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Wednesday, May 16, 2018

Congress reauthorizes EPA’s Brownfields program in FY 2018

posted by: Kirill Abbakumov

On March 23, 2018, President Trump signed a Fiscal Year (FY) 2018 omnibus spending package totaling $1.3 trillion in domestic and military spending. The bill included a reauthorization, as well as reforms to, the Environmental Protection Agency’s (EPA) Brownfields program.

Brownfield sites are abandoned or under-utilized industrial and commercial properties, which are contaminated, or perceived to be contaminated, due to past practices. EPA’s Brownfields program was originally authorized in 2002 through the Small Business Liability Relief and Brownfields Revitalization Act. It provides technical assistance and grants for local communities to undertake brownfields redevelopment projects at old manufacturing and industrial facilities, abandoned mills, and mines, and areas with leaking underground storage tanks.

The FY 2018 omnibus appropriations package provided $80 million for EPA’s Brownfields project grant program, which is level funding with FY 2017. In addition to providing $80 million for the program through FY 2018, the omnibus included a provision to reauthorize EPA’s Brownfields program at a level of $200 million from FY 2019 through FY 2023. The program expired in 2006, but had been funded by Congress annually since its expiration due to its bipartisan popularity.

The omnibus also included policy riders geared toward improving the EPA Brownfields program to help more sites undergo cleanup activities, such as:

  • Expanding liability protections for voluntarily and involuntarily acquired brownfields sites for state and local governments;
  • Creating multipurpose brownfields grants up to $1 million allowing communities to undertake multiple site brownfield projects under the same grant;
  • Increasing funding for brownfields remediation clean up grants from $200,000 to $500,000 per grant and allowing EPA to waive that limit up to $650,000 based on need;
  • Classifying abandoned petroleum sites as brownfields if there is no viable responsible party, and if the EPA and the state determine the entity assessing and remediating the site is not liable to clean up the site;
  • Increasing grant eligibility for non-profits and for publicly-owned brownfields sites acquired prior to January 11, 2002;
  • Capping administrative costs at five percent, while stipulating that administrative costs do not include investigation and identification, design of response plan or monitoring activities; and
  • Providing small community technical assistance grants of $20,000 to states for communities with populations under 15,000 or in disadvantaged areas where the annual median household income is less than 80 percent of the state-wide annual median.

Congressional appropriators are already working on FY 2019 spending levels, which must be set and passed before the current fiscal year ends on September 30, 2018. In February, President Trump released his FY 2019 budget request, which outlined the administration’s federal spending priorities for the next fiscal year. The president requested $62 million for the EPA’s Brownfields program for FY 2019, a $18 million cut from the $80 million appropriated in FY 2017, though Congress will ultimately determine the final spending level for the program in FY 2019. 

Friday, May 11, 2018

Labor report calls for apprenticeship expansion and workforce program cuts

posted by: Kirill Abbakumov

On May 10th, the Department of Labor’s (DOL) Task Force on Apprenticeship Expansion submitted a report with their recommendations on expanding apprenticeship in the U.S. to the President. The report includes some important recommendations focused on industry-driven strategies, but also continues a disturbing pattern of calls for cuts to vital workforce programs. This is worrying for economic developers, who urge the administration to strengthen the workforce and education systems instead of cutting investments to these systems.

The task force report is based on the work for four subcommittees over the past year and was called for by the President in his June 2017 Executive Order on Expanding Apprenticeship in America. Each subcommittee made a series of recommendations to the President in the May 10th report.

In brief:

  • The Subcommittee on Education and Credentialing focused on the components of an industry recognized apprenticeship program (IRAP), and recommended to avoid wage progression for apprentices that correspond with their growing skill level. It also called for DOL and Education to be partners with industry to increase access to virtual learning.
  • The Subcommittee on Attracting Business to Apprenticeship recommended a robust analysis of the skill shortages and the role apprenticeship can play in meeting business skill demands. It also recommended the Departments of Labor, Education and Commerce develop a centralized online community with apprenticeship resources.
  • The Subcommittee on Expanding Access, Equity and Career Awareness recommended launching an awareness campaign, supporting pre-apprenticeship, and promoting the use of technology in apprenticeship programs. It also recommended that DOL implement clear guidelines “that reinforce the principles of equity.”
  • The Subcommittee on Administrative and Regulatory Strategies to Expand Apprenticeship recommended IRAP implementation begin with a pilot program focused on an industry without a well-established registered apprenticeship system. It also suggested the system should focus on competency, not seat time requirements.

Earlier this year, Congress appropriated $145 million to apprenticeship expansion, specifically focused on registered apprenticeship. DOL is tasked with submitting a report to Congress by September 30th 2018 describing their allocation of these funds. Over the past two years, DOL has allocated more than $100 million to 36 states to expand innovating apprenticeship strategies. Appropriated funds have also been used to support industry and equity intermediary contracts to national organizations working with apprenticeship sponsors and businesses to expand apprenticeship. DOL has used remaining funds appropriated in Fiscal Year (FY) 2017 for contracts to build out online resources on apprenticeship and pre-apprenticeship, consistent with the task force recommendations.

Tuesday, May 8, 2018

EPA now accepting WIFIA applications

posted by: Kirill Abbakumov

On April 16, 2018, the Environmental Protection Agency (EPA) announced that it is now accepting letters of interest for loans provided through the Water Infrastructure Finance and Innovation Act (WIFIA) program to support water infrastructure projects.

The WIFIA program is a federal loan and guarantee program within EPA that aims to accelerate investment in American water infrastructure by providing long-term, low-cost supplemental loans for regionally and nationally significant projects. The new funding announcement is designed to provide up to $5.5 billion in loans and leverage over $11 billion for water infrastructure projects.

The WIFIA program helps finance the repair, rehabilitation, and replacement of aging infrastructure and conveyance system, primarily those with an anticipated cost of $20 million or more. However, recognizing the need for investment in both large and small communities, Congress has stipulated that 15% of WIFIA funds be set aside each year for small communities serving fewer than 25,000 residents. Such projects have a lower-cost threshold for eligibility, only requiring an anticipated cost of $5 million or more.

The WIFIA program received $63 million in funding in the FY2018 omnibus appropriations package, more than doubling the program’s overall funding from 2017. In 2017, EPA invited 12 projects across nine states to apply for WIFIA loans totaling over $2 billion.

WIFIA credit assistance can be used for a wide range of projects including drinking water treatment and distribution; wastewater conveyance and treatment; enhanced energy efficiency at drinking water and wastewater facilities; desalination; water recycling; and drought prevention or mitigation projects, many of which involve water infrastructure owned and maintained by local communities.

Prospective borrowers seeking WIFIA credit assistance must submit a letter of interest (LOI) by July 6.

