great. In your opinion, what are some of the 
ways in which we can promote resources and information for 
small communities? How can Congress help facilitate that 
coordination? Sort of that question was led by your past 
statement.
    Dr. Fleming. Right. Well, that is a good point. I must 
admit that when I came to Congress 10 years ago, I knew 
virtually nothing about the EDA. Perhaps I should have known 
more when I came, but there are so many different parts of 
Government, as we learn when we are sworn in.
    But we actually have a big presence out there across the 
country and in the Territories. We have six district offices. 
And then we have, like, almost 400 district offices underneath 
that. So we are spread out, we are very much public facing in 
our activities.
    And certainly we could do more, Congresswoman, to get the 
word out, but we are also very connected with the private 
sector that is involved in economic development as well. The 
chambers of commerce, I am already interacting with them. I 
have already traveled across the country, just in the 3 weeks I 
have been in the office. So there is a lot going on out there 
among the business folk, but a lot of times we in political 
office are not as aware.
    But certainly we are dedicated to doing more, and we will 
work with you in the future to give you all the information 
necessary.
    Mrs. Miller. Thank you.
    Ms. Titus. Our next questions will come from Ms. Mucarsel-
Powell.
    Ms. Mucarsel-Powell. Thank you, Madam Chair.
    And thank you, Dr. Fleming.
    I am a new freshman Member in Congress, representing 
Florida's 26th District, and we have been a recipient of some 
significant funding from the EDA. Just last fall, we received a 
$32 million grant that provides the Florida Department of 
Economic Opportunity, intended to boost the State's revolving 
loan fund program to help with recovery of Hurricane Irma. So I 
am very concerned by this administration's decision to 
terminate the EDA, which is the only agency that provides 
funding, grants, for business innovation, for disaster relief 
recovery, for economic development in some of these areas.
    And you mentioned in your opening statement that you are 
very concerned about the deficit and that you support the 
President's budget. But as you recall, in the last Congress, we 
last Congress approved a tax bill that added more than $1.5 
trillion to the deficit.
    So I am a little confused. And maybe, as a young Member of 
Congress, you can explain to me how that fits into the overall 
goal of reducing the deficit, the tax bill, but then cutting an 
agency that provides such needed funding in some of the rural 
areas, some in my district, but across the country--Flint, 
Michigan--some of the coal-affected communities, manufacturing 
communities, where the President said that he wanted to invest 
and help these workers.
    I am concerned. I am confused. If you can just talk a 
little bit about that.
    Dr. Fleming. Sure, I would be happy to.
    Congresswoman, budgets are about priorities, and this 
administration has a different set of priorities than the last 
one, which had a different set than the one before.
    A big priority, which I totally agree with, is the need for 
security, whether it is military security or border security. I 
was here during the Budget Control Act of 2011, which ended up 
gutting our military. My Air Force base, Barksdale Air Force 
Base in Louisiana, found that 50 percent of the crews were not 
ready and not nuclear certified for B-52s. So these are all 
things that are having to be addressed.
    And, look, I don't have all the answers to those questions. 
All I can say to you is that certainly tough decisions are 
having to be made.
    There is no question about it, EDA does fantastic work, and 
I will be 110 percent committed to its success, efficacy, and 
efficiency while I am leading it and while it is funded. But, 
ultimately, the funding is really the purse strings, is really 
here in Congress. So I don't really have a say anymore. That is 
now your job. As a freshman, welcome to the job. And I know it 
is a tough one.
    Ms. Mucarsel-Powell. It is.
    Dr. Fleming. Because I had to go through it as well. And I 
am sure that you will do well at that.
    Ms. Mucarsel-Powell. Thank you so much.
    Just another question. If the EDA were to be closed and 
terminated, you did say that you are confident that the 
administration can continue to provide necessary Federal 
support for communities through other Federal agencies and in 
conjunction with State agencies.
    So eliminating a $304 million per year agency is no small 
task. How can you ensure that the services will continue 
without having the Economic Development Administration? And who 
will be coordinating these efforts?
    Dr. Fleming. Congresswoman, the details I don't have, but 
here is what I can tell you. The drawdown would take 6 years, 
or that is the plan under the budget. It would require scaling 
down the personnel over time. So it wouldn't, per se, end 
everything immediately. It would have to scale down over time. 
Much of the work would have to remain under the Department of 
Commerce and would be disbursed under the Secretary himself or 
herself, whoever is in at that time going forward.
    So there are contingencies for that, but I don't have 
details, because, again, until such time as the appropriations 
end, it is impossible to execute on that. But there are 
provisions made on that.
    And, again, I would circle back to you another approach 
which has been suggested by this administration in the 
reorganization plan, would be to actually create a new agency, 
the Bureau of Economic Growth, that would actually take what is 
done here and incorporate similar items, grant-producing 
economic development items, from other sister agencies and 
departments, such as HUD and USDA and others, so that it could 
consolidate and actually be more cost-effective.
    So that is another approach, but that is not really in the 
budget. That is only in the reorganization plan.
    Ms. Mucarsel-Powell. Thank you, Dr. Fleming. I welcome more 
conversations with you in the future about this. Thank you.
    Dr. Fleming. Absolutely.
    Ms. Titus. Thank you.
    Now, we will go to Mr. Palmer.
    Mr. Palmer. Thank you, Madam Chair.
    Dr. Fleming, it is good to see you. You actually look 
younger. I mean, do you recommend getting out of Congress?
    Dr. Fleming. No comment, no comment.
    Mr. Palmer. You don't have to answer that. I will leave it 
at that.
    Dr. Fleming. But, let me congratulate you on your work, 
Congressman Palmer.
    And Gary is a good friend of mine, a policy director.
    So congratulations on that, and enjoyed working with you 
many years on many tough issues.
    Mr. Palmer. Well, thank you.
    I do want to ask some questions. There are probably 80 
other programs that do things similar to what EDA does. And I 
realize that you have a different perspective, having worked 
there, and I am not making a judgment on the work that EDA 
does. But one of my colleagues made a statement that the tax 
cuts that we passed added $1 trillion to the deficit. Actually, 
it was less than that. I think maybe meant the debt.
    But the real issue is not tax cuts, is it? I mean, we are 
trying to put more money in people's pockets so they can make a 
decision on how they spend it, rather than give it to the 
Federal Government. Shouldn't we be reducing Federal spending 
and letting people keep more of their money?
    Dr. Fleming. Yes, sir, I certainly agree with that, with 
this caveat. One thing that, again, I have come to appreciate 
about EDA is that this is not a straight unmatched grant 
program. The grant is made to a local community, which is 
matched usually at least 50-50, 1 to 1. And then that draws in 
private capital.
    And so we get, for every Federal dollar, we get $15 of 
private investment in return. That doesn't count local 
community match. And what is exciting about all of this is, to 
your point, keeping more dollars in your pocket.
    The Opportunity Zone, which really is a Jack Kemp, I 
believe, idea, something he promoted decades ago, has now 
finally come to fruition. And so it gives you the opportunity 
to not necessarily keep the money in your pocket, but to put it 
in an account that you are going to see grow, and that is with 
some reduction in the taxation of the capital gain from that 
account.
    And so what we want to do is to be a coordinating agency so 
that we work with our private partners, public-private 
partnership, to make sure that not only do we build jobs, grow 
jobs, and goods and services, but we improve blighted 
communities.
    So in my view, as a conservative, as you are, that is much 
better than just spending, laying Federal dollars down without 
any match and without any private capital.
    Mr. Palmer. My colleague, Miss Gonzalez-Colon, is all teed 
up to ask questions. I am going to get a little ahead of her 
here on this.
    My concern is you have got all these agencies, doing all 
this at the community level, and I can't dispute the investment 
from the private sector and certainly from local government as 
well, but when you have situations like you have got in Puerto 
Rico and you have got in Florida and Georgia and south Alabama 
with storms, there needs to be some issues addressed here and 
what you use this money for in terms of resiliency for storm 
mitigation.
    Some of my colleagues are rightly concerned over climate 
change, and I share some of their concerns in that respect, 
that whatever we are investing in, we need to take that into 
account.
    The thing that bothers me, Dr. Fleming, about this is that 
we have got all these agencies running all these programs, they 
are spending all this money in administrative costs, when I 
think we need to be thinking about the fiscal future of the 
country, as well as other issues related to climate change and 
whatever else they want to talk about.
    And I understand the President is trying to eliminate the 
funding for the EDA. It seems to me it makes sense to look at a 
way to consolidate these agencies and not have to spend as much 
money and get more bang for the buck. Do you want to comment on 
that?
    Dr. Fleming. Yes, thank you.
    Again, just speaking from the 3, 4 weeks I have been on 
service and what I see, and the capacity and the expertise and 
the professionalism of the people that actually do this work--
and I have been out in the field already, I visited with those 
who are actually in the local areas--the capacity and the 
ability to do this and to scale up, so for, perhaps, a marginal 
increase in Federal dollars for salaries and expense we can 
accommodate a lot more than what we do.
    And so that is where this idea of Bureau of Economic 
Growth, which is not part of the budget, but it is a part of 
the reorganization plan, may be something of interest to you, 
because that is where you get more bang for the buck.
    Mr. Palmer. I would be interested in that.
    I see we have a new chair.
    Ms. Mucarsel-Powell [presiding]. I got a promotion.
    Mr. Palmer. You got a promotion?
    Ms. Mucarsel-Powell. Very quickly.
    Mr. Palmer. Did they give you a gavel?
    Mr. Meadows. Yeah, she did.
    Ms. Mucarsel-Powell. I will use it while I am here. So the 
gentleman is out of time.
    Mr. Palmer. I thank the gentlelady.
    Ms. Mucarsel-Powell. I now recognize Delegate Holmes Norton 
from DC.
    Ms. Norton. Thank you very much, Madam Chair.
    And I appreciate your testimony, Mr. Fleming.
    I note that your budget is $304 million, and for next year 
it is proposed to be $30 million. Apparently, this is part of a 
shutdown of the agency.
    Now, you have testified that there is a 15-to-1 return for 
the taxpayers on what your agency does. With that kind of 
return, one wonders whether you can tell this committee that 
there will be in place an institution of some kind that will 
continue to render the service and will get that kind of 
return, or will there just be nothing left in its place?
    Dr. Fleming. Well, I would like to thank you, 
Congresswoman, for that question. That is a very good question, 
and I think it is important, relevant to the Washington, DC, 
area, for instance. I will note that the Secretary, who is also 
very excited about Opportunity Zones, was asking me just the 
last week, he wanted to know about the Opportunity Zones in the 
District of Columbia. He is very interested in that, and I 
think there are great opportunities there.
    But if the elimination occurs--and as I said, it would have 
to be a gradual reduction over a 6-year period--the work would 
have to be farmed out, if you will, to other agencies within 
Commerce. I don't know what they would be. It would be under 
the Secretary's direction. As I say, I don't have details on 
how that would work.
    Ms. Norton. Mr. Fleming, let me ask you this. Would you 
provide for the chairman of this committee the information I am 
requesting?
    If they are going to phase it and distribute it--they have 
got an agency now, they are cutting budgets, that gives us 15 
to 1 on the return. Have you had an increase in your budget 
over the past couple years?
    Dr. Fleming. Apart from the supplemental, basically no----
    Ms. Norton. So even without an increase, you are still 
getting----
    Dr. Fleming. Right. Sure.
    Ms. Norton. I don't know how I could name another agency 
that shows that kind of return.
    So we would like you to provide--the administration to 
provide through you--an analysis of whether or not that kind of 
return is going to be built into whoever gets your function. 
And we would like to see an outline of how these, the 
functions--very small agency you have--will be distributed and 
some analysis that it will be as efficient as this very small 
agency has been. So I am saying that for the record and for, I 
am sure, the chairman.
    This is a period of--I just came from a hearing on climate 
change. It is very frightening. We are not talking about 
something to come. We are talking about something that is being 
felt, especially in some Members' districts.
    How does the EDA help communities plan for those kinds of 
disruptions? They are very much greater than, let us say, even 
10 years ago or even last year. Are you in on the planning 
process, so before somebody gets hit, for example, in the 
panhandle, EDA, as small as it is, has been able to be helpful?
    Dr. Fleming. That is a great question, Congresswoman, and 
here is what we do. We focus in on weather events rather than 
climate. So as we improve and renew, we mitigate for 
resiliency.
    Ms. Norton. Can you do that ahead of time?
    Dr. Fleming. Well, sometimes we do, but more often than 
not, because there are more dollars involved and it is more of 
a crisis--let's say that a water system is flooded. Then when 
there are dollars used to replace that water system, it is 
rebuilt perhaps at a higher level or away from--so that with 
the next storm, it is not going to be affected.
    Perhaps power lines or telephone lines that may be taken 
down with a storm, we push towards putting them underground, so 
that with the next disaster, that doesn't happen.
    But I can't say, per se, and perhaps----
    Ms. Norton. Of course that may be a little more costly.
    Dr. Fleming. Oh, absolutely, no question. But then you 
always have to apply that to over time, some places get hit 
three or four times over a decade.
    Ms. Norton. So the cost-benefit would probably be worth it.
    Dr. Fleming. Exactly. Yes.
    Ms. Norton. Thank you very much, Madam Chair.
    Ms. Titus [presiding]. Thank you.
    We will now go to Miss Gonzalez-Colon.
    Miss Gonzalez-Colon. Thank you. Thank you, Madam Chair.
    First of all I want to say thank you, Mr. Fleming--and I 
don't know what is happening with the sound here, but----
    Dr. Fleming. Welcome to Congress.
    Miss Gonzalez-Colon. I want to say thank you to Secretary 
Ross as well. I mean----
    Mr. Meadows. Let's have you move over to Mrs. Miller's 
seat.
    Miss Gonzalez-Colon. Don't count my minutes. I did learn 
that in the State house. I was speaker of the house for a 
little bit.
    Ms. Titus. Reset the clock, like in a basketball game.
    Miss Gonzalez-Colon. Thank you.
    Secretary Ross, every time we got hit by the hurricane we 
received his call and he was eager to----
    Dr. Fleming. I can hear you, if you want to----
    Miss Gonzalez-Colon. OK, yeah, but the recording is the 
situation.
    He was eager to ask us about the different programs about 
EDA on the island. And in the case of Puerto Rico, $19 million 
are being allocated.
    And many people may not understand many of those programs, 
but CDBG funds are for many of those infrastructure for the 
Government. But the private areas, universities in the case of 
Puerto Rico, for research facilities, creative industries, 
incubators, creating jobs directly, in the case of Aeronautical 
and Aerospace Institute, public works.
    In the case of the island, 40 percent of our economy is 
just manufacturing industries. Pharmaceuticals. So that means 
that we do need to have a lot of research, scientific areas.
    So having the different kind of industries, like the Puerto 
Rico Manufacturing Extension, the Foundation for Puerto Rico, a 
lot of NGOs, the Puerto Rico Chamber of Commerce, retailers, 
the Puerto Rico Trade and Export Company, among many others--I 
am not going to list all of them--were instrumental to receive 
the backup in this award of EDA. So I want to say that, because 
they were kind of first responders.
    Dr. Fleming. Yeah.
    Miss Gonzalez-Colon. And sometimes a lot of Federal 
agencies still have not disbursed the Federal funds, but that 
is not the case with the Department of Commerce, and that is 
not the case with your agencies. And I want to say that. So 
having said that--I don't know what happened with the 
microphone.
    Mr. Meadows. Can we get some EDA money for new microphones?
    Miss Gonzalez-Colon. So having said that, I do know that 
making the tracking of the data is important. Making the 
accountability is critical to ensuring that all those Federal 
programs are efficient and effective, and I do support that. So 
