Economic Development Assistance for
Communities Affected by Employment
Changes Due to Military Base Closures
(BRAC)
Oscar R. Gonzales
Analyst in Economic Development Policy
June 16, 2009
Congressional Research Service
7-5700
www.crs.gov
RL34709
CRS Report for Congress
P
repared for Members and Committees of Congress

Economic Development Assistance for Communities Affected by BRAC

Summary
This report is intended to discuss the geographic impact of base closures and realignments;
summarize federal economic assistance programs for communities and individuals affected by
military base closures and realignments (BRAC); and highlight issues for Congress. The report
will be updated as events warrant.
The 2005 BRAC round includes the closure or realignment of 837 facilities and involves an
additional 160 facilities that will gain missions or resources, for a total of 997 changes
nationwide. Most of these changes are on a smaller scale, each involving fewer than 300 direct
job losses or gains, including military, civilian, and contractor jobs. 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.
Important policy issues before Congress include (1) the impact of military base closures and
expansions on local employment; (2) the possible elimination of the of the BRAC Commission
and the resulting impact on federal economic and community development programs—such as
the Community Development Block Grant (CDBG) program and the Economic Development
Administration (EDA)—that currently provide a preference for communities affected by BRAC;
(3) the adequacy and flat level of funding for federal assistance programs while anticipating an
80% increase from $17 billion to $32 billion in construction costs; (4) housing for military staff
amidst the mortgage crisis; (5) funding for communities experiencing growth through the defense
access road program; (6) delays in environmental cleanup that may cause difficulties in the
economic redevelopment of military facilities; and (7) redevelopment of military bases as
refineries to promote economic growth. In addition, the impact of the economic downturn and the
economic stimulus package through the American Recovery and Reinvestment Act of 2009
(ARRA, P.L. 111-5) will be important for communities affected by BRAC.
In the 110th Congress, Title I of the Military Construction and Veterans Affairs Appropriations Act
of 2009 (H.R. 6599) and Title I of the parallel Duncan Hunter National Defense Authorization
Act (H.R. 5658), allocated funding for BRAC-related activities for road construction, military
facilities, and housing assistance.
In the 111th Congress, ARRA provides $555 million for the Homeowner’s Assistance Fund under
the Housing Improvement Program (HAP), for military personnel affected by the 2005 BRAC
round. In addition, ARRA provides $10 billion for Recovery Zone Economic Development Bonds
for areas designated as economically distressed under previous BRAC round closures.
This report will be updated as events warrant.

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Contents
Background ................................................................................................................................ 1
Spatial Analysis .......................................................................................................................... 2
Methodology......................................................................................................................... 2
Employment Changes in Largest Facilities ............................................................................ 2
Employment Changes in Metropolitan Areas......................................................................... 5
Employment Changes at the State Level................................................................................ 7
Net Employment Losses and Gains ................................................................................. 7
Inter- and Intra-State Employment Changes .................................................................... 9
Employment Changes as a Share of Total Employment ................................................... 9
Federal Economic Development Assistance to State and Local Governments............................. 11
Office of Economic Adjustment .......................................................................................... 12
Overview ...................................................................................................................... 12
Type of Assistance ........................................................................................................ 12
Funding ........................................................................................................................ 12
Economic Development Administration .............................................................................. 13
Overview ...................................................................................................................... 13
Type of Assistance ........................................................................................................ 13
Funding ........................................................................................................................ 13
Community Development Block Grants .............................................................................. 14
Overview ...................................................................................................................... 14
Type of Assistance ........................................................................................................ 14
Funding ........................................................................................................................ 15
Other Assistance ................................................................................................................. 15
Department of Defense ................................................................................................. 15
Other Agencies ............................................................................................................. 15
Federal Assistance for Individual Workers Displaced by BRAC activities.................................. 16
DOD Worker Assistance Programs ...................................................................................... 16
Department of Labor Job Training Program for Dislocated Workers .................................... 16
Overview ...................................................................................................................... 16
Formula Grants ............................................................................................................. 16
National Emergency Grants (NEGs).............................................................................. 17
Other Assistance ................................................................................................................. 17
Issues for Congress ................................................................................................................... 18
Impacts on Communities..................................................................................................... 19
Elimination of the BRAC Commission................................................................................ 19
Increase in BRAC Construction Costs ................................................................................. 20
Housing for Military Staff Displaced by BRAC................................................................... 21
Recovery Zone Economic Development Bonds ................................................................... 21
Defense Access Road Program ............................................................................................ 22
Environmental Cleanup....................................................................................................... 22
BRAC Facility Redevelopment for Refineries ..................................................................... 22
Concluding Observations .......................................................................................................... 23

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Figures
Figure 1. Employment Losses and Gains at the Metropolitan Statistical Area (MSA)
Level ....................................................................................................................................... 6
Figure 2. Employment Losses and Gains at the State Level ....................................................... 10
Figure 3. EDA Funding FY1993-FY2008.................................................................................. 14

Tables
Table 1. Major Military Facilities to be Closed or Realigned, Ranked by Total Direct and
Indirect Employment Changes ................................................................................................. 3
Table 2. Rank of States by Total Direct and Indirect Job Losses and Gains Resulting from
BRAC...................................................................................................................................... 7
Table 3. Appropriations for Office of Economic Assistance FY2001-FY2008 ............................ 13
Table A-1. List of Federal Economic and Community Development Programs .......................... 24

Appendixes
Appendix. List of Federal Economic and Community Development Programs .......................... 24

Contacts
Author Contact Information ...................................................................................................... 29

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Background
On five occasions Congress has authorized the Department of Defense (DOD) to realign or close
military bases as part of the Base Realignment and Closure (BRAC) process. Under the BRAC
process: (1) the Department of Defense prepares a list of military bases to be realigned or closed;
(2) an independent BRAC Commission reviews the list, makes changes and sends a revised list to
the President; (3) the President reviews the list and transmits the list without changes to Congress;
and (4) the Secretary of Defense implements the approved recommendations unless a joint
resolution of disapproval is passed by Congress. Following the actual base closings and
realignments, DOD develops an environmental remediation plan to enable the conveyance of
surplus federal land to other entities.1
Military facilities were closed and realigned in 1988, 1991, 1993, and 1995 under a BRAC
process.2 More than 350 installations have been closed in these four BRAC rounds. The objective
of these BRAC rounds was to promote cost-savings and efficiency, eliminate redundancy, and
adapt a Cold War military to a post-Soviet, post-Cold War world.3
The 2005 BRAC round, however, 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.
This latest BRAC round includes the closure or realignment of 837 facilities and involves an
additional 160 facilities that will gain missions or resources due to the proposed closures and
realignments, for a total of 997 affected facilities nationwide. Most of these closures are on a
small scale, each involving less than 300 direct employment losses or gains each, including
military, civilian and contractor jobs. Twenty-two major military installations will be closed and
33 others will be realigned. According to GAO estimates, the 2005 BRAC round will entail
relocating over 123,000 personnel.4
In addition to BRAC-related actions that must be completed by September 15, 2011—under the
Global Defense Posture Realignment5 process—DOD is planning to transfer about 70,000

1 For a detailed examination of the BRAC process, For environmental remediation issues, see CRS Report RS21822,
Military Base Closures: DOD's 2005 Internal Selection Process, by Daniel H. Else and David E. Lockwood. A policy
challenge for Congress related to environmental cleanup is how to promote an appropriate environmental review of
military facilities within a reasonable time frame, since some facilities dating back to 1988 are still under
environmental review and remediation.
2 Prior to the 1988 BRAC round, military installations were closed, or their missions were altered by order of the
Secretary of Defense.
3 10 U.S.C. Section 2687 authorizes the Base Realignment and Closure (BRAC) process for (1) military installations at
which at least 300 civilian personnel are authorized to be employed, or (2) the realignment of any military installation
where at least 300 civilian personnel are authorized to be employed and where the closure or realignment is intended to
reduce the work force by more than 1,000 or by more than 50% of the number of civilian personnel authorized to be
employed at the installation.
4 See U.S. Government Accountability Office, GAO Observations on DOD Funding for Military Infrastructure and
Road Improvements Surrounding Growth, GAO Report D08-602R, April 1, 2008, available at http://www.gao.gov/
new.items/d08602r.pdf.
5 The Global Defense Posture Realignment (GDPR) process refers to base realignments and closures at the
international level and is a process similar to BRAC, but at the international level. Although GDPR is not directly
related to BRAC, it will impact local communities in the United States seeking to adjust to increases in employment
(continued...)
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military and civilian personnel to the United States by 2011.6 DOD also plans to increase the size
of the Army by 74,000 and the Marines by 27,000. These transfers and increases will also have
considerable economic development impacts. In 20 military facilities alone, these combined
changes will result in the net growth of 173,000 military and civilian personnel, not including
families and contractors.7
Spatial Analysis
Methodology
The Congressional Research Service (CRS) compiled a database with information on direct and
indirect military, civilian and employment changes for nearly 1,000 military facilities nationwide
to conduct an analysis of employment changes in communities throughout the country as a result
of BRAC. Data was obtained from Appendix O of the BRAC 2005 report to the President.8
Additional information was obtained from the head of the BRAC commission, former Secretary
of Veterans Affairs, Anthony J. Principi. A second database was developed using a Geographic
Information System (GIS) for analytical purposes to estimate and visualize information at
multiple geographic levels. This database includes information on employment changes for (1)
individual facilities; (2) metropolitan statistical areas; (3) counties; and (4) states. For each of
these geographic levels, information on employment gains and losses is available for six different
variables: direct military, civilian, and contractor losses or gains (3 variables); total direct
employment changes; indirect employment changes using an employment multiplier9 developed
by the BRAC commission; and total direct and indirect employment changes. In addition, reports
from government agencies such as GAO and DOD were compiled to review economic
development issues. The results of the compilation of this information are presented below.
Employment Changes in Largest Facilities
In general, DOD data show that a total of 21 major military facilities will be closed and 30 other
facilities will be realigned as part of the 2005 BRAC process. Table 1 includes a list of major
military installations that will be closed or realigned, based on final recommendations from the

