[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
INVESTING IN AMERICA: REAUTHORIZATION OF THE ECONOMIC DEVELOPMENT
ADMINISTRATION
=======================================================================
(117-15)
REMOTE HEARING
BEFORE THE
SUBCOMMITTEE ON
ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
APRIL 28, 2021
__________
Printed for the use of the
Committee on Transportation and Infrastructure
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available online at: https://www.govinfo.gov/committee/house-
transportation?path=/browsecommittee/chamber/house/committee/
transportation
______
U.S. GOVERNMENT PUBLISHING OFFICE
45-230 PDF WASHINGTON : 2021
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
PETER A. DeFAZIO, Oregon, Chair
SAM GRAVES, Missouri ELEANOR HOLMES NORTON,
DON YOUNG, Alaska District of Columbia
ERIC A. ``RICK'' CRAWFORD, Arkansas EDDIE BERNICE JOHNSON, Texas
BOB GIBBS, Ohio RICK LARSEN, Washington
DANIEL WEBSTER, Florida GRACE F. NAPOLITANO, California
THOMAS MASSIE, Kentucky STEVE COHEN, Tennessee
SCOTT PERRY, Pennsylvania ALBIO SIRES, New Jersey
RODNEY DAVIS, Illinois JOHN GARAMENDI, California
JOHN KATKO, New York HENRY C. ``HANK'' JOHNSON, Jr.,
BRIAN BABIN, Texas Georgia
GARRET GRAVES, Louisiana ANDRE CARSON, Indiana
DAVID ROUZER, North Carolina DINA TITUS, Nevada
MIKE BOST, Illinois SEAN PATRICK MALONEY, New York
RANDY K. WEBER, Sr., Texas JARED HUFFMAN, California
DOUG LaMALFA, California JULIA BROWNLEY, California
BRUCE WESTERMAN, Arkansas FREDERICA S. WILSON, Florida
BRIAN J. MAST, Florida DONALD M. PAYNE, Jr., New Jersey
MIKE GALLAGHER, Wisconsin ALAN S. LOWENTHAL, California
BRIAN K. FITZPATRICK, Pennsylvania MARK DeSAULNIER, California
JENNIFFER GONZALEZ-COLON, STEPHEN F. LYNCH, Massachusetts
Puerto Rico SALUD O. CARBAJAL, California
TROY BALDERSON, Ohio ANTHONY G. BROWN, Maryland
PETE STAUBER, Minnesota TOM MALINOWSKI, New Jersey
TIM BURCHETT, Tennessee GREG STANTON, Arizona
DUSTY JOHNSON, South Dakota COLIN Z. ALLRED, Texas
JEFFERSON VAN DREW, New Jersey SHARICE DAVIDS, Kansas, Vice Chair
MICHAEL GUEST, Mississippi JESUS G. ``CHUY'' GARCIA, Illinois
TROY E. NEHLS, Texas ANTONIO DELGADO, New York
NANCY MACE, South Carolina CHRIS PAPPAS, New Hampshire
NICOLE MALLIOTAKIS, New York CONOR LAMB, Pennsylvania
BETH VAN DUYNE, Texas SETH MOULTON, Massachusetts
CARLOS A. GIMENEZ, Florida JAKE AUCHINCLOSS, Massachusetts
MICHELLE STEEL, California CAROLYN BOURDEAUX, Georgia
KAIALI`I KAHELE, Hawaii
MARILYN STRICKLAND, Washington
NIKEMA WILLIAMS, Georgia
MARIE NEWMAN, Illinois
Vacancy
------
Subcommittee on Economic Development, Public Buildings, and
Emergency Management
DINA TITUS, Nevada, Chair
DANIEL WEBSTER, Florida ELEANOR HOLMES NORTON,
THOMAS MASSIE, Kentucky District of Columbia
JENNIFFER GONZALEZ-COLON, SHARICE DAVIDS, Kansas
Puerto Rico CHRIS PAPPAS, New Hampshire, Vice
MICHAEL GUEST, Mississippi Chair
BETH VAN DUYNE, Texas GRACE F. NAPOLITANO, California
CARLOS A. GIMENEZ, Florida JOHN GARAMENDI, California
SAM GRAVES, Missouri (Ex Officio) Vacancy
PETER A. DeFAZIO, Oregon (Ex
Officio)
CONTENTS
Page
Summary of Subject Matter........................................ v
STATEMENTS OF MEMBERS OF THE COMMITTEE
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. Daniel Webster, a Representative in Congress from the State
of Florida, and Ranking Member, Subcommittee on Economic
Development, Public Buildings, and Emergency Management,
opening statement.............................................. 9
Prepared statement........................................... 9
Hon. Sam Graves, a Representative in Congress from the State of
Missouri, and Ranking Member, Committee on Transportation and
Infrastructure, prepared statement............................. 63
WITNESSES
Panel 1
Dennis Alvord, Acting Assistant Secretary for Economic
Development, Economic Development Administration, U.S.
Department of Commerce, oral statement......................... 10
Prepared statement........................................... 12
Panel 2
Lisa Cooper, Executive Director, Northern Kentucky Area
Development District, on behalf of the National Association of
Development Organizations, oral statement...................... 26
Prepared statement........................................... 28
Garrett Hawkins, President, Missouri Farm Bureau, on behalf of
the American Farm Bureau Federation, oral statement............ 31
Prepared statement........................................... 33
Jonas Peterson, President and Chief Executive Officer, Las Vegas
Global Economic Alliance, on behalf of the International
Economic Development Council, oral statement................... 35
Prepared statement........................................... 37
Hon. Lenny Eliason, Commissioner, Athens County, Ohio, on behalf
of the National Association of Counties, oral statement........ 39
Prepared statement........................................... 41
Dan Carol, Director, Milken Institute Center for Financial
Markets, oral statement........................................ 44
Prepared statement........................................... 46
SUBMISSIONS FOR THE RECORD
Submissions for the Record by Hon. Dina Titus:
Letter of April 28, 2021, from Nathan Ohle, Chief Executive
Officer, Rural Community Assistance Partnership............ 5
``EDA Reauthorization Priorities for the 117th Congress''
from the Economic Development Administration Stakeholder
Coalition.................................................. 6
Letter of April 27, 2021, from Morgan W. Reed, President, ACT/The
App Association, Submitted for the Record by Hon. Daniel
Webster........................................................ 63
Fact Sheet, ``Bringing Broadband to Rural Ohio,'' Submitted for
the Record by Witness Hon. Lenny Eliason, Commissioner, Athens
County, Ohio, on behalf of the National Association of Counties 67
APPENDIX
Questions to Dennis Alvord, Acting Assistant Secretary for
Economic Development, Economic Development Administration, U.S.
Department of Commerce, from:
Hon. Dina Titus.............................................. 69
Hon. John Garamendi.......................................... 70
Question from Hon. Dina Titus to Lisa Cooper, Executive Director,
Northern Kentucky Area Development District, on behalf of the
National Association of Development Organizations.............. 71
Question from Hon. Dina Titus to Jonas Peterson, President and
Chief Executive Officer, Las Vegas Global Economic Alliance, on
behalf of the International Economic Development Council....... 72
Questions from Hon. Dina Titus to Dan Carol, Director, Milken
Institute Center for Financial Markets......................... 74
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April 22, 2021
SUMMARY OF SUBJECT MATTER
TO: LMembers, Subcommittee on Economic Development,
Public Buildings, and Emergency Management
FROM: LStaff, Subcommittee on Economic Development, Public
Buildings, and Emergency Management
RE: LSubcommittee Hearing on ``Investing in America:
Reauthorization of the Economic Development Administration''
_______________________________________________________________________
The Subcommittee on Economic Development, Public Buildings,
and Emergency Management will meet on Wednesday, April 28,
2021, at 2:00 p.m. EDT, in 2167 Rayburn House Office Building
and virtually via Zoom to hold a hearing entitled, ``Investing
in America: Reauthorization of the Economic Development
Administration.''
The purpose of the hearing is to receive testimony 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 recovering from disasters, including the
COVID-19 pandemic. The Subcommittee will hear from the EDA, the
National Association of Development Organizations (NADO), the
National Association of Counties (NACo), the International
Economic Development Council (IEDC), the American Farm Bureau
Federation, and the Milken Institute.
I. Introduction
The Subcommittee has jurisdiction over economic development
issues and federal agencies that promote economic development
in communities suffering economic distress, including EDA, an
agency within the Department of Commerce. EDA is led by the
Assistant Secretary of Commerce for Economic Development and is
the lead federal agency dedicated exclusively to addressing
economic development issues.\1\
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\1\ See the Public Works and Economic Development Act of 1965 (P.L.
89-136).
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Through its competitive grant process, EDA evaluates
project applications to determine the extent to which they
align with the investment priorities of the agency and
effectively address the creation and/or retention of high-
quality jobs. On April 14, 2021, EDA updated its investment
priorities to include: Equity, Recovery & Resilience, Workforce
Development, Manufacturing, Technology-Based Economic
Development, Environmentally-Sustainable Development, and
Exports and Foreign Direct Investment.\2\
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\2\ EDA, Investment Priorities, available at https://www.eda.gov/
about/investment-priorities/.
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For fiscal year (FY) 2021, the Trump administration
proposed eliminating EDA's budget, with the exception of $31.6
million for salaries and expenses.\3\ Congress, in FY2021,
appropriated $305.5 million for EDA programs and $40.5 million
for salaries and expenses, not including supplemental funding
for disasters.\4\
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\3\ EDA FY2021 Congressional Budget Request, February 2020,
available at https://www.commerce.gov/sites/default/files/2020-02/
fy2021_eda_congressional_budget_
justification.pdf.
\4\ Consolidated Appropriations Act, 2021 (P.L. 116-260).
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The Biden administration has not yet released a detailed
FY2022 budget request outlining funding for EDA nor has a
nominee for the Assistant Secretary position been announced.
However, the president's FY2022 discretionary request, or
``skinny budget,'' included $84 million for EDA's Assistance to
Coal Communities program.\5\
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\5\ Executive Office of the President, Office of Management and
Budget, President's request for FY2022 discretionary funding, April 9,
2021, available at https://www.whitehouse.gov/wp-content/uploads/2021/
04/FY2022-Discretionary-Request.pdf.
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II. Overview of EDA's Programs
Congress established the EDA in 1965 with the Public Works
and Economic Development Act (PWEDA, P.L. 89-136) to alleviate
conditions of substantial and persistent unemployment in
economically distressed areas.\6\ 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.'' \7\
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\6\ Generally, EDA considers areas distressed if their unemployment
rate is 1% (or above) the U.S. unemployment or the per capita income is
80% (or below) the U.S. Per Capita Income.
\7\ EDA, Mission, available at https://www.eda.gov/about/.
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In particular, EDA programs are intended to help local
communities attract and leverage private investment to maximize
job creation. 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 grants are used in conjunction with
private and local dollars to generate economic growth and
create jobs. In fact, EDA requires substantial local match--
often 50 percent or greater--for most grant recipients.\8\
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\8\ Congressional Research Service (CRS), Economic Development
Administration: A Review of Elements of Its Statutory History, June 3,
2011, available at https://crsreports.congress.gov/product/pdf/R/
R41241.
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EDA provides grants for projects through a variety of
programs, including planning, technical assistance, public
works, economic adjustment, trade adjustment assistance, and
multiple innovation challenges. Additionally, all public works
and economic adjustment projects must be consistent with an
EDA-approved Comprehensive Economic Development Strategy
(CEDS). Between FY2012 and FY2018, EDA invested nearly $1.9
billion in 4,710 projects.\9\ EDA estimates that these
investments are expected to create and/or retain 362,106 jobs
and attract more than $42 billion in private investment
funding.\10\
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\9\ EDA, EDA Performance Measurement and Program Evaluation,
available at https://www.eda.gov/performance/.
\10\ EDA, Underlying Data Disclaimer, available at https://
www.eda.gov/performance/data-disclaimer/. Note: Figures derived from
``Estimated Outcomes by State'' tab.
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The EDA administers its programs through six regional
offices located in Atlanta, GA; Austin, TX; Chicago, IL;
Denver, CO; Philadelphia, PA; and Seattle, WA. 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. At the local
level, EDA administers its programs through Economic
Development Districts (EDDs). EDDs are multi-jurisdictional
entities, commonly composed of multiple counties and in some
cases crossing state borders. EDDs lead the locally-based
economic development planning process that leverages the
involvement of the public, private and non-profit sectors to
establish a CEDS. EDA's most recent map of EDDs is included as
Appendix 2.
1. EDA AUTHORIZATION HISTORY
Following the expiration of the PWEDA authorization in
1970, five acts extending and amending EDA's statutory
authority were enacted between 1971 and 1976.\11\ In 1980,
Congress reauthorized EDA's programs for two additional years
through FY1982, and until 1998, EDA continued to operate
without congressional authorization.\12\
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\11\ CRS Report, Economic Development Administration: A Review of
Elements of Its Statutory History, June 3, 2011, at pg. 9.
\12\ Id. at pg. 14.
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The Economic Development Administration and Appalachian
Regional Development Reform Act of 1998 (P.L. 105-393)
reauthorized EDA for five years, and authorized funding levels
that gradually declined from an initial amount of $398 million
in FY1999 to $335 million in FY2003.\13\ Additionally, this
reauthorization put into place a number of management and
administrative reforms, including efforts to target the most
economically distressed areas in the United States. The
Economic Development Administration Reauthorization Act of 2004
(P.L. 108-373) reauthorized EDA for a period of five years,
through FY2008. Since that time, Congress has not reauthorized
EDA.
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\13\ Id.
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2. KEY GRANT PROGRAMS
Planning Assistance: EDA assists EDDs and Tribal
organizations, states, sub-state planning regions, cities, and
other eligible recipients to assist in project planning.
Comprehensive planning is an essential component in guiding
local economic development and ensuring the effectiveness of
development projects funded by EDA. Eligible activities include
developing, maintaining, and implementing a CEDS and related
short-term planning activities.
Public Works: EDA's Public Works program provides grants to
distressed communities to upgrade and expand their physical
infrastructure. Public Works investments help facilitate the
transition of communities from being distressed to becoming
competitive by developing key public infrastructure, such as
technology-based facilities that utilize distance learning
networks, smart rooms, and smart buildings; multi-tenant
manufacturing and other facilities; business and industrial
parks with fiber optic cable; and telecommunications and
development facilities. In addition, EDA invests in traditional
public works projects, including water and sewer systems
improvements, industrial parks, business incubator facilities,
expansion of port and harbor facilities, skill-training
facilities, and redevelopment of brownfields.
Economic Adjustment: One of EDA's most flexible programs,
the Economic Adjustment Assistance (EAA) program provides
various types of assistance--including planning, technical
assistance, revolving loan funds (RLFs), and infrastructure
development--to help communities experiencing either a gradual
erosion or sudden dislocation of local industry caused by
natural disasters, international trade competition, or major
plant closings.
EDA oversees 510 RLFs nationwide, with a combined EDA
investment of almost $566 million.\14\ The RLF portfolio has a
combined capital base of about $870 million (consisting of EDA
investment plus grantee matching funds plus interest
income).\15\ The Reinvigorating Lending for the Future Act of
2020 (RLF Act, P.L. 116-192) was enacted on October 20, 2020,
and eliminated ``in perpetuity'' reporting requirements for EDA
RLFs and releases the federal interest in EDA RLFs after seven
years.
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\14\ EDA FY2021 Congressional Budget Request, February 2020,pg. 83.
\15\ Id.
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Build to Scale: The Build to Scale (B2S) program--formerly
known as the Regional Innovation Strategies program--builds
regional economies through scalable startups through
competitions supporting entrepreneurship, acceleration of
company growth, and increased access to risk capital across
regional economies. The B2S program is administered by EDA's
Office of Innovation and Entrepreneurship, which is authorized
under Section 27 of the Stevenson-Wydler Technology Innovation
Act of 1980.\16\ In FY2021, EDA is awarding $38 million in B2S
funding through its Venture and Capital challenges.
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\16\ 15 U.S.C. Sec. 3722.
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Trade Adjustment: EDA's Trade Adjustment Assistance program
assists import-impacted U.S. manufacturing, production, and
service firms in developing and implementing projects to regain
global competitiveness, expand markets, strengthen operations,
and increase profitability, thereby increasing U.S. jobs.
Technical assistance is provided through a nationwide network
of 11 Trade Adjustment Assistance Centers to help U.S.
manufacturing, production, and service firms in all 50 States,
the District of Columbia, and Puerto Rico.
University Centers: EDA's University Center program enables
higher education institutions and consortiums to establish and
operate University Centers focused on leveraging university
assets to build regional economic ecosystems that support
innovation, entrepreneurship, resiliency, and inclusiveness. In
FY2021, EDA has made available $7.4 million in federal funds
for accredited institutions and consortia in EDA's Chicago and
Philadelphia regions.\17\
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\17\ EDA, Notice of Funding Opportunity: FY 2021 EDA University
Center Economic Development Program Competition, available at https://
www.eda.gov/files/programs/university-centers/FY21-EDA-UC-NOFO-
FINAL.pdf
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Research and National Technical Assistance: The Research
and National Technical Assistance (RNTA) program funds
research, evaluation, and national technical assistance
projects that promote competitiveness and innovation in
distressed communities throughout the U.S. and its territories.
RNTA is currently subdivided into two programs: Research &
Evaluation (R&E) and National Technical Assistance (NTA).
Through the R&E program, EDA supports the development of tools,
recommendations, and resources that shape and inform federal
economic development policy. R&E program investments support
regional, state, and local economic developers to enhance
understanding and implementation of economic development
concepts throughout the country. EDA's NTA program supports
projects that provide national-scale technical assistance,
disseminating best practices among communities trying to
address economic downturn. The FY2021 Notice of Funding
Opportunity (NOFO) makes $1.5 million available for R&E
projects and $1.0 million available for NTA projects.\18\
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\18\ U.S. Department of Commerce, Grants Notice: FY 2021-2023
Economic Development RNTA, available at https://www.grants.gov/web/
grants/view-opportunity.html?oppId=332576.
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3. STUDIES OF EDA PROGRAMS
In 2008, EDA contracted with accounting and advisory firm
Grant Thornton to study the costs and economic impact of EDA's
construction investments. 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.\19\ The study
further concluded that EDA's investment in business incubators
was worthwhile and generated significant impacts in communities
where the investments were made.\20\
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\19\ 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. Pg. 55.
\20\ Id.
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In 2017, nonprofit research firm SRI International studied
the impact of non-infrastructure economic development grant
programs on regional economic capacities, as well as the
relationship between those capacities and long-term outcomes
such as job creation and earnings growth.\21\ SRI International
found that non-infrastructure capacity building grants are
critical to fostering an economic development collaboration
system that leads to long-term desired economic development
outcomes, and that such grants support building capacities that
are associated with long-term growth in earnings, per capita
income, and employment growth.\22\
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\21\ SRI International. Innovative Metrics for Economic
Development: Final Report. November 17, 2017 Available at https://
www.eda.gov/files/performance/Innovative-Metrics-ED-Report.pdf.
\22\ Id.
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III. EDA Disaster Recovery and the COVID-19 Pandemic
1. NATURAL DISASTER RECOVERY
Within the federal government's Natural Disaster Recovery
Framework (NDRF), EDA serves as the coordinating agency for the
Economic Recovery Support Function (ERSF) on behalf of the
Department of Commerce.\23\ As the ERSF lead, EDA provides
leadership and coordination for primary and support agencies,
which contribute to the administration of grants, loans,
training and other forms of assistance to support economic
recovery efforts in disaster-impacted communities and regions.
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\23\ EDA, EDA and Disaster Recovery, available at https://
www.eda.gov/disaster-recovery/.
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In recent years, following disasters, Congress has
appropriated supplemental funding to assist the long-term
economic recovery of areas affected by major disasters. EDA may
also provide assistance through its regular programs without
prior congressional approval, typically through its economic
adjustment assistance program. In FY2018 and FY2019, EDA
received a combined total of $1.2 billion in supplemental
disaster appropriations from Congress to help regions recover
from economic harm and distress resulting from natural
disasters from 2017 to 2019.\24\ These funds included $600
million appropriated in the Bipartisan Budget Act of 2018 (P.L.
115-123) for additional EAA 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. In August 2019, EDA
published the FY2019 Disaster Supplemental NOFO, providing $587
million for grant investments to regions impacted by Hurricanes
Florence, Michael, and Lane; Typhoons Yutu and Mangkhut;
wildfires; volcanic eruptions; earthquakes; and other natural
disasters occurring in calendar year 2018, and tornadoes and
floods occurring in calendar year 2019.\25\
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\24\ EDA, Leading Economic Recovery Efforts in Disaster-Impacted
Communities, available at https://www.eda.gov/files/programs/disaster-
recovery/EDA-Disaster-Brochure.pdf.
\25\ Id.
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2. COVID-19 RECOVERY
On March 13, 2020, former President Trump declared a
nationwide emergency pursuant to Sec. 501(b) of the Stafford
Act in response to the COVID-19 pandemic. The pandemic impacted
employment and economic growth in the United States. During the
spring of 2020, the U.S. workforce lost approximately 20
million jobs, with the unemployment rate peaking at almost 15
percent.\26\ Although significant employment recovery occurred
in the months that followed, job gains stalled--and in some
areas deteriorated--by October 2020.\27\ The current
unemployment rate in the U.S. stands at six percent--almost
double the pre-pandemic rate of 3.5 percent.\28\ Certain
industries, such as travel, tourism, and hospitality, have
experienced significant financial and employment losses. For
example, it is estimated that the travel sector in the United
States lost 5.6 million jobs and $1.1 trillion in economic
output in 2020.\29\
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\26\ Hershbein, B. and Holzer, H. The COVID-19 Pandemic's Evolving
Impacts on the Labor Market: Who's Been Hurt and What We Should Do.
February 15, 2021, available at https://ssrn.com/abstract=3788395.
\27\ Id. at pg. 22.
\28\ U.S. Bureau of Labor Statistics, Labor Force Statistics from
the Current Population Survey, available at https://data.bls.gov/
timeseries/LNS14000000.
\29\ U.S. Travel Association, Final Tally: Travel Lost $1.1
Trillion in U.S. Economic Output in '20, March 17, 2021, available at
https://www.ustravel.org/press/final-tally-travel-lost-11-trillion-us-
economic-output-20.
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In order to ``prevent, prepare for, and respond to
coronavirus and for necessary expenses for responding to
economic injury as a result of coronavirus,'' Congress
appropriated $1.5 billion for EDA's EAA program in the
Coronavirus Aid, Relief, and Economic Security Act (CARES Act,
P.L. 116-136). To date, EDA has awarded over $1 billion of the
funding provided in the CARES Act to support a wide range of
projects in communities recovering from the economic effects of
the pandemic.\30\ More recently, Congress provided $3 billion
in EAA funding in the American Rescue Plan Act of 2021 (P.L.
117-2), 25 percent of which was dedicated to addressing
employment and gross domestic product losses in the travel,
tourism, and outdoor recreation industries.
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\30\ EDA, U.S. Economic Development Administration Marks Milestone
$1 Billion in Cares Act Grants Awarded, available at https://
www.eda.gov/news/blogs/2021/03/22/eda-marks-cares-act-milestone.htm.
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Witness List
Panel I
LMr. Dennis Alvord, Acting Assistant Secretary for
Economic Development, U.S. Department of Commerce
Panel II
LMs. Lisa Cooper, Executive Director, Northern
Kentucky Area Development District, On Behalf of the National
Association of Development Organizations
LMr. Garrett Hawkins, President, Missouri Farm
Bureau, On Behalf of the American Farm Bureau Federation
LMr. Jonas Peterson, President and CEO, Las Vegas
Global Economic Alliance, On Behalf of the International
Economic Development Council
LThe Honorable Lenny Eliason, Commissioner, Athens
County, Ohio, On Behalf of the National Association of Counties
LMr. Dan Carol, Director, Milken Institute Center
for Financial Markets
APPENDIX 1: EDA REGIONAL OFFICES
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Source: Economic Development Administration
APPENDIX 2: EDA ECONOMIC DEVELOPMENT DISTRICTS
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
INVESTING IN AMERICA: REAUTHORIZATION OF THE ECONOMIC DEVELOPMENT
ADMINISTRATION
----------
WEDNESDAY, APRIL 28, 2021
House of Representatives,
Subcommittee on Economic Development, Public
Buildings, and Emergency Management,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to call, at 2:10 p.m. in
room 2167 Rayburn House Office Building and via Zoom, Hon. Dina
Titus (Chair of the subcommittee) presiding.
Members present in person: None.
Members present remotely: Ms. Titus, Ms. Norton, Mr.
Pappas, Mr. Carbajal, Mr. Webster, Mr. Massie, Miss Gonzalez-
Colon, Mr. Guest, and Ms. Van Duyne.
Ms. Titus. The subcommittee will come to order.
I ask unanimous consent that the chair be authorized to
declare a recess at any time during today's hearing.
Without objection, so ordered.
I also ask unanimous consent that Members not on the
subcommittee be permitted to sit with the subcommittee at
today's hearing and ask questions.
Without objection, so ordered.
As a reminder, I would ask you to please keep your
microphone muted unless speaking. Should I hear any inadvertent
background noise, I will request that the Member mute their
microphone.
To insert a document into the record, please have your
staff email it to [email protected].
Before we proceed with our opening statements, I would like
to recognize the new vice chair of the subcommittee, Mr. Chris
Pappas of New Hampshire. He represents the First Congressional
District in New Hampshire. And, although that is a lot
different from Las Vegas, we do share a Greek heritage, so I
look forward to working with him, and I know that he will bring
his expertise to this role on the subcommittee.
So thank you, and welcome, Congressman Pappas.
Mr. Pappas. Thank you, Madam Chair. It is great to be on
board.
Ms. Titus. We will now proceed with the opening statements,
so I will welcome everybody to today's hearing.
Thank you to the witnesses for being with us, and thank you
for your patience.
I also saw in the news that the President intends to
nominate Alejandra Castillo for the position of Assistant
Secretary for Economic Development at the Commerce Department.
So this committee will look forward to working with her when
she is confirmed.
The topic for today's hearing is the congressional
reauthorization of the Economic Development Administration. It
was created in 1965 by the Public Works and Economic
Development Act, and it is the only Federal agency specifically
dedicated to supporting economic development.
The EDA administers a variety of grants programs that
invest in public works projects, higher education research and
initiatives, planning and technical assistance, economic
adjustment, and trade assistance for firms and businesses.
The agency also hosts a number of funding opportunities to
invest in innovation and technology, such as the Build to Scale
program and the Scaling Pandemic Resilience through Innovation
and Technology, or SPRINT, Challenge. These programs support
distressed communities and strengthen local economies by
creating and retaining jobs, mitigating hardship created by
dislocation of industry, assisting economic recovery from
disasters, and fostering innovation and entrepreneurship.
This agency doesn't always make the headlines. A lot of
people don't even know it exists. But the statistics show just
how impactful it can be in spurring economic growth and helping
communities rebound.
Since 2012, the EDA has invested nearly $1.9 billion in
4,700 projects all around the country. The EDA estimates that
these investments are expected to create or retain over 360,000
jobs and attract over $42 billion in private investment. The
EDA awards grants based on its core investment priorities.
Earlier this month, the agency updated those priorities to
include a focus on equity, technology-based economic growth,
and environmentally sustainable development.
I applaud the EDA for demonstrating a commitment to
addressing the issues facing our country, and through
reauthorization I hope we can work together to create more
opportunities for Americans.
For many communities, the EDA's grant programs are often
the only source of funding available for infrastructure or
workforce development projects. The EDA, though, has operated
without authorization since 2008, although Congress,
recognizing the importance of its critical mission and impact,
has constantly provided appropriations every year so that the
agency can continue to carry out its work promoting innovation
and competitiveness to prepare regions across the country for
growth and success in the 21st century.
This is a big moment for the EDA. Reauthorization
represents an opportunity to invest in workforce development
and innovation. Together, we can make regions outside of the
established tech hubs more competitive. We can help bring high-
speed internet to millions of Americans, and we can create
employment opportunities and infrastructure projects for
communities that have been historically underserved.
The EDA also plays an important role in helping communities
recover from disaster. Within the Federal Government's Natural
Disaster Recovery Framework, the EDA serves as the coordinating
agency for the Economic Recovery Support Function on behalf of
the Department of Commerce. A critical component of disaster
recovery is bringing back jobs, and ensuring that disaster
survivors have the resources necessary to get back up on their
feet after their lives have been upended.
The effects of the pandemic on employment have been
staggering. A year ago, approximately 20 million Americans were
out of a job. That is the most since the Great Depression. And
there has been significant progress in putting Americans back
to work. But still, almost 5 million people remain unemployed
in the U.S. today.
Last month, the EDA reached a milestone of awarding $1
billion of Economic Adjustment Assistance that was appropriated
by Congress through the CARES Act. That is a noteworthy
achievement, but with the $3 billion Congress provided to the
EDA in the American Rescue Plan Act, there is still a lot more
work that we can do.
The American Rescue Plan appropriation included $750
million as a set-aside for communities that have experienced
employment and GDP losses in the travel, tourism, and outdoor
recreation industry. Considering the devastating economic
losses in those sectors, I am particularly interested in
hearing EDA's plans for administering that funding. This is the
first time that has ever been done.
I believe the EDA can play a vital role in helping
diversify the economies in places like Las Vegas, that have
been so dependent on travel and tourism, so we can better
manage the next pandemic. As we work toward advancing the first
EDA reauthorization in over a decade, or almost two, I hope our
witnesses can share some of their experiences with EDA's
programs to better inform our dialogue about the agency's
future needs and capabilities.
I look forward to working with my colleagues on both sides
of the aisle on this comprehensive EDA reauthorization that
will build on its successes, and promote sustainable and
equitable economic development in communities of all sizes
across the country.
[Ms. Titus' 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
I'd like to welcome everyone to today's hearing. Thank you to our
witnesses for being with us.
We're here to discuss the congressional reauthorization of the
Economic Development Administration (EDA).
Created in 1965 by the Public Works and Economic Development Act,
the EDA is the only federal agency specifically dedicated to economic
development.
The EDA administers a variety of grant programs to invest in public
works projects, higher education research and initiatives, planning and
technical assistance, economic adjustment, and trade assistance for
firms.
The agency also hosts a number of funding opportunities to invest
in innovation and technology, such as the Build to Scale program and
Scaling Pandemic Resilience Through Innovation and Technology (SPRINT)
challenge.
These programs support distressed communities and strengthen local
economies by creating and retaining jobs, mitigating hardship created
by dislocation of industry, assisting economic recovery from disasters,
and fostering innovation and entrepreneurship.
This agency doesn't always make the headlines, but the statistics
show how impactful they can be in spurring economic growth and helping
communities rebound.
