[House Hearing, 106 Congress] [From the U.S. Government Publishing Office] THE FUTURE OF ROUND II EMPOWERMENT ZONES ======================================================================= HEARING before the SUBCOMMITTEE ON RURAL ENTERPRISES, BUSINESS OPPORTUNITIES, AND SPECIAL SMALL BUSINESS PROBLEMS of the COMMITTEE ON SMALL BUSINESS HOUSE OF REPRESENTATIVES ONE HUNDRED SIXTH CONGRESS SECOND SESSION __________ WASHINGTON, DC, JUNE 7, 2000 __________ Serial No. 106-61 __________ Printed for the use of the Committee on Small Business U.S. GOVERNMENT PRINTING OFFICE 67-149 WASHINGTON : 2000 _______________________________________________________________________ For sale by the U.S. Government Printing Office Superintendent of Documents, Congressional Sales Office, Washington, DC 20402 COMMITTEE ON SMALL BUSINESS JAMES M. TALENT, Missouri, Chairman LARRY COMBEST, Texas NYDIA M. VELAZQUEZ, New York JOEL HEFLEY, Colorado JUANITA MILLENDER-McDONALD, DONALD A. MANZULLO, Illinois California ROSCOE G. BARTLETT, Maryland DANNY K. DAVIS, Illinois FRANK A. LoBIONDO, New Jersey CAROLYN McCARTHY, New York SUE W. KELLY, New York BILL PASCRELL, New Jersey STEVEN J. CHABOT, Ohio RUBEN HINOJOSA, Texas PHIL ENGLISH, Pennsylvania DONNA M. CHRISTIAN-CHRISTENSEN, DAVID M. McINTOSH, Indiana Virgin Islands RICK HILL, Montana ROBERT A. BRADY, Pennsylvania JOSEPH R. PITTS, Pennsylvania TOM UDALL, New Mexico JOHN E. SWEENEY, New York DENNIS MOORE, Kansas PATRICK J. TOOMEY, Pennsylvania STEPHANIE TUBBS JONES, Ohio JIM DeMINT, South Carolina CHARLES A. GONZALEZ, Texas EDWARD PEASE, Indiana DAVID D. PHELPS, Illinois JOHN THUNE, South Dakota GRACE F. NAPOLITANO, California MARY BONO, California BRIAN BAIRD, Washington MARK UDALL, Colorado SHELLEY BERKLEY, Nevada Harry Katrichis, Chief Counsel Michael Day, Minority Staff Director ------ Subcommittee on Rural Enterprises, Business Opportunities, and Special Small Business Problems FRANK A. LoBIONDO, New Jersey, Chairman RICK HILL, Montana DONNA M. CHRISTIAN-CHRISTENSEN, JIM DeMINT, South Carolina Virgin Islands JOHN THUNE, South Dakota DAVID D. PHELPS, Illinois JOHN E. SWEENEY, New York TOM UDALL, New Mexico BRIAN BAIRD, Washington C O N T E N T S ---------- Hearing held on June 7, 2000 Witnesses Page Bono, Mary, Member, U.S. House of Representatives, California.... 4 Capuano, Michael, Member, U.S. House of Representatives, Massachusetts.................................................. 5 Mathews, Maria, Deputy Administrator for Rural Development, United States Department of Agricuture......................... 7 Velazquez, Gerard, Executive Director, Cumberland County Empowerment Zone............................................... 9 Dunkins, James, Vice-Chairman, Cumberland County Empowerment Zone 12 Appendix Opening statements: LoBiondo, Hon. Frank......................................... 22 Prepared statements: Bono, Mary................................................... 26 Capuano, Michael............................................. 29 Mathews, Maria............................................... 31 Velazquez, Gerard............................................ 36 Dunkins, James............................................... 45 Additional material: Written Statement of the EZ/EC Initiative Office, U.S. Department of Housing and Urban Development................ 48 THE FUTURE OF ROUND II EMPOWERMENT ZONES ---------- WEDNESDAY, JUNE 7, 2000 House of Representatives, Committee on Small Business, Subcommittee on Rural Enterprises, Business, Opportunities and Special Small Business Problems, Washington, DC. The Subcommittee met, pursuant to call, at 2:45 p.m., in room 2360, Rayburn House Office Building, Hon. Frank A. LoBiondo [chairman of the Subcommittee] presiding. Chairman LoBiondo. Committee will come to order. I would first like to apologize to our panelists and guests for the delay, unfortunately, beyond our control. Welcome to the Subcommittee on the Future of Round II Empowerment Zones. I am going to have a brief opening statement and then turn to our ranking member for her opening statement, and then we will move into the first panel. Good afternoon, ladies and gentlemen. Today the Subcommittee on Rural Enterprises, Business Opportunities and Special Small Business Problems is convening to discuss the Future of Round II Empowerment Zones. As many of you know, the EZ/ECs program was enacted in 1993. This 10-year program targets Federal grants to economically distressed urban and rural communities for social services and community redevelopment, and provides tax and regulatory relief. In what is now referred to as round I of the program, 104 empowerment zones and enterprise communities were created. As part of this program, each urban and each rural empowerment zone received $100 million and $40 million respectively in flexible Social Service Block Grant funds. In addition, qualifying EZ employers are entitled to a 20 percent credit on the first $15,000 of wages paid to certain qualified zone employees. The Taxpayer Relief Act of 1997 authorized a second round of 20 EZ designations known as Round II Empowerment Zones. In the round II competition, 279 communities and groups of adjacent communities, 119 in urban areas and 160 in rural areas, competed for 15 urban and five rural zone designations. In my congressional District in Cumberland County, New Jersey, we were one of the 15 urban areas to receive this designation on January the 13th, 1999. Unfortunately, employers in Round II Empowerment Zones are not currently able to benefit from the hiring tax credit afforded to employers located in the Round I EZs. Additionally, the block grant funding that is available for Round I EZs has not been made fully available to Round II zones. Cumberland County should be receiving $10 million a year for the next 10 years. To date, they have received approximately 6.7 million, only one third of the amount of funding promised at the Federal level over two years. Business people, community groups and residents of the Round II Empowerment Zones have no choice but to sit through Congress' annual appropriations battles before they are able to construct, with a level of certainty, economic plans that will revitalize their community. Those of us representing one of these distressed communities in Congress understand the vital need to have full funding mechanism in place for Round II, as it is in place for Round I designations. This is the second hearing that the Small Business Committee has held on this issue. The first was held on April 26th, 2000 in Mecca, California and was chaired by one of our witnesses, Representative Mary Bono. At that hearing, members of the community discussed their concerns with the uncertainty that Round II zones face and how these uncertainties affect their business plans. Surely, these uncertainties are not what Congress intended to subject these communities to when we decided to create new empowerment zones. Indeed, with the newly reached agreement regarding the Talent-Watts Community Renewal Legislation, Congress runs the risk of creating a fractured structure of community development zones and forgetting about the promises made to communities that were designated Round II Empowerment Zones in 1999. Over the last several years, our Nation has experienced an historic period of wealth creation. Our challenge now is to expand that prosperity to lower income families in rural and urban communities. Through empowerment zone opportunities, we invite low income working Americans to be participants in our strong American economy and to determine how resources will be used within their neighborhoods. Today, we will hear from two distinguished panels of witnesses to discuss the future of Round II Empowerment Zones. On the first panel we have a member of our full committee, Representative Mary Bono. Additionally, I would also like to welcome Representative Mike Capuano. Mike and I decided several months ago to form the EZ/EC congressional bipartisan caucus to highlight the fact that the 20 round II EZ/ECs designated by the President in 1999 still have not received the full funding allotment they were promised. Our second panel consists of Maria Matthews, the Deputy Administrator for Rural Development from the United States Department of Agriculture; Jerry Velazquez, Executive Director of the Cumberland County EZ; and Reverend James A Dunkins, Vice Chairman of the Cumberland County Empowerment Zone. [Mr. LoBiondo's statement may be found in appendix.] Chairman LoBiondo. I look forward to the enlightening testimony of our