I 

111TH CONGRESS 

1ST SESSION H. R. 3007 

To provide fiscal assistance to local governments. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 23, 2009 

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

Committee on Oversight and Government Reform 

A BILL 

To provide fiscal assistance to local governments. 

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

3 TITLE I—ALLOCATION AND 

4 PAYMENT OF FUNDS 

5 SEC. 101. SHORT TITLE; TABLE OF CONTENTS. 

6 (a) SHORT TITLE.—This Act may be cited as the 

7 ‘‘Local Fiscal Assistance Act of 2009’’. 

8 (b) TABLE OF CONTENTS.—The table of contents for 

9 this Act is as follows: 

TITLE I—ALLOCATION AND PAYMENT OF FUNDS 

Sec. 101. Short title; table of contents. 

Sec. 102. Payments to local governments. 

Sec. 103. Use of funds by local governments for priority expenditures. 

Sec. 104. Creation of trust fund; appropriations. 


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Sec. 105. Allocation among States. 

Sec. 106. Entitlements of local governments. 

Sec. 107. Definitions and special rules for application of allocation formulas. 

TITLE II—ADMINISTRATIVE PROVISIONS 

Sec. 201. Reports on use of funds; publication. 

Sec. 202. Miscellaneous provisions. 

Sec. 203. Definitions. 

1 SEC. 102. PAYMENTS TO LOCAL GOVERNMENTS. 

2 (a) IN GENERAL.—Except as otherwise provided in 

3 this Act, the Secretary shall, for each entitlement period, 

4 pay out of the Trust Fund to each unit of local govern5 ment a total amount equal to the entitlement of such unit 

6 determined under section 106 for such period. 

7 (b) INSTALLMENTS.—In the case of entitlement peri8 ods ending after the date of the enactment of this Act, 

9 such payments shall be made in installments, but not less 

10 often than once for each quarter, and, in the case of quar11 ters ending after the date of the enactment of this Act, 

12 shall be paid not later than 5 days after the close of each 

13 quarter. Such payments for any entitlement period may 

14 be initially made on the basis of estimates. Proper adjust15 ment shall be made in the amount of any payment to a 

16 unit of local government to the extent that the payments 

17 previously made to such government under this title were 

18 in excess of or less than the amounts required to be paid. 


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1 SEC. 103. USE OF FUNDS BY LOCAL GOVERNMENTS FOR 

2 PRIORITY EXPENDITURES. 

3 (a) IN GENERAL.—Funds received by units of local 

4 government under this title may be used only for priority 

5 expenditures. For purposes of this Act, the term ‘‘priority 

6 expenditures’’ means only— 

7 (1) ordinary and necessary maintenance and 

8 operating expenses for— 

9 (A) public safety (including law enforce10 ment, fire protection, and building code enforce11 ment); 

12 (B) environmental protection (including 

13 sewage disposal, sanitation, and pollution abate14 ment); 

15 (C) public transportation (including transit 

16 systems and streets and roads); 

17 (D) health; 

18 (E) recreation; 

19 (F) libraries; 

20 (G) social services for the poor or aged; 

21 and 

22 (H) financial administration; and 

23 (2) ordinary and necessary capital expenditures 

24 authorized by law. 

25 (b) CERTIFICATES BY LOCAL GOVERNMENTS.—The 

26 Secretary is authorized to accept a certification by the 


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1 chief executive officer of a unit of local government that 

2 the unit of local government has used the funds received 

3 by it under this title for an entitlement period only for 

4 priority expenditures, unless he determines that such cer5 tification is not sufficiently reliable to enable him to carry 

6 out his duties under this title. 

7 SEC. 104. CREATION OF TRUST FUND; APPROPRIATIONS. 

8 (a) TRUST FUND.— 

9 (1) IN GENERAL.—There is hereby established 

10 on the books of the Treasury of the United States 

11 a trust fund to be known as the ‘‘Local Government 

12 Fiscal Assistance Trust Fund’’ (referred to in this 

13 title as the ‘‘Trust Fund’’). The Trust Fund shall 

14 remain available without fiscal year limitation and 

15 shall consist of such amounts as may be appro16 priated to it and deposited in it as provided in sub17 section (b). Except as provided in this Act, amounts 

18 in the Trust Fund may be used only for the pay19 ments to local governments provided by this title. 

20 (2) TRUSTEE.—The Secretary of the Treasury 

21 shall be the trustee of the Trust Fund and shall re22 port to the Congress not later than March 1 of each 

23 year on the operation and status of the Trust Fund 

24 during the preceding fiscal year. 

