GAO

United States General Accounting Office

Report to Congressional Committees

September 2000 ECONOMIC 

DEVELOPMENT

Multiple Federal 

Programs Fund 

Similar Economic 

Development 

Activities

GAO/RCED/GGD-00-220

Page 1 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Contents

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
Contents

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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
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United States General Accounting Office

Washington, D.C. 20548

Resources, Community, and

Economic Development Division

B-284408 Letr

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.
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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 
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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; 
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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).
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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.
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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 

Provide Support for 

One or More Economic 

Development Activities 

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. These programs typically are 

available to applicants that include individuals; local, state, territorial, and 

tribal governments; and nonprofit organizations9

 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.
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Table 1: Number of Fiscal Year 1999 Federal Programs by Agency That Funded Six Selected Economic Development Activities

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 

Activities

Agency

Number of

programs that

fund one or

more of the

activities

Plans and

strategies

Buildings

and

facilities

Business

incubators

Industrial

parks

Roads

and

streets

Water and

sewer

U.S. Department of 

Agriculture

19 9 7 4 6 5 10

Appalachian Regional 

Commission

4 3 1 1 11 1

Department of Commerce 8 6 2 3 2 2 2

Department of Defense 7 7 0 0 0 0 0

Environmental Protection 

Agency

3 1 0 0 00 2

Department of Health and 

Human Services

3 2 2 1 10 2

Department of Housing and 

Urban Development

14 11 10 9 9 11 11

Department of the Interior 5 1 1 0 1 3 3

Small Business 

Administration

2 0 2 0 00 0

Department of Transportation 8 4 4 0 0 4 0

Total number of programs

(number of agencies)

73

(10)

44

(9)

29

(8)

19

(5)

20

(6)

26

(6)

31

(7)
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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

a

Agencies reported that they did not obligate any funds for fiscal year 1999 for four programs.

Dollars in millions

Range of total program obligations Number of programs

Nonea 4

Up to 50 42

51 to 100 5

101 to 500 8

501 to 1,000 1

Greater than 1,000 13
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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 

Activities and 

Applicants but Are 

Differentiated by Their 

Restrictions 

In all six of the economic development activities, we found that multiple 

programs fund similar activities and make this funding available to similar 

types of applicants. For example,

• 32 programs provide funds to state applicants for planning,

• 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 

10For 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. 
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• 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. 
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Additional Information 

Needed to Determine if 

Inefficiencies Result 

From Overlap

As we have previously reported, mission fragmentation and program 

overlap may sometimes be necessary when the resources and expertise of 

more than one agency are required to address a complex public need.11 At 

the same time, fragmentation and overlap can waste administrative 

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 

11See 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).

12See Rural Development: Patchwork of Federal Water and Sewer Programs Is Difficult to 

Use (GAO/RCED-95-160BR, Apr. 13, 1995).
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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 

13See Governmentwide Performance Plan, Office of Management and Budget (1999).

14Managing for Results: Opportunities for Continued Improvements in Agencies’ 

Performance Plans (GAO/GGD/AIMD-99-215, July 20, 1999).
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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, 
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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.
B-284408

Page 17 GAO/RCED/GGD-00-220 Federal Economic Development Activities

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
Page 18 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Appendix I

Scope and Methodology ApApenednxidexiIs

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. 
Appendix I

Scope and Methodology

Page 19 GAO/RCED/GGD-00-220 Federal Economic Development Activities

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 

obligations2

 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.
Appendix I

Scope and Methodology

Page 20 GAO/RCED/GGD-00-220 Federal Economic Development Activities

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).
Page 21 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Appendix II

Federal Programs and the Economic 

Development Activities That They Fund ApendxiI

Funded activities

Programs (listed by agency and subagency)

Catalog 

numbera

Plans and 

strategies

Buildings 

and 

facilities

Business 

incubators

Industrial 

parks

Roads 

and 

streets

Water 

and 

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 

Communities

10.760 •

Emergency Community Water Assistance 

Grants

10.763 •

Water and Waste Disposal Loans and Grants 10.770b •

Rural Housing Service

Rural Housing Site Loans and Self-Help 

Housing Land Development Loans

10.411b •

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 

Grants

10.854 • • • •

Office of Community Development

Empowerment Zones Program 10.772b • • • • ••

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 •
Appendix II

Federal Programs and the Economic 

Development Activities That They Fund

Page 22 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Funded activities

Programs (listed by agency and subagency)

Catalog 

numbera

Plans and 

strategies

Buildings 

and 

facilities

Business 

incubators

Industrial 

parks

Roads 

and 

streets

Water 

and 

sewer

Appalachian Local Development District 

Assistance

23.009 •

Appalachian State Research, Technical 

Assistance, and Demonstration Projects

23.011 •

Department of Commerce

Economic Development Administration

Grants for Public Works and Economic 

Development

11.300 • • • • •

Economic Development/Technical Assistance 11.303 •

Economic Development/State and Local 

Economic Development Planningc

11.305 •

Economic Adjustment Assistance 11.307 • • • • • •

Trade Adjustment Assistance 11.313 •

National Oceanic and Atmospheric Administration

Fisheries Development and Utilization 

Research and Developmental Grants and 

Cooperative Agreements Program

11.427 •

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 

Technology

11.614 •

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 

Assistance for Reductions in Defense Industry 

Employment

12.611b •

Office of the Secretary of Defense, Office of the Assistant Secretary (Economic Security)

Community Economic Adjustment Planning 

Assistance

12.607 •

Joint Land Use Studies 12.610 •

Community Base Reuse Plans 12.612 •

Growth Management Planning Assistance 12.613 •

(Continued From Previous Page)
Appendix II

Federal Programs and the Economic 

Development Activities That They Fund

Page 23 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Funded activities

Programs (listed by agency and subagency)

Catalog 

numbera

Plans and 

strategies

Buildings 

and 

facilities

Business 

incubators

Industrial 

parks

Roads 

and 

streets

Water 

and 

sewer

Environmental Protection Agencye

Office of Water

Capitalization Grants for State Revolving Funds 66.458 •

Office of Ground Water and Drinking Water

Capitalization Grants for Drinking Water State 

Revolving Loan Fund

66.468 •

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 

Awards

93.570 • • • • •

Native American Programs 93.612 •

Department of Housing and Urban Development

Community Planning and Development

Community Development Block Grants 

(CDBG)/Entitlement Grants

14.218 • • • • • •

CDBG/Small Cities Program 14.219 • • • • • •

CDBG/Special Purpose Grants/Insular Areas 14.225 • • • • • •

CDBG/Special Purpose Grants/Technical 

Assistance Program

14.227 •

CDBG/State’s Program 14.228 • • • • • •

Historically Black Colleges and Universities 

Program 

14.237 • • • • • •

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 

Program

14.511 •

Public and Indian Housing

Public Housing/Comprehensive Improvement 

Assistance Programd

14.852 • •

Public Housing/Comprehensive Grant Programd 14.859 • •

(Continued From Previous Page)
Appendix II

Federal Programs and the Economic 

Development Activities That They Fund

Page 24 GAO/RCED/GGD-00-220 Federal Economic Development Activities

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).