how can we track all those programs, all those funds that are 
allocated for all those grants for, for example, universities, 
and creating those incentives for incubators, research, those 
technical assistance, and at the same time creating the jobs 
and seeing the whole picture in areas of disaster?
    You were talking a few minutes ago about Opportunity Zones, 
and I am very proud to manage that in the case of Puerto Rico 
more than 94 percent of the island is an Opportunity Zone. 
Actually, I am trying to get that extended to the whole island. 
That should be a great opportunity. Combine that with the HOPE 
zones, which will provide another opportunity to combine 
different kind of programs, to allow Territories, in our case, 
that were hit to try to recover faster.
    So I do believe in the agency and combining those kind of 
programs. So tell us how we can provide more assistance, or how 
can we put that data tracking, the accountability, in order to 
make those kind of programs react or be more effective.
    Dr. Fleming. Yes. Great question, Congresswoman.
    First of all, let me say that Puerto Rico has really had 
two major disasters. One was the economic disaster, followed 
by, I guess, two hurricanes, right? One followed after the 
other, destroying as much as 80 percent of the island.
    We have currently obligated $19.9 million to nine projects, 
and I am sure there are going to be more, but we have got a 
lot----
    Miss Gonzalez-Colon. I am very happy to hear that.
    Dr. Fleming. OK, good. So Puerto Rico needs help, and we 
are happy to do it.
    Your other question seemed to surround around the metrics, 
about measurement. I am a physician. I come from working in 
retail as far as business creation and business ownership. To 
me, when it comes to that, continuous quality improvement and 
other things, I think it is important to be data-driven.
    And EDA is already very data-driven. For instance, you 
heard me say that our return on investment, Federal dollars to 
private dollars, is 15 to 1, $15 private to $1 Federal. That is 
a look back over 10 to 11 years. We earmark that 3, 6, and 9 
years, and we follow that. So that is very important to us. We 
don't make this up. It is not based on projections. We also 
measure the cost of it per job, sustainable job, $13,500 per 
job.
    So all of this is important to us. But we think there needs 
to be even more data collection. There need to be more things 
that we can do. So we are in the process of looking at that 
process in order to do just that.
    The taxpayers deserve to know the performance of the 
agencies that provide assistance, how can we do better with 
less, how can we streamline what we do, because we want as much 
money on target benefitting the people as possible, not paying 
salaries. Not that our employees don't deserve good salaries, 
they do, but we want to make sure not a cent of the taxpayer 
money is wasted in that.
    Miss Gonzalez-Colon. Thank you. I yield back.
    Ms. Titus. I think the more they know, the more they will 
be impressed, so I am glad you are doing that.
    Dr. Fleming. Well, thank you, Madam Chairwoman. And also we 
may need to do a better job of being transparent about it, 
being sure it is on the website. It is to some extent now. We 
are going to do more work on that.
    Ms. Titus. Thank you.
    Mr. Johnson.
    Mr. Johnson. Thank you, Madam Chair. Thank you, Madam Chair 
and Ranking Member Meadows, for hosting this hearing today.
    And thank you, Assistant Secretary Fleming, for lending 
your time and testimony to this discussion.
    The Economic Development Administration is key to reviving 
communities under economic stress and creating durable regional 
economies throughout the United States and I am particularly 
concerned about President Trump's attempt to curb funding for 
the EDA.
    It is true that the administration has called for reduced 
funding to the Economic Development Administration in its 2020 
budget request. Is that correct?
    Dr. Fleming. That is correct.
    Mr. Johnson. And despite EDA's success at helping American 
workers transition between careers, the Trump administration 
has called for draconian cuts to the EDA. I find this 
unsettling, because it is the security of our economy and job 
system that makes our country the land of the American Dream.
    How does a robust EDA help the American economy to 
flourish?
    Dr. Fleming. Well, thank you for that question. And you may 
recall we served together on the House Armed Services Committee 
for years and enjoyed spending all night passing the NDAA each 
year.
    Mr. Johnson. Yeah, we are coming back up on that time of 
year again.
    Dr. Fleming. Pretty soon. I can imagine. That is all right, 
I will be in bed asleep while you are awake.
    Mr. Johnson. I transitioned to T&I from HASC.
    Dr. Fleming. Oh, did you?
    Mr. Johnson. And I miss it. Maybe I will pick it up as a 
third committee at some point. But I don't miss those late 
nights.
    Dr. Fleming. Yes, indeed.
    Well, I mean, I, in my personal opinion, in my observation, 
in the measurements that we make here, there is no question 
that what we do at EDA helps the American people. It helps 
enterprise. It helps commerce.
    And again, what appeals to me is the fact that most of the 
dollars spent are by the local community and private 
individuals. That is really exciting to me, coming from a 
conservative, business-oriented background.
    But having said that, tough decisions have to be made. As I 
said before, each President has his or her own priorities in 
their budget, and certainly I support our President in his 
priorities.
    But to the extent that it is funded, and of course Congress 
controls the funding primarily to all agencies, we will be 
efficacious and efficient in spending every dime that is 
allowed.
    Mr. Johnson. Thank you. Well, it was once upon a time that 
Congress did have authority over our appropriations process, 
but it is being--it is under severe threat right now. But do 
you believe that the EDA should be fully funded?
    Dr. Fleming. Well, Congressman, again, I do support the 
President's budget, and I certainly bend to the will of 
Congress, whatever Congress decides in association with the 
President. I mean, ultimately even though the appropriations 
come from Congress, the President has to sign it for it to go 
into law. So if you appropriate the money, and the President 
agrees and signs to it, again, we will continue our operations 
efficaciously and efficiently utilizing the taxpayers' money 
for their good.
    Mr. Johnson. And there is no line item veto that exists at 
this point, so if we did plus up EDA, well, I would not expect 
that there would be an insistence that that appropriation not 
go through.
    Mr. Fleming, as fossil fuels become more expensive, 
innovators in our country are looking for new ways to power 
American transportation and technology. According to Forbes, 
more than half a million jobs around the world were created in 
the renewable energy sector in 2017. And as these new 
alternative fuel sources are incorporated into our 
infrastructure, the EDA will serve a vital role to help workers 
transition in our flourishing economy. Are you aware that 
renewable energy is creating jobs 12 times faster than the rest 
of the economy?
    Dr. Fleming. Congressman, to be honest with with you, that 
is not really in my wheelhouse. I haven't studied that. I 
pretty much rely on the experts, and I can't claim any real 
expertise in that area frankly.
    Mr. Johnson. But you do agree that it would be important 
that Americans are skilled in renewable energy jobs to keep up 
with the sector's growth in the rest of the world?
    Dr. Fleming. Well, I think it is a good thing that we have 
jobs available for Americans. As you know, unemployability 
levels are at historic lows today, not least of which is 
because of the deregulation and the reduction in taxes that 
have so much stimulated the economy.
    And I come from an area where natural gas has been very 
successful, so whatever types of energy we use, we want it to 
be the cleanest and the most cost effective possible, and we 
are always happy when it creates jobs.
    Mr. Johnson. Well, you are a true gentleman and a scholar, 
and I have enjoyed our discourse today.
    Dr. Fleming. Yeah. Thank you.
    Mr. Johnson. And I long for the time when we can have this 
kind of discourse with all members of the administration as 
opposed to obfuscation and evasion and outright sometimes 
deception and lies. But thank you for your testimony today.
    Dr. Fleming. Thank you, sir.
    Mr. Johnson. And with that, I yield back.
    Ms. Titus. Thank you, Mr. Johnson.
    Before I yield to the ranking member, I just want to point 
out there have been a number of comments about the what if 
scenario about reorganizing or dissolving or spreading out the 
programs among other agencies. Know that there is no real 
appetite from this chair to move in that direction. We are much 
more interested in reauthorizing, improving, strengthening, and 
if anything, bringing some of those other grant programs under 
this umbrella. So just to be sure that we are clear there. Now 
I recognize the ranking member.
    Mr. Meadows. Thank you, Madam Chair.
    And so Dr. Fleming, let me kind of pick up where she just 
left off. I spoke to Ms. Norton as she was leaving, and I know 
she asked you to get to this committee how you would actually 
go through devolving and actually closing down, and I asked her 
if it was all right with her, and I would assume with the 
chairman as well, if it is all right with her if we go the 
other way.
    Here is what I would like to ask you to do. Instead of 
coming up with plan on how you won't exist, would you be 
willing to work with this committee and come up with a plan how 
to reform, expand, and consolidate some of those other 
programs? And I think that would be real helpful as we look at 
that if you are OK with that Madam Chair?
    Ms. Titus. That is exactly the point I was trying to make.
    Dr. Fleming. I would be very happy to. We would welcome 
that. As you know, our staff across the board, 200 of them, 
career staff who are very dedicated to the work that we do, 
they get up every morning looking for ways to do a better job, 
so we would be happy to work with you on that.
    Mr. Meadows. Well, I know that they don't know this, but I 
know that you have been bragging about them behind their backs, 
you know, just how unbelievably professional. And I didn't 
realize how disperse they were across the country. I mean, 
there was--and this is my fourth term, and you would have 
thought that I would have picked up on that just in the air, 
but thank you for pointing that out. Here is what I would ask, 
then. If you could work with your team to do that.
    The second part of it is I can't imagine any scenario where 
you do not get at least the same level of funding that you have 
gotten, you know. Unless things are going to take a huge U-
turn, you and I both know that the chances--while I applaud the 
fact that you are saying you are supportive of the President's 
budget and his initiative, I also know that the chances of 
their being no appropriations or a reduction are slim to none, 
you know.
    Candidly, I think if we look at that, and hopefully that is 
good news to the employees that work for you, and I am not 
asking you to comment on that. But as we look at this, here is 
what would be extremely helpful to me is I mentioned it in my 
opening remarks, a matrix on how we are successful. For me, I 
want to measure, and if I can measure and Chairwoman Titus can 
measure, then all of a sudden we can take that, regardless of 
who is in the White House and say here is why it is successful. 
Not just in generic terms in terms of a reform, but if you can 
help us come up with a matrix on how you are successful, are 
you willing to do that and get that to the committee?
    Dr. Fleming. Yes, sir. Not only are we willing, but we are 
capable, and again, we have a lot of data to show. Again, we 
are data-driven, so we don't want to talk in blue sky. We want 
to talk about what we are capable of doing as proof by history. 
So we would be, you know, excited to work with you on that.
    Mr. Meadows. One of the other areas I would ask you to look 
at, if you would, for us, is with regards to USDA which is 
obviously a different agency. When you think of economic 
development, all of a sudden what happens, it gets very gray 
when it gets to our congressional districts. I am in a rural 
part of North Carolina, as you know, but it can be an EDA 
grant, or it can be a USDA grant or a USDA loan.
    And, candidly, I get more calls about this particular 
project, and it could be a WRDA project. It could be--there are 
just so many different, and yet in the minds of local county 
commissioners and city officials, they see it as economic 
development. I mean, pure and simple.
    So if you can identify those areas that perhaps are not 
under the purview of the Commerce Department and how we could 
potentially identify those, that gets a much--it is much more 
difficult legislatively than just a reauthorization, but we 
would love to work with OMB to see how we can do that and 
streamline that so that it is a one-size-fits-all.
    I mean, when the Congresswoman was talking about the fact 
that she didn't have a problem with Commerce in terms of the 
distribution of money when all I have heard are about problems 
in Puerto Rico, I mean, you get an A. The rest get an F. And so 
what I want to do is take the good practices that you and a lot 
of your colleagues right behind you are having. If you can help 
us do that as well, are you willing to do that with this 
committee?
    Dr. Fleming. Yes.
    Mr. Meadows. Yes.
    Dr. Fleming. Very much so.
    Mr. Meadows. All right. With that, I yield back.
    Ms. Titus. Thank you.
    As you put together that data, would you include in there 
some of the staffing issues because I know you have only 
granted out about a quarter of the amount of money that was 
appropriated for disasters, and I think part of that may be 
because of lack of staffing, so that would be important 
information for us to have. I know some of the other agencies 
have special hiring authorities. EDA doesn't, but maybe as we 
reauthorize, that would be something to look at.
    Dr. Fleming. I would be happy to work with you on that.
    Ms. Titus. Thank you.
    Are there any other questions for this witness from the 
Members? If not, well, we thank you very much, Dr. Fleming, for 
being here, and we look forward to working you to save and 
improve this agency, not dissolve it.
    Dr. Fleming. Thank you very, very much, Chairwoman Titus, 
and Ranking Member Meadows. And again, I miss you guys. I wish 
I could be back on the floor voting with you, but I am having a 
lot of fun here at EDA as well.
    Mr. Meadows. You were about to say you are having a better 
time.
    Dr. Fleming. You know me too well, Mark.
    Ms. Titus. I won't tell Mr. Johnson that. Thank you.
    We will ask for the second panel to please join us at the 
table. Thank you very much.
    Welcome to the subcommittee hearing. We would like to 
introduce the members of our second panel. Mr. Kevin Byrd, 
executive director for the New River Valley Regional Commission 
who is here on behalf of the National Association of 
Development Organizations. Welcome.
    The Honorable John Messner who is vice chairperson, 
District 1 commissioner, Gunnison County, Colorado, Board of 
Commissioners. Our commissioner is here on behalf of NACo, 
National Association of Counties.
    Mr. Mark Muro, policy director and senior fellow at 
Brookings, and Mr. Rodrick Miller, chief executive officer, 
Invest Puerto Rico, on behalf of the International Economic 
Development Council. Thank you all very much. We look forward 
to hearing from you.
    Without objection, our witnesses' full statements will be 
included in the record. And as with the previous panel, since 
your written testimony is part of the record, we would ask that 
you limit your oral testimony to just 5 minutes and kind of sum 
up for us.
    Before we hear from you all, I would like to recognize the 
gentlelady from Puerto Rico, Miss Gonzalez-Colon, to further 
introduce Mr. Miller.
    Miss Gonzalez-Colon. Thank you, Madam Chair, and I will say 
that I don't mind if the microphone gets bad because I just get 
upgraded here.
    I want to just extend--thank you for extending me the honor 
of introducing Mr. Rodrick Miller. He is the chief executive 
officer of Invest Puerto Rico. He is charged with carrying out 
a nonprofit mission to attract new businesses and investment 
capital to the island. This is basically a new job he just got 
after Act 13-2017 provided in Puerto Rico to have Invest Puerto 
Rico which is a nonprofit organization created to promote 
Puerto Rico as a competitive investment jurisdiction and to 
attract new businesses and capital investment to the island.
    Mr. Miller has recently joined this team after working as 
the president and CEO of the Detroit Economic Growth 
Corporation. He has also worked for the New Orleans Business 
Alliance for Economic Development, the Baton Rouge Area 
Chamber, the Greater Phoenix Economic Council, and was the 
economic development administrator of the city of Glendale, 
California.
    During his career, Mr. Miller has played a leading role in 
a diversity of projects ranging from the attraction of 
Microsoft regional headquarters to Detroit, helping structure 
transaction leading to significant real estate development such 
as the Outlets at the Riverwalk in New Orleans, and Coyotes 
Stadium in Phoenix, Arizona. I want to thank him for such an 
important task and I look forward to hearing his vision for 
Puerto Rico.
    And thank you for coming for the committee, and Madam 
Chair, for allowing me to introduce him.
    Ms. Titus. Well, thank you for that introduction.
    Mr. Miller, first Katrina, now Puerto Rico. You are just a 
storm follower; is that what you are? Thank you for being here.
    Mr. Meadows. He may be the causal effect of that.
    Ms. Titus. We will start with you, Mr. Byrd. Thank you.