Friday, May 4, 2018

TIGER grants to be replaced by new BUILDS program

posted by: Kirill Abbakumov

On April 20th, 2018, the Department of Transportation (DOT) announced the release of a new transportation infrastructure grant program that will replace the current Transportation Investment Generating Economic Recovery (TIGER) Grant program. The Better Utilizing Investments to Leverage Development (BUILD) program will disburse $1.5 billion for surface transportation infrastructure projects with significant local or regional impacts, including funding for roads, bridges, transit, rail or port support.

The BUILD program encourages local governments to develop a proven non-federal revenue stream for infrastructure projects. Also, the program does not allow new bond issuing to count towards this revenue goal, unless the applicant raises, or commits to raising, new funds to repay the bond. Funding can come from state, local and private sector investors, or other forms of cost-sharing such as toll credits, sales and gas tax measures and asset recycling. In addition, the funds may be used by rural areas for broadband deployment.

DOT will evaluate BUILD applications on the following criteria: safety, economic competitiveness, quality of life, environmental protection, state of good repair, innovation, partnerships and additional non-federal revenue for infrastructure investments. The $1.5 billion will come from the recently passed Consolidated Appropriations Act of 2018 (P.L. 115-141).

The BUILDS program coincides with the Trump administration’s plan to encourage local and state governments to put more funding into projects. However, unlike proposed funding for many of President Trump’s infrastructure priorities, the BUILDS grant program will contribute up to 80% of project costs for urban area projects and up to 100% for projects in rural communities.

As with TIGER grants, economic developers, local communities, and other stakeholders may apply directly or jointly with other local or state entities for this funding. The application deadline is July 19, 2018.

Thursday, April 26, 2018

EPA to clarify WOTUS withdrawal process

posted by: Kirill Abbakumov

On April 11, 2018, the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers announced a supplemental notice to clarify the agencies’ efforts to withdraw the Obama administration’s Waters of the U.S. (WOTUS) rule. The notice aims to clarify confusion caused by the initial proposal in 2017 which outlined the process EPA would use to withdraw the 2015 rule.

WOTUS is a term used in the Clean Water Act (CWA) to determine which waters and their conveyances fall under federal or state permitting authority. In 2014, the EPA and the Corps undertook an effort to rewrite and expand the current WOTUS definition and this rule was finalized in 2015. Since the rule was originally proposed, many communities expressed concerns about the impact a broader interpretation of WOTUS may have on locally-owned and maintained roads and roadside ditches, bridges, flood control channels, drainage conveyances and wastewater and stormwater systems.

The initial July 2017 notice, “Waters of the United States” – Recodification of Pre-Existing Rules, was the first step of a two-step process to review and rewrite the 2015 rule. The “step 1 proposal” would withdraw the 2015 rule and reinstitute regulations in place prior to the 2015 WOTUS rule.  With the introduction of the supplemental notice, the second step in the process to rewrite the current WOTUS definition will likely be delayed. Originally, the proposal to rewrite the rule was expected to be released in June 2018.

The new notice has been sent to the Office of Management and Budget (OMB) for interagency review, which could take 60 days or more. When OMB is finished with the review, the new proposal will be officially published in the Federal Register and open for public comment for 30 days.

Monday, April 23, 2018

New changes to FEMA flood insurance program

posted by: Kirill Abbakumov

On April 3rd, 2018, the Federal Emergency Management Agency (FEMA) announced new program changes to the National Flood Insurance Program (NFIP) in accordance with the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-2012) and the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA).

NFIP is the largest provider of flood insurance coverage for property owners in communities across the U.S. It aims to reduce the impact of flooding on private and public structures by providing affordable insurance to property owners, renters and business, as well as encouraging communities to adopt and enforce floodplain management regulations designed to help mitigate the effects of flooding on new and improved structures.

FEMA’s new changes to the NFIP include updated insurance policy premiums that conform to the premium rate caps established by the BW-12 and HFIAA. NFIP policy holders who receive coverage through the Increased Cost of Compliance (ICC) program will see an increase of 8% in their annual policies, which on average will increase premiums from $866 per policy to $935.

ICC coverage is included under NFIP’s Standard Flood Insurance Policy (SFIP). ICC is designed to help policyholders with the cost they incur if they are required by a state or local government agency to meet rebuilding standards after a flood. ICC coverage provides up to $30,000 to help pay for relocating, elevating, demolishing and floodproofing non-residential buildings.

Later this year, on October 1, 2018, FEMA will implement additional changes to the NFIP including:

  • Allowing policy holders who purchase a private flood insurance policy to cancel their duplicate NFIP policy;
  • Requiring NFIP insurers to notify certain policyholders of a lower-cost premium option;
  • Extending the eligibility for the newly mapped procedure rating option.
Tuesday, April 17, 2018

SBA 504 Loan now offered with 25 year maturity

posted by: Kirill Abbakumov

On April 4, 2018, the U.S. Small Business Administration (SBA) announced that it is making available a 504 Loan, and the Debenture that funds it, with a 25 year maturity in addition to the 10 and 20 year 504 Loan and Debenture that are currently available in the 504 Loan Program.

The 504 Loan Program provides long-term financing to small businesses for the purchase or improvement of land, buildings, and major equipment, in an effort to facilitate the creation or retention of jobs and local economic development. Loans are made to small businesses by Certified Development Companies (CDCs), which are certified and regulated by SBA to promote economic development within their community.

The Loan Program is financed by a loan obtained from a private sector lender with a senior lien covering at least 50% of the project cost (the “Third Party Loan”); a loan obtained from a CDC (the “504 Loan”) with a junior lien covering up to 40% of the total cost (backed by a 100% SBA-guaranteed debenture sold in private pooling transactions); and a contribution from the Borrower of at least 10% equity.

This new 25 year 504 Debenture will be made available for 504 Projects that are approved on or after April 2, 2018.

Thursday, April 12, 2018

Federal disaster recovery funding now available

posted by: Charlotte Scott

On Tuesday, April 10, Secretary of Commerce Wilbur Ross announced that the U.S. Economic Development Administration (EDA), within the Department of Commerce, has released its FY 18 Disaster Supplemental Notice of Funding Opportunity (NOFO), which will provide $587 million in grants to communities where a Presidential declaration of a major disaster was issues under the Stafford Act as a result of Hurricanes Harvey, Irma, and Maria, wildfires, and other natural disasters that occurred in 2017. These grants will be administered through the agency’s Economic Adjustment Assistance (EAA) Program, which will channel the funds through a wide range of technical, planning, and public works and infrastructure assistance.

