U.S. Economic Development Administration (EDA) Reauthorized

Community and Economic Development – Blog by UNC School of Government

https://ced.sog.unc.edu

U.S. Economic Development Administration (EDA) Reauthorized

By Jonathan Morgan

Published March 4, 2025

In December of 2024, Congress formally reauthorized the U.S. Economic Development Administration (EDA) with strong bipartisan support. The EDA reauthorization (S. 3891), the first in 20 years, is included as part of the Water Resources Development Act (S. 4367). The Economic Development Reauthorization Act of 2024 updates and modernizes the federal government’s approach to economic development in light of the major changes in industry sectors, technology, labor markets, and global commerce that have occurred over the last two decades.

EDA is a federal agency within the U.S. Department of Commerce that supports state and local efforts to promote private investment and job creation, especially in distressed communities, through grant funding, planning, and technical assistance. EDA plays a vital role in administering federal funding and assistance for disaster recovery, long-term planning, and resiliency efforts related to extreme weather and other hazardous events.

The agency awarded $3 billion in American Rescue Plan (ARP) grants to help regions “build back better,” create “good jobs,” and shore up travel, tourism and outdoor recreation sectors that were hard hit by the COVID-10 pandemic. With funding to date of more than $700 million through the CHIPS and Science Act of 2022, EDA has awarded implementation grants to 18 Regional Technology and Innovation Hubs (Tech Hubs) around the country. The Tech Hubs program seeks to help grow emerging innovation ecosystems in less prominent technology regions such that they become globally competitive in critical sectors such as artificial intelligence, biotechnology, semi-conductors, quantum computing, robotics, clean energy, and advanced manufacturing within a decade.

Core EDA grant programs include those focused on public infrastructure, business development, economic resilience, regional innovation and competitiveness, and disaster recovery:

Public Works – helps distressed communities construct, expand, and improve various types of physical infrastructure needed to support economic development such as water and sewer system upgrades, multi-tenant manufacturing facilities, business/industrial parks, port and harbor expansions, business incubators, workforce training facilities, and brownfield redevelopment.

Economic Adjustment Assistance – helps regions and communities respond to the effects of sudden and ongoing economic shocks due to major disruptions such as the loss of a major employer, industrial transition, a military base closing, or severe natural disaster. Grant funding can be used for market and environmental studies, planning, infrastructure improvements, site acquisition and preparation, construction and equipping of facilities, and revolving loan funds for small businesses.

Planning and Technical Assistance – supports the short-term planning and longer-term strategy formation efforts of organizations within designated Economic Development Districts (EDDs), states, local governments, sub-state planning regions, institutions of higher education, federally recognized tribal organizations, and other eligible entities. Planning activities related devising, implementing, and updating a Comprehensive Economic Development Strategy (CEDS) are eligible for funding. EDA provides technical assistance to distressed regions and communities through its support of feasibility studies and designated University Centers (UCs) around the U.S.

Disaster Recovery Supplemental Funding – helps pay for economic recovery, rebuilding, and resiliency planning in areas affected by disasters like hurricanes, floods, and wildfires with supplemental appropriations from Congress.

Across its various grant programs, EDA made 175 awards in North Carolina totaling more than $203 million from 2018 to early 2024. The state currently has 14 EDA Economic Development Districts (EDDs) that are administered by regional councils of government or other multi-county planning/development commissions. These EDDs facilitate Comprehensive Economic Development Strategies (CEDS) and coordinate regional efforts to promote prosperity through job creation and private investment. Currently, two EDA University Centers operate in North Carolina: one at Fayetteville State University and another at UNC-Chapel Hill.

The Economic Development Reauthorization Act of 2024 (S. 3891) amends the Public Works and Economic Development Act of 1965 to make significant reforms and updates to federal economic development programs, with key changes across multiple areas including:

Coordination and Capacity Building

• Authorizes EDA to fund capacity building activities at the local level defined as “all activities associated with early stage community-based project formation and conceptualization, prior to project pre-development activity” such as community outreach and engagement, research, and mentorship support.

• Allows grants to cover administrative expenses related to various planning processes and pre-development activities needed prior to implementing a project to include: community asset mapping, training, technical assistance, organizational development, feasibility and market studies, and demonstration projects.

