Economic Development: Multiple Federal Programs Fund Similar Economic
Development Activities (Letter Report, 09/29/2000, GAO/RCED/GGD-00-220).
Pursuant to a congressional request, GAO identified federal programs
that supported economic development, focusing on: (1) the programs that
more directly fund economic development activities, including the level
of financial support that they provide; and (2) comparing selected
aspects of these programs, such as program applicants, to identify areas
of potential overlap.
GAO noted that: (1) 10 agencies and 27 subagency units administer 73
programs that can be used to support one or more of the six activities
that GAO identified as being directly related to economic development;
(2) in some cases, a single program can be used to fund multiple
activities, while in some cases, a single program can be used to fund
only one type of activity; (3) while these 73 programs had total
combined obligations of about $58 billion during fiscal year (FY) 1999,
most of individual programs each had obligations was related to the six
activities that GAO identified as being directly related to economic
development; (4) specifically, for 30 of the programs--those for which
agencies could provide more detailed obligation
information--approximately $7 billion was obligated to support one or
more of the six economic development activities for FY 1999; (5) in many
cases, the programs required the applicants to supplement or match these
funds with funds from other sources; (6) in each of the six activity
areas, GAO identified programs that fund a similar activity and also
have the same applicants; and (7) while GAO identified overlap among
many federal programs that support economic development, additional
information is needed to determine whether that overlap resulted in the
inefficient or ineffective delivery of the programs involved.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: RCED/GGD-00-220
TITLE: Economic Development: Multiple Federal Programs Fund
Similar Economic Development Activities
DATE: 09/29/2000
SUBJECT: Community development programs
Economic development
Strategic planning
Redundancy
Federal aid programs
Budget obligations
Interagency relations
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GAO/RCED/GGD-00-220
A
Report to Congressional Committees
September 2000 ECONOMIC DEVELOPMENT
Multiple Federal Programs Fund Similar Economic Development Activities
GAO/ RCED/ GGD- 00- 220
Letter 3 Appendixes Appendix I: Scope and Methodology 18
Appendix II: Federal Programs and the Economic Development Activities That
They Fund 21 Appendix III: Selected Program Elements of Federal Programs
That Fund Economic Development Activities 26 Appendix IV: Timeline of
Federal Programs That Fund Selected
Economic Development Activities 46 Appendix V: Objectives and Restrictions
of Federal Programs
That Fund Selected Economic Development Activities 48 Tables Table 1: Number
of Fiscal Year 1999 Federal Programs by
Agency That Funded Six Selected Economic Development Activities 9 Table 2:
Number of Programs by Range of Total Obligations for
Fiscal Year 1999 10 Table 3: Federal Programs That Can Be Used to Fund
Economic Development Planning, Listed by Agency 27
Table 4: Federal Programs That Can Be Used to Fund Buildings and Facilities,
Listed by Agency 30 Table 5: Types of Applicants for Federal Programs That
Can Be
Used to Fund Business Incubators, Listed by Agency 35 Table 6: Federal
Programs That Can Be Used to Fund Industrial
Parks, Listed by Agency 38 Table 7: Federal Programs That Can Be Used to
Fund Roads and
Streets, Listed by Agency 40 Table 8: Federal Programs That Can be Used to
Fund Water and/ or
Sewer, Listed by Agency 43 Table 9: Listing of Selected Program Information
by Agency 48
Abbreviations
ARC Appalachian Regional Commission CDBG Community Development Block Grants
EDA Economic Development Administration HHS Department of Health and Human
Services HUD Department of Housing and Urban Development SBA Small Business
Administration USDA U. S. Department of Agriculture
Resources, Community, and Economic Development Division
Lett er
B- 284408 September 29, 2000 The Honorable George V. Voinovich Chairman,
Subcommittee on Government Management, Restructuring, and the District of
Columbia Committee on Governmental Affairs United States Senate
The Honorable John R. Kasich Chairman, Committee on the Budget House of
Representatives
The Honorable John L. Mica Chairman, Subcommittee on Criminal Justice, Drug
Policy, and Human Resources Committee on Government Reform House of
Representatives
In 1995, we identified hundreds of federal programs that supported economic
development either directly or broadly. In addition, we noted that there was
a lack of agreement on the definition of “economic development.”
1 We later reported that mission fragmentation and program
overlap existed among federal programs that support economic development. 2
Because of your interest in this topic, you asked us to (1) identify federal
programs that more directly fund economic development
activities, including the level of financial support that they provide, and
(2) compare selected aspects of these programs, such as program applicants,
to identify areas of potential overlap. In conducting our work, we
recognized that overlap could be managed, in part, through the coordination
of programs. Consequently, we also provide a broad discussion of the
potential role of the Government Performance and Results Act of 1993 in
addressing overlap among federal programs. 1 See Economic Development
Programs (GAO/ RCED- 95- 251R, July 28, 1995).
2 See Managing for Results: Using the Results Act to Address Mission
Fragmentation and Program Overlap (GAO/ AIMD- 97- 146, Aug. 29, 1997). The
term “fragmentation” refers to circumstances in which more than
one agency (or more than one part of a single agency) is involved in the
same broad category of activity and the term “overlap” refers to
programs that have something in common with each other.
To address your request, we first developed a framework within which we
could define activities that were generally accepted as being directly
related to economic development. Our framework includes the subset of
six economic development activities involving planning and developing
economic development strategies, constructing or renovating nonresidential
buildings, establishing business incubators (facilities that help small
businesses
get started), constructing industrial parks, constructing and repairing
roads and streets, and constructing water and sewer systems. The programs
that we identified within each of these activities generally provide
assistance in the form of grants, loans, loan guarantees, or direct
payments to entities such as state, local, territorial, and tribal
governments; private organizations; and individuals. We did not include
programs that provide direct federal spending, tax expenditures, or
regulatory provisions,
all of which can be used to support economic development activities.
Appendix I contains a more complete description of our scope and
methodology. Results in Brief Ten agencies and 27 subagency units administer
73 programs that can be used to support one or more of the six activities
that we identified as being
directly related to economic development. In some cases, a single program
can be used to fund multiple activities, while in others, a single program
can be used to fund only one type of activity. For example, within the
Department of Commerce, the Grants for Public Works and Economic Development
Program can be used to support all of the six activities except
planning, while the U. S. Department of Agriculture's (USDA) Water and Waste
Disposal Loans and Grants Program provides funds that support a single
economic development activity- providing water and sewer facilities and
services. In addition, some of these programs can be used to fund activities
other than those covered by this report, such as improving
drug prevention efforts, creating after- school reading programs, and
providing child care facilities. While these 73 programs had total combined
obligations of about $58 billion during fiscal year 1999, most of the
individual programs each had obligations of less than $50 million. In many
cases, only a portion of the obligations was related to the six activities
that we identified as being directly related to economic development.
Specifically, for 30 of the programs- those for which agencies could
provide more detailed obligation information- approximately $7 billion was
obligated to support one or more of the six economic development activities
for fiscal year 1999. In many cases, the programs required the applicants to
supplement or match these funds with funds from other sources. In each of
the six activity areas, we identified programs that fund a similar activity
and also have the same applicants. For example, we found that local
governments can apply for 16 different federal programs for roads
and streets activities. Some of this overlap reflects the fragmentation of
agencies' missions. For example, the Department of Housing and Urban
Development (HUD) and USDA both administer programs aimed at assisting
distressed communities; however, HUD's programs usually assist urban areas,
while USDA's programs usually assist rural areas. Among the
programs in which we identified overlap, such programs are differentiated by
legislative or regulatory restrictions that target funding on the basis of
characteristics such as geography, income and poverty levels, and
population density (rural or urban). Additional information- such as the
existing coordination among programs, the effectiveness of the programs, and
the implications for beneficiaries of changing the current programs- is
needed to determine
whether potential program overlap is necessary to meet federal priorities or
is creating an environment in which participants are not served as
efficiently and effectively as possible. The Government Performance and
Results Act of 1993 offers one potential structure for identifying
crosscutting activities and providing information on them. Agencies have
begun to use this process to identify crosscutting activities and the need
for coordination.
While we identified overlap among many federal programs that support
economic development, additional information is needed to determine whether
that overlap resulted in the inefficient or ineffective delivery of the
programs involved. Information derived from evaluation and analysis done by
agencies, the Office of Management and Budget, or others could identify the
degree of program inefficiencies, as well as methods for addressing them.
We provided the 10 agencies whose programs are covered in this report with a
draft of the report for their review and comment. The Departments of
Commerce, Health and Human Services, Housing and Urban Development, and
Transportation; the Appalachian Regional Commission;
the Small Business Administration; and the Environmental Protection Agency
generally agreed with the information presented in the draft report and
provided technical clarifications, which were incorporated where
appropriate. However, some of the agencies provided clarifying comments for
our consideration. USDA expressed concern with the report's methodology,
stating that the report oversimplifies the degree of overlap
because it does not address the efficiency or effectiveness of programs and,
consequently, could lead the reader to conclusions that are not justified by
the analysis undertaken. Furthermore, USDA stated that it can be less
efficient to separate a single activity, such as constructing water and
sewer facilities, from the many activities that are undertaken in a larger
project. We agree that the report does not include analyses of the programs'
efficiency or effectiveness but focuses on the degree of overlap of selected
aspects of the programs. We also state in the report that additional
information is needed in order to determine whether the overlap that we
identified has resulted in inefficient or ineffective delivery of the
programs
involved. Consequently, we did not modify the report to address this
concern. USDA also provided technical clarifications, which were
incorporated where appropriate. The Departments of the Interior and Defense
had no comments on the draft report.
Background According to the National Academy of Public Administration,
federal participation in economic development evolved during several
different
eras in the 20th century. Programs implemented during the 1930s
characteristically involved direct federal action, bypassing the states and
local governments. Those programs were followed with the programs of the
1940s and 1950s, which were intended to improve housing and
commercial districts in central cities and the programs of the 1960s, which
were created to provide economic development assistance to specific areas
where the economy was distressed. They further reported that, more recently,
the federal government has expanded and initiated new programs to address
technology and to provide multifaceted economic development
assistance for selected areas. 3 3 See A Path to Smarter Economic
Development: Reassessing the Federal Role, National Academy of Public
Administration (Nov. 1996).
In 1995, we reported that there is no commonly accepted definition for the
term “economic development.” 4 We found that some definitions of
economic development are broad and theoretical, including such phrases as
“the process of improving the standard of living and well being of the
population” and “to continue job creation and capacity building
efforts to maintain economic vitality and quality of life.” Other
definitions focus on activities and projects that are used to achieve
economic development goals. As one state director of community development
said, “Economic development is better described than defined.”
Because of the lack of agreement on what economic development encompasses,
in our 1995
work, we selected terms related to economic development- such as
“community development,” “economic development,” and
“small business”- that could identify programs involving
economic development activities. Using these terms and the Catalog of
Federal Domestic Assistance, we identified 342 federal programs whose
catalog descriptions included our search terms. 5 These programs were very
diverse and supported economic development both directly and remotely.
In 1997, we identified the existence of fragmentation and overlap among
numerous federal programs. 6 We reported that as the federal government has
responded over time to new needs and problems, many federal agencies have
been given responsibilities for addressing the same or similar national
issues, some of which will require the involvement of more than one federal
agency or more than one approach. We noted that the
Results Act offers a structured framework to address the fragmentation and
overlap of programs by fostering a dialogue among the agencies and the
Congress on strategic goals. This process should help to identify agencies
and programs that have similar missions, lead to more explicit discussions
of contributions and accomplishments, and encourage related
programs to develop common performance measures. 4 See GAO/ RCED- 95- 251R.
5 The Catalog of Federal Domestic Assistance is a governmentwide compendium
of federal programs and activities and is coordinated by the Office of
Management and Budget; compiled by the General Services Administration; and
contains information, both financial
and nonfinancial, about programs administered by federal departments and
agencies. The 2000 catalog lists 1, 425 domestic assistance programs that
are administered by 57 federal agencies.
6 See GAO/ AIMD- 97- 146.
While this report focuses on federal economic development programs, we
recognize that many state governments also have economic development
departments that assist, plan, and support economic development activities.
7 Much like the federal government, states provide grants and loans for
economic development activities, designate distressed areas for special
funding and tax incentives, use taxing and bonding authority to raise funds
for economic development activities, and provide funding and
tax incentives to support other economic development initiatives. According
to data compiled by the National Association of State Development Agencies,
all states offer programs that can be used to
support economic development. 8 The states' programs predominantly consist
of loans, tax credits, grants, and bonds. Within states are regional,
district, and local planning entities that help address the needs of
specific
geographic areas through planning efforts, as well as in the securing of
project funding. Ten Federal Agencies
Ten agencies and 27 subagency units administer 73 programs that can be
Provide Support for used to support one or more of the six activities that
we identified as being directly related to economic development. These
programs typically are One or More Economic available to applicants that
include individuals; local, state, territorial, and Development Activities
tribal governments; and nonprofit organizations 9 through loans, loan
guarantees, and project and formula grants. As shown in table 1, the number
of agencies, as well as the number of programs, varies depending on the type
of activity supported. For example, eight agencies administer 29 programs
that can be used to construct or renovate nonresidential buildings, while
five agencies administer 19 programs that can be used to create business
incubators.
7 Local governments and nonprofit organizations may also offer programs that
can be used to support economic development activities. 8 See Directory of
Incentives for Business Investment and Development in the United States,
National Association of State Development Agencies, fifth edition (1998). 9
In general, the intended beneficiaries of the programs also include these
groups.
Table 1: Number of Fiscal Year 1999 Federal Programs by Agency That Funded
Six Selected Economic Development Activities Activities Number of programs
that
fund one or Buildings
Roads more of the
Plans and and
Business Industrial
and Water and Agency
activities strategies facilities incubators parks
streets sewer
U. S. Department of 19 9 7 4 6 5 10 Agriculture Appalachian Regional 4 3 1 1
1 1 1
Commission Department of Commerce 8 6 2 3 2 2 2 Department of Defense 7 7 0
0 0 0 0 Environmental Protection
3 1 0 0 0 0 2 Agency Department of Health and
3 2 2 1 1 0 2 Human Services Department of Housing and
14 11 10 9 9 11 11 Urban Development Department of the Interior 5 1 1 0 1 3
3
Small Business 2 0 2 0 0 0 0 Administration Department of Transportation 8 4
4 0 0 4 0
Total number of programs 73
44 29
19 20
26 31 (number of agencies) (10) (9) (8) (5) (6) (6) (7)
Source: GAO's analysis of program information.
Four agencies- USDA, the Appalachian Regional Commission (ARC), the
Department of Commerce, and HUD- administer programs that can be used to
support all six of the activities. In contrast, programs within the
Department of Defense and the Small Business Administration support one of
the six activities we identified (planning and buildings, respectively). In
some cases, a single program can be used to fund multiple activities, while
in other cases, a single program can be used to fund only one type of
activity. For example, within the Department of Commerce, the Economic
Development Administration's (EDA) Grants for Public Works and Economic
Development Program can be used to support five activities- developing or
improving buildings, business incubators, industrial parks, roads and
streets, and water and sewer systems. On the other hand, USDA's Water and
Waste Disposal Loans and Grants Program provides funds to support a single
economic development activity- providing water and
sewer facilities and services. (See app. II for a list of the 73 programs
and the activities that they may be used to support.)
