I

103D CONGRESS

1ST SESSION H. R. 581

To authorize payments to units of general local government for fiscal years

1993 and 1994.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 26, 1993

Mr. CONYERS (for himself, Mrs. COLLINS of Illinois, Mr. WAXMAN, Mr. LANTOS, Mr. OWENS, Mr. TOWNS, Ms. THURMAN, Mr. RUSH, Ms. MALONEY,

Mr. PAYNE of New Jersey, Mr. ABERCROMBIE, Mr. BLACKWELL, Mrs.

COLLINS of Michigan, Mr. DELLUMS, Mr. DE LUGO, Mr. EVANS, Mr.

FALEOMAVAEGA, Mr. FRANK of Massachusetts, Mr. FORD of Tennessee,

Mr. JEFFERSON, Mr. LIPINSKI, Mr. MARTINEZ, Mr. MAZZOLI, Mr.

MFUME, Mr. THORNTON, Mr. TUCKER, Ms. WATERS, Mr. WHEAT, and

Mr. SANDERS) introduced the following bill; which was referred to the

Committee on Government Operations

A BILL

To authorize payments to units of general local government

for fiscal years 1993 and 1994.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Local Partnership Act

5 of 1993’’.

6 SEC. 2. FINDINGS.

7 The Congress finds that—
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1 (1) the total number of individuals in the Unit2 ed States who have full time jobs has declined by

3 900,000 since June 1990, falling from 98,400,000

4 in June 1990 to 97,500,000 in December 1992;

5 (2) effective local governments and the services

6 they provide contribute to national economic growth;

7 (3) because of the recession, many local govern8 ments are curtailing vital public services and raising

9 local taxes;

10 (4) local governments would spend quickly and

11 productively any additional Federal funds they re12 ceive under this Act;

13 (5) local governments, including counties, cities,

14 towns, Indian tribes, and Alaskan Native villages,

15 provide many essential public services more effec16 tively than the Federal Government;

17 (6) the amount of money provided by the Fed18 eral Government directly to county, municipal, and

19 township local governments declined from

20 $16,600,000,000 in 1981 to $10,500,000,000 in

21 1990;

22 (7) many new Federal laws, especially in the

23 environmental area, require substantial expenditures

24 by local governments to meet national standards
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1 without providing any Federal funds to offset these

2 expenditures;

3 (8) over the past decade the population of the

4 United States has become increasingly concentrated

5 in wealthier or poorer counties, with fewer people liv6 ing in middle-income counties in 1987 than in 1977;

7 (9) the disparities in per capita income between

8 cities and their suburbs accelerated in the 1980’s;

9 (10) in the 1980’s poverty became increasingly

10 concentrated in the Nation’s cities;

11 (11) many cities and rural areas face common

12 problems: an exodus of jobs and people, an eroding

13 tax base, and declining social services;

14 (12) there is a growing discrepancy in the abil15 ity of the Nation’s local governments to provide nec16 essary public services for their residents;

17 (13) this discrepancy has serious adverse con18 sequences for the entire Nation;

19 (14) rising labor unemployment both increases

20 the need for local governments to provide services

21 and reduces their tax receipts;

22 (15) there are differences among the States in

23 their rate of labor unemployment;

24 (16) in 1989–90 county, municipal, and town

25 governments raised $128,000,000,000 in taxes, of
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1 which about 63 percent, or $81,000,000,000, came

2 from property taxes;

3 (17) the Federal income tax raises revenue

4 more equitably and efficiently than the local prop5 erty tax;

6 (18) in August 1992 the Congressional Budget

7 Office estimated that total Federal individual and

8 corporate income tax receipts will increase from

9 $574,000,000,000 in fiscal year 1992 to

10 $666,000,000,000 in fiscal year 1994; and

11 (19) returning some of this extra Federal in12 come tax revenue to local governments in a manner

13 that is focused on the Nation’s most impoverished

14 local governments is in the national interest.

15 SEC. 3. ESTABLISHMENT OF PAYMENT PROGRAM.

16 (a) ESTABLISHMENT OF PROGRAM.—Title 31, Unit17 ed States Code, is amended by inserting after chapter 65

18 the following:

19 ‘‘CHAPTER 67—FEDERAL PAYMENTS

‘‘Sec.

‘‘6701. Payments to local governments.

‘‘6702. Local Government Fiscal Assistance Fund.

‘‘6703. Qualification for payment.

‘‘6704. State area allocations; allocations and payments to territorial governments.

‘‘6705. Local government allocations.

‘‘6706. Income gap multiplier.

‘‘6707. State variation of local government allocations.

‘‘6708. Adjustments of local government allocations.

‘‘6709. Information used in allocation formulas.

‘‘6710. Public participation.

‘‘6711. Prohibited discrimination.
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‘‘6712. Discrimination proceedings.

‘‘6713. Suspension and termination of payments in discrimination proceedings.

‘‘6714. Compliance agreements.

‘‘6715. Enforcement by the Attorney General of prohibitions on discrimination.

‘‘6716. Civil action by a person adversely affected.

‘‘6717. Judicial review.

‘‘6718. Audits, investigations, and reviews.

‘‘6719. Reports.

‘‘6720. Definitions and application.

1 ‘‘§ 6701. Payments to local governments

2 ‘‘(a) PAYMENT AND USE.—

3 ‘‘(1) PAYMENT.—The Secretary shall pay to

4 each unit of general local government which qualifies

5 for a payment under this chapter an amount equal

6 to the sum of any amounts allocated to the govern7 ment under this chapter for each payment period.

8 The Secretary shall pay such amount out of the

9 Local Government Fiscal Assistance Fund under

10 section 6702.

11 ‘‘(2) USE.—Amounts paid to a unit of general

12 local government under this section shall be used by

13 that unit for—

14 ‘‘(A) rehiring workers, restoring services,

15 or expanding programs which, because of the

16 most recent recession, have been laid-off, elimi17 nated, or overburdened, respectively; and

18 ‘‘(B) carrying out one or more programs of

19 the unit related to—

20 ‘‘(i) education;

21 ‘‘(ii) public safety;
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1 ‘‘(iii) health;

2 ‘‘(iv) social services such as emergency

3 food or shelter;

4 ‘‘(v) activities that are mandated by

5 Federal law, including such activities

6 under the Federal Water Pollution Control

7 Act or the Americans with Disabilities Act

8 of 1990; or

9 ‘‘(vi) any public works project for

10 which on-site labor can begin within 90

11 days after the date of the approval of the

12 project by the unit.

13 ‘‘(b) TIMING OF PAYMENTS.—The Secretary shall

14 pay each amount allocated under this chapter to a unit

15 of general local government for a payment period by the

16 later of 60 days after the date the amount is available

17 or the first day of the payment period.

18 ‘‘(c) ADJUSTMENTS.—(1) Subject to paragraph (2),

19 the Secretary shall adjust a payment under this chapter

20 to a unit of general local government to the extent that

21 a prior payment to the government was more or less than

22 the amount required to be paid.

23 ‘‘(2) The Secretary may increase or decrease under

24 this subsection a payment to a unit of local government

25 only if the Secretary determines the need for the increase
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1 or decrease, or the unit requests the increase or decrease,

2 within one year after the end of the payment period for

3 which the payment was made.

4 ‘‘(d) RESERVATION FOR ADJUSTMENTS.—The Sec5 retary may reserve a percentage of not more than 0.5 per6 cent of the amount under this section for a payment pe7 riod for all units of general local government in a State

8 if the Secretary considers the reserve is necessary to en9 sure the availability of sufficient amounts to pay adjust10 ments after the final allocation of amounts among the

11 units of general local government in the State.

