Targeted Fiscal Assistance Act of 1989 - Repeals provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 that terminated the general revenue sharing program. Revises the program to establish a framework for targeted fiscal assistance. Authorizes FY 1989 through 1991 appropriations.
Directs the Secretary of the Treasury, 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, general tax effort, and relative fiscal gap factors. Entitles local governments to a share of the State funds in accordance with a formula based on population, general tax effort, and relative income factors.
Eliminates provisions allowing State variation of local government allocations. Revises procedures for determining maximum and minimum limitations on local government entitlements.
HR 282 IH 101st CONGRESS 1st Session H. R. 282 To create a fiscal safety net program for needy communities. IN THE HOUSE OF REPRESENTATIVES January 3, 1989 Mr. MCEWEN introduced the following bill; which was referred to the Committee on Government Operations A BILL To create a fiscal safety net program for needy communities. 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 `Targeted Fiscal Assistance Act of 1989'. SEC. 2. FINDINGS AND PURPOSES. (a) FINDINGS- The Congress finds and declares that-- (1) with the same level of tax effort, high fiscal capacity communities can generate twice the tax revenues of low fiscal capacity communities; (2) such unevenness in revenue raising ability is responsible for substantial differences in the level and quality of basic community services such as public safety, emergency services, assistance to the homeless, indigent and elderly public health, and transportation; (3) low-income communities generally have higher concentrations of poor individuals who have above average needs for public services and place additional burdens on local governments; (4) these communities are further burdened by the numerous, unfunded Federal mandates with which they must comply; (5) it is a responsibility of the Federal government to help ensure that all citizens enjoy a minimum level of basic public services; (6) it is in the national interest to strengthen the weaker partners in the Federal system by lessening the fiscal disparities that exist among communities; (7) overall, the current system of Federal aid is only mildly targeted to needy communities and does little to lessen fiscal disparities; and (8) a well-targeted program of general purpose local fiscal assistance, with a moderate funding level, could reduce fiscal disparities between high-income and low-income local governments by 20 to 25 percent. (b) PURPOSE- It is the purpose of this Act to establish a program that will-- (1) reduce fiscal disparities among local governments, and (2) ensure that all communities can provide their citizens with a safety net of basic public services, by providing general purpose fiscal assistance to needy communities. SEC. 3. RESTORATION OF REVENUE SHARING LAW. (a) REPEAL OF REPEAL- Title XIV of the Consolidated Omnibus Budget Reconciliation Act of 1985 is repealed. (b) EFFECTIVENESS OF REPEALED AND AMENDED PROVISIONS REVIVED- The provisions of chapter 67 of title 31, United States Code, and the other provisions amended by title XIV of the Consolidated Omnibus Budget Reconciliation Act of 1985, shall be effective as if such title had not been enacted. (c) RETROACTIVE EFFECT- The provision of this section shall be effective as if enacted on April 7, 1988. SEC. 4. AUTHORIZATION OF TARGETED FISCAL ASSISTANCE. (a) IN GENERAL- Paragraph (1) of section 6701(a) of title 31, United States Code, is amended to read as follows: `(1) `entitlement period' means each one-year period beginning on October 1 of 1988, 1989, and 1990.'. (b) AMOUNTS AUTHORIZED TO BE APPROPRIATED- Section 6703 of title 31, United States Code, is amended-- (1) by striking out `$4,566,700,000' in subsection (b)(2) and inserting in lieu thereof `$2,283,000,000', (2) by striking out `sections 6708-6710' in subsection (b)(2) and inserting in lieu thereof `sections 6707, 6709, and 6710', and (3) by adding at the end thereof the following new subsection: `(d) There are authorized to be appropriated to the Bureau of Economic Analysis of the Department of Commerce for each of the fiscal years 1989, 1990, and 1991, $400,000 for the purpose of making the determinations required under section 6708(c)(6)(C).'. (c) Conforming Amendments- (1) The heading for chapter 67 of title 31, United States Code, is amended to read as follows: `CHAPTER 67--TARGETED FISCAL ASSISTANCE'. (2) The table of contents of title 31, United States Code, is amended by striking out the item relating to chapter 67 and inserting in lieu thereof the following: `67. Targeted Fiscal Assistance.'. (3) Section 6703 of title 31, United States Code, is amended by inserting `; Authorization of Appropriations' after `Fund' in the heading. (4) The table of contents for chapter 67 of title 31, United States Code, is amended by inserting `; authorization of appropriations' after `fund' in the item relating to section 6703. SEC. 5. ALLOCATION OF ASSISTANCE. (a) IN GENERAL- Chapter 67 of title 31, United States Code, is amended by striking out sections 6707, 6708, and 6709 and inserting in lieu thereof the following: `Sec. 6707. Special entitlements for Indian tribes, Alaskan native villages, and the District of Columbia `(a) For each entitlement period, the Secretary shall allocate out of the amount authorized for such entitlement period under section 6703(b)(2) to-- `(1) each Indian tribe and Alaskan Native village having a recognized governing body carrying out substantial governmental duties and powers, and `(2) the District of Columbia, an amount bearing the same ratio to the special allocation amount for such entitlement period as the population of