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    "ocrText": "The original documents are located in Box 5, folder \"Revenue Sharing\" of the Bradley H.\nPatterson Files at the Gerald R. Ford Presidential Library.\nCopyright Notice\nThe copyright law of the United States (Title 17, United States Code) governs the making of\nphotocopies or other reproductions of copyrighted material. Gerald Ford donated to the United\nStates of America his copyrights in all of his unpublished writings in National Archives collections.\nWorks prepared by U.S. Government employees as part of their official duties are in the public\ndomain. The copyrights to materials written by other individuals or organizations are presumed to\nremain with them. If you think any of the information displayed in the PDF is subject to a valid\ncopyright claim, please contact the Gerald R. Ford Presidential Library.\nDigitized from Box 5 of the Bradley H. Patterson Files at the Gerald R. Ford Presidential Library\nTHE WHITE HOUSE\nWASHINGTON\n9 p- - -: - compliment\nReg 50 procedues -\nm.\n261 Tribes\n347 Indian groups recigne &\nBIA actifies\nFORD is LIBRA RAID\nBrad\nEMBARGOED FOR RELEASE\nUNTIL 9:00 A.M., EDT,\nWEDNESDAY, OCTOBER 13, 1976\nOCTOBER 12, 1976\nOffice of the White House Press Secretary\nTHE WHITE HOUSE\nFACT SHEET\nGENERAL REVENUE SHARING\nSTATE AND LOCAL FISCAL ASSISTANCE AMENDMENTS\nOF 1976 (H.R. 13367)\nThe President today signed H.R. 13367, a three and three-quarters\nyear extension of the Federal Revenue Sharing program.\nThe bill provides a total of $25,555,856,277 to be distributed\nover the 45-month period (January 1, 1977 through September 30,\n1980) to eligible State and local governments.\nBACKGROUND\no History - The General Revenue Sharing program was authorized\nby Title I of the State and Local Fiscal Assistance Act of 1972,\nwhich was signed into law on October 20, 1972. The present law\nexpires on December 31, 1976. Under the current program States\nand local governments will have received $30.2 billion.\no Use - State and local governments have used these funds to\nmaintain and expand a wide range of programs and services.\nAccording to the testimony of governors, mayors, and county\nofficials, failure to extend the General Revenue Sharing pro-\ngram would have resulted in increased property taxes, cutbacks\nin essential services or more unemployment.\no Provisions - The bill which cleared the Congress on September 30,\n1976, closely follows President Ford's legislative recommendations\nto preserve the essential concept of the current Act, provide\ncontinued growth in funding, and improve and strengthen the\nprogram.\no Renewal - President Ford recommended renewal of the General\nRevenue Sharing program on April 25, 1975, urging \"that the\nCongress act to continue this highly successful and important\nnew element of American Federalism well in advance of the ex-\npiration date, in order that State and local governments can\nmake sound fiscal plans.\"\no Extension and Funding - H.R. 13367 extends the General Revenue\nSharing program through fiscal year 1980, from January 1, 1977,\nthrough September 30, 1980. It authorizes funds to be appropriated\nto the State and Local Government Fiscal Assistance Trust Fund\nto pay revenue sharing entitlements in the following amounts:\nfor the period January 1, 1977, to September 30, 1977, $4.99\nbillion; for each of fiscal years 1978, 1979, and 1980 a maximum\nof $6.85 billion. The actual authorization for each of these\nmore\nFORD\nGERALDA\nyears will be determined by multiplying $6.65 billion by the\nratio of individual Federal income tax receipts for the calendar\nyear ending more than one year before the end of the entitle-\nment period, to 1975 receipts.\nThis funding compares to the current annual funding rate of\n$6.65 billion. The Concurrent Resolution for Fiscal Year\n1977 includes outlays of $6.7 billion for the program.\nPresent law provides for the appropriation of revenue sharing\nfunds in the authorizing Act which removes them from the annual\nappropriations process. H.R. 13367 requires annual appropriation\naction.\no Nondiscrimination provisions - H.R. 13367 significantly amends\nthe nondiscrimination provisions of the existing bill by broad-\nening their coverage and providing new expedited enforcement\nmechanisms. Prohibitions against discrimination on the basis\nof age, handicapped status, and religion are added to those in\npresent law of race, color, national origin, and sex in programs\nor activities funded in whole or in part with revenue sharing\nfunds. When an allegation of discrimination is made, the unit\nof government will have to meet a new test of \"clear and con-\nvincing evidence\" that the program or activity is not directly\nreceiving revenue sharing funds.\nThe bill requires the Secretary of the Treasury to endeavor to\nenter into agreements with State and Federal agencies to inves-\ntigate noncompliance with the nondiscrimination provisions. It\nadds an expedited process for determining noncompliance and\nending payments, including hearings by administrative law judges.\nH.R. 13367 authorizes civil suits by private citizens, after\nexhaustion of administrative remedies, for redress of any act\nor practice prohibited by law, and authorizes the Attorney\nGeneral to intervene in private actions \"of general public\nimportance\" brought for violation of the nondiscrimination\nprovisions. Courts are authorized to award reasonable attorney\nfees to a prevailing plaintiff or defendant, other than the\nUnited States.\no Other major provisions of H.R. 13367:\n-- provides for greater public participation by requiring\nat least one public hearing on the possible uses of revenue\nsharing funds and at least one public hearing on the proposed\nuse of revenue sharing funds in relation to the unit of\ngovernment's entire budget.\n-- requires more detailed reporting by State and local\ngovernments on the use of revenue sharing funds, including\nsetting forth the amounts and purposes for which the funds\nhave been appropriated, spent, or obligated and showing their\nrelationship to functional items in the government's budget\nand identifying differences between the actual use of funds\nreceived and their proposed use.\n-- requires units of government which expect to receive\nrevenue sharing funds to have an independent audit of all\ntheir financial statements, in accordance with generally\naccepted auditing standards, to determine compliance with\nthe revenue sharing law, at least once every three years.\nThis requirement is waived for periods in which a unit of\ngovernment receives less than $25,000. Present law does not\nrequire an independent audit, nor does it include waiver\nauthority.\nmore\n3\n-- repeals the provision limiting the use by local govern-\nments of revenue sharing funds to priority expenditure categories\nsuch as maintenance and operating expenses for public safety,\nenvironmental protection, public transportation, health, and\ncapital expenditures authorized by law. This will give units\nof local government more flexibility in deciding how to use\nrevenue sharing funds.\n-- repeals the prohibition on the use of revenue sharing\nfunds by State or local governments for the matching share\nneeded to receive other Federal grant funds.\n-- requires the Advisory Commission on Intergovernmental\nRelations (ACIR), effective February 1, 1977, to study and\nevaluate the American Federal fiscal system in terms of the\nallocation and coordination of public resources among Federal,\nState and local governments and to report within three years\nof the first appropriation for the study, to the President and\nthe Congress on its findings and conclusions together with\nrecommendations for legislation it deems advisable.\n-- amends the provisions on State maintenance of transfers\nto local governments to require that States maintain transfers\nat or above the average of their intergovernmental transfers to\nlocalities during the immediately preceding two years. Present\nlaw compares the level of transfers to those made in fiscal\nyear 1972.\n-- requires the Secretary of the Treasury to report to\nthe Congress not later than March 1 of each year on compliance\nwith requirements on the use of funds by recipients, and to\nmake proposals to remedy significant problems in the administra-\ntion of the Act through appropriate legislation.\n# # #\nOF THE\nE TREASTER\nfor Brad Patterson\n1789\nJEANNA D. TULLY\nDIRECTOR\nOFFICE OF REVENUE SHARING\nDEPARTMENT OF THE TREASURY\nWASHINGTON, D. C. 20226\n202-634-5157\nTHE WHITE HOUSE\nWASHINGTON\nOctober 13, 1976\nNOTE TO JEANNA TULLY\nThank you for your phone call\nof the other day and for sending me the\nmaterials about Revenue Sharing.\nMay I suggest, please, that\nyou send a follow-up note on behalf of both\nof us to Mrs. Bellcourt (and send me a copy)\nsince I hesitate to draft a letter here which\ndeals so directly with your own regulations\nand which bears SO closely on an active\ndisciplinary case which your office is\nhandling.\nPlease advise Mrs. Bellcourt on\nwhat her rights are to get access to the audit\nreports, tell her what you can about the\ndisciplinary proceedings re the Tribal Council.\nSad Patton\nFORD &\ngetting involved\nyour guide to general revenue sharing\nDepartment\nof the Treasury\nOffice of\nPU\nRevenue Sharing\n&\nCCP\nGERALD R. FORD\nCCP CP\nDefinitions\nORS-These initials stand for the Office of Revenue Sharing.\nThis booklet, prepared by the Office of Revenue Sharing, provides members\nPreface\nof Common\nGRS-These initials stand for General Revenue Sharing.\nof the public with an understandable presentation of General Revenue Sharing\nAppropriation-A budgetary action by a government (a vote of the gov-\nand its importance to them. Several public interest groups have reviewed this\nRevenue Sharing\nerning body such as a city council, a town council, a county commission\npublication in draft and have made helpful and useful suggestions. We acknowl-\nTerms\nor a tribal council) to make available money in its budget for some\nedge their assistance and thank them for it. Listed below are the names of those\nspecific purpose. For example, a county commission votes to appro-\ngroups which returned their comments to us. However, the Office of Revenue\npriate (to make available) $10,000 to its department of recreation.\nSharing takes full responsibility for this publication and does not imply endorse-\nment by any organization listed in this preface.\nCapital Expenditures-Costs to a government which are usually non-\nrecurring, from year to year such as the acquisition of land; construction\nAmerican Federation of State, County and Municipal Employees\nor major alterations or replacement of buildings; improvements to\nAmerican Library Association\nexisting facilities; the purchase of machinery and equipment.\nCabinet Committee on Opportunity for Spanish Speaking People\nChief Executive Officer-The elected or legally designated official or offi-\nCenter for Community Change\ncials who have primary responsibility for the conduct of that unit's\nCenter for National Policy Review\ngovernmental affairs. Examples are mayor, city manager, county execu-\nCommon Cause\ntive or chairman of county board, governor, chief or president.\nFederalism Seventy-Six\nInternational City Management Association\nEntitlement Funds-The amount of money state and local governments\nJoint Center for Political Studies\nreceive for any entitlement period.\nLeadership Conference on Civil Rights\nEntitlement Period-Any of seven pay periods from January 1, 1972 to\nLeague of Women Voters\nDecember 31, 1976, designating various sums of general revenue shar-\nMunicipal Finance Officers Association\ning money to be distributed and varying in length from 6 months to\nNational Association for the Advancement of Colored People\none year.\nNational Association of Counties\nFiscal Year-A twelve-month accounting period. It may be the same as\nNational Center for Voluntary Action\nthe calendar year or it may be different. In many places the fiscal year\nNational Clearinghouse on Revenue Sharing\nNational Council of La Raza\nbegins July 1 and ends on June 30.\nNational Easter Seal Society for Crippled Children and Adults, The\nLocal Government-For purposes of this program, a unit of general gov-\nNational Governors' Conference\nernment below the state government level, such as a city, county, town,\nNational League of Cities/U.S. Conference of Mayors\ntownship, Indian tribe, Alaskan native village, borough, or parish.\nNational Urban League, Inc.\n\"Matching\" Funds-A financial agreement between the Federal govern-\nOffice of Government Liaison, United States Catholic Conference\nment and a state or local government in which the Federal government\nwill provide a specific amount of money if a state or local government\nwill put up a specific amount of money for a program, activity or a\nIn the right hand margin of this booklet, reference to sections of the general\nconstruction project. For example, new equipment for a city's voca-\nrevenue sharing act (Title I of the State and Local Fiscal Assistance Act of 1972)\nare abbreviated as \"Sec.\" Reference to the Office of Revenue Sharing's regula-\ntional rehabilitation center is going to cost $100,000. The Federal gov-\ntions is abbreviated as \"Reg.\" For more detailed information concerning the Act\nernment agrees to pay part of this cost by giving the city $75,000 only\nor Regulations, consult these references.\nif the city will pay $25,000 of the cost. Also contributions by a state or\nWe welcome your suggestions which would make this booklet more useful in\nlocal government in the form of personnel, equipment or facilities may\nsubsequent editions.\nqualify as matching contributions (called \"in-kind matching\").\nGraham W. Watt\nObligation (Encumbrance)-Any contractual or binding financial agree-\nDirector\nment entered into by a government to pay for services, equipment, or\nOffice of Revenue Sharing\nMarch, 1974\nconstruction projects. In other words, a binding financial agreement\nfor a government is 1) a contract, 2) a purchasing order issued to a\ncompany or organization to buy equipment or material or 3) payment\nof employee salaries for services rendered.\nOperating and Maintenance Expenditures-Recurring expenses to a gov-\nernment such as salaries.\nRecipient Government-Any general government including Indian tribes\nand Alaskan native villages eligible to receive General Revenue Sharing\nmoney.\nYour Government's General Revenue Sharing Trust Fund-Either a sep-\narate bank account in which your government must deposit its GRS\nFor sale by the Superintendent of Documents, U.S. Government Printing Office, Washington. D.C. 20402\nmoney or a separate set of GRS accounts maintained in your govern-\nment's financial records or books.\nii\n1\nIntroduction\nOn October 20, 1972, the State and Local Fiscal Assistance Act, better known\nas general revenue sharing, was signed into law. The program's basic purpose is\nYour\nto provide state and local governments with the opportunity and the money to\ndeal with community problems at a local level. Traditionally, federal categorical\nInvolvement\ngrants have been made for very specific purposes, legislated by Congress and\nadministered by federal agencies. Under the general revenue sharing program,\nThis section discusses your government's general revenue\ngovernors and state legislatures, mayors and city councils, county executives and\nsharing reporting responsibilities to the public and pre-\ncounty councils, tribal chiefs and tribal councils, and the people of all of these\nsents suggestions for your participation in local govern-\nment decision making.\ncommunities are determining how this money is to be used.\nIn each state, it will be local officials, responding to local conditions and local\nconstituencies who will decide what should happen; and more importantly,\nindividual citizens can now hold their own elected officials directly accountable\nReporting Responsibilities\nfor the expenditure of revenue sharing funds.\nReports are published in local newspapers for the public's information. This is\nCommunity members may become involved in the decision-making for this\nwhere you get involved! Each government receiving GRS money must file\nmoney by talking with local officials, attending council or commission meetings,\nreports each year with ORS:\nserving on community advisory groups, writing letters to the editor, encouraging\n1) The Planned Use Report shows a government's proposals for the use of its\nGRS money for a specific entitlement period.\ncommunity awareness and discussion. The purpose of this booklet is to provide\n2) The Actual Use Report indicates a government's actual expenditure of GRS\ninformation about the general revenue sharing program, especially about its\nmoney.\naspects which directly encourage public involvement in decision-making. Further\nLook for the publication\ninformation may be obtained from:\nThe Planned Use Report\nSec. 121 (b) & (c)\nof your government's reports.\nOffice of Revenue Sharing\nDepartment of the Treasury\nThe Act requires that Planned Use Reports be filed with the U. S. Treasury\nWashington, D.C. 20226\nDepartment and published in a newspaper of general circulation within the\ngeographic area of your government.\nTable\nYour Involvement\nThe purpose of this publication requirement is to provide you with information\nSee the Public Participation\nabout how your government proposes to use its general revenue sharing money.\nPlanning Calendar.\n1 Reporting Responsibilities\nof Contents\nThe published report will inform you of the whole range of funding choices\n3\nRevenue Sharing and Your Government's Budget\navailable to your government under the general revenue sharing program.\n6 Information Sources in Your Community\n7 Examples of Public Participation\nYour government is not legally obligated to carry out the proposed uses of GRS\n9 Public Participation Planning Calendar\nmoney which are reported on the published Planned Use Report. Therefore,\n9 Citizens' Check List\nafter surveying your community's needs and reading the Planned Use Report,\ngive your suggestions for \"priority uses\" of this money. The reporting mecha-\nThe Act\nnism gives you an opportunity to react to your government's views of local spend-\n13 Somę Specifics of the General Revenue Sharing Program\ning priorities and to suggest alternatives!\n14 Use of General Revenue Sharing Money\n15 Restrictions on the Use of General Revenue Sharing Money for Local and\nORS supplies the report form to each government.\nState Governments\nPlanned Use Reports must be published in a local newspaper and filed with the\nSupplementary Information\nORS before the beginning of an entitlement period. Units of government failing\nto file the report are not in compliance with the law, and their GRS payments\n17 Filing a Complaint\nwill be delayed until the report is filed.\nAllow yourselves enough time to\n17 ORS Action After Receipt of Complaint\norganize, comment, and suggest\n18 ORS Action After Receipt of Discrimination Allegation\nThe report must show the amounts and purposes for which your government\nalternative proposals for\n18 Discriminatory Actions Prohibited\nproposes to use the GRS money it expects to receive for an entitlement period\nGRS money.\nbased on an estimate supplied by the ORS.\n19 Capital Expenditures for Local Governments\n19 General Revenue Sharing Money Used for Social Services for Poor or\nEach government receives its Planned Use Report about 60 days before it must\nAged\nbe returned to the ORS.\n21 Indian Tribes and Alaskan Native Villages\n21 Restrictions on Use of General Revenue Sharing Money by Secondary\nRecipients\nYour government must:\n22 Your Government's Responsibilities to the Federal Government\n23 Other Office of Revenue Sharing Publications Available at the Govern-\nPublish an exact copy (it may be reduced in size but not abbreviated) of the\nment Printing Office\nPlanned Use Report in a newspaper of general circulation within its geographic\narea.\n2\n3\nThe Rules and Regulations for general revenue sharing do specify\nthe filing date of the report with ORS but not the date of publication\nThe Actual Use Report\nin your local newspapers. Ask your government when these reports\nThe Act requires that an Actual Use Report be filed with the U. S. Department\nare ordinarily published.\nof Treasury and be published in a newspaper of general circulation within the\ngeographic area of your government. Sec. 121 (a) & (c)\nAdvise all other local news media, including minority and bilingual news media,\nThe information on the Planned\nabout the publication of the report.\nUse Report hopefully will stimulate\nThe report form is supplied by ORS.\nSee the Public Participation\npublic discussion of state and local\nHave the chief executive officer sign a statement of assurances (see \"Your\nPlanning Calendar.\nspending priorities for general\nGovernment's Responsibilities to the Federal Government\" in the Supplementary\nThe Actual Use Report must be filed after the end of each entitlement period.\nrevenue sharing money.\nInformation section).\nDiscussion, in turn, will lead to\nThe report shows the amount and purposes for which GRS money was actually\nincreased public participation in\nMake available for public inspection during normal working hours a copy of\nspent or obligated (encumbered).\nthe decision-making process at\nthe report and any documents which explain and support the information\nthe state and local levels.\nsubmitted on the report.\nThe report shows any interest earned and any unexpended balance in the trust\nfund.\nA Sample Planned Use Report\nYour government must comply with the same publication and pub-\nForm For Local Governments\nlicity requirements for the Actual Use Report as are required for the\nPlanned Use Report.\nCheck your newspapers between\nMay 1 and June 30 for the publi-\nThe Actual Use Report may differ from your government's published Planned\ncation of this form.\nUse Report. The Actual Use Report is providing information about actual ex-\nThis is where you get involved!\npenditures, not proposed expenditures. For example, your government may have\nchanged its proposed use of its GRS money because of an unanticipated\nemergency or because citizens organized and requested GRS money for a\ncommunity need that had not been considered a priority need in your govern-\nYour government's\nAmount of available\nment's original proposals. Such changes do not require that a new Planned Use\nname is printed\nGRS money is printed\nhere.\nReport be filled out and published. Therefore, in order to be aware of changes\nCompare your government's Actual\nhere.\nin your government's proposed uses, the public should monitor actual expendi-\nUse Report with its Planned Use\nGENERAL REVENUE SHARING REPORT OF PLANNED USE\ntures of GRS money.\nReport for the same period of time.\nGeneral Revenue Sharing provides federal funds directly to local and state governments. The law requires each government to publish\na report of its plans for the use of these funds to inform its citizens and to encourage their participatic in deciding how the money\nought to be spent. Your government may spend its General Revenue Sharing money for the purposes listed below.\nGeneral Revenue Sharing\nPLANNED EXPENDITURES\nTHE GOVERNMENT OF\nPRIORITY\nOPERATING/\nand Your Government's\nCAPITAL (B)\nCATEGORIES (A)\nMAINTENANCE (C)\nANTICIPATING A GENERAL REVENUE SHARING PAY-\n1 PUBLIC SAFETY\n$\n$\nMENT OF\nDURING THE FIFTH ENTITLEMENT PERIOD, JULY 1, 1974\nBudget\n2 ENVIRONMENTAL\nPROTECTION\n$\n$\nTHROUGH JUNE 30, 1975, PLANS TO SPEND THESE\nFUNDS FOR THE PURPOSES SHOWN.\nThe general revenue sharing law states that governments receiving GRS money\n3 PUBLIC\nTRANSPORTATION\n$\n$\nACCOUNT NO.\nmust use it in accordance with the same rules and procedures that regulate the\n4 HEALTH\n$\n$\nexpenditure of the government's own money, Sec. 123 (a) (4)\nCitizens should learn their government's procedure for preparing and approv-\n5 RECREATION\n$\n$\ning its budget and discover where their involvement and assistance may be most\n6 LIBRARIES\n$\n$\neffective. This is where you get involved!\n7 SOCIAL SERVICES\n$\n$\nThe general revenue sharing money that your government receives is new\n(D) The news media have been advised that a complete copy of\nFOR AGED POOR\nthis report has been published in a local newspaper of general\nuncommitted money which makes it different from much of your government's\n8 FINANCIAL\nADMINISTRATION\n$\n$\ncirculation. have records documenting the contents of this\nreport and they are open for public scrutiny at\nbudget which is already committed from year to year for such expenses as\n9 MULTIPURPOSE AND\nGENERAL GOVT.\n$\nsalaries, ongoing projects, pensions, repayment of debts and paying interest on\nbonds and notes. Your involvement in the local decision-making process can\n10 EDUCATION\n$\n(E) ASSURANCES (Refer to instruction E)\nI assure the Secretary of the Treasury that the non-discrimina-\ndetermine how this \"new money\" is to be spent.\n11 SOCIAL\n$\ntion and other statutory requirements in Part E of the\nDEVELOPMENT\ninstructions accompanying this report will be complied with\n12 HOUSING COM-\nUNITY DEVELOPMENT\n$\nby this recipient government with respect to the entitlement\nfunds reported hereon.\nThe Budget\n13 ECONOMIC\nDEVELOPMENT\n$\nYour government's budget consists of legislatively approved appropriations\n14 OTHER (Specify)\n$\nSignature of Chief Executive Officer\nDate\n(the state assembly, city council, county commission, tribal council votes approval\n15 TOTALS\n$\nName & Title-Please Print\nof the budget.)\nThe steps in your government's\nExpenditure Categories\nThe statement of assurances (See \"Your Government's\nSupporting informa-\nEach state and local government receiving GRS money has its own procedural\nregular budgetary procedure are\n(See \"Use of GRS Money\"\nResponsibilities\nin Supplement Information section)\ntion is located\nlaws for preparing and approving its budget. Inquire about them! The diagram\nfollowed when it determines the\nin The Act section)\nhere.\nshows the basic aspects of this procedure.\nuses of GRS money.\n4\n5\n-current expenses (operating and maintenance costs such as salaries, sup-\nplies, contractual services)\n-capital expenditures (nonrecurring expenses such as the purchase of equip-\nPreparing Budget\nReview of\nPresentation\nment or the construction of a building)\n-debt service\nRequests\nRequests\nof the Budget\nThis proposed budget is the government's financial plan of income and expenses\nfor one or more fiscal years.\nThe Public\nLegislative Review\ncopies of this budget document are made available to the media,\nlibraries, civic groups, other public interest groups and to individual citizens.\nand Public Hearings\nExtra copies of the document are on file for public inspection in the Office of\nthe Chief Executive.\n4. Legislative Review and Public Hearings\nLegislative\nThe Adopted\nThe Government\nThe government's legislative body meets to discuss and\nAction\nBudget\nstudy the budget proposed by the Chief Executive Officer and his staff. Legisla-\ntive committees may study specific parts of the budget document and make\nrecommendations to the legislature as a whole.\nPUBLIC\nHEARING\nThe Public\nthe legislative body usually holds public hearings on the various\nparts of the proposed budget. Community groups and individuals now have the\nopportunity to formally express their opinions about the budget and can make\n1. Preparing Budget Requests\nsound requests and recommendations about any part or proposal.\nThe Government\nseveral months before the government's legislative body\n5. Legislative Action\nthe full legislature votes on the budget after con-\nwill meet to discuss the budget, agencies and departments within the govern-\nsidering testimony at the public hearings and the recommendations of its\nment begin to figure out how much money they will need in the next fiscal year.\ncommittees. At this point the vote generally is whether to adopt the entire\nThey consider present operating costs and the expense of proposed new or\nbudget as presented by the executive, to change certain parts, add new provisions\nexpanded programs, and prepare budget requests which are forwarded to the\nor to \"cut out\" some programs.\nChief Executive Officer and his Budget Committee.\nSee the Public Participation\nThe Public\ncitizens actively studying community needs may submit factual\nSmall Governments (5,000 or less population)\nPlanning Calendar.\nbudgetary requests to their government's agencies and departments. Moreover,\ninterested groups may assist officials in researching community needs for services\nThe budgetary process for governments of this size is usually less formal and\nand in evaluating existing services during this phase of preparing the budget.\nless complex. Generally, citizens living in these smaller communities are much\ncloser to their government's day-to-day operations, having many informal dis-\n2. Review of Budget Requests\ncussions of community needs and governmental expenditures. Citizens have\nmore opportunity for personal contact with their government officials and can\nThe Government\nthe Chief Executive Officer, budget officials, and depart-\neasily discuss budgetary requests with them.\nmental administrators meet to review and coordinate the requests from all the\nThe budget is usually prepared, presented to the legislative body for review\nparts of the government. They ask the government's financial officers (Comp-\nand approved at two or three meetings.\ntroller, Department of Revenue, Finance or Assessment) for information about\nhow much money the government will receive in the next year. The requests\nusually exceed the estimate of funds to be available. Requests are confirmed,\nAmending the \"Adopted Budget\"\ndenied, or altered to fit within the government's projected income.\nA local government's and even a state's budget can be amended during the\nfiscal year, and the process for amendment is very similar to the process of\nThe Public\ninformed and well-researched budget requests made by citizens\napproving a budget. The legislative body votes on all amendments to the budget.\ncan assist officials as they justify agency and departmental budget requests.\nCitizens may suggest amendments to the budget during the year.\n3. Presentation of the Budget\nThe Budget Calendar\nThe Government\nthe Chief Executive Officer presents the budget to the\nMost governments have a budget calendar which determines the beginning\nlegislative body. This document proposes how much money is going to be spent,\ndate of their fiscal year, the date for presenting the budget to the legislative body,\nfor what, by whom, (department, agency, committee, etc.) and from where the\nthe date by which the budget must be approved, the general scope of the\nmoney will come (property tax, federal grants, license and permit fees, death\nbudget, and the responsibility and authority for budget preparation and execu-\nand gift tax, sales tax from gasoline, liquor, tobacco and general revenue\ntion. The deadline dates of a government's budget calendar are set by state law,\nInquire about your\nsharing money). It also divides expenditures into three broad categories:\ncity charter, county resolution, ordinance, etc.\ngovernment's budget calendar\n6\n7\nAnnual Financial Report\nProblems Involving Discrimination\nGenerally, governments publish an annual financial report which provides\nDirector of Personnel\ninformation about their financial condition, organization of the government,\nEqual Employment Opportunity Office\ntabulations and other statistics. This report is usually filed after the close of the\nAffirmative Action Office\nfiscal year and is available for public inspection in the Office of the Chief\nHuman Relations Commission\nExecutive.\nInterested members of the public may find this report helpful in researching\nthe spending trends of their government, determining what money is already\nAn Organized Citizen Group and Public Hearings\n\"committed\" for the coming year (salaries, pensions) and in establishing justi-\nfication for budget requests.\nThe City Council of Phoenix, Arizona, conducted a public hearing on a staff-\nprepared list of projects to be funded by GRS money. Citizens urged Phoenix\nInformation Sources\nofficials to place higher priorities on human needs and social services. Nearly\n90% of the staff-proposed GRS budget was for one-time, nonrecurring expenses,\nin Your Community\nwith most of the emphasis placed on capital expenditures. Representatives of the\nSouthwestern Indian Development had met with City officials soon after the\nCOMMUNITY\nCENTER\nThe following officials, departments and organizations should be helpful in\ngeneral revenue sharing program passed Congress and asked that funds be\nfinding out more about your local government, your government's budget, and\nincluded for Indian requests. The staff did not accept their original request, but\nhow revenue sharing decisions are made. The size and type of your government\nincluded $50,000 for social services after the group renewed their request at the\nwill determine who performs these functions. This is where you get involved!\npublic hearing.\nThe Budget\nCitizen Reaction to Government's Spending Recommendation\nDirector of Finance\nApproximately $4 million in general revenue sharing money was received\nTreasurer\nby New Castle County, Delaware, during the first year of the program. The\nComptroller\nmajority of this money was planned for one-time expenditures (capital expendi-\nTax Commissioner/Commissioner of Revenue\ntures). The County Executive recommended that $485,000 be spent on \"human\nAuditor\nand social needs.\" An organization called the \"Human Resources Coalition\"\nTribal Clerk or Treasurer\nrequested that more of the county's revenue sharing money be spent for social\nBudget Director\nservices. A compromise was reached and the county agreed to spend $705,000\nIndependent CPA firm responsible for auditing government's funds\nfor social services.\nGeneral Administration\nExamples of the Public Participating\nCity Manager or Mayor\nin the Local Decision Making Process for\nBoard of Supervisors\nBoard of Trustees\nGeneral Revenue Sharing\nThe Governor's Office\nThe county council set up a screening committee to distribute this money.\nSecretary/Treasurer\nThe committee was composed of two representatives of the County Executive,\nCity, County or Township Clerk\ntwo representatives of the county council, two representatives of the Human\nCounty Administrative Officer\nResources Coalition and one representative of the United Fund.