Since 2012, the EDA has invested nearly $1.9 billion in 4,700
projects all across the country. The EDA estimates that these
investments are expected to create or retain over 360,000 jobs and
attract over $42 billion in private investment.
The EDA awards grants based on its core investment priorities.
Earlier this month, the agency updated those priorities to include a
focus on equity, technology-based economic growth, and environmentally-
sustainable development.
I applaud the EDA for demonstrating a commitment to addressing the
issues facing our country and through reauthorization I hope we can
work together to create more opportunities for Americans.
For many communities, the EDA's grant programs are often the only
source of funding available for infrastructure or workforce development
projects.
The EDA has operated without authorization since 2008, although
Congress, recognizing the importance of its critical mission and
impacts, has provided appropriations annually so that the agency can
continue to carry out its work promoting innovation and competitiveness
to prepare regions across the country for growth and success in the
21st century economy.
This is a big moment for the EDA. Reauthorization presents an
opportunity to invest in workforce development and innovation.
Together, we can make regions outside of the established tech hubs more
competitive, help bring high-speed internet to millions of Americans,
and create employment opportunities and infrastructure projects for
communities that have been historically underserved.
The EDA also plays an important role in helping communities recover
from disasters. Within the federal government's Natural Disaster
Recovery Framework, the EDA serves as the coordinating agency for the
Economic Recovery Support Function on behalf of the Department of
Commerce.
A critical component of disaster recovery is bringing back jobs and
ensuring that disaster survivors have the resources necessary to get
back on their feet after their lives have been upended.
The effects of the pandemic on employment have been staggering. A
year ago, approximately 20 million Americans were out of the job--the
most since the Great Depression. And while there has been significant
progress in getting Americans back to work, almost 5 million people
remain unemployed in the U.S.
Last month, the EDA reached the milestone of awarding $1 billion of
the Economic Adjustment Assistance funding Congress appropriated in the
CARES Act.
That's a noteworthy achievement, but with the $3 billion Congress
provided to the EDA in the American Rescue Plan Act, there's still a
lot of work to be done.
The American Rescue Plan appropriation included $750 million for
communities that experienced employment and GDP losses in the travel,
tourism, and outdoor recreation industries. Considering how devastating
the economic losses have been in those sectors, I'm particularly
interested in EDA's plans for administering that funding.
I believe the EDA can play a vital role in helping diversify the
economies in places like Las Vegas that are dependent on travel and
tourism so that we are able to better manage the next pandemic.
As we work toward advancing the first EDA reauthorization in over a
decade, I hope our witnesses can share some of their experiences with
EDA's programs to better inform our dialogue about the agency's future
needs and capabilities.
I look forward to working with my colleagues on both sides of the
aisle on a comprehensive EDA reauthorization that will build on its
successes and promote sustainable and equitable economic development in
communities of all sizes.
Ms. Titus. At this point, I would ask unanimous consent to
enter into the record of today's hearing a letter from the
Rural Community Assistance Partnership, and a document from the
Economic Development Administration Stakeholder Coalition
entitled, ``EDA Reauthorization Priorities for the 117th
Congress.''
Without objection, so ordered.
[The information follows:]
Letter of April 28, 2021, from Nathan Ohle, Chief Executive Officer,
Rural Community Assistance Partnership, Submitted for the Record by
Hon. Dina Titus
April 28, 2021.
Representative Peter DeFazio,
Chair,
House Transportation and Infrastructure Committee, 2134 Rayburn House
Office Building, Washington, DC 20515.
Representative Sam Graves,
Ranking Member,
House Transportation and Infrastructure Committee, 1135 Longworth House
Office Building, Washington, DC 20515.
Representative Dina Titus,
Chair,
Subcommittee on Economic Development, Public Buildings, and Emergency
Management, 2464 Rayburn House Office Building, Washington, DC
20515.
Representative Daniel Webster,
Ranking Member,
Subcommittee on Economic Development, Public Buildings, and Emergency
Management, 1210 Longworth House Office Building, Washington,
DC 20515.
Dear Chair DeFazio, Ranking Member Graves, Chair Titus, and Ranking
Member Webster:
On behalf of the Rural Community Assistance Partnership (RCAP), I
write to thank you for supporting the Economic Development
Administration (EDA) and recognizing the vital role that EDA programs
play in expanding the capacity of rural communities to grow and thrive.
As a national non-profit network serving small rural and tribal
communities in all 50 states, territories, and on tribal lands, we are
aware of the unique set of challenges that these communities face and
the immense value that economic development and technical assistance
funding provides.
EDA's programs are some of the most flexible and effective across
the federal government, however, many communities with the greatest
level of need are unable to access these funds because of a lack of
capacity and a need for more robust grant funding. Expanded national
technical assistance will bolster communities' ability to access funds
and will support EDA's mission to promote innovation in approaches to
economic development and inform economic development decision-making,
especially for communities impacted by the COVID-19 pandemic.
In 2020, the Coronavirus Aid, Relief, and Economic Security (CARES)
Act provided EDA with $1.5 billion for economic development assistance
programs to help communities prevent, prepare for, and respond to
coronavirus. The grants created by the CARES Act were proven to provide
critical and effective programs. In March of 2021, The American Rescue
Plan (ARP) was enacted and allocated $3 billion to assist communities
nationwide in advancing their coronavirus recovery and resiliency
strategies. The programs created will be crucial for economic
development and infrastructure investment.
In FY21 appropriations Congress funded $10 million for the Research
and National Technical Assistance (RNTA) program to allow qualified
non-profits to assist economically disadvantaged small, rural, and
underserved communities with activities associated with building
capacity to access EDA programs and services. While any support for
this crucial program is appreciated, funding for this program should be
increased to $20 million to better reflect the need in our most
vulnerable communities.
Rural places are often slower to recover from periods of economic
disruption than urban and suburban areas--evidenced by the fact that
employment and prime-age labor force participation in many of the
communities we serve had not yet recovered from the 2008 economic
recession when the pandemic hit last year. Increased funding for EDA,
including increased national technical assistance funding through RNTA
programs will confront this issue by leveraging best practices for
local, state, and regional leaders to carry out economic development
activities as we recover from the harmful impacts of COVID-19.
We appreciate the committee holding this important hearing to
evaluate the current level of need in disadvantaged communities and the
supportive role that EDA must play as we aim to quickly bounce back
from the pandemic. We stand ready to work with you and your colleagues
to ensure rural communities receive adequate development and technical
assistance funding to recover from the pandemic in a strong and
equitable manner.
Thank you,
Nathan Ohle,
CEO, Rural Community Assistance Partnership.
``EDA Reauthorization Priorities for the 117th Congress'' from the
Economic Development Administration Stakeholder Coalition, Submitted
for the Record by Hon. Dina Titus
Economic Development Administration (EDA) Stakeholder Coalition
eda reauthorization priorities for the 117th congress
Enhance EDA's Role in Capacity Building:
+ Increase EDA funding for Partnership Planning and enhance the
scope of related activities:
- As communities continue to respond to the COVID-19 pandemic,
they will need to reevaluate and revise their existing regional
development plans and Comprehensive Economic Development Strategies
(CEDS). Congress should significantly increase EDA funding for planning
assistance for communities as they endeavor to build stronger and more
resilient economies.
+ Increase EDA funding for Research and National Technical
Assistance (RNTA) and enhance the scope of related activities:
- Congress should enhance EDA's role and increase EDA funding
for national technical assistance that helps support the ultimate
success of economic development projects.
+ Increase EDA funding for Public Works and enhance the scope of
related activities, particularly related to broadband and resiliency:
- Congress should include direction for EDA to support both
broadband access and adoption. Broadband is an essential missing piece
in many communities with struggling economies. EDA is uniquely
positioned to provide strategic direction and funding for broadband
access and adoption and should be given further flexibility to seek out
new capabilities and partnerships in this realm. Emphasis should be
placed on ensuring equitable resource allocation among urban and rural
communities.
- In support of EDA's role in disaster resiliency and impact
mitigation, Congress should also direct the agency to take the current
and future impacts of climate change into consideration for Public
Works projects. In addition, a separate fund should be established
within the Public Works program that is expressly dedicated to projects
mitigating the impacts of climate change.
+ Create a new EDA Capacity-Building Grant Program:
- Communities taking advantage of EDA's planning resources
often lack the human and financial resources to implement those plans.
Congress should establish a grant program within EDA to fund three-year
positions for qualified economic development professionals to execute
CEDS or economic development strategic plans and dedicated funding for
economic development project pre-development work.
- Communities often struggle to move from economic development
concept to economic development reality due to a lack of funding at the
earliest stages of a project. Known as 'pre-development' work, these
items must be completed before a project can move forward or even
secure financing and partners. A dedicated funding source for pre-
development work at EDA would spark numerous economic development
projects that would otherwise never advance.
- Many communities lack the human resources necessary to
implement their CEDS or execute their strategic plans. Providing
funding for communities to hire staff and engage professional
consultants would allow projects to move forward with competent,
sustained oversight and direction, dramatically increasing the chances
for lasting success. This funding would be available to any
organization or entity otherwise eligible to receive EDA funding.
Reassess and Reconstitute EDA's Economic Distress
Formula:
+ Reassess and reconstitute EDA's economic distress formula and
consider reducing local match requirements permanently. Currently,
EDA's economic distress formula requires communities to invest as much
as 50 percent of the total project cost via matching funds, with EDA
providing federal funding for the remaining 50 percent of the total
project cost. For the most distressed communities, EDA's standard
Notice of Funding Opportunity (NOFO) guidance dictates that the maximum
allowable federal investment rate is 80 percent, which still requires
very distressed communities to contribute 20 percent of the project's
overall cost via matching funds, except in rare cases when the EDA
Assistant Secretary deems that an applicant has exhausted its taxing
and borrowing capacity.\1\ Congress should include direction for EDA's
economic distress formula to be reconstituted so that all communities
with eligible projects--and especially distressed communities--are
eligible to receive a higher overall percentage of federal funding.
---------------------------------------------------------------------------
\1\ Source: https://www.grants.gov/web/grants/view-
opportunity.html?oppId=321695 EDA's FY20 NOFO, document name: ``FY20
PWEAA NOFO including NCC and CARES.pdf'' PDF page 12 of 45
+ Reducing EDA's matching fund requirements is important also
because communities will be recovering from the COVID-19 pandemic for
an extended duration of time. This reality should be taken into
consideration and EDA's formula funding approach should be overhauled
accordingly. We encourage eliminating local match requirements for the
remainder of the declared COVID-19 Public Health Emergency (PHE) and
---------------------------------------------------------------------------
for at least 3 years following its culmination.
Codify EDA's Role in Disaster Resiliency and Recovery:
+ Congress should amend the Public Works and Economic
Development Act (PWEDA) to formally outline and designate EDA's
significant role in post-disaster assistance for impacted communities.
+ In EDA's reauthorization, Congress should establish an EDA
Office of Disaster Resilience & Recovery to preserve institutional
knowledge and leadership in the economic disaster resilience and
recovery realm. Enhancing EDA's disaster recovery leadership and
resources will help communities prepare for and mitigate negative
economic impacts associated with disasters. Congress should authorize a
dedicated fund with annual appropriations for immediate responses to
economic crises associated with declared disasters or states of
emergency.
+ In cases where a major disaster or emergency has been declared
under the Stafford Act, EDA should be required to increase the federal
share to 100 percent of the project cost, waiving all match
requirements for any funding appropriated for the purpose of disaster
or emergency response.
+ EDA has successfully utilized the flexible hiring authority
Congress provided to the agency to aid in EDA's response to COVID-19.
This authority was based in part on similar authorities provided to
other disaster response agencies and should be made a permanent
authority. Disasters and emergencies require increased resources to
ensure timely delivery of services while the agency continues to
provide vital services and resources through their normal, non-
emergency related work.
Codify and Fund EDA's Economic Development Integration
(EDI) Role:
+ While EDA is the only federal agency with a focus solely on
economic development, there are other agencies that engage in economic
development efforts. Enhanced coordination among federal agencies and
divisions supporting economic development can yield significant
benefits for stakeholders of all kinds. Congress should formally
establish an EDA Office of Economic Development Coordination &
Integration to formalize EDA's leadership role in the economic
development realm, and to emphasize its cross-cutting role in
coordinating economic development resources across the federal
government. Although EDA currently has an existing Economic Development
Integration (EDI) practice, PWEDA should be amended to include language
that formally establishes EDI and fully outlines its role.
+ Congress should provide dedicated funding for EDI so that this
practice can become a fully-resourced and fully-staffed division within
EDA. This would enhance the ability of EDI specialists to conduct on-
the-ground technical assistance in communities across the country,
ensuring the entirety of the federal government's resources are
effectively and efficiently utilized in support of local and regional
economic development.
Strengthen Collaboration Between EDA, Economic
Development Districts (EDD), and Economic Development Organizations:
+ Economic Development Districts (EDDs) and Economic Development
Organizations (EDOs) are core constituencies of EDA. As such, EDA
should explore all avenues to partner with and support collaboration
between EDDs and EDOs utilizing their authority and resources.
+ EDDs have long partnered with the Agency and have a dedicated
line of funding. EDOs are eligible to apply for competitive EDA funding
as they are units of local, state and tribal government, non-
governmental organizations or public-private partnerships. However,
many EDOs do not currently partner with EDA due to a combination of a
lack of available funding, lack understanding of EDA programming,
misperceptions related to eligibility and a perceived inflexibility at
EDA to explore new partnerships. Unfortunately, for various reasons
EDOs do not always partner with their local EDD either. This lack of
collaboration between EDDs, EDOs and EDA negatively impacts communities
as they look to better develop their economies. The disaster scenarios
in recent years have emphasized a need to significantly increase
collaboration between EDA, EDDs, and EDOs.
+ Congress should include clear directive for EDA to
collaborate, partner and support EDDs and EDOs in reauthorizing the
agency. Such a directive would further cement the vital, balanced roles
of planning and execution in supporting economic development. Congress
should also establish a technical and operational capacity assistance
program that provides resources to increase regional collaboration and
to execute regional economic development strategic plans.
Elevate EDA Leadership to an Under Secretary Level:
+ EDA is currently headed by an Assistant Secretary-level
appointee. Given EDA's role as the lead federal agency for economic
development and the vital importance of this role during times of
economic distress--and consistent with EDA's increased funding and its
thereby heightened role in facilitating disaster resiliency and
recovery and coordination among other agencies--Congress should elevate
the Assistant Secretary position to an Under Secretary level position
in EDA's reauthorization.
Raise EDA's Authorization Level to $3 Billion:
+ EDA's authorized funding level does not accurately reflect the
importance of the role the agency plays as the lead federal economic
development agency, nor does it adequately meet the demonstrated need
for economic development leadership and resources that exists across
America's communities and regions. EDA investments have a track record
of leveraging additional investments and catalyzing new economic
opportunity. Congress should significantly increase its annual
investment in EDA to enhance the reach and impact of the agency.
+ Between supplemental disaster response funding and annual
appropriations EDA received nearly $2 billion in funding for FY 2020
and more than $3 billion in FY 2021. In FY 2020 the agency received
requests for funding that far surpassed EDA's available funding, which
is indicative of both the value of EDA's leadership and programming, as
well as the significant and growing need for federal economic
development resources. Congress should increase EDA's annual authorized
funding level to $3 billion.
Coalition Members:
International Economic Development Council (IEDC)
Main Street America
National Association of Counties (NACo)
National Association of Development Organization (NADO)
National Association of Regional Councils (NARC)
National League of Cities (NLC)
Rural Community Assistance Partnership (RCAP)
Ms. Titus. I now recognize and call on the ranking member
of the subcommittee, Mr. Webster, for his opening statement.
Mr. Webster. Thank you, Chair Titus. It is great to be
here, and there are important issues involved in this hearing,
and I want to thank our witnesses for being here and joining us
for this hearing.
As you know, EDA has received a significant--you mentioned
it--a significant amount of supplemental funding in recent
years to help communities recover from disasters. Over the last
year alone, EDA received $1.5 billion from the bipartisan CARES
Act, and another $3 billion from the American Rescue Plan.
These amounts are significantly above the level that EDA
receives in base funding. So it is important that we ensure EDA
is positioned to properly manage these taxpayer dollars in the
most efficient way.
Ultimately, in many rural communities across the Nation,
access to broadband internet remains a major hurdle to
retaining and attracting businesses and jobs. In cities with
high-speed broadband options, many take broadband for granted.
However, in many parts of my district and in places all over
the country, meaningful access is just not available. This lack
of broadband, in many areas, especially rural areas, is a
serious impediment to many facets of American life, including
economic development.
Just about every business these days needs access to
broadband internet. It may not be the first thing that comes to
mind, but agricultural businesses today rely heavily on
broadband for things like operations, maintenance, weather
forecasting, and sales. Technology has created a huge
opportunity for farming to be more efficient, and supporting
growth in our agriculture communities ensures maintaining food
security for our Nation.
We also know that broadband impacts the ability of
distressed communities to attract jobs and businesses across a
host of other industries, including the healthcare and energy
sectors. While EDA can and does fund some broadband projects,
we must ensure any unnecessary hurdles are addressed so we can
help more Americans get connected.
Lastly, I want to make sure that those efforts to achieve
this goal do not harm existing rural broadband providers, which
often are small businesses themselves, and have spent capital
and time trying to reach these communities, often in creative
ways. So I look forward to hearing from our witnesses on these
and other issues. Thank you, Chair Titus, I yield back.
[Mr. Webster's prepared statement follows:]
Prepared Statement of Hon. Daniel Webster, a Representative in Congress
from the State of Florida, and Ranking Member, Subcommittee on Economic
Development, Public Buildings, and Emergency Management
Thank you, Chair Titus. I wanted to thank our witnesses for joining
us today for this important hearing.
As you know, EDA has received a significant amount of supplemental
funding in recent years to help communities recover from disasters.
Over the last year alone, EDA received $1.5 billion from the bipartisan
CARES Act and another $3 billion from the American Rescue Plan.
These amounts are significantly above the level that EDA receives
in base funding, so it is important that we ensure EDA is positioned to
properly manage these taxpayer dollars in the most effective way.
Ultimately, in many rural communities across the Nation, access to
broadband internet remains a major hurdle to retaining and attracting
businesses and jobs. In cities with high-speed broadband options, many
take broadband for granted. However, in many parts of my district, and
in places all over the country, meaningful access is just not
available. This lack of broadband in many rural areas is a serious
impediment to many facets of American life, including economic
development.
Just about every business these days needs access to broadband
internet. It may not be the first thing that comes to mind, but
agricultural businesses today rely heavily on broadband for things like
operations, maintenance, weather forecasting, and sales. Technology has
created a huge opportunity for farming to be more efficient, and
supporting growth in our agricultural communities ensures continued
food security for our Nation.
We also know broadband impacts the ability of distressed
communities to attract jobs and businesses across a host of other
industries, including the healthcare and energy sectors.
While EDA can and does fund some broadband projects, we must ensure
any unnecessary hurdles are addressed so we can help more Americans get
connected.
Lastly, I want to make sure that efforts to achieve this goal do
not harm existing rural broadband providers which are often small
businesses themselves that have spent capital and time trying to reach
these communities--often in creative ways.
I look forward to hearing from our witnesses today on these and
other issues.
Ms. Titus. Thank you, Mr. Webster.
Today we are going to be hearing testimony from witnesses
on two panels. Each panel will be followed by questions from
the Members.
I would now like to welcome the witness on our first panel,
Mr. Dennis Alvord, who is the Acting Assistant Secretary for
Economic Development at the U.S. Department of Commerce.
Thank you for joining us today. We look forward to hearing
your testimony.
Without objection, our witness' full statement will be
included in the record.
So, since your written testimony will be made a part of the
record, the subcommittee requests that you limit your oral
testimony to 5 minutes.
Mr. Alvord?
Mr. Alvord. Thank you, Chairwoman.
TESTIMONY OF DENNIS ALVORD, ACTING ASSISTANT SECRETARY FOR
ECONOMIC DEVELOPMENT, ECONOMIC DEVELOPMENT ADMINISTRATION, U.S.
DEPARTMENT OF COMMERCE
Mr. Alvord. Chairwoman Titus, Ranking Member Webster, and
members of the subcommittee, thank you for the opportunity to
testify on behalf of the Economic Development Administration.
EDA's mission is to lead the Federal economic development
agenda by promoting innovation, competitiveness, and preparing
American regions for growth and success in the worldwide
economy. EDA's creation over 50 years ago has provided tens of
thousands of catalytic grants to State and local governments,
nonprofits, economic development districts, institutes of
higher education, Tribal entities, and other organizations to
help communities create jobs and generate private investment
across the country.
EDA grants support many of the country's most economically
distressed areas, including regions that are recovering from
economic shocks like those experienced by coal and nuclear
powerplant communities, or other communities impacted by the
decline of an important industry.
EDA, through its organic statute, the Public Works and
Economic Development Act of 1965, provides targeted investments
that address a range of economic development needs, including
research, planning, technical assistance, and construction and
implementation projects. Using this flexible, comprehensive set
of tools, EDA helps regions bounce back from economic setbacks
and position themselves for long-term, sustainable economic
growth.
Since EDA was last authorized in 2004, the economic
conditions that communities face have changed and evolved. Over
the last 17 years, new industries have emerged while other
sectors have declined. Regions have encountered and responded
to devastating natural disasters, and we have all suffered the
impacts of a global pandemic.
EDA has also evolved. The bureau has improved its business
practices to be more responsive to its customers, launch new
evaluation tools and economic models, and, over the past 4
years, grown exponentially in size and budget. In 2017, EDA had
an annual appropriation of $276 million. In 2018 and 2019,
through two disaster recovery supplementals, EDA's budget
authority grew to $901.5 million and $904 million,
respectively. In 2020, Congress provided the agency a historic
influx of $1.5 billion under the CARES Act. Less than 1 year
later, EDA has received an additional $3 billion in funding
under the American Rescue Plan of 2021.
This growth in appropriations has also resulted in rapid
growth in EDA's headcount. Thanks to the additional hiring
authorities EDA received under the CARES Act, we successfully
solicited and reviewed over 3,000 resumes, and onboarded 83
staff. These new staff have helped EDA obligate over two-thirds
of the funding within 1 year of Congress enacting the CARES
Act, and has EDA well positioned to obligate the $3 billion
from the American Rescue Plan by the September 30, 2022,
deadline.
Notably, since our last reauthorization, EDA has been
recognized for our work in disaster recovery as the lead in
economic recovery under the National Disaster Recovery
Framework, leadership in Federal resource integration and
collaboration, and the creation of a robust regional innovation
program that continues to grow, as authorized by the America
COMPETES Act.
What hasn't changed in the last 55 years is EDA's continued
ability to rise to the challenge and ensure the funds entrusted
to us are invested in an equitable, fair, and impactful manner,
and that we are reaching the communities most in need of our
assistance. We are proud of the bureau's accomplishments and
believe that we can expand our work to assist distressed
communities, especially in the current economic climate.
EDA's investments are highly effective and generate
significant impacts. As reported by SRI International in a 2017
study, ``EDA makes a substantial number of infrastructure
grants directly to organizations and communities across the
Nation to support projects to improve roads, highways, water
supplies, and other critical infrastructure components . . .
``In many situations, EDA funds act as the primary catalyst
for other funding--that is, without the support and funding of
EDA, many projects would struggle to attract the necessary
capital. EDA grants act as a signaling mechanism to validate
the project and mobilize outside investment.''
Looking at EDA infrastructure investments, SRI
International's analysis found that, for every dollar EDA
invested, $17.5 in additional private investment dollars were
generated. The same study also found that EDA-supported
projects, and the investment they attracted, generated an
average of an additional 56,554 jobs, $3.187 billion in wages
and salaries, and $4.053 billion in personal income each year.
While EDA has been exceedingly successful in implementing
its programs, our rapid growth in recent years and the ever-
shifting economic development landscape means we must
constantly be reassessing how we meet the challenges of the
future. As such, we must broaden our horizon with an eye
towards 21st-century technologies and sectors that our
communities will need to access if they want to be competitive,
looking forward.
Chairwoman Titus, Ranking Member Webster, and members of
the subcommittee, thank you for the opportunity to address you
today.
Restoring economic prosperity to all parts of the Nation is
an important priority of the administration, and EDA is well-
positioned to leverage its strengths in furtherance of this
goal. I look forward to answering any questions you may have.
[Mr. Alvord's prepared statement follows:]
Prepared Statement of Dennis Alvord, Acting Assistant Secretary for
Economic Development, Economic Development Administration, U.S.
Department of Commerce
Introduction
Chairwoman Titus, Ranking Member Webster, and members of the
Subcommittee, thank you for this opportunity to testify on behalf of
the Economic Development Administration (EDA). EDA's mission is to lead
the federal economic development agenda by promoting innovation and
competitiveness, and preparing American regions for growth and success
in the worldwide economy.
Since EDA's creation over 50 years ago, it has provided tens of
thousands of catalytic grants to state and local governments, non-
profits, economic development districts (EDDs), institutes of higher
education, Tribal entities, and other organizations to help communities
create jobs and generate private investment across the country. EDA
grants support many of the country's most economically distressed areas
including regions that are recovering from economic shocks, like those
experienced by coal and nuclear power plant communities, or other
communities impacted by the decline of an important industry.
EDA, through its organic statute, the Public Works and Economic
Development Act of 1965 (PWEDA), provides targeted investments that
address a range of economic development needs including research,
planning, technical assistance, and construction and implementation
projects. Using this flexible and comprehensive set of tools, EDA helps
regions bounce back quickly from economic setbacks and position
themselves for long-term, sustainable economic growth. The project
examples below represent a range of the many notable successes as well
as highlight the impact that these investments have made:
In 2015, EDA awarded a $1.28 million public works grant
to Lamb County for road infrastructure improvements to help attract the
growing dairy industry and support regional economic diversification.
The award came one year after the last denim mill closed in West Texas,
leaving 300 workers without a job. Together with a local investment of
$1.5 million and partnerships with the Texas Department of
Transportation and the Texas Department of Agriculture, the EDA grant
made it possible to build a wide, heavy load-bearing road with expanded
capacity for dairy trucks. The county completed the road infrastructure
project in 2018 and Continental Dairy Company renovated the denim mill,
turning it into a state-of-the-art dairy processing plant that
immediately employed 200 local residents. In addition, a special effort
was made to reemploy those who previously worked at the denim mill.
Today, the dairy processing plant is a key provider of powdered milk, a
major component in everything from yogurt to ice cream. It is also
expanding to incorporate butter manufacturing, a move that is expected
to create an additional 100 jobs in the facility. Due to the health and
safety precautions already in place for processing raw milk, the plant
has not only continued operations, it has expanded during the COVID-19
pandemic. The road project has also been an economic force multiplier:
with the additional dairy truck traffic, more businesses have opened in
the immediate area, including the county's first major truck stop and
rest area, which has created new regional business opportunities, and
advanced innovative ways for local economies to thrive.
In May 2020, EDA awarded $2 million in 2018 Disaster
Supplemental funds to support the city of Wells, Nevada with making
critical storm water infrastructure upgrades to deepen and improve the
existing storm water channels in Elko County. The project will help
mitigate floodwater by adding culverts that will direct stormwater
safely through the commercial core to a river basin, which will create
a resilient roadway to the city's commercial and industrial enterprises
and maintain operations during significant flood events. Once
completed, the project will minimize flooding hazards, restore
productivity to commercially zoned acreage, support job creation, and
advance economic resiliency against future disasters.
In September 2020, EDA awarded $10.2 million in 2019
Disaster Supplemental funds to support the Leon County Research and
Development Authority with making infrastructure improvements to
support the critical need for expansion of the innovation-centric
economy in Leon County, Florida, an area hit hard by Hurricane Michael
in 2018. The project will construct a 40,000 square foot high-tech
incubator with redundant power supply at the Innovation Park of
Tallahassee to serve as a business continuity hub during power outages
and to aid in the formation and expansion of technology businesses.
Once completed, the project will promote resiliency, foster new
manufacturing operations, train a workforce for new opportunities, and
strengthen the regional economy.
In August 2020, EDA awarded a $400,000 CARES Act grant to
the North Central Regional Planning Commission (NCRPC), an EDA-funded
EDD. Due to the COVID-19 pandemic, Kansas's nearly 500 manufacturers
have experienced decreased market demand, supply chain disruption, and
increased workforce instability. As a result of this funding, the NCRPC
has contracted with Kansas State University's Technology Development
Institute to provide technical assistance to area manufacturers and
entrepreneurs with no-cost experts advising in areas such as market
research, product innovation, product promotion, and opportunities to
implement technological innovation to help rebound from challenges
caused or exacerbated by COVID-19. NCRPC has also begun surveying small
businesses and non-profits to determine which training topics would be
relevant to their stakeholders, and will be hiring appropriate
contractors to provide online and on-site trainings in Spring of 2021
to revitalize small businesses and foster resiliency in the event of
future disasters. Additionally, NCRPC hired a disaster recovery
coordinator to stay on top of the ever-changing state requirements,
funding opportunities, and serve as a point of contact for businesses
and other stakeholders to find the latest information and services
available during the recovery from the pandemic.
In April 2021, EDA awarded a $2.5 million Assistance to
Coal Communities grant to the Pea Ridge Public Service District to
extend public sanitary sewer services to local businesses and allow for
future economic growth in Barboursville, West Virginia. To assist this
area that was negatively impacted by the decline in the coal and other
extraction industries and the associated loss of jobs and income, this
EDA investment will keep businesses in the area open and allow them to
continue serving their community. Additionally, this investment will
attract private investment, advance economic resiliency and directly
impact the growth and viability of both current and future businesses
throughout the region.
EDA is an agile and dynamic organization that has been able to
successfully meet the needs of thousands of grantees facing a wide
array of economic development challenges. EDA's success is a direct
reflection of the strong partnerships we have built and maintained with
a range of stakeholders including over 390 EDDs, 60 University Centers,
and 50 Tribal partners. These partnerships reflect the bedrock
principle that sustainable economic development should be locally
driven and responsive to the varied needs of communities.
Since EDA was last authorized in 2004, the economic conditions that
communities face have changed and evolved. Over the last seventeen
years, new industries have emerged while other sectors have declined,
regions have encountered and responded to devastating natural
disasters, and we have all suffered the impacts of a global pandemic.
EDA has also evolved. The bureau has improved its business
practices to be more responsive to its customers, launched new
evaluation tools and economic models and, over the past four years,
grown exponentially in size and budget. In 2017, EDA had an annual
appropriation of $276 million. In 2018 and 2019, through two disaster
recovery supplementals, EDA's budget authority grew to $901.5 million
and $904 million respectively. In 2020, Congress provided the agency a
historic influx of $1.5 billion under the Coronavirus Aid, Relief, and
Economic Security (CARES) Act, in addition to $333 million in annual
appropriations. Less than one year later, EDA has received an
additional $3 billion in funding under the American Rescue Plan (ARP)
Act of 2021.
