I 

109TH CONGRESS 

1ST SESSION H. R. 1586 

To establish an annual Federal infrastructure support contribution for the 

District of Columbia, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 12, 2005 

Ms. NORTON (for herself, Mr. TOM DAVIS of Virginia, Mr. WOLF, Mr. HOYER, 

Mr. MORAN of Virginia, Mr. WYNN, Mr. CUMMINGS, and Mr. VAN

HOLLEN) introduced the following bill; which was referred to the Committee on Government Reform 

A BILL 

To establish an annual Federal infrastructure support contribution for the District of Columbia, 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 ‘‘District of Columbia 

5 Fair Federal Compensation Act of 2005’’. 

6 SEC. 2. FINDINGS; PURPOSE. 

7 (a) FINDINGS.—Congress finds as follows: 

8 (1) A General Accounting Office (GAO) report 

9 of May 2003 found that the District of Columbia 
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1 has a substantial structural imbalance, ranging from 

2 $470,000,000 to $1,100,000,000 annually, and that 

3 this imbalance is beyond the direct control of local 

4 officials because it is caused by mandates, legisla5 tion, and other requirements imposed by the Federal 

6 Government. 

7 (2) The GAO report was preceded by 2 reports 

8 by distinguished groups who also concluded that the 

9 District had a structural imbalance: A 2002 

10 McKenzie study commissioned by the Federal City 

11 Council (an organization of regional and local busi12 ness leaders), and a 2002 study by the Brookings 

13 Institute, led by Alice Rivlin, the former director of 

14 the Congressional Budget Office and former chair of 

15 the District of Columbia Financial Responsibility 

16 and Management Assistance Authority. 

17 (3) The components of the structural deficit are 

18 all Federal in origin and consist of the following: Lo19 cally provided services to the Federal Government; a 

20 Federal statute which exempts from taxation 66 per21 cent of the income earned in the District; the exemp22 tion from taxation of 42 percent of the real property 

23 owned by the Federal Government; and the require24 ment to provide State services, such as special edu-
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1 cation and mental health, although the District is 

2 not a State. 

3 (4) The District’s tax burden is among the 

4 highest in the Nation because of the Federal re5 quirements documented in the 2003 GAO report. 

6 However, the funding provided by these taxes is still 

7 insufficient to meet the obligations of the District, 

8 especially the long-term obligations to carry out crit9 ical capital projects to maintain and improve the 

10 District’s infrastructure, projects that are not only 

11 typically funded by a State but that the District 

12 must carry out because of its mandate to support 

13 the infrastructure needs of the Federal Government 

14 and the entire Washington region. As a result, the 

15 District must obtain the funds needed to meet these 

16 obligations through a continuous series of bor17 rowings, incurring more and more debt service pay18 ments each year, and causing the District’s per cap19 ita rate of general obligation debt to be the highest 

20 in the Nation. 

21 (5) The GAO concluded that greater manage22 ment efficiency by the District government is nec23 essary, but that ‘‘management improvement will not 

24 offset the underlying structural imbalance because it 
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1 is caused by factors beyond the direct control of Dis2 trict officials’’. 

3 (6) The GAO recommended against the only 2 

4 alternatives available to the District. Raising taxes 

5 would ‘‘worsen D.C.’s competitive advantage in at6 tracting new businesses and residents’’ and cutting 

7 services for residents and visitors would have ‘‘unde8 sirable consequences for the District’s economy’’. 

9 (7) According to the GAO, the options are to 

10 ‘‘change Federal procedures to expand the District’s 

11 tax base or provide additional financial support and 

12 a greater role by the Federal Government to help 

13 the District maintain fiscal balance’’. 

14 (8) The District of Columbia, through prudent 

15 budgeting and improved management, has had a 

16 balanced budget with surpluses for 7 years; however, 

17 the District’s Chief Financial Officer (whose position 

18 was created by a Federal statute) has found that se19 vere fiscal problems are inevitable as the District 

20 works to close spending pressures and find remedies 

21 to its inherent structural imbalance. 

