II 

114TH CONGRESS 

1ST SESSION S. 94 

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 

JANUARY 7, 2015 

Mr. VITTER 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. 

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

3 SECTION 1. PROHIBITION ON THE USE OF FEDERAL FUNDS 

4 TO PAY STATE AND LOCAL OBLIGATIONS. 

5 (a) IN GENERAL.—Notwithstanding any other provi6 sion of law, no Federal funds may be used to purchase 

7 or guarantee obligations of, issue lines of credit to, or proVerDate Sep 11 2014 03:35 Jan 14, 2015 Jkt 049200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S94.IS S94

smartinez on DSK4TPTVN1PROD with BILLS
2 

•S 94 IS

1 vide direct or indirect grants-and-aid to, any State govern2 ment, municipal government, local government, or county 

3 government which, on or after January 26, 2011, has de4 faulted on its obligations, is at risk of defaulting, or is 

5 likely to default, absent such assistance from the United 

6 States Government. 

7 (b) LIMIT ON USE OF BORROWED FUNDS.—The Sec8 retary of the Treasury shall not, directly or indirectly, use 

9 general fund revenues or funds borrowed pursuant to title 

10 31, United States Code, to purchase or guarantee any 

11 asset or obligation of any State government, municipal 

12 government, local government, or county government, or 

13 otherwise to assist such government entity, if, on or after 

14 January 26, 2011, that State government, municipal gov15 ernment, or county government has defaulted on its obli16 gations, is at risk of defaulting, or is likely to default, ab17 sent such assistance from the United States Government. 

18 (c) PROHIBITION ON FEDERAL RESERVE ASSIST19 ANCE.—Notwithstanding any other provision of law, the 

20 Board of Governors of the Federal Reserve System shall 

21 not provide or extend to, or authorize with respect to, any 

22 State government, municipal government, local govern23 ment, county government, or other entity that has taxing 

24 authority or bonding authority, any funds, loan guaran25 tees, credits, or any other financial instrument or other 


smartinez on DSK4TPTVN1PROD with BILLS
3 

•S 94 IS

1 authority, including the purchasing of the bonds of such 

2 State, municipality, locality, county, or other bonding au3 thority, or to otherwise assist such government entity 

4 under any authority of the Board of Governors. 

5 (d) LIMITATION.—Subsections (a) through (c) shall 

6 not apply to Federal assistance provided in response to 

7 a natural disaster. 

Æ 


smartinez on DSK4TPTVN1PROD with BILLS