Local Government Fiscal Assistance Amendments of 1983
PL 98-185 (H.R.2780), enacted 11/30/1983

PUBLIC LAW 98-185—NOV. 30, 1983 
97 STAT. 1309 
Public Law 98-185 
98th Congress 
An Act 
To extend and amend the provisions of title 31, United States Code, relating to the 
Nov. 30, 1983 
general revenue sharing program. 
[H.R. 2780] 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, 
Local 
Government 
Fiscal Assistance 
SHORT TITLE 
Amendments of 
1983. 
SECTION 1. This Act may be cited as the "Local Government Fiscal 31 USC 6701 
Assistance Amendments of 1983". 
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EXTENSION OF PROGRAM 
SEC. 2. Section 6701(a)(1) of title 31, United States Code, is "Entitlement 
amended to read as follows: 
period. 
"(1) 'entitlement period' means each one-year period begin-
ning on October 1 of 1982,1983,1984, and 1985.". 
TERMINATION OF STATE SHARE 
SEC. 3. Section 6703(b)(1) of title 31, United States Code, is 
amended by inserting after "each entitlement period" the following: 
"beginning before October 1,1983,". 
STATE VARIATIONS OF LOCAL GOVERNMENT ALLOCATIONS 
SEC. 4. Subsection (a) of section 6711 of title 31, United States 
Code, is amended— 
(1) by adding "and" at the end of clause (1); 
(2) by striking out "; and" at the end of clause (2) and 
inserting in lieu thereof a period; and 
(3) by striking out clause (3). 
MODIFICATION OF INTRASTATE ALLOCATION FORMULA IN CERTAIN 
CASES 
SEC. 5. Subsection (c) of section 6713 of title 31, United States 
Code, is amended— 
(1) by striking out "and" at the end of clause (1); 
(2) by striking out the period at the end of clause (2) and 
inserting in lieu thereof "; and"; and 
(3) by adding at the end thereof the following new clause: 
"(3) for purposes of intrastate allocations under sections 6708, 
6709, and 6712, consider any reduction in the amount of 
adjusted taxes of any unit of general local government if such 
reduction— 
"(A) results from a specific economic dislocation which 
causes— 
"(i) the closing of places of employment. 
97 STAT. 1310 
PUBLIC LAW 98-185—NOV. 30, 1983 
"(ii) declines in assessed values of, or receipt of taxes 
from, real property, or 
"(iii) declines in sales or income tax collections of 
such government, and 
"(B) would reduce the allocation of the unit of local 
government for an entitlement period by an amount equal 
to or greater than 20 percent of such allocation for the 
preceding entitlement period.". 
PUBLIC HEARINGS 
SEC. 6. Section 6714 of title 31, United States Code, is amended— 
(1) by striking out paragraph (1) of subsection (a); 
(2) by redesignating paragraphs (2) and (3) of subsection (a) as 
paragraphs (1) and (2), respectively; 
(3) by striking out "subsection (aX2)" in subsection (b)(1) and 
inserting in lieu thereof "subsection (a)(1)"; 
(4) by striking out clause (1) of subsection (c); 
(5) by striking out "subsection (a)(2)" in subsection (c)(2) and 
inserting in lieu thereof "subsection (a)(1)"; and 
(6) by redesignating clauses (2) and (3) of subsection (c) as 
clauses (1) and (2), respectively. 
DISCRIMINATION PROCEEDINGS 
SEC. 7. Section 6717 of title 31, United States Code, is amended— 
(1) by striking out "the Secretary submits a notice of noncom-
pliance to the government" in subsection (b) and inserting in 
lieu thereof "the government receives a notice of noncompliance 
from the Secretary of the Treasury"; and 
(2) by striking out "shall suspend payments to the govern-
ment under this chapter unless by the 10th day after the 
decision" in the second sentence of subsection (c) and inserting 
in lieu thereof "shall notify the government of the decision and 
shall suspend payments to the government under this chapter 
unless, within 10 days after the government receives notice of 
the decision,". 
AUDIT REQUIREMENTS 
SEC. 8. (a) Section 6723(a)(1) of title 31, United States Code is 
amended— 
(1) by striking out "expecting to receive" and "which 
receives"; 
(2) by striking out "at least once every 3 years" and inserting 
in lieu thereof "at least as often as is required by paragraph 
(2)"; and 
(3) by striking out "auditing standards" and inserting in lieu 
thereof "government auditing standards issued by the Comp-
troller General of the United States". 
(b) Section 6723(a)(2) of such title is amended to read as follows: 
"(2) Paragraph (1) of this subsection does not apply to a govern-
ment for a fiscal year in which the government receives less than 
$25,000 under this chapter. A government which receives at least 
$25,000 but not more than $100,000 under this chapter for a fiscal 
year shall have an audit made in accordance with paragraph (1) at 
least once every 3 years. A government which receives more than 
$100,000 under this chapter for a fiscal year shall have an audit 
PUBLIC LAW 98-185—NOV. 30, 1983 
97 STAT. 1311 
made in accordance with paragraph (1) for such fiscal year, except 
that, if the government operates on a biennial fiscal period, such 
audit may be made biennially but shall cover the financial state-
ment or statements for, and compliance with the requirements of 
this chapter during, both years within such period.". 
