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Friday, December 8, 2017

Federal Alert: A December to Remember

posted by: Matthew Mullin

It has been a very busy few weeks in Washington. Congress is at once grappling with the most far-reaching tax reform legislation in decades, addressing the latest White House request for supplemental disaster funding, and plotting a course for keeping the government running past the December 22nd expiration of the Continuing Resolution (CR) currently funding the government.


The House and Senate have now passed their versions of comprehensive tax reform legislation. There are significant differences between the bills, including individual tax brackets, sunsets for tax benefits, the elimination of tax exemption for some municipal bonds, roll-backs on historic tax credits and the elimination of New Markets Tax Credits.

To be clear, while a step closer to becoming the law of the land, the process is far from over.  Republican leaders in the House and Senate, as well as the White House, are still targeting final passage before the end of 2017.

The members of the conference committee that will iron out the bill for final consideration in the House and Senate are (Democrats in italics):

            Sen. Orrin Hatch – UT                                    Sen. Ron Wyden – OR
            Sen. Mike Enzi – WY                                      Sen. Bernie Sanders – VT
            Sen. Lisa Murkowski – AK                             Sen. Maria Cantwell – WA
            Sen. John Cornyn – TX                                  Sen. Debbie Stabenow – MI
            Sen. John Thune – SD                                   Sen. Robert Mendez – NJ     
            Sen. Rob Portman – OH                                Sen. Tom Carper – DE
            Sen. Tim Scott – SC                                       Sen. Patty Murray – WA
            Sen. Pat Toomey – PA

            Rep. Kevin Brady – TX                                   Rep. Richard Neal – MA
            Rep. Devin Nunes – CA                                 Rep. Sander Levin – MI
            Rep. Peter Roskam – IL                                 Rep. Lloyd Doggett – TX
            Rep. Diane Black – TN                                   Rep. Raul Grijalva – AZ
            Rep. Kristi Noem – SD                                   Rep. Kathy Castor – FL
            Rep. Rob. Bishop – UT
            Rep. Don Young – AK
            Rep. Greg Walden – OR
            Rep. John Shimkus – IL

Action Item #1

There is still time to raise your concerns with your Members of Congress, particularly if one of them happens to be on the conference committee. IEDC remains committed to protecting the tax-exempt status of municipal bonds (including Public Activity Bonds), historic tax credits and New Markets Tax Credits and we continue to communicate those views to Congress.

For more information:

The Joint Committee on Taxation has released this very in-depth analysis of the two versions of tax legislation.

Bloomberg Government has put together this very handy side-by-side comparison of the two bills.

The Committee for a Responsible Federal Budget has a good blog post explaining the scoring of the bill here.

Here is a brief report from the Congressional Research Service on the impact of the House and Senate tax bill on individuals over the life of the bill, by tax bracket.

Alan Simpson and Erskine Bowles, Co-Chairs of the National Committee on Fiscal Responsibility and Reform, penned an Op-Ed worth reading here.    

Supplemental Disaster Funding

On November 17th, the Office of Management & Budget (OMB) submitted their second supplemental disaster funding request related to Hurricane’s Irma, Marie and Harvey, as well as the Western wildfires. The request totaled roughly $44 billion, including a $300 million request for the Economic Development Administration (EDA). The request was quickly panned by Republican and Democrat lawmakers in Congress as woefully inadequate.

Texas, Florida, California, and Puerto Rico have, collectively, requested roughly $2.04 billion in supplemental funding for EDA. While we are encouraged by OMB’s request of $300 million given their previous requests to shut-down EDA, we are hopeful the agency will receive funding closer to that which was requested by Members of Congress and local leaders from impacted states. There is no firm timeline for when we might see the next supplemental legislation pass through Congress, though it had been hoped it would be part of the next fiscal 2017 appropriations bill, either another Continuing Resolution (CR) or full year spending bill.

Action Item #2

Please continue to encourage your elected officials to include EDA in future disaster supplemental funding requests. Be sure to include any examples you may have of how EDA has supported your community following disasters. If you have been fortunate enough to not need EDA in these circumstances, you should include a project or two from your community that has used EDA funding in the past. These past few months have seen unprecedented disasters impacting multiple states across broad regions. While your community may not be impacted, it is important to recognize that disaster can strike any community and when it does, resources like those offered by EDA will be there to help you rebuild only if we continue to show strong support for them today.

Fiscal 2017 Appropriations

The federal government is currently operating under a CR through Friday, December 22, 2017. If Congress does not act prior to midnight on that date, the federal government will shut down for the first time since 2013. Republicans in the House and Senate, as well as the White House, insist there will not be a shutdown, though disagreements over a number of potential policy riders may bring it down to the wire. OMB proposed shutting down a number of vital economic development programs for fiscal 2018, including MEP, the Minority Business Development Agency, CDBG, and multiple Rural Development programs, among others. Your voices will be critical in saving these agencies.

As a full-year spending bill takes shape, IEDC will share additional details with our members while remaining engaged with appropriators in Congress.

Action Item #3

Reach out to your Members of Congress and ask for their support for EDA in the full-year appropriations bill. Be sure to also include all of the agencies listed in our Why Invest in Economic Development brochure.

The end of 2017 is shaping up to be as exciting as the beginning. IEDC continues to be engaged on the Hill, with our partner agencies, and with our fellow economic development stakeholders. Your voices as economic development practitioners and constituents will always resonate more and it is critically important that you reach out to your elected officials and speak up in support of federal economic development resources and a tax plan to that supports responsible growth.

There will be much to discuss at the 2018 FED Forum March 25-27th here in Washington. Congress may still be grappling with tax reform, and may by that time have added infrastructure to their big-ticket legislative items list. The White House will have released their budget proposal for fiscal 2019, giving us a look at their priorities just over the horizon. We may soon learn more about rumors of a proposed merger of economic development programs and agencies into a new agency or department, and so a discussion among the members our profession on that topic will be timely. Registration is open now and program and speaker details will be updating regularly. We hope to have you with us in March!

Please contact Matt Mullin, Senior Director of Public Policy & Strategic Engagement, at mmullin@iedconline.org with any questions or concerns.

Friday, December 1, 2017

WOTUS rule implementation postponed until 2019

posted by: Kirill Abbakumov

On November 5, 2017, the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) proposed extending the implementation of the 2015 Waters of the United States (WOTUS) rule until 2019. EPA and Corps have sent their proposal to the Office of Management and Budget for review, after which it will be published as a proposed rule in the Federal Register and open to public comment. This would give the agencies more time to work through the rulemaking process to repeal and replace the 2015 WOTUS rule, which is currently under a nationwide stay pending a Supreme Court decision early next year.