• Formalizes the relationship and promotes greater coordination between EDA and regional commissions such as the Appalachian Regional Commission (ARC), which includes 31 North Carolina counties.

• Codifies the State Capacity Building Grant Program authorizing regional commissions to award grants in their service areas to support business retention/expansion, job creation, workforce development, university partnerships to assist distressed counties, and the implementation of “new or innovative economic development practices that will better position eligible counties to compete in the global economy.”

• Allows regional commissions to make grants for the planning, construction, equipment, and operation of demonstration health, nutrition, and childcare projects in distressed communities in order to “demonstrate the value of adequate health facilities and services to the economic development of the region.”

• Creates new regional commissions for counties in mid-Atlantic states (Delaware, Maryland, and Pennsylvania) and southern New England states (Connecticut, Massachusetts, and Rhode Island). Reauthorizes funding for the Alaska Denali Commission, Delta Regional Authority and Northern Great Plains Regional Authority and the others established under Subtitle V of Title 40 U.S.C.

• Establishes a new Office of Tribal Economic Development within EDA to coordinate all Commerce Department Tribal economic development efforts, help Tribal communities access EDA programs, and make connections with other federal agencies.

• Updates and specifies the roles of EDA University Centers to include supporting “local and regional capacity building,” assisting communities and regions with “data collection and analysis and other research relating to economic conditions and vulnerabilities that can inform economic development and adjustment strategies” along with providing “technical assistance, business development, and technology transfer services to businesses.”

Sectoral Partnerships for Workforce Development

• Authorizes EDA grants for the creation and expansion of innovative workforce training partnerships in key industry sectors. Grant funds can be used for planning, technical assistance, training, sector partnership formation, program design, and implementation.

• Creates a State Grant Pilot program to help states: 1) identify growing industry sectors that are experiencing challenges in filling certain positions and 2) implement a program to recruit and train individuals for such jobs using subsidies for tuition and stipends.

Infrastructure

• Authorizes EDA grants to fund physical infrastructure for workforce development programs (e.g., land acquisition and improvements, construction of training facilities, property rehabilitation, machinery, and equipment).

• Defines the eligible activities for high-speed broadband deployment projects to include planning, technical assistance, training, land acquisition, and real property improvements. Enables greater flexibility with grants for high-speed broadband projects by allowing communities to form public-private partnerships or consortia to undertake such projects.

• Authorizes grants under the Critical Supply Chain Site Development program to make sites ready for manufacturing projects that benefit distressed communities; align with regional economic development plans; prioritize workforce development; and support “industries determined to be of strategic importance to the national or economic security of the United States.” Grant funds may be used for investments in site utility infrastructure, site readiness (e.g., land assembly, environmental reviews, zoning, design, engineering, permitting, etc.), workforce development and sustainability programs, and efforts to “ensure disadvantaged communities have access to on-site jobs.”

Access to Grant Funding

• Clarifies eligibility and expands support under the Economic Adjustment grant program to include communities affected by contractions and economic disruptions in industries like coal, steel, and agriculture and those adversely impacted by water shortages due to drought or extreme heart or being located near a nuclear power plant.

• Increases federal cost-sharing from 50 percent to 60 percent for most projects, with up to 100 percent available for small communities with fewer than 10,000 residents.

• Allows certain regional commission funds to be used as the non-federal match for projects under certain circumstances.

• Modifies eligibility criteria for grant programs to allow consideration of additional distress indicators related to 1) severe unemployment, underemployment, or economic adjustment problems; 2) low median household income; 3) low labor force participation; or 4) energy industry transitions.

Disaster Recovery, Resilience, and Sustainability

• Establishes a new Office of Disaster Recovery & Resilience to streamline and coordinate federal recovery efforts in partnership with states, EDDs, University Centers, and other agencies.

• Authorizes grants for renewable energy technology projects to locate on brownfield sites.

• Allows for consideration of the extent to which projects awarded Public Works grants mitigate the impacts of extreme weather events, support outdoor recreation, and promote blue economy activities.

The legislation authorizes funding for EDA programs through fiscal year 2029 contingent on the availability of Congressional appropriations. It streamlines environmental reviews, updates the criteria for defining distressed communities, and requires the Government Accountability Office (GAO) to evaluate the programs administered by EDA and the regional commissions and report its findings to Congress.