22 (9) Maintaining financial stability in the Dis23 trict, just as in other cities, requires a stable, pre24 dictable source of revenue that increases modestly 

25 but regularly over time. 
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1 (b) PURPOSE.—It is the purpose of this Act to pro2 vide an efficient mechanism and formula for the transfer 

3 of revenue from the Federal Government to the District 

4 government, and to dedicate this revenue for the sole pur5 pose of rectifying an annual structural imbalance which 

6 is due to— 

7 (1) Federal requirements and limitations on the 

8 ability of the District of Columbia to generate rev9 enue; 

10 (2) the use of District of Columbia real prop11 erty by the Federal Government for Federal facili12 ties and other Federal purposes; and 

13 (3) the District’s status as a Federal city which 

14 is not part of a State but incurs many of the same 

15 expenses as a State that would otherwise be respon16 sible for these expenses. 

17 TITLE I—DIRECT FEDERAL CON18 TRIBUTION FOR INFRA19 STRUCTURE COSTS 

20 SEC. 101. ESTABLISHMENT OF DIRECT FEDERAL CON21 TRIBUTION TO DISTRICT OF COLUMBIA. 

22 (a) ENTITLEMENT OF DISTRICT TO CONTRIBU23 TION.—For each fiscal year beginning with fiscal year 

24 2006, the District of Columbia shall be entitled to receive 

25 an annual infrastructure support contribution to support 
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1 the infrastructure used by the District of Columbia and 

2 in part by the region in accordance with this title. 

3 (b) OBLIGATION OF UNITED STATES.—Subsection 

4 (a) constitutes budget authority in advance of appropria5 tions acts and represents the obligation of the Federal 

6 Government to make annual infrastructure support con7 tributions in accordance with this title. 

8 SEC. 102. DETERMINATION OF AMOUNT OF CONTRIBUTION. 

9 (a) IN GENERAL.—The amount of the annual infra10 structure support contribution required by this title is 

11 equal to— 

12 (1) in the case of fiscal year 2006, 

13 $800,000,000; and 

14 (2) in the case of each succeeding fiscal year, 

15 the amount required for the previous fiscal year, in16 creased by the applicable index described in sub17 section (b). 

18 (b) APPLICABLE INDEX.—In subsection (a), the ‘‘ap19 plicable index’’ with respect to a fiscal year is the greater 

20 of— 

21 (1) the percentage by which the Consumer 

22 Price Index (all Urban Consumers, United States 

23 City Average) for the 12-month period ending on 

24 June 30 preceding the beginning of the fiscal year 
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1 exceeds such Consumer Price Index for the pre2 ceding 12-month period; or 

3 (2) 4 percent. 

4 TITLE II—DEDICATED 

5 INFRASTRUCTURE ACCOUNT 

6 SEC. 201. ESTABLISHMENT OF ACCOUNT. 

7 There is established in the general fund of the Dis8 trict of Columbia an account to be known as the Dedicated 

9 Infrastructure Account (hereafter in this title referred to 

10 as the ‘‘Account’’), which shall consist of the following 

11 amounts: 

12 (1) Amounts deposited pursuant to section 202. 

13 (2) Such other amounts as may be deposited 

14 pursuant to District of Columbia law. 

15 (3) Interest earned on amounts in the account. 

16 SEC. 202. DEPOSIT OF ANNUAL INFRASTRUCTURE SUP17 PORT CONTRIBUTION. 

18 Each annual infrastructure support contribution 

19 made to the District of Columbia under title I for a fiscal 

20 year shall be deposited into the Account. 

21 SEC. 203. USE OF AMOUNTS IN ACCOUNT. 

22 (a) IN GENERAL.—Amounts in the Account may be 

23 used only for the following purposes: 

24 (1) Transportation activities, including the pay25 ment of the local share of participation in public 
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1 transportation activities and road construction and 

2 improvement projects. 

3 (2) Information technology improvements for 

4 the District government. 

5 (3) Debt service payments on bonds, notes, and 

6 other obligations of the District government. 

7 (4) Building and facility maintenance, construc8 tion, and capital improvement projects for District 

9 of Columbia public schools and public charter 

10 schools. 

11 (b) AVAILABILITY OF FUNDS.—Funds appropriated 

12 or otherwise made available from the Account shall remain 

13 available until expended. 

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