WOTUS is a term used in the Clean Water Act to define those waters that require federal Clean Water Act permits. In 2015, the Obama Administration finalized a new WOTUS rule that would have expanded federal jurisdiction over county-owned infrastructure, including county-owned ditches, channels, culverts and stormwater systems.

After the rule was finalized, lawsuits were filed in both appeals and district courts arguing that EPA and Corps had overreached in their authority to regulate certain bodies of water. The 6th Circuit Court of Appeals ruled that it had jurisdiction – a ruling that has since been challenged to the U.S. Supreme Court. It is expected that, when the Supreme Court rules on court jurisdiction, the stay may be lifted across much of the country, at which time the 2015 rule will be implemented.

As a result of a February 28 executive order titled, Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the “Waters of the United States Rule”, EPA and Corps are withdrawing and replacing the 2015 rule.

Current timeline for the WOTUS rule:

  • Phase ZERO has been sent to the White House Office of Management and Budget for review. Once the review is finished, it will be published in the Federal Register and the public will be permitted to comment on it for roughly 30 days. The rule is expected to be finalized in early 2018.
  • Phase ONE, to repeal the 2015 rule and reinstate previous regulations, has begun. The public comment period for this closed on September 27, and a final rule is expected by Spring 2018.
  • Phase TWO would replace the 2015 WOTUS rule. The timing for this action is uncertain, although it is likely tied to the rule’s withdrawal in Spring of 2018.
Tuesday, November 14, 2017

SelectUSA seeking to work with economic developers for 2018 Summit

posted by: Kirill Abbakumov

SelectUSA has announced that it is extending its deadline for proposals from economic developers until November 30, 2017 for the 2018 Summit. SelectUSA is a government-wide program of the International Trade Administration (ITA) under the Department of Commerce (DOC) that assists economic development organizations to compete globally for investment by providing information, a platform for international marketing, and high-level advocacy. 

SelectUSA is eager to work with economic development communities to plan and promote spin-off events to attract SelectUSA Summit participants to states, cities or regions. The dates of the SelectUSA Summit (June 20-22, 2018) allow for spin-off events to take place the week of June 25-29, 2018 with ample travel time during the weekend in-between (June 23-24, 2018).

All international SelectUSA Summit participants will also be actively encouraged to extend their stay in the United States and connect directly with economic developers, business leaders and local experts while exploring promising investment opportunities in various communities. The deadline for the SelectUSA Investment Summit Call for Proposals has been extended to Thursday, November 30. 

SelectUSA is encouraging economic developers to mobilize teams and local networks in order to plan a program to attract SelectUSA Summit delegations to visit various regions. SelectUSA and U.S. Export Assistance Centers across the country are prepared to work with economic developers to plan and implement spin-off events to showcase the tremendous investment opportunities in the U.S. market.

Since its inception, SelectUSA has facilitated more than $25 billion in investment, creating and/or retaining tens of thousands of American jobs.

For more information on SelectUSA's Call for Proposals and collateral and spin-off events, please visit the Summit website.

Friday, November 10, 2017

Federal government emphasizes continued investment in manufacturing

posted by: Kirill Abbakumov

In early October 2017, U.S. Secretary of Commerce Wilbur Ross released the Streamlining Permitting and Regulatory Burdens for American Manufacturers report that was submitted to President Donald Trump. The report gathered input from domestic manufacturers and industry stakeholders to identify 20 sets of regulations and permitting issues considered as top priority for reform and immediate action for increasing the capacity of American manufacturing industry.

With 12.4 million employees in the U.S. producing goods that are consumed domestically or exported abroad, manufacturing is one of the keys to building stronger communities. The report is taken as an important step in correcting the status quo and promoting American manufacturing by targeting onerous and lengthy processes and inadequately designed rules that add to an already overwhelming amount of government waste.

Three major themes were identified by domestic manufacturers and industry stakeholders in the report:

  • Overlap, duplication and lack of coordination between states and the Environmental Protection Agency (EPA);
  • Uncertainty related to the permitting process;
  • Inconsistency in application and enforcement.

As a critical economic sector, manufacturing has seen targeted development from the Economic Development Administration (EDA), which has invested close to $86 million in 84 projects since January 2017 to help communities and regions strengthen their manufacturing competitiveness. These included over $65 million in 47 projects that are expected to create and/or retain over 14,000 jobs and attract more than $3.4 billion in private investment.

EDA also invested over $20 million in 37 projects to support planning, research, technical assistance, access to capital, or other activities that are essential for successful manufacturing-related economic development and job creation in the future. These include the $2.35 million investment into Ranken Technical College in Missouri, a part of the new Manufacturing Inc. incubator. Ranken is a private, non-profit, degree-granting institution focused on providing the comprehensive education and training necessary to prepare students for employment and advancement in a variety of technical fields.

Thursday, November 2, 2017

Brownfields identified as priority by EPA

posted by: Kirill Abbakumov

On October 5, 2017, the Environmental Protection Agency (EPA) has released a draft of its strategic plan, which establishes work on brownfield sites as a key agency priority goal for 2018 and 2019. Cleaning up brownfield sites and returning them to public and business is expected to further benefit the environment, the communities where they are located, and create jobs that grow the economy.

Since 1995, the EPA has been administering federal brownfields grants that provide funds for inspection and cleanup of contaminated sites so that they can be used in redevelopment projects. Cleaning up a blighted property has both environmental and economic benefits including raising overall property values. Studies estimate that for every acre that is redeveloped, it produces an estimated 10 jobs and saves 4.5 acres of open space.

Cleaning up brownfields can also increase property values by 5-15% and for each public dollar spent and attract more than $17 in private investor funding. The federal government Accountability Office estimates there are 425,000 of these types of properties, such as abandoned strip malls, gas stations, dry cleaners, junkyards, warehouses, and industrial properties, across the United States.

Several brownfields reauthorization bills are awaiting action in Congress. Typically, the brownfields program is budgeted at about $160 million per year. The House of Representatives bills are:

  • The House Committee on Transportation and Infrastructure approved the Brownfields Reauthorization Act of 2017 (R. 1758) which would reauthorize the EPA’s brownfields redevelopment program at $200 million a year.
  • The House Committee on Energy and Commerce passed the Brownfields Enhancement, Economic Redevelopment and Reauthorization Act of 2017 (R. 3017) which would extend liability protections for local governments that acquire brownfields.
  • In the Senate, a bill introduced by Sen. James Inhofe (R-Okla.) was placed on the Senate legislative calendar Sept. 7.

The two House committees are in the process of negotiating a compromise between the two bills.