 TESTIMONY OF KEVIN BYRD, EXECUTIVE DIRECTOR, NEW RIVER VALLEY 
 REGIONAL COMMISSION, ON BEHALF OF THE NATIONAL ASSOCIATION OF 
DEVELOPMENT ORGANIZATIONS; HON. JOHN MESSNER, VICE CHAIRPERSON, 
 DISTRICT 1 COMMISSIONER, GUNNISON COUNTY, COLORADO, BOARD OF 
    COMMISSIONERS, ON BEHALF OF THE NATIONAL ASSOCIATION OF 
    COUNTIES; MARK MURO, POLICY DIRECTOR AND SENIOR FELLOW, 
 BROOKINGS INSTITUTION; AND RODRICK T. MILLER, CHIEF EXECUTIVE 
  OFFICER, INVEST PUERTO RICO, ON BEHALF OF THE INTERNATIONAL 
                  ECONOMIC DEVELOPMENT COUNCIL

    Mr. Byrd. Good afternoon, Madam Chairwoman Titus, and 
Ranking Member Meadows and members of the committee. I really 
appreciate the opportunity to join you today and testify on 
behalf of the importance of the Economic Development 
Administration in my community, my region, and our Nation.
    My name is Kevin Byrd. I am the executive director of the 
New River Valley Regional Commission. We are based in Radford, 
Virginia. We are a governmental agency that is dedicated to 
facilitating economic and community development and regional 
collaboration.
    My professional experience includes more than 15 years in 
community development and over 9 years in my current role. I 
also serve on the board for the National Association of 
Development Organizations known as NADO. NADO is an association 
that represents hundreds of other regional development 
organizations like mine across the country. These organizations 
serve as catalysts for regional economic development, public-
private partnerships, and strategic initiatives designed to 
fulfill locally identified priorities.
    Today I will address four key issues pertaining to the 
Economic Development Administration. First, I will explain the 
significance of EDA to my community and my region. Second, I 
will highlight the significance of EDA's national impact. 
Third, I will reiterate the importance of EDA's planning grants 
to economically distressed regions. And finally, I will 
underscore the importance of reauthorizing EDA and recommend 
opportunities for reforms and enhancements of EDA.
    So I will begin by highlighting the significance of EDA to 
my community and my region. My organization is comprised of 13 
local governments and 3 institutions of higher education. We 
act as a convener across all sectors in four counties and the 
city in southwest Virginia.
    EDA investments have had a tremendous impact on my region 
as they supported many successful government economic 
development projects, including one that I will highlight for 
you today. That is Virginia Tech Corporate Research Center.
    EDA made one of the first investments in the Virginia Tech 
Corporate Research Center which specializes in technology 
transfer from university research. EDA invested $600,000 in the 
late 1980s and also invested $2 million in 2009 to support a 
second phase of development. Today the Corporate Research 
Center is comprised of more than 180 high-tech firms and 
research centers and employs more than 3,000 people.
    In my role as first vice president of NADO's board, I work 
with the executive directors of similar organizations, across 
the country, who have regions that have benefitted immensely 
from job growth brought about by EDA investments.
    This brings me to my second core topic I would like to 
highlight for you today, the significance of EDA's national 
impact on economic growth. Between fiscal year 2012 and fiscal 
year 2017, EDA has invested over $1.6 billion in 4,058 projects 
to help communities and regions build capacity for economic 
development. In return for this investment, it is anticipated 
277,163 jobs will be created or retained, and more than $39 
billion in private investment will be attracted, according to 
recipient estimates. EDA's portfolio of programs allow 
communities to apply for assistance as a tailored fit to meet 
their unique needs.
    I also want to emphasize that EDA is the only Federal 
agency with the sole mission of helping to create high-quality 
jobs in the United States. EDA already has in place an Economic 
Development Integration team that works across the Federal 
Government to align and strengthen programs.
    Another important component of EDA, the partnership 
planning grants awarded to economic development districts. 
These grants serve as essential building blocks. They are the 
backbone of successful projects that guide local, State, and 
Federal investments which directly lead to job creation and 
retention.
    EDA and its network of regional offices, integrators, and 
economic development districts across the country are well 
positioned to help communities navigate and take advantage of 
the opportunities in this program.
    Finally, I will ask you to take advantage of some 
opportunities for reforms and enhancements of EDA. I also 
encourage you to increase EDA's annual authorized funding 
level. I urge you to support a modernization of EDA's role and 
encourage you to elevate EDA as the key Federal partner helping 
economically distressed and rural communities keep pace with 
the technological advancement, automation, and economic shifts 
that occur as a result.
    EDA has been a key partner in helping communities develop 
comprehensive economic development strategies that facilitate a 
process of assessing distressed regions' changing economic 
drivers and helping them refocus their efforts on promising 
investments.
    I also want to highlight the importance of the loan 
services EDA offers for small businesses through the revolving 
loan fund program. The reporting requirements associated with 
it are particularly burdensome. Currently. RLF awards stay in 
Federal control in perpetuity. RLFs should be fully transferred 
to the local intermediary within a specified number of years 
after final disbursement of a grant, 7 years is our suggested 
duration. This is standard protocol by which other Federal 
agencies operate their RLF programs. I encourage the committee 
to support efforts to reform EDA's RLF in this manner.
    So in closing, EDA has a record of success and is an 
essential partner. Therefore, I encourage you to support 
reauthorization and continued funding for the agency. Thank you 
again for the opportunity to address you today, and I look 
forward to answering your questions.
    [Mr. Byrd's prepared statement follows:]

                                 
Prepared Statement of Kevin Byrd, Executive Director, New River Valley 
     Regional Commission, on behalf of the National Association of 
                       Development Organizations
    Chairwoman Titus, Ranking Member Meadows, and members of the 
subcommittee, thank you for the opportunity to testify today on the 
importance of the Economic Development Administration (EDA) to my 
community, my region, and our nation.
    My name is Kevin Byrd, and I am the executive director of the New 
River Valley Regional Commission in Radford, Virginia. We are a public 
government entity dedicated to facilitating economic and community 
development and regional collaboration. My professional experience 
includes more than 15 years in community development, including 9 years 
in my current position.
    I also serve as a board member of the National Association of 
Development Organizations, known as NADO. NADO is an association that 
represents hundreds of other Regional Development Organizations like 
mine across the country. These organizations serve as catalysts for 
regional economic development, urban and rural planning, public-private 
partnerships, and strategic initiatives designed to fulfill locally-
identified priorities. They also collectively assist thousands of 
cities and counties across the country with economic development, 
workforce training, transportation planning, public infrastructure, 
affordable housing, disaster prevention, public health, and other 
community services.
    Today, I will address four core issues pertaining to the Economic 
Development Administration:
    1.  First, I will explain the significance of EDA to my community 
and my region.
    2.  Second, I will highlight the significance of EDA's national 
impact on regional development, job creation, and economic growth and 
competitiveness in communities across the country.
    3.  Third, I will reiterate the importance of EDA's planning grants 
to economically-distressed regions; and,
    4.  Finally, I will underscore the importance of reauthorizing the 
EDA, and I will recommend opportunities for reforms and enhancement of 
the EDA that could be accomplished via reauthorization.
    I will begin by highlighting the significance of EDA to my 
community and my region. My organization, the New River Valley Regional 
Commission, is comprised of 13 local governments and three institutions 
of higher education. My organization acts as a convener of local and 
state elected officials, economic development practitioners, business 
leaders, non-profit organizations, educators, and other stakeholders 
within a defined region that includes four counties and the city of 
Radford, Virginia. We serve the region by providing needed services and 
technical assistance, such as strategic planning, project development 
and implementation, and access to capital. We also help deploy needed 
federal, state, and local funds into the region, and we help to ensure 
compliance, accountability, and the timely implementation of projects.
    EDA investments have had a tremendous impact on my region, as they 
have supported many successful economic development projects, including 
two that I will highlight today: the Virginia Tech Corporate Research 
Center, and the New River Valley Commerce Park.
      EDA made one of the first investments into the Virginia 
Tech Corporate Research Center which specializes in technology transfer 
from University research. EDA invested $600,000 in the late 1980's, and 
also invested $2 million in 2009 to support a second phase of 
development. Today, the Virginia Tech Corporate Research Center is 
comprised of more than 180 private high-technology companies and 
research centers and employs more than 3,000 people. There are 35 
buildings currently in the park, with room for an additional 16 
buildings.
      Additionally, the New River Valley Commerce Park is a 
1,000+ acre, publicly-owned industrial site located in Pulaski County, 
Virginia just 30 minutes from Virginia Tech. A $3 million investment 
from EDA, along with local matching dollars from eleven local 
governments helped provide a water line, pump station upgrades, and 
other infrastructure ultimately allowing one million gallons of water 
per day to be delivered to the site. The first tenant of the New River 
Valley Commerce Park is Red Sun Farms, the largest producer of organic 
tomatoes on the east coast. Today, Red Sun Farms employs more than 100 
employees at an average wage of $13.36 per hour, with a nearly $23 
million capital investment to date at the Commerce Park location. 
Currently, three new international prospects are considering the site.
    EDA's success stories extend far beyond my region. In my role as 
First Vice President on NADO's board, I work with the executive 
directors of similar organizations across the country whose regions 
have also benefitted immensely from job growth and community 
development brought about by EDA investments. Particularly in 
economically distressed areas of the country, EDA investments are 
essential.
    This brings me to the second core topic I'd like to highlight for 
you today: the significance of EDA's national impact on regional 
development, job creation, and economic growth and competitiveness in 
communities across the country.
    Between FY 2012 and FY 2017, EDA invested over $1.6 billion in 
4,058 projects to help communities and regions build capacity for 
economic development. In return for this investment, it is anticipated 
that 277,163 jobs will be created or retained, and more than $39 
billion in private investment will be attracted, according to recipient 
estimates.
    EDA's portfolio of public works, economic adjustment, strategy 
development, business finance, technical assistance, and research and 
evaluation programs allow communities to apply for assistance tailored 
to fit their unique needs. EDA has developed a strong record in 
assisting communities struggling to overcome both long-term economic 
challenges (such as persistent poverty) as well as sudden severe 
economic adversities (such as plant closures and industry loss). 
Through its full range of program tools, the agency is positioned to 
help areas recover from economic downturns, industry and military base 
closures and realignments, natural disasters, and declines in resource-
based industries like coal, fisheries, and timber.
    I also want to emphasize that EDA is the only federal agency with 
the sole mission of helping create high-quality jobs in the United 
States. And EDA investments are successful in fostering collaborations 
with the business leaders, and public-private partnerships with 
industry stakeholders. For these reasons, EDA is uniquely suited to be 
the lead federal agency driving economic development. EDA has in place 
the policy, program, and partnership framework necessary to drive 
federal economic development efforts forward in a strategic, 
coordinated, and efficient manner. Furthermore, EDA already has in 
place an ``Economic Development Integration'' (EDI) team that works 
across the federal government to align and strengthen programs, and to 
reduce duplication of federal programs and planning processes. EDA's 
integration team also helps to break through bureaucratic red tape and 
make the most of taxpayer money. EDA's integration team is yet another 
example of how EDA is already serving to lead economic development 
efforts across the federal government. I encourage this committee to 
support efforts to continue to elevate EDA as the lead agency 
coordinating all economic development efforts at the federal level.
    Another important component of EDA's investment at the local and 
regional levels is the Partnership Planning grants given to economic 
development districts. These grants serve as essential building blocks 
that are the backbone of successful investment projects, which 
ultimately lead to job creation and retention in our communities. The 
products of the planning process also serve as guiding documents for 
local and state investment. EDA's network of hundreds Economic 
Development Districts (EDDs) across the country have decades of 
experience in implementing strategic economic development planning. 
Furthermore, EDA and its network of regional offices, integrators, and 
EDDs across the country are well-positioned to help communities 
navigate and take advantage of the Opportunity Zones program, along 
with other new economic development resources, investments, and 
opportunities as they become available.
    Finally, for all these reasons, I stand before you today to 
encourage you to reauthorize the EDA. In doing so, I ask that you to 
take advantage of some opportunities for reforms and enhancement of the 
EDA's programs and impact that could be accomplished via EDA 
reauthorization.
    EDA was originally created by the Public Works and Economic 
Development Act of 1965. EDA continues to operate from year-to-year 
through the annual congressional appropriations process, but its last 
authorization lapsed in 2008. I stand before you today to encourage the 
committee to support a reauthorization of EDA that would further EDA's 
role as a key driver of long-term economic development and growth in 
communities across the country. I also encourage you to support an 
increase in EDA's annual authorized funding level.
    In tandem with a reauthorization of EDA, I also urge you to support 
a modernization of EDA's role in helping to bring economically 
distressed communities into the 21st century. I encourage you to 
elevate EDA as the key federal partner helping economically distressed 
and rural communities keep pace with technological advancement, 
automation, and the economic shifts that occur as a result. Although we 
all know that technological innovation helps move our nation forward 
and creates economic prosperity, we also know that these trends are 
leaving some parts of the country behind and are having a negative 
impact on many rural and economically distressed communities. EDA has 
been a key partner in helping these communities develop Comprehensive 
Economic Development Strategies (CEDS) that facilitate a process of 
assessing distressed regions' changing economic drivers and helping 
them refocus their efforts on investing in industries and workforce 
training efforts that help expand learning pathways and upskill workers 
to compete in the national economy.
    I also want to highlight the importance of the loan services EDA 
offers for small businesses. EDA's Revolving Loan Fund (RLF) program 
supports small businesses and entrepreneurs by providing gap financing 
at or below market rates. The RLF program is particularly beneficial to 
businesses that might not otherwise be able to borrow capital.
    While the EDA RLF program is important and highly beneficial to 
communities across the country, the reporting requirements associated 
with it are particularly burdensome. Currently, EDA RLF awards stay in 
federal control in perpetuity. As a result, recipients are required to 
comply with extensive federal reporting and audit requirements 
indefinitely, even if those funds were first capitalized decades 
earlier. In order to remedy this issue, ownership of EDA RLFs should be 
fully transferred to the local intermediary within a specified number 
of years after final disbursement of the grant (seven years is the 
suggested duration). This is a standard protocol by which other federal 
agencies' RLF programs operate. I encourage the committee to support 
efforts to reform EDA's RLF in this manner.
    As Congress considers proposals to rebuild our nation's 
infrastructure, support economically distressed and rural communities, 
facilitate disaster recovery, and invest in drivers of economic growth, 
EDA remains a strong resource to assist in these endeavors. EDA has a 
strong record of success and has been an essential partner, and I 
encourage you to support reauthorization and continued funding for the 
agency.
    Thank you again for the opportunity to address the subcommittee 
today, and I look forward to answering your questions.

    Ms. Titus. Thank you very much, Mr. Byrd.
    Mr. Messner.
    Mr. Messner. Chairwoman Titus, Ranking Member Meadows, 
distinguished members of the subcommittee, thank you for the 
invitation to testify today on EDA's role in economic 
development and recovery.
    My name is John Messner, and I am a commissioner from 
Gunnison County, Colorado. Today I am also representing the 
National Association of Counties, or NACo, which represents all 
of the Nation's 3,069 counties.
    Counties play a major role in financing, administering, and 
coordinating Federal workforce and economic development 
programs. This includes EDA, a key pillar of the Federal, 
State, and local partnership. EDA programs and grants are a 
catalyst to spur recovery and innovation in communities 
throughout the country, and they are uniquely tailored to meet 
local and regional needs and conditions.
    The bottom line is that EDA is a program that works on the 
ground. It is essential to helping communities transition from 
one economy to the next and helps to broaden local economic 
development efforts. It is successful because it gives us, the 
local communities, the tools and knowledge to help ourselves.
    Counties strongly believe the program should continue to be 
authorized and continuously funded. I have seen firsthand the 
difference the EDA can make in mitigating the economic downturn 
and in supporting efforts to create a stable and diversified 
county in Gunnison County. We simply did not have the resources 
to pursue such a transformational initiative without the 
assistance of the EDA.
    As a bit of a background, Gunnison County is a rural county 
with a population of just 16,000 residents on the western slope 
of the Rockies. The county encompasses 3,200 square miles, and 
78 percent of the county is considered public lands. We have 
long relied on a few key industries for our economic stability 
including coal mining, oil and gas production, and outdoor 
recreation.
    Unfortunately, both Gunnison and Delta Counties have 
recently faced a significant negative impact due to coal mine 
closures. Ten years ago, there were 4 operating coal mines in 
Gunnison and Delta Counties, employing over 2,000 workers. Now 
there is just 1 left which employs only 250 workers.
    Our communities, economies, and residents have struggled as 
these closures have limited job opportunities in the region. 
Gunnison County has worked to respond to these economic changes 
and diversify our economy, and without assistance provided by 
the EDA, we would still be facing intense economic 
difficulties. EDA's engagement, financing, and support have 
been critical to our economic revitalization following the coal 
mining industry downturn.
    In September of 2016, EDA awarded a $650,000 grant to 
Gunnison and Delta Counties to create a collaborative 
multiagency innovation center and laboratory called the 
Innovation, Creativity, and Entrepreneurship Lab or ICE Lab for 
short. In addition to the EDA funding, the project leveraged 
other State and local funding opportunities and partnered with 
Western Colorado University.
    The ICE Lab serves as a coworking space, a business 
incubator, and a business accelerator for local businesses. 
Most importantly, it has allowed entrepreneurs a place to 
access capital, resources, and other startups, incentivizing 
them to stay and grow in Gunnison County rather than moving 
elsewhere. This includes retaining recent graduates of Western 
Colorado University.
    The ICE Lab has contributed to the significant success of 
many businesses, several of which have expanded in just 2 
years. Most importantly, these businesses operate in an 
extremely diverse set of industries from construction to 
manufacturing to food and beverage industries. These businesses 
have created new jobs and diversified our economy and filled a 
gap, providing job opportunities for those who lost them due to 
changes in the energy industry.
    As I said earlier, without EDA's assistance, these changes 
and the ICE Lab would not have been possible. EDA and the ICE 
Lab have been the catalyst for this economic revival. Moving 
forward through partnerships with the Outdoor Industry 
Association and with other private nonprofit State and local 
partners, our county will remain a catalyst for industry and 
economic growth.
    Chairwoman Titus, Ranking Member Meadows, thank you for 
having me here today. Counties across the country urge your 
continued support for the Economic Development Administration 
which helps us build prosperity from the ground up at the 
local, regional, and national levels. Thank you again for the 
opportunity to testify today on behalf of NACo. We look forward 
to partnering with Congress moving forward. I would be happy to 
answer any questions. Thank you.
    [Mr. Messner's prepared statement follows:]