\nCouncilmen\nThe original $705,000 was increased by $50,000 in accumulated interest making\nAldermen\nthe total $755,000. Of this amount, $255,000 was given to the Housing Authority,\nSelectmen\n$50,000 for aging programs, $15,000 for salary and expenses of the revenue\nPublic Information Officer\nsharing planner and the remaining $435,000 was divided among 18 other social\nCommissioners\nservice programs.\nTribal Chief\nBackground Information and Assistance\nCitizen Requests at Public Hearings\nJefferson County, which encompasses the Birmingham, Alabama area, received\nReference Librarian of local public library\nover $4 million in general revenue sharing during the First Entitlement\nLocal Newspaper Files\nPeriod. The County Board of Commissioners immediately decided to convene\nState Library Agency\npublic hearings to discuss how the money should be allocated. The commission-\nRegional Federal Agency Library and Information Center\ners advertised the time, place and nature of the hearings in several Birmingham\nLegal Assistance-For help in interpreting revenue sharing laws and local govern-\nnewspapers. Social service groups were the main attendees of the hearings.\nment laws\nTherefore, when the Commissioners decided how the funds would be spent,\nCity Attorney\nit was not surprising that over one third of the total allocation went for social\nState Attorney General or State's Attorney\nservices and social development programs. The county spent $1,247,500 to\nCorporation Counsel\nenlarge the home for the aged and the poor. Part of this money paid for hospital\nDistrict Attorney\nbeds and other furnishings, and $47,500 was used to pay for a substantial part\nLegal Counsel (independent legal firm retained by the government)\nof the new quarters for the mental health center.\n8\n9\nA Community Organization\n\"Street Sign Program\" of a local PTA to purchase street signs and develop cross-\nwalks that will help to control the flow of traffic around schools.\nThe San Francisco Study Center reports that in the City of San Francisco,\nduring November of 1972, just before the first general revenue sharing money\nwas to be received, the Mayor and the Board of Supervisors held a joint public\nPublic Participation Planning Calendar\nhearing to ascertain citizen views on how the money should be spent. In\nJanuary, the Mayor's office released a Preliminary Revenue Sharing Program,\nUse this chart to help plan the times at which you can participate in your\nfollowed by a series of three neighborhood hearings to get citizen reactions.\ngovernment's decision making process on the uses of GRS money. This is where\nFinally, in April, the Mayor released his revised Program and forwarded it to the\nyou get involved!\nBoard for review and approval.\nPUR=Planned Use Report\nResponse to some of the citizens' requests included $250,000 for the Haight\nAUR=Actual Use Report\nAshbury neighborhood, to be used in whatever manner the residents might\nORS=Office of Revenue Sharing\nagree upon; $100,000 for a consumer fraud division within the District Attorney's\nOffice; and $100,000 for a child care services coordination program.\nOf particular interest was the approval of $100,000 for recreation and park\nPost PUR\nimprovement in Visitacion Valley, a mixed ethnic and income neighborhood in\nWhen Does Your\nsouthern San Francisco., During the summer of 1972, a group of residents active\nEntitlement\nGovernment's Gov-\nPeriod Covered\nDate PUR\nMeetings,\nDate PUR is\nPeriod\nerning Body Meet\nWas\nHearings Etc.\nto Discuss Uses\nBy PUR\nDue at ORS\nPeriod Covered\nDate AUR is\nin the affairs of that neighborhood secured a grant from a local foundation to\nPublished\nHeld to Discuss\nBy AUR*\nDue at ORS\nhire a professional community organizer to put together a democratic organiza-\nof GRS Money?\nAlternative Uses\nof GRS Money\ntion. They began moving on small issues of immediate interest to large numbers\nof residents in order to gain credibility, experience and wide participation.\n1) Jan. 1, 1972\nto\n?\nNot required\n?\nI\n?\nJan. 1, 1972\nWithin seven months they were able to hold a Community Congress (attended\nJun. 30, 1972\nby over 300 people) to elect officers, adopt a Constitution and Platform, and\nselect a name: The All Peoples' Coalition.\n2) Jul. 1, 1972\nto\n?\nNot required\n?\n-\n?\n-\nOne of the key issues concerned the inadequate recreation and park facilities\nDec. 31, 1972\nand programs in the area. The All Peoples' Coalition sought out concerned\n3) Jan. 1, 1973\nJan. 1, 1973\npersons, organized them into committees, researched and decided upon desirable\nto\n?\nto\n?\nJun. 20, 1973\n?\nJun. 30, 1973\nSept. 1, 1973\nsolutions, and began negotiating with the Recreation and Parks Department for\nJun. 30, 1973\nJun. 30, 1973\nimplementation. The Department was clearly impressed by their display of being\n4) Jul. 1, 1973\nJul. 1, 1973\nJul. 1, 1973\nan informed, assertive organization, and when the Mayor's Office requested\nto\n?\nto\n?\nSept. 14, 1973\n?\nto\nSept. 1, 1974\nsuggestions from the Department for possible revenue sharing projects, the All\nJun. 30, 1974\nJun. 30, 1974\nJun. 30, 1974\nPeoples' Coalition proposals were immediately included.\n5) Jul. 1, 1974\nJul. 1, 1974\nJul. 1, 1974\nto\n?\nto\n?\nJun. 30, 1974\n?\nto\nSept. 1, 1975\nCitizens Advisory Committee\nJun. 30, 1975\nJun. 30, 1975\nJun. 30, 1975\n6) Jul. 1, 1975\nJul. 1, 1975\nJul. 1, 1975\nConcurrent with the passage of the general revenue sharing legislation, the\nto\n?\nto\n?\nJun. 30, 1975\n?\nto\nSept. 1, 1976\nCity Board of Directors (City Council) of Texarkana, Arkansas, (population over\nJun. 30, 1976\nJun. 30, 1976\nJun. 30, 1976\n21,000) began to re-examine the citizen participation process and management\n7) Jul. 1, 1976\nJul. 1, 1976\nJul. 1, 1976\nsystems that were being used for community development planning. After\nto\n?\nto\n?\nJun. 30, 1976\n?\nto\nJan., 1977\ncareful examination and reflection, it was decided to enlist the support of the\nDec. 31, 1976\nDec. 31, 1976\nDec. 31, 1976\ncitizens in setting community goals through the vehicle of a citizens advisory\ncommittee.\n*The Planned and Actual Use Reports may be returned on or before the listed due dates.\nThese reports must be published (see section on reports for publication requirements)\nOn May 17, 1973, a general citizens meeting was held to explain the general\nprior to returning them to the Office of Revenue Sharing. However, there is no specified\nrevenue sharing process to the residents of Texarkana. As a result of the support\npublication date.\nshown at this meeting, a Citizen, Advisory Committee for Revenue Sharing was\nEach Actual Use Report will show the actual amount of money received and spent by your\nappointed by the Directors on May 21, 1973.\ngovernment during each Federal fiscal year (July 1 - June 30).\nThe committee, composed of 33 members, was selected through proportional\nrepresentation from the City's nine planning districts. This was done to insure\nthe greatest possible representation from the city at large.\nThe City Board of Directors assembled this committee for the purpose of\nproposing five-year goals, determining priorities and formulating one-year\nobjectives that could aid the City Council in allocating general revenue sharing\nCitizens' Check List (Are You Informed?)\nfunds.\nThe Advisory Committee also meets to receive applications and supporting\nSince GRS money becomes a part of a local or state government's regular\ntestimony from city agencies, community groups, and private non-profit organi-\nbudget, citizens' opportunities to participate in the decision-making process\nzations desiring general revenue sharing money. From these applications and\nconcerning their government's expenditures are increased if they understand\nrequests, projects are selected to be funded with general revenue sharing money.\ntheir government's entire budget and its use in determining local priorities.\nAmong the community requests funded with general revenue sharing money\nListed below are check points which will help you to understand and to\nwere a private non-profit halfway house for mentally retarded and emotionally\nevaluate the impact of general revenue sharing money in your community.\ndisturbed males which received $10,000 for a housing facility; the Texarkana\nIt is important to note that most citizens are served by more than one level\nHistorical Museum received $4,500 for cultural and historical exhibits to be\nof government. For example, a person residing within a city might also receive\ndeveloped and displayed in the community; and $18,000 was given to the\nservices from county and state governments.\n10\n11\nAmount Received\nWhat community groups became involved in determining GRS expenditures?\nHow much GRS money has been received by your local and county govern-\nments?\nWhat was the community's reaction to the Planned Use Reports?\nHow much GRS money has been received by your state government?\nWhat was the process for community involvement:\nUse of GRS Money\nPublic Hearings?\nSelect Committees?\nWhat proposals did your government announce for the use of GRS money?\nAppointed Advisory Groups?\nSolicitation of requests for funding projects?\nCitizens attending regular council meetings?\nCitizen groups organizing, studying community needs and problems and\nDid you see your government's Planned Use Report published in the newspaper?\nsuggesting uses of GRS money?\nCitizens expressing their reaction to their government's use of GRS money at\nthe voting booth?\nHow has GRS money been spent?\nRole of Media\nTo what extent do GRS expenditures coincide with published proposed uses?\nWhat was the editorial reaction to GRS proposed and actual uses?\nHow much GRS money was spent for capital improvements?\nWere there news stories about the publication of Planned Use and Actual Use\nReports?\nHow much GRS money was spent for current expenses (such as salaries, and\nWere the minority and bilingual press in your community (if any) advised of\nsupplies)?\nthe publication of the Planned and Actual Use Reports?\nHow much GRS money was spent for programs or projects in each of the\nDid the media encourage public discussion of priority uses of your community's\npermitted expenditure areas (public safety, environmental protection, public\nGRS money?\ntransportation, recreation, health, libraries, social services for the poor or aged,\ncapital expenditures, and financial administration)?\nGRS and Civil Rights\nYour Government's Process for Setting Spending Priorities\nDo your government's departments and agencies practice fair hiring and non-\ndiscriminatory promotion policies?\nWhat departments, agencies and individuals are responsible for determining and\ncoordinating the spending priority process in your government?\nIf your government is purchasing land or building public facilities with revenue\nsharing funds, will they provide service to all segments of the community?\nDoes your government's charter require that public hearings be held before the\nbudget is adopted?\nIf your government is improving streets, alleys, roads, recreation and health\nfacilities or libraries with GRS money in some areas, will all neighborhood areas\nWhat is your government's timetable for preparing and adopting its budget?\nbe receiving comparable service because of these expenditures?\nDo departments normally consider community group requests prior to submitting\nIf your government is selling or leasing facilities funded by GRS to private groups,\ntheir annual budget requests?\nare these groups open to all segments of the community?\nIs public discussion and debate of spending priorities encouraged by your\nIf your government is paying contracts for construction projects, goods and/or\ngovernment?\nservices with GRS money, do the contractors and unions involved have non-\ndiscriminatory hiring and personnel policies?\nDoes your government survey the community's needs each year as part of its\nPublic Participation Impact on General Revenue Sharing Money\nbudget preparations?\nDo members of the public have an impact on their government's decisions for\nuse of GRS money?\nThe Community's Involvement in Decision-Making\nWas there information and publicity about establishing spending priorities for\nAre members of the public learning how to influence the budget-making and\nuse of GRS money?\npriority-şetting processes in your community?\n12\n13\nDo any community groups join together to suggest alternative spending priorities\nto their government?\nThe Act\nThis section outlines the uses of general revenue sharing\nDo members of the public better understand their government's own laws and\nmoney and the restrictions and prohibitions on its use.\nprocedures for determining local spending priorities?\nSome Specifics of The General Revenue\nDo members of the public realize that GRS money is a part of their community's\nSharing Program\nregular budget?\nEligibility\nAre your government's officials responsive to citizen requests and suggestions\nfor the use of GRS money?\nAll general governments as classified by the U.S. Census Bureau are eligible\nto receive GRS moneys. These governments include:\n50 State Governments and the District of Columbia\nAre members of the public and public interest groups evaluating the use of GRS\nmoney in the community?\nCities, Counties, Towns, Villages, Boroughs and Townships\nIndian Tribes and Alaskan Native Villages\nAre there public interest groups that will continuously monitor their govern-\nment's use of GRS money?\nGeneral\nDo members of the public organize into committees to study community issues\nand needs?\nRevenue\nIs the GRS money used for priority needs of the community?\nSharing\nTrust\nIs GRS money used to provide new services in your community?\n1/3\nFund\nDepartment\nAre existing services already provided by your government improved or expanded\nbecause of citizen requests?\n2/3\nof the Treasury\nto State\nGovernments\nto Local\nGovernments\nCity Hall\nState\nCapitol\nTribal\nCouncil\nCounty\nCommission\n14\n15\nAmount of Money Each Unit of Government Receives\nHealth (including prevention, diagnosis, evaluation and treatment of med-\nical and mental health conditions, physical rehabilitation services and edu-\ncational programs in public health)\nDetermined by formulas rather than applications.\nLibraries (including the operation of a bookmobile, purchasing of new books\nNo applications for GRS money\nFormulas designed by the U. S. Congress which use data to measure a govern-\nor development of specialized educational programs for the blind and\nare required.\nment's size (population), its need (per capita income), its effort to meet its\nhandicapped, and the upgrading of the general book collection)\nneed (taxes) and to determine the amount of GRS money to be received by a\nPublic Safety (including law enforcement; fire protection and building code\ngovernment.\ninspection; police academy; civil defense; inspection of buildings, plumb-\ning, electrical facilities, gas lines, boilers and elevators)\nPopulation, income and tax data used in the formulas are surveyed, collected\nand compiled from your government by the Bureau of the Census for the\nPublic Transportation (including highways; transit systems; streets; grade\nOffice of Revenue Sharing.\ncrossings; snow and ice removal and training public transportation drivers)\nRecreation (including participation and spectator sports programs; art, music\nDistribution of GRS Money\nand dance exhibitions; arts and crafts and other cultural activities; museums\nand zoos; park and playground activities)\nMoneys are distributed during seven entitlement periods (pay periods). The\nSocial Services for the poor or aged (including food; clothing; shelter; day\nentitlement periods, dates and amounts of money distributed nationally are:\ncare; job training) (see Section on Supplementary Information for examples\n1. January 1, 1972-June 30, 1972-$2,650,000,000\nof social service expenditures.)\n2. July 1, 1972-December 31, 1972-$2,650,000,000\n3. January 1, 1973-June 30, 1973-$2,987,500,000\nSecondary Recipients\n4. July 1, 1973-June 30, 1974-$6,050,000,000\nOIIIIIO\n5. July 1, 1974-June 30, 1975-$6,200,000,000\nPrivate organizations, nongovernmental agencies or other governmental units\n$30.2 billion to be distributed\n6. July 1, 1975-June 30, 1976-$6,350,000,000\nsuch as a fire district may request and receive GRS money from state and/or\nover 5 year period.\n7. July 1, 1976-December 31, 1976-$3,325,000,000\nlocal governments if the government's financial laws permit such transfers of\nmoney.\nThe Use of General Revenue Sharing Money\nYour government may decide to fund a secondary recipient with its GRS money.\nHowever, the GRS law does not require such expenditures.\nGeneral Revenue Sharing is financial assistance to meet local needs at the\nlocal level. Therefore, it is important that you know your community needs and\nknow how GRS money may be used for these needs.\nRestrictions on the Use of General Revenue\nState Governments (receive 1/3 of all GRS money)\nSharing Money for Local and State Gov'ts\nNo Matching\nSec. 104\nMay spend GRS money for anything that is legal under state law and does not\nReg. 51.30\nviolate the restrictions of the GRS legislation.\nNo state or local government may use, directly or indirectly, any revenue sharing\nfunds to obtain federal funds under any program which requires a government\nLocal Governments (receive 2/3 of all GRS money)\nto make a contribution in order to receive the federal funds.\nUnlike state governments, local governments are required to spend GRS within\nNondiscrimination\nSec. 122\nbroad categories of permissible expenditures.*\nReg. 51.32\n1. Any capital expenditures permitted by your state and local law. (See Sup-\nAny program or activity funded by GRS money cannot exclude persons from\nparticipation in it, deny persons its benefits or subject them to discrimination on\nplementary Information section for examples of capital expenditures.)\nthe basis of race, color, sex or national origin. (See Discriminatory Actions Pro-\n2. Operating and Maintenance expenses for:\nhibited in the Supplementary Information section)\nEnvironmental Protection (including sewage disposal; sanitation and pollu-\nState and Local Laws\nSec. 123 (a) (4)\ntion abatement; smoke regulation; inspection of water supply; sanitary engi-\nneering; street cleaning and waste collection; disposal or recycling activities\nand educational programs in such areas as water treatment and soil erosion)\nGovernments receiving GRS money must use it only in accordance with the same\nrules and procedures that regulate the expenditure of their government's own\nGRS money may be spent in any\nFinancial Administration (including expenses for accounting, auditing, budget-\nmoney.\nor all of these categories; the\ning, investing, tax collection, fiscal affairs, as distinguished from general ad-\nministrative costs like the chief executive's salary, voter registration and\nRules Example. If state and local laws prohibit your government from using its\ncategories are not listed in order\nown moneys to operate an ambulance service, it could not use revenue sharing\nof importance.\nlegislative expenses)\nfunds to run an ambulance service even though such a project would fall into\n*Debts created by bonds or loans may be repaid with GRS money if:\nthe priority category of \"health.\"\n1. Only the principal is repaid from GRS (no GRS money may be used to pay\ninterest on the debt);\nProcedures Example. If state and local law require public hearings for your\n2. The debt was incurred for a permitted expenditure;\ngovernment's proposed budget before its own moneys can be appropriated, then\n3. The money raised by going into debt was spent after January 1, 1972 and\nit was not spent in violation of the restrictions of the Act.\nrevenue sharing moneys also must be included in public hearings.\n16\n17\n2 Year Limitation\nSec. 123 (a) (2)\nReg. 51.33\nSupplementary\nRecipient governments must use, obligate or appropriate their revenue sharing\nfunds within 24 months of the end of the entitlement period for which each\nInformation\ncheck was issued.\nThis section presents more detailed explanations about\nDavis-Bacon Act\nSec. 123 (a) (6) and (7)\nvarious aspects of the general revenue sharing program.\nReg. 51.33\nWhen a recipient government pays with GRS money 25% or more of the total\ncosts of any contracted or subcontracted construction project (costing over\nFiling A Complaint\n$2,000), the government must include in its contracts prevailing wage determina-\ntions for laborers and skilled workers and labor practices as established under\nCitizen Complaint\nthe Davis-Bacon Act. This Act is administered by the U.S. Department of Labor.\nThere are no forms and there are no formal procedures for submitting a com-\nPrevailing Rates of Pay\nplaint alleging a violation of the use of general revenue sharing money. If you\nbelieve that there has been a violation of the State and Local Fiscal Assistance\nWhen a recipient government pays its own employees 25% or more of the total\nAct of 1972, provide the Office of Revenue Sharing with a written explanation\nstate\nwages in any employment category with GRS money, then each of the workers\ndetailing the nature of the alleged violation. Included with this explanation\ncode\nin the category (such as firemen, policemen) receiving a portion of his or her\nshould be supporting documentation of the alleged misuse.\nwages in revenue sharing funds must be paid at least the prevailing rate of pay\nwhich persons receive who are employed in similar occupations by that govern-\nComplaints should be filed in writing and sent to:\nment. All employees of the government who are not within an employment\nCompliance Manager\ncategory (such as the fire chief, the police chief) and who receive any portion of\nOffice of Revenue Sharing\ntheir pay in revenue sharing funds must also be paid at least the prevailing rate.\nU.S. Department of the Treasury\n1900 Pennsylvania Avenue, N. W.\nRevenue Sharing Trust Fund\nSec. 123 (a) (1)\nWashington, D. C. 20226\nReg. 51.40 (a)\nPhone: (202) 634-5187\nA government receiving GRS money must put it into a trust fund. This may be\ndone by opening a separate bank account or by establishing a separate set of\naccounts on the government's books.\nBy including the following information in any written complaint you will be\nassisting the ORS:\nAuditing and Fiscal Procedures\nReg. 51.40 (d)\nName, address and phone number of person and/or organization filing the com-\nplaint (complainant).\nThe GRS regulations require a recipient government to maintain its fiscal accounts\nin such a manner as to:\nNames of other individuals having knowledge of alleged misuse of GRS money\nwho may be contacted by ORS.\npermit the preparation of Planned and Actual Use Reports required by the\nSecretary of the Treasury;\nName of Chief Executive Officer of your government.\ndocument compliance with the matching funds prohibition;\nSpecific use of GRS money that is being or has been allegedly misused.\nThe fiscal records must be\nallow the tracing of GRS moneys to a level of expenditure that would indicate\navailable for public inspection\nwhether the funds were used in violation of the restrictions and prohibitions of\nThe reason why complainant believes that GRS money is being misused.\nduring normal working hours.\nthe Act.\nNewspaper clippings about use of GRS money, if available, and as much other\nAdditional Restrictions for Local Governments Only\nsupporting documentation as can be obtained.\nDirect welfare payments are not permitted; however, payment for services to\nNo complaint will be investigated concerning the allegation that GRS money\nwelfare recipients are allowable.\ncould have been used better by your government, as long as the money was\nused in accordance with the restrictions on the use of the GRS money. This is a\nOperating expenses for general education are not permitted; however, capital\nproblem which should be dealt with at the local level.\nexpenditures for education such as construction of a school facility or the pur-\nchase of educational equipment are permissible.\nOperating expenses for general government such as paying the chief executive's\nORS Action After Receipt of Complaint\nsalary, and voter registration are not permitted.\n1. Complaint will be acknowledged and examined.\n2. If the examination of the complaint indicates a possible violation of the law,\nthe ORS will:\na. notify the Chief Executive of the receipt of the complaint;\nb. in the case of a local government, the Governor also will be notified;\n18\n19\nC. conduct an investigation into the alleged violation, or;\n1. deny any person a service or a benefit;\nd. refer the complaint to the federal agency which has legal jurisdiction.\n2. provide any service or benefit which is different from that provided to others;\n3. The affected government will have the opportunity to respond to the com-\n3. subject a person to segregated treatment in any facility;\nplaint, and should possible evidence of noncompliance be gathered in the\n4. subject a person to segregated treatment in any matter related to receiving\nSee \"GRS and Civil Rights\" in\ninvestigation, the government will be given every opportunity to comply\nservice or benefits;\nthe Citizens Check List.\nvoluntarily.\n5. deny any person an opportunity to participate as an employee;\n6. treat an individual differently from others in determining admission, enroll-\n4. If the affected government does not comply voluntarily then ORS will begin\nment, eligibility, membership or other requirements that a person must meet\nformal legal action.\nto be provided any service or benefit;\n7. use any methods of discriminatory program administration (such as promo-\n5. Upon conclusion of the legal action (a hearing has been held, proposed\ntion test, hindering access to information, etc.)\nfindings and conclusions have been submitted, the administrative law judge\n8. limit access to or use of any facility through site selection.\nhas issued an order and any appeals have been resolved), if any government\nis judged to be in violation of the law, it will be given 60 days to correct\nthe situation in which the violation has occurred. For any government failing\nThe revenue sharing regulations state that a recipient government may use GRS\nto take such corrective action, the Office of Revenue Sharing will:\nmoney in a specific geographic area or for a specific group of persons within\nits jurisdiction, if the purpose of the expenditure is to eliminate a prior imbalance\na. not only recover the illegally spent GRS money\nin facilities or services which resulted from previous discriminatory actions.\nb. but will also withhold all future GRS money until the Secretary of the\nTreasury is satisfied that full compliance with the GRS law is achieved.\nCapital Expenditures for Local Governments\nORS Action After Receipt of\nReg. 51.32\nThe general revenue sharing law lists \"ordinary and necessary capital expendi-\nDiscrimination Allegation\n(d)-(h)\ntures authorized by law\" as permissible expenditures of GRS money (Section\n103 (a) (2)).\nComplaints alleging discrimination are handled in the same manner as other\nThe Office of Revenue Sharing defines ordinary and necessary capital expendi-\ncomplaints.\ntures as those expenditures which result in the acquisition of, or the addition to,\nfixed assets.\nIt is important that possible discriminatory actions or situations involving GRS\nmoney be reported as soon as possible, preferably before the money has been\nspent.\nHere are some examples; they are not meant to be all-inclusive.\n1) The purchase of cars, trucks, fire trucks, tractors, library bookmobiles, grass-\nPlease note.\nmowers, snowplows for trucks, sanders or highway maintenance equipment is\n1. If an ORS investigation results in possible evidence of discrimination, the ORS\npermissible.\nwill notify the recipient government and the State Governor in an attempt to\n2) Expenditures for heating plants, restrooms, garages, cafeterias, libraries or any\nsecure voluntary compliance.\nother type of building or improvement to a building has been allowed as have\nthe cost of temporary repairs to already existing structures.\n2. If the affected government does not comply voluntarily, then ORS will begin\n3) A capital expenditure may relate to any area of governmental activity, not just\nformal legal action.\npermitted categories listed in Section 103 (a) (1) (See Use of GRS money). For\nexample, the cost of constructing or equipping a school building or library is\n3. Upon conclusion of such legal actions (a hearing has been held, proposed\npermitted, even though the cost of operating and maintaining a school may\nfindings and conclusions have been submitted, an administrative law judge\nnot be paid with a local government's GRS money.\nhas-issued an order and appeals have been resolved), if the government is\n4) Various supplementary costs to capital improvements which include but are\njudged to be in violation of the law and has not demonstrated in 60 days\nnot limited to, attorney's fees for a title search, architects' fees, court costs\nthat it will comply, then ORS may:\nincurred to acquire property or defend title to property and property surveys\na. refer the case to the Attorney General of the U.S.\nare permissible GRS expenditures.\nb. issue an order in accordance with Title IV of the Civil Rights Act of 1964 to\n5) Broad areas of capital outlay include acquisition of land; construction or\nwithhold or to terminate or demand forfeiture of all of the government's\nrenovation of buildings; improvement to existing facilities; and the purchase\nGRS money.\nof machinery and equipment.\nC. take any other legal action to achieve the government's compliance with\nthe law.\nRemember, definitions of permissible capital expenditures are determined by\nyour state and local law. Should state or local law define capital expenditure in a\nnarrower or stricter way than the Office of Revenue Sharing does, the state and\nSec. 122\nlocal law must be followed.\nDiscriminatory Actions Prohibited\nReg. 51.32\nInsuring civil rights of persons (noncitizens as well as citizens) is emphasized\nin the general revenue sharing law. In this section, the civil rights regulations of\nGeneral Revenue Sharing Money Used\nthe general revenue sharing law are outlined. The public's understanding of\nthese regulations is important to community involvement in local government\nfor Social Services for Poor or Aged\ndecision making and in the monitoring of the use of GRS money.\nAny aspect of a program or activity which receives an appropriation of GRS\nThe Office of Revenue Sharing has established criteria to aid local govern-\nmoney may not directly or through contractual or other arrangements on the\nments in determining uses of their GRS money for social services for the poor\nbasis of race, color, national origin or sex:\nor aged.\n20\n21\nHere are some examples which will serve as illustrations. This list is not meant\nIndian Tribes and Alaskan Native Villages\nto be all-inclusive.\n1) Administrative expenses incurred in the operation of programs for the poor\nMany Indian tribes and Alaskan native villages qualify as units of local govern-\nor aged have been allowed as ordinary and necessary operating expenses.\nment eligible to receive general revenue sharing funds. The program takes into\nFor example, the cost of administering a Food Stamp Program is considered\nconsideration the rather unique status and structure of such governments in the\nan ordinary and necessary expense of providing social services to the poor.\nfollowing ways:\nGRS money can also be used for administrative expenses incurred in programs\n1. A population ratio formula is used to compute the tribe's/Alaskan native\nfor the poor or aged conducted by community organizations such as a\ngovernment's amount of GRS money.\nSec. 108 (b) (4)\nneighborhood council.\nExample: if 1/3 of the county area* is populated by eligible tribal/Alaskan\n2) The cost of operating a Community Action Program providing services for\nnative persons then 1/3 of the GRS funds allocated to the county area are\nthe poor or aged has been held to be a valid expenditure of GRS money.\npaid to the tribal/Alaskan native government.\n3) The funding of an agency which administers a number of subagencies, only\n2. Only the Indian/Alaskan native population residing on land under the juris-\none of which provides social services, was ruled not to constitute a priority\ndiction of the Indian/Alaskan native government is counted in this population\nexpenditure, since the GRS money would not be used exclusively on social\nfigure.\nservices for the poor or aged. However, GRS money used to fund the sub-\n3. GRS money received by tribal or Alaskan native governments must be ex-\nagency which provides social services for the poor or aged would be per-\npended for the benefit of tribal/Alaskan native persons living in each county\narea.\nmitted.\nReg. 51.34\n4) Salaries of social workers, case workers, librarians working with the blind\n4. This section of the regulations (51.34) is not meant to exclude non-\nand handicapped, and others working in programs with the poor or aged\nresidents and non-Indian/non-Alaskan natives from any service or facility\nmay be paid from GRS money.\nsupported through revenue sharing funds. However, the tribal/Alaskan native\npersons residing on the lands must at least have a reasonable opportunity to\n5) The operating expenses of neighborhood social centers, libraries and other\nderive benefits of the tribal/Alaskan native government's GRS money.\nneighborhood facilities which are of benefit to the poor or aged may be\npartially funded with general revenue sharing money to the extent that such\nExample: an Indian//Alaskan native government uses GRS money to initiate\nfunding reflects the use made of those facilities for the benefit of the poor\na noon lunch program which provides a hot midday meal to the elderly\nor aged.\npersons of the tribe/Alaskan native village. All elderly tribal/Alaskan native\n6) Direct welfare payments to the poor or aged are not permitted by the Act,\npersons and any elderly non-Indian/non-Alaskan natives (at the discretion of\nbut the payment of a portion of a poor tenant's rent is a permissible expendi-\nthe tribal/Alaskan native governments) in any of the counties* covered by\nture if the money goes to the landlord and not to the tenant.\njurisdiction of the Indian/Alaskan native government may participate in this\n7) General revenue sharing money may also be used to operate and maintain\nprogram. The regulations merely require that tribal/Alaskan native persons\npublic housing.\nbe assured of the opportunity to participate.\n8) A day care center and day care services may be funded through general\nrevenue sharing. The local unit of government must determine eligibility for\nRestrictions on Use of General Revenue\nthe use of a day care center, as families with working mothers may well\nexceed the Bureau of the Census definition of a low income family.