Community Development Block Grants: Funding and Other Issues in the 106th Congress

Publication Date: September 2000

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Social conditions

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Abstract:

On September 13, 2000, the Senate Appropriations Committee reported its version of H.R. 4635, a bill making appropriations for the Departments of Veteran Affairs, Housing and Urban Development, and Independent Agencies for FY2001. On June 21, 2000, the House of Representatives passed its version of H.R. 4635. The House bill includes $4.505 billion in funding for Community Development Block Grants, the federal government’s largest source of financial assistance to state and local governments for housing, commercial and industrial development and neighborhood revitalization efforts. The Senate Appropriations Committee recommends a $4.8 billion funding level.

As passed by the House, the bill provides $295 million less than the $4.8 billion appropriated in FY2000, and recommended by the Senate Appropriations Committee. The proposed reduction in funding could affect several Administration initiatives and the Economic Development Assistance Program. Under the House version of H.R. 4635, Economic Development Initiative (EDI) grants would be funded at a total of $10 million for FY2001. This is 96% less than the amount set aside for such grants in FY2000. The Senate version of H.R. 4635 includes $130 million in funding for the EDI projects with $123 million earmarked for specific projects identified in report (S.Rept. 106-410) accompanying the bill. Projects identified in the conference report accompanying the VA, HUD, Independent Agencies Appropriations Act for FY2000, accounted for $275 million in earmarked EDI projects.

In addition, neither the House or Senate versions of H.R. 4635 includes funding for the Administration’s Regional Connections proposal, Mississippi Delta Initiative, and Community Empowerment Fund.

On April 6, 2000, the House of Representatives passed H.R. 1776 by a vote of 417-8 (Roll Call Vote No. 110). The bill would reauthorize the CDBG program through FY2005, and would limit set-asides under the program to projects authorized under Sec. 107 and Sec. 108 of the Housing and Community Development Act of 1974 (42 U.S.C. 5301).

H.R. 1776 also includes a provision intended to encourage homeownership among municipal workers. For the purpose of promoting home ownership among teachers and uniformed municipal employees (including policemen, firemen, and sanitation and other maintenance workers) the bill would allow local governments to increase to 115 % (150% in high housing costs areas) the income ceiling governing the definition of low- and moderate income families and persons. Presently low-and moderate-income households are defined as having incomes that do not exceed 80% of the median income of the jurisdiction. The bill would amend the list of eligible activities to include mortgage lending and other activities in support of home ownership.

In the coming months Congress will address a number of community development issues, including reauthorization of the CDBG and revision of the CDBG program definitions of entitlement communities and low- and moderate-income households. Congress also will consider legislation appropriating funds for the program for FY2001, including funding for a number of new initiatives proposed by the Clinton Administration.