Funded activities

Programs (listed by agency and subagency)

Catalog 

numbera

Plans and 

strategies

Buildings 

and 

facilities

Business 

incubators

Industrial 

parks

Roads 

and 

streets

Water 

and 

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 

Lands

15.039 •

Bureau of Indian Affairs Facilities/Operations 

and Maintenance

15.048 •

Indian Loans/Economic Development 15.124 • • • •

Office of Insular Affairs

Economic, Social, and Political Development of 

the Territories and the Freely Associated States

15.875 • •

Small Business Administration

Small Business Loans 59.012 •

Certified Development Company Loans (504 

Loans)

59.041 •

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 

Areas

20.509 •

Federal Transit Technical Assistance 20.512 •

Transit Planning and Research 20.514 •

(Continued From Previous Page)
Appendix II

Federal Programs and the Economic 

Development Activities That They Fund

Page 25 GAO/RCED/GGD-00-220 Federal Economic Development Activities

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.
Page 26 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Appendix III

Selected Program Elements of Federal 

Programs That Fund Economic Development 

Activities ApendxiI

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 

Administer 44 

Programs That Can 

Fund EconomicDevelopment- Planning 

Activities

Economic development planning is generally regarded as a key element in 

achieving local and regional economic development goals. Economicplanning assistance is used in a variety of ways, such as for developing 

comprehensive economic adjustment strategies; preparing feasibility 

studies, reuse studies, and land use studies; and administering local 

planning organizations. Some federal economic development programs 

target areas that are adversely affected by changes in the military and 

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.
Appendix III

Selected Program Elements of Federal 

Programs That Fund Economic Development 

Activities

Page 27 GAO/RCED/GGD-00-220 Federal Economic Development Activities

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 

obligations for fiscal year 1999a Individual Local Nonprofit State

U.S. 

territories

Federal tribal 

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)

• •• •
Appendix III

Selected Program Elements of Federal 

Programs That Fund Economic Development 

Activities

Page 28 GAO/RCED/GGD-00-220 Federal Economic Development Activities

a

Specific planning obligations were not available for all programs.

Applicants

Agency/ program/ (catalog number)/ planning 

obligations for fiscal year 1999a Individual Local Nonprofit State

U.S. 

territories

Federal tribal 

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) • • •

(Continued From Previous Page)
Appendix III

Selected Program Elements of Federal 

Programs That Fund Economic Development 

Activities

Page 29 GAO/RCED/GGD-00-220 Federal Economic Development Activities

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 
Appendix III

Selected Program Elements of Federal 

Programs That Fund Economic Development 

Activities

Page 30 GAO/RCED/GGD-00-220 Federal Economic Development Activities

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 

Administer 29 

Programs That Can 

Fund Buildings and 

Facilities

Buildings and facilities are critical components to economic development. 

They provide a place for manufacturing, assembling, repairing, and storing 

business inventories and supplies, as well as operating businesses. We 

identified eight agencies that administer 29 programs that can be used by 

various types of applicants to support buildings, through such means as 

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)/ 

building and facilities obligations for fiscal year 1999a Individual Local Nonprofit State

U.S. 

territories

Federal tribal 

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) • • • • •
Appendix III

Selected Program Elements of Federal 

Programs That Fund Economic Development 

Activities

Page 31 GAO/RCED/GGD-00-220 Federal Economic Development Activities

a

Specific building and facilities obligations were not available for all programs.

Applicants

Agency/ program/(catalog number)/ 

building and facilities obligations for fiscal year 1999a Individual Local Nonprofit State

U.S. 

territories

Federal tribal 

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 Utilizationb

 (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) • • • • •

(Continued From Previous Page)
Appendix III

Selected Program Elements of Federal 

Programs That Fund Economic Development 

Activities

Page 32 GAO/RCED/GGD-00-220 Federal Economic Development Activities

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. 
Appendix III

Selected Program Elements of Federal 

Programs That Fund Economic Development 

Activities

Page 33 GAO/RCED/GGD-00-220 Federal Economic Development Activities

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 

programs3

 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.
Appendix III

Selected Program Elements of Federal 

Programs That Fund Economic Development 

Activities

Page 34 GAO/RCED/GGD-00-220 Federal Economic Development Activities

• 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 

Administer 19 

Programs That Can 

Fund Business 

Incubators

Business incubators are multitenant facilities that help entrepreneurs and 

small businesses get started. Incubators provide start-up firms with 

support that can include low-cost space, shared services, proactive 

technical and management support, a peer network, and access to financial 

assistance. We identified five federal agencies—USDA, the Department of 

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. 
Appendix III

Selected Program Elements of Federal 

Programs That Fund Economic Development 

Activities

Page 35 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Table 5: Types of Applicants for Federal Programs That Can Be Used to Fund Business Incubators, Listed by Agency

a

Specific business incubator obligations were not available for all programs.

Source: GAO’s analysis of program information. 

Dollars in millions

Applicants

Agency/ program/ (catalog number)/

business incubator obligations for fiscal year 1999a Individual Local Nonprofit State

U.S. 

territories

Federal tribal 

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) •
Appendix III

Selected Program Elements of Federal 

Programs That Fund Economic Development 

Activities

Page 36 GAO/RCED/GGD-00-220 Federal Economic Development Activities

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 
Appendix III

Selected Program Elements of Federal 

Programs That Fund Economic Development 

Activities

Page 37 GAO/RCED/GGD-00-220 Federal Economic Development Activities

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 equipment6

 and that at least 20 percent must be 

obtained from sources other than the federal government. 

Six Agencies 

Administer 20 

Programs That Can 

Fund Industrial Parks

Industrial parks generally include a tract of land under the control of one 

entity that provides facilities for businesses consistent with a master plan. 

Industrial parks provide a wide array of economic development 

opportunities, such as manufacturing, research, warehousing and 

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.
Appendix III

Selected Program Elements of Federal 

Programs That Fund Economic Development 

Activities

Page 38 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Table 6: Federal Programs That Can Be Used to Fund Industrial Parks, Listed by Agency

a

Specific industrial park obligations were not available for all programs.

Source: GAO’s analysis of program information.

Dollars in millions

Applicants

Agency/ program/ (catalog number)/ 

industrial park obligations for fiscal year 1999a Individual Local Nonprofit State

U.S. 

territories

Federal tribal 

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 •
Appendix III

Selected Program Elements of Federal 

Programs That Fund Economic Development 

Activities

Page 39 GAO/RCED/GGD-00-220 Federal Economic Development Activities

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 
Appendix III

Selected Program Elements of Federal 

Programs That Fund Economic Development 

Activities

Page 40 GAO/RCED/GGD-00-220 Federal Economic Development Activities

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 costsharing 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 

Administer 26 

Programs That Can 

Fund Roads and 

Streets Activities 

The development of roads and streets often promotes economic 

development. In addition, businesses consider a variety of factors, 

including the efficiency of transportation facilities, when making decisions 

to locate in a particular area. Six agencies administer 26 programs that 

support the development of roads and streets. As shown in table 7, federal 

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)/

roads and streets obligations for fiscal year 1999a Individual Local Nonprofit State

U.S. 

territories

Federal tribal 

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) • • • •
Appendix III

Selected Program Elements of Federal 

Programs That Fund Economic Development 

Activities

Page 41 GAO/RCED/GGD-00-220 Federal Economic Development Activities

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.

