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35–918 PDF 2007

THE SOUTHEAST CRESCENT AUTHORITY, THE NORTHERN BORDER ECONOMIC DEVELOPMENT COMMISSION, AND SOUTHWEST REGIONAL

BORDER AUTHORITY

(110–36)

HEARING

BEFORE THE

SUBCOMMITTEE ON 

ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS AND 

EMERGENCY MANAGEMENT

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

MAY 3, 2007

Printed for the use of the 

Committee on Transportation and Infrastructure

(

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JAMES L. OBERSTAR, Minnesota, Chairman 

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

GENE TAYLOR, Mississippi 

ELIJAH E. CUMMINGS, Maryland 

ELLEN O. TAUSCHER, California 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

JULIA CARSON, Indiana 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

BRIAN HIGGINS, New York 

RUSS CARNAHAN, Missouri 

JOHN T. SALAZAR, Colorado 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

DORIS O. MATSUI, California 

NICK LAMPSON, Texas 

ZACHARY T. SPACE, Ohio 

MAZIE K. HIRONO, Hawaii 

BRUCE L. BRALEY, Iowa 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ACURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

JERRY MCNERNEY, California 

VACANCY 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

WAYNE T. GILCHREST, Maryland 

VERNON J. EHLERS, Michigan 

STEVEN C. LATOURETTE, Ohio 

RICHARD H. BAKER, Louisiana 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

ROBIN HAYES, North Carolina 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

TED POE, Texas 

DAVID G. REICHERT, Washington 

CONNIE MACK, Florida 

JOHN R. ‘RANDY’ KUHL, JR., New York 

LYNN A WESTMORELAND, Georgia 

CHARLES W. BOUSTANY, JR., Louisiana 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

THELMA D. DRAKE, Virginia 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

(II)

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS AND EMERGENCY

MANAGEMENT

ELEANOR HOLMES NORTON, District of Columbia, Chairwoman 

MICHAEL H. MICHAUD, Maine 

JASON ALTMIRE, Pennsylvania 

MICHAEL A. ARCURI, New York 

CHRISTOPHER P. CARNEY, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

STEVE COHEN, Tennessee 

JAMES L. OBERSTAR, Minnesota 

(Ex Officio) 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

CHARLES W. DENT, Pennsylvania 

JOHN R. ‘RANDY’ KUHL, JR., New York 

JOHN L. MICA, Florida 

(Ex Officio) 

(III)

(V)

CONTENTS Page

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

TESTIMONY 

Butterfield, Hon. G.K., a Representative in Congress from the State of North 

Carolina ................................................................................................................ 12

Cuellar, Hon. Henry, a Representative in Congress from the State of Texas .... 21

Dole, Hon. Elizabeth, Senator from the State of North Carolina in the United 

States Senate ........................................................................................................ 12

Filner, Hon. Bob, a Representative in Congress from the State of California ... 21

Hayes, Hon. Robin, a Representative in Congress from the State of North 

Carolina ................................................................................................................ 12

Hinojosa, Hon. Ruben, a Representative in Congress from the State of Texas . 21

Hodes, Hon. Paul W., a Representative in Congress from the State of New 

Hampshire ............................................................................................................ 5

McIntyre, Hon. Mike, a Representative in Congress from the State of North 

Carolina ................................................................................................................ 12

Reyes, Hon. Silvestre, a Representative in Congress from the State of Texas .. 21

Rodriguez, Hon. Ciro D., a Representative in Congress from the State of 

Texas ..................................................................................................................... 21

Welch, Hon. Peter, a Representative in Congress from the State of Vermont ... 5

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Altmire, Hon. Jason, of Pennsylvania .................................................................... 30

Arcuri, Hon. Michael A., of New York ................................................................... 31

Butterfield, Hon. G.K., of North Carolina ............................................................. 37

Cohen, Hon. Steve, of Tennessee ............................................................................ 33

Cuellar, Hon. Henry, of Texas ................................................................................ 39

Dole, Senator Elizabeth, of North Carolina ........................................................... 40

Hayes, Hon. Robin, of North Carolina ................................................................... 43

Hinojosa, Hon. Ruben, of Texas .............................................................................. 44

Hodes, Hon. Paul, of New Hampshire ................................................................... 46

McHugh, Hon. John M., of New York .................................................................... 60

McIntyre, Hon. Mike, of North Carolina ............................................................... 63

Michaud, Hon. Michael H., of Maine ..................................................................... 34

Reyes, Hon. Silvestre, of Texas .............................................................................. 66

Rodriguez, Hon. Ciro D., of Texas .......................................................................... 68

Welch, Hon. Peter, of Vermont ............................................................................... 70

SUBMISSIONS FOR THE RECORD 

Hodes, Hon. Paul W., a Representative in Congress from the State of New 

Hampshire, letter from the Northern Forest Center ........................................ 51

vi


35918.001
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35918.002
viii


35918.003
ix


35918.004
x


35918.005
(1)

HEARING ON THE SOUTHEAST CRESCENT AUTHORITY, THE NORTHERN BORDER ECONOMIC DEVELOPMENT COMMISSION, AND 

THE SOUTHWEST REGIONAL BORDER AUTHORITY 

Thursday, May 3, 2007

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC

BUILDINGS AND EMERGENCY MANAGEMENT, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:13 a.m., in Room 

2167, Rayburn House Office Building, the Honorable Eleanor 

Holmes Norton [chairwoman of the subcommittee] presiding. 

Ms. NORTON. I want to welcome today’s witnesses and say good 

morning to all of you. It is my privilege to welcome Members of 

Congress to testify before the Subcommittee this morning on economic development and the elimination of poverty. I have only 

brief opening remarks because the Subcommittee appreciates and 

values the additional information and the very valuable time of the 

Members who will provide testimony following our own hearing on 

this very issue in July, 2006, concerning regional economic development initiatives. 

I especially want to acknowledge the efforts of Mr. Michaud, Mr. 

Hodes, and Mr. McIntyre and to commend you for your perseverance and dedication to pursue legislation you believe is vital and 

necessary for your region. We appreciate the time and energy you 

have invested in efforts to address poverty in your regions. For the 

Members new to the effort, we welcome your participation and will 

draw on your insights to help move these initiatives forward. 

In these times of severe budget constraints, we are mindful of 

the need to avoid redundancy and duplication in programs, and of 

the importance of targeting scarce resources in areas that will 

bring the highest investment return. We are very interested in 

hearing from Members about how your initiative fits into these 

concerns as well. 

We thank each of you for coming this morning, and we offer a 

special welcome to Senator Elizabeth Dole, who we believe will join 

us later. We look forward to hearing testimony from all of today’s 

witnesses. I am pleased to say to the Ranking Member, everybody 

take note, the Ranking Member has been totally feminized here, 

we appreciate that Mrs. Capito has come in for Mr. Graves, whose 

2

grandmother died. I know he would have wanted to be here to hear 

the Members. We very much appreciate her coming in his stead. 

Mrs. Capito. 

Mrs. CAPITO. Thank you, Madam Chair. I wish to extend my condolences to Mr. Graves on the death of his grandmother. I know 

that he wishes he could be here today to hear the testimony. 

I just briefly want to thank you for holding the hearing. And I 

also want to thank the distinguished panels of witnesses for taking 

the time out of their very busy schedules today. You will be providing testimony on the proposed regional economic development 

initiatives for the southeast, southwest, and northern border. Areas 

in these regions have high unemployment, low per capita income, 

and lack necessary infrastructure. 

Over the past couple of years, there has been increasing interest 

in creating regional economic development authorities to spur economic development in these areas. As a Member of Congress from 

West Virginia, I have great experience with one such commission, 

that being the Appalachian Regional Commission, which covers all 

55 counties of my State of West Virginia. Interestingly enough, 

during the past five years, three counties of my 18 counties have 

been removed from the ARC’s list of economically distressed counties, and one has jumped to the competitive category. 

I have seen first-hand what the ARC has done in my district, 

what it has done for the region, and it has had a long-standing history of success and great help for local economic development authorities. So I am very familiar with that. 

I look forward to everybody’s testimony. I thank the gentlemen 

for coming today. Thank you. 

Ms. NORTON. Other members who have statements to make? Mr. 

Michaud. 

Mr. MICHAUD. Thank you very much, Madam Chairwoman. I 

want to thank both you and the Ranking Member for holding this 

hearing. Chairwoman Norton, you have been an incredible advocate for economic development and for helping regions that are 

struggling, and on behalf of one such region, I want to thank you 

very much. 

I also want to recognize our colleagues here today. Mr. Hodes, 

Mr. Welch, and Mr. McHugh, who will not be able to make it today 

but I would ask, Madam Chair, that we ask unanimous consent 

that Mr. McHugh’s testimony be inserted in the record. 

Ms. NORTON. Without objection, so ordered. 

Mr. MICHAUD. The work of these colleagues and the work of their 

staffs has been invaluable in developing this legislation. They are 

truly dedicated to helping improve the economy in our region. 

I first lead a group of bipartisan cosponsors three years ago in 

developing this bill, and I especially want to commend Mr. Hodes, 

who has shown extraordinary leadership in heading up our group 

on this legislation in this Congress, as well as Mr. Welch. 

Madam Chairwoman, for 40 years the ARC has shown us an effective way to address regional economic distress. A small Federal 

investment in that region is going a long way towards creating 

jobs, infrastructure, business opportunities, and hope for the future. 

3

In the northern border region, we have seen a clear, persistent 

pattern of economic distress, with a lost of natural resource-based 

industries, the loss of jobs, and aging and crumbling infrastructure. 

If you look at the 28 counties in this bill that lie on the border or 

right next to the border between Maine and New York, you will 

find poverty above the national average, median household income 

that is $7500 below the national average, persistent unemployment 

that is consistently higher than the rest of the country, and most 

striking of all, a loss of almost 1 percent of the population between 

1990 and 2000, compared to 13 percent growth nationally over the 

same period. 

Clearly, this region has a compelling need for new investment. 

