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Tuesday, February 15, 2011

Economic Development Assistance for Communities Affected by Employment Changes Due to Military Base Closures (BRAC)

Oscar R. Gonzales
Analyst in Economic Development Policy

This report is intended to discuss the geographic impact of base closures and realignments; provide an analysis of federal economic assistance programs for communities and individuals affected by military base closures and realignments (BRAC); and analyze possible policy issues for Congress.

Unlike previous rounds, the 2005 BRAC round is focused on creating the infrastructure needed to support a transformed, expeditionary armed force—concentrated more on shifting forces and installation assets to promote the centralization of units in places from which they can be deployed rapidly. Thus, the 2005 BRAC round is characterized much more by realignment than closure. In 20 communities, an estimated increase of 170,000 workers is expected. In addition, estimated construction costs are anticipated to increase by 80% from $17 billion to $32 billion. These communities identified transportation, schools and affordable housing as their top infrastructure challenges. Some communities, however, will be affected by job losses, and job creation and unemployment were cited as key concerns.

Economic development programs for communities affected by BRAC include the Office of Economic Adjustment (OEA); the Economic Development Administration (EDA); the Community Development Block Grant (CDBG) program; Historically Underutilized Business Zones (HUBZones) under the Small Business Administration (SBA); and programs such as the Homeowner’s Assistance Program (HAP), the Defense Access Road (DAR) program, Recovery Zone Economic Development Bonds, and Economic Development Conveyances (EDCs).

Understanding the process to access funding under these programs is important for communities impacted by job losses and those affected by growth. EDA, for example, allocates funding to groups of counties organized as Economic Development Districts (EDDs), based on a plan known as a Comprehensive Economic Development Strategy (CEDS) and communities affected by BRAC must contact an EDA regional office and EDD to understand if competitive grant funding may be available. In contrast, CDBG allocates funding to one of over 1,100 entitlement communities based on a formula and on a plan known as the Consolidated Plan; BRAC funding is available primarily to help the homeless population near a base. The local communities must establish a Local Redevelopment Authority (LRA) to access assistance. The LRA serves as the primary link between the Department of Defense, the current installation, the local community, and the Federal and State agencies responsible for all BRAC matters.

In the 111
th Congress, the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5) provided $555 million for the Homeowner’s Assistance Fund under the Housing Improvement Program (HAP), for military personnel affected by the 2005 BRAC round. P.L. 111-117 provided an additional $323 million for the HAP program. ARRA also provided $10 billion for Recovery Zone Economic Development Bonds for areas designated as economically distressed under previous BRAC round closures.

The 112
th Congress may consider amendments to federal economic development programs to assist communities affected by the 2005 BRAC.

Date of Report: January 18, 2011
Number of Pages: 33
Order Number: RL34709
Price: $29.95

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