(...continued)
and population as a result of military realignment overseas.
6 U.S. Government Accountability Office, Defense Infrastructure: High-Level Leadership Needed to Help
Communities Address Challenges Caused by DOD-Related Growth, GAO Report 08-665, June 2008, available at
http://www.gao.gov/docsearch/abstract.php?rptno=GAO-08-665.
7 Ibid.
8 BRAC Commission, 2005 Defense Base Closure and Realignment Commission Report to the President, Washington,
DC, September 8, 2005.
9 Multiplier effects, which measure the rate at which a direct effect (e.g., base job losses) creates indirect effects such as
additional jobs, are important elements in estimating the impacts of a base closing. If, for example, one assumes that a
base job has a large indirect employment multiplier (e.g., 2.5-3.0), then for each direct base job lost, indirectly related
jobs in some defined geographic area are also predicted to be lost as a result. Similarly, an income multiplier allows one
to estimate total income generated by a military base.
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2005 BRAC Commission.10 The table ranks the military facilities by the number of direct and
indirect employment losses and gains for military, civilian and contractor staff.
Two of the largest facilities affected by job losses are Fort Monmouth, New Jersey, and Walter
Reed Army Medical Center in the District of Columbia. An estimated 5,200 jobs in Fort
Monmouth will be transferred to other facilities and a total of 9,700 jobs will be lost directly or
indirectly at this New Jersey facility, according to estimates developed by the BRAC
Commission.11 Most of these employment losses in Fort Monmouth will be civilian jobs, with
more than 4,600 civilian job losses, but a large majority of these positions will be transferred to
other facilities. Specifically, nine other military facilities would gain jobs transferred from Fort
Monmouth. Aberdeen Proving Ground in Maryland will gain several thousand positions as a
result of transfers from Fort Monmouth, and the U.S. Military Academy at West Point, New York,
will gain 421 jobs. Once the overall job transfers in Maryland, New Jersey, and New York are
accounted for, the net employment change is estimated to be a total reduction of 589 positions.
Table 1. Major Military Facilities to be Closed or Realigned, Ranked by Total Direct
and Indirect Employment Changes
Net Job Changes
Direct
Indirect
Total
Facility State
Employment Employment Employment
Military Civilian Contractor
Changes
Changes
Changes
Facilities with Net Job Losses
1. Fort Monmouth NJ
-620
-4,652
0
-5,272
-4,464
-9,736
2. Walter Reed
Medical
Center

DC
-2,668
-2,373 -622 -5,663 -3,869 -9,532
3. Fort Monroe
VA
-1,393
-1,948
-223
-3,564
-4,418
-7,982
4. Pope Air Force
Base

NC
-4,792
812 -132 -4,112 -3,472 -7,584
5. Naval Air
Station
Brunswick

ME
-2,880
-395
0 -3,275 -3,808 -7,083
6. Fort McPherson GA
-2,260
-1,881
0
-4,141
-2,705
-6,846
7. Brooks City
Base

TX
-1,297
-1,268 -358 -2,923 -2,799 -5,722
8. Lackland Air
Force
Base
TX
-2,168
-416 -116 -2,700 -2,282 -4,982
9. Cannon Air
Force
Base
NM
-2,388
-381
0 -2,769 -2,002 -4,771
10. Naval Station
Great
Lakes

IL
-2,059
-68 -10 -2,137 -2,560 -4,697
11. Naval Station
Ingleside
TX
-1,726
-254 -57 -2,037 -2,558 -4,595
12. Sheppard Air
Force
Base
TX
-2,464
-156
0 -2,620 -1,740 -4,360

10 BRAC Commission, 2005 Defense Base Closure and Realignment Commission Report to the President, Washington,
DC, September 8, 2005.
11 Ibid.
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Net Job Changes
Direct
Indirect
Total
Facility State
Employment Employment Employment
Military Civilian Contractor
Changes
Changes
Changes
13. Naval Base
Ventura
County

CA
-221
-1,421 -375 -2,017 -1,523 -3,540
14. Naval Support
New
Orleans

LA
-1,270
-603 -62 -1,935 -1,325 -3,260
15. Naval Center
San
Diego
CA
-1,596
-33 -1 -1,630 -1,469 -3,099
Facilities with Net Job Gains
1. Fort Belvoir
VA
4,162
6,375
2,058
12,595
8,726
21,322
2. Fort Bliss
TX
11,354
147
-
11,501
8,884
20,385
3. Fort Sam
Houston
TX
7,625
1,622 92 9,339 8,354 17,693
4. Fort Benning
GA
9,274
621
-
9,895
4,034
13,929
5. Fort Lee
VA
6,139
1,149
56
7,344
4,419
11,763
6. Fort Meade
MD
682
2,915
1,764
5,361
4,870
10,231
7. Fort Carson
CO
4,178
199
-
4,377
3,309
7,686
8. Fort Bragg
NC
3,425
238
-
3,663
2,509
6,172
9. Fort Sill
OK
3,445 105
-3
3,547 2,110 5,657
10. Marine Corps
Base
Quantico

VA 446
1,357
1,210 3,013 2,109 5,122
11. Bethesda Naval
Medical
Center

MD
1,418
674 737 2,829 2,049 4,878
12. Naval Station
China
Lake

CA
176
1,645 493 2,314 2,485 4,799
13. Little Rock Air
Force
Base

AK
2,576
176 - 2,752 1,993 4,745
14. Fort Riley
KS
2,415
334
-
2,749
1,737
4,486
15. Eglin Air Force
Base

FL
2,201
147 -
2,348 4,279
Source: CRS estimates based on BRAC Commission 2005 report.
Notes: Owing to space limitations only the top 30 military facilities—ranked by employment losses or gains—
are listed. A complete database and list of military facilities is available from the author.
The realignment of Walter Reed Army Medical Center will result in a net reduction of 9,500 jobs
in this facility in the District of Columbia. Many of these jobs, however, will be transferred to
nearby Bethesda Naval Medical Center in Maryland, 5.5 miles away. The Bethesda facility will
gain 2,800 jobs as a result of these transfers. In addition, personnel from Walter Reed will be
transferred to a community hospital that will be built at Fort Belvoir, Virginia, which will result in
a gain of 3,800 jobs in Fort Belvoir. An additional four military sites in Maryland and Virginia
will gain medical personnel as a result of staff transferred from Walter Reed Army Medical
Center. After accounting for job transfers, a total of 3,000 jobs in the Washington, DC,
metropolitan area will be loss instead of the original 9,500.
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Other major facilities that will be realigned include Fort Monroe in Virginia, with total direct and
indirect job losses of 7,900. Each of the following facilities will lose more than 5,000 jobs: Pope
Air Force base in North Carolina; the Naval Air Station in Brunswick, Maine; and Fort
McPherson in Texas.
Although considerable job losses will occur in certain facilities, other military installations will
have an increase in military and civilian personnel. For example, the following military facilities
will gain more than 10,000 direct and indirect jobs, based on estimates developed by the BRAC
Commission: Fort Belvoir in Virginia will gain an estimated 21,000 jobs; Fort Bliss and Fort Sam
Houston in Texas will see an increase of 20,000 and 17,600, respectively; Fort Benning in
Georgia is forecast to gain nearly 14,000 jobs; Fort Lee in Virginia is scheduled to gain an
estimated 11,700 jobs; and Fort Meade in Maryland will gain more than 10,000 jobs.
Communities that gain employment will see a need for access roads, schools, affordable housing,
business facilities, and infrastructure to accommodate the increase in military and civilian
personnel and their families. Some of these military facilities will also be affected by the
relocation of U.S. military and civilian personnel stationed abroad who are scheduled to move to
the United States. This will have an additional impact over the economic development of these
areas.12
Employment Changes in Metropolitan Areas
In addition to an analysis of individual facilities, it is useful to understand the impact of base
realignments and closures at the metropolitan level. As has been discussed, some facilities will
experience considerable job losses, but many of these employees will be transferred to nearby
facilities within the same metropolitan area. Figure 1 shows the location of military facilities—at
the Metropolitan Statistical (MSA) level—affected by employment changes related to BRAC. As
shown in the map, MSAs vary in size, with a greater geographic area in the West, in states such as
California, and relatively smaller sizes in the East.
The MSA-level map helps to illustrate that although some cities such as Boulder, Colorado will
see decreased employment as a result of base realignments, other nearby jurisdictions—such as
Colorado Springs—will gain jobs and help offset the changes. In states such as Colorado,
facilities that will lose employment are adjacent to metropolitan areas that will gain jobs.

