I 

116TH CONGRESS 

2D SESSION H. R. 8385 

To establish the Taxpayer Protection Program to provide forgivable loans 

to State, territory, Tribal, and local governments, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 24, 2020 

Mr. LAHOOD introduced the following bill; which was referred to the 

Committee on Oversight and Reform 

A BILL 

To establish the Taxpayer Protection Program to provide 

forgivable loans to State, territory, Tribal, and local governments, and for other purposes. 

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 ‘‘Taxpayer Protection 

5 Act of 2020’’. 

6 SEC. 2. TAXPAYER PROTECTION PROGRAM. 

7 (a) ESTABLISHMENT.—The Secretary of the Treas8 ury shall establish the Taxpayer Protection Program to 

9 provide forgivable loans to State, territory, Tribal, and 

10 local governments, in accordance with this section. 


pamtmann on DSKBC07HB2PROD with BILLS
2 

•HR 8385 IH

1 (b) APPLICATION.—Any State, territory, Tribal, or 

2 local government that seeks to receive a loan under the 

3 Program shall submit an application in such form and 

4 manner, and containing such information, as the Sec5 retary may require. 

6 (c) APPROPRIATION; LOAN AMOUNTS.— 

7 (1) APPROPRIATION.—Out of any money in the 

8 Treasury not otherwise appropriated, there are ap9 propriated to the Secretary to carry out the Pro10 gram, $186,000,000,000. 

11 (2) STATE LOAN AMOUNTS.— 

12 (A) IN GENERAL.—Of amounts appro13 priated under paragraph (1), the Secretary 

14 shall use $100,000,000,000 to carry out the 

15 Program with respect to the States. 

16 (B) RESERVED AMOUNT.—The Secretary 

17 shall reserve $835,000,000 of the amount de18 scribed under subparagraph (A) for each State. 

19 (C) REMAINDER.—The Secretary shall ap20 portion the remaining $58,250,000,000 to the 

21 States based on a State’s relative population 

22 proportion amount, calculated in the manner 

23 described under section 601(c)(3) of the Social 

24 Security Act. 


pamtmann on DSKBC07HB2PROD with BILLS
3 

•HR 8385 IH

1 (3) TERRITORIES.—Of amounts appropriated 

2 under paragraph (1), the Secretary shall use 

3 $3,000,000,000 to carry out the Program with re4 spect to the District of Columbia and the territories 

5 of the United States, with each such District or ter6 ritory receiving an amount based on the relative pop7 ulation proportion amount, calculated in the manner 

8 described under section 601(c)(6) of the Social Secu9 rity Act. 

10 (4) TRIBAL GOVERNMENTS.—Of amounts ap11 propriated under paragraph (1), the Secretary shall 

12 use $8,000,000,000 to carry out the Program with 

13 respect to Tribal governments, with each Tribal gov14 ernment receiving an amount based on increased ex15 penditures, calculated in the manner described under 

16 section 601(c)(7) of the Social Security Act. 

17 (5) LOCAL GOVERNMENTS.— 

18 (A) IN GENERAL.—Of amounts appro19 priated under paragraph (1), the Secretary 

20 shall use $75,000,000,000 to carry out the Pro21 gram with respect to local governments of 

22 States. 

23 (B) AGGREGATE RESERVATION FOR LOCAL

24 GOVERNMENTS OF A STATE.—With respect to a 

25 particular State, the Secretary shall reserve a 


pamtmann on DSKBC07HB2PROD with BILLS
4 

•HR 8385 IH

1 percentage of the amount of money described 

2 under subparagraph (A) for the local govern3 ments of the State, in the aggregate, equal to 

4 the percentage of the amount described under 

5 paragraph (2)(B) that is reserved for such 

6 State. 

7 (C) RESERVATION FOR METROPOLITAN

8 CITIES.—The Secretary shall reserve 

9 $26,250,000,000 of the amount described under 

10 subparagraph (A) for metropolitan cities. 

11 (D) RESERVATION FOR NON-METROPOLI12 TAN NON-COUNTY GENERAL PURPOSE LOCAL

13 GOVERNMENTS.—The Secretary shall reserve 

14 $11,250,000,000 of the amount described under 

15 subparagraph (A) for local governments that 

16 are not metropolitan cities or counties. 

