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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
TITLE I—ALLOCATION AND 
PAYMENT OF FUNDS 
SEC. 101. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Local Fiscal Assistance Act of 2009’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
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. 
SEC. 102. PAYMENTS TO LOCAL GOVERNMENTS. 
(a) IN GENERAL.—Except as otherwise provided in 
this Act, the Secretary shall, for each entitlement period, 
pay out of the Trust Fund to each unit of local govern-
ment a total amount equal to the entitlement of such unit 
determined under section 106 for such period. 
(b) INSTALLMENTS.—In the case of entitlement peri-
ods ending after the date of the enactment of this Act, 
such payments shall be made in installments, but not less 
often than once for each quarter, and, in the case of quar-
ters ending after the date of the enactment of this Act, 
shall be paid not later than 5 days after the close of each 
quarter. Such payments for any entitlement period may 
be initially made on the basis of estimates. Proper adjust-
ment shall be made in the amount of any payment to a 
unit of local government to the extent that the payments 
previously made to such government under this title were 
in excess of or less than the amounts required to be paid. 
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SEC. 103. USE OF FUNDS BY LOCAL GOVERNMENTS FOR 
PRIORITY EXPENDITURES. 
(a) IN GENERAL.—Funds received by units of local 
government under this title may be used only for priority 
expenditures. For purposes of this Act, the term ‘‘priority 
expenditures’’ means only— 
(1) ordinary and necessary maintenance and 
operating expenses for— 
(A) public safety (including law enforce-
ment, fire protection, and building code enforce-
ment); 
(B) environmental protection (including 
sewage disposal, sanitation, and pollution abate-
ment); 
(C) public transportation (including transit 
systems and streets and roads); 
(D) health; 
(E) recreation; 
(F) libraries; 
(G) social services for the poor or aged; 
and 
(H) financial administration; and 
(2) ordinary and necessary capital expenditures 
authorized by law. 
(b) CERTIFICATES BY LOCAL GOVERNMENTS.—The 
Secretary is authorized to accept a certification by the 
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chief executive officer of a unit of local government that 
the unit of local government has used the funds received 
by it under this title for an entitlement period only for 
priority expenditures, unless he determines that such cer-
tification is not sufficiently reliable to enable him to carry 
out his duties under this title. 
SEC. 104. CREATION OF TRUST FUND; APPROPRIATIONS. 
(a) TRUST FUND.— 
(1) IN GENERAL.—There is hereby established 
on the books of the Treasury of the United States 
a trust fund to be known as the ‘‘Local Government 
Fiscal Assistance Trust Fund’’ (referred to in this 
title as the ‘‘Trust Fund’’). The Trust Fund shall 
remain available without fiscal year limitation and 
shall consist of such amounts as may be appro-
priated to it and deposited in it as provided in sub-
section (b). Except as provided in this Act, amounts 
in the Trust Fund may be used only for the pay-
ments to local governments provided by this title. 
(2) TRUSTEE.—The Secretary of the Treasury 
shall be the trustee of the Trust Fund and shall re-
port to the Congress not later than March 1 of each 
year on the operation and status of the Trust Fund 
during the preceding fiscal year. 
(b) APPROPRIATIONS.— 
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local government located in the county area, 
and 
(B) that portion of each amount set aside 
under subparagraph (A) shall be allocated to 
each township government on the same basis as 
amounts are allocated to units of local govern-
ment under paragraph (2). 
If this paragraph applies with respect to any county 
area for any entitlement period, the remaining por-
tion allocated under paragraph (2) to the units of 
local government located in the county area (other 
than the county government and the township gov-
ernments) shall be appropriately reduced to reflect 
the amounts set aside under subparagraph (A). 
(4) INDIAN TRIBES AND ALASKAN NATIVE VIL-
LAGES.—If within a county area there is an Indian 
tribe or Alaskan native village which has a recog-
nized governing body which performs substantial 
governmental functions, then before applying para-
graph (1) there shall be allocated to such tribe or 
village a portion of the amount allocated to the 
county area for the entitlement period which bears 
the same ratio to such amount as the population of 
that tribe or village within that county area bears to 
the population of that county area. If this paragraph 
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applies with respect to any county area for any enti-
tlement period, the amount to be allocated under 
paragraph (1) shall be appropriately reduced to re-
flect the amount allocated under the preceding sen-
tence. If the entitlement of any such tribe or village 
is waived for any entitlement period by the gov-
erning body of that tribe or village, then the provi-
sions of this paragraph shall not apply with respect 
to the amount of such entitlement for such period. 
