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

Order Code IB10064
CRS Issue Brief for Congress
Received through the CRS Web
Community Development Block
Grants: Funding and Other Issues in
the 106th Congress
Updated September 20, 2000
Eugene Boyd
Government and Finance Division
Congressional Research Service ˜ The Library of Congress

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CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Community Development Block Grant Appropriations for FY2001
Funding for Capacity Building Initiatives
Related Programs and Proposals
Regional Connections
America’s Private Investment Companies (APICs)
Brownfield Redevelopment
Empowerment Zones and Enterprise Communities (EZs/ECs)
H.R. 1776: Reauthorizing and Amending the CDBG Program
Proposed Revision in the Income Targeting of CDBG Funds
Limiting the Use of Set-asides under the CDBG Program
Optional Entitlement Communities (OECs
Community Development Appropriations for FY2000
LEGISLATION
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
CHRONOLOGY
FOR ADDITIONAL READING

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Community Development Block Grants: Funding and Other Issues in the
106th Congress
SUMMARY
On September 13, 2000, the Senate
posal, Mississippi Delta Initiative, and Com-
Appropriations Committee reported its version
munity Empowerment Fund.
of H.R. 4635,a bill making appropriations for
the Departments of Veteran Affairs, Housing
On April 6, 2000, the House of Represe-
and Urban Development, and Independent
ntatives passed H.R. 1776 by a vote of 417-8
Agencies for FY2001. On June 21, 2000, the
(Roll Call Vote No. 110). The bill would
House of Representatives passed its version of
reauthorize the CDBG program through
H.R. 4635. The House bill includes $4.505
FY2005, and would limit set-asides under the
billion in funding for Community Development
program to projects authorized under Sec. 107
Block Grants, the federal government’s largest
and Sec. 108 of the Housing and Community
source of financial assistance to state and local
Development Act of 1974 (42 U.S.C. 5301).
governments for housing, commercial and
industrial development and neighborhood
H.R. 1776 also includes a provision
revitalization efforts. The Senate Appropria-
intended to encourage homeownership among
tions Committee recommends a $4.8 billion
municipal workers. For the purpose of pro-
funding level.
moting home ownership among teachers and

uniformed municipal employees (including
As passed by the House, the bill provides
policemen, firemen, and sanitation and other
$295 million less than the $4.8 billion appro-
maintenance workers) the bill would allow
priated in FY2000, and recommended by the
local governments to increase to 115 % (150%
Senate Appropriations Committee. The pro-
in high housing costs areas) the income ceiling
posed reduction in funding could affect several
governing the definition of low- and moderate-
Administration initiatives and the Economic
income families and persons. Presently low-
Development Assistance Program. Under the
and moderate-income households are defined
House version of H.R. 4635, Economic Devel-
as having incomes that do not exceed 80% of
opment Initiative (EDI) grants would be
the median income of the jurisdiction. The bill
funded at a total of $10 million for FY2001.
would amend the list of eligible activities to
This is 96% less than the amount set aside for
include mortgage lending and other activities
such grants in FY2000. The Senate version of
in support of home ownership.
H.R. 4635 includes $130 million in funding for
the EDI projects with $123 million earmarked
In the coming months Congress will
for specific projects identified in report
address a number of community development
(S.Rept. 106-410) accompanying the bill.
issues, including reauthorization of the CDBG
Projects identified in the conference report
and revision of the CDBG program definitions
accompanying the VA, HUD, Independent
of entitlement communities and low- and
Agencies Appropriations Act for FY2000,
moderate-income households. Congress also
accounted for $275 million in earmarked EDI
will consider legislation appropriating funds
projects.
for the program for FY2001, including funding
for a number of new initiatives proposed by
In addition, neither the House or Senate
the Clinton Administration.
versions of H.R. 4635 includes funding for the
Administration’s Regional Connections pro-
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
On September 13, 2000, the Senate Appropriations Committee reported its version of
H.R. 4635, the Departments of Veteran Affairs, Housing and Urban Development, and
Independent Agencies Appropriations Act for FY2001. The Senate Appropriations
Committee bill recommends $4.8 billion in funding for the Community Development Block
Grant (CDBG) program. On June 12, 2000, the House of Representatives passed H.R.
