August 9, 1978
Page 25119
By Mr. MUSKIE (for himself, Mr. HATHAWAY, Mr. MOYNIHAN, Mr. DOMENICI, Mr. KENNEDY, and Mr. RIBICOFF):
S. 3389. A bill to amend title II of the Public Works Employment Act of 1976; to the Committee on Environment and Public Works.
INTERGOVERNMENTAL ANTI-RECESSION ASSISTANCE ACT OF 1976
Mr. MUSKIE. Mr. President, I am introducing today, for myself, Mr. HATHAWAY, Mr. MOYNIHAN, Mr. DOMENICI, Mr. KENNEDY, and Mr. RIBICOFF, legislation to extend the Intergovernmental Anti-Recession Assistance Program Act — the so-called countercyclical assistance program.
When I first introduced the countercyclical aid bill 8 years ago, I had no idea that debate on the bill would become an annual congressional event. Congress first enacted countercyclical assistance at a time of very high employment. Our purpose was to provide short term aid to State and local governments whose budgets were squeezed by the pressures of recession. With this Federal help, we hoped to enable these governments to avoid tax increases and job lay offs that only make recession worse.
Countercyclical was more than just another Federal aid program. It contained a unique feature: When the National economy improved, when unemployment dropped below 6 percent, the program was to shut itself off. Countercyclical was designed to put money into the economy fast, where it was needed most, and then terminate itself when the need no longer existed.
As we approach the termination point written into the law, there are two points I believe we should keep in mind.
First. countercyclical assistance is and has always been intended as an anti-recession tool. As the recession becomes a thing of the past, it is appropriate and fair that fewer governments receive countercyclical funds.
Second, even when national unemployment has bottomed out, there will be some communities which are left behind — communities where economic problems remain because of long-term structural ills. Were countercyclical aid to these governments to terminate abruptly, the budget consequences could be severe.
I have kept these two facts in mind in drawing up the legislation I am introducing today.
Under the proposed legislation, the current program would be extended as is, and allowed to terminate when national unemployment drops below 6 percent. To insure that the program does not shut on and off repeatedly as unemployment hovers around 6 percent, the new bill would require that unemployment remain below that mark for two consecutive quarters before the program shuts off.
The idea of a program which terminates when no longer needed is very important — and I believe it should be retained.
Yet at the same time the legislation I am introducing today recognizes that some States and communities have lagged behind the national recovery rate. To help those communities this bill would distribute aid to State and local governments whose unemployment remains above 6 percent when the national rate falls below that mark.
Mr. President, I ask unanimous consent that the text of the bill be printed in the RECORD.
There being no objection, the bill was ordered to be printed in the RECORD, as follows :
S. 3389
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Intergovernmental Anti-recession Assistance Act of 1978".
FINANCIAL ASSISTANCE AUTHORIZED
SEC. 2. Section 202 of the Public Works Employment Act of 1976 is amended
(1) by striking out "five"in subsection (b) and inserting in lieu thereof "eight",
(2) by striking out "July 1, 1977" in subsection (b) and inserting in lieu thereof "October 1, 1978",
(3) by striking the period in subsection (b) and inserting in lieu thereof ", plus",
(4) by adding at the end of subsection (b) the following new paragraph:
"(3) such sums as may be necessary to implement section 210(c) of this Act.",
(5) by striking out "five" in subsection (c) and inserting in lieu thereof "eight" and by striking out "July 1, 1977" in subsection (c) and inserting in lieu thereof "October 1, 1978", and
(6) by striking out subsection (d), and inserting after subsection (c) the following new subsection:
"(d) (1) Suspension of Assistance.— Except to the extent necessary to make the payments required by paragraph (2), if the average rate of unemployment for the United States is less than 6 percent for each of 2 consecutive calendar quarters—
"(A) no amount may be appropriated under this Act for the fourth calendar quarter of the 4 calendar quarter period which begins with the first of such 2 calendar quarters, and
"(B) any amounts previously appropriated under this Act for such fourth calendar quarter shall be withheld from payment.