(5) RULE
FOR
SMALL
UNITS
OF
GOVERN-
MENT.—If the Secretary determines that in any 
county area the data available for any entitlement 
period are not adequate for the application of the 
formulas set forth in paragraphs (2) and (3)(B) 
with respect to units of local government (other than 
a county government) with a population below a 
number (not more than 500) prescribed for that 
county area by the Secretary, he may apply para-
graph (2) or (3)(B) by allocating for such entitle-
ment period to each such unit located in that county 
area an amount which bears the same ratio to the 
total amount to be allocated under paragraph (2) or 
(3)(B) for such entitlement period as the population 
of such unit bears to the population of all units of 
local government in that county area to which allo-
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cations are made under such paragraph. If the pre-
ceding sentence applies with respect to any county 
area, the total amount to be allocated under para-
graph (2) or (3)(B) to other units of local govern-
ment in that county area for the entitlement period 
shall be appropriately reduced to reflect the amounts 
allocated under the preceding sentence. 
(6) ENTITLEMENT.— 
(A) IN
GENERAL.—Except as otherwise 
provided in this paragraph, the entitlement of 
any unit of local government for any entitle-
ment period shall be the amount allocated to 
such unit under this subsection (after taking 
into account any applicable modification under 
subsection (c)). 
(B) MAXIMUM AND MINIMUM PER CAPITA 
ENTITLEMENT.—Subject to the provisions of 
subparagraphs (C) and (D), the per capita 
amount allocated to any county area or any 
unit of local government (other than a county 
government) within a State under this section 
for any entitlement period shall not be less than 
20 percent, nor more than 145 percent, of two- 
thirds of the amount allocated to the State 
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under section 105, divided by the population of 
that State. 
(C) LIMITATION.—The amount allocated 
to any unit of local government under this sec-
tion for any entitlement period shall not exceed 
50 percent of the sum of (i) such government’s 
adjusted taxes, and (ii) the intergovernmental 
transfers of revenue to such government (other 
than transfers to such government under this 
title). 
(D) ENTITLEMENT LESS THAN $1,000, OR 
GOVERNING
BODY
WAIVES
ENTITLEMENT.—If 
(but for this subparagraph) the entitlement of 
any unit of local government below the level of 
the county government— 
(i) would be less than $1,000 for any 
entitlement period ($500 for an entitle-
ment period of 6 months), or 
(ii) is waived for any entitlement pe-
riod by the governing body of such unit, 
then the amount of such entitlement for such 
period shall (in lieu of being paid to such unit) 
be added to, and shall become a part of, the en-
titlement for such period of the county govern-
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ment of the county area in which such unit is 
located. 
(7) ADJUSTMENT OF ENTITLEMENT.— 
(A) IN GENERAL.—In adjusting the alloca-
tion of any county area or unit of local govern-
ment, the Secretary shall make any adjustment 
required under paragraph (6)(B) first, any ad-
justment required under paragraph (6)(C) next, 
and any adjustment required under paragraph 
(6)(D) last. 
(B) ADJUSTMENT
FOR
APPLICATION
OF 
MAXIMUM OR MINIMUM PER CAPITA ENTITLE-
MENT.—The Secretary shall adjust the alloca-
tions made under this section to county areas 
or to units of local governments in any State in 
order to bring those allocations into compliance 
with the provisions of paragraph (6)(B). In 
making such adjustments he shall make any 
necessary adjustments with respect to county 
areas before making any necessary adjustments 
with respect to units of local government. 
(C) ADJUSTMENT
FOR
APPLICATION
OF 
LIMITATION.—In any case in which the amount 
allocated to a unit of local government is re-
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duced under paragraph (6)(C) by the Secretary, 
the amount of that reduction— 
(i) in the case of a unit of local gov-
ernment (other than a county government), 
shall be added to and increase the alloca-
tion of the county government of the coun-
ty area in which it is located, unless (on 
account of the application of paragraph 
(6)) that county government may not re-
ceive it, in which case the amount of the 
reduction shall be added to and increase 
the entitlement of the State government of 
the State in which that unit of local gov-
ernment is located; and 
(ii) in the case of a county govern-
ment, shall be added to and increase the 
entitlement of the State government of the 
State in which it is located. 
(c) SPECIAL ALLOCATION RULES.— 
(1) OPTIONAL FORMULA.—A State may by law 
provide for the allocation of funds among county 
areas, or among units of local government (other 
than county governments), on the basis of the popu-
lation multiplied by the general tax effort factors of 
such areas or units of local government, on the basis 
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of the population multiplied by the relative income 
factors of such areas or units of local government, 
or on the basis of a combination of those two fac-
tors. Any State which provides by law for such a 
variation in the allocation formula provided by sub-
section (a), or by paragraphs (2) and (3) of sub-
section (b), shall notify the Secretary of such law 
not later than 30 days before the beginning of the 
first entitlement period to which such law is to 
apply. Any such law shall— 
(A) provide for allocating 100 percent of 
the aggregate amount to be allocated under 
subsection (a), or under paragraphs (2) and (3) 
of subsection (b); 
(B) apply uniformly throughout the State; 
and 
(C) apply during the period beginning on 
the first day of the first entitlement period to 
which it applies and ending on September 30, 
2011. 
(2) CERTIFICATION.—Paragraph (1) shall apply 
within a State only if the Secretary certifies that the 
State law complies with the requirements of such 
paragraph. The Secretary shall not certify any such 
law with respect to which he receives notification 
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