This growth in appropriations has also result in rapid growth in
EDA's headcount. Using the temporary hiring authority EDA received
under the CARES Act, EDA successfully solicited and reviewed over 3,000
resumes and on-boarded 83 staff (with three more pending), many within
30-60 days, a record for EDA. These new staff helped EDA obligate over
two-thirds of the CARES Act funding within one year of Congress
enacting the CARES Act and has EDA well-positioned to obligate the $3
billion from the ARP Act by September 30, 2022. By contrast, using
regular hiring methods, EDA struggled to on-board staff quickly enough
to deliver on the two $600 million disaster supplements. Thanks to the
additional hiring authorities, and the dedication and hard-work of
EDA's existing staff, EDA expects to be able to obligate $4.5 billion
in supplemental pandemic-related funding in approximately two and a
half years.
Notably, since our last reauthorization, EDA has been recognized
for 1) our work in disaster recovery as the lead in economic recovery
under the National Disaster Recovery Framework, 2) leadership in
federal resource integration and collaboration, and 3) the creation of
a robust regional innovation program that continues to grow as
authorized by the America Creating Opportunities to Meaningfully
Promote Excellence in Technology, Education, and Science (COMPETES)
Act.
What hasn't changed for the last 55 years is EDA's continued
ability to rise to the challenge and ensure the funds entrusted to us
are invested in an equitable, fair and impactful manner and that we are
reaching the communities most in need of our assistance. We are proud
of the bureau's accomplishments and believe that we can expand our work
to assist distressed American communities especially in the current
economic climate.
Economic Impacts and Assessments
EDA's investments are highly effective and generate significant
impacts. As reported by SRI International in a 2017 study, ``EDA makes
a substantial number of infrastructure grants directly to organizations
and communities across the nation to support projects to improve roads,
highways, water supplies, and other critical infrastructure components
. . .
In many situations, EDA funds act as the primary catalyst for other
funding--that is, without the support and funding of EDA, many projects
would struggle to attract the necessary capital. EDA grants act as a
signaling mechanism to validate the project and mobilize outside
investment.''
Looking at EDA infrastructure investments between 2000-2010, SRI
International's analysis found that, for every dollar EDA invested,
$17.5 in additional private investment dollars were generated. This
same study also found that, across the 11 years of analysis, using the
combined impact of project costs and private investment generated, EDA-
supported projects and the investment they attracted generated an
average of an additional 56,554 jobs, $3.187 billion in wages and
salaries, and $4.053 billion in personal income each year. From these
results, SRI calculated that on average for every $6,368 in EDA
funding, a new job was created.
Additionally, EDA recently concluded an internal assessment of
infrastructure projects awarded between 2001 and 2015, using grantee
reporting of the number of jobs created or retained as a direct result
of EDA investments. The timeframe of 2001 to 2015 was used to allow us
to focus our analysis on data reported at six years following an award
(2021 being six years after 2015), which EDA has found to be its most
informative timeframe following award in terms of projects being
completed and response rates from grantees. This analysis showed that
for every $6,645 in EDA funding, a new job was created, consistent with
SRI's findings in their 2017 report as adjusted for inflation. EDA is
in the early stages of engaging another outside partner to update and
validate this data.
Ensuring Effectiveness
While EDA has been exceedingly successful in implementing its
programs, our rapid growth in recent years and the ever-shifting
economic development landscape means we must constantly be reassessing
how we meet the challenges of the future.
As noted above, over the past four years, EDA has increasingly been
called on to play a prominent role in disaster recovery efforts,
including two $600 million disaster supplementals in Fiscal Years 2018
and 2019, $1.5 billion under the CARES Act, and now $3 billion under
the ARP Act. Providing aid to communities in immediate need is one of
the most important responsibilities we have been entrusted. To that
effect, we are continuously looking for ways to streamline our internal
processes. For example, we are continuing to assess new ways to onboard
staff as quick as possible so we can be positioned to rapidly deploy
economic development to communities in need during severe disaster
seasons.
We are also looking into ways to elevate our disaster recovery
posture internally. Given this is a large and now consistent part of
EDA's portfolio, we are analyzing how best to build a core staff with
the capacity and expertise to respond to future disasters
expeditiously.
We are also looking into ways to improve our ability to deliver
economic development results in key growing sectors. One such example
is broadband. In many rural or underserved areas there is often only
one for-profit provider that is willing to install broadband because
the profit margins are too low. As such, communities often have to be
able to work these companies on commercially attractive terms to ensure
broadband is constructed in their area and operated effectively
afterward. EDA is looking into ways to help facilitate our ability to
catalyze broadband adoption more effectively in needy communities. As
mentioned earlier, PWEDA is now over 50 years old, and was conceived
with the aim of delivering traditional infrastructure like roads,
water, and sewer. As EDA looks toward the future, we must broaden our
horizon with an eye toward 21st century technologies and sectors that
our communities will need access to if they want to be competitive
moving forward. To that effect, EDA has programs like Build2Scale,
which builds regional economies through scalable startups by supporting
entrepreneurship and company growth, access to capital, and technology
commercialization; and, the STEM Talent Challenge, which creates and
implements innovative science, technology, engineering and mathematics
(STEM) apprenticeship models that expand regional workforce capacity to
support innovation driven businesses.
Finally, throughout the last few disaster seasons and the pandemic,
EDA's network of EDDs have shown their value in helping develop and
adapt regional recovery plans to help communities build back stronger
and more resilient, while also developing and managing key economic
development projects in various jurisdictions. EDDs have been able to
do this while often struggling to secure the local match required to
participate in an EDA grant. As such, EDA is looking into ways to
stabilize our EDD network to maximize their continued positive impact
on EDA's work As we continue to assess how best to position EDA for
future success, we look forward to working closely with our
stakeholders, other Federal agencies and Congress.
Conclusion
Chairwoman Titus, Ranking Member Webster, thank you for the
opportunity to address you today. EDA's accomplishments reflect our
commitment to encourage collaborative regional economic development,
promote innovation, cultivate entrepreneurship, build a well-qualified
workforce, and position our economic development partners to be more
resilient, agile, and competitive in the global marketplace. Restoring
economic prosperity to all parts of the nation is an important priority
of the Administration and EDA is well-positioned to leverage its
strengths in furtherance of this goal. I look forward to answering any
questions you may have.
Ms. Titus. Thank you very much, Mr. Secretary. We will now
move on to the Members' questions. Each Member will be
recognized for 5 minutes, and I will start by recognizing
myself.
I would like to talk to you, Mr. Secretary, about the new
set-aside for communities that have been so hard hit by the
drop in tourism. We know that that was just devastated by the
pandemic. People were not traveling. They couldn't go anywhere.
They didn't feel like being on holiday. Sixty-five percent of
total unemployment last year was in that hospitality, travel,
and tourism sector.
Now, we set aside 25 percent for Economic Adjustment
Assistance for those communities, and I wonder if you could
tell us where you are in the process of getting that money out,
setting up regulations. Is there anything else we need to do to
help you move that along, and make that work the way it was
intended?
Mr. Alvord. Thank you, Chairwoman. You know, we
unquestionably see the opportunity of assisting this particular
industry sector, and that, as you mentioned previously, it has
not been traditional for EDA to focus narrowly on a particular
industry sector.
But as you also mentioned, given the economic impacts from
the pandemic, we unquestionably saw that the travel, tourism,
and outdoor recreation sectors were among the most adversely
impacted as a result of the global pandemic. So we are thankful
to have the resources to be able to provide a very targeted
approach in this case, and addressing those needs.
I don't think that there are any additional authorities
that we need in order to be able to implement this assistance.
We are well along in the program design, and hope to be able to
soon make that funding available to the broader economic
practitioner community.
And we are intending to be incredibly flexible in our use
of those funds, so that we can meet a broad range of different
needs.
The impacts to the travel and tourism sector were very
widespread, affecting small and large communities alike
throughout the entire United States. So we certainly want to be
able to ensure that we can meet all of their different needs.
And you mentioned before, the importance of helping
communities to diversify their economies, and we certainly
couldn't agree more. So we hope that we will be able to put
some of this funding to use to help communities do just that,
as well as help bring back tourism, recreation, and other
activities that have been idle during the pandemic period.
So we will be funding a mix of strategies for recovery,
assistance for marketing, to help areas to bounce back quickly,
as well as core infrastructure investments to help the
industry.
Ms. Titus. I think flexibility is important, and I have
been getting questions about the confusion: can it be used to
promote, or advertise, or build infrastructure? So the sooner
we can get those instructions out, I think the better. People
will be very thankful for that.
Another question: as we move towards reauthorization, it
seems to me the need for a codified disaster recovery office at
EDA just seems more and more necessary. This language was
included when the House passed the Heroes Act, and I advocated
for creating such an office. Could you address that, as part of
our reauthorization considerations, and what capabilities you
might see such an office having or performing?
Mr. Alvord. Yes, Chairwoman, thank you for the question.
Unquestionably, disaster recovery has taken over the
majority of EDA's portfolio in the last 3 to 4 years, coming on
the heels of the natural disasters in 2017 and 2018, and then,
of course, the global pandemic.
First, I should start by thanking Congress, you and your
colleagues, for permitting a small reorganization within EDA,
where we were able to align some of our disaster-related
functions within the organization, bringing together economic
development integration in our disaster recovery functions
within a singular division. I think that is a good first step.
But what we saw is that it was very beneficial for us to be
able to aggregate these resources within the bureau. And we are
particularly appreciative of the flexibility that Congress
provided to us under the CARES Act and, again, under the
American Rescue Plan, to be able to have additional hiring
flexibility, so that we could act in a more agile manner in
responding to these disasters, and be able to scale up, bring
on staff quickly in order to be able to deploy resources to
these hard-hit areas.
So we would certainly be open to continuing discussions
with you about that and other areas that we might build upon to
enhance our role in this space.
Ms. Titus. Thank you. We look forward to working with you
on that, because I think that would be something to consider as
an improvement as we look at reauthorization.
Mr. Webster?
[Pause.]
Ms. Titus. I think you need to unmute, Mr. Webster.
Mr. Webster. How is that?
Ms. Titus. That is perfect, thank you.
Mr. Webster. OK, thank you.
Mr. Alvord, can you explain the different levels of local
match under the EDA programs, and what is the process and
criteria for EDA to adjust or possibly even waiver those
matches?
Mr. Alvord. Absolutely. So for EDA's core programs under
the Public Works and Economic Development Act, generally, we
require a matching component. Typically, that match starts at a
50/50-percent match rate. Depending on the levels of economic
distress exhibited by the community--and we typically look at
factors such as unemployment and per-capita income--we do have
the ability to go up to an 80-percent Federal share. In the
case of Indian Tribes, you can go to a 100-percent share.
Now, though that is true of our core programs under the
Public Works and Economic Development Act, in the case of the
supplemental appropriations that EDA has provided, Congress
expressly provided authority for EDA to go up to 100 percent.
So what we find is that a lot of the work that we have been
doing under those disaster supplementals--the CARES Act and the
American Rescue Plan--is really occurring at the higher grant
levels, at 80 percent and above.
And we do have the ability in truly exigent circumstances
to be able to waive those matching requirements through our
traditional programs, as well. Typically, we are looking for
some indication that the community has effectively exhausted
its taxing [inaudible] authority.
Mr. Webster. Thank you. Just as it is with the chair,
tourism and travel is important to us. I am from Florida. And
with respect to set-aside in that particular area, what
approach do you think you will be taking in order to facilitate
that?
Mr. Alvord. Yes, well, as I mentioned, we do want to ensure
that we are able to meet a broad and diverse range of needs
from across the country.
And unfortunately, the funding that was provided under the
American Rescue Plan was pursuant to our economic adjustment
authority, which is our most flexible authority. It allows us
to engage in a wide range of activities, including things like
recovery strategies, market feasibility studies. We are able to
capitalize locally and regionally through the revolving loan
funds, as well as invest in various different types of
infrastructure that can enable industries to diversify, bounce
back, and grow.
And in the case of travel and tourism in particular, we are
aware that there is high demand for things like marketing in
order to encourage tourism to return to areas that have seen a
significant downfall during the pandemic, but as well as
infrastructure, to diversify the economies of areas that have
been highly reliant on a single industry sector such as
tourism.
So we fully anticipate making a range of different types of
investments.
Mr. Webster. Mr. Alvord, how critical is broadband to
farmers to keep up with the evolving agriculture industry?
Mr. Alvord. You know, I truly believe that there are no
low-tech industries any longer. As we look at the 21st-century
economy, broadband has become a critically important enabling
tool for almost every industry sector. The pandemic certainly
shined a spotlight on that need, where we saw significant
demands for broadband in underserved areas, in particular. So
media can play a critically important role in helping to
address those needs.
Mr. Webster. Thank you so much. I yield back.
Ms. Titus. Thank you, Mr. Webster.
Ms. Norton, you are recognized for 5 minutes.
Ms. Norton. Thank you, Madam Chair.
Mr. Alvord, I am interested that environmentally
sustainable economic development is, of course, a priority for
your agency, because it is also essential for improving our
country's competitiveness.
EDA is tasked with supporting green, and this is my
interest: green or nature-based versions of its traditional
grant-based investments. And I am pleased that your agency
recognizes it is a key component of advancing and, indeed,
growing the economy. The benefits of using nature-based
approaches to tackle economic and infrastructure challenges are
becoming more widespread, and I am pleased that they are
becoming more commonly accepted as good practice for enhancing
resilience, while creating private-sector jobs and spurring
innovation.
I wonder if you could share with us what steps EDA is
taking to ensure its grant awards are supporting sustainable,
nature-based economic development, and whether EDA is working
with experts to guide these investments.
Mr. Alvord. Thank you, Congresswoman, for the question. I
appreciate that very much. This is an area that I feel,
personally, very passionate about. In fact, I came to public
service as the agency's first national brownfields coordinator,
which, of course, had a focus on the dual objectives of both
spurring economic development, but also ensuring environmental
cleanup and environmentally sustainable development.
So we have had a long history, actually, working in the
environmentally sustainable development space. We, as I
mentioned, have been involved with brownfield revitalization
for many years. We also implemented, some years ago, the Global
Climate Change Mitigation Incentive Fund, which focused very
much on green buildings, and ensuring greater levels of energy
efficiency as part of some of our infrastructure development.
And now, of course, we have just launched a new investment
priority on environmentally sustainable development, and we are
taking an even broader approach there. This investment priority
will focus on how we can leverage green products, processes,
places, and buildings to ensure a more sustainable economy.
And as you mentioned, there are significant opportunities
in the growing green energy and environmental sector for
innovation, commercialization, and future investment to grow
our economy. But there are also significant opportunities to
leverage improvements in the way that we undertake our
development to ensure that it is done in a more sustainable
manner, and EDA intends to incentivize exactly those types of
investments through this priority.
Ms. Norton. I note your mention of climate change, which,
as far as I am concerned, should be a number-one priority in
our country. I wonder if you would elaborate more on the
current and perhaps even future impacts of climate change, and
how you take that into consideration when evaluating
applications for public works projects.
Mr. Alvord. Yes, that is such an important question, and it
is something that we have been more and more involved in as we
have become more and more involved in disaster recovery work.
And it complements, I think, very well another one of our
assessment priorities, which is economic and environmental
resilience.
And so, when we are looking at helping economies to bounce
back and build back more quickly, we want to make sure that we
are putting infrastructure in place that is going to be more
resilient. And of course, we are also sensitive to the cost of
that infrastructure, and recognize that there is a significant
cost in terms of energy and developing construction materials.
Of course, there is embodied carbon within those materials. And
we want to make sure that we are building sustainably, so that
we don't have to deconstruct and reconstruct over and over
again to support our economy.
So we are certainly very focused on that, both at the front
end, in terms of the types of investments that we support, but
also on the back end in the way that we are implementing those
projects.
Ms. Norton. Thank you very much. My time has expired.
Ms. Titus. Thank you. Certainly, that would be a priority
that, if you have this special division for disaster
mitigation, it could fit right into.
Mr. Alvord. Absolutely.
Ms. Titus. I now recognize Mr. Guest for 5 minutes.
Mr. Guest. Thank you, Madam Chairman.
Mr. Secretary, first I want to thank you for being with us
today to discuss the importance of the reauthorization of EDA.
I was excited to read in your report, where you say: ``We are
also looking into ways to improve our ability to deliver
economic development results in key growing sectors. One such
example is broadband.'' And I know that you spoke on broadband
moments ago with Representative Webster.
I believe that we have seen, particularly in the world of
COVID-19, the importance of high-speed internet for families
and individuals. We see individuals who are working from home,
who are being educated from home, who are shopping from home,
worshiping from home, who are receiving their healthcare from
home through telemedicine.
And I also believe that broadband is a key component in
economic development, particularly in rural and remote
communities. And I would often argue that the deployment of
high-speed and reliable broadband is the most important thing
that we can do for rural America. Whether it be manufacturing,
agriculture, or small business, high-speed internet, which once
was a luxury, is now becoming a necessity.
With that in mind, that is why my office was proud to
partner with Ranking Member Graves on the E-BRIDGE Act, which
would expand the capabilities of your agency to provide high-
speed broadband development initiatives with existing grant
programs.
And so I would like, Mr. Secretary, if you will for just a
few moments, if you can expand on the role that EDA plays in
broadband development, and how the enhancement of legislation
like the E-BRIDGE Act would better allow EDA to assist our
communities.
Mr. Alvord. Thank you, Congressman Guest, for the question.
I couldn't agree with you more about the importance of
broadband as a critical enabling factor for successful economic
development. Just in the way that roads and water and sewers
and rural electrification was critically important to enabling
our economy in the past, broadband has served that role today.
And EDA supports broadband in a variety of different ways.
We have done a lot of work supporting planning and market
feasibility studies to help communities figure out the best
solution for their regions. There is a lot of variability
across our diverse country. In some cases, it makes sense to
run fiber. In other cases, wireless solutions are more
appropriate, given the geography. And we can certainly help
communities with that aspect of exploring broadband.
We have also supported broadband infrastructure, actually
helping to bring fiber to communities. We haven't had adequate
appropriations to do large investments in trunk lines to bring
broadband to previously underserved areas, but we have had some
success on a smaller scale, particularly in a business context,
being able to support broadband, bringing broadband to an
industrial park or a science park, helping to bring broadband
maybe that last mile, or at a building scale.
I think one of the things that we found is that, unlike
more traditional infrastructure, which was based on a public-
public relationship, broadband infrastructure is quite often
based on a public-private partnership in order to be able to
deploy that. And so this is one area where EDA's authorization
statute perhaps has not kept up with traditional times.
And we were pleased to provide some technical drafting
assistance to the sponsors of the E-BRIDGE Act, and we would
certainly be open to continuing to explore what might be most
appropriate in the context of a future EDA reauthorization.
Mr. Guest. Mr. Secretary, thank you again for joining us,
and thank you for your continued support for broadband. Please,
as there are ways in which we, as Members of Congress, can
continue to make sure that we are making broadband available to
our rural communities, that we are promoting that economic
development, please continue to have an open dialogue with us,
and let us know what we can do to better partner with you.
Mr. Alvord. Thank you.
Mr. Guest. Thank you, Madam Chairman, and I yield back.
Ms. Titus. Well, thank you, Mr. Guest. Be sure you keep us
up to date with your E-BRIDGE bill, so we can build some of
that into our reauthorization. It sounds like there is a lot of
interest in that, and a lot of need for it. It would be very
helpful.
I will now go to Mr. Pappas for 5 minutes.
Mr. Pappas. Well, thank you very much, Madam Chair.
And Mr. Alvord, I appreciate your comments, and really look
forward to working in a bipartisan fashion to realize a
reauthorization of EDA, which is so crucial. I want to thank
you for all the work that you have done through this tough
time. And I appreciate the attention that you have brought to
some of the critical programs here.
One of the issues that I hear about when I talk to
businesses in my district, especially manufacturers, is
challenges around workforce. I mean, we are already seeing, in
my State of New Hampshire, a 3.2-percent unemployment rate. We
know there are more that still have to return to the workforce.
But this is going to be a long-term challenge to figure out how
we recruit, retain, train the workforce of tomorrow to make
sure that we are aligning the skills with the needs of our
companies.
So I am wondering if you could offer some thoughts about
how EDA can help employers with these necessary efforts to find
skilled workers, to help them recruit, and to ensure that they
can really reach their full economic potential.
Mr. Alvord. Thank you, Congressman, for your support, and I
certainly look forward to working with you, as well.
Workforce is an area that we have seen significant
increased demand for EDA assistance over the last several
years. And so we have begun to invest more and more heavily in
this area. And it is certainly an area that we see receiving
some enhanced focus under the American Rescue Plan
implementation, as well.
Over the last year we had the opportunity, for the first
time, to implement a program that has been on the books and
authorized for quite some time under section 28 of the
Stevenson-Wydler Act or America COMPETES, called the STEM
apprenticeship program.
And for the first time last year, we received $2 million in
appropriations to implement that program, which is not a lot in
the context of the greater workforce development needs across
the country, but it did give us the opportunity, for the first
time, to have a very targeted competition in this space. And we
had a very robust competition that was highly subscribed, and
we ended up making seven awards for that $2 million across a
diverse range of applicants.
We had an Alaska Native community, a small rural community
college, an urban recipient, and so we are very much looking
forward to seeing the results of this initial cohort of
awardees, and what lessons we might take away from that
experience that we would be able to scale, then, in the context
of our other programming.
Unquestionably, one of the trends that we have seen is
that, when we are able to align specific industry needs within
a region and the workforce training programs, we get much
better results. And EDA is able to, again, invest in both the
hard and the soft infrastructure to support workforce
development and training.
Mr. Pappas. Well, terrific. Well, thanks for that, and I
would be interested to hear the impact that that $2 million
makes for those seven awardees. And if there is any additional
detail on that, please let us know.
One final question. I know, contained within the proposal
that the administration has put out, the American Jobs Plan, it
mentions lifting the $3 million infrastructure cap on how much
can go to projects. I am just wondering if you have thoughts on
EDA-funded infrastructure projects, as they can be a catalyst
for economic growth, and what level of investment do you see as
necessary to address our infrastructure needs.
Mr. Alvord. Yes, thank you, Congressman, for that question.
It is a great opportunity to clarify in that way.
So there is not a statutory cap on any of EDA's programs,
not in our public works and infrastructure programs, or any of
our other programs. I can certainly understand why there may
have been a perception that there is a cap, because,
practically speaking, EDA does entertain a lot of investments
in that price range. We have a variety of different types of
proposals. They quite often come in a $1.5 to $3 million range.
So I can see why there might have been a sense that there was a
cap.
In essence, it was probably largely driven by the fact
that, at our appropriation levels, we can only support so many
investments at a certain level. What we have seen, under the
various disaster supplemental appropriations, is quite a lot
more investment activity at higher levels. And there is, in
fact, a significant demand for that type of investment at the
$5, $10, even $15 million infrastructure range.
Mr. Pappas. Well, terrific. Thanks for the clarification on
that. I appreciate your work, and I yield back.
Mr. Alvord. Thank you.
Ms. Titus. Thank you. Mr. Carbajal, you are recognized for
5 minutes.
Mr. Carbajal. Thank you very much, Chairwoman Titus.
Across the Nation, U.S. nuclear capacity is estimated to
fall by 10.5 gigawatts by 2025 with the closing of 12 reactors,
including the Diablo Canyon nuclear reactor in my district. The
closure of the Diablo Canyon nuclear powerplant will have a
significant economic impact in my region and my district. The
powerplant currently employs roughly 1,500 individuals, with an
average salary of $157,000.
Many of my constituents are rightfully worried about the
job loss that will happen after the closure of the Diablo
Canyon powerplant. In Congress, I have worked with my
colleagues to include over $15 billion to the Economic
Development Administration to be able to provide funding for
competitive grants, and assist communities facing closure of
nuclear powerplants.
I have a three-part question for you.
Can you provide an update on how this funding is being
allocated?
Two, how is EDA working with communities to create plans to
mitigate job loss, and is workforce retraining part of those
efforts?
And lastly, are there success stories or examples you could
share with us on this program?
I am currently exploring ways to continue to support it.
Mr. Alvord. Thank you very much, Congressman, for that
question. And this is a newly emerging priority area within
EDA's portfolio, and we appreciate the additional resources
Congress has provided us to do work in this area.
As you mentioned, for the last couple of years, we have
received dedicated funding to assist communities that have
nuclear powerplants that have come to the end of their useful
life, and they are looking at transitioning their economies
into new areas.
We have begun to implement that assistance. We developed an
allocation algorithm to allocate that assistance across EDA's
six regional offices based on a variety of criteria, including
the number of such facilities that they have, and the various
phases that those facilities are in, as well as various
economic distress and other traditional criteria that we look
at. And they have begun to reach out to communities and solicit
applications for that assistance.
The communities are at very different stages. Some have
plants that have already closed, and they have already faced
the economic impacts, and the outfall that has resulted from
that closure. Others are facing an imminent closure, and they
are beginning to plan and prepare for that. And for others,
that closure may be much further out, but we certainly
encourage them to also consider diversifying their economy.
One of the challenges that many of these communities have
is that they were not highly diversified. They were very, very
focused on the power generation, and the resulting supply chain
industries. And as a result, when they go away, it does have a
very, very significant impact on the economy.
Now, we don't have a lot of successes to report in this
area to date, because we are just beginning our investment
activity. But I do think we have a number of relevant and
germane examples from work that we have done across other
sectors.
So for the last several years EDA has been investing very,
very heavily in assistance to coal communities. And many of the
characteristics are very similar, where, you know, the main
industry that the community is reliant upon has changed,
something has changed that undermines the base of the economy.
And therefore, they need to look at new opportunities to
diversify.
To your question about workforce, workforce has to be part
of the equation. It is a critically important building block.
And in most cases, what we need to be able to do is work with
industry closely to be able to understand what needs they have,
what skill sets they are looking to acquire, so that we can
then work with community providers to develop systems and
training programs to be able to transition the workforce into
those new jobs.
Mr. Carbajal. Thank you. With the remainder of my time, one
of the EDA's new investment priorities is an effort to increase
planning or implementation projects that advance equity. How
does EDA plan to incorporate equity considerations into its
grant programming?
Mr. Alvord. Yes, we have recently revised our investment
priorities, and we have made equity our number-one priority,
recognizing that it is critically important that we go out of
our way to focus our attention on those communities that are
most in need of our assistance. Statutorily, we have a focus on
economically distressed areas and regions.
With the equity priority, we will be taking a very
proactive approach to reaching out to underserved communities,
to minority communities that may not have been aware of EDA
assistance in the past, and educating them about the resources
that are available, and frankly, providing a little bit of
extra technical assistance to ensure that they are able to
competitively compete for the resources that we have available.
And we will also be considering that as part of our evaluation
criteria, to make sure that we are getting to those
communities.
I recently had an occasion to participate as part of a
Department-run Tribal consultation, and I was very struck by
hearing many of the Tribal leaders comment about the fact that
they just weren't familiar with the full panoply of programs
that the Commerce Department provides. I think it is really
incumbent upon us to be proactive in reaching out to these
underserved communities to make sure that they are, and can
avail themselves of those opportunities.
Mr. Carbajal. Thank you, Mr. Alvord. I am out of time.
I yield back, Madam Chair.
Ms. Titus. Thank you. You bring up a very good point,
though. Maybe some of your staff would be willing to work with
our offices to do roundtables or public hearings to inform
different communities about the programs that you have
available. So we would like to work with you on that. I know my
district would benefit from it, so I am sure----
Mr. Alvord. Chairwoman, we would welcome the opportunity,
we really would.
Ms. Titus. Great, all right. We will work on that. Well,
thank you, Mr. Secretary. Your comments have been very
enlightening. We have certainly appreciated your time. And we
will be working with you pretty extensively as we move this
reauthorization forward, and as we get some of your folks out
into the district.
We will add all those comments to the record. And if there
are no further questions, I will call up panel 2.
Thank you so much, Mr. Assistant Secretary.
Mr. Alvord. Thank you for having us.
Ms. Titus. I would ask the witnesses on panel 2 to please
turn their cameras on and keep them on for the duration of the
panel.
I would now like to welcome the witnesses on the second
panel: Ms. Lisa Cooper is executive director of the Northern
Kentucky Area Development District; Mr. Garrett Hawkins is
president of the Missouri Farm Bureau; Mr. Jonas Peterson is
president and CEO of Las Vegas Global Economic Alliance; the
Honorable Lenny Eliason is the commissioner of Athens County,
Ohio; and Mr. Dan Carol is the director of the Milken Institute
Center for Financial Markets.
So thank you all for being with us today. We look forward
to hearing your testimony.
Without objection, your full testimony will be included in
the record. And, as with the previous panel, since it is
included, the committee would request that you limit your oral
testimony to 5 minutes.
I would now like to recognize Mr. Massie, who is connected
to our first witness, and can give us an introduction to her.
Mr. Massie. Thank you, Madam Chairwoman. It is my honor and
pleasure to introduce my friend and northern Kentucky native,
Lisa Cooper.
She got her bachelor of business administration degree at
the University of Kentucky, and her master's in public
administration from Northern Kentucky University. And she is
the executive director of the Northern Kentucky Area
Development District. It covers eight counties in northern
Kentucky, and it is one of the most prosperous areas of
Kentucky. Even though we have been hit by COVID, as everybody
else has been hit, it is one of the lowest areas for
unemployment.
And so I would just like to say in the introduction that I
think it is prosperous, based in large part, on her work and
her leadership as the executive director at that area
development district. She has worked on community development,
human services, and workforce development, which was mentioned
in the previous panel. So she has a great perspective, and I
welcome her today.
Ms. Cooper. Thank you so much, Congressman Massie, for
those kind words. I really appreciate it.
Ms. Titus. Thank you, Mr. Massie.
Just a second, Ms. Cooper. OK, now you are recognized, and
you can proceed for 5 minutes.
TESTIMONY OF LISA COOPER, EXECUTIVE DIRECTOR, NORTHERN KENTUCKY
AREA DEVELOPMENT DISTRICT, ON BEHALF OF THE NATIONAL
ASSOCIATION OF DEVELOPMENT ORGANIZATIONS; GARRETT HAWKINS,
PRESIDENT, MISSOURI FARM BUREAU, ON BEHALF OF THE AMERICAN FARM
BUREAU FEDERATION; JONAS PETERSON, PRESIDENT AND CHIEF
EXECUTIVE OFFICER, LAS VEGAS GLOBAL ECONOMIC ALLIANCE, ON
BEHALF OF THE INTERNATIONAL ECONOMIC DEVELOPMENT COUNCIL; HON.
