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Community Development Block Grants:
Funding Issues in the 112th Congress and
Recent Funding History

Eugene Boyd
Analyst in Federalism and Economic Development Policy
March 23, 2012
Congressional Research Service
7-5700
www.crs.gov
R41754
CRS Report for Congress
Pr
epared for Members and Committees of Congress
c11173008


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Community Development Block Grants: Funding Issues in the 112th Congress

Summary
The FY2013 budget debate will take place within the context of growing concerns about the need
to address federal budget deficits, the national debt, and a sluggish economic recovery following
the longest and deepest recession since the Great Depression. The Obama Administration and the
112th Congress will continue to consider and debate a number of approaches to spur economic
activity and job growth, including federal public works and community and economic
development programs.
On February 13, 2012, the President released the Administration’s proposed federal budget for
FY2013. The Administration’s budget proposal includes $3.143 billion for activities funded under
the Department of Housing and Urban Development’s (HUD) Community Development Fund
(CDF) account. This includes $2.948 billion for Community Development Block Grant (CDBG)
formula grants awarded to states, entitlement communities, and insular areas; and $60 million for
Indian tribes. The Administration is also requesting $100 million for its Sustainable Communities
Initiative (SCI), which did not receive an appropriation for FY2012, and $35 million for capacity-
building grants awarded to three national intermediaries to provide technical assistance to local
community development organizations. In addition, the President’s budget request included $500
million in CDBG Section 108 loan guarantee authority to support large scale housing and
economic development activities. The FY2013 budget will be the third appropriations cycle
undertaken during the 112th Congress.
On April 15, 2011, the President signed into law P.L. 112-10, the Department of Defense and
Full-Year Continuing Appropriations Act for FY2011. The measure, which passed the House and
Senate on April 14, 2011, after months of intense budget negotiations, appropriated $3.508 billion
for activities in the CDF account, including $3.343 billion for CDBG formula funds. P.L. 112-10
included two provisions that reduced the account’s overall appropriations: (1) a 0.2% mandatory
across the board rescission of all appropriated funds; and (2) a 1% discretionary transfer from
designated HUD funds, including CDF activities, to HUD’s Transformation Initiative (TI). The
mandatory across-the-board rescission reduced the CDF account by $7 million to $3.501 billion,
while the 1% discretionary transfer moved up to $35 million from the CDF account to the
Department’s Transformation Initiative. The act also appropriated $64 million for Indian tribes’
CDBG activities and $98 million for the SCI, which supports regional coordination of land use
planning, housing, environmental, and transportation activities and policies.
Having completed action on the FY2011 appropriations, Congress began consideration of the
Obama Administration’s FY2012 budget proposals during the Spring of 2011.The President’s
proposed FY2012 budget recommended $3.804 billion for the CDF account. Unable to enact final
FY2012 appropriations before the end of FY2011, Congress enacted a series of continuing
resolutions to maintain funding for government activities. On November 1, 2011, the Senate
approved S.Amdt. 738 to H.R. 2112, a bill consolidating recommended appropriations of three
appropriations subcommittees: Transportation, Housing, and Urban Development; Agriculture;
and Commerce, Justice, and Science. A conference report accompanying this “Minibus” was filed
on November 14, 2011 (H.Rept. 112-284). The bill was passed by the House and Senate on
November 17, 2011, and signed by the President, as P.L. 112-55, on November 18, 2011. P.L.
112-55 included an appropriation of $3.408 billion for CDF activities, including $400 million in
CDBG disaster relief supplemental funding and $2.948 billion for CDBG formula grants to states
and local governments. This report will be updated as events warrant.
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Contents
Recent Developments ...................................................................................................................... 1
FY2013 Appropriations ................................................................................................................... 1
The Administration’s Budget Request....................................................................................... 1
Community Development Block Grants—Formula Grants................................................ 3
Sustainable Communities Initiatives (SCI) ......................................................................... 3
Section 108 Loan Guarantees.............................................................................................. 4
FY2012 Appropriations, P.L. 112-55............................................................................................... 4
The President’s FY2012 Budget Request.................................................................................. 5
Community Development Block Grants—Formula Grants................................................ 5
Sustainable Communities Initiatives (SCI) ......................................................................... 6
Section 108 Loan Guarantees.............................................................................................. 6
Congressional Actions ............................................................................................................... 6
House Bill............................................................................................................................ 6
Senate Bill ........................................................................................................................... 7
Conference Bill (Mini-Bus), P.L. 112-55 ............................................................................ 8
CDBG Disaster Supplemental Assistance........................................................................... 9
FY2011 Appropriations (P.L. 112-10 and H.R. 1) ......................................................................... 11
Passage of H.R. 1473, Full-Year Continuing Appropriations, P.L. 112-10 ....................... 12
H.R. 1 ................................................................................................................................ 12
Senate Appropriations Committee Amendment to H.R. 1, S.Amdt. 149 .......................... 14
Impact and Implications of Reduced Funding............................................................................... 15
Distribution of CDBG Funds: FY2010 to FY2012 ................................................................. 16
Impact of 2010 Census Data on CDBG Allocations...................................................................... 19
HUD Study of the Impact of New Data Sources..................................................................... 20
Recent Funding History................................................................................................................. 21
Formula Grants........................................................................................................................ 23
Impact of Inflation on CDBG-Formula Allocations.......................................................... 25
CDBG-Linked Set-Asides and Earmarks ................................................................................ 25
Earmarks Dominate Set-Aside Activities.......................................................................... 27
Special Appropriations ............................................................................................................ 28
Proposed Rescission of Neighborhood Stabilization Program Funds ............................... 29

Figures
Figure 1. CDF Appropriations: FY2000 to FY2011...................................................................... 22
Figure 2. CDBG Funding in Current and Constant Dollars: FY2000-FY2011 ............................. 25
Figure 3. CDF Set Asides in Current and Constant Dollars: FY2000 to FY2011 ......................... 26
Figure 4. CDF Earmarks and Set-Asides: FY2000 to FY2011...................................................... 27

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Tables
Table 1. CDBG and Related Appropriations: FY2012 Enacted and FY2013 Proposed.................. 2
Table 2. CDBG and Related Appropriations: FY2010 and FY2011 Enacted and FY2012
Proposed and Enacted................................................................................................................. 10
Table 3. CDBG and Related Appropriations: FY2010 Actual and FY2011Request,
Recommended, and Full Year Continuing Appropriations ......................................................... 13
Table 4. Average CDBG Allocation and Percentage Change: 2010 to FY2012 ............................ 16
Table 5. Actual Allocation of CDBG Formula Grants to States and Entitlement
Communities, for FY2010, FY2011, FY2012............................................................................ 17
Table 6. CDF Appropriations: FY2000 to FY2011........................................................................ 23
Table 7. Number of CDBG Grantees and Average Allocation: FY2000 to FY2011 ..................... 24
Table A-1. CDF Set-Asides from FY2000 to FY2011................................................................... 30

Appendixes
Appendix. CDF Set-Asides: FY2000 to FY2011 .......................................................................... 30

Contacts
Author Contact Information........................................................................................................... 32
Acknowledgments ......................................................................................................................... 32

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Recent Developments
On February 13, 2012, the President released the Administration’s federal budget request for
FY2013. The Administration’s budget proposal of $1.3 trillion for discretionary spending for
FY2013 includes $3.143 billion for activities funded under the Department of Housing and Urban
Development’s Community Development Fund account. The account includes funding for HUD’s
Community Development Block Grant Program, Section 108 loan guarantees, the
Administration’s Sustainable Communities Initiative, and Section 4 capacity-building activities.
FY2013 Appropriations
The Community Development Block Grant (CDBG) program, administered by the Department of
Housing and Urban Development (HUD), is the federal government’s largest and most widely
available source of financial assistance supporting state and local government-directed
neighborhood revitalization, housing rehabilitation, and economic development activities. These
formula-based grants are allocated to approximately 1,176 entitlement communities (metropolitan
cities with populations of 50,000, principle cities of metropolitan areas, and urban counties), the
50 states, Puerto Rico, and the insular areas of American Samoa, Guam, the Virgin Islands, and
the Northern Mariana Islands. Grants are used to implement plans intended to address housing,
community development and economic development needs, as determined by local officials.
The Administration’s Budget Request
The Obama Administration’s budget request for FY2013, released on February 13, 2012, includes
$3.143 billion for activities funded under the Department of Housing and Urban Development’s
Community Development Fund (CDF) account. The requested amount represents 8.9% of the
$35.347 billion in total discretionary budget authority requested by the agency for FY2013.
The Administration’s FY2013 budget proposal would increase total funding for CDF account
activities by 4.5% or $135 million. This increase in funding would be achieved by reinstating
funding for the Administration’s regional planning initiative (SCI) and by transferring funding for
Section 4 capacity building activities from another HUD account. Specifically, the Administration
is requesting $100 million in funding for its Sustainable Communities Initiative, which received
no funding in FY2012, but had an appropriation of $99 million in FY2011. In addition, the
Administration’s budget request would transfer funding for the Capacity Building for Community
Development and Affordable Housing (Section 4) program, which was funded at $35 million in
FY2012, from the Self-Help Housing Assistance account to the CDF account.
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Table 1. CDBG and Related Appropriations: FY2012 Enacted and FY2013 Proposed
(in millions of dollars)
FY2013
FY2012
Enacted
Admin.
Program
P.L. 112-55
Request House
Senate Conference
CDF, Totala
3,008.1 3,143.1



