I 
114TH CONGRESS 
2D SESSION 
H. R. 5276 
To prohibit the provision of Federal funds to State, territory, and local 
governments for payment of obligations, to prohibit the Board of Gov-
ernors of the Federal Reserve System from financially assisting State 
and local governments, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 18, 2016 
Mr. BARR (for himself, Mr. PITTENGER, Mr. STEWART, Mrs. BLACKBURN, 
Mr. ROKITA, Mr. YODER, Mr. HARRIS, Mr. YOHO, Mr. JENKINS of West 
Virginia, Mr. MEADOWS, Mr. BRIDENSTINE, Mr. STUTZMAN, Mr. 
POMPEO, Mr. MULVANEY, Mr. BRAT, Mr. JODY B. HICE of Georgia, Mr. 
RICE of South Carolina, Mr. BYRNE, Mr. WALKER, Mr. FINCHER, Mr. 
GROTHMAN, Mr. BABIN, Mr. AUSTIN SCOTT of Georgia, and Mrs. LUM-
MIS) introduced the following bill; which was referred to the Committee 
on Oversight and Government Reform, and in addition to the Committee 
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, territory, 
and local governments for payment of obligations, to 
prohibit the Board of Governors of the Federal Reserve 
System from financially assisting State and local govern-
ments, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘No Bailouts for State, 
Territory, and Local Governments Act’’. 
SEC. 2. PROHIBITION ON THE USE OF FEDERAL FUNDS TO 
PAY STATE AND LOCAL OBLIGATIONS. 
(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-in-aid to any State govern-
ment, municipal government, local government, or county 
government which, on or after January 1, 2013, 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, if such purchase, 
guarantee, extension of credit, or grant is made for the 
purpose of assisting the government in— 
(1) avoiding defaulting on the payment of prin-
cipal or interest due on an obligation of the govern-
ment; or 
(2) curing such a default. 
(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 
government, local government, or county government, or 
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otherwise to assist such government entity, if, on or after 
January 1, 2013, that State government, municipal gov-
ernment, or county government has filed for bankruptcy, 
defaulted on its obligations, is at risk of defaulting, or is 
likely to default, absent such assistance from the United 
States Government, if such purchase, guarantee, extension 
of credit, or grant is made for the purpose of assisting 
the government in— 
(1) avoiding defaulting on the payment of prin-
cipal or interest due on an obligation of the govern-
ment; or 
(2) curing such a default. 
(c) PROHIBITION ON FEDERAL RESERVE ASSIST-
ANCE.—Notwithstanding any other provision of law, the 
Board of Governors of the Federal Reserve System shall 
not provide or extend to, or authorize with respect to, any 
State government, municipal government, local govern-
ment, county government, or other entity that has taxing 
authority or bonding authority, any funds, loan guaran-
tees, credits, or any other financial instrument or other 
authority, including the purchasing of the bonds of such 
State, municipality, locality, county, or other bonding au-
thority, or to otherwise assist such government entity 
under any authority of the Board of Governors, if such 
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purchase, guarantee, extension of credit, or grant is made 
for the purpose of assisting the government in— 
(1) avoiding defaulting on the payment of prin-
cipal or interest due on an obligation of the govern-
ment; or 
(2) curing such a default. 
(d) LIMITATION.—Subsections (a) through (c) shall 
not apply to Federal assistance provided in response to 
a natural disaster. 
(e) STATE DEFINED.—For purposes of this section, 
the term ‘‘State’’ means any of the several States, the Dis-
trict of Columbia, and any territory or possession of the 
United States. 
Æ 
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