To learn more about how to redevelop brownfields, please visit www.brownfields2017.org, an initiative by the National Association of Counties (NACo).

Wednesday, November 1, 2017

SBA launches expedited disaster relief funding

posted by: Kirill Abbakumov

On October 16, 2017, the Small Business Administration (SBA) announced SBA's Express Bridge Loan Pilot Program (Express Bridge Pilot), which will provide expedited guaranteed bridge loan financing for disaster-related purposes to small businesses located in communities impacted by natural disasters.

SBA provides assistance to small businesses located in the communities affected by Presidentially-declared disasters. The Express Bridge Pilot initiative is designed to supplement the SBA’s disaster response capabilities and the Pilot will authorize the Agency's 7(a) Lenders with SBA Express lending authority to deliver expedited SBA-guaranteed financing on an emergency basis for disaster-related purposes to small businesses located in these communities while the businesses apply for and await long-term financing (including through SBA's direct disaster loan program, if eligible).

As a consequence of devastating hurricanes and storms in recent months, a new modification of the lending criteria will minimize the burden on businesses applying for loans through the Express Bridge Pilot and provide an incentive for SBA Express lenders to participate in the pilot. This will allow SBA Express lenders to expedite the processing of these small guaranteed loans in order to provide immediate cash to assist small businesses with rebuilding and continuing or restarting their operations while awaiting long-term disaster financing.

For full details, application criteria, and modified lending criteria, please consult the Federal Register.

Tuesday, October 24, 2017

SBA seeking public input on reducing regulatory burden

posted by: Kirill Abbakumov

On October 15, 2017, the Small Business Administration (SBA) extended its comment period for a proposed rule on “Reducing Unnecessary Regulatory Burden”. The information obtained from the public will assist SBA in identifying which regulations should be repealed, replaced, or modified because they are obsolete, unnecessary, ineffective, or burdensome.

SBA has an ongoing responsibility to ensure that the regulations it issues do not have an adverse economic impact on those affected by the rules. This responsibility has been reinforced in various executive orders that have expressly directed agencies to review their regulations with an eye towards reducing the time and money the public must spend to comply with the regulatory requirements.

One of SBA's primary objectives in carrying out these efforts is to continue to promote economic growth, innovation, and job creation in the small business sector, and to ensure that disaster survivors have the clear policy and procedural guidance they need to quickly obtain financial assistance to rebuild their lives. Anyone responding to SBA's request for feedback should keep these objectives in mind.

SBA has previously announced its request for information seeking input from the public on August 15, 2017, and is now extending it until November 15, 2017. Comments can be submitted through the Federal Register.

Monday, October 16, 2017

New round of funding available for rural communities

posted by: Kirill Abbakumov

On October 12, 2017, the Rural Utilities Service (RUS), an agency of the United States Department of Agriculture (USDA), announced the availability of up to $10 million in FY2017 and application deadlines for competitive grants to assist communities with extremely high energy costs through the Assistance to High Energy Cost Rural Communities Program.

This program was established in 2000 to provide assistance for communities most challenged by extremely high energy costs, defined by statute as average residential home energy expenditures that are 275% or more of the national average. This statutory threshold for eligibility is high and has the result of limiting the availability of this program to extremely high cost and typically remote areas.

The purpose of this program is to provide financial assistance for a broad range of energy facilities, equipment and related activities to offset the impact of extremely high home energy costs on eligible communities. The grants help communities provide basic energy needs by financing energy infrastructure supporting rural prosperity and job creation.

Grant funds may not be used to pay utility bills or to purchase fuel. Nor may grant funds be used for education and outreach except for training that is directly related to energy facilities financed in all or part by this program. Upgrades to existing facilities are also eligible. Grant projects under this program must serve an eligible community and not be for the primary benefit of an individual applicant, household, or business.

The deadline for applications is December 11, 2017. More information can be found on the Federal Register.

Tuesday, October 10, 2017

DOT announces $500 million for TIGER grants

posted by: Kirill Abbakumov

On September 6, 2017, the U.S. Department of Transportation (DOT) announced a new round of Transportation Investment Generating Economic Recovery (TIGER) Grant funding, totaling $500 million. These competitive grants, appropriated as part of the FY2017 budget year, will have an application deadline of October 16. 

As part of the rollout of this new funding, DOT will be hosting two webinars to assist in the completion of TIGER applications. These webinars will be held from 2:00 to 4:00 PM EDT on Wednesday, September 13 and Tuesday, September 19. To register, please visit the TIGER Webinar Series webpage. In addition, DOT confirmed that more webinars will also be held sometime in the future. This new round of grant funding has updated criteria, making these webinars an important source of information and assistance.

In the funding opportunity announcement, DOT states these grants will give special consideration to projects which emphasize improved access to reliable, safe, and affordable transportation for communities in rural areas, such as projects that improve infrastructure condition, address public health and safety, promote regional connectivity, or facilitate economic growth or competitiveness.”  This will provide an opportunity for economic developers to take advantage of this federal funding partnership in both rural and urban settings.

TIGER grants were originally introduced as part of the 2009 economic recovery package legislation (American Recovery and Reinvestment Act), have awarded over $5.1 billion for capital investments in surface infrastructure over 8 rounds of competitive grants. TIGER grants have historically achieved, on average, co-investment of $3.6 (including other Federal, State, local, private and philanthropic funds) for every TIGER dollar invested. 

Thursday, October 5, 2017

NGA launches new program to advise states on emerging tech

posted by: Kirill Abbakumov

On September 27, 2017, the National Governors Association (NGA) announced the creation of a new advisory division intended to help state government leaders better understand their roles in relation to a growing host of emerging technologies.

Called NGA Future, the new division is a place where emerging technology and state public policy intersect. The idea is to build a network of experts from the private sector, media and academia who can help governors understand which new technologies — like blockchain and the Internet of Things (IoT) — are worth their time and how they might fit into the future of state government policy.

These could be areas where states could take advantage of certain technological developments to improve how government operates, or areas where technological developments are going to change or have a major impact on state economies and therefore governors need to develop policy and best practices in preparation for that change.

The initial focus areas identified by NGA Future include blockchain, the tradeoffs inherent in increased connectivity, transactional payment technologies, distributed ledgers and their potential for state government, automation’s impact on the future of labor and the use of cognitive computing to improve public policy.

NGA traditionally has served as a convener and adviser for governors on a wide array of issues, including those surrounding technology. The organization has recently taken a facilitating role in helping states like Illinois scale emerging technology initiatives beyond state lines. The state's blockchain for government and Smart State initiatives have garnered interest from other states, and NGA is helping to host gatherings and share information that will allow further development elsewhere.