CDBG-formula
2,948.1
2,948.1

Entitlement Communities
2,058.8
2,058.8



States 882.3
882.3



CDBG Insular areas
7.0
7.0



CDBG Indian Tribes
60.0
60.0



Section 107 (technical assistance)b 0.0 0.0



CDBG Subtotal
3,008.1
3,008.1



Rural Innovation Fund
0.0
0.0



University Community Fundc 0.0
0.0


Capacity Building Sec. 4 Grants
0.0d 35.0 e



Sustainable Communities
0.0
100.0



Regional Integration Planning
Grants 0.0

46.0



Community Challenge Grants
0.0
46.0



HUD-DOT Integration
Research 0.0

8.0 f



Transfer to the Transformation
Initiative 0.0g 0.0h



CDBG-related set-asides and
earmarks 0.0

135.0



Disaster relief supplemental
400.0 0.0

Source: Prepared by CRS based on P.L. 112-55 and the Administration’s FY2013 budget submission.
a. Limits the percentage of funds under the account that may be used to cover planning, management, and
administrative expenses to no more than 20% of any grant awarded under this account.
b. Funds may be made available under the Department’s Transformation Initiative account.
c. Program funds could be made available under the Office of University Partnership (OUP) program or under
the Department’s Transformation Initiative.
d. For FY2012, $35 million was appropriated under a separate Self-Help Housing Assistance Program (SHOP)
account.
e. Funds are to be awarded to three national intermediaries: Local Initiative Support Corporation, Enterprise
Foundation, and Habitat for Humanity with a least $5 million in such assistance allocated rural capacity
building activities
f.
Includes $3 million for the development of energy modeling tool and to provide technical support for
energy efficiency and green building goals in HUD-assisted housing portfolio.
g. P.L. 112-55 appropriated $50 mil ion for the Department’s Transformation Initiative under a separate stand
alone account.
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h. The Administration’s budget requested that the Secretary be given the authority to transfer up to 0.5% or
no more than $120 million from selected accounts department-wide to the agency’s Transformation
Initiative. For the CDF account the Secretary would be allowed to transfer up to $15.7 million (0.5%) of
the proposal’s total appropriation under the account to the Department’s Transformation Initiative (TI).
The Secretary would be granted the authority to use TI funds to carry out activities in four areas: research
and evaluation; program demonstration; technical assistance; and information technology.
Community Development Block Grants—Formula Grants
Under the Administration’s FY2013 budget proposal funding for the CDBG formula grants would
remain unchanged from the amounts appropriated for FY2012. For FY2013, the Administration
has requested $2.948.1 billion for the CDBG formula component of the CDF account, including:
• $2.059 billion for CDBG entitlement communities;
• $882 million for CDBG state administered program; and
• $7 million insular areas.
The Administration is also requesting $60 million for Indian tribes. These are approximately the
same amounts that were appropriated for FY2012.
Sustainable Communities Initiatives (SCI)
The Administration’s FY2013 budget recommends reinstating funding for SCI program activities.
These programs did not receive funding in FY2012, but were funded at $99 million in FY2011.
The SCI is a set of planning-oriented grants first proposed by the Obama Administration in its
FY2010 budget and funded at $150 million. For FY2013 the Administration is requesting an
appropriation of $100 million. Funds would support SCI’s three components:
Regional Integrated Planning Grants. $46 million would be competitively
awarded to regional organizations in up to 25 metropolitan areas to support
efforts to develop effective models that would integrate the planning
requirements of various disciplines critical to the development of sustainable
communities. This would be done in collaboration with the Department of
Transportation (DOT), the Environmental Protection Agency (EPA), and other
federal agencies. Grant awards would focus on metropolitan-wide housing,
transportation, economic development, energy, and land use planning.
Community Challenge Grants. $46 million would be competitively awarded to
up to 50 communities to reform existing building codes, land use, and zoning
ordinances with the goal of promoting sustainable growth and discouraging
inefficient land use patterns. These funds are to be awarded to individual
communities to assist them in developing local complement to the larger regional
integration planning grants.
Housing-Transportation Integration Research. $8 million would be set aside for
a joint HUD, DOT, and EPA research initiative that would seek to quantify and
evaluate the benefits and trade-offs of various efforts. A portion of these funds
would be use to evaluate the long-term benefits of Regional Integrated Planning
Grants and Community Challenge Grants. In addition, the Administration is
requesting that $3 million be set aside to provide technical support for the
development of:
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1. a residential energy modeling system allowing HUD to estimate costs and
saving that may be achieved with energy-oriented retrofits of HUD public
and assisted housing;
2. common energy standards that would apply to new construction, substantial
or moderate rehabilitation, and energy retrofits; and
3. sources of utility and other private sources of funds that could be tapped to
finance energy efficiency improvements.
Section 108 Loan Guarantees1
The CDBG Section 108 Loan Guarantee program (Section 108) allows states and entitlement
communities to collateralize their annual CDBG allocation in an effort to attract private capital to
support economic development activities, housing, public facilities, and infrastructure projects.
Communities may borrow up to five times their annual allocation for a term of 20 years through
the public issuance of bonds. The proceeds from the bonds must be used to finance activities that
support job creation and that meet one of the national goals of the CDBG program. The activity
must principally benefit low or moderate income persons, aid in preventing or eliminating slums
or blight, or address an urgent threat to residents. Each community’s current and future annual
CDBG allocation serves as security in case of default. Financing is pegged to yields on U.S.
Treasury obligations of similar maturity to the principal amount.
The Administration’s budget proposes doubling the program’s loan commitment ceiling from
$240 million in FY2012 to $500 million in FY2013. The Administration’s budget justifications
noted that, given the continued difficulties in the credit markets, the proposed increase in funding
will help local governments finance large-scale job creation activities. In addition to an increase
in the loan commitment ceiling, the Administration proposes revamping the program by charging
a fee-based assessment to borrowers accessing the program, which would eliminate the need for
an appropriated credit subsidy.2 This proposal was first made by the Administration in its FY2010
budget, but it was rejected by Congress in favor of maintaining the status quo.
FY2012 Appropriations, P.L. 112-55
During the second half of 2011, Congress considered and debated the Administration’s budget
recommendations for FY2012. The FY2012 budget debate was undertaken with an eye on
reducing federal spending in an effort to address the federal deficit. Congress’ challenge was to
balance concern about controlling and reducing federal spending while focusing on funding
federal activities that support private sector job creation in an effort to combat a national
unemployment rate that remained high and a U.S. economy that continued to be mired in a so-
called “jobless recovery.” During consideration of the FY2012 budget, supporters of CDBG
touted the program’s support of state and local government community economic development

1 This program is authorized by 42 U.S.C. §5308.
2 The Credit Reform Act of 1990 requires federal agencies administering credit programs to estimate a program’s
subsidy rate and to request an appropriation to cover that cost. A credit subsidy is intended to cover the estimated long-
term cost to the federal government of a direct loan or loan guarantee. For loan guarantees, the subsidy cost is the net
present value of estimated payments by the government to cover defaults and delinquencies, interest subsidies, or other
payments, offset by any payments to the government, including origination and other fees, penalties, and recoveries.
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and private sector job creation and vowed to continue defending the program against cuts in
funding.3
The President’s FY2012 Budget Request
On February 14, 2011, the Obama Administration submitted its FY2012 budget recommendations
for congressional consideration. The Administration proposed restructuring the CDF account by
minimizing, through transfer or termination, activities not directly related by authorizing statute
to the CDBG program. The Administration’s budget proposed to
• reduce funding for CDBG formula grants;
• eliminate funding for the Neighborhood Initiative (NI) and Economic
Development Initiative (EDI) programs;
• eliminate funding for Section 107 activities;
• transfer its Sustainable Communities Initiative (SCI) to a new stand-alone
account; and
• convert Section 108 loan guarantees to a fee-based program.
The Administration’s FY2012 budget recommended a total funding level of $3.804 billion for
programs funded under the CDF account. The proposed funding level represented a 14.5%
reduction below the account’s FY2010 enacted appropriations level, but a 8.6% increase above
the $3.501 billion appropriated for FY2011.
Community Development Block Grants—Formula Grants
For FY2012, the Administration requested an 11.5%, increase in funding for the CDBG states and
entitlement communities formula components of the CDF account, from $3.296 billion
appropriated in FY2011 to $3.684 billion (see Table 2). It also sought to fund CDBG grants to
insular areas and Indian tribes at $7 million and $65 million, respectively, as required the CDBG
program’s authorizing statute.
In addition, the Administration requested $25 million for Rural Innovation Grants and $23 million
for Guam beyond the amount it would have received as an insular area grantee. Rural Innovation
Funds would have been awarded competitively and targeted to rural areas whose populations do
not exceed 20,000 persons to support innovative housing and economic development efforts,
while assistance to Guam was intended to address community development needs arising from
the relocation of military facilities and personnel to the island.
As in previous years, the Administration’s budget did not include funding for Economic
Development Initiatives and Neighborhood Initiatives grants, two programs subject to
congressional earmarks. The Administration stated that it opposed earmarking NI and EDI funds.

3 Zach Patton, “The CDBG Mobilization,” Governing, 2011, pp. 11-12.
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Sustainable Communities Initiatives (SCI)
The Administration’s FY2012 budget recommended transferring the SCI programs to a new
stand-alone account. For FY2012 the Administration requested an appropriation of $150 million.
Funds would have supported SCI’s three components:
Regional Integrated Planning Grants. $100 million would have been
competitively awarded to regional organizations in metropolitan areas to support
efforts to develop effective models that would integrate the planning
requirements of various disciplines critical to the development of sustainable
communities.
Community Challenge Grants. $40 million would have been competitively
awarded to individual communities to reform existing building codes, land use
and zoning ordinances as a complement to regional integration planning grants.
Housing-Transportation Integration Research. $10 million was to be set aside for
a joint HUD-DOT, and EPA research initiative that would seek to quantify and
evaluate the benefits and trade-offs of various efforts.
Section 108 Loan Guarantees4
The Administration’s budget proposed doubling the program’s loan commitment ceiling from
$250 million in FY2011 to $500 million in FY2012. The Administration’s budget justifications
noted that, given the continued difficulties in the credit markets, the proposed increase in funding
will help local governments finance large-scale job creation activities. In addition to an increase
in the loan commitment ceiling, the Administration proposed revamping the program by charging
a fee-based assessment to borrowers accessing the program, which would eliminate the need for
an appropriated credit subsidy.5 Congress rejected the proposal in favor of maintaining the status
quo.
Congressional Actions
House Bill
While the House Appropriations Committee did not formally report a FY2012 Transportation,
HUD, and Related Agencies Appropriations bill (THUD), the House Appropriations
Subcommittee on THUD approved, by voice vote, and released a draft bill, including an
accompanying draft committee report, on September 8, 2011.6 The subcommittee draft bill
recommended $3.501 billion for CDF activities, including $3.466 billion for CDBG formula