(c) Section 6723(b)(1) of such title is amended— 
31 USC 6723. 
(1) by striking out "at least once every 3 years" in clause (A) 
and inserting in lieu thereof "at least as often as would be 
required by subsection (a)(2)"; and 
(2) by striking out "auditing standards" and inserting in lieu 
thereof "government auditing standards issued by the Comp-
troller General of the United States". 
(d) Section 6723(c)(2) of such title is amended— 
(1) by striking out "generally accepted auditing standards" 
the first place it appears and inserting in lieu thereof "gen-
erally accepted government auditing standards issued by the 
Comptroller General of the United States"; and 
(2) by striking out "generally accepted auditing standards" 
the second place it appears and inserting in lieu thereof "such 
auditing standards". 
(e) Section 6723(e) of such title is amended by adding at the end 
Report, public 
thereof the following: "No later than 30 days following completion of 
inspection. 
the audit, the audit report shall be made available for public 
inspection by the State government or unit of local government.". 
TECHNICAL AMENDMENTS 
SEC. 9. (a)(1) Subsection (a) of section 6701 of title 31, United States 
Definitions. 
Code, is amended by adding at the end thereof the following new 
clauses: 
"(8) 'adjusted taxes of a unit of general local government' 
means the taxes imposed by the unit of general local govern-
ment for public purposes (except employee and employer assess-
ments and contributions to finance retirement and social 
insurance systems and other special assessments for capital 
outlay) determined by the Secretary of Commerce for general 
statistical purposes and adjusted (under regulations of the Sec-
retary of the Treasury) to exclude amounts properly allocated to 
education expenses. 
"(9) 'urbanized population' has the meaning given to such 
term by the Secretary of Commerce for general statistical 
purposes.". 
(2) Section 6701(c) of such title is amended by striking out the last 
Data 
sentence and inserting in lieu thereof the following: "Except as 
computations, 
provided in regulations prescribed by the Secretary of the Treasury, 
the Secretary shall make all data computations based on the ratio of 
the estimated population of the part to the population of the entire 
unit of general local government.". 
(3) Section 6701(d) of such title is amended by inserting "annex-
ation," after "constitutional change,". 
(4) Section 6701(eX2) of such title is amended by striking out 
"having one unit of general local government" and inserting in lieu 
thereof "and the sole unit of general local government in the area". 
(b) Section 6704(a) of such title is amended— 
31 USC 6704. 
(1) by inserting "under this chapter" before the semicolon at 
the end of clause (1); 
97 STAT. 1312 
PUBLIC LAW 98-185—NOV. 30, 1983 
(2) by striking out "received under" in clause (3) and inserting 
in lieu thereof "so received in accordance with"; 
(3) by striking out "consistent" in clause (5) and inserting in 
lieu thereof "in accordance"; 
(4) by striking out "section 6723(b)" in clause (7) and inserting 
in lieu thereof "section 6723(g)"; 
(5) by striking out "and" at the end of such clause (7); 
(6) by striking out the period at the end of clause (8) and 
inserting in lieu thereof "; and"; and 
(7) by inserting after such clause the following new clause: 
"(9) the government will comply with the requirements of 
sections 6714 and 6723.". 
31 use 6707. 
(c) Section 6707(c)(5) of such title is amended by striking out the 
last sentence. 
31 use 6709. 
(d) Clause (A) of section 6709(a)(2) of such title is amended to read 
as follows: 
"(A) the adjusted taxes of the unit of general local govern-
ment, divided by". 
31 use 6713. 
(e) Section 6713(a) of such title is amended by inserting "before the 
beginning of the entitlement period" immediately after "Secretary 
of Commerce". 
31 use 6716. 
(f) Section 6716 of such title is amended by striking out "when" in 
subsections (a) and (b) and inserting in lieu thereof "if. 
(g) Section 6716(c)(1) of such title is amended by inserting before 
the period at the end the following: "with respect to which the 
allegation of discrimination is made". 
31 use 6717. 
(h) Section 6717 of such title is amended— 
(1) by striking out "a part" in subsection (b)(3) and inserting 
in lieu thereof "any part ; 
(2) by striking out "except when" in subsection (c) and insert-
ing in lieu thereof "unless ; 
(3) by striking out "When" in such subsection and inserting in 
lieu thereof "If; and 
(4) by inserting "of discrimination" after "The holding" in 
subsection (e). 
31 use 6718. 
(i) Section 6718(b) of such title is amended by striking out "about" 
and inserting in lieu thereof "based on". 
STUDY OF FEDERAL/STATE/LOCAL FISCAL RELATIONSHIPS 
31 use 6701 
SEC. 10. (a) The Secretary of the Treasury shall undertake a study 
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of the following issues: 
(1) The various factors used in the current allocation formulas 
31 use 6701 
under chapter 67 of title 31, United States Code, and possible 
etseq. 
alternatives to such formulas and factors (such as State gross 
domestic product, the representative tax system, and the inclu-
sion of user fees in factors based on tax collections), including an 
analysis of the strengths and weaknesses of such formulas and 
factors. 