As we have heard in testimony before in this Subcommittee, 

most recently on January 23rd of this year, the regional commissions are an extremely valuable tool for promoting economic development. They can help us address the unique challenges of different regions without duplicating other Federal programs. I think 

the testimony we will hear today, and that we did hear on July 

10th of last year, will show that the northern border region has a 

real need and that a regional commission can help us tremendously. A regional commission can help us invest in transportation, 

health care, agriculture, broadband, and alternative energy. It can 

help us create jobs for the long term. 

Our region has all of the ingredients we need to face our challenges head-on and make ourselves an economic engine. A regional 

commission would bring us the resources and leadership we need 

to make a fundamental change in our future. 

In closing, Madame Chairwoman, I can say from personal experience that this commission is sorely needed. Like my father and my 

grandfather before me, I worked at Great Northern Paper Company in East Millinocket. Two days after I was elected and sworn 

in to Congress, the mill filed bankruptcy and closed its doors. It 

devastated the community. The story that I tell is not unfamiliar 

to other areas in the State of Maine that have had this happen to 

them as well. That is why this bill has the strong bipartisan support of our group of cosponsors. It also has the united support of 

economic development district directors, local NGOs, and major 

conservation groups. 

We need the kind of leadership and investment that a regional 

commission can bring, to make sure that instead of more mills closing, we can get onto a path of new jobs, new industry, where young 

people can stay, build, and live in the region where they were born. 

I look forward to hearing the testimony of the witnesses and to 

moving forward with this legislation to improve the lives of the 

people who live in the northern border region. With that, I yield 

back, Madam Chairwoman. 

Ms. NORTON. Thank you, Mr. Michaud. 

Are there any other opening statements? Mr. Arcuri. 

Mr. ARCURI. Thank you, Madam Chair. I would like to thank the 

Chairwoman and the Ranking Member for holding this hearing. 

Also, Mr. Hodes, Mr. Welch, thank you very much for your leadership, and Mr. Michaud, thank you very much for your leadership 

on this bill as well. It is a very important piece of legislation that 

I think will greatly benefit the region. 

4

I am proud to join the chorus of supporters here today as an 

original cosponsor of H.R. 1548, the Northern Border Economic Development Commission Act of 2007. This bipartisan legislation 

would be incredibly beneficial to the region by assessing and addressing the very specific needs, assets, and challenges of the region as a whole. The commission would create a Federal-State partnership where local development districts and other non-profits 

bring projects, ideas, and priorities to the commission from the 

local level to promote economic development through the planning, 

technical assistance, and funding of projects aimed at encouraging 

economic prosperity, specifically by providing grants for local transportation, infrastructure projects, broadband development, alternative energy projects, agricultural development, and health care 

facilities. 

Most importantly, this legislation is modeled after the very successful Appalachian Regional Commission approach, an idea conceived by the distinguished full Committee Chair, Mr. Oberstar, 

when he was a staffer on this very Committee over 40 years ago. 

Simply put, the numbers speak for themselves. Since its creation, 

the ARC has reduced the number of distressed counties in its region from 210 to 100, cut the poverty rate from 31 percent to 15 

percent, and helped 1,400 businesses create 2,600 new jobs. 

Speaking from personal experience, six counties in my upstate 

New York district have experienced similar success. The Village of 

Sherburne, New York, in Chenango County is a great example of 

how a small ARC award granted to them was extremely helpful in 

leveraging additional funds from State, local, and private sources 

for economic development initiatives that create jobs. A $200,000 

grant from ARC for the enhancement of aging water infrastructure 

in Sherburne, a problem that is plaguing many of the States in the 

northeast, was able to leverage close to $4 million dollars in State, 

local, community investment. By providing enhanced infrastructure 

capabilities, Sherburne, New York, has become a home for a number of new businesses in the area and continues to attract new investment. 

The Northern Border Economic Development Commission not 

only will extend similar benefits to economically distressed counties 

in Maine, New Hampshire, and Vermont, but will also allow upstate New York counties like Oneida, Herkimer, Cayuga, and Seneca to enjoy the same benefits their neighboring counties in the 

southern tier of New York enjoy under the Appalachian Regional 

Commission. 

Over the last several decades, upstate New York has had a consistent pattern of economic distress as a result of substantial losses 

in the manufacturing sector coupled with the aging infrastructure 

and lack of opportunities for a skilled workforce. My district alone 

has seen a staggering loss of more than 14,000 manufacturing jobs 

between 2000 and 2005. This has been devastating to our local 

communities. However, this is not an anomaly, it is extremely 

characteristic of several States in the northeast. A targeted regional approach like the one created by this bill can help bring economic vitality to a region in dire need. 

Madam Chair, I look forward to working together with my colleagues on both sides of the aisle to expedite the consideration of 

5

this bill before the Subcommittee and the full Committee. I thank 

you, and I yield back the balance of my time. 

Ms. NORTON. I want to thank both of these members. Your remarks I think have been tantamount to testimony that helps the 

Committee to understand why this bill and these regions are so important because of the kind of approach we have taken through 

this effort. We are fortunate to have with us the architect of all of 

this. I am very pleased that the Chairman of the Committee has 

joined us and would ask him if he would say a few words of opening remarks at this time. 

Mr. OBERSTAR. Madam Chair, your opening statement is right on 

target. You have framed the issue. We need to proceed with this 

hearing. We need to proceed with this legislation. It has broad bipartisan support. This is legislation that is in the best tradition of 

what we do on this Committee, and that is provide jobs, growth, 

mobility, economic development. 

But as we enter this hearing and move toward reporting this legislation from Committee in the near future, I am reminded of the 

report of the Chair and Co-Chair of the Appalachian Regional Commission about 20 years ago. It said, ‘‘Halfway home and a long way 

to go.’’ You cannot overturn 100 years of decline in 5, 10, 15, or 20 

years. It takes long-term investment and partnerships, and that is 

what this legislation creates the opportunity to do, as we have done 

with the Appalachian Regional Commission, to deal with the 

underpinnings—the need for infrastructure investment, the backbone road system, water and sewer and sewage treatment facilities, 

and then move to the vocational education centers, and then to the 

health clinics, and then to the industrial parks, and then the airports, the rail sidings. All that are needed to create the 

underpinnings for growth. ‘‘If the public sector does its part,’’ as 

Adam Smith said 200 years ago, ‘‘then the private sector can do its 

part.’’ Thank you. 

Ms. NORTON. Thank you very much, Mr. Chairman. 

I am very pleased to welcome the first two Members who will 

testify. Representative Paul Hodes of New Hampshire’s District 2, 

and Representative Peter Welch, a Vermont Member at Large. 

Which of you would like to proceed first? 

Mr. HODES. I am happy to begin, Madam Chair. 

Ms. NORTON. Are you both new Members of Congress? 

Mr. HODES. We are both. 

Ms. NORTON. See, I will not even ask you about seniority. No, I 

knew you were both new. Please go ahead, Mr. Hodes. 

TESTIMONY OF THE HONORABLE PAUL W. HODES, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW 

HAMPSHIRE; THE HONORABLE PETER WELCH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF 

VERMONT 

Mr. HODES. Madam Chairwoman and Ranking Member Capito, 

I want to thank you for giving my colleague Peter Welch and me 

the opportunity to present testimony before the Transportation and 

Infrastructure Subcommittee on Economic Development, Public 

Buildings, and Emergency Management today. I also thank the disVerDate 0ct 09 2002 16:15 Nov 07, 2007 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 P:\DOCS\35918 HTRANS1 PsN: JASON
6

tinguished panel for attending. And I join with you in expressing 

condolences to the Ranking Member, Mr. Graves. 

As you know, I am Paul Hodes. I represent New Hampshire’s 

2nd congressional district. I come before you today to offer my 

strong support for H.R. 1548, the Northern Border Economic Development Commission Act of 2007. 

My home State of New Hampshire is a unique State, blessed 

with incredible beauty, an abundance of natural resources, and a 

citizenry that values hard work, community, and fiscal restraint. 

But we are also facing our share of significant challenges. Parts of 

our State, specifically the northern region, have taken an economic 

beating are struggling to recover. A staggering number of jobs, and 

especially manufacturing jobs, have been lost. New Hampshire, and 

especially northern New Hampshire, has seen plants close and 

young people disappear to places that offer more opportunity. Parts 

of New Hampshire are economically stricken and for the people 

there it is getting harder and harder to get by. 

While running for office, I spent a lot of time in the North country and I spoke with countless people who had great pride of place, 

pride in their community, they had the drive to work hard and to 

improve their neighborhoods, but they felt their communities had 

been ignored for years, and especially by the Federal Government. 

Despite this neglect, there is a compelling case for coordinated Federal investment in northern New Hampshire. In fact, for the entire 

northern border region, which you can see here on the chart we 

have brought, which includes the northernmost counties of Maine, 

New Hampshire, Vermont, and New York, that region has higher 

unemployment, a higher percentage of people living in poverty, and 

lower household income than the rest of the Nation.k 

In northern New Hampshire, as I was campaigning, I will just 

point out one example that comes to mind, campaigning in the city 

of Berlin, the largest metropolitan area, if you will call it that, in 

my State north of Franconia Notch, is a city that was built on 

paper. Generations of people worked in the paper mills—fathers, 

sons, members of families. And entire culture was built on paper. 

As I campaigned this past summer in Berlin, while the paper mill 

had been bought and there were jobs there, the pulp mill had been 

closed down—300 jobs lost, moved out of the county. People were 

walking the streets at the annual summer festival for the first time 

in their lives without jobs, without prospects, ready to work but 

without the infrastructure and the help to do it. 

When I was first elected to serve in Congress this past November, I was very proud to work closely with other Members of Congress, along with my staff, and especially Mr. Michaud, from the 

border region to put together a plan to bring much needed economic development to the area. The Northern Border Economic Development Commission Act will help create jobs and kick-start local 

economies in northern New Hampshire and in the entire northern 

border region. 

The commission enforces the notion that if you are willing to 

work hard and play by the rules, we are here to help you get 

ahead. The people in the area this bill targets deserve a Government that works for them and with them. The Northern Border 

Economic Development Commission is an important step towards 

7

providing good paying jobs and economic opportunity in an area 

that needs and deserves it. 