witnesses, and now I turn to the ranking member for any opening statement she may have. Ms. Christian-Christensen. Thank you, Mr. Chairman. I am pleased to join you this afternoon for this hearing on something that I consider to be an important issue, the future of Round II and also Round III Empowerment Zones. I would like to welcome our panel of witnesses also, and especially extend a welcome to our colleagues, Representative Bono and Representative Capuano, and I look forward to hearing from all of you and learning your experiences and concerns and receiving some of your insights into this issue. Coming from a particularly economically distressed community, the U.S. Virgin Islands, and having introduced legislation myself, H.R. 3643, to create empowerment zones for the territories because they are not included in any of these authorizations, the EZ/EC program has been and continues to be of major interest to me. To this subcommittee, which represents the interests of rural business particularly, it is important that we look at this program, which has the potential to be a lifeline to our often overlooked or forgotten communities, either urban or rural. It is our responsibility to ensure that the EZ/EC program represents more than an empty promise, but that it will indeed provide the resources to enable parts of this country, which have not yet begun to share in its extraordinary economic bounty, to be able to do so. Today's hearing focuses on whether or not, given the limited funding we have provided theopportunities to Round II Empowerment Zones, to realize the goals set out in their strategic plans. We will also explore the need for additional tax incentives and other tools to encourage investment in these zones and review the recent agreement on new market provisions. The Taxpayer Relief Act of 1997 created what is now known as Round II of the empowerment zone enterprise communities, which provides for the designation of additional EZs. However, one of the major issues before us today is the fact that the Act failed to provide Social Service Block Grant funding for the second round, which was a key feature of that first round. Over the 10-year life of the program urban and rural EZs are each to receive 100 million and 40 million respectively. Currently, only 3 million for each urban zone and 2 million for each rural zone has been approved in Round II. The Empowerment Zone program is a vital antidote to the economic and social problems confronted by distressed urban and rural areas in this country. According to Vice President Gore, Round I resulted in more than 80 million in private sector investment to the designated communities and unprecedented public private partnerships. Round II should add more substance to the program because the Taxpayer Relief Act designated 20 additional communities, making them eligible for a share of 50 million in proposed Federal grants over the next 10 years. Despite these new provisions, the reason that we are all here today is because Round II lacks what it takes to fully empower these communities by encouraging the investment they need to make them whole. I must note at this point that it is the administration's goal and that of the Congress to obtain full funding for Round II of the Empowerment Zone program. Such legislation in the Congress would include H.R. 4463 introduced by Representative Bono, which would amend the Internal Revenue Code of 1986 to allow the empowerment zone employment credit for additional empowerment zones and enterprise communities and increase funding for those zones and communities. It is important that we look at this legislation as we seek a remedy to improve Round II Empowerment Zones. Last week, the White House announced an agreement between the administration and Speaker Hastert on the New Markets Initiative. This agreement incorporates a designation of yet a third round of EZs. We must look at the new components that that third round designation would add, either before creating a new program, or at least at the same time we consider the status of the current program. I look forward to listening to your testimony and discussing these issues with you. Again, thank you for being here. Chairman LoBiondo. Thank you. We will now move to the panel. Congresswoman Mary Bono, we thank you for joining us. Mary has sponsored legislation that a number of us are cosponsoring, that would help in the funding scenario, and has been a very strong advocate. We thank you for your help and welcome you today. STATEMENT OF THE HON. MARY BONO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA Ms. Bono. Thank you, Mr. Chairman. I would like to thank you and the ranking member for holding this hearing on the Round II Empowerment Zones and on H.R. 4463, the Empowerment Zone Enhancement Act of 2000. As we continue to study the very exciting agreement recently reached between the Speaker of the House and the President regarding the American Community Renewal Act and the New Markets Initiative, it has become even more clear that we must finish the work that was begun in the Round II Empowerment Zones. In 1997, 20 empowerment zones were authorized as part of the tax reconciliation package in the Balanced Budget Act. This second round of empowerment zones, 15 urban and five rural, were designated in January 1999. Unlike the first round, the Round II Empowerment Zones were not authorized to benefit from the employer wage tax credit, also referred to as the hiring tax credit, nor were there funds available to implement the strategic plans upon which the designations were made. A couple of months ago, the Small Business Committee held a hearing in the Desert Communities Empowerment Zone, which I have the pleasure of representing. While this hearing discussed some of the positive initiatives that have begun in eastern Coachella Valley, it also brought to light the obvious need, especially in rural empowerment zones, for consistent funding as well as the employer wage tax credit. I am concerned that Congress has an unfulfilled obligation to complete the process begun for the Round II Empowerment Zones. That is why I have introduced H.R. 4463, a bill to provide title 20 funding to the Round II Empowerment Zones and extend the hiring tax credit. I, along with my colleagues on the Round II Empowerment Zone Caucus, am committed to doing all that we can to ensure that we pass legislation to provide full funding along with the hiring tax credit for the second round empowerment zones and complete the commitment that we have made to our distressed communities. Thank you again for allowing me to testify on an issue that means very much to my district and to all of the Round II Empowerment Zones that are trying to better their communities. Thank you. [Mrs. Bono's statement may be found in appendix.] Chairman LoBiondo. Thank you, Mary. Next is Congressman Mike Capuano representing Boston, Massachusetts. I want to thank Mike for all his effort and energy in helping with the caucus that we set up. He has been a tireless advocate. This has been a very strong bipartisan effort. Mike, thank you for joining us today. STATEMENT OF THE HON. MIKE CAPUANO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MASSACHUSETTS Mr. Capuano. Thank you, Mr. Chairman, and thank you for inviting me here, and thank you, Madam Ranking Member, although some day it ought to be chairman soon, I hope, nothing personal. I really came to talk a little bit about promises made, promises broken, hope uplifted and hope shattered. That is what the EZs and ECs are all about. I know that many of the things that have happened in my community would not have happened without the promise of an empowerment zone. Some things have actually physically happened. We have had some social programs and we have had some investment, but we have many things in the pipeline that if we don't get the funding that we were promised, will never come to fruition, which I personally think is the worst thing that any government can do, which is to tell people we are going to help you, we are here to help and then walk away. And I honestly think, in many ways, that if we are not going to fund the Round III, we shouldn't designate them, just walk away, forget it and don't do it. I know in Boston, as you said, the numbers are the same. We are only getting 33 percent of themoney that we were promised to get, and that money has been put to great use. People have been hired, money has been invested. We have already leveraged, I think the number is, about $700 million are either leveraged already