Text: H.R.1452 — 106th Congress (1999-2000)All Information (Except Text)

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Introduced in House (04/15/1999)

 
[Congressional Bills 106th Congress]
[From the U.S. Government Printing Office]
[H.R. 1452 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 1452

To create United States money in the form of noninterest bearing credit 
in accordance with the 1st and 5th clauses of section 8 of Article I of 
   the Constitution of the United States, to provide for noninterest 
 bearing loans of the money so created to State and local governments 
          solely for the purpose of funding capital projects.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 15, 1999

  Mr. LaHood introduced the following bill; which was referred to the 
  Committee on Banking and Financial Services, and in addition to the 
Committee on the Budget, 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 create United States money in the form of noninterest bearing credit 
in accordance with the 1st and 5th clauses of section 8 of Article I of 
   the Constitution of the United States, to provide for noninterest 
 bearing loans of the money so created to State and local governments 
          solely for the purpose of funding capital projects.

    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 ``State and Local Government Economic 
Empowerment Act''.

SEC. 2. FINDINGS.

    The Congress hereby finds the following:
            (1) As of the date of the enactment of this Act, money is 
        principally created in the domestic economy by banks through 
        the process known as ``deposit expansion'' under which credit 
        is extended by banks to customers in exchange for the 
        assumption of an obligation by each customer to repay the 
        amount of any such credit with interest.
            (2) The creation of money through the extension of credit 
        and creation of debt, a traditional banking function, preceded 
        the establishment by the Congress of, first, the national 
        banking system and, subsequently, the Federal Reserve System.
            (3) The constitutional authority to create and regulate 
        money does not limit the Federal Government to creating money 
        through the production of coins or currency or the process of 
        debt creation but, except for a brief period during the 
        administration of President Lincoln, the Federal Government has 
        not exercised such authority more broadly.
            (4) The creation of money by the banks in conjunction with 
        the Federal reserve banks does not limit the constitutional 
        authority of the Congress to create Government credit funds in 
        the form of noninterest bearing credit to fund a legislatively 
        approved program or prevent the Congress from creating such 
        funds.
            (5) The creation of noninterest-bearing government credit 
        funds in measured or limited increments for the purpose of 
        funding capital and environmental projects in the public 
        interest--
                    (A) will allow projects to be built for \1/2\ to 
                \1/3\ the normal cost; and
                    (B) will allow more necessary projects to be built 
                at a lower cost to the taxpayers and at the same time 
                build additional wealth in the communities where such 
                projects are located.

SEC. 3. CREATION OF MONEY.

    (a) In General.--Pursuant to the exercise by the Congress of the 
authority contained in the 5th clause of section 8 of Article I of the 
Constitution, the Secretary of the Treasury shall have money available 
for purposes of this Act in an amount equal to the product of--
            (1) the population of the United States, as determined by 
        the Secretary of Commerce on the basis of the 1990 census; and
            (2) $1,400.
    (b) Loan Agreement.--The money referred to in section 3(a) shall be 
created by having the Secretary of the Treasury and the Board of 
Governors of the Federal Reserve System enter into a Loan Agreement in 
accordance with the following requirements:
            (1) The Board shall lend the United States Treasury an 
        amount up to a total of $360,000,000,000 at the rate of not 
        more than $72,000,000,000 per annum (on a cumulative basis) in 
        each of the 5 years commencing 60 days after the date of the 
        enactment of this Act.
            (2) The Secretary of the Treasury shall pay an annual fee 
        to the Board (the amount to be negotiated between the Secretary 
        and the Board) to cover the administrative costs the Board 
        incurs in acting as the agent of the Administrator appointed 
        under section 4(b). The amount of this administration fee each 
        year shall be charged to the recipients of the noninterest 
        bearing loans made to them during the year pursuant to section 
        7(e), pro rata to the amount of such loans.
    (c) Exercise of Sovereign Capacity to Create Money.--
            (1) In general.--Any amount made available pursuant to this 
        Act shall be treated as money created in the sovereign and 
        exclusive capacity of the United States, in accordance with the 
        Constitution, to create money.
            (2) Expenditure of tax revenue or borrowed funds not 
        authorized.--No provision of this Act shall be construed as 
        authorizing the expenditure of funds derived from revenues 
        imposed and collected by the United States Government under any 
        provision of law or from amounts borrowed by the United States 
        Government pursuant to chapter 31 of title 31, United States 
        Code, or any other provision of law.
    (d) Budget Treatment.--
            (1) Nonapplicability of provisions applicable to receipt 
        and expenditures of revenue and borrowed funds.--For purposes 
        of title 31, United States Code, the Congressional Budget and 
        Impoundment Control Act of 1974, the Balanced Budget and 
        Emergency Deficit Control Act of 1985, the Budget Enforcement 
        Act of 1990, or any other provision of law--
                    (A) money created under this section shall not be 
                treated as revenue when it is created or made available 
                to the Administrator under section 4(b) nor shall it be 
                treated as revenue by the Administrator or by the 
                Secretary of the Treasury when the loans referred to in 
                section 6 are repaid;
                    (B) the money created under this section and the 
                interest-free loan program established under section 
                6--
                            (i) shall not be treated as budget 
                        authority, new budget authority, budgetary 
                        resources, spending authority, new spending 
                        authority, entitlement authority, or credit 
                        authority;
                            (ii) shall not be subject to apportionment 
                        or sequestration other than in accordance with 
                        the provisions of sections 4, 5, and 6; and
                            (iii) shall not be taken into account in 
                        the determination of the baseline for any 
                        fiscal year; and
                    (C) the disbursement of money created under this 
                section shall not be treated as an outlay or a budget 
                outlay.
    (e) Bank Reserve Requirements.--No provision of this Act shall be 
construed as affecting any authority of the Board to adjust bank 
reserve requirements, as appropriate.