12 ‘‘(e) REPAYMENT OF UNEXPENDED AMOUNTS.—

13 ‘‘(1) REPAYMENT REQUIRED.—A unit of gen14 eral local government shall repay to the Secretary,

15 by not later than November 15, 1994, any amount

16 that is—

17 ‘‘(A) paid to the unit from amounts appro18 priated under the authority of this section; and

19 ‘‘(B) not expended by the unit by October

20 31, 1994.

21 ‘‘(2) DEPOSIT OF AMOUNTS REPAID.—Amounts

22 received by the Secretary as repayments under this

23 subsection shall be deposited in the general fund of

24 the Treasury as miscellaneous receipts.
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1 ‘‘(f) EXPENDITURE WITH DISADVANTAGED BUSI2 NESS ENTERPRISES.—

3 ‘‘(1) GENERAL RULE.—Of amounts paid to a

4 unit of general local government under this chapter

5 for a payment period, not less than 10 percent of

6 the total combined amounts obligated by the unit for

7 contracts and subcontracts shall be expended with—

8 ‘‘(A) small business concerns controlled by

9 socially and economically disadvantaged individ10 uals and women; and

11 ‘‘(B) historically Black colleges and univer12 sities and colleges and universities having a stu13 dent body in which more than 20 percent of the

14 students are Hispanic Americans or Native

15 Americans.

16 ‘‘(2) EXCEPTION.—Paragraph (1) shall not

17 apply to amounts paid to a unit of general local gov18 ernment to the extent the unit determines that the

19 paragraph does not apply through a process that

20 provides for public participation.

21 ‘‘(3) DEFINITIONS.—For purposes of this sub22 section—

23 ‘‘(A) the term ‘small business concern’ has

24 the meaning such term has under section 3 of

25 the Small Business Act; and
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1 ‘‘(B) the term ‘socially and economically

2 disadvantaged individuals’ has the meaning

3 such term has under section 8(d) of the Small

4 Business Act and relevant subcontracting regu5 lations promulgated pursuant to that section.

6 ‘‘§ 6702. Local Government Fiscal Assistance Fund

7 ‘‘(a) ADMINISTRATION OF FUND.—The Department

8 of Housing and Urban Development has a Local Govern9 ment Fiscal Assistance Fund, which consists of amounts

10 appropriated to the Fund.

11 ‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—There

12 are authorized to be appropriated to the Fund

13 $3,000,000,000 for fiscal years 1993 and 1994.

14 ‘‘§ 6703. Qualification for payment

15 ‘‘(a) IN GENERAL.—Under regulations issued by the

16 Secretary, a unit of general local government qualifies for

17 a payment under this chapter for a payment period only

18 after establishing to the satisfaction of the Secretary

19 that—

20 ‘‘(1) the government will establish a trust fund

21 in which the government will deposit all payments

22 received under this chapter;

23 ‘‘(2) the government will use amounts in the

24 trust fund (including interest) during a reasonable
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1 period specified in the regulations issued by the Sec2 retary;

3 ‘‘(3) the government will expend the payments

4 so received, in accordance with the laws and proce5 dures that are applicable to the expenditure of reve6 nues of the government;

7 ‘‘(4) if at least 25 percent of the pay of individ8 uals employed by the government in a public em9 ployee occupation is paid out of the trust fund, indi10 viduals in the occupation any part of whose pay is

11 paid out of the trust fund will receive pay at least

12 equal to the prevailing rate of pay for individuals

13 employed in similar public employee occupations by

14 the government;

15 ‘‘(5) if at least 25 percent of the costs of a con16 struction project are paid out of the trust fund, la17 borers and mechanics employed by contractors or

18 subcontractors on the project will receive pay at

19 least equal to the prevailing rate of pay for similar

20 construction in the locality as determined by the

21 Secretary of Labor under the Act of March 3, 1931

22 (46 Stat. 1494 et seq.; popularly known as the

23 Davis-Bacon Act), and the Secretary of Labor shall

24 act on labor standards under this paragraph in a

25 manner that is in accordance with Reorganization
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1 Plan No. 14 of 1950 (64 Stat. 1267) and section 2

2 of the Act of June 13, 1934 (48 Stat. 948);

3 ‘‘(6) the government will use accounting, audit,

4 and fiscal procedures that conform to guidelines

5 which shall be prescribed by the Secretary after con6 sultation with the Comptroller General of the United

7 States;

8 ‘‘(7) after reasonable notice to the government,

9 the government will make available to the Secretary

10 and the Comptroller General of the United States,

11 with the right to inspect, records the Secretary rea12 sonably requires to review compliance with this

13 chapter or the Comptroller General of the United

14 States reasonably requires to review compliance and

15 operations under section 6718(b); and

16 ‘‘(8) the government will make reports the Sec17 retary reasonably requires, in addition to the annual

18 reports required under section 6719(b).

19 ‘‘(b) REVIEW BY GOVERNORS.—A unit of general

20 local government shall give the chief executive officer of

21 the State in which the government is located an oppor22 tunity for review and comment before establishing compli23 ance with subsection (a).

24 ‘‘(c) SANCTIONS FOR NONCOMPLIANCE.—(1) If the

25 Secretary decides that a unit of general local government
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1 has not complied substantially with subsection (a) or regu2 lations prescribed under subsection (a), the Secretary shall

3 notify the government. The notice shall state that if the

4 government does not take corrective action by the 60th

5 day after the date the government receives the notice, the

6 Secretary will withhold additional payments to the govern7 ment for the current payment period and later payment

8 periods until the Secretary is satisfied that the govern9 ment—

10 ‘‘(A) has taken the appropriate corrective ac11 tion; and

12 ‘‘(B) will comply with subsection (a) and regu13 lations prescribed under subsection (a).

14 ‘‘(2) Before giving notice under paragraph (1), the

15 Secretary shall give the chief executive officer of the unit

16 of general local government reasonable notice and an op17 portunity for a proceeding.

18 ‘‘(3) The Secretary may make a payment to a unit

19 of general local government notified under paragraph (1)

20 only if the Secretary is satisfied that the government—

21 ‘‘(A) has taken the appropriate corrective ac22 tion; and

23 ‘‘(B) will comply with subsection (a) and regu24 lations prescribed under subsection (a).
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1 ‘‘§ 6704. State area allocations; allocations and pay2 ments to territorial governments

3 ‘‘(a) FORMULA ALLOCATION BY STATE.—For each

4 payment period, the Secretary shall allocate to each State

5 out of the amount appropriated for the period under the

6 authority of section 6702(b) (minus the amounts allocated

7 to territorial governments under subsection (e) for the

8 payment period) an amount bearing the same ratio to the

9 amount appropriated (minus such amounts allocated

10 under subsection (e)) as the amount allocated to the State

11 under this section bears to the total amount allocated to

12 all States under this section. The Secretary shall—

13 ‘‘(1) determine the amount allocated to the

14 State under subsection (b) or (c) of this section and

15 allocate the larger amount to the State; and

16 ‘‘(2) allocate the amount allocated to the State

17 to units of general local government in the State

18 under sections 6705 and 6706.

19 ‘‘(b) GENERAL FORMULA.—(1) The amount allocated

20 to a State under this subsection for a payment period is

21 the amount bearing the same ratio to $5,300,000,000

22 as—

23 ‘‘(A) the population of the State, multiplied by

24 the general tax effort factor of the State (deter25 mined under paragraph (2)), multiplied by the rel26 ative income factor of the State (determined under
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1 paragraph (3)), multiplied by the relative rate of the

2 labor force unemployed in the State (determined

3 under paragraph (4)); bears to

4 ‘‘(B) the sum of the products determined under

5 subclause (A) of this paragraph for all States.