or in the pipeline to be leveraged on projects to go into some of the poorest areas in my district. And I know that many people think of places like Boston as a wealthy area, and in general, that is true, but the empowerment zone in Boston represents the area of the city, the typical core area of the city that has been walked away from years after years after years from all government agencies that are now mostly populated by minorities, many of whom don't speak English. If we don't reinvest in those communities, you are going to have nothing but a hot bed of trouble forever, and I know that that is why empowerment zones were created. I know you know this. I know that anybody who understands what this whole program is all about understands it and supports it, and I recommend to anyone who doesn't know that to take a walk through any of them, either the urban ones or the rural ones. They are all the same. They look a little different but the bottom line is still the same. There are environmental concerns. In the cities you have dumps that that were there, walked away from years after year, and in the rural areas you have dumps they don't even know they are there until they walk across and stumble across them as they try to build something. So for me, I really came to talk about the promises that were made by the government. We should fulfill them. I make the same arguments when it comes to veterans. We have promised veterans certain things, and this House has voted to give those things because we feel strongly that if we made those promises, we need to live up to them. The same is true for every other American citizen. When the government makes a promise, we need to live up to it and we need to do that before we go on to the next step. That includes both Round IIIs, that includes the New Markets Initiative, that includes APIC, all of which are great programs. I support every one of them. I want to be there to vote for them, but they will not work, they will not work if we walk away from our commitments on Round II because anyone coming in the pipeline next is going to have to look at those Round II people who did all of the same things, followed all of the same rules, and were able to fulfill their commitments. What would you do if you were a city manager or a town manager and you know you have this wonderful APIC, all these new initiatives we are talking about, if you look right next door and the community next door has an empowerment zone or an EC that wasn't funded, you are not going to step up to the plate too quickly. We have only about 40 of these communities all across the country. They deserve to have the promises made to them fulfilled so we can get back to the business of fulfilling the hope that this Congress told them that we would fulfill, and that is why I came to say this today. Mr. Chairman, I appreciate your effort. You have been a fantastic leader. I have learned a lot in the short time that we have been working together on this issue, both on the issue on how to get things accomplished. You have done a great job for this year, and obviously we will be there forever to work on this issue to make sure that these commitments are fulfilled. Thank you. [Mr. Capuano's statement may be found in appendix.] Chairman LoBiondo. Thank you, Mike. If there are any questions that the committee has of our two Members on the panel, this would be the time. Otherwise, I think that the indication was that both Members had markups. You are welcome to join us if you have the time on this side. No questions. I am sorry. Ms. Christian-Christensen. It is a very brief question, but I completely agree with everything that you said, and I am a health person. I represent the health branches of the caucus, and we will never be able to address even the health issues unless we can address the economic and other issues in our community. The nine new empowerment zones, if they come into being, I understand don't have any grant funding. They just have tax incentives. Does that meet what you think our communities need? Mr. Capuano. As far as I am concerned, the answer is no. But for me, the most important thing, I was the mayor of my community for 9 years before I came here, and I would say that the most important thing, tell me what the rules are and stick by them so that I can make plans. You don't just build a building or set up a social network in matter of a year. It takes years to develop these things, to get a hold of the property. You may not own most of the property. You may not have people who want to develop properties that you want to develop. It takes years to find them, years to get the money lined up, and if the rules change when you are halfway down the road, you have already found the developer to develop that dump and you walk away, it is the worst thing. So the answer is no, I don't think it does enough. But my argument, my strongest argument comes that whatever we say we are going to do, we need to do it for the length of the program. Ms. Bono. I agree wholeheartedly with what he said. I think that, first of all, whatever the rules are from day one should be the rules. I think people can do a lot better if they know that what they are told they are going to get is what they get. It makes planning an awful lot easier, and that is what I heard in the field hearing, too, is that people, the uncertainty was probably the biggest deterrent of all. Chairman LoBiondo. We have a very strong feeling within the caucus that while we certainly don't object to the Round IIIs, we object to the Round IIIs being designated without the full commitment to the Round IIs, and that if Round II had the full commitment and funding scenario that the Round I's had, then we would open our arms to the new designation of Round III zones, welcome them in and help them through the process that we went through, but we find it very puzzling, many of us, that these Round IIIs are going to be designated when we have a very clear record of how the Round IIs have not been handled properly, and that is part of the reason of the hearing, to focus attention so that we can rectify this situation, and maybe through some of the testimony that we are going to have, the brakes will be put on those Round III designations until we can get our Round II straightened out. Thank you both very much. I would like to welcome--Mr. Phelps, Thank you for joining us. Okay. I would like to welcome our second panel. Thank you for joining us. And first we will call on Maria Matthews, Deputy Administrator for Rural Development for the Office of Community Development for the United States Department of Agriculture. Thank you for joining us. STATEMENT OF MARIA MATTHEWS, DEPUTY ADMINISTRATOR FOR RURAL DEVELOPMENT, OFFICE OF COMMUNITY DEVELOPMENT, UNITED STATES DEPARTMENT OF AGRICULTURE Ms. Matthews. And thank you very much, Mr. Chairman, and ranking member, for your invitation to the committee. I am very, very pleased to be here, and I am also very grateful to you and Congressman Capuano for your vision in beginning the EZ/EC congressional caucus forum so vitally needed by both the urban and the rural empowerment zones. And I would liketo stress also our enterprise communities, who have certainly demonstrated that in rural America, if you give them a lot, they learn how to do something with it very quickly. I do have a prepared statement, but I think it is best at this point that we have conversation, and I like to do that because I am originally from a Round I enterprise community in the Imperial Valley, California. I was the executive director of that enterprise community and the full beneficiary of Round I, and saw, prior to coming USDA, what that opportunity has now done for that community in establishing new jobs and new industry and in giving the community hope. And I think that that is definitely the foundation of the EZ/EC program and what it does, it has such a vision, and it gives a community hope in looking at itself holistically, and we required of these communities that had this hope and had this vision that the Federal Government would come in a different capacity as in past history and really provide them with a tool that gave them the reigns to solving their own problem while we gave them the resources with which to begin to implement those solutions. It was a completely new way of doing business, and in a sense, the community has embraced it wholeheartedly, and we promised them that if they went through this wonderful bittersweet, agonizing, sometimes painful process, a true community development