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11.307 ECONOMIC ADJUSTMENT ASSISTANCE

(Economic Adjustment)

FEDERAL AGENCY

ECONOMIC DEVELOPMENT ADMINISTRATION, DEPARTMENT OF COMMERCE

AUTHORIZATION

Public Works and Economic Development Act of 1965, as amended, Public Law 108-373, 118 Stat. 1756, 42 USC. 3149.

OBJECTIVES

To assist State and local interests design and implement strategies to adjust or bring about change to an economy. Program focuses on areas that have experienced or are under threat of serious structural damage to the underlying economic base. Such economic change may occur suddenly or over time, and generally results from industrial or corporate restructuring, new Federal laws or requirements, reduction in defense expenditures, depletion of natural resources, or natural disaster. Aids the long-range economic development of areas with severe unemployment and low family income problems; aids in the development of public facilities and private enterprises to help create new, permanent jobs.

TYPES OF ASSISTANCE

Project Grants.

USES AND USE RESTRICTIONS

Strategy investments help organize and carry out a planning process resulting in a Comprehensive Economic Development Strategy (CEDS) tailored to the community's specific economic problems and opportunities. Implementation Investments support one or more activities identified in an EDA-approved CEDS. Activities may include, but are not limited to, the creation/expansion of strategically targeted business development and financing programs such as: Revolving loan funds, infrastructure improvements, organizational development, and market or industry research and analysis.

ELIGIBILITY REQUIREMENTS

Applicant Eligibility

Eligible applicants include Economic Development Districts; States, cities or other political subdivisions of a State or a consortium of political subdivisions; Indian tribes or a consortium of Indian tribes; institutions of higher learning or a consortium of such institutions; or public or nonprofit organizations or associations acting in cooperation with officials of a political subdivision of a State. Applicants using EDA supplemental disaster assistance will generally be restricted to disaster-impacted areas.

Beneficiary Eligibility

Geographic areas, usually counties or groups of counties, which meet one of the following criteria: 1) An unemployment rate that is, for the most recent 24 month period for which data are available, at least one percent greater than the national average unemployment rate; 2) per capita income that is, for the most recent period for which data are available, 80 percent or less of the national per capita average income; or 3) a special need, as determined by EDA, arising from actual or threatened severe unemployment or economic adjustment problems resulting from severe short-term changes in economic conditions. Special need criteria are listed in the Agency's annual Notice of Funding Availability.

Credentials/Documentation

Applicants for assistance must develop a CEDS that identifies the actual or anticipated adjustment problem and indicate how the strategy will be developed. Implementation investments applications must be consistent with an approved CEDS.

APPLICATION AND AWARD PROCESS

Preapplication Coordination

EDA's Economic Development Representative (EDR) or regional office representative will meet with the proponent to determine whether preparation of a project proposal is appropriate. If appropriate, the proponent will be requested to prepare a brief project proposal according to an outline provided by the EDR. Following a review by the EDR and Regional Office Staff, the Regional Director will determine whether to invite a formal application. An environmental impact assessment is necessary; an environmental impact statement may also be required. This program is eligible for coverage under E.O. 12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review. The standard application forms as furnished by the Federal agency and required by 15 CFR Part 24 must be used for this program.

Application Procedure

If an application is invited by the regional office, an EDR or regional office representative will provide necessary forms and assist in filling them out. This program is subject to the provisions of OMB Circular No. A-110 and 15 CFR Part 24.

Award Procedure

Final decision on applications from eligible applicants is made by the Regional Office Director of the Economic Development Administration, Department of Commerce.

Deadlines

Proposals are accepted on a continuing basis and applications are invited and processed as received.

Range of Approval/Disapproval Time

Normally, two months are required for a final decision after the receipt of a completed application invited by EDA that meets all requirements.

Appeals

None.

Renewals

None.

ASSISTANCE CONSIDERATIONS

Formula and Matching Requirements

EDA may generally fund 50 percent of a project's cost, however certain conditions of high economic distress or an applicant's inability to provide all of the matching share may permit a higher grant rate. Grant rate requirements may be found in EDA's regulations at 13 CFR 301.

Length and Time Phasing of Assistance

None.

POST ASSISTANCE REQUIREMENTS

Reports

With the exception of strategy grants, quarterly financial reports are required until one year after final disbursement of funds. Reports on RLF grants are initially required semi-annually but may be changed to annual reports with the consent of the agency. Grantees are also required to report on program performance and project outcomes at intervals prescribed by the agency in compliance with GPRA of 1993.

Audits

In accordance with the provisions of OMB Circular No. A- 133 (Revised, June 27, 2003), recipients that are States, Local Governments, Nonprofit Organizations (to include Hospitals), and Institutions of Higher Learning shall be subject to the audit requirements contained in the Single Audit Act Amendments of 1996 (31 U.S.C. 7501 et seq.). Commercial organizations shall be subject to the audit requirements as stipulated in the award document. States, local governments, and nonprofit organizations that expend $500,000 or more in a year in Federal awards shall have a single or program-specific audit conducted for that year.

Records

As necessary for audit and as required by OMB Circular No. A-110 and 15 CFR Part 24. All financial and programmatic records, supporting documents, statistical reports and other records of grantees or sub grantees are required to be maintained by the terms of the agreement. The grantee must retain records for 3 years after completion of the project or submission of the final financial report, whichever is later, and be readily available for inspection and audit.

FINANCIAL INFORMATION

Account Identification

13-2050-0-1-452.

Obligations

(Investments) FY 04 $40,270,000; FY 05 est $44,793,000; and FY 06 est $0.

Range and Average of Financial Assistance

No specific minimum or maximum.

PROGRAM ACCOMPLISHMENTS

In FY 2004, 128 projects were funded.

REGULATIONS, GUIDELINES, AND LITERATURE

13 CFR Chapter III Part 308, Civil Rights Guidelines, RLF Plan Guidelines, CEDS Guidelines, RLF Standard Terms and Conditions and other publications are available from Regional Offices.

INFORMATION CONTACTS

Regional or Local Office

Refer to Appendix IV of the Catalog for EDA regional office addresses.

Headquarters Office

Refer to Appendix IV of the Catalog for EDA Regional Office addresses and telephone numbers.

Web Site Address

http://www.eda.gov/

EXAMPLES OF FUNDED PROJECTS

Investments awarded under the Economic Adjustment Program include: (1) strategy for recovery from plant closure and major permanent job loss; (2) rehabilitation of vacant industrial facility for multi-tenant use or as an incubator; (3) revolving loan funds or recapitalization of revolving loan funds.

CRITERIA FOR SELECTING PROPOSALS

All proposals and applications for funding submitted to EDA are evaluated competitively for conformance to statutory and regulatory requirements and conformance with EDA's Investment Policy Guidelines and funding priorities. EDA will invest in applicants who are entrepreneurial in spirit and in action. Potential investments will be analyzed using the following five supplemental evaluation criteria of approximately equal weight: extent that proposed investments are market-based; extent that proposed investments are pro-active in nature and scope; extent that proposed investments look beyond the immediate economic horizon, anticipate economic changes, and diversify the local and regional economy; likelihood that proposed investments maximize the attraction of private sector investments and would not otherwise come to fruition absent EDA's investment; likelihood that proposed investments have a high probability of success; likelihood that proposed investments result in an environment where high skill, high wage jobs are created; and likelihood the proposed investments maximize Return on Taxpayer Investment.