Monday, October 2, 2017

New EPI report examines local, state, and federal infrastructure investments

posted by: Kirill Abbakumov

On September 11, 2017, the Economic Policy Institute released a new report examining the division among federal, state, and local governments for funding, financing, and overseeing infrastructure investment. The main findings of the report are that the case for state and local governments to play the larger role in infrastructure investment is quite weak, while the benefits of a strong role for the federal government in funding, financing, and overseeing infrastructure investments are much greater.

Infrastructure plays a vital role in economic growth, and over the past year there have been a growing bipartisan support for increased investment in America’s infrastructure. But supporters of infrastructure investment often have conflicting ideas about which level of government will provide that investment.

The Trump administration’s infrastructure plan would leave state and local governments to pick up at least 80% of the increased investment. In contrast, Senate Democrats recently proposed a $1 trillion infrastructure plan constituted entirely of federally funded and financed investment.

Other key findings of this report include:

  • The federal government can help mitigate infrastructure funding challenges at the state level during economic downturns because it can run deficits over the short term, positioning the federal government in helping states to maintain stable or increasing infrastructure investment.
  • Infrastructure user fee pricing mechanisms are the best funding option for ensuring economic efficiency; such mechanisms can be managed at any level of government – federal, state, or local.
  • Because most infrastructure is connected to regional or national infrastructure networks, federal government may be better positioned than states to make infrastructure decisions that most effectively and efficiently integrate the network by taking into account economies of scale and positive spillover effects.
  • The federal government can play an important role in pricing externalities, taking account of externalities of carbon emissions and avoiding the challenge of states setting different carbon pricing levels.
  • A federal role can help ensure equitable access to infrastructure for all citizens by promoting equity and access to basic needs, ensuring that all citizens regardless of where they live and regardless of local economic conditions.
Wednesday, September 27, 2017

DOT to scrap proposed local hire program for infrastructure projects

posted by: Kirill Abbakumov

On August 24, 2017, the U.S. Department of Infrastructure (DOT) announced that it will withdraw a proposed rule developed under the Obama administration that would permit local governments to use geographic hiring preferences for transportation infrastructure projects.

DOT does not permit recipients or sub-recipients of federal funds to impose in-state or local geographic preferences in procurement processes unless those preferences are explicitly permitted or encouraged under federal law. However, many communities have sought to use “local hire” provisions to help ensure that low-income individuals and other underrepresented populations in or near infrastructure projects are able to benefit from jobs created through these investments.

The Obama administration previously sought to expand access to local hire provisions under federal transportation contracts, launching a pilot program under DOT to allow for local hire initiatives in at least 10 states. DOT also issued a Notice of Proposed Rulemaking (NPRM) in March 2015 that would have explicitly permitted such provisions, but the DOT withdrawal announcement signals that the Trump administration will not be carrying forward this important effort.

With President Trump’s continued support for a major infrastructure package, and more generally his campaign promises to focus on job creation and economic growth, the withdrawal is particularly disappointing for economic developers at the state level. A recent report from Georgetown’s Center on Education and the Workforce estimated that a $1 trillion investment in infrastructure could create more than 11 million new jobs in construction, manufacturing, and other critical sectors.

America currently lacks a well-designed infrastructure bill that could include significant new investments in work-based learning strategies and work supports that help to diversify the pipeline of workers into these new jobs is essential for promoting economic opportunities while also helping employers address existing and future workforce gaps. The bipartisan Building U.S. Infrastructure by Leveraging Demands for Skills (BUILDS) Act, introduced earlier in 2017, is only one such attempt at encouraging investment in industry-driven partnerships in infrastructure sectors while also supporting critical pre- and post-employment services to help low-skilled individuals advance in these careers.

Wednesday, September 20, 2017

SBA expands regulations on passive investments

posted by: Kirill Abbakumov

The U.S. Small Business Administration (SBA) is withdrawing the final rule concerning Small Business Investment Company (SBIC) investments in passive businesses that was published on December 28, 2016, and is replacing it with a new final rule. This final rule expands SBIC permitted investments in passive businesses and includes new reporting and other requirements for passive investments. This rule also makes a few minor technical amendments.

SBICs are generally prohibited from investing in passive businesses under the Act. Prior to this final rule, the previous SBIC program regulations provided for the two exceptions that allowed an SBIC to structure an investment utilizing a passive small business as a pass-through through a holding company exemption and blocker corporation exemption.

SBA is withdrawing the final rule published on December 28, 2016, and is replacing it with a new final rule that expands permitted investments in passive businesses, provides further clarification with regard to investments in such businesses, and adds certain requirements to improve SBA's ability to monitor such investments. The rule also includes a conforming change to the regulations regarding the amount of leverage available to SBICs under common control to be consistent with the Consolidated Appropriations Act of 2016 (H.R. 2029), which increased the maximum amount of such Leverage from $225 million to $350 million.

Wednesday, September 13, 2017

DOT announces experimental initiatives on public transit financing

posted by: Kirill Abbakumov

On August 31, 2017, the Department of Transportation’s (DOT) Federal Transit Administration (FTA) announced its proposal of new, experimental procedures to encourage more innovation in project funding, improved efficiency, and new project revenue streams in infrastructure and transportation projects. The primary goal is to address impediments to the greater use of public-private partnerships (P3s) and private investment in public transportation capital projects (Private Investment Project Procedures or PIPP).

Over the past decade, federal legislation has evolved to encourage increased use of public-private partnerships and private investment in public transportation capital projects. FTA has been active in providing limited technical assistance to transit agencies, local officials, and consultants on legal and regulatory issues, financing, and contract matters related to P3s in order to facilitate increased private sector participation in project development and operation of transit projects.

Upon ratification of the Moving Ahead for Progress in the 21st Century Act (MAP-21), FTA was able to identify impediments to the use of public-private partnerships and private investment in public transportation capital projects, and to develop and implement procedures that authorize an expedited project delivery program for capital investment projects that requires projects be supported, at least in part, by public-private partnerships.

FTA anticipates using the lessons learned from experimental PIPP procedures to develop more effective approaches to including private participation and investment in project planning, project development, finance, design, construction, maintenance, and operations.

FTA is soliciting public comments on the announced proposal until September 29, 2017. Any comments filed after this deadline will be considered to the extent practicable. Comments can be submitted through the Federal Register.

Friday, September 8, 2017

Congress to begin tax reform before the end of the year

posted by: Kirill Abbakumov

On July 27, the Trump administration and House and Senate leadership issued a joint statement on the importance of and next steps for tax reform, which they hope to hold up as a major legislative accomplishment. In the statement, the two congressional tax-writing committees aims to develop and draft legislation that will result in a comprehensive tax reform suitable for the needs of modern America. The statement also suggests that collaboration between Democrats and President Trump is expected.