(2) The long-term outlook for the fiscal condition and fiscal 
capacity of Federal, State, and local governments. 
(3) The concept of returning revenue sources to State and 
local governments along with responsibility for programs and 
activities for which financial assistance is now provided by the 
Federal Government, 
(4) The impacts of the cyclical nature of the economy and 
other factors, such as unemployment, on the expenditures. 
PUBLIC LAW 98-185—NOV. 30, 1983 
97 STAT. 1313 
needs, and fiscal capacities of Federal, State, and local govern-
ments, and the responsiveness of the distribution of Federal 
financial assistance to the cyclical nature of the economy and 
such other factors. 
(5) The responsiveness of the distribution of Federal assist-
ance to the fiscal capacities of State and local governments, and 
the responsiveness of the distribution of Federal assistance to 
the need for services of State and local governments and to cost-
of-living and cost-of-government differentials. 
(6) The mathematical forms, data, and administration of Fed-
eral grant formulas, including the formulas examined under 
paragraph (1). 
(7) The impact on State and local governments of— 
(A) modification of the provisions of the Internal Revenue 
Code of 1954 with respect to— 
(i) the deductibility of State and local government 
taxes, and 
(ii) the tax exempt status of State and local securities 
used for purposes other than the financing of public 
facilities and cash management, and 
(B) increases in allocations under chapter 67 of title 31, 
United States Code, made to compensate for the modifica-
tions described in clause (A). 
(b) The Secretary of the Treasury, in consultation with the Secre-
tary of Commerce, the Comptroller General of the United States, 
the Advisory Commission on Intergovernmental Relations, and rec-
ognized organizations of elected officials of State and local govern-
ments, including regional organizations of such officials and officials 
of States that may receive substantially reduced funding under 
alternative methods of allocating Federal grants-in-aid, shall de-
velop a plan for the completion of the study required by subsection 
(a). Such plan may provide for the participation of such individuals 
and organizations in the conduct of the study. 
(c) Upon completion of the study required by subsection (a), the 
Secretary shall solicit the views of the persons and organizations 
with whom he was required to consult by subsection (b) and shall 
append such views to a final report to the President and the 
Congress. Such report shall be submitted no later than June 30, 
1985. 
(d) There are authorized to be appropriated for each of the fiscal 
years 1984 and 1985 such sums as may be necessary to carry out this 
section, not to exceed for each such fiscal year an amount equal to 3 
percent of the cost of administering chapter 67 of title 31, United 
States Code, for the preceding fiscal year. 
26 u s e 1 et seq. 
31 u s e 6701 
et seq. 
Plan 
development. 
Report to 
President and 
eongress. 
Appropriation 
authorization. 
ADJUSTING DEFINITION OF MASSACHUSETTS TAX EFFORT 
SEC. 11. (a) For the purposes of allocating amounts under sections 
6708 and 6709 of title 31, United States Code, among units of general 
local government within the Commonwealth of Massachusetts for 
the entitlement period beginning October 1, 1983, the adjusted taxes 
of those governments shall include property taxes levied for the 
Commonwealth's 1982 fiscal year and recognized as fiscal year 1982 
receipts pursuant to Massachusetts General Laws, chapter 59, sec-
tions 21 and 23, and chapter 44, sections 35 through 46. 
(b) No tax collections credited to any unit of general local govern-
ment under subsection (a) for the Commonwealth's 1982 fiscal year 
1 1 - 1 9 4 O 
85 — 43 : QL 3 
97 STAT. 1314 
PUBLIC LAW 98-185—NOV. 30, 1983 
shall be credited to that unit of general local government for any 
other fiscal year. 
EFFECTIVE DATE 
31 use 6701 
SEC. 12. (a) Except as provided in subsection (b), the amendments 
" 
made by this Act shall apply to entitlement periods (as such term is 
Ante, p. 1309. 
defined in section 6701(aXl) of title 31, United States Code) begin-
ning on or after October 1,1983. 
Ante, p. 1310. 
(b) The amendments made by section 8 shall apply with respect to 
any fiscal year (or period) of any State government or unit of 
general local government beginning on or after October 1, 1983. 
Approved November 30, 1983. 
LEGISLATIVE HISTORY—H.R. 2780 (S. 1426): 
HOUSE REPORTS: No. 98-179 (Comm. on Government Operations) and No. 98-550 
(Comm. of Conference). 
SENATE REPORT No. 98-189 accompanying S. 1426 (Comm. on Finance). 
CONGRESSIONAL RECORD, Vol. 129 (1983): 
Aug. 2, considered and passed House. 
Sept. 21, considered and passed Senate, amended, in lieu of S. 1426. 
Nov. 17, House and Senate agreed to conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 19, No. 48 (1983): 
Nov. 30, Presidential statement.