The commission this bill would create would be charged with investing Federal resources for economic development and job creation in the most distressed counties of the northern border region. 

I am proud to say that a number of Representatives from both 

sides of the aisle have signed on as cosponsors to show their support. Among them is my colleague from New Hampshire, Carol 

Shay Porter, Maine Representatives Michael Michaud, who is with 

the panel today, and Tom Allen; New York Representatives John 

McHugh and Michael Arcuri, who is on this panel today; and my 

colleague, At Large Representative Peter Welch of Vermont, who 

you will hear from. 

By design and purpose, this bill follows the innovative Appalachian Regional Commission model drafted by Chairman Oberstar, 

who is also with us today, and I thank him for his extraordinary 

leadership in fashioning the notion and implementing commissions 

that show the great results that can be achieved. Based on this 

model, the commission we propose today would create a unique 

Federal-State partnership charged with promoting developing 

through regional planning, technical assistance, and funding of 

projects aimed at encouraging economic prosperity. Community development groups and other non-profits are encouraged to bring 

project ideas and priorities to the commission from the local level. 

This is very important in New Hampshire because we value publicprivate partnerships and grassroots initiatives. In fact, I am already working with local groups to prioritize funding needs. 

This bottom-up approach ensures that actions reflect both local 

needs and regional economic development goals. It also ensures 

that States have a deciding voice in what investment is made within their borders. 

I would like to bring to the Committee’s attention the Northern 

Forest Center, which has submitted a letter of support which, with 

the Chair’s permission, I would submit for the record. 

Ms. NORTON. So ordered. 

Mr. HODES. Thank you very much. This letter you will see points 

to a 2006 sustainable economic initiative in the northern border region which will work in close harmony I think with the commission 

we create. 

With its proposed budget of $40 million per year, the Northern 

Border Economic Development Commission can help meet a range 

of local needs. Whether the need is agricultural development, land 

and forestry conservation to maintain productive traditional uses, 

investment in transportation infrastructure, cyber infrastructure, 

alternative and renewable energy, or health care, this commission 

will play a key role in investing in the Nation’s economy. 

If this bill is passed, it will provide a much-needed boost for our 

northern communities. The people who live in this region that 

might be called the ‘‘ice belt’’ are hard-working, taxpaying, caring 

citizens. Their plight deserves our consideration. Working together, 

we can improve life in these distressed communities and build a 

better future not only for the region but for our entire country. 

8

I thank you for your time. Thank you for allowing me to testify 

before this distinguished Subcommittee. I look forward to working 

with you as we move ahead. Thank you very much. 

Ms. NORTON. Thank you very much, Mr. Hodes. 

Mr. Welch. 

Mr. WELCH. Thank you very much. I have a certain amount of 

modesty appearing before this Committee because the Members 

who have already given opening statements and have long experience have forgotten more about this than I will ever know. But I 

want to say, Mr. Michaud, you have laid out what is the challenge 

for these economically depressed areas, and that is what this is all 

about. 

Across the northern tier in New York, Vermont, New Hampshire, 

and Maine, we have those challenges. The idea here, Mrs. Capito, 

you have described exactly what the model is. I gather it is not a 

bad idea to do again, follow a model that has worked successfully 

in one place and transport it to another. That is essentially what 

it is that we are doing. I think Mr. Arcuri, Mr. Hodes, and I are 

very grateful that there is this model that has been successful, and 

we are grateful to you, Mr. Michaud, that you have encouraged us 

to come forward and try to provide this in a cooperative way to the 

northern tier. 

Vermont, in Franklin County, Orleans County, and Essex County, are all on the northern tier and have many of the problems that 

my colleague Mr. Hodes described and you did as well. This would 

have a very significant impact on that region of Vermont. These 

counties share similar struggles—infrastructure, high unemployment, youth who are leaving for better opportunities elsewhere. 

The northern border regions of Vermont, New York, and New 

Hampshire share those similar challenges. And what I think is 

great about this commission is it allows us as a region to work together and to try to leverage our assets into opportunity across 

that entire tier. 

Many community and economic development organizations work 

in this region in Vermont to promote higher quality of life and good 

paying jobs, I was very alarmed when I learned that there is no 

single economic development entity that is focused on the overall 

needs of the northeast border region as a whole. We do believe that 

we have to partner with our fellow States in order to best provide 

for the future opportunities for our citizens. 

I invite any of you here to come up sometime to Franklin County 

or the northeast kingdom. It is great biking, Mr. Chairman, some 

hills, if you can handle that. But if you did come, you would find 

some wonderful people—entrepreneurial, hard-working, and incredible natural resources, wonderful towns, but high unemployment, 

low wages, $10,000 below the national median. People are struggling and doing their best to get from here to there and pay their 

bills. They would like to be able to do what all of us would like to 

be able to do, and that is live in the communities we grew up in. 

The creation of this commission is going to give us a chance to 

face and tackle the challenges of rural economic development together. I thank this Committee for inviting us, and for your work 

and for your commitment to helping all of us across this country. 

Thank you. 

9

Ms. NORTON. I thank you both for your insights and this testimony. Let me just ask a couple of questions. 

We had a hearing on economic development and the Economic 

Development Act and the important advances that have been made 

in other regions, leveraging a very small amount of funds, drawing 

in industry in quite extraordinary ways, many times Federal investment. We began with areas where poverty had been endemic 

despite the industrial revolution, despite all that has happened to 

make this country an economic powerhouse. Now we are to the 

point where we better watch out about stereotyping where such 

needs are because the global economy has shuffled the deck. You, 

of course, come from New England and this was the strong manufacturing sector. People are moving from New England in part because it is cold and in part because of the loss of that manufacturing job base. 

In the testimony that we had before us previously, people have 

often focused on the difference between the investments made in 

the early years of the Act in traditional public works and toward 

new investments in technology, the information highway, if you 

will, instead of the concrete highway. I do not know that this is the 

only wave of the future, but any insights you could give us on 

whether or not that or other entirely new kinds of activities—you 

mentioned some of them—would take easily in the New England 

area where this has now become an endemic problem? 

Mr. HODES. Sure. Let us focus for a moment on the existing natural resources. In the norther border region there is an abundance 

of wood. This country faces a crisis in our energy policy, for example. The possibility of a new vision for the northern border region 

where the natural resources are used as biomass alternative fuels 

to create new industries, new jobs out of existing facilities and 

using the workforce in place is a great opportunity. For instance, 

there is a possibility, I talked about the pulp mill in Berlin that 

is now closed, there is a great opportunity to transform that potentially into an alternative fuel electricity-generating facility. We 

then would have the need for infrastructure in terms of moving 

that alternative energy out of the region into the grid. So that involves the basic infrastructure of electric transmission lines and 

other transportation facilities. 

So along with other initiatives, there is the possibility I think of 

a transformation and a new vision for the northern border region 

which this commission can play a key part in helping to create, 

first, with the appropriate studies, then with the appropriate investments that I think would transform the region. I see the possibility, being parochial for a moment, that New England and the 

northern border region can lead this Nation towards a new 21st 

century energy policy that will not only transform the lives of the 

people here, but throughout the country, and then we can lead the 

world in alternative energy. That is just one example of the way 

this commission could work to create a new kind of infrastructure 

than that which traditionally was focused on with other commissions. 

Ms. NORTON. Mr. Welch? 

Mr. WELCH. Madam Chair, it is a great question, but in Vermont 

we are creating jobs mainly from small companies. Oftentimes it is 

10

folks who live in urban areas, have an idea, and they prefer the 

lifestyle, and some of you from urban areas may not believe this, 

but there are actually folks who like living in the country and they 

want to come up and live there, they think it is a great place to 

raise their kids. They need infrastructure and they need a trained 

workforce. 

We are creating jobs in some of these northern areas but they 

are literally because somebody has an idea, they have a company, 

but they need an infrastructure and they need a workforce. 

Broadband is a big deal. We do not have it everywhere in Vermont. 

What has happened where there have been successful partnerships 

is we have had these development agencies that want to get to yes, 

what are the practical problems that a new business faces in order 

to get started. There is a location that these entrepreneurs can go 

to and get practical answers to there questions of people who want 

to help them succeed. We have got to have jobs, we know that, but 

we really need them in these poorer, lower income areas of 

Vermont. 

Ms. NORTON. I would like to ask the Ranking Member, Mrs. 

Capito, if she has any questions for these witnesses. 

Mrs. CAPITO. I do not really have a question. I would like to 

make a comment just as a person who lives in the ARC and has 

enjoyed the benefits I spoke about earlier. And thank you to Chairman Oberstar for his leadership those many years ago. We still 

have a lot of work to do and we are going to continue to do that, 

and he knows that. 

My comment is really centered on resources. The ARC, every 

year we fight to get the funding into the budget to be able to keep 

viable projects within the ARC. Certainly, as you create new regional commissions, it becomes again a question of resources. So I 

would hope if this is the direction that we go that we would all join 

together and make sure that to provide resources for a commission 

such as this and maintain our ARC resources it is not divide by 

half, it is multiply by two. With that, I yield back my time. 

Ms. NORTON. I would like to ask the Chairman if he has any 

questions to these witnesses? 

Mr. OBERSTAR. Thank you, Madam Chair, and I thank Mrs. 

Capito. I have been in West Virginia on numerous occasions, going 

back to the very origins of the ARC. 

Mr. Hodes, your predecessor some years removed, a member of 

this Committee, Congressman Jim Cleveland did not vote for much 

in the way of social programs funded by the Federal Government. 

The things he did support, the Federal Aid Highway Program, the 

Appalachian Regional Commission, and the Federal Economic Development Administration programs. He was a strong, articulate, 

and persistent advocate. And because he had such staunch views 

on other issues, when he spoke favorably on EDA and ARC people 

on his side of the aisle listened. We had a great partnership. He 

served with my predecessor and then I served with him. 

Creating this kind of regional economic development crosses 

over; it is not Democratic or Republican, it is people, it is needs. 