"(2) Whenever assistance is suspended under paragraph (1), it shall remain suspended until the fourth calendar quarter of the 4 calendar quarter period which begins with the first of 2 consecutive calendar quarters during which the average rate of unemployment is or exceeds 6 percent.".
ADJUSTMENTS FOR PAYMENTS
SEC. 3. Section 210(b) is amended to read as follows:
"(b) Adjustments.
"(1) Payments under this title may be made with necessary adjustments on account of overpayments or underpayments.
"(2) For any previous quarterly payment allotted pursuant to sections 202 and 203 in which a local government's allocation has been reduced as a result of a change in the methodology used to calculate the local unemployment rate as determined or assigned by the Secretary of Labor, the Secretary immediately shall make available sufficient funds to assure that such local government receives a lump sum supplemental payment such that the total prior allocations made pursuant to this Act are not less than the amount that otherwise would have been allotted to such local government under the methodology used prior to January 1, 1978. For purposes of this paragraph, eligibility is limited to those units of government which encompass or are within a standard metropolitan statistical area or central city for which current population surveys were used to determine annual unemployment date prior to January 1, 1978.
"(3) For any quarterly payment allotted pursuant to sections 202 and 203 in which a local government's allocation would be reduced as a result of a change in the methodology used to calculate the local unemployment rate as determined or assigned by the Secretary of Labor, the Secretary immediately shall make available sufficient funds to assure that such local government receives a supplemental payment such that the allocation made pursuant to this Act is not less than the amount that otherwise would have been allotted to such local government under the methodology used prior to January 1, 1978. For purposes of this paragraph, eligibility is limited to those units of government which encompass or are within a standard metropolitan statistical area or central city for which current population surveys were used to determine annual unemployment date prior to January 1, 1978.".
ELIMINATION OF CUT-OFF FOR LOW UNEMPLOYMENT; REPEAL OF PROGRAM STUDIES AUTHORITY
SEC. 4. (a) Section 210 (c) of the Public Works Employment Act of 1976 is repealed.
(b) Section 215 of such Act is repealed.
AUTHORIZATION OF APPROPRIATIONS FOR PUERTO RICO, GUAM, AMERICAN SAMOA, AND THE VIRGIN ISLANDS
SEC. 5 (a) Section 216 (a) of the Public Works Employment Act of 1976 is amended by
(1) striking out "five" and inserting in lieu thereof "eight"; and
(2) striking out "July 1, 1977" and inserting in lieu thereof "October 1, 1978".
(b) Section 216 (b) (3) (C) of such Act is amended by striking out "206,".
TITLE II—SUPPLEMENTARY FISCAL ASSISTANCE
SEC. 201. This title may be cited as the "Supplementary Fiscal Assistance Act of 1978".
FINDINGS OF FACT AND DECLARATION OF POLICY
SEC. 202. (a) Findings.—The Congress finds and declares that—
(1) State and local governments represent a significant segment of the national economy whose sound fiscal and economic condition is essential to national economic prosperity;
(2) long-term economic decline has imposed considerable hardships on the budgets of many State and local governments;
(3) general purpose fiscal assistance can be especially helpful to those State and local governments suffering with long-term economic problems; and
(4) a targeted general assistance program which aids the State and local governments with the most severe fiscal problems is an essential component of a comprehensive urban policy.
(b) Policy.— The Congress declares it to be the policy of the United States and the purpose of this title to provide general purpose fiscal assistance to State and local governments with severe long-term economic problems, as measured by an unemployment rate above six percent in periods when the national unemployment rate is below six percent. It is the intention of the Congress that amounts paid to a State or local government under this title shall not be substituted for amounts which the State would have paid or made available to the local government out of revenues from State sources.
AUTHORIZATION OF PAYMENTS
SEC. 203. (a) In General.— Whenever the seasonally adjusted national unemployment rate is between 5 percent and 6 percent, the Secretary of the Treasury (referred to in this title as the "Secretary") shall, in accordance with the provisions of this title, make payments to State and local governments with unemployment rates above 6 percent.
(b) Payments to Recipient Governments.— The Secretary shall pay, not later than five days after the beginning of each calendar quarter, to each State and local government which has filed a statement of assurances under section 206, an amount equal to the amount allocated to such government under section 204.
