A bill to provide for capital assistance to State and local governments.

Amends title 31 of the United States Code to add a new Chapter 74 - Capital Assistance to State and Local Governments.

Requires the Secretary of the Treasury, for each entitlement period, to pay out of the State and Local Government Capital Fiscal Assistance Trust Fund (as established by this Act): (1) to each State government a total amount equal to its entitlement for such period; and (2) to each unit of local government a total amount equal to its entitlement.

Requires such payments to be made in quarterly installments paid no later than five days after the close of the quarter.

Limits the use of such funds by State and local governments to capital expenditures.

Establishes the State and Local Government Capital Fiscal Assistance Trust Fund.

Makes appropriations for such Trust Fund.

Sets forth the procedure for determining the amounts which are to be allocated to each State for each entitlement period.

Declares that the State government shall be entitled to receive 33 1/3 percent of the amount allocated to a State for each entitlement period and that the remaining portion shall be allocated among the units of local government of that State.

Makes all units of local government eligible to receive such payments except: (1) any municipality, township, Indian tribe, or Alaskan Native Village which has a population of less than 35,000; (2) any county government with a population of less than 10,000; and (3) any unit of local government which is allocated less than $10,000 for such entitlement period.

Establishes the Discretionary Capital Assistance Trust Fund for payments to local governments which are not eligible to receive a payment out of the State and Local Government Capital Fiscal Assistance Trust Fund.

Requires reports to the Secretary on the use of funds by each State and local government which receives funds under this Act after the close of each entitlement period.

Sets forth miscellaneous provisions concerning qualifications of State and local governments to receive funds.

Terminates all authorities granted under this Act on September 30, 1985.