4 This program is authorized by 42 U.S.C. §5308.
5 The Credit Reform Act of 1990 requires federal agencies administering credit programs to estimate a program’s
subsidy rate and to request an appropriation to cover that cost. A credit subsidy is intended to cover the estimated long-
term cost to the federal government of a direct loan or loan guarantee. For loan guarantees, the subsidy cost is the net
present value of estimated payments by the government to cover defaults and delinquencies, interest subsidies, or other
payments, offset by any payments to the government, including origination and other fees, penalties, and recoveries.
6 The subcommittee-approved draft bill is available at http://appropriations.house.gov/UploadedFiles/
12THUD_xml.pdf. A copy of draft committee report accompanying the unnumbered draft bill is available at
http://appropriations.house.gov/UploadedFiles/FY_2012THUDReport.pdf.
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grants to states, local governments and insular areas; and $35 million for Indian tribes. Although
the subcommittee-approved draft bill would have maintained overall CDF appropriations at the
FY2011 funding level, the accompanying draft report noted that the report accompanying
H.Con.Res. 34, the FY2012 Budget Resolution, recommended eliminating the program on the
grounds that it was not a core federal government function. While the report accompanying the
THUD draft bill did not eliminate funding for the CDBG program, it did note that:
states and local communities can and should undertake more of their community
development activities using state and local taxes. Such a shift will provide better
transparency and accountability of local officials, who use taxpayer dollars on local
community development activities.7
The draft bill would have shifted CDF funding priorities, including eliminating funding for the
Administration’s Sustainable Communities Initiative, and reducing funding for CDBG Indian
Tribes from $64 million appropriated in FY2011 to $35 million (see Table 2). The subcommittee
draft bill also recommended rejecting the Administration’s proposal to restructure Section 108
loan guarantees to a fee-based program noting that instituting a proposed fee would increase
capital cost of Section 108 assisted projects while inhibiting state and local governments’ ability
to attract capital investment for projects in distressed areas. Instead, the bill recommended
maintaining the current structure, including appropriating $6.8 million in credit subsides to the
support $275 million in Section 108 loan guarantees. In addition, the bill included a provision that
recommended lowering the ceiling on the percentage of funds grantees could used to cover
CDBG administrative expenses from the current 20% to 10% of the grantee’s CDBG allocation.
Senate Bill
On September 21, 2011, the Senate Appropriations Committee reported S.Rept. 112-83, its
version of the Transportation, Housing and Urban Development Appropriations Act for FY2012,
S. 1596. The bill recommended a substantial reduction in the CDF account. Overall CDF funding
would have declined to $3.0 billion, excluding $400 million for CDBG supplemental disaster
assistance. The proposed $3 billion appropriations level was $500 million less than appropriated
for FY2011 or the House subcommittee draft bill, and $280.4 million less than requested by the
Administration. The Senate bill recommended $2.851 billion for CDBG formula funding and
would have reduced CDBG formula grant funding by 13.7% ($473 million) less than the
program’s FY2011 funding level of $3.302 million and 22.3% below the $3.668 billion requested
by the Administration. It also recommended $90 million for the Sustainable Communities
Initiative, which was $60 million less than the amount requested by the President and $9 million
less than appropriated for FY2011.
On October 13, 2011, Senator Inouye submitted an amendment (S.Amdt. 738) to H.R. 2112, the
Agriculture, Farm and Related Agencies Appropriations Act. The amendment, which was
approved on October 21, 2011, consolidated the provisions of three appropriations measures into

7 U.S. Congress, House Committee on Appropriations, Subcommittee on Transportation, Housing and Urban
Development, and Related Agencies, Department of Transportation, Housing and Urban Development, and Related
Agencies
, draft report to accompany unnumbered draft bill, 112th Cong., 1st sess., 2011, p. 85, at
http://appropriations.house.gov/UploadedFiles/FY_2012THUDReport.pdf.
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a single appropriations measure, or Minibus.8 The so-called “Minibus” was approved by the
Senate on November 1, 2011, by a vote of 69 to 30.
Among the amendments approved for inclusion in the bill was S.Amdt. 796. Proposed by Senator
Coburn, the amendment would have prohibited the use of grants made available under the bill
from being used to repay any other federal loans. This amendment has implications for the CDBG
program and its companion Section 108 loan guarantee program. Statutory authority governing
the Section 108 loan guarantee program allows CDBG funds to be used as collateral to secure and
repay Section 108 loan guarantees in case of default. In order to avoid default on Section 108 loan
guarantees, states and communities have used CDBG funds to cover revenue shortfalls associated
with the repayment of bonds used to finance Section 108 supported projects.
Conference Bill (Mini-Bus), P.L. 112-55
On November 3, 2011, the House requested a conference on H.R. 2112, to reconcile the
differences in House and Senate versions of the bill. House and Senate conferees filed a
conference report (H.Rept. 112-284) on November 14, 2011. The conference version of H.R.
2112 was approved by the House and Senate on November 17, 2011, and the act was signed into
law by the President as P.L. 112-55 on November 18, 2011. P.L. 112-55 appropriated $3.308
billion for CDF activities, including $300 million for CDBG disaster activities. With the
exception of CDBG disaster assistance, the act appropriated funds only for core CDBG programs,
specifically, $60 million for Indian Tribes; and $2.948 billion for formula grants to states,
entitlement communities, and insular areas (see Table 2). The $2.948 billion for CDBG formula
grants is 10.7% less than appropriated in FY2011, 19.6% less than requested by the
President,15% less than recommended by the House, but 3.4% more than recommended by the
Senate.
Other CDF activities funded in previous years, such as the Administration’s Sustainable
Communities Initiative, were not directly funded for FY2012. However, the conference report
accompanying the H.R. 2112 noted that such activities could be carried out with CDBG and the
agency’s Transformation Initiative funds.9 The decline in CDBG funding and the elimination of
funding for other programs reflects congressional efforts to reduce federal spending in support of
long-term deficit reduction.
P.L. 112-55 did not include:
• a provision included in the Senate version of H.R. 2112 which would have
prohibited the use of federal grants, such as CDBGs, from being used to repay
other federal loans, such as CDBG Section 108 loan guarantees; and
• a provision recommended by the House that would have reduced the percentage
of CDBG funds a grantee could use for administrative expenses from 20% to
10%.

8 The three consolidated into a single measure included the Senate version of H.R. 2112, S. 1596, and S. 1572.
9 U.S. Congress, House Appropriations Conference Committee, Agriculture, Rural Development, Food and Drug
Administration, Related Agencies Programs for the Fiscal Year Ending September 30, 2012, and for Other Purposes
,
Report to accompany H.R. 2112, 112th Cong., 1st sess., November 14, 2011, H.Rept. 112-284 (Washington: GPO,
2011), p. 317.
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The act did include a provision directing the General Accountability Office (GAO) to undertake a
study of the effectiveness of the two block grant programs (CDBG and HOME) administered by
HUD’s Office of Community Planning and Development (CPD). The act required the study be
completed and presented to Congress within 180 days (May 2012) following the enactment of
P.L. 112-55. The act also directed HUD to submit to Congress, within 120 days (March 2012)
following the passage of the act, a progress report on efforts the department has undertaken to
improve grantee accountability in the management of programs administered by CPD. In
addition, the conference report directed HUD to undertake an analysis of the extent to which
CDBG funds are being used to meet the matching fund requirements of other federal programs.
For the third year in a row, the Administration failed to win congressional support for its proposal
to convert Section 108 loan guarantees to a fee-based program. P.L. 112-55 maintained the
program’s current structure while appropriating $5.952 million in credit subsidies in support of
the $240 million in Section 108 loan guarantee commitments. The act included an additional
provision that prohibited a state from diverting proceeds from the sale of notes backed by Section
108 loan guarantees to any other community other than the local government that initially sought
and received the loan guarantee commitment.10
CDBG Disaster Supplemental Assistance
In addition to the regular CDBG appropriations for FY2012, P.L. 112-55 included $400 million in
CDBG supplemental disaster assistance. Funds were to be disbursed to states and local
governments to manage recovery efforts in areas declared disasters by the President in 2011.
These supplemental funds were to be used to assist such states and local governments undertake
disaster relief and long term recovery plans, including those related to the restoration of housing,
infrastructure, and economic revitalization. Funds could not be used for activities funded by or
eligible for reimbursement by the Federal Emergency Management Administration or the Army
Corps of Engineers. In order to receive funds eligible states and local governments were required
to submit disaster recovery plan detailing the use of funds and how planned activities would
contribute to disaster recovery efforts. The act allowed HUD to waive statutory or regulatory
provisions governing the use of CDBG funds, except those related to fair housing,
nondiscrimination, labor standards, and environmental review. In seeking a waiver of CDBG
program requirements, grantees were required to explain why such a waiver was necessary to the
grantee’s recovery efforts. Of the $400 million appropriated for disaster relief activities, the act
exempted $100 million of that amount from discretionary spending limits imposed by the
Balanced Budget and Emergency Deficit Control Act of 1985, as amended by the Budget Control
Act, P.L. 112-25.11

10 P.L. 112-55, Division C, Sec. 221.
11 For additional information on the spending caps and exemptions under the Budget Control Act see CRS Report
R41965, The Budget Control Act of 2011, by Bill Heniff Jr., Elizabeth Rybicki, and Shannon M. Mahan
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Table 2. CDBG and Related Appropriations: FY2010 and FY2011 Enacted
and FY2012 Proposed and Enacted
(in millions of dollars)
FY2012
FY2010
FY2011
Admin.
Enacted
Program
Enacted
Enacted
Request
House Senate P.L. 112-55
CDF, Total
4,450.0
3,501.0 3,781.4 3,501.0 3,001.0
3,008.1
CDBG-formula
3,950.1
3,302.9
3,668.5
3,466.0
2,851.0
2,948.1
Entitlement
2,760.2 2,702.2
2,563.1
2,421.3
1,990.8 2,058.8
Communities
States 1,183.0
988.8
1,098.4
1,037.7
853.2 882.3
CDBG Insular areas
6.9
6..9
7.0
7.0
7.0
7.0
CDBG Indian Tribes
64.3
64.2
65.0
35.0
60.0
60.0
Section 107 (technical
0.0 0.0
0.0
0.0
0.0 0.0
assistance)
CDBG Subtotal
4,014.4
3,367.1
3,733.5
3501.0 2,911.0
3,008.1
Grant to Guama 0.0
0.0
22.9
0.0
0.0
0.0
Rural Innovation Fundb 24.8
0.0
25.0
0.0
0.0 0.0
Catalytic Competition
— 0.0
0.0
0.0
0.0 0.0
Grants
University Community
24.8 0.0
0.0
0.0
0.0 0.0
Fundc
Sustainable Communitiesd 148.5 98.8 0.0
0.0
90.0
0.0
Regional Integration
99.0
69.2
0.0 0.0 63.0
0.0
Planning Grants
Community Challenge
39.6
29.6
0.0 0.0 27.0
0.0
Grants
Capacity Building
— 0.0
0.0 0.0 0.0
0.0
Clearinghouse
HUD-DOT Integration
9.9
0.0
0.0 0.0 0.0
0.0
Research
Neighborhood Initiative
21.9
0.0
0.0
0.0
0.0
0.0
Economic Development
171.1 0.0
0.0
0.0
0.0 0.0
Initiative
Transfer to the
44.5 35.0 0.0
0.0
0.0
0.0
Transformation Initiativee
CDBG-related set-
435.6 133.8 47.9
0.0
90.0
0.0
asides and earmarks
Disaster relief
100.0 0.0
0.0
0.0
400.0 400.0
supplemental
Source: Prepared by CRS based on Administration’s FY2012 budget submission and H.R. 1.
a. Funds would be transferred from the Defense Department and administered under the CDBG program and
would be used to address community development needs resulting from the relocation of various military
installations and personnel to Guam.
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b. Before FY2010, the program was funded under a separate account, Rural Housing and Economic
Development.
c. Prior to FY2007, CDBG-linked university activities were included in this account. For FY2009, program
funds of $23 million were appropriated under a separate HUD account, Research and Technology.
d. For FY2012, the Administration is proposed funding the programs at $150 million under a separate stand-
alone account.
e. Subtotal for FY2012 Transformation Initiative assumed transfer of 1% of amounts appropriated to programs
included in the CDF account.

