Title II, Subtitle A
‘‘(ii) subparagraph (C)(iii) of sub-
section (b)(2) shall apply as if the ref-
erence to ‘60 percent’ were a reference to
‘40 percent’; and
‘‘(iii) no advance may be made unless
the Secretary has been provided the certifi-
cations and information described in para-
graphs (3) through (6) of section 602(b).
‘‘SEC. 602. SHORT-TERM ADVANCES FOR SEASONAL CASH-
FLOW MANAGEMENT.
‘‘(a) IN GENERAL.—If the conditions in subsection
(b) are satisfied, the Secretary shall make an advance of
funds from time to time, out of any money in the Treasury
not otherwise appropriated, for the purpose of assisting
the District government in meeting its general expendi-
tures, as authorized by Congress, at times of seasonal
cash-flow deficiencies.
‘‘(b) CONDITIONS TO MAKING ANY SHORT-TERM AD-
VANCE.—The Secretary shall make an advance under this
section if—
‘‘(1) the Mayor delivers to the Secretary a req-
uisition for an advance under this section;
‘‘(2) the date on which the requisitioned ad-
vance is to be made is in a control period;
Title II, Subtitle A
‘‘(3) the Authority certifies to the Secretary
that—
‘‘(A) the District government has prepared
and submitted a financial plan and budget for
the District government;
‘‘(B) there is an approved financial plan
and budget in effect under the District of Co-
lumbia Financial Responsibility and Manage-
ment Assistance Act of 1995 for the fiscal year
for the fiscal year for which the requisition is
to be made;
‘‘(C) at the time of the Mayor’s requisition
for an advance, the District government is in
compliance with the financial plan and budget;
‘‘(D) both the receipt of funds from such
advance and the reimbursement of Treasury for
such advance are consistent with the financial
plan and budget for the year; and
‘‘(E) such advance will not adversely affect
the financial stability of the District govern-
ment;
‘‘(4) the Authority certifies to the Secretary, at
the time of the Mayor’s requisition for an advance,
the District government is effectively unable to ob-
tain credit in the public credit markets or elsewhere
Title II, Subtitle A
in sufficient amounts and on sufficiently reasonable
terms to meet the District government’s financing
needs;
‘‘(5) the Inspector General of the District of
Columbia certifies to the Secretary the information
described in paragraph (3) by providing the Sec-
retary with a certification conducted by an outside
auditor under a contract entered into pursuant to
section 208(a)(4) of the District of Columbia Pro-
curement Practices Act of 1985;
‘‘(6) the Secretary receives such additional cer-
tifications and opinions relating to the financial posi-
tion of the District government as the Secretary de-
termines to be appropriate from such other Federal
agencies and instrumentalities as the Secretary de-
termines to be appropriate; and
‘‘(7) the Secretary determines that there is rea-
sonable assurance of reimbursement for the advance
from the amount authorized to be appropriated as
the annual Federal payment to the District of Co-
lumbia under title V of the District of Columbia
Self-Government and Governmental Reorganization
Act for the fiscal year following the fiscal year in
which such advance is made.
‘‘(c) AMOUNT OF ANY SHORT-TERM ADVANCE.—
Title II, Subtitle A
‘‘(1) IN GENERAL.—Except as provided in para-
graph (3), if the conditions in paragraph (2) are sat-
isfied, each advance made under this section shall be
in the amount designated by the Mayor in the May-
or’s requisition for such advance.
‘‘(2) CONDITIONS APPLICABLE TO DESIGNATED
AMOUNT.—Paragraph (1) applies if—
‘‘(A) the Mayor determines that the
amount designated in the Mayor’s requisition
for such advance is needed to accomplish the
purpose described in subsection (a); and
‘‘(B) the Authority—
‘‘(i) concurs in the Mayor’s deter-
mination under subparagraph (A); and
‘‘(ii) determines that the reimburse-
ment obligation of the District government
for an advance made under this section in
the amount designated in the Mayor’s req-
uisition is consistent with the financial
plan for the year.
‘‘(3) MAXIMUM AMOUNT OUTSTANDING.—Not-
withstanding paragraph (1), the unpaid principal
balance of all advances made under this section in
any fiscal year of the District government shall not
at any time be greater than 150 percent of the
Title II, Subtitle A
amount authorized under title V of the District of
Columbia Self-Government and Governmental Reor-
ganization Act for appropriation as the Federal pay-
ment to the District government for the fiscal year
following the fiscal year in which the advance is
made.
‘‘(d) MATURITY OF ANY SHORT-TERM ADVANCE.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (3), if the condition in paragraph (2) is satis-
fied, each advance made under this section shall ma-
ture on the date designated by the Mayor in the
Mayor’s requisition for such advance.
‘‘(2) CONDITION APPLICABLE TO DESIGNATED
MATURITY.—Paragraph (1) applies if the Authority
determines that the reimbursement obligation of the
District government for an advance made under this
section having the maturity date designated in the
Mayor’s requisition is consistent with the financial
plan for the year.
