INTRODUCTION OF ECONOMIC DEVELOPMENT INITIATIVES FOR RURAL AMERICA -- HON. JOHN M. McHUGH (Extensions of Remarks - June 29, 2001)

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HON. JOHN M. McHUGH OF NEW YORK IN THE HOUSE OF REPRESENTATIVES Thursday, June 28, 2001

Mr. McHUGH. Mr. Speaker, as a life-long resident of Northern New York, I have watched the 24th Congressional District thrive as a bustling arena of agricultural production, aluminum processing, automobile parts fabrication, paper-making, tourism and textile manufacturing.

Regrettably, in the last decade or so, the trends have been altered dramatically and the manufacturing sector--particularly in the Northeast--has diminished considerably. Furthermore, our small family farmers have seen a dramatic decline in the price they receive for their hard-earned production, forcing many of them to abandon their beloved way of life. The statistics, unfortunately, bear this out; earlier this month it was reported that Northern New York continues to have the State's highest unemployment rate. While the unadjusted statewide unemployment rate was 4 percent and the national rate was 4.1 percent, the rate in the ten counties in my rural Northern and Central New York District ranged as high as 9.1 percent.

Mr. Speaker, we are a proud and independent people who have long relied on our ingenuity and integrity to make our way through life. While we have accomplished much through our resourcefulness, there is more that can, and must, be achieved to return greater prosperity to what we call ``God's country.'' That is why I rise today to introduce a legislative package of rural economic development initiatives that I believe will create at least the initial incentives to bring new business and industry opportunities--and the attendant job creation--to our rural communities.

First, the use of high-speed Internet access is no longer limited to the wealthy or so-called computer techies. It has fast become a mainstay of everyday life, particularly in the business world. Accordingly, the first measure I am introducing, the Rural America Digital Accessibility Act, contains four incentives to help bridge the digital divide in rural America.

The technology bond initiative would provide a new type of tax incentive to help state and local governments invest in a telecommunications structure and partner with the private sector to expand broadband deployment in their communities, especially underserved rural areas. The broadband expansion grant initiative complements these bonds by utilizing grants and loan guarantees in underserved rural communities to accelerate private-sector deployment of high-speed connections so that our residents can access the Internet with a local, rather than a long-distance, phone call. The third initiative targets funding for research to increase rural America's broadband accessibility and make it more cost-effective.

With six four-year universities and colleges and seven two-year colleges within my District's boundaries, it only makes good sense for us to tap the expertise of our nation's educators to assist in our endeavors. Accordingly, the fourth incentive will help small- and medium-sized businesses connect with educational institutions that can provide technological assistance designed to improve the business' productivity, enhance its competitiveness and promote economic growth.

Second, to help our farm community, I am introducing the Agricultural Producers Marketing Assistance Act. This measure would establish Agricultural Innovation Centers on a demonstration basis and provide desperately-needed technical expertise to assist producers in forming producer-owned, value-added endeavors. It would also help level the financial playing field for producers by providing a tax credit for eligible farmers who participate in these activities. In this way, farmers and producer groups can earn more by reaching up the agricultural marketing chain to capture more of the profits their product generates.

Lastly, but certainly not least, I am introducing the Rural America Job Assistance and Creation Act. This a comprehensive measure designed to address a host of issues that have been identified as problematic for residents and businesses in rural America.

Because many small businesses lack the financial capacity to support the training of highskilled workers, this legislation establishes regional skills alliances to help identify needed skills and develop and implement effective training solutions. It also encourages cooperation between educational institutions and entrepreneurs who have innovative ideas but who cannot afford the legal and consultant fees necessary to convert their concepts into reality.
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Another incentive involves an expansion of the work opportunity tax credit to include small businesses located in, and individuals living in, communities experiencing population loss and low job growth rates such as those found in rural Northern and Central New York. Approximately 100 such communities would be designated, subsidizing some 8,000 jobs in each area.

Mr. Speaker, when employees face layoffs or the shutdown of their place of employment, thereby losing some or all of their family income, the one thing that provides them some small sense of security is severance pay. While this is without a doubt a welcome helping hand in a time of need, unfortunately, the recipients often lose a third of their severance pay to taxes because they are pushed into a higher tax bracket. My legislation excludes from gross income up to $25,000 of any qualified severance payment, limited to payments of $150,000 or lower.

When a company that employs 100 or more workers makes the decision that it can no longer stay in business or must reduce its workforce, the Worker Adjustment and Retraining Notification, or WARN, Act requires 60 days advance notice of a major layoff or plant closing. As part of the notification requirement, current law states that notice be served upon, among others, the applicable State dislocated worker unit and the chief elected official of the appropriate unit of local government. I believe we must expand the notification process to include, as well, the appropriate Federal- and State-elected officials, i.e., U.S. Representatives and Senators and State Legislators. The expansion included in my legislation serves two purposes: (1) to alert these officials to the situation and the impact it will have on workers and the community and (2) to provide these officials with the opportunity to assist in determining if State and/or Federal resources are available and can be utilized to prevent closure or layoffs and the loss of employment opportunities. As publicly-elected officials, we have access to many avenues that may lend assistance at this troubling and uncertain time.