Applicants

Agency/ program/ (catalog number)/

roads and streets obligations for fiscal year 1999a Individual Local Nonprofit State

U.S. 

territories

Federal tribal 

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 • •

(Continued From Previous Page)
Appendix III

Selected Program Elements of Federal 

Programs That Fund Economic Development 

Activities

Page 42 GAO/RCED/GGD-00-220 Federal Economic Development Activities

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 

Administer 31 

Programs That Can 

Fund Water and Sewer 

Activities

Water and sewer projects represent an important and necessary 

infrastructure improvement for communities seeking to promote economic 

development. Numerous federal programs provide funding for various 

aspects of water- and sewer-related activities, such as constructing, 

expanding, or repairing water and wastewater facilities. Seven agencies 

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 
Appendix III

Selected Program Elements of Federal 

Programs That Fund Economic Development 

Activities

Page 43 GAO/RCED/GGD-00-220 Federal Economic Development Activities

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 

sewer obligations for fiscal year 1999a Individual Local Nonprofit State U.S. territories

Federal tribal 

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 Agencyb

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 Utilizationc (93.291) • • •
Appendix III

Selected Program Elements of Federal 

Programs That Fund Economic Development 

Activities

Page 44 GAO/RCED/GGD-00-220 Federal Economic Development Activities

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 

Applicants

Agency/ program/ (catalog number)water and 

sewer obligations for fiscal year 1999a Individual Local Nonprofit State U.S. territories

Federal tribal 

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 Programd

(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)

•

(Continued From Previous Page)
Appendix III

Selected Program Elements of Federal 

Programs That Fund Economic Development 

Activities

Page 45 GAO/RCED/GGD-00-220 Federal Economic Development Activities

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.
Page 46 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Appendix IV

Timeline of Federal Programs That Fund 

Selected Economic Development Activities ApendxiIV

1960s 1970s 1980s 1990s

Farm Ownership Loans (1961) 

Water and Waste Disposal 

Systems for Rural 

Communities (1961) 

Federal Transit Technical 

Assistance (1964) 

Federal Transit/Capital 

Investment Grants (1965)

Appalachian State Research, 

Technical Assistance, and 

Demonstration Projects (1965) 

Economic Development/

Technical Assistance (1965)

Economic Development/

State and Local Economic 

Development Planning (1965)

Appalachian Area 

Development (1965) 

Grants for Public 

Works and Economic 

Development (1965) 

Appalachian Local 

Access Roads (1965)

Appalachian Local Development 

District Assistance (1965)

Highway Planning and 

Construction (1966)

Rural Housing Site Loans and 

Self-Help Housing Land 

Development Loans (1968)

Business and Industry 

Loans (1972) 

Community Facilities Loans 

and Grants (1972)

Rural Development Grants (1972)

Rural Economic Development 

Loans and Grants (1973) 

Economic Adjustment 

Assistance (1974)

CDBG/Entitlement Grants (1974) 

CDBG/State's Program (1974)

CDBG/Small Cities 

Program (1974) 

CDBG/Section 108 Loan 

Guarantees (1974)

CDBG/Special Purpose 

Grants/Insular Areas (1974)

Trade Adjustment 

Assistance (1974)

Planning Assistance 

to States (1974)

Native American Programs (1974)

Bureau of Indian Affairs 

Facilities/Operations 

and Maintenance (1975)

Federal Transit/Formula 

Grants (1975)

Indian CDBG Program (1977)

Community Economic 

Adjustment (1978) 

Federal Transit/Metropolitan 

Planning Grants (1978)

Formula Grants for Other 

Than Urbanized Areas (1978) 

Fisheries Development and 

Utilization Research and 

Developmental Grants and 

Cooperative Agreements 

Program (1980)

Experimental Program 

to Stimulate Competitive 

Technology (1980) 

Public Housing/Comprehensive 

Improvement Assistance 

Program (1981) 

Joint Land Use Studies (1981)

Resource Conservation 

and Development (1981)

Growth Management 

Planning Assistance (1981)

Community Economic Adjustment 

Planning Assistance (1981)

Community Services 

Block Grant/Discretionary 

Awards (1981)

CDBG/Special Purpose 

Grants/Technical Assistance 

Program (1983)

Capitalization Grants for 

State Revolving Funds (1987)

Public Housing/Comprehensive 

Grant Program (1988)

Historically Black Colleges

and Universities (1989)

Rural Development, Forestry, 

and Communities (1989)

Emergency Community Water 

Assistance Grants (1990) 

Water and Waste Disposal 

Loans and Grants (1990)

Community Base 

Reuse Plans (1990) 

National Forest/Dependent 

Rural Communities (1990)

Rural Cooperative 

Development Grants (1990) 

Community Economic 

Adjustment Planning Assistance 

for Reductions in Defense 

Industry Employment (1990)

Transit Planning and 

Research (1991)

Community Outreach 

Partnership Center 

Program (1992)

Brownfield Pilots Cooperative 

Agreements (1993)

Empowerment Zones 

Programs (1993)

Airport Improvement 

Program (1994)

CDBG/Economic 

Development Initiative (1994)

Fisheries Disaster Relief (1996)

Capitalization Grants for 

Drinking Water State 

Revolving Fund (1996)

Fund for Rural America/Farm 

Ownership Loans (1996) 

Rural Business 

Opportunity Grants (1996)

Rural Housing and Economic 

Development (1999)

1920s 1930s 1940s 1950s

Fish, Wildlife, and Parks 

Programs on Indian 

Lands (1921)

Indian Loans/Economic 

Development (1921) 

Road Maintenance/

Indian Roads (1928)

Economic, Social, and Political 

Development of the Territories 

and the Freely Associated 

States (1929) 

Schools and Roads/

Grants to Counties (1937) Surplus Property 

Utilization (1949)

Small Business Loans (1953)

Watershed Surveys 

and Planning (1954)

Certified Development 

Company Loans (1958)
Appendix IV

Timeline of Federal Programs That Fund 

Selected Economic Development Activities

Page 47 GAO/RCED/GGD-00-220 Federal Economic Development Activities

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.
Page 48 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Appendix V

Objectives and Restrictions of Federal 

Programs That Fund Selected Economic 

Development Activities ApendxiV

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 

year 1999 

Catalog

number Objectives Use restrictions

U.S. Department of Agriculture

Farm Ownership Loans, 

$171

10.407 To assist eligible farmers, ranchers, 

and aquaculture operators through 

the extension of credit and 

supervisory assistance to become 

owners and/or 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.

Loan funds may be used to enlarge, improve, and buy 

family farms; provide necessary water and water 

facilities; provide basic soil treatment and land 

conservation measures; construct, repair, and improve 

buildings needed in the operation of a family farm; 

construct or repair farm dwellings; and provide facilities 

to produce fish under controlled conditions. 

