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The Local Partnership Act: what it could mean for your community.

HR 5798 was passed by the House Government Operations Committee on August 11, 1992 on a bipartisan vote of 31 to 10 and, if passed and included in the federal budget, would provide direct funding to many American cities and towns.

To become effective the legislation would have to: (1) be passed by the full HOuse of Representatives, (2) be passed in the Senate (both by Committee and on the floor, (3) be signed by the president and (4) gain actual budget funding through the normal appropriations process (which is already well advanced in both chambers of the Congress).

The following is a description of the proposed program.

HR 5798 is the proposed Local Partnership Act of 1992. Under the proposal $3 billion in funds would be made directly available to cities, towns and other general purpose local governments in the United States with distribution based on a multiple factor distribution formula. The money is proposed for distribution during the federal fiscal years 1992 or 1993. The language of the proposed legislation requires that any appropriation for the program "shall be offset by cuts elsewhere in (federal) appropriations for that fiscal year."

Permitted Uses of Funds--Funds provided under this proposal would be required to be spent in the following categories: rehiring workers, restoring services, or expanding programs which, because of the most recent recession, have been laid-off, eliminated, or overburdened, respectively: and carrying out one or more programs of the unit related to education, public safety, health, social services such as emergency food or shelter, activities that are mandated by federal law, including such activities under the Federal Water Pollution Control Act or the Americans with Disabilities Act of 1990 or any public works project for which the on-site labor can begin within 90 days after the date of the approval of the project by the unit.

A unit of government would be required to repay to the U.S. Treasury any funds received and not spent by October 31, 1993.

Distribution Formula

* Among States--After setting aside one percent of the funds for U.S. Territories, by one of two formulas whichever provides a state the larger share. The formulas make use of the following factors: population, tax effort, relative income, relative rate of labor force unemployment, income tax collections and urbanized population.

* Within States--After providing for payments to any Indian Tribes or Alaskan Native Villages in the state, the funds are distributed on a different formula. This formula includes the following elements: population, general tax effort (which excludes any taxes levied for education purposes) and the per capita income of residents of the jurisdiction compared to the per capita income of state residents. In order not to provide a windfall to jurisdictions with a large tax base relative to their population, a government only receives credit for tax effort equal to 2.5 times the general tax effort factor for all units of local government in the state.

Under the proposal four classes of jurisdictions of jurisdictions are created:

a) Jurisdictions that would receive less than $5,000 (or who waive their payment) would have those amount placed in a fund for allocation by the governor to public works projects within the state.

b) Jurisdictions whose residents' per capita income is more than 160 percent of the per capita income of residents of the state would be excluded from participation.

c) Jurisdictions whose residents' per capita income is more than 120 percent of the state average but equal to or less than 160 percent of this figure would receive "half funding" under the Act.

d) Jurisdictions whose residents' per capita income is 120 percent or less of the state average will receive "full funding".

What is called here, "half and full" funding is achieved by dividing funds allocated to the state area into two equal "pots". One pot is distributed among all jurisdictions with resident per capita incomes equal to or less than 160 percent of the state average and the second pot distributed among all jurisdictions whose resident per capita income is equal to or less than 120 percent of the state average.

Other Provisions

The proposal contains other provisions including procedures to guard against and adjudicate allegations of discrimination, audit requirements, a required public hearing prior to local determination of spending decisions, 10 percent of contracts or subcontracts shall be expended with small business controlled by socially and economically disadvantaged individuals and women, a requirement that any employee receiving at least 25 percent of his or her pay from the act must be paid wages prevailing for similar jobs by the government and requirements to be pay "Davis Bacon" wages on any construction project receiving 25 percent or more of its funding from the act.
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Author:Peterson, Doug
Publication:Nation's Cities Weekly
Date:Sep 14, 1992
Words:788
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