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1 [1] (March 20, 2025)

handle is hein.crs/asoecdss0001 and id is 1 raw text is: Cogesoa Resarc ServU Updated March 20, 2025 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 or income levels, * the laborforce participation rate (the percentage of the whole population that is either employed or unemployed but actively looking for work), * the unemployment rate (the percentage of the labor force that is unemployed), * the employment rate (which in this In Focus means the employment-to-population ratio (EPOP), or percentage of the whole population that is employed), and * the prime-age employment gap (PAEG, calculated as the difference in percentage points between (1) the national five-year average prime-age (25-54) EPOP and (2) the five-year average prime-age EPOP of the eligible area), 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's Economic Development Administration (EDA). It also includes considerations for Congress regarding the EDA's criteria. This report does not cover the EDA's new Distressed Area Recompete Pilot Program, which was enacted under the Stevenson-Wydler Technology Innovation Act of 1980, as amended (15 U.S.C. §3701 et seq.). For additional information on identifying areas of economic distress, see CRS Report R48059, Identifying Areas of Economic Distress: Examples and Considerations. Economic Distress 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 or median household income-the area has a per capita or median household 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; https://crsreport * Labor force participation-the area has a labor force participation rate that is 90% or less of the national average or a PAEG of 5% or more; EDA has previously noted that the PAEG accounts for prime-age workers who have stopped looking for jobs and left the labor force, not just those who are currently unemployed; * Expected economic dislocation and distress-the area is expected to experience actual or threatened severe unemployment or economic adjustment problems from energy industry transitions; or * Special Need-the area has experienced or is about to experience a special need arising from actual or threatened severe unemployment, underemployment, 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) and certain Workforce Training funding shall serve areas that meet one or more of the economic distress criteria (42 U.S.C. §3161(a)). EDA may also consider the criteria in the Critical Supply Chain Site Development grant program. * Areas that meet certain thresholds of the economic distress criteria may qualify for reduced cost-sharing responsibilities in some EDA programs. Generally, EDA funds 60% 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 non-disaster 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. PWEDA specifies that communities with populations under 10,000 must meet one or more of the distress criteria to be considered small. Small communities may receive increased federal cost-share rates. * Economic distress criteria are also used to designate Economic Development Districts (EDDs), which are multi-jurisdictional entities that assist with regionally .congress.gov

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