25 (b) APPROPRIATIONS.— 


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1 (1) IN GENERAL.—There is appropriated to the 

2 Trust Fund, out of amounts in the general fund of 

3 the Treasury attributable to the collections of the 

4 Federal individual income taxes not otherwise appro5 priated— 

6 (A) for the period beginning on the date of 

7 the enactment of this Act, and ending Sep8 tember 30, 2009, $30,000,000,000; 

9 (B) for fiscal year 2010, $30,000,000,000; 

10 and 

11 (C) for fiscal year 2011, $30,000,000,000. 

12 (2) DEPOSITS.—Amounts appropriated by para13 graph (1) for any fiscal year or other period shall be 

14 deposited in the Trust Fund on the later of (A) the 

15 first day of such year or period, or (B) the day after 

16 the date of enactment of this Act. 

17 (c) TRANSFERS FROM TRUST FUND TO GENERAL

18 FUND.—The Secretary shall from time to time transfer 

19 from the Trust Fund to the general fund of the Treasury 

20 any moneys in the Trust Fund which he determines will 

21 not be needed to make payments to units of local govern22 ment under this title. 

23 SEC. 105. ALLOCATION AMONG STATES. 

24 (a) IN GENERAL.—There shall be allocated to each 

25 State for each entitlement period, out of amounts approVerDate Nov 24 2008 03:17 Jun 25, 2009 Jkt 079200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3007.IH H3007

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1 priated under section 104(b)(1) for that entitlement pe2 riod, an amount which bears the same ratio to the amount 

3 appropriated under that section for that period as the 

4 amount allocable to that State under subsection (b) bears 

5 to the sum of the amounts allocable to all States under 

6 subsection (b). 

7 (b) DETERMINATION OF ALLOCABLE AMOUNT.— 

8 (1) IN GENERAL.—For purposes of subsection 

9 (a), the amount allocable to a State under this sub10 section for any entitlement period shall be deter11 mined under paragraph (2). 

12 (2) THREE FACTOR FORMULA.—For purposes 

13 of paragraph (1), the amount allocable to a State 

14 under this paragraph for any entitlement period is 

15 the amount which bears the same ratio to 

16 $20,000,000,000 as— 

17 (A) the population of that State, multiplied 

18 by the general tax effort factor of that State, 

19 multiplied by the relative income factor of that 

20 State, bears to 

21 (B) the sum of the products determined 

22 under subparagraph (A) for all States. 

23 SEC. 106. ENTITLEMENTS OF LOCAL GOVERNMENTS. 

24 (a) ALLOCATION AMONG COUNTY AREAS.—The 

25 amount to be allocated to the units of local government 


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1 within a State for any entitlement period shall be allocated 

2 among the county areas located in that State so that each 

3 county area will receive an amount which bears the same 

4 ratio to the total amount to be allocated to the units of 

5 local government within that State as— 

6 (1) the population of that county area, multi7 plied by the general tax effort factor of that county 

8 area, multiplied by the relative income factor of that 

9 county area, bears to 

10 (2) the sum of the products determined under 

11 paragraph (1) for all county areas within that State. 

12 (b) ALLOCATION TO COUNTY GOVERNMENTS, MU13 NICIPALITIES, TOWNSHIPS, ETC.— 

14 (1) COUNTY GOVERNMENTS.—The county gov15 ernment shall be allocated that portion of the 

16 amount allocated to the county area for the entitle17 ment period under subsection (a) which bears the 

18 same ratio to such amount as the adjusted taxes of 

19 the county government bear to the adjusted taxes of 

20 the county government and all other units of local 

21 government located in the county area. 

22 (2) OTHER UNITS OF LOCAL GOVERNMENT.— 

23 The amount remaining for allocation within a county 

24 area after the application of paragraph (1) shall be 

25 allocated among the units of local government (other 


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1 than the county government and other than town2 ship governments) located in that county area so 

3 that each unit of local government will receive an 

4 amount which bears the same ratio to the total 

5 amount to be allocated to all such units as— 

6 (A) the population of that local govern7 ment, multiplied by the general tax effort factor 

8 of that local government, multiplied by the rel9 ative income factor of that local government, 

10 bears to 

11 (B) the sum of the products determined 

12 under subparagraph (A) for all such units. 