Here is the list of eligible applicants under this program: (i) District Organization of an EDA-designated Economic Development District (EDD); (ii) Indian Tribe or a consortium of Indian Tribes; (iii) State, county, city, or other political subdivision of a State, including a special purpose unit of a State or local government engaged in economic or infrastructure development activities, or a consortium of political subdivisions; (iv) institution of higher education or a consortium of institutions of higher education; or (v) public or private non-profit organization or association acting in cooperation with officials of a political subdivision of a State.

The agency states that there is no application deadline, and that the proposals will be reviewed and accepted on a rolling basis. This grant program will continue to operate until all funds have been depleted, or if the NOFO is re-published or cancelled.

This new $587 million grant program represents the agency’s efforts to mobilize and generate a plan following the $600 million received in February under the Bi-Partisan Budget Act of 2018. The grants aim to foster economic resiliency to distressed communities by preventing prolonged economic dislocation after these disasters. To preview and learn more about the applications, visit: https://www.grants.gov/web/grants/view-opportunity.html?oppId=302953&utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=

On the same day, Secretary Ben Carson of the U.S. Department of Housing and Urban Development (HUD) announced that $28 billion of funds will be provided through its Community Development Block Grant- Disaster Recovery (CDBG-DR) Program. This $28 billion represents the largest single amount of disaster recovery assistance in HUD’s history. The program will target seriously damaged housing, businesses, and infrastructure from major disasters that have occurred since 2015 across nine states, Puerto Rico, and the U.S. Virgin Islands. Texas, Louisiana, Puerto Rico, and U.S. Virgin Islands will be the top recipients of these funds. $12 billion of this amount will be allocated to areas which experienced major disasters in 2017.

HUD announced that the grantees are required to spend the majority of these recovery funds in what HUD has identified as the “most impacted” areas. In the press release, HUD states that it plans to release administrative guidelines for grantees use of the funds in addressing long-term recovery needs. Read HUD’s full press release here, which includes a breakdown of funds awarded by state/territory: https://www.hud.gov/press/press_releases_media_advisories/HUD_No_18_028

Wednesday, April 11, 2018

FAA announces development grants for rural airports

posted by: Kirill Abbakumov

On April 9, 2018, the Federal Aviation Administration (FAA) announced a new round of capital development funding assistance for a maximum of 15 joint-use or former military airports that participate in the Military Airport Program (MAP).

The MAP provides capital development assistance to civilian airport sponsors of designated joint-use military airfields or former military airports that are included in the FAA's National Plan of Integrated Airport Systems (NPIAS). Under the program, airport sponsors designated to the MAP may receive set-aside grant funds from the Airport Improvement Program (AIP) (4% of discretionary funds) for airport development that will assist the airport sponsor in successfully transitioning the airport from military to civilian use.

Designated airport sponsors may receive up to $7 million per fiscal year for terminal projects and up to $7 million for construction, improvement, or repair of fuel farms, utility systems, surface automobile parking lots, hangars, and air cargo terminals that are not larger than 50,000 square feet. Revenue generating projects that may not normally be AIP eligible at the airport may be considered through the MAP to assist in the conversion of a military joint-use or former military facility to civilian use.

A maximum of 15 airports may participate in the MAP at any time. Three of the 15 may be general aviation (GA) airports; the remainder must be commercial service or reliever airports. In FY 2018, there are 12 slots available in the program; however, there are no openings available for GA airports

Applications must be received no later than June 8, 2018. More information on how to apply can be found here.

Thursday, April 5, 2018

The State of Federal Economic Development delivered at the 2018 FED Forum

posted by: Charlotte Scott

On Monday, March 26, IEDC President and CEO Jeff Finkle, delivered the State of Federal Economic Development speech at the annual FED Forum conference in Washington, D.C. Jeff touched upon a variety of policy issues and highlights that have affected the economic development landscape within the past year. Jeff emphasized administrative barriers that have proved to be operational and structural challenges for certain agencies, noting in particular the significant lack of major political appointees at agencies such as the Economic Development Administration (EDA), Export-Import Bank of the U.S., and the Census Bureau.

Beyond the challenges, Jeff noted several of recent legislative accomplishments for federal economic development, including the $600 million EDA received via the disaster recovery supplemental appropriation under the bipartisan legislation regarding spending caps that passed earlier this February. This was a huge win for the EDA, as this amount represents almost triple their usual annual budget. In addition, Jeff highlighted the success across the board for almost all economic development agencies and programs in the recently passed Omnibus spending bill. Jeff summarized some of these highlights, which included, $1.5 billion for the Department of Transportation’s TIGER grant program (a $1 billion increase from FY 17), $600 million for a new rural broadband grant and loan pilot program, $80 million for the Environmental Protection Agency’s Brownfields program, and significant overall budget increases for EDA, Hollings Manufacturing Extension Partnership, and the Minority Business Development Agency.

Jeff warned that despite these recent wins, federal economic development programs remain under attack, especially with the White House FY 19 Budget Proposal aiming to eliminate or cut funding for many of these agencies and programs. The proposal also includes reorganization plans that would reduce certain agencies’ ability to continue their active, hands-on operations. Therefore, Jeff concluded that it is still important for the economic development community to continue their outreach to politicians on the hill who champion these programs.

The link below can be used to download presentations from the 2018 FED Forum.

https://www.iedcevents.org/FEDForum/Downloads.html

Friday, March 30, 2018

White House budget and MBDA restructuring

posted by: Charlotte Scott

The Minority Business Development Agency (MBDA) was established in 1969 under the U.S. Department of Commerce. From its inception, the agency has helped facilitate growth and global competitiveness among businesses owned and operated by minority entrepreneurs. MBDA offers a range of services and programs, which provide clients with technical assistance, access to capital and finance management, contract opportunities, and access to new markets. In FY 2015 alone, the agency helped generate 26,896 jobs and awarded more than $5.9 billion in contracts and capital.

            MBDA fills an essential and targeted role in promoting the economic prosperity of minority-owned business, which in total, contribute over $1.4 trillion annually to the U.S.’s economic output, and directly account for 7.2 million U.S. jobs. The agency helps foster a more inclusive economy, promoting an economic environment that benefits all citizens.

            MBDA was marked for elimination in the White House FY 18 budget proposal, but was not in the FY 19 proposal. This indicates a shift in a positive direction; however, ongoing turnover has left the agency without a permanent director. On February 27, 2018, Acting National Director Chris Garcia resigned amid security clearance issues, and was replaced by Edith Jett McCloud. Although the agency is no longer set for elimination, the FY 19 White House budget proposal outlines major reorganization of MBDA’s structure and operations. The budget proposes to eliminate all 40 of the agency’s business outreach centers, claiming they are, “duplicative of programs operated by other Federal agencies…” The White House aims to re-establish the MBDA as a policy office, which will advocate for minority businesses across other Federal programs and agencies. This plan would mark a significant shift in the agency’s purpose.