                                 
 Prepared Statement of Hon. John Messner, Vice Chairperson, District 1 
  Commissioner, Gunnison County, Colorado, Board of Commissioners, on 
             behalf of the National Association of Counties
    Chairwoman Titus, Ranking Member Meadows and distinguished members 
of the subcommittee, thank you for the opportunity to testify on 
``Building Prosperity: EDA's Role in Economic Development and 
Recovery.'' The U.S. Department of Commerce Economic Development 
Administration (EDA) and its programs are vital for economic recovery, 
expansion and job creation to counties across the country, facilitating 
economic and job growth at both the local and regional levels.
    My name is John Messner and I am a commissioner from Gunnison 
County, Colorado. I am in my third year as county commissioner and 
prior to that had been a member of the Gunnison County Planning 
Commission for six years during a period of both economic uncertainty 
and great opportunity. I also serve on the National Association of 
Counties (NACo) Environment, Energy and Land Use Policy Steering 
Committee, and I am glad to be representing NACo here today.
                        about america's counties
    Counties are highly diverse, not only in my state of Colorado, but 
across the nation, and vary immensely in natural resources, social and 
political systems, cultural, economic and structural circumstances, and 
public health and environmental responsibilities. Counties range in 
size from 26 square miles to 87,860 square miles and have populations 
varying from just under 100 residents to close to ten million people. 
As we like to say, if you've seen one county, you've seen one county.
    Meanwhile, our responsibilities are often mandated by both the 
states and federal government. In many states, we are responsible for 
public health, child welfare, consumer protection, economic 
development, employment and workforce training, emergency management, 
land use planning, zoning and environmental protection.
    A key component of these responsibilities is local and regional 
economic and workforce development. Every day, we are tackling 
challenges such as unemployment and underemployment and we develop 
local economic growth strategies. In fact, according to a 2014 NACo 
workforce survey, 84 percent of counties have formed workforce training 
partnerships with local chambers of commerce, cities, state governments 
or regional economic development organizations. The same survey showed 
that more than 90 percent of counties participate in economic 
development activities, including workforce development, business 
recruitment and retention, regional marketing, small business support 
and infrastructure investments.
    Counties also play a major role in financing, administering and 
coordinating federal workforce and economic development programs. This 
includes EDA, a key pillar of the federal, state and local partnership.
                      about gunnison county, colo.
    Gunnison County is a rural county with a population of just over 
16,000 residents in the southwest part of Colorado, about 200 miles 
from Denver. The county encompasses 3,200 square miles--it is one of 
the largest in the state--and 78 percent of the county is considered 
public lands. The county has long relied on a few key industries for 
economic stability, including coal mining, oil and gas production, 
outdoor recreation, tourism and timber development. The county also has 
a ski resort and a university, Western Colorado University, which is an 
integral part of our workforce development initiatives.
              economic downturn in gunnison county, colo.
    Both Gunnison County and our neighboring county, Delta County, were 
heavily reliant on the coal mining industry and have faced significant 
negative economic impacts due to coal mine closures. In fact, the 
region has lost 75 percent of the mining jobs in the area in just the 
past few years. Ten years ago, there were four operating coal mines in 
the North Fork region of Gunnison and Delta Counties, which employed 
over 2,000 workers. Now, there is just one operating coal mine left, 
and even it has significantly reduced operations and workforce 
opportunities to the point where it is only employing approximately 250 
individuals. We estimate that over the last ten years our two counties 
have lost over 1,700 well-paying jobs, significantly impacting the 
families and the communities in which these workers lived. The closures 
of these mines occurred for several reasons, but primarily it was due 
to the competition with natural gas production which in current markets 
has been used as a less expensive resource for electricity generation.
    These closures have also negatively impacted tax revenues, which in 
turn impact the county's ability to advance an economic development 
strategy for the region. Following the closures, many of the residents 
struggled to find new job opportunities matching their career skills.
    We worked to respond to these economic changes by developing a more 
diversified economy. The county needed a stable and high-wage 
alternative to the mining industry that had previously dominated the 
area. However, we faced resource constraints at both the county and 
regional level. Without the assistance provided by EDA, Gunnison County 
would still be facing intense economic difficulties.
              eda grant project in gunnison county, colo.
    EDA's engagement, financing and support have been integral to our 
economic revitalization following the coal mining industry downturn. 
Realizing the need to diversify and stabilize our economy in order to 
ensure resiliency moving forward, the county engaged a process called 
the One Valley Prosperity Project, with the goal to identify strategies 
and funding mechanisms to engage in economic gardening and build upon 
the entrepreneurial spirit we knew was inherent in our community. In 
September 2016, EDA awarded a $650,000 grant to Gunnison County and 
City to create a collaborative, multi-agency innovation center and 
laboratory, called ``The ICELab'' (Innovation, Creativity, 
Entrepreneurship Lab), on the campus of Western Colorado University.
    Through the ICELab, local businesses and entrepreneurs would have a 
space to collaborate, compete for funding and have access to a work 
space, allowing local businesses to grow and create new jobs in the 
region. The ICELab was specifically funded through EDA's Partnerships 
for Opportunity and Workforce and Economic Revitalization (POWER) 
Initiative. POWER is a coordinated effort, involving multiple federal 
agencies, with the goal of aligning federal economic and workforce 
development programs with local resources to assist communities 
negatively impacted by changes in the coal industry and power sectors.
    Additional partners were brought on to leverage the grant provided 
by the EDA, including the state of Colorado, Western Colorado 
University, both Gunnison and Delta Counties, the City of Gunnison and 
the Gunnison/Crested Butte Tourism Association.
    The ICELab operates as a three-prong initiative by providing:
      A coworking space, which provides opportunities for 
people with different skills and expertise to work together in a shared 
space
      A business incubator, where different entrepreneurs and 
businesses can rent space and receive business coaching and resources, 
bringing together people with entrepreneurial ideas in a collaborative 
environment, and
      An accelerator program, where four to six organizations 
compete for a grant to participate in a twelve-week intensive training 
program for businesses that want to take their ideas to the next level 
and build their profile.
    Businesses within the ICELab are in all stages of development. Many 
are up and running and starting expansion after more than two years 
with the ICELab, growing their local economic footprint and adding new 
jobs in the process. Additionally, many entrepreneurs are generating 
business venture ideas, which have enticed young adults and college 
students to stay in the region following their graduation. Western 
Colorado University also plays an integral role in providing workforce 
development and education opportunities by coordinating with 
organizations throughout the region to bolster small business growth.
    In just two years, the ICELab has already generated several 
entrepreneurial success stories, helping boost new companies and expand 
existing businesses in a variety of sectors. The lab helped grow a 
local company developing hardware equipment for the fire-fighting 
industry and furthered the development of an invention that automates 
irrigation water pipelines on farms. The ICELab's success also extends 
to the food and beverage industry, as a hand-crafted coffee business 
headquartered in Gunnison County significantly expanded its regional 
reach by engaging with the lab's services and opportunities.
    Another outgrowth of the business incubator is the development of a 
second incubator in the region, in partnership with the Outdoor 
Industry Association and AIM Media, focused specifically on outdoor 
recreation. This has both enhanced entrepreneurial interests in the 
region and spurred different businesses to consider locating branches 
or headquarters in the region. In fact, through the EDA grant, Gunnison 
County and the broader region have now developed a robust pipeline of 
business start-ups and private sector investments by fostering 
collaborative innovation projects.
    We simply did not have the resources to pursue this type of 
transformational initiative and economic development without the 
assistance of EDA. EDA investments in our region, coupled with local 
and state funds, launched a robust economic recovery and job expansion 
in our community.
            eda programs benefit counties across the country
    Since 1965, EDA has worked with local and regional stakeholders to 
address the fundamental building blocks for economic growth: 
infrastructure investment, business development, loans and financing, 
regional innovation strategies and public-private partnerships.
    Counties strongly support EDA because the program focuses 
investments in the nation's most distressed areas, especially those 
suffering sudden or severe economic downturns. EDA's grants are 
particularly critical for rural areas, where resources for economic 
development can be scarce. Grants are awarded on a competitive basis, 
based on regional comprehensive economic development strategies (CEDs), 
and are developed and prioritized by local communities. This helps 
ensure that projects have significant local support and are part of a 
broader regional plan, rather than isolated, uncoordinated local 
projects. Through local and regional partnerships, counties and EDA are 
well-positioned to collaborate to address economic challenges impacting 
communities.
    One major use of EDA grants for counties is for water and 
infrastructure projects. In one instance, McDowell County, West 
Virginia received an EDA award of $1.75 million to the McDowell County 
Public Service District to support the replacement of antiquated water 
systems installed in the early 1900s. Prior to the EDA grant, water 
access and quality had been a major concern for the county of 27,000 
people, and the new project will benefit residents, several commercial 
businesses and government offices in the area that currently rely on an 
inadequate and unsafe water supply. The system replacement will serve 
as the catalyst for development and economic diversification in a 
region also severely impacted by the decline in the coal industry by 
supporting job retention, creating new employment opportunities and 
attracting private investments to the area. The county estimates that 
these investments will help create 99 jobs, save 65 additional jobs and 
leverage $1 million in private investment.
    EDA also has a long history of successfully supporting disaster 
recovery and resiliency efforts by facilitating the timely and 
effective delivery of federal economic development assistance to 
recovery planning, redevelopment and resiliency. EDA is uniquely 
positioned to coordinate regional disaster recovery efforts in 
partnership with its extensive network of Economic Development 
Districts (EDDs), university centers, institutions of higher education 
and other partners in designated impact areas.
    For example, following Hurricane Irma in 2017, EDA awarded $80,000 
in 2018 Disaster Supplemental funds to Hendry County, Florida to fund 
the Hendry County Community Fiber Optic broadband study, which will 
eventually provide fiber optic broadband infrastructure across the 
county. Results of this study will provide essential information to 
support the region's effort in building a broadband system, which will 
help to both diversify the Hendry County economy and increase its 
resiliency against future natural disasters. This resiliency also helps 
ensure businesses remain in the county and continue to grow throughout 
the region.
                             in conclusion
    EDA is proven to be an effective program for counties, communities 
and regions to aid in economic development and job creation. EDA 
programs and grants are a catalyst to spur recovery and innovation in 
communities, and they are uniquely tailored to meet local and regional 
needs and conditions. I have seen firsthand the difference EDA can make 
in mitigating economic downturns and in supporting our efforts to 
create a stable and diversified economy in Gunnison County.
    EDA is a program that works on the ground, is essential to helping 
communities transition from one economy to the next and helps to 
broaden local economic development efforts. It is successful because it 
gives us, the local communities, the tools and knowledge to help 
ourselves, and counties strongly believe the program should continue to 
be reauthorized and continuously funded.
    Chairwoman Titus and Ranking Member Meadows--thank you for having 
me here today. We appreciate your attention to this vital program, and 
I urge your continued support for the Economic Development 
Administration which helps build prosperity from the ground up at the 
local, regional and national levels.
    Thank you again for the opportunity to testify today on behalf of 
America's 3,069 counties. I would be happy to answer any questions.
                               resources
      https://www.eda.gov/annual-reports/fy2016/states/co.htm
      http://crestedbuttenews.com/2019/03/icelab-accelerator-
goes-national/
      https://icelab.co/

    Ms. Titus. Thank you, Mr. Messner.
    Mr. Muro.
    Mr. Muro. Chair Titus, Ranking Member Meadows, members of 
the committee, thanks so much for having me here to testify 
today on the continuing importance of the EDA and especially on 
an important new possible role that it needs to shoulder.
    As it stands, the agency plays an essential role in 
supporting economic adjustment as we have heard today and 
resilience at local places large and small, urban and rural, 
amid constantly changing conditions. For that reason, it not 
only merits reauthorization but its budget needs to be 
increased, I would say, and yet, while the Commerce 
Department's EDA remains invaluable in its current mission, it 
is my view that the agency's reach and responsibilities also 
need to grow in response to a new issue, the opportunities and 
challenges for people and places associated with the spread of 
powerful new technologies, especially automation and increasing 
artificial intelligence.
    That is why I want to argue that in reauthorizing the 
agency, policymakers should also broaden the EDA's mission and 
budget to include a concern about the impact of automation on 
local communities. The need for EDA attention to automation and 
AI follows from the breadth of these technologies' reach 
combined with their uneven impact which stem from the tendency 
to amplify the productivity of skilled work and substitute, 
that is, do away with, rote or routine work. These uneven 
effects across work and tasks also lead to uneven effects 
across places, and in many ways, share a lot in common with 
foreign competition, factory shutdowns, and corporate 
restructuring, other threats to communities that are part of 
the EDA's recognized mission.
    How this is playing out specifically in places is something 
we have looked at at Brookings with a recent research report 
called ``Automation and Artificial Intelligence: How Machines 
are Affecting People and Places.'' It shows we look both 
backwards and forwards in our research. What do we find? We 
have overall found that the future shouldn't be cataclysmic in 
aggregate. Only about one-quarter of people's jobs may be 
threatened and face high exposure. However, that is 36 million 
jobs that could be jeopardized. And meanwhile, there is a lot 
of dislocation associated with this, and that dislocation will 
frequently be in the kinds of places that EDA currently serves.
    Specifically, our work looks at the geography of where 
these impacts will hit hard, and we see special impacts in 
heartland States, smaller cities and towns, and in rural 
America. We find specifically that the automation exposure 
tasks reaches or achieves 50 percent of all the work in no less 
than 43 of the Nation's metropolitan areas in some 560 rural 
counties. Please check out my written testimony for maps and 
statistical detail on this including data cut to your own 
district so you can take a look at how this is playing out 
there.
    The upshot is that while technology will surely benefit the 
Nation in aggregate and in its best educated urban centers, its 
disparate local effects will likely hit home in disruptive, 
locally varied ways that may disrupt labor markets, could 
depress hiring, and necessitate arduous community transitions 
in our smaller communities.
    So how should you as members of this committee think about 
this? A few things come to mind. To begin with, the EDA should 
be reauthorized, and it should be significantly expanded, so 
making that major commitment is critical.
    But a few other things. I recommend that the 
reauthorization explicitly name automation as an economic 
disruption eligible for EDA economic adjusted assistance.
    A few other things. Reaffirm the EDA's commitment to 
regional full employment, especially to facilitate worker 
adjustment in hard-hit communities. Require the CEDS 
[Comprehensive Economic Development Strategy] plans. 
Incorporate analysis of emerging technologies' impacts on local 
people, firms, and economy. This is an important thing for 
communities to be thinking about looking forward. Empower EDA 
to launch or participate in an interagency program to help 
communities implement these kinds of strategies, and even 
expand the scope of the Trade Adjustment Assistance for Firms 
program to help companies adapt.
    Chair Titus, Ranking Member Meadows, EDA has steadily 
evolved over the years to respond to a steady series of 
unfolding national concerns. Now automation inroads are hitting 
home with special force among many of the EDA's historic 
partners in heartland America.
    Likewise, many of the agency's existing tools are highly 
relevant for helping such communities. Given that, the upcoming 
reauthorization holds out a great opportunity for Congress to 
help America's people and places contend with a very tricky 
issue that is a great challenge for regions. Thank you so much 
for having me.
    [Mr. Muro's prepared statement follows:]