Simplification and lowering of tax rates could significantly boost economic development and help tax payers around the country, particularly in rural communities. The priority for economic developers focus on the possibility of tax-exempt status of municipal bonds and the deductibility of state and local taxes.

Tax-exempt municipal bonds are a critical financing tool for major infrastructure purposes, including roads, bridges, hospitals and schools. Additionally, eliminating deductibility of state and local taxes would be a double tax on individuals, significantly impacting local middle class tax payers and asking them to shoulder an increased burden for key local priorities.

While the statement is a positive indication of cooperation between Congress and the administration, the lack of details indicates much work remains to be done. Tax reform is complicated, and each member of Congress and the coalition are likely to bring different ideas and concerns to the table. Congressional leaders have aimed for initial drafts to be released in September after the August recess, though that month will also be consumed by federal budget and appropriations debates and potentially additional health care reform efforts.

Wednesday, September 6, 2017

Congressional Democrats advocate for skills training in workforce development

posted by: Kirill Abbakumov

In late July, Congressional Democrats released details of the new “Better Deal” campaign in advance of the 2018 midterm elections that will highlight tax incentives for employer-based training while also boosting  federal investments in apprenticeship and public-private partnerships.

The “Better Deal” campaign focuses on a range of proposals, including efforts to increase federal support for infrastructure, reduce health care costs, and support family leave policies. Notably, the campaign also places significant emphasis on the idea of creating up to 10 million full-time jobs, in part by helping American workers get access to skills and credentials that will support career advancement.

The campaign materials emphasize three major policy ideas on skills:

  • Expanding registered apprenticeship and work-based learning, specifically by doubling the federal investment in apprenticeship. Congress has appropriated $95 million to support registered apprenticeship expansion as part of the FY2017 omnibus spending package approved in May, though the House appropriations committee recently passed an FY18 spending bill that would eliminate apprenticeship funding next year.
  • Providing a new tax credit for employers who hire and train new workers. This proposal would provide an unspecified tax credit to employers who hire and train new workers, so long as those workers are being paid a good wage and retain full-time employment with the business for a set period of time.
  • Creating a network of partnerships between businesses and career and technical education programs, including at community colleges. The proposal suggests that these investments will include both sector partnerships authorized under the Workforce Innovation and Opportunity Act (WIOA) and other partnerships with community and technical colleges and other training providers.

The ideas outlined in the Better Deal agenda are aligned with many of the priorities of economic developers across the nation, particularly the focus on work-based learning and expanding partnerships between business and other stakeholders. It remains to be seen how willing the Congress and the Trump administration are to work together to advance policies that will help workers and businesses stay competitive in today’s economy.

Monday, September 4, 2017

American businesses outline priorities for NAFTA renegotiation

posted by: Kirill Abbakumov

As the U.S., Canada, and Mexico meet in Washington D.C. to discuss the modernization of the North American Free Trade Agreement (NAFTA), the business community welcomes the opportunity to modernize the agreement, offering key objectives for the Trump administration to consider during renegotiation discussions.

Trade with Canada and Mexico is a significant driver of U.S. economic growth, with more than 125,000 small and medium-size businesses exporting to largest markets for American goods in Canada and Mexico. Most important, trade with Canada and Mexico supports 14 million American jobs and NAFTA is the foundation of this prosperous relationship. Therefore, the American business community believes that:

  • It is essential not to disrupt the $1.3 trillion in annual trade that crosses the borders because of NAFTA. Reverting to the high tariffs and other trade barriers that were in place before the agreement could risk millions of American jobs.
  • To avoid lost exports and lost jobs, NAFTA should be amended, not ended. The Agreement already has an amendment process built in to ensure that it can be modified as needed. This process should be used while preserving the many parts of the agreement that are working well.
  • The Agreement should be kept trilateral, as transitioning to entirely new bilateral agreements could interrupt commerce. Introducing divergent rules for Canada and for Mexico would only raise costs for businesses, sapping competitiveness and hobbling industries.
  • S. negotiators must consult Congress by following the Trade Promotion Authority (TPA) law, which the U.S. Chamber of Commerce helped pass in 2015. TPA already has the buy-in of lawmakers and the business and farming communities. It will also help build support for a modernization agreement in Congress.
  • Negotiations must move quickly as uncertainty about the future of free trade with Canada and Mexico would suppress economic growth in all three countries. It could also spur a political reaction that would harm existing trade ties.

SMEs expect such an approach to contribute to an even stronger NAFTA that would reinforce American trade relationships with Canada and Mexico, and reaffirm North American competitiveness in the global economy.

Friday, August 11, 2017

DOT announces new infrastructure grants

posted by: Kirill Abbakumov

DOT announces new infrastructure grants

On 5 July, 2017, the U.S. Department of Transportation (DOT) published a notice of funding opportunity through the Nationally Significant Freight and Highway Projects (INFRA) program, a new initiative which provides federal financial assistance to highway and freight projects of national or regional significance. The notice solicits applications for awards under the program's FY2017 and FY2018 funding, subject to future appropriations.

The new INFRA program advances a pre-existing grant program established in the FAST Act of 2015 and will make approximately $1.5 billion available to infrastructure projects that are in a neglected condition. In addition to providing direct federal funding, the INFRA program aims to increase the total investment by state, local, and private partners. INFRA will align them with national and regional economic vitality goals to leverage additional non-federal funding. The new program will increase the impact of projects by leveraging capital and allowing innovation in the project delivery and permitting processes, including public-private partnerships. 

DOT will make awards under the INFRA program to both large and small projects. Large project will receive at least $25 million and small project will receive at least $5 million. For each fiscal year of INFRA funds, 10% of available funds will be reserved for small projects. The INFRA grant program preserves the statutory requirement in the FAST Act to award at least 25% of funding for rural projects. For rural communities in need of funding for highway and multimodal freight projects with national or regional economic significance, INFRA is an opportunity to apply directly for financial assistance from the federal government. For these communities, DOT will consider an applicant’s resource constraints when assessing the leverage criterion.

INFRA grants may be used to fund a variety of components of an infrastructure project, however, the Department is specifically focused on projects in which the local sponsor is significantly invested and is positioned to proceed rapidly to construction. Eligible INFRA project costs may include: reconstruction, rehabilitation, acquisition of property (including land related to the project and improvements to the land), environmental mitigation, construction contingencies, equipment acquisition, and operational improvements directly related to system performance. 

Applications must be submitted by or on November 2, 2017. The “Apply” function on www.grants.gov website opened on August 1, 2017.