Among other things, an applicant must not have 

received debt forgiveness on more than three occasions 

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.
Appendix V

Objectives and Restrictions of Federal 

Programs That Fund Selected Economic 

Development Activities

Page 49 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Program’s name and 

obligations for fiscal 

year 1999 

Catalog

number Objectives Use restrictions

Rural Housing Site 

Loans and Self-Help 

Housing Land 

Development Loans, $1

10.411 To assist public or private nonprofit 

organizations interested in providing 

sites for housing; and to acquire and 

develop land in rural areas to be 

subdivided as adequate building sites 

and sold on a cost-development 

basis to families eligible for low- and 

very-low-income loans, cooperatives, 

and broadly based nonprofit rural 

rental housing applicants.

Funds may be used for purchasing and developing 

adequate sites and water and sewer facilities; paying 

necessary engineering costs, legal fees, and closing 

costs; and landscaping and other necessary facilities 

related to buildings such as walks, parking areas, and 

driveways. Loan funds may not be used for the 

refinancing of debts; payment of a fee or commission to 

a broker, negotiator, or other person for the referral of a 

prospective applicant or solicitation of a loan; and 

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 

America/Farm 

Ownership Loans, $0

10.453 To support research, education, and 

extension activities and to assist 

eligible farmers, ranchers, and 

aquaculture operators through the 

extension of credit and supervisory 

assistance to become owners and/or 

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.

Among other things, an applicant must 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; 

and have a minimum of 3 years of farming experience.

Schools and 

Roads/Grants to States, 

$210

10.665 To share receipts from the national 

forests with the states in which the 

national forests are located.

Applicants are states or territories of the U.S. containing 

national forest land. 

Schools and 

Roads/Grants to 

Counties, $5

10.666 To share receipts from national 

grasslands and land utilization 

projects with the counties in which 

the national grasslands and land 

utilization projects are located.

Applicants and beneficiaries may only be counties within 

the states that contain national grasslands or land 

utilization projects.

(Continued From Previous Page)
Appendix V

Objectives and Restrictions of Federal 

Programs That Fund Selected Economic 

Development Activities

Page 50 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Program’s name and 

obligations for fiscal 

year 1999 

Catalog

number Objectives Use restrictions

National 

Forest/Dependent Rural 

Communities, $3

10.670 To provide accelerated assistance for 

rural communities that are (1) located 

in or near a national forest, (2) 

economically dependent on forest 

resources, and (3) faced with acute 

economic problems. Assistance is for 

developing strategic action plans to 

diversify their economic base and to 

improve the economic, social, and 

environmental well-being of their 

areas.

An applicant must be a general purpose local 

government or a tribe represented by a nonprofit 

organization in areas with a population of not more than 

10,000 or any county that is not contained within a 

metropolitan statistical area. A county must derive at 

least 15 percent of its primary and secondary labor and 

proprietary income from forestry and forest-related 

industries, such as recreation and tourism, range, 

minerals, and wildlife. In all cases, the community or 

county must be within 100 miles of the boundary of a 

national forest. Individual businesses are not eligible for 

direct assistance.

Beneficiaries are rural communities.

Rural Development, 

Forestry, and 

Communities, $4

10.672 To identify, assist, and support local 

strategic planning objectives by 

joining state foresters; tribes; state 

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.

The Forest Service’s regional policies may further define 

and focus resources to meet the needs of the 

communities that they serve.

Water and Waste 

Disposal Systems for 

Rural Communities, 

$1,253

10.760 To provide basic human amenities, 

alleviate health hazards, and promote 

the orderly growth of the rural areas 

of the nation by meeting the need for 

new and improved rural water and 

waste disposal facilities.

Grant funds may not be used to pay interest on loans, 

pay operation and maintenance costs, or to acquire or 

refinance an existing system. Funded facilities shall 

primarily serve rural residents and rural businesses. The 

service area shall not include any area in any city or 

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)
Appendix V

Objectives and Restrictions of Federal 

Programs That Fund Selected Economic 

Development Activities

Page 51 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Program’s name and 

obligations for fiscal 

year 1999 

Catalog

number Objectives Use restrictions

Emergency Community 

Water Assistance 

Grants, 

less than $1

10.763 To help rural residents who have 

experienced a significant decline in 

the quantity or quality of water to 

obtain adequate quantities of water 

that meet the standards of the Safe 

Drinking Water Act.

Grants provided under this program shall not be used (1) 

to assist a rural area or community with a population of 

more than 10,000 or a median household income in 

excess of the statewide nonmetropolitan median 

household income according to the most recent 

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 

Loans and Grants, $332

10.766 To construct, enlarge, extend, or 

otherwise improve community 

facilities providing essential services 

for rural residents. 

All facilities financed in whole or in part with these funds 

shall be for public use. 

Business and Industry 

Loans, $1,206

10.768 To assist public, private, or 

cooperative organizations (profit or 

nonprofit), Indian tribes, or individuals 

in rural areas to obtain quality loans 

for the purpose of (1) improving, 

developing, or financing businesses, 

industry, and employment and (2) 

improving the economic and 

environmental climate in rural 

communities, including pollution 

abatement and control.

The program places numerous restrictions on the use of 

the loans.

Applicants and beneficiaries must be located in rural 

areas. 

Rural Development 

Grants, $36

10.769 To facilitate the development of small 

and emerging private business, 

industry, and related employment for 

improving the economy in rural 

communities.

Applicants eligible for rural business enterprise grants 

are public bodies and nonprofit corporations serving 

rural areas. Applicants eligible for television 

demonstration grants are statewide, private, nonprofit, 

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)
Appendix V

Objectives and Restrictions of Federal 

Programs That Fund Selected Economic 

Development Activities

Page 52 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Program’s name and 

obligations for fiscal 

year 1999 

Catalog

number Objectives Use restrictions

Water and Waste 

Disposal Loans and 

Grants, $22

10.770 To provide water and waste disposal 

facilities and services to low-income 

rural communities whose residents 

face significant health risks.

The projects funded under this program must primarily 

provide water and/or waste disposal services for 

residents of a county where the per capita income of the 

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 

Development Grants, $2

10.771 To establish and operate centers for 

rural cooperative development to 

improve economic conditions in rural 

areas by promoting the development 

of new cooperatives and/or the 

improvement of existing 

cooperatives.

Applicants must be nonprofit corporations and 

institutions of higher education. Funds must benefit 

residents of rural areas, which can be any area of a state 

that is not within the outer boundary of a city with a 

population of 50,000 or more, according to the latest 

decennial census of the United States.

Empowerment Zones 

Program, $15

10.772 To stimulate the creation of new jobs, 

particularly for the disadvantaged 

and long-term unemployed, and to 

promote revitalization of 

economically distressed rural areas.

USDA is not authorized to grant new designations under 

this program. Applicants must have been previously 

designated as a rural empowerment zone or enterprise 

community. 

Rural Business 

Opportunity Grants, $0

10.773 To promote sustainable economic 

development in rural communities 

with exceptional needs.

