FHWA Supplemental Guidance on the Determination of Economically Distressed Areas Under the Recovery Act

From The Federal Highway Administration

The Federal Highway Administration (FHWA) is issuing this guidance to provide additional information on the determination of economically distressed areas under the priority language in the Highway Infrastructure Investment appropriation of the Recovery Act. The FHWA is issuing this guidance after consultation with the Department of Commerce and its Economic Development Administration, which has reviewed the "special need" criteria below.

States shall give priority to projects that are located in an economically distressed area and can be completed within the 3-year timeframe over projects that meet only one of the priorities, provided that such projects also meet the other preferences, conditions, and requirements of the Recovery Act.

States shall exercise due diligence in selecting projects that are to be carried out in and for the benefit of economically distressed areas. In ensuring such due diligence has been carried out, the State should be able to provide information as to how the State identified, vetted, and examined projects located in economically distressed areas and how the State selected projects based on the priorities, preferences, conditions, and requirements of the Recovery Act.

States also shall use this guidance to determine whether any projects that have received Recovery Act funds should be reclassified in order to more accurately reflect the State's investment in economically distressed areas.

Economically Distressed Areas Identified by Unemployment Rate or Per Capita Income

States may continue to use the diagnostic self-assessment tool that FHWA developed to determine if a project is in an economically distressed area in accordance with the criteria set forth in section 301(a)(1) or (2) of the Public Works and Economic Development Act of 1965, as amended (PWEDA) (42 U.S.C. 3161). Section 301(a)(1) of PWEDA (42 U.S.C. 3161) provides that an area is economically distressed if it has a per capita income of 80 percent or less of the national average. Section 301(a)(2) (42 U.S.C. 3161) provides that an area is economically distressed if it has an unemployment rate that is, for the most recent 24-month period for which data are available, at least 1 percent greater than the national average unemployment rate. The FHWA's self-assessment tool utilizes a map that depicts project locations relative to economically distressed counties based on unemployment rate and per capita income. The maps may be accessed at:

•Example Map with Projects Added
•HEPGIS General Information Maps

Although the tool is based on a county-level designation, an economically distressed area also may be a region, municipality, smaller area within a larger community, or other geographic area. (See 42 U.S.C. 3161(b).) States may contact FHWA for assistance identifying economically distressed areas under section 301(a)(1) or (2) of PWEDA (42 U.S.C. 3161) for areas other than the county-level designation.

Economically Distressed Areas Identified by a Special Need Circumstance

The following guidance applies to the determination whether an area is economically distressed pursuant to the "special need" provision in section 301(a)(3) of PWEDA (42 U.S.C. 3161). Any such determination made pursuant to this guidance is solely for the purposes of implementing the Highway Infrastructure Investment appropriation provision, and does not constitute a determination of special need for purposes of programs administered by the Department of Commerce under section 301(a)(3) of PWEDA (42 U.S.C. 3161) or other laws.

If a State believes that an area that does not meet the criteria in section 301(a)(1) or (2) of PWEDA (42 U.S.C. 3161) (relating to the area's unemployment rate or per capita income) is nonetheless economically distressed, the State may consider whether such area meets the special need criteria under PWEDA by determining whether the area satisfies one or more of the criteria described below. An "area" may be a region, county, municipality, a smaller area within a larger community, or other geographic area. (See 42 U.S.C. 3161(b).) If a State intends to rely on any of the criteria listed below, it must provide to the FHWA Division Office documentation demonstrating satisfaction of the criteria.

In selecting additional projects, States shall use the criteria described below as another tool for identifying economically distressed areas based on the "special need" provision.

1.Actual Business Closure or Restructuring. An area has experienced an actual closure or restructuring of one or more businesses within the past twelve (12) months, resulting in sudden job losses and

a. For areas with population over 100,000, the actual or threatened dislocation is 500 jobs, or one (1) percent of the civilian labor force (CLF), whichever is greater.

b. For areas with population up to 100,000, the actual or threatened dislocation is 200 jobs, or one (1) percent of the CLF, whichever is greater.

2. Threatened Business Closure. An area has experienced a threat of closure of one or more businesses that results from a public announcement, such as a Worker Adjustment and Retraining Notification Act (WARN) notice under 29 U.S.C. 2101 et seq. or other credible source of notification, of an imminent closure or restructuring of a firm(s) and

a. For areas with population over 100,000, the actual or threatened dislocation is 500 jobs, or one (1) percent of the civilian labor force (CLF), whichever is greater.

b. For areas with population up to 100,000, the actual or threatened dislocation is 200 jobs, or one (1) percent of the CLF, whichever is greater.