Some of these programs can be used to fund activities other than those
covered by this report. For example, grants made through the Empowerment
Zones programs, which are operated by HUD and USDA, can be used for a
variety of purposes that include developing job- training centers, improving
drug prevention efforts, creating after- school reading programs, and
providing child care facilities in addition to the six activities covered by
this report. In fact, while the programs covered by this report
support activities that are generally accepted as being related to economic
development, each program may not include economic development as one of its
objectives. For example, the objectives of one such program- Highway
Planning and Construction- are to assist state transportation agencies in
planning and developing an integrated and interconnected transportation
system. While its mission does not say that it supports economic
development, the activities that it funds- which include constructing and
repairing roads- are generally recognized as supporting
economic development. The 10 federal agencies that administer these 73
programs obligated a total of about $58 billion during fiscal year 1999 for
these programs. The obligations for most of the programs were less than $50
million each. Specifically, as shown in table 2, only 13 programs had
obligations of over $1 billion each. On the other hand, obligations were $50
million or less for each of 46 programs, including 4 for which no funds were
obligated for fiscal year 1999.
Table 2: Number of Programs by Range of Total Obligations for Fiscal Year
1999
Dollars in millions
Range of total program obligations Number of programs
None a 4 Up to 50 42 51 to 100 5 101 to 500 8 501 to 1,000 1 Greater than
1,000 13 a Agencies reported that they did not obligate any funds for fiscal
year 1999 for four programs.
Source: GAO's analysis of program information.
In many cases, only a portion of the obligations was related to the six
activities that we identified. Specifically, for 30 of the programs- those
for which agencies could provide more detailed obligation information-
approximately $7 billion was obligated to support one or more of the six
economic development activities for fiscal year 1999. 10 For 12 programs in
six agencies, all of their obligations funded one or more of these 6
activities
during fiscal year 1999. Conversely, for four programs, agencies did not use
any portion of the obligations for these activities for fiscal year 1999,
although funding for such activities was allowable. The remaining programs
used various portions of their obligations to support these activities.
These amounts represent only part of the funds obligated for these programs
because many of the programs required the applicants to supplement or match
the funds with funds from other sources. Depending on the program, funds
from private sources; state and local governments; and, in some cases, other
federal programs may be used to provide the necessary matching funds. The
extent of matching requirements for the federal programs varied widely; some
programs required no matching funds, and others required that other funds be
used for at least 50 percent of a project's costs.
Programs Overlap in In all six of the economic development activities, we
found that multiple Activities and programs fund similar activities and make
this funding available to similar
types of applicants. For example, Applicants but Are Differentiated by Their
32 programs provide funds to state applicants for planning, Restrictions 18
programs provide funds to local applicants for buildings,
13 programs provide funds to local applicants for business incubators, 12
programs provide funds to local or state applicants for industrial parks,
16 programs provide funds to local applicants for roads or streets, and 10
For these 30 programs, total obligations were $39. 6 billion for fiscal year
1999. Of this amount, the Highway Planning and Construction Program
obligated $25. 9 billion, including $540 million to support the six
activities, and the remaining programs obligated $13.7 billion, including
$6. 3 billion to support the six activities.
17 programs provide funds to local applicants for water and sewer systems.
These programs are not mutually exclusive in that programs can be used to
fund more than one economic development activity. For example, the
Empowerment Zones programs, Rural Development Grant Program, five of the
Community Development Block Grant (CDBG) programs, the Historically Black
Colleges and Universities Program, and the Economic Adjustment Assistance
Program can be used to fund all six activities. On
the other hand, some of the overlap reflects mission fragmentation; that is,
more than one agency is involved in the same broad area of national need.
For example, USDA and HUD both administer programs aimed at assisting
distressed communities; however, USDA's programs usually assist rural areas,
and HUD's programs usually assist urban areas. Thus, applicants
such as states and counties, which include both urban and rural areas, may
need to apply for programs in both agencies to address the needs of their
distressed area. Similarly, applicants in the Appalachian region would need
to consider the programs administered by ARC, as well as programs in other
agencies. Appendix III contains more details on the programs that
support each of the six activities covered by this report. Many of the 73
programs contain legislative or regulatory restrictions that differentiate
the programs from each other. The current legislative and regulatory
restrictions have come about over many decades, as new programs have been
added and existing programs have been amended. (See app. IV for a timeline
that shows the original authorization date for each program.) The extent of
these restrictions varies among the programs; however, programs generally
target their funding on the basis of geography, income and poverty levels,
population density (rural or urban), and areas affected by military or
defense industry reductions. For example, programs
administered by ARC are targeted to assist counties that are designated as
being in the Appalachian region, applicants for USDA's Rural Development
Grant Program must be from rural areas, and HUD's CDBG programs must
principally benefit low- and moderate- income people. Thus, an applicant
from the Appalachian region may be able to apply for programs administered
by HUD, USDA, and ARC, while an applicant from a large city outside of the
Appalachian region might be able to apply only for programs at HUD. Appendix
V lists the objectives and the restrictions placed on the use of funds for
each program covered by this report.
Additional Information As we have previously reported, mission fragmentation
and program
overlap may sometimes be necessary when the resources and expertise of
Needed to Determine if more than one agency are required to address a
complex public need. 11 At Inefficiencies Result the same time,
fragmentation and overlap can waste administrative From Overlap resources
and increase the chance of gaps in services, thus creating an environment in
which participants are not served as efficiently and effectively as
possible. For example, we reported in 1995 that the patchwork of federal
water and sewer programs is difficult to use for rural
areas because applicants had to (1) coordinate funding from federal programs
whose timetables for awarding loans and grants differed, (2) contend with
duplicative application and administrative requirements when multiple
programs are used for project financing, and (3) cope with federal
requirements that hold very small projects to the same standards as large
projects. 12 To address inefficiencies that can arise from mission
fragmentation and program overlap, additional information is needed, such as
the existing coordination among programs, the effectiveness of the programs,
the relative costs and benefits of different delivery mechanisms (e. g.,
grants, loans, or tax expenditures), and the implications for
beneficiaries of changing the current programs. The degree of program
inefficiencies and the methods for addressing them might be identified using
information derived from evaluations and analyses done by agencies, the
Office of Management and Budget, or others, as well as information developed
through congressional oversight efforts.
The Results Act offers one potential structure for providing information by
identifying crosscutting activities, including economic development
activities that are shared among agencies. Specifically, the Results Act
requires the President to include with his annual budget submission a
federal government performance plan. In addition, the Results Act and
related guidance require the executive branch agencies to prepare multiyear
strategic plans and annual performance plans, as well as annual
reports on program performance. Through these planning and reporting
processes, agencies can identify their performance goals and indicate which
goals are related to the goals of other agencies. Agencies are
11 See Early Education and Care: Overlap Indicates Need to Assess
Crosscutting Programs (GAO/ HEHS- 00- 78, Apr. 28, 2000) and Managing for
Results: Barriers to Interagency Coordination (GAO/ GGD- 00- 106, Mar. 29,
2000). 12 See Rural Development: Patchwork of Federal Water and Sewer
Programs Is Difficult to Use (GAO/ RCED- 95- 160BR, Apr. 13, 1995).
encouraged to develop complementary or common goals for areas where
crosscutting activities are identified. Program evaluations that assess
performance may be conducted by agencies or other entities to provide
performance information on similar programs in order to facilitate
comparisons of the programs' effectiveness and the efficiency of various
delivery mechanisms, such as grants, loans, and tax expenditures. The
Results Act and related guidance also require that each agency's annual
performance plan include a discussion of the agency's coordination
activities with other agencies that have related performance goals or
crosscutting activities. The governmentwide performance plan for fiscal year
2000, which was published by the Office of Management and Budget, states
that the administration is continuing to discuss with the Congress and
others how to apply crosscutting analyses for budget and management
decisionmaking. 13 This plan shows federal support for community and
regional development for several agencies but does not explicitly address
crosscutting activities in this area. Also, in 1999, we reported that most
agencies' fiscal year 2000 plans showed some improvement over their prior
year's plans in recognizing crosscutting program efforts, but few plans
established complementary performance goals or discussed planned strategies
for coordination. 14 Similarly, we found that the plans and parts of plans
that we evaluated for this report generally did not have
complementary goals related to economic development. In cases where
performance goals seemed similar, the associated performance measures
differed sharply to reflect specific agency activities or funding. For
example, job creation and access is an important feature in most of the
plans. However, the Department of Transportation's plan measured access to
jobs in terms of increasing the accessibility to employment sites through
transportation services, and HUD measured the increase in the number,
quality, and accessibility of jobs in low- income urban and rural
communities in terms of job growth, unemployment rates, and poverty rates.
The plans that we reviewed also provided a list of other agencies that are
involved in crosscutting efforts and often provided information on the type
13 See Governmentwide Performance Plan, Office of Management and Budget
(1999).
14 Managing for Results: Opportunities for Continued Improvements in
Agencies' Performance Plans (GAO/ GGD/ AIMD- 99- 215, July 20, 1999).
of interagency coordination that is taking place. For example, the rural
development mission area in USDA's plan provides a listing of agencies both
inside and outside of USDA where the mission is similar or where
coordination is required. However, we found that, while the coordination
efforts described in the plans included the agencies whose programs we
identified, the plans did not always describe coordination on economic
development activities and the agencies are not consistent in identifying
one another for coordination. For example, in its plan, the Department of
Transportation has a goal to address disadvantaged and women- owned
business contracting and describes establishing a strong working
relationship with the Small Business Administration's (SBA) Interagency
Council on Women's Business Enterprises and the National Women's Business
Council. However, the SBA performance plan does not specifically mention the
Department of Transportation in its description of crosscutting efforts for
a similar goal.
Information on program operations also might be made available through
existing coordination mechanisms. For example, the Economic Development
Administration and Appalachian Regional Development Reform Act of 1998 (P.
L. 105- 393), which became effective in February 1999, specified that each
federal agency should cooperate with the Secretary of Commerce in carrying
out the act's provisions. The Senate report accompanying the act further
explained that better coordination of federal economic development
assistance was needed and that EDA should
be considered the lead agency in such coordination efforts. Conclusion While
we identified overlap among many federal programs that support economic
development, the Congress and others will need additional information in
order to determine whether that overlap resulted in inefficient or
ineffective delivery of the programs involved. This information may be
obtained through performance evaluations, and plans and reports provided for
by the Results Act and related guidance, and other monitoring efforts. For
example, program evaluations might provide information to help assess
performance, determine the extent to which programs deliver benefits to
their intended audiences, and compare the
effectiveness of various delivery mechanisms- such as grants and tax
expenditures. In addition, the Results Act and related guidance provide for
the preparation of various documents such as the governmentwide
performance plan, the executive branch agencies' strategic and annual
performance plans, and agencies' performance reports, which contain
information on the agencies' planned and actual performance. Finally,
information on program operations and performance might be developed and
shared through existing coordinating mechanisms.
Agency Comments We provided the 10 agencies whose programs are covered in
this report with a draft of the report for their review and comment. The
Departments
of Commerce, Health and Human Services, Housing and Urban Development, and
Transportation; ARC; SBA; and the Environmental Protection Agency generally
agreed with the information presented in the
draft report and provided technical clarifications, which were incorporated
where appropriate. However, some of the agencies provided clarifying
comments for our consideration. For example, EDA noted that “some
overlap is not necessarily bad, since it protects grantees from having only
one limited source to go to for support for their economic development
efforts and encourages competition and innovation, as well as
collaboration” among the various agencies. EDA also commented that
providing financing through the funding of locally administered revolving
loan funds makes them a significant tool for local economic development
efforts. Also, the Department of Health and Human Services and HUD agreed
that more information was needed to determine whether the overlap identified
resulted in the inefficient or ineffective delivery of programs.
USDA expressed concern with the draft report's methodology, stating that the
report oversimplifies the degree of overlap because it does not address the
efficiency or effectiveness of programs and, consequently, could lead the
reader to conclusions that are not justified by the analysis undertaken.
Furthermore, USDA stated that it can be less efficient to separate a single
activity, such as constructing water and sewer facilities, from the many
activities that are undertaken in a larger project. We agree that the report
does not include analyses of the programs' efficiency or effectiveness but
focuses on the degree of overlap of selected aspects of the programs. We
also state in the report that additional information is needed in order to
determine whether the overlap that we identified has resulted in the
inefficient or ineffective delivery of the programs involved. Consequently,
we did not modify the report to address this concern. USDA also provided
technical clarifications, which were incorporated where appropriate.
The Departments of Interior and Defense had no comments on the draft report.
As arranged with your offices, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days after
the date of this report. At that time, we will send copies to the
appropriate congressional committees and agencies. We will also make copies
available to others on request. If you have any questions about this report,
please
contact Nancy Simmons or us at (202) 512- 7631. Key contributors to this
assignment were R. Tim Baden, Gwenetta Blackwell- Greer, Dan Meyer, and Andy
Pauline.
Thomas J. McCool Director, Financial Institutions and Markets Issues
Stanley J. Czerwinski Associate Director, Housing, Community
Development, and Telecommunications Issues
Appendi Appendi xes x I
Scope and Methodology There is no commonly accepted definition for the term
“economic development,” and the term encompasses a wide range of
agencies, programs, and activities. Consequently, for this assignment, we
first developed a framework within which we could define activities that
were generally accepted as being related to economic development. To help
determine the primary activities of economic development assistance funded
by the federal government, we initially conducted interviews with officials
from the Economic Development Administration (EDA), whose mission is to help
economically distressed areas; other federal agencies;
and several national associations familiar with economic development.
Through the interviews, we identified a general consensus that the types of
activities funded by EDA would be considered economic development
activities.
We reviewed the descriptions of projects funded in fiscal year 1999 under
EDA's two major programs (Public Works and Economic Adjustment Assistance)
and grouped the projects into general activities. We then
selected six activities that represented a large percentage of the total
projects funded by EDA. These activities are (1) preparing plans and
strategies for economic development, (2) constructing buildings and
facilities, (3) supporting business incubators (facilities that help small
businesses get started), (4) developing industrial parks, (5) constructing
and repairing roads and streets, and (6) constructing water and sewer
facilities. We then conducted electronic searches of the 1999 fall update of
the Catalog of Federal Domestic Assistance to identify other federal
programs that provide funding for one or more of the six activities of
economic development assistance.