6 ‘‘(2) The general tax effort factor of a State for a

7 payment period is—

8 ‘‘(A) the net amount of State and local taxes of

9 the State collected during the years used by the Sec10 retary of Commerce in the most recent Bureau of

11 the Census general determination of State and local

12 taxes made before the beginning of the payment pe13 riod; divided by

14 ‘‘(B) the total income of individuals, as deter15 mined by the Secretary of Commerce for national in16 come accounts purposes, attributed to the State for

17 the same years.

18 ‘‘(3) The relative income factor of a State is a frac19 tion in which—

20 ‘‘(A) the numerator is the per capita income of

21 the United States; and

22 ‘‘(B) the denominator is the per capita income

23 of the State.

24 ‘‘(4) The relative rate of the labor force unemployed

25 in a State is a fraction in which—
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1 ‘‘(A) the numerator is the percentage of the

2 labor force of the State that is unemployed (as de3 termined by the Secretary of Labor for general sta4 tistical purposes); and

5 ‘‘(B) the denominator is the percentage of the

6 labor force of the United States that is unemployed

7 (as determined by the Secretary of Labor for general

8 statistical purposes).

9 ‘‘(c) ALTERNATIVE FORMULA.—The amount allo10 cated to a State under this subsection for a payment pe11 riod is the total amount the State would receive if—

12 ‘‘(1) $1,166,666,667 were allocated among the

13 States on the basis of population by allocating to

14 each State an amount bearing the same ratio to the

15 total amount to be allocated under this paragraph as

16 the population of the State bears to the population

17 of all States;

18 ‘‘(2) $1,166,666,667 were allocated among the

19 States on the basis of population inversely weighted

20 for per capita income, by allocating to each State an

21 amount bearing the same ratio to the total amount

22 to be allocated under this paragraph as—

23 ‘‘(A) the population of the State, multi24 plied by a fraction in which—
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1 ‘‘(i) the numerator is the per capita

2 income of all States; and

3 ‘‘(ii) the denominator is the per capita

4 income of the State; bears to

5 ‘‘(B) the sum of the products determined

6 under subparagraph (A) for all States;

7 ‘‘(3) $600,000,000 were allocated among the

8 States on the basis of income tax collections by allo9 cating to each State an amount bearing the same

10 ratio to the total amount to be allocated under this

11 paragraph as the income tax amount of the State

12 (determined under subsection (d)(1)) bears to the

13 sum of the income tax amounts of all States;

14 ‘‘(4) $600,000,000 were allocated among the

15 States on the basis of general tax effort by allocat16 ing to each State an amount bearing the same ratio

17 to the total amount to be allocated under this para18 graph as the general tax effort amount of the State

19 (determined under subsection (d)(2)) bears to the

20 sum of the general tax effort amounts of all States;

21 ‘‘(5) $600,000,000 were allocated among the

22 States on the basis of unemployment by allocating to

23 each State an amount bearing the same ratio to the

24 total amount to be allocated under this paragraph

25 as—
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1 ‘‘(A) the labor force of the State, multi2 plied by a fraction in which—

3 ‘‘(i) the numerator is the percentage

4 of the labor force of the State that is un5 employed (as determined by the Secretary

6 of Labor for general statistical purposes);

7 and

8 ‘‘(ii) the denominator is the percent9 age of the labor force of the United States

10 that is unemployed (as determined by the

11 Secretary of Labor for general statistical

12 purposes);

13 bears to

14 ‘‘(B) the sum of the products determined

15 under subparagraph (A) for all States; and

16 ‘‘(6) $1,166,666,667 were allocated among the

17 States on the basis of urbanized population by allo18 cating to each State an amount bearing the same

19 ratio to the total amount to be allocated under this

20 paragraph as the urbanized population of the State

21 bears to the urbanized population of all States. In

22 this paragraph, the term ‘urbanized population’

23 means the population of an area consisting of a

24 central city or cities of at least 50,000 inhabitants

25 and the surrounding closely settled area for the city
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1 or cities considered as an urbanized area by the Sec2 retary of Commerce for general statistical purposes.

3 ‘‘(d) INCOME TAX AMOUNT AND TAX EFFORT

4 AMOUNT.—(1) The income tax amount of a State for a

5 payment period is 15 percent of the net amount collected

6 during the calendar year ending before the beginning of

7 the payment period from the tax imposed on the income

8 of individuals by the State and described as a State in9 come tax under section 164(a)(3) of the Internal Revenue

10 Code of 1986 (26 U.S.C. 164(a)(3)). The income tax

11 amount for a payment period shall be at least one percent

12 but not more than 6 percent of the United States Govern13 ment individual income tax liability attributed to the State

14 for the taxable year ending during the last calendar year

15 ending before the beginning of the payment period. The

16 Secretary shall determine the Government income tax li17 ability attributed to the State on the same basis as the

18 Secretary of the Treasury determines that liability for gen19 eral statistical purposes.

20 ‘‘(2) The general tax effort amount of a State for

21 a payment period is the amount determined by multiply22 ing—

23 ‘‘(A) the net amount of State and local taxes of

24 the State collected during the years used by the Sec25 retary of Commerce in the most recent Bureau of
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1 the Census general determination of State and local

2 taxes made before the beginning of the payment pe3 riod; by

4 ‘‘(B) the general tax effort factor of the State

5 determined under subsection (b)(2).

6 ‘‘(e) ALLOCATION FOR PUERTO RICO, GUAM, AMER7 ICAN SAMOA, AND THE VIRGIN ISLANDS.—(1)(A) For

8 each payment period for which funds are available for allo9 cation under this chapter, the Secretary shall allocate to

10 each territorial government an amount equal to the prod11 uct of 1 percent of the amount of funds available for allo12 cation multiplied by the applicable territorial percentage.

13 ‘‘(B) For the purposes of this paragraph, the applica14 ble territorial percentage of a territory is equal to the

15 quotient resulting from the division of the territorial popu16 lation of such territory by the sum of the territorial popu17 lation for all territories.

18 ‘‘(2) The governments of the territories shall make

19 payments to local governments within their jurisdiction

20 from sums received under this subsection as they consider

21 appropriate.

22 ‘‘(3) For purposes of this subsection—

23 ‘‘(A) the term ‘territorial government’

24 means the government of a territory;
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1 ‘‘(B) the term ‘territory’ means Puerto

2 Rico, Guam, American Samoa, and the Virgin

3 Islands; and

4 ‘‘(C) the term ‘territorial population’

5 means the most recent population for each ter6 ritory as determined by the Bureau of Census.

7 ‘‘§ 6705. Local government allocations

8 ‘‘(a) INDIAN TRIBES AND ALASKAN NATIVES VIL9 LAGES.—If there is in a State an Indian tribe or Alaskan

10 native village having a recognized governing body carrying

11 out substantial governmental duties and powers, the Sec12 retary shall allocate to the tribe or village, out of the

13 amount allocated to the State under section 6704, an

14 amount bearing the same ratio to the amount allocated

15 to the State as the population of the tribe or village bears

16 to the population of the State. The Secretary shall allocate

17 amounts under this subsection to Indian tribes and Alas18 kan native villages in a State before allocating amounts

19 to units of general local government in the State under

20 subsection (b).

21 ‘‘(b) OTHER LOCAL GOVERNMENT ALLOCATIONS.—

22 (1) The Secretary shall allocate among the units of general

23 local government in a State (other than units receiving

24 allocations under subsection (a)) the amount allocated to

25 the State under section 6704 (as that amount is reduced
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1 by allocations under subsection (a)). Of the amount to be

2 allocated, the Secretary shall allocate a portion equal to

1 3 ⁄2 of such amount in accordance with section 6706(1),

and shall allocate a portion equal to 1 4 ⁄2 of such amount

5 in accordance with section 6706(2). A unit of general local

6 government shall receive an amount equal to the sum of

7 amounts allocated to the unit from each portion.