And we see this all throughout the country where resource-dependent areas have been depleted. The need to create new economic opVerDate 0ct 09 2002 16:15 Nov 07, 2007 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 P:\DOCS\35918 HTRANS1 PsN: JASON
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portunities that are not natural resource-based is a huge, steep 

challenge. 

New England was the birthplace of industrial revolution in 

America. But it was also the first to be hurt by long-term economic 

decline. First, the leather goods industry moved out, and then the 

needle trades moved out, and then wood fiber moved out as the 

lowly southern yellow pine was perfected for scientists to find a 

way to take the resin out and cure it to create straight two-by-fours 

instead of curvy ones and use that wood chip in pulp production, 

as I am sure Mr. Michaud very painfully knows. This is competition within the United States, however. 

So, creating an entity for economic development, but regional 

economic development. We know that problems do not start or stop 

at political boundaries, they cross over. 

I want to see more of an emphasis on regional initiatives in the 

legislation. As I have read through this, I think there are some refinements that I would suggest to my colleagues on shaping this 

and the other commissions to prioritize projects that truly are regional. I had an experience with the Upper Great Lakes Regional 

Commission in my district where all too often projects 

masqueraded under the name of regional but they were intensely 

local. You have to build coalitions across borders. 

I would suggest one of the priorities to be development of a natural resource research center. We established such an entity in Duluth for northern Minnesota, northern Wisconsin, it benefits the 

Upper Peninsula of Michigan. We do not have a regional commission any longer, it was dissolved many years ago, and I also want 

to take the lessons of failure of that commission to benefit the new 

commissions that we are creating here. But the establishment of a 

natural resource research institute that does some of the basic research on new product development. For example, they initiated 

hybrid poplar that grows to an eight inch, ten inch round wood in 

eight years. They harvest it just like any other crop on a farm. It 

can grow on those lands that we have taken out of production of 

corn or wheat or other grains, and you do not need the fertilizer 

or the limestone or the other to mend the soil. Those are the kinds 

of initiatives that really cross over boundaries, cross jurisdictions, 

and come back to the resource base of the area to benefit and create new job opportunities. 

So I encourage you to stimulate the regionality of your approach. 

And there are many others, we need not go into all of the parameters. But for that, and the southeast, and the other commissions 

that are created, those are the kinds of initiatives I think create 

justification for regional commission development, including backbone highway development where we can accelerate the movement 

of goods as well as people, both for travel and tourism and for 

goods movement. Thank you, Madam Chair. I thank our colleagues 

for their comments. 

Mr. HODES. Madam Chair, may I just briefly respond? 

Ms. NORTON. By all means, Mr. Hodes. 

Mr. HODES. Thank you, Mr. Oberstar, for those insightful comments. It is very helpful for you to focus the work of this commission regionally. I hesitate of course to speak for Mr. Cleveland, but 

I recognize his good work in this area and it is because he recogVerDate 0ct 09 2002 16:15 Nov 07, 2007 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 P:\DOCS\35918 HTRANS1 PsN: JASON
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nized the I think genius in these commissions of the bottom-up 

grassroots approach and the public-private partnership. 

I would commend to you, Mr. Oberstar, the letter from the 

Northern Forest Center which I think addresses your thoughts 

very directly, because it talks about the cooperation here between 

New Hampshire, Vermont, Maine, New York, and the governors of 

those States. This letter has appended to it a list of all the members of the Sustainable Economic Initiative. I think you will see 

that this work that has begun lays the kind of foundation you suggest is important and that this commission would then be instrumental in working with this initiative that has begun to focus regionally in exactly the way you suggest. I have submitted this for 

the record, as the Chairwoman has allowed me to do, but I commend it to your attention. Thank you very much. 

Ms. NORTON. I am going to move on because we have Senator 

Dole here and we have promised her that we would take her right 

away because she has such a narrow window. So we are finished 

with this panel. We very much appreciate their testimony, very appropriate testimony to open this hearing. 

Ms. NORTON. We appreciate that Senator Dole has walked all the 

way across from the other side to be with us. I am told that our 

Members from North Carolina will appear on the same panel with 

Senator Dole. Therefore, I am pleased to welcome Representative 

Mike McIntyre, Representative Robin Hayes, and Representative 

G.K. Butterfield as well to this panel. Thank you very much. 

Senator Dole, you may proceed. 

TESTIMONY OF THE HONORABLE ELIZABETH DOLE, SENATOR 

FROM THE STATE OF NORTH CAROLINA IN THE UNITED 

STATES SENATE; THE HONORABLE MIKE MCINTYRE, MEMBER OF THE UNITED STATES HOUSE OF REPRESENTATIVES 

FROM THE STATE OF NORTH CAROLINA; THE HONORABLE 

ROBIN HAYES, MEMBER OF THE UNITED STATES HOUSE OF 

REPRESENTATIVES FROM THE STATE OF NORTH CAROLINA; 

THE HONORABLE G.K. BUTTERFIELD, A MEMBER OF THE 

UNITED STATES HOUSE OF REPRESENTATIVES FROM THE 

STATE OF NORTH CAROLINA 

Senator DOLE. Thank you very much, Chairwoman Norton, Congresswoman Capito, members. I thank you very much for holding 

this hearing today and I welcome the opportunity to address the 

SouthEast Crescent Authority Act, SECA. 

This important legislation, which is identical to a companion bill 

I introduced in the Senate, would improve the lives of people in 

economically distressed communities across the southeastern 

United States. I sincerely appreciate the hard work of my friend 

Congressman Mike McIntyre on this issue, and I am grateful for 

the work that Congressmen Hayes and Butterfield are doing to 

help get this legislation passed by the House of Representatives. 

Broadly speaking, economically distressed hardly seems to describe my home State of North Carolina. Our statewide unemployment rate is a low 4.5 percent. Our economy is growing and adding 

new jobs. In fact, it was reported last month that 7,600 new tech 

jobs have been filled in just one year. North Carolina is home to 

13

25 of the Fortune 500 companies, many of which are in Charlotte, 

the second largest financial center in the United States. 

But if you travel beyond the glittering skyline of the queen city, 

the thriving research and university campuses of the Raleigh-Durham-Chapel Hill triangle, the bustling main streets and commerce 

centers of the Piedmont triad and our other cities, and the picturesque storefronts of our small towns, or if you just head down the 

road from the sprawling ocean front and mountainside vacation 

homes, you find a vastly different North Carolina. It is largely 

rural and it is significantly poorer. 

It is in these parts of North Carolina where educational attainment tends to be lower, unemployment rates tend to be higher. The 

challenges of globalization have landed smack on the shoulders of 

the region’s textile mill towns, tobacco producing areas, and furniture manufacturing communities. It is also in these parts of 

North Carolina where the rates of health problems such as cardiovascular disease, diabetes, and obesity are well above average. Just 

consider this. If the region east of Interstate 95 in North Carolina 

were its own State, it would rank fiftieth in terms of premature 

mortality. 

Madam Chairwoman, my aim is certainly not to paint a depressing picture of rural North Carolina. Rather, I describe this all too 

often overlooked part of my State so that this Subcommittee understands the tremendous opportunity that SECA holds for certain 

areas in North Carolina and across the southeast, areas that while 

distressed still hold great promise. 

SECA would provide the assistance to enable communities to leverage existing resources, update infrastructure, improve educational opportunities, and attract economic development. Proof 

positive is what the Appalachian Regional Commission, on which 

SECA is modelled, has done for parts of western North Carolina. 

According to the ARC, the percentage of Appalachian adults with 

a high school education has doubled over the past 30 years—doubled. Many residents now have access to adequate health care for 

the first time. And more than 840,000 Appalachian adults now 

have clean water and sanitation facilities. 

While 29 of our counties in western North Carolina have benefitted from the Appalachian Regional Commission, there is no Federal partnership to help our 71 counties to the east, counties that 

could desperately use a helping hand. For example, one community 

that would greatly benefit from SECA is located in rural Washington County. Approximately 30 families there live in serious poverty, 8 miles away from the closest public sewer system. 

Because these families do not have indoor plumbing, they are 

forced to rely on wellwater and outhouses. This is totally unacceptable in this day and age. Washington County has a modest operating budget of only $13 million per year, and three-quarters of 

these funds are allocated to State and federally-mandated programs such as health care, social services, and public safety. The 

county is financially unable to provide public sewer service to these 

families due to the lack of available programs at the State and Federal levels. This is just one example of where SECA could be a tremendous help. 

14

Another place that would benefit from SECA is the town of 

Ahoskie, a small community of approximately 4,500 residents in 

rural Hertford County. Hertford County is classified as Tier I; 

meaning, it is among North Carolina’s most economically deprived 

communities. According to the National Association of Development 

Organizations, Ahoskie’s wastewater treatment plant has reached 

full capacity, placing a tremendous burden on the town’s ability to 

grow and prosper. Under current estimates, the Town of Ahoskie 

must finance a $15.9 million project to expand the treatment plant. 

But it has only been able to secure $6.5 million in grant funding. 

In order to make up the over $9 million difference, the town will 

have to raise average sewer rates from $19 to $58 per household. 

This more than 200 percent rate increase will result in Ahoskie, 

one of the most economically depressed towns in the State, having 

the highest sewer fees in North Carolina. 

Last year my friend Al Delia, the former director of Federal Relations at East Carolina University, testified before this Subcommittee about SECA. In his testimony, Al mentioned a conversation he had with former Appalachian Regional Commission national chair, who said, and I will quote Al: ‘‘ARC rarely puts in the 

most money to a project, but it often puts the first or the last 

money into a project. In effect, the ARC money is the glue that 

holds projects together.’’

Let me underscore, communities across North Carolina and 

throughout the southeast need this glue. These areas are hurting. 

And we have seen with ARC and similar development commissions 

that SECA would make that positive difference. I am proud to support this legislation because SECA is not just about trying to provide opportunity, SECA is about not missing out on the tremendous opportunity that is just within the region’s grasp. Thank you 

very much for this opportunity to share my views this morning. 

Ms. NORTON. Thank you, Senator Dole. 