(C) AUTHORIZATION OF APPROPRIATIONS.— Subject to the provisions of subsection (d), there are authorized to be appropriated for each of the consecutive calendar quarters beginning after September 30, 1978, $15,000,000 plus such sums as may be necessary to implement section 211, for the purpose of making payments to State and local governments under this title.
(d) SUSPENSION OF ASSISTANCE.— If the average rate of unemployment for the United States is in excess of 5.99 percent or below 5.0 percent for each of 2 consecutive calendar quarters—
"(1) no amount may be appropriated under this title for the fourth calendar quarter of the 4 calendar quarter period which begins with the first of such 2 calendar quarters, and
"(2) any amounts previously appropriated under this Act for such fourth calendar quarter shall be withheld from payment.".
ALLOCATION
SEC. 204. (a) RESERVATIONS.
(1) ELIGIBLE STATES: The Secretary shall reserve one-third of the amounts authorized to be appropriated under section 203 in each calendar quarter for the purpose of making payments to eligible State governments under subsection (b) .
(2) ELIGIBLE UNITS OF LOCAL GOVERNMENT.— The Secretary shall reserve two-thirds of such amounts for the purpose of making payments to eligible units of local government under subsection (c).
(b) STATE ALLOCATION.
(1) IN GENERAL.— The Secretary shall allocate from amounts reserved under subsection
(a) (1) an amount for the purpose of making payments to each State equal to the total amount reserved under subsection (a) (1) for the calendar quarter multiplied by the applicable State percentage as defined in paragraph (2) .
(2) APPLICABLE STATE PERCENTAGE: For purposes of this subsection, the applicable State percentage is equal to the quotient resulting from the product of the State excess unemployment percentage multiplied by the State revenue sharing amount, divided by the sum of all such products for all the States.
(3) DEFINITIONS.— For the purposes of this section—
(A) the term "State" means each State of the United States;
(B) the State excess unemployment percentage is equal to the difference resulting from the subtraction of 6 percentage points from the State unemployment rate for that State, but such excess employment percentage shall not be less than zero;
(C) the State unemployment rate is equal to the rate of unemployment in the State during the appropriate calendar quarter, as determined by the Secretary of Labor and reported to the Secretary; and
(D) the State revenue sharing amount is the amount determined under section 107 of the State and Local Fiscal Assistance Act of 1972 for the most recently completed entitlement period, as defined in section 141(b) of such Act.
(C) LOCAL GOVERNMENT ALLOCATION.
(1) IN GENERAL.— The Secretary shall allocate from amounts reserved under subsection (a) (2) an amount for the purpose of making a payment to each local government, subject to the provisions of paragraph (4), equal to the total amount reserved under subsection (a) (2) for the calendar quarter multiplied by the local government percentage.
(2) Local government percentage.— For purposes of this subsection, the local government percentage is equal to the quotient resulting from the product of the local excess unemployment percentage, multiplied by the local revenue sharing amount, divided by the sum of such products for all local governments.
(3) Definitions.— For purposes of this subsection—
(A) the local excess unemployment percentage is equal to the difference resulting from the subtraction of 6 percentage points from the local unemployment rate, but such local excess unemployment percentage shall not be less than zero;
(B) the local unemployment rate is equal to the rate of unemployment in the jurisdiction of the local government during the appropriate calendar quarter, as determined or assigned by the Secretary of Labor and reported to the Secretary, except that in the case of a local government for which the Secretary of Labor cannot determine a local unemployment rate, he shall assign such local government the local unemployment rate of the smallest unit or subunit of local government for which he has determined a local unemployment rate which is within the jurisdiction of which such local government is located, unless—
(i) the Governor of the State in which such local government is located has provided the Secretary of Labor with a local government rate for such local government, and
(ii) the Secretary of Labor finds that such local unemployment rate provided by the Governor has been determined in a manner consistent with the procedures and methods used by the Secretary of Labor in determining local unemployment rates, in which case the Secretary of Labor shall assign such local government the local unemployment rate provided by such Governor,
(C) the local revenue sharing amount is the amount determined under section 108 of the State and Local Fiscal Assistance Act of 1972 for the most recently completed entitlement period, as defined in section 141(b) of such Act; and
(D) the term "local government" means the government of a county, municipality, township, or other unit of government below the State which—
(i) is a unit of general government, determined on the basis of the same principles as are utilized by the Bureau of the Census for general statistical purposes, and
(ii) performs substantial governmental functions.
