Economic Development Administration: FY2016 Appropriations
Released: 2016-07-29T00:00:00

T he Economic Development Administration (EDA) was created pursuant to the enactment of the Public Works and Economic Development Act of 1965, with the objective of fostering growth in economically distressed areas characterized by high levels of unemployment and low per-capita income levels. Federally designated disaster areas and areas affected by military base realignment or closure (BRAC) are also eligible for EDA assistance. EDA provides grants for public works, economic adjustment in case of natural disasters or mass layoffs, technical assistance, planning, and research.

The Consolidated Appropriations Act for FY2015 ( P.L. 113-235 ) appropriated $250 million in total funding for EDA, including $213 million in support of EDA programs and activities, and $37 million for salaries and expenses. On December 18, 2015, the President signed the Consolidated Appropriations Act of 2016, P.L. 114-113 , which appropriated $261 million in total funding for EDA, including $222 million for EDA programs and activities and $39 million for salaries and expenses. Total funding for FY2016 was 4.4% ($1.1 million) higher than the amount appropriated for FY2015. FY2016 appropriations included a significant increase ($5 million) in the amount of funds targeted to assist coal mining communities and a modest increase ($2 million) in funding for Planning Assistance. The increased funding for coal-impacted communities and planning assistance was offset by a reduction ($10 million) in the amount appropriated for Economic Adjustment Assistance and the zeroing out of funding for activities supporting innovative manufacturing. The program received an appropriation of $4 million in FY2015.

Administration's Request

The Obama Administration's FY2016 budget request, which was released on February 2, 2015, proposed an increase in total EDA funding from $250 million in FY2015 to $273 million in FY2016, a 9.2% increase. In addition, the Administration's request called for shifts in funding priorities. Specifically, the Administration's budget request proposed the following:

Reduced funding for what is EDA's most highly funded program, public works grants. The Administration recommended $14 million less for these grants than the $99 million that was appropriated in FY2015. Greater emphasis on projects intended to support job creation through regional innovation clusters by requesting an appropriation of $25 million for such activities, which was $15 million more than was appropriated for these activities in FY2015. Significant increases in funding for the Economic Adjustment Assistance, research and evaluation, and planning grants programs, including proposed increases of 17.8%, 100%, and 31.7% respectively for the three programs. A significant increase, 23%, in funding for salaries and expenses.

The Administration's budget request for each EDA program is listed in Table 1 along with the recommended amounts proposed by the House and Senate, and the enacted amount included in the Consolidated Appropriations Act of 2016, P.L. 114-113 .

The Administration's EDA budget justification document for FY2016 sought to recast EDA assistance in the context of global economic competition and the promotion of sustainable economic development. The Administration's emphases on promoting interagency coordination of resources and on the implementation of regional innovation strategies were among the primary reasons the Administration requested an $8 million increase in funding for its most flexible program, Economic Adjustment Assistance grants. The $9.5 million increase in requested funding for planning grants was another example of the Administration's attempt to coordinate and promote sustainable economic development. The increase in appropriations for planning grants would have been used to fund 16 previously unfunded Economic Development Districts (EDD) and to "conduct a one-time refresh" of each EDD's Comprehensive Economic Development Strategy (CEDS),which is a required element for establishing eligibility for EDA's Public Works and Economic Adjustment Assistance grants. Additional funding for planning grants would have been used to help EDDs incorporate new components of the CEDS that focus on economic resiliency and coordination with other federal, state, and local resources.

According to the Obama Administration, one manifestation of EDA's effort to promote interagency coordination is the central role it plays in the Administration's Partnerships for Workforce and Economic Revitalization Plus (POWER+) initiative, an interagency effort intended to coordinate competitively awarded federal grant assistance to communities experiencing economic disruption as a result of changes in the power sector and coal industry. The effort was intended to assist affected communities diversify their economic base, create sustainable high-paying jobs, attract new economic investments, and provide job training and reemployment services to dislocated workers in affected areas.

House Passed Bill, H.R. 2578

On May 27, 2015, the House Appropriations Committee reported an original measure, H.R. 2578 , the Departments of Commerce, Justice, Science, and Related Agencies Appropriations Bill for FY2016 (CJS). On June 3, 2015, the House passed H.R. 2578 by a vote of 242-183. The bill, as passed by the House, would have frozen EDA appropriations at their FY2015 levels, rejecting the Administration's request for an increase in overall funding and a shift in funding priorities. The bill would have appropriated $250 million for EDA, including $213 million for EDA activities and programs, and $37 million for salaries and expenses. The bill reflected slightly different funding priorities from those of the previous year. The bill proposed increasing funding for assistance to coal communities by $5 million and would have established assistance to these communities as a stand-alone program rather than a set-aside under the Economic Adjustment Assistance program while eliminating $4 million in funding for Innovative Manufacturing grants. (See Table 1 for a complete breakdown by program.)

