Statement Of Congressman Michael E. Capuano Before The Subcommittee On Rural Enterprises, Business Opportunities And Special Small Business Problems

"Chairman LoBiondo, Ranking Member Christensen, members of the Subcommittee,"

"It's a pleasure to be here this afternoon to testify on behalf of the EZ/EC Congressional Caucus in support of continued funding for the Round II Empowerment Zones and Enterprise Communities."

"As many of you know, the first round of 11 Empowerment Zones and 94 Enterprise Communities were authorized by Congress in 1993. In addition to several tax incentives, each urban EZ received $100 million and each rural EC received $40 million in federal funding over ten years to implement their comprehensive economic development plans. This funding has helped the Round I EZ/ECs create thousands of new jobs and new business opportunities across the nation."

"Because of the success of the first round EZ/ECs, Congress authorized a second round of 20 EZs and 20 ECs in 1997. Communities from across the nation applied for these designations, and the final selections were made in January of last year. Because of the hard work of community leaders and local officials, the City of Boston was fortunate enough to secure one of the Round II EZ designations."

"Unfortunately, the federal funding that accompanied the Round I designations was not mandated by Congress for the Round II communities. In each of the last two fiscal years, a small portion of the funds that were promised was provided through the appropriations process. Of the $20 million that each urban EZ was supposed to receive in the first two years of the program, they have received only $6.6 million -- $14.4 million less than anticipated."

"Even without the federal funds, the Boston Empowerment Zone has already made significant strides in bringing economic opportunity to several of the City's distressed neighborhoods. One example of the innovative work being done in the Zone is the School to Career (STC) program. Working with the business community, the public school system, and non-profit groups this initiative identifies businesses in the EZ that are willing to serve as mentors to students from the three high schools in the Zone."

"Participants are offered skills training such as resume writing and interview strategies in their schools, while job counseling services provide information on new industries and new career opportunities. Boston's preeminence in the health care and high tech industries offers students cutting edge careers in some of the world's leaders in these fields."

"The STC program has already served more than 300 students living in the Zone, and they hope to double that number in the coming years. The staff is also adding to the list of 60 business participants, and the City received a grant from the Department of Labor to continue these efforts over the next several years."

"The federal government's ongoing commitment to the Round II EZ/ECs is essential for programs like School-to-Career to continue serving these students. The Boston EZ has leveraged their promised federal funding with more than $400 million in new private sector investment. These funds could be lost if the federal government walks away from their promise to these communities. Thousands of residents in these EZs and ECs would lose out on new jobs and new economic opportunity."

"Congressman LoBiondo and I have formed the bipartisan EZ/EC Congressional Caucus to advocate for full funding for the Round II EZ/ECs. Because of the hard work of members on both sides of the aisle, we were able to secure a commitment from President Clinton and Speaker Hastert to include $200 million in funding for the Round II communities in the New Markets/Community Renewal tax package. This will give these communities one full year of funding -- $10 million for each urban EZ in FY 2001."

"Our work is not over though. We will continue to work to secure full, mandatory funding for the Round II EZ/ECs in the coming years. We are also concerned that the recent agreement includes the possibility of a third round of Empowerment Zones. We need to finish the work on the Round II Zones before we consider another round of designations. The government made a promise to these communities. We must fulfill that promise and make the Round II EZ/ECs whole."

"Thank you for the opportunity to testify here today. I would be happy to answer any questions you may have."