12 Additional information on the relocation of overseas military and civilian personnel, see U.S. Government
Accountability Office, Defense Infrastructure: High-Level Leadership Needed to Help Communities Address
Challenges Caused by DOD-Related Growth, GAO Report 08-665, June 2008.
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Figure 1. Employment Losses and Gains at the Metropolitan Statistical Area (MSA) Level

Source: CRS estimates based on BRAC Commission 2005 Report.
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Economic Development Assistance for Communities Affected by BRAC

In particular, the metropolitan areas that are projected to experience the greatest decrease in
employment, shown in Figure 1, include the following: Virginia Beach-Norfolk-Newport News,
VA; Atlanta-Sandy Springs-Marietta, GA; Portland-South Portland-Biddeford ME; Corpus
Christi, TX; St. Louis, MO-IL; Clovis, NM; Wichita Falls, TX; Oxnard-Thousand Oaks-Ventura,
CA; and Charleston-North Charleston, SC. The following MSAs, which are projected to
experience an increase in employment, with more than 4,000 new jobs, include Jacksonville, FL;
El Paso, TX; Columbus, GA-AL; Baltimore-Towson, MD; Richmond, VA; Colorado Springs,
CO; Lawton, OK; San Antonio, TX; Bakersfield, CA; Manhattan, KS.
A complete list of changes at the Metropolitan and Micropolitan13 level is available in Appendix
O of the BRAC Commission Report.
Employment Changes at the State Level
Net Employment Losses and Gains
At a state level, a geographic analysis shows that absolute job losses will be greatest in states such
as Virginia, the District of Columbia, Missouri, New Jersey, Maine and Illinois (ranked by
greatest number of total direct and indirect job losses). Table 2 presents the direct and indirect
employment gains and losses, ranked by state job losses, and based on data compiled by the
BRAC Commission. The table shows that Virginia will reassign an estimated 40,000 jobs, which
represents 3% of the total employment in the affected metropolitan areas in the state. Virginia is
followed by the District of Columbia, which will see a reduction of nearly 14,000 jobs, which
represents a 0.5% decrease of jobs in the city. Alternatively, states such as Texas, Maryland and
Florida are expected to gain 14,000, 16,000 and 28,000 jobs, respectively.
Table 2. Rank of States by Total Direct and Indirect Job Losses and Gains Resulting
from BRAC
State and Rank by
Direct Job Gains or Losses
Sub-
Total
Percent of
total

Total Employment
Gains
MSA
Losses
and
Employment
Military Civilian Contractor Direct Indirect Losses
Lost and Rank

United States 8,687
-15,874
-833
-8,023
-13,613 -21,322

1 Virginia
-5,570 -10,838
-2,362
-18,770 -20,940 -39,509 -3.00% 6
2 D.C.
-3,314 -3,145
-948 -7,407 -5,873 -13,272 -0.50% 17
3 Missouri
-1,187 -2,492
-296 -3,978 -3,129 -7,107 -0.20% 25
4 New
Jersey
104 -3,783
0 -3,679 -3,216 -6,895 -0.40% 21
5 Maine
-2,880
-94
0 -2,974 -3,587 -6,561 -0.80% 14
6 Illinois
-2,074 -832
76
-2,830 -3,092 -5,922 -2.30% 7
7 New
Mexico
-2,414 -217
1 -2,630 -1,836 -4,466 -2.04% 8
8 Alaska
-2,145 -301
-41 -2,487 -1,900 -4,387 -6.10% 2

13 A Micropolitan area has less than 10,000 inhabitants; a complete definition is available at http://www.census.gov/
population/www/estimates/aboutmetro.html.
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Sub-
State and Rank by
Total
Percent of
Direct Job Gains or Losses
total

Total Employment
Gains
MSA
Losses
and
Employment
Military Civilian Contractor Direct Indirect Losses
Lost and Rank
44 Nevada
1,029
75
248 1,352
1,004
2,356
0.50% 43
45 Ohio
291 1,347
-39 1,599
1,485
3,084
-0.80% 15
46 Arkansas
2,478
173
0 2,651
1,906
4,557
1.00% 47
47
Georgia
5,890 -2,254
695 4,331
886 5,217 1.22% 48
48 Oklahoma
3,436
-45
-3 3,388
2,010
5,398
8.10% 53
49 Kansas
3,305
306
-159 3,452
2,535
5,987
5.10% 51
50 Colorado
4,168
-687
-64 3,417
2,717
6,134
2.10% 50
51 Texas
9,718
-919
-644 8,155
5,588 13,848
-1.00% 12
52
Maryland
-1,180 7,773
2,307 8,900 6,937 15,837 0.10% 36
53
Florida
12,911 1,120
6
14,037 13,923 27,960 5.70% 52
Source: CRS estimates based on BRAC Commission 2005 Report.
Note: For the purposes of this table, the District of Columbia, Puerto Rico and Guam are included.
Inter- and Intra-State Employment Changes
Although Virginia and the District of Columbia will experience losses, nearby states such as
Maryland will benefit from considerable increases in employment. For example, Fort Meade in
Maryland will receive an influx of 10,000 direct and indirect jobs as a result of the BRAC
process. While Walter Reed Medical Center in the District of Columbia will close many of its
facilities and experience a direct and indirect loss of 9,500 jobs, the National Naval Medical
Center Bethesda will have a total direct and indirect gain of 4,900 jobs, which would result in a
net loss of 4,600 jobs in the Washington Metropolitan region.
In addition to interstate job changes, there will be considerable intra-state gains. In the case of
Virginia, for example, Fort Belvoir will gain 21,000 jobs and Fort Lee will gain an estimated
12,000 jobs. This direct and indirect net increase in jobs will help to offset the closure of Fort
Monroe, located in Virginia. However, Virginia will still lose almost 40,000 jobs as shown in
Table 1.
Employment Changes as a Share of Total Employment
The last column of Table 2 also presents a ranking of states by the share of jobs lost in
metropolitan statistical areas. Total job losses as a share of total employment will be primarily
focused in rural areas. Some communities in Idaho will lose an estimated 8% of jobs. In
particular, the Mountain Home, Micropolitan Statistical Area in Idaho will be one of the most
affected regions in the nation, with a loss of nearly 1,200 jobs out of the total 14,000 jobs in the
area.
Another state that would have experienced considerable job losses as a share of total
employment—had it not been removed from the list of bases to be closed—was Alaska. The
Fairbanks MSA, and Yukon-Anchorage MSA, were expected to see employment losses of more
than 6%. In these areas, however, the BRAC Commission and the Department of Defense decided
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not to close several military bases. This will result in job losses that are not as considerable as
those envisioned in the original BRAC Commission report.
In addition to Idaho and Alaska, states such as Kentucky (ranked third in job losses by
employment share), Mississippi (4th), and North Dakota (5th) will also experience considerable
job losses as a share of total employment. In Kentucky, the Elizabethtown Metropolitan Statistical
Area will experience direct and indirect job losses of 2,500 workers. In Mississippi, the
Pascagoula, Metropolitan Statistical Area will see job losses of 1,800 workers. The Gulfport-
Biloxi area will be affected by the realignment of Keesler Air Force Base. The closure of the
Grand Forks Air Force Base in North Dakota will result in direct and indirect job losses of 2,800
jobs.
Figure 2 shows employment losses and gains as a result of BRAC aggregated at the state level.
States such as Alaska, Hawaii and Louisiana will suffer considerable net job losses.
Figure 2. Employment Losses and Gains at the State Level