FY2011 Appropriations (P.L. 112-10 and H.R. 1)
On April 15, 2011, the President signed into law P.L. 112-10, the Department of Defense and
Full-Year Continuing Appropriations Act for FY2011. The measure, which passed the House and
Senate on April 14, 2011, after months of intense budget negotiations, included a provision
appropriating $3.508 billion for the Community Development Fund (CDF). The act included a
mandatory across-the-board rescission of 0.2% and a 1% discretionary transfer to the
Department’s Transformation Initiative, which granted the Secretary of HUD the authority to
reduce the CDF account’s total appropriation to $3.501 billion. This was approximately 16%
below the amount appropriated for FY2010. The CDF, which includes the formula-based
Community Development Block Grant program, was one of several accounts targeted for
significant budget reductions in an earlier version of a consolidated appropriations bill, H.R. 1,
that passed the House, but not the Senate. H.R. 1 would have reduced funding for CDBG
activities by 62.5% below the amount appropriated for FY2010.
Funding for HUD’s Community Development Fund, which includes the CDBG program, are
among the programs that were initially targeted for reduction as part of congressional efforts to
reduce the federal budget deficit. On February 19, 2011, the House-passed H.R. 1, a bill
providing continuing annual appropriations for FY2011.12 The House-passed version of H.R. 1
would have reduced total funding for discretionary programs by $61 billion below the amount
requested by the Obama Administration. Included among the programs and accounts targeted for
cuts by the House-passed version of the H.R. 1 was the CDF account, which includes the
formula-based CDBG program. The bill, as passed by the House, failed to win Senate approval.
An alternative measure, S.Amdt. 149, introduced in the Senate, also failed to win Senate
approval. This led to renewed negotiations between the Obama Administration, and House and
Senate leadership to resolve the FY2011 budget impasse.

12 Under Sec. 109 of P.L. 111-242, Continuing Appropriations Act for FY2011, a program whose complete distribution
of its FY2011 appropriations would have occurred at the beginning of the fiscal year is prohibited from allocating funds
or awarding grants. According to Sec. 109, the basis for this prohibition is that the complete distribution of program
funds would impinge on final funding prerogatives of Congress. Given this directive, in the absence of a full-year
appropriation and based on past practices, HUD may not allocate CDBG funds for the current fiscal year until Congress
has passed a final appropriations measure for FY2011.
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Passage of H.R. 1473, Full-Year Continuing Appropriations, P.L. 112-10
After weeks of negotiations, on April 15, 2011, President Obama signed into law P.L. 112-10,
formerly H.R. 1473, the Department of Defense and Full-Year Continuing Appropriations Act for
FY2011. The measure was passed by both the House and the Senate on the eve of the expiration
of P.L. 112-8, a week-long temporary spending measure that was signed by the President on April
9, 2011, to allow House and Senate leaders time to negotiate a final FY2011 appropriations
agreement that would avoid a government-wide shutdown.13
P.L. 112-10 appropriated $3.508 billion for activities in the CDF account, including $3.343 billion
for CDBG formula funds. The act also includes a 0.2% mandatory across the board rescission of
all appropriated funds14 and a 1% discretionary transfer from designated HUD funds, including
CDF activities to HUD’s Transformation Initiative.15 The mandatory across the board cut reduces
the CDF account by $7 million to $3.501, while the 1% discretionary transfer would move $35
million from the CDF account and its components to the Department’s Transformation Initiative.
Table 3 includes the adjusted appropriations for CDF activities taking into account both the 0.2%
rescission and the 1% transfer. Table 3 also includes the actual distribution of funds appropriated
for activities included in the CDF account for FY2010, as well as the Administration’s budget
request for FY2011 and the projected estimated distribution of funds in the account based on the
language included in H.R. 1 and a Senate Committee’s amended version of H.R. 1 (S.Amdt.
149).16
P.L. 112-10 appropriation of $3.501 billion for the CDF account is 21.3% less than the $4.450
billion appropriated for FY2010 CDF activities and 20.1% less than requested by the
Administration for FY2011. Conversely, the FY2011 appropriation is 133% higher than
recommended by H.R. 1, a measure passed by the House earlier during the 1st session of the 112th
Congress. Included in the CDF account is the CDBG program, which includes the formula-based
grants awarded to Puerto Rico, the 50 states, and eligible metropolitan area-based cities and
counties (entitlement communities); insular areas (Guam, the Virgin Islands, the Northern
Mariana Islands; and American Samoa), and Indian tribes. P.L. 112-10 reduced funding for
CDBG formula grants by 16.4%. Also included in the account are funds for the Sustainable
Communities Initiative (SCI), a competitively awarded grant program intended to support a
coordinated approach to regional land use, housing, environmental, and transportation planning
activities. P.L. 112-10 reduced funding for SCI activities by 33%.
H.R. 1
On February 19, 2011, the House passed H.R. 1, Full Year Continuing Appropriations Act for
FY2011. As passed the House, H.R. 1 would have reduced the CDF account by 66.3% below the
account’s FY2010 funding level of $4.450 billion, and would have prohibited funds from being

13 Included in P.L. 112-8, which funded the federal government through April 15, 2011,was a provision, Sec. 303,
appropriating $4.230 billion for the CDF for FY2011. That provision was voided with the passage of P.L. 112-10.
14 P.L. 112-10, Division B, Sec. 1119.
15 P.L. 112-10, Division B, Sec. 2259.
16 Given the minimal instructions included in the House-passed version of H.R. 1, figures included in Table 3 assume
that funds will be allocated among the CDBG components based on the same percentage distribution of funds allocated
for FY2010, except where noted.
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used for earmarks17 and the Administration’s Sustainable Communities Initiative (SCI). It did not
include instructions on how funds were to be allocated among the components of the CDBG
program: states and entitlement communities, insular areas, and Indian tribes. The program’s
governing statute18 and previous appropriations acts required that 70% of funds be allocated to
so-called entitlement communities19 and 30% to states and Puerto Rico for distribution to
nonentitlement communities after specific amounts were set aside for insular areas, Indian tribes,
and other programs included in the account. Given the minimal instructions included in the
House-passed version of H.R. 1, figures included in Table 3 assume that funds would have been
allocated among the CDBG components based on the same percentage distribution of funds
allocated for FY2010, except where noted.
Table 3. CDBG and Related Appropriations: FY2010 Actual and FY2011Request,
Recommended, and Full Year Continuing Appropriations
(in millions of dollars)
FY2011
FY2010
Administration
H.R. 1 Senate
Enacted
Program
Enacted
Request
H.R. 1 House
Committee
P.L. 112-10g
CDF, Total
4,450.0
4,380.1
1,500.0 4,230.0
3,501.0
CDBG-formula
3,943.2
3,943.3
1,478.0
3,943.2
3,294.3
Entitlement
2,760.2 2,760.3
1,034.6 2,760.2
2,306.0
Communities
States 1,183.0
1,183.0
443.4
1,183.0
988.3
Insular Areas
6.9 6.9
7.0a 7.0a 6.9a
CDBG Indian Tribes
64.3
64.3
15.0b 40.0
64.9
CDBG Subtotal
4,014.4
4,014.4
1,500.0
3,990.0
3,366.1
Sustainable
148.5 148.5 0.0 148.5
99.8
Communities
Regional Integration
99.0 99.0 0.0 0.0
69.9
Planning Grants
Community
39.6 39.6 0.0 0.0
29.9
Challenge Grants
Capacity Building
— —
0.0
0.0
0.0
Clearinghouse
HUD-DOT
9.9 9.9
0.0 0.0
0.0
Integration
Research


17 In previous years, the CDF account included two earmarked subaccounts: the Economic Development Initiative
(EDI) and the Neighborhood Initiative (NI). H.R. 1 explicitly prohibits funds being used for earmarks. See Section
1102 of H.R. 1.
18 42 U.S.C. 5301, et seq.
19 Entitlement communities include principle cities of metropolitan areas, cities in metropolitan areas whose population
exceeds 49,999 persons, and statutorily defined urban counties. In general, these are metropolitan-based counties whose
population meets or exceeds 200,000 persons, excluding the population of entitlement cities within its boundaries.
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FY2011
FY2010
Administration
H.R. 1 Senate
Enacted
Program
Enacted
Request
H.R. 1 House
Committee
P.L. 112-10g
Catalytic Competition
— 148.5 0.0 0.0
0.0
Grants
Rural Innovation Fundc 24.8

