Mar 11, 2009

Federal Stimulus for Economic Development


IEDC Stimulus Act Alert: EDA Funding Now Available

On Tuesday, March 10, the Department of Commerce’s Economic Development Administration (EDA) announced the availability of funds under the American Recovery and Reinvestment Act (ARRA) of 2009.

Urgent: Applications are accepted on a continuing basis and processed as received. In addition, preference will be given to activities that can be started and completed quickly, including a goal of using at least 50 percent of the funds for activities that can be initiated not later than 120 days after the date of the enactment of the Act (February 17, 2009).

A summary of EDA’s announcement is below, intended to help you and your community partners act quickly on this opportunity. Please
read the full announcement on EDA’s website (PDF) if you plan to apply for funding.

ARRA appropriated $150 million for the EDA American Recovery Program. EDA is soliciting applications through its Public Works and Economic Adjustment Assistance programs only. Applications may be submitted electronically in accordance with the instructions provided at
www.grants.gov or mailed to the applicable EDA regional office.

Priority Considerations and Requirements Under ARRA: EDA will give priority consideration to applications that will significantly benefit regions “that have experienced sudden and severe economic dislocation and job loss due to corporate restructuring.”

EDA will evaluate applications according to the following investment policy guidelines and funding priorities. Applications should strongly exemplify at least one of each.

• Investment Policy Guidelines:

• Be market-based and results driven

• Have strong organizational leadership

• Advance productivity, innovation and entrepreneurship

• Look beyond the immediate economic horizon, anticipate economic changes, and diversify the local and regional economy

• Demonstrate a high degree of local commitment

• Funding Priorities:

•  Investments in support of long-term, coordinated and collaborative regional economic development approaches

• Investments that support innovation and competitiveness

• Investments that encourage entrepreneurship

• Investments that support strategies that link regional economies with the global marketplace

Additional consideration will be given to applications that assist BRAC-impacted communities; those that link historic preservation and economic development; and those that support the economic revitalization of brownfields.

Limit on Use of Funds: Funds may not be used for any casino or other gambling establishment, aquarium, zoo, golf course, or swimming pool.

“Buy American” Restrictions and Davis-Bacon Wage Rate Requirements. ARRA-funded projects for public buildings or public works “[must use] iron, steel, and manufactured goods…produced in the United States.” The legislation allows for a waiver of this requirement under circumstances outlined in the full announcement. As with all EDA investments in public works, economic adjustment assistance, and revolving loan fund (RLF) projects that finance construction, awards under this competitive solicitation will be subject to Davis-Bacon wage rate requirements.

Award Information: Of the total $150 million available, $50 million will be allocated for economic adjustment assistance; EDA will allocate the remaining $100 million to either the Public Works and Economic Development Facilities Program or the Economic Adjustment Assistance Program, depending the needs demonstrated among EDA’s six regional offices.

• Public Works and Economic Development Facilities Program: Supports the construction or rehabilitation of essential public infrastructure and facilities necessary to generate or retain private sector jobs and investments, attract private sector capital, and promote regional competitiveness, including investments that expand and upgrade infrastructure to attract new industry, support technology-led development, accelerate new business development, and enhance the ability of regions to capitalize on opportunities presented by free trade.

• Economic Adjustment Assistance Program: Provides a wide range of technical, planning and infrastructure assistance (including assistance to establish RLFs) in regions experiencing adverse economic changes that may occur suddenly or over time.

Eligible Applicants: Nearly any public entity, educational institution or nonprofit organization engaged in economic development, or consortia thereof, may apply. For-profit, private-sector entities and individuals do not qualify for investment assistance.

Economic Distress Criteria: Potential applicants are responsible for demonstrating to EDA the nature and level of economic distress in the region in which the proposed project will be located. For a Public Works or an Economic Adjustment investment, the project must be located in a region that meets one (or more) of the following economic distress criteria: (i) an unemployment rate that is, for the most recent 24-month period for which data are available, at least 1 percentage point greater than the national average unemployment rate; (ii) per capita income that is, for the most recent period for which data are available, 80 percent or less of the national average per capita income; or (iii) a “Special Need” (see criteria below). The full funding announcement (PDF) details the data sources EDA uses to determine economic distress.

Special Need Criteria: A project is eligible pursuant to a “Special Need” if the project is located in a region that meets one of the criteria described below:

1. Closure or restructuring of industrial firms or loss of a major employer essential to the regional economy.
2. Substantial out-migration or population loss.
3. Underemployment, meaning employment of workers at less than full-time or at less skilled tasks than their training or abilities permit.
4. Military base closures or realignments, defense contractor reductions-in-force, or Department of Energy defense-related funding reductions.
5. Natural or other major disasters or emergencies, including terrorist attacks.
6. Extraordinary depletion of natural resources.
7. Communities undergoing transition of their economic base as a result of changing trade patterns.
8. Other special need, as determined by the Assistant Secretary.

Cost Sharing or Matching Share Requirement: Generally, the amount of the EDA grant may not exceed 50 percent of the total project cost. Projects may receive an additional amount not to exceed 30 percent, based on the relative needs of the region in which the project will be located. EDA will give preference to applications that include cash contributions (over in-kind contributions) as the matching share.

Additional information: Applicant eligibility, program objectives and priorities, application procedures, evaluation criteria, selection procedures, and other requirements for all programs are set forth in EDA’s regulations, available at www.eda.gov/InvestmentsGrants/Lawsreg.xml.

About EDA: EDA provides financial assistance to distressed communities in both urban and rural regions. Such distress may exist in a variety of forms, including high levels of unemployment, low income levels, large concentrations of low-income families, significant declines in per capita income, large numbers (or high rates) of business failures, sudden major layoffs or plant closures, trade impacts, military base closures, natural or other major disasters, depletion of natural resources, reduced tax bases, or substantial loss of population because of the lack of employment opportunities. EDA’s experience has shown that regional economic development to help alleviate these conditions is effected primarily through investments and decisions made by the private sector.