The term "local government" includes the District of Columbia and also includes the recognized governing body of an Indian tribe or Alaskan Native Village which performs substantial governmental functions. Such term does not include the government of a township area unless such government performs substantial governmental functions.
(4) Special limitation.— If the amount which would be allocated to any unit of local government under this subsection is less than $250, then no amount shall be allocated for such unit of local government under this subsection.
USES OF PAYMENTS
SEC. 205. Each State and local government shall use payments made under this title for the maintenance of basic services customarily provided to persons in the area under the jurisdiction of such State or local government. State and local governments may not use payments made under this title for the acquisition of supplies and aterials or for construction, except for normal supplies or repairs necessary to maintain such basic services.
STATEMENTS OF ASSURANCES
SEC. 206. (a) Statement Required.— Each State and local government may receive payments under this title only upon filing with the Secretary a statement of assurances, at such time and in such manner as the Secretary may prescribe by rule. The Secretary may not require any such government to file more than one such statement during each fiscal year.
(b) Contents of Statement.— Each statement of assurances required under subsection (a) shall contain assurances that—
(1) the requirements of section 205 will be complied with:
(2) the State or local government filing the statement will—
(A) use fiscal, accounting, and audit procedures which conform to guidelines established by the Secretary after consultation with the Comptroller General of the United States, and
(B) provide to the Secretary and to the Comptroller General of the United States access to and the right to examine such books, documents, papers, or records as the Secretary, after reasonable notice, may reasonably require for the purpose of reviewing and determining compliance with the provisions of this title;
(3) reasonable reports will be furnished to the Secretary in such form and containing such information as the Secretary may reasonably require to carry out the provisions of this title;
(4) the requirements of section 207 will be complied with;
(5) the requirements of section 208 will be complied with; and
(6) such government will spend amounts received under this title only in accordance with the laws and procedures applicable to the expenditure of its own revenues.
NONDISCRIMINATION
SEC. 207. (a) (1) In General.— No person in the United States shall, on the ground of race, color, national origin, or sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity of a State or local government which receives funds made available under this title. Any prohibition against discrimination on the basis of age under the Age Discrimination Act of 1975 (42 U.S.C. § 6101 et seq.) or with respect to an otherwise qualified handicapped individual as provided in section 504 of the Rehabilitation Act of 1973 (29 U.S.C. § 794 et seq.) shall also apply to such program or activity. Any prohibition against discrimination on the basis of religion, or any exemption from such prohibition, as provided in the Civil Rights Act of 1964 (42 U.S.C. § 2000e(2)) or title VIII of the Act of April 11, 1968 (42 U.S.C. § 3601 et seq.) , shall also apply to such program or activity.
(2) Exceptions.
(A) Funding.— The provisions of paragraph (1) of this subsection shall not apply where any State or unit of local government demonstrates, by clear and convincing evidence, that the program or activity with respect to which the allegation of discrimination has been made is not funded in whole or in part with funds made available under this title.
(B) Construction projects in progress.— The provision of paragraph (1) relating to discrimination with respect to an otherwise qualified handicapped individual under section 504 of the Rehabilitation Act of 1973 shall not apply to construction projects commenced prior to January 1, 1977.
(b) Enforcement and Remedies.— Subsection (a) of this section shall be enforced by the Secretary in the same manner and in accordance with the same procedures as are required by sections 122, 124, and 125 of the State and Local Fiscal Assistance Act of 1972(31 U.S.C. § 1221 et seq.), to enforce compliance with section 122 (a) of such Act. The Attorney General shall have the same authority, functions, and duties with respect to funds made available under this title as he has under section 122(g), 122(h), and 124(c) of such Act with respect to funds made available under such Act. Any person aggrieved by a violation of subsection (a) of this section shall have the same rights and remedies as a person aggrieved by a violation of subsection (a) of section 122 of such Act, including the rights provided under section 124 (c) of such Act.
