[Senate Hearing 118-142]
[From the U.S. Government Publishing Office]
S. Hrg. 118-142
REAUTHORIZATION OF THE ECONOMIC
DEVELOPMENT ADMINISTRATION: STATE
AND LOCAL PERSPECTIVES
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HEARING
before the
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
JUNE 21, 2023
__________
Printed for the use of the Committee on Environment and Public Works
[GRAPHIC) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
53-731 PDF WASHINGTON : 2023
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
THOMAS R. CARPER, Delaware, Chairman
SHELLEY MOORE CAPITO, West Virginia, Ranking Member
BENJAMIN L. CARDIN, Maryland KEVIN CRAMER, North Dakota
BERNARD SANDERS, Vermont CYNTHIA M. LUMMIS, Wyoming
SHELDON WHITEHOUSE, Rhode Island MARKWAYNE MULLIN, Oklahoma
JEFF MERKLEY, Oregon PETE RICKETTS, Nebraska
EDWARD J. MARKEY, Massachusetts JOHN BOOZMAN, Arkansas
DEBBIE STABENOW, Michigan ROGER WICKER, Mississippi
MARK KELLY, Arizona DAN SULLIVAN, Alaska
ALEX PADILLA, California LINDSEY O. GRAHAM, South Carolina
JOHN FETTERMAN, Pennsylvania
Courtney Taylor, Democratic Staff Director
Adam Tomlinson, Republican Staff Director
C O N T E N T S
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Page
JUNE 21, 2023
OPENING STATEMENTS
Carper, Hon. Thomas R., U.S. Senator from the State of Delaware.. 1
Capito, Hon. Shelley Moore, U.S. Senator from the State of West
Virginia....................................................... 4
WITNESSES
Cannon, Patricia, Director of Special Projects, Delaware
Department of State, Division of Small Business................ 7
Prepared statement........................................... 10
Fetzer, Chris, Executive Director, Northern Arizona Council of
Governments.................................................... 13
Prepared statement........................................... 15
Responses to additional questions from Senator Kelly......... 21
Higgins, Eileen, Commissioner, Board of County Commissioners,
District 5, Miami-Dade County; Miami, Florida.................. 24
Prepared statement........................................... 26
Graney, Mike, Executive Director, West Virginia Department of
Economic Development........................................... 37
Prepared statement........................................... 39
Day, Bryan, Executive Director, Little Rock Port Authority;
Little Rock, Arkansas.......................................... 46
Prepared statement........................................... 48
REAUTHORIZATION OF THE ECONOMIC
DEVELOPMENT ADMINISTRATION: STATE
AND LOCAL PERSPECTIVES
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WEDNESDAY, JUNE 21, 2023
U.S. Senate,
Committee on Environment and Public Works,
Washington, DC.
The Committee met, pursuant to notice, at 10:01 a.m. in
room 406, Dirksen Senate Office Building, Hon. Thomas R. Carper
(Chairman of the Committee) presiding.
Present: Senators Carper, Capito, Cardin, Markey, Kelly,
Padilla, Boozman, Sullivan, and Ricketts.
OPENING STATEMENT OF HON. THOMAS R. CARPER,
U.S. SENATOR FROM THE STATE OF DELAWARE
Senator Carper. Good morning. We are delighted to see you
all this morning and wish you a good morning. People are coming
from far and wide. Senator Capito and I are delighted to be
with you and delighted that you all could join us for this
hearing.
Today, we are going to hear from State and local officials
on the reauthorization of the U.S. Economic Development Agency,
or EDA, as we call it.
To our witnesses, Ms. Cannon, very nice to see you, welcome
Patty; Mr. Fetzer, great to see you. I have a son named
Christopher. It is one of our favorite names.
Ms. Higgins, nice to see you. Thanks so much for joining
us.
Mr. Graney, from Mount Hope, great to see you. There is
hope in Mount Hope. And you are bringing us some hope here
today.
Mr. Day, nice to see you.
Thank you all for joining us today and sharing your
perspectives with us on EDA's important programs. We look
forward to hearing what the EDA is doing well and what
improvements might help the agency work even better. As my
colleagues have heard me say more times than they want to
remember, everything I do I know I can do better. And I think
the same is true with all of us and the same is true with
programs like EDA. Today we are going to try to figure out how
to keep a good thing going but actually make it better and more
effective.
Before we hear from each of our witnesses, I want to share
a couple of thoughts about EDA and why I think it is important
for Congress to reauthorize this vital agency. Under the
umbrella of the Department of Commerce, EDA leads the Federal
Government's economic development agenda, as you know. EDA
helps to bring job growth and economic opportunity to
distressed communities in every region of our country.
Additionally, EDA promotes innovation and competitiveness in
local and regional economies across America to help them
succeed in the global marketplace.
As members of this Committee have heard me say more than a
few times, I represent a State that, much like a prizefighter,
punches above its weight in terms of its contributions to the
U.S. economy. The same can be said about EDA. This small agency
packs a big punch and makes an outsized impact across our
country, in almost every corner of our country.
Despite all of the exceptional work that EDA has done in
every one of our States, the agency has not been reauthorized
by Congress since 2004, that is about 20 years, two decades.
That is too long for an agency with such an important mission
to go without renewed authorization.
Let's think about the many ways that our work force and our
economy have changed since 2004. Just to mention a few, we have
witnessed technological advances that have transformed the way
that we live, the way that we work, and even the way that we
travel. We have also seen significant changes in manufacturing,
in energy production, and in the products we use on a daily
basis.
For example, the iPhone was first released in 2007, 3 years
after EDA was last reauthorized. Broadband Internet, which only
limited households and businesses had access to in 2004, has
become a necessity in our daily lives and our work. In
addition, businesses are experiencing new challenges, as well
new opportunities, such as how to operate more sustainably on a
warmer planet.
Through reauthorization, we have an opportunity to
modernize and improve EDA's ability to foster additional
economic growth. Why is this so important? Well, let me
paraphrase President Abraham Lincoln when I say that the role
of government is to do for the people what they cannot do for
themselves. Lincoln was once asked, what is the role of
government? He said, to do for the people what they cannot do
for themselves. EDA helps fulfill that role. Lincoln was unable
to join us as a witness today but I thought I would give him a
shout out.
[Laughter.]
Senator Carper. Some communities across our country are
struggling with how to navigate today's economy. Over the past
two decades, a number of factory towns have seen their last
plant close and are seeking to attract new industries. In
addition, cities are looking to reinvent themselves to compete
on a global scale. EDA can play a role in helping communities
turn their economic adversity into opportunity. Albert Einstein
used to say, in adversity lies opportunity. He was right. And
he is still right today.
As many of you may have heard me say, when I had the
privilege to serve as Governor of Delaware our State created
more jobs than in any other 8 year period. I didn't create a
single one of them. We have to create, as Patty will recall,
have to create a nurturing environment for job creation and job
preservation in our State. That was hugely helpful and still is
helpful. By working together we can do the same thing in States
across the country.
There are many aspects to creating such an environment. I
actually worked for a short while, right out of the Navy, got
an MBA at Delaware at the GI Bill and went to work for about 6
months in what was in the Division of Economic Development.
People said, what did you learn in 6 months, when you were
working at the Division of Economic Development? Among other
things, I learned the importance of work force preparation and
how that is a shared responsibility. I learned about access to
capital, I learned about access to research funding, research
that could be further enhanced. We learned about the protection
of intellectual property. Those are just a few things that I
learned. I only worked there for 6 months.
The other thing I learned, I learned to paraphrase our
President. He likes to say, all politics is personal, all
diplomacy is personal. One of the other things I learned is
economic development is personal. Economic development is
personal as well. And EDA plays an important role in supporting
programs in almost everything that I just mentioned.
I have also had an opportunity to witness first hand the
EDA's work in my home State of Delaware, and I am sure that
many of our colleagues on this Committee could cite chapter and
verse on experiences of their own. For example, for the First
State, we only have three counties, in our southernmost county,
Sussex County, EDA helped fund a Center for Automotive
Excellence at the Delaware Technical Community College in
Sussex County. Sussex County is one of the largest counties in
America, they raise more chickens than any county in America, I
believe. And maybe at one time raised more soybean than any
other county in America. But we needed to diversify the economy
there, and EDA has helped us to do that.
One of the ways was through a center for automotive
excellence at the Delaware Technical Community College just
outside of Georgetown, county seat. This center has helped us
fill a need for trained automotive technicians to work not just
at our auto dealerships all up and down the State but also to
help maintain the heavy duty trucks that are vital to our
poultry industry.
As I mentioned earlier, there are something like 300
chickens for every person who lives in Delaware. And we have
these chicken processing places, poultry processing places, and
then we send chickens out across the country in these huge
trucks. Those trucks need to be maintained. Now they are
getting help and the kind of maintenance that they need through
this program.
Delaware has also received funding from EDA to help our
travel and tourism sector, one of our State's largest economic
drivers, during the pandemic.
As we will hear from our witnesses today, EDA has an impact
in communities large and small, in urban areas as well as rural
ones. I look forward to working with our colleagues on this
Committee, with the Ranking Member especially, to ensure that
EDA has the necessary tools to help those communities punch
above their weight, just like it has helped Delaware do, my
adopted State, West Virginia, my native State, and many other
States as well.
Before we hear from our witnesses, I want to turn first to
our Ranking Member, Senator Capito, for her opening statement
and to give her the opportunity to introduce one of our
witnesses today whom I think she knows pretty well.
Senator Capito.
OPENING STATEMENT OF HON. SHELLEY MOORE CAPITO,
U.S. SENATOR FROM THE STATE OF WEST VIRGINIA
Senator Capito. Thank you, Mr. Chairman, and good morning
to everybody, and thank you for calling today's hearing to
discuss reauthorizing the EDA.
Welcome to all of our witnesses traveling far and wide.
Thank you for being here. We look forward to hearing from you.
I would like to extend a particularly warm welcome to Mr.
Graney. Thank you for being here today. Governor Jim Justice
assembled a tremendous team of economic development experts and
leaders who work tirelessly for the betterment of my home State
of West Virginia. Mr. Graney plays a pivotal role on that team
as the Executive Director of the Department of Economic
Development.
Mr. Graney brings years of professional experience to his
current position. He has spent most of his career in executive
or co-founder positions with companies related to the petroleum
industry. He was also president of One Stop, a chain of
convenience stores based in West Virginia.
Mr. Graney is very active, I can attest to this because we
live in the same community, in many community and non-profit
organizations.
So thank you, Mike, for coming.
Economic development is difficult work, but the reward for
West Virginia is obvious. Mr. Graney and the rest of his team
will work with all government levels to bring economic
opportunity to our State. And they have achieved some recent
success, and I hope he will talk about that. Better jobs will
allow West Virginians to continue to call the Mountain State
home as well as provide new careers for those who want to
return home or join us in West Virginia. So I thank him and his
team for their dedication to this vital effort.
As we hear from our witnesses today, EDA is an important
partner across the Nation for those who are working to advance
economic opportunities for their citizens. As the lead agency
for the Federal economic development agenda, the EDA provides
funding for critical infrastructure projects and other
activities that support job creation and retention in
economically disadvantaged urban and rural areas.
During my time in the Senate, one of the things I sought to
do is to strengthen EDA's presence and assistance in my home
State of West Virginia. I have been successful, I think. Since
2018, EDA has invested close to $233 million in 174 projects in
West Virginia to help communities across our State grow
economies, and keep those jobs too, and support thousands of
jobs.