3. Military Base Closures or Realignments, Defense Contractor Reductions-In-Force, or Department of Energy Defense-Related Funding Reductions. Military base closures or realignments, defense contractor reductions-in-force, or Department of Energy defense-related funding reductions.

a. A military base closure refers to a military base that was closed or is scheduled for closure pursuant to the 2005 defense base realignment assessment closure (BRAC) or other BRAC related Department of Defense (DOD) processes. An area or any community located near a military installation being closed or realigned pursuant to BRAC is eligible as a special need circumstance from the date of DOD’s recommendation for closure until five (5) years after the actual date of closing of the installation.

b. A defense contractor reduction-in-force refers to a defense contractor(s) experiencing defense contract cancellations or reductions resulting directly from a military installation being closed or realigned due to BRAC or other BRAC related Department of Defense (DOD) processes and having aggregate value of at least $10 million per year. This includes actual dislocations that already have occurred and threatened dislocations that are anticipated to occur no later than February 17, 2011 (two years after the enactment of the Recovery Act). Defense contracts that expire in the normal course of business will not be considered to meet this criterion.

c. A Department of Energy defense-related funding reduction refers to an area or community located in proximity to a Department of Energy facility that has experienced or will experience a substantial reduction of employment resulting directly from its defense mission change. The area is eligible from the date of the Department of Energy announcement of reductions until five (5) years after the actual date of reduced operations at the installation.

4. Natural or Other Major Disasters or Emergencies. Natural or other major disasters or emergencies, including terrorist attacks, if the area has received one of the following disaster declarations within 18 months prior to the date of the special need determination:

a. A Presidentially Declared Disaster declared under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, as amended (42 U.S.C. 5121 et seq.); or

b. A Federally Declared Disaster pursuant to the Magnuson-Stevens Fishery Conservation and Management Act, as amended (16 U.S.C. 1861a(a)); or

c. A Federally Declared Disaster pursuant to the Consolidated Farm and Rural Development Act, as amended (7 U.S.C. 1961); or

d. A Federally Declared Disaster pursuant to the Small Business Act, as amended (Pub. L. No. 85-536, 72 Stat. 384 (1958)).

The State also must determine that the natural or other major disaster or emergency has resulted in major negative impacts on economic development in the area expected to prevail for at least one year from the date of the disaster declaration.

EPA Meets Day 200 Recovery Act Commitment, Promoting Green Jobs and Healthier Communities

From U.S. Environmental Protection Agency

FOR IMMEDIATE RELEASE September 3, 2009

WASHINGTON – Two-hundred days after passage of the American Recovery and Reinvestment Act of 2009, U.S. EPA Administrator Lisa P. Jackson announced that the agency has met its goal to initiate or accelerate cleanup work at 20 contaminated Superfund sites from the National Priorities List. Superfund sites are often found in industrial areas hit hardest by the recession and pose unacceptable risks to human health and the environment. The Superfund program received $600 million in recovery act funds and, as of day 200, EPA has obligated more than $400 million. The funding will accelerate ongoing cleanup activities or initiate new construction projects, boosting local economies by creating and maintaining jobs while also protecting human health and the environment. “Two-hundred days after Congress passed the recovery act, EPA projects are up and running and creating jobs across the country. We’re providing real solutions for struggling communities and steadily working to pull our country out of the worst economic downturn in a generation,” said Administrator Jackson. “This is how we build a new foundation for prosperity – by making our communities cleaner, safer places to live, work and grow a business.”

To view a video message from Administrator Jackson on how EPA recovery act projects are creating green jobs and cleaner communities across the country, click here: http://yosemite.epa.gov/opa/MMwebcon.nsf/HTML/KMON-7VHQ5M?OpenDocument

The swift allocation of recovery act funds has helped spur new jobs and economic opportunities in sites across the country. In New Bedford, Mass., the recovery act is accelerating the pace of the harbor cleanup that was scheduled to take almost four decades. This cleanup, at one of the nation’s busiest fishing ports, will create and save jobs, and generate potential for millions of dollars in economic activity in tourism, development, and shipping in the years ahead. At the Iron Mountain Mine in Redding, Calif. – one of the nation’s most polluted sites – EPA is using recovery funds to halve the time needed for cleanup. Prior to EPA action, more than one ton of toxic materials were discharged from the Iron Mountain Mine into the waters of the Sacramento River every day. The cleanup will create or save close to 250 jobs in the area. Once completed, the local hydroelectric power plant will use the restored waters to produce more clean energy for the area.

In February, President Obama signed the ARRA. EPA manages more than $7 billion in projects and programs that will invest in environmental protection and provide long-term economic benefits to aid recovery efforts across the nation. As of September 2, EPA has obligated 92 percent of its ARRA program dollars. This means that EPA has doubled its obligations and seen a steady increase in “shovels in the ground” projects since day 100 in May 2009.

President Obama has directed that the recovery act be implemented with unprecedented transparency and accountability. To that end, the American people can see how every dollar is being invested at recovery.gov and for EPA specific projects visit: http://www.epa.gov/recovery