                                 
  Prepared Statement of Mark Muro, Policy Director and Senior Fellow, 
                         Brookings Institution
 promoting resilience: how the economic development administration can 
              help communities make the best of automation
    Chairman DeFazio, Ranking Member Graves, and Members of the 
Committee:
    Thank you for inviting me to testify today on the continuing 
importance of the Economic Development Administration (EDA) and, 
especially, on an important new role that it needs to shoulder.
    As it stands, the agency plays an essential role supporting 
economic adjustment and resilience in local places large and small, 
urban and rural, and amidst constantly changing conditions. And yet, 
while the Commerce Department's EDA remains invaluable in its current 
mission, it is my view that the agency's reach and responsibilities 
need to now grow to encompass the opportunities and challenges for 
people and places associated with the spread of powerful new 
technologies--particularly, automation and, increasingly, artificial 
intelligence.
    While local economic disruption is what the agency addresses, it is 
not now formally tasked to support communities being affected by 
technology-based disruption, which is now being recognized as one of 
the most significant sources of current and future community distress.
    Along these lines, my testimony--based on new research from my 
group at Brookings--initially affirms the importance of the EDA before 
turning to the new issue of automation. At that point, my narrative 
focuses on:
      The nature and spread of automation
      The particular geographical stamp of its impacts
      The relevance of a modernized EDA in mitigating some of 
the most troublesome local side-effects of these technologies.
    Overall, I argue that in reauthorizing the agency, policymakers 
should broaden the EDA's mission to include a concern about the impact 
of automation on local communities. More specifically, I suggest that 
the reauthorization explicitly name automation as an economic 
disruption eligible for economic adjustment assistance.
    The remainder of this testimony elaborates on these conclusions and 
related points. I also am attaching our recent comprehensive study of 
recent and near-future automation trends and needed responses, as well 
as data on the significant levels of projected automation-related task 
disruption expected in committee members' districts.
                              introduction
    Even as it is currently charged and operating the EDA has a 
compelling mission that is only getting more important--and that merits 
reauthorization.
    As the only federal government agency focused exclusively on 
regional economic development, the agency plays a critical role in 
fostering economic resilience in communities in an era of disruption.
    In this respect, the EDA has for 54 years endeavored to help local 
communities alleviate conditions of economic distress by providing 
public works investment, planning grants, technical assistance, 
adjustment aid, and other supports.\1\
---------------------------------------------------------------------------
    \1\ Ernest Boyd, ``Economic Development Administration: A Review of 
Elements of Its Statutory History.'' (Washington: Congressional 
Research Service, 2011).
---------------------------------------------------------------------------
    As such, the agency--while constantly under-funded and facing 
uncertainty about its future--has been on the front lines of deploying 
a flexible set of tools to respond to an intensifying proliferation of 
economic challenges in communities, including foreign competition, 
factory shutdowns, corporate restructuring, base closures, natural 
resource depletion, changes in energy markets, and natural disasters.
    In this way, the EDA has become the nation's principal government 
resource for supporting community adjustment in an era of dislocation.
    Yet there is now evidence that the amount of distress that 
confronts the EDA is growing--and changing. The recent Great Recession 
was the most dire and prolonged economic crisis for smaller cities, 
towns, and rural areas since the Depression. And the number and scale 
of weather-induced natural disasters appear to be increasing, with 
catastrophic implications for regions.\2\
---------------------------------------------------------------------------
    \2\ See Brian C. Thiede and Shannon M. Monnat, ``The Great 
Recession and America's Geography of Unemployment,'' Demographic 
Research, 2016; USGCRP, Climate Science Special Report: Fourth National 
Climate Assessment, Volume I, (Washington, DC: U.S. Global Change 
Research Program, 2017).
---------------------------------------------------------------------------
    And beyond that, a significant body of research literature--
including my own at Brookings--suggests that emerging digital 
technologies, including various forms of automation and artificial 
intelligence (AI), have introduced a new type of disruption into the 
nation's economic geography.\3\
---------------------------------------------------------------------------
    \3\ Mark Muro, ``Countering the Geographical Impacts of Automation: 
Computers, AI, and Place Disparities.'' (Washington, DC: February 14, 
2019). See also Mark Muro, Rob Maxim, and Jacob Whiton, ``Automation 
and Artificial Intelligence: How Machines are Affecting People and 
Places.'' (Washington, DC: Brookings Institution, 2019); Clara 
Hendrickson, Mark Muro, and William Galston: ``Counter the Geography of 
Discontent: Strategies for Left-Behind Places.'' (Washington, DC: 
Brookings Institution, 2018); and Paul Beaudry, Mark Doms, and Ethan 
Lewis, ``The IT Revolution at the City Level: Testing a Model of 
Endogenous Biased Technology Adoption,'' NBER Working Paper No. 12521.
---------------------------------------------------------------------------
    Most evident to date have been machine-driven dynamics that amplify 
the ability of skilled workers to add value, substitute for rote work, 
and inject winner-take-most--or ``superstar''--dynamics into 
markets.\4\ These trends have brought about growth surges in big, techy 
cities with the ``right'' skills and industries (think of New York, 
Washington, and the Bay Area) that have been accompanied by drift 
elsewhere. As a result, rising superstar places are now pulling away 
from the rest of America, leaving many smaller or rural communities 
with the ``wrong'' industries and skills in distress.
---------------------------------------------------------------------------
    \4\ See Enrico Moretti, The New Geography of Jobs, (New York, NY: 
Houghton Mifflin Harcourt, 2013) as well as Richard Florida, The New 
Urban Crisis, (New York, NY: Basic Books, 2017). See also Mark Muro, 
Jacob Whiton, and Sifan Liu, ``Online giants must accept responsibility 
for impacts on the physical world,'' The Avenue, January 8, 2018; Clara 
Hendrickson, Mark Muro, and Bill Galston, ``Mitigating the geography of 
discontent,'' LSE Business Review, December 10, 2018; David H. Autor, 
Frank Levy, and Richard J. Murnane, ``The Skill Content of Recent 
Technological Change: An Empirical Exploration,'' The Quarterly Journal 
of Economics, 2003; James Manyika, Sree Ramaswamy, Jacques Bughin, 
Jonathan Woetzel, Michael Birshan, and Zubin Nagpal, `` `Superstars:' 
The Dynamics of Firms, Sectors, and Cities Leading the Global 
Economy.'' McKinsey Global Institute Discussion Paper, October, 2018; 
Sherwin Rosen, ``The Economics of Superstars,'' The American Economic 
Review, 1981.
---------------------------------------------------------------------------
    Central to these dynamics, including the problems of the ``places 
left behind,'' are the disruptive impacts of automation, which boosted 
star places but hit smaller, less-educated Heartland communities hard.
    All of which suggests the need to add another item to the list of 
local economic dislocations that the EDA addresses: the fact that 
automation and AI, for all of their positive benefits for some, are 
injecting quantifiable negative impacts into many other, often-smaller, 
local communities. Pushing back against this challenge needs to become 
a new, explicit priority of the EDA as it continues to evolve with the 
economy and American communities.
                        the automation challenge
    The need for EDA attention to automation and AI follows from the 
breadth of the technologies' reach combined with their uneven impacts, 
which in turn stem from their tendency to amplify the productivity of 
skilled work and ``substitute'' for rote or ``routine'' work.\5\ These 
uneven effects across tasks, occupations, workers, and industries have 
hit home in disparate ways across communities in very much the same way 
as have such recognized EDA concerns as foreign competition, factory 
shutdowns, or corporate restructuring.
---------------------------------------------------------------------------
    \5\ Muro, Maxim, and Whiton, ``Automation and Artificial 
Intelligence.''
---------------------------------------------------------------------------
    How is this playing out specifically, in places? Brookings' recent 
research and policy report ``Automation and Artificial Intelligence: 
How Machines Are Affecting People and Places'' shows how with both a 
``backward-looking'' analysis of national occupational trends in the 
``IT'' era of automation from 1980 to now and a ``forward-looking'' 
analysis of the coming ``AI'' phase of automation.\6\
---------------------------------------------------------------------------
    \6\ Ibid.
---------------------------------------------------------------------------
    Informed by data and procedures derived from those of MIT economist 
David Autor, our backward-looking research suggests that while the 
first era of digital automation from 1980 until now did not bring mass 
unemployment (in fact 54 million new jobs were created) it did bring 
traumatic dislocation as well as wider job gains.
    Most notably, the period brought a painful ``hollowing out'' of the 
labor market, which resulted from reduced demand for ``mid-skill,'' 
``routine,'' or repetitive work given machine substitution for such 
tasks.
    As the chart below suggests, in fact, it is very clear that the 
rapid adoption of automation throughout the economy caused both 
employment growth and wage progress to slump or cease in the middle of 
the skill distribution for middle-wage occupations like production and 
clerical workers. Only at the high and low ends of the skill 
distribution did employment and wages grow. Our research confirms, 
then, that the expansion of IT-powered automation in the decades after 
1980 helped disrupt millions of ``routine'' middle-skill jobs, forcing 
large shifts of workers into low-wage service employment as robots and 
computers substituted for factory and clerical work even as it 
supported gains at the top and bottom.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Nor were these effects evenly dispersed across the country. By 
mapping the local incidence of ``routine'' or repetitive work in 1980 
we are able to depict the geography of automation disruption as it 
played out over the last four decades.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    The map is clear. Whereas routine work was spread widely throughout 
the country at the onset of the automation era, it was not spread 
evenly.
    And so what has followed in the last 35 years has also been uneven. 
With widespread adoption of industrial robots and the personal computer 
(PC) came a traumatic, locally variable disruption of middle-wage 
employment combined with a massive shift of middle-skilled, often non-
college-educated workers into lower-wage service activities. Notably, 
manufacturing and office administration-oriented regions--areas of the 
Midwest, Northeast, South, and West Coast with the highest 
concentrations of routine employment--were also the places that saw the 
largest shift to low-wage service employment in the information age.
    In sum, the first era of digital automation has not been spatially 
neutral. The places with the largest exposure to routine work--such as 
Detroit with its auto factories or New York with its millions of 
clerical workers--saw some of the greatest increases of lower-skill 
service employment in the IT era. Their relatively large routine, 
middle-skill workforces came under special pressure from automation. 
Conversely, metro areas with lower shares of routine employment--like 
Raleigh, North Carolina, with its universities and hospitals--saw less 
dramatic labor market transitions.
    But that's the initial IT era of automation. Now the IT era is 
transforming into an AI era pervaded by more powerful digital 
technologies such as machine learning and other forms of artificial 
intelligence.\7\ Which raises the question: What will the next phase of 
the interplay between automation and employment look like?
---------------------------------------------------------------------------
    \7\ See, for example, Darrell West and John Allen, ``How Artificial 
Intelligence is Transforming the World.'' (Washington: Brookings 
Institution, 2018) and Chris Meserole, ``What Is Machine Learning?'' 
(Washington: Brookings Institution, 2018).
---------------------------------------------------------------------------
    To shed some light on this, my group worked further with economist 
Ian Hathaway--a Brookings non-resident senior fellow--to analyze future 
trends in the AI phase of automation using estimates provided by the 
McKinsey Global Institute of occupational susceptibility to automation 
over the next few decades. (For more on our method see our paper).\8\
---------------------------------------------------------------------------
    \8\ Muro, Maxim, and Whiton, ``Automation and Artificial 
Intelligence.''
---------------------------------------------------------------------------
    Once again, we linked national information on automation's 
projected impact on task types and occupations to information on the 
occupational mix of local geographies to assess potential employment 
outcomes in states and metropolitan areas.
    What did we find? Looking at data that incorporates projections of 
AI's influence, the picture of future impact on occupation--and, in 
turn, on geography--appears a bit different from that of the earlier 
period.
    To be sure, the overall effects of automation we anticipate look 
set to again be wrenching but not cataclysmic in aggregate. That only 
25 percent of U.S. employment will face ``high'' exposure to automation 
(with 70 percent of current tasks at risk of substitution in the next 
few decades) seems manageable in aggregate. Likewise, it is reassuring 
that only about 6 percent of workers with a bachelor's degree face high 
automation threats in the coming decades. All of which leaves aside the 
likely creation of many new jobs supported by new productivity.
    However, even the 25 percent total job disruption figure amounts to 
36 million jobs that will incur significant upheaval in the coming 
years. Furthermore, our calculations suggest that significant 
occupational and geographical variation lies beneath the relatively 
manageable aggregate figures.
    At the national level, a curve describing occupations' current 
automation potential (with exposure rising up the vertical axis) has a 
distinct new look, in that it reports the highest exposure for roles 
with the lowest wages (those to the left on the horizontal axis) with 
reduced automation exposure the more wages rise (to the right of the 
figure):

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    This curve looks different from the earlier one plotting wage and 
employment growth against wage levels so as to suggest automation 
pressure. Whereas before routine task content below the 20th wage 
percentile was low, here the highest potential for future automation of 
current tasks is concentrated among the lowest-wage earners. This 
reflects in part a dramatically increased projected inroads of 
automation into the service sector thanks to coming AI applications for 
food-service operations and office administration. Task-level 
automation potential, meanwhile, falls steadily as average wages rise. 
Higher earners generally continue to face low automation threats based 
on current task content--though that could change as AI begins to put 
pressure on some higher-wage ``non-routine'' jobs.
    Turning now to the geography of these trends, we see again that 
while automation risk will be felt everywhere, its inroads in the AI 
era will continue to be felt differently across place (though now, the 
pattern is a little different given the broad new vulnerability of 
lower-end services).
    Along these lines, the data for automation exposure in the AI era 
show that automation impacts will be most disruptive in Heartland 
states, counties, and cities. Many of these are the same regions hit 
hardest by IT-era changes but now the impacts will extend into lower-
skill service occupations.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Along these lines, less-educated Heartland states and counties 
specialized in manufacturing and low-end service industries could be 
especially hard-hit by automation in the AI era, whereas well-educated 
states and counties along the Boston-Washington corridor and on the 
West Coast appear less exposed.
    In parallel fashion, smaller, less-educated communities will 
struggle relatively more with AI-phase automation, while larger, 
better-educated cities will experience less disruption and be more 
resilient. Here's how that looks:

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    According to the map, more than 50 percent of all workers' current 
employment-weighted tasks are potentially automatable in small 
metropolitan areas like Kokomo, Indiana and Hickory, North Carolina. In 
fact, the automation exposure of work tasks reaches or exceeds 50 
percent in no less than 43 of the nation's 382 metropolitan areas and 
in some 562 out of 1,974 rural counties. By contrast, the shares of 
vulnerable work in highly educated, highly digital metros like San 
Jose, California and the District of Columbia are just 40 percent and 
39 percent, respectively. Overall, these variations owe heavily to 
variations in local skill and education levels. Higher education levels 
can serve as a stay against AI-phase automation while lower, more 
``routine'' skills are more vulnerable to machine substitution.
    In sum, the spread of AI-era automation--like the earlier IT 
phase--appears likely to have significant and varied local impacts on 
exactly the kind of communities that the EDA serves. While the 
technology will surely benefit the nation in aggregate and in its best-
educated urban centers, its disparate local effects will likely hit 
home in disruptive, locally varied ways that roil local labor markets, 
depress hiring, or necessitate arduous community transitions. These 
likely local effects need to be recognized and addressed--and the EDA 
is better positioned than any other federal agency to take them on.
 promoting resilience: how the economic development administration can 
              help communities make the best of automation
    Without a doubt the full needed federal response to automation and 
AI is significant and multi-dimensional--far beyond the purview and 
capacity of even a robustly modernized and expanded EDA.
    For that reason, our recent report provides more than 20 pages of 
policy recommendations covering five major strategies aimed at multiple 
federal agencies as well as state and local government, business, 
educators, and the civic sector. These recommendations call on 
government to work with the private sector to embrace growth and 
technology so as to maintain or increase hiring and capitalize on the 
power of automation to foster productivity and create new work.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    In addition, Brookings' agenda challenges all parties to invest 
more thought and effort into ensuring that the labor market works 
better for all people. To that end, all actors need to promote a 
constant learning mindset, facilitate smoother transitions, reduce 
hardships for individuals whose jobs are being restructured, and help 
communities that are being heavily impacted.
    In this regard, it is both the first and the last challenges--of 
helping places make the most of emerging technologies while mitigating 
harsh local impacts--that calls upon this committee to articulate an 
important new responsibility for EDA.
    As I have implied, any comprehensive strategy for making sure 
automation and AI work for people and places will need to help places 
absorb automation for their economic good while specifically addressing 
the hardships of local communities that are especially disrupted. In 
keeping with that, an overarching new commitment for the EDA is in 
order, as are several more particular strategies.
    To begin with, the scale of the new needs highlighted here 
recommends not just that the EDA be reauthorized but that it be 
significant expanded. Along those lines our research suggests that that 
the reauthorization should:
      Make a major, comprehensive investment in the EDA to 
raise the agency's authorized funding level significantly so as to 
increase its ability to support communities' efforts to build strong 
economies. This testimony has noted that more communities have more to 
lose in an increasingly ``winner-take-most'' economy. Given that, this 
is clearly the time to double down on the nation's investment in the 
EDA and to raise the agencies authorized funding level. That the 
agency's 1978 funding level exceeded $3.5 million (equivalent to about 
$14 billion in today's dollars) argues for significant multiplication 
of the agency's current $300 million authorization.
    In addition, our research suggests that Congress should broaden the 
EDA's mission to include a concern about the impact of automation on 
local communities. Specifically, I recommend that the reauthorization:
      Explicitly name automation as an economic disruption 
eligible for EDA economic adjustment assistance. Notwithstanding 
perennial concerns about the agency's broad targeting, the committee 
should specifically and prominently call out automation-related 
dislocation as an important source of community economic distress that 
qualifies for EDA assistance. Automation is already arguably as 
significant a challenge for local communities as such accepted shocks 
as factory shutdowns, foreign competition, and the loss of 
manufacturing jobs. Not to acknowledge such dynamics seems arbitrary. 
What's more, the current silence implicitly limits and tilts the EDA's 
responses. Without an explicit naming of automation EDA responses will 
continue to flow toward a relatively narrow swath of trade, defense, 
natural disaster, and energy production industries when the true range 
of local distress is wider and includes significant dislocation in the 
service sector. With automation more prominently named the agency would 
be more likely to respond to on-the-ground conditions in a more 
relevant way through the use of its main tools, including adjustment 
assistance, planning assistance, technical assistance, research and 
evaluation, or adjustment for firms.
    Beyond that, several other recommendations appear appropriate and 
call on the committee to:
      Reaffirm the EDA's commitment to regional full 
employment, especially to facilitate worker-adjustment in hard-hit 
communities. On this point, numerous analysts agree that one of the 
most fundamental policy responses in the automation era must be to run 
a full-employment economy, with special attention paid to struggling 
localities.\9\ This consensus reflects the fact that in conditions of 
widespread hiring workers will have an easier time maintaining 
employment or transitioning from one job to another--a critical need 
given the disruptions of automation. Given that, the EDA should do more 
going forward to promote full-employment in the nation's local 
communities. Specifically, the committee should approve, as it has 
approved before, the use of EDA funds as a locally targeted anti-
recessionary or full-employment measure.\10\ Such targeting might even 
include providing standby authority to the President to be used to 
allow the EDA to allocate direct additional funds for public works 
projects aimed at boosting job-creation through public investment in 
areas of drastic need such as infrastructure, broadband, or housing.
---------------------------------------------------------------------------
    \9\ See, for example, Jared Bernstein, ``The Importance of Strong 
Labor Demand'' (Washington: The Hamilton Project, 2018); Josh Bivens, 
``Recommendations for Creating Jobs and Economic Security in the U.S.'' 
(Washington: Economic Policy Institute, 2018); and Robert Atkinson, 
``Technological Innovation, Employment, and Workforce Adjustment 
Policies'' (Washington: Information Technology and Innovation 
Foundation, 2018).
    \10\ Boyd, ``Economic Development Administration.''
---------------------------------------------------------------------------
      Expand support for community adjustment in regions 
experiencing harsh local impacts from automation and AI. Finally, 
Congress should not only officially empower the EDA to address 
automation fall-out and opportunities but bolster its budget so as to 
make a difference on this topic. The preceding discussion suggests the 
breadth and multifaceted nature of the issue. Therefore, Congress 
should increase the agency's ability to deploy its relevant programs 
and tools to help communities contending with the side-effects of 
automation-related job losses and labor-market dislocation. In this 
regard, virtually all of EDA's current programs appear highly relevant 
to helping rural and urban communities manage automation-related 
transitions so as to become more resilient. Public Works and Economic 
Development Assistance can help communities develop physical 
infrastructure such as technology-based facilities for utilizing 
distance learning for worker skill upgrading. Economic Adjustment 
Assistance could be deployed to support ``bottom-up'' local initiatives 
to mitigate dislocation and improve resilience, as with local 
retraining, technology adoption, and community adjustment strategies. 
Economic Development Planning Assistance could be leveraged to help 
states, counties, cities, and other planning regions incorporate 
automation issues into regional strategic initiatives. And for that 
matter the agency's Technical Assistance program can help communities 
promote resilience and address under- and unemployment by accessing 
expertise, data, reporting, and forecasts on automation trends across 
occupational groups, industries, and geographies.
      Require all funded Comprehensive Economic Development 
Strategy (CEDS) plans to incorporate analysis of emerging technologies' 
impacts on local people, firms, and economy to set strategies to pro-
actively embrace new trends. CEDS are strategy-driven plans for 
regional economic development, which regions must update at least every 
five years to qualify for EDA assistance. These plans help communities 
assess their economic conditions and build regional capacity, and as 
such they can nudge communities toward embracing new technologies while 
working to mitigate their harshest impacts. For example, a CEDS plan 
must contain a strengths, weaknesses, opportunities, and threats (SWOT) 
analysis, in which communities assess the effects of a wide variety of 
regional dynamics, such as international trade and investment, 
workforce preparedness, and natural hazards. In that vein, communities 
should likewise be encouraged to assess the impacts of emerging 
technologies--both opportunities for new economic activity, as well as 
areas of risk. CEDS also require communities to incorporate the concept 
of ``economic resilience,'' or a community's ability to recover from 
major shocks such as economic shifts or natural disasters. Here too, 
communities should consider their resilience in the face of disruptions 
caused by automation and other emerging technologies.
      Empower EDA to launch an interagency program to help 
communities implement strategies for automation, AI, and emerging 
technology adoption, with a focus on modernizing services and 
maximizing co-work with new technologies. Triage, mitigation, and 
defensiveness, meanwhile, should not be the sole response to automation 
of the EDA. In the long run embracing these new technologies will for 
many communities be the most effective way to maintain economic growth 
and provide struggling areas an opportunity to revitalize their 
economies. And so the EDA should support resilience by supporting 
communities' work to embrace technology and digital skills as a way to 
embrace change. However, the nation and its communities will be unable 
to achieve its full economic potential without better coordination 
across the multiple agencies of government tasked with supporting 
workers, firms, and communities. Accordingly, the EDA should lead in 
the creation of a robust interagency push for region future-proofing 
through technology. Among the relevant agencies are NIST's 
Manufacturing Extension Partnership; the Department of Labor's 
Employment and Training Administration; the Department of Education's 
Office of Career, Technical, and Adult Education; the Appalachian 
Regional Commission and Delta Regional Authority; the Small Business 
Administration; and the Manufacturing USA Institutes housed under 
multiple Executive Branch departments. Such a push, what's more, will 
need cohesion and funding.