17 (E) RESERVATION FOR COUNTIES.— 

18 (i) IN GENERAL.—The Secretary shall 

19 reserve $37,500,000,000 of the amount de20 scribed under subparagraph (A) for coun21 ties, with each county receiving an amount 

22 based on the relative population of the 

23 county compared to the aggregate popu24 lation of counties described under this subVerDate Sep 11 2014 18:43 Oct 21, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H8385.IH H8385

pamtmann on DSKBC07HB2PROD with BILLS
5 

•HR 8385 IH

1 paragraph with respect to the State in 

2 which the counties are located. 

3 (ii) NON-INCLUSION OF METROPOLI4 TAN CITY POPULATION.—In calculating the 

5 population of a county under clause (i), the 

6 population of the county shall not include 

7 any resident of the county that is also a 

8 resident of a metropolitan city. 

9 (d) USE OF FUNDS.—Loan amounts received under 

10 this section— 

11 (1) may be used— 

12 (A) to cover revenue losses caused by busi13 ness interruptions, unemployment, or other eco14 nomic hardship directly caused by the COVID– 

15 19 pandemic; and 

16 (B) for infrastructure or essential govern17 ment service expenditures, including all general 

18 operating expenses; and 

19 (2) may not be used for the service of any debt 

20 obligation or unfunded liability for employee retire21 ment benefits. 

22 (e) TRANSPARENCY.—Each recipient of a loan under 

23 the Program shall comply with the following: 


pamtmann on DSKBC07HB2PROD with BILLS
6 

•HR 8385 IH

1 (1) ACCOUNTING.—Loan funds shall be ac2 counted for separately from all other revenue 

3 sources. 

4 (2) WEBSITE.— 

5 (A) IN GENERAL.—The recipient shall 

6 maintain a publicly available website that 

7 prominently displays, either on its homepage or 

8 on a page linked directly from the homepage, a 

9 record of the following: 

10 (i) The dollar amount of each expend11 iture of funds received under the Program. 

12 (ii) The vendor or recipient of each 

13 such expenditure of funds. 

14 (iii) The purpose and date of each 

15 such expenditure of funds. 

16 (B) TIMING.—The information described 

17 under subparagraph (A) shall be made available 

18 on the website within 30 days of the related ex19 penditure. 

20 (f) DISBURSEMENT; TERMS AND INTEREST

21 RATES.— 

22 (1) DISBURSEMENT.— 

23 (A) IN GENERAL.—Loans under the Pro24 gram shall be disbursed quarterly, in accordVerDate Sep 11 2014 01:29 Oct 22, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H8385.IH H8385

pamtmann on DSKBC07HB2PROD with BILLS
7 

•HR 8385 IH

1 ance with subparagraph (B), until the earlier 

2 of— 

3 (i) the date on which the full loan dis4 bursement has been made; or 

5 (ii) June 30, 2022. 

6 (B) LIMITATION ON QUARTERLY DIS7 BURSEMENTS.—A recipient of a loan under the 

8 Program may not receive a disbursement with 

9 respect to a particular quarter that is more 

10 than the decrease in— 

11 (i) the recipient’s own-source revenue 

12 collections over the previous fiscal quarter, 

13 from 

14 (ii) the recipient’s own-source revenue 

15 collections for the same fiscal quarter in 

16 2019. 

17 (2) INTEREST RATE.—The Secretary shall set 

18 interest rates on loans under the Program based on 

19 the credit strength of the recipient, using the same 

20 calculation used by the Municipal Lending Facility 

21 of the Board of Governors of the Federal Reserve 

22 System. 

23 (3) REPAYMENT.—With respect to a loan made 

24 under the Program that is not forgiven, the recipient 


pamtmann on DSKBC07HB2PROD with BILLS
8 

•HR 8385 IH

1 shall be required to repay the loan in quarterly pay2 ments beginning on June 30, 2022. 