4635, The House bill includes $4.5 billion in Community Development Block Grant (CDBG)
assistance. This is $295 million less than appropriated for FY2000 and could mean
significant reduction in the funding of CDBG-related set-asides, including Economic
Development Initiative grants. On April 6, 2000, the House approved H.R. 1776, The
American Homeownership and Economic Opportunity Act of 2000. The bill would
reauthorize the Community Development Block Grant for fiscal years 2001 through 2005.
In addition, the bill includes provisions that would limit the use of CDBG funds for set-
asides. Senate action is expected after the August recess.
BACKGROUND AND ANALYSIS
The CDBG program is the largest source of federal financial assistance in support of
housing, neighborhood revitalization, and community and economic development efforts of
state and local governments. The Administration’s CDBG budget request of $4.9 billion for
FY2001 would provide $250 million more to entitlement communities and states under the
formula component of the program than the $4.236 allocated to entitlement communities and
states for FY2000. This proposed increase would be achieved by increasing overall CDBG
spending by $119 million and reducing total CDBG set asides by $131 million.
Community Development Block Grant Appropriations for FY2001
The Clinton Administration’s FY2001 budget proposal for the Community Development
Block Grants (CDBG) totals $4.9 billion, including $414 million for program set-asides. This
is $100 million more than originally appropriated for FY2000, and $119 million more after
subtracting the mandatory 0.38% cut in discretionary spending as required by, the
Consolidated Appropriations Act of 2000, P.L. 106-113.
The Administration is proposing several new initiatives under the CDBG program, the
two most notable being $22 million for a community and economic development initiative in
the Mississippi Delta, and $20 million for a technical assistance and capacity building
program for faith-based organizations involved in community and economic development
efforts. The Administration’s budget also includes increased funding for the Youthbuild
program and for capacity building grants to community development corporations and
nonprofit housing organizations.
The Administration is requesting $31.5 million for capacity building, which is an increase
of $7.75 million above the program’s FY2000 funding, and $75 million for Youthbuild
activities, which is a $32.5 million increase. The Youthbuild program, which funds training
and apprenticeship programs in construction trades for young adults involved in low income
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housing construction and rehabilitation projects, is the second largest set-aside under the
CDBG program.
These and other CDBG-based initiatives would be offset by eliminating or reducing
funding for a number of other CDBG set-asides, including:
! Supportive Services Grants ($55 million in FY2000);
! Neighborhood Initiative Grants ($30 million for FY2000); and
! Economic Development Initiative Grants ($275 million in FY2000
earmarks).
The largest CDBG set-aside is the Economic Development Initiative (EDI) program.
These funds are used in conjunction with Section 108 loan guarantees to fund economic
development projects. EDI (Sec. 108(q)) grants have been used in the past by Members of
Congress to fund specific projects. In FY2000, Members of Congress earmarked 87% of
these grants for specific projects. For FY1999, Congress earmarked 82% ($185 million) of
the $225 million in EDI appropriations for specific projects identified in the conference report
accompanying the FY1999 VA, HUD, and Independent Agencies Appropriations Act.
The Administration and entitlement communities and states have objected to EDI
earmarks on the grounds that they are noncompetitive. They have argued that large EDI
earmarks reduce the amount of funds available under the core CDBG program for distribution
to entitlement communities and states. For FY2000, approximately $240 million of the $275
million in EDI assistance is earmarked for specific projects identified in the conference report
accompanying the VA-HUD-Independent Agencies Appropriations Act.
Table 1. CDBG Funding: FY2000 Actual and FY2001 Proposed
FY2001 Appropriations Request
FY2000
Admin.
House
Senate
Program
Actual
CDBG Total
$4,800.0
$4,900.0
$4,505.0
$4,800.0
Entitlement
2,965.2
3,140.2
2,949.8
3,087.9
States
1,270.8
1,345.8
1,264.2
1,323.4
Total Set-asides
545.0
414.0
291.0
388.7
Indian Tribes
67.0
69.0
67.0
67.0
Native Amer. Econ. Dev. Access
--
[2.0]
0.0
0.0
Center
Tribal Colleges and Universities
--
[5.0]
0.0
3.0
National Amer. Indian Housing
2.2
2.2
3.0
2.2
Council
Housing Assistance Counsel
3.0
3.0
3.0
3.0
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Table 1. CDBG Funding: FY2000 Actual and FY2001 Proposed
FY2001 Appropriations Request
FY2000
Admin.