‘‘(3) LATEST PERMISSIBLE MATURITY DATE.—
Notwithstanding paragraph (1), the maturity date
for any advance made under this section shall not be
later than 11 months after the date on which such
advance is made.
Title II, Subtitle A
‘‘(e) INTEREST RATE.—Each advance made under
this section shall bear interest at an annual rate equal to
a rate determined by the Secretary at the time that the
Secretary makes such advance taking into consideration
the prevailing yield on outstanding marketable obligations
of the United States with remaining periods to maturity
comparable to the maturity of such advance, plus 1⁄8 of
1 percent.
‘‘(f) 10 BUSINESS-DAY ZERO BALANCE REQUIRE-
MENT.—After the expiration of the 12-month period be-
ginning on the date on which the first advance is made
under this section, the Secretary shall not make any new
advance under this section unless the District government
has—
‘‘(1) reduced to zero at the same time the prin-
cipal balance of all advances made under this section
at least once during the previous 12-month period;
and
‘‘(2) not requisitioned any advance to be made
under this section in any of the 10 business days fol-
lowing such reduction.
‘‘(g) DEPOSIT OF ADVANCES.—As provided in section
204(b) of the District of Columbia Financial Responsibil-
ity and Management Assistance Act of 1995, advances
made under this section for the account of the District
Title II, Subtitle A
‘‘(2) EXCEPTIONS
FOR
TRANSITIONAL
AD-
VANCES.—
‘‘(A) ADVANCES MADE BEFORE OCTOBER
1, 1995.—
‘‘(i) FINANCIAL
PLAN
AND
BUDGET
APPROVED.—If the Authority approves a
financial plan for the District government
before October 1, 1995, the District gov-
ernment may use the proceeds of any ad-
vance made under section 602 to discharge
its obligation to reimburse the Treasury
for any advance made under section
601(a).
‘‘(ii) FINANCIAL PLAN AND BUDGET
NOT APPROVED.—If the Authority has not
approved a financial plan and budget for
the District government by October 1,
1995, the annual Federal payment appro-
priated to the District government for the
fiscal year ending September 30, 1996,
shall be withheld and applied to discharge
the District government’s obligation to re-
imburse the Treasury for any advance
made under section 601(a).
Title II, Subtitle A
‘‘(B) ADVANCES MADE ON OR AFTER OC-
TOBER 1, 1995.—
‘‘(i) FINANCIAL
PLAN
AND
BUDGET
APPROVED.—If the Authority approves a
financial plan and budget for the District
government during fiscal year 1996, the
District may use the proceeds of any ad-
vance made under section 602 to discharge
its obligation to reimburse the Treasury
for any advance made under section
601(b).
‘‘(ii) FINANCIAL PLAN AND BUDGET
NOT APPROVED.—If the Authority has not
approved a financial plan and budget for
the District government by October 1,
1996, the annual Federal payment appro-
priated to the District government for the
fiscal year ending September 30, 1997,
shall be withheld and applied to discharge
the District government’s obligation to re-
imburse the Treasury for any advance
made under section 601(b).
‘‘(b) REMEDIES FOR FAILURE TO REIMBURSE.—If,
on any date on which a reimbursement payment is due
to the Treasury under the terms of any advance made
Title II, Subtitle A
under this title, the District government does not make
such reimbursement payment, the Secretary shall take the
actions listed in this subsection.
‘‘(1) 
WITHHOLD
ANNUAL
FEDERAL
PAY-
MENT.—Notwithstanding any other law, before turn-
ing over to the Authority (on behalf of the District
government under section 205 of the District of Co-
lumbia Financial Responsibility and Management
Assistance Act of 1995) any annual Federal pay-
ment appropriated to the District government for
any fiscal year under title V of the District of Co-
lumbia Self-Government and Governmental Reorga-
nization Act, the Secretary shall withhold from such
annual Federal payment, and apply toward reim-
bursement for the payment not made, an amount
equal to the amount needed to fully reimburse the
Treasury for the payment not made.
‘‘(2) 
WITHHOLD
OTHER
FEDERAL
PAY-
MENTS.—If, after the Secretary takes the action de-
scribed in paragraph (1), the Treasury is not fully
reimbursed, the Secretary shall withhold from each
grant, entitlement, loan, or other payment to the
District government by the Federal Government not
dedicated to making entitlement or benefit payments
to individuals, and apply toward reimbursement for
Title II, Subtitle A
the payment not made, an amount that, when added
to the amount withheld from each other such grant,
entitlement, loan, or other payment, will be equal to
the amount needed to fully reimburse the Treasury
for the payment not made.
‘‘(3) ATTACH
AVAILABLE
DISTRICT
REVE-
NUES.—If, after the Secretary takes the actions de-
scribed in paragraphs (1) and (2), the Treasury is
not fully reimbursed, the Secretary shall attach any
and all revenues of the District government which
the Secretary may lawfully attach, and apply toward
reimbursement for the payment not made, an
amount equal to the amount needed to fully reim-
burse the Treasury for the payment not made.
