I 
116TH CONGRESS 
2D SESSION 
H. R. 8385 
To establish the Taxpayer Protection Program to provide forgivable loans 
to State, territory, Tribal, and local governments, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 24, 2020 
Mr. LAHOOD introduced the following bill; which was referred to the 
Committee on Oversight and Reform 
A BILL 
To establish the Taxpayer Protection Program to provide 
forgivable loans to State, territory, Tribal, and local gov-
ernments, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Taxpayer Protection 
Act of 2020’’. 
SEC. 2. TAXPAYER PROTECTION PROGRAM. 
(a) ESTABLISHMENT.—The Secretary of the Treas-
ury shall establish the Taxpayer Protection Program to 
provide forgivable loans to State, territory, Tribal, and 
local governments, in accordance with this section. 
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(b) APPLICATION.—Any State, territory, Tribal, or 
local government that seeks to receive a loan under the 
Program shall submit an application in such form and 
manner, and containing such information, as the Sec-
retary may require. 
(c) APPROPRIATION; LOAN AMOUNTS.— 
(1) APPROPRIATION.—Out of any money in the 
Treasury not otherwise appropriated, there are ap-
propriated to the Secretary to carry out the Pro-
gram, $186,000,000,000. 
(2) STATE LOAN AMOUNTS.— 
(A) IN
GENERAL.—Of amounts appro-
priated under paragraph (1), the Secretary 
shall use $100,000,000,000 to carry out the 
Program with respect to the States. 
(B) RESERVED
AMOUNT.—The Secretary 
shall reserve $835,000,000 of the amount de-
scribed under subparagraph (A) for each State. 
(C) REMAINDER.—The Secretary shall ap-
portion the remaining $58,250,000,000 to the 
States based on a State’s relative population 
proportion amount, calculated in the manner 
described under section 601(c)(3) of the Social 
Security Act. 
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(3) TERRITORIES.—Of amounts appropriated 
under paragraph (1), the Secretary shall use 
$3,000,000,000 to carry out the Program with re-
spect to the District of Columbia and the territories 
of the United States, with each such District or ter-
ritory receiving an amount based on the relative pop-
ulation proportion amount, calculated in the manner 
described under section 601(c)(6) of the Social Secu-
rity Act. 
(4) TRIBAL GOVERNMENTS.—Of amounts ap-
propriated under paragraph (1), the Secretary shall 
use $8,000,000,000 to carry out the Program with 
respect to Tribal governments, with each Tribal gov-
ernment receiving an amount based on increased ex-
penditures, calculated in the manner described under 
section 601(c)(7) of the Social Security Act. 
(5) LOCAL GOVERNMENTS.— 
(A) IN
GENERAL.—Of amounts appro-
priated under paragraph (1), the Secretary 
shall use $75,000,000,000 to carry out the Pro-
gram with respect to local governments of 
States. 
(B) AGGREGATE RESERVATION FOR LOCAL 
GOVERNMENTS OF A STATE.—With respect to a 
particular State, the Secretary shall reserve a 
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percentage of the amount of money described 
under subparagraph (A) for the local govern-
ments of the State, in the aggregate, equal to 
the percentage of the amount described under 
paragraph (2)(B) that is reserved for such 
State. 
(C) RESERVATION
FOR
METROPOLITAN 
CITIES.—The 
Secretary 
shall 
reserve 
$26,250,000,000 of the amount described under 
subparagraph (A) for metropolitan cities. 
(D) RESERVATION
FOR
NON-METROPOLI-
TAN
NON-COUNTY
GENERAL
PURPOSE
LOCAL 
GOVERNMENTS.—The Secretary shall reserve 
$11,250,000,000 of the amount described under 
subparagraph (A) for local governments that 
are not metropolitan cities or counties. 