Source: CRS estimates based on BRAC Commission 2005 Report.
In terms of job gains, the states of Florida, Maryland, Texas, Colorado, Kansas, Oklahoma and
Georgia (ranked by greatest gain in employment) will benefit from the transfer of military
employees and facilities. Eglin Air Force Base in Florida will gain an estimated 4,200 jobs as a
result of the development of the Joint Strike Fighter Initial Joint Training Site. In addition, the
Army’s 7th Special Forces Airborne Group will relocate to Eglin from Fort Bragg.
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Federal Economic Development Assistance to State
and Local Governments
The federal government provides aid to local communities affected by military base closures and
realignments. Federal economic assistance covers a wide range of activities and agencies,
including, but not limited to
• planning and economic adjustment assistance provided by the Office of
Economic Adjustment of Department of Defense (DOD);
• the Economic Development Administration (Department of Commerce);
• the Rural Development Administration (Department of Agriculture);
• environmental cleanup at military bases (DOD, EPA and other agencies);
• disposal of surplus federal properties (DOD);
• the Federal Airport Improvement Program (DOD and Department of
Transportation);
• Community Development Block Grants (Department of Housing and Urban
Development); and
• Community Service Grants (Department of Health and Human Services).
Although only some federal economic assistance programs provide a preference for BRAC
activities, communities affected by BRAC changes can access other economic development funds
available through their state and local governments.
The Office of Management and Budget (OMB) estimates that total federal aid to states and local
communities was $444 billion in FY2008, and will be $467 billion in FY2009.14 Federal funds
can be used by states and local communities to offset certain economic losses, including the
closure of military bases. According to OMB, state and local governments have a constitutional
responsibility to promote economic development, and the federal government has played an
important role in providing economic development assistance:
The Federal Government provides grants, loans, and tax subsidies to State and local
governments. Federal grants help State and local governments finance programs covering
most areas of domestic public spending, including income support, infrastructure, education,
and social services.15
Funds specifically targeted for community and regional development are estimated to be $17.1
billion in 2009.16 Several of these economic assistance and development programs, such as those
funded by DOD through the Office of Economic Adjustment, the Economic Development

14 Office of Management and Budget, Budget of the United States Government Fiscal Year 2009, February 2008, p.
107. About half of the $476 billion in federal funds to state and local governments is used to cover Medicaid payments
under the Department of Health and Human Services. Report available at http://www.whitehouse.gov/omb/budget/
fy2009/pdf/apers/crosscutting.pdf.
15 Ibid.
16 Ibid.
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Administration (EDA) in the Department of Commerce and Community Development Block
Grants (CDBG) in the Department of Housing and Urban Development, give priority to BRAC
related projects because legislation specifically authorizes funding for BRAC activities. These
entities and programs are discussed in more detail below.
Office of Economic Adjustment
Overview
The Office of Economic Adjustment (OEA) is the primary source of federal assistance in the
Department of Defense to assist communities affected by employment losses and gains as a result
of BRAC.17 The OEA also serves as a coordinating agency to channel economic assistance for
communities affected by BRAC. Since 1988, the OEA has provided a total of $280 million in
funding for previous BRAC rounds, primarily to help communities prepare strategies for local
development efforts.
Type of Assistance
The Office of Economic Adjustment has provided assistance for communities, regions and states
to develop and implement plans to alleviate serious economic impacts that result from defense
program changes, including
• base closings, expansions, and openings;
• contract changes affecting firms; and
• personnel reductions or increases at military facilities.
The OEA has also maintained close working relationships with other federal agencies that have
programs that can be utilized to assist communities adversely affected by defense cutbacks or
realignments. By design, the OEA plays a facilitating role in the economic adjustment process.
The affected community, however, must exercise the principal role in initiating and carrying out
the adjustment and conversion plan.
Funding
Currently, the OEA operates with a staff of 45 civilian and 3 military personnel. Funding for the
office has been provided in the Defense Appropriations bill under the general operations and
maintenance account. In previous budget estimates, the OEA has indicated that most communities
affected by a BRAC round receive assistance averaging $400,000 to $500,000 a year for three to
five years depending on individual circumstances. In addition, there have been a number of
congressional adjustments for specific sites over the years, in amounts as high as $10,000,000 in a
single year.18 Table 3 lists the amounts appropriated for FY2001-FY2008.

17 For more information, see http://www.oea.gov.
18 For example, in the latest defense appropriations act, Congress authorized additional construction funds for facilities
affected by BRAC.
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Table 3. Appropriations for Office of Economic Assistance FY2001-FY2008
(in millions of $)

FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008
Appropriated 56.8 46.6 49.6 60.2 88.8 161.6 141.4 168.7
Source: Successive OEA budget estimates FY2001-FY2008, available at http://www.defenselink.mil/comptroller/
defbudget/fy2009/fy2009_o1.pdf under Operation and Maintenance Programs.
Economic Development Administration
Overview
The Public Works and Economic Development Act (PWEDA) of 1965 P.L. 89-136 (42 U.S.C. §
3121, 79 Stat 552), extended through 2004, authorizes economic adjustment grants to help
eligible communities respond to sudden changes in economic conditions, including those
resulting from natural disasters, changing trade patterns and military base closures.
Type of Assistance
The Economic Development Administration (EDA), has provided grants in excess of $640
million since the first BRAC round in 1988, and administered $274 million of DOD funds and $8
million from the Department of Energy, for defense adjustment projects involving closed military
bases. EDA grants are competitive and are made on a cost-share basis with local governments,
redevelopment agencies, and private or non-profit organizations. The grants include monies for
planning and technical assistance, infrastructure improvement, and revolving loan funds for
private business development.
Funding
PWEDA’s 2004 legislation (P.L. 108-373) authorizes the following amounts for economic
development assistance programs: $400 million in FY2004; $425 million in FY2005; $450
million in FY2006; $475 million in FY2007; and $500 million in FY2008. The statute also
authorizes $33.4 million in FY2004 and such sums as are necessary thereafter for salaries and
expenses. A minimum funding level of $27 million was established in the 2004 amendment for
the planning program.
Appropriations for EDA have declined as shown in Figure 3, with total funding falling below
$300 million in recent years. For FY2009, the Administration budget request included $40
million for economic adjustment assistance, $2.3 million less than appropriated in FY2008, and a
total of $132.8 million for EDA assistance, which is significantly less than the FY2008 enacted
amount of $279.9 million. On June 23, 2008, the Senate Appropriations Committee recommended
$232.8 million in funding for EDA activities ($200 million) and salaries and expenses ($32.8
million).19 This is $100 million more than requested by the Administration, but $47 million less
than appropriated in FY2008. In June 2008, the House Appropriations Committee also took

19 CRS Report RL34540, Commerce, Justice, Science and Related Agencies: FY2009 Appropriations, coordinated by
William J. Krouse, Oscar R. Gonzales, and Jennifer D. Williams.
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action on the appropriations measure. The Committee approved draft bill recommends an
appropriation of $282.8 million for EDA.20
Figure 3. EDA Funding FY1993-FY2008
EDA Funding FY1993-FY2008
Millions of Dollars
700
600
500
400
300
200
100
0
993 994 995 996
97
98
04
05
06
19
19
999 000 001 002 003
20
20
007 008
FY1 FY1 FY1 FY1 FY
FY
FY1 FY2 FY2 FY2 FY2 FY20 FY
FY
FY2 FY2

Source: EDA annual appropriations, OMB Budget of the United States for FY2009.
Community Development Block Grants
Overview
The Community Development Block Grant (CDBG) program was first authorized under Title I of
the Housing and Community Development Act of 1974, P.L. 93-393, as amended (42 USC 5301).
It is one of the largest and longest-standing federal block grants in existence. Billions of dollars in
federal assistance to state and local governments have been allocated through CDBG.21
Type of Assistance
The program allows states and eligible local government grantees to fund 25 eligible activities
related to housing, community development, neighborhood revitalization, economic development,

20 Ibid.
21 CRS Report RL34504, The Department of Housing and Urban Development: FY2009 Appropriations, by Maggie
McCarty et al..
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and the provision of public services. One of the eligible activities is related to “the proposed or
actual establishment, realignment, or closure of a military installation.”22
Funding
Excluding mandatory grants to state and local governments, the CDBG program’s $3.6 billion
regular appropriation for FY2008 makes it one of the largest sources of grant assistance to state
and local governments. In addition to its regular appropriations, Congress has used the program to
provide federal supplemental assistance to state and communities in their disaster recovery
efforts. This has included $3.483 billion in supplemental funding for September 11, 2001
recovery efforts in New York City, and $19.7 billion in supplemental assistance to the five states
(Alabama, Florida, Louisiana, Mississippi, and Texas) affected by the Gulf Coast hurricanes of
2005.23
Other Assistance
Department of Defense
In addition to activities funded by the Office of Economic Assistance, the Department of Defense
has responsibility for environmental reviews, land transfers and improvements in military
facilities. These DOD programs include
• DOD responsibility and funding for environmental review and cleanup at closing
military facilities, which may support local jobs after a base is designated for
closure but before federal land is actually transferred.
• Below market value transfer of land from closed military bases under the DOD’s
authority to make public benefit transfers and economic development
conveyances.
• The transfer of military airports to civilian use under the Federal Airport
Improvement Program of the Federal Aviation Administration (FAA).
Other Agencies
There are a number of other federal agencies and activities that may help communities adversely
affected by base closures and realignments. For example, the federal government has established
programs to promote economic development in rural communities with populations of less than
50,000, administered by the Rural Development Administration of the Department of Agriculture.
Such assistance includes community facilities loans, rural business enterprise grants, business and
industrial guaranteed loans, and intermediary relending programs.
The Appendix includes a list of these programs, including information on FY2008 funding,
eligible entities and method for distribution of funds. Federal assistance and economic