So the EDA's core programs do work. They have successfully
supported locally driven economic development since their
inception. And I know our witnesses will share more success
stories with us today.
However, it has been 20 years, as the Chairman noted, since
Congress last reauthorized EDA. Thankfully, we are kicking off
this process to develop legislation to reauthorize the EDA.
Time and time again, this Committee has proven that we can work
together in a bipartisan manner to pass meaningful legislation
that tackles the Nation's challenges and needs.
I believe any reauthorization effort should focus on these
things, reauthorizing EDA programs at fiscally responsible
funding levels, and reasserting a congressional direction over
EDA funding decisions. Two, enhancing congressional oversight
of EDA activities and encouraging coordination between other
Federal development programs and the private sector. Three,
updating EDA's processes for program implementation and project
delivery, and four, preserving locally driven economic
development decisions. We must achieve an appropriate balance
with this legislation.
That balance must uphold the core functions and goals of
the EDA while thoughtfully modernizing the EDA and its
authorities and programs. Further, I do not believe that we
should be creating new programs. In recent years, EDA received
a total of $4.5 billion in funding from the American Rescue
Plan Act and the CARES Act. This was on top of the $1.2 billion
total in supplemental appropriations provided to EDA for
disaster recovery in 2018 and 2019.
The Recompete Pilot Program, which was one of two new EDA
programs authorized in the CHIPS and Science Act, received a
total of $200 million in regular and supplemental
appropriations in fiscal year 2023 consolidated appropriations.
The Recompete Pilot Program will use eligibility metrics that
vary from existing EDA grant programs and focus on areas where
prime age employment trails the national average.
The other EDA program established by the CHIPS and Science
Act was the Tech Hubs Program. This program is designed to
accelerate regional technical growth and innovation through
regional based investments with the goal of becoming globally
competitive in certain technologies and industries. This
program received a total of $500 million in regular and
supplemental appropriations in fiscal year 2023 Consolidated
Appropriations Act.
Given the significant funding levels provided by Congress
to EDA, it is concerning that the majority of the agency's
programs are administered under expired authorizations. It is
past due that we put forth a serious bipartisan reauthorization
proposal. The U.S. economy looks very different than it did 20
years ago, and EDA's authorizing statutes should reflect this
reality.
However, I must stress that the reauthorization legislation
will not be successful if it departs from the EDA's traditional
missions. The legislation should not be used to pick winners
and losers. We must maintain EDA's focus on those areas that
truly need assistance and continue with an industry agnostic
approach that emphasizes locally driven economic development
decisions.
I look forward to hearing from our witnesses about what
policy and programmatic improvements can be made.
Thank you, Mr. Chairman, and I yield back my time.
Senator Carper. If you would like to go ahead and introduce
Mike Graney now, you are welcome to do that.
Senator Capito. I just did that.
Senator Carper. Did you want to say anything else?
Senator Capito. He is a great guy.
[Laughter.]
Senator Carper. OK. That is all you need to know. I like to
say the main thing is to keep the main thing the main thing. So
that is a good thing to know.
Welcome.
I have the opportunity to introduce three of our witnesses,
then turn to Senator Boozman to introduce his witness and thank
him for being a big part of this Committee and the work that we
do.
I am delighted to welcome this morning Patty Cannon, who is
Director of Special Projects with the Delaware Department of
State, Division of Small Business. Patty has worked for many
years on economic development in Delaware. People say how long,
I say not long enough.
In her current role, Patty works closely with the Economic
Development Administration as well as with business and
community leaders across the First State to help grow
Delaware's economy.
Welcome. It is great to see you.
We are also joined today by Chris Fetzer, who is the
Executive Director of the Northern Arizona Council of
Governments.
I think Senator Kelly was instrumental in inviting you to
join us. He is tied up right now, but I am sure he will be
joining us at some point in time in this hearing.
I understand that Mr. Fetzer is also the current president
of the board of National Association of Development
Organizations, which advocates on behalf of economic
development organizations across the country. When my wife asks
me who I was with today, I will tell her I was with the
president.
[Laughter.]
Senator Carper. We will just leave it at that, Chris.
Third, I am pleased to note that we have been joined by
Commissioner Eileen Higgins, from Miami-Dade County, Florida.
She is joining us on behalf of NACO, I believe, the National
Association of Counties. Commissioner Higgins was first elected
to the Miami-Dade Commission in 2018, following a career that
spanned being a business owner, a foreign service officer, and
community advocate.
Thank you for coming.
Now let me turn to Senator Boozman and ask him if he will
introduce Mr. Day for us.
Senator Boozman. Thank you, Senator Carper. We appreciate
yours and Senator Capito's leadership and the great example
that you set in working together to try and find common ground
for this really, so very important Committee.
I have the opportunity to introduce Bryan Day.
Thank you, Bryan, for joining us today.
He is going to discuss the important role the Economic
Development Administration has played in the Little Rock Port
Authority's operations and expansion. Bryan has been involved
with State and local government for over 35 years, and has been
the executive director of the Little Rock Port Authority since
2014.
Under his leadership, the Port has attracted industry from
around the world, with 50 businesses now calling the port home.
Together, these businesses employ around 10,000 people and
continue to contribute about a half a billion dollars annually
to the region.
Bryan and the Little Rock Port Authority have leveraged EDA
dollars as well as anyone, and I look forward to hearing his
expertise on why the EDA is important to so many communities
like Little Rock, Arkansas. It has certainly been a pleasure
working with Bryan for many years. And we appreciate all of his
efforts for the great State of Arkansas.
Thank you, Bryan, for being here.
Thank you, Mr. Chairman.
Senator Carper. Thank you, Senator Boozman.
Before Patty Cannon speaks, we have one House member from
Delaware in the U.S. House of Representatives. Her name is Lisa
Blunt Rochester. She used to be an intern in my office when I
was a Congressman years ago, and later on several occasions was
a member of my cabinet when I was Governor.
I put out a statement yesterday supporting her candidacy.
One of the things I mentioned, I talked about, an old proverb
that goes something like this, if you feed a person for a day,
you can do that, but if you want to help a person eat for life,
you teach them how to fish. If you give a person a fish, you
feed them for a day. But if you want to make sure they can feed
themselves for a lifetime, then you teach them how to fish.
Part of what we do is involved in that, in work force training
and work force development.
So with that thought in mind, I think it is noble work, I
think it is noble work and really important work.
Patty, with that, you are welcomed and may proceed.
Thank you.
STATEMENT OF PATRICIA CANNON, DIRECTOR OF SPECIAL PROJECTS,
DELAWARE DEPARTMENT OF STATE, DIVISION OF SMALL BUSINESS
Ms. Cannon. Thank you, Chairman Carper, Ranking Member
Capito, and members of the Committee that we hope will join
you, sir. Thank you for this opportunity to offer my testimony
before you today.
My name is Patty Cannon, and I am the Director of Special
Projects for the State of Delaware under the Department of
State within the Division of Small Business, where I also serve
as the grantee administrator for foreign trade zone number 99,
and as a member of the Delaware Workforce Development Board.
I have worked closely with the U.S. Economic Development
Administration, EDA, for over 20 years. And I come before you
today to voice strong support for the reauthorization of the
EDA.
On their website, a quote says, ``Public works program
investments help to facilitate the transition of communities
from being distressed to becoming competitive by developing key
public infrastructure.'' And while we firmly agree with that
statement, and we strongly encourage the reauthorization of EDA
to continue this important work, we would like to recommend
some of the following changes to EDA's policy to allow for
faster deployment of funds to the communities when they are in
need.
One, to eliminate or significantly reduce the required
match. It is a burden for small or underserved communities that
lack the resources to meet that financial match. Consider
setting aside 10 percent of EDA'S public works allocation to be
deployed via formula funding versus competitive funding.
Allocate capacity building, non-competitive funding to
communities and applicants that have failed to successfully
compete for EDA funding. This would strengthen the grant
writing and Federal reporting competencies in small,
underserved communities and increase their capacity to seek
funding from all funding sources, private, philanthropic, as
well as government funding sources.
Consider integrating the State and local work force boards
into the EDA funding criteria as an approved alternative to the
comprehensive economic development strategy, the CEDS, document
currently on file with EDA. CEDS are required to be updated
every 5 years, but the majority of membership in your local and
State work force boards by U.S. Department of Labor
requirements are, 50 percent of the majority are business
owners that are CEOs, COOs, other individuals with optimum
policymaking or hiring authority, and they provide employment
in your demand occupations. So they may have a better pulse on
what is happening.
I currently serve as the program administrator for two EDA
grants within the State of Delaware. The first was a CARES Act
funded revolving loan fund, an RLF. This was a competitive
application process, and we were ultimately awarded $1.5
million. The second was an American Rescue Plan, ARPA, non-
competitive travel, tourism, and outdoor recreation funding,
where Delaware was awarded $7,759,540.
But there are compelling differences in these two
applications and the time it took to get those funds deployed
in the community. The competitive RLF application took almost a
full year to get through the application approval process and
then the implementation plan approval process. The RLF program
was distributed to 31 small businesses, resulting in the
retention of 349 jobs across the entire State of Delaware. To
date, only one out of those 31 businesses is in default on
their loan. The remaining 30 small businesses survived the
pandemic as a result of this investment.
Every job matters. Not just to the employees and their
families, but to the economic prosperity of communities. It is
true in Delaware; it is true in every community.
The ARPA non-competitive application took less than 6
months to work through the approval of the application and the
approval of the implementation plan. The ARPA non-competitive
travel, tourism, and outdoor recreation funding resulted in
$760, $760 being returned to Delaware's economy for every $1
invested, and saved an industry that was dramatically impacted
by the COVID-19 pandemic.
Visitor spending topped $5.9 billion, a 30 percent increase
from 2020, and 2021 total visitor spending exceeding 2019, the
previous high mark, by 11 percent, to set a new Delaware
record. Tourism as an industry is the fourth largest private
employer, 9 percent, 9 percent of all private sector jobs in
Delaware are tied to the tourism industry.
In closing, please know that the EDA staff at the
Philadelphia regional office continue to be responsive, very
patient, and highly committed to helping everyone in their
region to be successful. We are grateful for the EDA funding
that has been awarded to the State of Delaware, including
funding to our universities and colleges that support
sophisticated research and development and technology transfer.
We respect, fully respect, that there will never be enough
funding to support every important project. But we firmly
believe that the work of the EDA is important to the U.S.
economy, and we ask this Committee to move forward with the
reauthorization.
Thank you.
[The prepared statement of Ms. Cannon follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. You are 7 seconds over your time. That is
pretty darned good around here.
[Laughter.]
Ms. Cannon. I am so sorry, sir.
Senator Carper. No, no, no apology is necessary.
Thank you very much again for joining us. Thank you very
much for that testimony.
Next, we are going to hear from Chris Fetzer.
Mr. Fetzer, please proceed with your testimony. Thanks for
joining us.
STATEMENT OF CHRIS FETZER, EXECUTIVE DIRECTOR, NORTHERN ARIZONA
COUNCIL OF GOVERNMENTS
Mr. Fetzer. Chairman Carper, Ranking Member Capito, members
of the Committee, good morning, and thank you for the
opportunity to testify today.
My name is Chris Fetzer. I serve as the Executive Director
of the Northern Arizona Council of Governments based in
Flagstaff, Arizona. NACOG serves a four county region, and is
an EDA designated economic development district.
I also currently serve as the President of the National
Association of Development Organizations, which advocates on
behalf of a national network of more than 400 EDDs across the
country.