The way I am going to proceed is I am going to ask one question 

of Senator, and I am going to ask the three Members to go vote 

and then come back. Before I ask Senator Dole a question, I am 

going to ask any of those Members who are privileged to vote on 

the House floor whether they have a question first for the Senator 

because you now have a vote. 

Mr. Oberstar? 

Mr. OBERSTAR. Madam Chair, may I join you in welcoming Senator Dole. 

Senator DOLE. Thank you very much. 

Mr. OBERSTAR. It is wonderful to have our colleagues from the 

other body make the long journey. 

[Laughter.] 

Senator DOLE. Thank you. I appreciate that. 

Mr. OBERSTAR. When Members from this side try to make the 

journey to the other side, there are more whitened bones along the 

200 meters than along the old Chisholm Trail. But when they come 

from the other side over here, it is wonderful. 

We have a partnership and we intend to work together, and we 

have a great delegation in your State with strong advocates on 

both sides of the aisle. And I said earlier, I am a strong advocate 

of regional economic development initiatives and probably have one 

15

of the pens that Lyndon Johnson used to sign into law the Economic Development Act of 1965 and the Appalachian Regional 

Commission Act. I was on the staff with my predecessor over there 

in the corner, John Blotnik, when that legislation was created and 

drafted much of the language and the Committee Report on the 

bill. So all those years I have followed ARC and supported other 

regional economic development initiatives. 

But I will say to this panel as I said to the previous one, in looking in over the draft and the proposed bill, I want to see more emphasis on regionality of projects. I also seek to develop kind of an 

umbrella entity for the regional commissions so that regionality 

really means something. 

We had some very unfortunate experiences in the Upper Great 

Lakes Regional Commission of Minnesota, Wisconsin, Michigan 

that caused its collapse and I want to avoid such failures for other 

commissions going forward. I think an important way to do that is 

to ensure that in the mix you have projects that are truly regional 

in nature, that cross over boundaries, because geography determines your economics, not the political boundaries. And whether it 

is development of roadways, regional rail systems, or emphasis on 

wood fiber resource development, and I need not go any further 

than that, we should stimulate and provide incentives for and increased grant support for projects that truly are regional in nature. 

Senator DOLE. Thank you very much. I appreciate those comments. And as we move forward together, we will certainly be looking at all aspects of this and understand exactly the message that 

you are conveying. Thank you very much. 

Mr. OBERSTAR. Thank you, Senator. 

Ms. NORTON. Before I ask my question, let me ask again if any 

member has a question? Mr. Coble, we are pleased to have you. I 

ask unanimous consent that Mr. Coble be welcomed to sit on the 

panel. He is not a member of the Subcommittee. Hearing no objection, Mr. Coble, you may speak. 

Mr. COBLE. Thank you, Madam Chair. I just wanted to welcome 

my friends, particularly Senator Dole, to this side of the Hill. I may 

have to stay on the floor, Madam Chairman, and may not get to 

come back. But I am fully supportive. My six counties probably will 

not directly benefit but certainly will indirectly benefit, as will the 

entire State. Thank you, Madam Chairman. 

Ms. NORTON. Yes, indeed. The members should go to vote. 

I just have one question for the Senator—the bell does not toll 

for her, at least over here—and that is, I think people might be 

surprised to hear you talk about wellwater and outhouses in a part 

of North Carolina which we now associate with the New South and 

all that sort of thing and the Research Triangle. Again, the Chairman talked about how geography determines this. One side of the 

State is ‘‘in the Appalachian Region’’ because of where the Appalachian Mountains flow, and the other side equally poor and does 

not have the same benefit. Do you think that the focus should be 

first on clean water and sewer treatment with some Federal money 

leveraging state money to make the area seem like an area where 

businesses of various kinds would want to locate? 

Senator DOLE. Certainly, that is a very important aspect. But I 

think there are many issues—education, economic opportunity, 

16

health care access, infrastructure. All of these are aspects where 

grants would be provided. So many parts of the rural south just fall 

below the national average with regard to these areas. And I think 

that, you know, as I have said, east of I-95, yes, it is almost like 

two different States in terms of these areas that are economically 

depressed that really have no economic base off which they can 

build. So we have got to provide the basics, and certainly infrastructure is very important. The Town of Ahoskie cannot grow, it 

cannot prosper when the treatment plant is at full capacity. And 

to think that a town, one of the most depressed economically, people suffering in Ahoskie from this situation, that their water rates 

would go from $19 to $58 and they would be paying the highest 

sewer rates of any town in North Carolina, and yet they are one 

of the most economically depressed. 

So I think we are on target to try to make the difference, to work 

this through carefully. I look forward to working with my colleagues to get this done in this session of Congress because it will 

make a tremendous difference to these areas of North Carolina and 

other parts of the southeast. 

Ms. NORTON. I very much appreciate your coming, Senator Dole. 

And I want to say, one of the first things we say is if we did anything will the Senate reciprocate. So I am very pleased to have you 

here and to note your interest. 

I am now going to call a recess until——

Mr. BUTTERFIELD. Madam Chairman. 

Ms. NORTON. Yes, sir? 

Mr. BUTTERFIELD. May I ask unanimous consent to enter my 

strong statement of support into the record in case I cannot get 

back? 

Ms. NORTON. Indeed, sir. 

Sorry for this bell, but I know I have held you already. 

Senator DOLE. Thank you again for the opportunity to work together to get this done. Thank you. 

Ms. NORTON. Thank you, Senator. 

We will resume in about 20 minutes. 

[Recess.] 

Ms. NORTON. Mr. McIntyre, rather than hold you, and I am not 

sure if the other members are coming back, I understand Mr. 

Hayes has indicated that he wanted his remarks in the record, I 

would be happy to receive your testimony at this time. 

Mr. MCINTYRE. Thank you so much, Madam Chairman. And you 

are correct, Representative Hayes told me he was doubtful he 

would be able to make it back. So I am happy to proceed. Thank 

you for your kindness. 

Madam Chairwoman, many thanks to you for agreeing to hold 

this important hearing on legislation that I have introduced, H.R. 

66, a bill to create the SouthEast Crescent Authority. And thanks 

also to Chairman Oberstar, who I know was here earlier, and to 

all the Subcommittee members. 

This is a measure that I have introduced, as you may recall, 

every Congress since the 107th Congress. It has continued to receive bipartisan support and cosponsorship from Members from 

States throughout the Union, including several southern States. I 

want to also thank Senator Dole and my colleagues RepresentaVerDate 0ct 09 2002 16:15 Nov 07, 2007 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 P:\DOCS\35918 HTRANS1 PsN: JASON
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tives Hayes and Butterfield, who are appearing on this panel as 

well today and for their presence earlier this morning. 

In fact, the first time this bill was introduced, the first time, back 

in the 107th Congress, and subsequently, we have not only been 

warmly received, but the first time it received unanimous bipartisan support. My hope is that this Subcommittee will once again 

endorse this bill and perhaps this legislative session we can move 

it to full Committee and hopefully ultimately to the floor. 

A Chapel Hill, North Carolina think tank that has studied 

changes in the south for almost 40 years, including in its State of 

the South Report for the year 2007, had information and statistics 

that examine the job and population growth, education systems, racial gaps, and economy of all the southern States. This report 

states: ‘‘As a result of the national economic slowdown of the early 

part of this decade, job growth stagnated in much of the south between the years 2000 and 2004.’’ The report continues to state: 

‘‘The slowdown illuminated the restructuring of the south’s economy.’’

I can tell you well, as many of my friends in my neighborhood, 

my church, friends I grew up with in school, friends of our family, 

jobs in the textiles in our area and in furniture-making factories 

in other areas of North Carolina, those jobs are gone, they have 

fled, while jobs in services, retail, and the professions have come 

in. And as a Member that represents a district from one of these 

southern States, the 7th District of North Carolina, as discussed in 

this 2007 report, I understand the conventional wisdom that lowwage manufacturing jobs are being exchanged for even lower-wage 

service and retail jobs. However, this conventional wisdom only 

goes so far. And it is apparent that, as the 2007 report states, ‘‘A 

more high-tech, globally competitive economy has introduced new 

employment opportunities for southerners but,’’ it says, ‘‘it has also 

destroyed jobs held by mature adults who have had prospects, very 

few, for shifting into jobs with comparable pay.’’

I know factories in my own hometown of Lumberton and in Robeson County and in adjoining counties particularly in southeast 

North Carolina where folks who had worked at factory jobs for the 

last 25 to 35 years, went straight out of high school, they got off 

the tobacco farms, were told that your future will not be in the tobacco farms, it will be in the factories, go work in the factories, 

then those children grew up, many of whom are my age now, and 

have been working in those factories literally for the last 25 to 35 

years and now find themselves without a job and having to go back 

for worker retraining or trying to find the kind of opportunity at 

community colleges and other places so that they can find other 

jobs that may have somewhere that they hope they can get comparable pay. 

Madam Chairman, the time is now in this situation and this atmosphere to work to change this pattern and ensure those individuals, whether they worked in textiles, tobacco, or manufacturing, 

and those communities that have been affected are not left behind. 

I am confident that the SouthEast Crescent Authority will do just 

that. The southeastern portion of our country, encompassing the 

States of Virginia, North Carolina, South Carolina, Georgia, Alabama, Mississippi, and Florida, is an area that has seen poverty 

18

rates well above the national average, unfortunately coupled with 

record unemployment. In fact, the Census Bureau found that in the 

calculation of poverty rates for 2003 to 2005 ten southern States 

exceeded the national average poverty rate of 12.6. And unfortunately, the educational gaps contribute to the economic gap, causing southerners to have even a harder time finding work that pays 

an above average wage that does not require education beyond 

high school. 

The seven States in the SouthEastern Crescent Region also experience natural disasters at a rate two to three times greater than 

any other region of the U.S. I can tell you during my first four 

years in office we had six hurricanes alone strike North Carolina 

in our district. We know of the other tragedies and unfortunate situations with storms, floods, the effect of nor’easters and hurricanes, as mentioned, tornadoes, that the south is affected at a rate 

two to three times greater than other regions and this vulnerability 

to natural disasters only further exacerbates the ability to recover 

from economic distress. 