\nSharing Money by Secondary Recipients\n9) Nursing homes for the poor or homes for the aged may be funded with\nGovernments receiving shared revenues directly may transfer some or all of\ngeneral revenue sharing money.\ntheir GRS money to nonprofit organizations, private associations or other gov-\n10) Local governments may contract with nongovernmental agencies (nonprofit\nernmental units. These secondary recipients must comply with the following\norganizations, community agencies) for numerous social services as long as\nrestrictions on the use of GRS money:\nsuch contractual arrangements with these agencies are legal under state or\n1. GRS money must be used only in accordance with the laws and procedures\nlocal law.\n(including state and local law) that regulate the use and expenditure of a\nsecondary recipient's money;\nOther examples of social service uses on which general revenue sharing money\n2. GRS money may not be used to \"match;\" that is, to obtain other federal\nmoney;\nmay be expended include:\n3. GRS money cannot be used to cause, to initiate or have the effect of dis-\nInterest-free loans to aid welfare recipients in securing jobs\ncrimination on the basis of race, color, national origin, or sex;\n4. When 25% or more of GRS money is used to pay the total cost of a sub-\nAdult education programs which benefit the poor or aged\ncontracted or contracted construction project (costing $2,000 or more), then\nthe Davis-Bacon Act wage determinations and labor standards must be\nfollowed.\nYouth development programs which aid poor or disadvantaged young persons\n5. In the case of local (not state) governments transferring GRS money to sec-\nondary recipients, secondary recipients must:\nYouth employment programs which either directly hire poor or disadvantaged\na) use the GRS money in the permitted expenditure areas (see Uses of GRS\nyouths or assist them to secure jobs in the private sector\nMoney in The Act section);\nb) not use GRS money for direct welfare payments;\nLibrary activities which serve the aged, homebound, and handicapped citizen\nc) not use GRS money to pay operating expenses for general education.\nAs can be seen from these examples, any activity which can reasonably be\nclassified a social service for the poor or aged may be funded with general\n*There are no counties in Alaska. However, for the allocation and use of GRS\nmoney, the Bureau of the Census' enumeration districts are used.\nrevenue sharing.\n22\n23\nYour government is not required by the general revenue sharing law to transfer\n1) to obtain federal matching funds or\nits GRS money to secondary recipients, but the law does give it such an oppor-\n2) in a category of expenditures not covered by the broad categories of Section\ntunity.\n103. These certifications are part of each Actual Use Report and become effec-\ntive when the chief executive officer signs the report.\nYour Governments' Responsibilities to the\nFederal Government\nOther Office of Revenue Sharing Publications\nAs your government reports to you the planned and actual uses of GRS\nAvailable at the Government Printing Office\nmoneys, it must also indicate to the Federal government its agreement to comply\nwith certain administrative requirements of the law. Knowledge of these re-\nWhat is General Revenue Sharing?\nquirements will facilitate the public's scrutiny of the use of general revenue\nA publication answering questions most frequently asked by government\nsharing money.\nofficials about the general revenue sharing program.\nCatalogue Number-T 1.2: R 32/6\nAssurances\nPrice-40c\nIn order to participate in the general revenue sharing program, each govern-\nment must assure the Secretary of the Treasury of its intention to comply with\nAudit Guide and Standards for Revenue Sharing Recipients\nthe following requirements which are found in the legislation:\nA publication to aid state and local government auditors and public account-\nants to understand the audit requirements for GRS money.\nIt will-\nCatalgoue Number-T 1. 10/2: AU 2\nPrice-90c\nSec. 123 (a) (1)\n1. establish trust fund and deposit all GRS money into it;\nRegulations Governing the Payment of Entitlements Under Title I of the State and\nSec. 123 (a) (2)\n2. use, appropriate, or obligate GRS money within 24 months from the end of\nLocal Fiscal Assistance Act of 1972\nthe entitlement period for which each check was issued;\nA publication containing indexed Regulations and the text of the General\nRevenue Sharing Act.\nSec. 123 (a) (3)\n3. use GRS money only for priority expenditures listed in Section 103 of the\nCatalogue Number-T1.10:IN5\nAct (local governments only);\nPrice-15c\nSec. 123 (a) (4)\n4. expend GRS money only in accordance with the laws and procedures which\nThese publications are for sale by the Superintendent of Documents, U. S.\napply to the use of the state and local government's own moneys;\nGovernment Printing Office, Washington, D. C. 20402.\nSec. 123 (a) (5)\n5. keep records adequate to establish compliance with the restrictions and\nPayment must accompany your orders.\nprohibitions of the program, provide access to these records for the purpose\nof reviewing compliance with the Act, and submit whatever reports which\nmay be required by the Secretary of the Treasury;\nSec. 123 (a) (6)\n6. comply with the provisions of the Davis-Bacon Act when 25% or more of\nthe costs of a contracted construction project are paid with GRS money;\nSec. 123 (a) (7)\n7. pay prevailing wage rates to government employees (See Section on Re-\nstrictions of GRS money);\nSec. 123 (a) (8)\n8. in the case of an Indian tribe or Alaskan native government, spend GRS\nmoney for the benefit of the tribe or village members living in each county;\nSec. 122\n9. not discriminate in any program or activity funded in whole or in part with\nGRS money on the basis of race, color, national origin or sex;\nSec. 104\n10. not use GRS money to participate either directly or indirectly in any federal\nmatching program.\nThese assurances are part of each Planned Use Report. The chief executive officer\nof your government has assured the Secretary of the Treasury of his or her\nintention to comply with the restrictions when he or she signs the Planned Use\nReport.\nCertifications\nSec. 103 (b) and 104 (e)\nThe chief executive officer must certify that his or her jurisdiction has not used\nshared revenues either:\nDepartment of the Treasury\nPostage and Fees Paid\nOffice of Revenue Sharing\nDepartment of the Treasury\n1900 Pennsylvania Ave. N.W.\nTREAS-551\nWashington, D.C. 20226\nOfficial Business\nU.S.MAIL\nPenalty for Private Use $300\nThird Class\nDEPARTMENT THE OF 1 THE TREASURY\nAMERICAN REVOLUTION 1776-1976 INDENTENNIAL\n1789\nOF\nDEPARTMENT THE TREASURY\nTHE\n1789\n31 Code of Federal Regulations\nSubtitle B, Part 51\nFederal Assistance to State\nand Local Governments\nRegulations\nGoverning the Payment\nof Entitlements\nUnder Title I of the State\nand Local Fiscal\nAssistance Act\nof 1972\nDepartment of the Treasury\nOffice of Revenue Sharing\nRevised November 1975\nCONTENTS\nRevenue Sharing Regulations\n1\nAppendix- Guidelines on Employee\nSelection Procedures (title 29 Part 1607)\n27\nRevenue Sharing Regulations Index\n31\nTitle 31-Money and Finance: Treasury\nSec.\n51.25\nWaiver of entitlement; non-delivery\nCHAPTER I-MONETARY OFFICES,\nof checks; insufficient data,\nDEPARTMENT OF THE TREASURY\n51.26\nReservation of funds and adjustment\nPART 51-FISCAL ASSISTANCE TO STATE\nof entitlement.\nAND LOCAL GOVERNMENTS\n51.27\nState must maintain transfers to lo-\ncal governments.\nRevenue Sharing\n51.28\nOptional formula.\n51.29\nThe Department of the Treasury\nAdjustment of data factors.\n51.30\nAdjustment of maximum and mini-\nhereby publishes in its entirety the reg-\nmum per capita entitlement; 100\nulations in Part 51 of Subtitle B of Title\npercent criterion.\n31, Code of Federal Regulations, which\nbecame effective April 5, 1973 (38 FR\nSubpart D-Prohibitions and Restrictions on Use\nof Funds\n9132) for entitlement periods beginning\n51.40\nMatching funds.\non or after January 1, 1973 and which\n51.41\nPermissible expenditures for local\nhave since been amended. Amendment\ngovernments.\nto the regulations was made pursuant to\n51.42\nWage rates and labor standards.\nthe authority vested in the Secretary of\n51.43\nRestrictions on expenditures by In-\nthe Treasury by the State and Local\ndian tribes and Alaskan native\nFiscal Assistance Act of 1972 (the Reve-\nvillages.\nnue Sharing Act) approved October 20,\nSubpart E-Nondiscrimination in Programs\n1972.\nFunded With Entitlement Funds\nThese complete regulations include all\n51.50\nPurpose.\nprevious amendments and, specifically,\n51.51\nDefinitions.\namendments filed on October 22, 1975 to\n51.52\nDiscrimination prohibited.\n31 CFR Part 51, creating a new subpart\n51.53\nEmployment.\n51.54\nfor civil rights regulations, and amend-\nSex discrimination.\n51.55\nAssurances required.\nments filed October 23, 1975, indicating\n51.56\nCompliance information and report.\nchanges in the designation of subparts\n51.57\nComplaints and investigations.\nand section numbers as well as clarify-\n51.58\nCompliance reviews and affirmative\ning existing policy and changing existing\naction.\nprocedures.\n51.59\nProcedure for effecting compliance.\n51.60\nHearing procedures.\nDated: November 10, 1975.\n51.61\nJurisdiction over property.\nJOHN K. PARKER,\n51.62\nDelegation.\nActing Director,\nSubpart F-Fiscal Procedures and Auditing\nOffice of Revenue Sharing.\n51.70\nProcedures applicable to the use of\nApproved: Richard R. Albrecht,\nfunds.\n51.71\nGeneral Counsel.\nAuditing and evaluation; scope of\naudits.\nSubpart A-General Information\nSubpart G-Proceedings for Reduction In Entitle-\nSec.\nment, Withholding or Repayment of Funds\n51.0\nScope and application of regulations.\n51.80\nScope of subpart.\n51.1\nEstablishment of Office of Revenue\n51.81\nLiberal construction.\nSharing.\n51.82\nReasonable notice and opportunity\n51.2\nDefinitions.\nfor hearing.\n51.3\nProcedure for effecting compliance.\n51.83\nOpportunity for compliance.\n51.4\nExtension of time.\n51.84\nInstitution of proceeding.\n51.5\nTransfer of funds to secondary re-\n51.85\nContents of complaint.\ncipient.\n51.86\nService of complaint and other\nSubpart B-Reports and Written Communications\npapers.\n51.87\nAnswer, referral to administrative\n51.10\nReports to the Secretary; assurances.\nlaw judge.\n51.11\nReport on planned use and actual\n51.88\nSupplemental charges.\nuse of funds.\n51.89\nProof; variance; amendment of\n51.12\nCertifications.\npleadings.\n51.13\nPublication and publicity of reports;\n51.90\nRepresentation.\npublic inspection.\n51.91\nAdministrative law judge; powers.\n51.14\nReports to the Bureau of the Cen-\n51.92\nHearings.\nsus.\n51.93\nStipulations.\n51.94\nEvidence.\nSubpart C-Computation and Adjustment of\n51.95\nEntitlement\nDepositions.\n51.96\nStenographic record; oath of re-\n51.20\nData.\nporter; transcript.\n51.21\nData affected by major disaster.\n51.97\nProposed findings and conclusions.\n51.22\nAdjusted taxes.\n51.98\nInitial decision of the administra-\n51.23\nDate for determination of allocation.\ntive law judge.\n51.24\nBoundary changes, governmental re-\n51.99\nCertification and transmittal of\norganization, etc.\nrecord and decision.\n1\nSec.\ncontext clearly indicates otherwise, or\nognized governing body and which per-\n(b) Determination to delay payment.\n51.100 What constitutes record.\nwhere the term is defined elsewhere in\nform substantial governmental func-\nWhenever the Secretary determines that\n51.101 Procedures on review of decision of\nthis part) the following definitions shall\ntions. Certification to the Secretary by\na recipient government has failed to\nadministrative law judge.\napply:\nthe Secretary of the Interior (or by the\ncomply with the communication require-\n51.102 Decision of the Secretary.\n(a) \"Act\" means the State and Local\nGovernor of a State in the case of a State\n51.103 Effect of order of repayment or with-\nments of Subpart B, he may delay pay-\nFiscal Assistance Act of 1972, Title I of\nholding of funds.\naffiliated tribe) that an Indian tribe or\nment of entitlement funds to such\n51.104 Publicity of proceedings.\nPublic Law 92-512, approved October 20,\nan Alaskan native village has a recog-\nrecipient. A determination to delay pay-\n51.105 Judicial review.\n1972.\nnized governing body and performs sub-\nment of entitlement funds shall not be\n(b) \"Chief executive officer\" of a unit\nstantial governmental functions, shall\nsubject to the procedure set forth in\nAUTHORITY: Pub. L. 92-512; and 5 U.S.C.\nof local government means the elected\nconstitute prima facie evidence of that\nparagraph (a) of this section and shall\n301.\nofficial, or the legally designated official,\nfact.\nbe in effect only for such time as is nec-\nwho has the primary responsibility for\n(j) \"Recipient government\" means a\nSubpart A-General Information\nessary to effect compliance.\nthe conduct of that unit's governmental\nState government or unit of local gov-\n§ 51.0 Scope and application of regula-\naffairs. Examples of the \"chief execu-\nernment as defined in this section.\n§ 51.4 Extension of time.\ntions.\ntive officer\" of a unit of local govern-\n(k) \"Secretary\" means the Secretary\nWhen by these regulations (other than\n(a) In general. The rules and regula-\nment may be: The elected mayor of a\nof the Treasury or any person duly au-\nthose specified in Subpart F of this part)\ntions in this part are prescribed for car-\nmunicipality, the elected county execu-\nthorized by the Secretary to perform the\nan act is required within a specified time,\nrying into effect the State and Local Fis-\ntive of a county, or the chairman of a\nfunction mentioned.\nthe Secretary may grant a request for an\ncal Assistance Act of 1972 (Title I, Public\ncounty commission or board in a county\nthat has no elected county executive, or\n(1) \"State government\" means the\nextension of time if in his judgment it is\nLaw 92-512) applicable to entitlement\ngovernment of any of the 50 States or\nnecessary and appropriate. Requests for\nperiods beginning January 1, 1973. Sub-\nsuch other official as may be designated\nthe District of Columbia.\nextensions of time shall set forth the\npart A sets forth general information\npursuant to law by the duly elected gov-\nerning body of the unit of local govern-\n(m) \"Unit of local government\" means\nfacts and circumstances supporting the\nand definitions of terms used in this part.\nneed for more time and the amount of\nSubpart B of this part prescribes reports\nment; or the chairman, governor, chief,\nthe government of a county, municipal-\nadditional time requested.\nor president (as the case may be) of an\nity, township, or other unit of govern-\nrequired under this part and publicity\nIndian tribe or Alaskan native village.\nment below the State which is a unit of\n§ 51.5 Transfer of funds to secondary\nconcomitant thereto. Subpart C of this\n(c) \"Department\" means the Depart-\ngeneral government and which shall be\nrecipients.\npart contains rules regarding the compu-\nment of the Treasury.\ndetermined on the basis of the same\nThose prohibitions and restrictions set\ntation, allocation and adjustment of\n(d) \"Entitlement\" means the amount\nprinciples as used by the Bureau of the\nforth in Subparts D and E of this part\nentitlement. Subpart D of this part pre-\nscribes prohibitions and restrictions on\nof payment to which a State govern-\nCensus for general statistical purposes.\nwhich are applicable to a recipient gov-\nthe use of funds. Subpart E of this part\nment or unit of local government is en-\nThe term \"unit of local government\"\nernment's entitlement funds continue to\ntitled as determined by the Secretary\nshall also include the recognized govern-\nbe applicable to such funds if they are\nprescribes fiscal procedures and auditing\npursuant to an allocation formula con-\nrequirements. Subpart F of this part\ning body of an Indian tribe or Alaskan\ntransferred to another governmental\ntained in the Act and as established by\ncontains rules relating to procedure and\nnative village which performs substan-\nunit or private organization. A violation\nregulation under this part.\ntial governmental functions. The Dis-\nof Subparts D and E of this part by a\npractice requirements where a recipient\n(e) \"Entitlement funds\" means the\ntrict of Columbia, in addition to being\nsecondary recipient shall constitute a\ngovernment has failed to comply with\nany provision of this part.\namount of funds paid or payable to a\ntreated as a State, shall also be treated as.\nviolation by the recipient government\n(b) Saving clause. Any cause of action\nState government or unit of local gov-\na county area which has no units of local\nand the applicable penalty shall be im-\nernment for the entitlement period.\ngovernment (other than itself) within its\nposed on the recipient government.\narising out of noncompliance with the\n(f) \"Entitlement period\" means one\ninterim regulations covering payments\ngeographic area.\nof the following periods of time:\nSubpart B-Reports and Written\nmade for the first and second entitle-\n(1) The 6-month period beginning\n§ 51.3 Procedure for effecting compli-\nCommunications\nment periods (January 1, 1972, through\nJanuary 1, 1973, and ending June 30,\nance.\n§ 51.10 Reports to the Secretary; assur-\nJune 30, 1972, and July 1, 1972, through\n1973.\nDecember 31, 1972) shall continue to be\n(a) In general. If the Secretary de-\nances.\ncovered by such regulations and any pro-\n(2) The fiscal year beginning July 1,\ntermines that a recipient government has\n(a) Reports for review and evaluation.\n1973, and ending June 30, 1974.\nceeding commenced thereon shall be gov-\nfailed to comply substantially with any\nThe Secretary may require each recip-\n(3) The fiscal year beginning July 1,\nerned by the procedures set forth in\nprovision of this part, and after giving\nient government receiving entitlement\n1974, and ending June 30, 1975.\nSubpart F of this part.\nreasonable notice and opportunity for a\nfunds to submit such annual and interim\n(4) The fiscal year beginning July 1,\nhearing to the Governor of the State or\nreports (other than those required by\n§ 51.1 Establishment of Office of Reve.\n1975, and ending June 30, 1976.\nthe chief executive officer of the unit of\n§ 51.11) as may be necessary to provide a\nnue Sharing.\n(5) The 6-month period beginning\nlocal government pursuant to Subpart G\nbasis for evaluation and review of com-\nThere is established in the Office of the\nJuly 1, 1976, and ending December 31,\nof this part, the Secretary shall notify\npliance with and effectiveness of the\nSecretary of the Treasury the Office of\n1976.\nthe recipient government that if it fails\nprovisions of the Act and regulations of\nRevenue Sharing. The office shall be\n(g) \"Governor\" means the Governor\nto take corrective action within 60 days\nthis part.\nheaded by a Director who shall be ap-\nof any of the 50 States or the Commis-\nfrom the date of receipt of such notifica-\n(b) Requisite assurances for receipt\npointed by the Secretary of the Treas-\nsioner of the District of Columbia.\ntion further payments to it will be with-\nof entitlement funds. Each Governor of\nury. The Director shall perform the func-\n(h) \"Independent public accountants\"\nheld for the remainder of the entitlement\na State or chief executive officer of a\ntions, exercise the powers and carry out\nmeans independent certified public ac-\nperiod and for any subsequent entitle-\nunit of local government, in order to\nthe duties vested in the Secretary of the\ncountants or independent licensed pub-\nment period until such time as the\nqualify for entitlement funds, must file\nTreasury by the State and Local Fiscal\nlic accountants certified or licensed by a\nSecretary is satisfied that appropriate\na statement of assurances when re-\nAssistance Act of 1972, Title I, Public\nregulatory authority of a State or other\ncorrective action has been taken and\nquested by the Secretary, on a form to\nLaw 92-512.\npolitical subdivision of the United States.\nthat there will no longer be any failure\nbe provided, that such government will\n(i) \"Indian tribes and Alaskan native\n§ 51.2 Definitions.\nto comply. Until he is satisfied, the Sec-\nabide by certain specific requirements of\nvillages' means those Indian tribes and\nretary shall make no further payments\nthe Act and the prohibitions and restric-\nAs used in this part (except where the\nAlaskan native villages which have a rec-\nof such amounts.\ntions of Subparts D, E, and F of this part,\n2\n3\nwith respect to the use of entitlement\n§ 51.13 Publication and publicity of re-\nwill be the latest and most complete data\nfactor for purposes of the revenue shar-\nfunds. The Secretary will afford each\nports; public inspection.\nsupplied by the Bureau of the Census or\ning allocation process.\nGovernor the opportunity for review and\nsuch other sources of data as in the judg-\n(b) Eligibility requirements. In order\n(a) Publication of required reports.\ncomment to the Secretary on the ade-\nEach recipient government must pub-\nment of the Secretary will provide for\nfor a recipient government to be eligible\nquacy of the assurances by units of local\nlish in a newspaper a copy of each report\nequitable allocations.\nfor the data stabilization benefit of para-\ngovernment in his State.\n(b) Computation and payment of en-\ngraph (a) of this section, it shall:\nrequired to be filed under § 51.11 (a) and\n(b) prior to the time such report is filed\ntitlements. (1) Allocations will not be\n(1) Be located within a State desig-\n§ 51.11 Report on planned use and ac-\nmade to any unit of local government\nnated by the President as a major dis-\ntual use of funds.\nwith the Secretary. Such publication\nshall be made in one or more newspapers\nif the available data is so inadequate as\naster area, and\n(a) Planned use report. Each recipient\nwhich are published within the State and\nto frustrate the purpose of the Act. Such\n(2) Be located within a geographical\ngovernment which expects to receive\nhave general circulation within the geo-\nunits of local government will receive an\nsubdivision of the State as certified to the\nfunds under the Act shall submit to the\nSecretary a report, on a form to be pro-\ngraphic area of the recipient government\nentitlement and payment when current\nOffice of Revenue Sharing as a major\nand sufficient data become available as\ndisaster area by the Administrator of the\nvided, of the specific amounts and pur-\ninvolved. In the case of a recipient gov-\nnecessary to permit an equitable alloca-\nDisaster Assistance Administration of the\nposes for which it plans to spend the\nernment located in a metropolitan area\nfunds which it expects to receive for an\nwhich adjoins and extends beyond the\ntion.\nDepartment of Housing and Urban De-\nboundary of the State, the recipient gov-\n(2) Payment to units of local govern-\nvelopment.\nentitlement period. The planned use re-\nernment may satisfy the requirement of\nment for which the Secretary has not\nFurther, each recipient government\nports for the third and fourth entitle-\nthis section by publishing its reports in\nreceived an address confirmation will be\nwithin the specific geographic area so\nment periods (the 6-month period begin-\nning January 1, 1973 and ending June 30,\na metropolitan newspaper of general cir-\ndelayed until proper information is avail-\ndesignated will be notified pursuant to\nculation even though such newspaper\nable to the Secretary.\nthe data improvement program, pro-\n1973, and the fiscal year beginning July 1,\nmay be located in the adjoining State\n(3) Where the Secretary determines\nvided for in $ 51.29 of each of its data\n1973 and ending June 30, 1974) shall be\nfiled with the Secretary on a date he shall\nfrom the recipient government.\nthat the data provided by the Bureau of\nfactors developed subsequent to the\ndetermine. Thereafter, each planned use\n(b) Publicity. Each recipient govern-\nthe Census or the Department of Com-\nmajor disaster designation and shall be\nment, at the same time as required for\nmerce are not current enough, or are not\nrequired to verify through its chief ex-\nreport shall be filed prior to the begin-\npublication of reports under paragraph\ncomprehensive enough, or are otherwise\necutive officer, that the data was ad-\nning of an entitlement period as defined\n(a) of this section, shall advise the news\ninadequate to provide for equitable al-\nversely affected by the major disaster.\nin $ 51.2(f).\nmedia, including minority and bilingual\nlocations he may use other data, includ-\nIn addition, the Secretary may require\n(b) Actual use report; status of trust\nnews media, within its geographic area\ning estimates. The Secretary's deter-\nthat such verifications be accompanied\nfund. Each recipient government which\nmination shall be final and such other\nreceives funds pursuant to the Act shall\nof the publication of its reports made\nby substantiating documentation evi-\nadditional data and estimates as are\nsubmit to the Secretary an annual re-\npursuant to paragraph (a) of this sec-\ndencing a causal relationship between\nused, including the sources, shall be pub-\nport, on a form to be provided, of the\ntion, and shall provide copies of such\nthe major disaster and the less favorable\nlicized by notice in the FEDERAL REGISTER.\nreports to the news media on request.\nrevenue sharing allocation value of the\namounts and purposes for which such\n(c) Special rule for 6 month entitle-\n(c) Public inspection. Each recipient\nsubject data factor. The Secretary, upon\nfunds have been spent or otherwise\ntransferred from the trust fund (as de-\ngovernment shall make available for\nment periods. For entitlement periods\nbeing satisfied that all of the require-\nwhich encompass only one-half of a year,\nfined in § 51.70(a)) during the reporting\npublic inspection a copy of each of the\nments of this section have been met with\nthe adjusted taxes and intergovern-\nreports required under § 51.11(a) and\nrespect to any post-disaster data factor,\nperiod. Such report also shall state any\nmental transfers of any unit of local gov-\n(b) and information as necessary to sup-\nshall refrain from using the post-disaster\ninterest earned on entitlement funds\nport the information and data submitted\nernment for that half-year will be esti-\ndata factor in the allocation process, and\nduring the period. Such reports shall\nmated to be one-half of the annual\non each of those reports. Such detailed\nshall continue to use the pre-disaster\nshow the status of the trust fund includ-\namounts.\ninformation shall be available for public\ndata factor, until whichever of the fol-\ning its balance as of June 30 and shall be\n(d) Units of local government located\ninspection at a specified location during\nlowing occurs first: (i) A data factor\nfiled with the Secretary on or before\nin more than one county area. In cases\nnormal business hours. The Secretary\nmore beneficial than the pre-disaster\nSeptember 1 of each calendar year. All\nwhere a unit of local government is lo-\nmay prescribe additional guidelines con-\ndata factor currently being used is de-\nsuch funds must be used, obligated, or\ncerning the form and content of such\ncated in more than one county, each part\nveloped, or (ii) 60 months have expired\nappropriated within the time period\ninformation.\nof such unit is treated for allocation pur-\nfrom the designation by the President of\nspecified in § 51.70(b)\nposes as a separate unit of government,\nthe specific major disaster area.\n§ 51.14 Reports to the Bureau of the\nand the adjusted taxes, and intergovern-\n§ 51.12 Certifications.\nCensus.\nmental transfers of such parts are esti-\n§ 51.22 Adjusted taxes.\nThe Secretary shall require a certifica-\nIt shall be the obligation of each re-\nmated on the basis of the ratio which the\n(a) In general. Tax revenues are com-\ntion by the Governor, or the chief ex-\ncipient government to comply promptly\npopulation of such part bears to the pop-\npulsory contributions to a unit of local\necutive officer of the unit of local gov-\nwith requests by the Bureau of the Cen-\nulation of the entirety of such unit.\ngovernment exacted for public purposes,\nernment, that no entitlement funds have\nsus (or by the Secretary) for data and\n§ 51.21 Data affected by major disaster.\nas such contributions are determined by\nbeen used in violation of the prohibition\ninformation relevant to the determina-\nthe Bureau of the Census for general\ncontained in § 51.40 against the use of\ntion of entitlement allocations. Failure\n(a) In general. Any change in data\nstatistical purposes. The term \"adjusted\nentitlement funds for the purpose of ob-\nof any recipient government to so comply\notherwise eligible for use in determining\ntaxes\" means the tax revenues adjusted\ntaining matching Federal funds. In the\nmay place in jeopardy the prompt re-\nthe entitlement of a recipient govern-\nby excluding an amount equal to that\ncase of a unit of local government the\nceipt by it of entitlement funds.\nment after April 1, 1974, shall be dis-\nportion of such compulsory contributions\nSecretary shall require a certification by\nregarded for a period of 60 months if that\nwhich is properly allocable to school op-\nSubpart C-Computation and Adjustment\nthe chief executive officer that entitle-\nchange:\nerations, debt service on school indebted-\nof Entitlement\nment funds received by it have been used\n(1) Resulted from a major disaster\nness, school capital outlays, and other\nonly for priority expenditures as pre-\n§ 51.20 Data.\ndetermined by the President under § 301\neducational purposes.\nscribed by § 51.41. The certifications re-\n(a) In general. The data used in de-\nof the Disaster Relief Act of 1974 (Pub.\n(b) Procedure for exclusion of tax\nquired by this section shall be in such\nL. 93-288) and\ntermination of allocations and adjust-\nrevenues for education. The tax revenues\n(2) Results in a data factor which is\nform as the Secretary may prescribe.\nments thereto payable under this part\nexacted by a unit of local government\nless beneficial than the previous data\nshall be adjusted to exclude any such tax\n4\n5\nrevenues used for financing education in\nof local government pursuant to section\na manner consistent with the following\n109(e) (2) (B) of the Act (the \"Memphis\nreorganization, or change in State\nbefore receiving an entitlement adjust-\nRule\") will be considered to be a change\nstatutes or constitution relevant to the\nment or payment redistribution pur-\nprovisions:\n(1) Where a unit of local government\ncomputation of entitlement of a unit of\nsuant to this section, obtain State cer-\nin a data definition and will not be given\nfinances education from a specific fund\neffect for any entitlement periods for\nlocal government under the Act, occur-\ntification that such change was ac-\nand lists tax revenues to the fund or\nwhich there are final data definitions.\nring during an entitlement period shall\ncomplished in accordance with State\nThe final date upon which determina-\nnot result in a change to the entitlement\nlaw. The certifying official shall be des-\nlevies a separate tax for purposes of edu-\ncation, such amounts as determined will\nof that unit until the next entitlement\nignated by the Governor, and such cer-\ntions of allocations and entitlements, in-\ncluding adjustments thereto, may be\nperiod. However, payment tendered to\ntification shall be submitted to the\nconstitute the tax revenues for education.\nmade for an entitlement period shall be\nsuch unit for the entitlement period may\nBureau of the Census.\n(2) If tax revenues for purposes of\ndetermined by the Secretary as soon as\nbe redistributed pursuant to the provi-\neducation are not separately identifiable\n§ 51.25 Waiver of entitlement; nonde-\nbecause education is financed by ex-\npracticable and shall be publicized by\nsions of paragraphs (b) and (c) of this\nlivery of checks; insufficient data.\nnotice in the FEDERAL REGISTER.\nsection.\npenditure or transferring of moneys\n(a) Waiver. Any unit of local govern-\nfrom a general fund (or similarly named\n(b) Time limitation and minimum ad-\n(b) New units of local government. A\nfund) to a school fund or funds, then the\njustment. If prior to the date determined\nunit of local government which came\nment may waive its entitlement for any\nentitlement period: Provided, The chief\nratio of tax revenues (as defined in para-\nby the Secretary pursuant to paragraph\ninto existence during an entitlement pe-\nexecutive officer with the consent of the\ngraph (a) of this section) to the total\n(a) of this section, it is established to the\nriod shall first be eligible for an entitle-\ngoverning body of such unit notifies the\nrevenues in such fund shall be calculated,\nsatisfaction of the Secretary by factual\nment allocation for the next entitlement\nand that ratio multiplied by the expendi-\nperiod. However, if such unit is a succes-\nSecretary that the entitlement payments\nevidence and documentation that the\nture or transfer of moneys from such\ndata used in the computation of an allo-\nsor government, it shall be eligible to\nfor a past, current, or next beginning\nfund to the school fund shall be equated\nreceive the entitlement payment of the\nentitlement period, or any combination\ncation is erroneous an adjustment will\nbe made. No adjustment of any kind\nunit or units of local government to\nthereof, are being waived. A waiver of\nwith the tax revenues properly allocable\nto expenses for education. The phrase\nwhich is less than $200 shall be made to\nwhich it succeeded in accordance with\nentitlement for the next beginning en-\nthe conditions of the succession.\ntitlement period will only be given ef-\n\"total revenues in such fund\" means cash\nan entitlement if in the judgment of the\nfect if the waiver is received during the\nand securities on hand in the general\nSecretary such adjustment will be bur-\n(c) Dissolution of units of local gov-\n6-month period immediately preceding\nfund (or similarly named fund) at the\ndensome, expensive, or otherwise imprac-\nernment. A unit of local government\nthat entitlement period. In the event that\nbeginning of the fiscal year, plus all\nticable.