            This potential restructuring would directly affect MBDA’s ability to continue its active, hands-on role within the economic development, and would require a complete transformation of its internal operations. For now however, MBDA is stable due to the recently passed Omnibus bill, which appropriates the agency $39 million. This number reflects a $6 million increase from FY 17. This final bill does not include any restructuring plans for MBDA, meaning that the President’s plan is temporarily postponed. However, it still remains important to continue monitoring the political discussion surrounding the agency in order to track the progress of potential legislation that will push this plan forward.

Tuesday, March 13, 2018

Federal Alert: We need your help – sign our letter supporting EDA!

posted by: Matthew Mullin

Thank you to those organizations that have signed onto our letter so far. There’s still time to add your voice – and we need your voice added! – in support of the Economic Development Administration.  Here’s what you need to know:

  • EDA has been marked for elimination, again, in the fiscal 2019 White House Budget proposal
  • EDA wasn’t even mentioned – at all – in the Department of Commerce’s five year strategic plan released last week
  • EDA received a $100 million cut in funding in their House appropriations bill for the current fiscal year

To be brief: EDA remains under attack, despite receiving broad, bipartisan support in Congress in the recent debate over disaster recovery funding. $600 million worth of bipartisan support, in fact. EDA needs our support today and tomorrow and for the foreseeable future.

Click the link below and add your organization to the growing list of supporters. Help us share the message that economic developers want a strong, robustly funded economic development agency. In the weeks and months ahead, IEDC will continue to engage Congress as we wrap up fiscal 2018 funding and dive into fiscal 2019 funding. We can’t do it without you!

Sign the letter today: https://docs.google.com/forms/d/e/1FAIpQLSfklHLrZkvcTUhG-0fQjc5pmHB_7KyKPDeQwCUAAFY6gEDqTg/viewform

IEDC’s 2018 FED Forum will take place here in Washington in just a few weeks. There’s still time to register and join your colleagues. We’ll be talking access to capital, manufacturing, infrastructure, workforce development, entrepreneurship and federal resources for urban and rural communities. In many cases, we’ll be joined by the top federal officials overseeing these program areas. Check out the conference website for more details and to register.

Please contact Matt Mullin, Senior Director, Public Policy & Strategic Engagement at mmullin@iedcoline.org for questions, comments or concerns.

Wednesday, March 7, 2018

BUILDS Act introduced in the House

posted by: Kirill Abbakumov

On February 6, 2018, House Representatives Paul Mitchell (R-MI) and Tim Ryan (D-OH) introduced bipartisan legislation called the Building U.S. Infrastructure by Leveraging Demand for Skills (BUILDS) Act (H.R. 4942). The legislation would support grants to industry partnerships in transportation, construction, energy, and other infrastructure industries. Department of Labor will work in consultation with the Departments of Transportation, Energy, and other federal agencies to administer the grants for local partnerships developing work-based learning programming for a diverse pipeline of skilled workers.

In 2017, the Trump administration released as set of infrastructure principles that included a goal of training a million new apprentices over 2 years. The President’s State of the Union address earlier this year included a call for infrastructure investments, however, without a clear emphasis on the link between the investment and developing a pipeline of workers.

BUILDS Act would set aside funding from a Congressional infrastructure package for workforce development. This funding would be used to train workers needed to 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, family-supporting job in these fields.

According to the National Skills Coalition, businesses in infrastructure are currently facing intense labor shortages because of impending retirements, lack of diversity in the workforce, and overall skill shortages in growth industries. Departments of Education and Labor report that there are 68% more projected job openings in infrastructure jobs over the next 5 years than there are students training for these jobs. Meanwhile, According to a member survey conducted by the Aeronautical Repair Station Association has released a member survey which indicates that its members are poised to lose out on close to $200 million in revenues this year due to unfulfilled technical jobs.

The Senate version of BUILDS was introduced by Senators Tim Kaine (D-VA) and Rob Portman (R-OH) in the summer of 2017.

Friday, March 2, 2018

Appropriations season is here and we need your help

posted by: Matthew Mullin

The federal government is currently operating under a continuing resolution until March 23rd. Full-year appropriations are likely forthcoming in the form of an omnibus spending bill for fiscal 2018. We need your help to make sure EDA receives support in the current and next fiscal years – a debate which is taking place right now. There are three calls to action below.

Where we stand now

Congress passed a two-year budget deal earlier this year that significantly increased defense and non-defense discretionary spending limits, effectively eliminating the budget caps previously in place. Tucked away in this deal was $600 million for EDA to lead the way in helping communities impacted by disaster last year recover and rebuild. All of this is, in theory, very good news for EDA and other federal economic development programs.

What happens next

Congress still has not passed full-year appropriations for the current fiscal year. Individually, the House and Senate moved two bills on EDA funding; the former passed the House and the later passed out of committee but has not been brought to the Senate floor. The White House request included a small amount of funding to provide for an orderly shutdown of the agency. As you can see, there significant variation between funding levels.

  • House: $175 million for fiscal 2018
  • Senate: $254 million for fiscal 2018
  • White House: $30 million for fiscal 2018 (to fund an orderly shutdown of the agency)

For the current fiscal year, there remains a possibility for significant cuts to EDA despite the fact that Congress appropriated $600 million in disaster supplemental funding. EDA must still engage in their day-to-day work helping to build stronger, more resilient economies using their annual appropriation, completely separate from their work in disaster recovery. We cannot take for granted that Congress will take action to fully fund EDA in the current year. We need your help:

  • Reach out to your Members of Congress and ask them to support EDA in coming omnibus
  • Thank them for their support of EDA’s role in disaster recovery; the $600 million in critical funding will do so much good across the country!
  • Remind them that EDA has a day-to-day role in local and regional job creation that needs strong funding
  • EDA was funded at $276 million in fiscal 2017 and urge them to provide at least level funding with last year

For fiscal year 2019, it will be much the same. The White House, despite themselves requesting $300 million in disaster supplemental funding for EDA, included only $15 million in funding for EDA.

The House and the Senate will soon begin to consider their spending bills for fiscal 2019. We are urging funding at least level with fiscal 2017 for EDA -- $276 million. We’re asking you to consider adding your name to this letter.

IEDC and our partners at the Ridge Policy Group will compile the letters by Member of Congress and leadership office and disseminate them accordingly. With your voice and leadership, EDA and other critical federal economic development programs will have their best chance for surviving the continued attack on their funding.

