Summary: States and localities can use tax concessions, financial assistance, and other benefits to attract new businesses and make themselves more competitive economically. Federal loans and grants help finance many of these state incentives. Concerns have been raised over the extent to which federal dollars are used simply to relocate jobs from one community to another. This report answers the following questions: What economic development activities can major federal programs fund for the benefit of states and communities? What restrictions exist for using program funds to relocate existing businesses and jobs? For those programs with restrictions, what procedures have federal agencies established to ensure compliance with the restrictions? What types of incentives have states and communities used to attract businesses, and what role may incentives play in a business' decision to relocate? GAO examines eight programs in the following agencies: the Department of Commerce, the Department of Housing and Urban Development, the Department of Labor, the Department of Health and Human Services, the Environmental Protection Agency, the Department of Agriculture, and the Department of Transportation.
