WASHINGTON, DC— Today, Reps. David Kustoff (TN-08) and French Hill (AR-02) introduced the CDBG Modernization Act. This bill, the CDBG Modernization Act, will establish a new formula for calculating the U.S. Department of Housing and Urban Development’s (HUD’s) Community Development Block Grant (CDBG) funding for cities and counties. Since its last update in 1978, the program’s ability to effectively allocate funds for activities such as economic development, community support, housing, and infrastructure has diminished. Today’s outdated formula has resulted in many better off communities receiving more funding than distressed communities that could put the funds to better use.

“The CDBG program’s current formula is not working and needs to be reformed. Memphis and Jackson are just two of many communities across the country that have missed out on funding due to the program’s old and inefficient formula. My bill, the CDBG Modernization Act, will establish a new and updated formula that more accurately targets funds to community needs. It will also require HUD to conduct a study measuring the efficiency of the program every ten years,” said Rep. Kustoff. “This legislation will limit the wasteful spending of taxpayer dollars and ensure cities in West Tennessee and across our country have the resources they need to facilitate economic growth and improve their well-being.”

“Formulas developed in 1978 have little connection to the reality of the world today and rural communities in Arkansas and across the country continue to miss out on CDBG funding because of HUD’s antiquated formula,” said Rep. Hill. “Our bill doesn’t prescribe a specific change to the formula but directs HUD to come up with alternative formulas that reflect a modern world. I thank my friend and colleague Rep. Kustoff for joining me in introducing this commonsense measure.” 

What the bill does:

· Directs HUD to conduct a study to:

• Assess the entitlement formula’s effectiveness in targeting community needs and report on funding inequities due to its current design.
• Develop alternative formulas that will more effectively target community needs and maintain effective needs-based targeting over time through re-evaluating factors.
• Compare the alternative formulas to the current entitlement formula to determine which recipients are over-subsidized and under-subsidized.

· Establishes a five-year “phase-in” implementation period to allow entitlement communities to adjust their budgets accordingly.

· Directs HUD to conduct a new study every 10 years on effectiveness of the CDBG program.