Applicants must be public bodies, nonprofit corporations, 

Indian tribes on federal or state reservations or other 

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 

Development Loans and 

Grants, $26

10.854 To promote rural economic 

development and job creation 

projects, including funding for project 

feasibility studies, start-up costs, 

incubator projects, and other 

reasonable expenses for the purpose 

of fostering rural development.

Funds must be used for projects that promote rural 

economic development and job creation. Limits are 

placed on the maximum amount for each grant or loan, 

as well as the term of the loan.

Applicants must be electric and telephone utilities that 

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 

and Development, $35

10.901 To encourage and improve the 

capability of state and local units of 

government and local nonprofit 

organizations in rural areas to plan, 

develop, and carry out programs for 

resource conservation and 

development.

Technical assistance is available only to sponsors within 

areas authorized by the Secretary of Agriculture for 

planning and installing approved projects specified in 

Resource Conservation and Development area plans, 

for land conservation, water management, community 

development, and environmental enhancement 

elements.

(Continued From Previous Page)
Appendix V

Objectives and Restrictions of Federal 

Programs That Fund Selected Economic 

Development Activities

Page 53 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Program’s name and 

obligations for fiscal 

year 1999 

Catalog

number Objectives Use restrictions

Watershed Surveys and 

Planning, $10

10.906 To provide planning assistance for 

federal, state, and local agencies for 

developing coordinated water and 

related land resources programs in 

watersheds and river basins.

Studies should focus on a limited number of critical 

problems of special concern nationally, such as flood 

damage reduction, erosion control, water conservation, 

preservation of wetlands, and water quality 

improvement.

Appalachian Regional Commission

Appalachian Area 

Development, $89

23.002 To create opportunities for selfsustaining economic development 

and improved quality of life in the 

Appalachian region.

Projects funded must be of high priority in the state’s 

Appalachian development plan and be either of critical 

importance to a phased investment and development 

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 

Access Roads, $3

23.008 To provide access to industrial, 

commercial, educational, 

recreational, residential, and related 

transportation facilities that directly or 

indirectly relate to the improvement of 

the areas determined by the states to 

have significant development 

potential and to meet the objectives 

stated under the Appalachian 

Regional Development program.

Funds may be used for engineering, right-of-way, 

relocation, and construction of projects relating to the 

program’s objectives. The federal and the state 

governments must accept the roads, and total access 

road construction may not exceed 1,400 miles. 

Applicants are state governments. State governments 

may solicit project proposals from other public entities 

and private groups within Appalachia.

Appalachian Local 

Development District 

Assistance, $5

23.009 To provide planning and development 

resources in multicounty areas, to 

help develop the technical 

competence essential to sound 

development assistance, and to meet 

the objectives stated under the 

Appalachian Regional Development 

program.

Applicants must be multicounty organizations that are 

certified by states within the Appalachian region. 

Appalachian State 

Research, Technical 

Assistance, and 

Demonstration Projects, 

$1

23.011 To assist ARC in accomplishing its 

objectives by expanding the 

knowledge of the region through 

state-sponsored research.

Applicants are states within the Appalachian region—

either singly or in combination with one another, local 

public entities, and state entities.

(Continued From Previous Page)
Appendix V

Objectives and Restrictions of Federal 

Programs That Fund Selected Economic 

Development Activities

Page 54 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Program’s name and 

obligations for fiscal 

year 1999 

Catalog

number Objectives Use restrictions

Department of Commerce

Grants for Public Works 

and Economic 

Development, $206

11.300 To promote long-term economic 

development and assist in the 

construction of public works and 

development facilities needed to 

initiate and support the creation or 

retention of permanent jobs in the 

private sector in areas experiencing 

substantial economic distress. 

Qualified projects must fulfill a pressing need of the area 

and must (1) tend to improve the opportunities for the 

successful establishment or expansion of industrial or 

commercial plants or facilities, (2) assist in the creation 

of additional long-term employment opportunities, or (3) 

benefit the long-term unemployed or underemployed 

and members of low-income families. In addition, 

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 

Development/Technical 

Assistance, $10

11.303 To promote economic development 

and alleviate underemployment and 

unemployment in distressed areas by 

(1) enlisting the resources of 

designated university centers in 

promoting economic development, 

(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.

Technical assistance is used for projects that promote 

economic development in economically distressed areas 

and to fund a network of university centers that provide 

technical assistance to distressed communities and 

businesses. Grants may not be used to start or expand a 

private enterprise. 

Economic 

Development/State and 

Local Economic 

Development Planning, 

$24

11.305 To help states, substate planning 

units, Indian Tribes, and/or local 

urban governments strengthen the 

economic-development-planning 

capability and formulate and 

establish comprehensive economic 

development plans designed to 

reduce unemployment and increase 

incomes.

Funds must be used to support comprehensive planning 

for economically distressed communities/areas. 

Beneficiaries are the unemployed and low-income 

residents in areas that are covered by the applicant.

Economic Adjustment 

Assistance, $137

11.307 To assist state and local interests in 

designing and implementing 

strategies to adjust or bring about 

change to an economy. Economic 

Adjustment Assistance grants may 

be used for planning, technical 

assistance, construction, and 

revolving loan funds. 

Beneficiaries must meet one of three criteria, which 

relate to unemployment rate, per capita income, or a 

special need resulting from severe short-term changes 

in economic conditions.

(Continued From Previous Page)
Appendix V

Objectives and Restrictions of Federal 

Programs That Fund Selected Economic 

Development Activities

Page 55 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Program’s name and 

obligations for fiscal 

year 1999 

Catalog

number Objectives Use restrictions

Trade Adjustment 

Assistance, $10

11.313 To provide trade adjustment 

assistance for firms and industries 

adversely affected by increased 

imports.

Applicants may be intermediary organizations (including 

Trade Adjustment Assistance Centers) that assist tradeinjured firms. For an industry association or other 

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 

and Utilization Research 

and Development 

Grants and Cooperative 

Agreements Program, 

$3

11.427 To increase greatly the nation’s 

wealth and quality of life through 

sustainable fisheries that support 

fishing industry jobs, safe and 

wholesome seafood, and recreational 

opportunities.

Proposals must respond to funding priorities that are 

described in the annual solicitation. 

Fisheries Disaster 

Relief, $4

11.477 To deal with commercial fishery 

failures due to fishery resource 

disasters that may be natural, manmade, or of undetermined origin.

Funds can be used for assessing the effects of 

commercial fishery failures, or restoring fisheries or 

preventing future failures, and assisting fishing 

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 

to Stimulate Competitive 

Technology, $4

11.614 To support technology-based 

economic growth in eligible 

jurisdictions by promoting 

partnerships between state and local 

governments, universities, 

community colleges, nonprofit 

organizations, and the private sector.

Eligible organizations must be headquartered in Alaska, 

Arkansas, Delaware, Hawaii, Idaho, Indiana, Iowa, 

Kansas, Kentucky, Louisiana, Maine, Mississippi, 

Montana, Nebraska, Nevada, New Hampshire, North 

Dakota, Oklahoma, Oregon, South Carolina, South 

Dakota, Utah, Vermont, West Virginia, Wisconsin, 

Wyoming, or the Commonwealth of Puerto Rico. 