0.0
24.8
0.0
University Community
24.8 24.8 0.0 24.8
0.0
Fundc
Neighborhood
21.9 —
0.0 0.0
0.0
Initiative
Economic
171.1 —
0.0 0.0
0.0
Development Initiative
Transfer to the
44.5 43.8 0.0 42.3
35.0
Transformation
Initiativee
Non-CDBG Set-
435.6 365.6 0.0 240.0
134.8
asides and earmarks
Source: Prepared by CRS based on Administration’s FY2012 budget submission and H.R. 1.
Notes: Totals and subtotals may not correspond to actual amounts due to rounding. Italics indicates entry’s
amount is a component of the item immediately above it.
a. 42 U.S.C. 5306(a)(2) requires HUD to set aside $7 million, as specified by 42 U.S.C. 5307(1)(a), for insular
areas before allocating funds to states and entitlement communities.
b. 42 U.S.C. 5306(a)(1) requires HUD to set aside 1% of the annual amount appropriated for al ocation to
Indian tribes. Congress has modified this requirement in annual appropriations acts setting aside a specific
amount. H.R. 1 does not include a specific amount for Indian tribes. H.R. 1473 assumes an al ocation of
$65.0 million for Indian tribes.
c. Before FY2010, the program was funded under a separate account, Rural Housing and Economic
Development.
d. Prior to FY2007, CDBG-linked university activities were included in this account as authorized under 42
U.S.C. 5307. For FY2009, program funds of $23 million were appropriated under a separate HUD account,
Research and Technology.
e. Subtotal for the Transformation Initiative assumes transfer of 1% of amounts appropriated from programs
included in the CDF account.
f.
The bill targets $17.5 million of this amount to metropolitan areas with populations not exceeding 500,000
persons.
g. Table reflects an across-the-board rescission of 0.2% included under Sec. 1119, of Title I, Division B of P.L.
112-10. It also reflects the transfer of 1% of the amounts appropriated to each program under the CDF
account to HUD’s Transformation Initiative. Please note the original appropriation for the CDF account
was $3.508 billion, including $3.343 billion for CDBG formula funds and insular areas, $65 million for Indian
tribes, and $100 million for the Sustainable Communities Initiative.
Senate Appropriations Committee Amendment to H.R. 1, S.Amdt. 149
On March 9, 2011, Senator Inouye, Chairman of the Senate Appropriations Committee, submitted
S.Amdt. 149, an amendment to H.R. 1, in the nature of a substitute, for Senate consideration.
S.Amdt. 149, which was defeated by a vote of 42 to 58, included a provision that would have
appropriated $4.230 billion for CDF activities. This included $3.990 billion for the CDBG
program. The amendment would have frozen CDBG formula grant funds allocated to states and
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entitlement communities at the FY2010 appropriation level of $3.943 billion, while insular areas
would have received $7 million and Indian tribes $40 million (1% of the amount appropriated as
required by statute).20 The Senate bill would have also funded the Rural Innovation Fund,
University Community Fund, and SCI programs at their FY2010 funding levels.
Impact and Implications of Reduced Funding
The FY2011 appropriations for the formula-based components of the CDBG program
(entitlement communities and states, and excluding insular areas) totaled $3.296 billion, which
was approximately 16.4% ($647 million) less than the $3.943 billion appropriated for FY2010.21
For FY2012, the CDBG allocations awarded to entitlement communities and states totaled $2.942
billion. This represented a decline of 10.7% ($354 million) less than the amount allocated in
FY2011. The reductions in funding for formula grant activities from FY2010 to FY2012 have
resulted in the average grant amount for entitlement communities declining from $2.4 million in
FY2010 to $1.7 million in FY2012. This is a 29.1% reduction in the average grant amount
awarded to entitlement communities. The decline in average funding is both a result of lower
appropriations and an increase in the number of communities qualifying for entitlement status
(Table 4). The average state allocation declined by 25.4%, from $23.2 million in FY2010 to
$17.3 million for FY2012.
Although the reductions in CDBG funding represent a decline in resources available to support
local community and economic development activities, they are less than the 62.5% reduction
proposed in H.R. 1. According to the U.S. Conference of Mayors and other organizations
representing state and local governments, the proposed reduction in funding included in H.R. 1
would have significantly impacted the long-term community and economic development plans of
the states and local governments forcing them to postpone or terminate activities that support
private sector economic development and job creation efforts, public facilities, and public
services.22 The proposed funding reduction included in H.R. 1 also would have undercut the
resources of non-profit organizations serving as CDBG sub-grantees. These entities are involved
in managing a range of CDBG-funded public services, facilities, and activities, including
homeless shelters, public safety activities, and job counseling.
Supporters of the CDBG program contend that the reduction in funding disproportionately affects
low and moderate income households given the statutory requirement that communities allocated
at least 70% of the program’s funds to activities principally benefitting low and moderate income
persons.23 The FY2012 appropriations for the formula component of the CDBG program is the
lowest amount appropriated in more than a decade. (See Table 6.) The reduction in funding for
entitlement communities will result in entitlement communities delaying some projects and

20 42 U.S.C. §5306.
21 The FY2011 amount assumes an across-the-board rescission of 0.2% and a 1% transfer of funds to the Department’s
Transformation Initiative. See Sec. 1119 and Sec. 2259 of P.L. 112-10.
22 See Housing and Development.Com, “Mayors Lobbying Senate to Restore CDBG Funding,” Community
Development Digest
, February 25, 2010, p. 1; and U.S. Conference of Mayors, “Community Development Block
Grants Work for America,” February 2011, http://www.usmayors.org/cdbg/. National League of Cities, “NLC
ACTION ALERT: Community Development Block Grant Recess Strategy,” press release, February 2011.
23 The program’s authorizing statue and regulations define low and moderate income persons as those persons whose
income do not exceed 80% of the median income of the jurisdiction.
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reducing support for others, including activities undertaken by community-based organizations
acting as sub-grantees.
Table 4. Average CDBG Allocation and Percentage Change: 2010 to FY2012
(in millions of dollars)
FY2011
Percentage
Percentage
Number of
Number
average
change
Number
change
eligible
FY2010
of eligible
allocation
from
of eligible
FY2010
from
entities
average
entities
under P.L.
FY2010 to
entities
average
FY2010 to

FY2010
allocation
FY2011
112-10
FY2011
FY2012
allocation
FY2012
Entitlement
communities 1,165 $2.4
1,167 $1.9 -16.7
1,176 $1.7 -29.1
States
51 23.2 51 19.4 -16.4 51 17.3 -25.4
Insular
areas
4 1.7 4 1.7 0.0 4 1.7 0.0
Source: HUD allocations at data at http://www.hud.gov/offices/cpd/about/budget/budget10/index.cfm and CRS,
based on information included in Table 3.

Distribution of CDBG Funds: FY2010 to FY2012
Table 5, identifies the FY2010, FY2011, and FY2012 actual distribution of CDBG formula funds
awarded to states and entitlement communities, and insular areas. The table presents information
at the state level, but each state total includes actual amounts allocated to the state and entitlement
communities within each state. The number of entitlement communities in each state are
identified in the last three columns of the table by fiscal year. Calculations for the three fiscal
years were generated by HUD. In short, P.L. 112-10, the Department of Defense and Full-Year
Continuing Appropriations Act for FY2011, reduced formula allocations to states and entitlement
communities by 16.4% below FY2010 allocations while FY2012 allocations, authorized by P.L.
112-55, the Consolidated Appropriations Act for FY2012, decreased CDBG formula allocations
by 25.1% below the amounts allocated to states and entitlement communities for FY2011.
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Table 5. Actual Allocation of CDBG Formula Grants to States and Entitlement
Communities, for FY2010, FY2011, FY2012
FY2010 Actual
FY2011 Actual
FY2012 Actual
State and
State and
State and
Number of
Number
Number of
Entitlement
Entitlement
Entitlement
Formula
of Formula
Formula
Communities
Communities
Communities
Recipients
Recipients
Recipients
Allocations:
Allocations:
Allocations:
in State
in State
in State
State
$3,942,610,534
$3,297,966,786
$2,941,666,022
FY2010
FY2011
FY2012
Alabama
$53,316,977
$44,562,795
$39,246,037 17 17 17
Alaska
5,165,029

4,340,720
3,843,406 2 2 2
Arizona
58,918,034

49,313,983
46,405,177 17 17 17
Arkansas
29,830,047
25,019,765
23,433,880 15 15 15
California
498,630,012