‘‘(4) TAKE OTHER ACTIONS.—If, after the Sec-
retary takes the actions described in paragraphs (1)
through (3), the Treasury is not fully reimbursed,
the Secretary shall take any and all other actions
permitted by law to recover from the District gov-
ernment the amount needed to fully reimburse the
Treasury for the payment not made.
‘‘SEC. 605. DEFINITIONS.
‘‘For purposes of this title—
‘‘(1) the term ‘Authority’ means the District of
Columbia Financial Responsibility and Management
Title II, Subtitle A
Assistance Authority established under section
101(a) of the District of Columbia Financial Re-
sponsibility and Management Assistance Act of
1995;
‘‘(2) the term ‘control period’ has the meaning
given such term under section 305(4) of such Act;
‘‘(3) the term ‘District government’ has the
meaning given such term under section 305(5) of
such Act;
‘‘(4) the term ‘financial plan and budget’ has
the meaning given such term under section 305(6)
of such Act; and
‘‘(5) the term ‘Secretary’ means the Secretary
of the Treasury.’’.
(d) EXPENDITURE OF FUNDS FROM ACCOUNT IN
ACCORDANCE WITH AUTHORITY INSTRUCTIONS.—Any
funds allocated by the Authority to the Mayor from the
escrow account described in subsection (b)(1) may be ex-
pended by the Mayor only in accordance with the terms
and conditions established by the Authority at the time
the funds are allocated.
(e) PROHIBITION AGAINST BORROWING WHILE SUIT
PENDING.—The Mayor may not requisition advances from
the Treasury pursuant to title VI of the District of Colum-
bia Revenue Act of 1939 if there is an action filed by the
Title II, Subtitle A
Mayor or the Council which is pending against the Author-
ity challenging the establishment of or any action taken
by the Authority.
SEC. 205. DEPOSIT OF ANNUAL FEDERAL PAYMENT WITH
AUTHORITY.
(a) IN GENERAL.—
(1) DEPOSIT INTO ESCROW ACCOUNT.—In the
case of a fiscal year which is a control year, the Sec-
retary of the Treasury shall deposit the annual Fed-
eral payment to the District of Columbia for the
year authorized under title V of the District of Co-
lumbia Self-Government and Governmental Reorga-
nization Act into an escrow account held by the Au-
thority, which shall allocate the funds to the Mayor
at such intervals and in accordance with such terms
and conditions as it considers appropriate to imple-
ment the financial plan for the year. In establishing
such terms and conditions, the Authority shall give
priority to using the Federal payment for cash flow
management and the payment of outstanding bills
owed by the District government.
(2) EXCEPTION FOR AMOUNTS WITHHELD FOR
ADVANCES.—Paragraph (1) shall not apply with re-
spect to any portion of the Federal payment which
is withheld by the Secretary of the Treasury in ac-
Title II, Subtitle A
cordance with section 604 of title VI of the District
of Columbia Revenue Act of 1939 to reimburse the
Secretary for advances made under title VI of such
Act.
(b) EXPENDITURE OF FUNDS FROM ACCOUNT IN AC-
CORDANCE
WITH
AUTHORITY
INSTRUCTIONS.—Any
funds allocated by the Authority to the Mayor from the
escrow account described in paragraph (1) may be ex-
pended by the Mayor only in accordance with the terms
and conditions established by the Authority at the time
the funds are allocated.
SEC. 206. EFFECT OF FINDING OF NON-COMPLIANCE WITH
FINANCIAL PLAN AND BUDGET.
(a) SUBMISSION OF REPORTS.—Not later than 30
days after the expiration of each quarter of each fiscal
year (beginning with fiscal year 1996), the Mayor shall
submit reports to the Authority describing the actual reve-
nues obtained and expenditures made by the District gov-
ernment during the quarter with its cash flows during the
quarter, and comparing such actual revenues, expendi-
tures, and cash flows with the most recent projections for
these items.
(b) DEMAND FOR ADDITIONAL INFORMATION.—If
the Authority determines, based on reports submitted by
the Mayor under subsection (a), independent audits, or
Title II, Subtitle A
such other information as the Authority may obtain, that
the revenues or expenditures of the District government
during a control year are not consistent with the financial
plan and budget for the year, the Authority shall require
the Mayor to provide such additional information as the
Authority determines to be necessary to explain the incon-
sistency.
(c) CERTIFICATION OF VARIANCE.—
(1) IN GENERAL.—After requiring the Mayor to
provide additional information under subsection (b),
the Authority shall certify to the Council, the Presi-
dent, the Secretary of the Treasury, and Congress
that the District government is at variance with the
financial plan and budget unless—
(A)(i) the additional information provides
an explanation for the inconsistency which the
Authority finds reasonable and appropriate, or
(ii) the District government adopts or im-
plements remedial action (including revising the
financial plan and budget pursuant to section
202(e)) to correct the inconsistency which the
Authority finds reasonable and appropriate,
taking into account the terms of the financial
plan and budget; and
Title II, Subtitle A
(B) the Mayor agrees to submit the re-
ports described in subsection (a) on a monthly
basis for such period as the Authority may
require.