13 (3) TOWNSHIP GOVERNMENTS.—If the county 

14 area includes one or more township governments, 

15 then before applying paragraph (2)— 

16 (A) there shall be set aside for allocation 

17 under subparagraph (B) to such township gov18 ernments that portion of the amount allocated 

19 to the county area for the entitlement period 

20 which bears the same ratio to such amount as 

21 the sum of the adjusted taxes of all such town22 ship governments bears to the aggregate ad23 justed taxes of the county government, such 

24 township governments, and all other units of 


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1 local government located in the county area, 

2 and 

3 (B) that portion of each amount set aside 

4 under subparagraph (A) shall be allocated to 

5 each township government on the same basis as 

6 amounts are allocated to units of local govern7 ment under paragraph (2). 

8 If this paragraph applies with respect to any county 

9 area for any entitlement period, the remaining por10 tion allocated under paragraph (2) to the units of 

11 local government located in the county area (other 

12 than the county government and the township gov13 ernments) shall be appropriately reduced to reflect 

14 the amounts set aside under subparagraph (A). 

15 (4) INDIAN TRIBES AND ALASKAN NATIVE VIL16 LAGES.—If within a county area there is an Indian 

17 tribe or Alaskan native village which has a recog18 nized governing body which performs substantial 

19 governmental functions, then before applying para20 graph (1) there shall be allocated to such tribe or 

21 village a portion of the amount allocated to the 

22 county area for the entitlement period which bears 

23 the same ratio to such amount as the population of 

24 that tribe or village within that county area bears to 

25 the population of that county area. If this paragraph 


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1 applies with respect to any county area for any enti2 tlement period, the amount to be allocated under 

3 paragraph (1) shall be appropriately reduced to re4 flect the amount allocated under the preceding sen5 tence. If the entitlement of any such tribe or village 

6 is waived for any entitlement period by the gov7 erning body of that tribe or village, then the provi8 sions of this paragraph shall not apply with respect 

9 to the amount of such entitlement for such period. 

10 (5) RULE FOR SMALL UNITS OF GOVERN11 MENT.—If the Secretary determines that in any 

12 county area the data available for any entitlement 

13 period are not adequate for the application of the 

14 formulas set forth in paragraphs (2) and (3)(B) 

15 with respect to units of local government (other than 

16 a county government) with a population below a 

17 number (not more than 500) prescribed for that 

18 county area by the Secretary, he may apply para19 graph (2) or (3)(B) by allocating for such entitle20 ment period to each such unit located in that county 

21 area an amount which bears the same ratio to the 

22 total amount to be allocated under paragraph (2) or 

23 (3)(B) for such entitlement period as the population 

24 of such unit bears to the population of all units of 

25 local government in that county area to which alloVerDate Nov 24 2008 03:17 Jun 25, 2009 Jkt 079200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3007.IH H3007

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1 cations are made under such paragraph. If the pre2 ceding sentence applies with respect to any county 

3 area, the total amount to be allocated under para4 graph (2) or (3)(B) to other units of local govern5 ment in that county area for the entitlement period 

6 shall be appropriately reduced to reflect the amounts 

7 allocated under the preceding sentence. 

8 (6) ENTITLEMENT.— 

9 (A) IN GENERAL.—Except as otherwise 

10 provided in this paragraph, the entitlement of 

11 any unit of local government for any entitle12 ment period shall be the amount allocated to 

13 such unit under this subsection (after taking 

14 into account any applicable modification under 

15 subsection (c)). 

16 (B) MAXIMUM AND MINIMUM PER CAPITA

17 ENTITLEMENT.—Subject to the provisions of 

18 subparagraphs (C) and (D), the per capita 

19 amount allocated to any county area or any 

20 unit of local government (other than a county 

21 government) within a State under this section 

22 for any entitlement period shall not be less than 

23 20 percent, nor more than 145 percent, of two24 thirds of the amount allocated to the State 


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1 under section 105, divided by the population of 

2 that State. 

3 (C) LIMITATION.—The amount allocated 

4 to any unit of local government under this sec5 tion for any entitlement period shall not exceed 

6 50 percent of the sum of (i) such government’s 

7 adjusted taxes, and (ii) the intergovernmental 

8 transfers of revenue to such government (other 

9 than transfers to such government under this 

10 title). 

