Military Base Closures: Redevelopment Assistance Programs

Military Base Closures:
Redevelopment Assistance Programs
Baird Webel
Analyst in Economics
Government and Finance Division
Summary
On September 15, 2005, President Bush approved the list¹ of military facilities that
the Defense Base Closure and Realignment Commission recommended be closed or
realigned in the current round of base closures, known generally as “BRAC.” The list
includes 22 major base closures and 33 major realignments and would result in a net
reduction of more than 8,000 military and civilian personnel.² On October 27, the
House failed to pass H.J.Res. 65, a motion of disapproval of this list. Thus, barring
some future congressional action, the recommendations will take effect over the next six³
years. Despite the difficulties inherent in a base closure, communities near facilities on
the list must now face a very high probability of life without a local military base.
Recognizing that closures and realignments can have a major impact on the economies
of the affected regions, Congress has created a variety of different resources available
both to communities and individual workers to help mitigate the resulting economic
dislocation. This report is intended to summarize these various programs. It will be
updated as events warrant.
Aid to Communities
Federal aid to communities affected by base closures and realignments covers a wide
range of activities and agencies: planning and economic adjustment assistance provided
by the Office of Economic Adjustment of Department of Defense (DOD), the Economic
Development Administration, and the Rural Development Administration; environmental

¹ See [http://www.brac.gov/finalreport.asp].
² The original BRAC list from DOD indicated a reduction of more than 26,000 personnel, but this
included more than 13,000 from overseas deployments that are not included in the BRAC
Commission recommendations.
³ See CRS Report RL32216, Military Base Closures: Implementing the 2005 Round, by David
E. Lockwood, for additional information on the BRAC process.

cleanup at military bases; disposal of surplus federal properties; the Federal Airport
Improvement Program; community development block grants; and community service
grants.
Office of Economic Adjustment
The Office of Economic Adjustment (OEA), [http://www.oea.gov], is the primary
source within DOD for assistance to communities affected by both increases and
decreases in military spending. It also serves as a focal point for assistance from other
federal agencies. The OEA has provided a total of $280 million in funding for previous
BRAC rounds, primarily with the intent of preparing strategies for local development
efforts and other federal funding.
Over the years, the OEA has provided planning and implementation assistance to
communities, regions, and states in an effort to alleviate serious economic impacts that
result from defense program changes, such as 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 play the principal
role in initiating and carrying out the adjustment and conversion plan.
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. Table
1 lists the amounts requested by the administration for OEA grants and administrative
expenses, the amounts appropriated for OEA, including congressional adjustments, and
the actual amounts spent by the OEA for FY1999-FY2007.
Table 1. Office of Economic Assistance Budget FY1999-FY2007
(in millions of $)
FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07
Requested 31.2 30.9 22.5 17.0 14.7 14.1 44.8 30.5 73.0
Appropriated 56.7 90.7 56.8 46.6 49.6 60.2 88.8 161.6 141.4
Actual 34.1 72.1 43.2 36.6 41.8 57.5 60.0
^Source:^S^u^cces^sⁱ^v^e^O^E^A^bu^dg^et^es^tⁱ^m^at^es^F^Y^2000-^F^Y^{2007, F}^Y²⁰⁰⁷^D^e^f^eⁿ^s^e^A^p^p^r^o^p^rⁱ^a^tⁱ^oⁿ^s^A^c^t^,
^con^f^eren^{ce report}^,^H^.^R^e^pt^{. 109-}^{678, p. 115.}

Economic Development Administration
Title IX of the Public Works and Economic Development Act of 1965,⁴ calls for
economic adjustment grants to eligible communities to help them respond to sudden
changes in economic conditions including those resulting from natural disasters, changing
trade patterns and military base closures. The Economic Development Administration
(EDA), [http://www.eda.gov], has provided grants from their appropriated funds in excess
of $640 million since the first BRAC round in 1988, as well as administering $274
million of DOD funds and $8 million from the Department of Energy for defense
adjustment projects that have included some closed military bases. EDA grants 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.
President Bush’s FY2006 budget request included the “Strengthening America’s
Communities Initiative,” which outlined substantial changes and realignment in federal
economic development programs, including the EDA. Exactly what these changes might
mean for assistance to BRAC communities is unclear. Congress has not acted on the
President’s proposals, nor set any timetable to do so.⁵
Other Assistance
In addition to the OEA and EDA, there are a number of other federal agencies and
activities that may help communities adversely affected by base closures and
realignments. They include the following:
^!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 potential transfer of military airports to civilian use under the Federal
Airport Improvement Program of the Federal Aviation Administration
(FAA).
^!The provision of financial grants to eligible communities under the
Community Development Block Grants Program of the Department of
Housing and Urban Development to promote neighborhood revitalization
and community and economic development that principally benefit low-
and moderate-income persons.

⁴ 42 USC 3201 et seq.
⁵ See CRS Report RL32823, An Overview of the Administration’s Strengthening America’s
Communities Initiative, coordinated by Eugene Boyd.