22 See 42 USC 5305 and 42 USC 5307 (b) (6).
23 See CRS Report RL33330, Community Development Block Grant Funds in Disaster Relief and Recovery, by Eugene
Boyd and Oscar R. Gonzales.
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development programs are available within the Department of Housing and Urban Development
(HUD), the Department of Commerce, Department of Agriculture and Department of Health and
Human Services.
Federal Assistance for Individual Workers
Displaced by BRAC activities
DOD Worker Assistance Programs
DOD has the authority to provide numerous incentives and transition benefits to departing
military personnel. These include early retirement incentives, temporary continuation of medical
care benefits, pre-separation counseling for separating service members, employment counseling
and placement assistance, relocation assistance, and special education benefits. In addition, the
Pentagon is also authorized to provide special benefits and incentives to civilian personnel
displaced by a defense drawdown. These include
• advance notification of a reduction in force;
• pre-separation counseling;
• a hiring preference system with federal agencies to re-employ qualified displaced
DOD employees;
• financial incentives to encourage early retirement of eligible employees; and
• continued health insurance coverage for up to 18 months following involuntary
separation.24
Department of Labor Job Training Program for Dislocated Workers
Overview
The Workforce Investment Act of 199825 (WIA) provides assistance specifically for dislocated
workers. Dislocated workers are generally characterized as workers with an established work
history who have lost their jobs as a result of structural changes in the economy—including
employment loss as a result of military base closures—and who are not likely to find new jobs in
their former industries or occupations.
Formula Grants
Of the funds appropriated for the dislocated worker program for FY2008, approximately 88% are
for formula grants to states and 12% are for a national reserve, which primarily funds National

24 For more information, see DOD’s webpage on assistance for civilian employees at http://www.cpms.osd.mil/
bractransition.
25 P.L. 105-220, 29 U.S.C. 2811 et seq.
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Emergency Grants (NEGs), discussed below.26 The governor can reserve not more than 15% of
the state’s formula grant for state level activities, and not more than 25% for “rapid response”
activities. At least 60% must be allocated to local workforce investment boards (WIBs) by a
formula prescribed by the governor. Rapid response activities are provided by specialists in the
state’s dislocated worker unit27 in the state’s workforce agency as soon as possible after learning
of a projected permanent closure or mass layoff. Activities include establishing onsite contact
with employers and employee representatives, providing information and access to available
employment and training activities, and providing assistance to the local community in
developing a coordinated response and in obtaining access to state economic development
assistance.
In addition to rapid response activities, there are three levels of services available to dislocated
workers: core, intensive, and training. To be eligible to receive intensive services, such as
comprehensive assessments and development of individual employment plans, an individual must
first receive at least one core service, such as job search assistance, and have been unable to either
obtain employment or retain employment that allows for self-sufficiency. To be eligible to receive
training services, such as occupational skills training and on-the-job training, an individual must
have received at least one intensive service, and must have been unable to obtain or retain
employment.
National Emergency Grants (NEGs)
NEGs, which are funded through the dislocated worker appropriation allotted to the national
reserve, provide supplemental dislocated worker funds to state workforce agencies and local
WIBs in order to meet the needs of dislocated workers and communities affected by significant
dislocation events that cannot be met with the formula allotments. In its May 24, 2005 Training
and Guidance Letter,28 DOL announced the availability of NEG funds to initiate planning for
workers expected to be effected by base closings or realignments, and to supplement WIA
formula funds for implementing a plan to provide employment-related services for workers. As of
February 27, 2008, DOL has awarded nearly $55 million in planning and implementation grants
to 38 states, the District of Columbia, and Guam.29
Other Assistance
In addition to these federal programs designed to provide transition assistance to displaced
workers, a variety of other programs might also provide assistance to those affected by base
closure. These include the following:

26 The statute at 29 U.S.C. 2862 [or WIA Section 132] species that of the funds appropriated for the dislocated worker
program, 80% are for formula grants to states and 20% are for a national reserve; the statutory language, however, is
overridden by the appropriations bills which specify the amounts allotted to the formula grants and to the national
reserve.
27 For a list of state rapid response unit coordinators, see http://www.doleta.gov/layoff/rapid_coord.cfm.
28 For more information, see http://wdr.doleta.gov/directives/attach/TEGL16-03_Ch2.pdf.
29 Source: Information provided by DOL on NEG funding from FY2003 though FY2007 and from
http://www.doleta.gov/neg/BRAC_awards.cfm updated February 27, 2008. In addition to these grants, DOL also
announced on March 26, 2008, a $5 million dislocated worker demonstration grant to assist Georgia in addressing the
civilian impacts of base realignment and closure transition, see http://www.doleta.gov/whatsnew/ new_releases/2008-
03-26.cfm.
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• Post-secondary education and training assistance for students under Title IV of
the Higher Education Act30; and vocational education programs under the Carl D.
Perkins Vocational and Technical Education Act,31
• Benefits related to past employment: Unemployment Compensation32 and
temporary health insurance continuation,33 and
• Benefits related to financial need: Temporary Assistance to Needy Families,34
Food Stamps, subsidized school meals,35 Medicaid36 and housing assistance
furnished by the Department of Housing and Urban Development.37
• Federal, state and local economic assistance programs identified by the Office of
Economic Adjustment (http://www.oea.gov), available in the “Catalog of Federal
Assistance for Impacted Communities.”
Issues for Congress
Important policy issues before Congress related to employment changes and economic
development as a result of BRAC-related activities include (1) the impact of military base
closures and expansions on local employment; (2) the possible elimination of the BRAC
Commission and the resulting impact on federal economic and community development
programs that currently provide a preference for communities affected by BRAC; (3) the flat
level of funding for federal assistance programs while anticipating an 80% increase from $17
billion to $32 billion in BRAC construction costs; (4) housing for military staff displaced by
BRAC, amidst the mortgage crisis; (5) funding for communities experiencing growth through the
defense access road program; (6) delays in environmental cleanup that may cause difficulties in
the economic redevelopment of military facilities; and (7) redevelopment of military bases as
refineries to promote economic growth. These issues are discussed in more detail below.38

30 See CRS Report RL34654, The Higher Education Opportunity Act: Reauthorization of the Higher Education Act, by
David P. Smole et al.
31 See CRS Report RL31747, The Carl D. Perkins Vocational and Technical Education Act of 1998: Background and
Implementation, by Rebecca R. Skinner.
32 See CRS Report RS22440, Unemployment Compensation (Insurance) and Military Service, by Julie M. Whittaker.
33 See CRS Report RL30626, Health Insurance Continuation Coverage Under COBRA, by Heidi G. Yacker.
34 See CRS Report RL32748, The Temporary Assistance for Needy Families (TANF) Block Grant: A Primer on TANF
Financing and Federal Requirements, by Gene Falk.
35 See http://www.fns.usda.gov/fns for information on food stamps and subsided meals.
36 See CRS Report RL33202, Medicaid: A Primer, by Elicia J. Herz.
37 See CRS Report RL34591, Overview of Federal Housing Assistance Programs and Policy, by Maggie McCarty et al.
38 Two bills were the primary vehicles for providing funds for BRAC-related activities in the 110th Congress. Title I of
the Military Construction and Veterans Affairs Appropriations Act of 2009 (H.R. 6599) and Title I of the parallel
Duncan Hunter National Defense Authorization Act (H.R. 5658) allocate funding for projects associated with BRAC.
Under the Department of Defense, appropriations and authorizations bills mirror each other. Each Title and sub-section
in one bill is required to mirror the other. For example, Title I in H.R. 6599 (Appropriations) is the same as Title I in
H.R. 5658 (Authorization). The same holds for the Senate versions of the bills (S. 3301 and S. 3001). Funds may be
used for a range of purposes related to the BRAC process, including construction of roads and military facilities, and
housing assistance for military personnel forced to transfer as a result of BRAC and unable to sell their homes. H.R.
6599 passed in the House on August 1, 2008. H.R. 5658 was passed by the House on May 22, 2008.
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Impacts on Communities
One of the most important issues for Congress is the impact of base closures and expansions on
local communities. Recent experience with the base closure and reuse process has shown that the
major problems facing communities include the effectiveness of Local Redevelopment
Authorities (LRAs)39 in obtaining funding, developing plans and organizing public-private
partnerships; reconciling of competing demands for the assets; sometimes unrealistic federal
appraisals of base assets; local funding constraints; the lack of short term interim leases from the
federal government; facilities that are not in compliance with local codes; land use constraints;
conservation issues; and excessive levels of environmental contamination.
The economic vulnerability of these communities and states to such job losses will depend upon
the rate at which jobs are eliminated at closed or realigned facilities, the success of displaced
workers in finding new jobs in the area, and the success of each state and community in
generating new job opportunities at closed military facilities, and elsewhere within the
community or state economy.
The issue of timing in base conversion, realignment and closure is also important for
communities. All parties are generally interested in moving the base conversion process along as
fast as possible. While the public interest generally may be served by moving as quickly as
practicable, some of the necessary steps, such as the environmental impact assessment and any
necessary cleanup, often require more time. Delay can also be caused by difficulties in getting
local governments to work cooperatively within redevelopment programs.
An earlier analysis conducted by CRS of the previous four BRAC rounds—based on statistics
compiled by the Department of Defense—found that military base closures had limited impact on
levels of unemployment in local communities.40 The effects at the state level were also relatively
small. Of the states that experienced military and civilian job losses directly and indirectly
resulting from BRAC actions for the previous four BRAC rounds, all experienced estimated
losses amounting to 0.4% or less of total jobs in each state. For the 2005 BRAC round, states are
estimated to experience job losses of less than 0.3%; many communities will experience
considerable increases in employment.41
Elimination of the BRAC Commission
The Duncan Hunter National Defense Authorization Act for FY2009 (H.R. 5658) includes a
section that would repeal the BRAC Commission. Under Section 2711, Subtitle B, Title XXVII,
the BRAC commission process would be eliminated for future base closures. The law would
require the “Repeal of commission approach for development of recommendations in any future