House
Senate
Program
Actual
Sec. 107
41.5
68.5
39.5
41.5
New Market University
—
[5.0]
0.0
0.0
Partnership
Institutions serving Native
Alaskans and Hawaiians
[2.0]
[2.0]
0.0
[3.0]
Self-help Housing Opportunity
24.0
17.5
20.0
0.0
Program
Mississippi Delta Region Initiative
--
22.0
0.0
0.0
Capacity Building for Com. Dev. and
Affordable Housing
23.75
31.5a
23.75
25.0a
National Comm. Dev. Initiative
[20.0]
[24.0]
[20.0]
[20.0]
Rural and tribal areas
[4.0]
[4.0]
[4.0]
[5.0]
Habitat for Humanities Cap.
[3.75]
[7.5]
[3.75]
--
Building
Supportive Services
55.0
--
55.0
55.0
Neighborhood Initiative
30.0
--
10.0
0.0
Earmarked projects
[23.0]
--
0.0
0.0
Youthbuild
42.5
75.0
45.0
60.0
Youthbuild USA for capacity-
[2.5]
[3.75]
[3.75]
[4.0]
building
Youthbuild for underserved and
–
–
–
[10.0]
rural areas
Econ. Dev. Initiative (EDI) Sec.
275.0
100.0
10.0
130.0
108(q))
EDI earmarks
[240.0]
--
0.0
[123.0]
Faith and community-based non-
profits capacity-building and technical
—
20.0
0.0
0.0
assistance
Other
9.75
9.5
15.0
2.0
Total
$4,871.0
$4,900.0
$4,505.0
$4,800.0
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Table 1. CDBG Funding: FY2000 Actual and FY2001 Proposed
FY2001 Appropriations Request
FY2000
Admin.
House
Senate
Program
Actual
Sec. 108 Loan Guarantee Subsidy
29.0
28.0
28.0
29.0
a Includes funding for LISC and Enterprise Foundation for activities that supports capacity-building and
technical assistance to community development corporations and community housing development
organizations.
Note: Totals may not add due to rounding. Brackets indicate amount subsumed under line immediately above.
Funding for Capacity Building Initiatives. For FY2000, Congress set aside $25
million in CDBG funds for capacity building activities intended to help nonprofit organizations
obtain the training necessary to effectively:
! compete for grants;
! administer federal assistance programs; and
! implement neighborhood improvement programs.
Capacity building and technical assistance increasingly have become a focus of the
Department of Housing and Urban Development in its efforts to develop partnerships with,
and provide nonprofit entities including community development corporations, housing
developers, and faith-based institution with greater access to HUD programs. For FY2001,
the Administration is requesting a 120% increase in funding for capacity building under the
CDBG program. This includes $20 million to finance a new program in support of faith-based
institutions and $7.75 million increase in funding for capacity building assistance targeted to
community development corporations and nonprofit housing entities. Three national
intermediaries -- Local Initiative Support Corporation (LISC) at [www.liscnet.org], the
Enterprise Foundation at [www.enterprisefoundation.org], and Habitat for Humanity
International at [www.habitat.org] -- have annual set asides to carry out capacity building
activities.
The House-passed version of H.R. 4635, the VA, HUD, Independent Agencies
Appropriations Act for FY2001, includes $27.5 million in direct CDBG assistance for capacity
building and technical assistance activities (See Table 2). This is $2.25 million more than
appropriated for FY2000. The Senate Appropriations Committee recommends slightly higher
funding of $29 million.
Table 2. CDBG Set-asides and Earmarked Funding for Capacity Building
Activities
(in millions of dollars)
FY2001 Proposed
FY2000
FY2001
Program
Actual
Admin.
House
Senate
Confer.
Capacity Building for Com.
Dev. and Affordable Housing
23.75
31.5
23.75
25.0
--
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Table 2. CDBG Set-asides and Earmarked Funding for Capacity Building
Activities
(in millions of dollars)
FY2001 Proposed
FY2000
FY2001
Program
Actual
Admin.
House
Senate
Confer.
National Comm. Dev.