8 ‘‘(2) From each portion to be allocated to units of

9 local government in a State under paragraph (1), the Sec10 retary shall allocate to a unit an amount bearing the same

11 ratio to the funds to be allocated as—

12 ‘‘(A) the population of the unit, multiplied by

13 the general tax effort factor of the unit (determined

14 under paragraph (3)), multiplied by the income gap

15 of the unit (determined under paragraph (4)), bears

16 to

17 ‘‘(B) the sum of the products determined under

18 subparagraph (A) for all units in the State for which

19 the income gap for that portion under paragraph (4)

20 is greater than zero.

21 ‘‘(3)(A) Except as provided in subparagraph (C), the

22 general tax effort factor of a unit of general local govern23 ment for a payment period is—

24 ‘‘(i) the adjusted taxes of the unit; divided by

25 ‘‘(ii) the total income attributed to the unit.
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1 ‘‘(B) If the amount determined under subparagraphs

2 (A)(i) and (ii) for a unit of general local government is

3 less than zero, the general tax effort factor of the unit

4 is deemed to be zero.

5 ‘‘(C)(i) Except as otherwise provided in this subpara6 graph, the adjusted taxes of a unit of general local govern7 ment are the taxes imposed by the unit for public purposes

8 (except employee and employer assessments and contribu9 tions to finance retirement and social insurance systems

10 and other special assessments for capital outlay), as deter11 mined by the Secretary of Commerce for general statistical

12 purposes and adjusted (under regulations of the Sec13 retary) to exclude amounts properly allocated to education

14 expenses.

15 ‘‘(ii) The Secretary shall, for purposes of clause (i),

16 include that part of sales taxes transferred to a unit of

17 general local government that are imposed by a county

18 government in the geographic area of which is located the

19 unit of general local government as taxes imposed by the

20 unit for public purposes if—

21 ‘‘(I) the county government transfers any part

22 of the revenue from the taxes to the unit of general

23 local government without specifying the purpose for

24 which the unit of general local government may ex25 pend the revenue; and
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1 ‘‘(II) the chief executive officer of the State no2 tifies the Secretary that the taxes satisfy the re3 quirements of this clause.

4 ‘‘(iii) The adjusted taxes of a unit of general local

5 government shall not exceed the maximum allowable ad6 justed taxes for that unit.

7 ‘‘(iv) The maximum allowable adjusted taxes for a

8 unit of general local government is the allowable adjusted

9 taxes of the unit minus the excess adjusted taxes of the

10 unit.

11 ‘‘(v) The allowable adjusted taxes of a unit of general

12 government is the greater of—

13 ‘‘(I) the amount equal to 2.5, multiplied by the

14 per capita adjusted taxes of all units of general local

15 government of the same type in the State, multiplied

16 by the population of the unit; or

17 ‘‘(II) the amount equal to the population of the

18 unit, multiplied by the sum of the adjusted taxes of

19 all units of municipal local government in the State,

20 divided by the sum of the populations of all the units

21 of municipal local government in the State.

22 ‘‘(vi) The excess adjusted taxes of a unit of general

23 local government is the amount equal to—

24 ‘‘(I) the adjusted taxes of the unit, minus
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1 ‘‘(II) 1.5 multiplied by the allowable adjusted

2 taxes of the unit;

3 except that if this amount is less than zero then the excess

4 adjusted taxes of the unit is deemed to be zero.

5 ‘‘(vii) For purposes of this subparagraph—

6 ‘‘(I) the term ‘per capita adjusted taxes of all

7 units of general local government of the same type’

8 means the sum of the adjusted taxes of all units of

9 general local government of the same type divided by

10 the sum of the populations of all units of general

11 local government of the same type; and

12 ‘‘(II) the term ‘units of general local govern13 ment of the same type’ means all townships if the

14 unit of general local government is a township, all

15 municipalities if the unit of general local government

16 is a municipality, all counties if the unit of general

17 local government is a county, or all unified city/

18 county governments if the unit of general local gov19 ernment is a unified city/county government.

20 ‘‘(4)(A) Except as provided in subparagraph (B), the

21 income gap of a unit of general local government is—

22 ‘‘(i) the number which applies under section

23 6706, multiplied by the per capita income of the

24 State in which the unit is located; minus
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1 ‘‘(ii) the per capita income of the geographic

2 area of the unit.

3 ‘‘(B) If the amount determined under subparagraph

4 (A) for a unit of general local government is less than

5 zero, then the relative income factor of the unit is deemed

6 to be zero.

7 ‘‘(c) SMALL GOVERNMENT ALLOCATIONS.—If the

8 Secretary decides that information available for a unit of

9 general local government with a population below a num10 ber (of not more than 500) prescribed by the Secretary

11 is inadequate, the Secretary may allocate to the unit, in

12 lieu of any allocation under subsection (b) for a payment

13 period, an amount bearing the same ratio to the total

14 amount to be allocated under subsection (b) for the period

15 for all units of general local government in the State as

16 the population of the unit bears to the population of all

17 units in the State.

18 ‘‘§ 6706. Income gap multiplier

19 ‘‘For purposes of determining the income gap of a

20 unit of general local government under section

21 6705(b)(4)(A), the number which applies is—

‘‘(1) 1.6, with respect to 1 22 ⁄2 of any amount allo23 cated under section 6704 to the State in which the

24 unit is located; and
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1 ‘‘(2) 1.2, with respect to the remainder of such

2 amount.

3 ‘‘§ 6707. State variation of local government alloca4 tions

5 ‘‘(a) STATE FORMULA.—A State government may

6 provide by law for the allocation of amounts among units

7 of general local government in the State on the basis of

8 population multiplied by the general tax effort factors or

9 income gaps of the units of general local government (de10 termined under sections 6705(a) and (b) or a combination

11 of those factors. A State government providing for a vari12 ation of an allocation formula provided under section

13 6705(a) and (b) shall notify the Secretary of the variation

14 by the 30th day before the beginning of the first payment

15 period in which the variation applies. A variation shall—

16 ‘‘(1) provide for allocating the total amount al17 located under section 6705(a) and (b);

18 ‘‘(2) apply uniformly in the State; and

19 ‘‘(3) apply only to payment periods beginning

20 before October 1, 1995.

21 ‘‘(b) CERTIFICATION.—A variation by a State govern22 ment under this section may apply only if the Secretary

23 certifies that the variation complies with this section. The

24 Secretary may certify a variation only if the Secretary is
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1 notified of the variation at least 30 days before the first

2 payment period in which the variation applies.

3 ‘‘§ 6708. Adjustments of local government allocations

4 ‘‘(a) MAXIMUM AMOUNT.—The amount allocated to

5 a unit of general local government for a payment period

6 may not exceed the adjusted taxes imposed by the unit

7 of general local government as determined under section

8 6705(b)(3). Amounts in excess of adjusted taxes shall be

9 paid to the Governor of the State in which the unit of

10 local government is located.

11 ‘‘(b) DE MINIMIS ALLOCATIONS.—If the amount al12 located to a unit of general local government (except an

13 Indian tribe or an Alaskan native village) for a payment

14 period would be less than $5,000 but for this subsection

15 or is waived by the governing authority of the unit of gen16 eral local government, the Secretary shall pay the amount

17 to the Governor of the State in which the unit is located.