SEC. 4. ADMINISTRATION OF THE ACT.

    (a) In General.--The Administrator of this Act shall be under the 
Department of the Treasury.
    (b) Management.--An Administrator shall be appointed by, and 
accountable to, the Secretary of the Treasury.
    (c) Duties of Administrator.--
            (1) In general.--The Administrator shall be solely 
        responsible for disbursing, pursuant to section 6, funds 
        created under this Act and otherwise carrying out the duties 
        imposed under this Act.
            (2) Appointment of agent.--The Administrator may appoint 
        the Board or any Federal reserve bank as an agent of the 
        Administrator to perform such duties of the Administrator under 
        this Act that the Administrator sees fit to delegate to the 
        Board or any such bank.
    (d) United States Government General Checking Account.--
            (1) Deposit.--Checks drawn on the money created under 
        section 3 shall be deposited to the credit of the United States 
        Government in a United States Government general checking 
        account at a Federal reserve bank.
            (2) Disbursements from account.--All disbursements of loans 
        under section 6 shall be made with United States Government 
        checks from the account referred to in paragraph (1).
    (e) Loan Repayment Account.--The Administrator shall establish and 
maintain a separate checking account in a Federal reserve bank for the 
deposit of any repayment of principal on loans made under section 6.

SEC. 5. ELIGIBILITY OF STATE AND LOCAL GOVERNMENTS FOR INTEREST-FREE 
              LOANS.

    (a) In General.--Subject to subsection (b), each State, county, 
township, incorporated municipality, school district, and Indian tribe 
shall be entitled to obtain a loan from the Administrator in accordance 
with section 6, unless such unit of government is delinquent in 
repaying a prior loan.
    (b) Maximum Amount Limitation.--The total amount of money to which 
any entity described in subsection (a) is eligible to borrow under this 
section shall not exceed the amount equal to the product of--
            (1) the resident population, as determined by the Secretary 
        of Commerce on the basis of the 1990 census, of the geographic 
        territory over which the entity has jurisdiction (or, in the 
        case of a school district, the latest official enrollment 
        figures as reported to the State in which the school district 
        resides); and
            (2) the amount equal to--
                    (A) in the case of a State, $200;
                    (B) in the case of a county (as defined in section 
                2 of title 1, United States Code), $100; if the State 
                has no township form of government, this amount shall 
                be $200;
                    (C) in the case of an incorporated municipality, 
                $600;
                    (D) in the case of any township, $100;
                    (E) in the case of any school district, $2,400; and
                    (F) in the case of an Indian tribe, $1,000.

SEC. 6. ISSUANCE OF INTEREST-FREE LOANS.

    Subject to sections 5(b) and 7, the Administrator shall issue an 
interest-free loan from the money created under section 3 to any 
government unit described in section 5(a) if the Administrator obtains 
such assurances as the Administrator determines to be appropriate from 
the unit that--
            (1) the proceeds of such loan will be used solely for the 
        purpose of--
                    (A) funding capital projects of the governmental 
                unit, including the construction of or improvements 
                to--
                            (i) school facilities;
                            (ii) streets, highways, bridges, and 
                        tunnels;
                            (iii) water and sewer systems;
                            (iv) waste disposal systems;
                            (v) public housing facilities;
                            (vi) public buildings and other public 
                        facilities; and
                            (vii) environmental facilities; or
                    (B) the cleanup of toxic waste sites or other 
                environmental improvements.