11 (D) ENTITLEMENT LESS THAN $1,000, OR

12 GOVERNING BODY WAIVES ENTITLEMENT.—If 

13 (but for this subparagraph) the entitlement of 

14 any unit of local government below the level of 

15 the county government— 

16 (i) would be less than $1,000 for any 

17 entitlement period ($500 for an entitle18 ment period of 6 months), or 

19 (ii) is waived for any entitlement pe20 riod by the governing body of such unit, 

21 then the amount of such entitlement for such 

22 period shall (in lieu of being paid to such unit) 

23 be added to, and shall become a part of, the en24 titlement for such period of the county governVerDate Nov 24 2008 03:17 Jun 25, 2009 Jkt 079200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H3007.IH H3007

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1 ment of the county area in which such unit is 

2 located. 

3 (7) ADJUSTMENT OF ENTITLEMENT.— 

4 (A) IN GENERAL.—In adjusting the alloca5 tion of any county area or unit of local govern6 ment, the Secretary shall make any adjustment 

7 required under paragraph (6)(B) first, any ad8 justment required under paragraph (6)(C) next, 

9 and any adjustment required under paragraph 

10 (6)(D) last. 

11 (B) ADJUSTMENT FOR APPLICATION OF

12 MAXIMUM OR MINIMUM PER CAPITA ENTITLE13 MENT.—The Secretary shall adjust the alloca14 tions made under this section to county areas 

15 or to units of local governments in any State in 

16 order to bring those allocations into compliance 

17 with the provisions of paragraph (6)(B). In 

18 making such adjustments he shall make any 

19 necessary adjustments with respect to county 

20 areas before making any necessary adjustments 

21 with respect to units of local government. 

22 (C) ADJUSTMENT FOR APPLICATION OF

23 LIMITATION.—In any case in which the amount 

24 allocated to a unit of local government is reVerDate Nov 24 2008 03:17 Jun 25, 2009 Jkt 079200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H3007.IH H3007

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1 duced under paragraph (6)(C) by the Secretary, 

2 the amount of that reduction— 

3 (i) in the case of a unit of local gov4 ernment (other than a county government), 

5 shall be added to and increase the alloca6 tion of the county government of the coun7 ty area in which it is located, unless (on 

8 account of the application of paragraph 

9 (6)) that county government may not re10 ceive it, in which case the amount of the 

11 reduction shall be added to and increase 

12 the entitlement of the State government of 

13 the State in which that unit of local gov14 ernment is located; and 

15 (ii) in the case of a county govern16 ment, shall be added to and increase the 

17 entitlement of the State government of the 

18 State in which it is located. 

19 (c) SPECIAL ALLOCATION RULES.— 

20 (1) OPTIONAL FORMULA.—A State may by law 

21 provide for the allocation of funds among county 

22 areas, or among units of local government (other 

23 than county governments), on the basis of the popu24 lation multiplied by the general tax effort factors of 

25 such areas or units of local government, on the basis 


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1 of the population multiplied by the relative income 

2 factors of such areas or units of local government, 

3 or on the basis of a combination of those two fac4 tors. Any State which provides by law for such a 

5 variation in the allocation formula provided by sub6 section (a), or by paragraphs (2) and (3) of sub7 section (b), shall notify the Secretary of such law 

8 not later than 30 days before the beginning of the 

9 first entitlement period to which such law is to 

10 apply. Any such law shall— 

11 (A) provide for allocating 100 percent of 

12 the aggregate amount to be allocated under 

13 subsection (a), or under paragraphs (2) and (3) 

14 of subsection (b); 

15 (B) apply uniformly throughout the State; 

16 and 

17 (C) apply during the period beginning on 

18 the first day of the first entitlement period to 

19 which it applies and ending on September 30, 

20 2011. 

21 (2) CERTIFICATION.—Paragraph (1) shall apply 

22 within a State only if the Secretary certifies that the 

23 State law complies with the requirements of such 

24 paragraph. The Secretary shall not certify any such 

25 law with respect to which he receives notification 


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1 later than 30 days prior to the first entitlement pe2 riod during which it is to apply. 

3 (d) GOVERNMENTAL DEFINITIONS AND RELATED

4 RULES.—For purposes of this Act— 

5 (1) UNITS OF LOCAL GOVERNMENT.—The term 

6 ‘‘unit of local government’’ means the government of 

7 a county, municipality, township, or other unit of 

8 government below the State which is a unit of gen9 eral government (determined on the basis of the 

10 same principles as are used by the Bureau of the 

11 Census for general statistical purposes). Such term 

12 also means, except for purposes of paragraphs (1), 

13 (2), (3), (5), (6)(C), and (6)(D) of subsection (b), 

14 and, except for purposes of subsection (c), the recog15 nized governing body of an Indian tribe or Alaskan 

16 native village which performs substantial govern17 mental functions. 