39 The role and effectiveness of the Local Redevelopment Authority (LRA) is critical to the success of communities.
The LRA identifies local reuse needs and conceives a redevelopment plan for the Department of Defense to consider in
the disposal of base property. LRAs should have broad-based membership, including, but not limited to, those
jurisdictions with zoning authority over the property.
40 .See CRS Report 96-562, Military Base Closures Since 1988: Status and Employment Changes at the Community
and State Level, by George H. Siehl and Edward Knight.
41 BRAC Commission, 2005 Defense Base Closure and Realignment Commission Report to the President, Washington,
DC, September 8, 2005. See Appendix O.
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round of base closures and realignments.”42 Before the development of the BRAC Commission
process, prior to 1988, very few military bases were closed. If the BRAC Commission is
eliminated, Congress may opt to consider an alternative to the Commission and possible impacts
on economic and community development programs that provide a preference for communities
affected by changes in employment as a result of BRAC. There may be important tradeoffs and
impacts on regional economic development if Congress, instead of the DOD, assumes decision-
making power over military base closures.
Increase in BRAC Construction Costs
In 2005, DOD originally estimated that construction costs related to BRAC would total $17.9
billion from 2006 to 2011. However, the FY2009 request had increased from the original 2005
estimate by nearly 80% to $32.0 billion. The considerable increase in construction costs has made
the 2005 BRAC round one of the most expensive of the five BRAC rounds implemented.43
Although BRAC appropriations requests for the 2005 round had been fully funded by Congress,
the Senate’s recommendation for FY2009 would reduce appropriations by 1% of the President’s
request.44
A policy issue for Congress is consideration of the adequacy of funding for federal assistance
programs amidst an increase in costs for internal BRAC-related construction inside and around
military facilities. While cost estimates for BRAC construction have increased from $17 billion in
2005 to $32 billion in 2009, funding for federal assistance programs to communities has remained
flat. An important question for Congress is how or whether to aid communities that will
experience an influx of hundreds of thousands of staff by the statutory deadline of September
2011. Although the expected increase in construction may lead to economic growth in selected
communities, state and local governments may have to fund projects related to economic
development. What is the role of the federal, state and local governments in supporting
communities affected by employment increases or losses and what is the appropriate level of
funding required to adjust to growth in employment, housing, traffic demand, and military
construction?

42 See Section 2711, Subtitle B, Title XXVII of .
43 Some analysts have questioned the issue of BRAC-related cost-savings. A report by GAO concluded that cost
savings were not on the level expected by the BRAC Commission in its plan. According to GAO: “Since the BRAC
Commission issued its cost and savings estimates in 2005, DOD will spend more, save less, and take longer than
expected to recoup up-front costs to implement two recommendations intended to improve DOD’s logistics systems.
Over the 2006—2011 BRAC time frame to implement these recommendations, GAO’s analysis of DLA’s data
indicates that estimated net savings will be reduced by more than $1.8 billion compared to the BRAC Commission’s
estimate, with a net cost of about $222 million to DOD. [ ... ] GAO’s analysis further shows that the projected net
annual recurring savings after 2011 have been reduced from nearly $360 million to almost $167 million, and that the
savings over 20 years are expected to be $1.4 billion rather than $4.8 billion as estimated by the Commission.” See
GAO Report GAO-08-159, Military Base Realignments and Closures: Cost Estimates Have Increased and Are Likely
to Continue to Evolve, December 11, 2007. Also see GAO Report GAO-08-315, Military Base Realignments and
Closures: Higher Costs and Lower Savings Projected for Implementing Two Key Supply-Related BRAC
Recommendations, March 5, 2008. For both reports, see http://www.gao.gov/docsearch/featured/brac.html.
44 See CRS Report RL34558, Military Construction, Veterans Affairs, and Related Agencies: FY2009 Appropriations,
by Daniel H. Else, Christine Scott, and Sidath Viranga Panangala.
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Housing for Military Staff Displaced by BRAC
The DOD Housing Improvement Program (HAP) supports military housing privatization and the
program predates the 1988 BRAC process. The Homeowners Assistance Fund is a sub-
component of this program, and may provide economic assistance to military personnel affected
by a relocation as a result of BRAC activities.45 In particular, funding is available for staff who
are unable to sell their homes due to declining home values as a result of a military base closure.
Because of the turmoil in the housing markets, an increase in requests for this type of assistance
may be expected. In addition, the downturn in the national economy, tightening of credit markets,
and uncertainty in the financial sector may have an important economic development impact over
housing prices and stock. State and local governments may seek federal DOD resources to offset
decreases in revenue as a result of the economic downturn.
In the 111th Congress, the American Recovery and Reinvestment Act (ARRA, P.L. 111-5)
provides $555 million for the Homeowner’s Assistance Fund as part of the Homeowner’s
Assistance Program, for the acquisition of property at or near military installations that have been
ordered to be closed. Applicant must have been owner-occupant of the property on May 13, 2005,
or prior to July 1, 2006, and must sell home prior to 30 September 2012; the property must be a
primary residence. A determination must be made that real estate values have dropped as a direct
result of the base closing or realignment announcement. Applicants must be relocating beyond
commuting distance from the area. Homeowner’s assistance can also be provided for wounded
soldiers in the Armed Forces, Department of Defense and Coast Guard civilian employees and
spouses. In addition, temporary homeowner assistance is provided for members of the armed
forces permanently reassigned during the current mortgage crisis. Also eligible are personnel
transferred or terminated within six months prior to the announcement who were owner-
occupants at the time of transfer. Additional information on the Homeowner’s Assistance
Program is available from the Office of Economic Adjustment and the Department of Defense.46
Recovery Zone Economic Development Bonds
In addition to funding for the Housing Improvement Program, ARRA includes funding for areas
that are economically distressed due to the Base Realignment and Closure (BRAC) process.47
Recovery Zones are defined as areas with significant poverty, unemployment, home foreclosures
or general distress. Recovery Zones may include Empowerment Zones, Renewal Communities
and areas affected by military base closures.48 Bonds are to be used for “(1) capital expenditures
paid or incurred with respect to property located in such zone [recovery zone], (2) expenditures
for public infrastructure and construction of public facilities, and (3) expenditures for job training