Wednesday, August 9, 2017

EPA will charge fees for financial assistance to water infrastructure projects

posted by: Kirill Abbakumov

On June 28, 2017, the Environmental Protection Agency (EPA) has published a final rule that establishes fees related to the provision of federal credit assistance under the Water Infrastructure Finance and Innovation Act of 2014 (WIFIA) in order to recover EPA’s cost of providing credit assistance to entities seeking to develop water infrastructure, as well as to cover the costs associated with the program.

WIFIA authorizes EPA to provide direct loans and loan guarantees to water infrastructure projects and to charge fees to recover all or a portion of the agency's cost of providing credit assistance and the costs of retaining expert firms, including financial, engineering, and legal services, in the field of municipal and project finance to assist in the underwriting and servicing of Federal credit instruments. This action applies to entities seeking credit assistance under the WIFIA program for the development and construction of a water infrastructure project.

EPA is establishing an application fee, credit processing fee, servicing fee, optional supplemental fee, and fee for extraordinary expenses to cover these costs to the extent not covered by congressional appropriations. To effectively administer the program, EPA will incur both internal administrative costs (staffing, program support contracts, and other costs) as well as the costs of retaining expert firms, including legal, engineering, and financial services, in the field of municipal and project finance, to assist in the underwriting of the federal credit instrument.

A detailed summary and breakdown of various fees can be found in the Federal Register.

Monday, August 7, 2017

International Entrepreneur rule delayed and under threat of elimination

posted by: Kirill Abbakumov

On July 11, 2017, the Department of Homeland Security (DHS) under U.S. Citizenship and Immigration released a notice that it is temporarily delaying the effective date of the International Entrepreneur Final Rule in order following the Presidential Executive Order on improved border security and immigration enforcement. This delay provides an opportunity to obtain comments from the public regarding a proposal to rescind the rule and review the possible implications.

The International Entrepreneur rule is designed to enhance entrepreneurship, innovation, and job creation in the United States. The rule would add new regulatory provisions on the use of parole in case-by-case basis for entrepreneurs of start-up entities whose entry into the U.S. would provide a significant public benefit through the substantial and demonstrated potential for rapid business growth and job creation. Such potential would be indicated by the receipt of significant capital investment from U.S. investors with established records of successful investments, or obtaining significant awards or grants from certain federal, state or local government entities. Granting parole would provide a temporary stay of up to 2 years (extendable by up to an additional 3 years) to allow the entrepreneur to oversee and grow their start-up entity in the country. A request for re-parole would be considered if the entrepreneur and his or her start-up entity continues to provide a significant public benefit as evidenced by substantial increases in capital investment, revenue, or job creation.

The delay and subsequent review of the rule provides the public, economic developers, and related entities and organizations to provide their feedback on the potential positive impact of the program on communities, cities, counties, and state where international entrepreneurs are responsible for significant improvement and creation of opportunities. In addition, potential negative implications from rescinding of the rule are also welcome for review by the DHS. The International Entrepreneur is similar to the EB0-5 visa program that incentivizes investment and employment creation in the U.S., and was also placed under review.

The implementation of the rule is delayed from July 17, 2017, to March 14, 2018                . Written comments from the public must be received on or before August 10, 2017 through the Federal Register.

Thursday, August 3, 2017

DOT announces $226.5 million funding opportunity for public transportation

posted by: Kirill Abbakumov

On July 18, the Federal Transit Administration (FTA), under the Department of Transportation (DOT) announced the opportunity to apply for approximately $226.5 million in FY 2017 funds under Grants for Buses and Bus Facilities Infrastructure Investment Program. Funds will be awarded competitively to assist in the financing of capital projects for acquisition of buses and/or construction of bus-related facilities. Incidental costs such as the costs of related workforce development and training activities, and project administration expenses, are also included.

The purpose of the Bus and Bus Infrastructure Program is to assist in the financing of buses and bus facilities capital projects, including replacing, rehabilitating, purchasing or leasing buses or related equipment, and rehabilitating, purchasing, constructing or leasing bus-related facilities. According to DOT’s latest Conditions & Performance Report, transit providers nationwide face a maintenance backlog of nearly $90 billion, including 10,000 buses estimated to be in poor or marginal condition.

The Bus and Bus Infrastructure Program provides funds to designated recipients that allocate funds to fixed route bus operators, and to states, and local governmental authorities that operate fixed route bus service. FTA also may award grants to eligible recipients for projects to be undertaken by economic development organizations engaged in public transportation. FTA may prioritize projects that demonstrate how they will address significant repair and maintenance needs, improve the safety of transit systems, and deploy connective projects that include advanced technologies to connect bus systems with other networks.

Complete proposals must be submitted electronically through www.grants.gov before or on August 25, 2017. More information can be found at transit.dot.gov

Monday, July 31, 2017

Congress continues work on spending bills without budget resolution

posted by: Kirill Abbakumov

As Congressional August recess approaches, the House Appropriations Committee continues its work on the 12 annual appropriations bills for FY 2017. To date, the Committee has passed 7 bills and anticipates approving the final 5 bills before the recess. Combined, these 12 bills will direct government funding for the next fiscal year. Currently, neither the House nor Senate have passed a FY 2018 budget resolution which sets funding amounts for all federal agencies and programs, allowing the appropriations committee to move ahead of the normal budget process.

In the House, budget committee leadership continues working on their FY 2018 resolution with negotiations ongoing between moderate and conservative members. House Republicans hope to use the FY 2018 budget to lay the groundwork for tax reform and some cuts to mandatory spending levels.

Reports indicate the House budget resolution, which has yet to be released, will also include reduced levels of non-defense discretionary spending while increasing the amount of defense discretionary spending. This increase in defense spending would be above the funding caps set by the Budget Control Act of 2011 (P.L. 112-25), requiring a new bipartisan budget agreement to fund these programs. Such an agreement could be difficult to reach, as Democrats would be unlikely to accept significant reductions in nondefense spending in exchange for higher defense caps. Despite this, House appropriators are pushing forward with their bills, even though if a new spending agreement is reached, it could require them to rewrite certain bills to meet the new spending levels.

The Senate Appropriations Committee is moving at a slower pace, and will likely mark up many of the spending bills after the August recess. Similar to the House, any bills passed by the Senate committee may need to be rewritten if a new budget agreement is reached.

Monday, July 24, 2017

New Senate bill to support infrastructure workforce

posted by: Kirill Abbakumov

On July 20, the Senate introduced the bipartisan Building U.S. Infrastructure by Leveraging Demands for Skills (BUILDS) Act, which would support grants to industry partnerships in transportation, construction, energy, and other infrastructure sectors. Administered by the U.S. Department of Labor and the Departments of Transportation, Energy, and other federal agencies, the grants would allow local partnerships to develop work-based learning programming and apprenticeships and help workers and businesses get the necessary skills for rebuilding American infrastructure.