Department of Defense

Planning Assistance to 

States, $6

12.110 To cooperate with any state in the 

preparation of comprehensive plans 

for developing, using, and conserving 

water and related land resources of 

drainage basins located within the 

boundaries of such state.

The state must have a planning program for developing, 

using, or conserving the water and related land 

resources either under way or laid out in sufficient detail 

so that the relationship of a state’s request for a 

particular aspect of the program may be appraised. 

Community Economic 

Adjustment, $0

12.600 To help communities, regions, and 

states alleviate serious economic 

impacts that result from Department 

of Defense program changes, such 

as base openings, expansions, and 

closings; contract changes; and 

personnel reductions and increases.

Funds are used in communities that are affected by 

changes in Department of Defense programs. 

(Continued From Previous Page)
Appendix V

Objectives and Restrictions of Federal 

Programs That Fund Selected Economic 

Development Activities

Page 56 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Program’s name and 

obligations for fiscal 

year 1999 

Catalog

number Objectives Use restrictions

Community Economic 

Adjustment Planning 

Assistance, $27

12.607 To assist local governments or states, 

on behalf of local governments, to 

undertake community economicadjustment-planning activities to 

respond to military base closures and 

realignments.

Funding is provided for areas requiring the reuse of 

military property.

An applicant must be from an area where the Secretary 

of Defense has announced that the local military 

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, 

less than $1

12.610 To enable the Army, Navy, Air Force, 

and Marine Corps to participate in 

developing and implementing Joint 

Land Use Studies that will be used to 

identify land use measures needed to 

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. 

An applicant must be studying an area where the 

Secretary of Defense determines that encroachment of 

the civilian community on a military installation is likely to 

impair the continued operation and utility of the military 

installation.

Community Economic 

Adjustment Planning 

Assistance for 

Reductions in Defense 

Industry Employment, 

$2

12.611 To assist local governments or states, 

on behalf of local governments, to 

undertake economic-adjustmentplanning activities to respond to 

major reductions in defense industry 

employment resulting from the 

cancellation, termination, or failure to 

proceed with a major Department of 

Defense acquisition.

Funding may be provided for community economicadjustment-planning activities in response to publicly 

announced planned reductions in Department of 

Defense spending, the cancellation or termination of a 

Department contract, or the failure to proceed with a 

previously approved major defense acquisition program, 

where the Secretary of Defense has determined that the 

action is likely to impose a direct and significantly 

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. 

(Continued From Previous Page)
Appendix V

Objectives and Restrictions of Federal 

Programs That Fund Selected Economic 

Development Activities

Page 57 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Program’s name and 

obligations for fiscal 

year 1999 

Catalog

number Objectives Use restrictions

Community Base Reuse 

Plans, $1

12.612 To assist local governments or states, 

on behalf of local governments, to 

conduct community base reuse plans 

at military installations that are 

closing or being realigned.

Funding may be provided for developing the community 

base reuse plan that is required as part of the 

Environmental Impact Statement for the disposal and 

reuse of military installations. 

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 

Planning Assistance, $0

12.613 To assist local governments or states, 

on behalf of local governments, to 

undertake community economicadjustment-planning activities to 

respond to military base openings or 

expansions.

Funding may be provided for community growthmanagement-planning activities when the opening or 

expansion of a military installation results in large-scale 

military-related population growth requiring additional 

public facilities and services off base.

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 

State Revolving Funds, 

$1,329

66.458 To create state revolving funds that 

will provide a long-term source of 

financing for constructing wastewater 

treatment facilities and implementing 

other water quality management 

activities.

The state must certify that it has the legal, managerial, 

technical, and operational capabilities to administer the 

program competently and that it will comply with 

applicable federal statutes.

Capitalization Grants for 

Drinking Water State 

Revolving Loan Fund, 

$775

66.468 To create state revolving funds that 

will provide a long-term source of 

financing for the costs of 

infrastructure needed to achieve or 

maintain compliance with 

requirements of the Safe Drinking 

Water Act and to protect public 

health. 

The state must certify that it has the legal, managerial, 

technical, and operational capabilities to administer the 

program competently and that it will comply with 

applicable federal statutes. 

(Continued From Previous Page)
Appendix V

Objectives and Restrictions of Federal 

Programs That Fund Selected Economic 

Development Activities

Page 58 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Program’s name and 

obligations for fiscal 

year 1999 

Catalog

number Objectives Use restrictions

Brownfield Pilots 

Cooperative 

Agreements, $51

66.811 To provide funds for states, tribes, 

and local governments to assess 

Brownfields, establish revolving loan 

funds to clean up brownfields, and 

provide environmental training in 

brownfield communities. 

Funds for assessment demonstration pilot activities 

must show direct links to site assessment, site 

identification, site investigation, and planning and/or site 

characterization at sites that have an actual, threatened, 

or suspected release of a hazardous substance. Funds 

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 

Utilization, less than $1

93.291 To convey or lease all surplus federal 

real properties that were made 

available by the disposal agency and 

are needed and usable by eligible 

organizations to carry out health 

programs.

Real property must be used for eligible health purposes.

Applicants must be states; their political subdivisions; 

tax-supported public health institutions; and nonprofit, 

tax-exempt institutions.

Beneficiaries must attend, work with or for, or be served 

by one of the eligible applicants. 

Community Services 

Block 

Grant/Discretionary 

Awards, $33

93.570 To support program activities of 

national or regional significance to 

alleviate the causes of poverty in 

distressed communities.

Funds may be used to improve the quality of the 

economic and social environment of low-income 

residents by providing resources for eligible applicants; 

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.

(Continued From Previous Page)
Appendix V

Objectives and Restrictions of Federal 

Programs That Fund Selected Economic 

Development Activities

Page 59 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Program’s name and 

obligations for fiscal 

year 1999 

Catalog

number Objectives Use restrictions

Native American 

Programs, $36

93.612 To provide financial assistance; 

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. 

Beneficiaries are Native Americans. 

Department Housing and Urban Development

CDBG/Entitlement 

Grants, $2,953

14.218 To develop viable urban communities 

by providing decent housing and a 

suitable living environment and by 

expanding economic opportunities, 

principally for persons of low and 

moderate income.

The grantee must certify that at least 70 percent of the 

grant funds received during a designated period of 1 to 3 

years are expended for activities that will principally 

benefit low- and moderate-income persons. Funds must 

be used to aid in preventing or eliminating slums or blight 

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 

Program, $60

14.219 To develop viable urban communities 

by providing decent housing; a 

suitable living environment; and 

expanding economic opportunities, 

principally for persons of low and 

moderate income.

At least 70 percent of each grant made available to a 

unit of general local government must benefit low- and 

moderate-income persons. Funds may not be used for 

constructing or rehabilitating public facilities for the 

general conduct of government and for making housing 

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. 

