I 116TH CONGRESS 1ST SESSION H. R. 4572 To prohibit the provision of Federal funds to State and local governments for payment of obligations, to prohibit the Federal Reserve Banks, the Department of the Treasury, and other Federal agencies from financially assisting State and local governments that have defaulted on their obliga- tions, and for other purposes. IN THE HOUSE OF REPRESENTATIVES SEPTEMBER 27, 2019 Mr. ROONEY of Florida introduced the following bill; which was referred to the Committee on Oversight and Reform, and in addition to the Com- mittee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To prohibit the provision of Federal funds to State and local governments for payment of obligations, to prohibit the Federal Reserve Banks, the Department of the Treasury, and other Federal agencies from financially assisting State and local governments that have defaulted on their obligations, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 04:35 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4572.IH H4572 kjohnson on DSK79L0C42 with BILLS 2 •HR 4572 IH SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Government Bailout 2 Prevention Act’’. 3 SEC. 2. DEFINITION. 4 In this Act, the term ‘‘State’’ means— 5 (1) any of the several States; 6 (2) the District of Columbia; and 7 (3) any territory or possession of the United 8 States. 9 SEC. 3. PROHIBITION ON THE USE OF FEDERAL FUNDS TO 10 PAY OR GUARANTEE STATE AND LOCAL OBLI- 11 GATIONS. 12 (a) IN GENERAL.—Notwithstanding any other provi- 13 sion of law, no Federal funds may be used to purchase 14 or guarantee obligations of, issue lines of credit to, or pro- 15 vide direct or indirect grants-and-aid to, any State govern- 16 ment, municipal government, local government, or county 17 government which, on or after January 1, 2019, has filed 18 for bankruptcy, has defaulted on its obligations, is at risk 19 of defaulting, or is likely to default, absent such assistance 20 from the United States Government. 21 (b) LIMIT ON USE OF BORROWED FUNDS.—The Sec- 22 retary of the Treasury shall not, directly or indirectly, use 23 general fund revenues or funds borrowed pursuant to title 24 31, United States Code, to purchase or guarantee any 25 asset or obligation of any State government, municipal 26 VerDate Sep 11 2014 04:35 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4572.IH H4572 kjohnson on DSK79L0C42 with BILLS 3 •HR 4572 IH government, local government, or county government, or 1 otherwise to assist such government entity, if, on or after 2 January 1, 2019, that State government, municipal gov- 3 ernment, or county government has defaulted on its obli- 4 gations, has filed for bankruptcy, is at risk of defaulting, 5 or is likely to default, absent such assistance from the 6 United States Government. 7 (c) PROHIBITION ON FEDERAL RESERVE ASSIST- 8 ANCE.—Notwithstanding any other provision of law, no 9 Federal Reserve Bank may provide or extend to, or au- 10 thorize with respect to, any State government, municipal 11 government, local government, county government, or 12 other entity that has taxing authority or bonding author- 13 ity, any funds, loan guarantees, credits, or any other fi- 14 nancial instrument, including the purchasing of the bonds 15 of such State, municipality, locality, county, or other bond- 16 ing authority, or to otherwise assist such government enti- 17 ty under any authority of any Federal Reserve Bank. 18 (d) LIMITATION.—Subsections (a) through (c) shall 19 not apply to Federal assistance provided in response to 20 a declared disaster. 21 SEC. 4. APPLICABILITY. 22 The prohibition under section 3— 23 (1) includes debt restructuring or any other re- 24 lated activity; and 25 VerDate Sep 11 2014 04:35 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4572.IH H4572 kjohnson on DSK79L0C42 with BILLS 4 •HR 4572 IH (2) does not include— 1 (A) any discretionary appropriations or di- 2 rect spending, as those terms are defined in 3 section 250(c) of the Balanced Budget and 4 Emergency Deficit Control Act of 1985 (2 5 U.S.C. 900(c)); and 6 (B) any grant awarded by the United 7 States to the State government, municipal gov- 8 ernment, local government, or county govern- 9 ment. 10 Æ VerDate Sep 11 2014 04:35 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H4572.IH H4572 kjohnson on DSK79L0C42 with BILLS