planning and put together a 10-year vision that we would assist them with the resources, at least just the seed resources, to begin making these solutions a reality. We did it in Round I, and the full anticipation of Round II applicants was that this would be the same promise. We have heard that mentioned and could not agree with you more fully on that. What it does do, and I am in complete agreement, to communities, when you do not provide them the funding they had an expectation of receiving, it does stagnate the implementation of their strategic plans. They cannot put all of those projects that they worked so hard to leverage resources and create partnerships to complete. It does not allow them to move forward. I think that if you look at the record in rural America for the 57 communities that we have designated, both as empowerment zones and enterprise communities, if you take a look at what they have done with the dollars that were given in Round I, for example, with their initial allocations of 40 million for first three zones and nearly three million for the 30 enterprise communities that were designated, they have leveraged, as of February of this year, about $1 billion in additional resources from other areas, both the Federal Government, State governments, local government, the private sector and nonprofit institutions. With that, they have created well over, close to 11,000 jobs, created 250 new businesses, put in 50 new water and waste lines, and on and on and on and trained people. They are on a leveraging ratio of about 8\1/2\ to 1 in terms of dollars. When you look at what Round II has done, and I believe Congressman Capuano talked a little bit about what the Round IIs have done with leveraging, considering the fact that they have received a third of what they were promised, on the rural side, the Round IIs have drawn down approximately $3 million of what they have received at this point, and this is based on our benchmark management system that we have at USDA where we collect this data. Well, they have already leveraged close to $30 million and are on a leveraging ratio of 9\1/2\ to 1, and I think what that demonstrates is that if we keep our promise, our communities keep their promise. They gain capacity. They learn how to use the resources that we give them in terms of technical assistance and the seed money that we give them, and they find partners in the public and the private sector to fulfill the intentions of their strategic plans. And I think that that is probably one of the most unique features of this particular initiative. In the President's request for fiscal year 2001, it had indicated, or it had requested 15 million a year on the rural side for the next 8 years, and although that is not full funding, because that follows the line for rural communities at 2 million a year for the zones and 250,000 for the enterprise communities, which is not what would equal the 40 million for the zones in the year and the 3 million for the enterprise communities, that has now been superseded by the new agreement between the President and the Speaker and has caused, as I think Congresswoman Bono said, great uncertainty within the Round II communities as to what the future of their funding is. I believe in recent information, it states 200 million, but the concern from the community is that it doesn't mention the enterprise communities in terms of the funding scheme and it doesn't really indicate how that funding is going to be distributed. And just this week for the U.S. Department of Agriculture's Office of Community Development has their enterprise committees and their empowerment zones in town for our annual training meeting, and in a session that we heard, this is a concern they have that they are uncertain about the Round II communities, they are uncertain about what that means for their funding future. And I think that we must find a way to calm that uncertainty and to fulfill the promise that we made to them and to see them flourish and continue to create jobs and continue to increase their capacity, continue to add potable water systems in communities that don't have them, continue to train people for this new business environment as they have been doing so well and continue to create the partnerships that will fundamentally change the social and economic conditions within their communities. I want to thank you very much for the opportunity to speak to you today. I believe that our communities are a shining example of what they can do when you provide them with some resources and allow them to have hope and innovation and look for their own solutions. Thank you. Chairman LoBiondo. Thank you very much, Ms. Matthews. [Ms. Matthews' statement may be found in appendix.] Chairman LoBiondo. Now, we will hear from Gerard Velazquez, executive director of the Cumberland County Empowerment Zone located in Bridgeton, New Jersey. Jerry, thank you. STATEMENT OF GERARD VELAZQUEZ, EXECUTIVE DIRECTOR, CUMBERLAND COUNTY EMPOWERMENT ZONE, BRIDGETON, NEW JERSEY Mr. Velazquez. Thank you, Mr. Chairman, members of the committee, for allowing me to speak before you today. When I first came on board at the empowerment zone, I was asked two questions: Number one, what empowerment zone meant to me, and number two, what I thought about the funding and the fact that funding had been cut. When we talk about empowerment zone in Cumberland County, we talk about three main issues: Number one, education and training. We have employers who have gone out of business who have left the area and left us with employees who are in big need of a retraining and retooling, which is really consistent with a lot of the empowerment zones in the distressed neighborhoods that we have. Number two, we talk about opportunity. We talk about opportunity to obtain the education, we talk about opportunity to obtain the training. We also talk about the opportunity to access the types of transportation, the types of initiatives that the urban areas and the distressed areas in the Round IIs in the rural areas as well, the residents, the businesses and the communities did not have. And lastly, most importantly, we talked about a transformation, a revitalization, if you will, of not only the community, but also the vision. One of the biggest problems that we have in our community is the whole issue around vision, where the vision of our distressed area has gone as a result of the businesses fleeing the areas, what the morale of the people in our communities is, why we don't have homeownership in our distressed areas. And those were the keys to our empowerment zone designation. Those were the keys to our strategy, if you will. We don't consider the empowerment zone as a program. This is definitely not a program. It is a long-term strategy that not only allows us to change what is going on in our community, but it really allows us to change the foundation of the programs, of the systems that are in place now that allows us to set up the mechanisms for long-term sustainability, long after the empowerment zone has gone away. The beauty of the empowerment zone is that we understand that it takes an entrepreneurial spirit to make the empowerment zone successful. We are not here to perpetuate the types of things that have been going on, good yes, bad no. We don't want to recreate the wheel, so to speak. We want to put rubber on the wheel. We want to make things happen. We want to enhance, we want to create and we want to move the process forward, so that when we are gone, hopefully 10-years from now when we get our full appropriation, that the sustainability of our neighborhoods is longstanding. If after 10 years we do not have a mechanism in place, or the mechanisms in place, the economic viability, then we have not done our job and we understand that fully, and that is a part of the process that we have gone through to put together our strategy. I talk about the initiatives, I talk about the types of activities that we have already been successful with in our zone. Our zone only has 16,000 residents in our census track. We have already created 700 jobs, a year and a half. I have only been on board for four months. We have already leveraged $43 million. We have already trained 300 residents within our zone. We have already saved businesses $300,000 in tax incentives as a result of the zone. That is with our existing incentives. That doesn't include the new incentives that are coming in. So we have had a lot of success. Part of our problem is that that success has dwindled as we have gone