18 ‘‘(c) USE OF PAYMENTS TO STATES.—The Governor

19 of a State shall use all amounts paid to the Governor

20 under subsections (a) and (b) for public works projects

21 in areas of the State where are located the units of general

22 local government with respect to which amounts are paid

23 under subsection (b).
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1 ‘‘§ 6709. Information used in allocation formulas

2 ‘‘(a) USE OF MOST RECENT INFORMATION.—Except

3 as provided in this section, the Secretary shall use the

4 most recent available information provided by the Sec5 retary of Commerce and the Secretary of Labor before the

6 beginning of the payment period to determine an alloca7 tion under this chapter. If the Secretary decides that the

8 information is not current or complete enough to provide

9 for a fair allocation, the Secretary may use additional in10 formation (including information based on estimates) as

11 provided under regulations of the Secretary.

12 ‘‘(b) POPULATION DATA.—(1) The Secretary shall

13 determine population on the same basis that the Secretary

14 of Commerce determines resident population for general

15 statistical purposes.

16 ‘‘(2) The Secretary shall request the Secretary of

17 Commerce to adjust the population information provided

18 to the Secretary as soon as practicable to include a reason19 able estimate of the number of resident individuals not

20 counted in the 1990 census or revisions of the census. The

21 Secretary shall use the estimates in determining alloca22 tions for the payment period beginning after the Secretary

23 receives the estimates. The Secretary shall adjust popu24 lation information to reflect adjustments made under sec25 tion 118 of the Act of October 1, 1980 (Public Law 96–

26 369, 94 Stat. 1357).
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1 ‘‘(c) ADDITIONAL DATA LIMITATIONS.—The Sec2 retary may not—

3 ‘‘(1) in determining an allocation for a payment

4 period, use information on tax collections for years

5 more recent than the years used by the Secretary of

6 Commerce in the most recent Bureau of the Census

7 general determination of State and local taxes made

8 before the beginning of that period; or

9 ‘‘(2) consider a change in information used to

10 determine an allocation for a period of 60 months if

11 the change—

12 ‘‘(A) results from a major disaster declared

13 by the President under section 401 of The Rob14 ert T. Stafford Disaster Relief and Emergency

15 Assistance Act; and

16 ‘‘(B) reduces the amount of an allocation.

17 ‘‘§ 6710. Public participation

18 ‘‘(a) HEARINGS.—(1) A unit of general local govern19 ment expending payments under this chapter shall hold

20 at least one public hearing on the proposed use of the pay21 ment in relation to its entire budget. At the hearing, per22 sons shall be given an opportunity to provide written and

23 oral views to the governmental authority responsible for

24 enacting the budget and to ask questions about the entire

25 budget and the relation of the payment to the entire budg-
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1 et. The government shall hold the hearing at a time and

2 a place that allows and encourages public attendance and

3 participation.

4 ‘‘(2) A unit of general local government holding a

5 hearing required under this subsection or by the budget

6 process of the government shall try to provide senior citi7 zens and senior citizen organizations with an opportunity

8 to present views at the hearing before the government

9 makes a final decision on the use of the payment.

10 ‘‘(b) DISCLOSURE OF INFORMATION.—(1) By the

11 10th day before a hearing required under subsection

12 (a)(1) is held, a unit of general local government shall—

13 ‘‘(A) make available for inspection by the public

14 at the principal office of the government a statement

15 of the proposed use of the payment and a summary

16 of the proposed budget of the government; and

17 ‘‘(B) publish in at least one newspaper of gen18 eral circulation the proposed use of the payment

19 with the summary of the proposed budget and a no20 tice of the time and place of the hearing.

21 ‘‘(2) By the 30th day after adoption of the budget

22 under State or local law, the government shall—

23 ‘‘(A) make available for inspection by the public

24 at the principal office of the government a summary
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1 of the adopted budget, including the proposed use of

2 the payment; and

3 ‘‘(B) publish in at least one newspaper of gen4 eral circulation a notice that the information re5 ferred to in subparagraph (A) is available for inspec6 tion.

7 ‘‘(c) WAIVERS OF REQUIREMENTS.—Under regula8 tions of the Secretary, a requirement—

9 ‘‘(1) under subsection (a)(1) may be waived if

10 the budget process required under the applicable

11 State or local law or charter provisions—

12 ‘‘(A) ensures the opportunity for public at13 tendance and participation contemplated by

14 subsection (a); and

15 ‘‘(B) includes a hearing on the proposed

16 use of a payment received under this chapter in

17 relation to the entire budget of the government;

18 and

19 ‘‘(2) under subsection (b)(1)(B) and (2)(B)

20 may be waived if the cost of publishing the informa21 tion would be unreasonably burdensome in relation

22 to the amount allocated to the government from

23 amounts available for payment under this chapter,

24 or if publication is otherwise impracticable.
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1 ‘‘(d) EXCEPTION TO 10-DAY LIMITATION.—If the

2 Secretary is satisfied that a unit of general local govern3 ment will provide adequate notice of the proposed use of

4 a payment received under this chapter, the 10-day period

5 under subsection (b)(1) may be changed to the extent nec6 essary to comply with applicable State or local law.

7 ‘‘(e) APPLICATION TO GOVERNMENTS WITHOUT

8 BUDGETS.—The Secretary shall prescribe regulations for

9 applying this section to units of general local government

10 that do not adopt budgets.

11 ‘‘§ 6711. Prohibited discrimination

12 ‘‘(a) GENERAL PROHIBITION.—No person in the

13 United States shall be excluded from participating in, be

14 denied the benefits of, or be subject to discrimination

15 under, a program or activity of a unit of general local gov16 ernment because of race, color, national origin, or sex if

17 the government receives a payment under this chapter.

18 ‘‘(b) ADDITIONAL PROHIBITIONS.—The following

19 prohibitions and exemptions also apply to a program or

20 activity of a unit of general local government if the govern21 ment receives a payment under this chapter:

22 ‘‘(1) A prohibition against discrimination be23 cause of age under the Age Discrimination Act of

24 1975.
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1 ‘‘(2) A prohibition against discrimination

2 against an otherwise qualified handicapped individ3 ual under section 504 of the Rehabilitation Act of

4 1973.

5 ‘‘(3) A prohibition against discrimination be6 cause of religion, or an exemption from that prohibi7 tion, under the Civil Rights Act of 1964 or title VIII

8 of the Act of April 11, 1968 (popularly known as the

9 Civil Rights Act of 1968).

10 ‘‘(c) LIMITATIONS ON APPLICABILITY OF PROHIBI11 TIONS.—Subsections (a) and (b) do not apply if the gov12 ernment shows, by clear and convincing evidence, that a

13 payment received under this chapter is not used to pay

14 for any part of the program or activity with respect to

15 which the allegation of discrimination is made.

16 ‘‘(d) INVESTIGATION AGREEMENTS.—The Secretary

17 shall try to make agreements with heads of agencies of

18 the United States Government and State agencies to in19 vestigate noncompliance with this section. An agreement

20 shall—

21 ‘‘(1) describe the cooperative efforts to be taken

22 (including sharing civil rights enforcement personnel

23 and resources) to obtain compliance with this sec24 tion; and
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1 ‘‘(2) provide for notifying immediately the Sec2 retary of actions brought by the United States Gov3 ernment or State agencies against a unit of general

4 local government alleging a violation of a civil rights

5 law or a regulation prescribed under a civil rights

6 law.

7 ‘‘§ 6712. Discrimination proceedings

8 ‘‘(a) NOTICE OF NONCOMPLIANCE.—By the 10th day

9 after the Secretary makes a finding of discrimination or

10 receives a holding of discrimination about a unit of general

11 local government, the Secretary shall submit a notice of

12 noncompliance to the government. The notice shall state

13 the basis of the finding or holding.