LENNY ELIASON, COMMISSIONER, ATHENS COUNTY, OHIO, ON BEHALF OF
THE NATIONAL ASSOCIATION OF COUNTIES; AND DAN CAROL, DIRECTOR,
MILKEN INSTITUTE CENTER FOR FINANCIAL MARKETS
Ms. Cooper. Thank you so much, Chairwoman Titus, Ranking
Member Webster, and members of the subcommittee. Thank you for
the opportunity to testify today on the U.S. Department of
Commerce and Economic Development Administration, and its
importance to my community, our region, and our country.
As Congressman Massie said, my name is Lisa Cooper, and I
am the executive director of the Northern Kentucky Area
Development District. We are a regional planning and
development organization based in Florence, Kentucky. And we
serve 8 counties and 54 cities. Our core mission is to
facilitate economic development and community development
efforts in our region, and to serve as a regional convener. We
have a board that is made up of both local elected officials,
as well as regional community leaders.
In addition, I also serve as a board member of the National
Association of Development Organizations, known as NADO. NADO
represents hundreds of organizations like mine that are EDA-
designated economic development districts across the country.
We help deploy Federal funding into local projects, support
business growth, facilitate both urban and rural planning, and
provide community services and technical assistance, and ensure
compliance and accountability with a lot of the programs that
we work with EDA on.
So today I would like to take a few minutes and share a few
examples of the significance of EDA to my community.
EDA investments have many important impacts across our
region. One example is the recent EDA SPRINT grant that has
been received by Northern Kentucky University. This is going to
help leverage the university's expertise in data analytics,
healthcare, technology, and logistics into a regional incubator
and regional projects. This grant supports innovation and
entrepreneurship, and does help promote economic
diversification throughout our region.
Another very different project involved EDA funding through
its public works program for Carroll County, which is one of
our rural counties, and three surrounding rural counties for a
regional wastewater treatment plant. This project not only
helped mitigate some very concerning environmental hazards for
the area, but it has allowed for the consolidation of a number
of smaller treatment plants. So this is resulting in things
like cost savings, better services to residents and businesses,
and it has also allowed them to expand their economic
development efforts.
And then thirdly, I wanted to talk just a little bit about
our EDA revolving loan fund. We have operated this program for
24 years. And last year, when it was recapitalized after EDA
received some supplemental funds for the CARES Act, this
allowed us to provide loans to small businesses to help them
stay afloat and stay in business through the COVID-19 pandemic.
For all of these reasons, I do want to emphasize the
importance of reauthorizing the EDA. But in doing so, I would
also like to ask you to consider making some further
enhancements to EDA programs and funding.
So first, a very critical component of EDA's investment
approach is the EDA partnership planning grants that are
provided to economic development districts like mine. These
planning grants lay the foundation for subsequent investments
into community projects.
So, in my experience, the basis for successful project
implementation begins with a robust and inclusive planning
process that promotes regional input.
Secondly, I would recommend consideration of amending the
Public Works and Economic Development Act of 1965 to specify
that EDA investments into high-speed broadband development are
eligible uses. NADO did endorse, last session, the bipartisan
E-BRIDGE legislation that Congressman Guest and Chairwoman
Titus mentioned earlier. And we would encourage the committee
to pursue reforms of this nature that we think could be very
beneficial.
In reauthorizing EDA, I respectfully request Congress to
place some emphasis on increased funding for EDA's public works
program, research and national technical assistance program,
and the partnership planning grants. These funding sources are
the most important to organizations like mine, but most
importantly to the communities and the residents that we serve.
I would also ask you to consider an overhaul of EDA's
economic distress formula to ensure a more inclusive and
equitable pattern of investment across the country. Currently,
the formula requires communities to invest as much as 50
percent of the total project cost, and this can be prohibitive.
Even for the most underserved and distressed communities, the
maximum allowable Federal grant at this point is 80 percent,
except in very rare cases. So I would encourage Congress to
consider including direction for EDA's economic distress
formula to be overhauled, and they can have a more reliable
pattern.
And finally, I would encourage support for the
recommendation made by EDA's Stakeholder Coalition, a group of
national organizations that have come together in support of
EDA's funding and program, to increase EDA's annual authorized
funding level to $3 billion. EDA's current funding level does
not accurately reflect the importance of EDA's role as the
leading Federal agency with a focus solely on economic
development.
So, in closing, EDA has been a crucial Federal partner for
my region, and EDA's investments have a proven record of
success. I encourage you to support not only the
reauthorization, but also the increased funding for the agency.
Thank you so much for the opportunity to address you today,
and I look forward to answering any of your questions.
[Ms. Cooper's prepared statement follows:]
Prepared Statement of Lisa Cooper, Executive Director, Northern
Kentucky Area Development District, on behalf of the National
Association of Development Organizations
Chairwoman Titus, Ranking Member Webster, and members of the
Subcommittee, thank you for the opportunity to testify today on the
U.S. Department of Commerce Economic Development Administration (EDA)
and its importance to my community, my region, and our nation.
My name is Lisa Cooper, and I am the Executive Director of the
Northern Kentucky Area Development District (NKADD), a regional
planning and development organization which is based in Florence,
Kentucky and serves a geographic region comprised of eight counties. My
organization's core mission is to facilitate economic and community
development and regional collaboration. Our board is comprised of local
officials including mayors and county officials as well as non-elected
citizen members from each county in our region.
I also serve as a board member for the National Association of
Development Organizations, known as NADO. NADO represents hundreds of
other Regional Development Organizations (RDOs) and EDA-designated
Economic Development Districts (EDDs) like mine across the country.
These regional organizations serve as catalysts for regional economic
development, urban and rural planning, business growth and support,
public-private partnerships, and strategic initiatives designed to
fulfill locally-identified priorities. Regional Development
Organizations and EDDs across the country collectively assist thousands
of cities and counties across the country with initiatives and projects
focused on economic development, workforce training, transportation
planning, public infrastructure, affordable housing, disaster
prevention and response, public health, and other community services.
Today, I will address three core issues pertaining to the U.S.
Economic Development Administration:
1. First, I will explain the importance of EDA funding and
programs to my community and my region.
2. Second, I will highlight the significance of the EDA
supplemental funding that my organization received through the CARES
Act, and I will explain how it is helping my community's economy
recover from the impacts of the pandemic.
3. Finally, I will underscore the importance of reauthorizing the
EDA, and I will recommend opportunities for reforms and enhancement of
the EDA and its programs that could be implemented through
reauthorization.
First, I will begin by highlighting the significance of EDA to my
community and my region. My organization acts as a convener of local
elected officials, economic development practitioners, business
leaders, non-profit organizations, educators, and other stakeholders
within a defined geographic region in Kentucky. We serve the region by
providing services and technical assistance, such as strategic
planning, project development and implementation, and by facilitating
access to capital. We also help deploy federal, state, and local funds
into the region, and we help to ensure compliance, accountability, and
implementation of projects.
EDA investments have had a very significant and positive impact in
my region, as they have supported many successful economic development
projects, including some that I will highlight today.
For example, EDA provided funding for the Carroll County Regional
Wastewater Treatment Plant through its Public Works program to
regionalize wastewater treatment for Carroll County and three
surrounding counties. This project not only mitigated environmental
hazards in the area, but also allowed for the consolidation of a number
of smaller treatment plants. This has resulted in costs savings through
economies of scale, better service to residents and businesses, and
economic development opportunities that were not possible prior to the
building of the plant.
Another regional example is the Northern Kentucky University (NKU)
SPRINT Grant that was provided through EDA's Scaling Pandemic
Resilience Through Innovation and Technology (SPRINT) Challenge. This
project leverages NKU's expertise in data analytics, healthcare,
technology, and logistics into regional projects. It also facilitates
entrepreneurial innovation and provides the tools that entrepreneurs
need to thrive, including access to knowledge, access to data, access
to talent, and access to capital. This project is increasing regional
competitiveness by enhancing the region's entrepreneurial opportunities
and capacity, overcoming challenges inhibiting innovation and job
creation, driving innovations from the initial idea through
commercialization, and supporting rural and underserved founders, to
create an ecosystem in which innovators and entrepreneurs will
strengthen and diversify the regional economy.
EDA's success stories also extend far beyond my region. In my role
serving 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 and rural
areas of the country, EDA investments are essential.
Another critical component of EDA's investment approach is the
Partnership Planning grant funding provided to EDDs. EDA planning
grants serve as essential building blocks that lay the foundation for
subsequent investments into community projects and local priorities.
EDA has been a key partner in helping 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 locally-identified
priorities and projects that ultimately lead to job creation and
retention in our communities, and that help leverage other sources of
federal, state, and local funding into communities. The network of
hundreds of EDA-designated EDDs across the country have decades of
experience in implementing strategic economic development planning. It
is crucial for EDA to continue funding this planning process as
communities are called upon to continue to reassess their long-term
strategic development plans and continue to adjust to changing economic
conditions. I strongly believe that the basis for effective project
implementation is to begin with a robust, equitable, and inclusive
planning process that promotes regional input.
The second core topic I would like to highlight today is the
significance of the EDA supplemental funding that my organization
received through the CARES Act, and how it is helping my region
recover.
The $1.5 billion in supplemental relief funding that EDA received
through the passage of the CARES Act has been essential for my
community. Since my organization is an EDD in good standing, my
organization therefore received an invitation letter from our EDA
Regional Office which invited us to request up to $400,000 in non-
competitive, automatic funding at 100% federal share.
EDA utilized this automatic, non-competitive process to distribute
funding to its institutional partners during the pandemic because this
was the most expedient and efficient way to quickly inject funding into
communities during a national emergency, and I applaud EDA for using
this efficient method to quickly distribute needed emergency relief
funding.
I truly cannot stress enough how important and valuable the
automatic, non-competitive approach to provision of relief funding was
for my organization and region. The infusion of supplemental relief
funding allowed my organization to quickly hire a disaster recovery
coordinator to help coordinate my region's response to the pandemic. It
also allowed our staff to work with our local governments on planning,
applications, and compliance the myriad of pandemic funding
opportunities and grants. Many of our communities have volunteer
elected officials and limited staff, and they would have likely been
either left out of funding opportunities or unable to comply with
funding guidelines without the staff we have in place through EDA
funding to assist them on a daily basis.
Additionally, the EDA funding provided through the CARES Act also
allowed my organization to recapitalize our existing EDA Revolving Loan
Fund (RLF) which we have operated for 24 years. In the past, we have
used the EDA RLF program to provide loans to small businesses in need
of working capital. Typically, the EDA RLF program is especially
beneficial for small businesses and entrepreneurs that might not
otherwise be able to borrow working capital, because through the EDA
RLF program, we can provide gap financing at or below market rates.
During the pandemic, the EDA RLF program became a vital lifeline
through which my organization could provide small loans that were
desperately needed by local businesses in order to stay afloat
throughout the pandemic.
I also want to express my gratitude and comment EDA for providing
CARES Act funding to institutional EDA partners at 100 percent federal
share, with no local match requirement during the pandemic. The
provision of 100% federal share relief funding allowed my organization
and region to tap into EDA resources without having to sacrifice local
resources, and without having to devote significant time to identifying
and securing other partners and/or other sources of local investment
during an already severely challenging time, when community resources
needs far outpaced available resources.
It is my hope that EDA will continue to use a similar approach to
the one that was used after the passage of the CARES Act when
administering the supplemental funding that the agency has received
through the American Rescue Plan Act. I would also encourage Congress
to ensure that a similar approach is used to administer any future
supplemental funding that is provided to EDA for the purpose of
disaster response or emergency relief.
The third and final point I would like to highlight today, for all
the aforementioned reasons, is the importance of reauthorizing the EDA.
In doing so, I ask that you further enhance elements of EDA's programs
and funding that are most important to communities like mine, and I
also encourage you to take advantage of some opportunities for reforms
of the EDA's that could be accomplished via EDA reauthorization.
Although EDA continues to operate from year-to-year through the
annual congressional appropriations process, its last authorization
lapsed in 2008. I encourage the Committee to support a reauthorization
of EDA that would protect and elevate EDA's standing as a driver of
long-term economic growth and federal investment in communities across
the country.
In reauthorizing EDA, I encourage you to support an increase in
EDA's annual authorized funding level to $3 billion. EDA's current
authorized funding level does not accurately reflect the importance of
the role the agency plays as the leading federal economic development
agency, nor does it adequately meet the existing need for community
development resources. Between supplemental disaster response funding
and annual appropriations, EDA received nearly $2 billion in funding
for FY 2020 and more than $3 billion in FY 2021. In FY 2020, the agency
received requests for funding that far surpassed EDA's available
funding, which is indicative of both the value of EDA's programs as
well as the significant and growing need for federal economic
development resources.
I also encourage you to place emphasis especially on increasing
funding for EDA Partnership Planning grants, EDA Public Works funding,
and EDA's Research and National Technical Assistance (RNTA) programs.
These funding sources are among the most important to organizations
like mine across the country, as they serve as the foundations of
strategic development plans, guide the development and implementation
of locally-identified projects, and help leverage other sources of
investment into communities.
In reauthorizing EDA, I also encourage you to take advantage of
some opportunities for reform, including the following recommendations.
I encourage you to reassess and reconstitute EDA's
economic distress formula, and consider reducing local match
requirements permanently, in order to ensure a more equitable pattern
of investment across the country. Currently, EDA's economic distress
formula requires communities to invest as much as 50 percent of the
total project cost via matching funds, with EDA providing federal
funding for the remaining 50 percent of the total project cost. Even
for the most distressed communities, EDA's standard Notice of Funding
Opportunity (NOFO) guidance dictates that the maximum allowable federal
investment rate is 80 percent, which still requires the nation's most
underserved and severely economically distressed communities to
contribute 20 percent of the project's overall cost via matching funds,
except in rare cases as determined by the EDA Assistant Secretary. I
encourage Congress to consider including direction for EDA's economic
distress formula to be reconstituted so that all communities--and
especially distressed communities--can reliably receive a higher
overall percentage of federal funding. Reducing EDA's matching fund
requirements is important also because communities will be recovering
from the COVID-19 pandemic for an extended duration of time.
I also recommend that you consider amending the Public
Works and Economic Development Act of 1965 to specify that EDA
investments into high-speed broadband deployment are an eligible use of
EDA funds, and to provide funding expressly for this purpose, with an
emphasis on improving sufficient broadband infrastructure in rural
communities especially. EDA should make targeted investments into
broadband projects that provide, expand, or improve high-speed
broadband access, and EDA funding should support planning and technical
assistance activities related to enhancing broadband access, as well as
engineering and construction costs. NADO endorsed the E-BRIDGE
legislation that was introduced during the last session of Congress,
and I would encourage the Subcommittee to further pursue this reform in
reauthorizing the EDA. I also encourage the Subcommittee to generally
elevate the role EDA plays in helping rural and economically distressed
communities keep pace with technological advancements, automation, and
economic shifts.
I encourage you to amend PWEDA to formally outline and
designate EDA's significant role in post-disaster assistance for
impacted communities as well. In EDA's reauthorization, Congress should
establish an EDA Office of Disaster Resilience & Recovery to preserve
institutional knowledge and leadership in the economic disaster
resilience and recovery realm. Enhancing EDA's disaster recovery
leadership and resources will help communities prepare for and mitigate
negative economic impacts associated with disasters. I encourage
Congress to authorize a dedicated fund with annual appropriations for
immediate responses to economic crises associated with declared
disasters or states of emergency. In cases where a major disaster or
emergency has been declared under the Stafford Act, EDA should be
required to increase the federal share to 100 percent of the project
cost, waiving all match requirements for any funding appropriated for
the purpose of disaster or emergency response. EDA has also
successfully utilized the flexible hiring authority Congress provided
to the agency to aid in EDA's response to COVID-19. This authority was
based in part on similar authorities provided to other disaster
response agencies and should be made a permanent authority. Disasters
and emergencies require increased resources to ensure timely delivery
of services while the agency continues to provide vital services and
resources through their normal, non-emergency related work.
Finally, I recommend that you codify and provide funding
for EDA's Economic Development Integration (EDI) role. Although EDA is
the only federal agency with a focus solely on economic development,
there are other agencies that engage in economic development efforts.
Enhanced coordination among federal agencies and divisions supporting
economic development can yield significant benefits for stakeholders of
all kinds. Congress should formally establish an EDA Office of Economic
Development Coordination & Integration to formalize EDA's leadership
and to emphasize its cross-cutting role in coordinating economic
development resources across the federal government. Although EDA
currently has an existing Economic Development Integration (EDI)
practice, PWEDA should be amended to include language that formally
establishes EDI and fully outlines its role. I also encourage Congress
to provide dedicated funding for EDA's EDI practice so that this
function can become a fully-resourced and fully-staffed division within
EDA. This would enhance the ability of EDI specialists to conduct on-
the-ground technical assistance in communities across the country,
ensuring the entirety of the federal government's resources are
effectively and efficiently utilized in support of local and regional
economic development.
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 federal partner to assist in these endeavors. EDA
has a proven record of success and has been an essential partner, and I
encourage you to support reauthorization and increased 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, Ms. Cooper. That was great,
some good suggestions for us to work on in the reauthorization.
We will now go to Mr. Hawkins.
Mr. Hawkins. Good afternoon, Madam Titus, Ranking Member
Webster, and members of the subcommittee. My name is Garrett
Hawkins, and I am a fifth-generation farmer from Appleton City,
Missouri. We live and farm just about 85 miles south of Kansas
City, and we are the third generation in our family to operate
the farm that we currently live on today.
Agriculture runs deep in our family, and spans livestock,
row crop, and dairy production. I am a proud husband and
father, and currently serve as president of the Missouri Farm
Bureau. I appreciate the opportunity to provide input on the
necessity of rural broadband and its importance to economic
development in rural America.
Broadband connectivity is critical in stimulating and
revitalizing the rural economy. It is essential to modern
agriculture, the farmers and ranchers who grow our food, and
the quality of life for those of us who live and work in rural
America.
In Missouri, I see the need for broadband in rural
communities every day. One family I know operates a soil lab,
with customers worldwide. Until recently, they struggled to
find an affordable, reliable broadband service. They were
paying hundreds of dollars a month for subpar internet.
However, with broadband investments made in Missouri, they now
have reliable service at the farm and at the lab, which has
boosted their global business.
Other families I know use online marketing tools to market
their products nationwide. Farms and agribusinesses use
broadband every day. Last month, I visited a fellow farmer in
southern Missouri who was thrilled to see a fiber optic line
being installed a few miles from his farm. His comment to me
was, ``Maybe it will come my way in a year or so.''
In Missouri, we have taken action to bring broadband to
rural communities. In 2017, Farm Bureau convened the Missouri
Broadband Working Group. Over 120 diverse stakeholders formed
recommendations for our Governor and congressional delegation.
As a result, our Governor established a statewide Office of
Broadband to keep its finger on the pulse of all things
broadband in Missouri. It would not have been established
without the collaborative efforts of Farm Bureau, our State
departments of agriculture and economic development, and the
University of Missouri.
We also successfully advocated for the Missouri Broadband
Grant program, which helps providers deploy broadband in
unserved and underserved areas. Last year, our legislature
passed a bill supported by Farm Bureau allowing community
improvement districts and neighborhood improvement districts to
facilitate broadband deployment.
We have seen recent success with EDA-funded projects in
rural Missouri. One community is receiving EDA funds to deploy
broadband infrastructure and enhance business and telework
capabilities. Many of our Regional Planning Commissions have
been able to identify potential projects: 5 of our 19 RPCs are
working on EDA-funded broadband deployment projects through the
CARES Act.
Farmers and ranchers depend on broadband, just as they do
highways, railways, and waterways. Today we use precision
agricultural tools to reduce the amount of fertilizer we apply
to fields, to decide how much water we need to sustain crops,
and determine the amount of pesticides to keep our crops
healthy.
Off the farm, rural communities need access to healthcare,
Government services, and educational and business
opportunities. As more physicians leave rural communities,
telemedicine has become a necessity for our families. In my
hometown of Appleton City, I serve on the board of one of the
smallest critical-access hospitals in the State. The hospital,
which my great aunt and uncle founded in the early 1930s,
employs over 100 people, and is one of our community's largest
employers. We work hard to keep our rural hospital thriving and
adapting with the latest medical technology. Unfortunately,
even though we can find providers for telehealth services, our
lackluster internet connection hinders us in providing care.
Broadband has also helped revitalize our rural economy and
promoted entrepreneurship. Several people now are using
connected workspaces along our main street in buildings that
were once empty. This lets them stay and contribute to our
community, while injecting their income into our local economy.
Farm Bureau appreciates the subcommittee's interest in rural
broadband and the economic viability of our rural communities.
Broadband is essential to modern agriculture and our quality of
life.
Thank you for the opportunity to testify on such an
important issue for our members, and I look forward to
answering your questions. Thank you, Madam Chair.
[Mr. Hawkins' prepared statement follows:]
Prepared Statement of Garrett Hawkins, President, Missouri Farm Bureau,
on behalf of the American Farm Bureau Federation
Good afternoon Chairwoman Titus (D-NV), Ranking Member Webster (R-
FL) and members of the Subcommittee. My name is Garrett Hawkins, and I
am a fifth-generation farmer and the third generation in my family to
own and operate the farm on which we live today. Agriculture runs deep
in our extended family and spans livestock, row crop, and dairy
production. I am a proud husband and father, and I serve as President
of Missouri Farm Bureau (MOFB). I appreciate the opportunity to provide
input on the necessity of rural broadband deployment and its importance
to economic development across rural America.
Deployment of broadband technology is a critical link in
stimulating and revitalizing the rural economy. Rural broadband (fixed
and mobile) is essential to modern agriculture, the farmers and
ranchers who grow our food, and the quality of life for rural
Americans. While most Americans take broadband for granted, according
to the Federal Communications Commission (FCC) 17% of rural Americans
lack access to fixed terrestrial 25 Mbps/3 Mbps broadband, compared to
only 1% of urban Americans. This is discouraging. Additionally, the
data and methodology used to collect broadband coverage has failed to
accurately determine broadband access resulting in an unreliable
estimate of rural Americans with broadband access. Farm Bureau members
have recognized the urgent need to deploy broadband in rural
communities and have elevated broadband access and affordability as a
priority due to its impact on their daily lives.
In Missouri, I see the need for broadband in rural communities
every day. One family I know operates a soil testing lab with customers
worldwide. Until recently, they struggled to find affordable, reliable
broadband service. They were paying hundreds of dollars a month for
sub-par broadband to barely run their business. However, with the
advancements and investments that have been made over the past few
years, they are now able to access reliable service at their farm and
at their lab, making it easier to conduct their global business.
Other families I know use online marketing tools to market their
products throughout the country. Farms and agribusinesses utilize
broadband every day to make their business model a success. Whether it
is a business that provides an agricultural service to a local
community or a company that ships products all over the country, this
service is critical to our everyday life. Just last month I was
visiting a farmer in southern Missouri who was thrilled to see a fiber-
optic line being installed just a few miles from his farm. ``Maybe'',
he said, ``they'll come my way in just a year or so.''
In Missouri, we have taken strong action to bring more broadband to
rural communities. In 2017, Missouri Farm Bureau convened the
``Missouri Broadband Working Group.'' This group was comprised of over
120 stakeholders from all industries that formed legislative and
regulatory recommendations that were ultimately taken to our Governor
and Congressional delegation. As a result, Missouri's Governor
established the Office of Broadband within our Department of Economic
Development. This office is responsible for keeping their finger on the
pulse of all things broadband in Missouri. The creation of this office
would not have been possible without the collaborative efforts of Farm
Bureau, our state Departments of Agriculture and Economic Development,
and the University of Missouri.
In addition, we successfully advocated for the Missouri Broadband
Grant Program, which provides financial assistance to providers who are
seeking to deploy broadband in underserved and unserved areas. Last
year, the Missouri legislature passed legislation supported by MOFB
that would allow our Department of Economic Development's Community
Improvement District and Neighborhood Improvement District programs to
be used to facilitate broadband deployment within those districts.
Just recently, we have seen success with a few EDA-funded projects
in rural Missouri. One community has been awarded funds that will bring
additional broadband infrastructure to the community and enhance both
business and telework capabilities in this town of approximately 3,000
people. In addition, many of our Regional Planning Commissions (RPCs)
and Councils of Government have been able to identify projects in their
jurisdiction. Five out of our 19 RPCs are in the process of funding
projects with EDA funds that were awarded via the CARES Act which will
help deploy broadband.
Although we have been able to make significant strides in our
state, the work is far from finished. Farm Bureau has and will continue
to advocate for significant investment to support broadband deployment
in rural communities. Knowing where adequate broadband services do and
do not exist is critical to crafting sound public policies related to
broadband deployment in rural areas.
The ability of the FCC and all other relevant agencies to utilize
accurate broadband coverage maps has been a priority. Last Congress,
Farm Bureau advocated for the passage of the Broadband Deployment
Accuracy and Technological Availability Act (Broadband DATA Act) which
was signed into law March 2020 as part of the CARES Act. This
bipartisan and comprehensive bill improves the accuracy of broadband
coverage maps and better directs federal funds for broadband buildout.
Specifically, this bill requires the FCC to improve the accuracy and
granularity of its maps by establishing a serviceable location fabric,
which will serve as a baseline for served, underserved and unserved
broadband areas, an outcome that Farm Bureau policy supports. We were
pleased Congress provided funding to implement this Act in December
2020 and look forward to its full implementation.
Farmers and ranchers depend on broadband just as they do highways,
railways and waterways to ship food, fuel and fiber across the country
and around the world. Many of the latest yield maximizing farming
techniques require broadband connections for data collection and
analysis performed both on the farm and in remote data centers.
However, 29 percent of U.S. farms have no access to the Internet
according to the USDA report, ``Farm Computer Usage and Ownership,
2017.''
America's farmers and ranchers embrace technology that allows their
farming businesses to be more efficient, economical and environmentally
responsible. Today's farmers and ranchers are using precision
agricultural techniques to make decisions that impact the amount of
fertilizer they need to purchase and apply to their fields, the amount
of water needed to sustain crops, and the amount and type of herbicides
or pesticides needed. These are only a few examples of how farmers use
broadband connectivity to achieve optimal yield, lower environmental
impact and maximize profits.
Knowing exactly where further buildout is needed is critical to
ensuring American farmers and ranchers can continue to innovate here at
home and globally. Farmers and ranchers rely on broadband access to
manage and operate successful businesses, the same as small businesses
do in urban and suburban America. Access to broadband is essential for
farmers and ranchers to follow commodity markets, communicate with
their customers, gain access to new markets around the world and,
increasingly, to ensure regulatory compliance.
Beyond specific on-farm needs, rural communities need access to
health care, government services, and educational and business
opportunities. For many rural communities, access can only be gained by
using broadband services and sophisticated technologies that require
high-speed connections. The coronavirus pandemic has only exacerbated
and made more apparent the need for rural broadband in rural
communities as employees shifted to working from home, school districts
closed and resorted to distance learning platforms, and patients sought
health care through telemedicine platforms.
As more and more primary care physicians and specialists leave
rural communities, telemedicine has become a necessity to provide
critical healthcare to our parents and kids. In my hometown of Appleton
City, Missouri, I serve on my local hospital board. Our hospital is one
of the smallest critical access hospitals in the state. The hospital,
which was founded by my family several generations ago, employs over
100 people in our local community and is one of our largest employers.
As we strive to keep our rural hospital thriving and adapting to the
latest and greatest medical technology, we often find that having
enough providers to serve our telehealth patients is not the problem--
our unstable internet connection hinders us in providing these popular
services.
Healthcare is not the only area where broadband can help revitalize
our rural economy. As we continue to weather the COVID-19 pandemic and
individuals continue to embrace telework options, our rural communities
can thrive if they have stable internet connections. In my hometown, I
know many individuals who, although they may not have broadband at
their homes or farms, are able to utilize connected work spaces in our
once-empty downtown. These individuals are able to stay and contribute
to their local community and inject their income into our local
economy, rather than being tethered to an urban center.
As Congress and the Administration deliberates proposals to advance
the deployment of broadband to rural communities, please consider the
following principles.
Data Accuracy & Mapping: We continue to advocate for
additional mapping and the use of more granular data sets when
determining which areas are eligible for federal (and state) funding.
Plan for the Future: When awarding broadband projects, we
should consider speeds that account for teleworking and remote
education needs, rather than just recreational use of broadband.
Foster Local, State, and Federal Partnerships: Close
working relationships between local, state, and federal partners are
critical to maximize the use of funds available for broadband
deployment. Various entities that deploy broadband should work together
to the greatest extent possible in order to ensure the needs of rural
America are being met.
Focus on Precision Agriculture: Too often, federal
programs do not take into account the specific needs of agriculture and
rural America when developing programs that incentivize deployment.
Agriculture as a whole has the potential to be a strong beneficiary of
rural broadband services, and it will be important to take these needs
into account. Access to broadband and data services can result in more
data-driven decisions on the farm, if the technology is available.
Farm Bureau appreciates the Subcommittee's interest in rural
broadband deployment and the economic viability of rural communities.
Rural broadband (fixed and mobile) is essential to modern agriculture,
the farmers and ranchers who grow our food and the quality of life for
rural Americans. Thank you again for the opportunity to testify on an
issue so critically important to the individuals Farm Bureau
represents. I look forward to answering any questions you may have.
Ms. Titus. Thank you so much, Mr. Hawkins, we appreciate
your being here. It was very interesting to hear all the
different ways that broadband can make such a difference. It is
today what electricity was when it was first invented: you just
can't exist without it.
I would now like to welcome Mr. Peterson.
Before you start, Mr. Peterson, I would take just a minute
to share your credentials with the committee.
Mr. Jonas Peterson is president and CEO of the Las Vegas
Global Economic Alliance. LVGEA is southern Nevada's leading
economic development organization. Mr. Peterson serves on the
boards of a variety of national and local organizations,
including as a board member of the Governance Committee of the
International Economic Development Council, whom he is
representing here today.
So welcome, it is nice to see you here, Mr. Peterson. Thank
you.
Mr. Peterson. Well, good afternoon, Chairwoman Titus,
Ranking Member Webster, and distinguished members of the
committee. Thank you so much for inviting me to participate in
today's hearing. My name is Jonas Peterson. I am the president
and CEO of the Las Vegas Global Economic Alliance. We are a
regional, public-private partnership that is focused on
diversifying and strengthening the economy here, in southern
Nevada. I am here today on behalf of the International Economic
Development Council, which is the world's largest professional
trade association, representing economic developers and the
practice of economic development.
During our current crisis caused by COVID-19, IEDC and our
5,000 members have worked tirelessly to provide resources to
communities struggling to respond and recover. Over the past 13
months, our families, our communities, and economies have all
taken a hard hit from the effects of COVID-19. In Las Vegas,
our unemployment rate spiked to 34 percent in April of 2020.
That is the highest level ever recorded.