Today I will begin by speaking about the importance of EDA
and how its investments have impacted northern Arizona. One
prominent example of an ongoing challenge in my region has been
the decline of the coal fired power industry. In late 2019, the
operators of the Navajo Generating Station, a coal fired power
plant located near the city of Page on the Navajo Nation,
abruptly ended operations years prior to the facility's
anticipate closure. While operational, the plant employed
hundreds of workers and brought in millions in revenue.
As you might imagine, the plant's sudden closure resulted
in devastating losses of jobs, business income, and tax revenue
that the region was not fully prepared to address. This closure
disproportionately impacted rural, tribal, and economically
distressed communities.
Fortunately, EDA is making investments to help support
northern Arizona's economic transition. As a result, we will be
better positioned in the future to respond to similar
scenarios.
We are now engaging in planning measures to prepare for the
impending closure of three remaining coal plants that are still
operational in the region. These planning efforts are being
supported by EDA funded grants.
EDA's successes extend far beyond my region. Nationally,
EDDs are often at the forefront of driving EDA's local impact
as they have ever since EDA's creation in 1965. EDDs are
important because they help local stakeholders access and
navigate EDA funding opportunities. Our staffs serve as EDA
funding experts who are trusted locally.
We are especially essential in helping rural, small, or
capacity constrained communities access funding. In other
words, EDDs help those communities most in need secure Federal
grants.
In reauthorizing the EDA, I encourage this Committee to
take the following actions. First, I encourage Congress to
invest in the operational capacity of EDDs. Currently, the lack
of adequate funding for staff capacity is an enormous challenge
for most EDDs, in part because until recently EDA funding
levels for EDDs had stagnated for decades.
Second, Congress should increase the annual authorized
funding level for EDA Partnership Planning grants. The
foundation of every successful project is a thoughtful and
intentional planning process. Planning helps ensure that
subsequent Federal project investments are strategic, fiscally
responsible, and aligned with local and regional priorities.
NADO recommends Congress authorize EDA Partnership Planning
grants at a level of at least $100 million annually.
Third, I encourage the Committee to restructure cost share
by reducing local match. EDA's current local match requirements
are often as high as 50 percent. This creates a huge barrier to
entry for many communities. NADO recommends raising EDA's
Federal share to 90 percent, reducing local match to 10 percent
for all EDA Partnership Planning grants.
Additionally, we encourage reduction of local match for EDA
funded project investments as well.
Fourth, Congress should enhance EDA's approach to disaster
mitigation. Disaster response work is something EDA is already
doing successfully. But congressional reforms could improve
service delivery. Currently, EDA disaster funding is often
delayed in reaching communities, in part because this funding
is typically appropriated via separate, end of year
supplemental appropriations.
In reauthorization, we encourage Congress to instead
authorize an annual line item for disaster response as well as
a dedicated disaster bureau within EDA. This would allow EDA to
deploy funds more rapidly to communities in need.
Finally, it has been remarkable over the past few years to
see EDA receive historic funding levels. However, I urge the
Committee to take steps that prevent EDA's original mission and
structure from being undermined, particularly as new priorities
and stakeholders emerge.
In reauthorizing EDA, I encourage the Committee to
prioritize EDA's traditional core programs, rather than
creating new programs. Although some of the recent new
initiatives have laid out exciting visions, it has become
increasingly difficult for rural, tribal, and under-resourced
communities to successfully compete in these new national
competitions.
Thank you for the opportunity to address the Committee
today. I look forward to answering your questions.
[The prepared statement of Mr. Fetzer follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. Mr. Fetzer, thanks very much for that
testimony and again for joining us today.
Next, we have Commissioner Higgins. After Commissioner
Higgins, we are going to hear from Mike Graney.
Commissioner Higgins.
STATEMENT OF EILEEN HIGGINS, COMMISSIONER, BOARD OF COUNTY
COMMISSIONERS, DISTRICT 5, MIAMI-DADE COUNTY; MIAMI, FLORIDA
Ms. Higgins. Good morning, Chairman Carper, Ranking Member
Capito, and distinguished members of the Committee. Thank you
for inviting me to testify on the importance of reauthorizing
the Economic Development Administration.
I am Miami-Dade County Commissioner Eileen Higgins. Today I
am sharing a local perspective and the recommendations from the
National Association of Counties.
Rural or urban, ag center or manufacturing hub, our
counties differ in lots of ways. But we all share one
fundamental responsibility, which is local and regional
economic development. And EDA has been an essential partner to
us in that development.
EDA's mission is more important today than ever as the
Nation deploys the historic Federal investments in
infrastructure, climate, broadband, and manufacturing. But
these investments in physical infrastructure must be
accompanied by investments in work force infrastructure. The
Nation needs workers ready to build these projects at the onset
and maintain them in the long run. Many of these jobs are
unlike the ones we have today.
So for Miami-Dade County, that is tourism. Jobs in hotels
and restaurants are plentiful. But they also don't pay well.
And that is why 15 percent of our residents live in poverty.
That is over 400,000 people not yet living the American dream.
But new EDA partnerships are changing that by helping Miami-
Dade ready our work force for higher paying jobs.
One EDA investment is building a construction trades
institute to offer participants hands on experience in
traditional certifications, plumbers, welders, electricians.
But also in green certifications, such as solar panel
installations. These certifications can be completed really
quickly, in less than a year, literally propelling participants
into the good paying construction and infrastructure jobs that
have long provided a gateway to the middle class.
Miami Tech Works was our response to EDA's Good Jobs
challenges. That brings together business leaders with
educational providers to align academic programs with industry
needs for a skilled tech work force. The program upskills
workers through certificate programs, associate degrees,
bachelor's degrees, providing multiple pathways into the high
paying tech sector.
More than 170 companies are participating and in the past 3
months have created 100 tech internships that did not exist
before. So you can see reauthorizing the EDA matters to
America's counties. But of course, NACO has some
recommendations on how to make it even better.
First, we would like to see more robust support for
capacity building and pre-development, especially in
communities that lack resources to fully build out their
comprehensive economic development strategies. And please, do
consider revising the match for Partnership Planning grants. It
is a stretch that many small and rural counties cannot meet.
The economic distress formula should also be reconstituted
so that the funds meet the places most in need. The current
matching requirements are a non-starter for lots of good
projects. The reality is that in smaller communities, it is
actually more expensive to build the physical infrastructure
needed to attract new industries. And when a major disaster is
declared, the Federal share should be 100 percent.
Speaking of disasters, counties rely on EDA for post-
disaster economic recovery activities, and Congress does too,
as evidenced by the many supplemental appropriations following
disasters. It is time to formalize EDA's role in disaster
recovery.
So I think you probably can predict our final
recommendation, it is pretty simple. We would like you to
please increase EDA's annual authorized funding level to meet
demand. In my county, EDA has connected people with high
quality jobs. But nationally, it has a proven track record in
driving economic growth and recovery. That is why I join NACO
today to advocate for its reauthorization with increased
financial support.
EDA investments will long pay dividends by ensuring
American workers, no matter where they live, have access to
good paying jobs, economic mobility, and real prosperity.
Thank you.
[The prepared statement of Ms. Higgins follows:]
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Senator Carper. Commissioner Higgins, thanks so much.
Mr. Graney, are you from Mount Hope? Bill Clinton, with
whom I served when I was Governor, he was President, I used to
say I come from a place called Hope. And you come from a place
called Mount Hope, higher and higher. There you go. Welcome
aboard, please proceed.
STATEMENT OF MIKE GRANEY, EXECUTIVE DIRECTOR,
WEST VIRGINIA DEPARTMENT OF ECONOMIC DEVELOPMENT
Mr. Graney. Thank you, Mr. Chairman, Ranking Member Capito,
members of the Committee. Good morning, and thank you for
inviting me.
I am Mike Graney. I am from Mount Hope, West Virginia, and
I am the Executive Director of the West Virginia Department of
Economic Development. I have been in this role for a little
over 4 and a half years, since Governor Jim Justice appointed
me. I still consider myself a recovering entrepreneur.
Senator Carper. You are talking to at least one recovering
Governor here.
[Laughter.]
Mr. Graney. In my brief time in this role, I have a clear
understanding and belief that the USEDA is a critical partner
to West Virginia. EDA has awarded over $220 million in funds to
projects in West Virginia since 2018. EDA's Assistance to Coal
Communities has funded so many critical projects in West
Virginia since its inception.
It is wonderful to have a Federal agency that understands
the plight of rural America as it struggles to rebuild its
economy after documented economic shocks. EDA has and I hope
will continue to support community driven, economic development
focused on creating good paying jobs, building economic
resilience, and accelerating the economic recovery for
industries and communities hit hardest by the downturn in the
coal industry.
Infrastructure has and I hope will continue to be the focus
of a large percentage of EDA applications because it is the
link to sustaining and expanding our existing businesses and
critical to the attraction of new businesses and industry.
Specific recent infrastructure, water, sewer, building
construction/rehab, projects that assisted with new jobs for
both new and existing industry expansion in West Virginia
include Nucor Steel in the Mason County Public Service
District, Mountain Top Beverage in the Morgantown Utility
Board, the Great Barrel Company in the White Sulphur Springs
Public Service District, Interstate Hardwoods in the Pocahontas
PSD, AmeriCarbon Enterprises in the Wyoming County EDA, Gat
Creek Furniture in the Berkeley Springs and Warm Springs PSD,
Westlake and Blue Racer Midstream in the Grandview-Doolin PSD
in the northern panhandle.
West Virginia successfully applied for and obtained
approximately 93 projects since 2018. The EDDs, in most cases,
prepare the applications and administer the funds. We are one
of the few States in the country that have every county in our
State represented by EDDs.
The West Virginia Economic Development Department works
closely with all our local economic development authorities,
all the Regional Planning and Development Councils, the EDDs,
and the USEDA Representative to West Virginia, Tracey Rowan,
who is truly a fantastic partner. We have nicknamed her The
Rock Star. Actually, I gave her that title, and she truly is a
rock star.
It really does take local, State, and Federal
collaboration, cooperation, and communication to deliver
successful projects and ensure resiliency and sustainability.
West Virginia has been an energy State and will continue to be
by adopting an all of the above strategy. And we will likely
need USEDA assistance as new methods of energy generation are
put in operation.
West Virginia has had several economic development
successes in recent years, and we are pleased, but we must
press forward. We need more. We are small, but we are nimble as
a State, and this makes us very effective.
While many of our counties have enjoyed the lower 20
percent USEDA match requirement, often those places that need
the infrastructure improvement the most have the least capacity
to fund the match. Twenty percent of a $4 million project is
$800,000; that is a lot of money, particularly for small,
impoverished counties.
I urge the USEDA to consider criteria that may qualify
certain projects or areas to further reduce or eliminate the
local match. I think I have heard that from other folks here.
And it really is an important issue. Maybe there is criteria
that says, OK, if these thresholds are met, we will reduce the
match or eliminate the match.
Thank you for the opportunity to share these remarks. Good
luck with finding the appropriate level of funding to re-
authorize the critical work of USEDA.
Thank you very much.
[The prepared statement of Mr. Graney follows:]
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Senator Carper. We thank you very much, Mr. Graney.
We have been joined by our colleague from Arizona. He
cannot stay with us for long.
Senator Kelly, if you want to go ahead and ask a question,
and maybe say a kind word about him, we will come to him. Go
ahead.
Senator Kelly. Thank you, Mr. Chairman. I have a couple of
mark ups today in Armed Services, I have to run out of here.