\nwhich dissolved, was absorbed or ceased\nan entitlement payment is returned or a\nrevenues to the fund (other than trust\n(c) Adjusted taxes and intergovern-\nto exist as such during an entitlement\nnotice of waiver is executed which is not\nor agency revenues) less cash and se-\nmental transfers. The dates for deter-\nperiod is eligible to receive an entitle-\nin accordance with this procedure, the\ncurities on hand at the end of the fiscal\nmining the amount of adjusted taxes and\nment payment for that entitlement pe-\nchief executive officer will be so notified\nyear. Trust and agency funds are those\nintergovernmental transfers of a unit of\nriod: Provided, That such unit of local\nby the Secretary and, unless the at-\nheld specifically for individuals or gov-\nlocal government will be the fiscal year of\ngovernment is in the process of winding\ntempted waiver is rescinded within 30\nernments for which no discretion can be\nsuch unit ending during the 12 months\nup its governmental affairs or a suc-\ndays \"of such notice, it shall be given ef-\nexercised as to the amounts to be paid\nprior to July 1, 1971. If a more recent\ncessor unit of local government has legal\nfect. However, in no event will a notice\nto the recipient.\nperiod is used, it shall be such fiscal year\ncapacity to accept and use such entitle-\nof waiver be given effect for an entitle-\n(3) If any instance where neither par-\nthat can be uniformly assembled for all\nment funds. Entitlement payments\nment period which is subsequent to the\nagraph (b) (1) nor (2) of this section\nunits of government prior to the begin-\nwhich are returned to the Secretary be-\nnext beginning entitlement period. The\npermits determination of school taxes,\nning of the affected entitlement period.\ncause of the cessation of existence of a\nentitlement waived and adjustments\nthen any procedure deemed equitable by\nunit of local government shall be placed\n§ 51.24 Boundary changes, governmen-\nthereto, if any, resulting from recalcula-\nthe Secretary shall be utilized to ascer-\nin the State and Local Government Fiscal\ntal reorganization, etc.\ntion of earlier entitlements, shall be\ntain adjusted taxes.\nAssistance Trust Fund until such times\nadded to and shall become a part of the\n(c) Validity of adjusted tax data. Al-\n(a) In general. Boundary changes,\nas they can be redistributed according\nentitlement of the next highest unit of\nlocation of funds under the Act will be\ngovernmental reorganizations, or\nto the conditions under which the unit\ngovernment eligible to receive entitle-\nbased on data reported by States and\nchanges in State statutes or constitu-\nof local government ceased to exist.\nment funds in that State in which the\nunits of local governments to the Bureau\ntions occurring prior to or during an\n(d) Limitations on adjustment for an-\nunit of government waiving entitlement\nof the Census and shall be in accord-\nentitlement period which were not taken\nnexations. (1) Annexations by units of\nis located. However, if the governing\nance with definitions established by the\ninto account during the initial allocation\nlocal government having a population\nbody of an Indian tribe or Alaskan native\nBureau. No unit of government shall\nshall, if not within the scope of para-\nof less than 5,000 on April 1, 1970, shall\nvillage waives its entitlement for any pe-\nreport to the Department of the Treas-\ngraph (d) of this section, affect such al-\nnot affect the entitlement of any unit of\nriod, the rules relating to distributions\nury or the Bureau of the Census in a\nlocation or payments in a manner con-\nlocal government for an entitlement\nwithin county areas (pursuant to section\nmanner which attempts to circumvent or\nsistent with the following provisions:\nperiod unless the Secretary determines\n108(b) (4) of the Act) are to apply to\nfrustrate the intent of this section.\n(1) A boundary change, governmental\nthat adjustments pursuant to such an-\nthe distribution within a county area as\nreorganization, or change in State\nnexations would be equitable and would\nif such tribe or village were not in exist-\n§ 51.23 Date for determination of allo-\nstatutes or constitution relevant to the\nnot be unnecessarily burdensome, ex-\nence for that period. A waiver of entitle-\ncation.\ncomputation of an entitlement of a unit\npensive, or otherwise impracticable.\nment by a unit of local government or\n(a) In general. Pursuant to the provi-\nof local government under the Act, oc-\n(2) Annexations of areas with a popu-\nIndian tribe or Alaskan native village\nsions of § 51.20 (a) and (b) (3), the de-\ncuring prior to the beginning of an en-\nlation of less than 250, or less than 5 per-\nshall be deemed irrevocable 30 days prior\ntermination of the data definitions upon\ntitlement period shall result in an altera-\ncent of the population of the gaining\nto the first payment for the entitlement\nwhich the allocations and entitlements\ntion to the entitlement of that unit if\ngovernment, shall not affect the en-\nperiod to which it relates.\nfor an entitlement period are to be cal-\nbrought to the attention of the Bureau\ntitlement of any unit of local govern-\n(b) Constructive waiver. Any recipient\nculated shall be made not later than the\nof the Census within 60 days (or by\nment.\ngovernment which has not waived and\nday immediately preceding the beginning\nJune 30, 1973, in case of the third entitle-\n(e) Certification. Units of local gov-\nis otherwise eligible to receive entitle-\nof the entitlement period. Any change in\nment period) after the beginning of such\nernment affected by a boundary change,\nment payments and which has failed to\nthe computation of local tax effort to\nentitlement period.\ngovernmental reorganization, or change\nprovide required reports, assurances or\ncredit certain county sales taxes to units\n(2) A boundary change, governmental\nin State statutes or constitution shall,\ncertifications pursuant to Subpart B is\n6\n7\nsubject to a determination of having\n(b) Adjustment to entitlement pay-\nment from own sources and to generally\nshould a State's calculated own source\nconstructively waived its entitlement\nments. Adjustment to an entitlement of a\nmonitor level of accordance with the\naverage aggregate intergovernmental\nfunds for the affected entitlement pe-\nrecipient government will ordinarily be\nmaintenance provision of paragraph (a)\ntransfers to units of local government\nriod through inaction. The Secretary,\neffected through alteration to entitle-\nof this section during future entitlement\n(over the appropriate periods) be less\nprior to such a determination, shall noti-\nment payments unless there is a down-\nperiods:\nthan such transfers as calculated for the\nward adjustment which is so substantial\n(1)- It shall be assumed that the ratio\nfy nonresponsive recipient governments\nbase period, the difference (as defined in\nas to make payment alterations imprac-\nof a State's own source intergovern-\nparagraph (b) (3) of this section) shall\nof their noncompliance and that their\nticable or impossible. In such case the\nmental transfers to units of local govern-\nconstitute the future indicated reduction\nentitlement funds are being temporarily\nSecretary may demand that the funds\nment to that State's total intergovern-\nin that State's entitlement unless such\nwithheld pursuant to § 51.3(b). If com-\nreceived by the recipient government in\nmental transfers to units of local gov-\nState can document to the Secretary that\npliance is not achieved within a reason-\nexcess of its entitlement be immediately\nernment is equal to the ratio of that\nthe fact or amount of nonmaintenance\nable period of time, which shall not be\nrepaid to the Trust Fund of the Depart-\nState's own-source revenues to its total\nas determined by application of the for-\nless than 30 days, the Secretary shall no-\nment of the Treasury.\nrevenues. Thus. for a State in which such\nmula is inaccurate.\ntify the affected recipient governments\n§ 51.27 State must maintain transfers to\nformula may be applied. its base year\n(c) Alternative procedure. If the Sec-\nthat if compliance is not achieved with-\nin a period of 30 days after mailing such\nlocal governments.\nown source intergovernmental transfers\nretary shall determine that application\nto units of local government shall be\nof the formula set forth in paragraph (b)\nnotice, a constructive waiver of en title-\n(a) General rule. The entitlement of\nassumed to equal its total intergovern-\nof this section in a particular case pro-\nment funds will be determined to have\nany State government for any entitle-\nmental transfers to units of local gov-\nvides an inaccurate or unfair measure of\noccurred. Entitlement funds thus con-\nment period beginning on or after July 1,\nernment in the base year multiplied by\ntransfer effort, then any formula, pro-\nstructively waived will be redistributed\n1973, shall be reduced by the amount (if\nits own source revenue in the base year\ncedure, or method deemed equitable by\npursuant to the provisions of paragraph\nany) by which—\ndivided by its total revenues in the base\nthe Secretary, may be utilized to measure\n(a) of this section.\n(1) The average of the aggregate\nyear.\nsuch transfer effort for the purpose of\n(c) Nondelivery. Entitlement funds for\namounts transferred by the State gov-\n(2) In a State in which the formula is\nimplementing the maintenance provi-\nany entitlement period which are re-\nernment out of its own sources during\napplied, the State's own source inter-\nsion.\nturned by the U.S. Postal Service to the\nsuch period (or during that State's fis-\ngovernmental transfers to units of local\n(d) Adjustment where State assumes\nDepartment of the Treasury as being\ncal year ending on or immediately prior\ngovernment in a future entitlement pe-\nresponsibility for category of expendi-\nnondeliverable because of incorrect ad-\nto the end of such period) and the pre-\nriod shall be assumed to equal the aver-\ntures. If the State government establishes\ndress information, or which are un-\nceding entitlement period (or such fiscal\nage of-\nto the satisfaction of the Secretary that\nclaimed for any reason, shall be placed\nyear) to all units of local government (as\n(i) The State's total intergovern-\nsince June 30, 1972, it has assumed re-\nin the State and Local Government Fis-\ndefined in § 51.2(m)) in such State, is\nmental transfers to units of local gov-\nsponsibility for a category of expendi-\ncal Assistance Trust Fund until such\nless than,\nernment during that period (or that\ntures which (before July 1, 1972) was the\ntime as payment can be made.\n(2) The similar aggregate amount for\nState's fiscal year ending on or imme-\nresponsibility of local governments lo-\n(d) Insufficient data. Entitlement\nthe 1-year period beginning July 1, 1971\ndiately prior to the end of such period)\ncated in such State, then, the aggregate\nfunds for any entitlement period which\n(or that State's fiscal year ending on or\nmultiplied by its own source revenue in\namount taken into account under para-\nare withheld from payment because of\nimmediately prior to the end of such\nthat period (or such fiscal year) divided\ngraph (a) (2) of this section shall be\ninsufficient data upon which to compute\nperiod).\nby its total revenues in that period (or\nreduced to the extent that increased\nthe entitlement, or for which payment\nFor purposes of paragraph (a) (1) of\nsuch fiscal year) and\nState government spending (out of its\ncannot be made for any other reason,\nthis section, the amount of any reduc-\n(ii) The State's total intergovern-\nown sources) for such category has re-\nshall remain in the State and Local Gov-\ntion in the entitlement of a State gov-\nmental transfers to units of local gov-\nplaced corresponding amounts which for\nernment Fiscal Assistance Trust Fund\nernment under this section for any en-\nernment during the preceding entitle-\nthe 1-year period beginning July 1, 1971\nuntil such time as payment can be made.\ntitlement period shall, for subsequent\nment period (or that State's fiscal year\n(or that State's fiscal year ending on or\n§ 51.26 Reservation of funds and ad-\nentitlement periods, be treated as an\nending on or immediately prior to the\nimmediately prior to the end of such\njustment of entitlement.\namount transferred by the State gov-\nend of such period) multiplied by its own\nperiod) it transferred to units of local\nernment out of its own sources during\nsource revenue in that period (or such\ngovernment.\n(a) Reservation of entitlement funds.\nsuch period to units of local government\nfiscal year) divided by its total revenues\n(e) Adjustment where new taxing\nIn order to make subsequent adjust-\nin such State. The phrase \"own sources\"\nin that period (or such fiscal year).\npowers are conjerred upon local govern-\nments to an entitlement payment under\nmeans all sources of State revenue (in-\n(3) Therefore, in a State in which the\nments. If a State establishes to the satis-\nthis part which may be necessitated be-\ncluding debt proceeds and the State's\nformula is applied, maintenance (for a\ncause of insufficient or erroneous data,\nfaction of the Secretary that since June\nrevenue sharing entitlement funds) but\ngiven entitlement period) of intergovern-\nor for any other reason, the Secretary\nmental transfer effort to units of local\n30, 1972, one or more units of local gov-\nexcluding intergovernmental revenues\nshall reserve in the State and Local Gov-\nernment within such State have had con-\nreceived from the Federal government.\ngovernment will be measured by the dif-\nernment Fiscal Assistance Trust Fund\nsuch percentage of the total entitlement\n(b) Measurement of maintenance of\nference between that State's average ag-\nferred upon them new taxing authority,\neffort. In those States that do not have\ngregate intergovernmental transfers to\nthen, the aggregate amount taken into\nfunds for any entitlement period as in\nhis judgment shall be necessary to insure\nan accounting system providing an audit\nunits of local government (over the ap-\naccount under paragraph (a) (2) of this\ntrail for all funds concerned (from own\npropriate periods) as calculated by em-\nsection shall be reduced to the extent of\nthat there will be sufficient funds avail-\nsource to final application) in intergov-\nploying the method described in para-\nthe larger of-\nable so that all recipient governments\nernmental transfer to units of local gov-\ngraph (b) (2) of this section and that\n(1) An amount equal to the amount of\nwill receive their full entitlements. Such\nernment (such as those States in which\nState's own source intergovernmental\nthe taxes collected by reason of the exer-\nreserve shall be known as the Obligated\nintergovernmental transfers to units of\ntransfers to units of local government in\ncise of such new taxing authority by such\nAdjustment Reserve and amounts re-\nlocal government are made from a com-\nthe base period as calculated by employ-\nlocal governments, or\nmaining in that reserve will accumulate\nmingled fund with no identification as\ning the method described in paragraph\n(2) An amount equal to the amount of\nuntil the liabilities of the Trust Fund are\nto specific revenue source), the following\n(b) (1) of this section.\nthe loss of revenue to the State by reason\ndischarged or sufficiently diminished to\nformula may be applied by the Secretary\n(4) Should the application of this for-\nof such new taxing authority being con-\npermit an allocation to recipient govern-\nto establish the base year intergovern-\nmula during any entitlement period indi-\nferred on such local governments.\nments.\nmental transfers to units of local govern-\ncate nonmaintenance, for example,\nNo amount shall be taken into consider-\n8\n9\nation under paragraph (e) (1) of this sec-\ntion (after any judicial review) shall be\nquestion those data factors by providing\nernments of a State do not total 100\ntion if such new taxing authority is an\ntransferred from the Secretary's Trust\nthe Department with factual documenta-\npercent of the amount allocated to that\nincrease in the authorized rate of tax\nFund to the general fund of the Treasury\ntion demonstrating evidence of error. If\nState, the amount to be allocated to\nunder a previously authorized kind of tax,\non the day on which such reduction be-\nthe Secretary determines that any data\ncounty areas shall be adjusted appro-\nunless the State is determined by the\ncomes final.\nfactors used were erroneous, necessary\npriately, and the allocation process shall\nSecretary to have decreased a related\nState tax.\n§ 51.28 Optional formula.\nadjustments will be made. Data factors\nbe repeated until the amounts allocated\nwhich are used for more than one en-\nto recipient governments of a State total\n(f) Special rule for period beginning\n(a) In general. A State government\ntitlement period will be subject to chal-\n100 percent of the amount allocated to\nJuly 1, 1973. In the case of the entitle-\nmay by law provide for the allocation of\nlenge and adjustment only for the first\nthat State.\nment period beginning July 1, 1973, the\nentitlement funds among county areas,\nentitlement period in which they were\npreceding entitlement period for purposes\nor among units of local government\nSubpart D-Prohibition and Restrictions on\nused.\nof paragraph (a) (1) of this section shall\n(other than county governments Indian\nUse of Funds\nbe treated as being the 1-year period be-\ntribes, and Alaskan native villages) (1)\n§ 51.40 Matching funds.\nginning July 1, 1972, or that State's fiscal\nOn the basis of the population multiplied\n§ 51.30 Adjustment of maximum and\nyear which ends prior to June 30, 1973.\nby the general tax effort factors of such\nminimum per capita entitlement; 100\n(a) In general. Entitlement funds\n(g) Special rule for period beginning\npercent criterion.\nmay not be used, directly or indirectly,\nareas or units of local governments; or,\nas a contribution in order to obtain any\nJuly 1, 1976. In the case of the entitle-\n(2) on the basis of the population multi-\n(a) County area maximum and mini-\nFederal funds under any Federal pro-\nment period beginning July 1, 1976, and\nplied by the relative income factors of\nmum per capita entitlement-(1) In\nending December 31, 1976, the aggregate\ngeneral. Pursuant to section 108(b) (6)\ngram. The indirect use of entitlement\nsuch areas or units of local government;\nfunds to match Federal funds is defined\namount taken into account under para-\nor, (3) on the basis of a combination of\nof the Act, the per capita amount allo-\nto mean the allocation of entitlement\ngraph (a) (1) of this section for the pre-\nthose two factors. Any State which pro-\ncated to any county area shall be not\nceding entitlement period and the aggre-\nfunds to a nonmatching expenditure and\nvides by law for such a variation in the\nless than 20 percent, nor more than 145\ngate amount taken into account under\nallocation formula provided by subsec-\npercent, of two-thirds of the amount\nthereby releasing or displacing local\nparagraph (a) (2) of this section shall be\nfunds which are used for the purpose of\ntions 108(a) or 108(b) (2) and (3) of the\nallocated to the State under section 106\none-half of the amounts which (but for\nAct, shall notify the Secretary of such\nof the Act, divided by the population of\nmatching Federal funds. This prohibition\nthis paragraph (g)) would be taken into\non use of entitlement funds as matching\nlaw not later than 90 days before the\nthat State.\naccount.\nbeginning of the first entitlement period\n(2) One hundred forty-five-percent\nfunds applies to Federal programs where\n(h) Report by Governor. Pursuant to\nto which such law is to apply. Any such\nrule. If a county area allocation is greater\nFederal funds are required to be matched\nthe authority of § 51.10 and in order to\nlaw shall:\nthan the 145-percent limit, its allocation\nby non-Federal funds and to Federal pro-\neffect compliance with this section, the\n(1) Provide for allocating 100 percent\nshall be reduced to the 145-percent level\ngrams which allow matching from either\nGovernor of each State shall submit to\nof the aggregate amount to be allocated\nand the resulting surplus shall be shared\nFederal 02 non-Federal funds.\nthe Secretary after the end of the State's\nunder subsections 108(a) or 108(b) (2)\nproportionately by all remaining uncon-\n(b) Secondary recipients. The prohi-\nfiscal year, on a form to be provided, the\nand (3) of the Act;\nstrained county areas.\nbition of paragraph (a) of this section\naggregate amounts transferred out of its\n(2) Apply uniformly throughout the\n(3) Twenty-percent rule. If, after the\napplies to a recipient government's en-\nown sources to units of local government\nState; and\ntitlement funds which are transferred by\napplication of paragraph (a) (2) of this\nfor those entitlement periods or that\n(3) Apply during the period beginning\nsection, a county area allocation is less\nit to another governmental unit or pri-\nState's fiscal years specified on the\non the first day of the first entitlement\nthan the 20-percent limit, its allocation\nvate organization. A violation of this\nreport:\nperiod to which it applies and ending on\nshall be increased to the 20-percent level\nsection by a secondary recipient shall\n(1) The State's own source funds.\nDecember 31, 1976.\nconstitute a violation by the recipient\nand the resulting deficit shall be shared\n(2) The State's total funds.\n(b) Singlc legislation required. If a\nproportionately by all remaining uncon-\ngovernment and the penalty provided\n(3) The State's own source transfers\nState government alters its county area\nby paragraph (f) of this section shall be\nstrained county areas.\nto units of local government.\nallocation formula or its local govern-\n(b) Local government (other than a\nimposed on the recipient government.\n(4) The State's total transfers to units\n(c) Certification required. Pursuant\nment allocation formula, or both, such\ncounty government)-( In general.\nof local government.\nalteration may be made only once and\nto § 51.12, the chief executive officer of\nExcept as provided below, the per-capita\n(1) Reduction in entitlement. If the\nmust be made in the same legislative\neach recipient government must certify\namount allocated to any unit of local\nenactment.\nto the Secretary that entitlement funds\nSecretary has reason to believe that par-\ngovernment (other than a county govern-\nreceived by it have not been used in vio-\nagraph (a) of this section requires a\n(c) Certification required. Paragraph\nment) shall be not less than 20-percent,\nlation of this section.\nreduction in the entitlement of any State\n(a) of this section shall apply within a\nnor more than 145-percent, of two-thirds\n(d) Increased State or local govern-\ngovernment for any entitlement period,\nState only if the Secretary certifies that\nof the amount allocated to the State\nment. revenues. No recipient govern-\nhe shall give reasonable notice and op-\nthe State law complies with the require-\nunder section 106 of the Act, divided by\nment shall be determined to have used\nportunity for hearing to the State. If,\nments of such paragraph. The Secretary\nthe population of that State.\nfunds in violation of paragraph (a) of\nthereafter, he determines that paragraph\nshall not certify any such law with re-\n(2) One hundred forty-five-percent\nthis section with respect to any funds\n(a) of this section requires the reduction\nspect to which he receives notification\nrule. If a unit of local government is al-\nreceived for any entitlement period (or\nof such entitlement, he shall also deter-\nlater than 30 days prior to the first\nlocated an amount greater than the 145-\nduring its fiscal year) to the extent that\nmine the amount of such reduction and\nentitlement period during which it is to\npercent limit, its allocation shall be re-\nnet revenues received by it from its own\nshall notify the Governor of such State\napply.\nduced to that level.\nsources during such period exceed the\nof such determinations and shall with-\n§ 51.29 Adjustment of data factors.\n(3) Twenty-percent rule. If a unit of\nnet revenues received by it from its own\nhold from subsequent payments to such\nlocal government is allocated an amount\nState government under this subtitle an\nThe data factors and data definitions\nsources during the 1-year period begin-\nless than the 20-percent limit, its alloca-\nused in computing entitlements under the\nning July 1, 1971 (or its fiscal year end-\namount equal to such reduction.\ntion shall be increased to the lower of\n(j) Transfer to general fund. An\nAct for any entitlement period will be\ning during the same period). In the case\nthe 20-percent limit or 50 percent of the\nmade available to each State government\nof the entitlement periods of 6 months,\namount equal to the reduction in the en-\nsum of that unit's adjusted taxes and\nand unit of local government as soon as\none-half of such net revenues shall be\ntitlement of any State government which\ntransfers.\nmeasured.\npracticable. Each such government will\nresults from the application of this sec-\n(c) One hundred-percent criterion. If\nbe given a reasonable opportunity to\n(e) Presumptions of compliance. No\nthe amounts allocated to recipient gov-\nrecipient government shall be determined\n10\n11\nto have used entitlement funds in viola-\nceived by units of local government may\ntion of the indirect prohibition of para-\nbe used only for priority expenditures.\nand opportunity for corrective action.\nexpend entitlement funds only for the\ngraph (a) of this section to the extent\nAs used in this part, the term \"priority\nbenefit of members of the tribe or village\nthat:\n§ 51.42 Wage rates and labor standards.\nexpenditures\" means:\nresiding in the county area from which\n(1) The expenditure of entitlement\n(1) Ordinary and necessary mainte-\n(a) Construction laborers and me-\nthe allocation of entitlement funds was\nfunds was accompanied by an aggregate\nnance and operating expenses for-\nchanics. A recipient government which\noriginally made. Expenditures which are\nincrease in nonmatching funds expendi-\n(i) Public safety (including law en-\nreceives entitlement funds under the Act\nso restricted will not constitute a failure\ntures.\nforcement, fire protection, and building\nshall require that all laborers and me-\nto comply with the requirement of Sub-\n(2) The receipt of entitlement funds\ncode enforcement);\nchanics employed by contractors or sub-\npart E of this part.\npermitted that government to reduce\n(ii) Environmental protection (in-\ncontractors in the performance of work\ntaxes: Provided, Nonentitlement revenue\ncluding sewage disposal, sanitation, and\non any construction project costing in\nSubpart E-Nondiscrimination in Pro-\nis sufficient to cover all matching funds\npollution abatement)\nexcess of $2,000.00 and of which 25 per-\ngrams Funded With Entitlement Funds\ncontributions.\n(iii) Public transportation (including\ncent or more of the cost is paid out of its\n§ 51.50 Purpose.\n(3) The matching funds contribution\ntransit systems and streets and roads)\nentitlement funds: (1) Will be paid\nin question is accounted for by an in-\nwages at rates not less than those pre-\nThe purpose of this subpart is to effec-\n(iv) Health:\nkind contribution which was not financed\nvailing on similar construction in the\ntuate section 122 of the Act to the end\n(v) Recreation;\ndirectly or indirectly with entitlement\nlocality as determined by the Secretary\nthat no person in the United States shall\n(vi) Libraries;\nfunds.\n(vii) Social services for the poor or\nof Labor in accordance with the Davis-\non the ground of race, color, national ori-\n(f) Determination by Secretary of the\nBacon Act as amended (40 U.S.C. 276a-\ngin, or sex be excluded from participa-\naged; and\nTreasury. If the Secretary has reason to\n(viii) Financial administration, and\n276a-5); and (2) will be covered by\ntion in, be denied the benefits of, or be\nbelieve that a recipient government has\n(2) Ordinary and necessary capital\nlabor standards specified by the Secre-\nsubjected to discrimination under any\nused entitlement funds to match Federal\nexpenditures authorized by law. No unit\ntary of Labor pursuant to 29 CFR Parts\nprogram or activity funded in whole or\nfunds in violation of the Act, the Secre-\nof local government may use entitlement\n1, 3, 5, and 7.\nin part with entitlement funds made\ntary shall give such government notice\nfunds for nonpriority expenditures which\n(b) Request for wage determination.\navailable pursuant to subtitle A of title\nand opportunity for hearing. If the Sec-\nare defined as any expenditures other\nIn situations where the Davis-Bacon\nI of the Act.\nretary determines that such government\nthan those included in paragraph (a) (1)\nstandards are applicable, the recipient\n§ 51.51 Definitions.\nhas, in fact, used funds in violation of\nand (2) of this section. Pursuant to\ngovernment must ascertain the U.S. De-\nthis section, he shall notify such govern-\n§ 51.12, the chief executive officer of each\npartment of Labor wage rate determina-\nUnless the context requires otherwise,\nment of his determination and shall re-\nunit of local government must certify to\ntion for each intended project and insure\nas used in this subpart, the term:\nquest repayment to the United States\nthat the wage rates and the contract\n(a) \"Facility\" includes all or any part\nthe Secretary that entitlement funds re-\nof an amount equal to the funds so used.\nclauses required by 29 CFR 5.5 and 29\nof structures, equipment, or other real or\nceived by it have been used only for\nTo the extent that such government fails\nCFR 5a.3 are incorporated in the con-\npersonal property or interests therein.\npriority expenditures as required by the\nto repay such amount, the Secretary shall\n(b) \"Funded\" means that entitlement\nAct.\ntract specifications. The recipient gov-\nwithhold from subsequent entitlement\nfunds have been made available for ex-\n(b) Use of entitlement funds for debt\nernment must also satisfy itself that the\npayments to that government an amount\nbidder is made aware of his labor stand-\npenditure in a designated program or\nretirement. The use of entitlement\nof entitlement funds equal to the funds\nfunds for the repayment of debt is a\nards responsibilities under the Davis-\nactivity through legislative action.\nused in violation of this section or, if\nBacon Act. Wage rate determinations\n(c) \"Program or activity\" means any\npermissible expenditure provided that:\nthis method is impracticable, the Sec-\n(1) Entitlement funds are not used to\nmay be obtained by filing a Standard\nfunction conducted by an identifiable ad-\npay any interest incurred because of the\nForm 308 with the Employment Stand-\nministrative unit of the recipient govern-\nretary may refer the matter to the At-\nards Administration of the applicable\nment, or by any other unit of govern-\ndebt,\ntorney General for appropriate civil\nregional office of the U.S. Department of\nment or private contractor receiving en-\n(2) The debt was originally incurred\naction.\nfor a priority expenditure purpose as de-\nLabor at least 30 days before the invita-\ntitlement funds from the recipient gov-\n(g) Use of entitlement funds to supple-\nfined in this section,\ntion for bids or, in case of construction\nernment.\nment Federal grant funds. The prohibi-\n(3) The actual expenditure from the\ncovered by general wage rate determina-\n§ 51.52 Discrimination prohibited.\ntion on use of entitlement funds con-\nproceeds of the indebtedness (i.e., for\ntions, the appropriate rate may be ob-\ntained in paragraph (a) of this section\n(a) General. No person in the United\nmaterials, contractors, etc.) was made on\ntained from the FEDERAL REGISTER.\ndoes not prevent the use of entitlement\nStates shall on the ground of race,\nfunds to supplement other Federal grant\nor after January 1, 1972 (the beginning\n(c) Government employees. A recipient\ncolor, national origin, or sex be excluded\nfunds. For example, if expenditures for\nof the first entitlement period),\ngovernment which employs individuals\nfrom participation in, be denied the\n(4) The actual expenditures from the\nwhose wages are paid in whole or in part\na project exceed the amount available\nbenefits of, or be subjected to discrimi-\nproceeds of the indebtedness were not in\nfrom entitlement funds must pay wages\nfrom non-Federal funds plus matched\nnation under any program or activity\nviolation of any restrictions enumerated\nwhich are not lower than the prevailing\nFederal funds, the recipient government\nfunded in whole or in part with entitle-\nin this subpart.\nrates of pay for persons employed in sim-\nmay use entitlement funds to defray the\nment funds made available pursuant to\n(c) Effect of noncompliance. In the\nilar public occupations by the same em-\nexcess costs: Provided, however, That\nsubtitle A of title I of the Act.\ncase of a unit of local government which\nployer. However, this subsection shall\nthe entitlement funds are not used to\n(b) Specific discriminatory actions\nuses an amount of entitlement funds for\napply with respect to employees in any\nmatch other Federal funds: And Pro-\nprohibited. (1) A recipient government\nvided further, That in the case of a unit\nother than priority expenditures as de-\ncategory only if 25 percent or more of\nshall not, under any program or activity\nof local government, the use of entitle-\nfined in paragraph (a) of this section, it\nthe wages of all employees of the recip-\nto which the regulations of this subpart\nwill pay over to the Secretary (for deposit\nient government in such category are\nment funds to supplement Federal grants\napply, directly or through contractual\nin the general fund of the Treasury) an\npaid from the trust fund established by\nis restricted to the category of expendi-\nor other arrangements, on the ground\namount equal to 110 percent of any\nit under $ 51.70(a).\ntures as set forth in § 51.41.\nof race, color, national origin, or sex:\namount expended in violation of para-\n(i) Deny any service or other benefit\n§ 51.41 Permissible expenditures for\ngraph (a) of this section, unless such\n§ 51.43 Restriction on expenditures by\nIndian tribes and Alaskan native\nprovided.\nlocal governments.\namount of entitlement funds is promptly\nvillages.\n(ii) Provide any service or other bene-\n(a) In general. Entitlement funds re-\nrepaid to the trust fund of the local\nfit which is different, or is provided in\ngovernment after notice by the Secretary\nIndian tribes and Alaskan native vil-\na different form from that provided to\nlages as defined in $ 51.2 are required to\nothers.\n12\n13\n(iii) Subject any person to segregated\n§ 51.53 Employment.\nbasis of sex, be excluded from participa-\n(3) Any distinction between married\nor separate treatment in any facility or\n(a) Employment practices. In any pro-\ntion in, be denied the benefits of, or\nmales and married females and any dis-\nin any matter or process related to re-\nbe subjected to discrimination in recruit-\ntinction between unmarried males and\nceipt of any service or benefit.