Directed Revenue Sharing Act of 1988

Directed Revenue Sharing Act of 1988 - Amends Federal law to establish a directed revenue sharing program of payments to local governments of high unemployment and low-income communities. Sets forth the general framework for the timing of payments and for adjustments.

Establishes in the Treasury a Local Government Essential Services Trust Fund, with the Secretary of the Treasury as the personal trustee, and authorizes FY 1989 through 1991 appropriations to finance it. Presents formulas for various allocations of these amounts. Authorizes FY 1989 through 1991 amounts to the Department of Commerce for specified administrative functions.

Describes qualifying criteria for and conditions to be met by local governments seeking entitlement under the program. Withholds payments in cases of noncompliance.

Directs the Secretary, for each entitlement period, to allocate: (1) special entitlements for Indian tribes, Alaska Native villages, and the District of Columbia; and (2) funds to each State (for subsequent allocation to local governments) in accordance with a formula based on the State's need factor and relative fiscal capacity factor.

Entitles local governments to a share of the State funds in accordance with a specified formula based on population, a general tax effort factor, and an income factor.

Limits the per capita entitlement of any local government unit, based on a specified formula.

Directs the Secretary to use the most recent information available when determining allocations. Disallows the use of certain data in these calculations.

Requires any unit of local government expending directed revenue sharing payments to hold at least one public meeting on the proposed use in relation to the entire budget and to disclose this information both prior to the meeting and after adoption of the budget under the relevant law.

Prohibits recipients of funds under this Act from discriminating in any of their programs or activities, unless the government shows, by clear and convincing evidence, that revenue sharing payments are not used for any part of the relevant program or activity. Prescribes procedures for: (1) instituting administrative proceedings for violations of the prohibitions; (2) suspending and terminating payments; and (3) administrative and judicial review of these sanctions.

Authorizes the Attorney General to bring a civil action against local governments that have practiced prohibited discrimination. Authorizes private suits by persons adversely affected by such discrimination, but only after administrative remedies have been exhausted.

Requires the Secretary of the Treasury annually to report to the Congress on: (1) the status and operation of the Local Government Directed Revenues Trust Fund (Local Government Essential Services Trust Fund); and (2) the administration of the directed revenue sharing program. Directs recipient local governments to report annually to the Secretary on the payments.

Directs the Comptroller General to study and report to the Congress on methods of identifying local governments that have low capacities to raise revenues from their own sources relative to their public needs. Details required study contents.

Authorizes appropriations.