The BUILDS Act would help businesses in targeted industries grow and maintain the workforce necessary to keep up with demand, while also ensuring that a diverse range of workers could access the training and credentials needed to find sustainable jobs in these fields. The Act would support implementation grants of up to $2.5 million over three years – and renewal grants of up to $1.5 million - to partnerships comprised of multiple employers in a target industry, education or training providers, labor organizations, local workforce boards, and other stakeholders where appropriate. Partnerships would be required to carry out activities that support:

  • Assistance in navigating the registration process for registered apprenticeship;
  • Connecting businesses and education providers for development of classroom curriculum to complement on-the-job learning;
  • Serving as employers of record for participants in work-based learning programs for a transitional period;
  • Training managers and front-line workers to serve as mentors to work-based learning participants;
  • Helping businesses recruit individuals for work-based learning, particularly individuals being served in the workforce system or by other human service agencies.

Partnerships would focus on apprenticeship and other work-based learning programming during which workers earn wages while obtaining specific occupational skills and credentials along a career pathways in key industries that help advance workers into higher-paying jobs.

The BUILDS Act coincides with strong political interest in infrastructure investment, as President Trump has released a plan to incentivize up to $1 trillion in new funding for construction and related projects that could lead to as many as 11 million new jobs. Businesses in infrastructure currently face intense labor shortages given impending retirements, a lack of diversity in the workforce, and overall skill shortages in growth industries. According to a report by the Departments of Education and Labor, there are 68% more projected job openings in infrastructure jobs over the next five years than there are students training for these jobs, with an approximate potential loss of $200 million in revenues in 2017 due to unfilled technical jobs.

Friday, July 21, 2017

Hollings MEP program receives increased funding

posted by: Kirill Abbakumov

On June 27, 2017, National Institute of Standards and Technology (NIST) issued a final rule to amend the regulations governing the Hollings Manufacturing Extension Partnership (MEP) program to allow NIST to provide up to 50% of the capital and annual operating and maintenance funds required to establish and support an MEP Center. The regulations are also being amended to remove other cost sharing rules that are not required by the MEP authorizing statute or current program policies.

The Hollings MEP Program consists of technical centers in each state that connects small and medium-sized manufacturers to public and private training, tools, and other resources essential for increasing innovation capabilities, expanding domestic and foreign markets, and improving productivity and overall competitiveness.  MEP focuses on small and mid-sized enterprises that puts manufacturers. MEP leverages more than $100 million of federal investment into a nearly $300 million program by partnering with state a local governments and the private sector to provide a wealth of expertise and resources to manufacturers

Prior to being amended the program required that NIST provide less than 50% of the capital and annual operating and maintenance funds of an MEP Center beginning in the fourth year of a cooperative agreement. The revised statute allows NIST to provide up to 50% of the capital and annual operating and maintenance funds required to establish and support an MEP Center. This is a welcome change for economic development, as an increase in funding translates to greater support for a program that aid small American manufacturers in developing new products, expanding into global markets, adopting new technology, reshoring production, and upgrading their technological capabilities.

Thursday, July 20, 2017

House passes TANF subsidised jobs bill

posted by: Kirill Abbakumov

On June 23, 2017, the House passed the Accelerating Individuals into the Workforce Act (H.R. 2842) which would allocate $100 million under the current Temporary Assistance for Needy Families (TANF) contingency fund for demonstration grants to support subsidized jobs programs. At least one of the demonstration projects supported by the grants would need to fund registered apprenticeship programs, and the bill requires that 15% of the overall funding be reserved for career pathways programs as defined by the Workforce Innovation and Opportunity Act (WIOA).

More than 80% of today’s jobs require postsecondary education and training, but less than 10% of adult TANF recipients have education beyond high school. Despite these barriers, less than 7% of combined federal and state TANF spending goes to work, education and training programs. 

Under current law, TANF funds can be used by states to subsidize TANF recipient’s wages, however less than 1% of total TANF spending is used on subsidized jobs programs. The American Reinvestment and Recovery Act (ARRA) also provided an additional $5 billion in funding to supplement states’ TANF spending on subsidized jobs, though that funding expired after FY2010. These programs can be successful if they connect participants to training and upskilling opportunities, like those available in apprenticeship programs and when built into career pathways programs.

The bill recognizes the importance of investing in training opportunities for TANF recipients, a population and an activity drastically underfunded in the current TANF system. However, the Act currently lacks language that would see the program receive increased annual funding to keep pace with historic levels of investment and dedicate new resources for proven strategies like industry partnerships and career pathways.

Tuesday, July 18, 2017

House passes 2017 Perkins reauthorization act

posted by: Kirill Abbakumov

On June 23, 2017, the House passed the Strengthening Career and Technical Education for the 21st Century Act of 2017, which would reauthorize the Carl D. Perkins Career and Technical Education Act. The bill was passed out of committee on May 17, by a unanimous vote.

The bill is similar to the reauthorization bill passed by the House in September 2017 and includes requirements for closer alignment of postsecondary performance indicators with the core performance indicators under the Workforce Innovation and Opportunity Act (WIOA). It also contains requirements that state Perkins plans describe how CTE programs fit within the state’s broader vision and strategy for preparing an educated and skilled workforce. The bill would additionally adopt several key WIOA definitions, including recognized postsecondary credentials, industry or sector partnerships, and career pathways.

Despite strong support for the House bill, the prospects for Senate action are uncertain. The Senate did not take up the House bill last year and was unable to reach agreement on their own proposal, in large part because of partisan disagreements about the Secretary of Education’s oversight role in CTE programs.

In addition, President Trump’s FY2018 budget request includes a proposed reduction of $168 million for Perkins state grant, or a cut of 15% against current funding levels. This makes the reauthorization effort come against a backdrop of larger political discussion around the future of federal investments in education and workforce initiatives.

Friday, July 14, 2017

FAA reauthorization bill increases funding for airports in local communities

posted by: Kirill Abbakumov

On June 21, 2017, the House Transportation and Infrastructure Committee Chairman Bill Shuster (R-Pa.) introduced the new FAA reauthorization bill which extends the current one-year extension expiring on September 30 to a new six-year period, providing more long-term certainty regarding aviation policy. The main objective of the new 21st Century Aviation Innovation, Reform and Reauthorization Act (21st Century AIRR Act) remains the intention to privatize air-traffic control, there are several provisions that provide positive developments for county governments.