I have a couple of questions for Mr. Fetzer, from NACOG in
Arizona. Thank you, Mr. Chairman.
Mr. Fetzer, Chris, leads the Northern Arizona Council of
Governments, which is the economic development district for
northern Arizona. And he has been a leader in all economic
development efforts in northern Arizona for the past decade.
Thank you for that. You have been a tremendous asset to
myself and my team.
Chris, thank you for making the trip.
I often hear from mayors and tribal leaders that it feels
like they do not have the capacity to apply for Federal funding
opportunities or secure private sector development deals
because of a lack of funding or a lack of capacity.
But I understand that EDA can help, especially through
Partnership Planning grants. And I understand that currently,
NACGO receives about $75,000 a year from a Partnership Planning
grant.
In your testimony, my understanding is your recommend
increasing that allocation to $250,000 a year. If NACOG
receives that level of funding, what additional resources would
you be able to provide to the cities and Tribes in your region?
And would you be able to better help rural and tribal
communities take advantage of this funding?
Mr. Fetzer. Chairman Carper, Senator Kelly, thank you for
the question. It is very germane to much of the testimony that
you have heard from myself and other members of the panel this
morning.
The work that EDDs do with the Partnership Planning grant
funds that are provided currently is to provide technical
assistance. And if additional funding were provided through the
Partnership Planning grants, we would simply add staff.
As you are very well aware, northern Arizona, our entire
State is large geographically. Many of the communities that we
serve are under 10,000. In that case, many of the staff working
in those communities wear many hats. There are a few that do a
lot of different jobs locally.
While they have great needs for infrastructure development
and different project ideas that will help to grow the local
economy, just as important as creating jobs is retaining those
existing jobs. They rely on the EDDs and our staff to be the
technical expertise and provide the assistance in identifying
the grant opportunities, helping develop the applications, and
submitting those.
Then on the back end, NACOG as well as many of our NADO
members across the country, have the ability and the expertise
to help with implementation as well as the management and
administration of those grants in order to make sure they are
being spent wisely and in accordance with all the applicable
requirements.
Senator Kelly. Thank you. It seems like that increase would
certainly benefit these rural and tribal communities.
I also want to discuss one more thing in my remaining time,
and that is how EDA can better help local governments invest in
site development expenses like utility hook ups, permitting
expenses, and investments in work force development. Two weeks
ago, I introduced a bill called the ONSHORE Act, with Senator
Vance, which would provide EDA with a dedicated program to
support site development projects in industries that are
critical to our economic and national security.
Chris, I know you discussed pre-development costs in your
opening statement, or at least I was told that. I was hoping
you could expand on this. Can you explain why these projects do
not compete well for EDA funding under existing programs? And
can you also explain why investing in site development can
sometimes be worthwhile for a community as they try to attract
companies?
Mr. Fetzer. Chairman Carper, Senator Kelly, with respect to
that question, much of the grant funding that is provided
through, say, the economic adjustment program by EDA to
communities, is for very specific aspects of projects that are
based upon known companies that have committed to come to an
area to expand.
Sometimes we find that a community will be in a chicken and
egg type of scenario where pre-development, site development
funding would allow the attraction, or again the expansion of
existing businesses in areas where without that investment, it
is not likely to occur. There are other aspects of pre-
development that would be beneficial because like Commissioner
Higgins mentioned in her testimony, as important as work force
is, throughout the Intermountain West, and it is particularly
acute in northern Arizona, is the availability of work force
housing or more specifically, the lack of availability.
So the ability to use pre-development or EDA planning funds
to prepare work force housing assessments would also be
valuable in preparing the community to be able to expand with
those projects and be able to provide housing in a way that
would actually allow the attraction of a work force.
Senator Kelly. Thank you, Chris.
Thank you, Mr. Chairman.
Senator Carper. You bet. Thanks for making time to join us
today.
Mr. Day, are you ready? All right.
Before you speak, I am going to telegraph a pitch. I love
baseball. One of my favorite baseball terms is telegraphing a
pitch. So the way the pitcher holds the ball, releases the
ball, you can figure out whether it is a fast ball, curve ball,
or whatever. So I am going to telegraph a pitch for when we
start questioning. The first question I am going to ask is,
where do you all agree, on what major points is there
consensus. There are a lot of things here in Washington that
divide us. Senator Capito and I are always looking for what
brings us together.
So one of the first questions, maybe the first question I
will ask is, where do you agree? Where is the consensus on the
major points that we need to be focused on. Thanks.
Mr. Day.
STATEMENT OF BRYAN DAY, EXECUTIVE DIRECTOR,
LITTLE ROCK PORT AUTHORITY; LITTLE ROCK, ARKANSAS
Mr. Day. Chairman Carper, Ranking Member Capito, and
members of the Committee, thank you for the opportunity to
speak before you today to discuss the reauthorization of the
Economic Development Administration.
My name is Bryan Day, and I am the Executive Director of
the Little Rock Port Authority.
The Port of Little Rock is Arkansas's largest public port
and industrial park. And its sole purpose is to create jobs for
the central Arkansas.
As you heard, the port is home to 50 businesses from across
America and around the world. These businesses employ about
10,000 people, contribute half a billion dollars a year to the
local economy.
As the Little Rock Port Authority works to attract industry
and create jobs, we cannot do it alone. Over the last 20 years,
we have been the recipient of a number of EDA grants via the
Public Works/Economic Adjustment Assistance grant program. I
would like to share a few examples.
In 2002, the Little Rock Port Authority received $2 million
from the EDA to build a dock on our slack water harbor. In
2005, the Little Rock Port Authority received $1.5 million from
the EDA to build two warehouses at the slack water harbor. The
dock and the warehouse investments have created hundreds of
opportunities to move commodities and attract new industry to
the inland river system.
In 2007, the Little Rock Port Authority received $1.5
million from the EDA to build additional rail infrastructure to
support Welspun, an Indian owned gas and oil pipe company. This
company has invested over $400 million into their facility and
currently employs 1,000 people.
In 2019, Little Rock Port Authority received $2 million to
assist with the development of road and the extension of
utilities. This infrastructure investment allowed Amazon to
locate at the port where they built a 4 million square foot
distribution facility at a cost of approximately $500 million.
Today, that facility employs 3,000 people.
In 2022, the Little Rock Port Authority received $3 million
from the EDA to extend rail infrastructure to support TREX, a
manufacturer of composite lumber. When TREX is fully
operational, they will have invested over $400 million in their
facility and will employ over 500 people.
The EDA has provided $13 million in grants to Little Rock
Port Authority over the past 20 years. While that is not a lot
of money, this investment has directly resulted in over $2.5
billion in capital investment and the creation of over 5,000
jobs. I can think of no better return on an investment than
what we have accomplished with help from the EDA.
I do hope the Committee recommends the continuation of
funding for this program. It has helped communities across the
Nation achieve objectives that they could not have done
otherwise.
However, as you consider reauthorization, I would like to
ask that you take the following into consideration. One, the
Economic Development Administration was created to help develop
local economies by generating new employment and stimulating
industrial and commercial development. This is an effective
Federal program that creates lasting benefits for local
communities.
I would encourage the Committee to remain focused on the
original intent of the program. The EDA has a proven track
record that has worked and continues to work very well in
communities across the country.
Two, local communities have a better understanding of their
respective needs and know what works best for them within their
specific economic development arena. EDA grant programming
should remain flexible enough to give local communities the
ability to design and implement projects that are best suited
for those individual environments.
Oftentimes grant requirements from the agency have an
adverse impact on a community's ability to apply for and manage
the funds. Having the flexibility to use EDA funds with less
stringent parameters will result in greater benefits to the
local community.
Three, the EDA grant process should remain simple. Smaller
and rural communities often do not have the capacity to develop
a grant application, complete the permitting, meet the
timelines, and implement the program mandates established
within the grant. Simplification of the process and
modification of the guidelines will have a positive impact on
many of our communities and their ability to utilize these
funds.
Finally, the EDA should explore redefining the grant
program to allow communities the ability to design and build
basic infrastructure to prepare those communities for future
economic development growth. Many of the grants are tied into
specific job creation requirements, and this often prohibits a
local community from meeting their specific future economic
development needs. Allowing the EDA to invest in creating
shovel ready sites would be a game changer for our communities
and greatly enhance their ability to attract jobs to the area.
Thank you again for giving me an opportunity to appear
before you. I wholeheartedly support the reauthorization of the
Economic Development Administration. The Little Rock Port
Authority could not have accomplished what we have over the
past 20 years without help from the EDA. That is a given.
I have shared with you some of my thoughts on changes that
I believe would be beneficial to all our communities of all
sizes. I hope you will give them consideration.
Thank you again for the opportunity to appear before you.
[The prepared statement of Mr. Day follows:]
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Senator Carper. Mr. Day, thank you for those words, and our
thanks to everybody on our panel.
I mentioned I was telegraphing my pitch. That will be my
last question. I will ask you, looking back at this hearing,
where is the consensus you would like to really emphasize.
I live in a State that is about 100 miles from north to
south, about 50 miles from east to west. We have about a
million people. Most of our people live in the northernmost
county, but the fastest growing area is actually Sussex County
down south.
When you take State Route 1 from I-95 heading south, you go
right through Sussex County. If you keep going, you go into--
Ben Cardin has joined us--you go into the MarVa of DelMarVa,
into the State of Maryland. If you drive through, before you
get into Sussex County, you go right past the town of Milford.
Right on State Route 1, there are a bunch of auto dealerships.
About 10 years ago, I held a press conference, I think it
was on a Saturday morning, which is pretty unusual. We had it
at one of those auto dealerships, I think it was the Chevrolet
dealership. The idea was to unveil for the first time ever a
built in America electric vehicle, the Chevrolet Volt. It got
like 38 miles on a charge. We routinely get 300 miles on
charges today.
But it was the Chevrolet Volt. We had a press conference,
well attended, on a Saturday morning. I would be behind the
wheel of the Chevrolet Volt, and we would get a camera crew or
two behind me, which was pretty crowded. Then we would just
take off and hit the road. It was a hoot. We did it until all
the camera crews got to go for a spin.
Then we came back and concluded the event. And the fellow
who was the president of the company there said, how would you
like to come back and see our maintenance shop? I said, sure.
It was a Saturday morning, nobody was working.
I said, what are some of the challenges you face? He said,
we have a hard time finding people who are trained, who are
trainable, who will come to work and meet our work force needs.
He said, it is not just us, it is not that dealership, he said,
it is every dealership in the State.
As it turned out, we found that not only was it auto
dealerships, cars, trucks, vans, but also if you look at the
poultry industry, which is huge in our State, if you look at
all the integrators, they have trucks all the time out, across
the eastern part of the United States, and they need people to
maintain them as well.
We put together this partnership that I alluded to earlier
that involved EDA, the State, the counties, and the local
governments who would do X, Y, and Z; EDA would do thus and so.
It worked. And we got a bunch of auto dealerships, cars,
trucks, vans, and said, we will do our part. The State said, we
will do our part through Sussex County, our vo-tech school
districts and through our educational system.
Anyway, it worked. It is still working. That is one of our
great successes.
Ms. Cannon, would you share with us one or two other great
successes? I like to say, find out what works, do more of that.
Ms. Cannon. Yes, thank you, Senator.
It is interesting that you chose to speak about the Del
Tech example, the Delaware Technical Community College example,
which is where that occurred. That actually occurred in 2016,
and it is still thriving today. So it is a great example of how
an EDA investment has a long term return on that investment,
not just for the businesses, but for the people that could
train there and then could go work anywhere with that skill
set. Some of them go to Maryland, some of them go to New
Jersey. They don't all stay in Delaware, but we are thrilled
when they do.