along in the process. The residents of our community are shying away from the empowerment zone because they were promised a lot of things, and obviously now, with one third of the money, we are having a big problem achieving all of things that we had in our 2-year plan, and then obviously, our 10-year implementation strategy. Businesses who were willing to come in, who were ready to come into our neighborhoods have now thought about it again and said, well, if you are not going to revitalize your downtown areas, if you are not going to create viable employees and viable communities, then maybe we want to take a second look about coming into the zone, and it is very critical that everyone understand that the strategy that we have implemented will create opportunity not only for the residents, for the businesses, but also the region as a whole, and it is a critical aspect of what we are trying to do here. Lastly, I think that it is just very important to understand that when we talk about the funding that is necessary, it is really the funding will create a foundation for us. We have been asked to set up a strategy that builds a neighborhood, that revitalizes a community. We have been given enough money to build a few houses. That is not going to work. We need to be given the opportunities, we need to be given the resources. Again, $100 million over 10 years is not a whole lot of money in the scheme of things. We are talking about investment that is going to go, and just in Cumberland County, we are talking about leveraging our money at least 10 to one. So for the $100 million that you are putting in there, you are going to get $10 for every dollar at least, new businesses coming in, and again, in the end, the biggest benefit to us will be that some money today, over the course of the next 10 years, has created a mechanism that will allow us to have Cumberland County be sustainable long into the future and that is the key to the empowerment zone. And I am here to talk and ask you to please do whatever you can to give us the resources that we need to bring our communities back to life, to bring the hope back, to bring sustainability back, to bring the viability back that has been lost over the course of time. We are not going to fix this today, we are not going to fix this tomorrow, but over the course of the next 10 years, we can definitely implement strategies, implement mechanisms, implement the types of programming that is necessary to help Cumberland County be brought back to life. Thank you. [Mr. Velazquez's statement may be found in appendix.] Chairman LoBiondo. Thank you, Jerry, very much for your testimony, and also, since I have had a chance to sort of up close and personal see your work, thank you for the commitment, the dedication you bring to making our zone work, and it is a tremendous asset to enabling us. Next on the panel is Reverend James A. Dunkins, the vice chair of the Cumberland County Empowerment Zone, and I would like to just take a minute and say just a personal observation, that we can craft legislation and we can have the best of intentions, and this legislation is a very good example of identifying sections of our nation that can use additional help, a role that the Federal government should play. We can put the right language in. We can provide tax incentives, we can provide funding. What we are not able to do is to put in the legislation and mandate an energy and enthusiasm from the people who have to make it work. I have known Jim Dunkins for a lot of years. Our community is enriched beyond measurement by, Jim, what you have done, the dedication, the energy, the enthusiasm, the countless hours that you put in to working with the youth of the community, working with employment issues, working in areas that many other people would have given up on. The ability for us to succeed with legislation like this is, in large measure, in direct proportion to the energy that people like yourself bring to the program. I want to thank you so very much for what you have done or what you are going to continue to do, for being here today, and I look forward to your testimony. Reverend Dunkins. Thank you, Mr. Chairman. I am almost afraid to speak after that eloquent introduction, but I do thank you for allowing me to speak today. STATEMENT OF REVEREND JAMES A. DUNKINS, VICE CHAIRMAN, CUMBERLAND COUNTY EMPOWERMENT ZONE, BRIDGETON, NEW JERSEY Reverend Dunkins. My name is Reverend James A. Dunkins. I am the pastor of the Shiloh Baptist Church in Port Norris, New Jersey, which is in Cumberland County, which is a part of the empowerment zone. I have heard so many people speak already, so I don't have to use any of the terminology that you all are familiar with, designations and zones and all the other stuff. I want to talk about people. I am an administrator in the Bridgeton school system. I had to leave school at 2:00 because a 16-year old student in our county was killed in a collision. He was riding with another student who is 24 years old. This student was in the alternative program that was shut down becausefunding was not available for him to immediately get into the slot. He was put out of school or placed out waiting for a slot to open up. So in the meantime, what did they do, they ride around, they sell drugs, they become involved in other areas that is going to give them some sort of notoriety and something to do. As has been stated, our problem is not the problem of not knowing what to do. It is that we can never get a light at the end of the tunnel. We can never see beyond someone starting a program, designating some money and then saying that it is over and we don't worry about the community suffering, I am talking about the people suffering. I would like to tell you about the residents of Cumberland County, the residents of Port Norris, a very desolate area where we are building more prisons than we are doing anything else because we don't have the social service programs, we don't have the long-term commitments that we can make any inroad into getting any kind of viable training. I believe that the empowerment zone, no, I know the empowerment zone is the answer to giving us some stability. We have high crime. We have social diseases that are left worse by someone promising us to give money and when we don't get the money, we have programs that leave dilapidated buildings, that leave eyesores, that leave people with no hope, that leave grandmothers in the community saying, Reverend, I am not getting involved anymore because nothing is going to be done. We drag people out to the polls. We tell them money is coming in. We tell them Mr. LoBiondo is going to do it, we tell them this person is going to do it, and then we still don't have any kind of viable commitment in our area. In our program we probably could have saved that young man's life because I started a program through some of the money the empowerment zone has promised. We have even placed some of our community money into it. I started a program called the Job Readiness Program. We take juveniles off the street who may not ever make it in a mainstream social setting of a regular school system, may not make it in the programs that are already here, but they can make it if someone puts some time into them. We are teaching them skills such as anger management. We are teaching them skills how not to get fired at your job, how not to curse your job out, how to make sure you are going to become a productive member of society. It is programs like these that need to have some long-term investments because what we are going for, we can make a stable program that can be self-sufficient if we can get the money and we can save people's lives. Port Norris, as I said, is a small desolate community. You have seen the numbers, but you know what we do have, we have a community policing unit. We have young men standing on the corner. We have women who are having babies who are long-term third generation welfare recipients. We have all of the same indicators that you have. If you look at the composite ranking out of the 21 counties in New Jersey, we have some of the highest numbers in all of the negative areas, and what happens, we get an empowerment zone designated--I have served on countless boards, countless numbers of committees, and we do it tirelessly because we see some benefits to people. I am telling you that if you really want to make a difference, if you really want to see some people's lives changed, forget all of these numbers, all this designation, all this Round II, Round