(2) SPECIAL RULE FOR INCONSISTENCIES AT-
TRIBUTABLE TO ACTS OF CONGRESS.—
(A) DETERMINATION BY AUTHORITY.—If
the Authority determines that the revenues or
expenditures of the District government during
a control year are not consistent with the finan-
cial plan and budget for the year as approved
by the Authority under section 202 as a result
of the terms and conditions of the budget of the
District government for the year as enacted by
Congress or as a result of any other law en-
acted by Congress which affects the District of
Columbia, the Authority shall so notify the
Mayor.
(B) CERTIFICATION.—In the case of an in-
consistency described in subparagraph (A), the
Authority shall certify to the Council, the Presi-
dent, the Secretary of the Treasury, and Con-
gress that the District government is at vari-
ance with the financial plan and budget unless
the District government adopts or implements
Title II, Subtitle A
remedial action (including revising the financial
plan and budget pursuant to section 202(e)) to
correct the inconsistency which the Authority
finds reasonable and appropriate, taking into
account the terms of the financial plan and
budget.
(d) EFFECT OF CERTIFICATION.—If the Authority
certifies to the Secretary of the Treasury that a variance
exists—
(1) the Authority may withhold any funds de-
posited with the Authority under section 204(b) or
section 205(a) which would otherwise be expended
on behalf of the District government; and
(2) the Secretary shall withhold funds otherwise
payable to the District of Columbia under such Fed-
eral programs as the Authority may specify (other
than funds dedicated to making entitlement or bene-
fit payments to individuals), in such amounts and
under such other conditions as the Authority may
specify.
SEC. 207. RECOMMENDATIONS ON FINANCIAL STABILITY
AND MANAGEMENT RESPONSIBILITY.
(a) IN GENERAL.—The Authority may at any time
submit recommendations to the Mayor, the Council, the
President, and Congress on actions the District govern-
Title II, Subtitle A
ment or the Federal Government may take to ensure com-
pliance with a financial plan and budget or to otherwise
promote the financial stability, management responsibility,
and service delivery efficiency of the District government,
including recommendations relating to—
(1) the management of the District govern-
ment’s financial affairs, including cash forecasting,
information technology, placing controls on expendi-
tures for personnel, reducing benefit costs, reforming
procurement practices, and placing other controls on
expenditures;
(2) the relationship between the District gov-
ernment and the Federal Government;
(3) the structural relationship of departments,
agencies, and independent agencies within the Dis-
trict government;
(4) the modification of existing revenue struc-
tures, or the establishment of additional revenue
structures;
(5) the establishment of alternatives for meet-
ing obligations to pay for the pensions of former
District government employees;
(6) modifications or transfers of the types of
services which are the responsibility of and are deliv-
ered by the District government;
Title II, Subtitle A
(7) modifications of the types of services which
are delivered by entities other than the District gov-
ernment under alternative service delivery mecha-
nisms (including privatization and commercializa-
tion);
(8) the effects of District of Columbia laws and
court orders on the operations of the District gov-
ernment;
(9) the establishment of a personnel system for
employees of the District government which is based
upon employee performance standards; and
(10) the improvement of personnel training and
proficiency, the adjustment of staffing levels, and
the improvement of training and performance of
management and supervisory personnel.
(b) RESPONSE TO RECOMMENDATIONS FOR ACTIONS
WITHIN AUTHORITY OF DISTRICT GOVERNMENT.—
(1) IN
GENERAL.—In the case of any rec-
ommendations submitted under subsection (a) dur-
ing a control year which are within the authority of
the District government to adopt, not later than 90
days after receiving the recommendations, the Mayor
or the Council (whichever has the authority to adopt
the recommendation) shall submit a statement to the
Authority, the President, and Congress which pro-
Title II, Subtitle A
vides notice as to whether the District government
will adopt the recommendations.
(2) IMPLEMENTATION
PLAN
REQUIRED
FOR
ADOPTED RECOMMENDATIONS.—If the Mayor or the
Council (whichever is applicable) notifies the Author-
ity and Congress under paragraph (1) that the Dis-
trict government will adopt any of the recommenda-
tions submitted under subsection (a), the Mayor or
the Council (whichever is applicable) shall include in
the statement a written plan to implement the rec-
ommendation which includes—
(A) specific performance measures to de-
termine the extent to which the District govern-
ment has adopted the recommendation; and
(B) a schedule for auditing the District
government’s compliance with the plan.
(3) 
EXPLANATIONS
REQUIRED
FOR
REC-
OMMENDATIONS
NOT
ADOPTED.—If the Mayor or
the Council (whichever is applicable) notifies the Au-
thority, the President, and Congress under para-
graph (1) that the District government will not
adopt any recommendation submitted under sub-
section (a) which the District government has au-
thority to adopt, the Mayor or the Council shall in-
Title II, Subtitle A
clude in the statement explanations for the rejection
of the recommendations.