The bill contains several key features for local governments. The Essential Air Service (EAS) program, which supports commercial flights for the nation’s most rural communities, would see increased funding each year throughout the bill’s lifetime. In fact, the final year of the authorization would fund EAS at $350 million, almost double the current funding level. This vital program to connect the nation’s most rural communities with larger transportation hubs will ensure continued travel options for county residents as well as key opportunities for economic development.  In his FY 2018 budget blueprint, President Trump had advocated for the program’s elimination.

Also included in the bill is the Airport Improvement Program (AIP), a key grant mechanism to assist airports in starting new projects, would see an increase in the 21st Century AIRR Act. Funding levels under the bill would increase each year through 2023, in total raising AIP funding from the current level of $3.35 billion to slightly more than $3.8 billion, which amounts to a $467 million increase.

On June 27, 2017, the Transportation and Infrastructure Committee approved the bipartisan 21st Century AIRR Act (H.R. 2997). However, Congress remains divided on the issue of air-traffic control privatization, with only the House advocating for privatization, while the Senate leaves air-traffic with the FAA. Despite contention, the new reforms are expected to cut red tape to ensure manufacturers can get products to market on time, stay competitive, and continue to employ millions of Americans, as well as encourage American innovation in aviation technologies to promote a stronger workforce.

Wednesday, July 12, 2017

EPA to redefine contentious WOTUS rule

posted by: Kirill Abbakumov

In late June 2017, the Trump administration announced that they will repeal the Waters of the United States (WOTUS) rule. The Environmental Protection Agency (EPA), Department of the Army and U.S. Army Corps of Engineers are proposing a new rule that would rescind the Obama administration’s WOTUS rule and re-codify the regulatory text that existed before its adoption in 2015. The agencies claim that these actions would provide certainty in the interim while a new rule-making process is undertaken.

Property developers, chemical manufacturers and oil-and-gas producers have voiced opposition to the rule, which they argue is an intrusion on property owners’ rights and an impediment to economic growth. The rule expanded the definition of federally-regulated waters so broadly that ditches, canals, collection ponds, and isolated wetlands far from “navigable waters” were covered. In order to build or make modifications on their land, farmers, ranchers, and businesses would need to hire consultants and lawyers to get costly federal permits. In late February, President Trump signed an executive order directing the EPA to review WOTUS and to do so based on a much narrower interpretation of “navigable waters” as outlined in a 2006 Supreme Court opinion.

EPA Administrator Scott Pruitt stated that "EPA is taking significant action to return power to the states and provide regulatory certainty to our nation's farmers and businesses.” According to him, the re-codification "is the first step in the two-step process to redefine 'waters of the U.S.' and we are committed to moving through this re-evaluation to quickly provide regulatory certainty, in a way that is thoughtful, transparent and collaborative with other agencies and the public."

The proposed rule would recodify the identical regulatory text that was in place prior to the 2015 Clean Water Rule and that is currently in place as a result of the U.S. Court of Appeals for the Sixth Circuit's stay of the 2015 rule. Therefore, this action, when final, will not change current practice with respect to how the definition applies. The agencies have also begun deliberations and outreach on the second step rulemaking involving a re-evaluation and revision of the definition of "waters of the United States" in accordance with the Executive Order.

Monday, July 10, 2017

House approves EPA’s brownfields reauthorization program

posted by: Kirill Abbakumov

On June 15, 2017, the U.S. House Energy and Commerce Committee’s Subcommittee on the Environment approved the reauthorization of the Environmental Protection Agency (EPA)’s Brownfields Enhancement Redevelopment and Reauthorization Act of 2017 (H.R. 3017) which would reauthorize EPA’s brownfields program and extend liability protections for local governments that did not cause or contribute to the contamination.

EPA’s brownfields program provides technical assistance and grants for communities to undertake brownfields projects. The program was originally authorized in 2002 through the Small Business Liability Relief and Brownfields Revitalization Act. While the program’s authorization expired in 2006, Congress has continued to fund the program on an annual basis.

Brownfields are abandoned or underutilized properties whose redevelopment is hindered by real or perceived environmental contamination.  There are an estimated 400-600,000 sites like these throughout the United States, and redeveloping these locations has been a priority for the Conference of Mayors since the 1990s.

Redeveloping brownfields cleans up properties, creates jobs, and recycles land back into productive use while preserving farms and greenfields. According to EPA, since the inception of the program, over 26,000 brownfield sites have been assessed and over 5,700 properties and 66,000 acres have been made ready for reuse. The program has leveraged over 123,000 jobs and over $23.6 billion dollars. It is estimated that every dollar spent leverages approximately $16 in other investments.

Friday, July 7, 2017

HUD Secretary Ben Carson expresses concern FY2018 budget

posted by: Kirill Abbakumov

On June 8, 2017, U.S. Department of Housing and Urban Development (HUD) Secretary Ben Carson expressed his concern before the House and Senate Transportation, Housing and Urban Development Appropriations Subcommittee over the Trump administration’s FY2018 budget request for HUD. The President’s budget proposes a $7.4 billion reduction to HUD’s budget relative to FY2017 enacted levels. The budget would eliminate the Community Development Block Grant (CDBG) program, currently funded at $3 billion, and the HOME Investment Partnerships program, currently funded at $950 million.

The CDBG program provides annual grants on a formula basis to nearly 1,200 metropolitan city, county, and state governments. There are 185 counties that receive these grants directly, while local entitlement cities and counties receive 70% of CDBG funds and states receive 30%. Counties utilize the flexibility of CDBG funds to support projects that address their local community and economic development, housing, water and infrastructure and human service priorities. HOME funds are used for the acquisition, reconstruction and rehabilitation of housing for low-income families.

Senate subcommittee members from both parties expressed concerns about the drastic cuts proposed in the president’s budget. Senate Subcommittee Chair Susan Collins (R-Maine) stated that the funding levels proposed in the FY2018 budget will place vulnerable families at risk of losing their assistance and of becoming homeless, while Ranking Member Jack Reed (D-R.I.) shared similar concerns that the drastic cuts will be devastating to communities across the nation. Several House T-HUD Appropriations Subcommittee members similarly expressed concerns about the proposed cuts during their hearing.

Secretary Carson noted in his testimony that HUD looks forward to working with state, local, and private partners to support them in playing a greater role in local community and economic development.  He also reiterated during the hearings that he expected improved efficiency, public-private partnerships, and greater flexibility would help HUD meet its mission even with reduced funding.

The outcome of the testimony resulted in an advice to cities, counties, and states to collect information on CDBG and HOME-funded housing, community, and infrastructure projects. This will be needed to calculate the impact of these programs on local entities, if the programs are to be eliminated in FY 2018.