III, and give us what we said we are going to get. And if you give it to us, we can make a difference in the community. We have stagnant industry, we have industries leaving us, and I am telling you, you are looking for chaos in the street, you are looking for people who have no hope, they are going to have no determination and no commitment to doing things the right way. If I could tell you what the empowerment zone means in just closing up, I can tell you this. I can see that our young people can be turned around. I can see that we can have businesses. We have young entrepreneurs in our minority, in the minorities of our county who definitely, if they had some long- term commitment, can make businesses work. I hate to bring up something like institutional racism, but we don't have the loans. They don't get the cooperation from the banks. You know what they do? They put together money on their credit card, they start businesses, and then we come along and say we can help you, and then the help is never forthcoming. I am saying that the empowerment zone can help us see that light at the end of the tunnel if you will give us the funding we have. I know our program maybe will have a 5-year projection where we can be self-sufficient surviving on our own because we can take kids, at a prorated basis, out of the high schools. They get dropped out, maybe they won't graduate, but you know what they won't do, they won't be wearing an orange prison suit. They will be able to get a job. It may be small skilled labor, but they will start somewhere. So I know that if you can help us in any way to get that money through, I can go along with Mr. Velazquez and we can do something in Cumberland County that is going to make a difference in people's lives. Chairman LoBiondo. Well, Jim, thank you. [Reverend Dunkins' statement may be found in appendix.] Chairman LoBiondo. One of the things that we hope to accomplish through this hearing and hearings like this are to be able to put the human face on what happens here inside the Beltway, that this drastically affects people's lives. We have the ability to impact in a very positive way if we do the right thing, and your testimony very much helped to highlight that. We will go into the questions now and I would like to start with Ms. Matthews. And in your written testimony, you mentioned that the New Markets Community Renewal agreement calls for 100 million in FY 2001 and 100 million in FY 2002. I am a little taken back. It was my understanding in the agreement that we entered into that we would receive 200 million for Round IIs in FY 2001. Could you please help clarify this discrepancy? Ms. Matthews. I think that a lot of those details are still being worked out, but I can tell you that still having those details in the working out phase is what is creating the uncertainty with the communities. I wish I could give you more information to clarify that, but I don't have any more to give you at this time. Chairman LoBiondo. Because from my standpoint, there was no doubt in my mind of what the memorandum called for, and it clearly called for 200 million, and I don't recall seeing anywhere a spread over a 2-year period. So that is a great cause for concern, and as I just want to very stridently state, that that scenario is totally unacceptable because of all the reasons said before. Reverend Dunkins, I wanted to follow up and ask you, you talked in some terms of problems with the youth, and while much of the focus of the legislation has to deal with job creation and what would be considered help in the adult community, I think you touched on an area that is important because it speaks directly to our future. Can you give us some more specific examples of how you think the youth in our community, and I am sure it would be the same in other communities, would benefit from programs and give us any specifics that you might be able to come up with about examples that you think would be there if we are able to deliver on this promise. Reverend Dunkins. Yes. I can start with something very concrete. In the Port Norris area, one of the barriers is a water waste treatment system. That may not seem like it is connected directly to youth, but it is, because one of the things is we don't have a car wash, we don't have alaundromat. We don't have certain things that we can give these young people, unskilled labor. So what I am saying, a lot of times young people get involved in the juvenile justice system and become habitual offenders, but also the ones that don't even become offenders don't also become contributing adults. So one of the things that we look at that the zone can do is give us the money we need to take away some of these barriers. Transportation is a barrier. When I talked about second and third generation welfare recipients, one of the reasons is the training is in Vineland and Bridgeton, but Cumberland County doesn't have a transportation system or bus system that runs from Port Norris. So they can't even get there. So a lot of times there is no baby-sitting. So while we are waiting on all of this help to become as adults, I am saying that a lot of times they start out as teenage mothers, they start out as juveniles. And then we get an adult population that have no school skills and have no training. So what I see is a direct impact, not only on the youth because if the adults can get a job and become examples--one of the things I tell my teachers when we are training, and I am going to be very brief, is when they tell me when a kid does something that is catastrophic, something that is crazy, they say they should know better. My answer always to them is who taught them better, and if we don't get some adults that know better, that there is hope, that there is jobs, who is going to teach the young people better? Chairman LoBiondo. Great answer. Mr. Velazquez, you stated that we have created over 700 new jobs with our zone, and could you give me your take on what the additional hiring tax credit would mean to this number, and provide some specific examples if you can think of them? Mr. Velazquez. Sure. I think obviously, when we talk about the tax incentives, the most important thing the tax incentives bring to the table is an opportunity for our residents to be hired in situations where they typically would not have been. The incentives allow us to invest in human capital. It allows a business to take a chance on hiring someone from the zone that they may not have hired before. It allows us to get involved with programs such as Reverend Dunkins' and the local training where we are going to train people, and those incentives are the linchpin that allow the businesses, or that provide the businesses kind of the mechanism to take a chance that they would not have. One of the things that I would like to point out about the 700 jobs we have created, we are talking about small businesses, we are talking about businesses that are local. Even for the businesses that are coming in, we have a business that is coming in from Belgium, we have a business that is coming in from another county, we are talking about hiring locally. We are talking about people who have lived in the area. We are talking about the leverage of human capital within our zones. The benefit, and it is appropriate that we hear today of the tax incentives, is that the major thrust and the major benefactors of the tax incentives are the small businesses. The largest sole business that we have created through the empowerment zone only employs eighty people. So we are talking about many, many businesses that compose the 700 that are hired, and again, those tax incentives that we now have, the additional tax incentives that are proposed are going to allow businesses to take a chance where they didn't before, to hire someone that is not quite as skilled as they would have liked. However, with the knowledge that there is empowerment zone backing, with the knowledge that there are programs in place, they are willing to take that chance and willing to hire people that typically would not have been hired. Chairman LoBiondo. Thank you. I have some more questions, but I would like to turn to Congresswoman Christian- Christensen. Ms. Christian-Christensen. Thank you, Mr. Chairman. I want to join the panelists and thank you for calling this hearing and for the new caucus that you have started because it has been a very enlightening hearing. We don't have an empowerment zone, as I said in my opening remarks, but being on the outside, we kind of thought that things were moving along a