Our tourism industry, which accounts for roughly one out of
every three jobs in southern Nevada, has been particularly hard
hit. Visitor volume fell by over 55 percent last year, compared
to the previous year, and we lost billions from canceled
events, trade shows, and conventions.
At my organization, revenue fell by over 20 percent during
the pandemic, straining our ability to deliver critical
economic development planning and access to business support
services during a time of great need. So we applied for our
first-ever EDA grant in May of 2020. And after nearly a year of
review, I am pleased to say we were finally approved for
approximately $300,000 of Federal assistance in March of this
year.
So the review process took much longer than we were
expecting. The final amount was about one-third of our original
application. But I want to say that we are absolutely grateful
for the funding. It will fuel a new recovery strategy for our
region, and boost our critical business support services.
Now, our shared belief in the importance and effectiveness
of EDA serves as a very strong foundation to build upon as
Congress looks at reauthorization. In addition to significantly
increasing the funding authority of the agency, expanding its
ability to coordinate Federal economic development resources
across the Government, and providing EDA with robust resources
and authorities to expand broadband access and adoption, we
also recommend that Congress focus on the key areas of capacity
building and disaster recovery while considering EDA
reauthorization.
Many communities have economic development strategic plans,
and a list of projects they would undertake, but lack the
resources needed to put those plans fully into action. From
lacking the predevelopment resources to get a project moving,
to not having the staff needed to fully execute plans--I can
relate to that--low capacity can have a chilling effect on
economic growth. Our regional economies would benefit greatly
from resources dedicated to advancing local capacity.
Congress should consider a pilot program at EDA that is
dedicated to addressing capacity for economic development, both
financial and human.
We also recommend that Congress establish an EDA office of
disaster resilience and recovery to preserve institutional
knowledge and leadership in this space. Enhancing EDA's
disaster recovery leadership and resources will help
communities prepare for and mitigate the negative economic
impacts associated with disasters. This office should have
annual appropriations provided and dedicated staff.
In cases where a major disaster or emergency has been
declared under the Stafford Act, EDA should be required to
increase the Federal share to 100 percent of the project cost,
waiving all match requirements for any funding appropriated for
the purpose of disaster or emergency response. Requiring
communities to pay to access disaster funding runs contrary to
the goal of funding, which is to help. Not waiving match
requirements for disaster funding hurts communities, and leaves
many out who did not possess the financial and human capacity
to access these desperately needed resources.
Finally, the events of the past several months have further
highlighted the great divide between those who are empowered by
economic opportunity and those denied equal access to economic
opportunity. So, no matter which part of the country we live
in, where we are from, how big or how small our community is,
we can and we must do more to create opportunities to achieve
economic success and security for all people.
IEDC is committed to that end, and we look forward to
working with EDA in support of that goal. We encourage Congress
to consider this imperative as you deliberate over the future
of EDA.
On behalf of IEDC, our members, my fellow economic
developers across the country, thank you so much for your
support of EDA, and your support of regional economic
development efforts at home. Thank you.
[Mr. Peterson's prepared statement follows:]
Prepared Statement of Jonas Peterson, President and Chief Executive
Officer, Las Vegas Global Economic Alliance, on behalf of the
International Economic Development Council
Chair Titus, Ranking Member Webster, and distinguished Members of
the Committee:
Thank you for inviting me to participate in today's hearing. My
name is Jonas Peterson. I am President and CEO of the Las Vegas Global
Economic Alliance, a regional, public-private partnership focused on
diversifying and strengthening the economy in Southern Nevada. I am
here today on behalf of the International Economic Development Council
(IEDC), the world's largest professional trade association representing
economic developers and the practice of economic development, where I
serve as Secretary/Treasurer of the board of directors. I would like to
thank you for this opportunity to provide testimony on the important
issue of reauthorizing the Economic Development Administration. I would
also like to acknowledge my fellow panelist and thank them for their
support for economic development and EDA.
IEDC represents roughly 5,000 economic development professionals
and stakeholders, most of whom are located in the United States. Our
organization has been dedicated to the advancement of economic well-
being for 95 years. During the public health and economic crisis caused
by COVID-19, IEDC and our members have worked tirelessly to provide
resources to communities struggling to respond and recover. We have
convened thousands of people through a series of free webinars covering
topics ranging from accessing federal resources to working with
downtown retailers struggling to hang on. We have worked hand-in-hand
with our fellow stakeholders here in Washington to help Congress and
the administration understand what the situation on the ground looked
like from the perspective of economic development and what help was
needed most. While not perfect and not as fast as we would like, we are
proud of the results thus far. IEDC's work in aiding communities
impacted by disasters and hardship did not start with this pandemic.
Since Hurricane Katrina ravaged the gulf coast in 2005, IEDC has
responded to major disasters throughout the United States, including
Puerto Rico, the U.S. Virgin Islands, and the Northern Mariana Islands,
often with the support of EDA. From 2010 to 2020, IEDC completed 184
disaster recovery and resiliency projects in 18 states and territories.
This work includes technical assistance projects, strategic planning,
business retention & expansion, and much more. From 2017 to 2020, over
150 volunteers participated in disaster recovery and resiliency
projects, taking time off from their day jobs to go to communities in
need and helping them rebuild their economies. We are proud to partner
with EDA and have firsthand experience with its power to change for the
better.
The Economic Development Administration is the only federal agency
with the sole mission of economic development. Since the passage of the
Public Works and Economic Development Act of 1965 that established the
agency, EDA has played an essential role in providing federal resources
and leadership in support of regional economic development. Through
programs such as Economic Adjustment Assistance and Public Works, EDA
has broad authority to provide resources tailored to the specific needs
of a community, be they infrastructure, technical assistance, or
planning. It is this broad authority that provides EDA flexibility in
assisting communities that is unmatched in any other federal program.
EDA resources help economic developers on the ground in several
different ways. From last-mile infrastructure that may be the final,
essential piece that brings together an entire project to Revolving
Loan Funds that are providing capital access to entrepreneurs and small
businesses throughout the region, EDA has a tangible, positive impact
on the economic health of communities across the country.
Over the past thirteen months our families, communities and
economies have taken a hard hit from the public health and economic
crisis caused by COVID-19. In Las Vegas, we have felt the impact of the
virus. In April of last year, our unemployment rate spiked to 34%, the
highest level ever recorded. Our tourism industry, which accounts for
almost one out of every three jobs in Southern Nevada, has been
particularly hard hit. Visitor volume fell by over 55% in 2020 compared
to the previous year, and we lost billions from cancelled conventions
and tradeshows.
At the Las Vegas Global Economic Alliance, our revenue fell by over
20% during the pandemic, straining our ability to deliver critical
economic recovery planning and access to business support services
during a time of great need. So, in order to support our work, we
applied for our first-ever EDA grant in May of 2020. After nearly a
year of review, we were finally approved for approximately $300,000 of
federal assistance in March. The review process took much longer than
we expected and the final amount was approximately one-third of our
original application. However, we are extremely grateful for the
funding. It will fuel a new recovery strategy for our region and
support critical business support services.
Our shared belief in the importance and effectiveness of EDA serves
as a strong foundation to build upon as we move forward with
reauthorization. In addition to significantly increasing the funding
authority of the agency, expanding its ability to coordinate federal
economic development resources across the federal government, and
providing EDA with robust resources and authorities to help expand
broadband access and adoption, we recommend that Congress focus on the
key areas of capacity building and disaster recovery while considering
EDA reauthorization.
We recommend that Congress include capacity building as a key
component of EDA's reauthorization. Many communities have robust
economic development strategic plans and a list of projects they would
undertake but lack resources to put those plans fully into action. From
lacking pre-development resources to get a project moving, to lacking
the staff needed to fully execute plans, low-capacity can have a
chilling effect on economic growth. Regional economies would greatly
benefit from resources dedicated to advancing local capacity to act.
Congress should consider a pilot program at EDA that is dedicated to
addressing regional capacity for economic development, both financial
and human.
We recommend that Congress establish an EDA Office of Disaster
Resilience & Recovery to preserve institutional knowledge and
leadership in the economic disaster resilience and recovery realm.
Enhancing EDA's disaster recovery leadership and resources will help
communities prepare for and mitigate negative economic impacts
associated with disasters. This Office should have annual
appropriations provided and dedicated staff. Through this office EDA
can continue to support the work of organizations like IEDC. IEDC has
for many years participated in recovery efforts, including providing
technical assistance and training, as well as marshalling volunteer
economic developers, who are eager to go to disaster impacted areas to
help their counterparts rebuild.
We also recommend in cases where a major disaster or emergency has
been declared under the Stafford Act, EDA should be required to
increase the federal share to 100 percent of the project cost, waiving
all match requirements for any funding appropriated for the purpose of
disaster or emergency response. It has been suggested in the past that
EDA has the existing authority to waive local match requirements. It
has not chosen to do so with the funding received through the CARES
Act. By its very nature, disaster funding is an intentional effort to
aid communities that need funding to rebuild following a disaster. It
seems then that requiring communities to pay to access that funding,
which they are being offered because something so devastating has
occurred that it has attracted the attention of the very top of the
federal government and Congress, runs contrary to the goal of the
funding, which is to help. Not waiving match requirements for disaster
funding hurts communities by taking from the stricken, delaying
distribution of those funds while scrambling to gather match money or
securing a waiver, and because it is leaving out untold communities
that do not possess the financial and human capacity to access these
desperately needed funds.
Finally, the events of the past several months have further
highlighted the great divide between those who are empowered by
economic opportunity and those denied equal access to economic
opportunity. We must commit to do more to bridge and eliminate this
divide and see to it that no such divides form again in the future. EDA
is in a unique position to help our nation address racial and
socioeconomic inequity and should be charged with helping to advance
economic opportunity for all. No matter which part of the country we
live in, where we are from, how big or how small our community is, we
can and must do more to create more opportunities to achieve economic
success and security for all people. IEDC is committed to that end and
we look forward to working with EDA in support of that goal. We
encourage Congress to consider this imperative as you consider the
future of EDA in this reauthorization.
On behalf of IEDC, our members and my fellow economic developers
across the country, thank you for your support of EDA and your support
for regional economic development efforts at home. EDAs mission at its
core is to help communities recover from economic distress. They are
the experts in economic recovery and resiliency at the federal level.
As this body considers 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 or
not worked and what more the agency can do in their community. Given
the tools and support necessary, the EDA can play a larger role in
assisting communities in achieving robust, equitable and lasting
economic prosperity.
Thank you.
Ms. Titus. Thank you very much.
We will now move to Commissioner Eliason.
Mr. Eliason. Thank you, Chairwoman Titus, Ranking Member
Webster, and distinguished members of the subcommittee. I
appreciate the invitation to testify before you today on behalf
of the EDA reauthorization. I am the president of the board of
commissioners here, in Athens County, and also serve on the
board of the National Association of Counties, which represents
3,069 counties in the country.
Counties play a major role in financing, administering, and
coordinating Federal workforce and economic development
programs. This includes the EDA, which is a key pillar of the
Federal, State, and local partnership.
EDA programs and grants are the catalyst to spur recovery
and innovation in communities across the country, and they are
uniquely tailored to meet local and regional needs and
conditions. EDA is a program that works on the ground, because
it is essential to help communities transition from one economy
to the next at the local level, with local efforts. It is
successful because it gives us, the local communities, the
tools and the knowledge to help ourselves, and counties
strongly believe the program should be continued to be
reauthorized, and continuously funded.
I have seen firsthand the difference that EDA can make in
mitigating economic downturns and supporting our efforts to
create a stable and diversified economy here, in Athens County.
For a little bit of background, Athens County is a rural
county with a population of around 65,000 residents in
southeastern Ohio. We remain heavily weighted, from an
employment perspective, in the following industry sectors:
Government, accommodations, food services, retail trade, and
healthcare. The county is also the home to Ohio University, and
the school holds an integral position in the local community
and economy, being its largest employer. While the community
has been significantly impacted by the downturn in the coal
industry, we have experienced growth in other sectors,
including energy, manufacturing, healthcare, finance, and
construction.
Preexisting challenges to economic development in our
county include issues related to broadband infrastructure and
accessibility, workforce and affordable housing, and site
development and infrastructure. Athens County has worked to
respond to these challenges, both before and during the
pandemic, and assistance provided by the EDA has been critical
to this response.
EDA's engagement and financing and support have been vital
to economic development here in Athens County. While we receive
assistance from EDA for business attraction, capital
construction, and workforce training efforts, perhaps the most
critical assistance has come in the form of a grant to help our
community transition away from coal to the modern
diversification of our economy.
Just this past January, the Ohio University Voinovich
School of Leadership and Public Affairs was awarded a $2.2
million EDA investment, which has been matched by $550,000 in
local funds, to accelerate the region's transition from a coal
economy to a new initiative called the Resilience Initiative
for Southeastern and Eastern Ohio, otherwise known as RISE
Ohio.
RISE Ohio is a 2-year program, led by the Voinovich School,
alongside the Buckeye Hills Regional Council and the Ohio Mid-
Eastern Governments Association, which is focused on supporting
communities in 18 counties in the region, including Athens
County, to make an economic transition to new industries, and
ensuring continued job creation, as well as economic growth and
diversification. This project will help regional leaders devise
strategies to accelerate the economy's transition to new
industries, and help utilize the region's Opportunity Zones.
Once completed, the project will catalyze the process of
strategic recovery and ongoing economic resilience within a
critical part of Appalachian Ohio.
Without the assistance of EDA, we would not have the
resources to pursue these kinds of transformational initiatives
and economic developments. EDA investments in our region,
coupled with local and State funds, have helped to launch a
robust economic recovery and job expansion in our community.
Counties strongly support the EDA because the program
focuses on investments in the Nation's most distressed areas,
especially those suffering from sudden or severe economic
downturns caused by both preexisting issues and those that have
been made worse by the COVID-19 pandemic. Counties across the
country urge your continued support for the Economic
Development Administration, including increased funding
[inaudible] reauthorization to continue assisting with building
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, and we look forward to partnering with Congress
moving forward, in conjunction with the EDA. And I will be
happy to answer any questions.
[Mr. Eliason's prepared statement follows:]
Prepared Statement of Hon. Lenny Eliason, Commissioner, Athens County,
Ohio, on behalf of the National Association of Counties
Chairwoman Titus, Ranking Member Webster, and distinguished members
of the subcommittee, thank you for the opportunity to testify on
``Investing in America: Reauthorization of the Economic Development
Administration.'' The U.S. Department of Commerce's Economic
Development Administration (EDA) and its programs are vital for
economic recovery, expansion, and job creation in counties across the
country, facilitating economic and job growth at both the local and
regional levels. As the nation continues to respond to the COVID-19
pandemic and pivot towards recovery, support for EDA and its programs
is more important than ever.
My name is Lenny Eliason, and I am the President of the Board of
Commissioners in Athens County, Ohio. As county commissioners, my
colleagues and I play key roles in economic development by bringing in
new business and industries to our communities, as well as keeping
established employers from moving way. I also serve on the National
Association of Counties (NACo) Board of Directors in my capacity as
Past President, and I am glad to be representing NACo here today.
About America's Counties
Counties are highly diverse, not only in my state of Ohio, but
across the country. They 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 over ten
million.
Counties' 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.
Local and regional economic and workforce development is a critical
component of these responsibilities. Day-to-day, counties tackle such
challenges as unemployment and underemployment, and we work to develop
local economic growth strategies. According to a 2014 NACo workforce
survey, 84 percent of counties have established workforce training
partnerships with local chambers of commerce, cities, state governments
or regional economic development organizations. That 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.
Additionally, counties play a major role in financing,
administering, and coordinating federal workforce and economic
development programs. This includes the EDA, a key pillar of the
federal, state, and local partnership.
About Athens County, Ohio
Athens County is a rural county with a population of just under
65,000 in southeastern Ohio. The County remains heavily weighted from
an employment perspective in the following industry sectors:
government, accommodations and food services, retail trade and
healthcare and social services. The county is also home to Ohio
University, and the school holds an integral position in the local
community and economy.
While Athens County has been significantly impacted by the decline
of the coal industry, which once played a leading role in the region's
economy, other industries have begun to grow in the area. Since 2016,
Athens County has experienced growth in the energy, manufacturing,
health care, financial and construction sectors. The county also
continues to build and support its entrepreneurial and technology
ecosystems and expects jobs in these areas to grow. A region's
workforce is a critical measure of its economic success.
Challenges to Economic Development in Athens County, Ohio
Athens County, like others across the country, has been heavily
impacted by the COVID-19 pandemic and has experienced a downturn in
economic development since the public health emergency began. Programs
have been suspended and canceled, pre-existing issues with access to
technology and broadband have been exacerbated, revenue loss continues
to be a major issue and nearly all forms of in-person economic
activities have been reduced. The county is having difficulty keeping
up with the increased demand for food aid, online learning, financial
assistance, and other benefits. The coal industry, which was already in
dramatic decline, has been hit especially hard.
All these issues have directly impacted tax revenues, which in turn
impacts the county's ability to advance an economic development
strategy for the region. Following closures in certain sectors, many of
our residents have struggled to find new job opportunities matching
their career skills. Athens County has a labor force of 27,100 with
roughly 24,800 people actively employed.
We have worked to respond to these challenges by developing a
multi-step plan that directly addresses many of the negative impacts
experienced by local businesses due to the COVID-19 pandemic. The
Athens County Economic Development Council, Athens Area Chamber of
Commerce and Athens County Convention and Visitors Bureau have created
a resource guide to help area businesses navigate current financial
challenges. The resource guide categorizes assistance into three
priority focus areas: resources, relief and rebound. Each of these
priority areas are only strengthened by the work done by the EDA via
programs provided to our county.
Other common challenges to Economic Development in Athens County
include:
Broadband Infrastructure and Accessibility: This is a
challenge that extends beyond Athens County throughout the southern
Ohio region. A 2019 Appalachian Regional Commission funded study of
eight counties, including Athens found that between 80-90 percent of
households in areas of 20 or less households per square mile have no
access to broadband services. The lack of adequate service also hinders
economic development efforts around the county's remote work strategy,
which aims to attract and incentivize those who can work remote
completely to move to Athens.
Workforce and Affordable Housing: Athens County has a
housing shortage that ranges from workforce and affordable housing to
mid-level housing stock. This housing shortage has a direct negative
impact on retaining and attracting talent to the county.
Site Development and Infrastructure: As with many rural
communities, access to capital for building projects and infrastructure
improvements is a challenge. Athens County is unable to take advantage
of site certification programs that make the county competitive for
attraction and expansion projects due to lack of available sites and
adequate infrastructure.
EDA investment in building and infrastructure projects helps the
county leverage additional private sector funding and make projects
less risky for developers and bank participation. More EDA investments
for broadband infrastructure and accessibility would be helpful as
well.
EDA Grant Projects in Athens County, Ohio
EDA's engagement, financing and support have been integral to our
economic revitalization in the wake of the COVID-19 pandemic and its
negative economic impacts, as well other, pre-existing challenges to
economic development in the county including issues related to
broadband infrastructure and accessibility, workforce and affordable
housing and site development and infrastructure. Recognizing the need
to diversify and stabilize our economy, the county has partnered with
Ohio University on several projects related to economic and workforce
development.
In September 2018, EDA awarded just over $1.6 million through the
Assistance to Coal Communities (ACC) initiative to Ohio University and
the Ohio Valley Regional Development Commission of Athens to establish
the Building Opportunities Beyond Coal Accelerating Network. The
Network has supported workforce development, cluster expansion and
opportunity zone enhancement and identified infrastructure investments
needed to access local, national, and global markets. The project has
led to job creation and served as a catalyst for economic development
in southern Ohio communities that have been impacted by the decline of
the coal industry.
In August of the following year, the county and our collaboration
with the local university received an additional $1.15 million through
the Assistance to Coal Communities initiative, matched by a little over
$287,000 in local dollars, to fund infrastructure upgrades to the Ohio
University Innovation Center in Athens County.
This project included the renovation of offices to provide an array
of business incubation resources to expand, diversify and create new
entrepreneur business opportunities. This in turn has led to job
creation and served as a stimulant for economic development in the
communities that have been impacted by the decline in the coal
industry. The economic impact of companies supported by the innovation
center since 2019 has resulted in the creation of 335 jobs, $22.8
million in employee compensation and $78 million in generated economic
output for the region.
And, in January of this year, the county received a $2.2 million
investment through the EDA's Assistance to Coal Communities initiative,
which has been matched by $550,000 in local funds. The funding will go
to Ohio University, the Buckeye Hills Regional Planning Council, and
the Ohio Mid-Eastern Government Association to support an 18-county
partnership by providing technical assistance to communities affected
by the decline in the coal industry in Athens County.
The project will help regional leaders devise strategies to
accelerate the economy's transition to new industries and develop
prospectuses to help utilize the region's Opportunity Zones. Once
completed, the project will catalyze a process of strategic recovery
and ongoing economic resilience within this critical part of
Appalachian Ohio.
This funding comes at a critical time, as the COVID-19 pandemic
continues to compound the negative economic impacts of the decline in
the regional coal industry and as long-term unemployment and
underemployment grows.
Frankly, without the assistance of the EDA, we would not have the
resources to pursue these kinds of transformational initiatives and
economic development. EDA investments in our region, coupled with local
and state funds, have helped to launch 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 on the nation's most distressed areas, especially those
suffering sudden or severe economic downturns caused by both pre-
existing issues and those made worse by the COVID-19 pandemic. 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 to 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
the EDA are well-positioned to collaborate to address economic
challenges impacting communities.
One major use of EDA grants for counties is for disaster recovery
and economic assistance, which has been critical to counties' ability
to respond to the COVID-19 pandemic. Earlier this month, EDA provided a
grant of $750,000, which was matched by a local investment of $187,500,
to the Medical Center of the Americas Foundation in El Paso County,
Texas, that it will also share with the city of El Paso. The money
provided will fund the Product and Supplier Development Lab program,
which will create a lab of the same name, that will support innovators
and companies working to address the shortage of PPE and other medical
supplies, diagnostics, and devices.
The creation of this lab will generate impact in the community
through the growth of new companies, living wage jobs and technology-
based industry development. The program will serve three main purposes:
bolster supply chain development and manufacturing
expertise to produce critical items through assisting medical device
suppliers and manufacturers to complete and meet necessary regulatory
standards for the industry;
support innovation and the development of new medical
device production through design thinking;
product development, and prototyping assistance; and
Address public health concerns by increasing
manufacturing capacity for PPE and medical devices, diagnostics, and
ancillary supplies.
The $1.5 billion in supplemental funding that EDA received through
the CARES Act for COVID-19 recovery assistance has been helpful for
counties across the country. In November of last year, EDA provided a
grant of $600,000 to the City of Gallup in McKinley County, New Mexico.
Matched with $150,000 in local dollars, the grant helped to support the
city with recovery efforts from the COVID-19 pandemic by advancing
transportation, logistics and autonomous vehicle industries in the
county. The project will support a master planning process for the
municipal airport and autonomous vehicle industries in efforts to
resume commercial air travel, which will in turn allow the transport of
healthcare professionals and patients in need of critical care. Once
completed, the project will diversify the regional economy by offering
commercial air services, creating employment opportunities, helping
businesses expand operations and advancing economic resiliency
throughout the region.
EDA Reauthorization
Looking towards reauthorization of EDA, counties support increased
funding and program flexibilities to expand EDA's reach to communities
in need of economic revitalization and development and to enhance the
program's utilization. EDA should receive a robust increase in funding
to meet the demands of local communities for economic development
resources and to properly reflect the leading role EDA plays in job
creation in distressed areas. EDA's local match requirement may need to
be reduced or waived to ensure severely distressed communities can
apply and receive funding with a reduced or without a matching
requirement, similar to CARES Act funding. Furthermore, increasing
funds targeted towards essential infrastructure investments, including
water, sewer and broadband would be beneficial counties, particularly
rural ones in need but lacking basic resources to attract economic
development investments.
In Conclusion
EDA has 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. As we continue to respond to the
COVID-19 pandemic, and shift towards recovery, EDA remains a vital tool
for economic recovery. I have seen firsthand the difference the EDA can
make in mitigating economic downturns and in supporting our efforts to
create a stable and diversified economy here in Athens County.
The 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. EDA helps provide the
needed funding to make many projects come to fruition. It is successful
because it gives local communities, the resources, tools, and knowledge
to help ourselves, and counties strongly believe EDA should be
reauthorized and receive increased funding.
Chairwoman Titus, Ranking Member Webster, and distinguished members
of the subcommittee--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.
Ms. Titus. Thank you very much, Commissioner. We appreciate
that input from the counties, and we will be calling on you to
help us as we reauthorize this.
We will now go to Mr. Carol.
Mr. Carol. Good afternoon. Thank you, Chair Titus, Ranking
Member Webster, and members of the subcommittee for inviting me
to testify today and offer some recommendations on the future
of the EDA, especially as it pertains to infrastructure.
My name is Dan Carol. I am a director at the Milken
Institute Center for Financial Markets, and serve as adjunct
faculty at Georgetown University, where I teach infrastructure
finance. Formerly, I served as a senior advisor for
infrastructure and energy for Governor Jerry Brown of
California.
My testimony today will be pretty simple: as Congress
wisely considers bold investments to make U.S. infrastructure
globally competitive and equitable for all, we must ensure that
a small portion of new spending is carved out to incentivize
long-term resilience and better infrastructure system
performance. Otherwise, without the right carrot, sticks, and
technical assistance capacity in place, we won't be able to
overcome the Nation's multitrillion-dollar deferred maintenance
hole, a hole that existed long before the pandemic, let alone
marshal the trillions we will need by 2050 to address climate
change and extreme weather.
A substantial body of research finds that the key
investment Congress can make to move U.S. infrastructure
systems from 19th-century creakiness to 21st-century
performance is predevelopment funding. Recent reports by the
Milken Institute and others highlight the importance of
predevelopment capital to turn good project plans into shovel-
worthy and investment-ready projects.
What is predevelopment? Predevelopment pays for the
critical tasks that need to be completed before project
construction can begin, such as financial feasibility studies,
site acquisition costs, architectural and engineering work, and
permitting. This predevelopment gap is especially acute for
smaller, rural, and historically underserved areas that cannot
access the technical assistance they need for broadband and
other community-scale infrastructures to get off the ground.
Over its history, Congress has used the EDA several times
as an accelerator mechanism to address pressing economic and
innovation challenges. Now the time has come, in my view, for
another mission. EDA should return to its public works roots,
and jumpstart the next generation of resilient infrastructure
projects that thousands of local communities are demanding,
post-COVID.
Shifting America's infrastructure towards resilience and
performance will not be easy. We will need a series of
strategic investments, beginning with predevelopment funding,
to deliver better outcomes over the next 3 to 10 years. The
payback, however, will far outweigh the pay-for. Based on past
studies looking at the value of predevelopment, we would expect
$20 in economic activity to flow from each dollar spent on
predevelopment. That would mean $300 billion in economic
activity could be generated by the $15 billion Federal
predevelopment fund we have proposed.
This shift, however, does not have to wait for the final
set of infrastructure bills now under discussion, nor for EDA
reauthorization later this year. In my written testimony, I
suggest specific steps that EDA can take now to kickstart a new
pipeline of resilient infrastructure projects in high demand,
such as emergency centers, and public buildings, and rural
hospitals with microgrids, broadband, critical water systems,
and regionally significant projects across the EDA system.
This would not be the first time that EDA has taken on the
infrastructure problem at scale. In fact, in the mid-1970s, the
agency was appropriated $6 billion in funding--that is $28
billion in today's dollars--to accelerate local and State
public works projects to help the country out of a recession.
How? As this committee assesses the future for EDA, my
testimony calls for the creation of regional resilience centers
housed in the six EDA regions to incubate 21st-century, whole-
of-Government Federal coordination from the bottom up, across
all infrastructure modes. These regional centers would house
project finance and tech assistance teams to help communities,
EDDs, and others successfully build projects from a focus menu
of ready-to-go and replicable projects that are in high demand
in each region, based on distinct regional resilience
challenges.
Many of these recommendations are supported by a diverse
set of groups, including the U.S. Chamber of Commerce, the
National Association of Manufacturers, the Coalition for Green
Capital, the IEDC, NADO, and others. My written testimony
provides an indepth discussion of each of these issues, and I
am happy to answer any questions you have.
Again, thank you.
[Mr. Carol's prepared statement follows:]
Prepared Statement of Dan Carol, Director, Milken Institute Center for
Financial Markets
Good afternoon. Thank you Chair Titus, Ranking Member Webster, and
Members of the Subcommittee on Economic Development, Public Buildings,
and Emergency Management for inviting me to testify today.
My name is Dan Carol, and I am a Director of the Milken Institute
Center for Financial Markets.\1\ Formerly I served as the Senior
Advisor for Infrastructure and Energy for Governor Jerry Brown of
California and led efforts to create the West Coast Infrastructure
Exchange, a 2015 winner of the Harvard Ash Center award for government
innovation. I also serve as adjunct faculty in the Master's Program in
Urban and Regional Planning at Georgetown University. I am testifying
today on my own behalf.
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\1\ The Milken Institute is a nonprofit, nonpartisan think tank
that promotes evidence-based research that serves as a platform for
policymakers, industry practitioners, and community members to come
together in catalyzing practical solutions to challenges we face both
here in the U.S. and globally. The Center for Financial Markets
conducts research and constructs programs designed to facilitate the
smooth and efficient operation of financial markets--to help ensure
that they are fair and available to those who need them when they need
them. More information on the Milken Institute's work on Resilient
Infrastructure can be found here: https://milkeninstitute.org/
resilient-infrastructure
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Thank you for the opportunity to offer input and recommendations
today on the future of the Economic Development Administration (EDA)
and the reauthorization of the Public Works and Economic Development
Act (PWEDA), especially as it pertains to infrastructure. My message
today will be pretty simple. While maintaining important core programs
supporting regional economic innovation and economic development, EDA
should return to its roots as a public works agency with an updated
mission for the future focused on resilient infrastructure. Over its
long history, EDA has served as an effective incubator for new federal
initiatives in rural development, economic adjustment assistance due to
globalization, and disaster relief, among others.
When combined with 21st Century updates such as predevelopment
investment \2\, EDA's regional structure and existing authorities are
perfectly positioned to accelerate the innovations we need to address
the nation's most pressing challenge: funding and financing the
infrastructure that communities need today in order to compete in the
economy of tomorrow.
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\2\ Predevelopment pays for tasks that need to be completed before
project construction can begin, such as economic feasibility studies,
site acquisition costs, architectural and engineering work, and
permitting. https://www.federalregister.gov/documents/2015/01/22/2015-
01256/expanding-federal-support-for-predevelopment-activities-for-
nonfederal-domestic-infrastructure
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My testimony today will be divided into three parts.
I. First, I will briefly describe the infrastructure moment we
are in and identify some key research-based strategies which I believe
can ``unstick'' the infrastructure debate.
