I 
116TH CONGRESS 
1ST SESSION H. R. 4572 
To prohibit the provision of Federal funds to State and local governments 
for payment of obligations, to prohibit the Federal Reserve Banks, the 
Department of the Treasury, and other Federal agencies from financially 
assisting State and local governments that have defaulted on their obliga-
tions, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 27, 2019 
Mr. ROONEY of Florida introduced the following bill; which was referred to 
the Committee on Oversight and Reform, and in addition to the Com-
mittee on Financial Services, for a period to be subsequently determined 
by the Speaker, in each case for consideration of such provisions as fall 
within the jurisdiction of the committee concerned 
A BILL 
To prohibit the provision of Federal funds to State and 
local governments for payment of obligations, to prohibit 
the Federal Reserve Banks, the Department of the 
Treasury, and other Federal agencies from financially 
assisting State and local governments that have defaulted 
on their obligations, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
VerDate Sep 11 2014 
04:35 Oct 03, 2019
Jkt 099200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H4572.IH
H4572
kjohnson on DSK79L0C42 with BILLS
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Government Bailout 
Prevention Act’’. 
SEC. 2. DEFINITION. 
In this Act, the term ‘‘State’’ means— 
(1) any of the several States; 
(2) the District of Columbia; and 
(3) any territory or possession of the United 
States. 
SEC. 3. PROHIBITION ON THE USE OF FEDERAL FUNDS TO 
PAY OR GUARANTEE STATE AND LOCAL OBLI-
GATIONS. 
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, no Federal funds may be used to purchase 
or guarantee obligations of, issue lines of credit to, or pro-
vide direct or indirect grants-and-aid to, any State govern-
ment, municipal government, local government, or county 
government which, on or after January 1, 2019, has filed 
for bankruptcy, 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 Sec-
retary 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 
VerDate Sep 11 2014 
04:35 Oct 03, 2019
Jkt 099200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H4572.IH
H4572
kjohnson on DSK79L0C42 with BILLS
government, local government, or county government, or 
otherwise to assist such government entity, if, on or after 
January 1, 2019, that State government, municipal gov-
ernment, or county government has defaulted on its obli-
gations, has filed for bankruptcy, is at risk of defaulting, 
or is likely to default, absent such assistance from the 
United States Government. 
(c) PROHIBITION ON FEDERAL RESERVE ASSIST-
ANCE.—Notwithstanding any other provision of law, no 
Federal Reserve Bank may provide or extend to, or au-
thorize with respect to, any State government, municipal 
government, local government, county government, or 
other entity that has taxing authority or bonding author-
ity, any funds, loan guarantees, credits, or any other fi-
nancial instrument, including the purchasing of the bonds 
of such State, municipality, locality, county, or other bond-
ing authority, or to otherwise assist such government enti-
ty under any authority of any Federal Reserve Bank. 
(d) LIMITATION.—Subsections (a) through (c) shall 
not apply to Federal assistance provided in response to 
a declared disaster. 
SEC. 4. APPLICABILITY. 
The prohibition under section 3— 
(1) includes debt restructuring or any other re-
lated activity; and 
VerDate Sep 11 2014 
04:35 Oct 03, 2019
Jkt 099200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H4572.IH
H4572
kjohnson on DSK79L0C42 with BILLS
(2) does not include— 
(A) any discretionary appropriations or di-
rect spending, as those terms are defined in 
section 250(c) of the Balanced Budget and 
Emergency Deficit Control Act of 1985 (2 
U.S.C. 900(c)); and 
(B) any grant awarded by the United 
States to the State government, municipal gov-
ernment, local government, or county govern-
ment. 
Æ 
VerDate Sep 11 2014 
04:35 Oct 03, 2019
Jkt 099200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6301
E:\BILLS\H4572.IH
H4572
kjohnson on DSK79L0C42 with BILLS