This legislation is modeled primarily after the successful Appalachian Regional Commission, to which Mr. Oberstar referred earlier when Ms. Dole was testifying. It puts together a local-FederalState partnership to lift our citizens out of poverty and to create 

jobs. Unfortunately, we have been hit by the double whammy with 

the high record levels of unemployment and poverty, the highest in 

the Nation over several of these years. We want to help. And that 

is what SECA would do, with infrastructure, education and job 

training, an emphasis on health care, entrepreneurship, small business development, and leadership development. The communities 

with the greatest need would be targeted and grants would be 

made according to the degree of distress. 

Madam Chairwoman, the southeastern United States is one of 

the last vast areas of our country not to have a Federal focus on 

dealing with economic development and ending poverty and 

strengthening these communities. We know that the other various 

economic commissions all serve great areas, but the south has had 

no such entity. We have many projects, as I am sure we could discuss for a long time, where Federal funding like SECA could help 

make those projects a reality and help leverage the Federal funds 

into much greater return. This is just the final component that is 

missing to help the south truly have a chance to move ahead. 

Madam Chairwoman, thank you for this opportunity to testify. 

SECA will be a valuable tool to assist local and county officials to 

work with regional officials. I know the Chairman, Mr. Oberstar, 

raised that issue with Ms. Dole earlier. We are focusing on working 

with councils of governments, which by definition serve regions 

that have a multi-county area, that can focus on those pockets of 

economic distress and that could leverage additional funds to allow 

our citizens to reach their economic potential. I am pleased we will 

have the opportunity to continue to hear from others from the affected region. We all share the same excitement to help this area 

of our country that, unfortunately, has been too often overlooked. 

This will be that opportunity to bring those new resources. This 

will be that final chance we have to access Federal monies to help 

19

clean up the distress left in the wake of unemployment, poverty, 

drop-outs, and poor health care delivery. 

Thank you so much for your willingness to hold this hearing. I 

look forward to working with you, Madam Chairwoman, the members of the Subcommittee, and, Lord willing, the full Committee so 

that we can move this to the floor. It is the least we can do to act 

now and to help the least of these who have suffered enough to 

help bolster economic progress and help them, indeed, fulfill their 

opportunity for the American dream. Thank you so much, and may 

God bless you as you consider this and deliberate upon it. 

Ms. NORTON. Thank you very much, Mr. McIntyre. This is very 

interesting testimony. You indicated that the region, the SouthEast 

Crescent Region, those three, four, five States——

Mr. MCINTYRE. Seven States. 

Ms. NORTON. Seven States. 

Mr. MCINTYRE. Yes, ma’am. 

Ms. NORTON. That region has had flat or only a slight increase 

in job creation. You know, what happened to the New South? What 

is the biggest impediment? Why has job growth, which in past decades spurted in this area, are slowed? 

Mr. MCINTYRE. Thank you for asking that. That is why I would 

be happy to provide to the Committee in much more detail that 

State of the South Report, to which I referred, that has all the demographics and statistics. But let me say in more general terms, 

yes, there have been great opportunities, as Mrs. Dole indicated in 

her testimony. We know that banking and commerce are tremendous particularly in the Charlotte area, that runs right up to the 

South Carolina line from North Carolina. We know that the Research Triangle Park has been the cutting edge in terms of hightech opportunity in the Raleigh-Durham-Chapel Hill-Cary area. We 

know Atlanta has taken off. And there are other certain areas that 

we can point to as beacons of progress, thankfully. But move beyond those areas and we are in great distress. 

Madam Chairwoman, I can tell you as the Chairman of the Subcommittee on Rural Development over on the Agriculture Committee, we just had testimony two days ago on rural broadband access and the great distress that is suffered now because a lot of 

these areas do not even have broadband access to telemedicine, 

health care delivery, business opportunity, educational opportunity. 

In the Subcommittee that I Chair on Rural Development, this was 

a very vicious problem in terms of allowing any economic progress. 

For instance, in North Carolina 85 our 100 counties, which makes 

the math easy, therefore 85 percent of our counties in North Carolina are considered by definition rural. So, yes, we have 15 counties 

we are very proud of and that you regularly hear about as part of 

the New South, the other 85, including nearly all the ones except 

for one that I represent, are all involved in a dire situation with 

regard to poverty, with regard to high school drop-outs, with regard 

to worker retraining. 

Let me say also another reason is, I mentioned earlier I grew up 

and I live on tobacco road, we all know the changes that have occurred with regard to tobacco production. It was the last, and a lot 

of people still do not realize this, when we did the tobacco buy-out, 

that I helped co-author a couple of sessions ago, that was the last 

20

Federal farm program in America from the Depression Era that the 

farmers were still living under in eastern North Carolina and 

South Carolina and Virginia, down into Georgia and northern Florida. They are just coming out of that, just from the last two to 

three years, of living under a Depression Era federally-mandated 

farm program. And as they make the transition out of the tobacco 

economy, then we are hit with the whammy of the textile mills 

closing, which was to support farm families. Those are gone now 

with some the trade agreements that have occurred, that are a 

matter of record, and that has affected textiles and furniture, particularly in North Carolina. 

I remember when President Clinton used to talk about how the 

trade agreements would positively affect America. We have had 

some positive benefits, as we know, but he also would say there 

would be pockets of distress. And yes, that is what this is targeted 

at is those pockets of distress, to use President Clinton’s phrase, 

the economically distressed counties that are still way far behind 

the curve and that are still suffering from high unemployment levels because of the economic downturn they have suffered. 

Ms. NORTON. Mr. Capito, do you have any questions for Mr. 

McIntyre? 

Mrs. CAPITO. I want to thank the gentleman for his testimony. 

I appreciate the analysis that you made. 

Mr. MCINTYRE. Thank you. 

Mrs. CAPITO. I just have one quick question. Senator Dole in her 

comments mentioned that parts of North Carolina are part of the 

Appalachian Regional Commission. 

Mr. MCINTYRE. Right. 

Mrs. CAPITO. And I guess parts of the SouthEast Crescent Authority are also part of the Delta Regional Commission. Is that correct? 

Mr. MCINTYRE. Not exactly. What we have tried to do, and Dr. 

Al Delia, who was with East Carolina University, and we have a 

representative from ECU today that is here on their behalf, did 

was to make sure there is no overlap. This covers counties that 

have not been helped. For instance, in North Carolina, yes, we 

have some counties way up in the western part of the State in the 

mountains that are part of the, thankfully, very successful Appalachian Regional Commission. I live five hours from the mountains 

because I am down from I-95, which I am sure you all are familiar 

with, and East to the coast. And it is that eastern part of I-95, as 

Senator Dole mentioned, that is the most severely affected by poverty and drop-outs and economic downturn. 

We live on Tobacco Road, as I referred to earlier, and where the 

textile mills have closed. This is where we have some of the most 

impoverished counties actually in America, and these counties are 

not covered now at all in our State because we are so far East 

away from the mountains. This legislation covers eastern and central Virginia, the Carolinas, down to Georgia, northern Florida and 

over. This does not touch anywhere near the mountain areas, barely runs into the piedmont areas, which are the rolling hills between 

the mountains and the coastal plain. 

Mrs. CAPITO. I thank you. I was just wondering about any kind 

of duplication. I know a lot of the coordination has to go through 

21

the governors’ offices. They are on the commissions and they do a 

lot of the detail work and the research work. I am sure it could be 

worked out. Anyway, thank you very much. 

Mr. MCINTYRE. Thank you. In fact, if anything, the governor’s office, for instance, could use ARC in the western part of our State, 

they would not have to reinvent the wheel, they could use it as an 

example for the counties down East, as we say, who are literally 

five hours away, 250 miles East of the mountains, that are still in 

this unfortunate poverty cycle that we are in. 

Mrs. CAPITO. Thank you. I yield back. 

Ms. NORTON. Thank you very much, Mrs. Capito. And I very 

much thank you, Mr. McIntyre, for coming and offering us this 

very helpful testimony. 

Mr. MCINTYRE. Thank you, Ms. Norton. I appreciate your consideration. God bless you all in your work. 

Ms. NORTON. I would like to ask what looks like a Texas delegation to come forward now. Mr. Cuellar, Mr. Reyes, Mr. Filner from 

California, Mr. Hinojosa, and Mr. Rodriguez, from Texas as well. 

Mr. Cuellar, we will have begin. You said you had to be out of 

here by a time certain. 

TESTIMONY OF THE HONORABLE HENRY CUELLAR, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS; 

THE HONORABLE SILVESTRE REYES, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF TEXAS; THE HONORABLE 

BOB FILNER, A REPRESENTATIVE IN CONGRESS FROM THE 

STATE OF CALIFORNIA; THE HONORABLE RUBEN HINOJOSA, 

A REPRESENTATIVE IN CONGRESS FROM THE STATE OF 

TEXAS; THE HONORABLE CIRO D. RODRIGUEZ, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. CUELLAR. Thank you, Madam Chair. [Remarks made off 

mic.] First of all I want to thank Chairman Reyes. The Chairman 

is the elite sponsor and I want to thank Chairman Reyes for the 

leadership that he has taken. 

I am honored to join Congressman Reyes as one of the cosponsors 

of H.R. 2068, the Southwest Regional Border Authority Act. This 

legislation strives to reverse the economic hardship facing our communities along the border. What I want to focus on, Madam Chair 

and members of the Committee, is the hundreds of thousands of 

citizens that live in the unique communities called colonias. I think 

Congressman Filner and Congressman Rodriguez know about the 

colonias. These are unincorporated communities that are composed 

of families with very low income and usually lack the basic services. They do not have water, they do not have sewage, they do not 

have sewer systems, they do not have the basic utilities that we 

take for granted. 