[20.0]
[24.0]
[20.0]
[20.0]
--
Initiative
Rural and tribal
[4.0]
[4.0]
[4.0]
[4.0]
--
areas
Habitat for Humanities
[3.75]
[7.5]
[3.75]
--
--
Cap. Building
Youthbuild USA Capacity
--
Building
2.5
3.75
3.75
4.0
Cap. Building and Tech.
--
Assist. for Faith-based
—
20.0
0.0
0.0
Nonprofits
Total
$25.25
$55.25
$27.5
$29.0
--
Note: Totals may not add due to rounding. Brackets indicate amount subsumed under line immediately above
Related Programs and Proposals
Regional Connections. The Administration’s FY2001 budget includes $25 million in
support of smart growth initiatives intended to mitigate the impacts of suburban sprawl and
promote regional strategies for land use development. The grant program, which is a part of
the Administration’s “livability agenda,” would be administered by states or regional
organizations such as Councils of Government (COGs) or Metropolitan Planning
Organizations (MPOs). According to the Administration, the program’s core purpose would
be to promote and coordinate regional solutions to infrastructure development, transportation
planning, and workforce development. The Administration’s FY2000 budget proposal
included $50 million for a Regional Connections Program, which failed to win congressional
support. Neither the House nor Senate versions of H.R. 4635, the VA, HUD, Independent
Agencies Act for FY2001, includes funding for the Regional Connections Program
America’s Private Investment Companies (APICs). The program would be
administered by the HUD and Small Business Administration (SBA). Modeled after SBA’s
Small Business Investment Companies (SBIC) program, the APIC program is intended to
encourage equity investment in large scale development projects in economically distressed
urban and rural communities. The program is expected to leverage $278 million in private
equity investments. The Administration’s FY2001 budget request includes $37 million in tax
credits, which are expected to leverage $1 billion in private investment. For FY2000 the
Congress appropriated $20 million in credit subsidies to support $556 million in loan
guarantees.
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The VA-HUD-Independent Agencies Appropriations Act for FY2000, P.L. 106-74,
includes $20 million for APICs, pending enactment of authorizing legislation by June 30, 2000.
If legislation is not enacted, funds would be transferred to the Community Development
Financial Institutions program at the Department of Treasury.
Legislators made some progress in meeting the June 30, 2000 deadline for enactment of
APIC authorizing legislation. On April 13, 2000, the House Banking and Financial Services
Committee reported H.R. 2764, America’s Private Investment Companies Act. The bill, which
was introduced on September 9, 1999, was discharged from the House Subcommittee on
Housing and Community Opportunity on April 12, 2000. It was considered, marked up, and
reported out of full committee the next day. During the committee’s consideration of the bill,
an amendment was added that would limit program authorization to 5 years. During this 5-
year period, HUD would license 15 new for-profit APICs annually. After several weeks of
negotiations between the Adminstration and the Speaker of the House, the House considered
and passed H.R. 4923, the Community Renewal and New Markets Act of 2000. A similar
measure, S. 2779, was introduced in the Senate on June 22, 2000. Both bills would authorize
the creation of APICs.
The House version of H.R. 4635 – the VA, HUD, Independent Agencies Appropriations
bill for FY2001 – does not include funding for the APIC program. H.Rept. 106-674
accompanying H.R. 4635 noted the absence of legislation authorizing the creation of APICs
as the reason for not funding the APIC program. The Senate Appropriations Committee
version of H.R. 4635 does not include funding for APICs. For additional information on
APICs and community renewal and new markets legislation see CRS Report RL30597,
Renewal Communities and New Markets Initiatives (H.R. 4923, S. 2779, S. 2936., by Bruce
K. Mulock,

Brownfield Redevelopment. Brownfields are contaminated industrial and commercial
facilities. Developers of designated brownfield sites may receive federal funds, including
Environmental Protection Agency funds, to remove or mitigate the effects of the
environmental contaminants. Other funds, including brownfield funds administered by HUD,
may be used to assist in redeveloping the site or facility for new commercial or industrial uses.
HUD is requesting $50 million in funding for brownfield redevelopment projects. This
is $25 million more than appropriated in FY2000. HUD funds would be used to finance job
creation activities that benefit low and moderate income persons. Administration estimates
place the number of eligible brownfield sites at 450,000 nationwide. HUD funds are used in
conjunction with Section 108 loan guarantees, and are expected to leverage $200 million in
Section 108 commitments, which could support the creation of 20,000 to 25,000 jobs,
according to administration estimates.