II. Second, I will offer ideas about what EDA can do now, without
new Congressional authority, to help to accelerate the deployment of
resilient infrastructure projects, job creation, equitable growth, and
regional competitiveness.
III. Third, I will outline recommendations for the Committee to
consider as it looks towards reauthorizing the agency and modernizing
the mission of the EDA, including the creation of a Federal
Infrastructure Predevelopment Fund and additional outcome-focused
recommendations for the Committee to consider to strengthen the
performance of U.S. infrastructure systems.
I. The Infrastructure Moment
America's multi-trillion dollar infrastructure systems are in the
midst of profound transformation. Disruptions from big data, extreme
weather events, and driverless cars were already transforming how
traditional infrastructure systems were funded, financed, and designed
before the COVID-19 pandemic.
What's not new is that most of the funding shortfall identified by
the American Society of Civil Engineers' annual report card is due to
deferred maintenance that has built up over decades. This downward
trend arises from several factors, from political preferences for
above-ground ribbon cuttings over underground pipe replacement to the
lack of technical capacity in communities experiencing fiscal
distress.\3\ The biggest issue, however, is poor procurement and asset
management practices. Governments often receive negative media coverage
if they don't choose the low-cost capital bid and generally don't get
penalized for failing to maintain valuable assets meant to last a
lifetime.
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\3\ It is worth recalling that U.S. state and local sector hadn't
fully recovered from the 2008 crash even before COVID-19 hit. States
missed out on $283 billion in otherwise expected revenue from 2008-2018
due to the slow recovery, increasing the rate of deferred maintenance
in many areas. https://www.pewtrusts.org/en/research-and-analysis/
issue-briefs/2019/06/lost-decade-casts-a-post-recession-shadow-on-
state-finances
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Each year, we see the long-term effects of decades of deferred
maintenance and local fiscal challenges revealing themselves in
dramatic new ways, from Flint's water crisis, to dam and levee failures
in the Carolinas and Mississippi regions, to wildfire-induced utility
bankruptcy in the West and the recent grid failure in Texas.
The size of this infrastructure performance problem, for both
public and private infrastructure, is enormous. According to an Oxford
Economics 2017 infrastructure study, U.S. infrastructure needs by 2050
are conservatively estimated to be $17.3 trillion dollars.\4\ That
means that without substantial investment now in innovation and
technical assistance capacity to improve the performance of America's
public, public-private, and private infrastructure systems, we stand to
lose $6.9 trillion in available savings that could be realized through
more effective infrastructure productivity and procurement reforms.
Business as usual, when it comes to infrastructure, is going to be
very, very costly. These estimates don't even include the multi-
trillion potential costs of infrastructure outages and economic losses
for communities vulnerable to the effects of extreme weather and
climate change.
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\4\ Projected based on U.S. funding gap data found in Oxford Global
Outlook 2017 and McKinsey estimates of infrastructure performance
potential using life-cycle asset management and other best practices.
Note ASCE's annual report cards only project out needs for five years,
hence the difference. ``Infrastructure Productivity: How to Save $1
Trillion a Year,'' McKinsey Global Institute and https://
www.mckinsey.com/business-functions/operations/our-insights/bridging-
infrastructure-gaps-has-the-world-made-progress
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Happily, we don't have to reinvent the wheel to begin to fix these
persistent performance problems with future rounds of federal
infrastructure investments. According to study \5\ after study,\6\
there are successful models for building high-performance
infrastructure systems that can be adapted to the U.S. context. We
simply need to deploy these techniques more effectively.
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\5\ Richard Dobbs, Herbert Pohl, Diaan-Yi Lin, Jan Mischke, Nicklas
Garemo, Jimmy Hexter, Stefan Matzinger, Robert Palter, and Rushad
Nanavatty, ``Infrastructure Productivity: How to Save $1 Trillion a
Year,'' McKinsey Global Institute, January 2013.
\6\ Georgetown University, Beeck Center, Performance-Based
Infrastructure: Making the Shift, A Leadership and Economic
Competitiveness Opportunity for Maine and the Northeast, 2015, https://
repository.library.georgetown.edu/handle/10822/1051507. Also see
Building California's Future, 2016, https://www.treasurer.ca.gov/
publications/biennial/2016.pdf
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Shifting America's massive infrastructure systems and practices
will not be easy. We will need a series of strategic investments and
interventions to deliver better outcomes over the next 3 to 10 years,
using both existing infrastructure authorities and programs, and new
investments designed to catalyze bottom-up success. I recommend to the
Committee that it consider a series of strategic interventions
beginning with these three acceleration pathways:
Invest in base levels of technical capacity and support
to allow state and local governments and community organizations, which
fund \2/3\ of all public infrastructure, to institute life-cycle asset
management systems;
Use regional approaches to break down jurisdictional
implementation silos and align investments based on landscape-level
infrastructure outcomes and other performance objectives, including
resilience and equity;
Engage cross-sectoral leaders and investors to create
innovative infrastructure delivery systems and policy incentives,
recognizing that many forms of infrastructure are privately financed or
funded through public-private partnerships.\7\
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\7\ For example, critical infrastructure sectors such as energy and
telecommunications are largely privately-funded or structured as
public-private partnerships. See American Council on Renewable Energy,
2020 https://acore.org/new-acore-analysis-reflects-on-u-s-renewable-
energy-and-energy-storage-finance-amid-covid-19/
#: :text=ACORE%20launched%20the%20%241T,
to%20help%20realize%20this%20goal. Also see US Telecom Industry Metrics
& Trends 2020,https://www.ustelecom.org/wp-content/uploads/2020/02/
USTelecom-State-of-Industry-2020.pdf
I will now address these pathways in the context of EDA's role in
infrastructure and what it can do now and in the next three years.
II. What EDA Should Do Now
As I outlined in a recent piece in Barron's,\8\ the time is now for
EDA to focus on resilient infrastructure deployment using eligible
funding it has received under the American Rescue Plan Act (ARPA). With
a focused strategy to meet frontline community demand, EDA could use
its ARPA allocation to accelerate and pilot long-overdue efforts to
move the U.S. infrastructure system from 19th-century creakiness to
21st-century performance. To do that, the agency should consider four
strategies to ensure that it effectively spends out its available
funding by September 30, 2022.
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\8\ ``The $3 Billion That Can Kick-Start U.S. Infrastructure
Spending'' https://www.barrons.com/articles/the-3-billion-that-can-
kickstart-u-s-infrastructure-spending-51617894284?tesla=y
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Support Only a Limited ``Menu'' of Community Resilience Projects.
EDA programs can be used for a wide range of infrastructure projects,
which means that scores of communities will bring hundreds of good and
not-so-good project ideas forward for grant funding. Given the short
window for EDA's Rescue Plan funding, I recommend serving up a focused
menu of ready-to-go and replicable projects that are in high demand. In
an era of grid failures, water failures, repeated floods, derechos, and
droughts, thousands of communities are looking to build a common set of
projects: from better broadband access \9\ to shored-up levees to data-
smart, urban water systems. For example, there are 130,000 schools,
hospitals, and community colleges that want to copy what the Blue
Rancheria Tribe built in Northern California: a community emergency
center with micro-grids and wi-fi, so there was a place to go after the
2018 wildfires.\10\ Each of the 6 EDA regional centers could offer a
different menu of replicable resilience projects matched to differing
regional needs and known demand.
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\9\ Arctaris Impact Funds, 2021. https://www.businesswire.com/news/
home/20210217005595/en/Arctaris-Funds-Broadband-Fiber-in-Opportunity-
Zones-to-Increase-Digital-Equity
\10\ https://www.washingtonpost.com/climate-solutions/2020/01/01/
amid-shut-off-woes-beacon-energy/?arc404=true
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Fund Predevelopment Capacity, Not Planning. For distressed
communities struggling to jumpstart local economies and create
investment-ready projects, the critical funding gap is catalytic
predevelopment capital. Predevelopment pays for tasks that need to be
completed before project construction can begin, such as economic
feasibility studies, site acquisition costs, architectural and
engineering work, and permitting. Recent reports by the Council of
Development Financing Agencies, International Council of Sustainable
Infrastructure, and the Milken Institute have highlighted the
importance of predevelopment capital for local projects that struggle
to find support within existing federally-funded programs.\11\ The
predevelopment gap is especially acute for smaller and historically
underserved communities that lack the fiscal condition to acquire
specialized technical assistance.\12\
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\11\ For more on the Value of Predevelopment, see: Milken Review,
April 2020, https://www.milkenreview.org/articles/the-case-for-an-
infrastructure-predevelopment-fund US Treasury, ``Recommendations of
the Build America Investment Initiative Interagency Working Group'',
2015 (https://www.treasury.gov/resource-center/economic-policy/
Documents/Build%20America
%20Recommendation%20Report%201-15-15%20FOR%20PUBLICATION.pdf)
Presidential Memorandum, January, 2015 (https://
www.federalregister.gov/documents/2015/01/22/2015-01256/expanding-
federal-support-for-predevelopment-activities-for-nonfederal-domestic-
infrastructure) International Coalition of Sustainable Infrastructure:
https://sustainability-coalition.org/ Council of Development Financing
Agencies, Policy Priorities, 2021, page 17 https://www.cdfa.net/cdfa/
cdfaweb.nsf/pages/CDFA-2021-Policy-Agenda.html/$file/CDFA-2021-
Adminstration-Policy-Paper-Final.pdf
\12\ A recent practical example of interest to this Subcommittee's
jurisdiction which highlights the need for expanded predevelopment and
technical assistance funding involves the excellent new integration
efforts under the FEMA's Building Resilient Infrastructure and
Communities (BRIC) program where many states are reporting that the
$600,000 limit for capacity support to local governments is limiting
the number of communities with the expertise and skill set to write and
access project grants.
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Using some of the EDA's allocated funding under the American Rescue
Plan for predevelopment could supplement the existing predevelopment
programs at EDA,\13\ which are already over-subscribed. Not only are
these funds a boon to communities, but they're also a smart venture
investment, generating $16-20 in economic payoff \14\ for every
predevelopment dollar spent. No wonder a diverse set of groups \15\
from the U.S. Chamber of Commerce and the National Association of
Manufacturers to the Coalition for Green Capital and the International
Economic Development Council, support expanding predevelopment
investment in this Congress.
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\13\ For example: https://eda.gov/pdf/about/Local-TA-and-UC-
Program-1-Pager.pdf
\14\ https://www.epa.gov/brownfields/brownfields-program-
environmental-and-economic-benefits
\15\ https://milkeninstitute.org/sites/default/files/2021-01/
LettetoCongresThValuoPredevelopmen
InvestmentForStrengtheningandSustainingU.S.Infrastructure.pdf
---------------------------------------------------------------------------
In sum, the EDA can pave the way to better 21st century
infrastructure by delivering funding and technical assistance for a
focused portfolio of replicable resilience projects.
Be Nimble and Adaptive. There are too many stories where government
relief checks take too long to reach affected individuals, and
historically underserved communities find it impossible to access
grants. To meet the moment, incoming EDA leadership needs to look at
new ways to accelerate on the ground results and scale. While the EDA
has many technical assistance delivery mechanisms, the greatest scale
at this time can be achieved by relying on the EDA's 50-state
University Center network to ramp up expanded technical assistance to
service the proposed resilient infrastructure project menu. In turn,
EDA's university partners need to think and act anew about their role
in 21st century infrastructure deployment, partnering with project
finance experts and impact investors to create project acceleration
centers to help build next-generation resiliency projects and train up
community leaders and students with the skill sets needed for life-
cycle innovation.
Emphasize Life-Cycle Outcomes Such As Equity and Resilience. To
meet the moment, EDA leadership should also allocate some of its ARPA
funding to pilot performance-based infrastructure investment
incentives. For larger projects, a portion of EDA infrastructure
funding could be conditioned on requiring local project sponsors to do
an infrastructure risk & resilience assessment (IRRA) to ensure that
life-cycle project costs, maintenance needs, and other risks are
considered, along with alternative financing and project management
systems. The pause created by the IRRA, like the old environmental
impact assessment under the National Environment Policy Act, would
offer a clear moment in the procurement process for improvements.\16\
Taking this step is also likely to attract private and impact capital.
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\16\ As noted, most U.S. infrastructure projects (be it a public
university building or a transportation project) are promoted by a
single public agency and only the capital costs of the project are
initially funded by the governing legislative authority. Little regard
is given to the life-cycle costs of the project over its 30-year or
more life, which studies show is fueling the nation's extreme deferred
maintenance gap. Even less consideration is given to managing life-
cycle operational risks or performance outcomes that drive up project
costs. Richard Dobbs, et al ``Infrastructure Productivity: How to Save
$1 Trillion a Year,'' McKinsey Global Institute, January 2013, http://
www.mckinsey.com/industries/infrastructure/ourinsights/infrastructure-
productivity.
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III. What Congress Should Consider for ``EDA Next'': A New Mission
Focused on Resilient Infrastructure
EDA, created by the Public Works and Economic Development Act of
1965, has long punched above its weight as one of the few federal
agencies focused exclusively on economic development. I know this from
personal experience. I have worked closely with EDA Administrators
serving both the Obama and Trump Administrations, helping to advance
bottom-up technical assistance and regional innovation competitions,
including the Invest in Manufacturing Community Partnership \17\ and
efforts to expand community technical assistance to promote the
innovative use of Opportunity Zone funding for resilient infrastructure
projects.\18\
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\17\ IMCP: https://www.eda.gov/archives/2016/imcp/overview/
\18\ https://milkeninstitute.org/articles/opportunity-zone-
workshop-series-opens-mississippi https://www.eda.gov/archives/2021/
news/blogs/2019/10/01/success.htm
---------------------------------------------------------------------------
Until recent infusions of federal funding through the CARES Act
(2020) and the American Rescue Plan (2021), the agency has had an
annual budget hovering around $250-300 million for the last two
decades. Over the last five decades, the agency's Congressionally-
mandated mission has grown over time to cover economic adjustment
assistance, manufacturing, regional innovation clusters, and disaster
relief.\19\ EDA currently has seven investment priorities: Equity,
Recovery & Resilience, Workforce Development, Manufacturing,
Technology-Based Economic Development, Environmentally-Sustainable
Development, and Exports & Foreign Direct Assistance.\20\ EDA retains a
diffuse footprint across the United States for a small agency. Within
its six designated federal regions, the agency also funds 377 Economic
Development Districts, over 50 University Centers \21\ and 11 Trade
Adjustment Centers.\22\
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\19\ As noted in the CRS Report, Economic Development
Administration: A Review of Elements of Its Statutory History: ``The
agency evolved from a cluster of programs targeted primarily to
distressed communities to an agency that was also called upon to direct
assistance to urban areas, and to address issues confronting
communities experiencing sudden and abrupt economic dislocation caused
by factory shutdowns, foreign competition, base closures and
disasters.'' CRS R41241, June 3, 2011.
\20\ Commerce Department release, April 14, 2021. https://
content.govdelivery.com/accounts/USEDA/bulletins/2ccd92e
\21\ https://www.eda.gov/programs/university-centers/current-list/.
Note: EDA's UC program includes four Historically Black Colleges and
Universities (HBCUs)
\22\ See http://www.taacenters.org/locations.html
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Over its history, Congress has used the EDA several times as an
accelerator mechanism to address pressing economic challenges.\23\ Now
the time has come, in my view, for another mission. EDA should pave the
way for shifting best practices for the deployment of resilient and
equitable 21st century infrastructure.
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\23\ Phillip Singerman, Repurposed Federal Economic Development
Programs: A Practitioner Perspective, Economic Development Quarterly,
May 2008.
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This would not be the first time EDA has taken on the
infrastructure problem at scale. In fact, in 1976-1977, the agency was
appropriated $6 billion in funding ($28 billion in today's dollars!) to
accelerate counter-cyclical, state and local public works projects to
help the country come out of recession.\24\ The Local Public Works
program awarded funds to state and local governments through a bottom-
up process.
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\24\ Public Works Employment Act of 1976, P.L. 93-369. Recognizing
local fiscal conditions, EDA program grants covered 100% of the costs
of predevelopment and actual construction. CRS Report, Economic
Development Administration: A Review of Elements of Its Statutory
History`` CRS R41241, June 3, 2011, pages 12-13.
---------------------------------------------------------------------------
I argued above that in order to save as much as $7 trillion dollars
by 2050, Congress should consider strategic investments now to
accelerate the shift of the U.S. infrastructure system towards an
outcomes-based system anchored by performance, resilience, and equity.
EDA can lead the way by returning to its Public Works roots. The
mission: scaling up resilient, community-scale infrastructure for a new
era of extreme weather and addressing post-COVID equitable
infrastructure needs like broadband, clean water, and more.
This new mission for resilient communities and public works should
have three objectives: meeting basic community infrastructure needs to
drive equitable growth outcomes, incentivizing performance-based
infrastructure investments for projects of regional significance, and
incubating 21st century whole-of-government federal coordination from
the bottom up across all infrastructure modes. Along with the reforms
recommended above regarding focused project deployment menus and
University Center investments, this new effort should be anchored by
the creation of a Federal Predevelopment Fund to catalyze the next
generation of shovel-worthy projects.
Create a Federal Infrastructure Predevelopment Fund at EDA. A
Federal Infrastructure Predevelopment Fund, as originally proposed,\25\
would support a three-year base investment in flexible predevelopment
funding designed to jumpstart a pipeline of community-level resilience
projects, offer competitive predevelopment funding for projects of
regional and national significance and catalyze the needed, long-term
shift to performance-based infrastructure funding by the federal
government.
---------------------------------------------------------------------------
\25\ https://www.milkenreview.org/articles/the-case-for-an-
infrastructure-predevelopment-fund
---------------------------------------------------------------------------
The fund would support local technical assistance grants and loans
to rapidly develop community-led projects while acting as a catalyst
for investment-ready resilience partnerships. As noted earlier,
existing predevelopment programs offering this form of technical
assistance are either over-subscribed for large resilient
infrastructure projects or hard-to-access for smaller communities who
need this support to advance projects from concept to completion.
Eligible infrastructure investments would include water systems,
energy, transportation, broadband, housing, and natural infrastructure
projects alone or in combination with these other investments.
The fund would address local capacity and barriers that impede a
pipeline of shovel-worthy projects and help communities reform broken
public procurement systems that fail to create the incentives for long-
term resilience and timely maintenance. This investment in life-cycle
asset management \26\ would also attract sidelined private capital into
community infrastructure at greater scale because the political risks
would be removed through predevelopment work.\27\
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\26\ American Society of Civil Engineers, Changing The
Infrastructure Equation: Using Asset Management to Optimize Investments
https://www.asce.org/uploadedFiles/Issues_and_Advocacy/Infrastructure/
Content_Pieces/changing-infrastructure-equation-report.pdf
\27\ NRDC, Taking the High Road to More and Better Infrastructure,
2016 https://www.nrdc.org/sites/default/files/taking-high-road-more-
and-better-infrastructure-ip.pdf Also see: European Investment Bank,
``European PPP Expertise Center,'' 2016, www.eib.org/epec/ (accessed
May 2, 2016).
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Stand Up Regional Resilience Centers. Congress could further
leverage its investment in local capacity by linking the Predevelopment
Fund to a nationwide network of regional acceleration centers, housed
at EDA. These Regional Resilience Centers would accelerate capacity-
building on the ground, transfer best practices and successful models
among states and regions, and promote federal whole-of-government
closer to where projects are developed.
Although it is no secret that Congress has been considering a
``national infrastructure bank'' for 15 years, an idea predicated on
the prevalence of Hoover Dam-scale projects, studies show these
projects are relatively limited.\28\ EDA Regional Resilience Centers,
however, could focus on innovations that America needs now, like
broadband for remote work, energy-efficient hospitals, and modern water
management systems. These Regional Centers could house project finance
and technical assistance teams, acting as expert leads to help
communities successfully build one of the replicable projects on the
EDA resilience project short-list.
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\28\ U.S. Treasury, 2016: 40 Proposed U.S. Transportation and Water
Projects of National Significance https://www.treasury.gov/connect/
blog/Documents/final-infrastructure-report.pdf
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Whether it's a region where there is too much water, not enough
water, or another location-specific resilience challenge, going
regional would bring resources and performance accountability closer to
the ground, as recommended in recent reports by the Kinder and Milken
Institutes.\29\ A regional delivery strategy for federal engagement
would allow communities to act quickly to deliver on the most pressing
projects in their region without being slowed down by federal
programmatic requirements, funding silos that don't fit post-COVID
community priorities, or local matching requirements that make it
harder for smaller and underserved communities to access the technical
assistance they need to innovate.
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\29\ Kinder Institute, 2021. A Bottom-Up Strategy for American
Renewal.https://kinder.rice.edu/research/bottom-infrastructure-
strategy-american-renewal Milken Institute, 2021. Accelerating
Infrastructure Investment Across the Country https://
milkeninstitute.org/reports/infrastructure-investment. US DOT Regional
Infrastructure Accelerator Program, 2021 https://
www.transportation.gov/buildamerica/financing/tifia/regional-
infrastructure-accelerators-program Harvard Ash Center, Government
Innovations, https://www.innovations.harvard.edu/west-coast-
infrastructure-exchange
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Link Funding To Performance Improvements. Access to predevelopment
funding would hinge on a commitment to evaluating economic and equity
outcomes as well as to long-term performance improvements in key
economic resilience criteria, such as life-cycle asset management,
budgeting, and other fiscal best practices. As noted earlier, based on
past economic studies by EDA and EPA, each $1 spent on predevelopment
will generate $16-20 in total economic outcomes and funding
leverage.\30\
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\30\ EPA: https://www.epa.gov/brownfields/brownfields-program-
environmental-and-economic-benefits EDA: https://www.eda.gov/
performance/
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Match Fund Size to Community Need. Because a diverse set of groups,
from the American Society of Civil Engineers and the Local Initiatives
Support Corporation to the Natural Resources Defense Council and the
Center for Rural Innovation, are calling for expanded predevelopment
investment,\31\ the Milken Institute was asked recently: exactly how
much predevelopment support is needed right now to jumpstart more
projects?
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\31\ Letter to Congressional Leaders, January 25, 2021. See:
https://milkeninstitute.org/sites/default/files/2021-01/
LettetoCongresThValuoPredevelopmenInvestmentForStrengtheningand
SustainingU.S.Infrastructure.pdf.
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Based on our analysis, the benefit of/the case for a $15-25 billion
predevelopment fund to jumpstart community, state, and regional-scale
innovation over the next three years is easily supported by the data.
We compiled estimates on the national need for flexible
predevelopment funding based on two methods. One looked at historical
and projected gaps between municipal bond spending on infrastructure
and known gaps, using the more conservative estimates prepared by
Oxford Research.\32\ The other method was compiled working with project
finance experts who are already funding and financing high-demand
infrastructure project types, such as community broadband, community
micro-grids, and other projects. Each method confirmed that on-the-
ground predevelopment demand far exceeded $15 billion. Based on past
studies by the EPA and the EDA, we would expect $16-20 in benefits to
flow from each $1 spent on predevelopment, or $240-320 billion in total
benefits accruing from a $15 billion fund.
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\32\ Oxford Global Infrastructure Report, 2017 U.S. data is drawn
from pages 65 and 148 for the key US data.
---------------------------------------------------------------------------
Estimate #1: Predevelopment Needs Based on Oxford Economics Gap
Analysis
Charts 1 and 2 below indicate a gap between municipal spending in
the United States and the need of about $200 billion for 2019;
municipal spending is projected to fall short by an average of $162
billion annually between 2020 and 2040 based on the Oxford data.
These charts are based on Oxford Research's more conservative
analysis of U.S. infrastructure needs). Chart 1 assessed the gap
between actual municipal infrastructure spending based on data from the
Securities Industry and Financial Markets Association and then looked
at projected gaps based on current municipal trends and the Oxford
needs estimate (Chart 2).
Based on average predevelopment costs of 10% of capital costs,\33\
an additional $15 billion or more in predevelopment funding would lead
to a minimum of 9x in infrastructure spending, not including any
additional economic multiplier effects or project investment due to
market standardization. As we have already seen with solar
installations, this standardization is likely to produce additional
investment.
---------------------------------------------------------------------------
\33\ Predevelopment costs generally range between 7-12% of final
capital cost at ribbon cutting, depending on the project type. Based on
sources from our project developer database, 10% is our working rule of
thumb for cost and need estimation.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Estimate #2: Predevelopment Needs Based on Replicable Project Category
Estimates
We reached out to project finance experts to aggregate estimates of
predevelopment need and impact for a set of high-demand projects that
communities are asking for where skill set and project development
funding are unavailable.
The table below summarizes the aggregated data for predevelopment
for the four high-demand use cases we analyzed.
------------------------------------------------------------------------
Project Type Aggregated Estimates
------------------------------------------------------------------------
Multi-Purpose Community Center/Emergency Project size: $5-20 million.
Center with micro-grid for small $5M x 30,000 projects =
communities to be located at 130,000+ $150B
schools, hospitals, or in other multi- Projected Predevelopment
purpose facilities. Costs: $15B
------------------------------------------------------------------------
E.V. Charging Stations for advanced Project Size: $2-12 M
mobility and equity services in urban Total Costs (Based on White
neighborhoods, specifically commercial House goal for 500K E.V.
business centers. Chargers): $10.7 Billion*
Projected Predevelopment
Costs: $1.07 Billion
------------------------------------------------------------------------
Broadband for rural coops nationwide...... Project size: $5-100 M
Number of rural coops: 838
Projected Predevelopment
Costs: $1.7 billion
Source: Post Road analysis,
based on EIA data
------------------------------------------------------------------------
Water projects for (a) rural, upstream Advanced wastewater
conservation infrastructure treatment needs estimates
implementations to improve downstream from EPA for 18 target
municipal water quality and urban and/or states on (a) is $11.333 B
coastal green infrastructure to address The combined national need
flooding, stormwater, sea rise, and waste on (b) for ``combined sewer
recycling or sewer outflows. overflow'' and ``stormwater
management'' is $67.2 B
Projected Predevelopment
Costs: $7.8 B
------------------------------------------------------------------------
Predevelopment Needs for 4 Major Use Cases $25.5 billion
------------------------------------------------------------------------
IV. Concluding Recommendations: EDA Next
As Congress wisely considers big and bold investments to make our
nation's infrastructure globally competitive and equitable to all, we
must also ensure that a small portion of new spending is carved out to
incentivize long-term resilience and infrastructure system performance
for both public and private infrastructure.
Without the right carrots, sticks, and technical assistance
capacity investments designed to promote better infrastructure
outcomes, we won't be able to overcome the multi-trillion-dollar
deferred maintenance funding gap that existed long before the pandemic,
let alone marshal the trillions we will need by 2050 to address climate
change and extreme weather. That's because a fix for what ails us is
not just a question of how much we spend but also how well we buy and
maintain these life-cycle investments.
In my testimony today, I have proposed that EDA use its existing
funding and authority to deliver focused support to communities seeking
critical resilient infrastructure projects, such as emergency centers
with micro-grids, broadband, critical water systems, and regionally-
demanded projects in each of its six regions.
Moving forward, as the Committee assesses the future for EDA and
EDA reauthorization, I believe a return to its roots as a unique
project accelerator is advised. With additional funding and direction
from this Subcommittee and Congress, EDA can catalyze a growing
pipeline of next-generation, community-scale infrastructure projects,
promote better local best practices, and break down federal agency
silos over time. These would be wise investments to make.
While the critical performance shifts we need for better U.S.
infrastructure cannot happen overnight, these challenges and
opportunities can be addressed realistically in stages. It begins with
the proposed three-year investment to help distressed communities now
with predevelopment support and the creation of Regional Resilience
Centers to find cross-modal efficiencies and lift up equitable
outcomes.
Thank you for bringing attention to these critical issues and for
the opportunity to testify here today. I am happy to answer any
questions you may have.
Ms. Titus. Thank you. It is always good to have some
academic input into anything that we consider. I appreciate
that.
We will now move on to Member questions. Each Member will
be recognized for 5 minutes. And I will start by recognizing
myself.
Mr. Peterson, you and Mr. Carol both mentioned this need
for predevelopment funding. We know there is pencil-ready,
there is shovel-ready. Now we are hearing predevelopment,
something I think we need to learn more about. I don't know if
you want to jump in there, Mr. Peterson, and add to what Mr.
Carol was saying.
Mr. Peterson. Yes, I would be happy to. Thank you so much
for the question.
Here is what I know. Every community has a list of
potential projects that remain on the shelf because they don't
have the initial resources to get the ball rolling. So a
dedicated source of predevelopment project funding would allow
communities to access critical resources that would help them
get more of those projects off the shelf.
Also, staff capacity is a major issue, likely as much as
project funding, that could be addressed through this type of a
pilot program. It is critically important that communities have
access to the resources that can make all those great projects
in our comprehensive economic development strategies a reality,
so they are not just well-conceived, well-intentioned ideas.
So we need to address that space between the plan and
getting to the finished product that we all want. Capacity
building, in my mind, including predevelopment funding, would
go a long way.
Mr. Carol. If I could just add to that, Madam Chair, so we
have available more detailed language on the types of
predevelopment elements that happen after planning has
determined the needs. But I think here--and I am happy to share
that with the committee, in addition to the written testimony--
I think here are just a few examples.
There are existing predevelopment programs. EPA brownfields
is a perfect example. Only the public sector will remediate a
site that can then lead to private development and create a lot
of activity. The TIGER bill, now RAISE program, is another
example for large projects, where cities like Las Vegas and
others can do innovative projects. Both of those programs are
always oversubscribed.
And I think the other element I would put out there, the
committee has done some great work around the FEMA BRIC
program, which is a great example of helping communities access
funding that is there for resilient infrastructure projects.
But there is a $600,000 State cap on technical assistance, so
each State only has $600,000 to help communities access money
that is there--grant writers, down the line--what Jonas was
saying--that is actually cutting off communities from getting
funding that is already there. So skipping that predevelopment
step after planning is unrecommended.
Ms. Titus. Thank you, very interesting. I would go back to
you, Mr. Peterson, since you are in Las Vegas and have seen the
devastating impact of COVID on travel and tourism. Can you
share with us some of the things that you all are doing that we
might consider, as we look at reauthorization, now that EDA has
a special set-aside for communities hit by downturns in this
area?
Mr. Peterson. Thanks again, Chairwoman Titus, for the
question.
So in southern Nevada--so the Las Vegas Convention and
Visitors Authority really takes the lead on all things tourism.
But, as the regional economic development group, we very much
are strategically aligned, and partner on a variety of
projects.
So here is what I would share. It is absolutely critical
that we get America's tourism economy firing on all cylinders
again. A lot of damage has been done. And Chairwoman Titus, as
you know, we have definitely seen that damage here, in Las
Vegas. So investments in health and safety infrastructure,
investments in tourism infrastructure, I think, will prove
essential. Flexibility is important here, because communities
look so different.