As a former Texas Secretary of State, I can tell you that there 

are about 400,000 people living in more than 2,000 colonias in 

Texas alone. When you look, for example, at my congressional district, the average household income is about $28,866, which is 

about 31.3 percent below the national average. When you look at 

the people who live in the colonias, their average income is usually 

around $10,800 a year. So you are talking about people who have 

incomes of $10,800 a year, you are talking about people who do not 

22

have water and sewers, you are talking about people that do not 

have the roads, and it affects them in so many ways. It is not only 

the physical infrastructure that is not available for them, but it is 

also what I call the social infrastructure, because they do not have 

access to health care and the other things that we take for granted. 

I am in support of this legislation because it is one way that the 

Federal Government can join the States along the southwest border. I know in the State of Texas as a former legislator, and I believe I passed probably the landmark legislation that we had in 

Texas at the State level dealing with colonias, but also as a former 

Secretary of State, I can tell you that when you talk about 400,000 

people that live in the colonias just in Texas, and Mr. Filner can 

talk about California also, you are talking about 2,000 colonias that 

are basically ‘‘people that live in Third World conditions.’’ I certainly would invite you all to come in. I think once you walk out 

of one of the colonias you will see that we are not exaggerating. We 

are talking about people that really are living in very difficult 

areas. 

I will close at this time, Madam Chair. I want to thank you. I 

have to go introduce the Tejano, I think means Texan, of the Year 

for the Speaker; I think the Members are going to join me. But I 

want to thank you, and I certainly want to thank Chairman Reyes, 

Mr. Filner, and Mr. Rodriguez, but especially Mr. Reyes for taking 

the lead on this. Thank you. 

Ms. NORTON. Thank you. Obviously, the notion of such primitive 

conditions should make us understand there is a lot of work to be 

done on this issue. We appreciate your testimony. Thank you very 

much for coming. 

Mr. Reyes. 

Mr. REYES. Good morning, Madam Chair and Ranking Member 

Capito. Thank you very much for holding this hearing and for allowing me to testify on H.R. 2068, the Southwest Regional Border 

Authority Act. I would also like to thank Chairman Oberstar for 

his vision in helping me with this issue, and also to thank all my 

colleagues here from the U.S.-Mexico border region for their support in creation of this very important piece of legislation. 

Members of the Subcommittee, I am here today to talk about the 

conditions that exist in many places along the border and to give 

you I think a better understanding of the great need for the creation of a regional economic development authority for the southwest border region of the United States. It was because of this need 

in places like my congressional district of El Paso, Texas, that I introduced H.R. 2068. I just want the members to understand that 

I have introduced this particular legislation for the past three congresses. I would greatly appreciate your support to move this legislation very important to our border region in this the 110th Congress. 

The southwest border region, as defined in H.R. 2068, includes 

all counties within 150 miles of the U.S.-Mexico border. This region 

contains 11 counties in New Mexico, 65 counties in Texas, 10 counties in Arizona, and 7 counties in California, for a combined population of approximately 29 million people. According to research 

compiled by the Interagency Task Force on Economic Development 

of the Southwest Border, 20 percent of the residents in this region 

23

of the Nation live below the poverty level. Unemployment rates 

often reach as high as five times the national unemployment rate. 

And a lack of adequate access to capital has created economic disparities and has made it very difficulty for businesses to start up 

and to remain in business in this border region. Border communities have long endured a depressed economy and very low paying 

jobs. 

Our economic challenges partly stem from our position as a border community. Economic development in border communities is 

difficult to stimulate without assistance from the Government, private sector, and community non-profits. H.R. 2068 would help foster planning to encourage infrastructure development, technology 

development, and deployment of that technology, education and 

workforce development, and community development through entrepreneurship. 

Modeled in part after the Appalachian Regional Commission, the 

Southwest Border Region Authority would be successful because of 

four guiding principles: 

First, the Authority would fund proposals designed at the local 

level, followed by approval at the State level, in order to meet regional economic development goals. 

Second, these projects would lead to the creation of a diversified 

regional economy to be prioritized. Currently, States and counties 

often are forced to compete against each other for the very limited 

funding that is available. 

Third, the Authority would be an independent agency. Having 

the Authority set up in this manner would keep it from having to 

attempt to satisfy another Federal agency’s mission requirements 

when determining which projects are to be funded. 

And finally, the Authority would be comprised of one Senate confirmed Federal representative and the governors of the States of 

Texas, New Mexico, Arizona, and California. The proposed structure would allow equal representation by each State and a liaison 

back to the Federal agencies. 

For too long, Madam Chair, the needs of the southwest border 

region have been either ignored or overlooked and certainly underfunded. We need to recognize all of the challenges facing this potentially vibrant border and to help the region make the most of 

its many, many assets. One important part of that effort would be 

to establish a new economic development opportunity in the southwest through an authority created by H.R. 2068, the Southwest 

Border Regional Authority Act. 

Madam Chair, I want to thank you and Ranking Member for allowing me to speak on behalf of this very important legislation. I 

would be glad to answer any questions you might have. Thank you 

very much. 

Ms. NORTON. Thank you very much, Representative Reyes, for 

this testimony on this terrible poverty in the southwest region. 

Again, that is not what people think of when they think of Texas. 

And so you have brought to light an important problem somehow 

or the other we are going to have to deal with. 

Mr. Filner. 

24

Mr. FILNER. Thank you, Madam Chair. Thank you for holding 

this hearing. We thank Mr. Reyes for the legislation. And I accept 

your apology for lumping me in with the Texans. 

[Laughter.] 

Ms. NORTON. Well, I do not know what rich California is doing 

here in the first place. 

[Laughter.] 

Mr. FILNER. Well let me tell you. I represent the entire MexicoCalifornia border. The issue I think for us is that because of the 

border, which impacts every aspect of life in our community, what 

happens there is a result of national policy and yet the local communities are expected to bear the brunt of that. And I just want 

to give you a few examples. 

Interestingly enough, Madam Chair, 300,000 people per day go 

back and forth across the border in my district, legally, 300,000 a 

day. That is an incredible movement. That is a major city going 

back and forth. When we built the border crossings which handle 

this incredible volume of traffic, the local infrastructure was not 

considered. When NAFTA, for example, lead to an increase of 

trucks from, say, 1500 to 3000 a day, there was no road envisioned, 

planned, or built to take that traffic to the Interstate Highway System. Local roads had to handle it. Those roads are now the most 

dangerous roads in America because of this heavy international 

truck traffic. Yet the Federal Government, whose policy resulted in 

the traffic, did nothing to help ameliorate it. 

I am probably the only Congressman in America who can say 

that 50 million gallons of raw sewage flows daily through my district. That is because the rivers that come from south of the border 

in Tijuana and other parts of Baja flow north, the Tijuana River 

in one part of my district, the New River and Alamo River in another part, flow through my district, one of them into the Pacific 

Ocean. Because Tijuana has no sewage facilities for more than half 

of its population of two or three million, that raw sewage, which 

gets dumped in back gullies and flows into a river, comes through 

my district. It is an international problem. 

The local community cannot afford to build a waste treatment 

plant to cover that. It took us two decades to finally get one built 

at the border and it was obsolete the day it opened. That took two 

decades to get Federal funding for that infrastructure. And everybody in America is entitled to waste treatment, and yet we at the 

border did not have that. Mexico could not handle it. We had to do 

it to protect the health of our own citizens, and yet the local community has to bear the brunt. 

One of my counties at the border is a nonattainment area for a 

particulate matter. The Mexican city of Mexicali in fact produces 

much of the pollution that U.S. citizens have to deal with. And yet 

we are required under the law to mitigate that pollution. It is not 

pollution coming from our Nation, and so how can our communities 

be burdened with the expense of that. 

We can go on and on. Local hospitals have closed in my area because of the impact of having to provide medical care for poor and 

also undocumented workers. In every aspect, whether you talk 

about health, transportation, environmental protection, highways, 

other means of infrastructure, the border impacts the local commuVerDate 0ct 09 2002 16:15 Nov 07, 2007 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 P:\DOCS\35918 HTRANS1 PsN: JASON
25

nities. The mechanism that Mr. Reyes envisions in this bill will 

help us get support for doing the work that has to be done just for 

the quality of life that everybody else in America enjoys but because of the border pressures we cannot afford. 

So we are looking forward to the passage of this bill and to these 

mechanisms to help us deal with these very crucial problems. 

Thank you, Madam Chair. 

Ms. NORTON. Thank you very much, Mr. Filner. 

Mr. Rodriguez. 

Mr. RODRIGUEZ. Thank you, Madam Chair. Thank you very much 

for allowing us this opportunity to present to you some of our concerns and ask for your support on this important legislation. Let 

me also take this opportunity to thank Congressman Silvestre 

Reyes for introducing this legislation that is drastically needed. Let 

me also indicate to you that there is a real serious situation on the 

border and the Southwest Regional Border Authority Act provides 

the opportunity for many communities along the border to receive 

the assistance and resources they have long needed in order for 

them to develop their infrastructure and economic prosperity. 

Madam Chair, I represent an extensive district that spans from 

El Paso County, far West Texas, to Dimmit County, close to 700 

miles along the Mexican border, and also up 150 miles to San Antonio. This district encompasses one of the largest stretches of border of any other that is contiguous in the United States. I have represented this district for the last five months. But as I have travelled through the 20 counties which I represent in the 23rd Congressional District, I have seen some of the poorest counties in the 

entire country. The Southwest Regional Border Authority Act 

brings the Federal Government to the border and this particular 

legislation can help enhance that community. 

I would like to share with the Committee a situation in a community in my district that we are facing. They are a small rural 

community that was in great need of a wastewater treatment 

plant, and I have several that fit this description. The current 

wastewater plant was built years ago on a flood plain, and with the 

annual rains came the overflow of waste. The State environmental 

agency had threatened to fine this particular community. The community applied and received approval from the USDA Rural Development Loan Grant Program. They were approved and the award 

was granted, an 80 percent loan, 20 percent grant. This posed a 

significant problem for this particular community. They have very 

little resources and could not afford the payment on the loan to be 

able to make that happen. These rural communities have a very 

small tax base and most of the individuals go at this time of year 

to the north to work in the fields, then come back to the community. These are communities that as they go they build their own 

homes, without any insurance, and have very little resources. 