Senator Carper. What might be some other successes that you
could point to, please?
Ms. Cannon. The other two main successes that I think were
made 4 or 5 years ago, actually in 2017 there was an investment
made at Del State University as part of the University Center
for Competitiveness. And that one is still thriving. It got
additional funding in 2020. And in 2021, the University of
Delaware got some of the funding from EDA for the tremendous
work that they are doing there at the STAR campus. And then a
Dupont experimental----
Senator Carper. The STAR campus, is that where the Chrysler
plant used to be?
Ms. Cannon. It is where the Chrysler plant used to be.
Senator Carper. It employed something like 4,000 people,
and they closed it. We lost 4,000 jobs just like that. And now
the STAR campus has been created, and about 4,000 people work
there in all kinds of high tech businesses.
Ms. Cannon. And working in collaboration with the students,
which gives them some real life examples, experience.
And then the Delaware Innovation Space, which was a Dupont
facility that was shut down, I think 235,000 square feet. They
helped to fund the renovation of that building.
Senator Carper. Who is they, they helped to fund?
Ms. Cannon. I am sorry, EDA, sir, thank you, helped to fund
the renovation of that building. And it is now a high class
step up incubator, so that when somebody starts in their
garage, then they go to some of the smaller incubators. When
they are ready to really ramp up, they go to the Delaware
Innovation Space. And that has been a tremendous success for
Delaware.
We have a lot of great successes there in Delaware because
of EDA.
Senator Carper. Thank you for taking us on a walk down
memory lane and right into the future. Thank you.
That was my question.
Senator Capito.
Senator Capito. Thank you.
Mr. Graney, you mentioned in your remarks about the
Assistance to Coal Communities program. Certainly we have
suffered in West Virginia with the downturn in the coal
industry. And that is one of the reasons that I have been
particularly supportive, obviously, of this issue.
Can you talk a little bit more about that program and how
it has been helpful, and maybe what you see for the future of
that assistance for coal communities?
Mr. Graney. Thank you very much, Senator Capito, for the
question.
Forty-four of the 55 counties of West Virginia are
coalfield affected communities. So it is broad based throughout
the State. And while there has been a big downturn in the coal
economy and a lot of loss of jobs, indeed, the secondary
induced and indirect jobs as well have been reduced.
So, when we have the opportunity to attract a new business
or an expansion of an existing business, and we get assistance
from the USEDA, it really helps those communities recover. And
while we have a number of communities that are still suffering
and will continue until we identify that great opportunity for
them, they will continue to suffer.
What is unique about West Virginians is that they will
travel a long way for a job, for a good job. And so what we are
finding is that we had the Nucor Steel facility announced in
Mason County, West Virginia. We will have people travel for an
hour and a half to a good job like that from southern West
Virginia where those coalfield affected communities are
suffering.
So having the USEDA support the sewer there is just
critically important to make that happen.
Senator Capito. Mr. Fetzer, you mentioned a coal community
in Arizona. Are you using these funds, the Assistance to Coal
Community program, for those improvements that you mentioned?
Mr. Fetzer. Yes, Senator Capito. We have previously used
Assistance to Coal Communities and are continuing to with a
couple of current grants that are looking at future closures.
One of the lessons we learned with the previous closure, it
was accelerated much sooner than anticipated. The closures that
are scheduled for the other remaining plants are a little bit
further out, but one as soon as 2025. So those grants are
looking at the existing assets that are there at the power
plants in terms of buildings, equipment, infrastructure, water,
sewer, transportation access, and the like, to determine what
are the most suitable types of industries that those properties
could be redeveloped to utilize. Again, that is EDA funded
planning work that is ongoing.
Senator Capito. OK, thank you.
Mr. Graney, you mentioned, well, I wanted to ask you about,
EDA maintains an interest in real property acquired,
constructed, or improved with agency funds for the estimated
useful life of a project, which is 20 years, I think.
What obstacles have you encountered, and do you have any
ideas for some additional flexibilities for those EDA owned
properties?
Mr. Graney. Ranking Member Capito, thanks for the question.
It is a great question.
In my short time there, there are a couple of properties
that had that control put in place, that there was an interest
in purchasing the property. Unfortunately, it could not be
transacted, because currently, that program lasts for 20 years.
You have to take the entire balance back if you sell the
property before that 20 year anniversary.
Senator Capito. Yes.
Mr. Graney. To me, it makes sense that they would pay back
the unamortized balance of the loan, that in the 19th year you
wouldn't want to have to pay back $4 million, you could pay
back $100,000 or whatever the unamortized balance is. I think
that kind of flexibility would do well to reduce some of the
strings that other folks have talked about.
Senator Capito. Yes.
Does anybody else have that issue? Have you run into that
issue? OK.
Let me ask you about, I can give you one answer on where
everybody agrees, and that is the local match. So I am not
going to ask that question. That one came through loud and
clear.
[Laughter.]
Senator Capito. Capacity building was the other one I heard
pretty much all the way through.
So the other thing is the site ready portion of this, which
I am exceedingly interested in from West Virginia as we are
trying to grow our economy, and the developers have done a
great job. But we also have areas that have either never been
touched or have been touched maybe, you know, outside of a
brownfield. The Brownfield program really works well in our
State for that site development.
But for those sites, I could imagine maybe we could use EDA
funds, maybe not to build a physical infrastructure, or that
would be good, but to at least do some of the prep work that
would go in pre-building. Mr. Graney, how do you feel about
that?
Mr. Graney. I feel your point exactly. I agree completely.
So, flexibility along those lines. West Virginia has
recently passed site legislation to enable the development
office to do some preliminary work, but not a lot of
earthmoving. But doing the phase one, doing all the NEPA
studies, doing archaeological studies, doing some preliminary
engineering report work to understand, and then understanding
what infrastructure might cost, water, sewer broadband, roads
you have it.
At least you would have that information, and you wouldn't
have a 2 year study period to have to go through that process.
I refer to it as the lip of the cup strategy. All you have to
do is tap it in to get it done.
So I think if we can have flexibility using USEDA funds to
do that work it can be very, very helpful, as opposed to
identifying that occupant and knowing they need a 10 inch water
line or what have you, post. Having a site ready facility could
mean the difference between having someone select West Virginia
or not.
Senator Capito. Right.
Thank you.
Senator Carper. Thank you very much, Senator Capito.
We have been joined by Senator Cardin. He is my neighbor in
DelMarVa, just south of us and west of us, he is everywhere.
And he is on this Committee, has been stuck sitting next to me
on the Finance Committee, too. I am glad he has hung in there.
Senator Cardin. I am a neighbor of the Chairman in
Delaware, of the Ranking Member in West Virginia, we are
neighbors. I am sorry I am not a neighbor to my colleagues over
there.
[Laughter.]
Senator Cardin. But Marylanders are all over.
Welcome to the panel today.
I strongly support the reauthorization of EDA; 2004 has
been too long. I agree with the Ranking Member that there seems
to be a great deal of consensus.
I just want to add my support for capacity building. I
think that is an extremely important point. We have strong
regional councils in Maryland. EDA is important from Appalachia
in the western part of our State, to the Eastern Shore, to
Baltimore City. It is an important tool for economic growth. So
it is important that we reauthorize it.
I will give you one example, and Ms. Higgins, I want to ask
you a question on resilience. We got a grant last year for a
city dock in Annapolis. It is going to be economic growth for
Annapolis. Annapolis, by the way, has more subsidized housing
than most cities; people don't realize that about Annapolis. So
it is going to help on economic growth.
But it is also going to deal with resilience. Annapolis
harbor floods all the time, not from extreme weather events,
just tidal flooding. So it is going to be an important project
for resilience.
Ms. Higgins, Miami-Dade is challenged. Can you connect the
dots for us on EDA, economic growth and resilience?
Ms. Higgins. There are a number of things that are really
important. Some of our work force development programs are
literally looking at connecting these folks who now work in
very low wage tourism jobs with the jobs we need to build the
infrastructure. In some cases, we have physical infrastructure
that is going to have to protect us from what is coming with
rising seas and what not.
But we also have to, and we do, depend on EDA all
throughout the State of Florida for disaster recovery,
particularly the economic assistance. That is one of the
reasons, on behalf of the State and county, but also the
National Association of Counties, we really do believe it is
time to standardize and codify EDA's role in disaster recovery.
When disaster hits, we need you to be ready, not to have EDA
have to prep to get ready to arrive, whether it is 3 weeks or 4
weeks later.
So the role of EDA is everything from work force
development to some of our smaller communities actually funding
some of the physical infrastructure to actually responding just
in case we need you.
Senator Cardin. In Maryland, we are looking at wind energy,
offshore wind. Absolutely, the work force issues and job
training are critically important. Connecting that dot with EDA
help would be extremely valuable.
Ms. Cannon, I want to ask you a question about small
businesses. I wear another hat; I chair the Small Business
Committee here. We are looking at the reauthorization of the
SBA programs.
How do we coordinate better the tools that are available
for economic growth under the SBA and the EDA program? A lot of
it overlaps. I am not sure how well that is coordinated.
Ms. Cannon. Thank you, Senator, that is a great question. I
actually spent some time doing some research last night trying
to imagine that kind of a question. So thank you for that.
What I learned was that there is a lot of research out
there, as I am sure you all know. Sixty-four percent of small
businesses, after a disaster, suffer a loss in assets. That is
what EDA focuses on, the assets, did you lose a building, did
you lose a generator, do you need new equipment. But I believe
it was 94 percent lose revenue.
So in my world, in the Division of Small Business at the
State of Delaware, we have tried our best when COVID hit and
the shutdown happened to say, how do we save as many, as know
that Ellicott City was a great case study for us in preparing
what we wanted to do for COVID. Because when they flooded for
the fourth or fifth time, what the case study showed was that
some of the businesses just shut down. They said, we are done,
we are tired, we are not rebuilding again.
But some of them relocated. And when they relocated,
working for the rebuilding to happen, they found a new home,
and they found new customers. So they just never came back. So
it is so important that the SBA focus on cash flow, getting
those EIDL loans out to help them with the cash flow issue they
have when revenue stops.
Then EDA, I think, has to be able to step up. I think the
biggest challenge for EDA in stepping up for small businesses
is that at a high level, EDA says, well, who is going to own
the asset? If a private company is going to own it, that is not
really what we do.
So my struggle is, how do I help my small businesses who
need an asset when EDA says that is not really what I do?
Senator Cardin. Thank you. I would just make an
observation. Ellicott City had two 100 year floods within 20
months. So it has been really challenged on how to deal with
the increased flooding in that community.
To Senator Capito, the western part of my State, as you
know, also had coal. So it is important for us to use the tools
we can on economic growth under EDA and also under the ARC
program to help those communities. I am glad to see there is a
focus on that.
Senator Carper. Senator Cardin, thanks so much for joining
us.
Senator Boozman.
Senator Boozman. Thank you, Mr. Chairman.
Mr. Day, as you outlined in your testimony, the Little Rock
Port Authority has had great success in partnership with EDA
with acquiring $13 million in grant funding and leveraging it
to tremendous economic development. Can you talk about the
decisions that go into applying for EDA funding for the Little
Rock Port and your experiences working with EDA in executing
both the application process and the project delivery?
Mr. Day. Thank you, Senator. And thank you for always
supporting the Port of Little Rock and Central Arkansas. We are
grateful for that.