\ngram or activity funded in whole or in\npart with entitlement funds, a recipient\nment, hiring, or employment, whether\nunmarried females will be considered to\n(iv) Restrict in any way the enjoyment\ngovernment may not (directly or indi-\nfull-time or part-time, under any pro-\nbe a distinction made on the basis of sex.\nof any advantage or privilege enjoyed by\nothers receiving any service or benefit.\nrectly through contractual or other ar-\ngram or activity funded in whole or in\nSimilarly, a recipient government must\n(v) Treat an individual differently\nrangements) subject any individual to\npart with entitlement funds.\nnot deny employment to women with\ndiscrimination on the ground of race,\n(b) Recruitment and advertisement.\nyoung children unless it has the same\nfrom others in determining whether the\nindividual satisfies any admission, en-\ncolor, national origin, or sex in its em-\n(1) Recipient governments engaged in\nexclusionary policies for men; or termi-\nployment practices. These practices in-\nrecruiting activity must recruit employ-\nnate an employee of one sex in a par-\nrollment, eligibility, membership, or other\nrequirement or condition which individ-\nclude recruitment, recruitment advertis-\nees of both sexes for all jobs.\nticular job classification upon reaching\ning, hiring, layoff, termination, upgrad-\n(2) Advertisement in newspapers and\na certain age unless the same rule is ap-\nuals must meet in order to be provided\ning, demotion, transfer, rates of pay or\nother media for employment must not\nplicable to persons of the opposite sex.\nany service or other benefit.\nother forms of compensation, use of fa-\nexpress a sex preference. The placement\n(4) A recipient government may not\n(vi) Deny any person an opportunity\ncilities, and other terms and conditions\nof an advertisement in columns headed\nrefuse to hire men or women, or deny\nto participate in a program or activity\nof employment.\n\"Male\" or \"Female\" will be considered to\nmen or women a particular job because\nas an employee.\nbe a discriminatory limitation.\nthere are no separate restrooms or other\n(vii) Deny any person an equal oppor-\n(b) Employee selection procedures.\n(3) A recipient government shall not\nseparate facilities. The recipient govern-\ntunity to participate as appointed mem-\nThe Equal Employment Opportunity\nrecruit primarily or exclusively at enti-\nment's policies and practices must assure\nCommission, in carrying out its respon-\nbers of planning or advisory bodies in\nties which furnish as applicants only or\nthat appropriate facilities are available\nsibilities in ensuring compliance with\nconnection with the disposition of en-\npredominantly members of one sex if\nfor use by both sexes.\ntitle VII of the Civil Rights Act of 1964,\ntitlement funds.\nsuch recruitment has the effect of dis-\n(5) Recipient governments may not\nhas published Guidelines on Employee\n(2) A recipient government may not\ncriminating on the basis of sex.\ndeny any employee the right to any job,\nSelection Procedures (29 CFR Part 1607)\nutilize criteria or methods of administra-\n(c) Job policies and practices. (1) Em-\nwhich the employee is qualified to per-\nto assist in establishing and maintaining\ntion which have the effect of\nployees of both sexes shall have an\nform, in reliance upon a State \"protec-\nequal employment opportunities. Among\n(i) Subjecting individuals to discrimi-\nequal opportunity to any available job\ntive\" law that does not apply equally to\nother things, these Guidelines forbid the\nnation on the basis of race, color, na-\nthat he or she is qualified to perform.\nboth sexes.\nuse of employee selection practices, pro-\ntional origin, or sex.\n(2) Recipient governments must not\n(6) A recipient government shall not:\ncedures, and devices (such as tests, min-\n(ii) Perpetuating the results of past\nimum educational levels, and the like)\nmake any distinction based upon sex in\n(i) Classify a job as being for males\ndiscriminatory practices.\nwhich disqualify a disproportionate num-\nemployment opportunities, wages, hours\nor for females.\n(iii) Defeating or substantially impair\nor other conditions of employment. It\n(ii) Maintain or establish separate\nber of minority individuals or women\ning accomplishment of the objectives 01\nshall be an unlawful employment prac-\nlines of progression, seniority lists, career\nfor employment and which are not re-\nthe program or activity with respect to\nlated to job performance. Recipient gov-\ntice for an employer to have a pension\nladders, tenure, systems, position de-\nindividuals of a particular race, color,\nor retirement plan which establishes dif-\nscriptions or job requirements which are\nernments using selection procedures\nnational origin, or sex.\nwhich are not in conformity with the\nferent optional or compulsory retirement\nbased on sex or which classify persons\n(3) A recipient government may not,\nages based on sex. It shall be an unlaw-\non the basis of sex.\nEEOC Guidelines shall, upon request of\nwith respect to any program or activity\nthe Secretary, set forth the reasons for\nful employment practice for an employer\n(d) Marital or parental status. In any\nto which this subpart applies, make se-\nto provide for both, unequal benefits and\nprogram or activity funded in whole or\nany such noconformity, and, if neces-\nlections of site or location of facilities\nunequal contributions in the areas of\nin part with entitlement funds:\nsary, the actions the recipient govern-\nwhich have the effect of:\ninsurance, pension or retirement plans,\n(1) Family status. A recipient govern-\nment is taking or will take to assure that\n(i) Excluding individuals from such\nits selection procedures are job related.\nwelfare or other fringe benefits pro-\nment shall not treat an employee or\nfacilities.\napplicant for employment differently on\n(c) Self-evaluation. Recipient govern-\ngrams, Further, it shall be an unlawful\n(ii) Denying the individuals the bene-\nemployment practice for an employer to\nthe basis of sex in any employment ac-\nments are expected to conduct a continu-\nfits of such facilities.\ning program of self-evaluation to ascer-\nprovide for either unequal benefits or\ntion or policy because of the employee's\n(iii) Subjecting individuals using the\nunequal contributions in such areas un-\nor applicant's marital status or status as\nfaclities to discrimination on the ground\ntain whether any of their recruitment,\nless such unequal benefits or unequal\na parent. Such action may also not be\nof race, color, national origin, or sex.\nemployee selection, or promotional poli-\ncies (or lack thereof) directly or indi-\ncontributions are directly related to ac-\ntaken with respect to pregnancy unless\n(4) Recipient governments are encour-\ntuarial differences. Proof of such ac-\nthe recipient government can demon-\naged to take action with entitlement\nrectly have the effect of denying equal\ntuarial differences shall be provided by\nstrate that the pregnancy of the indi-\nfunds to ameliorate an imbalance in\nemployment opportunities to minority\nthe recipient government upon the re-\nvidual concerned prevents adequate job\nindividuals or women.\nservices or facilities provided to any geo-\nquest of the Secretary. In the areas of\nperformance by that individual. In no\n(d) Employment compliance reviews.\ngraphic area or specific group in order\nCompliance reviews of recipient govern-\ninsurance, pensions, welfare programs\nevent may a recipient government have\nto overcome the effects of prior discrim-\nand other fringe benefits, it shall be an\na policy or take an action which bene-\nments will be scheduled by the Office\ninatory practice or usage. If entitlement\nfunds are allocated to a program or ac-\nof Revenue Sharing, giving priority to\nunlawful employment practice for a re-\nfits a person because of his or her status\nany recipient government programs\ncipient government to make available\nas head of household or principal family\ntivity which currently provides an im-\nbenefits for the wives and families of\nwage earner.\nfunded with entitlement funds which\nbalance of services or facilities to per-\nmale employees where the same benefits\n(2) Pregnancy as a temporary disa-\nshow a significant disparity between the\nsons protected by this subpart, then such\nare not made available for the husbands\nbility. A recipient government shall treat\npercentage of minority persons or women\nimbalance must be ameliorated.\nin the work force and the percentage\nand families of female employees; or to\nany temporary disability arising from\n(5) The enumeration of specific forms\nof minority or women employees in the\nmake available benefits for the wives of\npregnancy, childbirth, false pregnancy,\napplicable programs.\nmale employees which are not made\ntermination of pregnancy, and recovery\nof prohibited discrimination in this para-\ngraph does not limit the generality of\navailable for female employees; or to\ntherefrom in the same manner as it\nthe prohibition in paragraph (a) of this\n§ 51.54 Sex discrimination.\nmake available benefits to the husbands\ntreats any other temporary disability for\nsection.\nof female employees, which are not made\nall job related purposes. The term \"job\n(a) General. No person shall, on the\navailable for male employees.\nrelated purposes\" includes commence-\n14\n15\nment, duration. and extensions of leave,\nthe exclusive possession of any other\nthe provisions of this subpart, he will\n(1) There has been an express finding\npayment of disability income, reinstate-\nagency, institution, or person, and such\ncause a prompt investigation to be made\non the record, after notice and oppor-\nment or termination of employment, re-\nagency, institution, or person fails or\nby the Office of Revenue Sharing, or\ntunity for hearing, of a failure to comply\ninstatement pay rate and position, fringe\nrefuses to furnish this information, the\nother appropriate Federal or State agen-\nwith a requirement of this subpart.\nbenefits, accrual of seniority or other\nrecipient government shall SO certify in\ncy, of the program or activity concerned.\n(2) At least 10 days have elapsed from\nbenefit of service, and promotion.\nits report and shall set forth what ef-\nSuch investigation may be made, if nec-\nthe date of the order of the administra-\n(e) Sex as a bona fide occupational\nforts it has made to obtain the informa-\nessary, with the assistance of complain-\ntive law judge. During this period addi-\nqualification. Nothing in these regula-\ntion.\nants or of the recipient government.\ntional efforts will be made to assist the\ntions shall prohibit the hiring of employ-\n(b) Compliance reports. Each recipi-\nrecipient government to comply with this\nees of one sex if sex is a bona fide occu-\n§ 51.58 Compliance reviews and affirm-\nent government shall keep such records\nsubpart and to take appropriate correc-\npational qualification. A bona fide OC-\native action.\ncupational qualification is only allowed\nand submit on request of the Secretary\ntive action.\n(a) Compliance reviews. The Secre-\nwhere there is a reasonable factual basis\ntimely, complete and accurate compli-\n(3) Thirty days have elapsed after the\ntary shall monitor and determine com-\nSecretary has filed with the Committee\nto believe that all, or substantially all,\nance reports at such times, in such form,\npliance of recipient governments with\non Government Operations of the House\nof one sex are unable to perform the job\nand containing such information, as the\nthe requirements of this subpart and of\nof Representatives and the Committee on\nin question. Further, the burden of dem-\nSecretary may determine to be necessary\nthe Act. Compliance reviews will be un-\nFinance of the Senate a full written re-\nonstrating that sex is a bona fide occu-\nor useful to enable the Office of Revenue\npational qualification for a given job\nSharing to ascertain whether the\ndertaken from time to time, as appro-\nport of the circumstances and the\npriate, at the discretion of the Secretary.\ngrounds for such action. The time limita-\nrests on the recipient government.\nrecipient government has complied or is\n(b) Affirmative action. Any recipient\ntion of subparagraphs (2) and (3) can\ncomplying with this subpart. Recipient\n§ 51.55 Assurances required.\ngovernment which has been determined\nrun concurrently.\ngovernments shall make available on re-\nto be in violation of this subpart must\n(4) The Secretary has notified the re-\n(a) General. In order to qualify for\nquest of Office of Revenue Sharing offi-\ncials, rácial, ethnic, male/female, and\ntake reasonable steps to remove or over-\ncipient government that, in addition to\nany payment for any entitlement period,\ncome the consequences of such discrim-\nwhatever sanctions have been imposed by\neach Governor of a State or each chief\nnational origin data showing the extent\nination where a practice or usage has in\nthe administrative law judge, the Office\nexecutive officer of a unit of local gov-\nto which minorities and females are or\nwill be beneficiaries of entitlement funds.\npurpose or effect tended to exclude in-\nof Revenue Sharing shall withhold pay-\nernment shall, prior to the beginning\nIn the case of any program under which\ndividuals from participation in, deny\nment of all entitlement funds until such\nof each entitlement period, execute to the\na primary recipient government extends\nthem the benefits of, or subject them to\ntime as the recipient government com-\nsatisfaction of the Secretary an assur-\nor will extend entitlement funds to any\ndiscrimination under any program or\nplies with the order of the administra-\nance that all programs to be funded in\nactivity to which this subpart applies, on\ntive law judge. Further, the amount of\nwhole or in part with entitlement funds\nother secondary recipient, such second-\nthe ground of race, color, national origin,\nthe forfeiture or repayment of entitle-\nwill be conducted in compliance with the\nary recipient shall submit such compli-\nor sex. The Secretary will, upon a find-\nment funds, if any, will be limited to the\nrequirements of this subpart. Assurances\nance reports to the primary recipient as\ning of noncompliance, determine the\nprogram or activity in which the non-\nrequired under this paragraph shall be\nmay be necessary or useful to enable the\ncompliance has been found. Such funds\nsubmitted pursuant to $ 51.10(b) and\nprimary recipient to carry out its obliga-\nsteps necessary to remove the noncom-\npliance and will determine a timetable\nshall be collected by a downward adjust-\nshall be in such form and detail as pre-\ntions as a recipient government under\nthis subpart. Each recipient government\nfor implementing those steps.\nment to future entitlement payments\nscribed by the Secretary.\n(b) Failure to comply. Any recipient\nshall identify, on request of the Office of\n§ 51.59 Procedure for effecting compli-\nand will be deposited in the general fund\ngovernment which fails to comply with\nRevenue Sharing, any State or local\nance.\nof the Treasury. If the Secretary deter-\nparagraph (a) of this section shall have\nagency which has been legally authorized\n(a) General. Whenever the Secretary\nmines that adjustment to future entitle-\nits entitlement payments withheld for\nto monitor its civil rights compliance\ndetermines that a recipient government\nment payments is impracticable, he may\nthe applicable entitlement period. Any\nactivities.\nhas failed to comply with this subpart,\nrefer the matter to the Attorney Gen-\nrecipient government to which a deter-\n§ 51.57 Complaints and investigations.\nhe shall notify the chief executive officer\neral for appropriate civil action to re-\nmination of noncompliance with para-\nof the recipient government and the\nquire payment of such amount to the\ngraph (a) of this section has been made\n(a) Complaints. Any person who be-\nGovernor of the State in which the gov-\nUnited States.\nshall be entitled to notice and oppor-\nlieves anyone has been subjected to dis-\nernment is located of the noncompliance\n(c) Withholding pursuant to court\ntunity for hearing. However, notwith-\ncrimination prohibited by this subpart,\nand shall request the Governor to secure\naction. The Secretary may immediately\nstanding § 51.59, no payments shall be\nmay personally or by a representative file\ncompliance. If, within a reasonable\nwithhold the payment of entitlement\nmade for the applicable entitlement pe-\nwith the Secretary a written statement\nperiod of time not to exceed 60 days, the\nfunds to a recipient government pending\nriod pending the outcome of such hear-\nsetting forth the nature of the discrim-\nGovernor fails or refuses to secure com-\nthe entry of an affirmative action order\ning.\nination alleged and the facts upon which\npliance, the Secretary is authorized:\nby a Federal court if:\nthe allegation is based. No representative\n§ 51.56 Compliance information and\n(1) To refer the matter to the Attor-\n(1) A violation of the nondiscrimina-\nof a recipient government nor any of its\nreports.\nney General of the United States with a\ntion provision of this subpart or the Act\nagencies shall intimidate, threaten, co-\nrecommendation that an appropriate\n(Sec. 122) was alleged in the complaint\n(a) Access to sources of information.\nerce, or discriminate against any person\ncivil action be instituted;\nbefore the court;\nEach recipient government shall permit\nor class of persons because of testimony,\n(2) To initiate an administrative hear-\n(2) The court finds that the recipient\naccess by authorized representatives of\nassistance, or participation in an inves-\ning pursuant to the powers and functions\ngovernment has violated the nondis-\nthe Office of Revenue Sharing and De-\ntigation, proceeding, or hearing under\nprovided by title VI of the Civil Rights\ncrimination provision of this subpart or\npartment of Justice during normal busi-\nthis subpart.\nAct of 1964 (42 U.S.C. 2000d) or\nthe Act; and\nness hours to such of its facilities, books,\n(b) Investigations. The Secretary shall\n(3) To take such other action as may\n(3) The question of withholding has\nrecords, accounts, personnel, and other\nadvise the chief executive officer of the\nbe provided by law.\nnot been resolved by the court.\nsources of information as may be rele-\nrecipient government of any complaint\n(b) Administrative hearing. An order\n(d) Action by Attorney General.\nvant to a determination of whether the\nreceived pursuant to paragraph (a). If\nof an administrative law judge to with-\nNothing in these regulations is intended\nrecipient government is complying with\nthe Secretary has reason to believe that\nhold temporarily, to repay, or to forfeit\nto preclude the United States, in a civil\nthis subpart. Where any information re-\nthe complaint shows that a recipient\nentitlement funds will not become effec-\naction initiated by the Attorney General\nquired of a recipient government is in\ngovernment has failed to comply with\ntive until:\nof the United States pursuant to § 122\n16\n17\n(c) of the Act, from seeking, or a court\nfrom granting, an order to require the\nSubpart F-Fiscal Procedures and Auditing\nviewing compliance and operations\naudit reports are retained for 3 years\nrepayment of funds previously paid un-\n§ 51.70 Procedures applicable to the\nunder the Act.\nafter the issuance of the audit report,\nuse of funds.\nand are available upon request to the\nder the Act, or an order that the payment\n§ 51.71 Auditing and evaluation; scope\nof funds under the Act be terminated\nSecretary and the Comptroller General\nA recipient government which receives\nof audits.\nor to their representatives; and,\nor withheld. In addition, the Secretary\nentitlement funds under the Act shall:\nmay initiate the procedure provided for\n(a) In general. The Secretary shall\n(4) Audit reports shall contain a clear\nin paragraph (a) (2) of this section\n(a) Establish a trust fund and deposit\nprovide for such auditing and evalua-\nstatement of the auditor's findings as to\nall entitlement funds received and all\nagainst a recipient government which\ntion as may be necessary to insure that\ncompliance or noncompliance with the\ninterest earned thereon in that trust\nhas been named as a defendant in such\nexpenditures of entitlement funds by re-\nrequirements of the Act and the regula-\nfund. The trust fund may be established\ncivil action if it is the Secretary's judg-\ncipient governments comply with the re-\ntions of this part. In the event that an\nment, after consultation with the Attor-\non the books and records as a separate\nquirements of the Act and regulations of\nauditor is unable to review compliance\nset of accounts, or a separate bank ac-\nney General, that an administrative\nthis part. Detail audits, reviews and\nwith all of the provisions of paragraph\ncount may be established.\nwithholding of entitlement funds is an\nevaluations may be made on a sample\n(b), the audit report shall reflect those\n(b) Use, obligate, or appropriate such\nbasis through inspection of records, and\nareas in which a compliance review was\nappropriate measure to ensure compli-\nfunds within 24 months from the end\nof reports required under subpart B of\nnot performed. Audit reports which\nance with this subpart.\nof the entitlement period to which the\nthis part, and through on-site examina-\ndisclose or otherwise indicate a possible\n§ 51.60 Hearing procedures.\ncheck is applicable. Any interest earned\ntions, to determine whether the recipient\nfailure to comply substantially with any\non such funds while in the trust fund\ngovernments have properly discharged\nrequirements of the Act or the regula-\nWhenever a procedure which requires\nshall be used, obligated, or appropriated\nnotice and opportunity for a hearing is\ntheir financial responsibilities and to\ntions of this part will be submitted to the\nwithin 24 months from the end of the\ninvoked by the Secretary to effect com-\nevaluate compliance with the Act and\nSecretary by the Governor or chief ex-\nentitlement period during which the in-\npliance under this subpart, the proce-\nthe regulations of this part.\necutive officer.\nterest was received or credited. An ex-\ndural regulations promulgated in sub-\n(b) Scope of audits. The scope of such\ntension of time in which to act on the\npart G of this part shall govern.\naudits may include a review of entitle-\nfunds, or interest earned thereon, must\nSubpart G-Proceedings for Reduction in\nment fund transactions, accounts and\n§ 51.61 Jurisdiction over property.\nbe obtained by application to the Secre-\nEntitlement, Withholding, or Repayment\nreports. In addition, the scope of such\nof Funds\ntary. Such application will set forth the\naudits may include an examination of\nThe Office of Revenue Sharing shall\nfacts and circumstances supporting the\n§ 51.80 Scope of subpart.\nthe following areas:\nhave jurisdiction over any program or\nneed for more time and the amount of\n(1) Compliance with assurances made\nThe regulations of this subpart govern\nactivity for purposes of this subpart for\nadditional time requested. The Secretary\nunder § 51.10.\nthe procedure and practice requirements\nas long as a recipient government retains\nmay grant such extensions of time\n(2) Compliance with the requirement\ninvolving adjudications where the Act\nownership or possession of any real or\nas in his judgment appear necessary or\nthat States must maintain transfers to\nrequires reasonable notice and oppor-\npersonal property or any interest there-\nappropriate.\nlocal governments as required by section\ntunity for hearing.\nin, which was purchased in whole or in\n(c) Provide for the expenditure of en-\n107(b) of the Act.\npart with entitlement funds for the ap-\ntitlement funds in accordance with the\n§ 51.81 Liberal construction.\n(3) Compliance with the reporting re-\nplicable program or activity. Further, if\nlaws and procedures applicable to the ex-\nquirements and accuracy of the reports\nThe regulations in this subpart shall\nsuch property is transferred to another\npenditure of its own revenues.\nsubmitted to the Secretary as set forth\nbe liberally construed to secure just, ex-\nparty, the Office of Revenue Sharing will\n(d) Maintain its fiscal accounts in a\nin Subpart B of this part.\npeditious, and efficient determination of\nretain jurisdiction over the recipient\nmanner sufficient to:\n(4) Accuracy of fiscal data reported to\nthe issues presented. The Rules of Civil\ngovernment for purposes of this subpart\n(1) Permit the reports required by the\nthe Bureau of the Census.\nProcedure for the District Courts of the\nfor as long as the property is used to\nSecretary to be prepared therefrom,\n(5) Accuracy of the public records re-\nUnited States, where applicable, shall be\nprovide benefits similar to those which\n(2) Document compliance with the\nquired under § 51.13(c).\na guide in any situation not provided for\nwere provided by the property before the\nmatching funds certification, and\n(c) Reliance on State auditors and in-\nor controlled by this subpart, but shall be\ntransfer.\n(3) Permit the tracing of entitlement\ndependent public accountants. It is the\nliberally construed or relaxed when\nfunds to a level of expenditure adequate\nintention of the Secretary to rely to the\nnecessary.\n§ 51.62 Delegation.\nto establish that such funds have not\nmaximum extent possible on audits of\nbeen used in violation of the restrictions\n§ 51.82 Reasonable notice and oppor-\nThe Secretary may assign to officials\nrecipient governments by State auditors\ntunity for hearing.\nand prohibitions of this part.\nof the Department, officials of other\nand independent public accountants.\nThe accounting for entitlement funds\nWhenever the Secretary has reason to\ndepartments or agencies of the Federal\nshall at a minimum employ the same fis-\nThe Secretary may accept such audits\nbelieve that a recipient government has\ngovernment, or officials of State agen-\nand audits by local government auditors\ncal accounting and internal audit pro-\nfailed to comply with any section of the\ncies, responsibilities and authority to\ncedures as are used with respect to ex-\nwhen such acceptance is consistent with\nAct or of the provisions of this part, and\neffectuate the purposes of this section\npenditures from revenues derived from\nthe objectives of the Act and regulations\nthat repayment, withholding, or reduc-\nincluding the achievement of effective\nthe recipient government's own sources.\nof this part, and provided:\ntion in the amount of an entitlement of\n(e) Provide to the Secretary and to the\n(1) Audits are performed in accord-\ncoordination within the executive branch\na recipient government is required, he\nComptroller General of the United\nance with generally accepted auditing\nshall give reasonable notice and oppor-\nin the implementation of Title VI and\nStates, on reasonable notice, access to\nstandards. Recipient governments are\ntunity of hearing to such government\nTitle VII of the Civil Rights Act of 1964\nencouraged to have such audits per-\nand the right to examine such books,\nprior to the invocation of any sanction\n(42 U.S.C. 2000d; 2000e). Such delega-\ndocuments, papers or records as the Sec-\nformed, to the extent they consider prac-\nunder the Act.\ntion shall be made only with the consent\nticable, in accordance with standards for\nretary may reasonably require for the\nof the affected departments and agen-\nthe Audit of Governmental Organiza-\n§ 51.83 Opportunity for compliance.\npurpose of reviewing compliance with\ncies, and in no event will the Secretary\nthe Act and the regulations of this part\ntions, Programs, Activities and Functions\nExcept in proceedings involving will-\ndelegate authority to review the initial\nissued by the Comptroller General in\nor, in the case of the Comptroller Gen-\nfulness or those in which the public in-\ndecision of an administrative law judge\nJune 1972.\neral, as the Comptroller General may\nterest requires otherwise, a proceeding\nto officials outside the Department.\n(2) Audits include coverage as set\nreasonably require for the purpose of re-\nunder this part will not be instituted\nforth in paragraph (b) of this section.\nuntil such facts or conduct which may\n(3) Audit workpapers and related\nwarrant such action have been called to\n18\n19\nthe attention of the chief executive of-\nfirst-class mail. Such mailing shall con-\nshall file one if the administrative law\nAct (5 U.S.C. 3105), shall conduct pro-\nficer of the recipient government in writ-\nstitute complete service.\njudge so requests.\nceedings upon complaints filed under\ning and he has been accorded an oppor-\n(c) Filing of papers. Whenever the\n(f) Referral to administrative law\nthis subpart.\ntunity to demonstrate or achieve com-\nfiling of a paper is required or permitted\njudge. Upon receipt of the answer by the\n-(b) Powers of administrative law\npliance with the requirements of the Act\nin connection with a proceeding under\nDirector, or upon filing a reply if one\njudge. Among other powers provided by\nand the regulations of this part. If the\nthis part, and the place of filing is not\nis deemed necessary, or upon failure of\nlaw, the administrative law judge shall\nrecipient government fails to meet the\nspecified in this subpart or by rule or\nthe respondent to file an answer within\nhave authority, in connection with any\nrequirements of the Act and regulations\norder of the administrative law judge,\nthe time prescribed in the complaint or\nproceeding under this subpart, to do the\nwithin such reasonable time as may be\nthe paper shall be filed with the Director,\nas extended under paragraph (a) of this\nfollowing things:\nspecified by the Secretary, a proceeding\nOffice of Revenue Sharing, Treasury De-\nsection, the complaint (and answer, if\n(1) Administer oaths and affirma-\nshall be initiated. If the recipient gov-\npartment, Washington, D.C. 20226. All\none is filed) shall be referred to the ad-\ntions;\nernment is a unit of local government, a\npapers shall be filed in duplicate.\nministrative law judge who shall then\n(2) Make ruling upon motions and\ncopy of all written communications re-\n(d) Motions and requests. Motions\nproceed to set a time and place for hear-\nrequests. Prior to the close of the hearing\ngarding the alleged violation shall be\nand requests may be filed with the desig-\ning and shall serve notice thereof upon\nno appeal shall lie from any such ruling\ntransmitted by the Secretary to the Gov-\nnated administrative law judge, except\nthe parties at least 15 days in advance\nexcept, at the discretion of the adminis-\nernor of the State in which the unit of\nthat an application to extend the time\nof the hearing date.\ntrative law judge, in extraordinary\nlocal government is located.\nfor filing an answer shall be filed with\n§ 51.88 Supplemental charges.\ncircumstances;\n§ 51.84 Institution of proceeding.\nthe Director, Office of Revenue Sharing.\n(3) Determine the time and place of\npursuant to § 51.87(a).\nIf it appears that the respondent in\nhearing and regulate its course and con-\nA proceeding to require repayment of\n§ 51.87 Answer; referral to administra-\nits answer falsely and in bad faith, denies\nduct. In determining the place of hear-\nfunds to the Secretary, or to withhold\ntive law judge.\na material allegation of fact in the com-\ning the administrative law judge may\nfunds from subsequent entitlement pay-\nplaint or states that it has no knowledge\ntake into consideration the requests and\nments, or to reduce the entitlement of a\n(a) Filing. The respondent's answer\nsufficient to form a belief, when in fact\nconvenience of the respondent or its\nrecipient government, shall be instituted\nshall be filed in writing within the time\nit does possess such information, or if it\ncounsel;\nby the Secretary by a complaint which\nspecified in the complaint, unless on\nappears that the respondent has know-\n(4) Adopt rules of procedure and\nnames the recipient government as the\napplication the time is extended by the\ningly introduced false testimony during\nmodify the same from time to time as\nrespondent.\nSecretary. The respondent's answer shall\nthe proceedings, the Secretary may\noccasion requires for the orderly disposi-\n§ 51.85 Contents of complaint.\nbe filed in duplicate with the Director,\nthereupon file supplemental charges\ntion of proceedings;\nOffice of Revenue Sharing.\n(a) Charges. A complaint shall give a\nagainst the respondent. Such supple-\n(5) Rule upon offers of proof, re-\n(b) Contents. The answer shall con-\nplain and concise description of the al-\nmental charges may be tried with other\nceive relevant evidence, and examine\ntain a statement of facts which con-\ncharges in the case, provided the re-\nwitnesses;\nlegations which constitute the basis for\nstitute the grounds of defense, and it\nspondent is given due notice thereof and\n(6) Take or authorize the taking of\nthe proceeding. A complaint shall be\nshall specifically admit or deny each\nis afforded an opportunity to prepare its\ndepositions;\ndeemed sufficient if it fairly informs the\nallegation set forth in the complaint, ex-\ndefense thereto.\n(7) Receive and consider oral or\nrespondent of the charges against it so\ncept that the respondent shall not deny\na material allegation in the complaint\n§ 51.89 Proof; variance; amendment of\nwritten arguments on facts or law:\nthat it is able to prepare a defense to the\npleadings.\n(8) Hold or provide for the holding\nwhich it knows to be true; nor shall a\ncharges.\nof conferences for the settlement or sim-\nrespondent state that it is without suffi-\nIn the case of a variance between the\n(b) Demand for answer. Notification\nplification of the issues by consent of the\ncient information to form a belief when\nallegations in a pleading and the evi-\nshall be given in the complaint as to the\nparties:\nin fact it possesses such information.\ndence adduced in support of the plead-\nplace and time within which the re-\n(9) Perform such acts and take such\nThe respondent may also state affirma-\ning, the administrative law judge may\nspondent shall file its answer, which time\ntively special matters of defense.\nmeasures as are necessary or appropri-\norder or authorize amendment of the\nshall be not less than 30 days from the\nate to the efficient conduct of any pro-\n(c) Failure to deny or answer allega-\npleading to conform to the evidence:\ndate of service of the complaint. The\nceeding; and\ntion in the complaint. Every allegation\nProvided, The party that would other-\ncomplaint shall also contain notice that\n(10) Make initial findings and\nin the complaint which is not denied in\nwise be prejudiced by the amendment is\na decision by default will be rendered\ndecision.\nthe answer shall be deemed to be ad-\ngiven reasonable opportunity to meet the\nagainst the respondent in the event it\nmitted and may be considered as proved,\nallegation of the pleading as amended.