(E) RESERVATION FOR COUNTIES.— 
(i) IN GENERAL.—The Secretary shall 
reserve $37,500,000,000 of the amount de-
scribed under subparagraph (A) for coun-
ties, with each county receiving an amount 
based on the relative population of the 
county compared to the aggregate popu-
lation of counties described under this sub-
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ance with subparagraph (B), until the earlier 
of— 
(i) the date on which the full loan dis-
bursement has been made; or 
(ii) June 30, 2022. 
(B) LIMITATION
ON
QUARTERLY
DIS-
BURSEMENTS.—A recipient of a loan under the 
Program may not receive a disbursement with 
respect to a particular quarter that is more 
than the decrease in— 
(i) the recipient’s own-source revenue 
collections over the previous fiscal quarter, 
from 
(ii) the recipient’s own-source revenue 
collections for the same fiscal quarter in 
2019. 
(2) INTEREST RATE.—The Secretary shall set 
interest rates on loans under the Program based on 
the credit strength of the recipient, using the same 
calculation used by the Municipal Lending Facility 
of the Board of Governors of the Federal Reserve 
System. 
(3) REPAYMENT.—With respect to a loan made 
under the Program that is not forgiven, the recipient 
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shall be required to repay the loan in quarterly pay-
ments beginning on June 30, 2022. 
(g) LOAN FORGIVENESS.— 
(1) IN GENERAL.—The Secretary shall forgive a 
loan made to a recipient under the Program if the 
recipient is— 
(A) a local government other than a coun-
ty— 
(i) with a population of less than 
250,000; or 
(ii) with a population of 250,000 or 
more that has sound pension funds; 
(B) a county— 
(i) with a population of less than 
500,000; or 
(ii) with a population of 500,000 or 
more that has sound pension funds; or 
(C) a State that, as of June 30, 2022— 
(i) has sound pension funds; 
(ii) has a truly balanced budget; 
(iii) has rainy-day fund protections; 
and 
(iv) does not use a fixed cost of living 
adjustment with respect to any pension 
system administered by the State. 
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(2) TREATMENT
OF
GOVERNMENTS
ESTAB-
LISHING SOUND PENSION FUNDS.— 
(A) IN
GENERAL.—With respect to a 
State, a local government described under para-
graph (1)(A)(ii), or a county described under 
paragraph (1)(B)(ii) that does not have sound 
pension funds at the time of application for as-
sistance under the Program, such State, local 
government, or county shall only be eligible to 
receive loan forgiveness under paragraph (1) 
if— 
(i) the State, local government, or 
county has sound pension funds before 
such forgiveness; and 
(ii) any changes made to employer 
contributions schedules to achieve sound 
pension funds do not result in a contribu-
tion schedule which increases estimated fu-
ture actuarially determined employer con-
tributions relative to the contribution 
schedule in place on July 1, 2020. 
(B) 
ACTUARIALLY
DETERMINED
EM-
PLOYER
CONTRIBUTIONS.—For purposes of 
subparagraph (A)(ii), actuarially determined 
employer contributions shall follow generally ac-
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cepted actuarial principles, as defined by the 
Secretary. 
(h) FINDINGS AND SENSE OF CONGRESS RELATED 
TO STATE BENEFIT PLANS.— 
(1) FINDINGS.—The Congress finds the fol-
lowing: 
(A) Securing the health, safety, welfare 
and property of, and the pursuit of happiness 
by, residents is each State’s supreme obligation. 
(B) State reported unfunded pension liabil-
ities among the several States at the end of fis-
cal year 2018 totaled $1,237,791,372,000. 
(C) The economic impact of the COVID– 
19 pandemic is likely to further increase the 
unfunded liabilities of employee benefit plans of 
the States and increase the annual cost of these 
systems, creating fiscal tension between funding 
essential government services and servicing un-
funded liabilities. 
(D) The COVID–19 pandemic has caused 
reductions in expected revenues of the States 
while at the same time increasing public de-
mand for essential government services. 