In terms of working with the EDA, we have a great
relationship with the EDA. Your staff, the EDA staff does a
remarkable job working with communities. We have no qualms with
that. They are responsive and eager to help us. The folks we
work with on a daily and weekly basis are really good.
When we work with EDA grants through the Port, and I am
mainly talking about kind of the public works infrastructure
investment, they are all tied into specific job creation. And
that is time consuming. Sometimes you have to wait until you
get a prospect that announces. Then you contact the EDA and
say, we have got this prospect that is going to bring 500 jobs
and invest X number of dollars. Can we apply for
infrastructure, can we apply for road extension assistance?
And as you have heard today in this capacity conversation,
when a prospect comes to a community, any community in America,
they are not looking to locate at the community. They are
looking for reasons to not locate at the community. If we tell
them that is going to take 6 to 12 to 18 months to get the site
ready, then that is a reason they might choose to go elsewhere.
We are no longer just competing with our neighbors, we are
competing with the world. With what we saw with the pandemic
and supply chain challenges, there is a lot of interest in
reinvesting in manufacturing and distribution.
So in working with the EDA and how we decide to do it, when
this prospect comes and they finally choose us, we convince
them that we can deliver the site within 12 to 18 months with
all the infrastructure, the roads, we work with the State and
the county and the local governments, and we bring EDA into the
equation as part of that ongoing conversation. We tell them,
here is what we can bring, here is what we need, and they work
with us.
So the Committee has heard today that it would be nice to
be able to do some preliminary work, some advance work. That is
what I hope we will be able to do in the future.
Senator Boozman. Arkansas is a small State, we all kind of
know each other and work together. As you know, many rural
communities in Arkansas, similar to rural communities across
the United States, are losing businesses, employment
opportunities, and population. Fifty-three percent of the
counties in America lost population last census.
Many of these areas have benefited from programs that
target rural economic development, such as investment from the
EDA. The EDA is such a valuable resource for so many people who
need this help.
However, most of these communities are at a disadvantage
when applying for any grant funding because they lack the
bandwidth or expertise to submit a ``top'' application.
Can you talk about the importance of keeping this process
as simple as possible? I hope that is the theme of today, in
addition to being focused on the intent of the program.
Mr. Day. Yes, sir, thank you. Good question.
As I mentioned in my comments, we have to keep the program
simple. I will tell you, we get a lot of grants from different
Federal agencies. The EDA is easier to work with than others.
But when you go into a small, rural community, and you have
to get all the engineering done, the permitting, the cost
analysis, the benefit, and you have to implement the mandates
for the program that might be apprenticeships or resiliency or
equity, and all of those things are important, but a small
community struggles with that.
You have heard today from all of my colleagues that the
match is burdensome. If it is a million dollar project, and it
is a 20 percent match, $200,000 is hard for a small community
to get.
So as you look to reauthorize, if you can make it simpler.
I heard someone talk about a kind of a formula based incentive
instead of competitive. That might be a good approach for
certain communities.
But we do know, we have seen success in rural Arkansas, if
you have an available property, an available building, a
prospect will locate there. But for a community to have to do
all the heavy lifting on the front end, to manage the grant,
and then even after the fact, once you build it, you are not
done with the management of the grant. You have to report
annually and keep coming back.
That does create challenges for a community that has a
volunteer city council or volunteer court that has a staff of
four or five people. It is a challenge. So simple is better.
Senator Boozman. Thank you very much.
Thank you, Mr. Chairman.
Senator Carper. Thank you.
Senator Markey, thank you for coming back. You are
recognized. And after you, Senator Ricketts.
Senator Markey. Thank you, Mr. Chairman.
It is hard for some communities to even get started. Match
requirements are one reason why communities struggle to get
projects off the ground.
Ms. Cannon, how would reducing or eliminating funding match
requirements in Economic Development Administration programs
help smaller communities access these investments?
Ms. Cannon. Senator, I think it would an amazing change
that would help the smallest and most rural communities to get
access to these funds. I did some research just on the
Philadelphia regional office, because I lived in Delaware all
my life, it is what I know. So I looked, at just at the State
level compared the unemployment rate of every State and the two
territories, Puerto Rico, and Virgin Islands, that the EDA
office in Philadelphia is responsible for.
None of them would have qualified for the maximum
contribution from EDA or the maximum investment in 2004. And as
recently as April 2023, only one from a statewide perspective
would have qualified, and that would have been the United
States Virgin Islands.
So when you look at those numbers, Senator Carper had asked
us a couple of months ago to pull together a focus group in our
rural part of the State, because they were so frustrated with
EDA. Again, EDA folks are really nice, they try really hard.
But the EDA staff was frustrated that our rural community folks
did not have the capacity.
So it was kind of a chicken and egg scenario where
everybody wants to get to yes, but they couldn't get there. SO
I think that change would be dramatic.
Senator Markey. Thank you.
Aside from having cash on hand to fulfill match
requirements, there is a lot of work that has to happen before
communities are even ready to apply for grants, much less
construct and develop projects. Communities need to pay for
environmental studies, put together business plans and grant
applications, and conduct architectural and engineering work.
And all of that requires money and time.
Ms. Cannon, based on your experience working with
communities who are interested in making the most of funding
opportunities, what can help communities best prepare shovel
ready projects?
Ms. Cannon. In the State of Delaware, we were fortunate in
that that issue became a big issue. Geographically we are
relatively small. So we were able to for the last 3 years, our
Governor and our legislature approved $10 million a year in
what they call a site readiness fund. And they compete directly
for those dollars, the developers do, that have sites that they
want to get ready.
The problem is it is not enough. And it certainly isn't
enough if you try to do that across the country.
But EDA today would say, when you look at the NOFO, and you
try to find a way to get to yes, the NOFO looks like maybe they
would provide funding for that. But then when you set up the
call with the EDA regional office and your community that wants
to do it, they start asking questions, how far along are you on
the engineering, do you have this, do you have that. And the
local communities get frustrated then hang up and call us and
say, we don't think the EDA is easy to work with.
Senator Markey. I get it.
Mr. Fetzer, would funding for project pre-development and
technical assistance help communities navigate the overwhelming
number of grant programs and funding opportunities?
Mr. Fetzer. Senator Markey, absolutely. Those types of
activities that you just described in your remarks are very
consistent with Ms. Cannon's comments as well in terms of how
communities can be prepared to bring that investment.
Currently, without that eligibility, that is a barrier.
Senator Markey. That is why I am planning to reintroduce
the Local Infrastructure Funding and Technical Assistance Act,
or the LIFT Act, which would provide grants to under-resourced
communities that want to bring beneficial projects into their
communities. The funding would help cover the costs of market
assessment, business plan preparation, capacity building for
local governments and organizations, grant writing, and much
more.
Mr. Fetzer, would you agree that dedicated funding for pre-
development activities could help kickstart projects that may
otherwise never go forward?
Mr. Fetzer. Yes, Senator Markey, I would agree with that
statement. I had a similar question earlier from Senator Kelly,
and described it in some scenarios as a chicken and egg. And
this type of funding would certainly allow us to overcome that,
and allow projects to proceed.
Senator Markey. Thank you, and rural communities, urban
communities, low income communities, everyone deserves a chance
to build resilient infrastructure and benefit from these new
historic programs. We thank all of you for your work on it.
Thank you, Mr. Chairman and Ranking Member.
Senator Carper. Thank you, Senator.
Senator Ricketts, thanks for coming again and again.
Senator Ricketts. My pleasure. Thank you, Chairman Carper
and Ranking Member Capito, for calling this hearing so we can
talk about the EDA.
I want to thank our panelists for your testimony and
sharing your experiences with the EDA.
Nebraska has been a recipient of a number of these grants.
One in particular I am going to highlight has to do with Blair,
Nebraska. We received a grant through the Assistance to Nuclear
Closure Communities for over $1.5 million, which helped the
city of Blair expand its water line. And one of the things it
did when it expanded this water line was support a
biotechnology campus that produces enzymes that help us
produce--guess what, Chairman Carper? Ethanol.
[Laughter.]
Senator Capito. Wait a minute----
[Laughter.]
Senator Ricketts. You knew I was going to figure out a way
to tie this back into ethanol, didn't you? I love this
Committee, because we get to talk about ethanol.
One of the other companies on this campus, which you would
be fascinated to know about, has a unique fermentation process
that takes some of the same sugars that come out of ethanol and
produce omega-3 fatty acids, which then are fed to salmon in
fish farms, which prevents the need for going out and catching
wild fish, cutting them up and feeding to the salmon so that
they get the same omega-3. So it became much more sustainable.
A very cool way to make a sustainable way to have fish farms.
That is one of the other businesses supported on doing it.
The point is it allows smaller communities like Blair to be
able to invest and grow campuses that create great paying jobs.
These are great paying jobs that they have here. And I was just
on with my entire Nebraska delegation, we are doing a Farm Bill
tour on Monday, and heard consistently about the importance of
water infrastructure for small communities to be able to, for
example, facilitate food processing or dairy operations or
things like that.
So it is absolutely a critical thing to be able to do. I
wanted to be here today to add my sentiments to what has
already been expressed about the need to reauthorize the EDA at
fiscally responsible levels, and to preserve the ability of
local economic development decision.
With that, I yield back.
Senator Carper. Thanks, Senator Ricketts. Thanks for
bringing the perspective of a recovering Governor, at least two
of us here.
Senator Padilla, welcome.
Senator Padilla. Thank you, Mr. Chairman, and Ranking
Member Capito. I appreciate the opportunity to chime in on this
hearing as well.
Let me begin by echoing one of the items and issues that
Senator Markey raised, that is utilizing resources to assist
smaller cities, smaller jurisdictions that may not have the
capacity of larger jurisdictions in preparation and competing
for different grants and other resources. I won't be repetitive
of his questions, just want to associate myself with his
concern as a priority as well.
Separately, we often discuss loss of life and physical
damage in the aftermath of natural disasters. But we rarely
focus on the longer term economic challenges for entire
communities that can persist for months or years after a
disaster hits. This Committee has had numerous hearings and
conversations about wildfires, long term drought, flooding,
other types of extreme storms, routinely forcing shops to
close, small businesses to shut down, jobs to leave towns, and
personal savings to run dry when individuals have to dip into
their own pockets to cover insurance, and entrepreneurs, small
business owners, have to rebuild.
In times of increasingly devastating natural disasters,
EDA's mission to promote a resilient economy and address
rapidly evolving economic conditions I think must prioritize
disaster recovery. Again, not just in the aftermath, but in the
long term. That is one of the reasons I plan to introduce
legislation to establish the Office of Disaster Recovery within
the EDA. This office would be tasked with coordinating post-
disaster economic recovery initiatives and assure that we
rebuild holistically our impacted communities, beyond just
initial critical repairs.
Ms. Higgins and Mr. Fetzer, this sounds familiar to you
because in both your written and your verbal testimony earlier,
you referenced your specific recommendations for the
establishment of an EDA Office of Disaster Resilience and
Recovery. Would you just take a minute to reinforce to the
Committee why it is so important for Congress to do so?
Beginning with Ms. Higgins.
Ms. Higgins. Thank you, Senator. Having a robust role that
is codified for EDA in disaster recovery is really important.
Congress is using EDA in this role, but because we haven't
reauthorized and formalized it, it can be ad hoc, and it can
often by reactive rather than proactive.
So the idea of formalizing is really important to America's
counties for a couple of reasons. It means the agency has
institutional knowledge that carries on from one community's
experience to another. It has leadership that has led through
these difficult situations, and then quite frankly, it has good
relationships and knowledge about the communities that are
often on the receiving end of these considerations.