We sent lists of these programs by activity to the federal agencies
responsible for the programs and asked them to confirm that the programs
could be used to fund the specified activity, delete programs that were
listed incorrectly, add programs that we had omitted, and verify or provide
data on budgetary obligations for the programs. We also shared the lists
with the National Association of Development Organizations to obtain its
input on the accuracy and completeness of the lists. We modified the lists
where appropriate. To identify the similarities among the federal programs
that we identified within the six activities of economic development
assistance, we used the catalog's program descriptions to compare
information on the programs' objectives, types of assistance provided,
intended applicants and beneficiaries, and obligations. We analyzed the
programs by various dimensions, such as program type, to help highlight
similar patterns among programs. We used the catalog's definitions for the
various types of applicants and grouped the beneficiaries into similar
categories using the narrative descriptions from the catalog. 1 We analyzed
information from the catalog and the agencies on program
obligations 2 for fiscal year 1999. These analyses could overstate or
understate the federal involvement in funding the programs. For example,
some agency officials had to estimate the extent to which certain programs'
obligations were used exclusively for funding a particular type of economic
development activity; these breakouts are not always easily ascertainable.
Thus, while these figures may be the best available information, they
remain estimates. Direct federal assistance, tax expenditures, and
regulatory provisions that provide economic development assistance are not
included in the catalog and are not addressed in this report.
We discussed economic development issues with representatives from EDA in
headquarters, Seattle, and Chicago; local economic development offices in
Richland, Washington, and Benton Harbor, Michigan; and national associations
(National Association of Development Organizations, 1 The catalog
categorizes applicants into six groups: individual, which includes
individuals, groups, and profit- making organizations; local, which includes
various local governmental units; nonprofit, which includes organizations
that earn no profit; state, which includes state
governmental units, institutions of higher education, and hospitals; U. S.
territories, which includes governmental units, institutions of higher
education, and hospitals in those territories; and federal tribal
governments, which includes governing bodies of federally recognized Indian
tribes. 2 For some programs, information provided in the program
description's “obligations” section of the Catalog of Federal
Domestic Assistance represented budget authority.
National Association of State Development Agencies, and National League of
Cities). We reviewed EDA's annual performance plan, project files, and other
pertinent program documents.
To broadly determine economic development crosscutting coordination efforts
and related goals, measures, and strategies, we performed a limited review
of the annual performance plans for fiscal year 2001 for the U. S.
Department of Agriculture's (USDA) rural development mission area (Rural
Housing Service, Rural Utilities Service, Rural Business Cooperative
Service), the Small Business Administration (SBA), EDA, the Department
of Housing and Urban Development (HUD), and the Department of
Transportation's strategic goal section regarding economic growth and trade.
To evaluate crosscutting discussions, we used our guidance on evaluating
annual performance plans; 3 the Office of Management and Budget's Circular
A- 11, which provided guidance for preparing and submitting the annual
performance plans; and our recent reports on improving performance plans and
crosscutting efforts and recommendations. We performed our work from
September 1999 through July 2000 in accordance with generally accepted
government auditing standards.
3 See The Results Act: An Evaluator's Guide to Assessing Agency Performance
Plans (GAO/ GGD- 10. 1. 20, Apr. 1998).
Federal Programs and the Economic
Appendi x II
Development Activities That They Fund Funded activities Buildings
Roads Water Catalog Plans and and
Business Industrial and and Programs (listed by agency and subagency) number
a strategies
facilities incubators parks streets
sewer U. S. Department of Agriculture
Farm Service Agency Farm Ownership Loans 10.407 Fund for Rural America/ Farm
Ownership Loans 10.453 Forest Service Schools and Roads/ Grants to States
10. 665 Schools and Roads/ Grants to Counties 10. 666 National Forest/
Dependent Rural Communities 10. 670 Rural Development, Forestry, and
Communities 10. 672 Rural Utilities Service Water and Waste Disposal Systems
for Rural
10. 760 Communities Emergency Community Water Assistance 10. 763
Grants Water and Waste Disposal Loans and Grants 10. 770 b Rural Housing
Service Rural Housing Site Loans and Self- Help
10. 411 b Housing Land Development Loans Community Facilities Loans and
Grants 10. 766
Rural Business- Cooperative Service Business and Industry Loans 10. 768
Rural Development Grants 10. 769 Rural Cooperative Development Grants 10.
771 Rural Business Opportunity Grants 10. 773 Rural Economic Development
Loans and 10. 854 Grants Office of Community Development
Empowerment Zones Program 10.772 b Natural Resources Conservation Service
Resource Conservation and Development 10. 901 Watershed Surveys and Planning
10. 906
Appalachian Regional Commission
Appalachian Area Development 23.002 Appalachian Local Access Roads 23.008
(Continued From Previous Page)
Funded activities Buildings
Roads Water Catalog Plans and and
Business Industrial and and Programs (listed by agency and subagency) number
a strategies
facilities incubators parks streets
sewer
Appalachian Local Development District 23. 009 Assistance Appalachian State
Research, Technical
23. 011 Assistance, and Demonstration Projects Department of Commerce
Economic Development Administration Grants for Public Works and Economic 11.
300 Development Economic Development/ Technical Assistance 11.303
Economic Development/ State and Local 11. 305
Economic Development Planning c Economic Adjustment Assistance 11. 307 Trade
Adjustment Assistance 11. 313 National Oceanic and Atmospheric
Administration Fisheries Development and Utilization 11. 427 Research and
Developmental Grants and Cooperative Agreements Program
National Oceanic and Atmospheric Administration- National Marine Fisheries
Service Fisheries Disaster Relief 11. 477 National Institute of Standards
and Technology Experimental Program to Stimulate Competitive
11. 614 Technology Department of Defense
Office of the Chief Engineers, Department of the Army Planning Assistance to
States 12. 110 Office of Economic Adjustment, Office of the Deputy Under
Secretary of Defense (Industrial Affairs and Installations) Community
Economic Adjustment 12. 600 Community Economic Adjustment Planning 12. 611 b
Assistance for Reductions in Defense Industry Employment
Office of the Secretary of Defense, Office of the Assistant Secretary
(Economic Security) Community Economic Adjustment Planning 12. 607
Assistance Joint Land Use Studies 12.610
Community Base Reuse Plans 12.612 Growth Management Planning Assistance 12.
613
(Continued From Previous Page)
Funded activities Buildings
Roads Water Catalog Plans and and
Business Industrial and and Programs (listed by agency and subagency) number
a strategies
facilities incubators parks streets
sewer Environmental Protection Agency e
Office of Water Capitalization Grants for State Revolving Funds 66. 458
Office of Ground Water and Drinking Water Capitalization Grants for Drinking
Water State 66. 468 Revolving Loan Fund Office of Solid Waste and Emergency
Response
Brownfield Pilots Cooperative Agreements 66. 811
Department of Health and Human Services
Program Support Center Surplus Property Utilization 93. 291 Administration
for Children and Families Community Services Block Grant/ Discretionary 93.
570 Awards Native American Programs 93. 612
Department of Housing and Urban Development
Community Planning and Development Community Development Block Grants
14. 218 (CDBG)/ Entitlement Grants CDBG/ Small Cities Program 14.219
CDBG/ Special Purpose Grants/ Insular Areas 14.225 CDBG/ Special Purpose
Grants/ Technical
14. 227 Assistance Program CDBG/ State's Program 14.228
Historically Black Colleges and Universities 14. 237 Program Empowerment
Zones Program 14.244
CDBG/ Economic Development Initiative 14. 246 CDBG/ Section 108 Loan
Guarantees 14. 248 Rural Housing and Economic Development 14.250 Policy
Development and Research Community Outreach Partnership Center
14. 511 Program Public and Indian Housing
Public Housing/ Comprehensive Improvement 14. 852 Assistance Program d
Public Housing/ Comprehensive Grant Program d 14. 859
(Continued From Previous Page)
Funded activities Buildings
Roads Water Catalog Plans and and
Business Industrial and and Programs (listed by agency and subagency) number
a strategies
facilities incubators parks streets
sewer
Indian CDBG Program 14. 862
Department of the Interior
Bureau of Indian Affairs Road Maintenance/ Indian Roads 15.033 Fish,
Wildlife, and Parks Programs on Indian
15. 039 Lands Bureau of Indian Affairs Facilities/ Operations
15. 048 and Maintenance Indian Loans/ Economic Development 15. 124
Office of Insular Affairs Economic, Social, and Political Development of 15.
875 the Territories and the Freely Associated States Small Business
Administration
Small Business Loans 59. 012 Certified Development Company Loans (504 59.
041 Loans) Department of Transportation
Federal Aviation Administration Airport Improvement Program 20. 106 Federal
Highway Administration Highway Planning and Construction 20. 205 Federal
Transit Administration Federal Transit/ Capital Investment Grants 20. 500
Federal Transit/ Metropolitan Planning Grants 20. 505 Federal Transit/
Formula Grants 20. 507 Formula Grants for Other Than Urbanized
20. 509 Areas Federal Transit Technical Assistance 20. 512
Transit Planning and Research 20. 514 a These numbers are from the Catalog
of Federal Domestic Assistance. b Program is listed out of the number
sequence of the Catalog of Federal Domestic Assistance so that programs can
be grouped by administering units.
c This program was subsequently merged with the program entitled Economic
Development- Support for Planning Organizations (11.302). d Programs 14.852
and 14.859 were subsequently consolidated into a new program entitled Public
Housing Capital Fund (14.872).
e In addition to the programs listed in the Catalog of Federal Domestic
Assistance, Environmental Protection Agency officials said that they had
four additional programs that fund water and sewer activities, including the
Mexico Border Program, Alaska Native and Rural Villages Program, Special
Needs Border Program, and Hardship Cities Program.
Source: GAO's analysis of program information.
Selected Program Elements of Federal Programs That Fund Economic Development
Appendi x I II
Activities Many federal programs fund each of the six economic development
activities identified in this report. Among the programs funding particular
economic development activities, there are both similarities and differences
related to the type of assistance, purposes, and eligible applicants, as
well as other restrictions. Total program funding and spending for economic
development activities varies widely among the programs. Detailed
information follows on each of the six economic development activities we
identified. Planning economic development activities. Constructing or
renovating nonresidential buildings. Establishing business incubators.
Constructing industrial parks. Constructing and repairing roads and streets.
Constructing water and sewer systems.
Nine Agencies Economic development planning is generally regarded as a key
element in Administer 44
achieving local and regional economic development goals. Economicplanning
assistance is used in a variety of ways, such as for developing Programs
That Can
comprehensive economic adjustment strategies; preparing feasibility Fund
EconomicDevelopment- studies, reuse studies, and land use studies; and
administering local Planning planning organizations. Some federal economic
development programs target areas that are adversely affected by changes in
the military and
Activities defense industry, adversely affected by sudden and severe
economic
changes, and/ or chronically distressed economically. Programs also target
land and water resource development, as well as transportation needs. We
identified nine agencies that fund economic development- planning activities
through 44 programs for various types of applicants. 1 (See table 3.)
1 Although many federal programs provide funding for planning, these
programs were selected because they fund planning activities directed toward
expanding business, creating jobs, and/ or improving local economies.
Table 3: Federal Programs That Can Be Used to Fund Economic Development
Planning, Listed by Agency
Dollars in millions
Applicants Agency/ program/( catalog number)/ planning
U. S. Federal tribal obligations for fiscal year 1999 a Individual Local
Nonprofit State territories governments
U. S. Department of Agriculture
National Forest/ Dependent Rural Communities (10.670), $3 Rural Development,
Forestry and Communities
(10.672) Rural Development Grants (10.769) Rural Cooperative Development
Grants (10. 771) Empowerment Zones Program (10.772) Rural Business
Opportunity Grants (10.773) Rural Economic Development Loans and Grants
(10.854) Resource Conservation and Development (10. 901)
Watershed Surveys and Planning (10.906), $2
Appalachian Regional Commission
Appalachian Area Development (23. 002), $3 Appalachian Local Development
District Assistance
(23.009), $6 Appalachian State Research, Technical Assistance,
and Demonstration Projects (23.011), $0 Department of Commerce
Economic Development/ Technical Assistance (11.303), $10 Economic
Development/ State and Local Economic
Development Planning (11. 305) b , $24 Economic Adjustment Assistance
(11.307), $24
Trade Adjustment Assistance (11.313), $10 Fisheries Development and
Utilization Research and Development Grants and Cooperative Agreements
Program (11.427), $0
Fisheries Disaster Relief (11.477), $0
Department of Defense
Planning Assistance to States (12.110) Community Economic Adjustment
(12.600) Community Economic Adjustment Planning Assistance (12.607)
(Continued From Previous Page)
Applicants Agency/ program/ (catalog number)/ planning
U. S. Federal tribal obligations for fiscal year 1999 a Individual Local
Nonprofit State territories governments
Joint Land Use Studies (12.610) Community Economic Adjustment Planning
Assistance for Reductions in Defense Industry Employment (12. 611)
Community Base Reuse Plans (12.612) Growth Management Planning Assistance
(12.613)
Environmental Protection Agency
Brownfield Pilots Cooperative Agreements (66. 811)
Department of Health and Human Services
Community Services Block Grants/ Discretionary Awards (93.570) Native
American Programs (93.612)
Department of Housing and Urban Development
CDBG/ Entitlement Grants (14. 218) CDBG/ Small Cities Program (14.219) CDBG/
Special Purpose Grants/ Insular Areas
(14.225) CDBG/ Technical Assistance Program (14. 227)
CDBG/ State's Program (14.228) Historically Black Colleges and Universities
Program (14.237) Empowerment Zones Program (14.244), $5
CDBG/ Economic Development Initiative (14. 246) Rural Housing and Economic
Development (14.250) Community Outreach Partnership Center Program (14.511)
Indian CDBG Program (14. 862), $0
Department of the Interior
Fish, Wildlife, and Parks Programs on Indian Lands (15.039), $0 Department
of Transportation
Highway Planning and Construction (20.205), $540 Federal Transit/
Metropolitan Planning Grants (20.505) Federal Transit Technical Assistance
(20. 512)
Transit Planning and Research (20.514) a Specific planning obligations were
not available for all programs.
b This program was subsequently merged with the program- Economic
Development/ Support for Planning Organizations (11.302). Source: GAO's
analysis of program information.
As shown in this table, federal programs that fund planning activities are
available to various types of applicants. Each of the applicants is eligible
for multiple planning programs. For example, local governments can apply for
30 of the programs, and state governments can apply for 32 of the programs.
In addition, many programs are available to more than one type of applicant.
For example, 17 programs allow both local governments and
nonprofit organizations to apply for funding. We found that the programs
could also be grouped according to a common purpose. Of the 44 planning
programs, we found that 33 programs could be used for planning to generally
improve economies, 10 programs listed planning related to transportation and
resources, and 8 programs listed economic planning to address crises.
Further analysis shows that a local applicant could use 23 of the programs
that funded planning to generally improve economies. Consequently, as long
as the program requirements had been met, a local community applicant that
was seeking funds to conduct planning to improve its economy could
potentially apply to six
Department of Defense programs, five USDA programs, four Commerce programs,
five HUD programs, and three Appalachian Regional Commission (ARC) programs.