       Currently the disparate relevant offices and agencies operate 
with only limited coordination. And many of them, like EDA, are under 
the constant threat of extinction. Congress, therefore, should not only 
ensure a predictable, multi-year stream of funding for each of these 
agencies, but should also mandate that they enhance their cross-agency 
cooperation and align their missions to help communities embrace 
emerging technologies for growth. As the only federal government agency 
focused exclusively on economic development, EDA would be well 
positioned to lead such an effort.
      Expand the scope of the Trade Adjustment Assistance (TAA) 
for Firms program to help companies adapt to disruptive new 
technologies. Finally, the EDA should move to update its dealings with 
firms given the emergence of new technologies such as AI. Government 
policies to embrace the transformative power of emerging technologies 
will have significant impacts on firms across the country--creating 
both ``winners and losers.'' Some firms, particularly those who have 
the capacity to be early adopters of new technologies, will see a boost 
to their production and sales. However, others will be forced to 
contract, merge, or go out of business when exposed to these new 
technologies--threatening the livelihood of the workers they employ. 
The EDA's TAA for Firms program helps firms affected by the disruptive 
impacts of international competition restructure their business 
operations, in order to minimize layoffs and boost production and 
sales. However, the program is narrow in scope (helping only those 
firms disrupted by trade), and grossly underfunded. Congress should 
therefore look at reorienting TAA for Firms to help companies adapt to 
the disruptive effects of both trade and technology, and should expand 
its budget to allow it to meet the full scope of forthcoming 
challenges.
    In sum, expanding the EDA's budget to deliver of these activities 
in automation-impacted regions would enable the EDA to continue 
evolving its work of helping communities retain existing jobs and 
generate new ones in the age of automation and AI.
                               conclusion
    Chairman DeFazio, Ranking Member Graves, members of the committee: 
The EDA has steadily evolved during its lifespan to respond to an 
evolving series of national concerns ranging from the problems of 
depressed rural communities and the well-being of people in urban 
poverty to the local impacts of outmigration, military base closures, 
natural disasters, trade disruptions, and the sudden loss of 
manufacturing jobs. Now, it is time for Congress to acknowledge and 
respond to the pervasive, but also locally specific, side-effects and 
opportunities associated with automation and AI.
    Automation's inroads are hitting home with special force among many 
of the EDA's historic partners in the Heartland of America. Likewise, 
many of the agency's existing tools are highly relevant to helping such 
communities respond.
    Given that, the upcoming reauthorization of the EDA holds out a 
signal opportunity for Congress to help America's people and places 
contend with the challenges of automation in local labor markets and 
employ these powerful technologies in ways that support prosperity.
    Thank you again for inviting me. I look forward to addressing these 
issues with you.
    The author would like to thank Rob Maxim, Jacob Whiton, and Anthony 
Fiano for help with preparing this testimony.
    The views expressed in these written remarks are those of the 
author alone and do not necessarily represent those of the staff, 
officers, or trustees of the Brookings Institution.
    For additional information, including an appendix of automation 
exposure by state, county, metropolitan area, and Committee Member 
districts, and a full copy of the report ``Automation and Artificial 
Intelligence: How machines are affecting people and places,'' see 
electronic version of submitted testimony.

    Ms. Titus. Thank you.
    Mr. Miller.
    Mr. Miller. Good afternoon, Chair Titus, Ranking Member 
Meadows, and members of the committee. My name is Rodrick 
Miller. I am CEO of Invest Puerto Rico, an independent, not-
for-profit, nonpartisan, private-sector driven investment 
promotion engine in charge of promoting Puerto Rico as a 
competitive jurisdiction to attract new businesses and capital 
investments to the island.
    I am here today on behalf of the International Economic 
Development Council, the world's largest professional trade 
association representing economic developers in the practice of 
economic development. I would like to thank you for this 
opportunity to provide testimony on the important issue of 
economic prosperity post-disaster and the role that the 
Economic Development Administration has in its recovery 
efforts.
    I would also like to extend congratulations to Dr. Fleming. 
I know he had to leave, but as someone who has recently 
transitioned into a new role, I wish him well and offer our 
support.
    My first interaction with the EDA was post-Hurricane 
Katrina through the New Orleans Business Alliance where I 
served as the chief executive officer. Hurricane Katrina was 
one of the worst disasters our country had seen. In New 
Orleans, the EDA made several strategic multiyear investments 
in the creation of the New Orleans Business Alliance and a 
variety of other entities.
    The New Orleans Business Alliance, which is a public-
private partnership, is the lead economic development 
organization for the city of New Orleans, and it is a full-
service economic development organization which means it 
engages in many core functions ranging from business retention 
and expansion, credit analysis and finance, real estate 
development, marketing and attraction, and many other 
activities. Through the critical investment of Federal funds 
from the EDA and the activities of the New Orleans Business 
Alliance, the city has been able to rebuild and thrive.
    From the perspective of economic developers, the post-
disaster environment is not unlike that of other professions. 
It involves assessment, planning, and execution. The process is 
like most of our work. It is a collaborative process. We engage 
with elected officials, business and civic leaders. We often 
act as conveners to advance programs, policies, and projects 
that will lead to the retention and creation of jobs in our 
communities.
    While healthcare, safety, and welfare action must come 
first following a disaster, economic developers are hard at 
work, sometimes behind the scenes, enabling economic recovery. 
Economic needs following disaster can take many forms. From 
homeowners to business owners, there is an abundance of need, 
and unfortunately, much of it goes unmet for too long.
    From the perspective of economic developers, economic 
recovery is no different. The practice areas that economic 
developers operate in, business retention and expansion and 
infrastructure development, marketing attraction, and so on, it 
isn't hard to see that the need is both great and it is varied. 
Does the community have a current economic development 
strategy? Do we have the resources to connect with our 
businesses and aid them in the short, medium, and long term? 
How can we move economically critical infrastructure projects 
forward like sewer systems and broadband and ports and so on 
that are not part of initial response but are essential to 
recovery? What projects have we been putting off due to the 
lack of resources that are now vital to restarting the economic 
engine of the community? Where would the resources for this 
come from?
    This is where the EDA comes in. EDA has invested nearly $20 
million in disaster supplemental funding in Puerto Rico, and 
that is just the beginning. The project supports myriad 
components of our economy through a combination of technical 
assistance and infrastructure work. From supporting local 
retail to building facilities to house incubators, the EDA is 
helping to create a stronger, more resilient economy in Puerto 
Rico.
    The EDA also supports the work of organizations like the 
International Economic Development Council. IEDC has, for many 
years now, participated in recovery efforts including providing 
technical assistance and training as well as marshalling 
volunteer economic developers like myself who are eager to go 
to disaster-impacted areas to help their counterparts rebuild.
    The EDA, like organizations such as Invest Puerto Rico, 
can't do it alone. We need sustained, consistent input and 
support from our elected officials and from our businesses and 
from those living in our community. Economic development 
doesn't happen in a vacuum, and it really succeeds when 
everyone participates. Thank you.
    [Mr. Miller's prepared statement follows:]

                                 
   Prepared Statement of Rodrick T. Miller, Chief Executive Officer, 
Invest Puerto Rico, on behalf of the International Economic Development 
                                Council
    Chairman Titus, Ranking Member Meadows, Members of the Committee:
    Good morning. My name is Rodrick Miller. I am CEO of Invest Puerto 
Rico, an independent, not-for-profit, non-partisan, private sector-
driven investment promotion engine charged with promoting Puerto Rico 
as a competitive jurisdiction to attract new businesses and capital 
investments to the Island. I am here today on behalf of the 
International Economic Development Council, the world's largest 
professional trade association representing economic developers and the 
practice of economic development. I would like to thank you for this 
opportunity to provide testimony on the important issue of economic 
prosperity post-disaster and the role the Economic Development 
Administration has in recovery efforts. I would also like to extend our 
congratulations to Dr. Fleming on his recent confirmation. As someone 
who has also recently transitioned into a new role, I wish him well and 
offer our support.
    My first interaction with the Economic Development Administration 
(EDA) was post-Hurricane Katrina through the New Orleans Business 
Alliance for Economic Development, where I served as Chief Executive 
Officer. Hurricane Katrina decimated the city physically, emotionally 
and economically. At the time, Hurricane Katrina was one of the worst 
disasters our country had seen. In New Orleans, EDA made a strategic, 
multi-year investment in the creation of the New Orleans Business 
Alliance for Economic Development. This organization, which is a 
public-private partnership, is the lead economic development 
organization for the City of New Orleans. The New Orleans Business 
Alliance is a full-service economic development organization (EDO), 
which means it engages in many core economic development functions, 
such as business retention and expansion, credit analysis and finance, 
real estate development, marketing and attraction, among many other 
activities. Through the critical investment from the EDA and the 
activities of the New Orleans Business Alliance for Economic 
Development, the city has been able to rebuild and thrive.
    From the perspective of economic developers, the post-disaster 
environment is not unlike that of other professions. It involves 
assessment, planning, and execution. The process is like most of our 
work: collaborative. We engage with elected officials, business and 
civic leaders. We often act as conveners to advance programs, policies, 
and projects that will lead to the retention and creation of jobs in 
our communities. While healthcare, safety, and welfare action must come 
first following a disaster, economic developers are hard at work 
sometimes behind the scenes preparing for economic recovery.
    Economic need following disasters can take many forms. From 
homeowners to business owners, there is an abundance of need, and 
unfortunately, much of it goes unmet for too long. From the perspective 
of economic developers, economic recovery need is no different. 
Considering the practice areas economic developers operate in--business 
retention and expansion, infrastructure, marketing and attraction, and 
so on--it isn't hard to see that need is both great and varied. Does 
the community have a current economic development strategy? Do we have 
the resources to connect with our businesses and aid them in the short, 
medium and long-term? How can we move economically critical 
infrastructure projects forward--sewer systems, broadband, ports, and 
so on--that are not part of the initial response, but are essential to 
economic recovery? What projects have we been putting off due to lack 
of resources that are now vital to restarting the economy's engine? 
Where will the resources come from to do all of this?
    This is where the EDA comes in. EDA has invested nearly $20 million 
in disaster supplemental funding in Puerto Rico, and this is just the 
beginning. The projects support myriad components of our economy 
through a combination of technical assistance and infrastructure work. 
From supporting local retail to building facilities to house 
incubators, EDA is helping to create a stronger, more resilient economy 
in Puerto Rico. EDA also supports the work of organizations like the 
International Economic Development Council. IEDC has for many years now 
participated in recovery efforts, including providing technical 
assistance and training, as well as marshalling volunteer economic 
developers like myself, who are eager to go to disaster impacted areas 
to help their counterparts rebuild. EDA, like organizations such as 
Invest Puerto Rico, can't do it alone. We need sustained, consistent 
input and support from our elected officials, from our businesses, and 
from those living in our communities. Economic development doesn't 
happen in a vacuum and succeeds most when everyone participates.
    EDA has been a leader in economic recovery since the creation of 
the agency in 1965. It has aided communities in rural and urban 
settings with targeted investments that can be tailored to meet the 
specific needs of that community. It has worked in collaboration with 
other federal programs, like those at the Department of Housing and 
Urban Development, Department of Agriculture, Small Business 
Administration, Department of Labor, Delta Regional Authority and 
Appalachian Regional Commission, bringing their specific and unique 
expertise in economic development to leverage resources for better 
outcomes. These collaborations at the federal level are quite similar 
to those practiced by economic developers at the local level. We, too, 
work with partners in our city planning offices, our state housing 
authorities, our local workforce boards, our utilities, our educators, 
and anyone else that has a role to play in economic well-being.
    EDA is an agency that, as its primary purpose, helps communities 
recover from economic distress. They are the experts in economic 
recovery and resiliency at the federal level. As this body considers 
both future disaster roles and statutory reauthorization of the agency, 
I encourage you to engage with the economic developers in your 
communities. Hear from them about how EDA's investments have worked. 
Hear also from them how EDA can do more--from defederalizing Revolving 
Loan Funds to supporting greater integration and collaboration across 
federal agencies. Given the tools and support necessary, the EDA can 
play a larger role in assisting communities recovering from disasters 
and economic distress and allow our country to build back a stronger, 
more resilient economy. I am confident that you will hear that my 
experience in New Orleans, and now Puerto Rico, is not unique and that 
EDA is more than worthy of your continued support.
    Thank you.