EDA is also very helpful because, I use the example, versus
the IDA loans in SBA, very strict, quite frankly, to apply for
one of those. During COVID, our small businesses could not meet
the requirements.
But then we have other revolving loan funds that EDA allows
to establish which are more attuned to these local businesses
that have never, ever had to have access to capital before. So
it is a great marriage between having the disaster recovery
response and the long term knowledge that EDA already has in
economic assistance.
Senator Padilla. Thank you.
Mr. Fetzer, anything to add?
Mr. Fetzer. Senator Padilla, yes, I would agree with
Commissioner Higgins' comments. Really institutionalizing it in
a way that retains that knowledge and the ability to be, again,
proactive and not a lagging response when communities are most
in need would be quite valuable.
Senator Padilla. Great.
I want to make sure I am clear that our main streets, our
commercial corridors and business districts, especially in
smaller jurisdictions, need our ongoing attention, not just in
the aftermath of a disaster. In the last Congress, Senator
Wicker and I introduced the Revitalizing Small and Local
Businesses Act, which would provide resources for non-profit
organizations to also provide operating support, technical
assistance, and training to networks of business district
organizations working on the ground in underserved and rural
communities as well as urban neighborhoods.
Ms. Higgins, how do partnerships with local organizations
and larger non-profit organizations strengthen EDA's efforts to
serve these business districts?
Ms. Higgins. I will give you one example. We have a great
EDA grant that is working to enable folks from low wage jobs to
get into high paying tech jobs. But when you are transferring
people from the service economy into middle class and higher
paying jobs, that transition is just not you take a class and
get certified in this. Folks have trouble getting to work. They
may need social services or supportive services about how to
transition into a more professional style of work force.
So in our EDA grant, we actually have non-profit partners
that are providing those wraparound services for one entire
year after the person gets their first high paying job, to make
sure that it is a long term success. We want people lifted out
of poverty with EDA assistance. We want them to stay out of
poverty, not falling back because this is their first time in a
different sort of workplace.
Senator Padilla. Thank you very much.
Thank you, Mr. Chair.
Senator Carper. You bet. Thanks so much for joining us.
Senator Capito.
Senator Capito. Thank you, Mr. Chairman.
I thank all of you.
I just have one final question for the panel. EDA
investment priorities, which are used as a criterion in
reviewing project applications, can change from Administration
to Administration. For example, the Biden administration
removed critical infrastructure and opportunity zones as
priorities, while equity and environmentally sustainable
development were added. It seems to me that Congress should
provide some stability here.
So we will start with you, Ms. Cannon. Do you have any
light to shed on that particular issue?
Ms. Cannon. I will pause for a moment, because obviously, I
led the State of Delaware's effort on opportunity zones when
that was first passed. I think that the biggest concern most of
us who were involved in opportunity zones had was that the
original intent was to really get the funds invested in those
really distressed communities.
Senator Capito. Right.
Ms. Cannon. And what ended up happening or what it appears
to have happened was really rich people that were going to
build a hotel in a really upscale neighborhood----
Senator Capito. The same thing happened in our State.
Ms. Cannon. Right. It happened everywhere. But I think the
spirit of the opportunity zone was good. I would hope that we
go back to looking at a census tract level, to Mr. Padilla's
comment about the main street corridors.
The biggest challenge I think when EDA is looking at their
objectives is that you might have a little pocket community
that just had a plant shut down or just had something horrible
happen, but they are surrounded by a neighborhood, a census
tract next door that is doing really well. So as a standalone
census tract with 5,000 or 8,000 people, sometimes they can't
get the help they need.
So yes, I think having Congress put some stability into
that, that if in fact an economic development office in a
State, in a county, in a community builds around that objective
that that objective doesn't change.
Senator Capito. Mr. Fetzer, do you have any comments?
Mr. Fetzer. Senator Capito, I believe that some of those
considerations that you mentioned are important. But the
predictability because of the needs of communities,
particularly rural, small communities, those needs don't change
over time. They are foundational to building a strong, economic
ecosystem so that you can attract and retain business.
So those things are important. But they could also become a
distraction from pursuing the investments that our communities
need.
Senator Capito. So basically, the way I am interpreting
your answer here, is the core functions have to remain the
same, or the core decisionmaking has to revolve around the same
core principles from Administration to Administration. You
could add things on maybe as things go around. But I am
thinking, as we are looking at a reauthorization, I am not sure
how specific we would want to be, but we have got to have the
core functions remain the same.
Am I interpreting that correctly?
Mr. Fetzer. I would agree. There is regulatory flexibility,
too, within EDA that helps to address changes over time.
Senator Capito. Right. So keep that.
Ms. Higgins, do you have a comment on that?
Ms. Higgins. We had a similar situation with opportunity
zones as Ms. Cannon had. I think opportunity zones locked us
into an actual place versus economic development opportunities,
which can occur in a different piece of property, but still
aptly serve people who are in need of routes to prosperity and
better jobs.
I think predictability matters. It certainly matters for
these smaller counties. If they have managed to apply once, why
the heck do you want to make it so complicated to apply a
second time? But even a big county like mine, with the pre-
development on these sites which can take 2 years, if 4 years
later the rules are changed, we may have the resources to do
our pre-development in the way that rural counties may not. But
then we might not qualify for something in the long run.
So some consistency is always a good thing.
Senator Capito. Mr. Graney.
Mr. Graney. I think these guys are the pros. I have only
been doing this for 4 years. I can't add to what they have
said.
Senator Capito. All right.
Mr. Day.
Mr. Day. Yes, Senator, I agree. I think that the change in
priorities, changing requirements, changing programs from
Administration to Administration makes it a burden on
communities. Not everyone can do it. It is a federalism at its
finest. The program works well. Let's keep it simple, let's
keep it streamlined, let's focus on the creation of jobs and
not put those other requirements every 4 years, every 8 years,
into the program.
It is a team sport, it is a long sport, and it takes a lot
of time to get there. Thank you.
Senator Capito. Thank you.
My final comment, Mr. Chairman, is Mr. Graney mentioned
Tracey Rowan, who is in our West Virginia EDA. What a
difference she makes. Having that right resource that is paying
attention to your State, and in our lucky case, our State
alone, and her consistency and knowledge, has been incredible.
So I want to give a shout out to our rock star, Tracey Rowan at
the EDA. She is fantastic.
Senator Carper. Thank you so much for that. She doesn't
just say this at a hearing.
Senator Capito. I don't say that about you--oh, just
kidding.
[Laughter.]
Senator Carper. She doesn't just brag on the EDA's point
person in West Virginia in a hearing, she says it regularly. We
are blessed in our region as well.
We have been joined by Senator Dan Sullivan from the great
State of Alaska.
Go right ahead.
Senator Sullivan. Thank you, Mr. Chairman.
I want to thank the witnesses.
I have just really one basic question to get your insights,
to all the witnesses. It is really actually reflective of the
title of the hearing, which is getting State and local
perspectives. In Alaska, we are often subject, and I think most
States feel this way, where the Federal Government is about
5,000 miles away from my State, and they often don't understand
us. And then they come up with one size fits all approaches to
policy and economic development that was crafted here. And of
course, it just doesn't work in my State.
I am assuming that all of you have had similar experiences.
Maybe I can just start with the basic question of, when we are
looking at the reauthorization process now, which is a good
opportunity, to instill the value of preserving locally driven
economic development decisions and making sure EDA does not
become kind of an entity that is a Washington, DC, bureaucracy
that directs everybody.
So how do we ensure that locally driven economic
development decisions as a key component of EDA, and I am
assuming you guys all think that is important, so Mr. Day, why
don't we start with you and go down the line.
Mr. Day. Thank you, Senator. I do think that every
community is different, and every community knows what is best
for them. So as you draft the reauthorization, you look at the
programs, try to preserve the ability for that community to
present a project or implement a program that meets their
needs. Because what works in Alaska might not work in Arkansas,
might not work on the East Coast.
I am not quite sure how you do that in the programmatic
drafting of the bill. But don't lose sight of local communities
know best for them.
Senator Sullivan. And your point, in Arkansas there might
be a real emphasis on one area of your economy that we don't
even have in Alaska and vice versa.
Mr. Day. That is true, yes, sir.
Senator Sullivan. Good.
Mr. Graney. Senator, I would agree with everything he just
said. I think it is critically important to keep the local
flavor. And Alaska is different from West Virginia; West
Virginia is different from Arkansas and Miami-Dade County.
Senator Sullivan. Do you think that a current EDA approach
has enough of that local flavor, or is it getting too
centralized in Washington?
Mr. Graney. I have only been in this role for about 4 and a
half years, but it has been my impression that it does have
that local flavor currently.
Senator Sullivan. Ok. Good.
Ms. Higgins. Senator, I think I agree. Mr. Graney said it
well: There is a lot of ability, and from the examples we have
shared here, we are all from different places, that how we are
implementing in different counties and different States,
economic development, EDA has been able to help us fund.
But I think one of the themes you have heard us talk about
today is that there are places that remain locked out of
getting this funding and the match requirements have been rigid
enough, particularly for some smaller places. Good projects,
and remember, we talk about locking projects and places out of
economic opportunity. We are actually locking people out of
that option.
So I think in this reauthorization, looking at making sure
those matching requirements are not stopping development in
places that really need it is a way to make EDA even more
responsive and responsible for these locally developed
initiatives.
Senator Sullivan. Good, thank you.
Mr. Fetzer. Senator Sullivan, in terms of the matching fund
burden requirements, I am in full agreement that we need to
reduce those.
Senator Sullivan. I don't even know what it is right now.
What is the typical match?
Mr. Fetzer. Well, it can be as much as 50 percent in some
cases. But it depends. That is probably the best answer.
Senator Sullivan. And is it dependent upon ability to pay?
Mr. Fetzer. It is not dependent on ability to pay, it is
based on distress factors. That is one of the things that many
of us have touched on in our testimony here today, is that the
needs or the merits of projects may not have a direct
relationship with the ability of that jurisdiction to pay
match. But the need is great.
Senator Sullivan. So you think that is a reform that is
recommended?
Mr. Fetzer. Correct. I would also speak to the planning
process, because there have been numerous references to locally
driven solutions. And while EDA has a requirement for each
economic development district to create a comprehensive
economic development strategy known as the CEDS, the CEDS, if
it is done right within a region, is all about locally driven
solutions in response to what is different between Alaska and
Arizona and Massachusetts can be accounted for in those
planning processes, so that we can identify what the most
important needs are and how to grow local economies. And if we
do it right, too, we are using a robust engagement process with
stakeholders to really understand their needs.
Senator Sullivan. Good. Great. Thank you.
Ms. Cannon. Great question, Senator. I will say this, that
I have a minor in psychology, which makes me dangerous because
I think I know things. But I will tell you that my perspective
of EDA and how they implement is that they implement from a
utilitarian perspective. They want to do the greatest good for
the greatest number of people.
The tech hub solicitation or NOFO that is out now is
saying, and they told us specifically, don't apply as a State.
We want you to be regional. We want you to be able to say, we
touch this many people in this many geographic territories.
While that is noble in some respect to say for every public
dollar we invested we touched the greatest number of
communities and the greatest number of people, the reality is
that some of the people with the greatest need will never get
the opportunity to participate in EDA funding because they
can't meet the match, they can't meet the eligibility criteria.