14 ‘‘(b) INFORMAL PRESENTATION OF EVIDENCE.—A

15 unit of general local government may present evidence in16 formally to the Secretary within 30 days after the govern17 ment receives a notice of noncompliance from the Sec18 retary. Except as provided in subsection (e), the govern19 ment may present evidence on whether—

20 ‘‘(1) a person in the United States has been ex21 cluded or denied benefits of, or discriminated against

22 under, the program or activity of the government, in

23 violation of section 6711(a);
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1 ‘‘(2) the program or activity of the government

2 violated a prohibition described in section 6711(b);

3 and

4 ‘‘(3) any part of that program or activity has

5 been paid for with a payment received under this

6 chapter.

7 ‘‘(c) TEMPORARY SUSPENSION OF PAYMENTS.—By

8 the end of the 30-day period under subsection (b), the Sec9 retary shall decide whether the unit of general local gov10 ernment has not complied with section 6711 (a) or (b),

11 unless the government has entered into a compliance

12 agreement under section 6714. If the Secretary decides

13 that the government has not complied, the Secretary shall

14 notify the government of the decision and shall suspend

15 payments to the government under this chapter unless,

16 within 10 days after the government receives notice of the

17 decision, the government—

18 ‘‘(1) enters into a compliance agreement under

19 section 6714; or

20 ‘‘(2) requests a proceeding under subsection

21 (d)(1).

22 ‘‘(d) ADMINISTRATIVE REVIEW OF SUSPENSIONS.—

23 (1) A proceeding requested under subsection (c)(2) shall

24 begin by the 30th day after the Secretary receives a re25 quest for the proceeding. The proceeding shall be before
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1 an administrative law judge appointed under section 3105

2 of title 5. By the 30th day after the beginning of the pro3 ceeding, the judge shall issue a preliminary decision based

4 on the record at the time on whether the unit of general

5 local government is likely to prevail in showing compliance

6 with section 6711 (a) or (b).

7 ‘‘(2) If the administrative law judge decides at the

8 end of a proceeding under paragraph (1) that the unit

9 of general local government has—

10 ‘‘(A) not complied with section 6711 (a) or (b),

11 the judge may order payments to the government

12 under this chapter terminated; or

13 ‘‘(B) complied with section 6711 (a) or (b), a

14 suspension under section 6713(a)(1)(A) shall be dis15 continued promptly.

16 ‘‘(3) An administrative law judge may not issue a

17 preliminary decision that the government is not likely to

18 prevail if the judge has issued a decision described in para19 graph (2)(A).

20 ‘‘(e) BASIS FOR REVIEW.—In a proceeding under

21 subsections (b) through (d) on a program or activity of

22 a unit of general local government about which a holding

23 of discrimination has been made, the Secretary or admin24 istrative law judge may consider only whether a payment

25 under this chapter was used to pay for any part of the
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1 program or activity. The holding of discrimination is con2 clusive. If the holding is reversed by an appellate court,

3 the Secretary or judge shall end the proceeding.

4 ‘‘§ 6713. Suspension and termination of payments in

5 discrimination proceedings

6 ‘‘(a) IMPOSITION AND CONTINUATION OF SUSPEN7 SIONS.—(1) The Secretary shall suspend payment under

8 this chapter to a unit of general local government—

9 ‘‘(A) if an administrative law judge appointed

10 under section 3105 of title 5 issues a preliminary de11 cision in a proceeding under section 6712(d)(1) that

12 the government is not likely to prevail in showing

13 compliance with section 6711 (a) and (b);

14 ‘‘(B) if the administrative law judge decides at

15 the end of the proceeding that the government has

16 not complied with section 6711 (a) or (b), unless the

17 government makes a compliance agreement under

18 section 6714 by the 30th day after the decision; or

19 ‘‘(C) if required under section 6712(c).

20 ‘‘(2) A suspension already ordered under paragraph

21 (1)(A) continues in effect if the administrative law judge

22 makes a decision under paragraph (1)(B).

23 ‘‘(b) LIFTING OF SUSPENSIONS AND TERMI24 NATIONS.—If a holding of discrimination is reversed by

25 an appellate court, a suspension or termination of pay-
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1 ments in a proceeding based on the holding shall be dis2 continued.

3 ‘‘(c) RESUMPTION OF PAYMENTS UPON ATTAINING

4 COMPLIANCE.—The Secretary may resume payment to a

5 unit of general local government of payments suspended

6 by the Secretary only—

7 ‘‘(1) as of the time of, and under the conditions

8 stated in—

9 ‘‘(A) the approval by the Secretary of a

10 compliance agreement under section

11 6714(a)(1); or

12 ‘‘(B) a compliance agreement entered into

13 by the Secretary under section 6714(a)(2);

14 ‘‘(2) if the government complies completely with

15 an order of a United States court, a State court, or

16 administrative law judge that covers all matters

17 raised in a notice of noncompliance submitted by the

18 Secretary under section 6712(a);

19 ‘‘(3) if a United States court, a State court, or

20 an administrative law judge decides (including a

21 judge in a proceeding under section 6712(d)(1)),

22 that the government has complied with sections

23 6711 (a) and (b); or

24 ‘‘(4) if a suspension is discontinued under sub25 section (b).
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1 ‘‘(d) PAYMENT OF DAMAGES AS COMPLIANCE.—For

2 purposes of subsection (c)(2), compliance by a government

3 may consist of the payment of restitution to a person in4 jured because the government did not comply with section

5 6711 (a) or (b).

6 ‘‘(e) RESUMPTION OF PAYMENTS UPON REVERSAL

7 BY COURT.—The Secretary may resume payment to a unit

8 of general local government of payments terminated under

9 section 6712(d)(2)(A) only if the decision resulting in the

10 termination is reversed by an appellate court.

11 ‘‘§ 6714. Compliance agreements

12 ‘‘(a) TYPES OF COMPLIANCE AGREEMENTS.—A com13 pliance agreement is an agreement—

14 ‘‘(1) approved by the Secretary, between the

15 governmental authority responsible for prosecuting a

16 claim or complaint that is the basis of a holding of

17 discrimination and the chief executive officer of the

18 unit of general local government that has not com19 plied with section 6711 (a) or (b); or

20 ‘‘(2) between the Secretary and the chief execu21 tive officer.

22 ‘‘(b) CONTENTS OF AGREEMENTS.—A compliance

23 agreement—

24 ‘‘(1) shall state the conditions the unit of gen25 eral local government has agreed to comply with
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1 that would satisfy the obligations of the government

2 under sections 6711 (a) and (b);

3 ‘‘(2) shall cover each matter that has been

4 found not to comply, or would not comply, with sec5 tion 6711 (a) or (b); and

6 ‘‘(3) may be a series of agreements that dispose

7 of those matters.

8 ‘‘(c) AVAILABILITY OF AGREEMENTS TO PARTIES.—

9 The Secretary shall submit a copy of a compliance agree10 ment to each person who filed a complaint referred to in

11 section 6716(b), or, if an agreement under subsection

12 (a)(1), each person who filed a complaint with a govern13 mental authority, about a failure to comply with section

14 6711 (a) or (b). The Secretary shall submit the copy by

15 the 15th day after an agreement is made. However, if the

16 Secretary approves an agreement under subsection (a)(1)

17 after the agreement is made, the Secretary may submit

18 the copy by the 15th day after approval of the agreement.

19 ‘‘§ 6715. Enforcement by the Attorney General of pro20 hibitions on discrimination

21 ‘‘The Attorney General may bring a civil action in

22 an appropriate district court of the United States against

23 a unit of general local government that the Attorney Gen24 eral has reason to believe has engaged or is engaging in
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1 a pattern or practice in violation of section 6711 (a) or

2 (b). The court may grant—

3 ‘‘(1) a temporary restraining order;

4 ‘‘(2) an injunction; or

5 ‘‘(3) an appropriate order to ensure enjoyment

6 of rights under section 6711 (a) or (b), including an

7 order suspending, terminating, or requiring repay8 ment of, payments under this chapter or placing ad9 ditional payments under this chapter in escrow

10 pending the outcome of the action.