The report ( H.Rept. 114-130 ) accompanying the bill directed EDA to allocate at least $15 million to assist communities affected by job losses in the coal mining industry as part of the Administration's POWER+ initiative. The report included language directing EDA to give priority to coal mining communities that had not yet developed a CEDS when awarding POWER+ funding. The funds would have been used to begin the CEDS planning process. The report directed EDA, within 90 days of enactment of H.R. 2578 , to submit to the House Committee on Appropriations a report on the government-wide effort to assist coal mining communities as part of the POWER+ initiative, including descriptions of EDA's and other federal agencies' past efforts and future plans to assist coal communities.

In addition, the House Appropriations Committee report accompanying the bill included language admonishing EDA on its slow implementation of the Innovative Manufacturing loan guarantee program. The report noted that although the program had received funding as far back as FY2012, EDA had not yet issued loan guarantees, but noted that the agency expected to issue its first loan guarantee during the second quarter of FY2016. The report directed EDA to provide the committee with periodic updates on the status of the program, including a written report within 60 days following enactment of the act. The report also included language directing EDA to use its Regional Innovation Program (RIP) funds to support university- and state-sponsored incubator programs.

Senate Appropriations Committee Reported Bill, H.R. 2578

On June 16, 2015, the Senate Appropriations Committee reported its version of H.R. 2578 , the Departments of Commerce, Justice, Science, and Related Agencies Appropriations Bill for FY2016. The Senate Appropriations Committee rejected the Administration's proposed increase in funding for EDA programs and recommended freezing total funding at the FY2015 total of $250 million, including $213 million for EDA programs and $37 million for salaries and expenses. The Senate bill did not include funding for coal mining communities and innovative manufacturing. Instead, the bill recommended a $3 million increase in funding for Economic Adjustment Assistance grants. The report ( S.Rept. 114-66 ) accompanying the bill directed EDA to set aside, within the Economic Adjustment Assistance account, up to $10 million for regional innovation grants, $2 million for innovative energy efficiency grants, $3 million for Economic Adjustment Assistance grants awarded to communities within the Appalachian Regional Commission, and $3 million in grant assistance for communities within the boundaries of the Delta Regional Authority.

The report accompanying the Senate bill directed EDA to continue to ensure that RIP grants were awarded to multiple grantees across a diverse geographic area. Like its House counterpart, the Senate report encouraged EDA to fund university-based incubators with priority going to incubator projects where states had made a significant investment in establishing an incubator program. The report also would have set aside $2 million in RIP funding for "cluster grants to support nonprofit, job-creating, revolving, equity-based seed capital funds."

In addition to identifying funding priorities and set-asides within various EDA programs, the report accompanying the Senate Appropriations Committee reported version of the CJS bill included two additional directives for EDA:

The committee encouraged EDA to assist communities potentially affected by nuclear power plant closures identify best practices that may be implemented to mitigate the impact of such closures. The committee also admonished the agency for the delay in delivering a plan, mandated in FY2015, that identify how better to use existing programs to assist various types of distressed communities and encourage manufacturing investments.

Continuing Resolutions

Congress did not pass the Departments of Commerce, Justice, Science, and Related Agencies Appropriations Bill for FY2016, before the beginning of 2016 fiscal year on October 1, 2015. On September 30, 2015, Congress passed and the President signed P.L. 114-53 , an act providing for continuing appropriations from October 1, 2015, to December 11, 2015. The act included provisions allowing departments and agencies, including EDA, to expend federal funds during this period at a rate as outlined in the department or agency's FY2015 appropriations act. The Continuing Appropriations Act also prohibited the use of funds for activities that were not funded in FY2015. Congress passed two additional continuing resolutions that extended the period covered by a continuing resolution: P.L. 114-96 , to cover the period through December 16, 2015, and P.L. 114-100 , to extend the period covered to December 22, 2015.

Consolidated Appropriations Act of 2016, P.L. 114-113

On December 18, 2015, Congress approved, and the President signed into law P.L. 114-113 , the Consolidated Appropriations Act of 2016, providing appropriations for a number of federal agencies and departments, including the programs and activities of the Economic Development Administration, for the remainder of FY2016. The act included $261 million for EDA, including $222 million for programs and activities and $39 million for salaries and expenses. EDA's FY2016 appropriations included a 50% increase (from $10 million to $15 million) in the amount of funds targeted to assist coal mining communities as part of the Administration POWER+ initiative. The act also included a $2 million increase in funding for planning assistance to EDA-designated economic development districts charged with developing Comprehensive Economic Development Strategies (CEDS). The increased funding for coal-impacted communities and planning assistance was offset by a $10 million reduction in the amount appropriated for Economic Adjustment Assistance and the zeroing out of appropriations for activities supporting innovative manufacturing. That program received an appropriation of $4 million in FY2015. In addition, P.L. 114-113 included a provision rescinding $10 million in EAA unobligated balances from prior year appropriations.