Economic Development Administration: Remediation Activities Account for a Small Percentage of Total Brownfield Grant Funding

In report GAO-06-7, GAO recommended that the Economic Development Administration (EDA) implement a standard procedure requiring regional offices to add a special condition to grants for brownfield sites where remediation of hazardous substances was required stipulating that the grant recipient provide evidence that remediation had been conducted in accordance with all applicable federal, state, and local regulations. EDA issued revised operational guidance on December 1, 2006, that requires specific language to be added to the special terms and conditions section in the event that EDA funds incidental remediation as part of a reuse investment. EDA clarifies that brownfield investments are considered reuse investments. Per EDA's revised Fiscal Year 2007 Operational Guidance, the following language is to be added to special terms and conditions: "Compliance with Environmental Restrictions: Grantee agrees to comply with all environmental use restrictions and permit, health plan or coordination requirements, set forth in the [Lease...., Quitclaim Deed] and any amendments, supplements, or succeeding documents. Compliance with said restrictions shall be included in any contract documents for project construction. Grantee shall certify compliance before final disbursement of investment funds." The requirement of this special condition in the event of incidental remediation at brownfield investment sites will help ensure that projects comply with all environmental standards, promote efficiency, and help limit any potential liability to the government.

In report GAO-06-7, GAO recommended that the Economic Development Administration (EDA) ensure that regional staff verified estimated jobs and private sector investment for proposed projects by following existing guidelines or creating new ones, as necessary. EDA issued revised operational guidance on December 1, 2006, that included a new methodology that regional offices are to use to calculate estimated jobs and private sector investment attributable to EDA projects. The guidance includes a detailed description of the new methodology and a worksheet to guide the EDA staff in preparing the estimate. The worksheet must be completed for all projects and attached to the Investment Summary in the project file. The revised methodology and requirement to document how the estimate was calculated will help EDA make more accurate funding decisions, based on accurate job forecasts and investment information, and will likely increase the chances of EDA funding projects with the greatest potential impact.