18 (2) CERTAIN AREAS TREATED AS COUNTIES.— 

19 In any State in which any unit of local government 

20 (other than a county government) constitutes the 

21 next level of government below the State government 

22 level, then, except as provided in the next sentence, 

23 the geographic area of such unit of government shall 

24 be treated as a county area (and such unit of gov25 ernment shall be treated as a county government) 


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1 with respect to that portion of the State’s geo2 graphic area. In any State in which any county area 

3 is not governed by a county government but contains 

4 two or more units of local government, such units 

5 shall not be treated as county governments and the 

6 geographic areas of such units shall not be treated 

7 as county areas. 

8 (3) TOWNSHIPS.—The term ‘‘township’’ in9 cludes equivalent subdivisions of government having 

10 different designations (such as ‘‘towns’’), and shall 

11 be determined on the basis of the same principles as 

12 are used by the Bureau of the Census for general 

13 statistical purposes. 

14 (4) UNITS OF LOCAL GOVERNMENT LOCATED IN

15 LARGER ENTITY.—A unit of local government shall 

16 be treated as located in a larger entity if part or all 

17 of its geographic area is located in the larger entity. 

18 (5) ONLY PART OF UNIT LOCATED IN LARGER

19 ENTITY.—If only part of a unit of local government 

20 is located in a larger entity, such part shall be treat21 ed for allocation purposes as a separate unit of local 

22 government, and all computations shall, except as 

23 otherwise provided in regulations, be made on the 

24 basis of the ratio which the estimated population of 


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1 such part bears to the population of the entirety of 

2 such unit. 

3 (6) BOUNDARY CHANGES, GOVERNMENTAL RE4 ORGANIZATION, ETC.—If, by reason of boundary line 

5 changes, by reason of State statutory or constitu6 tional changes, by reason of annexations or other 

7 governmental reorganizations, or by reason of other 

8 circumstances, the application of any provision of 

9 this section to units of local government does not 

10 carry out the purposes of this title, the application 

11 of such provision shall be made, under regulations 

12 prescribed by the Secretary, in a manner which is 

13 consistent with such purposes. 

14 SEC. 107. DEFINITIONS AND SPECIAL RULES FOR APPLICA15 TION OF ALLOCATION FORMULAS. 

16 (a) IN GENERAL.—For purposes of this title— 

17 (1) POPULATION.—Population shall be deter18 mined on the same basis as resident population is 

19 determined by the Bureau of the Census for general 

20 statistical purposes. 

21 (2) URBANIZED POPULATION.—Urbanized pop22 ulation means the population of any area consisting 

23 of a central city or cities of 50,000 or more inhab24 itants (and of the surrounding closely settled terri25 tory for such city or cities) which is treated as an 


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1 urbanized area by the Bureau of the Census for gen2 eral statistical purposes. 

3 (3) INCOME.—Income means total money in4 come received from all sources, as determined by the 

5 Bureau of the Census for general statistical pur6 poses. 

7 (4) PERSONAL INCOME.—Personal income 

8 means the income of individuals, as determined by 

9 the Department of Commerce for national income 

10 accounts purposes. 

11 (5) DATES FOR DETERMINING ALLOCATIONS

12 AND ENTITLEMENTS.—Except as provided in regula13 tions, the determination of allocations and entitle14 ments for any entitlement period shall be made as 

15 of the first day of the third month immediately pre16 ceding the beginning of such period. 

17 (6) INTERGOVERNMENTAL TRANSFERS.—The 

18 intergovernmental transfers of revenue to any gov19 ernment are the amounts of revenue received by that 

20 government from other governments as a share in fi21 nancing (or as reimbursement for) the performance 

22 of governmental functions, as determined by the Bu23 reau of the Census for general statistical purposes. 

24 (7) DATA USED; UNIFORMITY OF DATA.— 


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1 (A) GENERAL RULE.—Except as provided 

2 in subparagraph (B), the data used shall be the 

3 most recently available data provided by the 

4 Bureau of the Census or the Department of 

5 Commerce, as the case may be. 

6 (B) USE OF ESTIMATES, ETC.—Where the 

7 Secretary determines that the data referred to 

8 in subparagraph (A) are not current enough or 

9 are not comprehensive enough to provide for eq10 uitable allocations, he may use such additional 

11 data (including data based on estimates) as 

12 may be provided for in regulations. 