Come to Washington

Finally, the 2018 FED Forumhttps://www.iedcevents.org/FEDForum/Registration.html is taking place at the end of next month. Regular registration has been extended until March 9th, though the hotel is filling up fast! While much of the news that is coming out of Washington is negative and seems focused on anything but economic development, the FED Forum will bring focus to myriad programs, policies, and best practices that can help you in your community still. Some highlights include:

  • Infrastructure! We’ve got a proposal of sorts from the White House and bipartisan agreement in Congress that something must be done. Economic developers must be engaged right now in order to secure our priorities in whatever bill or bills may come.
  • Manufacturing programs throughout the federal government continue to support areas ranging from workforce, to R&D, to tech transfer, to basic science. We’ve got a great panel put together that you won’t want to miss.
  • ‘A city boy’ and a ‘small town girl’ will take us on a journey (get it?) to key offerings in economic development for cities and rural communities. As many of these programs have experienced and continue to experience changes in the last year, it is more important than ever to connect with federal officials and experts.
  • Keynote from Dennis Alvord, Deputy Assistant Secretary for Regional Affairs from EDA, during our luncheon on Monday, which will also feature our annual awards presentation for federal leadership in economic development.
  • Volunteering, networking, touring, laughing and pancakes: all of these will take place on Saturday and Sunday at the FED Forum. We’ll cap-off Sunday with FED Talks, where we turn the mic over to you and your colleagues for enlightening entertaining discussions on how the federal government is, and isn’t working for you.
  • While you’re here, spend some time visiting with your staff contacts on the Hill. Congress will be in recess that week – probably – which means it is the best time to connect and reconnect with staff in personal offices and committee offices.

In conclusion:

  • Call your Member of Congress and tell them you need EDA and ask for their support for them in the fiscal 2018 omnibus spending bill.
  • Sign-on to our letter supporting EDA in the coming fiscal 2019 spending
  • Register for the FED Forum! Learn the latest and offer your perspective.

IEDC was very pleased with the inclusion of EDA in the disaster supplemental. This victory would not have been possible without your direct support and intervention!  A modest sigh of relief is warranted, but that is all. We must continue to urge support for EDA. We need your help.

Join us at the FED Forum next month. If you have any questions, please contact Matt Mullin, Senior Director, Public Policy & Strategic Engagement at mmullin@iedconline.org

Thursday, February 22, 2018

Trump’s $1.5 trillion infrastructure plan in brief

posted by: Kirill Abbakumov

On February 12, 2018, the White House has released its long-awaited vision of a new federal infrastructure overhaul, which would total $1.5 trillion. The infrastructure plan comprises mainly two parts: grant funding and regulatory reform.

The plan calls for $200 billion over 10 years in new federal spending, with the goal of leveraging those dollars to yield a total of $1.5 trillion in new spending and financing for infrastructure projects across the country. In addition to the grant components and regulatory reforms mentioned in the plan, the plan also dedicates sections to workforce development reforms, designed to support work-based learning, career and technical education.

There are four main components of the plan, three of which involve funding allocations and one which deals with regulatory streamlining measures:

  • The first component accounts for 50% of the new package’s funding and would go towards a new “incentives program,” which economic developers could access to cover as much as 20% of funding towards an infrastructure project. Traditionally, the federal government has contributed as much as 80% towards infrastructure projects. This change, which only applies to this infrastructure plan, would call for local governments to increase their financial contribution for a project, whether it be from existing revenue shifting or private sector partnerships.
  • The second component is dedicated to rural infrastructure, allocating $50 billion for infrastructure in communities with 50,000 residents or less. Grant program funding would be controlled by state governors, who would determine which projects the funding supports. Plan language implies that local investments from public or private sectors may be expected. Transportation, broadband water resources, storm water and waste water infrastructure, and power and electric facilities are named as prime sectors for these funds.
  • The third grant program calls for $20 billion to go towards “transformative projects.” This notion would build upon President Trump’s calls during the 2016 presidential campaign for new, transformative projects of “national significance.” The availability of funds would be determined by the projects’ stages: 30% for demonstration; 50% for planning; and 80% for capital construction.
  • The plan’s final funding component calls for the expansion of federal loan programs to $14 billion, many of which are used by economic developers, local, and state governments. These lending programs, the Transportation Infrastructure Finance and Innovation loans, Water Infrastructure Finance and Innovation loans and Railroad Rehabilitation and Improvement Financing program, provide low interest loans for projects.

Considerable focus has also been given to the streamlining of the permit process for undertaking infrastructure projects. Most notably, the administration has introduced a “One Agency, One Decision” process in which one lead agency would be responsible for greenlighting project permits.

The White House has stated it is open to revisions to their plan, as Congress will be tasked with crafting legislation. It has been suggested that as many as 11 separate congressional committees could have sections of jurisdiction within the infrastructure package as they process the plan into a legislative text.

Thursday, February 15, 2018

NIST seeking public comments on National Plan for Advanced Manufacturing

posted by: Kirill Abbakumov

On February 5, 2018, the National Science and Technology Council, Committee on Technology, Subcommittee on Advanced Manufacturing, the Office of Science and Technology Policy (OSTP) has issued a Request for Information (RFP) which seeks input from all interested parties on the development of a National Strategic Plan for Advanced Manufacturing. OSTP seeks input from the public on ways to improve government coordination and on long-term guidance for federal programs and activities in support of United States manufacturing competitiveness, including advanced manufacturing research and development that will create jobs, grow the economy across multiple industrial sectors, strengthen national security, and improve healthcare.

Through this Request for Information, OSTP seeks responses to a number of questions to improve government coordination and provide long-term guidance for federal programs and activities in support of United States manufacturing competitiveness, including advanced manufacturing R&D.

Responses are due by March 7, 2018. Instructions on submitting a response can be found on the NIST website.

Wednesday, February 14, 2018

Federal Alert: Two Major White House Proposals

posted by: Charlotte Scott

This past week, the White House made two major announcements, including an infrastructure plan and their budget proposal for fiscal 2019. Both proposals have far-reaching implications for economic developers.

White House Budget Proposal

The proposal includes a plan to bolster defense spending to $716 billion, while imposing heavy budget cuts that limit non-defense discretionary spending to $540 billion. Trump aims to mitigate the nation’s growing deficit via this budget strategy. Here are the overall highlights:

  • The Department of Veterans Affairs, Homeland Security, and Department of Defense will all see significant funding increases
  • HUD, EPA, Labor Department will all see significant funding cuts
  • Opioids and Mental Health will receive an additional $10 billion in funding
  • The Department of Homeland Security will receive an additional $5.1 B
    • Including $1.6 billion for 65 miles of border wall, $2.8 billion to increase immigration detention to 52,000 beds per day, $782 million to hire an additional 2,750 officers and agents at CBP and ICE

How does this proposal affect economic development?

