I 117th CONGRESS 2d Session H. R. 7868 IN THE HOUSE OF REPRESENTATIVES May 24, 2022 Mr. Kustoff (for himself and Mr. Hill ) introduced the following bill; which was referred to the Committee on Financial Services A BILL To modernize the formulas for allocation of Community Development Block Grant Program grants for entitlement communities to more effectively target such amounts for community development needs, and for other purposes.

1. Short title This Act may be cited as the CDBG Modernization Act of 2022 . 2. Initial study and report (a) Study Not later than the expiration of the 12-month period beginning on the date of the enactment of this Act, the Secretary of Housing and Urban Development (in this Act referred to as the Secretary ) shall conduct a study to— (1) analyze and assess the effectiveness of the formulas under paragraphs (1) through (3) of section 106(b) of the Housing and Community Development Act of 1974 ( 42 U.S.C. 5306(b) ) Act, and the factors used in such formulas, including the use of the age of housing factor (as such term is defined in section 102(a) of such Act ( 42 U.S.C. 5302(a) )), in effectively targeting funding under the Community Development Block Grant Program (in this Act referred to as the Program ) for community development needs and in carrying out the purposes of such program under section 101 of such Act ( 42 U.S.C. 5301 ); and (2) develop revised and updated formulas for use under paragraphs (1) through (3) of such section 106(b), or updated factors for use in such formulas, that— (A) more effectively target funding under the Community Development Block Grant Program for community development needs; (B) eliminate any funding inequities that use of such age of housing factor has contributed to under the Program; (C) include an element that provides for re-evaluation to maintain effective targeting for community development needs of grantees over time and adjusts funding in accordance with such changing needs; and (D) more effectively carry out the purposes of the Program under section 101 of such Act. (b) Report Not later than the expiration of the period referred to in subsection (a) of this section, the Secretary shall submit a report to the Congress that— (1) describes the study conducted pursuant to subsection (a) and sets forth any findings and conclusions of such study; (2) sets forth the revised and updated formulas or factors developed pursuant to subsection (a)(2) and to be used under section 106(b) of such Act, as amended by section 3 of this Act; (3) specifies how such revised and updated formulas or factors shall be counted for purposes of section 106(b)(3) of the Housing and Community Development Act of 1974; (4) identifies how the use of the age of housing factor has contributed to inequities in effectively targeting funding under the Program to community development needs of grantees; and (5) compares the effects of using such revised and updated formulas or factors to the effects of applying paragraphs (1)(B) and (2)(B) of section 106(b) of the Housing and Community Development Act of 1974, as in effect on the date of the enactment of this Act, to determine which grantees are over-subsidized or under-subsidized with respect to community development needs. 3. Subsequent studies and reports (a) Subsequent studies Not later than the expiration of each successive 10-year period after the expiration of the period referred to in section 2(a), the Secretary shall conduct a study to— (1) analyze and assess the effectiveness of the revised and updated formulas or factors set forth pursuant to section 2(b)(2) of this Act in effectively targeting funding under the Community Development Block Grant Program (in this Act referred to as the Program ) for community development needs and in carrying out the purposes of such program under section 101 of such Act ( 42 U.S.C. 5301 ); and (2) develop recommendations regarding revisions and updates to such formulas and factors that— (A) more effectively target funding under the Community Development Block Grant Program for community development needs; (B) include an element that provides for re-evaluation to maintain effective targeting for community development needs of grantees over time and adjusts funding in accordance with such changing needs; and (C) more effectively carry out the purposes of the Program under section 101 of such Act. (b) Reports Not later than the expiration of each applicable 10-year period referred to in subsection (a) of this section, the Secretary shall submit a report to the Congress that— (1) describes the study conducted pursuant to subsection (a) for such period and sets forth any findings and conclusions of such study; (2) sets forth the recommended revisions and updates developed pursuant to subsection (a)(2); (3) specifies how such recommended revisions and updates should be counted for purposes of section 106(b)(3) of the Housing and Community Development Act of 1974; and (4) compares the effects of using such recommended revisions and updates to the effects of applying paragraphs (1)(B) and (2)(B) of section 106(b) of the Housing and Community Development Act of 1974, as then in effect, to determine which grantees are over-subsidized or under-subsidized with respect to community development needs. 4. Applicability of new formulas or factors (a) Amendment to 1974 Act Subsection (b) of section 106 of the Housing and Community Development Act of 1974 ( 42 U.S.C. 5306(b) ) is amended by striking the subsection designation and all that follows through the end of paragraph (3) and inserting the following: (b) (1) The Secretary shall determine the amount to be allocated to each metropolitan city in accordance with the revised and updated formulas or factors set forth pursuant to section 2(b)(2) of the CDBG Modernization Act of 2022 in the report pursuant to such section 2(b). (2) The Secretary shall determine the amount to be allocated to each urban county in accordance with the revised and updated formulas or factors set forth pursuant to section 2(b)(2) of the CDBG Modernization Act of 2022 in the report pursuant to such section 2(b). (3) In determining the amount to be allocated each metropolitan city and urban county, the Secretary shall count each revised and updated formula or factor as provided in the report pursuant to section 2(b) of the CDBG Modernization Act of 2022 . . (b) Phase-In Notwithstanding any other provision of law, the Secretary shall adjust any allocations for metropolitan cities and urban counties made pursuant to section 106 of the Housing and Community Development Act of 1974 ( 42 U.S.C. 5306 ) for any of the first 5 fiscal years commencing after the date of the enactment of this Act to provide for phase-in of the effects from the amendments made by this Act and to allow such entitlement entities to adjust their budgets accordingly.