The House-passed version of H.R. 4635, the VA, HUD, Independent Agencies
Appropriations Act for FY2001, includes $20 million in funding for brownfield redevelopment
projects. Such projects would fund EDI grants and could leverage additional funds through
the use of Sec. 108 loan guarantees. The Senate Appropriations Committee approved bill
includes $25 million for brownfield redevelopment. For additional information on EPA’s
funding of brownfield redevelopment, see CRS Report 97-731, Superfund and the Brownfields
Issue, by Mark Reisch.
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Empowerment Zones and Enterprise Communities (EZs/ECs). The EZ/EC program
provides targeted tax incentives and grants to selected urban and rural cities and counties.
Federal assistance is used to encourage private sector economic activity in economically
distressed urban neighborhoods and rural areas leading to job opportunities for residents of the
area, particularly low- and moderate-income residents. In 1994, HUD and U.S. Department
of Agriculture (USDA) created 104 EZs/ECS in urban and rural areas. In 1999, a second
group (Round II) of communities (15 urban/5 rural) received the EZ designation. For
FY2000, Congress appropriated $55 million for the 20 EZs designated in 1999. The
Administration is requesting an additional $55 million in FY2001 for these Round II EZs.
Neither the House nor Senate version of H.R. 4635, the VA, HUD, Independent Agencies Act
for FY2001, includes funding for EZ/ECs. For additional discussion of EZ/EC proposals
during the 106th Congress, see CRS Report 97-257, Empowerment Zones/Enterprise
Communities Program: Implementation and Developments, by Bruce K. Mulock.
Table 3. CDBG-Related Programs
(in millions of dollars)
Proposed Appropriations
FY2000
Program
Approp.
Adm.
House
Senate
Conference
Regional Connections
—
25.0
0.0
0.0
--
Empowerment Zones
55.0
55.0
0.0
0.0
--
Brownfield Redevelopment
25.0
50.0
20.0
25.0
--
America’s Private
--
Investment Companies
20.0
37.0
0.0
0.0
Total
$100.0
$167.0
20.0
25.0
--
H.R. 1776: Reauthorizing and Amending the CDBG Program
On April 12, 2000, the House passed H.R. 1776, the American Homeownership and
Economic Opportunity Act of 2000. The bill includes CDBG-related provisions that would:
! authorize the program for 5 years, from FY2001 through FY2005;
! modify the income targeting requirements of the program; and
! limit the number of the CDBG-linked set-asides.
Proposed Revision in the Income Targeting of CDBG Funds. The CDBG program
requires that 70% of the allocation awarded to each entitlement community or state be used
to fund activities that benefit low-and moderate-income persons.12 The bill includes a provision
intended to encourage home ownership among municipal workers. For the purpose of
1 Low- and moderate-income families and individual are those whose income does not exceed 80% of
the median income of the area involved. 42 U.S.C. 5302(a)(20)(A).
2 Low- and moderate-income families and individual are those whose income does not exceed 80% of
the median income of the area involved. 42 U.S.C. 5302(a)(20)(A).
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promoting home ownership among teachers and uniformed municipal employees (including
policemen, firemen, and sanitation and other maintenance workers), the bill would allow local
governments to increase to 115% (150% in high housing costs areas) the income ceiling
governing the definition of low- and moderate-income families and persons. The bill would
amend the list of eligible activities to include:
! mortgage downpayments;
! reasonable closing costs normally associated with the purchase of a residence;
! pre- or post-purchase counseling on the financial and other obligations of
home ownership; ormortgage interest rates subsidy.

Supporters of the amendment argue that a home ownership program for first time
homebuyers, would encourage eligible municipal employees to consider residing within the
jurisdiction where they are employed. This incentive is a means of combating the flight of
civic leadership and middle-class tax dollars to adjacent jurisdictions. Opponents of the
provision argue that it reduces the funds available for the truly needy. In addition, the
program, which would be limited to uniformed municipal employees and teachers, would
result in unequal treatment of other non-uniformed municipal employees.
