Targeted Fiscal Assistance Payments to Local Governments Act

Targeted Fiscal Assistance Payments to Local Governments Act - Entitles local governments to an allocation of funds from the Local Government Targeted Fiscal Assistance (TFA) Trust Fund.

Authorizes appropriations to the Trust Fund. Authorizes appropriations to the Department of Commerce for FY 1987 for administrative expenses.

Sets forth eligibility requirements for TFA payments, including that funds support essential public services. Authorizes the Secretary to withhold TFA payments if a local government has not substantially complied with such requirements.

Provides for special allocations of TFA funds for Indian tribes, Alaskan native villages, and the District of Columbia.

Directs the Secretary to allocate TFA funds to each State (for subsequent allocation to local governments) according to a specified formula based on the need factor, the general tax effort factor, and the relative fiscal gap factor, as defined in this Act, for each State.

Entitles local governments to a portion of such State's funds according to a specified formula based on the following factors, as defined in this Act, for each unit of local government relative to all units in such State: (1) the unit's population; (2) the unit's general tax effort factor; and (3) the unit's income factor. Limits the amount of such local government's allocation of State funds based upon a specified formula.

Sets forth requirements relating to the use of certain information by the Secretary in determining allocations of TFA funds.

Requires a unit of local government expending TFA funds to hold at least one public hearing on the proposed use of such funds in relation to its entire budget. Requires public disclosure of the local government's proposed use of TFA funds and of its proposed budget.

Prohibits any discrimination based on race, color, national origin, or sex with respect to the provision of TFA funds. Prohibits discrimination in the provision of TFA funds based on age, religion, or a person's handicap. Sets forth provisions relating to: (1) the institution of administrative proceedings for violations of such prohibitions; (2) the suspension and termination of TFA payments for such violations; and (3) administrative and judicial reviews of such suspensions or terminations.

Permits the Attorney General to bring a civil action in a U.S. district court against a unit of general local government that has discriminated in the provision of TFA funds.

Permits a person who has been adversely affected by such discrimination to bring a civil action in an appropriate district or State court.

Requires the Secretary to annually report to the Congress on: (1) the status of the Trust Fund; and (2) the administration of TFA funds. Requires each unit of general local government receiving TFA funds to annually report to the Secretary.

Requires the Comptroller General to undertake a series of studies on methods to identify local governments that have low capacities to raise revenues from their own sources relative to their essential public service needs. Authorizes appropriations for FY 1987 and 1988.