Department of Agriculture:

  • Eliminates the Rural Business-Cooperative Service
  • Eliminates the Rural Water and Wastewater Grants program while modifying the loan program to expand the eligible community size ceiling to 20,000
  • Eliminates the Rural Economic Development Grants program

Department of Commerce:

  • Eliminates the Economic Development Administration
  • Eliminates the Manufacturing Extension Partnership (MEP), it directs MEP centers to transition solely to non-Federal revenue sources.
  • The Budget requests $9.8 billion for DOC (including changes in mandatory programs), a $546 million or a 6-percent increase from the 2017 enacted level.
  • Establish Minority Business Development Agency (MBDA) as a policy office, and eliminates their business outreach centers.

Department of Defense:

  • Provides $10.5 million for the Office of Economic Adjustment
  • Does not call for a round of Base Realignment and Closures (BRAC)

Department of Housing and Urban Development:

  • Eliminates the Community Development Block Grant (CDBG) program.

Department of Labor:

  • Funding cuts for National Dislocated Worker Grants and Adult Employment and Training Activities
  • Nearly doubled funding for apprenticeships from $95 million to $200 million

Department of Transportation:

  • TIGER program is eliminated
  • Limiting funding of the Capital Investment Grant program to projects that already have secured funding agreements

It is important to note that the President released this budget proposal just days after Congress passed budget legislation that significantly increased funding for both defense and non-defense discretionary spending. Perhaps with more time to adjust, this proposal would have provided a less aggressive budget cut strategy. We will continue to track the progress of this proposal and any changes that should arise, but it is worth noting that it is exactly this: a proposal. Congress will ultimately decide what to fund and at what levels.

IEDC will be reaching out shortly to offer guidance and resources on how best to engage your elected officials here in Washington. In the meantime, please take a moment to review our ‘Why Invest Brochure’ and consider sharing it with your colleagues, local stakeholders and elected officials.

Infrastructure Proposal

With a $200 billion investment in Federal funds, the plan claims that it will generate roughly $1.3 trillion via public-private financing at state, local, Tribal, and private levels. The main areas the plan aims to tackle are:

  • Encouraging Rural Investment
    • $50 billion will be devoted to a new Rural Infrastructure Program, which will allocate the bulk of these funds to State governors.
  • Increasing State and Local Authority
    • The Incentives Program and the Rural Infrastructure Program will award funds directly to state and local authorities, who can decide which projects to prioritize.
    • The plan will expand processed that allow environmental review and permitting decisions to be delegated to States.
    • The plan allows Federal agencies to divest assets that can be better managed by State or local governments or the private sector.
  • Reducing Regulatory Barriers to Streamline Projects
    • The plan intends to increase flexibility of the US Army Corps of Engineers, the Department of Veterans Affairs, and transportation projects with minimal Federal funding.
    • The Superfund program plans to expand funding eligibility for land revitalization projects and provide tools for managing their legal and financial matters.
  • Altering the Environmental Permitting Process
    • A “one agency, one decision” structure will be established for environmental review, transforming it from a consecutive to a concurrent review process, aiming to shorten it to a two-year operation.
  • Strengthening Workforce Development
    • The plan will reform the Perkins Career and Technical Education Program, and create short-term programs that provide students with a certification or credential in an in-demand field eligible for Pell Grants.
    • The plan will also target Federal Work-Study funds.

Trump aims to “layer over” existing trust funds by administering block grants, relying heavily on public-private investment to reach the $1.3 trillion goal. This plan highlights the many regulatory issues and barriers that delay infrastructure development. Introducing this infrastructure plan will likely incite Congressional debate surrounding these issues, which could potentially lead to significant legislative fixes in the long run.

The next few months will be packed with debate and, hopefully, legislative action. IEDC will continue to share updates with you as these and more initiatives move forward. We will be talking about all thing federal economic development at the 2018 FED Forum, taking place March 25th – 27th here in Washington, DC. There’s still plenty of time to register and we’re adding new speakers daily – register here today!

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

Monday, February 12, 2018

CDFI Program to award $183.5 million in 2018

posted by: Kirill Abbakumov

On February 1, 2018, the Treasury Department’s Community Development Financial Institutions (CDFI) Fund published the Notice of Funds Availability (NOFA) inviting the applications for Fiscal Assistance (FA) awards of Technical Assistance (TA) grants under the CDFI program the fiscal year 2018 funding round, totalling approximately $183.5 million.

Through the CDFI Program, the CDFI Fund provides FA awards of up to $1 million to Certified CDFIs to build their capacity to lend to their target markets, and TA grants of up to $125,000 to build certified, certifiable, and emerging CDFIs’ organizational capacity to serve their target markets. The CDFI Fund expects to award approximately $183.5 million in FY 2018. Funds for the FY 2018 funding round are subject to change based on passage of a final FY 2018 budget. If Congress does not appropriate funds for the CDFI Program, there will not be an FY 2018 funding round.

The CDFI Fund was established by the Riegle Community Development Banking and Financial Institutions Act of 1994 to promote economic revitalization and community development through investment in and assistance to CDFIs. Since its creation, the CDFI Fund has awarded more than $2.5 billion to for-profit and non-profit community-based lending organizations known as CDFIs. These organizations serve rural and urban low-income people, and communities across the nation that lack adequate access to affordable financial products and services.

The FY 2018 funding round will begin in late September 2018. For more information about this NOFA, as well as application requirements, please see the Federal Register.

Thursday, January 25, 2018

Supreme Court determines WOTUS jurisdiction

posted by: Kirill Abbakumov

On January 22, 2018, the Supreme Court of the United States (SCOTUS) decided where the 2015 Waters of the United States (WOTUS) rule should be heard first in the court system. The nine justices ruled unanimously that federal district courts have jurisdiction, rather than the appeals courts. This potentially invalidates the nationwide stay issued by the 6th U.S. Circuit Court of Appeals in October 2015.

WOTUS is a term used in the Clean Water Act (CWA) to determine what waters and their conveyances fall under federal verses state permitting authority. In 2014, the Environmental Protection Agency (EPA) and the Army Corps of Engineers (Corps) rewrote and expanded the WOTUS definition, finalizing the rule in 2015. Subsequently, lawsuits were filed in both appeals and district courts arguing that EPA and the Corps had overreached in their authority to regulate certain bodies of water. However, there was significant debate whether district or appeals court had the authority to hear the case, setting the stage for the recent SCOTUS decision.

Once the 6th Circuit Court of Appeals put a nationwide stay on the rule, it could not be implemented nationally until the stay is lifted. However, now that SCOTUS decided that the cases belong in the district courts, there is some confusion about how this decision will impact the nationwide stay.

The 6th Circuit is expected to lift the nationwide stay in the upcoming weeks. At this point, the 2015 rule would go into effect in 37 states, likely resulting in additional lawsuits in the district courts. The other 13 states – Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, North Dakota, South Dakota, Wyoming, and New Mexico – put the stay on the rule within their districts since 2015.