Limiting the Use of Set-asides under the CDBG Program. The bill, H.R. 1776, would
prohibit the use of set-asides, except for Indian tribes, and special purpose grants authorized
under 42 U.S.C. 5307. These include grants:
! To Guam, Virgin Islands, American Samoa, and the Commonwealth of the
Northern Mariana Islands;to historically black colleges and universities;
! to community development work study program;
! to colleges and universities in partnership with states and local governments;
! for community adjustment and economic diversification activities stemming
from military base closures; and for technical assistance to state and local
governments.

The bill would allocate the remaining funds by formula to states and entitlement
communities. It would also require that any amendment or appropriation language that would
violate the provision limiting the use of set-asides must specifically:
! refer to subsection 408(b) of the Housing and Economic Opportunity Act of
2000, H.R. 1776, currently under consideration in the House; and state that
the amendment or appropriation provision modifies or supersedes subsection
408(b).
The bill would exclude Sec. 108 financed projects from the requirements of Sec. 4078(b).
(See Table 4)
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Table 4. CDBG Set-Asides
(in millions of dollars)
FY2001 Proposed
FY2000
Actual
Adm.
House
Sen.
Total Set-asides
545.0
414.0
291.0
387.9
Indian Tribes
67.0
69.0
67.0
67.0
Sec. 107
41.5
68.5
39.5
41.5
Subtotal
108.5
137.5
106.5
108.5
Set-asides that would be in noncompliance with Subsection 408(b) of H.R. 1776
Self-Help Housing Opportunity
20.0
17.5
20.0
0.0
Program
Mississippi Delta Region Initiative
--
22.0
0.0
0.0
Capacity Building for Com. Dev. and
Affordable Housing
23.7
31.5a
23.4
25.0
Supportive Services
55.0
--
55.0
55.0
Neighborhood Initiative
30.0
--
10.0
0.0
Youthbuild
42.5
75.0
45.0
60.0
Faith-based non-profits capacity-
building and technical assistance1
—
20.0
0.0
0.0
Other
9.7
9.5
21.0
9.4
Subtotal
161.5
176.5
174.4
149.4
Set-asides not subject to subsection 408(b) prohibition
Econ. Dev. Initiative (EDI) Sec.
35.0
100.0
10.0
7.0
108(q))
EDI earmarks (sec108 q)a
240.0
--
0.0
123.0
a Does not include $20 million for brownfield redevelopment activities.
Subsection 408(b) would not cover CDBG set-asides under Section 108, the provision
governing loan guarantees and Economic Development Initiative grants. As presently
structured, the provision would allow Members to request earmarks under subsection 108(q)
of Title I of the Housing and Community Development Act of 1974, 42 U.S.C. 5308(q). In
FY2000, EDIs comprised 50.4% of total CDBG set-asides, specific EDI earmarks actually
accounted for 44% of total CDBG set-asides. The remaining 6.4% of funds were allocated
for competitively awarded EDI funds (See Chart 1). Proponents of set-asides contend that
such projects serve as demonstration and models that test the applicability of certain activities
and approaches. Critics of set-asides argue that:
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! they siphon funds from the core program – CDBG’s formula-based block
grants:
! they are narrowly focused categorical programs hidden within a block grant;
and they are awarded noncompetitively to specific projects.
Optional Entitlement Communities (OECs)
Late in the first session of the 106th Congress, HUD unveiled a proposal that would create
a new category of entitlement community eligible for a direct formula-based allocation of
funds. The new category, called optional entitlement communities (OECs), would include:
! cities with population of 25,000 to 49,999; and
! counties with populations between 100,000 and 200,000.
Communities meeting these thresholds – 263 cities and 159 counties according 1998 Census
estimates – would receive formula-based allocations directly from HUD. Funding for an OEC
in a state would result in a corresponding reduction in that state’s CDBG allocation. States
that have no OECs would experience no change in their formula allocation. OECs in each
state would receive a formula allocation equal to the OEC’s share of the state’s formula
allocation. For example, if an OEC’s formula factors account for 5% of a state’s formula
allocation, the OEC would receive a direct allocation of 5% of the state’s nonentitlement
allocation. The state’s nonentitlement allocation would be reduced by a corresponding
amount.