(c) IMPLEMENTATION OF REJECTED RECOMMENDA-
TIONS BY AUTHORITY.—
(1) IN GENERAL.—If the Mayor or the Council
(whichever is applicable) notifies the Authority, the
President, and Congress under subsection (b)(1)
that the District government will not adopt any rec-
ommendation submitted under subsection (a) which
the District government has authority to adopt, the
Authority may by a majority vote of its members
take such action concerning the recommendation as
it deems appropriate, after consulting with the Com-
mittee on Government Reform and Oversight of the
House of Representatives and the Committee on
Governmental Affairs of the Senate.
(2) EFFECTIVE
DATE.—This subsection shall
apply with respect to recommendations of the Au-
thority made after the expiration of the 6-month pe-
riod which begins on the date of the enactment of
this Act.
SEC. 208. SPECIAL RULES FOR FISCAL YEAR 1996.
(a) ADOPTION
OF TRANSITION BUDGET.—In the
case of fiscal year 1996, the following rules shall apply:
Title II, Subtitle A
(1) Not later than 45 days after the appoint-
ment of its members, the Authority shall review the
proposed budget for the District of Columbia for
such fiscal year submitted to Congress under section
446 of the District of Columbia Self-Government
and Governmental Reorganization Act (taking into
account any items or provisions disapproved by the
Mayor or disapproved by the Mayor and reenacted
by the Council under section 404(f) of the District
of Columbia Self-Government and Governmental Re-
organization Act, as amended by section 202(f)(3))
and the multiyear plan for the District of Columbia
prepared pursuant to section 443 of the District of
Columbia Self-Government and Governmental Reor-
ganization Act, and shall submit any recommenda-
tions for modifications to such financial plan and
budget to promote the financial stability of the Dis-
trict government to the Mayor, the Council, the
President, and Congress.
(2) Not later than 15 days after receiving the
recommendations of the Authority submitted under
paragraph (1), the Council (in consultation with the
Mayor) shall promptly adopt a revised budget for
the fiscal year (in this section referred to as the
‘‘transition budget’’), and shall submit the transition
Title II, Subtitle A
budget to the Authority, the President, and Con-
gress.
(3) Not later than 15 days after receiving the
transition budget from the Council under paragraph
(2), the Authority shall submit a report to the
Mayor, the Council, the President, and Congress
analyzing the budget (taking into account any items
or provisions disapproved by the Mayor or dis-
approved by the Mayor and reenacted by the Council
under section 404(f) of the District of Columbia
Self-Government and Governmental Reorganization
Act, as amended by section 202(f)(3)), and shall in-
clude in the report such recommendations for revi-
sions to the transition budget as the Authority con-
siders appropriate to promote the financial stability
of the District government during the fiscal year.
(b) FINANCIAL PLAN AND BUDGET.—
(1) DEADLINE FOR SUBMISSION.—For purposes
of section 202, the Mayor shall submit the financial
plan and budget for fiscal year 1996 as soon as
practicable after the date of the enactment of this
Act (in accordance with guidelines established by the
Authority).
(2) ADOPTION
BY
COUNCIL.—In accordance
with the procedures applicable under section 202
Title II, Subtitle A
(including procedures providing for review by the
Authority)—
(A) the Council shall adopt the financial
plan and budget for the fiscal year (including
the supplemental budget incorporated in the fi-
nancial plan and budget) prior to the submis-
sion by the Mayor of the financial plan and
budget for fiscal year 1997 under section
202(a); and
(B) the financial plan and budget adopted
by the Council (and, in the case of a financial
plan and budget disapproved by the Authority,
together with the financial plan and budget ap-
proved and recommended by the Authority)
shall be submitted to Congress (in accordance
with the procedures applicable under such sec-
tion) as a supplemental budget request for fis-
cal year 1996 (in accordance with section 446
of the District of Columbia Self-Government
and Governmental Reorganization Act).
(3) TRANSITION
BUDGET
AS
TEMPORARY
FI-
NANCIAL PLAN AND BUDGET.—Until the approval of
the financial plan and budget for fiscal year 1996 by
the Authority under this subsection, the transition
budget established under subsection (a) (as enacted
Title II, Subtitle A
by Congress) shall serve as the financial plan and
budget adopted under this subtitle for purposes of
this Act (and any provision of law amended by this
Act) for fiscal year 1996.
(c) RESTRICTIONS
ON ADVANCES FROM TREAS-
URY.—
(1) MONTHLY DETERMINATION OF PROGRESS
TOWARD
FINANCIAL
PLAN
AND
BUDGET.—During
each month of fiscal year 1996 prior to the adoption
of the financial plan and budget, the Authority shall
determine whether the District government is mak-
ing appropriate progress in preparing and adopting
a financial plan and budget for the fiscal year under
this subtitle.
(2) CERTIFICATION.—The Authority shall pro-
vide the President and Congress with a certification
if the Authority finds that the District government
is not making appropriate progress in developing the
financial plan and budget for a month, and shall no-
tify the President and Congress that the certification
should be canceled if the Authority finds that the
District government is making such progress after
the certification is provided.
(3) PROHIBITION AGAINST ALLOCATION OF AD-
VANCES
IF
CERTIFICATION
IN
EFFECT.—At any
100
Title II, Subtitle A
time during which a certification under paragraph
(2) is in effect, Authority may not allocate any funds
obtained through advances to the Mayor under title
VI of the District of Columbia Revenue Act of 1939
from the escrow account in which the funds are held.