\nfails to file its answer as required.\n§ 51.92 Hearings.\nand no further evidence in respect of\nThe administrative law judge shall make\nsuch allegation need be adduced at a\nfindings on any issue presented by the\n(a) In general. The administrative\n§ 51.86 Service of complaint and other\nhearing.\npleadings as so amended.\nlaw judge shall preside at the hearing\npapers.\n(d) Failure to file answer. Failure to\non a complaint. Testimony of witnesses\n§ 51.90 Representation.\n(a) Complaint. The complaint or a\nfile an answer within the time prescribed\nshall be given under oath or affirmation.\ntrue copy thereof may be served upon\nin the complaint, except as the time for\nA respondent or proposed respondent\nThe hearing shall be stenographically\nthe respondent by first-class mail or by\nanswer is extended under paragraph (a)\nmay appear in person through its chief\nrecorded and transcribed. Hearings will\ncertified mail, return receipt requested;\nof this section, may constitute an ad-\nexecutive officer or it may be represented\nbe conducted pursuant to section 7 of\nor it may be served in any other manner\nmission of the allegations of the com-\nby counsel or other duly authorized rep-\nthe Administrative Procedure Act (5\nwhich has been agreed to by the respond-\nresentative. The Secretary shall be rep-\nU.S.C. 556).\nplaint and a waiver of hearing, and the\nent. Where the service is by certified\nadministrative law judge may make his\nresented by the General Counsel of the\n(b) Failure to appear. If a respondent\nmail, the return Postal Service receipt\nfindings and decision by default without\nfails to appear at the hearing, after due\nTreasury.\nduly signed on behalf of the respondent\na hearing or further procedure.\nnotice thereof has been served upon it or\nshall be proof of service.\n(e) Reply to answer. No reply to the\n§ 51.91 Administrative law judge;\nupon its counsel of record, it shall be\n(b) Service of papers other than com-\nrespondent's answer shall be required,\npowers.\ndeemed to have waived the right to a\nplaint. Any paper other than the com-\nand new matter in the answer shall be\n(a) Appointment. An administrative\nhearing and the administrative law\nplaint may be served upon the respond-\ndeemed to be denied, but the Secretary\njudge may make his findings and deci-\nlaw judge, appointed as provided by sec-\nent or upon its attorney of record by\nmay file a reply in his discretion and\nsion against the respondent by default.\ntion 11 of the Administrative Procedure\n(c) Waiver of hearing. A respondent\n20\n21\ncopy duly certified (pursuant to para-\n(b) Oath of reporter. The reporter\nmined to be expended in violation of the\nmay waive the hearing by informing the\ngraph (b) of this section) shall be\nmaking the stenographic record shall\nAct and the provisions of this part; or\nadministrative law judge, in writing, on\nor before the date set for hearing, that\ndeemed sufficient.\nsubscribe an oath before the administra-\n(c) An order that the Secretary with-\n(e) Objections. Objections to evidence\ntive law judge, to be filed in the record of\nhold from subsequent entitlement pay-\nit desires to waive hearing. In such event\nshall be in short form, stating the\nthe case, that he (or she) will truly and\nments to the respondent an amount equal\nthe administrative law judge may make\nhis findings and decision based upon the\ngrounds of objection relied upon, and\ncorrectly report the oral testimony and\nto the amount of entitlement funds de-\npleadings before him. The decision shall\nthe record shall not include argument\nproceedings at such hearing and accu-\ntermined to be expended in violation of\nthereon, except as permitted by the ad-\nrately transcribe the same to the best of\nthe Act and the provisions of this part; or\nplainly show that the respondent waived\nministrative law judge. Rulings on such\nhis (or her) ability.\n(d) An order that the entitlement of a\nhearing.\nobjections shall be a part of the record.\n(c) Transcript. In cases where the\nrecipient government be reduced and\n§ 51.93 Stipulations.\nNo exception to the ruling is necessary\nhearing is stenographically reported by\nthe amount of such reduction to be with-\nto preserve the right of either party to\na Government contract reporter copies\nheld from subsequent entitlement pay-\nThe administrative law judge shall\nof the transcript may be obtained from\nthe proceeding.\nments; or\nprior to or at the beginning of the hear-\nthe reporter at rates not to exceed the\n(e) An order dismissing the proceed-\ning require that the parties attempt to\n§ 51.95 Depositions.\nmaximum rates fixed by contract be-\nings.\narrive at such stipulations as will elimi-\n(a) In general. Depositions for use at\ntween the Government and the reporter.\nWhere the hearing is stenographically\n§ 51.99 Certification and transmittal of\nnate the necessity of taking evidence\na hearing may, with the written approval\nrecord and decision.\nwith respect to allegations of facts con-\nof the administrative law judge, be taken\nreported by a regular employee of the\ncerning which there is no substantial dis-\nby either the Secretary or the respond-\nDepartment of the Treasury, a copy\nAfter reaching his initial decision, the\npute. The administrative law judge shall\nthereof will be supplied to the respond-\nadministrative law judge shall certify to\nent or their duly authorized representa-\ntake similar action, where it appears ap-\ntives. Depositions may be taken upon\nent or its counsel at actual cost of dupli-\nthe complete record before him and shall\npropriate, throughout the hearing and\noral or written interrogatories, upon not\ncation. Copies of exhibits introduced at\nimmediately forward the certified record,\nshall call and conduct any conferences\nthe hearing or at the taking of deposi-\ntogether with a certified copy of his initial\nless than 15 days written notice to the\nwhich he deems advisable with a view to\ntions will be supplied to the parties upon\ndecision, to the Secretary. The adminis-\nother party, before any officer duly au-\nthe simplification, clarification, and dis-\nthorized to administer an oath for gen-\nthe payment of a reasonable fee (31\ntrative law judge shall serve also a copy\nposition of any of the issues involved.\nU.S.C. 483(a)).\nof the initial decision by certified mail to\neral purposes. Such written notice shall\nthe chief executive officer of the respond-\nstate the names of the witnesses and the\n$ 51.97 Proposed findings and conclu-\n§ 51.94 Evidence.\nent or to its attorney of record.\ntime and place where the depositions are\nsions.\n(a) In general. Any evidence which\n§ 51.100 What constitutes record.\nwould be admissible under the rules of\nto be taken. The requirement of 15 days\nExcept in cases where a respondent\nwritten notice may be waived by the par-\nhas failed to answer the complaint or\nThe transcript of testimony, pleadings\nevidence governing proceedings in mat-\nties in writing, and depositions may then\nhas failed to appear at the hearing, or\nand exhibits, all papers and requests filed\nters not involving trial by jury in the\nbe taken from the persons and at times\nhas waived the hearing, the administra-\nin the proceeding, together with all find-\nCourts of the United States, shall be ad-\nand places mutually agreed to by the\ntive law judge, prior to making his ini-\nings, decisions and orders, shall con-\nmissible and controlling as far as pos-\nparties.\ntial decision, shall afford the parties a\nstitute the exclusive record in the matter.\nsible: Provided that, the administrative\n(b) Written interrogatories. When a\nreasonable opportunity to submit pro-\nlaw judge may relax such rules in any\n§ 51.101 Procedure on review of de-\ndeposition is taken upon written inter-\nposed findings and conclusions and sup-\nhearing when in his judgment such re-\ncision of administrative law judge.\nrogatories, any cross-examination shall\nporting reasons therefor.\nlaxation would not impair the rights of\n(a) Appeal to the Secretary. Within 30\nbe upon written interrogatories. Copies\neither party and would more speedily\n§ 51.98 Initial decision of the adminis-\ndays from the date of the initial decision\nof such written interrogatories shall be\nconclude the hearing, or would better\ntrative law judge.\nand order of the administrative law\nserved upon the other party with the no-\nserve the ends of justice. Evidence which\ntice, and copies of any written cross-\nAs soon as practicable after the con-\njudge, the respondent may appeal to the\nis irrelevant, immaterial or unduly repe-\ninterrogatories shall be mailed by first\nclusion of a hearing and the receipt of\nSecretary and file his exceptions to the\ntitious shall be excluded by the admin-\nclass mail or delivered to the opposing\nany proposed findings and conclusions\ninitial decision and his reasons therefor.\nistrative law judge.\nparty at least 10 days before the date\ntimely submitted by the parties, but in no.\nThe respondent shall transmit a copy of\n(b) Depositions. The deposition of any\nof taking the depositions, unless the par-\nevent later than 30 days after the sub-\nhis appeal and reasons therefor to the\nwitness may be taken pursuant to § 51.95\nmission of proposed findings and con-\nDirector of the Office of Revenue Shar-\nties mutually agree otherwise. A party\nand the deposition may be admitted.\nupon whose behalf a deposition is taken\nclusions if they are submitted, the ad-\ning. who may, within 30 days from receipt\n(c) Proof of documents. Official docu-\nmust file it with the administrative law\nministrative law judge shall make his\nof the respondent's appeal, file a reply\nments, records, and papers of a respond-\njudge and serve one copy upon the op-\ninitial decision in the case. The initial\nbrief in opposition to the appeal. A copy\nent shall be admissible as evidence\ndecision shall include a statement of the\nof the reply brief, if one is filed, shall be\nposing party. Expenses in the reporting\nwithout the production of the original\nof depositions shall be borne by the party\nfindings of fact and the conclusions\ntransmitted to the respondent or its\nprovided that such documents, records\nat whose instance the deposition is\ntherefor, as well as the reasons or basis\ncounsel of record. Upon the filing of an\nand papers are evidenced as the original\ntaken.\ntherefor, upon all the material issues\nappeal and a reply brief, if any, the Sec-\nby a copy attested or identified by the\nof fact, law or discretion presented on\nretary shall make the final agency deci-\nchief executive officer of the respondent\n$51.96 Stenographic record; oath of\nthe record, and shall provide for one of\nsion on the record of the administrative\nor the custodian of the document. and\nreporter; transcript.\nthe following orders:\nlaw judge submitted to him.\ncontain the seal of the respondent.\n(a) In general. A stenographic record\n(a) An order that the respondent pay\n(b) Appeal by the Director of the Office\n(d) Exhibits. If any document, record,\nshall be made of the testimony and pro-\nover to the Secretary an amount equal\nof Revenue Sharing. In the absence of an\npaper, or other tangible or material thing\nceedings, including stipulations and ad-\nto 110 percent of any amount determined\nappeal by the respondent, the Director\nis introduced in evidence as an exhibit,\nmissions of fact in all proceedings, but\nto be improperly expended by the re-\nof the Office of Revenue Sharing may, on\nthe administrative law judge may au-\nnot arguments of counsel unless other-\nspondent in violation of § 51.41 relating\nhis own motion, within 45 days after the\nthorize the withdrawal of the exhibit\nwise ordered by the administrative law\nto priority expenditures; or\ninitial decision, serve on the respondent\nsubject to any conditions he deems\njudge. A transcript of the proceedings\n(b) An order that the respondent pay\nby certified mail a notice that he will ap-\nproper. An original document, paper or\n(and evidence) at the hearing shall be\nover to the Secretary an amount equal\npeal the decision to the Secretary, for\nrecord need not be introduced, and a\nmade in all cases.\nto the amount of entitlement funds deter-\nreview. Within 30 days from such notice,\n22\n23\nthe Director of the Office of Revenue\nwill be withheld until the Secretary is\nSharing or his counsel will file with the\nsatisfied that appropriate corrective ac-\nSecretary his exceptions to the initial\ntion has been taken and there is full\ndecision and his supporting reasons\ncompliance with the Act and regulations\ntherefor. A copy of the exceptions shall be\nof this part. In every case in which the\ntransmitted to the respondent or its\ncounsel of record, who, within 30 days\nrespondent is a unit of local government,\nafter receipt thereof, may file a reply\na copy of the final order and notice shall\nbrief thereto with the Secretary and sub-\nbe submitted to the Governor of the\nmit a copy to the Director of the Office\nState in which the respondent is located.\nof Revenue Sharing or his counsel. Upon\nthe filing of a reply brief, if any, the Sec-\n§ 51.104 Publicity of proceedings.\nretary will make the final agency decision\n(a) In general. A proceeding con-\non the record of the administrative law\nducted under this subpart shall be open\njudge.\nto the public and to elements of the news\n(c) Absence of appeal. In the absence\nmedia provided that, in the judgment of\nof either exceptions by the respondent\nthe administrative law judge, the pres-\nor a notice of appeal by the Director of\nence of the media does not detract from\nAPPENDIX\nthe Office of Revenue Sharing within the\nthe decorum and dignity of the proceed-\ntime set forth in paragraphs (a) and (b)\ning.\nof this section, or a review initiated by\n(b) Availability of record. The record\nthe Secretary on his own motion within\nestablished in any proceeding conducted\nthe time allowed to the Director of the\nunder this subpart shall be made avail-\nOffice of Revenue Sharing, the initial de-\nable to inspection by the public as pro-\ncision of the administrative law judge\nvided for and in accordance with regu-\nshall constitute the final decision of the\nlations of the Department of the Treas-\nDepartment.\nury pursuant to 31 CFR Part 1.\n$ 51.102 Decision of the Secretary.\n(c) Decisions of the administrative law\njudge. The statement of findings and the\nOn appeal from or review of the initial\ninitial decision of the administrative law\ndecision of the administrative law judge,\njudge in any proceedings, whether or not\nthe Secretary will make the final agency\non appeal or review, shall be indexed and\ndecision. In making his decision the Sec-\nmaintained by the Director of the Office\nretary will review the record or such por-\nof Revenue Sharing and made available\ntions thereof as may be cited by the par-\nfor inspection by the public at the public\nties to permit limiting of the issues. The\ndocuments room of the Department. If\nSecretary may affirm, modify, or revoke\nthe findings and initial decision of the\npracticable, the statement of findings\nand the decisions of the administrative\nadministrative law judge. A copy of the\nlaw judge shall be published periodically\nSecretary's decision shall be transmitted\nimmediately to the chief executive officer\nby the Department and offered for sale\nof the respondent or its counsel of record.\nthrough the Superintendent of Docu-\nments.\n§ 51.103 Effect of order of repayment\nor withholding of funds.\n§ 51.105 Judicial review.\nIn case the final order against the re-\nActions taken under administrative\nspondent is for repayment of funds to\nproceedings pursuant to this subpart\nthe United States, such amount as de-\nshall be subject to judicial review pur-\ntermined by the order shall be repaid\nsuant to section 143 of Subtitle C of the\nupon request by the Secretary. To the ex-\nAct. If a respondent desires to appeal a\ntent that the respondent fails to do SO\ndecision of the administrative law judge\nupon request of the Secretary, the Secre-\nwhich has become final, or a final order\ntary shall withhold from subsequent en-\nof the Secretary for review of appeal, to\ntitlement payments to the respondent an\nthe U.S. Court of Appeals, as provided by\namount equal to the amount not repaid.\nlaw, the Secretary, upon prior notifica-\nIn case the final order against the re-\ntion of the filing of the petition for re-\nspondent is for the withholding of an\nview, shall have prepared in triplicate, a\namount of subsequent entitlement pay-\ncomplete transcript of the record of the\nments, such amounts as ordered shall be\nproceeding, and shall certify to the cor-\nwithheld by the Director of the Office of\nrectness of the record. The original cer-\nRevenue Sharing after notice to the chief\ntificate together with the original record\nexecutive officer of the recipient govern-\nshall then be filed with the Court of Ap-\nment that if it fails to take corrective\npeals which has jurisdiction.\naction within 60 days after receipt of\nthe notice, further entitlement payments\n[FR Doc.75-31236 Filed 11-17-75;8:45 am]\n24\nPART 1607-GUIDELINES ON EM-\ninstances persons are using tests as the\nPLOYEE SELECTION PROCEDURES\nbasis for employment decisions without\nevidence that they are valid predictors\nSec.\nof employee job performance. Where\n1607.1\nStatement of purpose.\n1607.2\n\"Test\" defined.\nevidence in support of presumed rela-\n1607.3\nDiscrimination defined.\ntionships between test performance and\n1607.4\nEvidence of validity.\njob behavior is lacking, the possibility of\n1607.5\nMinimum standards for validation.\ndiscrimination in the application of test\n1607.6\nPresentation of validity evidence.\nresults must be recognized. A test lacking\n1607.7\nUse of other validity studies.\ndemonstrated validity (i.e., having no\n1607.8\nAssumption of validity.\nknown significant relationship to job\n1607.9\nContinued use of tests.\n1607.10\nbehavior) and yielding lower scores for\nEmployment agencies and employ-\nment services.\nclasses protected by title VII may result\n1607.11\nDisparate treatment.\nin the rejection of many who have neces-\n1607.12\nRetesting.\nsary qualifications for successful work\n1607.13\nOther selection techniques.\nperformance.\n1607.14 Affirmative action.\n(c) The guidelines in this part are\nAUTHORITY: The provisions of this Part\ndesigned to serve as a workable set of\n1607 issued under sec. 713(a), 78 Stat. 265; 42\nstandards for employers, unions and\nU.S.C. 2000e-12.\nemployment agencies in determining\nSOURCE: The provisions of this Part 1607\nwhether their selection procedures con-\nappear at 35 F.R. 12333, Aug. 1, 1970, unless\nform with the obligations contained in\notherwise noted.\ntitle VII of the Civil Rights Act of 1964.\nSection 703 of title VII places an affirma-\n§ 1607.1 Statement of purpose.\ntive obligation upon employers, labor\n(a) The guidelines in this part are\nunions, and employment agencies, as\nbased on the belief that properly vali-\ndefined in section 701 of the Act, not to\ndated and standardized employee selec-\ndiscriminate because of race, color,\ntion procedures can significantly con-\nreligion, sex, or national origin Subsec-\ntribute to the implementation of non-\ntion (h) of section 703 allows such per-\ndiscriminatory personnel policies, as\nsons to give and to act upon the\nrequired by title VII. It is also recognized\nresults of any professionally developed\nthat professionally developed tests, when\nability test provided that such test, its\nused in conjunction with other tools of\nadministration or action upon the results\npersonnel assessment and complemented\nis not designed, intended or used to dis-\nby sound programs of job design, may\ncriminate because of race, color, religion,\nsignificantly aid in the development and\nsex or national origin.\"\nmaintenance of an efficient work force\n§ 1607.2 \"Test\" defined.\nand, indeed, aid in the utilization\nand conservation of human resources\nFor the purpose of the guidelines in\ngenerally.\nthis part, the term \"test\" is defined as\n(b) An examination of charges of dis-\nany paper-and-pencil or performance\ncrimination filed with the Commission\nmeasure used as a basis for any employ-\nand an evaluation of the results of the\nment decision. The guidelines in this part\nCommission's compliance activities has\napply, for example, to ability tests which\nrevealed a decided increase in total test\nare designed to measure eligibility for\nusage and a marked increase in doubtful\nhire, transfer, promotion, membership,\ntesting practices which, based on our\ntraining, referral or retention. This defi-\nexperience, tend to have discriminatory\nnition includes, but is not restricted to,\neffects. In many cases, persons have\nmeasures of general intelligence, mental\ncome to rely almost exclusively on tests\nability and learning ability; specfic intel-\nas the basis for making the decision to\nlectual abilities; mechanical, clerical and\nhire, transfer, promote, grant member-\nother aptitudes; dexterity and coordina-\nship, train, refer or retain, with the\ntion; knowledge and proficiency; occu-\nresult that candidates are selected or re-\npational and other interests; and atti-\njected on the basis of a single test score.\ntudes, personality or temperament. The\nWhere tests are so used, minority can-\nterm \"test\" includes all formal, scored,\ndidates frequently experience dispropor-\nquantified or standardized techniques of\ntionately high rates of rejection by fail-\nassessing job suitability including, in\ning to attain score levels that have been\naddition to the above, specific qualifying\nestablished as minimum standards for\nor disqualifying personal history or back-\nqualification.\nground requirements, specific educa-\ntional or work history requirements,\nIt has also become clear that in many\nscored interviews, biographical informa-\n27\n(1) Where a validity study is conducted\nmade to underscore the principle that\n(5) Differential validity. Data must be\ntion blanks, interviewers' rating scales,\nin which tests are administered to appli-\nattainment of or performance at a\ngenerated and results separately reported\nscored application forms, etc.\ncants, with criterion data collected later,\nhigher level job is a relevant criterion\nfor minority and nonminority groups\nthe sample of subjects must be represent-\n§ 1607.3 Discrimination defined.\nin validating emp' syment tests only\nwherever technically feasible. Where a\native of the normal or typical candidate\nwhen there is a high probability that\nminority group is sufficiently large to\nThe use of any test which adversely\ngroup for the job or jobs in question.\npersons employed will in fact attain\nconstitute an identifiable factor in the\naffects hiring, promotion, transfer or\nThis further assumes that the applicant\nthat higher level job within a reasonable\nlocal labor market, but validation data\nany other employment or membership\nsample is representative of the minority\nhave not been developed and presented\nopportunity of classes protected by title\nperiod of time.\npopulation available for the job or jobs in\n(2) Where a test is to be used in dif-\nseparately for that group, evidence of\nVII constitutes discrimination unless:\nquestion in the local labor market. Where\n(a) the test has been validated and evi-\nferent units of a multiunit organization\nsatisfactory validity based on other\na validity study is conducted in which\nand no significant differences exist be-\ngroups will be regarded as only provi-\ndences a high degree of utility as here-\ntests are administered to present em-\ninafter described, and (b) the person\ntween units, jobs, and applicant popula-\nsional compliance with these guidelines\nployees, the sample must be represent-\ntions, evidence obtained in one unit may\npending separate validation of the test\ngiving or acting upon the results of the\native of the minority groups currently\nsuffice for the others. Similarly, where\nfor the minority group in question. (See\nparticular test can demonstrate that al-\nincluded in the applicant population. If\nternative suitable hiring, transfer or\nthe validation process requires the col-\n§ 1607.9). A test which is differentially\nit is not technically feasible to include\npromotion procedures are unavailable\nlection of data throughout a multiunit\nvalid may be used in groups for which\nminority employees in validation studies\norganization, evidence of validity specific\nit is valid but not for those in which\nfor his use.\nconducted on the present work force, the\nto each unit may not be required. There\nit is not valid. In this regard, where a\nconduct of a validation study without\n§ 1607.4 Evidence of validity.\nmay also be instances where evidence of\ntest is valid for two groups but one group\nminority candidates does not relieve any\n(a) Each person using tests to select\nvalidity is appropriately obtained from\ncharacteristically obtains higher test\nfrom among candidates for a position or\nmore than one company in the same in-\nperson of his subsequent obligation for\nscores than the other without a cor-\ndustry. Both in this instance and in the\nvalidation when inclusion of minority\nfor membership shall have available for\nresponding difference in job performance,\nuse of data collected throughout a multi-\ncandidates becomes technically feasible.\ninspection evidence that the tests are\ncutoff scores must be set so as to predict\n(2) Tests must be administered and\nbeing used in a manner which does not\nunit organization, evidence of validity\nthe same probability of job success in\nscored under controlled and standardized\nboth groups.\nviolate § 1607.3. Such evidence shall be\nspecific to each unit may not be re-\nconditions, with proper safeguards to\nexamined for indications of possible\nquired: Provided, That no significant\n(c) In assessing the utility of a test\nprotect the security of test scores and to\ndiscrimination, such as instances of\ndifferences exist between units, jobs, and\nthe following considerations will be ap-\ninsure that scores do not enter into any\nplicable:\nhigher rejection rates for minority can-\napplicant populations.\njudgments of employee adequacy that\ndidates than nonminority candidates.\n(1) The relationship between the test\nFurthermore, where technically fea-\n§ 1607.5 Minimum standards for vali-\nare to be used as criterion measures.\nand at least one relevant criterion must\ndation.\nCopies of tests and test manuals, includ-\nsible, a test should be validated for each\nbe statistically significant. This ordi-\n(a) For the purpose of satisfying the\ning instructions for administration,\nminority group with which it is used;\nnarily means that the relationship should\nscoring, and interpretation of test results,\nthat is, any differential rejection rates\nrequirements of this part, empirical evi-\nbe sufficiently high as to have a prob-\nthat are privately developed and/or are\ndence in support of a test's validity must\nability of no more than 1 to 20 to have\nthat may exist, based on a test, must be\nnot available through normal commercial\nbe based on studies employing generally\noccurred by chance. However, the use of\nrelevant to performance on the jobs in\nchannels must be included as a part of\naccepted procedures for determining cri-\na single test as the sole selection device\nquestion.\nthe validation evidence.\n(b) The term \"technically feasible\"\nterion-related validity, such as those\nwill be scrutinized closely when that test\n(3) The work behaviors or other cri-\ndescribed in \"Standards for Educational\nis valid against only one component of\nas used in these guidelines means having\nteria of employee adequacy which the\nand Psychological Tests and Manuals\"\njob performance.\nor obtaining a sufficient number of mi-\ntest is intended to predict or identify\nnority individuals to achieve findings of\npublished by American Psychological\n(2) In addition to statistical signifi-\nmust be fully described; and, addition-\nAssociation, 1200 17th Street NW.,\ncance, the relationship between the test\nstatistical and practical significance, the\nally, in the case of rating techniques, the\nWashington, D.C. 20036. Evidence of\nand criterion should have practical sig-\nopportunity to obtain unbiased job per-\nappraisal form(s) and instructions to\nformance criteria, etc. It is the responsi-\ncontent or construct validity, as defined\nnificance. The magnitude of the rela-\nthe rater(s) must be included as a part\nbility of the person claiming absence of\nin that publication, may also be appro-\nof the validation evidence. Such criteria\ntionship needed for practical signifi-\ntechnical feasibility to positively demon-\npriate where criterion-related validity is\nmay include measures other than actual\ncance or usefulness is affected by sev-\nstrate evidence of this absence.\nnot feasible. However, evidence for con-\neral factors, including:\nwork proficiency. such as training time.\n(c) Evidence of a test's validity should\ntent or construct validity should be ac-\n(i) The larger the proportion of ap-\nsupervisory ratings, regularity of attend-\nconsist of empirical data demonstrating\ncompanied by sufficient information from\nplicants who are hired for or placed on\nance and tenure. Whatever criteria are\nthat the test is predictive of or signifi-\njob analyses to demonstrate the rele-\nthe job, the higher the relationship needs\nused they must represent major or\ncantly correlated with important ele-\nvance of the content (in the case of job\nto be in order to be practically useful.\ncritical work behaviors as revealed by\nments of work behavior which comprise\nknowledge or proficiency tests) or the\ncareful job analyses.\nConversely, a relatively low relationship\nor are relevant to the job or jobs for\nconstruct (in the case of trait measures).\n(4) In view of the possibility of bias\nmay prove useful when proportionately\nwhich candidates are being evaluated.\nEvidence of content validity alone may\nfew job vacancies are available;\ninherent in subjective evaluations, su-\nbe acceptable for well-developed tests\n(ii) The larger the proportion of ap-\n(1) If job progression structures and\nthat consist of suitable samples of the\npervisory rating techniques should be\nplicants who become satisfactory em-\nseniority provisions are so established\nessential knowledge, skills or behaviors\ncarefully developed, and the ratings\nployees when not selected on the basis\nthat new employees will probably, within\nshould be closely examined for evidence\ncomposing the job in question. The types\nof the test, the higher the relationship\na reasonable period of time and in a\nof bias. In addition, minorities might ob-\nof knowledge, skills or behaviors con-\nneeds to be between the test and a cri-\ngreat majority of cases, progress to a\ntain unfairly low performance criterion\ntemplated here do not include those\nterion of job success for the test to be\nhigher level, it may be considered that\nwhich can be acquired in a brief orien-\nscores for reasons other than supervisor's\npractically useful. Conversely, a relatively\ncandidates are being evaluated for jobs\nprejudice, as when, as new employees,\nlow relationship may prove useful when\nat that higher level. However, where job\ntation to the job.\nthey have had less opportunity to learn\n(b) Although any appropriate valida-\nproportionately few applicants turn out\nprogression is not so nearly automatic,\njob skills. The general point is that all\nor the time span is such that higher\ntion strategy may be used to develop\nto be satisfactory;\ncriteria need to be examined to insure\nsuch empirical evidence, the following\n(iii) The smaller the economic and\nlevel jobs or employees' potential may\nfreedom from factors which would un-\nminimum standards, as applicable, must\nhuman risks involved in hiring an un-\nbe expected to change in significant\nfairly depress the scores of minority\nways, it shall be considered that candi-\nbe met in the research approach and in\nqualified applicant relative to the risks\ngroups.\nthe presentation of results which con-\nentailed in rejecting a qualified appli-\ndates are being evaluated for a jcb at\nor near the entry level. This poirt is\nstitute evidence of validity:\n29\n28\nor its publisher, or casual reports of test\ndation, as described in the guidelines in\ncant, the greater the relationship needs\nearlier \"failure\" candidates who have\nutility be accepted in lieu of evidence of\nthis part, before it administers the test-\nto be in order to be practically useful.\navailed themselves of more training or\nConversely, a relatively low relationship\nvalidity. Specifically ruled out are: as-\ning program and/or makes referral pur-\nsuant to the test results. The employment\nexperience. In particular, if any appli-\nmay prove useful when the former risks\nsumptions of validity based on test names\nor descriptive labels; all forms of pro-\nagency must furnish on request such\ncant or employee during the course of\nare relatively high.\nmotional literature; data bearing on the\nevidence of validation. An employment\nan interview or other employment pro-\n§ 1607.6 Presentation of validity evi-\nagency or service will be expected to\ncedure claims more education or experi-\nfrequency of a test's usage; testimonial\ndence.\nrefuse to administer a test where the\nence, that individual should be retested.\nstatements of sellers, users. or consul-\nThe presentation of the results of a\ntants; and other nonempirical or anec-\nemployer or union does not supply satis-\n§ 1607.13 Other selection techniques.\nvalidation study must include graphical\ndotal accounts of testing practices or\nfactory evidence of validation. Reliance\nby the test user on the reputation of the\nSelection techniques other than tests,\nand statistical representations of the re-\ntesting outcomes.\n(b) Although professional supervision\ntest, its author, or the name of the test\nas defined in § 1607.2, may be improperly\nlationships between the test and the cri-\nshall not be deemed sufficient evidence\nused so as to have the effect of discrim-\nteria, permitting judgments of the test's\nof testing activities may help greatly to\nof validity (see § 1607.8(a)). An employ-\ninating against minority groups. Such\nutility in making predictions of future\ninsure technically sound and nondis-\nment agency or service may administer\ntechniques include, but are not restricted\nwork behavior. (See § 1607.5(c) concern-\ncriminatory test usage, such involvement\na testing program where the evidence of\nto, unscored or casual interviews and un-\ning assessing utility of a test.) Average\nalone shall not be regarded as constitut-\ning satisfactory evidence of test validity.