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[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 251 Introduced in Senate (IS)]

112th CONGRESS
  1st Session
                                 S. 251

     To prohibit the provision of Federal funds to State and local 
   governments for payment of obligations, to prohibit the Board of 
  Governors of the Federal Reserve System from financially assisting 
          State and local governments, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            February 1, 2011

  Mr. Vitter (for himself, Mr. Crapo, and Mr. DeMint) introduced the 
 following bill; which was read twice and referred to the Committee on 
                  Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL

 
     To prohibit the provision of Federal funds to State and local 
   governments for payment of obligations, to prohibit the Board of 
  Governors of the Federal Reserve System from financially assisting 
          State and local governments, and for other purposes.

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

SECTION 1. PROHIBITION ON THE USE OF FEDERAL FUNDS TO PAY STATE AND 
              LOCAL OBLIGATIONS.

    (a) In General.--Notwithstanding any other provision of law, no 
Federal funds may be used to purchase or guarantee obligations of, 
issue lines of credit to, or provide direct or indirect grants-and-aid 
to, any State government, municipal government, local government, or 
county government which, on or after January 26, 2011, has defaulted on 
its obligations, is at risk of defaulting, or is likely to default, 
absent such assistance from the United States Government.
    (b) Limit on Use of Borrowed Funds.--The Secretary of the Treasury 
shall not, directly or indirectly, use general fund revenues or funds 
borrowed pursuant to title 31, United States Code, to purchase or 
guarantee any asset or obligation of any State government, municipal 
government, local government, or county government, or otherwise to 
assist such government entity, if, on or after January 26, 2011, that 
State government, municipal government, or county government has 
defaulted on its obligations, is at risk of defaulting, or is likely to 
default, absent such assistance from the United States Government.
    (c) Prohibition on Federal Reserve Assistance.--Notwithstanding any 
other provision of law, the Board of Governors of the Federal Reserve 
System shall not provide or extend to, or authorize with respect to, 
any State government, municipal government, local government, county 
government, or other entity that has taxing authority or bonding 
authority, any funds, loan guarantees, credits, or any other financial 
instrument or other authority, including the purchasing of the bonds of 
such State, municipality, locality, county, or other bonding authority, 
or to otherwise assist such government entity under any authority of 
the Board of Governors.
    (d) Limitation.--Subsections (a) through (c) shall not apply to 
Federal assistance provided in response to a natural disaster.
                                 <all>
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