We definitely appreciate the set-aside funds for tourism
communities impacted by the pandemic, and I would submit
Congress should consider speedy, equitable distribution of
those funds to help tourism reemerge, really, in a way that
benefits those markets like Las Vegas that have a very
recognized brand, but also our small and medium communities,
even emerging markets.
Ms. Titus. Yes, you don't have to have the famous Las Vegas
Strip to be a tourist destination, you can have some place of
natural beauty, some historic site. I think someplace in Kansas
has the world's largest ball of twine. There is always
something somebody wants to see. So we need to encourage it in
other places, as well as Las Vegas, certainly.
Well, thank you, both of you, for those good answers. We
will now go to Mr. Webster for questions.
[Pause.]
Ms. Titus. Unmute.
Mr. Webster. OK, is that better? Am I on now?
Mr. Peterson, you recommended support for the capacity
building at a local level, and the chairman also asked about
that same thing. Can you talk more about what types of
resources are needed and why, and where in the mix of projects,
or whatever it is, do those kick in?
Do they start early? Give me a little idea about that.
Mr. Peterson. Yes, great question. Again, thank you.
You know, I think capacity building is critically
important. Let me give you a very specific example, and that
would be in my organization, the Las Vegas Global Economic
Alliance.
As a result of the pandemic, we have seen cuts to some of
our funding sources and, as a result, to balance our budget we
have had to pull back in some areas, including operations
staff. So I think there is very much a need for capacity
building in terms of staff for operations that will allow
economic development organizations to make more projects become
a reality.
And again, I can't emphasize enough that so many
communities across the country have incredible comprehensive
economic development strategies, where I think we need the help
in capacity building, some of that predevelopment project
funding, to better scope out projects, get the ball rolling,
and then capacity building for staff and resources directly to
EDOs to help them make those projects become a reality.
Mr. Webster. OK, Mr. Carol, along the same lines there, it
seems like I am hearing the same thing, but maybe it is not.
Can you give us some examples of why predevelopment support was
mentioned, and how does that differ from what we just talked
about?
Mr. Carol. Sure, so--and I think, as an engineer,
Representative Webster, you can certainly understand, there is
that initial phase of what outcomes do we need to buy, in terms
of the size of a wastewater treatment plant, or any level of
service, and then there is how do you actually make the project
happen. And those steps, to decide what technology, what
design, where are you going to do it, assembling the land,
those are all the things that have to happen before a municipal
bond deal is done, or before a public-private partnership is
done, or before even a grant is gotten.
A good example, I think, would be in northern California
there is the Blue Lake Rancheria microgrid center that was
built in 2018. This is a new technology to use microgrids in a
community center. It was a, I believe, $6.2 million deal. At
least $1\1/2\ million was predevelopment to do something that
now thousands of communities want: a small hospital, a school
building, a place to go where you can charge your phone and
sleep after the next flood, fire, or alien invasion.
That is new technology that needs a certain type of
expertise, and the same, really, with broadband, because there
are different sizes of broadband deals that--I think we could
stretch broadband investment by using predevelopment to make
sure that we have--here are the different tiers of projects
that you can do.
Mr. Webster. So I got that, but you listed off several
places where money is needed. It's one thing applying for a
grant, going through a process, getting that. On the other
hand, there are a couple of places along the way, including
what we are doing here, where speed wins. So how do you balance
that?
Sometimes you can't have enough time to do maybe
predevelopment, or whatever you want to call it. Or is it that
we are not starting soon enough?
Mr. Carol. Well, in my full written testimony, what I am
identifying is right now infrastructure in the U.S., our $2
trillion deferred maintenance gap is a procurement problem. We
buy the low-cost capital bid with no plan to maintain it, and
have been doing that for decades across red and blue States,
and I think----
Mr. Webster. Oh, we are great at that.
Mr. Carol. Excuse me?
Mr. Webster. We are great at that.
Mr. Carol. And so, if we could use the predevelopment
carrot as a way to incentivize communities to think what is the
life-cycle outcomes that we want to buy, in terms of vehicle-
miles traveled or broadband delivered, I think that is where
EDA could play a real innovative role as kind of an initial
startup engine to think about this life-cycle resilience,
particularly for post-COVID infrastructure needs in some
categories that everyone is demanding at high scale, including
broadband.
Mr. Webster. Thank you very much, and I yield back.
Ms. Titus. Thank you. We will go to Ms. Norton for 5
minutes.
Ms. Norton. Thank you, Madam Chair. This question is for
Mr. Peterson.
As you know, Mr. Peterson, communities taking advantage of
EDA's planning resources often lack the human and the financial
resources to implement those plans. I was interested in the
notion you indicated of a pilot program. How would that benefit
economic developers?
Mr. Peterson. Thank you so much for the question. I think
it goes--the concept of the pilot program that we have in mind
goes to exactly what you said, the financial but also the human
needs of organizations to build capacity with economic
development groups in a variety of ways.
And once again, flexibility, I think, is important here,
but designed around getting more of those projects that are
scoped out, are in those great plans, to fruition. So
operations, project funding, staffing, and staffing that has
multiple years to see projects to fruition, I think, is
important. I can speak for my organization when we look at
grants. We don't need them to last forever, but we do need a
time horizon that allows us to staff up, implement, and staff
back down without disrupting the organization.
So those are the areas that we see are critically
important. Thank you.
Ms. Norton. I think that if that pilot program was spread
across the board, it would be very helpful.
Mr. Peterson, may I ask yet another question? You are in a
position to address racial and socio-economic inequality. And
you describe that in your testimony. Could you elaborate as to
how EDA, in particular, can provide more opportunities to those
who are underserved?
Mr. Peterson. Well, another excellent question. Thank you.
And I will share, on behalf of IEDC, this is an issue that is
near and dear to our hearts. So we have built equity, as a
priority, into our programs, our services, our planning--
everything we do as an organization. From an EDA point of view,
I appreciate the efforts that are already underway to look at
underserved communities.
I love the idea of doing even more to get the word out. I
think it is--it amazes me how often parts of our community
don't know about the great resources already available through
EDA, and so I think more can be done there.
And then I think we need to take a systematic look at how
we prioritize projects to make sure we are hitting the right
areas that address a critically important equality issue.
Ms. Norton. Thank you very much.
I have a special interest in climate change. And Mr. Carol,
I have a question for you.
Climate resiliency is a key goal of the Transportation and
Infrastructure Committee on which I serve. In your testimony
you illustrate how EDA, in particular, can play a role in that.
Why is it important for EDA to be involved in the fight against
climate change?
What does it bring to the table, what does EDA bring to the
table, that other agencies and funding sources lack or do not?
Mr. Carol. Thank you very much for the question. I guess I
would answer it in two ways.
One, what we are seeing on the ground is the--if you are a
local or State official, it is the integration of modes, so
there is a bunch of great Federal programs. Sometimes they are
siloed. And if you are a local official trying to put
together--and you know, 25 sources of capital, it is super
hard. That is one of the skill sets that Jonas Peterson was
talking about that is missing. And so EDA, because it is
multimodal, is able to help with that.
I mentioned the example of, really, what we are hearing
from many communities around the country, is that they want an
emergency microgrid public building. Is it a library? Is it a
school? Is it a rural health center? Does it involve broadband?
It is all of those things.
And so we are seeing a lot of new types of community-scale
projects--energy-efficient wastewater, we have all these
wastewater facilities, that are usually the largest energy
user, built in the 1970s. There are dams and levees, waste to
value.
So EDA has this regional footprint, which is great. We have
regional innovation strategies they have developed. And as they
look and scan for where are--I sort of see this as: EDA can
create a food truck offering, you know, these are the six types
of projects in highest demand, and we can help you with those,
rather than--particularly with the ARPA money, the rescue plan
money, to be able to spend that out in the next, you know, 18
months is not going to--looking at thousands of projects, I
don't think, would be as efficient.
Ms. Norton. Thank you very much, Madam Chair.
Ms. Titus. Thank you. You know, we are hearing from these
answers--this is what we heard from the Secretary earlier, and
it reinforces that need for maybe some of us to get staff to
come out and do roundtables or townhalls in our district to
[inaudible] some of these communities about just what is
available.
We now go to Mr. Guest.
Mr. Guest. Thank you, Madam Chairman.
Mr. Hawkins, I want to speak with you about the importance
of rural broadband. I know that that is contained within the
essence of your report. You say in there that Farm Bureau has
continued ``to advocate for significant investment to support
broadband deployment in rural communities.''
Then you go to list out very eloquently that ``the
coronavirus pandemic has only exacerbated and made more
apparent the need for rural broadband in rural communities as
employees shifted to working from home, school districts closed
and resorted to distance learning platforms, and patients
sought healthcare through telemedicine platforms.''
Then you go on to say ``farmers and ranchers depend on
broadband just as they do highways, railways, and waterways to
ship food, fuel, and fiber across the country and around the
world. Many of the latest yield-maximizing farming techniques
require broadband connections for data collection and analysis
performed both on the farm and in remote data centers.''
Then lastly, you say, ``however, 29 percent of U.S. farms
have no''--and again, you say ``no''--``access to the
internet.''
And so, Mr. Hawkins, if you will for just a moment, could
you please expand on, again, how important broadband
infrastructure is to the agriculture and ag industry suppliers,
especially how they relate to rural remote communities?
And then also speak, if you will, about what Congress can
do to expand the availability of broadband to rural America.
Mr. Hawkins. Thank you, Congressman, for the question. I
would say one of our members summed it up best for me the other
day, when he described broadband as the invisible thread that
connects agriculture, our rural communities, and our urban
centers. It truly is key, as we talk about economic
revitalization across rural America.
And so, if we have learned anything as a result of the
pandemic, we saw several things. In our communities, especially
my hometown of 1,100 people, we saw very quickly that, while we
have service, the need is great. The service that we have for
high-speed internet, essentially, goes from the east to the
west city limits of Appleton. And for our farm families that
live outside of town, data plans were quickly getting used up
on cell phones, as families scrambled to try to help their kids
adjust to the new way of life and get through school. And so,
quickly, we learned yet again, just at the home level, how
important it is to keeping things going, from an education
standpoint.
In our community and in our county, we have roughly about
17 percent poverty. And we do have a real issue with substance
abuse. And, as we talk about--as a health community, as we talk
about telemedicine, I mentioned in my testimony that unreliable
internet is the biggest impediment for us to utilizing
telemedicine. And the number-one service we need is access to
mental health services, followed by cardiac services. So it is
not like we can't find a provider. It is being able to do it
via the internet in a reliable fashion.
And then finally, as we think about the farm gate, you
know, when we saw supply chains break down during COVID, and
when, for the first time, some Americans went to a grocery
store and saw a near-empty meat case, it led everyone to be
reminded that they depend on us, as farmers and ranchers, three
times a day, at least, right?
And so I can assure you that the kink in the supply chain
wasn't at the farm gate. We had plenty of product. We had
plenty of animals. We had plenty of crops. The issue was at the
processing site. But what we learned is that we have farmers
who are willing to adjust to use the internet and to reach
consumers directly. That is why we started a meat processor
database within our Missouri Farm Bureau website, so that our
farmers could connect with consumers and vice versa.
So time and time again, we see opportunities with basic
broadband service. As we think about the future of agriculture,
what we don't know, we don't know. There are farmers who have
access to high-speed internet who are clearly at the head of
the curve, in terms of adopting cutting-edge technology. Then
you have folks like my grandfather, growing up, that still used
a spiral-bound shirt pocket notebook, that would do his data
collection in that notebook, and then crunch the numbers on the
back of a Post Toasties box. So we span everything in
agriculture, and that is what truly makes us so incredibly
diverse, as well as resilient.
So bottom line, though, is we talk about bringing home the
next generation to our communities and to agriculture. High-
speed internet is critical, absolutely critical to agriculture,
to entrepreneurship, to healthcare, to education. It is that
thread of life that our rural communities need.
Mr. Guest. Mr. Hawkins, thank you so much for being with us
today. And please pass along my thanks to all the farmers,
particularly those related to Farm Bureau that work so hard
every day to feed America. Thank you again.
Mr. Hawkins. Thank you.
Ms. Titus. Commissioner, you mentioned the internet in your
comments. Do you want to weigh in on this question?
Mr. Eliason. One of the things that is important to
understand is that the FCC needs to modernize its data
collection. So when you look at the maps that are being used,
it is important to understand that using census block is not a
good way to figure out where the service areas are.
We are putting a lot of money out there for broadband
development, and we have to make sure that we implement it in a
manner where it actually goes to the best service. There have
been a lot of restrictions by States to local development of
the broadband service. So it is something that we have to work
from our side to try to get those of us that don't have
providers that are not investing in the local areas, especially
rural areas, because they are not as financially profitable to
be able to get those. So there is a lot of work to be done.
But as we go through the process of implementing the
moneys, it is important to make sure that the money actually
gets built, and it gets used and done, because it is not only
accessibility, but affordability. So there are two sides to
that coin, when it comes to the development of rural broadband.
So it is important to understand.
We did a study here, in our Buckeye Hills Regional Council,
and it turned out it was going to be $8 billion to get fiber to
all the homes, because we are in a hilly area, so you can't use
satellite, and you can't use some of the other things out there
that are available in areas that have much more line-of-sight
availability. So it is really an expensive proposition, so we
have to make sure we take a look at that.
And I can tell you lots of stories about kids having to go
to McDonald's and Wi-Fi hotspots here in our county to try and
get their work done. So they are falling behind. And that
happens in a lot of rural areas because they don't have the
accessibility.
Ms. Titus. Thank you. Thank you very much.
Miss Gonzalez-Colon, is she still with us?
[Pause.]
Ms. Titus. Well, while we wait for her, I would just go
back and ask Ms. Cooper.
You mentioned the SPRINT grant that you got with a
university campus there in your area. Could you talk a little
bit more about your relationship with the university, and how
the university can help with the Economic Development
Administration, and that whole kind of scenario?
Ms. Cooper. Oh, absolutely. Thank you so much for the
question.
We are very fortunate to have Northern Kentucky University
as, not only a great educational institution, but a great
partner in our region. I had mentioned the data analytics. We
have an incredible economic data center there that our
businesses rely on, that we rely on, so that we can make proper
decisions. Local government, small businesses, and our large
businesses all partner together with this university to try and
not only address the needs of our region as a whole, but
individual business issues that may come up, so that they can
grow and develop.
The entrepreneurship piece of it is huge. It is going to be
an incubator for entrepreneurs, where they can come and not
only help develop their project, but also take that idea, and
take it to commercialization. And those of you who work with
entrepreneurs know that that is always a step that folks
struggle with. They have the idea, they know what they want to
do, but having that support system around them, and having that
ability to take that project to commercialization is something
that is key. And it often keeps a great idea and a great
entrepreneur from becoming a success story.
So we are really excited about this opportunity, and this
EDA investment will help us work with these folks through our
revolving loan fund. Once they get these ideas, we can take
them, work with them, with their business plans, and take them
to that next step. So it is really exciting.
Ms. Titus. It sounds like it. And I have talked to the
economic development folks here at UNLV, and they are working
on something similar, with the incubator and then the
accelerator, I think they called it. You know, get the idea,
and then push it out there, and then it becomes part of the
business world. So it really can make a difference. So thank
you for that.
Any further questions from any of the Members, Mr. Webster?
We are good?
Mr. Webster. We are good.
Ms. Titus. What?
Mr. Webster. I just said I am good.
Ms. Titus. OK.
Mr. Webster. It was a great, great, great hearing.
Ms. Titus. Well, thank you all very much. I think it has
been a good hearing. We got some good information to use, and
we are all excited on both sides of the aisle about
reauthorizing the EDA, and we have seen what kind of good work
it can do in the time of a disaster, or just in sponsoring and
helping us to develop when times are good. So thank you. Your
comments have been very helpful.
I now 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.
I also ask unanimous consent that the record remain open
for 15 days for any additional comments and information
submitted by Members or witnesses to be included in the record
of the hearing.
Without objection, so ordered.
And so we will be talking to you all again, I am sure, as
we move forward with this effort.
And now the subcommittee stands adjourned, thank you.
[Whereupon, at 3:58 p.m., the subcommittee was adjourned.]
Submissions for the Record
----------
Prepared Statement of Hon. Sam Graves, a Representative in Congress
from the State of Missouri, and Ranking Member, Committee on
Transportation and Infrastructure
Thank you to Chair Titus and to today's witnesses.
I also want to welcome Mr. Hawkins, President of the Missouri Farm
Bureau. His knowledge and work in Missouri will help us better
understand how we can better position EDA to support farming businesses
and economies.
EDA was created in a time when a lack of traditional
infrastructure--like water, sewerage, or roads--prevented many
distressed communities from attracting businesses and jobs.
Unfortunately, many areas still have these challenges. And to make
matters worse, many rural communities now have the added challenge of a
lack of broadband connectivity.
While EDA can and has funded certain broadband projects, updating
EDA's authorities to remove hurdles to more viable projects is
critical.
Last Congress, I introduced H.R. 6491, the E-BRIDGE Act, to do just
that so that more broadband projects could be considered by EDA. I look
forward to working with Members of the Committee and stakeholders as we
prepare to reintroduce this legislation.
Letter of April 27, 2021, from Morgan W. Reed, President, ACT/The App
Association, Submitted for the Record by Hon. Daniel Webster
April 27, 2021.
The Honorable Dina Titus,
Chairman,
House Committee on Transportation and Infrastructure, Subcommittee on
Economic Development, Public Buildings, and Emergency
Management, Washington, DC 20515.
The Honorable Daniel Webster,
Ranking Member,
House Committee on Transportation and Infrastructure, Subcommittee on
Economic Development, Public Buildings, and Emergency
Management, Washington, DC 20515.
Investing In America: Reauthorization of the Economic Development
Administration
Dear Chairwoman Titus, Ranking Member Webster, and Members of the
Subcommittee,
We applaud this Subcommittee for its examination of the dynamics of
economic development, with tomorrow's hearing, ``Investing in America:
Reauthorization of the Economic Development Administration.'' ACT/The
App Association (the App Association) is the leading trade group
representing small mobile software and connected device companies in
the app economy, a $1.7 trillion ecosystem led by U.S. companies and
employing 23,910 in Nevada and 237,090 in Florida alone.\1\ Our member
companies create the software that brings your smart devices to life.
They also make the connected devices that are revolutionizing
healthcare, education, public safety, and virtually all industry
verticals. They propel the data-driven evolution of these industries
and compete with each other and larger firms in a variety of ways,
including on privacy and security protections.
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\1\ ACT/The App Association, State of the U.S. App Economy: 2020
(7th Ed.), available at https://actonline.org/wp-content/uploads/2020-
App-economy-Report.pdf.
---------------------------------------------------------------------------
App Association members exist all over the world and in a wide
variety of geographies due to the mobile nature of the digital
ecosystem. In rural and suburban areas, accelerators and incubators are
particularly integral because they provide a cluster of resources that
wouldn't otherwise be available to startups and fledging developers.
These resources include everything from venture capital and office
space to things as fundamental as a stable broadband connection.
Moreover, the app ecosystem often takes the shape of a ``hub and
spoke'' system in each locality where it flourishes, where accelerators
and incubators serve as hubs that support the software and device
companies branching off as spokes.
The United States Economic Development Agency (EDA) has a regional
focus in bringing economic development initiatives to localities. The
App Association believes the EDA can play a key role in deploying
broadband to rural and underserved communities as part of the
Subcommittee's priority to foster robust economic growth.
I. State of Play at the Economic Development Agency
The EDA exists both to provide capital to localities to spur
business development in their regions and to bolster local
infrastructure as a means to facilitate economic development.\2\
Capital is provided through EDA grant programs such as Economic
Adjustment Assistance (EAA) grants, intended to ``fund market and
environmental studies, planning or construction grants, and capitalize
or recapitalize revolving loan funds (RLFs) to help provide small
businesses with the capital they need to grow.'' \3\ The Coronavirus
Aid, Relief, and Economic Security (CARES) Act provided the EDA with
$1.5 billion for economic development assistance programs to help
communities respond to COVID-19. Although this funding is nearly five
times the recent annual appropriation for EDA,\4\ the COVID-19 pandemic
is undoubtedly a disastrous event that occurred at such scale it will
take considerable gains in productivity to recover lost economic
output. An article published by McKinsey & Company earlier this year
makes a poignant point on this:
---------------------------------------------------------------------------
\2\ U.S. Economic Development Administration Value Proposition
Statement, available at https://www.eda.gov/about/Value-Proposition.htm
\3\ Economic Development Administration Economic Adjustment
Assistance Program one-pager, available at https://www.eda.gov/pdf/
about/Economic-Adjustment-Assistance-Program-1-Pager.pdf
\4\ ``The Economic Development Administration and the CARES Act
(P.L. 116-136),'' Congressional Research Service, (April 2, 2020),
available at https://crsreports.congress.gov/product/pdf/IN/IN11303
``Just as 19th-century farmers needed roads and railroads to
participate in the broader economy, today's Americans need
digital to do the same. Too many cannot, either because of a
lack of high-speed access (78 percent coverage in rural areas
at the beginning of 2019) or lack of affordability. In terms of
education, such deficits are likely to have damaging long-term
effects, particularly on Black, Hispanic, and poorer
schoolchildren, whose parents are also the most likely to have
been economically hurt by the COVID-19 crisis. For both
economic opportunity and racial equity, then, broadening
digital access should be a high priority.'' \5\
---------------------------------------------------------------------------
\5\ ``America 2021: Rebuilding lives and livelihoods after COVID-
19,'' McKinsey & Company, (February 16, 2021) available at https://
www.mckinsey.com/industries/public-and-social-sector/our-insights/
america-2021-rebuilding-lives-and-livelihoods-after-covid-19
II. Broadband as Infrastructure and the Value of Public-Private
Partnerships
One way to boost productivity and bridge gaps in equity is through
investing in digital infrastructure. The App Association supports
Eliminating Barriers to Rural Internet Development Grant Eligibility
(E-BRIDGE) Act (H.R. 6491/S. 3648, 116th) because this legislation
would ensure that economic development organizations, in public-private
partnerships or through consortia, can use Economic Development
Administration grant funds to support broadband deployment. The
legislation addresses a significant issue in broadband deployment via
public-private partnerships because most internet service providers
(ISPs) operate for-profit. Although EAA grants can be used for
broadband deployment, EDA regulations only allow non-profits access to
grants and explicitly exclude for-profit organizations from access to
these grants--even if a for-profit is working with a non-profit in a
partnership.
A change to existing law is necessary due to the many benefits of
public-private partnerships and consortia. One way public-private
partnerships are optimized is the private sector brings the
efficiencies and resources to address the issue at hand. Meanwhile, the
public sector minimizes the risk assumed by the private sector by
ensuring there will be a use for the resources the private sector
coordinated. An example of how this might work can be found in the
creation of federal office buildings. The federal government (public
sector) will hire a management company (private sector) to build the
building. By agreeing upfront to be the building's tenant for a number
of years, the government offsets the risk the management company faces
in not having tenants. A similar argument could be made in the
deployment of broadband. However, as stated previously, ISPs are
usually for-profit entities and it is not clear in current law whether
their status precludes projects in which they participate from
eligibility for EAA grants.
Moreover, there have been impressive gains in broadband deployment
through consortia such as Microsoft Corporation's Airband Initiative--
where a total of 633,000 previously unserved people gained internet
access since 2017.\6\ However, partnerships within the private sector
can only go so far: meaning, they will only go so far as it makes sense
for the bottom line. Public-private partnerships have the potential to
go much further--especially in addressing issues of equity--and could
be a mechanism through which any infrastructure package \7\ addresses
the issue of broadband access.
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\6\ Microsoft Airband Initiative website: https://
www.microsoft.com/en-us/corporate-responsibility/airband
\7\ Fact Sheet: The American Jobs Plan, The White House, (March 31,
2021), available at https://www.whitehouse.gov/briefing-room/
statements-releases/2021/03/31/fact-sheet-the-american-jobs-plan/
---------------------------------------------------------------------------
III. Federal Economic Development Support Unlocks Key Benefits for
Communities
The app economy itself and the problem-solving efforts of our
member companies illustrate the need for broadband deployment and grant
funding to benefit partnerships centered on internet connectivity in
specific ways.
Telehealth
One such use case for broadband is telehealth (live audio and video
interactions between patients and caregivers), which Americans adopted
quite rapidly in the early days of the COVID-19 pandemic. And while the
data collected after the beginning of the pandemic is instructive,
research before it began has shown that digital health tools like
telehealth help improve the quality of care and help manage costs. For
example, the University of Mississippi Medical Center (UMMC), a member
of the App Association's Connected Health Initiative,\8\ used
telehealth as a means to reach patients with heart disease, obesity,
cardiovascular disease, or diabetes well before the pandemic. In 2015,
UMMC established a pilot diabetes telehealth program, which provided
100 rural Mississippians suffering from diabetes with wirelessly-
connected glucose monitors to manage their treatments. By wirelessly
bringing their doctors and guidance to them, 96 percent of patients
complied with their medications. Moreover, they saw a decrease in blood
glucose levels among participants, and no diabetes-related
hospitalizations throughout the pilot.\9\ The savings weren't only
measured in quality of life: these same first 100 patients collectively
saved an incredible $336,184 in healthcare costs. Using this data, cost
analyses estimate that if 20 percent of Mississippi's diabetic
population were enrolled in the telehealth program, it would save the
state $180 million in Medicaid dollars.\10\
---------------------------------------------------------------------------
\8\ Connected Health Initiative website: http://
www.connectedhi.com/
\9\ ACT/The App Association, ``Tuning into Telehealth: How TV White
Spaces Can Help Mississippi Tackle the Diabetes Epidemic,'' (July 20,
2017), available at https://actonline.org/2017/07/20/tuning-into-
telehealth-how-tv-white-spaces-can-help-mississippi-tackle-the-
diabetes-epidemic/
\10\ Connected Health Initiative, ``Testimony of Morgan Reed,
Executive Director, The Connected Health Initiative, Before the U.S.
Senate Committee on Health, Education, Labor, and Pensions (HELP)
Subcommittee on Primary Health and Retirement Security,'' (Sept. 25,
2018), available at https://actonline.org/wp-content/uploads/CHI-
Testimony-Health-Care-in-Rural-America.pdf
---------------------------------------------------------------------------
In a similar project, the University of Virginia (UVA) Health
System, another Connected Health Initiative member, conducted a
diabetes management program for rural patients involving remote patient
monitoring. Over six months, the patients' mean hemoglobin A1C levels
(a marker for diabetes control) dropped from an uncontrolled 9.9
percent to a much more manageable 7.7 percent.\11\ In Senate HELP
Committee testimony in July 2020, Karen Rheuban of the UVA Karen S.
Rheuban Center for Telehealth summarized the steps UVA had taken to
establish telehealth services before the pandemic:
---------------------------------------------------------------------------
\11\ ACT/The App Association, ``PSA: Healthcare Tech Isn't Just at
the Doctor's Office--It's on Your Wrist,'' (August 22, 2019), available
at https://actonline.org/2019/08/22/psa-healthcare-tech-isnt-just-at-
the-doctors-office-its-on-your-wrist/
``Prior to COVID-19, we facilitated more than 100,000
telemedicine-related patient services using high definition
video teleconferencing, monitored more than 11,000 patients at
home, screened more than 18,000 patients with diabetes for
retinopathy, the number one cause of blindness in working
adults, and through our electronic medical record, EPIC,
---------------------------------------------------------------------------
facilitated more than 12,000 e-consults between providers.''
As a result, UVA was well-positioned to switch in-person
appointments to virtual, converting more than 45,000 in-clinic patient
appointments to virtual patient visits beginning in mid-March of
2020.\12\ This bears repeating: seemingly overnight UVA converted from
in-person to virtual nearly half the total previous telehealth
appointments.
---------------------------------------------------------------------------
\12\ ``Testimony of Karen S. Rheuban, Director, University of
Virginia Center for Telehealth, Before the U.S. Senate Committee on
Health, Education, Labor, and Pensions (HELP) Committee,'' (June 17,
2020), available at https://www.help.senate.gov/imo/media/doc/
Rheuban.pdf
---------------------------------------------------------------------------
These telehealth benefits are only possible with meaningful
solutions to broadband access issues, where today nearly 30 million
Americans do not have sufficient access.\13\
---------------------------------------------------------------------------
\13\ Bridging The Digital Divide For All Americans, Federal
Communications Commission, available at https://www.fcc.gov/about-fcc/
fcc-initiatives/bridging-digital-divide-all-americans
---------------------------------------------------------------------------
Agriculture
Another use case for broadband is precision agriculture. Besides
serving on the Federal Communications Commission's Task Force for
Reviewing the Connectivity and Technology Needs of Precision
Agriculture in the United States,\14\ the App Association has member
companies in the precision agriculture space.
---------------------------------------------------------------------------
\14\ Task Force for Reviewing the Connectivity and Technology Needs
of Precision Agriculture in the United States, Federal Communications
Commission, available at https://www.fcc.gov/task-force-reviewing-
connectivity-and-technology-needs-precision-agriculture-united-states
---------------------------------------------------------------------------
SwineTech, located in Cedar Rapids, Iowa, created an internet of
things (IoT) device that helps alleviate the strain that piglet
crushing has on the agriculture industry. Founded in 2015, SwineTech
created SmartGuard, a wearable device that senses when there may be a
crushing event and encourages the sow to move through sound and
vibration.\15\
---------------------------------------------------------------------------
\15\ SwineTech website: https://swinetechnologies.com/
---------------------------------------------------------------------------
App Association member company involvement in precision agriculture
goes further than just farmstock. Founded in 2017 and headquartered in
Fargo, North Dakota, Bushel is an agricultural technology company that
provides a subscription-based web and mobile application specifically
designed to harness reliable data for every level of the grain supply
chain. The Bushel platform has more than 2,000 grain facilities that
are active users including producers, retailers, and processors of
grain. The platform covers contracts between grain facilities and their
producers with an included e-signature capability to handle business on
their app--including scale tickets, contracts, cash bids, and more.\16\
---------------------------------------------------------------------------
\16\ Bushel website: https://bushelpowered.com/
---------------------------------------------------------------------------
It is widely known that the broad adoption of the internet
unleashed a wave of economic activity previously unknown to mankind.
The benefits of the internet, however, are only accessible to those
with a reliable broadband connection. The hub and spoke infrastructure
of the app ecosystem lends itself well to the EDA grant model this
Subcommittee oversees, as even smaller grants to connect the hubs could
have an outsized impact on job growth in the app economy in your
districts. For any of this promising technology to reach its full
potential, rural and underserved communities must have access to
broadband, and the EDA can facilitate partnerships to make this happen.
Sincerely,
Morgan W. Reed,
President, ACT/The App Association.
