[Budget of the United States Government]
[VI. Investing in the Common Good: Program Performance in Federal Functions]
[21. Community and Regional Development]
[From the U.S. Government Publishing Office, www.gpo.gov]


 
                 21.  COMMUNITY AND REGIONAL DEVELOPMENT

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                 Table 21-1.  FEDERAL RESOURCES IN SUPPORT OF COMMUNITY AND REGIONAL DEVELOPMENT
                                            (In millions of dollars)
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                                                                               Estimate
               Function 450                   1998   -----------------------------------------------------------
                                             Actual     1999      2000      2001      2002      2003      2004
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Spending:
  Discretionary Budget Authority..........    10,263     8,884     8,902     8,902     8,902     8,902     8,902
  Mandatory Outlays:
    Existing law..........................      -407      -477      -602      -701      -734      -761      -815
    Proposed legislation..................  ........  ........        29       116       194       223       231
Credit Activity:
  Direct loan disbursements...............     1,502     2,402     2,085       N/A       N/A       N/A       N/A
  Guaranteed loans........................     1,427     2,165     3,144       N/A       N/A       N/A       N/A
Tax Expenditures:
  Existing law............................     1,150     1,275     1,365     1,290     1,210     1,090     1,080
  Proposed legislation....................  ........  ........        12       195       376       465       543
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N/A = Not available

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  Federal support for community and regional development helps build the 
Nation's economy, and helps economically distressed urban and rural 
communities secure a larger share of America's prosperity. The Federal 
Government spends over $10 billion a year, and offers about $1.4 billion 
in tax incentives to help States and localities create jobs and economic 
opportunity, and build infrastructure to support commercial and 
industrial development.
  Federal programs have stabilized and revitalized many of these 
communities allowing them to expand their economic base and support 
their citizens, particularly those in need. Communities hard hit by 
natural disasters receive Federal assistance to rebuild infrastructure, 
businesses, and homes. States and localities also use these Federal 
funds to leverage private resources for their community revitalization 
strategies.

Department of Housing and Urban Development (HUD)

  HUD provides communities with funds to promote commercial and 
industrial development, enhance infrastructure, and develop strategies 
for providing affordable housing close to jobs.
  Community Development Block Grants (CDBG) provide funds for various 
community development activities directed primarily at low-and moderate-
income persons. CDBG funds go to improving housing, public works and 
services, promoting economic development, and acquiring or clearing 
land. Seventy percent of CDBG funds go to over 950 central cities and 
urban counties, and the remaining 30 percent go to States to award to 
smaller localities. The Indian CDBG program focuses mainly on public 
infrastructure, community facilities, and economic development.
  HUD's HOME program (which is described in the Income Security 
function) supports construction of new housing, rehabilitation of 
existing homes, acquisition of standard housing, assistance to home 
buyers, and assistance for tenant-based rental.

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  The 2000 goals for the CDBG and HOME programs include:
   Increasing the number of CDBG grantees who incorporate 
          milestones with timetables in Consolidated Plans that can help 
          demonstrate progress in improving locally defined conditions 
          in their neighborhoods and communities;
   Developing a standardized HUD assessment of consolidated 
          plans;
   Assisting 108,000 households and assisting 95,000 newly 
          constructed units of affordable housing through HOME, helping 
          to increase to 72 percent the number of worst case housing 
          need households receiving Federal assistance;
   Providing housing assistance to almost 210,000 households 
          though the CDBG program.
  By the end of 2000, HUD will establish baseline measures against which 
to judge the contributions these programs make to community development 
and affordable housing.
  Empowerment Zones (EZs) provide tax incentives and grants to carry out 
10-year, community-wide strategic plans to revitalize designated areas. 
In 1994, the Administration designated nine EZs, two Supplemental EZs 
(which were designated full EZs in 1998) and 95 Empowerment Communities 
(ECs). These original EZs and related ECs have begun leveraging private 
investment, expanding affordable housing and homeownership 
opportunities, and helping create jobs. In December 1998, the 
Administration selected 15 new urban Zones and five new rural Zones 
(administered by the Agriculture Department) from more than 268 
distressed areas that applied for new designations. These Zones, along 
with the 20 new rural ECs were selected in January 1999, and will begin 
implementing their comprehensive strategies to redevelop their areas.
  The 2000 goals for the EZ and EC program include:
   Increase to 95 percent the share of urban EZs and ECs that 
          show satisfactory progress toward locally defined benchmarks, 
          as measured by the tracking system.