(Continued From Previous Page)
Appendix V

Objectives and Restrictions of Federal 

Programs That Fund Selected Economic 

Development Activities

Page 60 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Program’s name and 

obligations for fiscal 

year 1999 

Catalog

number Objectives Use restrictions

CDBG/Special Purpose 

Grants/Insular Areas, $7

14.225 To provide community development 

assistance for American Samoa, 

Guam, the Northern Mariana Islands, 

Palau, and the Virgin Islands.

Applicants must be from American Samoa, Guam, the 

Northern Mariana Islands, Palau, and the Virgin

Islands.

The principal beneficiaries are low- and moderateincome persons. 

CDBG/Special Purpose 

Grants/Technical 

Assistance Program, $8

14.227 To help states, units of general local 

government, Indian tribes, and 

areawide planning organizations to 

plan, develop, and administer local 

CDBG programs.

Applicants must be qualified to provide technical 

assistance to assist governmental units and may not use 

funding for the cost of acquiring or developing the 

necessary specialized skills or knowledge for carrying 

out this program.

CDBG/State’s Program, 

$1,206

14.228 To develop viable urban communities 

by providing decent housing; a 

suitable living environment, and 

expanding economic opportunities, 

principally for persons of low and 

moderate income.

The grantee, which must be a state government, must 

ensure that at least 70 percent of the grant funds 

received during a designated period of 1 to 3 years are 

expended for activities that will principally benefit lowand moderate-income persons. Funds must be used to 

help prevent or eliminate slums or blight or meet other 

community development needs having a particular 

urgency.

Historically Black 

Colleges and 

Universities Program, 

$10

14.237 To help historically black colleges and 

universities expand their role and 

effectiveness in addressing 

community needs in their locality, 

including neighborhood revitalization, 

housing, and economic development. 

Funds must be used for projects that meet both a CDBG 

national objective and the CDBG eligibility requirements. 

Applicants must be historically black colleges and 

universities as determined by the Department of 

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 

Program, $45

14.244 To stimulate the creation of new jobs 

empowering low-income persons and 

families receiving public assistance to 

become economically self-sufficient, 

particularly for the disadvantaged 

and long-term unemployed, and to 

promote revitalization of 

economically distressed areas.

HUD is not authorized to grant new designations under 

this program. Applicants must have been previously 

designated as an urban empowerment zone or 

enterprise community. 

(Continued From Previous Page)
Appendix V

Objectives and Restrictions of Federal 

Programs That Fund Selected Economic 

Development Activities

Page 61 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Program’s name and 

obligations for fiscal 

year 1999 

Catalog

number Objectives Use restrictions

CDBG/Economic 

Development Initiative, 

$60

14.246 To help public entities that are eligible 

under the Section 108 Loan 

Guarantees Program to carry out 

economic development projects. 

Grant assistance must enhance the 

security of loans guaranteed under 

the Section 108 Program or improve 

the viability of projects financed with 

loans guaranteed under the Section 

108 Program. In addition, this 

program will make competitive 

economic development grants in 

conjunction with Section 108 loan 

guarantees for qualified brownfield 

projects.a

Funds may be used only in conjunction with projects and 

activities assisted under the Section 108 Loan 

Guarantees Program. 

Applicants are units of general local government that are 

eligible public entities under the Section 108 Loan 

Guarantees Program.

The principal beneficiaries are low- and moderateincome persons.

CDBG/Section 108 Loan 

Guarantees, $1,261

14.248 To provide communities with a source 

of financing for economic 

development, housing rehabilitation, 

public facilities, and large-scale 

physical development projects.

Funds must be used for projects and activities that 

principally benefit low- and moderate-income persons, 

aid in the elimination or prevention of slums and blight, 

or meet urgent needs of the community. 

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 

Economic Development, 

$25

14.250 To expand the supply of affordable 

housing and access to economic 

opportunities in rural areas.

Applicants are local, rural, and nonprofit community 

development organizations and Indian tribes.

Community Outreach 

Partnership Center 

Program, $8

14.511 This program funds partnerships 

among institutions of higher 

education and communities to solve 

urban problems through research, 

outreach, and the exchange of 

information.

Funds must be used for research and outreach activities 

that focus on problems associated with housing, 

economic development, neighborhood revitalization, 

infrastructure, health care, job training, education, crime 

prevention, planning, community organizing, and other 

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/ 

Comprehensive 

Improvement Assistance 

Program,b

 $356

14.852 To improve the physical condition and 

upgrade the management and 

operation of existing public housing 

projects.

Applicants must be public housing agencies that own 

and operate low-income housing projects with fewer 

than 250 units.

(Continued From Previous Page)
Appendix V

Objectives and Restrictions of Federal 

Programs That Fund Selected Economic 

Development Activities

Page 62 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Program’s name and 

obligations for fiscal 

year 1999 

Catalog

number Objectives Use restrictions

Public Housing/ 

Comprehensive Grant 

Programb

, $2,493

14.859 To provide funds to improve the 

physical condition and upgrade the 

management and operations of 

existing public housing projects to 

assure that they continue to be 

available to serve low-income 

families. 

Applicants must be public housing agencies that own 

and operate low-income housing projects with 250 or 

more units under an existing annual contributions 

contract with HUD.

Indian CDBG Program, 

$67

14.862 To assist Indian tribes and Alaska 

Native villages in the development of 

viable Indian communities. 

Funds may not be used for constructing and improving 

governmental facilities, purchasing equipment, general 

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 

Maintenance/Indian 

Roads, $7

15.033 To provide limited routine 

maintenance on paved, gravel, earth, 

and unimproved roads, bridges, and 

airstrips.

Funds must be used to repair and maintain public roads 

serving Indian reservations, with particular emphasis on 

school bus routes and arterial highways; for snow 

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 

Programs on Indian 

Lands, $26

15.039 To promote conserving, developing, 

and using fish, wildlife, and 

recreational resources for the 

sustenance, cultural enrichment, 

economic support, and maximum 

benefit of Indians.

Applicants and beneficiaries must be federally 

recognized Indian tribal governments that have facilities 

and Native American organizations authorized by Indian 

tribal governments.

(Continued From Previous Page)
Appendix V

Objectives and Restrictions of Federal 

Programs That Fund Selected Economic 

Development Activities

Page 63 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Program’s name and 

obligations for fiscal 

year 1999 

Catalog

number Objectives Use restrictions

Bureau of Indian Affairs 

Facilities/Operations and 

Maintenance, $1

15.048 To provide funds for basic operating 

and maintenance services of 

noneducation facilities that are 

owned or operated by the Bureau of 

Indian Affairs and located on 

reservations. 

Applicants and beneficiaries must be federally 

recognized Indian tribal governments that have facilities 

on a reservation that is owned or operated by the 

Bureau of Indian Affairs. 

Indian Loans/Economic 

Development, $5

15.124 To assist federally recognized Indian 

tribal governments, Native American 

organizations, and individual 

American Indians in obtaining 

financing from private sources to 

promote business development 

initiatives on or near federally 

recognized Indian reservations.

Loans may be used to finance commercial, industrial, 

agricultural, or business activities organized for profit. 

Loan guarantees to private lenders will be provided only 

if funds would otherwise be unavailable to the borrower. 