such tribe or village, or of the District of Columbia, bears to the total population of all of such tribes, villages, and the District of Columbia. `(b) For purposes of this section, the term `special allocation amount' means, for any entitlement period, the amount equal to-- `(1) 1.5, multiplied by `(2) the total population of all Indian tribes, Alaskan Native villages, and the District of Columbia, multiplied by `(3) the amount determined by dividing-- `(A) the amount authorized for such entitlement period under section 6703(b)(2), by `(B) the total population of the United States. `Sec. 6708. State area allocations for units of general local government `(a) For each entitlement period, the Secretary of the Treasury shall allocate to each State out of the amount authorized for the period under section 6703(b)(2) (after deduction of the amount allocated under section 6707) an amount bearing the same ratio to such amount authorized (after such deduction) as-- `(1) the product of-- `(A) the need factor of the State, multiplied by `(B) the general tax effort factor of the State, multiplied by `(C) the relative fiscal gap factor of the State; bears to `(2) the sum of the products determined under paragraph (1) for all States. `(b) The Secretary shall allocate the amount allocated to a State under this section among the units of local government in that State under section 6709. `(c) For purposes of the section-- `(1) The need factor of a State for an entitlement period is the sum of-- `(A) one plus a fraction whose numerator is the number of individuals in the State having a family income less than 150 percent of the poverty level (as determined using the criteria of poverty prescribed by the Office of Management and Budget) and whose denominator is the population of the State as determined by the latest decennial census; multiplied by `(B) the population of the State (as determined under section 6713(b)). `(2) The general tax effort factor of a State for an entitlement period is-- `(A) the per capita adjusted taxes of the State, divided by `(B) the per capita total taxable resources of the State. `(3) The relative fiscal gap factor of a State for an entitlement period is-- `(A) 2 multiplied by the sum of the total taxable resources of all the States, divided by the sum of the need factors of all the States; minus `(B) the total taxable resources of such State, divided by the need factor of such State. `(4) The per capita adjusted taxes of a State for an entitlement period is the amount determined by dividing-- `(A) the net amount of State and local taxes of the State collected during the years used by the Secretary of Commerce in the most recent Bureau of the Census general determination of State and local taxes made before the beginning of the entitlement period, by `(B) the population of the State, `(5) The per capita total taxable resources of a State for an entitlement period is the amount determined by dividing-- `(A) the total taxable resources of the State for such entitlement period, by `(B) the population of the State. `(6)(A) The total taxable resources of a State for an entitlement period is-- `(i) in the case of the entitlement period beginning on October 1, 1988, the total taxable resources of the State for the most recent year for which data are available, `(ii) in the case of the entitlement period beginning on October 1, 1989, the average of the total taxable resources of the State for the 2 most recent years for which data are available, and `(iii) in the case of each succeeding entitlement period, the average of the total taxable resources of the State for the 3 most recent years for which data are available. `(B) The total taxable resources of a State for any year is the revenue raising capacity of the State for such year as determined by the Director of the Bureau of Economic Analysis of the Department of Commerce on the basis of the gross product of the State for such year increased by the total income of the residents of the State for such year that was not derived from assets located, or activities conducted, within the State. `(C) In consultation with the Secretary of the Treasury, the Director of the Bureau of Economic Analysis of the Department of Commerce shall determine for each year-- `(i) the gross product of each State, `(ii) the income of residents of each State that was not derived from assets located, or activities conducted, within the State, and `(iii) the total taxable resources of each State. `Sec. 6709. General entitlement for units of general local government `(a) Except as otherwise provided in this chapter, each unit of general local government in any State (other than the District of Columbia and any Indian tribe and Alaskan Native village which is eligible to receive an entitlement under section 6707 for such period) shall be entitled to receive for each entitlement period an amount bearing the same ratio to the amount required by section 6708(b) to be allocated among the units of general local government in such State as-- `(1) the product of-- `(A) the population of such unit of general local government (as determined under section 6713(b)), multiplied by `(B) the general tax effort factor of such unit of general local government (as determined under subsection (b)(1)), multiplied by `(C) the relative income factor of such unit of general local government (as determined under subsection (b)(2)), bears to `(2) the sum of the products determined under paragraph (1) of this subsection for all units of the general local government located in such State. `(b) For purposes of this section-- `(1) The general tax effort factor of a unit of general local government for an entitlement period is-- `(A) the per capita adjusted taxes of the unit of local government, divided by `(B) the per capita income