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1 1 (June 1, 2022)

handle is hein.crs/govefxe0001 and id is 1 raw text is: Congressional Research Service nforming the legislitive debate since 1914 Updated June 1, 2022 Areas of Economic Distress for EDA Activities and Programs Congress has used program criteria to direct federal assistance to areas that are economically distressed or comparatively disadvantaged. Place-based measures frequently associated with economic distress include indicators such as poverty, unemployment rates, and income levels. The term economically distressed area lacks a standardized definition and may vary by agency, program, or executive branch initiative. This In Focus summarizes the criteria as well as the data sources and mapping tools used for determining economic distress for activities and programs administered by the Department of Commerce, Economic Development Administration (EDA). It also includes considerations for Congress regarding the EDA's criteria. Economic Dkstress Criteria in PWE DA Section 301(a) of the Public Works and Economic Development Act (PWEDA) of 1965 (42 U.S.C. §3161(a)) describes the economic distress criteria and thresholds that qualify areas as eligible for assistance through selected EDA programs and for other purposes. In PWEDA, economic distress is determined by one or more of the following calculations or thresholds: Low per capita income-the area has a per capita income of 80% or less of the national average; Unemployment rate above national average-the area has an unemployment rate that is, for the most recent 24-month period for which data are available, at least 1% greater than the national average unemployment rate; or * Special Need-an area that has experienced or is about to experience a special need arising from actual or threatened severe unemployment or economic adjustment problems resulting from severe short-term or long-term changes in economic conditions (42 U.S.C. §3161(a)(3)). Special needs have included substantial out-migration or population loss, military base closures, and negative effects of changing trade patterns. How Does EDA Apply Economic Distress Criteria? Since authorizing the agency in 1965, Congress has directed EDA to address long-term economic distress and economic adjustment concerns resulting from short-term disruptions in various ways. For instance * Among other requirements, PWEDA specifies that projects that receive Public Works and Economic Adjustment Assistance (PWEAA) funding shall serve areas that meet one or more of the economic distress criteria (42 U.S.C. §3161(a)). * Areas that meet certain thresholds of the economic distress criteria may qualify for reduced cost-sharing responsibilities in some EDA programs. Generally, EDA funds 50% of total costs for PWEAA projects. EDA regulations outline the maximum allowable federal investment rate for projects based on levels of economic distress, among other factors (13 C.F.R. §301.4). For nondisaster PWEAA grants, the maximum EDA investment rate may increase by an additional 30% based on regional needs that reflect conditions of economic distress (42 U.S.C. §3144). EDA may provide disaster recovery and other assistance at an even lower cost-sharing rate. * Economic distress criteria are also used to designate Economic Development Districts (EDDs). EDDs must contain at least one geographic area that fulfills the economic distress criteria among other requirements (42 U.S.C. §3171). * EDA-supported University Centers are required to provide services that benefit distressed areas (13 C.F.R. §306.5(a)). Unlike the items above, there are typically no requirements to meet minimum levels of economic distress for EDA's training, research, and technical assistance programs or planning investments (13 C.F.R. §301.3(b)), or for EDA programs authorized by the Stevenson-Wydler Technology Innovation Act of 1980, as amended (15 U.S.C. §3701 et seq.) or the Trade Act of 1974, as amended (19 U.S.C. §2341 et seq.). Mleasuring Economkc Distress For EDA purposes, data from the U.S. Census Bureau and the Bureau of Labor Statistics (BLS) are generally the primary sources used to measure economic distress. According to statute and regulations * Low per capita income may be determined by Per Capita Money Income (PCMI) data (five-year data from the Census Bureau's American Community Survey (ACS)); and * Unemployment rate may be determined by the most recent data published by the BLS's Local Area Unemployment Statistics (LAUS). If the ACS or BLS data are not the most recent or available federal data, EDA considers federal data from other sources. If no federal data are available, EDA may consider data from the state (42 U.S.C. §3161(c)). The circumstances for distress qualifying as a special need are specified in legislation, regulations (13 C.F.R. §301.3), and funding notices. EDA reviews the evidence of special need provided by grant applicants. For EDA purposes, designations of economic distress may change at different intervals because

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