Supporters contend that the proposal would provide a predictable stream of funds,
increase local control over the distribution of funds, and improve the long-range community
planning function. Detractors counter that the proposal would reduce the amount of funds
available to smaller and poorer communities whose populations do not meet the OEC
thresholds, reduce the role of the state in community planning, and further fragment HUD’s
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delivery of services. In addition, critics contend that the OECs would further strain HUD’s
ability to manage and oversee the entitlement communities program.
Community Development Appropriations for FY2000
On October 20, 1999, the President signed the VA-HUD-Independent Agencies
Appropriations Act for FY2000 into law as P.L. 106-74. The act included $4.8 million in
funding for CDBG activities. On December 23, 1999, the President signed the Consolidated
Appropriations Act for FY2000, P.L. 106-113. This act included a mandatory 0.38% across-
the-board cut in discretionary spending, as a result the CDBG appropriation was $4.781
billion. Approximately 11.4% of total CDBG funds are allocated to set-asides. Of the $545
million allocated for set-asides in FY2000, nearly 45% ($240 million) is allocated to Section
108(q) EDI earmarks. These are for specific projects identified in the conference report
(H.Rept. 106-379), which must be funded under the Section 108(q) provision.
LEGISLATION
H.R. 1776 (Lazio)
American Homeownership and Economic Opportunity Act of 2000. A bill to expand
home ownership in the United States and for other purposes. Passed House April 6, 2000
(Roll Call Vote 110: Yea and Nays: 417-8).
H.R. 2764 (LaFalce)
A bill to license America’s Private Investment Companies and provide enhanced credit
to stimulate private investment in low-income communities, and for other purposes. House
Committee on Banking and Financial Services ordered the bill to be reported (amended) April
13, 2000.
H.R. 4635 (Walsh)
A bill to provide appropriations for activities of the Departments of Veteran Affairs,
Housing and Urban Development, and Independent Agencies for FY2001. House Committee
on Appropriations reported an original measure, H.R. 4635 (H.Rept. 106-67) June 12, 2000.
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
U.S. Congress. House. Committee on Appropriations. H.Rept. 106-674 to accompany H.R.
4635, Departments of Veteran Affairs, Housing and Urban Development Appropriations
Act for FY2001. June 12, 2000.
U.S. Congress. House. Committee on Banking and Financial Services, H.Rept. 106-553 to
accompany H.R. 1776, American Homeownership and Economic Opportunity Act of
2000. April 5, 2000.
–––– H.Rept 106-638 to accompany H.R. 2764, America’s Private Investment Companies
Act of 2000. May 23, 2000.
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CHRONOLOGY
09/13/2000
H.R. 4635 reported by the Senate Appropriations Committee (S.Rept. 106-
410)

06/21/2000
H.R. 4635 passed by the House. Measure agreed to by recorded vote:
256-169 (Roll Call Vote 309).
06/12/2000
House Committee on Appropriations reported an original measure, H.R. 4635
(H.Rept. 106-674).
05/23/2000
H.R. 2764 reported (amended) by Committee on Banking and Financial
Services (H.Rept. 106-638).
04/13/2000
H.R. 2764 ordered reported (amended) by the Yeas and Nays: 33-14.
04/06/2000
H.R. 1776 passed by House. House agreed to by recorded vote: 417-8 (Roll
Call Vote 110).
03/29/2000
H.R. 1776 reported (amended) by Committee on Banking and Financial
Services (H.Rept. 106-553). Ordered reported by voice vote.

08/05/1999
H.R. 2764 introduced and referred to House Committee on Banking and
Financial Services.
05/12/1999
H.R. 1776 introduced and referred to House Committee on Banking and
Financial Services.
FOR ADDITIONAL READING
CRS Report 96-503 GOV. Community Development Block Grants: An Overview, by Eugene
Boyd.
CRS Report RS20381. Empowerment Zone/ Enterprise Communities Program: Information
on Round II & III, by Bruce K. Mulock.
CRS Report RL30504. Appropriations for FY2001: VA, HUD, and Independent Agencies,
coordinated by Dennis W. Snook and E. Richard Bourdon.
CRS Report RS20597. Renewal Communities and New Markets Initiative, by Bruce K.
Mulock.
CRS Report 97-731. Superfund and the Brownfields Issue, by Mark Reisch.
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