Economic Adjustment Assistance

To address the needs of distressed communities experiencing adverse economic changes that may occur suddenly or over time, and generally result from industrial or corporate restructuring, new Federal laws or requirements, reduction in defense expenditures, depletion of natural resources, or natural disaster.

Adjustment Assistance grants (referred to throughout this document as investments) are intended to enhance a distressed community's ability to compete economically by stimulating private investment in targeted areas.

Current investment priorities include proposals that: (a) promote comprehensive, entrepreneurial, and innovation-based economic development efforts that enhance the competitiveness of regions in the global economy.

The investments will be part of a long-term strategy to promote the region's success in achieving a rising standard of living by supporting existing industry clusters, developing emerging new clusters, or attracting new regional economic drivers; (b) support technology-led economic development and reflect the important role of linking universities and industry and technology transfers; and (c) advance community-and faith-based social entrepreneurship in redevelopment strategies for regions of chronic economic distress.

Agency - Department of Commerce

The Department of Commerce fosters and promotes the nation's economic development and technological advancement through vigilance in international trade policy, domestic business policy and growth, and promoting economic progress at all levels.

Office - Refer to Appendix IV of the Catalog for EDA regional office contact information.
Website Address

Program Accomplishments

In FY 2007, 113 projects were funded.

Uses and Use Restrictions

Strategy investments help organize and carry out a planning process in order to develop a Comprehensive Economic Development Strategy (CEDS) tailored to the community's specific economic problems and opportunities.

Implementation investments support one or more activities identified in an EDA-approved CEDS.

Awards may be used for activities such as developing and updating a CEDS and for implementing the CEDS by carrying out projects for site acquisition and preparation, construction, rehabilitation, and equipping facilities, technical assistance, market or industry research and analysis, and other activities set out in 13 CFR 307.3.

Eligibility Requirements

Applicant Eligibility

Eligible applicants for EDA investment assistance include a State, city, county, 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 such political subdivision, an institution of higher education or a consortium of institutions of higher education, an Economic Development District organization, a private or public nonprofit organization or association, including a faith-based non-profit organization, acting in cooperation with officials of a political subdivision of a State, or an Indian Tribe, or a consortium of Indian Tribes.

Individuals, companies, corporations, and associations organized for profit are not eligible.

As used in this paragraph, 'State' includes the Commonwealth of Puerto Rico, the U.S.

Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau.

Beneficiary Eligibility

None. Investments are intended to alleviate long-term deterioration and sudden and severe economic dislocation in distressed communities and regions.


Applicants for assistance must develop a CEDS that identifies the actual or anticipated adjustment problem and prescribe steps to address that problem. Implementation investment applications must be consistent with an approved CEDS.

Aplication and Award Process

Preapplication Coordination

This program is eligible for coverage under E.O.

12372, "Intergovernmental Review of Federal Programs." EDA's Regional Office representative or Economic Development Representative (EDR) will meet with the proponent to determine whether preparation of a project proposal is appropriate.

If appropriate, the proponent will be requested to prepare a brief project proposal according to an outline provided by the EDR.

Following a review by the EDR and regional office staff, the Regional Director will determine whether to invite a formal application.

An environmental impact assessment is necessary; an environmental impact statement is required for this program.

Application Procedures

This If an application is invited by the regional office, an EDR or regional office representative will provide necessary application materials. This program is subject to the provisions of OMB Circular No. A-110 and 15 CFR Part 24.

Award Procedures

Applications are invited and approved by the Regional Director.


Proposals are accepted on a continuing basis and applications are invited and processed as received.


Section 209 of the Public Works and Economic Development Act of 1965, as amended (PWEDA), (42 U.S.C. 3149).

Range of Approval/Disapproval Time

Normally, two months are required for a final decision after the receipt of a completed application invited by EDA that meets all statutory and regulatory requirements.





Assistance Considerations

Formula and Matching Requirements

The maximum investment rate shall not exceed 50 percent of the project cost, except that the project may receive an investment rate up to 80 percent based on relative needs as measured by the severity and duration of unemployment and the per capita income level and extent of underemployment in the region. Indian Tribes may be eligible for an investment rate of 100 percent. In addition, States or political subdivisions of a State that have exhausted their effective borrowing and taxing capacity or nonprofit organizations that have exhausted their effective borrowing capacity may also be eligible for a 100 percent rate. On average, EDA investment assistance covers approximately 50 percent of project costs.

Length and Time Phasing of Assistance


Post Assistance Requirements


With the exception of strategy grants, quarterly financial reports are required until one year after final disbursement of funds.

Reports on revolving loan fund investments are initially required semi-annually but may be changed to annual reports with the consent of the agency.

Recipients also are required to report on program performance and project outcomes at intervals prescribed by the agency in compliance with Government Performance Results Act of 1993.


In accordance with the provisions of OMB Circular No. A-133, recipients that are States, local governments, nonprofit organizations, and institutions of higher learning are subject to the audit requirements contained in the Single Audit Act Amendments of 1996 (31 U.S.C. 7501 et seq.). Commercial organizations shall be subject to the audit requirements as stipulated in the award document. States, local governments, and nonprofit organizations that expend $500,000 or more in a year in Federal awards shall have a single or program-specific audit conducted for that year.


All financial and programmatic records, supporting documents, statistical reports and other records of recipients and sub-recipients are required to be maintained by the terms of the agreement. The grantee must retain records for three years after completion of the project or submission of the final financial report and be readily available for inspection and audit.

Financial Information

Account Identification



(Investments) FY 07 $64,228,016; FY 08 $42,300,000; and FY 09 est $40,330,000.

Range and Average of Financial Assistance

In FY 2007, grants ranged from $13,382 to 6,080,000. The average grant for Economic Adjustment Assistance in FY 2007 was $568,390.

Regulations, Guidelines, and Literature

13 CFR Parts 300-302, 307.

Information Contacts

Regional or Local Office

Refer to Appendix IV of the Catalog for EDA regional office contact information.

Headquarters Office

Economic Development Administration, Department of Commerce, 1401 Constitution Avenue, N.W., Washington, DC 20230.

Criteria for Selecting Proposals

EDA will review all investment applications for the feasibility of the budget presented and conformance with EDA statutory and regulatory requirements. EDA will assess the economic development needs of the region in which the proposed project is located, as well as the capacity of the applicant to implement the proposed project. Furthermore, EDA will select proposals competitively based on strategic areas of interest and priority considerations identified in the applicable announcement of federal funding opportunity (FFO). EDA also may consider the degree to which a proposed project: (a) is market-based and results driven; (b) has strong organizational leadership; (c) advances productivity, innovation and entrepreneurship; (d) looks beyond the immediate economic horizon, anticipates economic changes, and diversifies the local and regional economy; and (e) demonstrates a high degree of local commitment. Applications for Economic Adjustment investment assistance must meet EDA investment policy guidelines as set out in 13 CFR 301.8, the requirements set out in 13 CFR part 307, as applicable, and other requirements as provided in the applicable FFO.

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