SEC. 209. CONTROL PERIODS DESCRIBED.
(a) INITIATION.—For purposes of this Act, a ‘‘control
period’’ is initiated upon the occurrence of any of the fol-
lowing events (as determined by the Authority based upon
information obtained through the Mayor, the Inspector
General of the District of Columbia, or such other sources
as the Authority considers appropriate):
(1) The requisitioning by the Mayor of ad-
vances from the Treasury of the United States for
the support of the District government under title
VI of the District of Columbia Revenue Act of 1939
(sec. 47–3401, D.C. Code), or the existence of any
unreimbursed amounts obtained pursuant to such
authority.
(2) The failure of the District government to
provide sufficient revenue to a debt service reserve
fund of the Authority under subtitle B of title II.
(3) The default by the District government with
respect to any loans, bonds, notes, or other form of
borrowing.
101
Title II, Subtitle A
(4) The failure of the District government to
meet its payroll for any pay period.
(5) The existence of a cash deficit of the Dis-
trict government at the end of any quarter of the
fiscal year in excess of the difference between the es-
timated revenues of the District government and the
estimated expenditures of the District government
(including repayments of temporary borrowings)
during the remainder of the fiscal year or the re-
mainder of the fiscal year together with the first 6
months of the succeeding fiscal year (as determined
by the Authority in consultation with the Chief Fi-
nancial Officer of the District of Columbia).
(6) The failure of the District government to
make required payments relating to pensions and
benefits for current and former employees of the
District government.
(7) The failure of the District government to
make required payments to any entity established
under an interstate compact to which the District of
Columbia is a signatory.
(b) TERMINATION.—
(1) IN GENERAL.—A control period terminates
upon the certification by the Authority that—
102
Title II, Subtitle A
(A) the District government has adequate
access to both short-term and long-term credit
markets at reasonable interest rates to meet its
borrowing needs; and
(B) for 4 consecutive fiscal years (occur-
ring after the date of the enactment of this Act)
the expenditures made by the District govern-
ment during each of the years did not exceed
the revenues of the District government during
such years (as determined in accordance with
generally accepted accounting principles, as
contained in the comprehensive annual financial
report for the District of Columbia under sec-
tion 448(a)(4) of the District of Columbia Self-
Government and Governmental Reorganization
Act).
(2) CONSULTATION
WITH
INSPECTOR
GEN-
ERAL.—In making the determination under this sub-
section, the Authority shall consult with the Inspec-
tor General of the District of Columbia.
(c) CONTROL PERIOD DEEMED TO EXIST UPON EN-
ACTMENT.—For purposes of this subtitle, a control period
is deemed to exist upon the enactment of this Act.
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Title II, Subtitle B
Subtitle B—Issuance of Bonds
SEC. 211. AUTHORITY TO ISSUE BONDS.
(a) IN GENERAL.—
(1) REQUEST OF MAYOR.—Subject to the re-
quirements of this subtitle, the Authority may at the
request of the Mayor pursuant to an act of the
Council issue bonds, notes, or other obligations to
borrow funds to obtain funds for the use of the Dis-
trict government, in such amounts and in such man-
ner as the Authority considers appropriate.
(2) SPECIAL
RULE
FOR
INSTRUMENTALITIES
WITH
INDEPENDENT
BORROWING
AUTHORITY.—In
the case of an agency or instrumentality of the Dis-
trict government which under law has the authority
to issue bonds, notes, or obligations to borrow funds
without the enactment of an act of the Council, the
Authority may issue bonds, notes, or other obliga-
tions to borrow funds for the use or functions of
such agency or instrumentality at the request of the
head of the agency or instrumentality.
(b) DEPOSIT OF FUNDS OBTAINED THROUGH BOR-
ROWING WITH AUTHORITY.—Any funds obtained by the
District government through borrowing by the Authority
pursuant to this subtitle shall be deposited into an escrow
account held by the Authority, which shall allocate such
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Title II, Subtitle B
funds to the District government in such amounts and at
such times as the Authority considers appropriate, consist-
ent with the specified purposes of such funds and the ap-
plicable financial plan and budget under subtitle A.
(c) USES OF FUNDS OBTAINED THROUGH BONDS.—
Any funds obtained through the issuance of bonds, notes,
or other obligations pursuant to this subtitle may be used
for any purpose (consistent with the applicable financial
plan and budget) under subtitle A for which the District
government may use borrowed funds under the District
of Columbia Self-Government and Governmental Reorga-
nization Act and for any other purpose which the Author-
ity considers appropriate.
SEC. 212. PLEDGE OF SECURITY INTEREST IN REVENUES
OF DISTRICT GOVERNMENT.
(a) IN GENERAL.—The Authority may pledge or
grant a security interest in revenues to individuals or enti-
ties purchasing bonds, notes, or other obligations issued
pursuant to this subtitle.