LABOR STANDARDS
Sec. 208. All laborers and mechanics employed by contractors on all construction projects funded in whole or in part by payments under this title shall be paid wages at rates not less than those prevailing on similar projects in the locality as determined by the Secretary of Labor in accordance with the Davis-Bacon Act (40 U.S.C. § 276a to §276a-5). The Secretary of Labor shall have, with respect to the labor standards specified in this section, the authority and functions set forth in Reorganization Plan No. 14 of 1950 (15 C.F.R. 3176) and section 2 of the Act of June 13, 1934, as amended (40 U.S.C. § 276c) .
LIMITATION OF PAYMENTS TO STATES
SEC. 209. (a) No State shall receive a payment for any calendar quarter under this Title which exceeds the amount of the payment such State received under Title I of this Act for the most recent calendar quarter for which payments were made under such Title I.
(b) The Secretary shall reallocate any amounts withheld from payment under subsection (a) to units of local government in accordance with the provisions of Sec. 204 ©).
WITHHOLDING
SEC. 210. Except as otherwise provided by section 207(b), whenever the Secretary, after affording reasonable notice and an opportunity for a hearing, finds that a State or unit of local government has failed to comply substantially with any assurance contained in the statement filed pursuant to section 206 of this title, the Secretary shall notify such government that further payments will not be made under this title until he is satisfied that there is no longer any such failure to comply. The Secretary shall make no further payments to such government under this title until he is satisfied that the State or unit of local government is in substantial compliance with the provisions of this title.
ADJUSTMENTS FOR PAYMENTS
SEC. 211. Adjustments.
(a) Payments under this title may be made with necessary adjustments on account of overpayments or underpayments.
(b) For any quarterly payment allotted pursuant to sections 203 and 204 in which a local government's allocation would be reduced as a result of a change in the methodology used to calculate the local unemployment rate as determined or assigned by the Secretary of Labor, the Secretary immediately shall make available sufficient funds to assure that such local government receives a supplemental payment such that the allocation made pursuant to this Act is not less than the amount that otherwise would have been allotted to such local government under the methodology used prior to January 1, 1978. For purposes of this paragraph, eligibility is limited to those units of government which encompass or are within a standard metropolitan statistical area or central city for which current population surveys were used to determine annual unemployment data prior to January 1, 1978.
RULEMAKING
SEC. 212. The Secretary is authorized to prescribe, after consultation with the Secretary of Labor, such rules as may be necessary to carry out his functions under this Act. Such rules shall be prescribed initially by the Secretary not later than ninety days after the date of enactment of this Act.
REPORTS
SEC. 213. The Secretary shall report to Congress as soon as is practical after the end of each calendar year during which payments are made under the provisions of this title. Such reports shall include detailed information on the amounts paid to each State and unit of local government under the provisions of this title and any amounts withheld by the Secretary pursuant to sections 207 and 209.
Mr. HATHAWAY. Mr. President, I am pleased to join with the senior Senator from Maine (Mr. MUSKIE in introducing legislation to extend the Anti-recession Fiscal Assistance Act.
The program was developed in 1976 as a Federal response to the fiscal plight of State and local government units during the recent recession. Countercyclical revenue sharing has been invaluable in maintaining vital Government functions without raising local taxes during the financial dislocations caused by high unemployment and economic stagnation.
Senator MUSKIE helped introduce this concept to the Senate and saw through its enactment. I have had the opportunity to review the program as chairman of the Senate Finance Subcommittee on Revenue Sharing. We believe this program is essential to hard-pressed Government units during periods of high unemployment.
For this reason, I am introducing this bill as a reauthorization of the countercyclical assistance program with special provisions for those governments with excessive unemployment as the national program terminates.
The Senate Finance Committee plans to act on reauthorization this week. I am confident that this legislation will be favorably received by my colleagues.