The community ended up accepting the award, but other communities have not always been that fortunate. Now they find themselves having to double and in some cases triple the amount that 

they charge for water in order to pay for that loan. The Southwest 

Regional Border Authority Act could help in future situations such 

as this. It includes a section intended to supplement Federal grant 

programs. Section 206 of this bill provides opportunities for the 

26

communities who are unable to take advantage of current Federal 

grant programs because they do not have the required State or 

local match funds that are needed in order for them to be able to 

access those loans. 

Madam Chair, this is just one example of the situation that we 

find ourselves in along the border. As I traveled through all of the 

20 of my counties, what I heard over and over again was Congressman, please help us help ourselves. I believe this bill does that. 

Let me also share one thing that is seldom understood. Every 

single community, and I will mention Eagle Pass, Texas, that just 

got hit with a tornado, a very small community, about 34,000, 

35,000, 7 people were killed, and finally after seven days the Administration is there to help out—but the Mexican border side has 

over 300,000 people. Each community, when you look at El Paso, 

Juarez is approximately, what, over a million people, 2 million people. 

As Congressman Filner indicated, the communities on the other 

side are usually ten times larger than our communities, they continually come and use our infrastructure, they use our access to 

health care, they use all of our facilities, and those burdens usually 

have to be carried by the local individuals there, such as law enforcement and other facilities. That is one of the areas that is often 

overlooked and not understood, that individuals come over and purchase on our side and go back, but they use our infrastructure. So 

we ask for your help and your assistance. 

I will close by sharing with you. I have had this district for just 

five months. I went to one of the communities when I was campaigning and afterwards they asked me for an all-weather road so 

the Border Patrol could go through there for checking. And I felt 

like telling them, my God, you need an all-weather road on all your 

existing roads. We have some communities that are on the U.S. 

side and they almost look like, this sounds very bad, but it looks 

like we are in a Third World country in some of those communities, 

and I am talking about on the U.S. side. So I would ask for your 

help and your assistance in this area. It is an area that, as we look 

at trade with NAFTA, these are the areas that need infrastructure 

in order to allow those 18-wheelers to go up north to Chicago 

through Eagle Pass, and Del Rio, and some of my communities, 

Presidio. So I ask for your help and your assistance in making this 

happen. Thank you very much, Madam Chair. 

Ms. NORTON. I thank all three of you for your testimony. I think 

most Americans have no idea about the grinding poverty you are 

talking about. That is just not the image we have of our country. 

And as to California and Texas, you appear to share more than a 

border. And, yes, importantly, your Southwest Border Regional Authority would cross State lines. These appear to be all border 

towns. They are the first towns that would receive immigration, 

legal and illegal. It is as if when emigrants came in the 19th century, the very first place they settled, they settled right in New 

York, New Jersey, in the first places they hit. Of course, the difference was that they came because there was an overwhelming 

need for work. So nobody would have thought you needed some 

kind of economic development. They needed jobs and that was the 

27

economic development. The conditions were not the best, but then 

we rectified that. 

I would like to know, would your Southwest Border Authority bill 

set up the first network for working together in these two States 

on the impact of immigration from a poorer country to our country? 

Is there any existing network, or would you in effect be creating 

it? 

Mr. REYES. Our legislation, as I said, models the legislation from 

Appalachia. What we are trying to do with this legislation is provide an economic development engine for border counties. We are 

not only America’s first line of defense, we are also America’s best 

economic opportunity, because trade and commerce, since the passage of the North American Free Trade Agreement, comes through 

all of our respective communities. There are four major trade 

routes coming into the United States from Mexico, and by extension from Latin America. They come through these four States. 

So this is an opportunity to provide one authority that would 

take into account all four States. It would be working under a coordinated effort, also in conjunction with the State governments, 

the governor would have an appointee on this board. So we feel 

that it does three very important things: first, it is a coordinated 

effort; secondly, it addresses the biggest problem in terms of the 

economies of our border region, and that is giving our communities 

an economic development engine; and third, it also provides under 

this coordinated effort an opportunity for States to work together. 

But more than that, it provides a vehicle where we hope we can 

use it as a springboard to bring Mexico into the equation. In other 

words, everything on our border we feel strongly, I am not speaking for the other Members, but having heard them speak before, we 

all feel very strongly that Mexico needs to be looked at as a partner. Whether it is dealing with issues in border enforcement, economic opportunity, trade, commerce, tourism, our communities are 

interlaced or interlocked. And this authority would give us a great 

springboard for that. 

Mr. FILNER. Ms. Norton, if I may add. 

Ms. NORTON. Yes, Mr. Filner. 

Mr. FILNER. You hit upon a very good question. There is no institutional mechanism that unites us. This would be the first. We 

have informal alliances. We have a border caucus in Congress; the 

governors have a border governors conference; and the counties 

have a border counties caucus. So we have these attempts to work 

together informally, but there is no institutionalized mechanism 

and this would be a credible step forward. 

Ms. NORTON. Yes, Mr. Rodriguez? 

Mr. RODRIGUEZ. Let me just reinforce the fact that this is essential and critical. I have always said that this would be a good way 

for us also to communicate with each other. I have always felt real 

strongly that in order to protect our country, we also need to be 

well aware in terms of what is happening in Mexico and for us to 

have good relationships. And what better way than to be working 

on projects together. I think this legislation allows that to begin to 

occur. So I ask for your serious consideration. 

Ms. NORTON. Well thank you very much. Formalizing this border 

relationship across States will be very important. If one State 

28

works by itself on reducing poverty and economic development, you 

just simply end up exchanging poor people. Well, poor people will 

go to where the economic development appears and where there 

are jobs, and you do not get anywhere that way. This is one value 

of being the United States; we can work across borders. 

I must say what is most intriguing to me about your testimony 

is this opportunity for the several States to work together now not 

only on border protection issues, which obviously is already occurring, that is a Federal issue, but on issues on which we are deeply 

implicated but issues of poverty which come to you because of 

where you happen to be located. 

I am going to ask the Ranking Member, Mrs. Capito, if she has 

any questions for the panel. 

Mrs. CAPITO. Thank you Madam Chair. I do not really have a 

question. Well, I guess I do have a question. Since your region is 

so vastly different than my region, which is a part of the Appalachian Regional Commission, and I mentioned to the panel before 

this that we are always struggling to fund the ARC and have been 

for decades now to keep the funding source and stream going. But 

in realizing that, the monies there are monies that are supplemental to what you are already doing in Texas and in California 

to help I am sure alleviate some of the problems that you have described. 

I am kind of curious to know how a commission created by States 

would be able to interact with Mexico. I am sure that is something 

that could be worked out and I am certain that it is necessary as 

you move through the process. But I am just interested to know, 

in each of your two States, what kind of efforts the States are 

doing right now to try to alleviate this. And how do you think a 

commission like this would come in, as an overseer, or as a 

supplementer, or as a replacement? 

Mr. REYES. Thank you for that question. It is a great question 

and gives us an opportunity to let the Committee know that there 

are already organizations such as the Border Health Commission 

that takes that into account. Because when we look at the border 

region, as my colleague Mr. Filner mentioned, there is no way to 

keep out pollution from Mexico, or vice versa. Although the international boundary exists, it is an imaginary line. So issues of pollution, contamination, as Mr. Filner said, the problems that they 

have with sewer treatment, affect both sides of the border. 

We have the Border Health Commission, the Border Economic 

Commission, and we have the Pan American Health Organization. 

There are a number of organizations that have been in place already that serve as models for what we think will spring from this 

authority, and that is to help address the number one issue of the 

border region in terms of poverty, unemployment and even underemployment, because underemployment is a huge issue along the 

border region. So we would be very happy to provide you additional 

information because in this short period of time it is impossible to 

really fully cover it but I think it would be worthwhile for the Committee to consider. 

Mr. FILNER. Just briefly. You raise a really important issue. Obviously, the Federal governments have the policy and the authority 

at the border areas, and yet both Washington and Mexico City do 

29

not really understand the border. The relationships have been built 

around local relationships. I mean, it is a truly binational community—families, jobs, education, everybody going back and forth all 

the time. Families have relationships, mayors have relationships, 

the governors have tried in recent years, but the Federal governments do not come as an integrative force from either country. Obviously, the policies affect what is going on but there is no attempt 

at the federal level to really integrate with the things at that local 

level. So we need this kind of organization, we need others. Right 

now we try to survive with local relationships when it is the two 

Federal governments that have the power and have not used that 

power to really aid our border communities in a realistic way. 

Mrs. CAPITO. Thank you. I yield back. 

Mr. RODRIGUEZ. I just want to add. Our problem right now, and 

I would say especially with Mexico but also probably with Canada, 

we need new institutions that allow us to begin to dialogue together, and this allows that and it allows an opportunity to create 

those new institutions. I am sure there are others that are needed 

and that are lacking there. To give an example, the tornado hit and 

I went and visited both Piedras Negras and they got hit harder. 

They are very different the way they operate. They cut to the 

chase, they were out there cleaning up. After five days they were 

offering help to us. I told the county judge there, go in and take 

it, and so they came over and started helping us. I went across and 

the reason I went across is because during Katrina we had 20,000 

people in San Antonio, the Mexican army came into San Antonio 

and they just came in and set up and they did not ask for anything, they just started to feed people, and they fed people there 

for about 20 days or so. And so I went over there to pay my respects and because they also had lost three lives with the tornado, 

we lost seven. 

And so I think this will allow us to begin to create those institutions that might be needed. Maybe later on there might be some 

changes that we might have to make. But I think this is an essential institution that would help us dialogue together and make 

some things happen that are positive for both side. 

Ms. NORTON. Again, I want to thank all three of you from the 

now California/Texas delegation for coming to testify here. It has 

been very, very informative and very helpful to us as we try to see 

if we can find some way to be of assistance to you. Again, thank 

you very much for your testimony this morning. 

Mr. REYES. Thank you, Madam Chair. We will provide that additional information for the record. 

Ms. NORTON. Thank you very much. 

The hearing is now adjourned. 

[Whereupon, at 12:25 p.m., the committee was adjourned.]

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