Anticipating a decision by SCOTUS, the Trump administration released a proposed rule late last year to delay implementation of the 2015 rule for two years. EPA estimates that this rule will be finalized in the next month. Concurrently, the Administration is working on an effort to withdraw the 2015 rule and recodify pre-existing regulations, while they work on a new WOTUS rewrite.

Tuesday, January 23, 2018

SBA increases licensing and examination fees

posted by: Kirill Abbakumov

On December 13, 2017, the U.S. Small Business Administration (SBA) has implemented a rule that revised its regulations to increase the Small Business Investment Company (SBIC) licensing and examination fees. SBA last increased fees for SBIC in 1996.

The Small Business Investment Act of 1958, as amended, allows SBA to collect licensing and examination fees to offset SBA's costs associated with the administration of these two activities. Current fees offset less than 40% of SBA's administrative expenses related to these activities. This final rule increases SBIC licensing and examination fees in annual steps through October 2020, at which time SBA estimates that the annual fees will recoup approximately 80% of SBA's annual expenses directly related to these activities. Beginning in October 2021, this rule increases licensing and examination fees annually based on inflation.

The rationale for this rule is based on the fact that SBA's major expenses are related to licensing and examination (e.g., personnel compensation and benefits associated with licensing and examinations, technology, subscription services, travel, and other associated costs), and excludes SBA's overhead costs (e.g., office space, utilities, and other supporting offices within SBA). In FY 2016, licensing and examination fees reimbursed approximately 35% of SBA's direct licensing and examination expenses, and less than a quarter of SBA's licensing and examination expenses when including overhead.

Monday, January 22, 2018

Government shutdown ends with third CR

posted by: Kirill Abbakumov

On January 22, 2018, the U.S. Senate and House of Representatives passed a temporary funding bill, or continuing resolution (CR), to fund the federal government through February 8, 2018. President Trump signed the legislation, soon after officially ending the shutdown, which lasted just under three days.

A breakthrough in negotiations was made after Senate Majority Leader Mitch McConnell promised to allow a floor vote on immigration legislation in February. House leadership, however, has not yet indicated whether it would follow suit.

Central to the shutdown was insistence that legislation would contain clarification on the current Deferred Action for Childhood Arrivals (DACA) policy before its expiration on March 6th. The current DACA provisions, established by an Executive Order signed by former President Barack Obama, provided certain legal protections for those who came to the United States as children with their parents, including protection from deportation. Leader McConnell’s assurance that a bill addressing DACA would come to the Senate floor for debate paved the way for a shutdown-ending vote, which passed with bipartisan support 81-18.

Friday, January 19, 2018

House passes new bill for brownfields renewal

posted by: Kirill Abbakumov

In late November, the U.S. House of Representatives overwhelmingly passed the Brownfields Enhancement, Economic Redevelopment, and Reauthorization Act of 2017 (H.R. 3017) on a 409 to 8 vote. The bill would reauthorize the U.S. Environmental Protection Agency’s (EPA) Brownfields Program. Leading up to the bill’s passage, the House Energy and Commerce, as well as Transportation and Infrastructure committees negotiated a compromise between two brownfield reauthorization bills that they had previously passed (H.R. 3017/H.R. 1758).

Originally passed in 2002 as part of the Small Business Liability Relief and Brownfields Revitalization Act (P.L. 107-118), EPA’s brownfields program provides technical assistance and grants for communities to reclaim previously owned industrial sites that have fallen into disuse. According to the EPA, there are more than 400,000 U.S. brownfields. Since the program’s inception, there have been more than 27,075 brownfields assessments and 69,275 brownfields acres cleaned up. This has sparked economic development opportunities and created over 129,240 jobs. Although the program expired in 2006, its popularity prompted Congress to appropriate funds on an annual basis.

Key provisions in the Brownfields Enhancement, Economic Redevelopment, and Reauthorization Act of 2017 include:

  • Expands brownfields liability protection for state and local governments that acquire brownfields through voluntary and involuntary means.
  • Includes abandoned petroleum sites as brownfields if there is no viable responsible party, and if EPA and the state determine that the entity assessing and remediating the site is not liable to clean up the site.
  • Broadens the universe of eligible brownfield grant entities to include 501(c)(3) organizations with a limited liability cooperation, limited liability partnership, and/or qualified community development entity. This would allow more communities to partner with outside entities to redevelop brownfields.
  • Increases funding for brownfields cleanup grants from $200,000 to $500,000 per site and allows EPA to waive that limit up to $750,000 based on need.
  • Permits additional administrative costs to be charged back to the grant. Grant recipients can use up to 5% of their brownfields grant for administrative costs.
  • Allows grants for renewable energy projects on brownfield sites, including facilities that generate wind, solar, or geothermal energy or any energy efficiency improvement project on brownfields.
  • Provides small technical assistance grants of $20,000 to states for communities with populations under 10,000 and/or in disadvantaged areas where the annual median household income is less than two-thirds of the state-wide annual median income.

The bill has been sent to the U.S. Senate for consideration, where a similar bill, the Brownfields Utilization, Investment, and Local Development Act (S. 822) was passed by the Senate Environmental and Public Works Committee in July 2016. S. 822 is currently awaiting action on the floor of the Senate.

Monday, January 15, 2018

PARTNERS Act aims to strengthen work-based learning and apprenticeship

posted by: Kirill Abbakumov

On October 25, 2017, Representatives Suzanne Bonamici (D-OR) and Drew Ferguson (R-GA) introduced the bipartisan Promoting Apprenticeship with Regional Training Networks for Employers Required Skills (PARTNERS) Act of 2017. The bill would support partnership between businesses and other local workforce stakeholders to enable small- and medium-sized employers to develop and expand work-based learning programs.

Work based learning, including apprenticeship, provides individuals with paid, on-the-job work training and experience. Small- and medium-sized businesses often lack the infrastructure to establish apprenticeships or work-based learning programs on their own. Industry or sector partnerships can help reduce the burdens on businesses and by convening local stakeholders to collaboratively develop training related instruction, support services, and on-the-job training components of a work-based learning program.

Under the PARTNERS Act, industry and sector partnerships would receive grants of up to $500,000 for two years. Recipients would convene necessary partners and coordinate a set of business services to help small- and medium-sized businesses develop and run work-based learning programs. Partnerships would also coordinate worker support services to improve worker retention and success.

Business engagement activities could include:

  • Assistance navigating registration process for apprenticeship;
  • Connecting businesses with education providers to develop classroom instruction to complement on-the-job learning;
  • Development of curriculum design of the on-the-job component of a program;
  • Service as employer of record during a transitional period for participants entering work-based learning programs;
  • Providing training to managers and front-line workers to aide in their provision of mentoring or training to work-based learning participants;
  • Recruitment of individuals to participate in the work-based learning programs, particularly individuals receiving additional workforce and human services.