Department of Commerce

   The Economic Development Administration (EDA) provides assistance to 
communities to help build capacity and address long-term economic 
challenges through its nationwide program delivery network. EDA's public 
works grants help build or expand public facilities to stimulate 
industrial and commercial growth, such as industrial parks, business 
incubators, access roads, water and sewer lines, and port and terminal 
developments. EDA, working with State and local governments and the 
private sector, has completed a total of 8,570 projects, creating or 
retaining over 783,000 private sector jobs, invested over $4.9 billion 
in grants, and generated over $49.5 billion in private investment. 
Between 1992 and 1998, EDA awarded 1,208 public works grants, totaling 
$1.2 billion, to economically distressed communities to build these 
types of infrastructure projects.
  EDA's revolving loan fund (RLF) program enhances communities' capacity 
to invest in locally identified commercial development that creates 
jobs. Since 1976, when the RLF program was implemented, EDA has provided 
initial capital for over 550 local RLFs.
  These funds have made more than 7,200 loans to private businesses and 
have leveraged more than $1.9 billion in private capital that upon 
repayment has tended to stay in the community for re-lending and further 
economic development activity.
  The 2000 goals for EDA include:
   Creation or retention of a total of 66,753 jobs.

Department of the Treasury

  The Community Development Financial Institutions (CDFI) Fund seeks to 
promote economic revitalization and community development in distressed 
areas by increasing the availability of capital and leveraging private 
sector funds. The CDFI Fund provides financial and technical assistance 
to a diverse set of specialized, private, for-profit and nonprofit 
financial institutions known as community development financial 
institutions. CDFIs

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have a primary mission of community development and include community 
development banks, credit unions, loan funds, venture capital funds, and 
microenterprise loan funds.
  The 2000 goals for the CDFI Fund include:
   Increasing the diversity of CDFIs that receive assistance so 
          that all 50 States have at least one CDFI awardee; and
   Increasing the number of CDFIs that receive assistance to 135 
          from an estimated 125 in 1999.

Department of Agriculture (USDA)

  USDA gives financial assistance to rural communities and businesses to 
boost employment and further diversify the rural economy. The Rural 
Community Advancement Program's grants, loans, and loan guarantees help 
build rural community facilities, such as health clinics and day care 
centers, and create or expand rural businesses. USDA also provides loans 
through the Intermediary Relending Program (IRP), which provides funds 
to an intermediary such as a State or local government that, in turn, 
provides funds for economic and community development projects in rural 
areas.
  The 2000 goals for these USDA programs include:
   Creating 100,000 new jobs, compared to 82,000 in 1998, 
          through the Business and Industry loans, IRP, and community 
          facilities programs.

Department of the Interior

  The Interior Department's Bureau of Indian Affairs (BIA) helps Tribes 
manage and generate revenues from mineral, agricultural and forestry 
resources. BIA also promotes Tribal and individual self-sufficiency by 
developing Tribal resources and obtaining capital investments. The 
Department of the Interior (DOI) is partnering with the Department of 
Commerce, the Small Business Administration and Tribal governments to 
fulfill the Administration's directive to develop a strategic plan and 
coordinate existing public and private sector economic development 
initiatives. BIA and the Department of Justice seek to lower crime rates 
on the 56 million acres of Indian lands that are held in trust for 
tribes by DOI, through the expansion of its joint law enforcement 
initiative begun in 1998. BIA maintains over 7,000 buildings, including 
185 schools and 3,000 housing units; over 100 high-hazard dams; and 
(with the Transportation Department and State and local governments) 
about 50,000 miles of roads and 745 bridges. Finally the Department will 
strengthen its trust services program by facilitating more prudent land 
management and maintaining about 150 Tribal resource management plans, 
projects, co-management programs, and fishing access sites; supporting 
15 irrigation projects; managing 46 million acres for farming and 
grazing; completing the first phase of a comprehensive environmental 
audit; and funding 20 water rights negotiation teams.
  The 2000 goals for DOI include:
   Generating nearly $60 million in federally-guaranteed 
          commercial loans on reservations. These loans, supported by a 
          $5 million appropriation, will foster growth and development 
          in Indian country;
   Reducing crime rates on Indian lands by increasing the number 
          of police officers from 1.3 per 1,000 citizens, which is 
          currently just over half the national average;
   Replacing at least two of BIA's oldest, most dilapidated 
          schools, making major improvements and repairs to additional 
          schools (including a joint demonstration project with the 
          Department of Energy utilizing energy-efficient construction 
          materials), and about 430 minor improvement projects. In 
          addition, BIA will provide financial assitance to Tribes for 
          participating in the Administration's school modernization 
          initiative; and
   Obtaining about $250 million in timber sales revenue by 
          helping Tribes manage 16 million acres of forest land.