So I am a firm believer, I used to be the executive
director of the Delaware Workforce Board, I am an active member
now, I firmly believe that every community across this country
has an active local and State board that lives under the U.S.
Department of Labor Regulations. They meet regularly. The 50
percent membership has to be from the private sector who are
creating those jobs. They have to have ultimate hiring and
decisionmaking authority and policy setting authority. I think
there are ways to help EDA find the right balance.
Again, to some degree, there is real value in the
utilitarian approach. But I would hope, I can tell you right
now, I have three little communities that will never qualify
under EDA standards for the match, for the eligibility. But the
need is great. And I don't know how to help them in the absence
of some of those changes.
So we are hoping that that happens through reauthorization.
Senator Sullivan. Great. Thank you. Those are great
answers.
Thank you, Mr. Chairman.
Senator Carper. Thank you. Senator Sullivan, thanks so much
for joining us.
Senator Sullivan raised the issue that led us to talking
about CEDS, which is Comprehensive Economic Development
Strategy. For years, we couldn't understand why we couldn't get
to first base on economic development, EDA support. It turns
out we were not providing and updating on a regular basis a
comprehensive economic development strategy.
Do you have any idea of other States that are guilty of not
providing an updated CEDS on a regular basis? Does anybody
know? That seems like, in terms of an admission to actually
making progress and getting support from the EDA, you have to
have a CEDS. Do you believe that most States do that? Does
anybody know?
Ms. Higgins. I may not know, Senator, about the States,
because at least in our State, we have several regions that
have to create them.
But Mr. Fetzer highlighted this very clearly. Right now for
smaller communities, some of the EDDs that develop the CEDS are
huge geographically. And the $70,000 to $75,000 that is
currently allowed, it doesn't matter where you live, that does
not cover the cost of one full time employee, to get into these
things.
So I would say they may, even if they are complying, they
don't have the staffing because of that level of funding to
make sure that it is adequate, it is up to date, and it is
inspiring to attract economic development in some areas.
Senator Carper. OK.
Patty, did you want to say something?
Ms. Cannon. Yes. I can tell you that if you submit an
application----
Senator Carper. Who is you? If you submit, if you submit--
you said if you submit----
Ms. Cannon. If anybody submits an application----
Senator Carper. Well, not anybody can submit. When you say
you, who are you talking about?
Ms. Cannon. An eligible entity.
Senator Carper. Thank you.
Ms. Cannon. I am so sorry, sir. An eligible entity submits
an application to EDA. The first thing they will do is look to
see if you have an active CEDS. If you do not, it doesn't go
any further.
Maybe that is an important criteria to try to encourage
States and communities. But I think Ms. Higgins makes a great
point in that Delaware geographically and demographically is
small. So the people who get involved in writing the CEDS
generally all know each other. The larger the State, the less
likely that is to be true.
So that is the other reason that I firmly believe that
while the CEDS is a nice thing to have every 5 years and to
have to synch it together with stakeholders and say, what do we
envision our State to look like over the next 5 years, I still
think the State and local boards, the work force boards, are
where the rubber meets the road in most of our communities.
Senator Carper. All right. Thanks for that.
When I was Governor, I had the opportunity to participate
in the National Governors Association. And I remember us
petitioning, at that time I think it was the Clinton
administration, then later the Bush administration, for Federal
support. There was always a question about how, what would be
an appropriate balance of Federal support as opposed to State
and local support.
One of the things I learned early on, rather than just
giving money to States, you have to have some skin in the game.
I think there is a balance here between making sure that we are
providing the money where it is most needed and can be put to
best use, but also make sure that there is skin in the game. If
there is not, then sometimes we don't spend the moneys wisely
as otherwise we should.
I have a follow up question on climate resilience for Ms.
Higgins. The EDA's public works program helps distressed
communities upgrade and build physical infrastructure, as you
know. Due to the climate crisis, low lying places like Miami-
Dade County and my own State of Delaware, in Maryland and other
coastal States, are under threat due to rising sea levels and
an increased frequency of extreme weather events that we see
all too often.
Commissioner Higgins, do you think there are opportunities
for EDA to maybe do more to incorporate climate resiliency into
its public works program?
Ms. Higgins. I certainly think it should be considered.
This would be another case where perhaps EDA can collaborate
with other programs that exist. For example, in the
Infrastructure Investment and Jobs Act, there is funding
available for example for raising off system bridges to be more
accommodating to rising seas, to looking at improvements that
make not just coastal communities but communities across
America less vulnerable to things like flooding.
So yes, public works right now, we should be thinking, and
I believe every local community is thinking about what do we
need to be building to make sure our communities are more
resilient in the face of a changing climate and in the face of
a changing work force and economic conditions. Resiliency, I
can't think of a single county in Florida that doesn't have
resiliency as a top priority, from the largest one in mine,
Miami-Dade County, to our most rural counties in Florida.
Senator Carper. All right, thank you.
My sister and I were born in a coal mining town, as Senator
Capito knows, born in a coal mining town called Beckley, about
70, 80 miles south of Charleston. Our grandparents' neighbors
were coal miners. I remember my sister and I as little kids
being at our grandparents' house.
Mr. Meadows, who was their neighbor, would come home late
afternoon from mining coal, his face black with soot. He would
clean up and go out and milk his cow. I still remember, he
would invite my sister and I to come and help him milk his cow.
We were just little kids. Then we would get to drink some of
the milk. It is a memory I will always cherish. I think my
sister does, too.
My grandfather was a butcher. He was not just a butcher at
Patton's Market in Beckley, but before that he was a butcher at
a general store that was owned by a coal mining company. And
the coal mining company, in the next region, next to where my
grandfather was a butcher, the butcher there was Robert Byrd,
who went on to become the most elected Senator in the history
of the country. So you never know where those butchers are
going to go.
So I have an interest and concern about coal mining. West
Virginia has been part of who I am all of my life.
Having said that, the State that I live in now is a State
where, as my colleagues have heard me say probably too often,
we are the lowest lying State in the country, as Patty Cannon
knows, the lowest lying State. My State is sinking; the seas
around us are rising.
That is not a good thing, when one of the top two
industries in your State is tourism. One of the reasons why
people flock to Delaware is because we have more five star
beaches than any other State in the country.
So the ability to actually how do we address climate
change, how do we do that in a way to increase jobs, as it
turns out, there are a ton of jobs that are being created off
of our shores. Senator Cardin mentioned it, he said, in
Maryland we are looking at offshore wind. They are not just
looking at offshore wind, we are deploying offshore windmill
farms off of Rhode Island all the way down to Maryland. And we
are doing it by putting thousands of people to work in good
paying jobs, a lot of jobs created just in building the wind
turbines that are being deployed.
But as we do all that, I mentioned some of the factors that
drive economic development that I learned a long time ago when
I was a youngster working at the Division of Economic
Development, I did not mention the cost of power. That is a
hugely important element in a lot of industries and a lot of
job creation.
One of the places we have learned how to address, create
power fairly cheaply, is wind and solar. In the meantime, the
question is what we do with all the people who are displaced,
like folks who work in fossil fuel industries. I think we have
a moral obligation to look after them as well.
In our State, I hope we are taking that moral obligation
seriously. I know they are in West Virginia.
I said earlier I wanted to telegraph my pitch. The pitch I
want to telegraph is to ask this last question. Where do you
think there is consensus here, maybe important consensus?
Senator Sullivan and I spent a lot of years in the military, he
is a retired Marine colonel, I am a retired Navy captain. We
were in a lot of training in the Navy, most people think you
graduate from high school or college, you go into the military
and you never have any more training. No, you train and train
all the time.
In the Navy, we would have to take tests and so forth. Our
instructors would stomp their foot, literally, and say, these
are some things that are going to be on the test. And they
would not always say, this is going to be on the test, but they
would stomp their foot. This is a chance for you to stomp your
feet and to tell us what is going to be on the test, for if we
take out nothing else from here, at the end of this hearing,
what are one or two really important things. Just very crisply
and succinctly.
Patty, would you lead us off, please?
Ms. Cannon. Thank you, sir. So you just want one item?
Senator Carper. Just give us one.
Ms. Cannon. One item is let's fix that match. I don't know
what that fix looks like, but I think we need to fix that
match.
Senator Carper. Thank you.
Mr. Fetzer.
Mr. Fetzer. Thank you, Chairman Carper. I really do
appreciate the dialogue that we have had with the Committee
today. I think first and foremost would be increasing the
investment in EDA's core programs, like Partnership Planning.
Senator Carper. All right, thank you.
Ms. Higgins.
Ms. Higgins. First and foremost, reauthorize the EDA.
Because all of these reforms cannot happen and modernization if
that does not occur. And I think all the ideas and all the
examples you have seen here, but also some of the challenges we
face can be addressed if we have a modern reauthorization that
helps with match, that helps with access, that helps with the
different sorts of projects and work force that didn't exist
when it was reauthorized last.
Senator Carper. Good. Thank you for that.
Mr. Graney.
Mr. Graney. Fix the match, however that is appropriate to
do. Keep it simple and keep making it a little more flexible,
have it address other needs.
Senator Carper. In the Navy we had something called the
KISS, Keep It Simple Stupid.
[Laughter.]
Senator Carper. Mr. Day.
Mr. Day. I agree with all that has been said, Senator. I
would add that, allow local communities the ability to grow
their own, build their capacity for future economic development
through the creation of shovel ready sites.
Senator Carper. Thanks.
Senator Capito, any last words?
Senator Capito. Thank you all very much. It was terrific.
We have a vote, and so I am going to be slipping out. Thank
you very much.
Senator Carper. Thank you very much.
Our thanks to our staffs as well.
Maybe one last thought. I talked about a moral obligation.
People ask me what I like most about my job. I like helping
people. And I think if you ask Senator Capito or anybody else
who serves on this Committee, they would pretty much say the
same thing, we love helping people.
One of the best ways you can help somebody is make sure
they have a job, and make sure they have a job so they can
support themselves and their families and be a contributing
member of our society. There are a lot of different ways we
make that happen. One of the important ways is through an
entity we call the Economic Development Administration.
As I said early on, everything I do I know I can do better.
Clearly, you have all come up with some ideas how the Federal
Government can meet its obligations and opportunities better by
making some changes within the EDA. And you have given us
plenty to think about.
The other thing I want to say is thank you for what you do
with your lives. I hope your work gives you as much joy as mine
has given me for all these years. But if we don't have jobs,
people who don't go to work and support themselves and their
families, at the end of the day, we don't have much. It is just
critically important stuff.
The last thing is, not that you would know this, this is a
Committee that actually works well together. We are a Committee
that believes that bipartisan solutions generally are lasting
solutions. So that is where we work, whether it is bipartisan
infrastructure legislation, water, roads, highways, bridges,
you name it, clean air, we try to do as much work across the
aisle as much as we can to get things done. There are a lot of
instances that not only do good things for the planet, but
actually create economic opportunities and jobs for people to
go to.
So with that, I would say in closing, I have some
boilerplate stuff I have to read so we will be in good shape
here. I want to thank all of you for joining us today. We have
to do some housekeeping.
Senators will be allowed to submit written questions for
the record by close of business on Wednesday, July 12th. We
will compile those questions and send them to you, to our
witnesses. We are going to ask you to try to reply to us by
Wednesday, July 26th.
Again, I just want to say to our staffs who have worked
diligently to pull all of you together and to make sure this
was a meaningful hearing and a productive hearing, our thanks
to all of them.
With that, it is a wrap. This hearing is adjourned.
[Whereupon, at 11:58 a.m., the hearing was adjourned.]
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