While a number of the programs overlap in their purposes and eligible
applicants, in practice, the additional requirements imposed by specific
programs limit the number of eligible applicants. For example, four of the
Department of Defense programs are specifically designated for communities
affected by military base closures or reductions in defense industry
employment. Also, as the names imply, the National Forest/ Dependent Rural
Communities Program and the Appalachian State
Research, Technical Assistance, and Demonstration Projects Program are
targeted to areas in or near national forests and areas within the
Appalachian region, respectively. Other programs have specific criteria
based on unemployment, per capita need, and other criteria. In addition,
some programs are targeted to rural or urban areas. Almost all of the
programs provide assistance through grants. Some also provide loans; direct
payments; advisory services; training; and the use of property, facilities,
and equipment. The total program obligation amounts
for fiscal year 1999 vary widely. Twenty- three programs have obligations of
$10 million or less, 12 programs have obligations of between $10 million
and $50 million, and 5 programs have obligations of $50 million to $100
million. One program has obligations of over $100 million but less than $1
billion, while three programs have obligations of over $1 billion. Agencies
reported the planning obligations for 13 programs. Five of the programs
reported no planning obligations for fiscal year 1999, another five programs
had planning obligations of less than $10 million, two programs had
planning obligations of $10 million to $25 million, and one program- Highway
Planning and Construction- reported obligations of $540 million for fiscal
year 1999.
In addition, some of the programs required that the funds be used in
conjunction with funds from other sources. These requirements generally fit
into three categories: 17 programs require no matching, although they may
use it as a priority- ranking factor; 11 programs require minimums of 20 or
25 percent; and 4 programs require at least 50 percent. In addition, 12
programs have various matching requirement percentages or other assistance
requirements.
Eight Agencies Buildings and facilities are critical components to economic
development. Administer 29
They provide a place for manufacturing, assembling, repairing, and storing
business inventories and supplies, as well as operating businesses. We
Programs That Can identified eight agencies that administer 29 programs that
can be used by Fund Buildings and various types of applicants to support
buildings, through such means as
Facilities purchasing, constructing, or renovating nonresidential buildings.
(See table
4.)
Table 4: Federal Programs That Can Be Used to Fund Buildings and Facilities,
Listed by Agency
Dollars in millions
Applicants Agency/ program/( catalog number)/
U. S. Federal tribal building and facilities obligations for fiscal year
1999 a Individual Local Nonprofit State territories governments U. S.
Department of Agriculture
Farm Ownership Loans (10.407) Fund for Rural America/ Farm Ownership Loans
(10.453) National Forest/ Dependent Rural Communities (10.670) Rural
Development, Forestry and Communities (10.672) Rural Development Grants
(10.769)
(Continued From Previous Page)
Applicants Agency/ program/( catalog number)/
U. S. Federal tribal building and facilities obligations for fiscal year
1999 a Individual Local Nonprofit State territories governments
Community Facilities Loans and Grants (10.766) Empowerment Zones Program
(10.772)
Appalachian Regional Commission
Appalachian Area Development (23. 002), $2
Department of Commerce
Grants for Public Works and Economic Development (11.300), $32 Economic
Adjustment Assistance (11.307), $41
Department of Health and Human Services Surplus Property Utilization b
(93.291) Community Services Block Grant/ Discretionary Awards (93.570)
Department of Housing and Urban Development
CDBG/ Entitlement Grants (14. 218), $38 CDBG/ Small Cities Program (14.219)
CDBG/ Special Purpose Grants/ Insular Areas (14.225) CDBG/ State's Program
(14.228) Historically Black Colleges and Universities Program (14.237)
Empowerment Zones Program (14.244), $3
CDBG/ Economic Development Initiative (14. 246) CDBG/ Section 108 Loan
Guarantees (14. 248) Rural Housing and Economic Development (14.250) Indian
CDBG Program (14. 862), $24
Department of the Interior
Indian Loans/ Economic Development (15.124), $2
Small Business Administration
Small Business Loans (59.012) Certified Development Company Loans (504
Loans)
(59.041), $1,996 Department of Transportation
Airport Improvement Program (20.106), $81 Federal Transit/ Capital
Investment Grants (20. 500) Federal Transit/ Formula Grants (20.507) Formula
Grants for other than urbanized areas (20.509)
a Specific building and facilities obligations were not available for all
programs.
b The Surplus Property Utilization Program (93.291) provides assistance
through the sale, exchange, or donation of property and goods. Source: GAO's
analysis of program information.
As shown in the table, federal programs that fund buildings and facilities
are available to various types of applicants. Also, each type of applicant
is eligible for multiple programs. For example, local governments can apply
for 18 programs, states can apply for 17 programs, and nonprofit
organizations can apply for 15 programs. In addition, many programs allow
more than one type of applicant to apply. The majority of these programs
share the same purpose- to promote economic development- and the remaining
programs support either the agricultural or transportation industry. Of the
23 programs that are to promote economic development, 11 were available to
local governmental units, 9 were available to nonprofit organizations, and
11 were available to state governments. 2
Although some of the programs appear to share the same purpose and
applicant, in practice, additional requirements limit the number of
applicants that would be eligible for the programs. For example, the
Empowerment Zones programs in HUD and USDA are limited to specific
geographic areas that have been designated as empowerment zones or
enterprise communities; the ARC program is to be used for high- priority
projects that are included in the applicable state's Appalachian development
plan; and applicants for USDA's Community Facilities Loans and Grants
Program must, among other things, be unable to finance the project using
their own resources or commercial credit at reasonable rates
and terms. In addition, programs can be used to support activities other
than buildings. For example, the Community Development Block Grants (CDBG)
Entitlement Grants Program allows recipients to undertake a wide range of
activities such as rehabilitating residential buildings and other activities
directed at revitalizing neighborhoods and improving community services.
The total obligations for fiscal year 1999 varied significantly among the 29
programs that could be used to fund buildings; however, the amount obligated
to purchase, construct, or renovate buildings is generally not
available. For fiscal year 1999, three programs- the CDBG/ Section 108 Loan
Guarantees, the Indian Loans/ Economic Development, and the Small 2 Five of
these programs allowed applicants from local governmental units, nonprofit
organizations, and state governments; and two programs allowed applicants
from both local and state governments.
Business Loans programs- provided loan guarantees that totaled about $1. 3
billion, of which all but $14 million was obligated under the CDBG Program.
During the same time frame, SBA obligated $11 billion in loan guarantees
through its Certified Development Company Loan and Small Business Loans
programs, and USDA obligated $171 million in direct loans through its Farm
Ownership Loan Program. USDA also obligated $332
million in loans and grants through its Community Facilities Loans and
Grants Program. One program- Surplus Property Utilization- obligated less
than $1 million for salaries and expenses to carry out the sale,
exchange, or donation of property, some of which may have involved
buildings. The remaining 21 programs provided grants. Thirteen of these
programs had total program obligations of under $100 million each, three
programs had total obligations of $100 million to $300 million, and five
programs 3 had total obligations of between $1 billion and $3 billion. The
agencies were able to identify $223 million that was obligated for
activities related to buildings for fiscal year 1999 through eight programs.
In addition,
the SBA Small Business Loans Program obligated approximately $2 billion for
activities related to building for fiscal year 1999.
In addition, 11 programs from six agencies required that the funds be used
in conjunction with funds from other sources. One other program- Rural
Development, Forestry and Communities Grants- may also have a negotiated
cost- sharing arrangement. Specifically, regarding programs with
requirements for other funds, USDA limits its contribution to no more than
80 percent of a project's cost under the National Forest/ Dependent Rural
Communities Program; Commerce's EDA specifies that, with some exceptions,
its grants may
be used for up to 50 percent of the cost of the project; 4 funds from HUD's
CDBG/ Economic Development Initiative Program can be used only in
conjunction with projects assisted under the CDBG/ Section 108 Loan
Guarantees Program; the Department of Transportation generally requires
applicants to
provide 10 or 20 percent of the project costs under its grant programs; 3
These programs were CDBG/ Entitlement Grants, the CDBG/ State's Program, the
Airport Improvement Program, Federal Transit/ Capital Investment Grants, and
Federal Transit/ Formula Grants.
4 Increased federal assistance can be provided for projects in areas that
are highly distressed, for projects that assist Indian tribes, and for other
reasons.
the Appalachian Area Development Program specifies that, in general, funds
can be used for up to 80 percent of the eligible development costs for
projects involving construction and equipment and that at least 20 percent
must be obtained from sources other than the federal government;
the Department of the Interior's Indian Loans/ Economic Development Program
requires the borrower have 20 percent equity in the business being financed;
and SBA's Certified Development Company Loan Program generally requires
that at least 10 percent of the project cost must be injected by the small
business. Five Agencies
Business incubators are multitenant facilities that help entrepreneurs and
Administer 19
small businesses get started. Incubators provide start- up firms with
support that can include low- cost space, shared services, proactive
Programs That Can
technical and management support, a peer network, and access to financial
Fund Business assistance. We identified five federal agencies- USDA, the
Department of Incubators Commerce, the Department of Health and Human
Services (HHS), HUD, and ARC- that administer 19 programs that can be used
to fund business incubator activities. Eighteen of these programs indicated
that funds were to be used to generally promote economic development, and
one program- Experimental Program to Stimulate Competitive Technology-
has the stimulation of competitive technology as its objective. As shown in
table 5, federal programs that fund business incubators are available to
various types of applicants, and many programs are available to more than
one type of applicant. Conversely, each type of applicant is eligible for
multiple programs. For example, applicants from local governments are
eligible to apply for 13 programs, and state governments
can apply for 12 programs. In addition, the programs that had the same
purpose often had the same applicants. For example, 12 of the programs that
indicated that the funds were to be used for promoting economic development
were available to applicants from local governments, including economic
development districts and electric utility companies.
Table 5: Types of Applicants for Federal Programs That Can Be Used to Fund
Business Incubators, Listed by Agency
Dollars in millions
Applicants Agency/ program/ (catalog number)/
U. S. Federal tribal business incubator obligations for fiscal year 1999 a
Individual Local Nonprofit State territories governments
U. S. Department of Agriculture
National Forest/ Dependent Rural Communities (10.670) Rural Development,
Forestry and Communities
(10.672) Rural Development Grants (10.769) Empowerment Zones Program
(10.772) Rural Economic Development Loans and Grants (10.854), $0
Appalachian Regional Commission
Appalachian Area Development (23. 002), $1
Department of Commerce Grants for Public Works and Economic Development
(11.300), $14 Economic Adjustment Assistance (11.307), $3
Experimental Program to Stimulate Competitive Technology (11.614) Department
of Health and Human Services
Community Services Block Grant/ Discretionary Awards (93.570) Department of
Housing and Urban Development
CDBG/ Entitlement Grants (14. 218), $13 CDBG/ Small Cities Program (14.219)
CDBG/ Special Purpose Grants/ Insular Areas (14.225) CDBG/ State's Program
(14.228) Historically Black Colleges and Universities Program (14.237)
Empowerment Zones Program (14.244), $4
CDBG/ Economic Development Initiative (14. 246) CDBG/ Section 108 Loan
Guarantees (14. 248) Rural Housing and Economic Development (14.250)
a Specific business incubator obligations were not available for all
programs. Source: GAO's analysis of program information.
Although some of the programs appear to share the same purpose and
applicant, in practice, the requirements of specific programs limit the
number of eligible program applicants. For example, the Empowerment Zones
programs in HUD and USDA are limited to specific geographic areas that have
been designated as empowerment zones or enterprise communities, the ARC
program is to be used for high- priority projects that are included in the
applicable state's Appalachian development plan, and
applicants for USDA's Rural Economic Development Loans and Grants Program
must be electric and telephone utilities that have current loans with USDA's
Rural Utilities Service or Rural Telephone Bank. In addition, all of the
programs can be used to support activities other than business incubators.
For example, the CDBG Entitlements Grant Program allows
recipients to undertake a wide range of activities, such as acquiring real
property, rehabilitating private residences, and engaging in other
activities directed at revitalizing neighborhoods and improving community
services. The total obligations for fiscal year 1999 varied significantly
among the 19 programs that could be used to support business incubators;
however, the amount obligated to support business incubators is generally
not available. For fiscal year 1999, one program provided loan guarantees of
$1.3 billion
under the CDBG/ Section 108 Loan Guarantees Program. HUD acknowledged that
its program could be used to support business incubators but did not have
information about how much of the loan guarantees had actually been used for
that purpose. During the same time frame, USDA obligated $15 million for
direct loans and $11 million for
project grants through the Rural Economic Development Loans and Grants
Program. USDA also agreed that the funds could be used to support business
incubators but told us that none of the fiscal year 1999 funds had been used
for that purpose. Of the remaining programs, all of which involved either
project grants, formula grants, or direct payments, most had total program
obligations of under $100 million each. Only the CDBG/ Entitlement Grants
Program and the CDBG/ State's Program obligated over $1 billion each for
fiscal year 1999. HUD agreed that CDBG funds could be used to support
business incubators and reported that it obligated $13 million through the
entitlement grants program specifically to support business incubators. HUD
did not have information on how the states had obligated other CDBG grant
funds for business incubators. EDA, HUD, and ARC provided information on the
specific obligations for business incubators during fiscal year 1999 for
five of the other grant programs. These included $14 million obligated
through the Grants for Public Works and Economic
Development Program for business incubators. All other specific obligations
for business incubators were under $5 million each. For six of these
programs, applicants must supplement the funds received with funds or loan
guarantees from other sources. Specifically, USDA's Rural Economic
Development Loans and Grants Program requires the use
of supplemental funds equal to 20 percent of the amount of the application.
In addition, for each of EDA's three programs that can be used to fund
business incubators, EDA specifies that the basic grant rate is 50 percent
of the cost of the project. 5 Funds from the CDBG/ Economic Development
Initiative Program can be used only in conjunction with projects assisted
under the CDBG/ Section 108 Loan Guarantees Program. Finally, the
Appalachian Area Development Program specifies that funds can be used for up
to 80 percent of the eligible developmental costs for projects involving
construction and equipment 6 and that at least 20 percent must be
obtained from sources other than the federal government. Six Agencies
Industrial parks generally include a tract of land under the control of one
Administer 20
entity that provides facilities for businesses consistent with a master
plan. Industrial parks provide a wide array of economic development Programs
That Can
opportunities, such as manufacturing, research, warehousing and Fund
Industrial Parks
distribution, and service centers. Critical components of these parks
include transportation, water and sewer, utilities, and telecommunications
infrastructure. We identified six federal agencies that can fund industrial
parks through 20 programs for various types of applicants. (See table 6.)
5 In two of the three programs, exceptions can be made for projects in areas
that are highly distressed, for projects that assist Indian tribes, and for
other reasons. 6 The percentage can be higher under certain conditions, such
as high economic distress.
Table 6: Federal Programs That Can Be Used to Fund Industrial Parks, Listed
by Agency
Dollars in millions
Applicants Agency/ program/ (catalog number)/ U. S. Federal tribal
industrial park obligations for fiscal year 1999 a Individual Local
Nonprofit State territories governments
U. S. Department of Agriculture
National Forest/ Dependent Rural Communities (10.670) Rural Development,
Forestry and Communities
(10.672) Community Facilities Loans and Grants (10.766), $1 Rural
Development Grants (10.769) Empowerment Zones Program (10.772) Rural
Economic Development Loans and Grants (10.854), $0 Appalachian Regional
Commission
Appalachian Area Development (23. 002), $5
Department of Commerce
Grants for Public Works and Economic Development (11.300), $51 Economic
Adjustment Assistance (11.307), $11
Department of Health and Human Services
Community Services Block Grant/ Discretionary Awards (93.570) Department of
Housing and Urban Development
CDBG/ Entitlement Grants (14. 218) CDBG/ Small Cities Program (14.219) CDBG/
Special Purpose Grants/ Insular Areas (14.225) CDBG/ State's Program
(14.228) Historically Black Colleges and Universities Program (14.237)
Empowerment Zones Program (14.244), $1
CDBG/ Economic Development Initiative (14. 246) CDBG/ Section 108 Loan
Guarantees (14. 248) Indian CDBG Program (14. 862), $0
Department of the Interior
Indian Loans/ Economic Development (15.124), $0 a Specific industrial park
obligations were not available for all programs.