45 According to DOD, “The Homeowners Assistance Program (HAP) is authorized in Section 1013 of the
Demonstration Cities and Metropolitan Development Act of 1966, as amended. The law provides some monetary relief
to eligible service member (including Coast Guard) and federal employee (including non-appropriated fund)
homeowners who suffer financial loss on the sale of their primary residences when a base closure or realignment
announcement causes a decline in the residential real estate market and they are not able to sell their homes under
reasonable terms or conditions.” See http://hap.usace.army.mil/Overview.html.
46 See http://hap.usace.army.mil/ and Frequently Asked Questions at http://hap.usace.army.mil/FAQs.html.
47 26 U.S.C. 1400U-1(b).
48 For additional information on Renewal Communities and Empowerment Zones, see CRS Report RS21220, Renewal
Communities Initiative: Background and Overview, by Bruce K. Mulock, and CRS Report RS20381, Empowerment
Zone/Enterprise Communities Program: Overview of Rounds I, II, and III, by Bruce K. Mulock.
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and educational programs.”49 A total of $10 billion has been allocated for the program, to be
allocated among the states according to the decline in employment during 2008. A minimum
allocation of at least 0.9 percent of the $10 billion is designated for each state. For additional
information, see CRS Report R40523, Tax Credit Bonds: Overview and Analysis, by Steven
Maguire.
Defense Access Road Program
The Defense Access Road Program (DAR) allows DOD to pay for public highway improvements
required as a result of sudden or unusual defense-generated traffic impacts such as BRAC-related
activities. Although DOD does not fund highways outside military bases, access roads to military
installations may be funded under this program and some communities have already benefitted.
For example, $36 million from DAR will fund the design and construction of installation
entrances in Fort Belvoir, Virginia. Projects are eligible for funding if they are related to military
activities such as BRAC actions, if a defense action will result in a doubling of traffic, or if a new
road is needed to accommodate special military vehicles. Given the projected decline in state and
local government coffers due to decreased economic activity at the national level, federal
assistance for road construction could become an increasingly important component of economic
development.
Environmental Cleanup
The amount of funds and time required to complete the environmental review and cleanup of
closed military bases will depend on the type and extent of contamination present on those
properties, and the actions that will be necessary to make the land safe for civilian reuse. Cleanup
can take many years, as the continuing cleanup of certain bases closed between 1988 and 1995
demonstrates. As in prior rounds, availability of funding and capabilities of cleanup technologies
could limit the degree of cleanup on bases closed in the 2005 round, making certain land uses
infeasible and posing challenges to economic redevelopment. In deliberations over the 2005
round, some Members of Congress and the BRAC Commission expressed concern that DOD’s
estimates could be undervalued because they do not reflect all possible land uses and the
corresponding degree of cleanup that may be necessary to redevelop these bases.
A policy issue for Congress is related to the timing of base closures, particularly in relation to
environmental contamination and cleanup of military facilities. Environmental contamination of
military bases poses special problems that affect the types and timing of reuse activities, and has
consumed about one-fourth of the money appropriated for base closures since 1988. Congress
continues to address this problem legislatively, but additional concerns and responses seem likely
in the future.
BRAC Facility Redevelopment for Refineries
Subtitle C, Section 2722 of the Duncan Hunter National Defense Authorization Act for Fiscal
Year 2009, H.R. 5658, requires that the Secretary of Defense will prepare and submit a report by
October 1, 2009 evaluating the feasibility of using military installations selected for closure under

49 26 U.S.C. 1400U-1(c).
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BRAC as locations for the construction of petroleum or natural gas refineries or nuclear power
plants. The conversion of military facilities into refineries may have important economic
development impacts on local communities where these installations are located.
Concluding Observations
The Base Realignment and Closure process has affected communities nationwide since 1988.
Congressional districts have been affected economically by defense spending cuts and the
employment losses and gains from the four previous BRAC rounds. In general, the 2005 BRAC
round is more focused on realignment instead of base closures. With an expected shift of nearly
200,000 military and civilian staff nationwide, there will be increasing demand for economic
assistance to plan for BRAC-related growth in communities. Communities that gain jobs will
have to plan for population and economic growth that may result in greater demand for housing,
infrastructure, services and increases in traffic, with 173,000 military and civilian staff expected
to arrive in the top 20 military facilities gaining employment.
In addition, the balance between Congress, DOD, and the executive branch in deciding what
bases to close will continue to be an important issue. Members of Congress are interested in the
impact of military base closures on their local districts, and the economic impact of employment
declines and gains. BRAC, however, is a process more focused on national security requirements
and less on economic development. Observers note that if federal economic assistance programs
do not meet redevelopment needs, local communities may face the unanticipated responsibility of
funding efforts to adjust to increases and declines in military facilities at the state and local levels.
With respect to employment changes at the regional level, the closure and realignment of
facilities will result in the direct and indirect transfer of military, civilian and contractor jobs
throughout the nation. Some communities will experience an increase in employment whereas
others will see a decrease in military jobs; the impact will vary depending on the individual
characteristics of the affected areas. A major factor that will affect economic impact is the total
share of jobs lost or gained as a share of total employment at the metropolitan or micropolitan
level. Rural communities that tend to be smaller and have a less diversified economic base, may
experience a greater impact than large urban centers with a diverse economy. Communities that
gain jobs will have to plan for population growth that may result in greater demand for housing,
infrastructure, services and increases in traffic. Communities that lose jobs may have to focus on
economic and community development programs such as CDBG and EDA that can help to offset
the impact of decreases in employment.50

50 See Peter L. Sternberg and Thomas D. Rowley, “A comparison of military base closures in metro and non-metro
counties,” Government Finance Review, October 1993.
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Appendix. List of Federal Economic and
Community Development Programs
Table A-1. List of Federal Economic and Community Development Programs
Program Name, Description
FY2008 Funding
Eligible Entities
Formula or Distribution Method
Department of Housing and Urban Development
Community Development Block
50 states, Puerto Rico,
Formula-based block grants.
Grants
metropolitan-based entitlement
Funds are distributed to state and local
Formula-based block grants allocated
communities (metropolitan cities governments based on the higher yield
to states and local governments in
with populations of 50,000 or
from one of two needs-based formulas.
support of neighborhood
more and urban counties). In
(1) 30% of funds are al ocated to states
revitalization, economic development,
FY2005, there were 1,032
for distribution to communities that do
and housing activities. Communities
entitlement communities. $7
not receive a direct allocation. States
may use block grants to support 23
million is set aside for insular
receive funds based on one of two
categories of eligible activities. 70% of
areas including Guam, American
formulas:
funds must be used on eligible
Samoa, and the Virgin Islands.
—Formula A al ocates funds based on
activities and projects that principal y
each state’s share of population,
benefit low- or moderate-income
poverty, and overcrowded housing;
persons. Includes BRAC preference.
—Formula B al ocates funds based on
each state’s share of poverty, housing
FY2008 enacted: $3.866 billion
built before 1939, and population.
(2) 70% of funds are al ocated to
entitlement communities based on one
of two formulas:
—Formula A al ocates funds based on
each entitlement community’s share of
population, poverty, and housing built
before 1939 (age of housing);
—Formula B al ocates funds based on
each entitlement community’s share of
poverty, overcrowded housing, and the
lag in population growth.
CDBG set-asides

Project grants.