(2) SENSE OF CONGRESS.—It is the sense of 
the Congress that if and to the extent a State’s leg-
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islature determines that performance of its supreme 
obligation is impaired by funding otherwise required 
under any health, welfare, retirement, or other ben-
efit plan offered to its employees, then that State’s 
legislature, with its Governor’s consent, may change 
the terms of any such benefit plan to the extent it 
was not contemporaneously funded in any manner it 
determines to be necessary and proper, notwith-
standing the terms of any State law or constitution 
to the contrary. 
(i) DEFINITIONS.—In this section: 
(1) INDIAN TRIBE.—The term ‘‘Indian Tribe’’ 
has the meaning given that term in section 4(e) of 
the Indian Self-Determination and Education Assist-
ance Act (25 U.S.C. 5304(e)). 
(2) LOCAL GOVERNMENT.—With respect to a 
State, the term ‘‘local government’’ means a county, 
municipality, town, township, village, parish, bor-
ough, or other unit of general government below the 
State level. 
(3) METROPOLITAN CITY.—The term ‘‘metro-
politan city’’ has the meaning given that term under 
section 102(a) of the Housing and Community De-
velopment Act of 1974 (42 U.S.C. 5302(a)). 
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(4) PROGRAM.—The term ‘‘Program’’ means 
the Taxpayer Protection Program. 
(5) RAINY-DAY FUND PROTECTIONS.— 
(A) IN
GENERAL.—With respect to a 
State, the term ‘‘rainy-day fund protections’’ 
means that the State— 
(i) has a fund that— 
(I) is intended to be used during 
emergency periods when revenues de-
crease, to offset such decrease; and 
(II) is subject to safeguards to 
prevent use of amounts in the funds 
for nonemergency purposes, such as 
requiring a resolution approved by a 
legislative 
supermajority 
that 
an 
emergency or disaster has occurred 
before amounts may be appropriated 
from the fund; and 
(ii) has enacted a State statute— 
(I) setting a target for the fund 
of holding reserves of 5 to 10 percent 
of annual general revenues; and 
(II) under which amounts are 
automatically deposited in the fund in 
order to meet such target, during any 
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year in which the economy is not in a 
declared recession. 
(B) ALTERNATE
CERTIFICATION.—Not-
withstanding subparagraph (A), a State has 
‘‘rainy-day fund protections’’ if the State cer-
tifies to the Secretary that— 
(i) the State has protections for the 
State’s rainy-day fund that are at least as 
effective as those described under subpara-
graph (A); and 
(ii) the State’s rainy-day fund held an 
amount equal to more than 5 percent of 
the State’s 2019 annual operating budget 
in reserve as of January 1, 2020. 
(6) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Treasury. 
(7) SOUND PENSION FUNDS.—With respect to a 
recipient under the Program, the recipient has 
‘‘sound pension funds’’ if— 
(A) all pension funds of the recipient are 
based on generally accepted actuarial principles, 
as defined by the Secretary, taking into account 
the Actuarial Standards of Practice promul-
gated by the Actuarial Standards Board; and 
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(B) the amortization or employer contribu-
tion schedules of such plans target a 100 per-
cent pension funding ratio over no more than 
25 years. 
(8) TERRITORY.—The term ‘‘territory’’ means 
the District of Columbia, Puerto Rico, the U.S. Vir-
gin Islands, Guam, the Northern Mariana Islands, 
and American Samoa. 
(9) TRIBAL GOVERNMENT.—The term ‘‘Tribal 
government’’ means the recognized governing body 
of an Indian Tribe. 
(10) TRULY BALANCED BUDGET.—With respect 
to a State, the term ‘‘truly balanced budget’’ means 
that— 
(A) the State has a constitutional or statu-
tory requirement that— 
(i) operating budgets achieve end of 
year balance; and 
(ii) deficits may not be carried year to 
year; and 
(B) for purposes of calculating revenues to 
determine whether the State’s operating budget 
has achieved an end of year balance, such reve-
nues may only include actual monies received, 
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and do not include transfers from other State 
funds or borrowing proceeds. 
Æ 
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