13 (b) INCOME TAX AMOUNT OF STATES.—For pur14 poses of this title— 

15 (1) IN GENERAL.—The income tax amount of 

16 any State for any entitlement period is the income 

17 tax amount of such State as determined under para18 graphs (2) and (3). 

19 (2) INCOME TAX AMOUNT.—The income tax 

20 amount of any State for any entitlement period is 15 

21 percent of the net amount collected from the State 

22 individual income tax of such State during 2009 or 

23 (if later) during the last calendar year ending before 

24 the beginning of such entitlement period. 


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1 (3) CEILING AND FLOOR.—The income tax 

2 amount of any State for any entitlement period— 

3 (A) shall not exceed 6 percent, and 

4 (B) shall not be less than 1 percent, 

5 of the Federal individual income tax liabilities attrib6 uted to such State for taxable years ending during 

7 2008 or (if later) during the last calendar year end8 ing before the beginning of such entitlement period. 

9 (4) STATE INDIVIDUAL INCOME TAX.—The in10 dividual income tax of any State is the tax imposed 

11 upon the income of individuals by such State and 

12 described as a State income tax under section 

13 164(a)(3) of the Internal Revenue Code of 1986. 

14 (5) FEDERAL INDIVIDUAL INCOME TAX LIABIL15 ITIES.—Federal individual income tax liabilities at16 tributed to any State for any period shall be deter17 mined on the same basis as such liabilities are deter18 mined for such period by the Internal Revenue Serv19 ice for general statistical purposes. 

20 (c) GENERAL TAX EFFORT OF STATES.— 

21 (1) IN GENERAL.—For purposes of this title— 

22 (A) GENERAL TAX EFFORT FACTOR.—The 

23 general tax effort factor of any State for any 

24 entitlement period is (i) the net amount col25 lected from the State and local taxes of such 


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1 State during the most recent reporting year, di2 vided by (ii) the aggregate personal income (as 

3 defined in paragraph (4) of subsection (a)) at4 tributed to such State for the same period. 

5 (B) GENERAL TAX EFFORT AMOUNT.—The 

6 general tax effort amount of any State for any 

7 entitlement period is the amount determined by 

8 multiplying— 

9 (i) the net amount collected from the 

10 State and local taxes of such State during 

11 the most recent reporting year, by 

12 (ii) the general tax effort factor of 

13 that State. 

14 (2) STATE AND LOCAL TAXES.— 

15 (A) TAXES TAKEN INTO ACCOUNT.—The 

16 State and local taxes taken into account under 

17 paragraph (1) are the compulsory contributions 

18 exacted by the State (or by any unit of local 

19 government or other political subdivision of the 

20 State) for public purposes (other than employee 

21 and employer assessments and contributions to 

22 finance retirement and social insurance sys23 tems, and other than special assessments for 

24 capital outlay), as such contributions are deterVerDate Nov 24 2008 03:17 Jun 25, 2009 Jkt 079200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\H3007.IH H3007

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1 mined by the Bureau of the Census for general 

2 statistical purposes. 

3 (B) MOST RECENT REPORTING YEAR.— 

4 The most recent reporting year with respect to 

5 any entitlement period consists of the years 

6 taken into account by the Bureau of the Census 

7 in its most recent general determination of 

8 State and local taxes made before the close of 

9 such period. 

10 (d) GENERAL TAX EFFORT FACTOR OF COUNTY

11 AREA.—For purposes of this title, the general tax effort 

12 factor of any county area for any entitlement period is— 

13 (1) the adjusted taxes of the county government 

14 plus the adjusted taxes of each other unit of local 

15 government within that county area, divided by 

16 (2) the aggregate income (as defined in para17 graph (3) of subsection (a)) attributed to that coun18 ty area. 

19 (e) GENERAL TAX EFFORT FACTOR OF UNIT OF

20 LOCAL GOVERNMENT.—For purposes of this title— 

21 (1) IN GENERAL.—The general tax effort factor 

22 of any unit of local government for any entitlement 

23 period is— 

24 (A) the adjusted taxes of that unit of local 

25 government, divided by 


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1 (B) the aggregate income (as defined in 

2 paragraph (3) of subsection (a)) attributed to 

3 that unit of local government. 

4 (2) ADJUSTED TAXES.— 

5 (A) IN GENERAL.—The adjusted taxes of 

6 any unit of local government are— 

7 (i) the compulsory contributions ex8 acted by such government for public pur9 poses (other than employee and employer 

10 assessments and contributions to finance 

11 retirement and social insurance systems, 

12 and other than special assessments for 

13 capital outlay), as such contributions are 

14 determined by the Bureau of the Census 

15 for general statistical purposes, and 

16 (ii) adjusted (under regulations pre17 scribed by the Secretary) by excluding an 

18 amount equal to that portion of such com19 pulsory contributions which is properly al20 locable to expenses for education. 