\nvalidity comports with the standards\nscored application forms. Where there\nscores for all tests and criteria must be\nprovided in § 1607.7.\nare data suggesting employment discrim-\nreported for all relevant subgroups, in-\ncluding minority and nonminority groups\n§ 1607.9 Continued use of tests.\nination, the person may be called upon to\n§ 1607.11 Disparate treatment.\npresent evidence concerning the validity\nwhere differential validation is required.\nUnder certain conditions, a person may\nbe permitted to continue the use of a\nThe principle of disparate or unequal\nof his unscored procedures as well as\nWhenever statistical adjustments are\ntest which is not at the moment fully\ntreatment must be distinguished from\nof any tests which may be used, the\nmade in validity results for less than per-\nthe concepts of test validation. A test\nevidence of validity being of the same\nfect reliability or for restriction of score\nsupported by the required evidence of\nor other employee selection standard-\ntypes referred to in §§ 1607.4 and 1607.5.\nrange in the test or the criterion, or both,\nvalidity. If, for example, determination\nof criterion-related validity in a specific\neven though validated against job per-\nData suggesting the possibility of dis-\nthe supporting evidence from the valida-\nsetting is practicable and required but\nformance in accordance with the guide-\ncrimination exist, for example, when\ntion study must be presented in detail.\nnot yet obtained. the use of the test may\nlines in this part-cannot be imposed\nthere are differential rates of applicant\nFurthermore, for each test that is to be\ncontinue: Provided: (a) The person can\nupon any individual or class protected\nrejection from various minority and\nestablished or continued as an opera-\nby title VII where other employees,\nnonminority or sex groups for the same\ntional employee selection instrument, as\ncite substantial evidence of validity as\napplicants or members have not been\njob or group of jobs or when there are\na result of the validation study, the\ndescribed in $ 1607.7 (a) and (b); and\nsubjected to that standard. Disparate\ndisproportionate representations of mi-\nminimum acceptable cutoff (passing)\n(b) he has in progress validation pro-\nnority and nonminority or sex groups\nscore on the test must be reported. It is\ncedures which are designed to produce,\ntreatment, for example, occurs where\nmembers of a minority or sex group have\namong present employees in different\nexpected that each operational cutoff\nwithin a reasonable time, the additional\ndata required. It is expected also that the\nbeen denied the same employment, pro-\ntypes of jobs. If the person is unable\nscore will be reasonable and consistent\nmotion, transfer or membership oppor-\nor unwilling to perform such validation\nwith normal expectations of proficiency\nperson may have to alter or suspend test\ncutoff scores so that score ranges broad\ntunities as have been made available to\nstudies, he has the option of adjusting\nwithin the work force or group on which\nenough to permit the identification of\nother employees or applicants. Those\nemployment procedures so as to elimi-\nthe study was conducted.\nemployees or applicants who have been\nnate the conditions suggestive of em-\ncriterion-related validity will be obtained.\n§ 1607.7 Use of other validity studies.\ndenied equal treatment, because of prior\nployment discrimination.\nIn cases where the validity of a test\n§ 1607.10 Employment agencies and\ndiscriminatory practices or policies, must\nemployment services.\nat least be afforded the same opportu-\n§ 1607.14 Affirmative action.\ncannot be determined pursuant to\n(a) An employment service, including\nnities as had existed for other employees\n$ 1607.4 and $ 1607.5 (e.g., the number of\nNothing in these guidelines shall be\nprivate employment agencies, State em-\nor applicants during the period of dis-\nsubjects is less than that required for a\ninterpreted as diminishing a person's ob-\ntechnically adequate validation study. or\nployment agencies, and the U.S. Training\ncrimination. Thus, no new test or other\nligation under both title VII and Execu-\nan appropriate criterion measure cannot\nand Employment Service, as defined in\nemployee selection standard can be im-\ntive Order 11246 as amended by Execu-\nbe developed), evidence from validity\nsection 701(c), shall not make applicant\nposed upon a class of individuals pro-\ntive Order 11375 to undertake affirmative\nstudies conducted in other organizations,\nor employee appraisals or referrals based\ntected by title VII who, but for prior\naction to ensure that applicants or em-\non the results obtained from any psycho-\ndiscrimination, would have been granted\nsuch as that reported in test manuals and\nployees are treated without regard to\nlogical test or other selection standard\nthe opportunity to qualify under less\nrace, color, religion, sex, or national\nprofessional literature, may be consid-\nered acceptable when: (a) The studies\nnot validated in accordance with these\nstringent selection standards previously\norigin. Specifically, the use of tests which\nin force.\npertain to jobs which are comparable\nguidelines.\nhave been validated pursuant to these\n(i.e., have basically the same task ele-\n(b) An employment agency or service\n§ 1607.12 Retesting.\nguidelines does not relieve employers,\nments), and (b) there are no major dif-\nwhich is requested by an employer or\nunions or employment agencies of their\nferences in contextual variables or\nunion to devise a testing program is\nEmployers. unions, and employment\nobligations to take positive action in af-\nsample composition which are likely to\nrequired to follow the standards for test\nagencies should provide an opportunity\nfording employment and training to\nvalidation as set forth in these guide-\nfor retesting and reconsideration to\nmembers of classes protected by title VII.\nsignificantly affect validity. Any person\nciting evidence from other validity\nlines. An employment service is not\nstudies as evidence of test validity for his\nrelieved of its obligation herein because\nthe test user did not request such valida-\nown jobs must substantiate in detail job\ntion or has requested the use of some\ncomparability and must demonstrate the\nlesser standard than is provided in these\nabsence of contextual or sample differ-\nences cited in paragraphs (a) and (b) of\nguidelines.\n(c) Where an employment agency or\nthis section.\nservice is requested only to administer\n$ 1607.8 Assumption of validity.\na testing program which has been else-\nwhere devised, the employment agency\n(a) Under no circumstances will the\nor service shall request evidence of vali-\ngeneral reputation of a test, its author\n30\n31\nRevenue Sharing Regulations Index\nItem\nSection\nAct Defined\n51.2(a)\nActivity Defined\n51.51(c)\nActual Use Report\n51.11(b)\nAdjusted Taxes\n51.22\nIntergovernmental transfers\n51.23(c)\nProcedure for excluding education revenues\n51.22(b)\nValidity of data\n51.22(g)\nAdjustment of (see also Computation)\nData factors\n51.29\nEntitlement\n51.20\nEntitlement payments\n51.26(b)\nLocal Government\n51.30(a)(b)\nObligated Adjustment Reserve\n51.26(a)\nOne-hundred percent criterion\n51.30(c)\nNew Tax powers\n51.27(e)\nAdministrative Hearing\n51.59(b)\nAdministrative Law Judge\n51.90, 51.104(c), 51.9\nAppeals\n51.101(a)(b)(c)\nAllocations-Data Sufficiency\n51.20(b)(1)\nDates\n51.23\nAlternate State Procedure for State Maintenance\nof Transfers\n51.27(c)\nApplication of Regulations\n51.0\nAppropriation Time Limit (see also Auditing)\n51.70(b)\nAssurances\nRequired\n51.55\nReports to the secretary\n51.10\nReports for review\n51.10(a)\nAuditing and Fiscal Procedures\nAuditing and evaluation\n51.71\nProcedures applicable to the use of funds\n51.70\naccess to books\n51.70(e)\nappropriations\n51.70(b)\ncompliance, documented\n51.70(d)(2)\nexpenditures\n51.70(c)\nfiscal account\n51.70(d)\ninterest earned\n51.70(b)\ntracing\n51.70(d)(2)\ntrust fund\n51.70(a)\nAvailability of Records\n51.104(b)\nBonafied occupational qualification\n51.54(e)\n33\nItem\nSection\nSection\nItem\nChief Executive Officer\n51.24\n51.2(b)\nBoundary Changes\nDepartment\n51.2(c)\nBureau of the Census Report\n51.14\nEntitlement Funds\n51.2(d), (e)\nEntitlement Period\n51.2(f)\nCertification Report\n51.12\nFacility\n51.51(a)\nFunded\n51.2(b)\n51.51(b)\nChief Executive Officer\nGovernor\n51.2(g)\nApplication of Regulations\n51.0\nIndependent Public Accountants\n51.2(g)\nIndian Tribes and Alaskan Native Villages\n51.2(i)\nAppropriation Time Limit (see also Auditing)\n51.70(b)\nProgram\n51.51(c)\nRecipient Government\n51.2(j)\nAssurances\nRequired\n51.55\nDepositions\n51.64, 51.65\nReports to the secretary\n51.10\n51.10(a)\nDisaster Relief\nReports for review\n51.21\nDiscrimination\nAuditing and Fiscal Procedures\n51.50\n51.71\nAssurances\nAuditing and evaluation\n51.55\nProcedures applicable to the use of funds\n51.70\nComplaints and investigations\n51.57\n51.70(e)\nHearing Procedure\naccess to books\n51.60\n51.70(b)\nSpecific actions prohibited\nappropriations\n51.52, 51.53, 51.54\ncompliance, documented\n51.70(d)(2)\n51.70(c)\nDissolution of Local Government Unit\n51.24(c)\nexpenditures\nfiscal account\n51.70(d)\nEducation Tax Revenues\n51.22(b)\ninterest earned\n51.70(b)\n51.70(d)(2)\nEffect of Order of Withholding Funds\n51.103\ntracing\ntrust fund\n51.70(a)\nEmployee selection procedures\n51.53(b)\nAvailability of Records\n51.104(b)\nEmployment discrimination\n51.53, 4\nBonafied occupational qualification\n51.54(e)\nEntitlement Funds\n51.2(e)\n51.24\nPeriods\nBoundary Changes\n51.2(f)(1-5)\nReservation of\n51.26(a)\nBureau of the Census Report\n51.14\nWaiver of\n51.25(a)\nCertification Report\n51.12\nErrors (see also Adjustment of)\n51.29\nChief Executive Officer\n51.2(b)\nEvaluation (see also Auditing and Evaluation)\n51.71\nCivil Rights\n51.50\nEvidence (see also Administrative law judge)\n51.94\nCompliance information\n51.56(a)\nExpenditures (see also Auditing and Fiscal Procedures)\n51.70\n51.56(b)\nDebt retirement (conditions)\n51.41(b)\nCompliance Report\nEnvironmental\n51.41(a)(1)\n51.58\nFinancial administration\nCompliance Review\n51.41(a)(1)\nOrdinary and necessary capital expenditures\n51.41(a)(1)\nComplaints and investigations\n51.85-51.86\nPublic safety\n51.41(a)(1)\nComputation and Adjustment of Entitlements\n51.20\nPublic transportation\n51.41(a)(1)\nStreets\n51.41(a)(1)\nTransit\n51.41(a)(1)\nCounty\nLocal unit in one or more counties\n51.20(d)\nSocial services\n51.41(a)(1)\nMinimum and maximum entitlement\n51.30(a)\nExtension of Time\n51.4\nData (see also Computation)\nInsufficient\n51.25(c)\nFire Protection\n51.41(a)(1)\nPublic record\n51.13(c)\nFiscal Account (see also Auditing and Fiscal Procedures) 51.70\nDavis-Bacon Act\n51.42\nGovernment\n51.41(b)\nLocal\nDebt Retirement\n51.2(m)\nboundary changes\n51.24\nDefinitions\n51.2, 51.51\nunit\nActivity\n51.51(c)\n51.2(m)\n35\n34\nSection\nItem\nItem\nSection\nunits in one or more counties\n51.20(d)\nReports (see also Bureau of Census)\n51.14\nRecipient\n51.2(j)\nActual use\n51.11(b)\nState\n51.2(I)\nAssurances\n51.10\nPlanned use\n51.11(a)\nGovernment Employees-Wage Standards\n51.42(c)\nRecruitment and Advertisement\n51.54(b)\nGovernor's Report\n51.27(h)\nReservations of Funds\n51.26\nHearing Procedures\n51.60\nSecondary Recipients\n51.5\nIndependent Public Accountants\n51.2(h)\nSelf Evaluation\n51.53(c)\nIndian Tribes and Alaskan Native Villages\n51.2(i)\nSex Discrimination\n51.54\n51.25(c)\nSocial Services\nInsufficient Data-Waiver\n51.41(a)(1)\nInterest Earned\n51.70(b)\nSpecial Districts\n51.5\nIntergovernmental Transfers-Allocation\n51.23(c)\nState Maintenance of Local Transfers\n51.27\nInterrogatories (see also Depositions)\n51.95(b)\nTransfer of Funds\n51.5\nJudicial Review (see also Administrative Law Judge)\n51.105\nTrust Fund (see also Auditing and Fiscal Procedures)\n51.70(a)\nJurisdiction over Property\n51.61\nValidity of Adjusted Tax Data\n51.22(c)\nLimitations on Adjustments for Annexations\n51.24(d)\nWage Rates and Labor Standards\n51.43\nMarital Status\n51.54(d)(1)\nWithhold Future Payments\n51.98(c)\nMatching Funds (see Expenditures)\n51.40\nWaiver\n51.25(a)\nNon-compliance-permissible expenditures\n51.41(c)\nNon-delivery of Check\n51.25(b)\nOffice of Revenue Sharing\n51.1\nOptional Formula\n51.28\nParental Status\n51.54(d)(1)\nPenalties for Matching (see also Prohibitions\nand Restrictions)\n51.40(f)\nPlanned Use Report\n51.11(a)\nPregnancy\n51.54(d)(2)\nProcedure for Affecting Compliance\n51.59\nProhibitions and Restrictions on Use-Matching Funds\n51.40\nCertification\n51.40(c)\nDiscrimination\n51.50\nFederal funds\n51.40(a)\nSupplement federal grants\n51.40(g)\nIndian tribes\n51.44\nIncrease in State or local revenues\n51.40(d)\nSecondary recipients\n51.40(b)\nWage Rates and Labor Standards\n51.43\nPublications and Publicity\nNews reports\n51.13\nPublicity of proceedings\n51.104\nRecords\n51.104(b)\n36\n*U.S. GOVERNMENT PRINTING OFFICE:1975 633-509/53 1-3\n37\nDepartment of the Treasury\nPostage and Fees Paid\nOffice of Revenue Sharing\nDepartment of the Treasury\nTreas 551\nWashington, D.C. 20226\nOfficial Business\nU.S.MAIL\nPenalty for Private Use $300\nPublic Law 92-512\n92nd Congress, H. R. 14370\nOctober 20, 1972\nAn Act\n86 STAT. 919\nTo provide fiscal assistance to State and local governments, to authorize Federal\ncollection of State individual income taxes, and for other purposes.\nBe it enacted by the Senate and House of Representatives of the\nUnited States of America in Congress assembled,\nFederal-\nState revenue\nTITLE I-FISCAL ASSISTANCE TO STATE AND LOCAL\nsharing.\nGOVERNMENTS\nSubtitle A-Allocation and Payment of Funds\nSEC. 101. SHORT TITLE.\nThis title may be cited as the \"State and Local Fiscal Assistance Act\nCitation\nof\nof 1972\".\ntitle.\nSEC. 102. PAYMENTS TO STATE AND LOCAL GOVERNMENTS.\nExcept as otherwise provided in this title, the Secretary shall, for\neach entitlement period, pay out of the Trust Fund to-\n(1) each State government a total amount equal to the entitle-\nment of such State government determined under section 107 for\nsuch period, and\n(2) each unit of local government a total amount equal to the\nentitlement of such unit determined under section 108 for such\nperiod.\nIn the case of entitlement periods ending after the date of the enact-\nment of this Act, such payments shall be made in installments, but not\nless often than once for each quaiter, and, in the case of quarters\nending after September 30, 1972, shall be paid not later than 5 days\nafter the close of each quarter. Such payments for any entitlemen\nperiod may be initially made on the basis of estimates. Proper adjust-\nment shall be made in the amount of any payment to a State govern-\nment or a unit of local government to the extent that the payments\npreviously made to such government under this subtitle were in\nexcess of or less than the amounts required to be paid.\nSEC. 103. USE OF FUNDS BY LOCAL GOVERNMENTS FOR PRIORITY\nEXPENDITURES.\n(a) IN GENERAL-Funds received by units of local government\nunder this subtitle may be used only for priority expenditures. For\n\"Priority\npurposes of this title, the term \"priority expenditures\" means only-\nexpenditures.\"\n(1) ordinary and necessary maintenance and operating expenses\nfor-\n(A) public safety (including law enforcement, fire protec-\ntion, and building code enforcement),\n(B) environmental protection (including sewage disposal,\nsanitation, and pollution abatement),\n(C) public transportation (including transit systems and\nstreets and roads),\n(D) health,\n(E) recreation,\n(F) libraries,\n(G) social services for the poor or aged, and\nFORD LIBRARY & 078830\n(H) financial administration; and\n(2) ordinary and necessary capital expenditures authorized by\nlaw.\n(b) CERTIFICATES BY LOCAL GOVERNMENTS.-The Secretary is\nauthorized to accept a certification by the chief executive officer of a\nunit of local government that the unit of local government has used\n25\nPub. Law 92-512\nOctober 20, 1972\n86 STAT. 920\nthe funds received by it under this subtitle for an entitlement period\nonly for priority expenditures, unless he determines that such certi-\nfication is not sufficiently reliable to enable him to carry out his duties\nunder this title.\nSEC. 104. PROHIBITION ON USE AS MATCHING FUNDS BY STATE OR\nLOCAL GOVERNMENTS.\n(a) IN GENERAL.-No State government or unit of local government\nmay use, directly or indirectly, any part of the funds it receives under\nthis subtitle as a contribution for the purpose of obtaining Federal\nfunds under any law of the United States which requires such govern-\nment to make a contribution in order to receive Federal funds.\n(b) DETERMINATIONS BY SECRETARY OF THE TREASURY.-If the Sec-\nretary has reason to believe that a State government or unit of local\ngovernment has used funds received under this subtitle in violation of\nsubsection (a), he shall give reasonable notice and opportunity for\nhearing to such government. If, thereafter, the Secretary of the Treas-\nury determines that such government has used funds in violation of\nsubsection (a), he shall notify such government of his determination\nand shall request repayment to the United States of an amount\nequal to the funds SO used. To the extent that such government fails to\nrepay such amount, the Secretary shall withhold from subsequent\npayments to such government under this subtitle an amount equal to\nthe funds SO used.\n(c) INCREASED STATE OR LOCAL GOVERNMENT REVENUES.-No State\ngovernment or unit of local government shall be determined to have\nused funds in violation of subsection (a) with respect to any funds\nreceived for any entitlement period to the extent that the net revenues\nreceived by it from its own sources during such period exceed the net\nrevenues received by it from its own sources during the one-year period\nbeginning July 1, 1971 (or one-half of such net revenues, in the case\nof an entitlement period of 6 months).\n(d) DEPOSITS AND TRANSFERS TO GENERAL FUND.-Any amount\nrepaid by a State government or unit of local government under sub-\nsection (b) shall be deposited in the general fund of the Treasury. An\namount equal to the reduction in payments to any State government or\nunit of local government which results from the application of this sec-\nPost, P. 935.\ntion (after any judicial review under section 143) shall be transferred\nfrom the Trust Fund to the general fund of the Treasury on the day\non which such reduction becomes final.\n(e) CERTIFICATES BY STATE AND LOCAL GOVERNMENTS.-The Secre-\ntary is authorized to accept a certification by the Governor of a State\nor the chief executive officer of a unit of local government that the\nState government or unit of local government has not used any funds\nreceived by it under this subtitle for an entitlement period in violation\nof subsection (a); unless he determines that such certification is not\nsufficiently reliable to enable him to carry out his duties under this\ntitle.\nSEC. 105. CREATION OF TRUST FUND; APPROPRIATIONS.\n(a) TRUST FUND.-\n(1) IN GENERAL-There is hereby established on the books of\nthe Treasury of the United States a trust fund to be known as the\n\"State and Local Government Fiscal Assistance Trust Fund\"\n(referred to in this subtitle as the \"Trust Fund\"). The Trust Fund\nshall remain available without fiscal year limitation and shall con-\nsist of such amounts as may be appropriated to it and deposited\nin it as provided in subsection (b). Except as provided in this title,\n26\nOctober 20, 1972\nPub. Law 92-512\n86 STAT. 921\namounts in the Trust Fund may be used only for the payments to\nState and local governments provided by this subtitle.\n(2) TRUSTEE.-The Secretary of the Treasury shall be the\nReport to\ntrustee of the Trust Fund and shall report to the Congress not\nCongress.\nlater than March 1 of each year on the operation and status of the\nTrust Fund during the preceding fiscal year.\n(b) APPROPRIATIONS.-\n(1) IN GENERAL.-There is appropriated to the Trust Fund, out\nof amounts in the general fund of the Treasury attributable to the\ncollections of the Federal individual income taxes not otherwise\nappropriated-\n(A) for the period beginning January 1, 1972, and ending\nJune 30, 1972, $2,650,000,000;\n(B) for the period beginning July 1, 1972, and ending\nDecember 31, 1972, $2,650,000,000;\n(C) for the period beginning January 1, 1973, and ending\nJune 30, 1973, $2,987,500,000;\n(D) for the fiscal year beginning July 1, 1973,\n$6,050,000,000;\n(E) for the fiscal year beginning July 1, 1974,\n$6,200,000,000;\n(F) for the fiscal year beginning July 1, 1975,\n$6,350,000,000; and\n(G) for the period beginning July 1, 1976, and ending\nDecember 31, 1976, $3,325,000,000.\n(2) NONCONTIGUOUS STATES ADJUSTMENT AMOUNTS.-There is\nappropriated to the Trust Fund, out of amounts in the general\nfund of the Treasury attributable to the collections of the Federal\nindividual income taxes not otherwise appropriated-\n(A) for the period beginning January 1, 1972, and ending\nJune 30, 1972, $2,390,000;\n(B) for the period beginning July 1, 1972, and ending\nDecember 31, 1972, $2,390,000;\n(C) for the period beginning January 1, 1973, and ending\nJune 30, 1973, $2,390,000;\n(D) for each of the fiscal years beginning July 1, 1973,\nJuly 1, 1974, and July 1, 1975, $4,780,000; and\n(E) for the period beginning July 1, 1976, and ending\nDecember 31, 1976, $2,390,000.\n(3) DEPOSITS.-Amounts appropriated by paragraph (1) or (2)\nfor any fiscal year or other period shall be deposited in the Trust\nFund on the later of (A) the first day of such year or period, or\n(B) the day after the date of enactment of this Act.\n(c) TRANSFERS FROM TRUST FUND TO GENERAL FUND.-The Secre-\ntary shall from time to time transfer from the Trust Fund to the\ngeneral fund of the Treasury any moneys in the Trust Fund which he\ndetermines will not be needed to make payments to State governments\nand units of local government under this subtitle.\nSEC. 106. ALLOCATION AMONG STATES.\n(a) IN GENERAL.-There shall be allocated to each State for each\nentitlement period, out of amounts appropriated under section 105 (b)\n(1) for that entitlement period, an amount which bears the same ratio\nto the amount appropriated under that section for that period as the\namount allocable to that State under subsection (b) bears to the sum\nof the amounts allocable to all States under subsection (b).\n(b) DETERMINATION OF ALLOCABLE AMOUNT.-\n27\nPub. Law 92-512\nOctober 20, 1972\n86 STAT, 922\n(1) Ix GENERAL.-For purposes of subsection (a), the amount\nallocable to a State under this subsection for any entitlement period\nshall be determined under paragraph (2), except that such amount\nshall be determined under paragraph (3) if the amount allocable\nto it under paragraph (3) is greater than the sum of the amounts\nallocable to it under paragraph (2) and subsection (c).\n(2) THREE FACTOR FORMULA.-For purposes of paragraph (1),\nthe amount allocable to a State under this paragraph for any\nentitlement period is the amount which bears the same ratio to\n$5,300,000,000 as-\n(A) the population of that State, multiplied by the general\ntax effort factor of that State, multiplied by the relative\nincome factor of that State, bears to\n(B) the sum of the products determined under subpara-\ngraph (A) for all States.\n(3) FIVE FACTOR FORMULA.-For purposes of paragraph (1), the\namount allocable to a State under this paragraph for any entitle-\nment period is the amount to which that State would be entitled\nif-\n(A) 1/3 of $3,500,000,000 were allocated among the States on\nthe basis of population.\n(B) 1/3 of $3,500,000,000 were allocated among the States on\nthe basis of urbanized population,\n(C) 1/3 of $3,500,000,000 were allocated among the States on\nthe basis of population inversely weighted for per capita\nincome,\n(D) ½ of $1,800,000,000 were allocated among the States on\nthe basis of income tax collections. and\n(E) ½ of $1,800,000,000 were allocated among the States on\nthe basis of general tax effort.\n(c) NONCONTIGUOUS STATES ADJUSTMENT.-\n(1) IN GENERAL.-In addition to amounts allocated among the\nStates under subsection (a), there shall be allocated for each\nentitlement period, out of amounts appropriated under section\n105 (b) (2), an additional amount to any State (A) whose alloca-\ntion under subsection (b) is determined by the formula set forth\nin paragraph (2) of that subsection and (B) in which civilian\nemployees of the United States Government receive an allowance\n80 Stat. 512.\nunder section 5941 of title 5, United States Code.\n(2) DETERMINATION OF AMOUNT.-The additional amount allo-\ncable to any State under this subsection for any entitlement period\nis an amount equal to a percentage of the amount allocable to that\nState under subsection (b) (2) for that period which is the same\nas the percentage of basic pay received by such employees sta-\ntioned in that State as an allowance under such section 5941. If\nthe total amount appropriated under section 105 (b) (2) for any\nentitlement period is not sufficient to pay in full the additional\namounts allocable under this subsection for that period, the Sec-\nretary shall reduce proportionately the amounts so allocable.\nSEC. 107. ENTITLEMENTS OF STATE GOVERNMENTS.\n(a) DIVISION BETWEEN STATE AND LOCAL GOVERNMENTS.-The\nState government shall be entitled to receive one-third of the amount\nallocated to that State for each entitlement period. The remaining\nportion of each State's allocation shall be allocated among the units\nof local government of that State as provided in section 108.\n(b) STATE MUST MAINTAIN TRANSFERS TO LOCAL GOVERNMENTS.-\n28\nOctober 20, 1972\nPub. Law 92-512\n86 STAT. 923\n(1) GENERAL RULE.-The entitlement of any State government\nfor any entitlement period beginning on or after July 1, 1973,\nshall be reduced by the amount (if any) by which—\n(A) the average of the aggregate amounts transferred by\nthe State government (out of its own sources) during such\nperiod and the preceding entitlement period to all units of\nlocal government in such State, is less than,\n(B) the similar aggregate amount for the one-year period\nbeginning July 1, 1971.\nFor purposes of subparagraph (A), the amount of any reduction\nin the entitlement of a State government under this subsection\nfor any entitlement period shall, for subsequent entitlement\nperiods, be treated as an amount transferred by the State govern-\nment (out of its own sources) during such period to units of\nlocal government in such State.\n(2) ADJUSTMENT WHERE STATE ASSUMES RESPONSIBILITY FOR\nCATEGORY OF EXPENDITURES.-If the State government establishes\nto the satisfaction of the Secretary that since June 30, 1972, it has\nassumed responsibility for a category of expenditures which\n(before July 1, 1972) was the responsibility of local governments\nlocated in such State, then, under regulations prescribed by the\nSecretary, the aggregate amount taken into account under para-\ngraph (1) (B) shall be reduced to the extent that increased State\ngovernment spending (out of its own sources) for such category\nhas replaced corresponding amounts which for the one-year\nperiod beginning July 1, 1971, it transferred to units of local\ngovernment.\n(3) ADJUSTMENT WHERE NEW TAXING POWERS ARE CONFERRED\nUPON LOCAL GOVERNMENTS.-If a State establishes to the satisfac-\ntion of the Secretary that since June 30, 1972, one or more units of\nlocal government within such State have had conferred upon them\nnew taxing authority, then, under regulations prescribed by the\nSecretary, the aggregate amount taken into account under para-\ngraph (1) (B) shall be reduced to the extent of the larger of-\n(A) an amount equal to the amount of the taxes collected\nby reason of the exercise of such new taxing authority by\nsuch local governments, or\n(B) an amount equal to the amount of the loss of revenue\nto the State by reason of such new taxing authority being\nconferred on such local governments.\nNo amount shall be taken into consideration under subparagraph\n(A) if such new taxing authority is an increase in the authorized\nrate of tax under a previously authorized kind of tax, unless the\nState is determined by the Secretary to have decreased a related\nState tax.\n(4) SPECIAL RULE FOR PERIOD BEGINNING JULY 1, 1973.-In the\ncase of the entitlement period beginning July 1. 1973, the preced-\ning entitlement period for purposes of paragraph (1) (A) shall\nbe treated as being the one-year period beginning July 1, 1972.\n(5) SPECIAL RULE FOR PERIOD BEGINNING JULY 1, 1976.-In the\ncase of the entitlement period beginning July 1, 1976. and ending\nDecember 31, 1976. the aggregate amount taken into account un-\nder paragraph (1) (A) for the preceding entitlement period and\nthe aggregate amount taken into account under paragraph (1)\n(B) shall be one-half of the amounts which (but for this para-\ngraph) would be taken into account.\n29\nPub. Law 92-512\nOctober 20, 1972\n86 STAT, 924\n(6) REDUCTION IN ENTITLEMENT.-If the Secretary has reason\nto believe that paragraph (1) requires a reduction in the entitle-\nment of any State government for any entitlement period, he shall\ngive reasonable notice and opportunity for hearing to the State. If.\nthereafter, he determines that paragraph (1) requires the reduc-\ntion of such entitlement, he shall also determine the amount of\nsuch reduction and shall notify the Governor of such State of\nsuch determinations and shall withhold from subsequent payments\nto such State government under this subtitle an amount equal\nto such reduction.\n(7) TRANSFER TO GENERAL FUND.-An amount equal to the\nreduction in the entitlement of any State government which\nPost, p. 935.\nresults from the application of this subsection (after any judicial\nreview under section 143) shall be transferred from the Trust\nFund to the general fund of the Treasury on the day on which\nsuch reduction becomes final.\nSEC. 108. ENTITLEMENTS OF LOCAL GOVERNMENTS.\n(a) ALLOCATION AMONG COUNTY AREAS.-The amount to be allo-\ncated to the units of local government within a State for any entitle-\nment period shall be allocated among the county areas located in that\nState SO that each county area will receive an amount which bears the\nsame ratio to the total amount to be allocated to the units of local\ngovernment within that State as-\n(1) the population of that county area, multiplied by the\ngeneral tax effort factor of that county area, multiplied by the\nrelative income factor of that county area, bears to\n(2) the sum of the products determined under paragraph (1)\nfor all county areas within that State.\n(b) ALLOCATION TO COUNTY GOVERNMENTS, MUNICIPALITIES, Town-\nSHIPS, ETc.-\n(1) COUNTY GOVERNMENTS.-The county government shall be\nallocated that portion of the amount allocated to the county area\nfor the entitlement period under subsection (a) which bears the\nsame ratio to such amount as the adjusted taxes of the county\ngovernment bear to the adjusted taxes of the county government\nand all other units of local government located in the county area.\n(2) OTHER UNITS OF LOCAL GOVERNMENT.-The amount remain-\ning for allocation within a county area after the application of\nparagraph (1) shall be allocated among the units of local gov-\nernment (other than the county government and other than town-\nship governments) located in that county area so that each unit\nof local government will receive an amount which bears the same\nratio to the total amount to be allocated to all such units as-\n(A) the population of that local government, multiplied by\nthe general tax effort factor of that local government, multi-\nplied by the relative income factor of that local government,\nbearsto\n(B) the sum of the products determined under subpara-\ngraph (A) for all such units.\n(3) TOWNSHIP GOVERNMENTS.-If the county area includes one\nor more township governments, then before applying paragraph\n(2)-\n(A) there shall be set aside for allocation under subpara-\ngraph (B) to such township governments that portion of the\namount allocated to the county area for the entitlement\nperiod which bears the same ratio to such amount as the sum\n30\nOctober 20, 1972\nPub. Law 92-512\n86 STAT. 925\nof the adjusted taxes of all such township governments bears\nto the aggregate adjusted taxes of the county government,\nsuch township governments, and all other units of local gov-\nernment located in the county area, and\n(B) that portion of each amount set aside under subpara-\ngraph (A) shall be allocated to each township government\non the same basis as amounts are allocated to units of local\ngovernment under paragraph (2).\nIf this paragraph applies with respect to any county area for any\nentitlement period, the remaining portion allocated under para-\ngraph (2) to the units of local government located in the county\narea (other than the county government and the township govern-\nments) shall be appropriately reduced to reflect the amounts set\naside under subparagraph (A).\n(4) INDIAN TRIBES AND ALASKAN NATIVE VILLAGES.-If within a\ncounty area there is an Indian tribe or Alaskan native village\nwhich has a recognized governing body which performs substan-\ntial governmental functions, then before applying paragraph (1)\nthere shall be allocated to such tribe or village a portion of the\namount allocated to the county area for the entitlement period\nwhich bears the same ratio to such amount as the population of\nthat tribe or village within that county area bears to the popula-\ntion of that county area. If this paragraph applies with respect\nto any county area for any entitlement period, the amount to be\nallocated under paragraph (1) shall be appropriately reduced\nto reflect the amount allocated under the preceding sentence. If\nthe entitlement of any such tribe or village is waived for any\nentitlement period by the governing body of that tribe or village,\nthen the provisions of this paragraph shall not apply with respect\nto the amount of such entitlement for such period.\n(5) RULE FOR SMALL UNITS OF GOVERNMENT.-If the Secretary\ndetermines that in any county area the data available for any\nentitlement period are not adequate for the application of the\nformulas set forth in paragraphs (2) and (3) (B) with respect to\nunits of local government (other than a county government) with\na population below a number (not more than 500) prescribed for\nthat county area by the Secretary, he may apply paragraph (2)\nor (3) (B) by allocating for such entitlement period to each such\nunit located in that county area an amount which bears the same\nratio to the total amount to be allocated under paragraph (2)\nor (3) (B) for such entitlement period as the population of such\nunit bears to the population of all units of local government in\nthat county area to which allocations are made under such para-\ngraph. If the preceding sentence applies with respect to any\ncounty area, the total amount to be allocated under paragraph\n(2) or (3) (B) to other units of local government in that county\narea for the entitlement period shall be appropriately reduced\nto reflect the amounts allocated under the preceding sentence.