Mr. Speaker, my Congressional District borders the Canadian Provinces of Ontario and Quebec, and we consider Canadians to be not only our neighbors to the North, but our friends, as well. One valuable benefit of this association is the symbiotic relationship we have nurtured in the area of economic development and job creation. Unfortunately, the current immigration visa procedures for H-1 B professional speciality workers often complicate the employment related travel of Canadians to the United States and preclude what should be a seamless and unencumbered process. In September 2000, the General Accounting Office reported that Immigration and Naturalization Service decisions about the priority of H-1 B applications in comparison to other types of petitions handled by INS have resulted in delays of several months in processing employers' requests for H-1 B workers.

Delays of this nature mean that businesses across the nation, but particularly in Northern New York, are placed at a disadvantage. In my border communities, workers oftentimes travel mere miles to cross the border to provide the skilled labor needed by American companies. In

Another component of the package I am introducing will give statutory authority to the already-existing National Rural Development Partnership and State Rural Development Councils. The NRDP and its principal organizational component, the SRDCs, were established a decade ago to help rural community leaders, government policy makers, agency program administrators, rural development practitioners, and citizens address a long-standing problem--the lack of coordination in identifying rural community needs, planning solutions to meet those needs, and implementing those solutions. State Rural Development Councils currently exist in 40 States, including the State of New York. While neither the Partnership nor the Councils make policy and generally do not administer programs, the key to their success has always been collaboration--bringing together funds, knowledge and individuals to assist rural communities. They have helped generate local solutions to rural development needs and a specific authorization would help establish a dedicated and predictable funding source for their activities.

Mr. Speaker, the U.S. travel and tourism industry is one of America's largest employers and my Congressional District is no exception to that statistic. Northern New York State contains some of the most scenic and environmentally-unique lands in the entire nation: The Adirondack Mountains, the St. Lawrence River Valley and Seaway, the Champlain Valley and the Thousand Islands region. Tourism is a critical component of our economy and is universally recognized as a significant contributor to the region's visibility, economic development, and overall quality of life. But the full potential of the industry remains untapped. Some of the factors that have limited the benefits to be realized from the tourism industry include the vastness of the region, the compartmentalization of its assets and resources and, perhaps most importantly, the lack of regular data upon which to base policy or marketing decisions.

While considerable effort has been undertaken at the State and local levels to promote development and jobs for the region, as well as to market and promote the abundance of tourist related attractions and events, we continue to lack integration of current economic development efforts with the tourism potential of the region.

It is for these reasons that I am proposing establishment of the Northern New York Travel and Tourism Research Center at the William C. Merwin Rural Services Institute at the State University of New York at Potsdam, New York. The Center would fill the critical deficiency we face and play a crucial role in the economic revitalization of Northern New York.

The final element of my job creation and assistance legislation mandates the General Accounting Office to examine and report to Congress on how best to address the long-term problems resulting from a lack of infrastructure and a lack of venture capital in rural areas. The study will focus on the need for expanding existing economic development and small business loan/grant programs and will include tourism and agriculture-related projects. The study will help us better identify the problems that presently exist and evaluate how infrastructure, venture capital and federal programs can be better utilized to enhance rural areas.

Mr. Speaker, during the nearly nine years I have been honored and privileged to represent the residents of Northern and Central New York in the U.S. House of Representatives, I have joined in a wide variety of efforts to help revitalize rural America--from tax relief for individuals and the business community, protection and enhancement of the environment and addressing our energy problems to preserving our health care system, promoting fair international trade and enhancing transportation opportunities.

Most recently, since the start of the 107th Congress in January, I have spearheaded several efforts to help rural America and its citizens. I am involved in legislative initiatives that would assist our communities recover and develop property known as brownfields, and are designed to complement broader, more comprehensive brownfields legislation moving through Congress. The Brownfields Redevelopment Incentives Act provides direct federal funding, loans and loan guarantees, and tax incentives to increase the amount of support available to assess and clean pieces of abandoned, idled, or underused property where expansion, redevelopment, or reuse is complicated by environmental contamination or perceived contamination.

I have also joined with several of my House colleagues from New York in introducing the Acid Rain Control Act. By reducing sulfur and nitrogen emissions, the measure would result in more than $60 billion in annual benefits by providing improvements to human health, visibility, aquatic and forest ecosystems, and buildings and cultural structures. At the same time, the EPA estimates costs associated with implementation of the Act to be about $5 billion. I think it is safe to say that this is the kind of cost-effective legislation we strive to achieve, with 12 times the benefits for the costs involved.

A third initiative I introduced earlier this year, the Self-Employed Health Affordability Act, provides for the full deductibility of health insurance costs for the self-employed. Current law provides for 100 percent deductibility in 2003, but we need to make the change immediately in order to bring relief to the many hard-working small business and farm families who must pay their own health insurance premiums. Coupled with estate tax reform, rate reductions and pension improvements, among other tax code changes recently enacted into law, this is another step toward helping our taxpayers keep more of their hard-earned money and decide for themselves how it should be spent.

Mr. Speaker, as I stated earlier, my constituents are proud and resourceful. They, too, have continued to take the initiative to help themselves and their communities develop the tools necessary to fulfill our mutual goals.

The economic development package I am introducing today is simply one more step, albeit of a more comprehensive nature, that I
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am taking in a long line of legislative initiatives designed to assist our communities manage the wide-ranging challenges faced by rural America in the 21st century.
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