11 ‘‘§ 6716. Civil action by a person adversely affected

12 ‘‘(a) AUTHORITY FOR PRIVATE SUITS IN FEDERAL

13 OR STATE COURT.—If a unit of general local government,

14 or an officer or employee of a unit of general local govern15 ment acting in an official capacity, engages in a practice

16 prohibited by this chapter, a person adversely affected by

17 the practice may bring a civil action in an appropriate dis18 trict court of the United States or a State court of general

19 jurisdiction. Before bringing an action under this section,

20 the person must exhaust administrative remedies under

21 subsection (b).

22 ‘‘(b) ADMINISTRATIVE REMEDIES REQUIRED TO BE

23 EXHAUSTED.—A person adversely affected shall file an

24 administrative complaint with the Secretary or the head

25 of another agency of the United States Government or the
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1 State agency with which the Secretary has an agreement

2 under section 6711(d). Administrative remedies are

3 deemed to be exhausted by the person after the 90th day

4 after the complaint was filed if the Secretary, the head

5 of the Government agency, or the State agency—

6 ‘‘(1) issues a decision that the government has

7 not failed to comply with this chapter; or

8 ‘‘(2) does not issue a decision on the complaint.

9 ‘‘(c) AUTHORITY OF COURT.—In an action under this

10 section, the court—

11 ‘‘(1) may grant—

12 ‘‘(A) a temporary restraining order;

13 ‘‘(B) an injunction; or

14 ‘‘(C) another order, including suspension,

15 termination, or repayment of, payments under

16 this chapter or placement of additional pay17 ments under this chapter in escrow pending the

18 outcome of the action; and

19 ‘‘(2) to enforce compliance with section 6711

20 (a) or (b), may allow a prevailing party (except the

21 United States Government) a reasonable attorney’s

22 fee.

23 ‘‘(d) INTERVENTION BY ATTORNEY GENERAL.—In

24 an action under this section to enforce compliance with

25 section 6711 (a) or (b), the Attorney General may inter-
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1 vene in the action if the Attorney General certifies that

2 the action is of general public importance. The United

3 States Government is entitled to the same relief as if the

4 Government had brought the action and is liable for the

5 same fees and costs as a private person.

6 ‘‘§ 6717. Judicial review

7 ‘‘(a) APPEALS IN FEDERAL COURT OF APPEALS.—

8 A unit of general local government which receives notice

9 from the Secretary about withholding payments under sec10 tion 6703(c), suspending payments under section

11 6713(a)(1)(B), or terminating payments under section

12 6712(d)(2)(A), may apply for review of the action of the

13 Secretary by filing a petition for review with the court of

14 appeals of the United States for the circuit in which the

15 government is located. The petition shall be filed by the

16 60th day after the date the notice is received. The clerk

17 of the court shall immediately send a copy of the petition

18 to the Secretary and the Attorney General.

19 ‘‘(b) FILING OF RECORD OF ADMINISTRATIVE PRO20 CEEDING.—The Secretary shall file with the court a

21 record of the proceeding on which the Secretary based the

22 action. The court may consider only objections to the ac23 tion of the Secretary that were presented before the Sec24 retary.
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1 ‘‘(c) COURT ACTION.—The court may affirm, change,

2 or set aside any part of the action of the Secretary. The

3 findings of fact by the Secretary are conclusive if sup4 ported by substantial evidence in the record. If a finding

5 is not supported by substantial evidence in the record, the

6 court may remand the case to the Secretary to take addi7 tional evidence. Upon such a remand, the Secretary may

8 make new or modified findings and shall certify additional

9 proceedings to the court.

10 ‘‘(d) REVIEW ONLY BY SUPREME COURT.—A judg11 ment of a court under this section may be reviewed only

12 by the Supreme Court under section 1254 of title 28.

13 ‘‘§ 6718. Audits, investigations, and reviews

14 ‘‘(a) INDEPENDENT AUDIT.—(1) Except as provided

15 in this section, a unit of general local government that

16 receives a payment under this chapter shall have an inde17 pendent audit made of the financial statements of the gov18 ernment at least as often as is required by paragraph (2)

19 to determine compliance with this chapter. The audit shall

20 be carried out under generally accepted government audit21 ing standards issued by the Comptroller General of the

22 United States.

23 ‘‘(2) Paragraph (1) does not apply to a unit of gen24 eral local government for a fiscal year in which the govern25 ment receives less than $25,000 under this chapter. A unit
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1 of general local government which receives at least

2 $25,000 but not more than $100,000 under this chapter

3 for a fiscal year shall have an audit made in accordance

4 with paragraph (1) at least once every 3 years. A govern5 ment which receives more than $100,000 under this chap6 ter for a fiscal year shall have an audit made in accord7 ance with paragraph (1) for such fiscal year, except that,

8 if the government operates on a biennial fiscal period, such

9 audit may be made biennially but shall cover the financial

10 statement or statements for, and compliance with the re11 quirements of the chapter during, both years within such

12 period.

13 ‘‘(3) An audit of financial statements of a unit of gen14 eral local government carried out under another law of the

15 United States for a fiscal year is deemed to be in compli16 ance with paragraph (1) for that year if the audit substan17 tially complies with the requirements of paragraph (1).

18 ‘‘(b) WAIVER BY LOCAL GOVERNMENT.—A unit of

19 general local government may waive application of sub20 section (a)(1) if—

21 ‘‘(1) the financial statements of the government

22 are audited by independent auditors under State or

23 local law at least as often as would be required by

24 subsection (a)(2);
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1 ‘‘(2) the government certifies that the audit is

2 carried out under generally accepted auditing stand3 ards issued by the Comptroller General of the Unit4 ed States;

5 ‘‘(3) the auditing provisions of the State or

6 local law are applicable to the payment period to

7 which the waiver applies; and

8 ‘‘(4) the government submits to the Secretary a

9 brief description of the auditing standards used

10 under the relevant State or local law and specifica11 tion of the payment period to which the waiver ap12 plies.

13 ‘‘(c) WAIVER BY SECRETARY.—Under regulations of

14 the Secretary, the Secretary may waive any requirement

15 under subsection (a)(1) or (b) for a unit of general local

16 government for a fiscal year if the Secretary decides that

17 the financial statements of the government for the year—

18 ‘‘(1) cannot be audited, and the government

19 shows substantial progress in making the statements

20 auditable; or

21 ‘‘(2) have been audited by a State agency that

22 does not follow generally accepted auditing stand23 ards issued by the Comptroller General of the Unit24 ed States or that is not independent, and the State
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1 agency shows progress in meeting those auditing

2 standards or in becoming independent.

3 ‘‘(d) SERIES OF AUDITS.—A series of audits carried

4 out over a period of not more than 3 years covering the

5 total amount in the financial accounts of a unit of general

6 local government is deemed to be a single audit under sub7 sections (a)(1) and (b) of this section.

8 ‘‘(e) AUDIT OPINION.—An opinion of an audit car9 ried out under this section shall be provided to the Sec10 retary in the form and at times required by the Secretary.

11 No later than 30 days following the completion of the

12 audit, the unit of general local government shall make the

13 audit report available for public inspection.

