[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 184 Introduced in Senate (IS)]

112th CONGRESS
  1st Session
                                 S. 184

To prohibit taxpayer bailouts of fiscally irresponsible State and local 
                              governments.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

             January 25 (legislative day, January 5), 2011

  Mr. Ensign introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To prohibit taxpayer bailouts of fiscally irresponsible State and local 
                              governments.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. PROHIBITION ON THE USE OF FEDERAL FUNDS TO PAY STATE 
              OBLIGATIONS.

    Notwithstanding any other provision of law, no Federal funds may be 
used to purchase or guarantee obligations of, issue lines of credit to 
or provide direct or indirect grants-and-aid to, any State government, 
municipal government, local government, or county government which a 
nationally recognized statistical rating organization has determined 
has defaulted on its obligations or is likely to default, absent such 
assistance from the United States Government.

SEC. 2. LIMIT ON USE OF BORROWED FUNDS.

    The Secretary shall not, directly or indirectly, use general fund 
revenues or funds borrowed pursuant to title 31, United States Code, to 
purchase or guarantee any asset or obligation of any State government, 
municipal government, local government, or county government or to 
otherwise assist such governments, in any instance in which a 
nationally recognized statistical rating organization has determined 
that the State government, municipal government, local government, or 
county government has defaulted on its obligations or is likely to 
default, absent such assistance from the United States Government.

SEC. 3. LIMIT ON FEDERAL RESERVE FUNDS.

    The Board of Governors of the Federal Reserve System shall not, 
directly or indirectly, lend against, purchase, or guarantee any asset 
or obligation of any State government, municipal government, local 
government, or county government or to otherwise assist such 
governments, in any instance in which a nationally recognized 
statistical rating organization has determined that the State 
government, municipal government, local government, or county 
government has defaulted on its obligations or is likely to default, 
absent such assistance from the United States Government.
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