To provide for general revenue sharing and assistance for education for States and their local governments.

Summary: Emergency Targeted Revenue Sharing Act of 2003 - Authorizes and makes appropriations for FY 2003 through 2005 for financial assistance to States and their local governments for: (1) assistance for education; and (2) general revenue sharing.

Directs the Secretary of the Treasury to make allotments of such funds to States, with 50 percent of such allotments to be distributed by States among their local governments. Bases the amount of a State's allotment and of a local government's share upon relative: (1) school-age population, in the case of education assistance; and (2) general population, in the case of general revenue sharing.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Emergency Targeted Revenue Sharing 
Act of 2003''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Federal grants to State and local governments predate 
        the Constitution. Early grants included land grants for public 
        schools and universities. Later, Congress created financial 
        grants to the States with matching requirements and conditions, 
        including grants for highway construction, vocational 
        education, public health, and maternity care.
            (2) During the Nixon Administration, the emphasis of 
        Federal grants-in-aid programs was shifted from categorical 
        grants to block grants and general revenue sharing, which sent 
        funds to State and local governments with virtually no 
        programmatic requirements. Revenue sharing is not a new or 
        radical proposal.
            (3) Despite this long history of assistance to State and 
        local governments, the Federal Government is not providing 
        sufficient aid to the States in their current fiscal crisis. 
        The State fiscal crisis is twice as severe as the crisis in the 
        early 1990s, with States carrying fiscal year 2004 budget 
        deficits totaling roughly $100,000,000,000. Yet continuing 
        decreases in Federal taxes for the wealthiest Americans leave 
        significantly fewer Federal revenues to help the States provide 
        basic services for their residents.
            (4) To meet residents' needs, States have been forced to 
        increase income, property, and sales taxes for middle-income 
        and working families, in addition to raising taxes on 
        businesses. States also have had to cut funding for health 
        care, education, child care, public safety, and other programs. 
        At least 18 States have planned or are considering cuts in 
        spending on elementary and secondary education, resulting in 
        shortened school years and teacher layoffs. Cuts in State aid 
        have caused many colleges and universities to lay off faculty 
        and raise tuition.
            (5) Federal spending for the war and occupation of Iraq is 
        further straining the Federal Government's ability to aid the 
        States, undermining financial assistance for education, public 
        housing, Medicaid, Temporary Assistance for Needy Families, and 
        other important programs.
            (6) Defense appropriations will grow rapidly and 
        uncontrollably, continuing to crowd out spending for vital 
        human needs at the Federal and State levels. Homeland security 
        is directly threatened by cuts in police, fire, and hospital 
        budgets.
            (7) The Federal Government must help the States to avert 
        greater fiscal damage because it has more economic tools 
        available than the States. Unlike the Federal Government, 49 
        States have some form of a balanced budget requirement, forcing 
        States to reduce expenditures, increase revenues, or use both 
        of these options to close their budget gaps.
            (8) To live up to its historic obligations and provide 
        relief at a time of economic disaster, the Federal Government 
        immediately should enact a program of emergency targeted 
        revenue sharing, with assistance for schools and education 
        given first priority.

SEC. 3. EDUCATION FINANCIAL ASSISTANCE FOR STATES AND THEIR LOCAL 
              GOVERNMENTS.

    (a) Appropriation.--There is authorized to be appropriated and is 
appropriated to carry out this section $14,500,000,000 for fiscal year 
2003, $12,500,000,000 for fiscal year 2004, and $12,500,000,000 for 
fiscal year 2005.
    (b) Payment.--The Secretary of the Treasury shall pay to each State 
an amount equal to the amount allotted to the State under subsection 
(c).
    (c) Allotments.--From the amounts appropriated under subsection (a) 
for each fiscal year, the Secretary of the Treasury shall allot to each 
of the States as follows, except that no State shall receive less than 
\1/2\ of 1 percent of such amount:
            (1) State level.--50 percent shall be allotted among such 
        States on the basis of the relative school-age population of 
        each such State, as determined by the Secretary of the 
        Treasury, in consultation with the Secretary of Education, on 
        the basis of the most recent decennial census.
            (2) Local government level.--50 percent shall be allotted 
        among such States as determined under paragraph (1) for 
        distribution by the State to the various units of general local 
        government within such States on the basis of the relative 
        school-age population of each such unit within each such State, 
        as determined by the Secretary of the Treasury, in consultation 
        with the Secretary of Education, on the basis of the most 
        recent decennial census.
    (d) Use of Funds by State and Local Governments.--Funds received 
under this section may be used only for ordinary and necessary 
maintenance and operating expenses, and ordinary and necessary capital 
expenditures authorized by law, for primary, secondary, or higher 
education.
    (e) Effective Date.--Not later than 45 days after the date of 
enactment of this Act, the Secretary of the Treasury shall make 
payments to States under this section for fiscal year 2003. The 
Secretary of the Treasury shall make subsequent fiscal year payments 
not later than one year following the prior fiscal year's payments 
under this section.

SEC. 4. GENERAL REVENUE SHARING WITH STATES AND THEIR LOCAL 
              GOVERNMENTS.

    (a) Appropriation.--There is authorized to be appropriated and is 
appropriated to carry out this section $14,500,000,000 for fiscal year 
2003, $12,500,000,000 for fiscal year 2004, and $12,500,000,000 for 
fiscal year 2005.
    (b) Payment.--The Secretary of the Treasury shall pay to each State 
an amount equal to the amount allotted to the State under subsection 
(c).
    (c) Allotments.--From the amounts appropriated under subsection (a) 
for each fiscal year, the Secretary of the Treasury shall allot to each 
of the States as follows, except that no State shall receive less than 
\1/2\ of 1 percent of such amount:
            (1) State level.--50 percent shall be allotted among such 
        States on the basis of the relative population of each such 
        State, as determined by the Secretary of the Treasury on the 
        basis of the most recent decennial census.
            (2) Local government level.--50 percent shall be allotted 
        among such States as determined under paragraph (1) for 
        distribution by the State to the various units of general local 
        government within such States on the basis of the relative 
        population of each such unit within each such State, as 
        determined by the Secretary of the Treasury on the basis of the 
        most recent decennial census.
    (d) Effective Date.--Not later than 45 days after the date of 
enactment of this Act, the Secretary of the Treasury shall make 
payments to States under this section for fiscal year 2003. The 
Secretary of the Treasury shall make subsequent fiscal year payments 
not later than one year following the prior fiscal year's payments 
under this section.

SEC. 5. DEFINITIONS.

    In this Act:
            (1) State.--The term ``State'' means any of the several 
        States, the District of Columbia, and the Commonwealth of 
        Puerto Rico.
            (2) Unit of general local government.--
                    (A) In general.--The term ``unit of general local 
                government'' means--
                            (i) a county, parish, township, city, or 
                        political subdivision of a county, parish, 
                        township, or city, that is a unit of general 
                        local government as determined by the Secretary 
                        of Commerce for general statistical purposes; 
                        and
                            (ii) the District of Columbia, the 
                        Commonwealth of Puerto Rico, and the recognized 
                        governing body of an Indian tribe or Alaskan 
                        native village that carries out substantial 
                        governmental duties and powers.
                    (B) Treatment of subsumed areas.--For purposes of 
                determining a unit of general local government under