Source: GAO's analysis of program information.
USDA and HUD administer 15 of the 20 programs, while ARC and the Departments
of Commerce, Health and Human Services, and the Interior administer the
remaining programs. The table also shows that federal funds for industrial
parks are available to various types of applicants. Each type of applicant
is eligible for multiple programs. For example, local
governments can apply for 12 programs, and states can apply for 12 programs.
In addition, many programs provide funding for more than one type of
applicant. In analyzing the purposes of these programs, we found that 18
programs included the promotion of economic development as a program
purpose,
while 12 programs listed improving community and quality of life as a
program purpose. We also found that programs with the same purpose often had
the same eligible applicants. Eleven programs share the common purpose of
promoting economic development and supporting a local applicant, and six
programs share the common purpose of improving the community, improving the
quality of life, and supporting a local applicant.
Consequently, a local applicant wanting to promote economic development
through the use of industrial parks could apply to the Rural Economic
Development Loans and Grants Program; Rural Development, Forestry and
Communities Program; Grants for Public Works and Economic Development
Program; CDBG/ Entitlement Grants Program; CDBG/ Small Cities Program; CDBG/
Economic Development Initiative; National
Forest/ Dependent Rural Communities Program; Economic Adjustment Assistance
Program; or USDA's Empowerment Zone Program, Rural Development Grants, and
Appalachian Area Development Program. Applicants for the Rural Economic
Development Loans and Grants Program generally must be electric and
telephone utilities that have current loans with USDA's Rural Utilities
Service or Rural Telephone Bank.
Assistance is provided in a variety of ways; however, almost all of the
programs provide assistance through grants. Of the 20 programs, 7 are
targeted to rural areas and 4 to urban areas. The obligations for fiscal
year 1999 for the programs vary widely, ranging from $3 million to about $3
billion. Fourteen of the programs' obligations were for less than $100
million, 3 had obligations of $100 million to $1 billion, and 3 had
obligations of over $1 billion. Agencies provided obligation information for
fiscal year 1999 on industrial parks for nine programs. Two programs
reported that $1 million or less was obligated for industrial parks, while
three other programs reported no obligations. The Appalachian Area
Development
Program reported $5 million, the Economic Adjustment Assistance Program
reported $11 million, and the Grants for Public Works and
Economic Development Program reported obligating $51 million for industrial
parks in fiscal year 1999. Five of these programs require applicants to
supplement the funds received with funds from other sources. In addition,
one program- Rural Development, Forestry and Communities- may have
negotiated cost- sharing arrangements. For the programs requiring funds from
other sources, two programs require 20 percent or more in matching funds,
two programs require matching funds of up to 50 percent, and another
requires various matching percentages depending on the type of activity. In
addition, one program provides a 90- percent maximum loan guarantee and
requires that the borrower have 20 percent equity in the business being
financed. Some of the programs provide greater assistance if applicants meet
other criteria, such as if an area is severely economically depressed.
Six Agencies The development of roads and streets often promotes economic
Administer 26 development. In addition, businesses consider a variety of
factors,
including the efficiency of transportation facilities, when making decisions
Programs That Can
to locate in a particular area. Six agencies administer 26 programs that
Fund Roads and support the development of roads and streets. As shown in
table 7, federal
Streets Activities programs for roads and streets are available to various
types of applicants.
Also, each type of applicant is eligible for multiple programs. For example,
local governments can apply for funding from 16 programs, and states can
apply for funding from 15 programs. In addition, many of these programs
provide funding for multiple types of applicants.
Table 7: Federal Programs That Can Be Used to Fund Roads and Streets, Listed
by Agency
Dollars in millions
Applicants Agency/ program/ (catalog number)/
U. S. Federal tribal roads and streets obligations for fiscal year 1999 a
Individual Local Nonprofit State territories governments U. S. Department of
Agriculture
Schools and Roads/ Grants to States (10. 665) Schools and Roads/ Grants to
Counties (10.666) Community Facilities Loans and Grants (10.766),
$11 Rural Development Grants (10.769)
(Continued From Previous Page)
Applicants Agency/ program/ (catalog number)/
U. S. Federal tribal roads and streets obligations for fiscal year 1999 a
Individual Local Nonprofit State territories governments
Enpowerment Zones Program (10.772)
Appalachian Regional Commission
Appalachian Local Road Access (23.008), $3
Department of Commerce
Grants for Public Works and Economic Development (11.300), $28 Economic
Adjustment Assistance (11.307), $24
Department of Housing and Urban Development
CDBG/ Entitlement Grants (14. 218), $216 CDBG/ Small Cities Program (14.219)
CDBG/ Special Purpose Grants/ Insular Areas
(14.225) CDBG/ State's Program (14.228)
Historically Black Colleges and Universities Program (14.237) Empowerment
Zones Program (14.244), $1
CDBG/ Economic Development Initiative (14. 246) CDBG/ Section 108 Loan
Guarantees (14. 248) Public Housing/ Comprehensive Improvement
Assistance Program (14.852) b Public Housing/ Comprehensive Grant Program
(14.859) b Indian CDBG Program (14. 862), $1
Department of the Interior
Road Maintenance/ Indian Roads (15.033), $7 Indian Loans/ Economic
Development (15.124), $0 Economic, Social, and Political Development of the
Territories and the Freely Associated States (15.875) Department of
Transportation
Airport Improvement Program (20.106), $29 Highway Planning and Construction
(20.205) Federal Transit/ Capital Investment Grants (20. 500) Federal
Transit/ Formula Grants (20.507), $13
a Specific roads and streets obligations were not available for all
programs. b Programs 14.852 and 14.859 were subsequently consolidated into a
new program- Public Housing Capital Fund (14.872). Source: GAO's analysis of
program information.
In analyzing the uses of these programs, we found that 23 programs included
road construction as a program use, while 22 included repair,
reconstruction, or maintenance as a program use. We also found that the
programs often had the same purposes and applicants. Thirteen of the
programs could be used to construct roads and allowed applicants to include
local governmental units. Consequently, as long as specific
program requirements were met, a local community needing to construct a road
could apply to one or more programs at ARC, USDA, Commerce, HUD, and the
Department of Transportation. However, restrictions of specific programs
distinguish one program from another. Such restrictions include a
requirement that funding be used for rural areas, for areas with low- and
moderate- income persons, or for areas in a targeted geographic
region. For example, only communities in the Appalachian region could apply
for the Appalachian Local Road Access Program.
Twenty- three of the programs that can be used to fund activities related to
roads and streets provide funding through grants and three provide funding
through loans. The obligations for programs varied widely, ranging from $3
million to over $3 billion for fiscal year 1999. Of the federal programs
that we identified that funded roads and streets activities, most required
no matching funds, while others required minimum matching funds ranging from
10 to 50 percent of the project's costs. For some of the programs, the
required nonfederal matching funds varied on the basis of the area's level
of economic distress, such as the area's level of poverty or unemployment.
Seven Agencies
Water and sewer projects represent an important and necessary Administer 31
infrastructure improvement for communities seeking to promote economic
development. Numerous federal programs provide funding for various Programs
That Can aspects of water- and sewer- related activities, such as
constructing, Fund Water and Sewer
expanding, or repairing water and wastewater facilities. Seven agencies
Activities
administer 31 programs that support water- and sewer- related activities for
various types of applicants; however, two agencies- USDA and HUD- administer
21 of the 31 programs. In analyzing the purposes of these programs, we found
that 29 programs included the provision of necessary water facilities as a
program purpose, while 25 programs listed the
provision of necessary water and sewer facilities as a program purpose. As
shown in table 8, federal programs that fund water and sewer activities are
available to various types of applicants. Also, each type of applicant is
eligible for multiple programs. For example, local and state governments
can apply for 17 programs and 14 programs, respectively. In addition, many
programs are available to more than one type of applicant.
Table 8: Federal Programs That Can be Used to Fund Water and/ or Sewer,
Listed by Agency
Dollars in millions
Applicants Agency/ program/ (catalog number)/ water and
Federal tribal sewer obligations for fiscal year 1999 a Individual Local
Nonprofit State U. S. territories governments
U. S. Department of Agriculture
Farm Ownership Loans (10.407) Rural Housing Site Loans and Self- Help
Housing Land Development Loans (10. 411) Water and Waste Disposal Systems
for Rural
Communities (10.760), $1, 244 Emergency Community Water Assistance Grants
(10.763) Community Facilities Loans and Grants (10.766), $2
Business and Industry Loans (10.768) Rural Development Grants (10.769) Water
and Waste Disposal Loans and Grants
(10.770), $22 Empowerment Zones Program (10.772)
Rural Economic Development Loans and Grants (10.854), $1 Appalachian
Regional Commission
Appalachian Area Development (23. 002), $29
Department of Commerce
Grants for Public Works and Economic Development (11.300), $65 Economic
Adjustment Assistance (11.307), $39
Environmental Protection Agency b
Capitalization Grants for State Revolving Funds (66.458), $1,296
Capitalization Grants for Drinking Water State
Revolving Loan Fund (66.468), $791 Department of Health and Human Services
Surplus Property Utilization c (93.291)
(Continued From Previous Page)
Applicants Agency/ program/ (catalog number) water and
Federal tribal sewer obligations for fiscal year 1999a Individual Local
Nonprofit State U. S. territories governments
Community Services Block Grant/ Discretionary Awards (93.570) Department of
Housing and Urban Development
CDBG/ Entitlement Grants (14. 218), $60 CDBG/ Small Cities Program (14.219)
CDBG/ Special Purpose Grants/ Insular Areas
(14.225) CDBG/ State's Program (14.228)
Historically Black Colleges and Universities Program (14.237) Empowerment
Zones Program (14.244), less than $1
CDBG/ Economic Development Initiative (14. 246) CDBG/ Section 108 Loan
Guarantees (14. 248) Public Housing/ Comprehensive Improvement
Assistance Program d (14. 852) Public Housing/ Comprehensive Grant Program
(14.859) d Indian CDBG Program (14. 862), $7
Department of the Interior
Bureau of Indian Affairs Facilities/ Operations and Maintenance (15.048),
less than $1 Indian Loans/ Economic Development (15.124), $0
Economic, Social, and Political Development of the Territories and the
Freely Associated States (15.875) a Specific water and sewer obligations
were not available for all programs.
b In addition to programs listed in the Catalog of Federal Domestic
Assistance, Environmental Protection Agency officials reported four other
projects that fund water and sewer projects, including the Mexico Border
Program, and the Alaska Native and Rural Villages, Special Needs Border, and
Hardship Cities programs. c The Surplus Property Utilization Program
(93.291) provides assistance through the sale, exchange, or
donation of property and goods. d Two of the HUD programs, 14.852 and 14.859
have been consolidated into the HUD program, Public Housing Capital Fund
(14.872).
Source: GAO's analysis of program information.
We also found that the programs often had the same purposes and applicants.
Of the 25 programs that could be used to provide necessary water facilities,
17 allowed applicants to be local governmental units, and 14 allowed
applicants to be a state governmental unit (nine programs
allowed both types of applicants). Consequently, as long as specific program
requirements were met, a local community needing to provide necessary water
facilities could apply for five HUD programs, eight USDA programs, two EDA
programs, one ARC program, and one Department of
Health and Human Services program. In some cases, specific program
requirements do limit who is eligible to apply for these programs. Under
these requirements, funding must be used for rural areas or to principally
benefit low- and moderate- income people. USDA's Water and Waste Disposal
Systems for Rural Communities Program is generally available only in areas
with a population of 10, 000 or less. Twenty- three of the programs provide
funding through project or formula grants, 5 provide loans (4 provide both
grants and loans), and 3 provide
other resources such as a donation of property. The obligations that were
made through these programs for fiscal year 1999 vary widely, ranging to
nearly $3 billion (for the Community Development Block Grants/ Entitlement
Grants program). Seventeen of the programs' obligations were less than $100
million, 7 had obligations of $100 million to $1 billion, and 7
had obligations over $1 billion. Of the 31 federal programs that funded
water and sewer activities, 22 required no matching funds, other programs
required minimum matching funds of 20 or 25 percent, and still others
required matching funds of 50 percent of the project's costs.
Timeline of Federal Programs That Fund
Appendi x I V
Selected Economic Development Activities 1920s 1930s 1940s 1950s
Fish, Wildlife, and Parks Schools and Roads/
Surplus Property Small Business Loans (1953)
Programs on Indian Grants to Counties (1937) Utilization (1949)
Watershed Surveys Lands (1921)
and Planning (1954) Indian Loans/ Economic
Certified Development Development (1921)
Company Loans (1958) Road Maintenance/
Indian Roads (1928) Economic, Social, and Political
Development of the Territories and the Freely Associated States (1929)
1960s 1970s 1980s 1990s
Farm Ownership Loans (1961) Business and Industry
Fisheries Development and Emergency Community Water
Water and Waste Disposal Loans (1972)
Utilization Research and Assistance Grants (1990)
Systems for Rural Community Facilities Loans
Developmental Grants and Water and Waste Disposal
Communities (1961) and Grants (1972)
Cooperative Agreements Loans and Grants (1990)
Federal Transit Technical Rural Development Grants (1972)
Program (1980) Community Base
Assistance (1964) Rural Economic Development
Experimental Program Reuse Plans (1990)
Federal Transit/ Capital Loans and Grants (1973)
to Stimulate Competitive National Forest/ Dependent
Investment Grants (1965) Economic Adjustment
Technology (1980) Rural Communities (1990)
Appalachian State Research, Assistance (1974)
Public Housing/ Comprehensive Rural Cooperative
Technical Assistance, and CDBG/ Entitlement Grants (1974)
Improvement Assistance Development Grants (1990)
Demonstration Projects (1965) CDBG/ State's Program (1974)
Program (1981) Community Economic
Economic Development/ CDBG/ Small Cities
Joint Land Use Studies (1981) Adjustment Planning Assistance
Technical Assistance (1965) Program (1974)
Resource Conservation for Reductions in Defense
Economic Development/ CDBG/ Section 108 Loan
and Development (1981) Industry Employment (1990)
State and Local Economic Guarantees (1974)
Growth Management Transit Planning and
Development Planning (1965) CDBG/ Special Purpose
Planning Assistance (1981) Research (1991)
Appalachian Area Grants/ Insular Areas (1974)
Community Economic Adjustment Community Outreach
Development (1965) Trade Adjustment
Planning Assistance (1981) Partnership Center
Grants for Public Assistance (1974)
Community Services Program (1992)
Works and Economic Planning Assistance
Block Grant/ Discretionary Brownfield Pilots Cooperative
Development (1965) to States (1974)
Awards (1981) Agreements (1993)
Appalachian Local Native American Programs (1974)
CDBG/ Special Purpose Empowerment Zones
Access Roads (1965) Bureau of Indian Affairs
Grants/ Technical Assistance Programs (1993)
Appalachian Local Development Facilities/ Operations
Program (1983) Airport Improvement
District Assistance (1965) and Maintenance (1975)
Capitalization Grants for Program (1994)
Highway Planning and Federal Transit/ Formula
State Revolving Funds (1987) CDBG/ Economic
Construction (1966) Grants (1975)
Public Housing/ Comprehensive Development Initiative (1994)
Rural Housing Site Loans and Indian CDBG Program (1977)
Grant Program (1988) Fisheries Disaster Relief (1996)
Self- Help Housing Land Community Economic
Historically Black Colleges Capitalization Grants for
Development Loans (1968) Adjustment (1978)
and Universities (1989) Drinking Water State
Federal Transit/ Metropolitan Rural Development, Forestry,
Revolving Fund (1996) Planning Grants (1978)
and Communities (1989) Fund for Rural America/ Farm
Formula Grants for Other Ownership Loans (1996)
Than Urbanized Areas (1978) Rural Business
Opportunity Grants (1996) Rural Housing and Economic
Development (1999)
Note: The Schools and Roads/ Grants to States Program is not listed in the
table because it began in 1908. Also, for some programs, the dates listed
reflect the authorization of the current program even though similar
activities existed before that program's authorization. Source: GAO's
analysis of program information.