of such unit. `(2) The relative income factor of a unit of general local government for an entitlement period is equal to one minus 80 percent of a fraction in which-- `(A) the numerator is the per capita income of the unit of local government; and `(B) the denominator is the per capita income of the State in which such unit is located, except that if the computation results in a number which is less than zero, the relative income factor of such unit shall be zero. `(3)(A) The per capita adjusted taxes of a unit of local government is-- `(i) the adjusted taxes of such unit, divided by `(ii) the population of such unit. `(B) The Secretary of the Treasury shall include that part of sales taxes transferred to a unit of general local government that are imposed by a county government in a geographic area of a unit of general local government as taxes of the unit of general local government under subparagraph (A) when-- `(i) the county government transfers any part of the revenue from the taxes to the unit of general local government without specifying the purpose for which the unit of general local government may expend the revenue; and `(ii) the chief executive officer of the State notifies the Secretary that the taxes satisfy the requirements of this paragraph. `(C) Notwithstanding subparagraph (A)-- `(i) the per capita adjusted taxes of a township government shall not exceed 200 percent of the average per capita adjusted taxes of all township governments in the State, `(ii) the per capita adjusted taxes of a municipal government shall not exceed 200 percent of the average per capita adjusted taxes of all municipal governments in the State, `(iii) the per capita adjusted taxes of a county government shall not exceed 200 percent of the average per capita adjusted taxes of all county governments in the State, and `(iv) the per capita adjusted taxes of a unified city/county government (to be defined by the Bureau of the Census) shall not exceed 200 percent of the average per capita adjusted taxes of all units of general local governments in the State. `(4)(A) The per capita income of a unit of general local government is-- `(i) the total income of individuals (as defined in section 6701(a)(4)) attributed to the unit of local government, divided by `(ii) the population of such unit. `(B) The per capita income of a State is-- `(i) the total income of individuals (as defined in section 6701(a)(4)) attributed to the State, divided by `(ii) the population of such State.'. (b) Elimination of Alternative Allocation to Local Governments- (1) Section 6711 of title 31, United States Code, is repealed. (2) Section 6701 of title 31, United States Code, is amended by striking out `6711,' in subsection (a)(5)(B). (c) Conforming Amendments- (1) Section 6701 of title 31, United States Code, is amended-- (A) by inserting `the District of Columbia and' after `(3) of this title,' in subsection (a)(5)(B), and (B) by striking out subsection (e). (2) Section 6712 of title 31, United States Code, is amended to read as follows: `Sec. 6712. Adjustments of local government allocations `(a)(1) Subject to paragraphs (2) and (3) of this subsection, the per capita entitlement of any unit of general local government in a State under section 6709 for any entitlement period shall be no more than 200 percent of the amount determined by dividing-- `(A) the amount allocated to the State under section 6708, by `(B) the State population. `(2) The entitlement of any unit of general local government under section 6709 for any entitlement period shall be no more than 50 percent of the product of-- `(A) the adjusted taxes of such unit of general local government (as determined under subparagraph (A) of section 6709(b)(3) without regard to subparagraphs (B) and (C) of such section); and `(B) a fraction in which-- `(i) the numerator is the per capita income of the State in which the unit is located (as determined under section 6709(b)(4)(B)); and `(ii) the denominator is the per capita income of the unit of local government (as determined under section 6709(b)(4)(A)). `(3) For purposes of section 6709, if-- `(A) the entitlement of any unit of general local government (except the District of Columbia and any Indian tribe or an Alaskan Native village) under section 6709 and this section for an entitlement period would be less than $500; `(B) the amount of such entitlement divided by the population of such unit, is less than 5 percent of the amount allocated to the State under section 6708, divided by the State population; or `(C) such entitlement is waived by the governing authority of the unit of general local government, the Secretary shall not pay such entitlement to such unit of general local government. `(b) Any amounts which may not be paid to a unit of general local government by reason of subsection (a) shall be reallocated among the other units of general local government in the same State in proportion to the entitlements (under section 6709) of such other units, but no such reallocation shall cause the entitlement of any such other unit to exceed the amount to which that unit is constrained by subsection (a).'. (3) The table of contents for chapter 67 of title 31, United States Code, is amended by striking out the items relating to sections 6707, 6708, and 6709 and inserting in lieu thereof the following: `6707. Special entitlements for Indian tribes, Alaskan native villages, and the District of Columbia. `6708. State area allocations for units of general local government. `6709. General entitlement for units of general local government.'.
Introduced in House
Introduced in House
Referred to the House Committee on Government Operations.
Referred to the Subcommittee on Human Resources and Intergovernmental Relations.
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