Appendix F: Organizing the state pilot
The competition, state commitments, financing and progress reports.
The pilot concentrates the Mission for America's organizing work in a state willing to mobilize its owners, lenders, builders and public agencies. The winner receives an embedded Reconstruction Finance Corporation (RFC) team and seeks about $30 million over two years from the Labor Department's national dislocated-worker reserve for training and the state posts needed to administer it. The buildings and factories draw on private finance and eligible national programs. Selection creates neither a state lending program nor an exemption from those programs' rules.
Bring the people who can start
The application must identify what each partner brings:
- Owners bring buildings and projects they are prepared to undertake. Schools, hospitals, housing authorities and private owners retain responsibility for signing their contracts.
- Large contractors bring portfolios and delivery capacity. Small contractors bring local jobs and training places: homes in a co-op's program, scattered public housing, smaller schools and municipal buildings, and subcontract packages on larger projects. They need working capital and a succession of financed jobs around which to hire.
- Unions and experienced tradespeople bring supervisors and apprenticeship capacity. Colleges and technical schools bring instruction and hands-on sites; community organizations help recruit people who would otherwise miss the opportunity.
- Banks, credit unions, utilities and other financing partners identify the projects and capital they can bring. A co-op can organize efficiency work repaid on members' utility bills. Each project still needs financing suited to its borrower and buildings.
When owners, contractors, lenders and training providers prepare together, one party need not wait for every other party to finish before beginning its own work. This is the organizing advantage the pilot tests.
The state’s commitments
What the state provides is administrative will. Every item on this list is something a governor can set in motion without asking the legislature for a new appropriation. State law varies, and any state that enters should expect its own lawyers to find an item or two that needs a statutory change and not merely an executive action. That discovery is part of what the negotiation is for.
- Put forward a practical plan to pay large numbers of people from their first week of training. Identify the payment route, instruction, health coverage, childcare and responsible officials before enrollment begins. Commit to changing obstructive state rules and administrative limits so that learning and paid work can start immediately. State lawyers must distinguish changes the governor can make from those requiring the legislature, and federal conditions remain binding. The training appendix explains those distinctions.
- Claim the food assistance reimbursement. Build the third-party agreements with community colleges and community organizations so that eligible nonfederal spending on this population draws its 50 percent reimbursement. This is the single largest thing a state can do, and most states do almost none of it.
- Where the state has room, transfer up to 30 percent of the annual TANF grant into the Child Care and Development Fund, and cover the gap from the unspent TANF balance. Not every state has a balance to spare, so this is not a condition of winning; a state without one shows where its childcare money comes from instead. The 30 percent is measured against each year's grant and the chance to use it expires when the federal year does, so the transfer comes out of the money arriving, not the balance already banked. The balance then pays for the welfare programs the transfer would otherwise have funded, and for childcare for the parents in the program directly. A state already transferring to the Social Services Block Grant is spending part of the same 30 points and should count both.
- Set the childcare entry threshold and the graduated phase-out high enough that a raise during training does not end a family's childcare.
- Write the retrofit standard into the housing agency’s qualified allocation plan, which governs future qualifying low-income housing tax-credit allocations, including rehabilitation. The agency adopts the plan and the governor approves it after a public hearing. This is the pilot’s commitment to use the allocation power described in the national program. It changes the terms of future awards; owners still arrange and sign for the work on their properties.
- Raise what the state pays childcare providers. A state sets its own payment rates from a survey of the local market or an approved alternative method, and the federal rule requires only that the base rate be high enough for a provider to meet health, safety, quality and staffing requirements. The 75th percentile of the local market is the benchmark the federal government used for decades and the one most states still measure themselves against, and a great many of them pay well below it. Moving to it raises what every provider in the state can afford to pay its staff. That is the difference between a rate high enough to lift all childcare wages in the area and a program that simply pays more for its own clients and draws staff away from other providers. The rate has to move for everyone, not just the program's own families, and federal rules forbid paying a different rate depending on whether a family is on welfare, which is exactly the property this needs. Where the state has room, the TANF transfer funds that rise federally; the application must show that the state's available transfer room and usable balance, or another source, can sustain the commitment. The care and hubs appendix explains the funding.
- Point the state's own financing authority at the retrofit work. A qualifying green bank, energy financing authority or infrastructure bank that puts meaningful money or a credit enhancement into a project can open a route to a Department of Energy guarantee under the state-financing-institution route, without the innovation test an ordinary retrofit could never pass. A state that already has such an institution should aim it here. A state that does not should expect this to be one of the items its own lawyers flag as needing the legislature rather than the governor.
- Put the state agencies in one building. The people running workforce money, food assistance, TANF, childcare and housing finance should be able to walk to each other's desks, because most of what slows this work down is a handoff between two agencies that have never met.
Choosing the state
This is an open competition and it is run as one. The inaugural address makes the offer to every governor in the country on published terms. The lending in the national financing programs is national, so any state that wants to use it can. What is scarce is the federal attention, the delivery staff and the demonstration money, and those go to whichever state commits most and moves first.
The competition itself is deliberately small and fast, because a normal federal competition would eat the year this program is trying to save.