Objectives and Restrictions of Federal Programs That Fund Selected Economic
Appendi x V
Development Activities The programs that we have identified as funding
similar activities have various objectives and use restrictions. For each of
the programs, table 9 shows the total obligations for fiscal year 1999 and
the program's objectives, as well as some of the restrictions that are
placed on program applicants or beneficiaries.
Table 9: Listing of Selected Program Information by Agency
Dollars in millions
Program's name and obligations for fiscal
Catalog year 1999 number Objectives Use restrictions
U. S. Department of Agriculture
Farm Ownership Loans, 10. 407 To assist eligible farmers, ranchers, Loan
funds may be used to enlarge, improve, and buy $171 and aquaculture
operators through
family farms; provide necessary water and water the extension of credit and
facilities; provide basic soil treatment and land supervisory assistance to
become conservation measures; construct, repair, and improve owners and/ or
operators of farms that buildings needed in the operation of a family farm;
are family farms or smaller; make construct or repair farm dwellings; and
provide facilities efficient use of the land, labor, and to produce fish
under controlled conditions.
other resources; carry on sound and successful farming operations; and Among
other things, an applicant must not have enable farm families to have a
received debt forgiveness on more than three occasions reasonable standard
of living. prior to April 4, 1996, to receive a guaranteed loan; be unable
to obtain suitable credit from other sources at reasonable rates and terms;
be a U. S. citizen or permanent resident; have the necessary education
and/ or experience, training, and managerial ability to operate a family
farm; realistically project the ability to repay the loan; and have a
minimum of 3 years of farming experience.
(Continued From Previous Page)
Program's name and obligations for fiscal
Catalog year 1999 number Objectives Use restrictions
Rural Housing Site 10. 411 To assist public or private nonprofit Funds may
be used for purchasing and developing Loans and Self- Help organizations
interested in providing adequate sites and water and sewer facilities;
paying Housing Land
sites for housing; and to acquire and necessary engineering costs, legal
fees, and closing Development Loans, $1
develop land in rural areas to be costs; and landscaping and other necessary
facilities subdivided as adequate building sites related to buildings such
as walks, parking areas, and and sold on a cost- development driveways. Loan
funds may not be used for the basis to families eligible for low- and
refinancing of debts; payment of a fee or commission to very- low- income
loans, cooperatives,
a broker, negotiator, or other person for the referral of a and broadly
based nonprofit rural prospective applicant or solicitation of a loan; and
rental housing applicants.
operating costs or expenses of administration other than the actual cash
cost of incidental administrative expenses if funds to pay for those
expenses are not otherwise available. An applicant must be a private or
public nonprofit organization that will make the developed sites available
to qualified borrowers in open country and towns with a population of 10,
000 or less and places with a population of up to 25, 000 under certain
conditions. Developed sites must be for housing to be built by the
self- help method for low- and very- low- income families and may be sold to
families, nonprofit organizations, public agencies, and cooperatives
eligible for assistance under any section of Title V of the Housing Act of
1949, or under any other law that provides financial assistance.
Fund for Rural 10. 453 To support research, education, and
Among other things, an applicant must be unable to America/ Farm extension
activities and to assist obtain suitable credit from other sources at
reasonable Ownership Loans, $0 eligible farmers, ranchers, and rates and
terms; be a U. S. citizen or permanent resident; aquaculture operators
through the
have the necessary education and/ or experience, extension of credit and
supervisory training, and managerial ability to operate a family farm;
assistance to become owners and/ or and have a minimum of 3 years of farming
experience.
operators of farms that are family farms or smaller; make efficient use of
the land, labor, and other resources; carry on sound and successful farming
operations; and enable farm families to have a reasonable standard of
living.
Schools and 10. 665 To share receipts from the national
Applicants are states or territories of the U. S. containing Roads/ Grants
to States, forests with the states in which the
national forest land. $210
national forests are located. Schools and
10. 666 To share receipts from national Applicants and beneficiaries may
only be counties within Roads/ Grants to grasslands and land utilization the
states that contain national grasslands or land Counties, $5
projects with the counties in which utilization projects.
the national grasslands and land utilization projects are located.
(Continued From Previous Page)
Program's name and obligations for fiscal
Catalog year 1999 number Objectives Use restrictions
National 10. 670 To provide accelerated assistance for An applicant must be
a general purpose local Forest/ Dependent Rural rural communities that are
(1) located
government or a tribe represented by a nonprofit Communities, $3
in or near a national forest, (2) organization in areas with a population of
not more than economically dependent on forest 10, 000 or any county that is
not contained within a
resources, and (3) faced with acute metropolitan statistical area. A county
must derive at economic problems. Assistance is for
least 15 percent of its primary and secondary labor and developing strategic
action plans to proprietary income from forestry and forest- related
diversify their economic base and to industries, such as recreation and
tourism, range, improve the economic, social, and minerals, and wildlife. In
all cases, the community or environmental well- being of their
county must be within 100 miles of the boundary of a areas. national forest.
Individual businesses are not eligible for direct assistance.
Beneficiaries are rural communities. Rural Development,
10. 672 To identify, assist, and support local The Forest Service's regional
policies may further define Forestry, and strategic planning objectives by
and focus resources to meet the needs of the Communities, $4
joining state foresters; tribes; state communities that they serve. and
federal agencies; local governments; not- for- profit organizations; and
others in finding, developing, and sustaining rural development activities
that extend and diversify natural resource use.
Water and Waste 10. 760 To provide basic human amenities, Grant funds may
not be used to pay interest on loans, Disposal Systems for alleviate health
hazards, and promote pay operation and maintenance costs, or to acquire or
Rural Communities, the orderly growth of the rural areas
refinance an existing system. Funded facilities shall $1, 253 of the nation
by meeting the need for
primarily serve rural residents and rural businesses. The new and improved
rural water and
service area shall not include any area in any city or waste disposal
facilities. town having a population in excess of 10, 000, according to the
latest decennial census of the United States. The applicant must (1) be
unable to finance the proposed project from its own resources or through
commercial credit at reasonable rates and terms and (2) have the
legal authority necessary for constructing, operating, and maintaining the
proposed facility or service, and for obtaining, giving security for, and
repaying the proposed loan. Among other requirements, the plans and
specifications must be developed to comply with state and local health and
pollution regulations.
(Continued From Previous Page)
Program's name and obligations for fiscal
Catalog year 1999 number Objectives Use restrictions
Emergency Community 10. 763 To help rural residents who have Grants provided
under this program shall not be used (1) Water Assistance experienced a
significant decline in
to assist a rural area or community with a population of Grants, the
quantity or quality of water to
more than 10, 000 or a median household income in less than $1 obtain
adequate quantities of water
excess of the statewide nonmetropolitan median that meet the standards of
the Safe household income according to the most recent Drinking Water Act.
decennial census of the United States; (2) to finance facilities that are
not modest in size, design, and cost; (3) to pay loan or grant finders'
fees; (4) to pay any annual recurring costs considered to be operational
expenses;
(5) to pay rent for the use of equipment or machinery owned by the rural
community; (6) to purchase existing systems; (7) to refinance existing
indebtedness; and (8)
to make reimbursement for projects developed with other grant funds.
Community Facilities 10. 766 To construct, enlarge, extend, or
All facilities financed in whole or in part with these funds Loans and
Grants, $332 otherwise improve community shall be for public use. facilities
providing essential services for rural residents. Business and Industry 10.
768 To assist public, private, or The program places numerous restrictions
on the use of
Loans, $1, 206 cooperative organizations (profit or the loans.
nonprofit), Indian tribes, or individuals in rural areas to obtain quality
loans Applicants and beneficiaries must be located in rural for the purpose
of (1) improving, areas. developing, or financing businesses, industry, and
employment and (2)
improving the economic and environmental climate in rural communities,
including pollution
abatement and control. Rural Development
10. 769 To facilitate the development of small Applicants eligible for rural
business enterprise grants Grants, $36 and emerging private business, are
public bodies and nonprofit corporations serving industry, and related
employment for
rural areas. Applicants eligible for television improving the economy in
rural demonstration grants are statewide, private, nonprofit, communities.
public television systems whose coverage is predominantly rural- a city,
town, or unincorporated area that has a population of 50, 000 or less and is
not an urbanized area immediately adjacent to a city, town, or
unincorporated area that has a population of over 50, 000.
Beneficiaries are generally any private business that will employ 50 or
fewer new employees, has less than $1 million in projected gross revenue,
has or will use technological innovation, and will use new products in rural
areas and new processes that can be used in such production.
(Continued From Previous Page)
Program's name and obligations for fiscal
Catalog year 1999 number Objectives Use restrictions
Water and Waste 10. 770 To provide water and waste disposal The projects
funded under this program must primarily Disposal Loans and facilities and
services to low- income provide water and/ or waste disposal services for
Grants, $22 rural communities whose residents residents of a county where
the per capita income of the face significant health risks.
residents is not more than 70 percent of the most recent national average
per capita income, as determined by the Department of Commerce, and the
unemployment rate of the residents is not less than 125 percent of the most
recent national average unemployment rate, as determined by the Bureau of
Labor Statistics. Also, the
residents must face significant health risks because they do not have access
to an affordable community water and/ or waste disposal system. Rural
Cooperative 10. 771 To establish and operate centers for
Applicants must be nonprofit corporations and Development Grants, $2 rural
cooperative development to
institutions of higher education. Funds must benefit improve economic
conditions in rural residents of rural areas, which can be any area of a
state areas by promoting the development that is not within the outer
boundary of a city with a of new cooperatives and/ or the population of 50,
000 or more, according to the latest improvement of existing decennial
census of the United States. cooperatives.
Empowerment Zones 10. 772 To stimulate the creation of new jobs, USDA is not
authorized to grant new designations under Program, $15 particularly for the
disadvantaged
this program. Applicants must have been previously and long- term
unemployed, and to designated as a rural empowerment zone or enterprise
promote revitalization of community. economically distressed rural areas.
Rural Business
10. 773 To promote sustainable economic Applicants must be public bodies,
nonprofit corporations, Opportunity Grants, $0 development in rural
communities Indian tribes on federal or state reservations or other
with exceptional needs. federally recognized tribal groups, and cooperatives
with members who are primarily rural residents and who conduct activities
for the mutual benefit of the members. The beneficiaries must be rural
communities and
businesses in rural areas. Rural Economic 10. 854 To promote rural economic
Funds must be used for projects that promote rural Development Loans and
development and job creation economic development and job creation. Limits
are Grants, $26
projects, including funding for project placed on the maximum amount for
each grant or loan,
feasibility studies, start- up costs, as well as the term of the loan.
incubator projects, and other reasonable expenses for the purpose
Applicants must be electric and telephone utilities that of fostering rural
development. have current Rural Utilities Service loans or that have Rural
Telephone Bank loans or outstanding guarantees.
Applicants may not be delinquent on any federal debt or be in bankruptcy
proceedings. Resource Conservation
10. 901 To encourage and improve the Technical assistance is available only
to sponsors within and Development, $35 capability of state and local units
of areas authorized by the Secretary of Agriculture for
government and local nonprofit planning and installing approved projects
specified in organizations in rural areas to plan,
Resource Conservation and Development area plans, develop, and carry out
programs for for land conservation, water management, community resource
conservation and development, and environmental enhancement development.
elements.
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Catalog year 1999 number Objectives Use restrictions
Watershed Surveys and 10. 906 To provide planning assistance for Studies
should focus on a limited number of critical Planning, $10 federal, state,
and local agencies for
problems of special concern nationally, such as flood developing coordinated
water and damage reduction, erosion control, water conservation, related
land resources programs in preservation of wetlands, and water quality
watersheds and river basins.
improvement.
Appalachian Regional Commission
Appalachian Area 23. 002 To create opportunities for selfsustaining Projects
funded must be of high priority in the state's Development, $89 economic
development
Appalachian development plan and be either of critical and improved quality
of life in the importance to a phased investment and development Appalachian
region.
program for a multicounty area or of unusual economic benefit to such area.
The grants may be used for providing supplemental funds under any federal
grant- inaid program.
Appalachian Local 23. 008 To provide access to industrial,
Funds may be used for engineering, right- of- way, Access Roads, $3
commercial, educational, relocation, and construction of projects relating
to the recreational, residential, and related
program's objectives. The federal and the state transportation facilities
that directly or
governments must accept the roads, and total access indirectly relate to the
improvement of road construction may not exceed 1, 400 miles. the areas
determined by the states to Applicants are state governments. State
governments have significant development may solicit project proposals from
other public entities potential and to meet the objectives and private
groups within Appalachia.
stated under the Appalachian Regional Development program. Appalachian Local
23. 009 To provide planning and development Applicants must be multicounty
organizations that are
Development District resources in multicounty areas, to certified by states
within the Appalachian region. Assistance, $5 help develop the technical
competence essential to sound
development assistance, and to meet the objectives stated under the
Appalachian Regional Development program. Appalachian State
23. 011 To assist ARC in accomplishing its Applicants are states within the
Appalachian region-
Research, Technical objectives by expanding the either singly or in
combination with one another, local
Assistance, and knowledge of the region through public entities, and state
entities. Demonstration Projects, state- sponsored research. $1
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Department of Commerce
Grants for Public Works 11. 300 To promote long- term economic
Qualified projects must fulfill a pressing need of the area and Economic
development and assist in the and must (1) tend to improve the opportunities
for the Development, $206
construction of public works and successful establishment or expansion of
industrial or development facilities needed to commercial plants or
facilities, (2) assist in the creation initiate and support the creation or
of additional long- term employment opportunities, or (3) retention of
permanent jobs in the
benefit the long- term unemployed or underemployed private sector in areas
experiencing
and members of low- income families. In addition, substantial economic
distress. proposed projects (1) must be consistent with the
currently approved Comprehensive Economic Development Strategy for the area
and for the Economic Development District, if any, in which it will be
located and (2) must have an adequate local share of funds. Projects must be
capable of being started and completed in a timely manner. Economic
11. 303 To promote economic development Technical assistance is used for
projects that promote Development/ Technical
and alleviate underemployment and economic development in economically
distressed areas Assistance, $10
unemployment in distressed areas by and to fund a network of university
centers that provide (1) enlisting the resources of technical assistance to
distressed communities and designated university centers in
businesses. Grants may not be used to start or expand a promoting economic
development, private enterprise. (2) supporting innovative economic
development projects, (3) disseminating information and
studies of economic development issues of national significance, and (4)
financing feasibility studies and other projects leading to local economic
development.