(b) DEDICATION OF REVENUE STREAM FROM DIS-
TRICT GOVERNMENT.—The Authority shall require the
Mayor—
(1) to pledge or direct taxes or other revenues
otherwise payable to the District government (which
are not otherwise pledged or committed), including
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Title II, Subtitle B
payments from the Federal Government, to the Au-
thority for purposes of securing repayment of bonds,
notes, or other obligations issued pursuant to this
subtitle; and
(2) to transfer the proceeds of any tax levied
for purposes of securing such bonds, notes, or other
obligations to the Authority immediately upon collec-
tion.
SEC. 213. ESTABLISHMENT OF DEBT SERVICE RESERVE
FUND.
(a) IN GENERAL.—As a condition for the issuance
of bonds, notes, or other obligations pursuant to this sub-
title, the Authority shall establish a debt service reserve
fund in accordance with this section.
(b) REQUIREMENTS FOR FUND.—
(1) FUND DESCRIBED.—A debt service reserve
fund established by the Authority pursuant to this
subsection shall consist of such funds as the Author-
ity may make available, and shall be a trust fund
held for the benefit and security of the obligees of
the Authority whose bonds, notes, or other obliga-
tions are secured by such fund.
(2) USES OF FUNDS.—Amounts in a debt serv-
ice reserve fund may be used solely for the payment
of the principal of bonds secured in whole or in part
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Title II, Subtitle B
by such fund, the purchase or redemption of such
bonds, the payment of interest on such bonds, or the
payment of any redemption premium required to be
paid when such bonds and notes are redeemed prior
to maturity.
(3) RESTRICTIONS ON WITHDRAWALS.—
(A) IN
GENERAL.—Amounts in a debt
service reserve fund may not be withdrawn from
the fund at any time in an amount that would
reduce the amount of the fund to less than the
minimum reserve fund requirement established
for such fund in the resolution of the Authority
creating such fund, except for withdrawals for
the purpose of making payments when due of
principal, interest, redemption premiums and
sinking fund payments, if any, with respect to
such bonds for the payment of which other
moneys of the Authority are not available, and
for the purpose of funding the operations of the
Authority for a fiscal year (in such amounts
and under such conditions as are established
under the budget of the Authority for the fiscal
year under section 106(a)).
(B) USE OF EXCESS FUNDS.—Nothing in
subparagraph (A) may be construed to prohibit
110
Title II, Subtitle C
(4) The Authority shall carry out activities
under subtitle B with respect to bonds, notes, or
other obligations of the Authority outstanding dur-
ing such period.
(b) REQUIRING MAYOR TO SUBMIT BUDGETS TO AU-
THORITY.—With respect to the budget for each fiscal year
beginning after the date of the enactment of this Act
which is not a control year, at the time the Mayor submits
the budget of the District government adopted by the
Council to the President under section 446 of the District
of Columbia Self-Government and Governmental Reorga-
nization Act, the Mayor shall submit such budget to the
Authority.
SEC. 222. GENERAL ASSISTANCE IN ACHIEVING FINANCIAL
STABILITY AND MANAGEMENT EFFICIENCY.
In addition to any other actions described in this title,
the Authority may undertake cooperative efforts to assist
the District government in achieving financial stability
and management efficiency, including—
(1) assisting the District government in avoid-
ing defaults, eliminating and liquidating deficits,
maintaining sound budgetary practices, and avoiding
interruptions in the delivery of services;
(2) assisting the District government in improv-
ing the delivery of municipal services, the training
111
Title II, Subtitle C
and effectiveness of personnel of the District govern-
ment, and the efficiency of management and super-
vision; and
(3) making recommendations to the President
for transmission to Congress on changes to this Act
or other Federal laws, or other actions of the Fed-
eral Government, which would assist the District
government in complying with an approved financial
plan and budget under subtitle A.
SEC. 223. OBTAINING REPORTS.
The Authority may require the Mayor, the Chair of
the Council, the Chief Financial Officer of the District of
Columbia, and the Inspector General of the District of Co-
lumbia, to prepare and submit such reports as the Author-
ity considers appropriate to assist it in carrying out its
responsibilities under this Act, including submitting copies
of any reports regarding revenues, expenditures, budgets,
costs, plans, operations, estimates, and other financial or
budgetary matters of the District government.
SEC. 224. REPORTS AND COMMENTS.
(a) ANNUAL REPORTS
TO CONGRESS.—Not later
than 30 days after the last day of each fiscal year which
is a control year, the Authority shall submit a report to
Congress describing—
112
Title II, Subtitle C
(1) the progress made by the District govern-
ment in meeting the objectives of this Act during the
fiscal year;
(2) the assistance provided by the Authority to
the District government in meeting the purposes of
this Act for the fiscal year; and
(3) any other activities of the Authority during
the fiscal year.
(b) REVIEW AND ANALYSIS OF PERFORMANCE AND
FINANCIAL ACCOUNTABILITY REPORTS.—
(1) IN GENERAL.—The Authority shall review
each report prepared and submitted by the Mayor
under section 456 of the District of Columbia Self-
Government and Governmental Reorganization Act
(as added by section 3(a) of the Federal Payment
Reauthorization Act of 1994), and shall submit a re-
port to Congress analyzing the completeness and ac-
curacy of such reports.