Neighborhood Initiative
Congressional y selected
Congress al ocates funds to a diverse
community development
group of recipients. Program was
FY2008 enacted: $26 million
corporations.
originally targeted to community
development corporations involved in
neighborhood revitalization.
Economic Dev. Initiative
No specific criteria establishing
Congress grants funds to a diverse
eligibility for funding.
groups of recipients including
FY2008 enacted: $180 million
universities, community colleges,
nonprofit entities, local governments.
Funds are used to support a variety of
activities including recreation, literacy,
historic preservation, job training,
feasibility studies, public services. No
specific list of eligible activities.
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Program Name, Description
FY2008 Funding
Eligible Entities
Formula or Distribution Method
National Community Development Local Initiative Support
Project grants.
Initiative (Living Cities) Program
Corporation and the Enterprise
Federal funds are used in coordination
supports local community
Foundation (national nonprofit
with investments from foundations and
development corporations involved in
intermediaries). The two
corporations in support of
neighborhood revitalization.
nonprofit intermediaries support redevelopment efforts in distressed
neighborhood revitalization
urban neighborhoods. Working
FY2008 enacted: $35 million
efforts of local community
through two national intermediaries,
development corporations.
the Local Initiative Support
More than 300 community
Corporation and the Enterprise
development corporations in 23
Foundation, local community
selected cities have been
development corporations receive
involved in the program.
technical and financial assistance in
support of their revitalization efforts.
More than $250 million in private
sector funds from 14 participating
corporate and foundation entities have
been used in the program since its
inception in 1991.
Brownfields Econ. Dev. Initiative
State and local governments are
Project grants.
(BEDI) Funds are use to reclaim
direct recipients of funds.
BEDI funds must be used in
contaminated sites for adaptive reuse.
Subgrantees or beneficiaries may coordination with CDBG Sec. 108 loan
include businesses or nonprofits
guarantees. These grants and the
FY2008 enacted: $10 million
involved in job creation
accompanying Sec. 108 loan guarantees
activities.
must be consistent with a community’s
CDBG plan and must meet the same
income targeting requirements as the
CDBG program. In 2004, HUD
selected 17 communities to receive
$24.6 million in BEDI grants and $119
million in loan guarantees.
Rural Housing and Econ. Dev.
Local rural nonprofits,
Project grants.
Grants
community development
Applications are evaluated and rated
Grants are awarded for two
corporations, state housing
based on five rating factors:
categories of activities:
finance agencies, state
(1) capacity of the applicant and
(1) capacity building; and (2) support
community and economic
relevant organizational experience
for innovative housing and economic
agencies, and federally
development activities. Grants are
recognized Indian tribes.
(25 points);
limited to $150,000 under the first
(2) need and extent of the problem
category, and $400,000 under the
(25 points);
second category.
(3) soundness of approach (25 points);
FY2008 enacted: $17 million
(4) leveraging resources (10 points);
and
(5) achieving program results and
evaluation (15 points).
Grants are awarded to applicants
securing the highest scores.
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Program Name, Description
FY2008 Funding
Eligible Entities
Formula or Distribution Method
CDBG Sec. 108 Loan Guarantees CDBG entitlement communities
Loan guarantees.
Allow states and CDBG entitlement
and states on behalf of
Open application process. Applications
communities to borrow up to five
nonentitlement communities are
are reviewed by HUD to determine
times their annual CDBG al ocations
direct recipients of funds.
compliance with national objectives of
to finance eligible large-scale economic Subgrantees or beneficiaries may the CDBG program and feasibility of
development projects.
include nonprofits and for-profit
the project. Among the factors used to
entities involved in job creation
assess loan risk are the following:
FY2008 enacted: $5 million
activities.
(1) the length of the proposed
repayment period;
(2) the ratio of expected annual debt
service requirements to the expected
annual grant amount awarded to the
state or entitlement community;
(3) the likelihood that the public entity
or state will continue to receive CDBG
assistance during the proposed
repayment period;
(4) the public entity’s ability to furnish
adequate financial security; and
(5) the amount of program income the
proposed activities are reasonably
expected to contribute to repayment
of the guaranteed loan.
Department of Commerce
Economic Development
Economic Development
Competitive grants.
Administration (EDA) Agency
Districts (EDD) are multi-county General y, EDA administers a number
administers several economic
organizations established to
of competitive project grants. Grants
development programs, including
promote economic development may not exceed 50% of the cost of the
public works grants for upgrading
and job creation. EDA provides
project. Projects meeting certain
infrastructure, planning, and trade
assistance to 327 EDDs. The
specified criteria and for areas
adjustment assistance. Eligible projects
areas designated as EDDs must
characterized as severely depressed
must:(1) improve the opportunities for meet one of three criteria: (1)
may be eligible for additional funding
business creation or expansion; (2)
low per capita income; (2)
not to exceed 30% of the cost of the
assist in the creation of additional
unemployment higher than the
project. Projects must be located in
permanent private-sector jobs; or (3)
national average; (3) sudden
economically distressed areas including
benefit low-income persons including
economic dislocation or
those experiencing high unemployment
those who are unemployed or
persistent and long-term
or low incomes. Priority is given to
underemployed. Includes BRAC
economic distress. Funds may
projects:
preference.
also be awarded to states, cities,
(1) in areas with persistently high rates
and other political subdivisions
of poverty;
FY2008 enacted: $280 million
and other organizations.
(2) involving previously unserved
distressed areas and applicants;
(3) involving innovative partnerships
and private investment leveraging;
(4) that support sub-state regional
networks and collaborations; and (5) in
areas undergoing significant economic
downturns and dislocations.
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Program Name, Description
FY2008 Funding
Eligible Entities
Formula or Distribution Method
Department of Agriculture
Rural Business Opportunity
A rural area is defined as a city,
Competitive grants.
Grants
town, or unincorporated area
that has a population of 50,000
Grant selection criteria include the
Grants to public bodies, nonprofit
or less and is not an urbanized
extent to which:
organizations, Indian tribes, and
area immediately adjacent to a
(1) economic activity generated by the
cooperatives for training and assistance city, town, or unincorporated
project is sustainable;
to rural businesses, economic planning
area that has a population in
(2) the project leverages funds from
for rural areas, and training for rural
excess of 50,000 persons.
other sources;
entrepreneurs.
(3) the project will induce additional
economic benefits;
FY2008 enacted: $15 million
(4) the targeted community has
experienced long-term population or
job loss;
(5) the proposed project will serve a
community that may be experiencing
economic trauma due to natural
disaster, base closure, or exodus or
downsizing by a major employer;
(6) the project would be located in a
community that may be characterized
as chronically poor.
Department of Health and Human Services
Community Services Block
50 states, Puerto Rico, Indian
Formula block grants.
Grants
tribes, and the territories of
HHS is required under the CSBG Act
Guam, American Samoa, the
to reserve 1.5% of appropriated funds
Provide assistance to states and local
Virgin Islands, and the Northern for training and technical assistance and
communities, working through a
Mariana Islands.
other administrative activities, of which
network of community action agencies
half of this set-aside must be provided
and other neighborhood-based
to state or local entities. Also, half of
organizations for the reduction of
1% of funding is reserved for outlying
poverty, the revitalization of low-
territories (Guam, American Samoa,
income communities, and the
the Virgin Islands, and the Northern
empowerment of low-income families
Mariana Islands). Block grants are
and individuals in rural and urban
al otted to states and Puerto Rico
areas.
based on the relative amount received
FY2008 enacted: $665 million
in each state, in FY1981, under a
section of the former Economic
Opportunity Act. HHS may al ow
Indian tribes to receive their al otments
directly, rather than through the state.
States are required to pass through at
least 90% of their federal block grant
allotments to “eligible entities.” There
are more than 1,000 eligible entities
around the country, of which
approximately 80% are private
nonprofit organizations and about 20%
are public agencies.
Community Economic
Nonprofit community
Competitive discretionary grants.
Development
development corporations
Funds are awarded at the Secretary’s
including charitable, faith-based,
discretion. This program is one of the
The purpose of the Community
Indian, and Alaskan Native
related activities authorized by the
Economic Development discretionary
organizations.
CSBG Act. The program supports local
grant program is to promote and
community development corporations’
support projects that address
National Youth Sports Program, and
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Program Name, Description
FY2008 Funding
Eligible Entities
Formula or Distribution Method
economic self-sufficiency for low-
efforts to generate employment and
income persons and distressed
business development opportunities for
communities by awarding funds to
low-income residents. Projects must:
community development corporations
(1) directly benefit persons living at or
(CDCs) to create employment and
below the poverty level and (2) be
business development opportunities.
capable of being completed within 12
Each year approximately 40-45 grants
to 60 months of the date the grant was
are awarded with a maximum grant
awarded. Preference is given to
award level of $700,000.
projects that document public/private
partnership including the leveraging of
FY2008 enacted: $33 million
cash and in-kind contributions.
Preference is also given to projects
located in areas characterized by
poverty and other indicators of
socioeconomic distress, such as a
Temporary Assistance to Needy
Families (TANF) assistance rate of at
least 20%, designation as an
Empowerment Zone or Enterprise
Community (EZ/EC), high levels of
unemployment, high levels of
incidences of violence, gang activity,
crime, drug use, and low-income
noncustodial parents of children
receiving TANF.
Job Opportunities for Low-Income
Nonprofit, tax-exempt
Competitive discretionary grants.
Individuals (JOLI)
organizations including faith-
This program is a set-aside within the
based and community
Community Economic Development
FY2008 enacted: $5 million
development corporations and
Program. The program provides grants
charitable organizations.
to community based, nonprofit
organizations to demonstrate and
evaluate ways of creating new
employment opportunities with private
employers for individuals receiving
TANF and other low-income
individuals whose family income level
does not exceed 100% of the poverty
guidelines. Projects to help with this
effort include self-employment and
micro-enterprises, new businesses,
expansion of existing businesses, or
creating new jobs or employment
opportunities.
Rural Community Facilities
Tax-exempt nonprofit
Competitive discretionary grant.
organizations, states, and local
This program is one of the related
FY2008 enacted: $8 million
governments.
activities under the community

economic development component of
the CSBG. Grants are provided to
nonprofit organizations that train and
offer technical assistance on water and
waste water facilities management and
home repair to low-income families,
and that develop low-income rental
housing units in rural communities.
Approximately 8 water and wastewater
projects are funded annual y.
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Program Name, Description
FY2008 Funding
Eligible Entities
Formula or Distribution Method
Small Business Administration
Historically Underutilized Business
Census tracts are eligible in the
Provides federal contracting
Zone (HUBZone). Includes BRAC
50 states. Information is
preferences to smal businesses. These
preference.
available at http://www.sba.gov/
preferences go to smal businesses that
hubzone
obtain HUBZone certification in part
by employing staff who live in a
HUBZone. The company must also
maintain a principal office in one of
these specially designated areas.
Source: Compiled by CRS from the Budget Appendix.
Notes: Not all federal economic assistance programs listed in the table have a preference for communities
affected by BRAC. A program identified in italics is a component of the program preceding it in roman type.

Author Contact Information

Oscar R. Gonzales

Analyst in Economic Development Policy
ogonzales@crs.loc.gov, 7-0764

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