Economic 11. 305 To help states, substate planning
Funds must be used to support comprehensive planning Development/ State and
units, Indian Tribes, and/ or local
for economically distressed communities/ areas. Local Economic urban
governments strengthen the Beneficiaries are the unemployed and low- income
Development Planning,
economic- development- planning residents in areas that are covered by the
applicant. $24
capability and formulate and establish comprehensive economic development
plans designed to reduce unemployment and increase
incomes. Economic Adjustment 11. 307 To assist state and local interests in
Beneficiaries must meet one of three criteria, which Assistance, $137
designing and implementing relate to unemployment rate, per capita income,
or a strategies to adjust or bring about
special need resulting from severe short- term changes change to an economy.
Economic in economic conditions. Adjustment Assistance grants may be used
for planning, technical assistance, construction, and revolving loan funds.
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Catalog year 1999 number Objectives Use restrictions
Trade Adjustment 11. 313 To provide trade adjustment
Applicants may be intermediary organizations (including Assistance, $10
assistance for firms and industries Trade Adjustment Assistance Centers)
that assist tradeinjured adversely affected by increased firms. For an
industry association or other imports.
organizations to be eligible for industry assistance, evidence must be
submitted to demonstrate that the industry faces import competition and
includes a substantial number of Trade Act- certified firms or worker
groups.
Fisheries Development 11. 427 To increase greatly the nation's Proposals
must respond to funding priorities that are
and Utilization Research wealth and quality of life through described in the
annual solicitation. and Development sustainable fisheries that support
Grants and Cooperative
fishing industry jobs, safe and Agreements Program,
wholesome seafood, and recreational $3 opportunities.
Fisheries Disaster 11. 477 To deal with commercial fishery Funds can be used
for assessing the effects of Relief, $4 failures due to fishery resource
commercial fishery failures, or restoring fisheries or disasters that may be
natural, man
preventing future failures, and assisting fishing made, or of undetermined
origin.
communities affected by the failures. However, the Secretary of Commerce
must first determine that the activity will not expand the commercial
fishery failure in that fishery or into other fisheries or other
geographical
regions. Experimental Program 11. 614 To support technology- based Eligible
organizations must be headquartered in Alaska, to Stimulate Competitive
economic growth in eligible Arkansas, Delaware, Hawaii, Idaho, Indiana,
Iowa, Technology, $4
jurisdictions by promoting Kansas, Kentucky, Louisiana, Maine, Mississippi,
partnerships between state and local Montana, Nebraska, Nevada, New
Hampshire, North governments, universities, Dakota, Oklahoma, Oregon, South
Carolina, South community colleges, nonprofit
Dakota, Utah, Vermont, West Virginia, Wisconsin, organizations, and the
private sector.
Wyoming, or the Commonwealth of Puerto Rico.
Department of Defense
Planning Assistance to 12. 110 To cooperate with any state in the The state
must have a planning program for developing, States, $6 preparation of
comprehensive plans using, or conserving the water and related land for
developing, using, and conserving resources either under way or laid out in
sufficient detail water and related land resources of so that the
relationship of a state's request for a
drainage basins located within the particular aspect of the program may be
appraised. boundaries of such state.
Community Economic 12. 600 To help communities, regions, and Funds are used
in communities that are affected by Adjustment, $0 states alleviate serious
economic changes in Department of Defense programs. impacts that result from
Department
of Defense program changes, such as base openings, expansions, and closings;
contract changes; and personnel reductions and increases.
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Catalog year 1999 number Objectives Use restrictions
Community Economic 12. 607 To assist local governments or states, Funding is
provided for areas requiring the reuse of
Adjustment Planning on behalf of local governments, to military property.
Assistance, $27
undertake community economicadjustment- planning activities to An applicant
must be from an area where the Secretary respond to military base closures
and of Defense has announced that the local military realignments.
installation is a candidate for closure or realignment or that a final
decision has been made that the installation will be closed or realigned. A
determination must have been made that the action will result in a direct
and significantly adverse consequence to the affected community. Joint Land
Use Studies, 12. 610 To enable the Army, Navy, Air Force, An applicant must
be studying an area where the less than $1 and Marine Corps to participate
in Secretary of Defense determines that encroachment of developing and
implementing Joint the civilian community on a military installation is
likely to
Land Use Studies that will be used to impair the continued operation and
utility of the military identify land use measures needed to installation.
ensure that further public and private development around a military
installation is compatible with both the mission of the military
installation and the plans of the jurisdictions
responsible for the land surrounding the installation.
Community Economic 12. 611 To assist local governments or states, Funding
may be provided for community economicadjustment-
Adjustment Planning on behalf of local governments, to planning activities
in response to publicly Assistance for undertake economic-
adjustmentplanning
announced planned reductions in Department of Reductions in Defense
activities to respond to Defense spending, the cancellation or termination
of a Industry Employment, major reductions in defense industry Department
contract, or the failure to proceed with a $2
employment resulting from the previously approved major defense acquisition
program, cancellation, termination, or failure to where the Secretary of
Defense has determined that the proceed with a major Department of action is
likely to impose a direct and significantly Defense acquisition.
adverse consequence. An applicant may be eligible for funding Defense
industry adjusting planning if the cancellation, termination, or failure to
proceed with a major weapons system involves the loss of (1) 2,500 or more
full- time contractor employee positions in a metropolitan statistical area,
(2) 1, 000 or more jobs in a labor market area outside a metropolitan
statistical area, and (3) 1 percent of the total number of civilian jobs in
that area.
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Community Base Reuse 12. 612 To assist local governments or states,
Funding may be provided for developing the community Plans, $1 on behalf of
local governments, to base reuse plan that is required as part of the
conduct community base reuse plans
Environmental Impact Statement for the disposal and at military
installations that are reuse of military installations. closing or being
realigned.
An applicant must be from an area with a local military installation that
the Secretary of Defense announced (in 1988, 1992, 1993, or 1995) was a
candidate for closure or realignment or announced that a final decision had
been made that the installation would be closed or realigned and for which a
community reuse plan is required for the Department of Defense Environmental
Impact Statement or Environmental Assessment. Growth Management
12. 613 To assist local governments or states, Funding may be provided for
community growthmanagement-
Planning Assistance, $0 on behalf of local governments, to planning
activities when the opening or undertake community economicadjustment-
expansion of a military installation results in large- scale planning
activities to military- related population growth requiring additional
respond to military base openings or public facilities and services off
base.
expansions. An applicant may be eligible if (1) establishing or expanding a
local military installation involves the assignment of more than 2,000
military, civilian, and contractor personnel to a new or expanded
installation or the assignment of more military, civilian, and
contractor personnel that is equal to 10 percent of the employment in
counties or independent municipalities within 15 miles of the installation,
whichever is lesser; (2)
the new or expanded installation will result in a direct and significantly
adverse consequence on the affected community; and (3) other special impact
assistance is not available.
Environmental Protection Agency
Capitalization Grants for 66. 458 To create state revolving funds that The
state must certify that it has the legal, managerial, State Revolving Funds,
will provide a long- term source of technical, and operational capabilities
to administer the $1, 329
financing for constructing wastewater program competently and that it will
comply with treatment facilities and implementing applicable federal
statutes. other water quality management activities.
Capitalization Grants for 66. 468 To create state revolving funds that The
state must certify that it has the legal, managerial,
Drinking Water State will provide a long- term source of technical, and
operational capabilities to administer the Revolving Loan Fund,
financing for the costs of program competently and that it will comply with
$775
infrastructure needed to achieve or applicable federal statutes. maintain
compliance with requirements of the Safe Drinking Water Act and to protect
public health.
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Catalog year 1999 number Objectives Use restrictions
Brownfield Pilots 66. 811 To provide funds for states, tribes, Funds for
assessment demonstration pilot activities Cooperative and local governments
to assess must show direct links to site assessment, site Agreements, $51
Brownfields, establish revolving loan identification, site investigation,
and planning and/ or site funds to clean up brownfields, and
characterization at sites that have an actual, threatened, provide
environmental training in or suspected release of a hazardous substance.
Funds brownfield communities. for the capitalization of revolving loan fund
pilots may be used only for specific removal actions and may not be used for
remedial actions. Funds for assessment
demonstration pilots and the capitalization of revolving loan fund pilots
may not be used for actual development activities. Funds for pilot
activities may not be used at sites contaminated by petroleum products
except to address a nonpetroleum hazardous substance (e. g., comingled
waste). Funds may not be used to match any other federal funds. Funds
awarded for the capitalization of revolving loan fund pilots must be used
for removal
actions at brownfield sites that have completed or have substantially
completed assessment activities, unless unique circumstances warrant an
exception to this restriction. Funds awarded for environmental job training
must be used to prepare trainees to handle and remove hazardous substances,
including training in innovative or alternative treatment technologies.
Department of Health and Human Services
Surplus Property 93. 291 To convey or lease all surplus federal Real
property must be used for eligible health purposes. Utilization, less than
$1 real properties that were made Applicants must be states; their political
subdivisions;
available by the disposal agency and tax- supported public health
institutions; and nonprofit, are needed and usable by eligible tax- exempt
institutions. organizations to carry out health programs.
Beneficiaries must attend, work with or for, or be served by one of the
eligible applicants. Community Services 93. 570 To support program
activities of
Funds may be used to improve the quality of the Block national or regional
significance to economic and social environment of low- income Grant/
Discretionary
alleviate the causes of poverty in residents by providing resources for
eligible applicants; Awards, $33
distressed communities. by arresting tendencies toward dependency, chronic
unemployment, and community deterioration in urban and rural areas; by
addressing water and wastewater treatment needs; by providing national or
regional character building, sports, and physical fitness programs for low-
income youth; and by involving significant new combinations of resources.
Funds must be used for
projects that are generally capable of being completed within 12 to 60
months of the award of the grant.
Beneficiaries are low- income families and individuals.
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Catalog year 1999 number Objectives Use restrictions
Native American 93. 612 To provide financial assistance; Beneficiaries are
Native Americans. Programs, $36 training and technical assistance;
and research, demonstration, and evaluation activities for public and
private nonprofit organizations for the development and implementation of
social and economic development
strategies that promote selfsufficiency, improve social and economic
conditions of Native Americans within their communities,
and increase the effectiveness of Indian tribes and Native American
organizations in meeting
their economic and social goals.
Department Housing and Urban Development
CDBG/ Entitlement 14. 218 To develop viable urban communities The grantee
must certify that at least 70 percent of the Grants, $2, 953 by providing
decent housing and a grant funds received during a designated period of 1 to
3 suitable living environment and by years are expended for activities that
will principally
expanding economic opportunities, benefit low- and moderate- income persons.
Funds must principally for persons of low and be used to aid in preventing
or eliminating slums or blight moderate income.
or meet other community development needs having a particular urgency.
Applicants are determined by a statutory formula and include cities in
metropolitan statistical areas that are designated by the Office of
Management and Budget as a central city of the metropolitan statistical
area, as well as other cities with populations of over 50, 000 in
metropolitan statistical areas and qualified urban
counties with populations of at least 200,000. CDBG/ Small Cities 14. 219 To
develop viable urban communities At least 70 percent of each grant made
available to a Program, $60 by providing decent housing; a
unit of general local government must benefit low- and suitable living
environment; and moderate- income persons. Funds may not be used for
expanding economic opportunities, constructing or rehabilitating public
facilities for the principally for persons of low and
general conduct of government and for making housing moderate income.
allowances or other income maintenance- type payments. Applicants must be
communities in Hawaii that are not eligible for funding under the CDBG
entitlement community program. All other states have elected to administer
the Small Cities Program under the CDBG State's Program. Applicants may not
be metropolitan
cities, urban counties or units participating in an urban county's CDBG
program, and Indian tribes eligible for assistance under section 106( a) of
the act, as amended.
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Catalog year 1999 number Objectives Use restrictions
CDBG/ Special Purpose 14. 225 To provide community development
Applicants must be from American Samoa, Guam, the Grants/ Insular Areas, $7
assistance for American Samoa, Northern Mariana Islands, Palau, and the
Virgin Guam, the Northern Mariana Islands, Islands. Palau, and the Virgin
Islands.
The principal beneficiaries are low- and moderateincome persons. CDBG/
Special Purpose
14. 227 To help states, units of general local Applicants must be qualified
to provide technical Grants/ Technical
government, Indian tribes, and assistance to assist governmental units and
may not use
Assistance Program, $8 areawide planning organizations to funding for the
cost of acquiring or developing the plan, develop, and administer local
necessary specialized skills or knowledge for carrying CDBG programs. out
this program.
CDBG/ State's Program, 14. 228 To develop viable urban communities The
grantee, which must be a state government, must $1, 206 by providing decent
housing; a ensure that at least 70 percent of the grant funds suitable
living environment, and received during a designated period of 1 to 3 years
are expanding economic opportunities, expended for activities that will
principally benefit low- principally for persons of low and
and moderate- income persons. Funds must be used to moderate income. help
prevent or eliminate slums or blight or meet other community development
needs having a particular urgency.
Historically Black 14. 237 To help historically black colleges and
Funds must be used for projects that meet both a CDBG Colleges and
universities expand their role and
national objective and the CDBG eligibility requirements. Universities
Program, effectiveness in addressing $10 community needs in their locality,
Applicants must be historically black colleges and including neighborhood
revitalization, universities as determined by the Department of housing, and
economic development.
Education. The principal beneficiaries include any city, county, town,
township, parish, village, or other general political subdivision of a state
within which the historically black college or university is located.
Empowerment Zones 14. 244 To stimulate the creation of new jobs HUD is not
authorized to grant new designations under Program, $45 empowering low-
income persons and this program. Applicants must have been previously
families receiving public assistance to
designated as an urban empowerment zone or become economically self-
sufficient, enterprise community. particularly for the disadvantaged and
long- term unemployed, and to promote revitalization of economically
distressed areas.