(2) SUBMISSION OF REPORTS BY MAYOR.—Sec-
tion 456 of the District of Columbia Self-Govern-
ment and Governmental Reorganization Act, as
added by section 3(a) of the Federal Payment Reau-
thorization Act of 1994, is amended by adding at
the end the following new subsection:
113
Title II, Subtitle C
‘‘(e) SUBMISSION OF REPORTS TO DISTRICT OF CO-
LUMBIA FINANCIAL RESPONSIBILITY AND MANAGEMENT
ASSISTANCE AUTHORITY.—In the case of any report sub-
mitted by the Mayor under this section for a fiscal year
(or any quarter of a fiscal year) which is a control year
under the District of Columbia Financial Responsibility
and Management Assistance Act of 1995, the Mayor shall
submit the report to the District of Columbia Financial
Responsibility and Management Assistance Authority es-
tablished under section 101(a) of such Act in addition to
any other individual to whom the Mayor is required to
submit the report under this section.’’.
(c) COMMENTS REGARDING ACTIVITIES OF DISTRICT
GOVERNMENT.—At any time during a control year, the
Authority may submit a report to Congress describing any
action taken by the District government (or any failure
to act by the District government) which the Authority
determines will adversely affect the District government’s
ability to comply with an approved financial plan and
budget under subtitle A or will otherwise have a signifi-
cant adverse impact on the best interests of the District
of Columbia.
(d) REPORTS ON EFFECT OF FEDERAL LAWS ON
DISTRICT GOVERNMENT.—At any time during any year,
the Authority may submit a report to the Mayor, the
114
Title III
Council, the President, and Congress on the effect of laws
enacted by Congress on the financial stability and man-
agement efficiency on the financial plan and budget for
the year and on the District government in general.
(e) MAKING REPORTS PUBLICLY AVAILABLE.—The
Authority shall make any report submitted under this sec-
tion available to the public, except to the extent that the
Authority determines that the report contains confidential
material.
TITLE III—MISCELLANEOUS
PROVISIONS
SEC. 301. OTHER DISTRICT BUDGET REFORMS.
(a) INCLUSION
OF ALL FUNDS
OF DISTRICT
IN
BUDGET OF DISTRICT GOVERNMENT.—
(1) IN
GENERAL.—Section 103 of such Act
(sec. 1–202, D.C. Code) is amended—
(A) by amending paragraph (10) to read
as follows:
‘‘(10) The term ‘District revenues’ means all
funds derived from taxes, fees, charges, miscellane-
ous receipts, the annual Federal payment to the Dis-
trict authorized under title V, grants and other
forms of financial assistance, or the sale of bonds,
notes, or other obligations, and any funds adminis-
115
Title III
tered by the District government under cost sharing
arrangements.’’;
(B) by amending paragraph (14) to read
as follows:
‘‘(14) The term ‘resources’ means revenues,
balances, enterprise or other revolving funds, and
funds realized from borrowing.’’; and
(C) by amending paragraph (15) to read
as follows:
‘‘(15) The term ‘budget’ means the entire re-
quest for appropriations or loan or spending author-
ity for all activities of all departments or agencies of
the District of Columbia financed from all existing,
proposed or anticipated resources, and shall include
both operating and capital expenditures.’’.
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) shall apply with respect to reve-
nues, resources, and budgets of the District of Co-
lumbia for fiscal years beginning with fiscal year
1996.
(b) 
RESTRICTIONS
ON
REPROGRAMMING
OF
FUNDS.—
(1) IN
GENERAL.—Section 446 of such Act
(sec. 47–304, D.C. Code) is amended by adding at
the end the following: ‘‘After the adoption of the an-
142
Title III
(e) DEADLINE FOR APPOINTMENT.—
(1) IN GENERAL.—Not later than 30 days after
its members are appointed, the Authority shall ap-
point the Inspector General of the District of Colum-
bia pursuant to section 208(a)(1) of the District of
Columbia Procurement Practices Act of 1985 (as
amended by subsection (a)).
(2) TRANSITION RULE.—The term of service of
the individual serving as the Inspector General
under section 208(a) of the District of Columbia
Procurement Practices Act of 1985 prior to the ap-
pointment of the Inspector General by the Authority
under section 208(a)(1) of such Act (as amended by
subsection (a)) shall expire upon the appointment of
the Inspector General by the Authority.
SEC. 304. COUNCIL APPROVAL OF CERTAIN CONTRACTS.
(a) IN GENERAL.—Section 451 of the District of Co-
lumbia Self-Government and Governmental Reorganiza-
tion Act (sec. 1–1130, D.C. Code) is amended—
(1) by amending the heading to read as follows:
‘‘SPECIAL RULES REGARDING CERTAIN CONTRACTS’’;
(2) by striking ‘‘No contract’’ and inserting
‘‘(a) 
CONTRACTS
EXTENDING
BEYOND
ONE
YEAR.—No contract’’; and