Fact Sheet, ``Bringing Broadband to Rural Ohio,'' Submitted for the
Record by Witness Hon. Lenny Eliason, Commissioner, Athens County,
Ohio, on behalf of the National Association of Counties
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Bringing Broadband to Rural Ohio
Appalachian Ohio needs a robust network that reaches all households
and can support 30+ years of growth.
Fiber-to-the-home is the only solution that can do this.
what it will cost
To run fiber to all locations known to have less than 25Mbps/3Mbps,
it will cost:
$497 Million for 57,873 households in the eight Buckeye
Hills counties (Athens, Hocking, Meigs, Monroe, Morgan, Noble, Perry,
Washington)
$2.26 Billion for 265,831 households in all 34
Appalachian counties
how to make it work
Subsidized networks must be robust and open, funding must be
transparent and accountable, and awards should go to the best value
based on capacity and reliability, rather than lowest bidder.
Robust: Networks must meet national standards for
capacity, reliability, scalability, and support.
Open: Designs must allow multiple providers to compete on
an even footing. This works best when the network is built by a public-
private partnership.
Transparent: Recipients must provide full transparency,
with quarterly public reports that include detailed lists of all
locations served or passed.
Accountable: Funding agencies must verify progress via
public-partner or third-party testing/inspection before releasing
payments, with substantial penalties for providers who overstate
availability or performance.
more detail available
A brief with more detailed recommendations is available from
Connecting Appalachia. To request a copy, contact Tom Reid at
[email protected].
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Appendix
----------
Questions from Hon. Dina Titus to Dennis Alvord, Acting Assistant
Secretary for Economic Development, Economic Development
Administration, U.S. Department of Commerce
Question 1. During your testimony before the House Appropriations
Committee's Subcommittee on Commerce, Justice, and Science on April 21,
2021, you stated that 53% of the Economic Development Administration's
(EDA) Coronavirus Aid, Relief, and Economic Security Act (CARES)
funding went to existing grantees. How can Congress assist EDA in
expanding its applicant pool in order to partner with new
organizations?
Answer. In implementing the CARES Act, EDA deliberately invested
heavily in existing grantees in order to quickly and effectively
address the pandemic by building local capacity through the development
of resiliency development plans and the funding of regional disaster
recovery coordinators. EDA was also able to support communities by
providing immediate access to capital to hard hit small businesses. EDA
recognizes that the role our partner organizations play is vitally
important in keeping the economy thriving. We are committed to working
with you to determine how we can expand our core constituencies in a
manner that will enhance those organizations' ability to continue their
essential work in their communities. As Congress considers EDA
reauthorization, we would welcome the opportunity to engage directly on
this important topic.
Question 2. Within their Comprehensive Economic Development
Strategies (CEDS), EDA requires communities and Economic Development
Districts (EDDs) to incorporate the concept of economic resilience,
including the ability to withstand the impacts of natural disasters and
climate change. With EDA's updated investment priorities in mind, does
EDA plant to require consideration of concepts like equity and
sustainability in future CEDS?
Answer. EDA looks forward to working with the Administration
pursuant to President Biden's Executive Order 13985, Advancing Racial
Equity and Support for Underserved Communities Through the Federal
Government, to identify and continue to embed equitable principles and
approaches across the bureau, consistent with EDA's mission to empower
distressed communities through revitalization and diversification of
local economies. Additionally, EDA will review its policies and actions
to ensure they do not create barriers to participation by eligible
institutions seeking grants from EDA, particularly those that have not
previously applied to or been awarded grants by EDA or those that plan
to provide assistance to underserved communities.
EDA encourages communities and organizations that are developing or
updating their CEDS to address the concept of resilience in a way that
works best for their region, and to embrace a broad concept of
resilience that may include issues of sustainability such as the
impacts of natural disasters and climate change. Although already
suggested as a potential way to address the resilience requirement
within the CEDS, more information on climate resilience--including
suggested tools and resources--will be incorporated in a forthcoming
update to the CEDS Content Guidelines to encourage regions to consider
climate when thinking about how to address resilience in their CEDS.
In addition, the CEDS Content Guidelines also recommends that
equitable development--including engaging the region's vulnerable and/
or underserved populations in the planning process--be included in the
development and implementation of the CEDS. It is anticipated that more
information on engaging underserved populations will also be included
in future versions of the CEDS Content Guidelines.
Question 3. EDA makes investments in economically distressed
communities to promote innovation and accelerate long-term sustainable
economic growth. Is EDA taking steps to build expertise in sustainable
development? Is EDA working with other government agencies or
congressionally chartered foundations to ensure EDA-funded projects are
climate-conscious and sustainable?
Answer. EDA has a long-standing history of supporting
environmentally sustainable development, beginning with our partnership
with the Environmental Protection Agency and other federal agencies on
brownfields redevelopment, continuing with our development and
implementation of the Global Climate Change Mitigation Incentive Fund
during the Obama Administration, and more recently through adoption of
our Environmentally Sustainable Development investment priority.
EDA strongly believes that investments in environmentally
sustainable economic development are essential to improving our
Nation's competitiveness, and that green versions of its traditional
grant-based investments are a key driver to advancing and growing the
economy. By encouraging environmentally sustainable economic
development, EDA helps to cultivate innovations that can fuel green
growth in communities suffering from economic distress. Through
investments in emerging regional clusters related to energy, cutting-
edge environmental technologies, green building practices, and
sustainable communities that connect jobs to workers through smart
location choices, EDA is well-positioned to foster job creation by
limiting the Nation's dependence on fossil fuels, enhancing energy
efficiency, curbing greenhouse gas emissions, protecting natural
systems, and encouraging resilience to the climate crisis.
EDA operationalizes the notion that improvements in environmental
quality can drive economic growth through our Environmentally
Sustainable Development investment priority. The Environmentally
Sustainable Development investment priority promotes job creation and
economic prosperity through projects that develop and implement green
products, processes, places and buildings. While such projects enhance
environmental quality, it should be noted that the environmental
benefits are ancillary to the projects' economic development impacts.
EDA, through the Environmentally Sustainable Development investment
priority, seeks to support green economic development projects that
will result in one or more of the following: the development or
manufacture of a green end-product; greening of an existing function or
process creation of, or renovation to, a green building; and support or
enhancement of a green place or location.
Question 4. How effective are the current Federal criteria for
economic distress? What statutory changes, if any, could be made to
improve economic distress criteria to ensure adequate assistance is
awarded to the communities that needs it most?
Answer. EDA's statutory criteria for determining economic
distress--per capita income and 24-month unemployment rates--directly
relate to EDA's mission to raise the standard of living for all
citizens and communities and are, therefore, useful for identifying
communities in need of assistance. Like all statistical measures, those
two criteria also have limitations, and there are other measures of
distress that Congress may wish to consider. EDA will be happy to
provide technical assistance on this issue if it is a matter the
Committee wishes to pursue further.
Questions from Hon. John Garamendi to Dennis Alvord, Acting Assistant
Secretary for Economic Development, Economic Development
Administration, U.S. Department of Commerce
Question 1. Can you please confirm that the Economic Development
Administration's (EDA) grantmaking authorized under the Public Works
and Economic Development Act of 1965 (42 U.S.C. 3121 et seq.) is not
currently subject to any ``Buy America'' requirements? Note that I am
referring to domestic preference requirements for local procurement,
not the federal government-wide Buy America Act, which only applies to
direct federal procurement and not grantmaking for local projects.
Answer. There are no statutory requirements that apply Buy America
requirements to EDA grants. Executive Orders 13858, Strengthening Buy-
American Preferences for Infrastructure Projects, and 14005, Ensuring
the Future is Made in All of America by All of America's Workers,
however, apply to EDA grants and require EDA to encourage grant
recipients ``to use, to the greatest extent practicable, iron and
aluminum as well as steel, cement, and other manufactured products
produced in the United States in every contract, subcontract, purchase
order, or sub-award that is chargeable'' to the grant (EO 13858). That
policy was reaffirmed in EO 14005.
Question 2. Can you confirm that neither the $3 billion
appropriated by Congress under the American Rescue Plan Act (Public Law
117-2) nor the $1.5 billion under the CARES Act (Public Law 116-136)
for EDA grantmaking is subject to ``Buy America'' requirements?
Answer. It is correct that no statutory Buy America requirements
are applicable to funds appropriated to EDA under those Acts. The
requirements of Executive Orders 13858, however, apply to these funds.
EDA also has a long history of supporting Buy America goals through the
implementation of its grants and actively encourages its recipients to
maximize the use of domestic sources. For example, every EDA grant
contains an award condition encouraging recipients ``to use, to the
greatest extent practicable, iron and aluminum as well as steel,
cement, and other manufactured products produced in the United States
in every contract, subcontract, purchase order, or sub-award that is
chargeable under this Award.''
Question 3. Can you confirm that since the Buy American Act only
applies to direct federal procurement, this means that President
Biden's Executive Order #14005 has no force and effect on EDA's future
grantmaking?
Answer. President Biden has made clear his support for Made in
America provisions through the issuance of Executive Order 14005 in the
first two weeks of his Presidency. That order is not limited to the Buy
American Act, and several of its provisions are applicable to EDA. EDA
will continue to diligently implement current executive orders on Buy
American requirements, as well as any future orders.
Question 4. As this Subcommittee prepares the first major EDA
reauthorization in more than 15 years, I believe Congress must consider
amending the Public Works and Economic Development Act (42 U.S.C. 3121
et seq.) to add permanent, statutory ``Buy America'' requirements for
all EDA grantmaking. This is likely the single most significant federal
program under the full Committee's jurisdiction still lacking statutory
``Buy America'' requirements. Acting Assistant Secretary Alvord, will
your agency commit to provide technical assistance on how best to add
statutory ``Buy America'' requirements in any forthcoming EDA
reauthorization legislation?
Answer. EDA will be happy to provide technical assistance and
commits to working with your staff on addressing this important issue.
Question from Hon. Dina Titus to Lisa Cooper, Executive Director,
Northern Kentucky Area Development District, on behalf of the National
Association of Development Organizations
Question 1. In your testimony, you discussed the value of the
Economic Development Administration's (EDA) Partnership Planning
Program. How would expansion of EDA's Partnership Planning Program
assist local communities as they look to reassess their Comprehensive
Economic Development Strategies (CEDS) and reevaluate their plans for
economic recovery?
Answer. One of the key responsibilities that Economic Development
Districts (EDDs) across the country are tasked with by the U.S.
Department of Commerce Economic Development Administration (EDA) is to
lead a regional economic development planning process that leverages
the involvement of community stakeholders and public, private, and non-
profit sectors. EDDs are responsible for developing a strategic
``roadmap'' for economic development and regional collaboration, known
as a Comprehensive Economic Development Strategy (CEDS), which becomes
the foundation for regional community and economic development
projects. This foundation is essential in order to ensure that economic
development projects that are subsequently undertaken are strategic.
The CEDS process also lays the initial groundwork to ensure that local
community stakeholders have input into projects that are ultimately
undertaken and implemented, and to ensure the long-term sustainability
of community development efforts and initiatives. Ultimately, the CEDS
is designed to guide the economic prosperity and resiliency of a
geographic region, and the CEDS provides a coordinating mechanism for
individuals, organizations, local governments, industry partners, and
other stakeholders to engage in a meaningful conversation and debate
about the economic direction of their community.
There are 392 EDA-designated EDDs across the country. In FY 2021,
Congress appropriated $33.5 million for ``Partnership Planning,'' of
which $30.7 million was provided by EDA to EDDs to support the planning
process. Split among 392 EDDs across the country, each EDD receives
roughly $70,000 annually to carry out the planning and CEDS process.
This relatively small annual amount of $70,000 is barely enough to
cover one qualified full-time staff person along with the necessary
resources to support their role and work. Furthermore, the dollar
amount that each EDD receives from EDA has not increased in well over a
decade. And in order to receive this annual amount, EDDs must provide
matching funds. Congressional action is needed to increase resources
for the Partnership Planning program, to allow for sufficient
administrative capacity and staffing to support the CEDS planning
process and for EDDs themselves. The amount of resources provided for
planning should be reflective of the foundational nature of the
planning process and its importance, and should also be reflective the
importance of EDA's core partners, the EDDs themselves and their
sufficient staffing and administrative capacity.
In addition to the regular development and updating of their CEDS,
EDDs also provide technical assistance services, planning support, and
other general support to the municipalities and counties within their
regions. Many rural, underserved, and/or economically distressed areas
in particular benefit from these services that they would otherwise not
be able to afford outright. EDDs assist with the development of
comprehensive plans, feasibility studies, federal grant applications,
and many other community support services. These planning and
administrative functions are important because they help ensure the
efficient use and effective deployment of federal resources. An
expansion of the EDA Partnership Planning program in support of these
undertakings would bolster the capacity of EDDs and enhance the
effectiveness of their work.
The impact of the pandemic should also factor into the reevaluation
of EDA Partnership Planning program. Over the past year, in response to
the pandemic, many already underserved and economically distressed
communities have been faced with unprecedented challenges and have had
to pivot in many ways, including by reinventing aspects of how
residents live, work, study, travel, convene, and receive healthcare
and other support services. As a result, communities have had to change
or reevaluate aspects of their strategic plans and the ways that they
operate. Even as the pandemic comes to an end, communities will have to
continue to evolve and respond to new circumstances brought about by
the changes and upheaval of the past year, and will be called upon to
sustain a long-term response to the economic injury that has resulted
from the pandemic. As a result, the Partnership Planning program is
more important than ever, not only to support the traditional elements
of the planning process, but also to support reevaluation and
reinvention of existing protocols.
Ultimately, an overall expansion of EDA's Partnership Planning
program and resources would support more strategic planning processes,
from which more strategic economic development initiatives can
eventually evolve and grow. An expansion of the Partnership Planning
program's resources would allow for enhanced administrative and
staffing support within the EDDs, as well as a more wide-reaching
public input process that encompasses a larger and more diverse subset
of community stakeholders, thereby supporting greater equity and
enhanced inclusivity throughout the planning process. Increasing
resources for Partnership Planning would also support the use of more
advanced technological tools and allow for communities to undertake
more data-driven planning processes (i.e. would allow for more robust
analysis of data, and could also allow for investments in important
technology such as Geographic Information System (GIS) mapping and
planning software), laying the groundwork for more valuable and
informative assessments of long-term regional trends, economic drivers,
migration patterns, employment and industry data, and other factors and
changes that are impacting the region. Ultimately, a more robust,
ambitious, and strategic planning process creates the foundation for
more robust, ambitious, and strategic initiatives, projects, and
community investments, and increases the chances of community
development efforts having long-term success.
Question from Hon. Dina Titus to Jonas Peterson, President and Chief
Executive Officer, Las Vegas Global Economic Alliance, on behalf of the
International Economic Development Council
Question 1. In your testimony, you described the possibility of a
pilot program within the Economic Development Administration (EDA) to
improve regional capacity building. Can you elaborate on how you
envision the structure and operation of this program, as well as the
benefits such a program could provide to local communities?
Answer. To help communities advance economic development strategic
plans and CEDS, seize economic development opportunities, promote
economic resiliency, and create inclusive local economies, we support
the establishment of a capacity building program in the reauthorization
of the Economic Development Administration. The Local Economic Capacity
Building program should include the following components:
1. Technical assistance for expanding local capacity to
understand, access, and successfully utilize EDA resources and other
federal economic development resources.
a. Develop and execute a training program to help local economic
development professionals and community stakeholders better understand
EDA's resources, as well as all other federal economic development
programs and resources.
b. Create EDA staff positions in Washington and the 6 regional
offices to act as technical assistants for communities seeking federal
economic development resources. EDA should act as a clearinghouse for
local economic development professionals and community stakeholders on
all federal economic development programs in order to promote greater
outcomes for the community while also promoting leveraging resources
and collaboration among the federal agencies involved in economic
development. A one-stop source of information would greatly increase
local understanding and utilization of federal resources and yield
better economic futures for residents.
c. Offer grant funding for on-going research on best practices
in utilizing federal economic development programs and resources which
can be used to improve program performance and continued training for
local economic development professional and community stakeholders.
d. These resources should be available to all communities,
though special attention should be paid toward reaching severely
distressed communities and first-time partner communities.
2. Grant funding for expanding local professional capacity to
execute economic development strategic plans, CEDS, or otherwise expand
a community's ability to develop a robust, resilient and sustainable
local economy.
a. Establish a grant to fund economic development staff
positions at eligible organizations--defined as those currently
eligible to receive grant funding from EDA, including economic
development organizations, non-profits, state and local governments,
tribes, and economic development districts. Funding this effort will
provide communities lacking human capital to execute economic
development strategic plans and CEDS, respond to economic disruptions
or seize opportunities as they arise with resources to hire economic
development professionals. Success in this effort should be measured in
both economic outcomes and if the community receiving funding is able
to sustain the position through local funds after the grant period has
ended.
b. This funding should be available to communities meeting
distress criteria defined by EDA or be located in a federally declared
disaster area.
c. Offer no-match funding for 3 years to fund an economic
development staff position; allow extension to 5 years with 25 percent
local match in year 4 and 50 percent local match in year 5. If the
position becomes permanent and funded locally after year 5 and remains
so for 24 months, EDA will return the local match funds from years 4
and 5.
d. Require work plans and goals for the created position; work
plans and goals should include specifics on how the funded position
will integrate and collaborate with existing economic development
efforts within the community.
3. Dedicated funding for pre-development finance to support
critical funding gaps between project concept and project execution.
a. Establish a grant to fund pre-development activities that
will move projects from concept to execution.
b. Dedicated funding for pre-development finance is necessary in
a competitive environment where funding for projects further along in
the process or past the pre-development stage altogether often
overshadow those in the pre-development phase.
c. This funding should be available to communities meeting
distress criteria defined by EDA or be located in a federally declared
disaster area.
d. Grants should be no-match funds in order to reach communities
most in need and in reflection of the entrepreneurial nature of pre-
development activities, for which it may be harder to secure funding.
e. Each of EDA's 6 regional offices should receive an
appropriate allocation of an annual sum of not less than $75 million to
fund pre-development activities.
4. Robust, simplified and transparent reporting for all Local
Economic Capacity Building funded grants.
a. Require annual reporting from grant recipients that
highlights project goals and outcomes. Report requirements should be
designed to capture information that supports successful project
execution, overall grant program successes and challenges and broader
economic development data, while also providing for transparency and
accountability.
b. Detailed reporting requirements should be shared with grant
recipients upon award notification at the latest; ideally, they would
be included in the notice of funding opportunity.
c. Reports should be collected in as simplified a manner as
possible, utilizing the latest available technology for online
reporting.
d. EDA should make report data available to the public in
aggregate and individually by grant as soon as appropriate, but not
later than 90 days after collection, through EDA.gov.
In addition, IEDC fully supports the proposal from the Milken
Institute to establish a pre-development fund dedicated to advancing
vital infrastructure projects that would otherwise languish in search
of pre-development financing. Our nation is in critical need of
infrastructure investments that will get projects moving forward and
put people back to work. The Milken Institute's proposal would provide
resources and direction for EDA to play a unique, leading role in this
effort by leveraging EDA's existing work in infrastructure and their
existing bottom-up network of local economic developers and
infrastructure projects.
IEDC thanks the committee for their continued leadership, interest
and support for economic development. We welcome the opportunity to
continue our discussions as we work together to reauthorize the
Economic Development Administration.
Questions from Hon. Dina Titus to Dan Carol, Director, Milken Institute
Center for Financial Markets
Question 1. You spoke at length regarding infrastructure
predevelopment costs in your testimony. How much should Congress invest
in predevelopment in the next few years? What are the net benefits of
such an investment?
Answer. As Congress wisely considers bold investments to make our
nation's infrastructure globally competitive and equitable to all,
Congress should consider setting aside a small portion of new spending
to incentivize long-term resilience and better infrastructure system
performance.
A substantial body of research outlined in my full written
testimony [https://transportation.house.gov/imo/media/doc/
Carol%20Testimony.pdf] finds that the key investment Congress can make
to move U.S. infrastructure systems from 19th-century creakiness to
21st-century performance is predevelopment funding.
Shifting America's infrastructure systems and project pipeline
towards resilience and performance will not be easy. We will need a
series of strategic investments, beginning with predevelopment funding,
to deliver better outcomes and reduce our multi-trillion dollar
deferred maintenance gap over the next three to ten years. Our
macroeconomic estimates of infrastructure funding gaps to 2050,
provided to the Subcommittee, found an annual need of over $200 billion
per year.
To reverse these trends, we therefore recommend an initial
investment in predevelopment performance incentives for $15 billion
over three years. The proposed predevelopment fund would address local
capacity and barriers that impede catalyzing a pipeline of shovel-
worthy projects and help communities reform broken public procurement
systems that fail to create the incentives for long-term resilience and
timely maintenance.
Our $15 billion recommendation is based on an analysis we conducted
looking at high levels of community demand for infrastructure projects,
such as rural hospitals with micro-grids, community broadband
partnerships and projects of unique or regional significance that do
not easily fit current funding programs. For example, a predevelopment
program to help 25% of the nation's 130,000 schools, rural hospitals
and public emergency centers to be able to deploy micro-grids and offer
broadband services during emergencies would alone cost $15 billion.
The payback however, will far outweigh the pay-for. Based on past
studies cited in my testimony looking at the value of predevelopment
commissioned by the U.S. Economic Development Administration and the
U.S. Environmental Protection Agency, we would expect $17-20 in
economic activity to flow from each $1 spent on predevelopment. That
would mean up to $300 billion in total benefits could be generated by
the $15 billion federal predevelopment fund we have proposed.
These analyses do not measure additional benefits that flow from
predevelopment investments over their life-cycle, including added
resilience and equity benefits or reduced climate and taxpayer risks. A
report from a U.S. Treasury Working Group [https://www.treasury.gov/
resource-center/economic-policy/Documents/Build%20
America%20Recommendation%20Report%201-15-15%20FOR%20PUB-LICATION.pdf]
found that although predevelopment costs only account for a small
percentage of total costs, predevelopment activities have considerable
influence on which projects will move forward, where and how they will
be built, who will fund them, and who will benefit from them. Other
analyses find that predevelopment investments can attract sidelined
private capital into community infrastructure at greater scale because
the political risks would be removed through predevelopment work.
Nor does this consider how essential this capacity is to
underserved and smaller communities which find it hard to access either
federal grant programs or attract potential impact capital investors
without predevelopment funding to turn a good idea into an investment-
ready project.
The predevelopment fund would support local technical assistance
grants and loans to rapidly develop community-led projects while acting
as a catalyst for investment-ready resilience partnerships. As noted in
my testimony, existing predevelopment programs offering this form of
technical assistance are either oversubscribed for large resilient
infrastructure projects or hard-to-access for smaller communities who
need this support to advance projects from concept to completion.
A recent practical example of interest to this Subcommittee's
jurisdiction which highlights the need for expanded predevelopment and
technical assistance funding involves the excellent new integration
efforts under the FEMA's Building Resilient Infrastructure and
Communities (BRIC) program. Many states are reporting that the $600,000
limit for capacity support to local governments is limiting the number
of communities with the expertise and skill set to write and access
project grants.
That is why a diverse set of groups, including the International
Economic Development Council (IEDC), U.S. Chamber of Commerce, National
Association of Manufacturers, Rural Community Assistance Partnership,
Council of Development Financing Agencies, Farm Conservation Alliance,
National Association of Counties, National League of Cities, Natural
Resources Defense Council, and the Coalition for Green Capital are
calling for expanded predevelopment investment and the creation of
regional resilience centers to accelerate best practices. The full
sign-on letter is here [https://milkeninstitute.org/sites/default/
files/2021-01/LettetoCongresThValuo
PredevelopmenInvestmentForStrengtheningandSustainingU.S.Infrastructure.p
df].
This investment would be fully compatible with IEDC's call for a
Local Economic Capacity Building program to offer grants for technical
assistance, training, and capacity to scale up best practices in
utilizing federal economic development programs and resources which can
be used to improve program performance.
Question 2. Your testimony called for the creation of six regional
resilience centers at EDA to accelerate infrastructure project
development and deployment. Can you explain how this would work? Where
would these centers be housed and who would staff them? Would this be
duplicative of proposals for a national infrastructure bank and clean
energy accelerator?
Answer. In addition to a three year investment in predevelopment
capacity to catalyze a resilient infrastructure pipeline in areas like
broadband, community resilience, and energy and water system security,
Congress could further leverage its investment in local capacity by
linking a new predevelopment fund to a nationwide network of regional
acceleration centers, housed within the six regions of the U.S.
Economic Development Administration.
These regional resilience centers could accelerate capacity-
building on the ground, transfer best practices and successful models
among states and regions, and promote federal whole-of-government
coordination closer to where projects are developed (see infographic
[https://milkeninstitute.org/sites/default/files/2021-05/
InvestmentinInfrastructurePredevelopment.pdf]). This investment would
also be complementary with various ideas being considered in parallel
by Congress to create either an Infrastructure Financing Facility, a
national infrastructure bank or a clean energy accelerator. Each of
these financing proposals will require a steady pipeline of shovel-
worthy and investment-grade projects, which will depend on lifting up
regional best practices and investing in local predevelopment.
As outlined in my full written testimony, EDA's experience in
investing in a wide range of public works and economic development
projects in infrastructure ``modes'' including water, energy, dams and
levees, broadband and rural transportation make the agency well-suited
for the task of piloting this bottom up shift in best practices at the
local, state and federal levels. Each EDA regional center's goal would
be to promote cross-agency collaboration, multistate partnerships, and
direct training for best practices to scale and accelerate the use of
predevelopment investments by states, counties, and other units of
local government. Whether it's a region where there is too much water,
not enough water, or another location-specific resilience challenge,
going regional would bring resources and performance accountability
closer to the ground.
A regional delivery strategy for federal engagement would allow
communities to act quickly to deliver on the most pressing projects in
their region without being slowed down by federal programmatic
requirements, funding silos that don't fit post-COVID community
priorities, or local matching requirements that make it harder for
smaller and underserved communities to access the technical assistance
they need to innovate.
We envision that these regional centers would be (1) flexible in
how they were set up within each EDA regional office; (2) accountable
for spending performance evaluation and learning; (3) highly focused in
what each center would choose to fund based on data and demand; but (4)
share a common set of resilience definitions and investment standards.
Regional Centers: Flexibility
Each of the six proposed regional resilience centers would house
project finance and technical assistance teams tasked with helping
communities successfully advance replicable and resilient projects
based on distinct regional resilience challenges and available
predevelopment funding.
We would recommend that each EDA Regional Director, in consultation
with the EDA Assistant Secretary, decide how best to stand up this
functionality, either within the Regional Office, or housed within
another institution or entity or implementation partnership within the
region. Because of the need for specialized skill sets that may not
exist within EDA's existing regional staff or funded entities within
each regions (EDDs and UCs), EDA's Regional Directors should also be
given the flexibility to create new project acceleration entities that
could offer unique service delivery capacities that do not currently
exist in the region.
Regional Centers: Performance and Evaluation
To leverage program learning and long-term fiscal impact from new
investments in predevelopment and regional resilience acceleration
centers, Congress should link funding to an iterative learning agenda
to support continuous improvement of the functioning and performance of
programmatic investments. For example, following a three-year operating
period, EDA should be required to submit to Congress a report that
contains recommendations for performance incentives to encourage better
lifecycle asset management for all infrastructure projects funded by
the Federal Government.
This report should also assess how to best link federal
predevelopment assistance and federal permitting improvements by state
and local infrastructure project sponsors; whether a national public
finance training center or a national infrastructure bank is needed to
narrow the infrastructure funding and finance gap of the United States;
and the need for resilient infrastructure circuit-riders to further
reach under-served communities with critical project development
expertise.
Regional Centers: Investment Focus
EDA programs can be used for a wide range of infrastructure
projects, which means that scores of communities will bring hundreds of
good and not-so-good project ideas forward for grant funding. For the
proposed EDA regional resilience centers, we would recommend that each
center offer technical assistance for a focused menu of ready-to-go and
replicable projects that are in high demand during the three year trial
period. Each of the six EDA regional centers could offer a different
menu of replicable resilience projects matched to differing regional
needs and known data-driven demand.
As noted in my testimony, we know what some of those high-demand
use cases are across the United States, such as community broadband and
community emergency centers where thousands of schools, hospitals, and
community colleges want to copy what the Blue Rancheria Tribe built in
Northern California: a community emergency center with micro-grids and
wi-fi, so there was a place to go after the 2018 wildfires.
Regional Centers: Common Standards
We would advise that there be a clear definition of resilient
infrastructure systems and eligible project categories. In our view,
``resilience'' refers to the ability of infrastructure systems and
projects, including their interconnected governmental, economic,
financing and procurement systems, to provide sustainable, reliable,
high-performance and well-maintained infrastructure services over the
lifetime of an infrastructure asset. Resilient infrastructure systems
and projects are distinguished by lifetime operations, maintenance,
preparedness and early warning systems that manage the known and
foreseeable risks of operations that can threaten system operation and
service levels, due to accidents, natural disasters, extreme weather,
shocks and threats to regional economies, including cyber-attacks and
technology disruption.
In terms of project categories, we would suggest that each center
ensure that funds are used to increase state and local capacity to
achieve resilience objectives and accelerate project development and
deployment in these areas:
grid reliability, energy efficiency, and energy storage;
new post-disaster response and public safety needs;
water, transportation, and communications, including
distance health and learning networks;
critical post-COVID-19 community infrastructure needs and
mission-critical public facilities.
Finally, as noted above, the creation of a predevelopment fund and
companion regional resilience centers would be complementary to any of
the infrastructure financing facilities now under consideration in
Congress, from a national infrastructure bank to a clean energy
facility or anything in between.
These regional resilience centers could also help supplement
existing federal financing centers at DOT's Build America Bureau and
the EPA's Office of Water Financing, which are operating successfully
but are not being easily accessed by small-scale project sponsors under
$100 million in size. EDA regional resilience centers, however, could
focus on community-scale projects in the $5-75 million range where
access to technical assistance and capacity is acute.
The proposed structure will be especially suitable for at least two
critical new areas of wide-scale community demand, e.g., innovative
broadband partnerships and emergency centers in schools, rural
hospitals and disaster-prone neighborhoods to offer critical services
during disasters and grid outages. Thousands of communities need this
kind of technical assistance to develop these projects, and other
unique regional projects.
In the long run, the project pipeline demand created by regional
resilience centers and a predevelopment fund will likely fuel the
creation of regional project portfolios of smaller-scale infrastructure
projects that a national infrastructure financing facility could invest
in directly, or act as a take-out investment vehicle to promote project
bundling and impact investment.
The Milken Institute thanks the committee for their continued
leadership, interest and support for economic development and public
works. We welcome the opportunity to continue work together to
reauthorize the Economic Development Administration and accelerate
economic resilience and equity.