No Bailouts for State, Territory, and Local Governments Act

Bill: 114-hr-5276
Sponsor: full_name: Rep. Barr, Andy [R-KY-6]
Introduced: 2016-05-18
Policy area: Economics and Public Finance
Subjects: Federal Reserve System

Government lending and loan guarantees

State and local finance

U.S. territories and protectorates
Latest action: action_date: 2016-05-18
text: 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.

Summaries:
action_date: 2016-05-18
action_desc: Introduced in House
text: <p><strong>No Bailouts for State, Territory, and Local Governments Act </strong></p> <p>This bill prohibits the use of federal funds to purchase or guarantee obligations of, issue lines of credit to, or provide direct or indirect grants-in-aid to any state (defined to include the District of Columbia and any U.S. territory or possession), municipal, local, or county government that, 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, without such federal assistance, if such purchase, guarantee, extension of credit, or grant is made to assist the government in: (1) avoiding defaulting on the payment of principal or interest due on an obligation of the government, or (2) curing such a default. </p> <p>The Departrment of the Treasury is prohibited from using general fund revenues or borrowed funds to purchase or guarantee, for the same purposes, any asset or obligation of any such state, municipal, local, or county government. </p> <p>The Board of Governors of the Federal Reserve System is prohibited from: (1) providing or extending to, or authorizing with respect to, such a state, municipal, local, or county government, or other entity with taxing authority or bonding authority, for the same purposes, any funds, loan guarantees, credits, or any other financial instrument or other authority, including bond purchases; or (2) otherwise assisting such a government entity, for the same purposes, under any Board authority. </p> <p>Such prohibitions shall not apply to federal assistance provided in response to a natural disaster.</p>

tv_txt: I 114th CONGRESS 2d Session H. R. 5276 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. Lummis ) 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 governments, and for other purposes.

1. Short title This Act may be cited as the No Bailouts for State, Territory, and Local Governments Act . 2. Prohibition on the use of Federal funds to pay State and local obligations (a) In general Notwithstanding any other provision of law, no Federal funds may be used to purchase or guarantee obligations of, issue lines of credit to, or provide direct or indirect grants-in-aid to any State government, 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 principal or interest due on an obligation of the government; or (2) curing such a default. (b) Limit on Use of Borrowed Funds The Secretary 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 otherwise to assist such government entity, if, on or after January 1, 2013, that State government, municipal government, 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 principal or interest due on an obligation of the government; or (2) curing such a default. (c) Prohibition on Federal Reserve assistance 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 government, county government, or other entity that has taxing authority or bonding authority, any funds, loan guarantees, credits, or any other financial instrument or other authority, including the purchasing of the bonds of such State, municipality, locality, county, or other bonding authority, or to otherwise assist such government entity under any authority of the Board of Governors, 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 principal or interest due on an obligation of the government; 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 District of Columbia, and any territory or possession of the United States.