Tennessee Valley Authority (TVA)

   TVA operates integrated navigation, flood control, water supply, and 
recreation programs. Along with TVA's electric power program, these 
programs contribute to the economic prosperity of the seven-State region 
it serves. In 2000, TVA plans to pay for most of these programs in a new 
way,

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using proceeds from the agency's $6.8 billion power program, user fees 
and sources other than appropriations. The budget proposes 
appropriations of $7 million for TVA to manage the Land Between The 
Lakes National Recreation Area.
  The 2000 goals for TVA include:
   Maximizing the number of days the Tennessee River is open to 
          commercial navigation from Knoxville, Tennessee to Paducah, 
          Kentucky, with a 2000 performance target of full availability 
          93 percent of the time; and
   Minimizing flood damage by operating the river system with 
          flood control as a priority, and maintaining a 2000 target of 
          80 percent of flood storage availability.

Appalachian Regional Commission (ARC)

   ARC targets its resources to highly distressed areas, focusing on 
critical development issues on a regional scale, and making strategic 
investments that encourage other Federal, State, local and private 
participation and dollars. From 1988 to 1996, Appalachian employment 
grew at the national rate of 10.6 percent.
  The 2000 goals for ARC include:
   5,000 people will retain or get jobs;
   18,000 households will have access to new or improved water, 
          sewerage and waste management systems;
   7,000 people will benefit from business development services; 
          and
   140 physicians will be placed in the region's health 
          professional shortage areas to provide another 700,000 patient 
          office visits a year.

Disaster Relief and Insurance

   The Federal Government provides financial help to cover a large share 
of the Nation's losses from natural disasters. Over the last five years, 
the two major Federal disaster assistance programs--the Federal 
Emergency Management Agency's (FEMA) Disaster Relief Fund and the Small 
Business Administration's (SBA) Disaster Loan program--have provided 
over $24.9 billion in emergency assistance. The Federal Government 
shares the costs with States for infrastructure rebuilding; makes 
disaster loans on uninsured losses to individuals and businesses; and 
provides grants for emergency needs and housing assistance, unemployment 
assistance, and crisis counseling.
   In addition to its post disaster response activities, FEMA is working 
to establish 100 ``disaster resistant communities'' in each State by the 
end of 1999. In exchange for offering the only source of flood insurance 
available to property owners, participating communities must mitigate 
future losses by adopting and enforcing floodplain management measures 
that protect lives and new construction from flooding. FEMA is also 
modernizing its inventory of floodplain maps, and will be taking 
measures to mitigate properties experiencing repetitive flood damages.
  The 2000 goals for FEMA include:
   Processing disaster declarations within eight days, making 50 
          percent of funding for emergency work projects available to 
          States within 30 days of application approval, making 80 
          percent of public assistance funding determination within an 
          average of 180 days, and closing 90 percent of disasters in 
          the Public Assistance Program within two years of the 
          declaration date; and
   increasing the number of flood insurance policies in force by 
          five percent per year, on average.
  The 2000 goals for the SBA Disaster Loan Program include:
   Increasing the number of disaster loan applications processed 
          within 21 days of receipt from 77 percent in 1998 to 80 
          percent; and
   Establishing an effective field presence (being able to 
          accept disaster loan applications) within three days of a 
          disaster, for 98 percent of declared events.

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Tax Expenditures

  The Federal Government provides tax incentives to encourage community 
and regional development activities, including: (1) tax-exempt bonds for 
airports, docks, high-speed rail facilities, and sports and convention 
facilities (costing $3.6 billion from 2000 to 2004); (2) tax incentives 
for qualifying businesses in economically distressed areas that qualify 
as Empowerment Zones--including an employer wage credit, higher up-front 
deductions for investments in equipment, tax-exempt financing, and 
accelerated depreciation--as well as capital gains preferences for 
certain investments in the District of Columbia and incentives for 
first-time buyers of a principal residence in the District (costing $1.9 
billion over the five years); (3) a 10-percent investment tax credit for 
rehabilitating buildings that were built before 1936 for non-residential 
purposes (costing $150 million over the five years); (4) tax exemptions 
for qualifying mutual and cooperative telephone and electric companies 
(costing $135 million over the five years); and (5) up-front deductions 
of environmental remediation costs at qualified sites (costing $135 
million over the five years).