416,405,347 351,573,471 181 181 185
Colorado
40,776,639

34,036,991
32,933,094 22 22 22
Connecticut
45,226,742

37,855,191
34,325,990 23 23 23
Delaware
7,754,022
6,489,675
6,233,818 4 4 4
District of
19,636,404
16,328,680
13,904,983 1 1 1
Columbia
Florida
172,387,975
143,959,449
123,354,155 78 77 80
Georgia
88,719,365
74,356,236
72,331,774 25 25 27
Hawai
16,331,868
13,652,666
12,204,143 4 4 4
Idaho
13,306,473
11,171,762
10,660,286 8 8 8
Illinois
186,636,960
156,500,801
146,421,200 51 51 51
Indiana
75,280,553
62,939,342
59,842,592 25 25 25
Iowa
44,391,171
37,135,076
32,857,042 12 12 12
Kansas
30,264,453
25,325,915
23,399,317 10 10 10
Kentucky
49,407,821
41,383,633
38,294,674 10 10 10
Louisiana
68,563,722
57,131,650
45,354,000 15 15 14
Maine
21363472
17,889,167
16,106,214 7 7 7
Maryland
59,055,404
49,389,644
42,440,741 15 15 15
Massachusetts
117,649,272
98,171,023
88,974,486 38 38 38
Michigan
141,260,510
118,346,494
111,620,816 46 46 46
Minnesota
62,071,555
51,888,923
47,038,219 21 21 21
Mississippi
38,270,634
32,081,524
27,513,192 7 7 7
Missouri
71,768,251
60,244,487
56,650,547 17 17 17
Montana
9,933,211
8,325,198
7,347,866 4 4 4
Nebraska
20,683,366
17,196,655
16,398,847 3 4 4
Nevada
21,933,014
18,357,637
17,633,337 8 9 7
New
Hampshire 14,303,671
11,979,325
10,831,576 6 6 6
New
Jersey
109,303,706
91,446,370
77,708,633 57 58 58
New
Mexico
22,830,540
19,146,748
14,165,369 6 6 6
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FY2010 Actual
FY2011 Actual
FY2012 Actual
State and
State and
State and
Number of
Number
Number of
Entitlement
Entitlement
Entitlement
Formula
of Formula
Formula
Communities
Communities
Communities
Recipients
Recipients
Recipients
Allocations:
Allocations:
Allocations:
in State
in State
in State
State
$3,942,610,534
$3,297,966,786
$2,941,666,022
FY2010
FY2011
FY2012
New
York
374,236,685
313,082,305
281,664,304 49 49 49
North
Carolina
77,770,615
65,281,862
65,385,998 27 27 27
North
Dakota
6,851,614
5,739,254
4,925,059 4 4 4
Ohio
174,218,540
145,724,619
135,321,183 45 45 45
Oklahoma
32,629,101
27,348,173
24,942,864 11 11 10
Oregon
39,408,379
32,931,463
28,411,302 15 15 14
Pennsylvania
236,902,677
197,939,554
167,973,973 48 48 48
Rhode
Island
18,671,084
15,630,053
14,662,008 7 7 7
South
Carolina
41,999,569
35,217,977
32,602,287 17 17 17
South
Dakota
8,671,615
7,268,635
6,552,541 3 3 3
Tennessee
54,075,918
45,352,207
44,563,668 17 17 18
Texas
276,687,113
231,949,252
215,435,097 78 78 78
Utah
22,522,762
18,657,954
18,142,062 14 16 17
Vermont
9,014,623
7,555,362
6,837,137 2 2 2
Virginia
65,725,958
54,944,504
48,666,534 30 30 30
Washington
66,000,003
55,094,657
48,830,368 31 31 33
West
Virginia
27,027452
22,624,783
19,137,316 9 9 9
Wisconsin
71,488,467
59,757,871
54,535,888 23 23 23
Wyoming
4,561,267
3,826,802
3,196,119 3 3 2
Puerto
Rico
119,176,219
99,666,627
66,983,925 28 28 28
Formula
Subtotal
3,942,610,534
3,297,966,786
2,941,666,022 1,216 1,221 1,227
American
Samoa 1,121,951
1,133,433
1,158,648 1 1 1
Guam
3,050,365
3,085,838
3,158,206 1 1 1
Northern
Marianas 880,151 824,363 793,489 1 1 1
Virgin
Islands
1,877,526
1,872,506
1,889,657 1 1 1
Insular Area
6,929,993
6,916,140
7,000,000 4 4 4
Subtotala
Total
3,949,540,527
3,304,882,926
2,948,100,000
Indian Tribes
64,350,000
64,200,000
60,000,000
Subtotalb
Source: CRS Analysis based on HUD FY2010, FY2011, FY2012 allocation data available at http://www.hud.gov/
offices/cpd/communitydevelopment/budget/.
a. 42 U.S.C. 5306(a)(2) requires HUD to set aside $7 million, as specified 42 U.S.C. 5307(1)(a), for insular
areas before allocating funds to states and entitlement communities.
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b. 42 U.S.C. 5306(a)(1) requires HUD to set aside up to 1% of annual amount appropriated for al ocation to
Indian tribes. From time to time Congress has modified this requirement in annual appropriations acts to
set aside a specific amount.
Impact of 2010 Census Data on CDBG Allocations
Of the amounts appropriated each fiscal year to carry out CDBG eligible activities 70% is
allocated to cities and urban counties meeting required minimum population thresholds. These
communities are identified collectively as “entitlement communities.”24 The remaining 30% of
funds appropriated for CDBG formula distribution is allocated among the 50 states and Puerto
Rico for distribution to small or so-called “nonentitlement communities.”
CDBG funds awarded to eligible entitlement communities and states are allocated using the
highest yield from one of two statutorily-based formulas.25 For each of the two categories of
eligible entitlement communities (metropolitan cities and urban counties), Formula A, the original
formula created with the initial passage of the Housing and Community Development Act of
1974, P.L. 93-383, allocates funds based on each metropolitan city and urban county’s share of
the following weighted factors:
• population relative to the total population for all metropolitan cities or urban
counties (0.25);
• poverty relative to total person in poverty for all metropolitan cities or urban
counties (0.50); and
• overcrowded housing relative to the total number of persons living in
overcrowded housing conditions for all metropolitan cities or urban counties
(0.25).
The second formula, Formula B, enacted with the passage of the Housing and Community
Development Amendments of 1977, P.L. 95-128, allocates funds to metropolitan cities and urban
counties using the following weighted factors:
• a population growth lag factor26 intended to measure the extent that a
community’s population has lagged behind the national average for all
metropolitan cities and urban counties since 1960 (0.20);
• each community’s share of poverty relative to the total persons living in poverty
for all metropolitan cities or urban counties (0.30); and

24 To qualify for a direct allocation of funds a city must be located in a metropolitan area, have a minimum population
of 50,000 or more persons, or be designated by the Office of Management and Budget as the principle (central) city of
a metropolitan area, 42 U.S.C. § 5302(a)(4). A county may qualify for a direct allocation by meeting the statutory
definition of urban county as outlined at 42 U.S.C. § 5302(a)(6) and 42 U.S.C. § 5306. Cities and urban counties
meeting the minimum population thresholds qualifying them as eligible to receive a direct allocation of CDBG funds
are collectively labeled “entitlement communities.” For FY2012, the total number of CDBG entitlement communities
was 1,176.
25 42 U.S.C. § 5306.
26 This factor is intended to measure the extent to which a metropolitan city or urban county’s population growth rate
has lagged behind the population growth rate for all metropolitan cities or urban counties between the period 1960 and
the most recent date that data is available for all metropolitan cities or urban counties.
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• housing built before 1940 relative to the total number of housing units built
before 1940 for all metropolitan cities or urban counties (0.50).
The distribution of CDBG funds to states are also governed by a two formula system with
Formula A using each state’s relative share of population, poverty, and overcrowded housing in
nonentitlement areas to allocate funds, and Formula B using each state’s relative share of poverty
housing built before 1940, and in persons living in poverty in all nonentitlement areas.
HUD Study of the Impact of New Data Sources
The statute governing the administration of the CDBG program requires HUD to use, with
respect to each fiscal year, “the most recent data compiled by the United States Bureau of the
Census and the latest published reports of the Office of Management and Budget (OMB)
available ninety days prior to the beginning of such fiscal year.”27 Starting with the FY2012
allocations, HUD will use Census Bureau data from the 2010 Decennial Census and the 2005-
2009 American Community Survey (ACS) five-year estimates. The ACS five-year estimates will
be updated every year allowing HUD to annually update data sources used to allocate CDBG
funds. This will allow allocations to reflect the most recent demographic changes more
accurately.
Prior to the FY2012 allocations HUD used 2000 Decennial Census as the data source for poverty,
overcrowded housing conditions, and pre-1940 housing stock. In the case of the FY2011
allocations, it also used 2009 population estimates and data from 1960 decennial census to
calculate each community and state’s relative share of population and extent of population growth
lag.
In December 2011, HUD released a study on the impacts of the introduction of 2010 Census and
ACS data on the allocation of CDBG formula grant funds.28 In order to analyze the effect the new
data sources would have on the distribution of program funds, the study assumed that the number
of eligible entities and the program’s appropriations would be held constant from FY2011 to
FY2012. This assumption isolates the impact of the change in data sources on the distribution of
funds. The following are selected findings the HUD study.
• Communities that may be most negatively impacted by the change in data
sources are more likely to be located in Puerto Rico, the Mid-Atlantic, and
Pacific/Hawaii regions. Entitlement communities in these regions experienced a
decline of -22.6%, -4.9%, and -3.1%, respectively, in their CDBG allocation due
to changes in data sources.
• Entitlement communities positively impacted by the change in data sources are
more likely to be located in the Rocky Mountain, Great Plains, and Midwest
regions. Entitlement in these regions would experience an increase of 9.5%,
6.8%, and 5.3%, respectively, in their CDBG allocation.29

27 42 U.S.C. § 5302(b).
28 Paul Joice, Ben Winter, and Heidi Johnson, Redistribution Effect of Introducing 2010 Census and 2005-2009 ACS
Data into the CDBG Formula
, Department of Housing and Urban Development, Office of Policy Development and
Research, Washington, DC, December 2011, http://www.huduser.org/publications/pdf/cdbg_redis_eff.pdf. See
Appendix 1 of the document for a map of HUD’s Administrative Regions.
29 Ibid. Table 2.9, Shifting Shares of CDBG Entitlement Funding by Region, page 15.
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• The introduction of new data sources results in principal (central) cities of
metropolitan areas and urban counties receiving a greater share of funds (0.2%
and 1.2%, respectively), while funding allocated to other entitlement (satellite)
cities would decline by 3.1%. According to the report, “these changes are driven
largely by increasing shares of poverty in urban counties, decreasing shares of
overcrowding in satellite cities, and increasing shares of pre-1940 housing in
principal (central) cities.30
• Two states, New Mexico and Puerto Rico,31 experience the largest decline in
funding, 27.4% and 27.3%, respectively, as a result of declines in their relative
shares of poverty and overcrowded housing.32
The report is available at http://www.huduser.org/publications/pdf/cdbg_redis_eff.pdf. Appendix
2 of the report includes a comparison of funding allocations for the 1,166 entitlement
communities awarded grants in FY2011.
Recent Funding History
This section of the report is a review of the CDF accounts funding history from FY2000 to
FY2011. It includes a discussion of the three primary components of the CDF account:
• CDBG formula grants;
• CDBG-related set-asides and earmarks; and
• CDBG-linked supplemental or special appropriations.
Figure 1 is a graphic representation of the distribution of the primary components of CDF
account since FY2000.