Funds may not be used for speculation. The financial 

assistance must be used on or near an Indian 

reservation. 

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 

Political Development of 

the Territories and the 

Freely Associated 

States, $282

15.875 To promote the economic, social, and 

political development of the territories 

and freely associated states, leading 

toward greater self-government and 

self-sufficiency for them.

Applicants and beneficiaries must be the U.S. territories 

of Guam, the Virgin Islands, American Samoa, the 

Northern Mariana Islands, and the freely associated 

states of the Federated States of Micronesia, the 

Republic of the Marshall Islands, and the Republic of 

Palau.

Small Business Administration

Small Business Loans

[Regular Business 

Loans—7(A) Loans], 

$8,998

59.012 To provide guaranteed loans for small 

businesses that are unable to obtain 

financing in the private credit 

marketplace but can demonstrate an 

ability to repay loans. 

Funds must be used to construct, expand, or convert 

facilities; to purchase building equipment or materials; or 

for working capital. Funds may not be used for gambling 

establishments, nonprofit organizations, speculators in 

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 

Company Loans

(504 Loans), $1,779

59.041 To assist small businesses by 

providing long-term, fixed-rate 

financing for fixed assets through the 

sale of debentures to private 

investors.

A nonprofit Certified Development Company must certify 

applicants.

Beneficiaries are small businesses, as defined by SBA.

(Continued From Previous Page)
Appendix V

Objectives and Restrictions of Federal 

Programs That Fund Selected Economic 

Development Activities

Page 64 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Program’s name and 

obligations for fiscal 

year 1999 

Catalog

number Objectives Use restrictions

Department of Transportation

Airport Improvement 

Program, $1,618

20.106 To assist sponsors, owners, or 

operators of public-use airports in 

developing a nationwide system of 

airports adequate to meet the needs 

of civil aeronautics.

Grants may not be used to construct hangars, most 

parking facilities, and buildings that are not related to 

safety, landscaping, or routine maintenance.

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 

Construction, $25,936

20.205 To assist state transportation 

agencies in planning and developing 

an integrated, interconnected 

transportation system by constructing 

and rehabilitating the National 

Highway System, including the 

Interstate System; and for 

transportation improvements to all 

public roads except those functionally 

classified as local; to provide aid for 

the repair of federal-aid roads 

following disasters; to foster safe 

highway design; to replace or 

rehabilitate deficient or obsolete 

bridges; and to provide for other 

special purposes. 

Federal aid highway funds are generally apportioned by 

statutory formulas to the states and generally reserved 

to roads open to the public and not functionally classified 

as local. 

Projects in urban areas with a population of 50,000 or 

more must be based on a transportation-planning 

process carried out by the metropolitan planning 

organization in cooperation with the state and transit 

operators. Projects in nonmetropolitan areas of a state 

must be consistent with the state transportation plan. 

Federal Transit/Capital 

Investment Grants, 

$2,182

20.500 To assist in financing the acquisition, 

construction, reconstruction, and 

improvement of facilities, rolling 

stock, and equipment for use in 

public transportation service in urban 

areas and in coordinating service 

with highway and other transportation 

in such areas.

Applicant must have legal, financial, and technical 

capacity to carry out the proposed project and maintain 

facilities and equipment purchased with federal 

assistance.

Federal 

Transit/Metropolitan 

Planning Grants, $41

20.505 To assist in developing transportation 

improvement programs, long-range 

transportation plans, and other 

technical studies.

States receive an apportionment for subsequent 

distribution by formula to the metropolitan planning 

organization to be used in urban areas in each state.

(Continued From Previous Page)
Appendix V

Objectives and Restrictions of Federal 

Programs That Fund Selected Economic 

Development Activities

Page 65 GAO/RCED/GGD-00-220 Federal Economic Development Activities

Program’s name and 

obligations for fiscal 

year 1999 

Catalog

number Objectives Use restrictions

Federal Transit/ Formula 

Grants, $2,465

20.507 To assist in financing the acquisition, 

construction, leasing, maintenance, 

planning, and improvement of 

facilities and equipment in mass 

transportation service and to assist 

with paying the operating expenses 

to improve or to continue such 

service for urbanized areas with 

populations of under 200,000.

Funds will be used in urbanized areas (as defined by the 

Bureau of the Census) through designated recipients 

that must be public entities and legally capable of 

receiving and dispensing federal funds. 

Beneficiaries are publicly owned operators of mass 

transportation services.

Formula Grants for 

Other than Urbanized 

Areas, $183

20.509 To improve, initiate, or continue public 

transportation service in 

nonurbanized areas by providing 

financial assistance for operating and 

administrative expenses and for the 

acquisition, construction, and 

improvement of facilities and 

equipment and to provide technical 

assistance for rural

transportation providers.

Funds are apportioned to states and may be used for 

eligible capital expenses, project administration, and 

operating expenses needed to provide efficient and 

coordinated public transportation service in 

nonurbanized areas. Fifteen percent of the state’s 

annual apportionment must be spent to support rural 

intercity bus transportation, unless the governor certifies 

that such needs are adequately met. 

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 

Assistance, $6

20.512 To improve mass transportation 

service; to contribute toward meeting 

total urban transportation needs at a 

minimum cost; and to assist in the 

reduction of urban transportation 

needs by improving the ability of 

transit industry operating officials to 

plan, manage, and operate their 

systems more effectively and safely.

Criteria for preliminary approval include (1) compatibility 

with the Federal Transit Administration’s Strategic Plan; 

(2) availability of funding; (3) nonfederal funding match; 

(4) importance of proposal to the fiscal year program 

activity; (5) potential for impact on the state-of-the-art 

from the viewpoint of innovation in transit technology, 

services, and operations; (6) technical feasibility and 

potential for successful introduction into use in the transit 

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)
Appendix V

Objectives and Restrictions of Federal 

Programs That Fund Selected Economic 

Development Activities

Page 66 GAO/RCED/GGD-00-220 Federal Economic Development Activities

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.

Program’s name and 

obligations for fiscal 

year 1999 

Catalog

number Objectives Use restrictions

Transit Planning and 

Research, $9

20.514 To foster innovation in public transit 

systems, through local 

demonstrations of promising, but 

risky, new technologies and service 

or operational concepts; to address 

economic and social issues resulting 

from human impacts on the 

environment and develop riskassessment methodologies, 

integrated assessments, and other 

analytical tools for effective policy 

formulation; to develop practical 

know-how for solving fundamental 

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.

Criteria for preliminary approval include (1) compatibility 

with the Federal Transit Administration’s plans; (2) 

availability of funding; (3) potential for impact on the 

state-of-the-art from the viewpoint of innovation in transit 

technology, services, and operations; (4) technical 

feasibility and potential for successful introduction into 

use in the transit industry; (5) background, experience, 

and demonstrated capabilities of the applicant; (6) 

partnerships with public and private organizations; (7) 

non-Federal Transit Administration funding match; and 

(8) other pertinent matters, such as geographic 

distribution of projects and questions of environmental 

and labor impact.

(Continued From Previous Page)

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