EDA Final Rule Updates Public Works and Economic Adjustment Act Grant Rates

Content

ACTION:

Final rule.

SUMMARY:

On January 4, 2025, the Economic Development Reauthorization Act of 2024 became law. The Economic Development Administration
(“EDA”), U.S. Department of Commerce, publishes this final rule to reflect an amendment made to the grant rates prescribed
by EDA's authorizing statute, the Public Works and Economic Development Act of 1965. Immediate implementation of the rule
will prevent public confusion between EDA's implementing regulations and changes enacted in the Economic Development Reauthorization
Act of 2024.

DATES:

This rule is effective November 19, 2025.

FOR FURTHER INFORMATION CONTACT:

Jeffrey Roberson, Chief Counsel, Office of the Chief Counsel, Economic Development Administration, U.S. Department of Commerce,
1401 Constitution Avenue NW, Suite 72023, Washington, DC 20230; telephone: (202) 482-1315; email: jroberson@eda.gov.

SUPPLEMENTARY INFORMATION:

Background

On January 4, 2025, the Thomas R. Carper Water Resources Development Act of 2024 (Pub. L. 118-272) became law and contained
the Economic Development Reauthorization Act of 2024 (“the Act”) in Title II of Division B. The Act reauthorizes EDA through
Fiscal Year 2029 and updates numerous authorities that govern the operation of EDA under its organic act, the Public Works
and Economic Development Act of 1965 (“PWEDA”).

This rule addresses an explicit conflict between EDA's existing regulations (13 CFR chapter III) and the Act with respect
to EDA's cost sharing requirements for projects that meet EDA's distress criteria. Prior to the Act, section 204 of PWEDA
(42 U.S.C. 3144) specified that EDA's federal grant rate for projects that meet PWEDA's eligibility requirements shall not
exceed 50 percent. Section 2215 of the Act

  amended section 204 of PWEDA to require that EDA's federal grant rate for projects that meet PWEDA's eligibility requirements
  not exceed 60 percent. From this 60 percent federal grant rate, EDA is permitted to increase the federal grant rate up to
  30 percent based on relative needs, and up to 100 percent in certain circumstances. Thus, prior to the Act, EDA had a maximum
  federal grant rate that ranged from 50 percent to 80 percent based on distress with some exceptions to get to 100 percent.
  Since the enactment of the Act, EDA's maximum federal grant rate ranges from 60 percent to 90 percent based on distress with
  some additional exceptions to get to 100 percent.

In this rule-making, EDA is taking a conservative approach and only updating the parts of its regulations that are explicitly
contradicted by the Act and are necessary for ongoing EDA operations. EDA anticipates additional rule-makings to fully implement
the Act, including at least one that would solicit notice and comment on a comprehensive update to EDA's distress criteria
and grant rates.

Classification

Administrative Procedure Act and Regulatory Flexibility Act

Pursuant to 5 U.S.C. 553(a)(2), prior notice and opportunity for public comment are not required for rules concerning public
property, loans, grants, benefits, and contracts. This rule conforms EDA's grant regulations with a statutory change directed
by Congress.

Because prior notice and an opportunity for public comment are not required pursuant to 5 U.S.C. 553, or any other law, the
analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) are inapplicable. Therefore, a regulatory flexibility analysis has not been prepared.

Executive Orders No. 12866, 13563, and 14192

This final rule was drafted in accordance with Executive Orders 12866, 13563, and 14192. OMB has determined that this rule
is a significant regulatory action for purposes of Executive Orders 12866, as defined in section 3(f), and 13563. This rule
is not an E.O. 14192 regulatory action because it is does not impose any more than de minimis regulatory costs.

Congressional Review Act

This final rule is not major under the Congressional Review Act (5 U.S.C. 801 et seq.).

Executive Order No. 13132

This final rule does not contain policies that have federalism implications.

Paperwork Reduction Act

The Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (“PRA”) requires that a Federal agency consider the impact of paperwork and other information collection burdens imposed
on the public and, under the provisions of PRA section 3507(d), obtain approval from OMB for each collection of information
it conducts, sponsors, or requires through regulations. This final rule does not require the collection of any information
and is therefore not subject to the PRA.

List of Subjects in 13 CFR Part 301

Applicant and application requirements, Economic distress levels, Eligibility requirements, Grant administration, Grant programs,
Investment rates.

For the reasons discussed above, EDA is amending title 13, chapter III of the Code of Federal Regulations as follows:

PART 301—ELIGIBILITY, INVESTMENT RATE AND APPLICATION REQUIREMENTS

Regulatory Text 1. The authority citation for part 301 continues to read as follows:

Authority:

42 U.S.C. 3121; 42 U.S.C. 3141-3147; 42 U.S.C. 3149; 42 U.S.C. 3161; 42 U.S.C. 3175; 42 U.S.C. 3192; 42 U.S.C. 3194; 42 U.S.C.
3211; 42 U.S.C. 3233; Department of Commerce Delegation Order 10-4.

1. Amend § 301.4 by:

a. In paragraph (b)(1), removing the number “50” and adding in its place the number “60”;

b. Revising Table 1 to paragraph (b)(1)(ii); and

c. In paragraph (b)(3)(i), removing the number “50” and adding in its place the number “60”.

The revision reads as follows:

§ 301.4 Investment rates.

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(b) * * *

(1) * * *

(ii) * * *

| Projects located in regions in which: | Maximum allowable
investment rates(percentage) |
| --- | --- |
| (A) The 24-month unemployment rate is at least 225% of the national average; or | 80 |
| (B) The per capita income is not more than 50% of the national average | 80 |
| (C) The 24-month unemployment rate is at least 200% of the national average; or | 70 |
| (D) The per capita income is not more than 60% of the national average | 70 |
| (E) The 24-month unemployment rate is at least one percentage point greater than the national average; or | 60 |
| (F) The per capita income is not more than 80% of the national average | 60 |

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Dated: November 17, 2025. Benjamin Page, Deputy Assistant Secretary and Chief Operating Officer. [FR Doc. 2025-20307 Filed 11-18-25; 8:45 am] BILLING CODE 3510-24-P

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