The Labor Department publishes the terms on inauguration day. The transition team prepares the notice and interagency agreement beforehand. The demonstration money is discretionary and the Secretary awards it, so this is a notice of funding opportunity, not anything requiring a vote. It is issued jointly with Agriculture, Health and Human Services and Energy, whose programs make up the rest of the bundle. A governor reads one document, not five, and the agencies have already agreed with each other before anybody applies.
What a state submits is short. A letter from the governor; a completed checklist of the commitments above with a named official and a date against each one; the state's own count of what it has to work with, meaning its unspent TANF balance, separating uncommitted funds from existing obligations, how much of this year's transfer room it has left, its existing food assistance employment and training agreements and its housing finance agency's current allocation plan; and two or three candidate sites for the first cohorts. It also names the banks, builders and major property owners prepared to participate, the projects they bring, and the financing or delivery commitments they are prepared to make. A letter of enthusiasm is not a loan commitment, and the application must distinguish them. It runs to tens of pages; final underwriting and contracts follow as the projects are developed.
It is scored on commitment and speed, not need. How much of the checklist the governor will sign, how quickly each item can be in force, whether the agencies that have to cooperate have said they will, and whether real owners, lenders and builders are prepared to put projects, capital and crews into the work. A poor state and a rich one are equally eligible. What is being tested is whether a state will move, not whether it is deserving.
Federal teams visit the serious applicants within 60 days. The award is made inside 90. The formal agreement on the federal side is a demonstration grant agreement plus a memorandum of understanding across the federal agencies, which is what the RFC team then works to.
One state ends up with the concentrated support. The states that come second and third go through the same process and finish it, with their agreements drafted and any statutory changes their own lawyers have identified written up, and then they sit ready. A second state is cheap at that point, because the RFC team has already drafted the agreements and identified the legal changes. That is why the runners-up are asked to finish, not told they lost. Territories enter on the same terms as states.
Federal staff on loan and the state posts the grant pays
The in-state RFC team consists of experienced federal employees placed inside the state on assignments that further federal objectives. Their home agencies continue to pay their salaries, so neither the state nor the demonstration grant pays for the team. They package projects for federal finance and find every grant the state is eligible for. That includes the Labor Department's apprenticeship expansion, dislocated-worker grants, sector partnerships and other awards. Most states leave opportunities unused because nobody has the hours to track what is open and the deadlines pass. The team gets the applications written and filed on time.
The authority is the Intergovernmental Personnel Act, at sections 3371 to 3375 of title 5, which permits federal staff assignments into a state agency for up to two years, extendable to four. The companion authority, section 3161 of title 5, does the same job in Washington by letting any agency head lend people to a temporary organization at no charge to the receiving side, and it is how the RFC staff is assembled. The people who already run the federal credit programs are exactly the people who should be sitting in the state packaging applications to them. The details use existing salaries and avoid a new hiring action; the home agencies still bear those salary costs.
What a federal employee on loan cannot do is be the state. Food assistance employment and training money and TANF are administered by states. The signature that claims a federal reimbursement on a state's behalf has to belong to somebody the state employs, and so do the third-party agreements with community colleges and community organizations that generate the match. That is a handful of posts, not an office, and it is the only staffing the demonstration grant is asked to pay for. Everything else it buys goes to the training itself.
The demonstration's operating budget is designed around federal awards, existing benefit funds and support already being provided by eligible partners, rather than a new claim on the governor's general-budget reserves. Those reserves are spoken for long before this program arrives. That does not erase the contributions individual financing routes require: SNAP reimbursement needs qualifying nonfederal expenditure, and the Section 1703 state-financing route needs meaningful support from the state institution. The state agreement must identify those commitments as well as the federal funds.
How success is measured
The state publishes the following measures monthly from the beginning, including in the months when they are bad. A program that only reports good months is not believed when it reports a good one.
The measures combine speed, lasting employment, investment, and service use. The reporting commitments can be made before anyone knows which state wins, while volumes depend on what the work produces. They supply evidence for the charter argument in 2031.
Days from application to money out of the door. The comparison is with long public-program delays: four and a half years for rural broadband, and more than two years from the 2021 infrastructure law to the first federally funded NEVI charging station in December 2023.1 Six months frozen in 2009, because the federal weatherization program was required for the first time to pay the Davis-Bacon prevailing wage for each trade, no prevailing rate had ever been published for weatherization work, and nothing could move until the Department of Labor issued one. These histories measure different intervals, including law-to-construction and a temporary program freeze. The pilot must publish consistent application, commitment, payment, and delivery dates, rather than compare unlike clocks. A median application-to-payment interval measured in weeks would make a strong part of the argument.
People still employed at 12 months. A worker who has been retrained twice already, and watched both of the new things go away, is the reader who has to be convinced. Twelve-month retention is the number that separates this from what they have already been through.
Loans closed and dollars out of the door, against the actual baseline of how few applications ever close today, and how long they take.
The average annual energy bill cut per retrofitted building, in dollars, the figure a person recognizes on their own bill.
Hubs open, and people through the door, counted by service, so it is possible to see whether the clinic and the childcare are being used or merely present.
Childcare places created, and care workers trained and still working at 12 months, reported beside the construction numbers, not beneath them. A program that counts roofs and not children has decided what it thinks the work is worth.