lot better than they are, and we really have heard quite a bit about our communities that are so much in need of hope, communities that are so hard to convince to hope one more time, and to have those hopes dashed is really a travesty in those communities. It makes most of the questions that I did have not really very relevant at this point, but let me ask Reverend Dunkins, we have several pieces of legislation in the Congress that talk about applying Federal funding to faith-based organizations, and it is a little bit of a controversy over the people that feel that we should and others that feel that we shouldn't. Can you talk about the role that faith-based organizations, particularly, have played in this empowerment zone? Reverend Dunkins. Yes. I can tell you that in our state, when faith-based organizations were started, we were one of the only organizations, churches. We do have a development corporation at our church. I convinced my traditional old congregants that we now need to move into accepting grants. You will find that my people are well-informed from the oldest to the youngest on what a 501(C)(3) is. They understand how to put together a corporation, but this is what they didn't understand. They now see how we have made the segue of doing old benevolent fund and doing WIC and knowing the people in the community, they understand now how we can take our expertise, which was maybe unskilled and thought to be unskilled, and really make an impact by partnering with other people. So the faith-based look or the faith-based advantage which people should look at is we can be effective, whereas regular programs cannot be effective if they look at the bureaucracy attached. I can go in to Annie Lane's house and say, you have a young man on drugs and we now have a program that is a halfway house at our church. Because we have a faith-based organization, we can get to that young man quicker than the police can. So the faith-based piece you are talking about is very important with the empowerment zones because most of the churches and most of the activities that are in the community lead some way to the religious community or lead to the institution of the church. So I think that the social impact of the church of faith- based can make the quality of the programs better and that is what we have been able to do. We are partnering with welfare, we are partnering with every agency in our area because they are glad to get the help that we can provide as an organized community of faith. Ms. Christian-Christensen. I don't know if anyone else wanted to comment. Ms. Matthews. Well, I think that I would like to comment on that because we see faith-based organizations as a good community partner in rural America. Oftentimes, a faith-based institution in some of our rural communities will be the centerpiece of that neighborhood or that community and will be the one place where many community members feel safe to come and talk about the issues, form their strategic plan and what have you. I think that the empowerment zone/enterprise community initiative does exactly that. It opens the spectrum of partnership to every organization that is a key member of truly beginning to solve the problems of endemic poverty in the community, and a faith-based organization in many of our poorest communities plays the key role of being one of the central places, safety oflearning, of child care, and so you cannot exclude any partner when you are looking at a holistic view to community economic development. Ms. Christian-Christensen. Thank you, Mr. Chairman. I don't have any other questions at this time. Chairman LoBiondo. Mr. Phelps, do you have any questions? Mr. Phelps. I don't have any questions other than just say I have an empowerment zone in deep southern Illinois in my district, which shares many of the demographics that all of you have experienced in your territories, so I fully support and hope that we can advance from here. And I guess what I would ask maybe ourselves, what do we need to do beyond pushing for funding? Is there a vacuum in what is going on right now that is not getting clearly indicated in the process? Mr. Velazquez. I think one of the keys to the process is have everyone understand or clearly define what full funding is. Are we talking about $10 million for this year? Are we talking about multiyear funding? Are we talking about implementing our strategy over the long term? I think that we need to come to grips with the terminology that we are using so that everyone understands when we say ``full funding,'' when we say ``200 million,'' does it mean 100 million over 2 years? Does it mean 200 hundred million this year? I think that is critical as we have, as empowerment zone directors have gotten together and talked about the issues and concerns that we have. One of our biggest concerns is just the clarity and the definitions of what those meanings and what the terminology is because, again, one person's understanding of full funding may be totally different. Our understanding as empowerment zone directors is full funding is $10 million a year over the next nine years. That is full funding for us. So if we can make sure that the definitions are clear, I think that would help in pushing the process forward. Mr. Phelps. As members that participate in the process, one of the things, not necessarily speaking for everyone, but one of the things that concerns me is when we talk about expanding the program that is in the middle of yet being commitment to funding, do you think this helps our chances of solidifying our funding that hasn't been forthcoming, or are we going to sort of distribute what is available among all the new as well as old commitments? What do you think our chances are, better or worse, from expanding sort of Round III so to speak? How would you feel? Sometimes this process works where the more you get involved, the better everybody is in the way of terms of dollars. Sometimes it can erode what was originally intended but yet never quite met. So that is my concern as a member here, what do I push on, get on board for the whole program as the full scope of things or do I just push for what McKinley intended was originally and not yet met? Mr. Velazquez. Again, from the point of view of a Round II, one of the things that we as a board had to kind of deal with was the whole issue around, okay, we had a $20 million plan that is now a $6.7 million plan, do we fund all the programs that were proposed at a lower level and have a lot of programs that are halfway successful or partially successful, or do we fund enough programs or the programs that we have that are going to make a difference and are really going to have sustainability, and from our point of view, we decided that we were going to fund programs fully so that they would have the full impact on a community. And again if it was only five programs that were fully effective, that had long-term viability that 3 years from now, if the empowerment zone went away, still worked, then that is what we decided we were going to do. So again, speaking from a Round II, as a Round II director, obviously in our opinion we would like full funding for Round II. We would like to make the difference, and I think the difference that would be made and really realized would allow possibly for Round III in the future. Reverend Dunkins. I want to speak from my perspective from what have you just said, because to me, I think my answer to you would be yes, we have got to keep pushing it no matter what is coming down. I believe the empowerment zone, in its weakest element, is still whatever program you keep coming up with, maybe a light bulb will come on in someone's head sooner or later, and say we keep coming up with the same type programs that we have already said will make a difference but we are not funding. So as long as you keep that in the forefront, I think somebody along the way is going to see that the empowerment zone, in its weakest element, is going to be successful, because if I can leave one person with a business that wouldn't have had a business, if I can leave one person with a job that didn't have a job, that is going to be better than all the promises in the world. So I guess what I see in this whole malaise of things is that we continue, no matter what other program I hear about, they all seem to be similar, and we are talking about not fully funding what we have already promised to fund. So somewhere along the line somebody's got to say, hey, we have got something good, let us put some money