H.R.1452 - State and Local Government Economic Empowerment Act106th Congress (1999-2000)
|Sponsor:||Rep. LaHood, Ray [R-IL-18] (Introduced 04/15/1999)|
|Committees:||House - Banking and Financial Services; Budget|
|Latest Action:||House - 04/30/1999 Referred to the Subcommittee on Domestic and International Monetary Policy. (All Actions)|
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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. <all>