21 (B) CERTAIN SALES TAXES COLLECTED BY

22 COUNTIES.—In any case where— 

23 (i) a county government exacts sales 

24 taxes within the geographic area of a unit 

25 of local government and transfers part or 


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1 all of such taxes to such unit without 

2 specifying the purposes for which such unit 

3 may spend the revenues, and 

4 (ii) the Governor of the State notifies 

5 the Secretary that the requirements of this 

6 subparagraph have been met with respect 

7 to such taxes, 

8 then the taxes so transferred shall be treated as 

9 the taxes of the unit of local government (and 

10 not the taxes of the county government). 

11 (f) RELATIVE INCOME FACTOR.—For purposes of 

12 this title, the relative income factor is a fraction— 

13 (1) in the case of a State, the numerator of 

14 which is the per capita income of the United States 

15 and the denominator of which is the per capita in16 come of that State; 

17 (2) in the case of a county area, the numerator 

18 of which is the per capita income of the State in 

19 which it is located and the denominator of which is 

20 the per capita income of that county area; and 

21 (3) in the case of a unit of local government, 

22 the numerator of which is the per capita income of 

23 the county area in which it is located and the de24 nominator of which is the per capita income of the 

25 geographic area of that unit of local government. 


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1 For purposes of this subsection, per capita income shall 

2 be determined on the basis of income as defined in para3 graph (3) of subsection (a). 

4 TITLE II—ADMINISTRATIVE 

5 PROVISIONS 

6 SEC. 201. REPORTS ON USE OF FUNDS; PUBLICATION. 

7 (a) REPORTS ON USE OF FUNDS.—Each State gov8 ernment and unit of local government which receives funds 

9 under title I shall, after the close of each entitlement pe10 riod, submit a report to the Secretary setting forth the 

11 amounts and purposes for which funds received during 

12 such period have been spent or obligated. Such reports 

13 shall be in such form and detail and shall be submitted 

14 at such time as the Secretary may prescribe. The Sec15 retary shall establish a publicly accessible website for pur16 poses of this Act and shall post such reports on that 

17 website. 

18 (b) REPORTS ON PLANNED USE OF FUNDS.—Each 

19 State government and unit of local government which ex20 pects to receive funds under title I for any entitlement 

21 period beginning on or after October 1, 2009 shall submit 

22 a report to the Secretary setting forth the amounts and 

23 purposes for which it plans to spend or obligate the funds 

24 which it expects to receive during such period. Such re25 ports shall be in such form and detail as the Secretary 


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1 may prescribe and shall be submitted at such time before 

2 the beginning of the entitlement period as the Secretary 

3 may prescribe. 

4 SEC. 202. MISCELLANEOUS PROVISIONS. 

5 (a) ASSURANCES TO THE SECRETARY.—In order to 

6 qualify for any payment under title I for any entitlement 

7 period beginning on or after October 1, 2009, a State gov8 ernment or unit of local government must establish (in 

9 accordance with regulations prescribed by the Secretary, 

10 and, with respect to a unit of local government, after an 

11 opportunity for review and comment by the Governor of 

12 the State in which such unit is located) to the satisfaction 

13 of the Secretary that— 

14 (1) it will establish a trust fund in which it will 

15 deposit all payments it receives under title I; 

16 (2) it will use amounts in such trust fund (in17 cluding any interest earned thereon while in such 

18 trust fund) during such reasonable period or periods 

19 as may be provided in such regulations; 

20 (3) in the case of a unit of local government, 

21 it will use amounts in such trust fund (including any 

22 interest earned thereon while in such trust fund) 

23 only for priority expenditures (as defined in section 

24 103(a)), and will pay over to the Secretary (for de25 posit in the general fund of the Treasury) an 


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1 amount equal to 110 percent of any amount ex2 pended out of such trust fund in violation of this 

3 paragraph, unless such amount is promptly repaid to 

4 such trust fund (or the violation is otherwise cor5 rected) after notice and opportunity for corrective 

6 action; 

7 (4) it will provide for the expenditure of 

8 amounts received under title I only in accordance 

9 with the laws and procedures applicable to the ex10 penditure of its own revenues; 