3 (g) LOAN FORGIVENESS.— 

4 (1) IN GENERAL.—The Secretary shall forgive a 

5 loan made to a recipient under the Program if the 

6 recipient is— 

7 (A) a local government other than a coun8 ty— 

9 (i) with a population of less than 

10 250,000; or 

11 (ii) with a population of 250,000 or 

12 more that has sound pension funds; 

13 (B) a county— 

14 (i) with a population of less than 

15 500,000; or 

16 (ii) with a population of 500,000 or 

17 more that has sound pension funds; or 

18 (C) a State that, as of June 30, 2022— 

19 (i) has sound pension funds; 

20 (ii) has a truly balanced budget; 

21 (iii) has rainy-day fund protections; 

22 and 

23 (iv) does not use a fixed cost of living 

24 adjustment with respect to any pension 

25 system administered by the State. 


pamtmann on DSKBC07HB2PROD with BILLS
9 

•HR 8385 IH

1 (2) TREATMENT OF GOVERNMENTS ESTAB2 LISHING SOUND PENSION FUNDS.— 

3 (A) IN GENERAL.—With respect to a 

4 State, a local government described under para5 graph (1)(A)(ii), or a county described under 

6 paragraph (1)(B)(ii) that does not have sound 

7 pension funds at the time of application for as8 sistance under the Program, such State, local 

9 government, or county shall only be eligible to 

10 receive loan forgiveness under paragraph (1) 

11 if— 

12 (i) the State, local government, or 

13 county has sound pension funds before 

14 such forgiveness; and 

15 (ii) any changes made to employer 

16 contributions schedules to achieve sound 

17 pension funds do not result in a contribu18 tion schedule which increases estimated fu19 ture actuarially determined employer con20 tributions relative to the contribution 

21 schedule in place on July 1, 2020. 

22 (B) ACTUARIALLY DETERMINED EM23 PLOYER CONTRIBUTIONS.—For purposes of 

24 subparagraph (A)(ii), actuarially determined 

25 employer contributions shall follow generally acVerDate Sep 11 2014 18:43 Oct 21, 2020 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H8385.IH H8385

pamtmann on DSKBC07HB2PROD with BILLS
10 

•HR 8385 IH

1 cepted actuarial principles, as defined by the 

2 Secretary. 

3 (h) FINDINGS AND SENSE OF CONGRESS RELATED

4 TO STATE BENEFIT PLANS.— 

5 (1) FINDINGS.—The Congress finds the fol6 lowing: 

7 (A) Securing the health, safety, welfare 

8 and property of, and the pursuit of happiness 

9 by, residents is each State’s supreme obligation. 

10 (B) State reported unfunded pension liabil11 ities among the several States at the end of fis12 cal year 2018 totaled $1,237,791,372,000. 

13 (C) The economic impact of the COVID– 

14 19 pandemic is likely to further increase the 

15 unfunded liabilities of employee benefit plans of 

16 the States and increase the annual cost of these 

17 systems, creating fiscal tension between funding 

18 essential government services and servicing un19 funded liabilities. 

20 (D) The COVID–19 pandemic has caused 

21 reductions in expected revenues of the States 

22 while at the same time increasing public de23 mand for essential government services. 

24 (2) SENSE OF CONGRESS.—It is the sense of 

25 the Congress that if and to the extent a State’s legVerDate Sep 11 2014 18:43 Oct 21, 2020 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H8385.IH H8385

pamtmann on DSKBC07HB2PROD with BILLS
11 

•HR 8385 IH

1 islature determines that performance of its supreme 

2 obligation is impaired by funding otherwise required 

3 under any health, welfare, retirement, or other ben4 efit plan offered to its employees, then that State’s 

5 legislature, with its Governor’s consent, may change 

6 the terms of any such benefit plan to the extent it 

7 was not contemporaneously funded in any manner it 

8 determines to be necessary and proper, notwith9 standing the terms of any State law or constitution 

10 to the contrary. 

11 (i) DEFINITIONS.—In this section: 

12 (1) INDIAN TRIBE.—The term ‘‘Indian Tribe’’ 

13 has the meaning given that term in section 4(e) of 

14 the Indian Self-Determination and Education Assist15 ance Act (25 U.S.C. 5304(e)). 