^!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.
Worker Assistance
There are a number of federal programs that can provide transition assistance to
workers displaced by base closures. These include various forms of transition assistance
and benefits provided by DOD to its workers as well as other types of assistance available
to all dislocated workers (e.g., the dislocated worker job training program of the
Department of Labor, unemployment compensation, and food stamps).
DOD 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 GI bill 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 (including the maintenance of a government- wide list of vacant
positions) 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.⁶
Department of Labor (DOL) Job Training Program
for Dislocated Workers⁷
Overview. The Workforce Investment Act of 1998⁸ (WIA), authorizes, among
other programs, a program specifically for providing training and other services to
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 and who are not likely to find new jobs in their former industries or occupations.
The WIA program provides services to dislocated workers regardless of the cause of
dislocation, and has been utilized in the past by workers affected by base closures.

⁶ For more information, see DOD’s webpage on assistance for civilian employees at
[http://www.cpms .osd.mil/bractransition].
⁷ This section authored by CRS Specialist in Social Legislation Ann Lordeman.
⁸ P.L. 105-220, 29 U.S.C. 2811 et seq.

All WIA programs operate on a July 1 to June 30 program year (i.e., appropriations
for FY2004 are for program year 2004, which is from July 1, 2004 through June 30,
2005). The FY2004 appropriation for dislocated workers was $1.4 billion. This was
increased to $1.5 billion for both FY2005 and FY2006. The authorization for WIA
programs expired on September 30, 2003; Congress, however, has continued to fund the
programs through annual appropriations.
Formula Grants. Of the funds appropriated for the dislocated worker program,
approximately 80% are for formula grants to states and 20% are for a national reserve,
which primarily funds National Emergency Grants (NEGs). ( NEGs are discussed below.)
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 dislocated⁹
worker unit 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, provided
sequentially, 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, 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. Individuals receive these services through a coordinated service delivery
system called the “one-stop” system. Each one-stop system in a local area must include
at least one physical center, which may be supplemented by affiliated sites.¹⁰ In addition
to these services, local WIBs can decide whether to provide supportive services, such as
transportation and child care, and need-related payments. Supportive services can be
provided to individuals who are participating in core, intensive, or training services, and
who are unable to obtain them through other programs.
National Emergency Grants (NEGs). NEGs, which are funded through the
20% of 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

⁹ For a list of state dislocated worker unit coordinators, see [http://www.doleta.gov/layoff/
e_sdwuc.cfm].
¹⁰ To find the location of one-stop centers, see America’s Service Locator at
[ h t t p : / / www.s e r vi c e l oc a t or .or g/ ]

Training and Guidance Letter,¹¹ DOL announced the availability of NEG funds for Phase
I planning grants to states that may be affected by the 2005 BRAC. The purpose of these
grants is to plan a comprehensive response to a BRAC closure or realignment. States
eligible to receive the Phase I planning grants are those states listed in the Secretary of
Defense’s May 13, 2005 announcement of installations being recommended for closure
or realignment. It is expected that no state will receive Phase I planning funds in excess
of $1 million. Awards will be made in consultation with DOD. Phase II grants were
made to states to provide employment and training assistance to affected workers,
beginning in November 2005 when current BRAC actions were finalized.¹²
Other Assistance
In addition to the various 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:
^!Post-secondary education and training assistance for students under Title
IV of the Higher Education Act¹³; and vocational education programs
under the Carl D. Perkins Vocational and Technical Education Act.¹⁴
^!Benefits related to past employment: Unemployment Compensation¹⁵ and
temporary health insurance continuation.¹⁶
^!Benefits related to financial need: Temporary Assistance to Needy
Families,¹⁷ Food Stamps, subsidized school meals,¹⁸ Medicaid¹⁹ and
housing assistance furnished by the Department of Housing and Urban
Development.

¹¹ For more information, see [http://www.doleta.gov/directives/attach/TEGL16-03_Ch2.pdf] and
NEG BRAC Planning Grant Q and A’s at [http://www.doleta.gov/neg/Faqs.cfm].
¹² For additional DOL resources to assist workers who may be affected by local base realignment
or closure, see [http://www.doleta.gov/BRAC] or [http://www.brac-coach.org].
¹³ See CRS Report RL33040, The Higher Education Act: Reauthorization Status and Issues, by
Adam Stoll.
¹⁴ See CRS Report RL31747, The Carl D. Perkins Vocational and Technical Education Act of

1998: Background and Implementation, by Rebecca R. Skinner and Richard N. Apling.

¹⁵ See CRS Report RS21964,Military Service and Unemployment Compensation Insurance, by
Julie Whittaker.
¹⁶ See CRS Report RL30626, Health Insurance Continuation Coverage Under COBRA, by Heidi
G. Yacker.
¹⁷ See CRS Report RL32748, The Temporary Assistance for Needy Families (TANF) Block
Grant: A Primer on Financing and Requirements for State Programs, by Gene Falk.
¹⁸ See [http://www.fns.usda.gov/fns] for information on food stamps and subsided meals.
¹⁹ See CRS Report RL32277, How Medicaid Works: Program Basics, coordinated by Elicia Herz.