Support services that help keep workers on the job could include:

  • Connecting participants with adult basic education;
  • Connecting participants with pre-work-based learning training, including through pre-apprenticeship programs;
  • Providing connections to transportation and child care services;
  • Developing mentorship opportunities; and
  • Providing tools, clothing, and other required items necessary to start employment.
Thursday, January 11, 2018

Higher Education Act reauthorization introduced in the House

posted by: Kirill Abbakumov

House Education and Workforce Committee introduced the Promoting Real Opportunity, Success, and Prosperity through Education Reform (PROSPER) Act. If signed into law, this bill would be the first reauthorization of the Higher Education Act (HEA) since 2008.

The bill embodies the consolidation of federal student aid, the expansion of apprenticeships and reconfiguration of the Federal Work Study program. The bill also includes several provisions intended to reduce federal regulations on higher education institutions, including elimination of the gainful employment rule and stator limitations. Unlike the bipartisan Perkins Act reauthorization bill passed by the House earlier this summer, the PROSPER Act is being advanced as a party-line measure without Democratic co-sponsors, which means that bill would have little chance of advancing through the Senate as drafted.

The PROSPER Act passed out of committee on December 12, 2017, by a party-line vote of 23-17. While the Act does offer some potentially useful investments in work study, apprenticeship, and other workforce development strategies, this partisan bill doesn’t do enough to make it easier for individuals to get the skills and credentials they need to advance their careers. Despite all this, the PROPSER Act promises some foundation on which to advance HEA reauthorization.

More information on the key elements of the PROSPER Act can be found here.

Tuesday, December 26, 2017

EDA updates Revolving Loan Fund regulations

posted by: Kirill Abbakumov

On December 1, 2017, the Economic Development Administration (EDA) has published revisions to the regulations implementing the Public Works and Economic Development Act, which governs EDA’s Revolving Loan Fund (RLF) Program. The regulatory changes will enable the Department to more efficiently manage the residual RLF portfolio going forward.

The changes incorporate current best practices and strengthen EDA's efforts to evaluate, monitor, and improve performance within the agency's RLF program by establishing the Risk Analysis System, a risk-based management framework, to evaluate and manage the RLF program.

To make RLF awards more efficient for Recipients to administer and EDA to monitor, EDA is also reorganizing the RLF regulations and making changes to improve readability and clarify those requirements that apply to the distinct phases of an RLF award.

In addition, EDA is updating other parts of its regulations, including revising definitions, replacing references to superseded regulations to reflect the promulgation of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”), streamlining the provisions that outline EDA's application process, and clarifying EDA's property management regulations.

The updated regulations will take effect on January 2, 2018. After the final rule becomes effective, EDA will update the full text of EDA's regulations, as amended, and post it on EDA's Web site at www.eda.gov/​about/​regulations.htm

Wednesday, December 20, 2017

Federal Alert: This Week in Washington

posted by: Matthew Mullin

Congress will vote on a number of measures this week that will impact economic development and the nation for years to come. Taxes, disaster funding, and fiscal 2018 appropriations will all be brought to a vote by Friday.

Taxes

The conference report for HR 1 – the tax bill – includes a number of key changes:

  • Increased corporate tax rate from 20% to 21%
  • 20% credit for rehabilitating historic structures amortized over 5 years; 10% credit for pre-1936 buildings eliminated
  • New Markets Tax Credits preserved
  • Tax exemption related to Private Activity Bonds (PABs) is preserved, including those related to the construction of professional sports stadiums
  • Capital gains income may be temporarily deferred if invested in qualified opportunity zones; estimated to raise $1.6 billion in investments for opportunity zones over 10 years

Congress will be voting to adopt the Conference Report and sending HR 1 to the White House as early as today. The nuts and bolts of the tax bill are better at this stage than in earlier versions of the bill. However, there can be no doubt that decreasing revenue by at least $1.5 trillion will have a negative impact on funding for federal economic development programs over the next several years.

Disaster Funding

Speaker of the House Paul Ryan has signaled he will attach an $81 billion dollar supplemental disaster spending measure to the next fiscal ’18 bill, due out before midnight this Friday. The bill includes a number of key items, including:

  • $600 million for the Economic Development Administration (EDA), including a critical 2% carve out for salaries and expenses to help EDA effectively manage and execute this funding
  • $26.1 billion for Community Development Block Grants (CDBG)
  • $12.1 billion for the Army Corps of Engineers

The bill will bring the total amount of disaster funding for 2017 to $132.75 billion, a record. The Senate has yet to weigh in and it is possible the funding will be delayed past this Friday’s expiring Continuing Resolution (CR) unless agreement materializes quickly.

2018 Appropriations

Congress must pass legislation by midnight Friday to avoid a government shutdown. At this point, it seems unlikely we will see full-year appropriations for the remainder of 2018. The House is likely to pass a Defense-CR hybrid, funding defense for the remainder of the year and funding everything else through a CR into January, prompting another funding showdown at that time.

The Senate will have to respond, either by passing the House measure or altering it before kicking it back to the House. If it kicks it back to the House with changes, which it is almost certain to do since the measure will need at least 8 Democratic votes in the Senate to pass, the Speaker will likely need Democratic votes to pass it to avert a shutdown.

All of this essentially equates to kicking the can again, so we will be once again debating fiscal 2018 funding – well into the second quarter of the fiscal year. Disaster funding could be included to help gather votes, though it seems just as likely disaster funding will be excluded in favor of keeping it for a ‘final’ push for complete fiscal 2018 funding in January.

Wrapping up 2017

We are pleased that at the end of this very tumultuous year, EDA remains intact and positioned to remain strong into the coming years, SelectUSA has been identified as a priority by the new administration, CDBG lives on to fight another day, New Markets Tax Credits & Historic Tax Credits will continue to be part of the economic developer’s toolkit, and tax exemption for PABs will continue to support growth in communities across the country. And despite the devastation of disasters from Puerto Rico and the U.S. Virgin Islands to California, the importance of economic recovery has taken hold with the administration and Congress.

However, we remain concerned about EDA funding overall, which should at least be at fiscal 2017 levels – about $273 million – and providing SelectUSA with at least $10 million. The debate over the federal role in local economic development will only increase in intensity as we begin to wrestle with decreasing revenue against increasing need. For now we have no new action items for economic developers beyond continuing to communicate your support for robust funding for EDA in both the disaster supplemental and fiscal 2018 appropriations.

Before very long we will be pivoting to fiscal 2019 and the next set of administration priorities: President Trump will deliver the State of the Union address on January 30th, 2018, and releasing his fiscal 2019 budget proposal shortly thereafter. Join us at the 2018 FED Forum March 25-27th for the latest news and information on all things federal economic development.

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.

Taxes

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):

            Senate
            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

            House
            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.