16 (2) LOCAL GOVERNMENT.—With respect to a 

17 State, the term ‘‘local government’’ means a county, 

18 municipality, town, township, village, parish, bor19 ough, or other unit of general government below the 

20 State level. 

21 (3) METROPOLITAN CITY.—The term ‘‘metro22 politan city’’ has the meaning given that term under 

23 section 102(a) of the Housing and Community De24 velopment Act of 1974 (42 U.S.C. 5302(a)). 


pamtmann on DSKBC07HB2PROD with BILLS
12 

•HR 8385 IH

1 (4) PROGRAM.—The term ‘‘Program’’ means 

2 the Taxpayer Protection Program. 

3 (5) RAINY-DAY FUND PROTECTIONS.— 

4 (A) IN GENERAL.—With respect to a 

5 State, the term ‘‘rainy-day fund protections’’ 

6 means that the State— 

7 (i) has a fund that— 

8 (I) is intended to be used during 

9 emergency periods when revenues de10 crease, to offset such decrease; and 

11 (II) is subject to safeguards to 

12 prevent use of amounts in the funds 

13 for nonemergency purposes, such as 

14 requiring a resolution approved by a 

15 legislative supermajority that an 

16 emergency or disaster has occurred 

17 before amounts may be appropriated 

18 from the fund; and 

19 (ii) has enacted a State statute— 

20 (I) setting a target for the fund 

21 of holding reserves of 5 to 10 percent 

22 of annual general revenues; and 

23 (II) under which amounts are 

24 automatically deposited in the fund in 

25 order to meet such target, during any 


pamtmann on DSKBC07HB2PROD with BILLS
13 

•HR 8385 IH

1 year in which the economy is not in a 

2 declared recession. 

3 (B) ALTERNATE CERTIFICATION.—Not4 withstanding subparagraph (A), a State has 

5 ‘‘rainy-day fund protections’’ if the State cer6 tifies to the Secretary that— 

7 (i) the State has protections for the 

8 State’s rainy-day fund that are at least as 

9 effective as those described under subpara10 graph (A); and 

11 (ii) the State’s rainy-day fund held an 

12 amount equal to more than 5 percent of 

13 the State’s 2019 annual operating budget 

14 in reserve as of January 1, 2020. 

15 (6) SECRETARY.—The term ‘‘Secretary’’ means 

16 the Secretary of the Treasury. 

17 (7) SOUND PENSION FUNDS.—With respect to a 

18 recipient under the Program, the recipient has 

19 ‘‘sound pension funds’’ if— 

20 (A) all pension funds of the recipient are 

21 based on generally accepted actuarial principles, 

22 as defined by the Secretary, taking into account 

23 the Actuarial Standards of Practice promul24 gated by the Actuarial Standards Board; and 


pamtmann on DSKBC07HB2PROD with BILLS
14 

•HR 8385 IH

1 (B) the amortization or employer contribu2 tion schedules of such plans target a 100 per3 cent pension funding ratio over no more than 

4 25 years. 

5 (8) TERRITORY.—The term ‘‘territory’’ means 

6 the District of Columbia, Puerto Rico, the U.S. Vir7 gin Islands, Guam, the Northern Mariana Islands, 

8 and American Samoa. 

9 (9) TRIBAL GOVERNMENT.—The term ‘‘Tribal 

10 government’’ means the recognized governing body 

11 of an Indian Tribe. 

12 (10) TRULY BALANCED BUDGET.—With respect 

13 to a State, the term ‘‘truly balanced budget’’ means 

14 that— 

15 (A) the State has a constitutional or statu16 tory requirement that— 

17 (i) operating budgets achieve end of 

18 year balance; and 

19 (ii) deficits may not be carried year to 

20 year; and 

21 (B) for purposes of calculating revenues to 

22 determine whether the State’s operating budget 

23 has achieved an end of year balance, such reve24 nues may only include actual monies received, 


pamtmann on DSKBC07HB2PROD with BILLS
15 

•HR 8385 IH

1 and do not include transfers from other State 

2 funds or borrowing proceeds. 

Æ 


pamtmann on DSKBC07HB2PROD with BILLS