    Ms. Titus. Thank you. Well, I thank all the witnesses. You 
have done a good job of not only giving us examples of success 
for the EDA but offering some very constructive suggestions as 
we move forward with the reauthorization. The 7-year suggestion 
for the RLF is something that we certainly take note of that is 
worthwhile.
    And I want to talk some more about the automation. You say 
that 25 percent of U.S. employment will be challenged by the 
threat of automation?
    Mr. Muro. Yeah. And that doesn't mean that their jobs will 
disappear. This doesn't mean wholesale, one-quarter of the 
population out of work, but it means that each of those workers 
will confront substantial change and perhaps temporary job 
loss, you know, all kinds of challenges and maybe the need to 
completely retrain. So it is that ongoing change that is--so 
the measure is, really, I think about disruptive changes in 
workers' lives.
    Ms. Titus. It certainly seems to fit under the eligibility 
requirement if we make it a little more specific. You know, I 
represent Las Vegas where it is all about the service industry, 
and you would think you need people to perform those jobs, but 
that is not the case. You are moving to robots. You are moving 
to automated luggage systems. All sorts of things that are in 
automation and artificial intelligence are affecting even the 
hospitality industry.
    Mr. Muro. Yeah. This is one of the things that has come 
into focus in just the last few years that accommodations, 
hotel-restaurant could be much more exposed than we think. 
Ideally, this will lead to better jobs for some of these 
people, but there is no doubt that there will be a lot of 
transition and dislocation as you try and get ahead of some of 
that.
    Ms. Titus. I also noticed you mentioned that the districts 
where you see this most affected are small towns, the 
heartland, and rural America. That tends to kind of correlate 
with red districts politically, so that would make it easier 
for us to work across the aisle to try to shore up some of 
these projects for the EDA because it is not just big cities or 
Las Vegas losing jobs. It is those kind of areas too that will 
be greatly affected by automation.
    Mr. Muro. I would say, you know, that this, though, does 
cross across all kinds of lines and that what you say is 
somewhat true, but it is also true that there are a lot of blue 
places that will be affected as well.
    Another telling thing is recent opinion polling is showing, 
though, equal degrees of concern across that line of party. So 
I think this is something that is affecting a lot of people in 
a lot of places. I think this is something they are talking 
about over dinner at night, you know. It is something that is 
just on the radar of communities out there.
    Ms. Titus. If we were to expand the eligibility of the 
Economic Development Administration to include the problems 
caused by automation, just give us kind of an example of a 
scenario, of a situation where somebody might apply for a 
grant, and what would that grant be to do?
    Mr. Muro. Well, first, you know, right off, these are the 
results of capital investments. It is not that different from 
things that the agency is already looking at. It is not unlike 
a plant closure. Usually, it is the result of a defined 
investment, so this could be identified.
    And certainly at the local level, there are places--you 
know, it is easily--you could also use the occupational 
categories to declare a particular occupation as at risk. I 
think that is another way to think about it.
    Ms. Titus. Can you help us define that if we want to put 
that in the reauthorization?
    Mr. Muro. Pardon?
    Ms. Titus. Can you help work with us to define that and 
make it more specific if we want to put that in the 
reauthorization?
    Mr. Muro. Absolutely. Absolutely. One of the strengths is 
there is now a growing body of work that is pointing in similar 
directions, not just from Brookings but others, and this is a 
researchable topic. So there is now a good body of research 
that is pointing similar directions at a very specific level 
for particular occupations.
    Ms. Titus. Thank you.
    Mr. Miller, of the $191 million that has been allocated for 
Puerto Rico, they have only gotten about $20 million. Can you 
address that? Do you see some of the problems that we might be 
able to identify with getting the money out? Is it with 
staffing? Is it with the application process, redtape, lack of 
knowledge? How would you explain that, and how can we improve 
it?
    Mr. Miller. So I think there are a couple of things. One 
is, whenever these kind of disasters hit, you know, there is a 
pressure to get money out quickly. And I think it really has to 
be, in some respects, staged in order to actually have the 
impacts and be as strategic as possible. So I think that is a 
delicate dance between, you know, how quickly the money is 
disbursed and how it is disbursed.
    I would say, you know, there was a lot in that question. I 
think one of the things is that we see that there is tremendous 
momentum in Puerto Rico. When I look at the situation on the 
ground in Puerto Rico, when I look at New Orleans, when I look 
in Detroit, all the markets that received EDA funding, I 
wouldn't say that Puerto Rico is more challenged in terms of 
how they are disbursing that than other markets. I think the 
reality is there are a variety of challenges that have to be 
confronted, and so they are really trying to figure out how to 
do it. There has been major motion to kind of make it much more 
effective, for example, the establishment of Invest Puerto Rico 
as the economic development agency taking away the bureaucracy 
and the thing around how companies are brought to the island is 
a major step in the right direction. There is the Green Energy 
Act that just passed. There are Opportunity Zones, so there are 
a variety of things that have been done to kind of move us down 
the path.
    But I think it is an ongoing relationship development to 
try and figure out how to get the money. And one of the things 
that is really important about the EDA is that the EDA's 
dollars are very targeted, very specific. So we are going 
through these processes to get moneys from a variety of Federal 
pools, but the EDA has historically, in my experience, been one 
of the most effective at getting the money out and actually 
making sure that it is very targeted. It never seems to be 
quite enough to get all the way to where you want to go but 
enough to kind of get the momentum moving and actually 
incentivize and encourage the private sector to add additional 
dollars to projects.
    Ms. Titus. Thank you.
    Miss Gonzalez-Colon?
    Miss Gonzalez-Colon. Thank you, and thank you Mr. Meadows, 
for referring.
    Mr. Miller, I have plenty of questions, and I just have 5 
minutes, so I will submit some for the record afterwards. But 
my first question will be with all your experience dealing with 
disasters before, and you just said about the laws that are in 
place on the island and how we can combine the Opportunity 
Zones that are now in place and the Federal funds that are in 
the island.
    And one of my concerns is if we got the local regulations 
and how to deal with permits to make a lot of that private 
investment on the island. And being in the State house for 14 
years, I know that is one of the biggest issues. Another one is 
energy, the cost of energy on the island as well.
    Mr. Fleming a few minutes ago just said in his testimony 
that Secretary of Treasury Mnuchin estimated $100 billion in 
private capital, but of those, just 17 projects are underway, 
none of those in Puerto Rico yet. Do we need to have a local 
law to get Opportunity Zones launched on the island?
    Mr. Miller. No. I don't think we need a local law to get 
Opportunity Zones launched on the island. I think, you know, we 
are still waiting for the Federal rules to be finalized. What I 
would say is that the big piece of this is really about how 
these dollars shift the competitiveness. And so whereas there 
are other investments that basically say we are going to get 
things back up and running, or we are going to put dollars in 
this so that we, you know, fix this problem.
    The EDA dollars are particularly important because the 
reason why communities such as Puerto Rico or Detroit, or New 
Orleans have such a hard time bouncing back is because there 
has been a lack of investment for so long and a lack of 
opportunity to make these kind of strategic shifts. And what 
these EDA dollars do post-disaster is actually allow the 
communities not to rebuild themselves but to actually reinvent 
themselves.
    So whereas HUD and some of the other dollars are really 
about kind of how do you kind of get back to where you were, 
the EDA dollars are really catalytic in terms of shifting the 
conversations. How do we make Puerto Rico a more competitive 
place for investment over the long term? How do we make it a 
more sustainable economy, a more resilient economy?
    So the idea is that, you know, we need to cut redtape in 
Puerto Rico. We need to figure out how we articulate our story 
better. We need to be very clear about where we are going, but 
we really just need more support and kind of----
    Miss Gonzalez-Colon. In your experience, this is a very 
personal way. I mean, you have more than 20, 25 codels in the 
last few years, and we got a lot of NGOs coming, more than 20 
universities coming from the mainland to the island, a lot of 
people interested in helping now, and I really appreciate that. 
But you know, with all the Federal agencies on the island, 
every time we met with communities and everybody, there is a 
lot of research, studies, waiting for those studies to be 
released, and how long those studies will take? It will take 1 
year, 2 years, 4 years, 5 years, 10 years. And in that term, a 
lot of communities get--you know, feel that there is no sense 
of urgency in resolving those problems.
    And there is rain, and there is a lot of flooding again, 
and you see the problems with the Corps of Engineers. And I 
will never--you know, I will never say any bad word about the 
Corps of Engineers because they are investing in the island. 
Actually, they are doing $2.5 billion investment, and I will 
say that that is the best agency working there. But again, 
there is a lot of concern in terms of what is going to be 
happening? It is going to be--how long will it take? It will 
take 10 years, 5, 7?
    So in your experience, working with Katrina, working in 
areas, depressed areas like Detroit, how long it will take to 
have a full recovery on the island? It will be just the 
reconstruction, the recovery? Are we talking about just 
infrastructure or the jobs and the socioeconomic areas?
    Mr. Miller. And so I think that the answer to that question 
is multifaceted. One is that a full and robust recovery is 
going to take a lot greater coordination between the Federal 
Government and the island government, the local municipalities, 
the nonprofit sector, and the private sector. No one entity, no 
one piece of that puzzle has all of the keys to it, so there 
has to be an integrated approach to recovery. And so that is 
one of the first things that I would say is absolutely 
critical, that there is a partnership. The Federal Government 
can't pay for it all. The private sector can't pay for it all. 
It has to be a coordinated effort.
    The second thing that I would say about it is that, you 
know, Puerto Rico--and don't tell anybody. I know nobody's 
really listening. New Orleans was cool. Detroit is cool. New 
Orleans and Detroit were both cool. I think Puerto Rico 
actually has a cool factor that, you know, it hasn't been able 
to articulate. And one of the things, I think, that we are 
trying to do in Invest Puerto Rico is really articulate a value 
proposition around why Puerto Rico is a place where companies 
are going to make more money if they come there, where young 
people can do good and do well if they come there.
    And so that is the opportunity that Puerto Rico has in 
front of it. To actually tell a very nuanced story of a 
community at the center of the Americas in the Caribbean and 
that really has a value proposition that is unique. And so one 
of the things that will be essential to the comeback and the 
reinvention of Puerto Rico is going to be not only rebuilding 
the physical infrastructure but also reversing the population 
trend. The number-one driver of investment decisions is people. 
Can you get people that are smart and talented, and I think 
Puerto Rico is well on its way to doing that.
    So if all of those factors come together, I think we can be 
stable, and you know, you have got 3 to 5 years where you have 
got kind of the attention at the national level. If all those 
factors come together within 5 to 7 years, we could be kind of 
on a completely different trajectory. And our goal at Invest 
Puerto Rico isn't just to try and figure out how to bring in 
jobs today and jobs tomorrow, a shot in the arm, but it is 
really how to fundamentally shift the economy in Puerto Rico so 
it will be sustainable for 20, 30, 40, 50 years from now.
    Miss Gonzalez-Colon. Thank you.
    Ms. Titus. Mr. Meadows?
    Mr. Meadows. Madam Chair, just because of the lateness of 
the hour, I am going to give my questions to all of you and let 
you respond back to the committee instead of taking any time, 
so I will yield back the balance of my time.
    Ms. Titus. Well, thank you very much. And so we will take 
those questions and get them to you.
    Just briefly, one thing that was mentioned, I think, Mr. 
Messner, you mentioned about universities. I think we need to 
look at how to make universities better partners in these 
incubators and things like that. So we will take that into 
account too.
    So any further questions?
    Miss Gonzalez-Colon?
    OK. Well seeing none,I will thank you all for waiting so 
late and giving us such great testimony. It has been very 
helpful, and we will be calling on you again, I am sure.
    I ask unanimous consent that the record of today's hearing 
remain open until such time as our witnesses have provided 
answers to any questions that may be submitted to them in 
writing and unanimous consent that the record remain open for 
15 days for any additional comments and information submitted 
by the Members or witnesses to be included in the record for 
today's hearing.
    Without objection, so ordered.
    No other Members have anything to add?
    The subcommittee stands adjourned. Thank you very much.
    [Whereupon, at 5:08 p.m., the subcommittee was adjourned.]



                                Appendix

                              ----------                              


 Questions from Hon. Peter A. DeFazio for Hon. John C. Fleming, M.D., 
  Assistant Secretary of Commerce for Economic Development, Economic 
        Development Administration, U.S. Department of Commerce

    Question 1. What positions are currently vacant that are funded by 
the disaster supplemental and in which region are the vacancies 
located? Is there a hiring plan to fill these positions? What is the 
state of the hiring process (i.e. Applications under review, 
interviews, etc. . . . )?
    Answer.

                            FY 2019 Vacancies
          Economic Development AdministrationPAs of 15 May 2019
------------------------------------------------------------------------
 Permanent or                                          Status of Hiring
   Disaster        Office    No.    Position Title         Process
------------------------------------------------------------------------
Disaster        ATRO \\        1  Civil Engineer     Recruitment on hold
                                                      pending
                                                      reassessment of
                                                      need
------------------------------------------------------------------------
Disaster        ARO            2  Civil Engineer     Posted 4/25, Closed
                                                      5/9 (Position
                                                      Discussion)
------------------------------------------------------------------------
Disaster        PRO            3  Economic           Certs issued on 4/3
                                   Development
                                   Representative
------------------------------------------------------------------------
Disaster        PRO            4  Economic           Certs issued on 3/
                                   Development        29
                                   Representative
------------------------------------------------------------------------
Disaster        PRO            5  Economic           Certs issued 4/11
                                   Development
                                   Specialist
------------------------------------------------------------------------
Disaster        PRO            6  Environmental      Certs issued 5/9
                                   Protection
                                   Specialist
------------------------------------------------------------------------
Disaster        PRO            7  Management         YRCI Developing Job
                                   Analyst            Opportunity
                                                      Announcement (JOA)
                                                      4/12
------------------------------------------------------------------------
Disaster        SRO            8  Economic           Certs issued on 3/
                                   Development        29
                                   Representative
------------------------------------------------------------------------
Disaster        SRO            9  Economic           Certs issued on 3/
                                   Development        29
                                   Representative
------------------------------------------------------------------------
Disaster        SRO           10  Economic           Selection made
                                   Development        pending security
                                   Specialist
------------------------------------------------------------------------
Disaster        SRO           11  Economic           Pending re-
                                   Development        advertisement
                                   Specialist
------------------------------------------------------------------------
Disaster        SRO           12  Environmental      Certs issued on 5/9
                                   Protection
                                   Specialist
------------------------------------------------------------------------
Disaster        OCC           13  Attorney           Recruitment on hold
                                                      pending
                                                      reassessment of
                                                      need
------------------------------------------------------------------------
Disaster        OFMS          14  Administrative     Certs issued 5/10
                                   Officer
------------------------------------------------------------------------
Disaster        OFMS          15  Budget Analyst     Certs returned to
                                                      be audited on 3/27
                                                      (Resubmit package
                                                      for recruiting)
------------------------------------------------------------------------
Disaster        OEA           16  Management and     Selection made
                                   Program Analyst    pending security
------------------------------------------------------------------------
Disaster        OEA           17  Management and     Selection made
                                   Program Analyst    pending security
------------------------------------------------------------------------
Disaster        OEA           18  Public Affairs     Vacancy closed
                                   Specialist         pending issuance
                                                      of certificate by
                                                      5/24
------------------------------------------------------------------------
Disaster        ORA           19  Program Analyst    Recruitment package
                                   (Student Intern)   to be submitted
------------------------------------------------------------------------
Disaster        PNP           20  Program Analyst-   Selection made
                                   Performance Data   pending security
------------------------------------------------------------------------
Disaster        PNP           21  Program Analyst-   Salary/incentive
                                   Performance Data   negotiation as of
                                                      3/22/4/30,
                                                      Selectee declined
                                                      position, Will re-
                                                      advertise
------------------------------------------------------------------------
\\ (Note: YRCI has been contracted by the DOC to assist in processing
  human resources transaction. ATRO: Atlanta Regional Office, ARO:
  Austin Regional Office, PRO: Philadelphia Regional Office, SRO:
  Seattle Regional Office, OCC: Office of the Chief Counsel, OFMS:
  Office of Financial Management Services, OEA: Office of Extramural
  Affairs, ORA: Office or Regional Affairs, PNP: Performance and
  National Programs.)


    Question 2. How much disaster supplemental funding has been 
allocated to each region and, for each region, what percentage has been 
obligated?
    Answer. Of the $600.0 million appropriated, EDA allocated $587.0 
million to the regions for making grants, $1.0 million to the 
Department's Office of the Inspector General, and set aside $12.0 
million for salaries and expenses for administering the grants. The 
allocation of the $587.0 million for grants is shown in the second 
column for the table below. Overall, as of June 11, 2019, EDA is 33.6 
percent obligated. The amounts in the disaster table are cumulative and 
include both FY18 and FY19.

------------------------------------------------------------------------
                                                               Percent
                                 TOTAL FUNDS   Obligations     Annual
            Region              AVAILABLE 26- as of 11-Jun- Obligated 11-
                                   Oct-18          19          Jun-19
------------------------------------------------------------------------
Philadelphia (01)                191,269,000    55,005,700         28.8%
------------------------------------------------------------------------
Atlanta (04)                     147,362,000    65,612,968         44.5%
------------------------------------------------------------------------
Denver (05)                       17,435,000     5,596,000         32.1%
------------------------------------------------------------------------
Chicago (06)                       8,005,000     8,005,000        100.0%
------------------------------------------------------------------------
Seattle (07)                      93,811,000    16,615,886         17.7%
------------------------------------------------------------------------
Austin (08)                      129,118,000    46,558,000         36.1%
------------------------------------------------------------------------
Headquarters (99)                         --            --          0.0%
========================================================================
                                 587,000,000   197,393,554         33.6%
------------------------------------------------------------------------


    Question 3. How did EDA calculate the regional allocations of 
disaster funding that was distributed in the FY18 Disaster 
Supplemental? Are these numbers subject to change, and if so, what 
would trigger a re-allocation?
    Answer. EDA's calculations for regional allocations of disaster 
funding depend on the unique circumstances of the particular disasters. 
Historically this has involved such factors as Congressional direction/
intent, the level of impact in terms of counties and population 
affected, and economic vulnerability factors such as unemployment and 
per capita income in impacted counties. For the FY18 Disaster 
Supplemental, EDA started its analysis by allocating approximately two-
thirds of the funding to the Regional Offices overseeing disaster 
recovery in areas affected by Hurricanes Irma, Harvey, and Maria, and 
the California wildfires. This approach was taken in recognition of the 
severity of these specific disaster events; Congressional intent to 
focus recovery assistance in those areas; requests from Governors and 
Congressional delegations from Florida, Texas, Puerto Rico, Virgin 
Islands and California; a recognition of the unique challenges facing 
Puerto Rico and the Virgin Islands because they were hit by successive 
storms, and EDA's prior experience with disasters of this scale. The 
remaining funds were allocated by formula to all of EDA's Regional 
Offices based on the percent of disaster-impacted populations, percent 
of disaster-impacted counties, and per capita income in impacted 
counties.
    EDA may exercise its discretion to adjust the allocations to the 
Regional Offices based on its experience in administering disaster 
supplemental appropriations to ensure the funds are used to maximum 
effect or to adjust for unforeseen changes in recovery efforts.