30 Ibid. Executive Summary, p. ii.
31 42 U.S.C. § 5302(a)(2) includes Puerto Rico in the definition of a state for the purposes of the CDBG program.
32 Ibid. p. 28.
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Figure 1. CDF Appropriations: FY2000 to FY2011
(in billions of dollars)
2011
2010
2009
2008
2007
2006
2005
Fiscal Year 2004
2003
2002
2001
2000
0
2
4
6
8
10
12
14
16
18
20
22
24
Billions of $
Formula Grants
Set-asides
Disaster Recovery
NSP
ARRA

Source: CRS analysis based on Table 6 and HUD Budget Justifications.
From FY2000 to 2010, total appropriations for the CDF account—excluding special and
supplemental appropriations for disasters, mortgage foreclosures, and economic recovery—
fluctuated between a high of $5.112 billion for FY2001 and a low of $3.772 billion for FY2007
(see Table 6). The FY2011 appropriation for CDF activities are the lowest appropriated in more
than a decade.
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Table 6. CDF Appropriations: FY2000 to FY2011
(in billions of dollars)
Year
2000
2001 2002 2003 2004 2005
2006
2007
2008
2009 2010 2011
CDBG Formula
4.235 4.399 4.341 4.340 4.331 4.117 3.711 3.711 3.593 3.642 3.948 3.303
Grants
Set-asides
0.545 0.713 0.659 0.565 0.603 0.585 0.467 0.061 0.274 0.258 0.502 0.198
EDI & NI
earmarks
0.263a 0.401 0.336 0.301 0.334 0.300 0.356 0.0 0.206
0.185
0.195
0.0
CDF Total
4.780 5.112 5.000 4.905 4.934 4.702 4.178 3.772 3.867 3.900 4.450 3.501
Disaster
0.000 0.000 3.480 0.000 0.000 0.150 16.673 0.000 9.800 0.00 0.100 0.000
Recovery
NSP
— — — — — — — —
3.900 2.000 1.000 0.000
ARRA
— — — — — — — — —
1.000 —
0.000
Supplemental/
Special Funds
0.000 0.000 3.480 0.000 0.000 0.150 16.673 0.000 13.700 3.000 1.100 0.000
Subtotal
Total
4.780 5.046 8.480 4.905 4.934 4.852 20.851 3.772 17.566 6.900 5.550 3.501
Source: CRS appropriations reports, HUD Budget Justifications.
a. Total appropriations were $256.2 million for EDI, including $232 million for earmarked projects and $30
million for NI, including $23 million for earmarked projects. EDI original appropriation of $275 million was
subject to a rescission of $18.8 mil ion.
Formula Grants
During recent appropriations cycles the funding level for the CDBG-formula component of the
CDF account has been the focus of debate. Supporters of the program have pressed for increased
funding, contending that the program’s appropriations have declined in both current and constant
dollars. Supporters noted that this decline or near stagnation in funding has been compounded by
the increased number of communities gaining entitlement status and thus eligibility for a direct
allocation of a share the 70% of funds dispersed to so-called “entitlement communities.”
Entitlement communities have been forced share an ever-shrinking or stagnant slice of the CDBG
formula pie with an ever-increasing number of eligible grant recipients. Critics of the program
have argued that increased funding has not been justified based on the program’s PART score33
and more recently, the need to reduce domestic discretionary spending as part of a larger effort to
reduce federal budget deficit and the national debt.
As noted in Table 7, during the period from FY2000 to FY2010, the average grant amount
allocated to CDBG entitlement communities declined by 26.7% from a high of $3 million in

33 Performance Assessment Rating Tool (PART) “is a questionnaire designed to help assess the management and
performance of programs. It is used to evaluate a program’s purpose, design, planning, management, results, and
accountability to determine its overall effectiveness.” The latest undertaken for the CDBG program was FY2003. For
additional information on PART see http://www.whitehouse.gov/omb/expectmore/part.html. For a link to the CDBG
entitlement program’s FY2003 PART review see http://www.whitehouse.gov/omb/expectmore/summary/
10001161.2003.html.
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FY2002 to a low of $2.1 million in FY2008. The total amount appropriated declined annually
from FY2001 to FY2008 and has been increasing from FY2009 to FY2010, but the average
allocation had been steadily declining. However, since FY2008, the average allocation had
increased by 9%, from $2.2 to $2.4 million in FY2010. However, the FY2011 estimated average
allocation of $1.9 million is a reversal of that recent trend. For FY2011, the average allocation is
34.5% less than the amount appropriated in FY2000. The decline in the average grant amount is
both a function of fewer dollars appropriated and an increase in the number of entitlement
communities as more cities and counties achieve the population threshold necessary to be
designated an entitlement community. From FY2000 to FY2011, the number of jurisdictions
receiving a direct allocation as CDBG entitlement communities increased by 155, from 1,012 to
1,167 (see Table 7).
Table 7. Number of CDBG Grantees and Average Allocation: FY2000 to FY2011
(Fiscal Year Allocations )

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011a
Total allocated
$2.964 $3.079 $3.039 $3.038 $3.032 $2.882 $2.593 $2.598 $2.510 $2.549 $2,760 $2,325
to entitlement
communities (in
billions of $)
Number of
1,012 1,018 1.023 1041 1,111 1,117 1.135 1,140 1.151 1,159 1.165 1,167
entitlement
communities
Average
$2.9 $3.0 $3.0 $2.9 $2.7 $2.6 $2.3 $2.3 $2.2 $2.2 $2.4 1.9
entitlement
allocation (in
millions of $)
Total allocated
$1.271 $1.320 $1.302 $1.302 $1.299 $1.235 $1.111 $1.113 $1.076 $1.093 $1.183 $973
to states (in
billions of $)
Number of
51 51 51 51 51 51 51 51 51 51 51 51
states + Puerto
Rico
Average state
$24.9 $25.9 $25.5 $25.5 $25.5 $24.2 $21.8 $21.8 $21.1 $21.4 $23.2 $19.1
allocation (in
millions of $)
Source: CRS analysis based on data from HUD.
a. Figures for FY2011 are based on preliminary estimates generated by HUD.
The fluctuations in the average annual grant amount awarded to states was less pronounced. In
FY2010, $1.183 billion was allocated among the 50 states and Puerto Rico for distribution to
nonentitlement communities. This was 7.4% ($88 million) less than the $1.271 billion made
available to states in FY2000, but 7.6% ($90 million) more than allocated to states for FY2009.
During this period the average state allocation declined from a high of $25.5 million in FY2002
to $21.1 million in FY2008 before rebounding to $23.2 in FY2010. However, the FY2011
average state allocation of $19.1 million reverses that upward trend. The FY2011 estimated
average allocation is 23.3% less than the FY2000 amount and 17.7% less than the FY2010
average state allocation.
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Impact of Inflation on CDBG-Formula Allocations
When measured in inflation-adjusted constant dollars, program funding declined by 40% during
this period, from $4.235 billion in FY2000 to $2.545 billion in FY2011. As Figure 2 illustrates,
appropriations for CDBG formula grants have fluctuated between $3.5 billion and $4.3 billion in
current (non-inflation adjusted) dollars during the last decade.
Figure 2. CDBG Funding in Current and Constant Dollars: FY2000-FY2011
(Base Year 2000)
5
4.5
4
3.5
$
3
2.5
illions of
B

2
1.5
1
0.5
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Fiscal Year
formula grants current $
formula grants constant $

Source: CRS analysis.
CDBG-Linked Set-Asides and Earmarks34
In addition to the CDBG formula program, the CDF is also populated by a number of other
programs with smaller appropriation levels, narrower objectives, and fewer direct recipients.
Some set-asides included in the account are intended to complement the activities of the larger
formula grant program. Others are intended to meet other agency objectives and still others are
earmarked for specific activities or projects. Some observers have contended that a number of
these programs have been funded at the expense of the larger CDBG formula grant program,
particularly those projects funded as earmarks.

34 Set-asides are funds in a larger appropriations measure that is designated to fund a specific program or activity.
Under House and Senate rules, “an earmark is a provision in legislation or report language that is included primarily at
the request of a Member, and provides, authorizes, or recommends a specific amount to an entity or to a specific state,
locality, or congressional district.” For a discussion of disclosure procedures CRS Report R40976, Earmarks Disclosed
by Congress: FY2008-FY2010 Regular Appropriations Bills
, by Carol Hardy Vincent and Jim Monke.
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Figure 3. CDF Set Asides in Current and Constant Dollars: FY2000 to FY2011
(in millions of dollars)
700
600
500
$ 400
of
s

300
illion
M

200
100
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Fiscal Year
CDF set asides Current $
CDF set asides in constant $

Source: CRS analysis.
From FY2000 to FY2011, the number and appropriations for set aside programs included in the
CDF account has fluctuated significantly. In FY2001 Congress appropriated $647 million for
CDF set-asides, but only $61 million in FY2007. In FY2007, Congress eliminated all earmarks in
the CDF account. In FY2010, Congress appropriated $509 million in CDF set-aside activities,
with a significant portion of that amount targeted to the earmark accounts of Economic
Development Initiative (EDI) and Neighborhood Initiative (NI). Most recently, for FY2011
Congress eliminated funding for the EDI and NI earmarked accounts. The broad swing in the
amounts appropriated for CDF set-asides was a result of Congress’ decisions:
• to move several categorical grant programs into or out of the CDF account,
including deciding to no longer fund a program or to transfer selected
programs to another account;
• to reduce funding for specific programs; and
• to fund, and at what amount, two programs that have been the vehicles for
congressional earmarks, EDI and NI programs.
See Table A-1 in the Appendix for a detailed listing of programs included as set-asides in the
CDF account during the period from FY2000 to FY2011. From FY2000 to FY2008, CDBG-
related set-asides and earmarks declined by 59.4% when measured in constant FY2000 dollars,
but rebounded in FY2009 and FY2010 before declining significantly in FY2011. (See Figure 3.)
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Earmarks Dominate Set-Aside Activities
With the exception of FY2011 and FY2007 (when there were no earmarks), and FY2010 (when
the Obama Administration introduced its Sustainable Communities Initiative), congressional
earmarked projects funded by the EDI and NI programs were the dominant elements of CDBG-
related set aside appropriations. These two programs are used exclusively for congressionally
earmarked projects.
The issue of earmarks has been the source of debate during recent Congresses. During the
FY2007 appropriations cycle Congress removed all earmarks from the CDF account.
Subsequently both houses of Congress have instituted new rules governing disclosure of earmark
requests.35 Since FY2007, EDI and NI earmarks have been included in subsequent legislation
appropriating funds for CDF activities. In FY2008 and FY2009, EDI and NI earmarks were the
dominant components of CDBG-linked set asides programs. As Figure 4 illustrates, the
combined appropriations for EDI and NI in FY2008 and FY2009 were twice the amount
appropriated for other set-aside activities combined. For FY2011 Congress did not fund NI and
EDI earmarks.
Figure 4. CDF Earmarks and Set-Asides: FY2000 to FY2011
(in millions of dollars)
450
400
350
300
$
of
250
200
Millions 150
100
50
0
2001
2002
2003
2004
2005
2006
2007 2008
2009 2010
2011
Fiscal Year
EDI & NI earmarks
Other set asides

Source: CRS analysis.

