Title: Taxpayer Protection Act of 2020
Policy area: Government Operations and Politics

Summary:
Taxpayer Protection Act of 2020
This bill directs the Department of the Treasury to establish the Taxpayer Protection Program to provide forgivable loans to state, territory, tribal, and local governments to cover revenue losses caused by the COVID-19 pandemic and for other specified purposes.
Specifically, loan amounts received under this bill may be used (1) to cover revenue losses caused by business interruptions, unemployment, or other economic hardship directly caused by the COVID-19 pandemic; and (2) for infrastructure or essential government service expenditures, including all general operating expenses. However, they may not be used for the service of any debt obligation or unfunded liability for employee retirement benefits.
The bill permits loan forgiveness if a state or local government meets specified requirements, such as a state having a truly balanced budget, sufficient rainy-day funds, and sound pension funds (i.e., pension funds that are based on generally accepted actuarial principles and that meet other specified requirements).

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8385 Introduced in House (IH)]

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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 governments, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives 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 Treasury shall establish 
the Taxpayer Protection Program to provide forgivable loans to State, 
territory, Tribal, and local governments, in accordance with this 
section.
    (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 Secretary may require.
    (c) Appropriation; Loan Amounts.--
            (1) Appropriation.--Out of any money in the Treasury not 
        otherwise appropriated, there are appropriated to the Secretary 
        to carry out the Program, $186,000,000,000.
            (2) State loan amounts.--
                    (A) In general.--Of amounts appropriated 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 described under subparagraph 
                (A) for each State.
                    (C) Remainder.--The Secretary shall apportion 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.
            (3) Territories.--Of amounts appropriated under paragraph 
        (1), the Secretary shall use $3,000,000,000 to carry out the 
        Program with respect to the District of Columbia and the 
        territories of the United States, with each such District or 
        territory receiving an amount based on the relative population 
        proportion amount, calculated in the manner described under 
        section 601(c)(6) of the Social Security Act.
            (4) Tribal governments.--Of amounts appropriated under 
        paragraph (1), the Secretary shall use $8,000,000,000 to carry 
        out the Program with respect to Tribal governments, with each 
        Tribal government receiving an amount based on increased 
        expenditures, calculated in the manner described under section 
        601(c)(7) of the Social Security Act.
            (5) Local governments.--
                    (A) In general.--Of amounts appropriated under 
                paragraph (1), the Secretary shall use $75,000,000,000 
                to carry out the Program 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 percentage of the amount of 
                money described under subparagraph (A) for the local 
                governments 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-metropolitan 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 described 
                        under subparagraph (A) for counties, with each 
                        county receiving an amount based on the 
                        relative population of the county compared to 
                        the aggregate population of counties described 
                        under this subparagraph with respect to the 
                        State in which the counties are located.
                            (ii) Non-inclusion of metropolitan city 
                        population.--In calculating the population of a 
                        county under clause (i), the population of the 
                        county shall not include any resident of the 
                        county that is also a resident of a 
                        metropolitan city.
    (d) Use of Funds.--Loan amounts received under this section--
            (1) may be used--
                    (A) to cover revenue losses caused by business 
                interruptions, unemployment, or other economic hardship 
                directly caused by the COVID-19 pandemic; and
                    (B) for infrastructure or essential government 
                service expenditures, including all general operating 
                expenses; and
            (2) may not be used for the service of any debt obligation 
        or unfunded liability for employee retirement benefits.
    (e) Transparency.--Each recipient of a loan under the Program shall 
comply with the following:
            (1) Accounting.--Loan funds shall be accounted for 
        separately from all other revenue sources.
            (2) Website.--
                    (A) In general.--The recipient shall maintain a 
                publicly available website that prominently displays, 
                either on its homepage or on a page linked directly 
                from the homepage, a record of the following:
                            (i) The dollar amount of each expenditure 
                        of funds received under the Program.
                            (ii) The vendor or recipient of each such 
                        expenditure of funds.
                            (iii) The purpose and date of each such 
                        expenditure of funds.
                    (B) Timing.--The information described under 
                subparagraph (A) shall be made available on the website 
                within 30 days of the related expenditure.
    (f) Disbursement; Terms and Interest Rates.--
            (1) Disbursement.--
                    (A) In general.--Loans under the Program shall be 
                disbursed quarterly, in accordance with subparagraph 
                (B), until the earlier of--
                            (i) the date on which the full loan 
                        disbursement has been made; or
                            (ii) June 30, 2022.
                    (B) Limitation on quarterly disbursements.--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 shall be required 
        to repay the loan in quarterly payments 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 county--
                            (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.
            (2) Treatment of governments establishing sound pension 
        funds.--
                    (A) In general.--With respect to a State, a local 
                government described under paragraph (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 assistance 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 contribution 
                        schedule which increases estimated future 
                        actuarially determined employer contributions 
                        relative to the contribution schedule in place 
                        on July 1, 2020.
                    (B) Actuarially determined employer 
                contributions.--For purposes of subparagraph (A)(ii), 
                actuarially determined employer contributions shall 
                follow generally accepted actuarial principles, as 
                defined by the Secretary.
    (h) Findings and Sense of Congress Related to State Benefit 
Plans.--
            (1) Findings.--The Congress finds the following:
                    (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 liabilities 
                among the several States at the end of fiscal 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 unfunded liabilities.
                    (D) The COVID-19 pandemic has caused reductions in 
                expected revenues of the States while at the same time 
                increasing public demand for essential government 
                services.
            (2) Sense of congress.--It is the sense of the Congress 
        that if and to the extent a State's legislature determines that 
        performance of its supreme obligation is impaired by funding 
        otherwise required under any health, welfare, retirement, or 
        other benefit 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, notwithstanding 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 Assistance 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, borough, or other unit of general 
        government below the State level.
            (3) Metropolitan city.--The term ``metropolitan city'' has 
        the meaning given that term under section 102(a) of the Housing 
        and Community Development Act of 1974 (42 U.S.C. 5302(a)).
            (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 
                                decrease, 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 
                                year in which the economy is not in a 
                                declared recession.
                    (B) Alternate certification.--Notwithstanding 
                subparagraph (A), a State has ``rainy-day fund 
                protections'' if the State certifies 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 subparagraph 
                        (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 promulgated by the Actuarial 
                Standards Board; and
                    (B) the amortization or employer contribution 
                schedules of such plans target a 100 percent pension 
                funding ratio over no more than 25 years.
            (8) Territory.--The term ``territory'' means the District 
        of Columbia, Puerto Rico, the U.S. Virgin 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 statutory 
                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 revenues may only 
                include actual monies received, and do not include 
                transfers from other State funds or borrowing proceeds.
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