1/ The amount shown for Centers includes bonus grants to redevelopment area projects.
The new authorizing legislation requires that not less than ten percent of funds appropriated under Title I of the Act be for projects in redevelopment areas designated under Section 401(a)(6). The original budget request for fiscal 1975 contained a proposed language change which would have eliminated the requirement that a certain percentage of funding be directed to Public Works Impact Program (PWIP) projects. The adjustment requested herein will realign public works funds to provide for PWIP projects at the ten percent rate specified in the new authorization. The amounts originally requested for Districts (excluding
centers), Urban areas, Indian reservations and Redevelopment areas are reduced in order to make funds available for PWIP projects.
The $157 million will permit EDA to continue a program for the construction or expansion of public works projects which offer substantial employment potential, improve the capacity for economic growth through the development of a structure conducive to the location of industrial and commerical enterprises, or provide essential public services to the citizens of depressed areas. The program finances the development of such projects as water and sewer systems, industrial parks, access roads, and expansion of harbor and airport facilities, and essential community facilities designed to improve an area's economic opportunities.
The new legislation provides new flexibility for this program by the addition of new program tools.
addition to previously authorized fixed asset loans and guarantees of loans for working capital, eligible
borrowers can now receive direct working capital loan; guarantees of up to 90 percent of the outstanding
balance of fixed capital loans made by private lending institutions; and guarantees of rental payments
of leases for buildings and equipment at a rate of up to 90 percent of remaining rental payments.
increase of $2,000,000 is required to finance these new tools.
In compliance with the wishes of the Senate Committee, EDA will develop a Memorandum of Understanding with SBA to assure that the lease guarantee programs of the two agencies act in a complementary
The increased funds are needed to carry out the purposes of Section 302 of the Act including, the awarding of grants to states for 80 percent of the cost of economic development planning, and for defraying the cost to Districts of assigned review activities under the provisions of OMB Circular A-95.
Of the total request, $5,500,000 will support planning grants to the States as authorized by Section
302(b) of the Act (including the District of Columbia, Puerto Rico, Virgin Islands, Guam, and
American Samoa) to increase their ability to develop a continuing comprehensive planning process
which would be carried out in cooperation with sub-State planning and development organizations.
The
addition of State grants to EDA's current planning efforts will provide for the coordination of economic
development planning and will facilitate the exchange of information and ideas among the various levels
of government thereby leading to more effective overall planning and implementation of plans. A State
planning program will also provide a sound base for the implementation of the new Title IX Economic
Adjustment program. An annual report describing the planning process being implemented is to be submitted
to the Secretary by each grantee.
The remaining $1,000,000 is required for assisting Districts assigned OMB Circular A-95 review activities
and for the newly authorized planning program for cities, other subdivisions of a State, or sub-State
planning and development organization to conduct a continuous process of defining economic development
goals and formulating and implementing a development program.
A new Section 304 authorizes $35 million to provide States with funds to be used to supplement or make
grants or loans for EDA projects under the authority of Titles I, II, and IV.
This new grant program
will be executed in consonance with the plans developed under Section 302 of the Act. Grant supplements
by States can be used to reduce or waive the non-Federal share of project funding, subject to the special
matching requirements of the supplemental program, i.e. funds must be matched on a 25%/75% basis by
the State. Funds may also be used to fund projects in whole or in part on a "first dollar" basis, if
the Secretary certifies that each project meets all requirements of the Act and could be approved for
Federal funding under the Act if funds were available. Funds appropriated under the authority of
Section 304 will be distrubted among the States in the ratio which all grants under Title I since the
beginning of EDA in each State bears to the total of such grants in all States. This supplemental
requests that $13,000,000 be appropriated so that this program can be initiated in fiscal 1975.
Activity:
Economic adjustment (Title IX)
(Dollar amounts in thousands)
The new legislation provides authority for a new Federal effort of adjustment assistance.
of this new title is to provide special economic development and adjustment assistance programs to States
and local areas to help them meet actual or threatened unemployment arising from actions of the Federal
government, and economic adjustment problems resulting from severe changes in economic conditions, and
to encourage cooperative intergovernmental action to prevent and solve problems as they occur.
A redevelopment area or economic development district established under Title IV of this Act, an
Indian tribe, a State, a city or other political subdivision of a State, or a combination of such political
subdivisions can receive assistance under this program.
Grants can be made directly to eligible recipients who have a special need relating to a rise or an
expected rise in unemployment or other economic adjustment problems. Such eligible recipients must submit
plans to the Secretary for approval in order to use grant funds for any of the following: public
facilities, public services, business development, planning, unemployment, rent supplements, mortgage
payment assistance, research, technical assistance, training, relocation of individuals, and other
appropriate assistance.
Grants approved under this title may be used in direct expenditures by the applicant or through redistribution to public and private groups in grants, loan guarantees or other assistance.
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