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Catalog year 1999 number Objectives Use restrictions
CDBG/ Economic 14. 246 To help public entities that are eligible Funds may
be used only in conjunction with projects and Development Initiative, under
the Section 108 Loan
activities assisted under the Section 108 Loan $60
Guarantees Program to carry out Guarantees Program. economic development
projects. Grant assistance must enhance the
Applicants are units of general local government that are security of loans
guaranteed under eligible public entities under the Section 108 Loan the
Section 108 Program or improve Guarantees Program.
the viability of projects financed with loans guaranteed under the Section
The principal beneficiaries are low- and moderateincome 108 Program. In
addition, this persons. program will make competitive economic development
grants in conjunction with Section 108 loan guarantees for qualified
brownfield
projects. a CDBG/ Section 108 Loan 14. 248 To provide communities with a
source Funds must be used for projects and activities that Guarantees, $1,
261 of financing for economic
principally benefit low- and moderate- income persons, development, housing
rehabilitation, aid in the elimination or prevention of slums and blight,
public facilities, and large- scale or meet urgent needs of the community.
physical development projects.
Applicants include metropolitan cities and urban counties that are CDBG
entitlement recipients, nonentitlement communities that are assisted in
their submission of applications by states that administer the
CDBG Program, and nonentitlement communities eligible to receive CDBG funds
under the CDBG Small Cities Program. Rural Housing and 14. 250 To expand the
supply of affordable
Applicants are local, rural, and nonprofit community Economic Development,
housing and access to economic development organizations and Indian tribes.
$25
opportunities in rural areas. Community Outreach 14. 511 This program funds
partnerships Funds must be used for research and outreach activities
Partnership Center among institutions of higher
that focus on problems associated with housing, Program, $8 education and
communities to solve economic development, neighborhood revitalization,
urban problems through research,
infrastructure, health care, job training, education, crime outreach, and
the exchange of
prevention, planning, community organizing, and other information.
areas deemed appropriate by the Secretary of Housing and Urban Development.
Applicants must be institutions of higher education with a demonstrated
ability to carry out eligible activities. Beneficiaries are institutions of
higher education and the communities that they serve.
Public Housing/ 14. 852 To improve the physical condition and Applicants
must be public housing agencies that own Comprehensive
upgrade the management and and operate low- income housing projects with
fewer Improvement Assistance
operation of existing public housing than 250 units. Program, b $356
projects.
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Catalog year 1999 number Objectives Use restrictions
Public Housing/ 14. 859 To provide funds to improve the Applicants must be
public housing agencies that own Comprehensive Grant
physical condition and upgrade the and operate low- income housing projects
with 250 or Program b , $2,493
management and operations of more units under an existing annual
contributions existing public housing projects to contract with HUD. assure
that they continue to be available to serve low- income
families. Indian CDBG Program, 14. 862 To assist Indian tribes and Alaska
Funds may not be used for constructing and improving $67 Native villages in
the development of governmental facilities, purchasing equipment, general
viable Indian communities. government expenses, operating and maintenance
expenses, political activities, new housing construction (except through
community- based development
organizations), and income payments. Applicants must be any Indian tribe,
band, group, or nation, including Alaska Indians, Aleuts, and Eskimos and
any Alaska Native village that is eligible for assistance under the Indian
Self- Determination and Education Assistance Act or which had been eligible
under the State and Local Fiscal Assistance Act of 1972.
The principal beneficiaries are low- and moderateincome persons. Department
of the Interior
Road 15. 033 To provide limited routine
Funds must be used to repair and maintain public roads Maintenance/ Indian
maintenance on paved, gravel, earth, serving Indian reservations, with
particular emphasis on Roads, $7 and unimproved roads, bridges, and
school bus routes and arterial highways; for snow airstrips. removal, ice
control, washout repair, and landslide removal; for replacement,
rehabilitation, or maintenance of bridges on Indian reservation roads; for
the operation and maintenance of a ferry across Lake Roosevelt; and for the
maintenance of public airstrips that are not
maintained by other governmental entities and are located on Indian
reservations. Applicants must be federally recognized Indian tribal
governments and Native American organizations authorized by tribal
governments that have jurisdiction over qualifying road miles or other
facilities that qualify for this program.
Beneficiaries must be federally recognized Indian tribal governments and
individual American Indians. Fish, Wildlife, and Parks 15. 039 To promote
conserving, developing,
Applicants and beneficiaries must be federally Programs on Indian and using
fish, wildlife, and
recognized Indian tribal governments that have facilities Lands, $26
recreational resources for the
and Native American organizations authorized by Indian sustenance, cultural
enrichment, tribal governments. economic support, and maximum benefit of
Indians.
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Bureau of Indian Affairs 15. 048 To provide funds for basic operating
Applicants and beneficiaries must be federally Facilities/ Operations and
and maintenance services of recognized Indian tribal governments that have
facilities Maintenance, $1
noneducation facilities that are on a reservation that is owned or operated
by the owned or operated by the Bureau of
Bureau of Indian Affairs. Indian Affairs and located on reservations. Indian
Loans/ Economic 15. 124 To assist federally recognized Indian Loans may be
used to finance commercial, industrial, Development, $5 tribal governments,
Native American
agricultural, or business activities organized for profit. organizations,
and individual Loan guarantees to private lenders will be provided only
American Indians in obtaining if funds would otherwise be unavailable to the
borrower. financing from private sources to Funds may not be used for
speculation. The financial promote business development assistance must be
used on or near an Indian
initiatives on or near federally reservation. recognized Indian
reservations.
Applicants and beneficiaries must be federally recognized Indian tribal
governments, Native American organizations authorized by Indian tribal
governments, and individual American Indians. Economic, Social, and
15. 875 To promote the economic, social, and Applicants and beneficiaries
must be the U. S. territories Political Development of political development
of the territories of Guam, the Virgin Islands, American Samoa, the the
Territories and the
and freely associated states, leading Northern Mariana Islands, and the
freely associated
Freely Associated toward greater self- government and states of the
Federated States of Micronesia, the States, $282
self- sufficiency for them. Republic of the Marshall Islands, and the
Republic of
Palau.
Small Business Administration
Small Business Loans 59. 012 To provide guaranteed loans for small Funds
must be used to construct, expand, or convert
[Regular Business businesses that are unable to obtain facilities; to
purchase building equipment or materials; or Loans- 7( A) Loans], financing
in the private credit
for working capital. Funds may not be used for gambling $8, 998 marketplace
but can demonstrate an establishments, nonprofit organizations, speculators
in ability to repay loans. property, lending or investment organizations,
financing real property held for investment, indiscriminately relocating a
business, or paying off a loan to an unsecured creditor who is in a position
to sustain loss.
Funds are available only when other funds are not available on reasonable
terms. Applicants are small businesses as defined by the SBA. Beneficiaries
are small businesses, including those owned by low- income and handicapped
individuals or located in high unemployment areas. Certified Development
59. 041 To assist small businesses by A nonprofit Certified Development
Company must certify Company Loans
providing long- term, fixed- rate applicants. (504 Loans), $1, 779
financing for fixed assets through the sale of debentures to private
Beneficiaries are small businesses, as defined by SBA. investors.
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Catalog year 1999 number Objectives Use restrictions
Department of Transportation
Airport Improvement 20. 106 To assist sponsors, owners, or Grants may not be
used to construct hangars, most Program, $1, 618 operators of public- use
airports in
parking facilities, and buildings that are not related to developing a
nationwide system of safety, landscaping, or routine maintenance. airports
adequate to meet the needs of civil aeronautics.
Applicants must be states; counties; municipalities; U. S. territories and
possessions; and other public agencies, including an Indian tribe or pueblo
that has jurisdiction over an airport that is listed in the National Plan of
Integrated Airport Systems. Certain units of local government may be
eligible for grants to implement noise- compatibility projects. Private
owners of publicuse
reliever airports or airports having at least 2, 500 passengers boarding
annually and receiving scheduled passenger aircraft service also are
eligible.
Highway Planning and 20. 205 To assist state transportation Federal aid
highway funds are generally apportioned by Construction, $25,936 agencies in
planning and developing statutory formulas to the states and generally
reserved
an integrated, interconnected to roads open to the public and not
functionally classified transportation system by constructing as local. and
rehabilitating the National Highway System, including the
Projects in urban areas with a population of 50, 000 or Interstate System;
and for
more must be based on a transportation- planning transportation improvements
to all
process carried out by the metropolitan planning public roads except those
functionally organization in cooperation with the state and transit
classified as local; to provide aid for
operators. Projects in nonmetropolitan areas of a state the repair of
federal- aid roads must be consistent with the state transportation plan.
following disasters; to foster safe highway design; to replace or
rehabilitate deficient or obsolete bridges; and to provide for other special
purposes. Federal Transit/ Capital 20. 500 To assist in financing the
acquisition,
Applicant must have legal, financial, and technical Investment Grants,
construction, reconstruction, and
capacity to carry out the proposed project and maintain $2, 182 improvement
of facilities, rolling
facilities and equipment purchased with federal stock, and equipment for use
in assistance. public transportation service in urban areas and in
coordinating service with highway and other transportation in such areas.
Federal 20. 505 To assist in developing transportation States receive an
apportionment for subsequent Transit/ Metropolitan improvement programs,
long- range
distribution by formula to the metropolitan planning Planning Grants, $41
transportation plans, and other organization to be used in urban areas in
each state.
technical studies.
(Continued From Previous Page)
Program's name and obligations for fiscal
Catalog year 1999 number Objectives Use restrictions
Federal Transit/ Formula 20. 507 To assist in financing the acquisition,
Funds will be used in urbanized areas (as defined by the Grants, $2, 465
construction, leasing, maintenance, Bureau of the Census) through designated
recipients
planning, and improvement of that must be public entities and legally
capable of
facilities and equipment in mass receiving and dispensing federal funds.
transportation service and to assist with paying the operating expenses
Beneficiaries are publicly owned operators of mass to improve or to continue
such transportation services. service for urbanized areas with populations
of under 200,000.
Formula Grants for 20. 509 To improve, initiate, or continue public Funds
are apportioned to states and may be used for
Other than Urbanized transportation service in eligible capital expenses,
project administration, and Areas, $183
nonurbanized areas by providing operating expenses needed to provide
efficient and
financial assistance for operating and coordinated public transportation
service in administrative expenses and for the nonurbanized areas. Fifteen
percent of the state's acquisition, construction, and
annual apportionment must be spent to support rural improvement of
facilities and intercity bus transportation, unless the governor certifies
equipment and to provide technical
that such needs are adequately met. assistance for rural transportation
providers.
Eligible recipients may include state agencies, local public agencies,
nonprofit organizations, Indian tribes, and operators of public
transportation services, including intercity bus service in rural and small
urban areas. Urbanized areas, as defined by the Bureau of the
Census, are not eligible. Federal Transit Technical
20. 512 To improve mass transportation Criteria for preliminary approval
include (1) compatibility Assistance, $6 service; to contribute toward
meeting with the Federal Transit Administration's Strategic Plan;
total urban transportation needs at a (2) availability of funding; (3)
nonfederal funding match; minimum cost; and to assist in the (4) importance
of proposal to the fiscal year program reduction of urban transportation
activity; (5) potential for impact on the state- of- the- art needs by
improving the ability of from the viewpoint of innovation in transit
technology, transit industry operating officials to services, and
operations; (6) technical feasibility and
plan, manage, and operate their potential for successful introduction into
use in the transit
systems more effectively and safely. industry; (7) background, experience,
and demonstrated
capabilities of applicant; (8) geographic distribution of existing projects;
and (9) other pertinent matters, such as questions of environmental impact
and labor impact.
(Continued From Previous Page)
Program's name and obligations for fiscal
Catalog year 1999 number Objectives Use restrictions
Transit Planning and 20. 514 To foster innovation in public transit Criteria
for preliminary approval include (1) compatibility Research, $9 systems,
through local
with the Federal Transit Administration's plans; (2) demonstrations of
promising, but
availability of funding; (3) potential for impact on the risky, new
technologies and service state- of- the- art from the viewpoint of
innovation in transit or operational concepts; to address
technology, services, and operations; (4) technical economic and social
issues resulting feasibility and potential for successful introduction into
from human impacts on the
use in the transit industry; (5) background, experience, environment and
develop riskassessment and demonstrated capabilities of the applicant; (6)
methodologies, partnerships with public and private organizations; (7)
integrated assessments, and other
non- Federal Transit Administration funding match; and analytical tools for
effective policy
(8) other pertinent matters, such as geographic formulation; to develop
practical distribution of projects and questions of environmental know- how
for solving fundamental
and labor impact. industrywide problems, such as how to accommodate the
travel needs of
persons with disabilities, how to finance transit infrastructure
construction, and how to meet the requirements of the Clean Air Act; and to
support developing information and technical assistance to convey the
results of research, technology development, and
innovative demonstrations for adaptation and local implementation.
a Brownfield sites are abandoned, idled, or under- used industrial and
commercial facilities where expansion or redevelopment is complicated by
real or perceived environmental contamination. b According to the Catalog of
Federal Domestic Assistance, these programs have been consolidated
into the Public Housing Capital Fund (14.872). Source: The Catalog of
Federal Domestic Assistance.
(385817) Lett er
GAO United States General Accounting Office
Page 1 GAO/ RCED/ GGD- 00- 220 Federal Economic Development Activities
Contents
Contents Page 2 GAO/ RCED/ GGD- 00- 220 Federal Economic Development
Activities
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United States General Accounting Office
Washington, D. C. 20548 Page 3 GAO/ RCED/ GGD- 00- 220 Federal Economic
Development Activities
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Appendix I
Appendix I Scope and Methodology
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Appendix I Scope and Methodology
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Appendix II
Appendix II Federal Programs and the Economic Development Activities That
They Fund
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Appendix II Federal Programs and the Economic Development Activities That
They Fund
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Appendix II Federal Programs and the Economic Development Activities That
They Fund
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Appendix II Federal Programs and the Economic Development Activities That
They Fund
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Appendix III
Appendix III Selected Program Elements of Federal Programs That Fund
Economic Development Activities
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Appendix III Selected Program Elements of Federal Programs That Fund
Economic Development Activities
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Appendix III Selected Program Elements of Federal Programs That Fund
Economic Development Activities
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Appendix III Selected Program Elements of Federal Programs That Fund
Economic Development Activities
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Appendix III Selected Program Elements of Federal Programs That Fund
Economic Development Activities
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Appendix III Selected Program Elements of Federal Programs That Fund
Economic Development Activities
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Economic Development Activities
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Appendix III Selected Program Elements of Federal Programs That Fund
Economic Development Activities
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Appendix III Selected Program Elements of Federal Programs That Fund
Economic Development Activities
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Economic Development Activities
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Economic Development Activities
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Economic Development Activities
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Economic Development Activities
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Appendix III Selected Program Elements of Federal Programs That Fund
Economic Development Activities
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Appendix III Selected Program Elements of Federal Programs That Fund
Economic Development Activities
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Economic Development Activities
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Appendix IV
Appendix IV Timeline of Federal Programs That Fund Selected Economic
Development Activities
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Appendix V
Appendix V Objectives and Restrictions of Federal Programs That Fund
Selected Economic Development Activities
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United States General Accounting Office Washington, D. C. 20548- 0001
Official Business Penalty for Private Use $300
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