SEC. 7. ADMINISTRATIVE PROVISIONS.

    (a) Disbursement Requirements.--Loans made under section 6 shall be 
disbursed by the Administrator--
            (1) in a lump sum for the full amount of the loan; or
            (2) if the Administrator determines that partial 
        disbursements are appropriate in the case of loans for 
        construction projects in order to accommodate a greater number 
        of loan requests, over the construction period of the project.
    (b) Minimum Phase-In Period.--Disbursements on all eligible loans 
approved under section 6 shall begin before the end of the 5-year 
period beginning on the date of the enactment of this Act.
    (c) Period to Maturity.--The period to maturity of any loan made 
under section 6 shall be the estimated number of years of the useful 
life of the infrastructure installation (if any) which is financed by 
the loan, but, in any case, shall be a minimum of 10 years and a 
maximum of 30 years.
    (d) Applicability of State Law.--The number or the principal 
amounts of interest-free loans made under section 6 to any governmental 
unit established by a State, or the period to maturity of any such 
loan, may not exceed the maximum number, amount, or period to maturity 
established under the law of such State, unless the State provides a 
waiver from any such limitation with respect to any such governmental 
unit.
    (e) Administrative Fees.--The Administrator shall impose an 
administrative fee on each recipient of a loan under section 6 in an 
amount not to exceed the lesser of--
            (1) 0.25 percent of the total amount of the loan; or
            (2) the amount sufficient to cover all administrative costs 
        incurred by the Administrator, including overhead, for making 
        and administering that particular loan.
    (f) Terms of Repayment.--The repayment terms of any loan under 
section 6 shall require quarterly payments by the recipient in equal 
amounts determined by dividing--
            (1) the sum of the principal and the administrative fees 
        applicable with respect to such loan; by
            (2) the number of calendar quarters any portion of which 
        falls within the period to maturity of the loan.
    (g) Collections of Past Due Amounts and Collection Fees.--
            (1) Enforced collections.--The Administrator shall take 
        action to enforce collection of past due amounts of any loan on 
        which 4 or more quarterly payments are due and payable.
            (2) Impoundment of delinquent amount.--In the case of any 
        delinquent loan described in paragraph (1), the Administrator 
        may seek an order from any district court of the United States 
        of appropriate jurisdiction directing a United States marshall 
        to impound, under authority of this section, any available 
        funds of the debtor in an amount equal to the amount currently 
        due as of the date of such action to reduce or eliminate the 
        delinquency.
            (3) Waiver of debtor's right to defend against 
        collection.--As a condition for receiving any loan under 
        section 6, the recipient shall waive any right to take any 
        legal action to prevent or defend against the collection by the 
        Administrator of any amount which the parties agree is past 
        due.
            (4) Cost of collection.--The costs incurred by the 
        Administrator in collecting any amount under this subsection 
        with respect to any loan shall be added to and treated as a 
        part of the principal amount of the loan.
            (5) Balance of loan principal and fees payable in 
        accordance with terms of loan.--A debtor who is subject to 
        collection proceedings under this subsection for any delinquent 
        portion of a loan under section 6 shall continue to meet the 
        repayment schedule applicable to such loan for the remaining 
        amount of principal and fees.

SEC. 8. DISPOSITION OF FUNDS UPON REPAYMENT.

    The Administrator shall, at such times and in such amounts as the 
Administrator determines to be appropriate, transfer amounts in the 
loan repayment account referred to in section 4(e) hereof to the United 
States Government general checking account referred to in section 
4(d)(1).

SEC. 9. DEFINITIONS.

    For purposes of this Act, the following definitions shall apply:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator appointed by the Secretary of the Treasury.
            (2) Board.--The term ``Board'' means the Board of Governors 
        of the Federal Reserve System.
            (3) Indian tribe.--The term ``Indian tribe'' means any 
        Indian tribe, band, pueblo, nation, or other organized group or 
        community, including any Alaska Native village or regional or 
        village corporation as defined in or established pursuant to 
        the Alaska Native Claims Settlement Act, which is recognized as 
        eligible for the special programs and services provided by the 
        United States to Indians because of their status as Indians.
            (4) Secretary.--Except when used in connection with a 
        reference to the Secretary of Commerce, the term ``Secretary'' 
        means the Secretary of the Treasury.
            (5) State.--The term ``State'' includes the District of 
        Columbia, the Commonwealth of Puerto Rico, Guam, American 
        Samoa, the United States Virgin Islands, and the Northern 
        Mariana Islands.
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