35 For a discussion of disclosure procedures see CRS Report RL34462, House and Senate Procedural Rules
Concerning Earmark Disclosure
, by Sandy Streeter, and CRS Report R40976, Earmarks Disclosed by Congress:
FY2008-FY2010 Regular Appropriations Bills
, by Carol Hardy Vincent and Jim Monke.
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Special Appropriations
When events have warranted, Congress has used the CDBG program’s administrative framework
and rules to provide supplemental or special appropriations (see Figure 1). These supplemental
funds have been used to
• support local and state government disaster relief, recovery, and mitigation
activities following such events as the terrorist attacks of 9/11 and the Gulf
Coast hurricanes of 2005;36
• assist local and state governments in reducing the inventory of abandoned and
foreclosed properties (caused by the recent and ongoing mortgage foreclosure
crisis) by providing funds to states and selected communities to be used to
acquire, rehabilitate, and resell foreclosed properties under the Neighborhood
Stabilization Program (NSP);37 and
• assist local and state governments in supporting private sector job creation in
response to the economic recession that began in December 2007, as part of a
larger federal effort under the American Recovery and Reinvestment Act
(ARRA).38
With the exception of CDBG-ARRA funds, which were allocated to all eligible CDBG
entitlement communities, disaster relief and NSP funding were allocated only to states or
communities meeting specific criteria or eligibility thresholds.39 In the case of CDBG disaster
funding, only communities designated as disaster areas by a presidential declaration have
received funds, at the discretion of Congress. Each Congress decides if the magnitude of the
disaster warrants supplemental CDBG funds beyond funds typically made available by the
Federal Emergency Management Administration (FEMA).
In the case of the first and third rounds of the Neighborhood Stabilization Program, known as
NSP-1 and NSP-3, funds were allocated to states based on the relative number and percentages of
mortgage foreclosures, subprime loans, and mortgage delinquencies and defaults. Congress
established a minimum grant amount to be awarded to each state of 0.5% of the amount
appropriated. Of the amounts allocated to each state under NSP-1 and NSP-3, Congress required
each state to dispense a portion of these funds to local governments experiencing high rates of
mortgage foreclosures, subprime loans, and mortgage delinquencies and defaults allowing these
communities to directly administer these funds. It further limited the direct allocation of NSP to

36 For additional information on the use of CDBG funds for disaster relief and recovery see CRS Report RL33330,
Community Development Block Grant Funds in Disaster Relief and Recovery, by Eugene Boyd.
37 For additional information on the use of CDBG funds to address the mortgage foreclosure crisis see CRS Report
RS22919, Community Development Block Grants: Neighborhood Stabilization Program; Assistance to Communities
Affected by Foreclosures
, by Eugene Boyd and Oscar R. Gonzales.
38 This was not the first time Congress used the CDBG program framework to create jobs in response to a recession.
The Emergency Jobs Appropriations Act of 1983, P.L. 98-8, allocated an additional $1 billion in CDBG funds to be
used for job creation activities in response to a national unemployment rate of 10.7% and what a General Accounting
Office (GAO) report characterized as the worst economic recession of the post-World War II era. The report noted that
the CDBG program was the most efficient job creation mechanism of the 77 federal programs that received funding
under the act. The report, Emergency Jobs Act of 1983: Funds Spent Slowly, Few Jobs Created, GAO/HRD 87-1, is
available at http://archive.gao.gov/f0102/132063.pdf.
39 Congress funded three rounds of NSP activities. These three rounds have been designated as NSP-1, NSP-2, and
NSP-3.
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communities whose allocation met a minimum threshold of $2 million for NSP-1 and $1 million
for NSP-3 funds. As a result 309 communities qualified for administration of NSP-1 funds while
268 communities met or exceeded the NSP-3 threshold. NSP-2 funds were awarded
competitively to states, local governments, and non-profit organizations. For-profit entities are
also allowed to participate as partners with any of the three primary grant recipients of NSP-2
funds.
Proposed Rescission of Neighborhood Stabilization Program Funds
On March 1, 2011, Representative Gary Miller introduced the Neighborhood Stabilization
Termination Act, H.R. 861, which would rescind the $1 billion in NSP-3 funds appropriated
under the Wall Street Reform Act. On March 2, 2011, the House Financial Services Committee’s
Subcommittee on Insurance, Housing, and Community Opportunity conducted a hearing on NSP
and three federal foreclosure mitigation programs. On March 9, 2011, the House Financial
Services Committee considered, marked up, and ordered reported H.R. 861. During the markup
the committee approved by voice vote an amendment requiring HUD to publish a notice of
termination of the NSP program on its website. The notice is to be posted within five days
following the bill’s enactment and is to include language directing citizens to contact their
congressional representatives and locally elected officials if they are concerned about the impact
of foreclosures on their communities.
During the March 2, 2011, subcommittee hearing and the March 9, 2011, markup session by the
House Financial Services Committee, Representative Miller, sponsor of H.R. 861, characterized
the program as ineffective and a waste of taxpayers’ dollars. He argued that, given the need to
address the larger issue of reducing the federal debt and deficit, funding for NSP-3 should be
rescinded. In addition, he argued that the program was a giveaway to banks and speculators.
Other Members countered that the program has been successful in assisting communities to
combat the negative impacts of the mortgage foreclosure crisis on neighborhoods, property
values, and local revenues generated by property taxes. During the March 2 hearing, HUD’s
Assistant Secretary for Community Planning and Development, Mercedes M. Márquez, offered
written testimony stating that HUD expects “NSP will impact 100,000 properties in the nation’s
hardest-hit markets,” with 36,000 units already under construction.40 In addition, the Assistant
Secretary’s testimony stated that “based on NSP1 activity budgets, the Department estimates that
NSP will support more than 93,000 jobs nationwide.”41 Members also argued that the program
helps reduce the supply of abandoned, blighted, and foreclosed housing stock. The measure
passed the House on March 16, 2011, by a vote of 242 to 182. A companion bill to H.R. 861 has
not been introduced in the Senate.


40 U.S. Congress, House Financial Services, Insurance, Housing, and Community Opportunity, “Legislative Proposals
to End Taxpayer Funding for Ineffective Foreclosure Mitigation Programs,” 112th Cong., 1st sess., March 2, 2011, pp.
4-5. http://financialservices.house.gov/media/pdf/030211marquez.pdf.
41 Ibid., p. 8.
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Appendix. CDF Set-Asides: FY2000 to FY2011
Table A-1. CDF Set-Asides from FY2000 to FY2011
(in millions of dollars)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Indian
Tribes
67.0 71.0 70.0 70.5 71.6 68.4 59.4 59.4 62.0 65.0 64.3 64.2
Housing Assistance
3.0 2.9 3.3 3.3 3.3 3.3 —a — — — — —
Council
National American
2.2 2.6 2.6 2.4 2.5 2.4 — — —b
— — —
Indian Housing
Council
National Housing
— 10.0 5.0 5.0 5.0 4.8 —c — — — — —
Dev. Corp.
National Council
— — 5.0 5.0 5.0 4.8 —c — — — — —
of LaRaza
Sec.107 Grantsd
41.5 45.4 42.5 48.8 51.7 43.4 0.0
4.0 5.0


Hawaiian
— —- 9.6 — —a — — — — — — —
Homelands
University Comm.
—a
—a
—a
—a
—a
—a
—a
—e — — 24.8 —
Fund
Resident
55.0 55.0 55.0 —f
— — — — — — — —
Opportunity
Support Services
(ROSS)
Working Capital
— 15.0 13.8 3.4 4.9 3.4 1.6 1.6 1.5 3.2 — —
Fund Info. Tech.
transfer
Self-help
20.0 19.9 22.0 25.1 26.8 24.8 —c — — — — —
Homeownership
Opportunity
(SHOP)
Capacity Building
23.8
28.5
29.0
32.3
34.5
34.2
—c — — — —
YouthBuild
42.5 60.0 65.0 59.6 64.6 61.5 49.5 0.0g
— — — —
Sustainable
— — — — — — — — — —
148.5
98.8
Communities
Rural Innovation
— — — — — — — — — —
24.8h —
Fund
Alaskan Museumi
— — — — 9.9 — — — — — — —
Special
Olympics
4.0 — — — — 1.9 — — — — — —
Hudson
River
Park — — — — —
30.7 — — — — — —
Salt Lake City
— 2.0 — — — — — — — — — —
Olympic Games
Temp. Housing
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Community Development Block Grants: Funding Issues in the 112th Congress


2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Wel stone Center
— — — 8.9 — — — — — — — —
for Community
Building
NI 30.0j 43.9 42.0 41.8 43.7 41.4 49.5 — 25.9 19.5 22.1 —
EDI 256.2k 357.3l 294.2 259.3 279.3m 259.9 306.9
— 179.8 165.3 172.8

Transformation
— — — — — — — — — —
L44.5n 35.0
Initiative
Total CDF Set-
545.2 713.5 659.0 565.4 603.5 585.0 466.9 61.0 273.2 258.3 502.0 198.0
Asides
a. Funded under Sec. 107 activities.
b. Transferred to HUD’s Public and Indian Housing account.
c. Transferred to new Self Help and Assisted Housing account, created with the passage of P.L. 109-148.
d. Sec. 107 of the Housing and Community Development Act of 1974, as amended, authorizes the funding of a
number of activities including technical assistance; community development demonstration projects;
community development work study programs; grants to minority serving institutions of higher education,
including Historically Black Colleges and Universities, institutions serving Native Americans, Hispanic-serving
institutions, and university-community partnerships.
e. Prior to FY2007, CDBG-linked university activities were included in Sec. 107 subaccount. For FY2007,
program funds of $23 million were appropriated under a separate HUD account, Research and Technology.
f.
ROSS appropriations transferred to HUD’s Public Housing Capital Fund account.
g. Program authority transferred to the Department of Labor.
h. Before FY2010, the program was funded under a separate account, Rural Housing and Economic
Development.
i.
Added by P.L. 108-199, Sec. 165.
j.
FY2000 appropriation includes $23 million in congressional earmarks and $7 million in competitive grants.
Al funds after FY2000 earmarked for projects included in conference reports.
k. FY2000 appropriation includes $232 million in congressional earmarks and $24 million in competitive grants.
Al funds after FY2000 were earmarked for congressional y designated projects. Does not include $27.5
million in emergency supplemental appropriations.
l.
Includes amounts appropriated under P.L. 103-377 and P.L. 106-554. Al funds were earmarked for specific
projects.
m. Includes $2.990 million added by P.L. 108-199, Sec. 167.
n. Subtotal for Transformation Initiative assumes transfer of 1% of amounts appropriated to programs included
in the CDF account.






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Community Development Block Grants: Funding Issues in the 112th Congress

Author Contact Information

Eugene Boyd

Analyst in Federalism and Economic Development
Policy
eboyd@crs.loc.gov, 7-8689


Acknowledgments
The author would like to acknowledge Julius Jefferson, Information Specialist, KSG-G&F, and
Rod Williams, Government and Finance Division intern, for their contributions to the
development of this report.
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