\n(6) ENTITLEMENT.-\n(A) IN GENERAL.-Except as otherwise provided in this\nparagraph, the entitlement of any unit of local government for\nany entitlement period shall be the amount allocated to such\nunit under this subsection (after taking into account any\napplicable modification under subsection (c)).\n(B) MAXIMUM AND MINIMUM PER CAPITA ENTITLEMENT.\nSubject to the provisions of subparagraphs (C) and (D), the\nper capita amount allocated to any county area or any unit of\nlocal government (other than a county government) within a\n31\nPub. Law 92-512\nOctober 20, 1972\n86 STAT. 926\nState under this section for any entitlement period shall not\nbe less than 20 percent, nor more than 145 percent, of two-\nthirds of the amount allocated to the State under section 106,\ndivided by the population of that State.\n(C) LIMITATION.-The amount allocated to any unit of\nlocal government under this section for any entitlement period\nshall not exceed 50 percent of the sum of (i) such government's\nadjusted taxes, and (ii) the intergovernmental transfers of\nrevenue to such government (other than transfers to such\ngovernment under this subtitle).\n(D) ENTITLEMENT LESS THAN $200, OR GOVERNING BODY\nWAIVES ENTITLEMENT.-If (but for this subparagraph) the\nentitlement of any unit of local government below the level of\nthe county government-\n(i) would be less than $200 for any entitlement period\n($100 for an entitlement period of 6 months), or\n(ii) is waived for any entitlement period by the gov-\nerning body of such unit,\nthen the amount of such entitlement for such period shall (in\nlieu of being paid to such unit) be added to, and shall be-\ncome a part of, the entitlement for such period of the county\ngovernment of the county area in which such unit is located.\n(7) ADJUSTMENT OF ENTITLEMENT.-\n(A) IN GENERAL-In adjusting the allocation of any county\narea or unit of local government, the Secretary shall make any\nadjustment required under paragraph (6) (B) first, any adust-\nment required under paragraph (6) (C) next, and any adjustment\nrequired under paragraph (6) (D) last.\n(B) ADJUSTMENT FOR APPLICATION OF MAXIMUM OR MINIMUM\nPER CAPITA ENTITLEMENT.-The Secretary shall adjust the alloca-\ntions made under this section to county areas or to units of local\ngovernments in any State in order to bring those allocations into\ncompliance with the provisions of paragraph (6) (B). In making\nsuch adjustments he shall make any necessary adjustments with\nrespect to county areas before making any necessary adjustments\nwith respect to units of local government.\n(C) ADJUSTMENT FOR APPLICATION OF LIMITATION.-In any case\nin which the amount allocated to a unit of local government is re-\nduced under paragraph (6) (C) by the Secretary, the amount of\nthat reduction-\n(i) in the case of a unit of local government (other than a\ncounty government), shall be added to and increase the\nallocation of the county government of the county area in\nwhich it is located, unless (on account of the application of\nparagraph (6)) that county government may not receive it,\nin which case the amount of the reduction shall be added to\nand increase the entitlement of the State government of the\nState in which that unit of local government is located; and\n(ii) in the case of a county government, shall be added to\nand increase the entitlement of the State government of the\nState in which it is located.\n(c) SPECIAL ALLOCATION RULES.-\n(1) OPTIONAL FORMULA.-A State may by law provide for the\nallocation of funds among county areas, or among units of local\ngovernment (other than county governments), on the basis of the\npopulation multiplied by the general tax effort factors of such\nareas or units of local government, on the basis of the population\n32\nOctober 20, 1972\nPub. Law 92-512\n86 STAT. 927\nmultiplied by the relative income factors of such areas or units\nof local government, or on the basis of a combination of those\ntwo factors. Any State which provides by law for such a variation\nin the allocation formula provided by subsection (a), or by para-\ngraphs (2) and (3) of subsection (b), shall notify the Secretary\nof such law not later than 30 days before the beginning of the first\nshall- entitlement period to which such law is to apply. Any such law\n(A) provide for allocating 100 percent of the aggregate\namount to be allocated under subsection (a), or under para-\ngraphs (2) and (3) of subsection (b)\n(B) apply uniformly throughout the State; and\n(C) apply during the period beginning on the first day of\nthe first entitlement period to which it applies and ending\non December 31, 1976.\n(2) CERTIFICATION.-Paragraph (1) shall apply within a State\nonly if the Secretary certifies that the State law complies with\nthe requirements of such paragraph. The Secretary shall not\ncertify any such law with respect to which he receives notifica-\ntion later than 30 days prior to the first entitlement period dur-\ning which it is to apply.\n(d) GOVERNMENTAL DEFINITIONS AND RELATED RULES.-For pur-\nposes of this title—\n(1) UNITS OF LOCAL GOVERNMENT.-The term \"unit of local gov-\nernment\" means the government of a county, municipality, town-\nship, or other unit of government below the State which is a unit\nof general government (determined on the basis of the same prin-\nciples as are used by the Bureau of the Census for general statis-\ntical purposes). Such term also means, except for purposes of\nparagraphs (1), (2), (3), (5), (6) (C), and (6) (D) of subsec-\ntion (b), and, except for purposes of subsection (c), the recog-\nnized governing body of an Indian tribe or Alaskan native village\nwhich performs substantial governmental functions.\n(2) CERTAIN AREAS TREATED AS COUNTIES.-In any State in\nwhich any unit of local government (other than a county govern-\nment) constitutes the next level of government below the State\ngovernment level, then, except as provided in the next sentence,\nthe geographic area of such unit of government shall be treated\nas a county area (and such unit of government shall be treated as\na county government) with respect to that portion of the State's\ngeographic area. In any State in which any county area is not\ngoverned by à county government but contains two or more units\nof local government, such units shall not be treated as county\ngovernments and the geographic areas of such units shall not be\ntreated as county areas.\n(3) TOWNSHIPS.-The term \"township\" includes equivalent\nsubdivisions of government having different designations (such\nas \"towns\"), and shall be determined on the basis of the same\nprinciples as are used by the Bureau of the Census for general\nstatistical purposes.\n(4) UNITS OF LOCAL GOVERNMENT LOCATED IN LARGER ENTITY.-A\nunit of local government shall be treated as located in a larger\nentity if part or all of its geographic area is located in the larger\nentity.\n(5) ONLY PART OF UNIT LOCATED IN LARGER ENTITY.-If only part\nof a unit of local government is located in a larger entity, such\npart shall be treated for allocation purposes as a separate unit of\n33\nPub. Law 92-512\nOctober 20, 1972\n86 STAT. 928\nlocal government. and all computations shall, except as otherwise\nprovided in regulations, be made on the basis of the ratio which\nthe estimated population of such part bears to the population of\nthe entirety of such unit.\n(6) BOUNDARY CHANGES, GOVERNMENTAL REORGANIZATION, ETC.-\nIf, by reason of boundary line changes, by reason of State statu-\ntory or constitutional changes. by reason of annexations or other\ngovernmental reorganizations. or by reason of other circum-\nstances, the application of any provision of this section to units of\nlocal government does not carry out the purposes of this subtitle,\nthe application of such provision shall be made, under regulations\nprescribed by the Secretary, in a manner which is consistent with\nsuch purposes.\nSEC. 109. DEFINITIONS AND SPECIAL RULES FOR APPLICATION OF\nALLOCATION FORMULAS.\n(a) IN GENERAL.-For purposes of this subtitle-\n(1) POPULATION.-Population shall be determined on the same\nbasis as resident population is determined by the Bureau of the\nCensus for general statistical purposes.\n(2) URBANIZED POPULATION.-Urbanized population means\nthe population of any area consisting of a central city or cities of\n50,000 or more inhabitants (and of the surrounding closely settled\nterritory for such city or cities) which is treated as an urbanized\narea by the Bureau of the Census for general statistical purposes.\n(3) INCOME-Income means total money income received from\nall sources, as determined by the Bureau of the Census for general\nstatistical purposes.\n(4) PERSONAL INCOME.-Personal income means the income of\nindividuals, as determined by the Department of Commerce for\nnational income accounts purposes.\n(5) DATES FOR DETERMINING ALLOCATIONS AND ENTITLE-\nMENTS.-Except as provided in regulations, the determination of\nallocations and entitlements for any entitlement period shall be\nmade as of the first day of the third month immediately preceding\nthe beginning of such period.\n(6) INTERGOVERNMENTAL TRANSFERS-The intergovernmental\ntransfers of revenue to any government are the amounts of revenue\nreceived by that government from other governments as a share in\nfinancing (or as reimbursement for) the performance of govern-\nmental functions, as determined by the Bureau of the Census for\ngeneral statistical purposes.\n(7) DATA USED; UNIFORMITY OF DATA.-\n(A) GENERAL RULE-Except as provided in subparagraph\n(B), the data used shall be the most recently available data\nprovided by the Bureau of the Census or the Department of\nCommerce, as the case may be.\n(B) USE OF ESTIMATES, ETC.-Where the Secretary deter-\nmines that the data referred to in subparagraph (A) are not\ncurrent enough or are not comprehensive enough to provide\nfor equitable allocations, he may use such additional data\n(including data based on estimates) as may be provided for\nin regulations.\n(b) INCOME TAX AMOUNT OF STATES.-For purposes of this sub-\ntitle-\n(1) IN GENERAL.-The income tax amount of any State for any\nentitlement period is the income tax amount of such State as deter-\nmined under paragraphs (2) and (3).\n34\nOctober 20, 1972\nPub. Law 92-512\n86 STAT. 929\n(2) INCOME TAX AMOUNT.-The income tax amount of any State\nfor any entitlement period is 15 percent of the net amount collected\nfrom the State individual income tax of such State during 1972 or\n(if later) during the last calendar year ending before the begin-\nning of such entitlement period.\n(3) CEILING AND FLOOR.-The income tax amount of any State\nfor any entitlement period-\n(A) shall not exceed 6 percent, and\n(B) shall not be less than 1 percent,\nof the Federal individual income tax liabilities attributed to such\nState for taxable years ending during 1971 or (if later) during\nthe last calendar year ending before the beginning of such entitle-\nment period.\n(4) STATE INDIVIDUAL INCOME TAX.-The individual income tax\nof any State is the tax imposed upon the income of individuals by\nsuch State and described as a State income tax under section\n164 (a) (3) of the Internal Revenue Code of 1954.\n78 Stat. 40.\n(5) FEDERAL INDIVIDUAL INCOME TAX LIABILITIES.-Federal indi-\n26 USC 164.\nvidual income tax liabilities attributed to any State for any period\nshall be determined on the same basis as such liabilities are deter-\nmined for such period by the Internal Revenue Service for general\nstatistical purposes.\n(c) GENERAL TAX EFFORT OF STATES.-\n(1) IN GENERAL.-For purposes of this subtitle-\n(A) GENERAL TAX EFFORT FACTOR.-The general tax effort\nfactor of any State for any entitlement period is (i) the net\namount collected from the State and local taxes of such State\nduring the most recent reporting year, divided by (ii) the\naggregate personal income (as defined in paragraph (4) of\nsubsection (a)) attributed to such State for the same period.\n(B) GENERAL TAX EFFORT AMOUNT.-The general tax effort\namount of any State for any entitlement period is the amount\ndetermined by multiplying-\n(i) the net amount collected from the State and local\ntaxes of such State during the most recent reporting year\nby\n(ii) the general tax effort factor of that State.\n(2) STATE AND LOCAL TAXES.-\n(A) TAXES TAKEN INTO ACCOUNT.-The State and local\ntaxes taken into account under paragraph (1) are the com-\npulsory contributions exacted by the State (or by any unit of\nlocal government or other political subdivision of the State)\nfor public purposes (other than employee and employer\nassessments and contributions to finance retirement and social\ninsurance systems, and other than special assessments for\ncapital outlay), as such contributions are determined by the\nBureau of the Census for general statistical purposes.\n(B) MOST RECENT REPORTING YEAR.-The most recent\nreporting year with respect to any entitlement period consists\nof the years taken into account by the Bureau of the Census\nin its most recent general determination of State and local\ntaxes made before the close of such period.\n(d) GENERAL TAX EFFORT FACTOR OF COUNTY AREA.-For purposes\nof this subtitle, the general tax effort factor of any county area for\nany entitlement period is-\n(1) the adjusted taxes of the county government plus the ad-\n35\nPub. Law 92-512\nOctober 20, 1972\n86 STAT. 930\njusted taxes of each other unit of local government within that\ncounty area, divided by\n(2) the aggregate income (as defined in paragraph (3) of\nsubsection (a)) attributed to that county area.\n(e) GENERAL TAX EFFORT FACTOR OF UNIT OF LOCAL GOVERN-\nMENT.-For purposes of this subtitle-\n(1) IN GENERAL-The general tax effort factor of any unit of\nlocal government for any entitlement period is-\n(A) the adjusted taxes of that unit of local government,\ndivided by\n(B) the aggregate income (as defined in paragraph (3) of\nsubsection (a)) attributed to that unit of local government.\n(2) ADJUSTED TAXES.-\n(A) IN GENERAL-The adjusted taxes of any unit of local\ngovernment are-\n(i) the compulsory contributions exacted by such\ngovernment for public purposes (other than employee\nand employer assessments and contributions to finance\nretirement and social insurance systems, and other than\nspecial assessments for capital outlay), as such contri-\nbutions are determined by the Bureau of the Census for\ngeneral statistical purposes,\n(ii) adjusted (under regulations prescribed by the\nSecretary) by excluding an amount equal to that portion\nof such compulsory contributions which is properly\nallocable to expenses for education.\n(B) CERTAIN SALES TAXES COLLECTED BY COUNTIES.-In any\ncase where-\n(i) a county government exacts sales taxes within the\ngeographic area of a unit of local government and\ntransfers part or all of such taxes to such unit without\nspecifying the purposes for which such unit may spend\nthe revenues, and\n(ii) the Governor of the State notifies the Secretary\nthat the requirements of this subparagraph have been\nmet with respect to such taxes,\nthen the taxes SO transferred shall be treated as the taxes of\nthe unit of local government (and not the taxes of the\ncounty government).\n(f) RELATIVE INCOME FACTOR.-For purposes of this subtitle, the\nrelative income factor is a fraction-\n(1) in the case of a State, the numerator of which is the per\ncapita income of the United States and the denominator of which\nis the per capita income of that State;\n(2) in the case of a county area, the numerator of which is the\nper capita income of the State in which it is located and the denom-\ninator of which is the per capita income of that county area; and\n(3) in the case of a unit of local government, the numerator of\nwhich is the per capita income of the county area in which it is\nlocated and the denominator of which is the per capita income of\nthe geographic area of that unit of local government.\nFor purposes of this subsection, per capita income shall be determined\non the basis of income as defined in paragraph (3) of subsection (a).\n(g) ALLOCATION RULES FOR FIVE FACTOR FORMULA.-For purposes\nof section 106 (b) (3)-\n(1) ALLOCATION ON BASIS OF POPULATION.-Any allocation\namong the States on the basis of population shall be made by\n36\nOctober 20, 1972\nPub. Law 92-512\n86 STAT, 931\nallocating to each State an amount which bears the same ratio to\nthe total amount to be allocated as the population of such State\nbears to the population of all the States.\n(2) ALLOCATION ON BASIS OF URBANIZED POPULATION.-Any\nallocation among the States on the basis of urbanized population\nshall be made by allocating to each State an amount which bears\nthe same ratio to the total amount to be allocated as the urbanized\npopulation of such State bears to the urbanized population of all\nthe States.\n(3) ALLOCATION ON BASIS OF POPULATION INVERSELY WEIGHTED\nFOR PER CAPITA INCOME.-Any allocation among the States on\nthe basis of population inversely weighted for per capita income\nshall be made by allocating to each State an amount which bears\nthe same ratio to the total amount to be allocated as-\n(A) the population of such State, multiplied by a fraction\nthe numerator of which is the per capita income of all the\nStates and the denominator of which is the per capita income\nof such State, bears to\n(B) the sum of the products determined under subpara-\ngraph (A) for all the States.\n(4) ALLOCATION ON BASIS OF INCOME TAX COLLECTIONS.-Any\nallocation among the States on the basis of income tax collections\nshall be made by allocating to each State an amount which bears\nthe same ratio to the total amount to be allocated as the income tax\namount of such State bears to the sum of the income tax amounts\nof all the States.\n(5) ALLOCATION ON BASIS OF GENERAL TAX EFFORT.-Any allo-\ncation among the States on the basis of general tax effort shall be\nmade by allocating to each State an amount which bears the same\nratio to the total amount to be allocated as the general tax effort\namount of such State bears to the sum of the general tax effort\namounts of all the States.\nSubtitle B-Administrative Provisions\nSEC. 121. REPORTS ON USE OF FUNDS; PUBLICATION.\n(a) REPORTS ON USE OF FUNDS.-Each State government and unit\nof local government which receives funds under subtitle A shall, after\nthe close of each entitlement period, submit a report to the Secretary\nsetting forth the amounts and purposes for which funds received dur-\ning such period have been spent or obligated. Such reports shall be in\nsuch form and detail and shall be submitted at such time as the\nSecretary may prescribe.\n(b) REPORTS ON PLANNED USE OF FUNDS.-Each State government\nand unit of local government which expects to receive funds under\nsubtitle A for any entitlement period beginning on or after January 1,\n1973, shall submit a report to the Secretary setting forth the amounts\nand purposes for which it plans to spend or obligate the funds which\nit expects to receive during such period. Such reports shall be in such\nform and detail as the Secretary may prescribe and shall be submitted\nat such time before the beginning of the entitlement period as the\nSecretary may prescribe.\n(c) PUBLICATION AND PUBLICITY OF REPORTS.-Each State govern-\nment and unit of local government shall have a copy of each report\nsubmitted by it under subsection (a) or (b) published in a newspaper\nwhich is published within the State and has general circulation within\nthe geographic area of that government. Each State government and\nunit of local government shall advise the news media of the publica-\ntion of its reports pursuant to this subsection.\n37\nPub. Law 92-512\nOctober 20, 1972\n86 STAT. 932\nSEC. 122. NONDISCRIMINATION PROVISION.\n(a) IN GENERAL.-No person in the United States shall on the\nground of race, color, national origin, or sex be excluded from partici-\npation in, be denied the benefits of, or be subjected to discrimination\nunder any program or activity funded in whole or in part with funds\nmade available under subtitle A.\n(b) AUTHORITY OF SECRETARY.-Whenever the Secretary determines\nthat a State government or unit of local government has failed to\ncomply with subsection (a) or an applicable regulation, he shall notify\nthe Governor of the State (or, in the case of a unit of local government,\nthe Governor of the State in which such unit is located) of the non-\ncompliance and shall request the Governor to secure compliance. If\nwithin a reasonable period of time the Governor fails or refuses to\nsecure compliance, the Secretary is authorized (1) to refer the matter\nto the Attorney General with a recommendation that an appropriate\ncivil action be instituted; (2) to exercise the powers and functions\n78 Stat. 252.\nprovided by title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d)\nor (3) to take such other action as may be provided by law.\n(c) AUTHORITY OF ATTORNEY GENERAL.-When a matter is referred\nto the Attorney General pursuant to subsection (b), or whenever he has\nreason to believe that a State government or unit of local government is\nengaged in a pattern or practice in violation of the provisions of this\nsection, the Attorney General may bring a civil action in any appro-\npriate United States district court for such relief as may be appro-\npriate, including injunctive relief.\nSEC. 123. MISCELLANEOUS PROVISIONS.\n(a) ASSURANCES TO THE SECRETARY.-In order to qualify for any\npayment under subtitle A for any entitlement period beginning on or\nafter January 1, 1973, a State government or unit of local government\nmust establish (in accordance with regulations prescribed by the Sec-\nretary, and, with respect to a unit of local government, after an\nopportunity for review and comment by the Governor of the State in\nwhich such unit is located) to the satisfaction of the Secretary that-\n(1) it will establish a trust fund in which it. will depcsit all pay-\nments it receives under subtitle A;\n(2) it will use amounts in such trust fund (including any\ninterest earned thereon while in such trust fund) during such rea-\nsonable period or periods as may be provided in such regulations;\n(3) in the case of a unit of local government, it will use amounts\nin such trust fund (including any interest earned thereon whi'e in\nsuch trust fund) only for priority expenditures (as defined in\nsection 103(a)), and will pay over to the Secretary (for depcsit\nin the general fund of the Treasury) an amount equal to 110 per-\ncent of any amount expended out of such trust fund in violation of\nthis paragraph, unless such amount is promptly repaid to such\ntrust fund (or the violation is otherwise corrected) after notice\nand opportunity for corrective action;\n(4) it will provide for the expenditure of amounts received\nunder subtitle A only in accordance with the laws and procedures\napplicable to the expenditure of its own revenues;\n(5) it will-\n(A) use fiscal, accounting, and audit procedures which\nconform to guidelines established therefor by the Secretary\n(after consultation with the Comptroller General of the\nUnited States),\n(B) provide to the Secretary (and to the Comptroller Gen-\neral of the United States), on reasonable notice, access to, and\n38\nOctober 20, 1972\nPub. Law 92-512\n86 STAT. 933\nthe right to examine, such books, documents, papers, or rec-\nords as the Secretary may reasonably require for purposes of\nreviewing compliance with this title (or, in the case of the\nComptroller General, as the Comptroller General may reason-\nably require for purposes of reviewing compliance and oper-\nations under subsection (c) (2) and\n(C) make such annual and interim reports (other than\nReports.\nreports required by section 121) to the Secretary as he may\nreasonably require;\n(6) all laborers and mechanics employed by contractors or sub-\ncontractors in the performance of work on any construction proj-\nect, 25 percent or more of the costs of which project are paid out\nof its trust fund established under paragraph (1), will be paid\nwages at rates not less than those prevailing on similar construc-\ntion in the locality as determined by the Secretary of Labor in\naccordance with the Davis-Bacon Act, as amended (40 U.S.C.\n276a-276a-5), and that with respect to the labor standards speci- 49 Stat. 1011.\nfied in this paragraph the Secretary of Labor shall act in accord-\nance with Reorganization Plan Numbered 14 of 1950 (15 F.R.\n3176; 64 Stat. 1267) and section 2 of the Act of June 13, 1934, 5 USC app.\nas amended (40 U.S.C. 276c)\n63 Stat. 108.\n(7) individuals employed by it whose wages are paid in whole\nor in part out of its trust fund established under paragraph (1)\nwill be paid wages which are not lower than the prevailing rates\nof pay for persons employed in similar public occupations by the\nsame employer; and\n(8) in the case of a unit of local government as defined in the\nsecond sentence of section 108 (d) (1) (relating to governments of\nIndian tribes and Alaskan native villages), it will expend funds\nreceived by it under subtitle A for the benefit of members of the\ntribe or village residing in the county area from the allocation of\nwhich funds are allocated to it under section 108 (b) (4).\nParagraph (7) shall apply with respect to employees in any category\nonly if 25 percent or more of the wages of all employees of the State\ngovernment or unit of local government in such category are paid\nfrom the trust fund established by it under paragraph (1).\n(b) WITHHOLDING OF PAYMENTS.-If the Secretary determines that\na State government or unit of local government has failed to comply\nsubstantially with any provision of subsection (a) or any regulations\nprescribed thereunder, after giving reasonable notice and opportunity\nfor a hearing to the Governor of the State or the chief executive officer\nof the unit of local government, he shall notify the State government\nor unit of local government that if it fails to take corrective action\nwithin 60 days from the date of receipt of such notification further\npayments to it will be withheld for the remainder of the entitlement\nperiod and for any subsequent entitlement period until such time as\nthe Secretary is satisfied that appropriate corrective action has been\ntaken and that there will no longer be any failure to comply. Until he\nis satisfied, the Secretary shall make no further payments of such\namounts.\n(c) ACCOUNTING, AUDITING, AND EVALUATION.-\n(1) IN GENERAL-The Secretary shall provide for such account-\ning and auditing procedures, evaluations, and reviews as may be\nnecessary to insure that the expenditures of funds received under\nsubtitle A by State governments and units of local government\ncomply fully with the requirements of this title. The Secretary is\nauthorized to accept an audit by a State of such expenditures of a\n39\nPub. Law 92-512\nOctober 20, 1972\n86 STAT. 934\nState government or unit of local government if he determines that\nsuch audit and the audit procedures of that State are sufficiently\nreliable to enable him to carry out his duties under this title.\n(2) COMPTROLLER GENERAL SHALL REVIEW COMPLIANCE.-The\nComptroller General of the United States shall make such reviews\nof the work as done by the Secretary, the State governments, and\nthe units of local government as may be necessary for the Con-\ngress to evaluate compliance and operations under this title.\nSubtitle C-General Provisions\nSEC. 141. DEFINITIONS AND SPECIAL RULES.\n(a) SECRETARY.-For purposes of this title, the term \"Secretary\"\nmeans the Secretary of the Treasury or his delegate. The term \"Secre-\ntary of the Treasury\" means the Secretary of the Treasury per-\nsonally, not including any delegate.\n(b) ENTITLEMENT PERIOD.-For purposes of this title, the term\n\"entitlement period\" means-\n(1) The period beginning January 1. 1972, and ending June 30,\n1972.\n(2) The period beginning July 1, 1972, and ending Decem-\nber 31, 1972.\n(3) The period beginning January 1, 1973, and ending June 30,\n1973.\n(4) The one-year periods beginning on July 1 of 1973, 1974, and\n1975.\n(5) The period beginning July 1, 1976, and ending Decem-\nber 31, 1976.\n(e) DISTRICT OF COLUMBIA.-\n(1) TREATMENT AS STATE AND LOCAL GOVERNMENT.-For pur-\nposes of this title, the District of Columbia shall be treated both-\n(A) as a State (and any reference to the Governor of a\nState shall, in the case of the District of Columbia, be treated\nas a reference to the Commissioner of the District of\nColumbia). and\n(B) as a county area which has no units of local govern-\nment (other than itself) within its geographic area.\n(2) REDUCTION IN CASE OF INCOME TAX ON NONRESIDENT INDIVID-\nUALS-If there is hereafter enacted a law imposing a tax on\nincome earned in the District of Columbia by individuals who are\nnot residents of the District of Columbia, then the entitlement of\nthe District of Columbia under subtitle A for any entitlement\nperiod shall be reduced by an amount equal to the net collections\nfrom such tax during such entitlement period attributable to\nindividuals who are not residents of the District of Columbia. The\npreceding sentence shall not apply if-\n(A) the District of Columbia and Maryland enter into an\nagreement under which each State agrees to impose a tax\non income earned in that State by individuals who are resi-\ndents of the other State, and the District of Columbia and\nVirginia enter into an agreement under which each State\nagrees to impose a tax on income earned in that State by\nindividuals who are residents of the other State, or\n(B) the Congress enacts a law directly imposing a tax on\nincome earned in the District of Columbia by individuals who\nare not residents of the District of Columbia.\n40\nOctober 20, 1972\nPub. Law 92-512\n86 STAT. 935\nSEC. 142. REGULATIONS.\n(a) GENERAL RULE.-The Secretary shall prescribe such regulations\nas may be necessary or appropriate to carry out the provisions of this\ntitle.\n(b) ADMINISTRATIVE PROCEDURE ACT To APPLY.-The rulemaking\nprovisions of subchapter II of chapter 5 of title 5 of the United States\nCode shall apply to the regulations prescribed under this title for enti-\n80 Stat. 381.\ntlement periods beginning on or after January 1, 1973.\n5 USC 551.\nSEC. 143. JUDICIAL REVIEW.\n(a) PETITIONS FOR REVIEW.-Any State which receives a notice of\nreduction in entitlement under section (b), and any State or unit\nof local government which receives a notice of withholding of pay-\nments under section (b) or 123 (b), may, within 60 days after\nreceiving such notice, file with the United States court of appeals for\nthe circuit in which such State or unit of local government is located\na petition for review of the action of the Secretary. A copy of the peti-\ntion shall forthwith be transmitted to the Secretary; a copy shall also\nforthwith be transmitted to the Attorney General.\n(b) RECORD-The Secretary shall file in the court the record of the\nproceeding on which he based his action, as provided in section 2112\nof title 28, United States Code. No objection to the action of the\n72 Stat. 941;\nSecretary shall be considered by the court unless such objection has\n80 Stat. 1323.\nbeen urged before the Secretary.\n(c) JURISDICTION OF COURT.-The court shall have jurisdiction to\naffirm or modify the action of the Secretary or to set it aside in whole\nor in part. The findings of fact by the Secretary, if supported by sub-\nstantial evidence contained in the record, shall be conclusive. However,\nif any finding is not supported by substantial evidence contained in\nthe record, the court may remand the case to the Secretary to take\nfurther evidence, and the Secretary may thereupon make new or\nmodified findings of fact and may modify his previous actions. He\nshall certify to the court the record of any further proceedings. Such\nnew or modified findings of fact shall likewise be conclusive if sup-\nported by substantial evidence contained in the record.\n(d) REVIEW BY SUPREME COURT.-The judgment of the court shall\nbe subject to review by the Supreme Court of the United States upon\ncertiorari or certification, as provided in section 1254 of title 28,\nUnited States Code.\n62 Stat. 928.\nSEC. 144. AUTHORITY TO REQUIRE INFORMATION ON INCOME TAX\nRETURNS.\n(a) GENERAL RULE.-\n(1) INFORMATION WITH RESPECT TO PLACE OF RESIDENCE.-Sub-\npart B of part II of subchapter A of chapter 61 of the Internal\nRevenue Code of 1954 (relating to income tax returns) is amended\n68A Stat. 731.\nby adding at the end thereof the following new section:\n26 USC 6001.\n\"SEC. 6017A. PLACE OF RESIDENCE.\n\"In the case of an individual, the information required on any\nreturn with respect to the taxes imposed by chapter 1 for any period 26 USC 1.\nshall include information as to the State, county, municipality, and\nany other unit of local government in which the taxpayer (and any\nother individual with respect to whom an exemption is claimed on such\nreturn) resided on one or more dates (determined in the manner pro-\nvided by regulations prescribed by the Secretary or his delegate)\nduring such period.\"\n(2) CLERICAL AMENDMENT.-The table of sections for such\nsubpart B is amended by adding at the end thereof the following:\n41\nPub. Law 92-512\nOctober 20, 1972\n86 STAT. 936\n\"Sec. 6017A. Place of residence.\"\n(b) CIVIL PENALTY.-\n(1) IN GENERAL-Subchapter B of chapter 68 of the Internal\n68A Stat. 821;\nRevenue Code of 1954 is amended by adding at the end thereof\n85 Stat. 551.\nthe following new section:\n26 USC 6651.\n\"SEC. 6687. FAILURE TO SUPPLY INFORMATION WITH RESPECT TO\nPLACE OF RESIDENCE.\n\"(a) CIVIL PENALTY.-If any person fails to include on his return\nany information required under section 6017A with respect to his place\nof residence, he shall pay a penalty of $5 for each such failure, unless\nit is shown that such failure is due to reasonable cause.\n'(b) DEFICIENCY PROCEDURES NOT To APPLY.-Subchapter B of\n26 USC 6211.\nchapter 63 (relating to deficiency procedures for income, estate, gift,\n26 USC 4940.\nand chapter 42 taxes) shall not apply in respect of the assessment or\ncollection of any penalty imposed by subsection (a).\"\n(2) CLERICAL AMENDMENT.-The table of sections for such sub-\nchapter B is amended by adding at the end thereof the following:\n\"Sec. 6687. Failure to supply information with respect to place of\nresidence.\"\n*U.S. GOVERNMENT PRINTING OFFICE: 1973-729-146/301\n42\nis\nDepartment of the Treasury\nPostage and Fees Paid\nDepartment of the Treasury\nOffice of Revenue Sharing\nTreas 551\n#\nWashington, D.C. 20226\nOfficial Business\nU.S.MAIL\nPenalty for Private Use $300"
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