14 ‘‘(f) INVESTIGATIONS BY SECRETARY.—(1) The Sec15 retary shall maintain regulations providing reasonable and

16 specific time limits for the Secretary to—

17 ‘‘(A) carry out an investigation and make a

18 finding after receiving a complaint referred to in sec19 tion 6716(b), a determination by a State or local ad20 ministrative agency, or other information about a

21 possible violation of this chapter;

22 ‘‘(B) carry out audits and reviews (including in23 vestigations of allegations) about possible violations

24 of this chapter; and
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1 ‘‘(C) advise a complainant of the status of an

2 audit, investigation, or review of an allegation by the

3 complainant of a violation of section 6711 (a) or (b)

4 or other provision of this chapter.

5 ‘‘(2) The maximum time limit under paragraph

6 (1)(A) is 90 days.

7 ‘‘(g) REVIEWS BY COMPTROLLER GENERAL.—The

8 Comptroller General of the United States shall carry out

9 reviews of the activities of the Secretary, State govern10 ments, and units of general local government necessary

11 for the Congress to evaluate compliance and operations

12 under this chapter.

13 ‘‘§ 6719. Reports

14 ‘‘(a) REPORTS BY SECRETARY TO CONGRESS.—Be15 fore June 2 of each year, the Secretary personally shall

16 report to the Congress on—

17 ‘‘(1) the status and operation of the Local Gov18 ernment Fiscal Assistance Fund during the prior fis19 cal year; and

20 ‘‘(2) the administration of this chapter, includ21 ing a complete and detailed analysis of—

22 ‘‘(A) actions taken to comply with sections

23 6711 through 6715, including a description of

24 the kind and extent of noncompliance and the

25 status of pending complaints;
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1 ‘‘(B) the extent to which units of general

2 local government receiving payments under this

3 chapter have complied with sections 6702 and

4 6718(a), (b), and (d), including a description of

5 the kind and extent of noncompliance and ac6 tions taken to ensure the independence of au7 dits conducted under section 6718(a), (b), and

8 (d);

9 ‘‘(C) the way in which payments under this

10 chapter have been distributed in the jurisdic11 tions receiving payments; and

12 ‘‘(D) significant problems in carrying out

13 this chapter and recommendations for legisla14 tion to remedy the problems.

15 ‘‘(b) REPORTS BY UNITS OF GENERAL LOCAL GOV16 ERNMENT TO SECRETARY.—(1) At the end of each fiscal

17 year, each unit of general local government which received

18 a payment under this chapter for the fiscal year shall sub19 mit a report to the Secretary. The report shall be submit20 ted in the form and at a time prescribed by the Secretary

21 and shall be available to the public for inspection. The re22 port shall state—

23 ‘‘(A) the amounts and purposes for which the

24 payment has been appropriated, expended, or obli25 gated in the fiscal year;
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1 ‘‘(B) the relationship of the payment to the rel2 evant functional items in the budget of the govern3 ment; and

4 ‘‘(C) the differences between the actual and

5 proposed use of the payment.

6 ‘‘(2) The Secretary shall provide a copy of a report

7 submitted under paragraph (1) by a unit of general local

8 government to the chief executive officer of the State in

9 which the government is located. The Secretary shall pro10 vide the report in the manner and form prescribed by the

11 Secretary.

12 ‘‘(c) REGULATIONS.—The Secretary shall prescribe

13 regulations for applying this section to units of general

14 local government that do not adopt budgets.

15 ‘‘§ 6720. Definitions and application

16 ‘‘(a) DEFINITIONS.—In this chapter—

17 ‘‘(1) ‘unit of general local government’ means—

18 ‘‘(A) a county, township, city, or political

19 subdivision of a county, township, or city, that

20 is a unit of general local government as deter21 mined by the Secretary of Commerce for gen22 eral statistical purposes; and

23 ‘‘(B) the District of Columbia and the rec24 ognized governing body of an Indian tribe or
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1 Alaskan Native village that carries out substan2 tial governmental duties and powers;

3 ‘‘(2) ‘payment period’ means each one-year pe4 riod beginning on October 1 of 1992 and 1993;

5 ‘‘(3) ‘State and local taxes’ means taxes im6 posed by a State government or unit of general local

7 government or other political subdivision of a State

8 government for public purposes (except employee

9 and employer assessments and contributions to fi10 nance retirement and social insurance systems and

11 other special assessments for capital outlay) as de12 termined by the Secretary of Commerce for general

13 statistical purposes;

14 ‘‘(4) ‘State’ means any of the several States

15 and the District of Columbia;

16 ‘‘(5) ‘income’ means the total money income re17 ceived from all sources as determined by the Sec18 retary of Commerce for general statistical purposes;

19 ‘‘(6) ‘per capita income’ means—

20 ‘‘(A) in the case of the United States, the

21 income of the United States divided by the pop22 ulation of the United States;

23 ‘‘(B) in the case of a State, the income of

24 that State, divided by the population of that

25 State; and
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1 ‘‘(C) in the case of a unit of general local

2 government, the income of that unit of general

3 local government divided by the population of

4 the unit of general local government;

5 ‘‘(7) ‘finding of discrimination’ means a deci6 sion by the Secretary about a complaint described in

7 section 6716(b), a decision by a State or local ad8 ministrative agency, or other information (under

9 regulations prescribed by the Secretary) that it is

10 more likely than not that a unit of general local gov11 ernment has not complied with section 6711 (a) or

12 (b);

13 ‘‘(8) ‘holding of discrimination’ means a holding

14 by a United States court, a State court, or an ad15 ministrative law judge appointed under section 3105

16 of title 5, that a unit of general local government ex17 pending amounts received under this chapter has—

18 ‘‘(A) excluded a person in the United

19 States from participating in, denied the person

20 the benefits of, or subjected the person to dis21 crimination under, a program or activity be22 cause of race, color, national origin, or sex; or

23 ‘‘(B) violated a prohibition against dis24 crimination described in section 6711(b); and

25 ‘‘(9) ‘public safety’ includes—
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1 ‘‘(A) crime and substance abuse prevention

2 activities;

3 ‘‘(B) the establishment of neighborhood

4 satellite police precincts for the purpose of en5 hancing community-based policing; and

6 ‘‘(10) ‘Secretary’ means the Secretary of Hous7 ing and Urban Development.

8 ‘‘(b) TREATMENT OF SUBSUMED AREAS.—If the en9 tire geographic area of a unit of general local government

10 is located in a larger entity, the unit of general local gov11 ernment is deemed to be located in the larger entity. If

12 only part of the geographic area of a unit is located in

13 a larger entity, each part is deemed to be located in the

14 larger entity and to be a separate unit of general local

15 government in determining allocations under this chapter.

16 Except as provided in regulations prescribed by the Sec17 retary, the Secretary shall make all data computations

18 based on the ratio of the estimated population of the part

19 to the population of the entire unit of general local govern20 ment.

21 ‘‘(c) BOUNDARY AND OTHER CHANGES.—If a bound22 ary line change, a State statutory or constitutional change,

23 annexation, a governmental reorganization, or other cir24 cumstance results in the application of sections 6704

25 through 6708 in a way that does not carry out the pur-
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1 poses of sections 6701 through 6708, the Secretary shall

2 apply sections 6701 through 6708 under regulations of the

3 Secretary in a way that is consistent with those pur4 poses.’’.

5 (b) DEFICIT NEUTRALITY.—Any appropriation to

6 carry out the amendment made by this Act to title 31,

7 United States Code, for fiscal year 1993 or 1994 shall

8 be offset by cuts elsewhere in appropriations for that fiscal

9 year.

10 SEC. 4. CLERICAL AMENDMENT.

11 The table of chapters at the beginning of subtitle V

12 of title 31, United States Code, is amended by adding at

13 after the item relating to chapter 65 the following:

‘‘67. Federal Payments ..................................................................... 6701’’.

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