in it. Mr. Phelps. Just real quickly, in terms of faith-based concerns, I very much applaud you for your concern and your input and activity because I am one that believes that while we need resources in these poor communities, that for those people that believe that there is going to be a value system, all of a sudden raise up, because you have got resources pouring in, even though a good job is a good start for teaching the family values, I hope that your leadership in the community from the standpoint of faith-based is really the key to try to get dysfunctional families, teaching their young people that violence and destruction of property and not staying in school, whatever else we promote that is decent, is going to have to come from the community. We don't have the answers here for the few dollars, but we can sure help those families that are struggling. Thank you. Ms. Matthews. If I may, I think I would like to address it from the standpoint of something Mr. Velazquez said earlier, that in the scheme of things, when you look at an urban or a rural designation, you look at the actual amounts. $40 million over the course of 10 years is not a lot of money when you are looking at a 10-year vision for the change of an entire social and economic structure and community that begins with hope. I think that the $40 million that we promised those zones and the $3 million we promised those enterprise communities are, again, just a piece of the puzzle that they have put together with partnerships, and leveraging has demonstrated already, when it comes to $9 million, there is something that we, as rural communities, need to look at in terms of what is being proposed. One is that it is only tax incentives. We have capacity issues in rural America that may not put us in a position to be able to use solely tax incentives. We need to build infrastructure systems that will allow rural communities to diversify their economies and grow new markets and what have you. So that alone may be something that would require a discussion from rural communities and see how much excitement there is about the prospect of a zone with only those characteristics, and also talking to the question of a little equity. I think in current conversations the distribution of the nine new zones is seven urban and two rural. Well, two rural don't seem like an awful lot when we have more than 13,000 rural placesand 1,400 rural counties, and I think also that we have demonstrated in rural America that we know how to gain capacity and make small dollars go very far. I think the enterprise communities are a good example of that so that would be my comments on the question. Chairman LoBiondo. Let me reemphasize that Congressman Capuano and myself, and I believe I speak for most of the members of the caucus, feel very strongly about the Round IIIs with any designation and possible funding before Round IIs are, fully enabled by virtue of the promises that were made. We think that, since we are dealing with one year at a time right now, to expand to Round IIIs without the firm commitment for Round IIs leads to a path for potential trouble, if not worse, than the way of disaster for programs--any of these zones that we have that are up and running, putting plans together, if on any single year the funding drops or is--some reason isn't there, we have got a catastrophe on our hands. I think that unless we have that commitment on the Round IIs, the Round IIIs only put more pressure that way. Let me just take a moment to say that we find that with any successful program, there are partnerships that are developed. I think we have a clear indication today, with the partnerships between the Federal government, our local communities, different agencies within the government, but I also want to publicly thank Senator Bob Torricelli. He has been a great partner for us in New Jersey. He was very instrumental in the designation of our zone. He continues to remain very instrumental in our help in putting together what we need to additionally do. We have had personal discussions and meetings. We have his commitment of pushing on the Senate side, because there are a lot of questions of we are working on the House side, what happens on the Senate side. Senator Torricelli has assured me of his continued strong backing for the program, and I want to publicly thank him for that. Another question for Ms. Matthews, but any of our panelists, as we are going through this, we are talking specifically about doing something with the tax credits and specifically for the funding. But as we are examining what we have been able to do with empowerment zones in the rural and the urban and the communities and all the aspects of this, do you have any suggestions of areas that can or should be tweaked with wording and/or authorization, other than the tax credits or the funding, that would help in allowing the zones to be more productive and just be better off? Ms. Matthews. I think I can only tell you what some of the rural communities are telling me as I go out and visit them in the community, and I think that some rural communities that do not maybe fit within the current eligibility criteria in terms of poverty and what have you would like an exploration of other criteria that may bring more rural areas into eligibility for this community development planning process, because I think, as Mr. Velazquez said, and as you said, actually, that maybe consider that some of these metropolitan areas are considered very wealthy, or they have a lot of money, or a high per capita income or what have you, but there are certainly pockets within these communities as there are in rural America, especially when you take the eligibility from a census track perspective, that sometimes--particularly in the West, for example, you will take a very, very large area into a census track that can skew numbers--there are other measurements that indicate need. I think we could have a discussion on how we might be able to better serve some of those areas. Certainly for Round II specifically, the tax incentives and full funding are just the two things that are going to be continuously on the mind of those communities so that they continue the implementation of the plans. Chairman LoBiondo. Mr. Velazquez, do you find that in the day-to-day operation of our zone, that there are any particularly onerous rules and regulations that you are compelled to work under that are hampering your ability to have full maximization in the zone of what our potential is? Mr. Velazquez. I think functionally the zones are working pretty well actually. The process that has been set up seems to be working well, allows us some flexibility. It also provides a monitoring mechanism so that everyone is aware of what is happening. Obviously, there are some areas that we can tweak as far as how the funds are utilized. Part of our other problem, back to the definition issue, is the money originally was coming through the social service block grant, which allowed for more flexibility in the types of programs that we were going to implement. The money came through HUD, which then had a whole new definition of how the money could be used, economic opportunity versus the more general definition that was used in the CFR. So, again, that is the result of the type of money that came out of the Round II appropriation, but I think it is important and critical--again, I hate to go back to this, but for us it is important that we know up front how our money can be used so that when we are implementing our strategies, it is clear and the opportunities are clear for us, because what it has meant for us as a Round II, and the changing definition, means we have to go back and revisit all of our implementation plans and then tweak them, and maybe in some cases, some programs, such as the local programming, the human service programming, has fallen by the wayside because we have not been able to put it into that category of economic development. Again, that is a critical issue for us. But as far as process goes, it has actually been a pretty easy process to work with. Chairman LoBiondo. Well, I want to thank our panelists for being here today. This was, I think, very helpful for us in our quest for full funding for our Round IIs, Empowerment Zones in order to help the many people that we have the potential to reach. Your testimony was extremely valuable. I appreciate your taking the time to spend with us here. With that, the subcommittee is adjourned. 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