    Question 4. Many other agencies conduct disaster recovery functions 
including FEMA and the Small Business Administration. How does EDA 
coordinate with these other agencies? Are there opportunities to better 
synchronize disaster recovery efforts across multiple agencies?
    Answer. In the disaster recovery framework, EDA coordinates with 
other federal agencies in two main ways that vary somewhat by whether 
EDA is working exclusively in the context of the National Disaster 
Recovery Framework (NDRF) or also under the auspices of a supplemental 
disaster appropriation. These two contexts overlap in some respects 
because an EDA deployment under the NDRF typically precedes EDA's 
receipt of disaster supplemental appropriations.
    Initially, in the Recovery Support Function (RSF) context, EDA 
works to coordinate with other federal agencies in the Joint Field 
Office (JFO) in disaster locations, and at the headquarters and 
regional levels, to determine where other agency missions and funding 
streams may complement EDA's priorities. EDA also manages the 
interagency Economic Recovery Support Function (ERSF) Working Group, 
which includes the Small Business Administration, U.S. Department of 
Agriculture, Federal Emergency Management Agency (FEMA), Department of 
Housing and Urban Development (HUD), Environmental Protection Agency, 
Department of Labor, Internal Revenue Service, Department of Treasury, 
and other Department of Commerce (DOC) bureaus, to share information 
and to facilitate interagency coordination. Later, in disaster 
locations, whether under the ERSF or acting pursuant to a supplemental 
disaster appropriation, EDA coordinates with other agencies at the JFO, 
including inviting diverse federal agencies to participate in EDA 
organized economic recovery workshops and assisting communities to 
navigate multiple federal resources at once. EDA initiates individual 
conversations with federal agencies about specific issues of 
overlapping interest, including complementary funding streams and 
specific projects of mutual interest. EDA is an active participant in 
the interagency Recovery Support Function Leadership Group (RSFLG), 
managed by FEMA. The RSFLG is led by six Recovery Support Functions 
(RSFs), which are coordinated by a lead agency and supported by other 
federal agencies: Economic (coordinated by DOC/EDA); Housing 
(coordinated by HUD); Infrastructure (coordinated by the U.S. Army 
Corps of Engineers), Natural and Cultural Resources (coordinated by the 
Department of Interior); Health and Social Services (coordinated by the 
Department of Health and Human Services); and Community Planning and 
Capacity Building (coordinated by FEMA).
    Commerce/EDA reports general supplemental funding data to FEMA 
through its participation in the RSFLG's Program Management Office 
(PMO). The PMO tracks all supplemental funding, which was a result of 
the historic 2017 hurricane season and subsequent major disasters (such 
as the California Wildfires) of 2018. The PMO has a public facing 
website, which displays supplemental funding for over 20 other federal 
agencies. The website is https://recovery.fema.gov/.

    Question 5. How does EDA track and determine the return on 
investment of its grants? What metrics does the administration use, and 
can you please share with us the results of those performance metrics? 
Specifically, can you talk about jobs created, return on investment, 
and private investment that has been leveraged through EDA grants?
    Answer. EDA collects and analyzes performance measures in 
compliance with the Government Performance and Results Act (GPRA), as 
amended by the Government Performance and Results Act Modernization Act 
of 2010 (GPRAMA). EDA primarily focuses on two performance goals: (1) 
promoting private investment and job creation in economically 
distressed communities and regions through infrastructure investments 
and (2) building community capacity to achieve and sustain regional 
competitiveness and economic growth through non-infrastructure 
investments.
    For its infrastructure investments, EDA's primary return on 
investment (ROI) data sources are grantee-provided reports of jobs 
created or retained and private investment leveraged. Each fiscal year 
(FY), EDA sets performance targets based on several factors \1\. 
Grantees report actual data three, six, and nine years after award.\2\ 
Six-year infrastructure reporting data \3\ follow:
---------------------------------------------------------------------------
    \1\ These factors include regular Public Works, Economic Adjustment 
Assistance infrastructure, and Revolving Loan Fund appropriation 
levels; targets are inflation adjusted based on the Bureau of Labor 
Statistics Consumer Price Index. Currently, EDA is developing through a 
research cooperative agreement with the Urban Institute a more robust 
methodology for estimating outcomes of and setting targets for its 
investments.
    \2\ EDA analyzes and validates the reported numbers by directly 
following-up with the grantees at three, six, and nine-year intervals 
from the investment award. EDA also conducts a limited number of annual 
site visits. The chart contains the most recently available data for 
the six-year results. These data were collected and analyzed in FY2018 
and are thus the most up-to-date. The response rate at six years is the 
highest and most reliable.
    \3\ EDA has found that the data collected at the six-year mark best 
capture ROI and have the highest response rate. These data are 
unrevised as of their time of analysis. Typically, the analysis of six-
year reporting data for grants made in FY x (i.e., the data reported at 
FY x + 6) occurs during the budget formulation process for FY x + 8.


------------------------------------------------------------------------
                                     Jobs Created or        Private
                                         Retained          Investment
                                   -------------------     Leveraged
                FY                                     (millions of USD)
                                             Reported ------------------
                                     Target   @ FY+6            Reported
                                                        Target   @ FY+6
------------------------------------------------------------------------
2002                                 28,900    30,719     $970    $1,393
------------------------------------------------------------------------
2003                                 22,900    24,533     $810      $855
------------------------------------------------------------------------
2004                                 22,427    26,695     $824    $2,281
------------------------------------------------------------------------
2005                                 18,193    26,416     $674    $1,617
------------------------------------------------------------------------
2006                                 17,548    36,046     $662    $2,402
------------------------------------------------------------------------
2007                                 16,570    12,685     $647    $2,063
------------------------------------------------------------------------
2008                                 15,640    12,486     $612    $1,744
------------------------------------------------------------------------
2009                                 27,958    19,526   $1,093    $2,118
------------------------------------------------------------------------
2010                                 15,834    24,101     $652    $1,003
------------------------------------------------------------------------
2011                                 13,392    18,114     $561      $199
------------------------------------------------------------------------
2012                                 12,348    36,456     $525    $3,226
------------------------------------------------------------------------


    EDA is developing innovative metrics to better measure the impact 
of its non-infrastructure investments \4\, which it makes through its 
EAA, Regional Innovation Strategies, Local Technical Assistance, 
Partnership Planning, and Research and National Technical Assistance 
programs. The projected launch of these new metrics is Q3 of FY2020.
---------------------------------------------------------------------------
    \4\ EDA tracks and measures its non-infrastructure investments' 
activities and outcomes, such as:
      percentage of Districts Organizations and Indian Tribes 
implementing economic development initiatives from the Comprehensive 
Economic Development Strategy (CEDS) process that lead to private 
investment and job creation and retention; and
      percentage of sub-state jurisdiction members actively 
participating in the Economic Development District (EDD) activities.
---------------------------------------------------------------------------
    For more information on how EDA conducts performance measurement, 
please visit https://www.eda.gov/performance/.

    Question 6. Are EDA grants oversubscribed? If so, by how much? 
Please provide data for each grant program that EDA administers.
    Answer. EDA grants are oversubscribed; i.e., EDA receives more 
proposals/applications than it can fund with its annual appropriations. 
In FY 2018, EDA received requests for funding that totaled more than 
double its annual appropriation for its primary implementation 
programs: Public Works (PW) and Economic Adjustment Assistance (EAA). 
Additionally, for its Regional Innovation Strategies (RIS) program, EDA 
received requests for funding in FY 2018 that totaled more than 5.5 
times its annual Regional Innovation (RI) program \5\ appropriation, 
through which the RIS program is funded.
---------------------------------------------------------------------------
    \5\ The RI program is authorized by the Stevenson-Wydler Technology 
Innovation Act of 1980 Sec.  27, 15 U.S.C. Sec.  3722 (2015) 
(originally enacted as the America COMPETES Reauthorization Act of 
2010, Pub. L. No. 111-358, sec. 603, Sec.  27, 124 Stat. 3982, 4030-37 
(2011) and subsequently amended by the Revitalize American 
Manufacturing and Innovation Act of 2014, Pub. L. No. 113-235, sec. 
705, Sec.  27, 128 Stat. 2130, 2231-34 (2014))

----------------------------------------------------------------------------------------------------------------
                Proposals/               IRCed               Grants\7\                      Oversubscription \8\
               Applications         Applications\6\   ----------------------               ---------------------
 Program  --------------------------------------------                       Appropriation
              #          $          #          $          #          $                        % (#)      % ($)
----------------------------------------------------------------------------------------------------------------
PW            170  $280,450,093     107  $151,215,237      93  $136,236,119   $117,500,000      183%       239%
----------------------------------------------------------------------------------------------------------------
EAA \9\       158  $113,886,803     106   $72,105,620      93   $64,450,067    $67,000,000      170%       170%
================================================================================================================
PW+           328  $394,336,896     213  $223,320,857     186  $200,686,186   $184,500,000      176%       214%
EAA
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
RIS \10\      233  $120,474,506     n/a           n/a      40   $20,836,841    $21,000,000      583%       574%
----------------------------------------------------------------------------------------------------------------

    Question 7. As EDA\\ plays an increasingly\\ consistent role\\ in 
disaster recovery, what changes in current authorization can be made to 
facilitate expedited mobilization and grant execution?
---------------------------------------------------------------------------
    \6\ EDA considers PW and EAA projects that are evaluated by EDA 
Investment Review Committees (IRCs) to be highly competitive and takes 
this data into account when evaluating its proposal/application 
pipeline and demand. EDA operates the RIS program differently; there is 
no analogous phase in RIS program application evaluation.
    \7\ Grant $ (i.e., obligations) may exceed appropriations because 
EDA re-obligates de-obligated or otherwise recovered prior-year funds.
    \8\ Oversubscription by # is calculated by (Proposals/Applications 
#)  (Grants #); oversubscription by $ is calculated by (Proposals/
Applications $)  (Appropriation).
    \9\ EAA data includes both regular EAA proposals and appropriations 
as well as EAA proposals and appropriations regarding Assistance to 
Coal Communities. See, e.g., 164 Cong. Rec. No. 50--Book II at H2084 
(Mar. 22, 2018).
    \10\ EDA obligated its FY18 RI program appropriation through the 
RIS program in FY19.
---------------------------------------------------------------------------
    Answer. Expedited mobilization and grant execution is a high 
priority for EDA. During FY 2019, EDA is recruiting up to 39 term-
limited staff to support its Disaster Recovery work and is currently 
soliciting applications for Economic Development Integrators in the 
Denver and Chicago regional offices. EDA has also reached out to FEMA, 
SBA, and HHS to more fully understand the authorities granted to those 
agencies for disaster-related hiring. EDA will work with the Department 
and OPM to continue to bring maximum effort to the responsible 
mobilization of disaster resources.
    These additional staff can help implement EDA's role in the RSFLG 
referenced above, along with its interagency role in leading 
coordination of the RSF and in a supporting role to the CPCB RSF.

    Question 8. EDA has played a key role in responding to major 
economic disruption caused by economic factors, natural disaster, or 
other causes. How does EDA help communities plan for these types of 
disruptions? What role does economic resilience play in EDA's programs 
and planning processes?
    Answer. EDA is a strong proponent of the concept that a community 
or region cannot effectively build the capacity for economic 
development and prepare for potential economic disruptions unless that 
community or region has an asset-based plan that clearly defines 
community strengths and vulnerabilities. EDA's Partnership Planning 
program helps communities and regions with their long-term economic 
development planning efforts, supporting a national network of 391 
Economic Development Districts (EDDs), which are EDA designated areas 
(i.e., mostly county groupings) that have self-identified as economic 
regions based on shared economic goals and assets. EDA's support helps 
each EDD develop and implement a Comprehensive Economic Development 
Strategy (CEDS) which is an economic development blueprint for that 
region based on a collaborative, regionally-driven planning process. 
Going further, EDA is also a supporting agency to FEMA's Community 
Planning and Capacity Building (CPCB) RSF, which plays a key role in 
these efforts before, during, and after a disaster.
    All CEDS must incorporate the concept of economic resilience, which 
EDA defines as the ability of a community or region to withstand or 
quickly recover from major disruptions-or shocks-to its underlying 
economic base. As a baseline, EDA recommends a two-pronged approach for 
regions to approach resilience within their CEDS: 1) implement goals or 
specific actions to bolster the long-term durability of the region, and 
2) establish information networks among the various stakeholders in the 
region to facilitate active and regular communication between all 
sectors to collaborate on existing and future challenges. In addition 
to playing a prominent role in EDA's economic development planning 
process, the concept of resilience is highly-visible as an EDA 
Investment Priority (an initial evaluation requirement within EDA's 
grant application review process), and as a key factor in grant awards 
made under EDA's FY 2018 Supplemental Appropriation for Natural 
Disasters.

    Question 9. In his testimony, Dr. Fleming suggested EDA can help 
improve coordination of federal economic development programs. What can 
EDA do to achieve this within its current authorization? What 
additional authority would EDA need to fully achieve this goal?
    Answer. Under its current authorization, EDA has successfully 
established an Economic Development Integration (EDI) team. New, 
additional authorities are not necessary for EDA to accomplish this 
work. However, its capacity to provide integrated support for economic 
development priorities (local, regional, and Federal) is currently 
constrained by the total number of vacant EDA staff positions, both in 
the regions and at EDA HQ, which EDA is addressing through an 
aggressive hiring and recruitment effort. EDA has posted advertisements 
for specific vacancies (Denver, Chicago, and EDA HQ) to USA Jobs. Once 
certification lists have been established, EDA will be able to commence 
the interview process to identify candidates to fill these vacancies.
    EDI personnel work with their EDA colleagues and other federal 
peers to identify opportunities for greater interagency collaboration 
and to facilitate the coordinated and effective investment of federal 
economic development resources. In addition to four EDI positions at 
EDA HQ, Regional Integrators work in each of EDA's six regional offices 
(Atlanta, GA, Austin, TX, Chicago, IL, Denver, CO, Philadelphia, PA, 
and Seattle, WA) to further enhance EDA's capacity to support local and 
regional economic development projects. Through EDI, EDA works in 
partnership with other federal agencies to implement policies and 
procedures that:
      Increase Access: Ensuring that local and regional 
applicants can easily identify and apply for the federal economic 
development resources that can best support their local priorities and 
objectives.
      Enhance Collaboration: Facilitating coordination among 
multiple partners and stakeholders (federal and non-federal, public and 
private) to promote multiple, strategic investments in support of local 
priorities that can contribute to sustainable economic growth, 
especially for distressed communities.
      Reduce Administrative Burdens: Working with federal 
interagency partners on guidance tools to help applicants navigate and 
possibly consolidate different administrative requirements that are 
triggered by each individual award of federal assistance (e.g., 
strategic planning, reporting).
    EDA also deploys its EDI capacities to support critical Federal 
priorities, including economic recovery in disaster areas, and 
Opportunity Zones.
    Fundamental statutory changes, however, are likely necessary if 
Congress wants to address integration on a government-wide basis. The 
Administration's reorganization proposals submitted to Congress in 
accordance with Executive Order 13781, ``Comprehensive Plan for 
Reorganizing the Executive Branch,'' which seek to stream-line 
government, creating economies of scale and reducing overlap and 
fragmentation. For EDA, this includes consolidating EDA into the Bureau 
of Economic Growth along with the Department of Housing and Urban 
Development's Community Development Block Grant program and rural 
business and community facility grants from the Department of 
Agriculture, among other changes. The Bureau of Economic Growth would 
consolidate existing economic development programs to provide a central 
place for grants and technical assistance to communities and 
entrepreneurs focused on job creation, business growth, and 
strengthening local economies. EDA also stands ready to work with 
Congress and other Federal agencies to identify the various statutory 
differences in eligibility, unique definitions, differing program 
requirements for similar activities, etc. that are the root cause of 
many of the difficulties agencies have had in effectively coordinating 
action or creating common applications.