11 (5) it will— 

12 (A) use fiscal, accounting, and audit proce13 dures which conform to guidelines established 

14 therefor by the Secretary (after consultation 

15 with the Comptroller General of the United 

16 States), 

17 (B) provide to the Secretary (and to the 

18 Comptroller General of the United States), on 

19 reasonable notice, access to, and the right to ex20 amine, such books, documents, papers, or 

21 records as the Secretary may reasonably require 

22 for purposes of reviewing compliance with this 

23 Act (or, in the case of the Comptroller General, 

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1 quire for purposes of reviewing compliance and 

2 operations under subsection (c)(2)), and 

3 (C) make such annual and interim reports 

4 (other than reports required by section 201) to 

5 the Secretary as he may reasonably require; 

6 (6) all laborers and mechanics employed by con7 tractors or subcontractors in the performance of 

8 work on any construction project, 25 percent or 

9 more of the costs of which project are paid out of 

10 its trust fund established under paragraph (1), will 

11 be paid wages at rates not less than those prevailing 

12 on similar construction in the locality as determined 

13 by the Secretary of Labor in accordance with sub14 chapter IV of chapter 31 of title 40, United States 

15 Code (commonly referred to as the ‘‘Davis-Bacon 

16 Act’’); 

17 (7) individuals employed by it whose wages are 

18 paid in whole or in part out of its trust fund estab19 lished under paragraph (1) will be paid wages which 

20 are not lower than the prevailing rates of pay for 

21 persons employed in similar public occupations by 

22 the same employer; and 

23 (8) in the case of a unit of local government as 

24 defined in the second sentence of section 106(d)(1) 

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1 kan native villages), it will expend funds received by 

2 it under title I for the benefit of members of the 

3 tribe or village residing in the county area from the 

4 allocation of which funds are allocated to it under 

5 section 106(b)(4). 

6 Paragraph (7) shall apply with respect to employees in 

7 any category only if 25 percent or more of the wages of 

8 all employees of the State government or unit of local gov9 ernment in such category are paid from the trust fund 

10 established by it under paragraph (1). 

11 (b) WITHHOLDING OF PAYMENTS.—If the Secretary 

12 determines that a State government or unit of local gov13 ernment has failed to comply substantially with any provi14 sion of subsection (a) or any regulations prescribed there15 under, after giving reasonable notice and opportunity for 

16 a hearing to the Governor of the State or the chief execu17 tive officer of the unit of local government, he shall notify 

18 the State government or unit of local government that if 

19 it fails to take corrective action within 60 days from the 

20 date of receipt of such notification further payments to 

21 it will be withheld for the remainder of the entitlement 

22 period and for any subsequent entitlement period until 

23 such time as the Secretary is satisfied that appropriate 

24 corrective action has been taken and that there will no 

25 longer be any failure to comply. Until he is satisfied, the 


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1 Secretary shall make no further payments of such 

2 amounts. 

3 (c) ACCOUNTING, AUDITING, AND EVALUATION.— 

4 (1) IN GENERAL.—The Secretary shall provide 

5 for such accounting and auditing procedures, evalua6 tions, and reviews as may be necessary to insure 

7 that the expenditures of funds received under title I 

8 by State governments and units of local government 

9 comply fully with the requirements of this Act. The 

10 Secretary is authorized to accept an audit by a State 

11 of such expenditures of a State government or unit 

12 of local government if he determines that such audit 

13 and the audit procedures of that State are suffi14 ciently reliable to enable him to carry out his duties 

15 under this Act. 

16 (2) COMPTROLLER GENERAL SHALL REVIEW

17 COMPLIANCE.—The Comptroller General of the 

18 United States shall make such reviews of the work 

19 as done by the Secretary, the State governments, 

20 and the units of local government as may be nec21 essary for the Congress to evaluate compliance and 

22 operations under this Act. 

23 SEC. 203. DEFINITIONS. 

24 (a) SECRETARY.—For purposes of this Act, the term 

25 ‘‘Secretary’’ means the Secretary of the Treasury or his 


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1 delegate. The term ‘‘Secretary of the Treasury’’ means the 

2 Secretary of the Treasury personally, not including any 

3 delegate. 

4 (b) ENTITLEMENT PERIOD.—For purposes of this 

5 Act, the term ‘‘entitlement period’’ means each of the fol6 lowing: 

7 (1) The period beginning on the date of the en8 actment of this Act and ending September 30, 2009. 

9 (2) Fiscal year 2010. 

10 (3) Fiscal year 2011. 

Æ 


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