TITLE III--CRIME PREVENTION Subtitle A--Ounce of Prevention Council SEC. 30101. OUNCE OF PREVENTION COUNCIL. (a) Establishment.-- (1) In general.--There is established an Ounce of Prevention Council (referred to in this title as the ``Council''), the members of which-- (A) shall include the Attorney General, the Secretary of Education, the Secretary of Health and Human Services, the Secretary of Housing and Urban Development, the Secretary of Labor, the Secretary of Agriculture, the Secretary of the Treasury, the Secretary of the Interior, and the Director of the Office of National Drug Control Policy; and (B) may include other officials of the executive branch as directed by the President. (2) Chair.--The President shall designate the Chair of the Council from among its members (referred to in this title as the ``Chair''). (3) Staff.--The Council may employ any necessary staff to carry out its functions, and may delegate any of its functions or powers to a member or members of the Council. (b) Program Coordination.--For any program authorized under the Violent Crime Control and Law Enforcement Act of 1994, the Ounce of Prevention Council Chair, only at the request of the Council member with jurisdiction over that program, may coordinate that program, in whole or in part, through the Council. (c) Administrative Responsibilities and Powers.--In addition to the program coordination provided in subsection (b), the Council shall be responsible for such functions as coordinated planning, development of a comprehensive crime prevention program catalogue, provision of assistance to communities and community-based organizations seeking information regarding crime prevention programs and integrated program service delivery, and development of strategies for program integration and grant simplification. The Council shall have the authority to audit the expenditure of funds received by grantees under programs administered by or coordinated through the Council. In consultation with the Council, the Chair may issue regulations and guidelines to carry out this subtitle and programs administered by or coordinated through the Council. SEC. 30102. OUNCE OF PREVENTION GRANT PROGRAM. (a) In General.--The Council may make grants for-- (1) summer and after-school (including weekend and holiday) education and recreation programs; (2) mentoring, tutoring, and other programs involving participation by adult role models (such as D.A.R.E. America); (3) programs assisting and promoting employability and job placement; and (4) prevention and treatment programs to reduce substance abuse, child abuse, and adolescent pregnancy, including outreach programs for at-risk families. (b) Applicants.--Applicants may be Indian tribal governments, cities, counties, or other municipalities, school boards, colleges and universities, private nonprofit entities, or consortia of eligible applicants. Applicants must show that a planning process has occurred that has involved organizations, institutions, and residents of target areas, including young people, and that there has been cooperation between neighborhood-based entities, municipality-wide bodies, and local private-sector representatives. Applicants must demonstrate the substantial involvement of neighborhood-based entities in the carrying out of the proposed activities. Proposals must demonstrate that a broad base of collaboration and coordination will occur in the implementation of the proposed activities, involving cooperation among youth-serving organizations, schools, health and social service providers, employers, law enforcement professionals, local government, and residents of target areas, including young people. Applications shall be geographically based in particular neighborhood or sections of municipalities or particular segments of rural areas, and applications shall demonstrate how programs will serve substantial proportions of children and youth resident in the target area with activities designed to have substantial impact on their lives. (c) Priority.--In making such grants, the Council shall give preference to coalitions consisting of a broad spectrum of community-based and social service organizations that have a coordinated team approach to reducing gang membership and the effects of substance abuse, and providing alternatives to at- risk youth. (d) Federal Share.-- (1) In general.--The Federal share of a grant made under this part may not exceed 75 percent of the total costs of the projects described in the applications submitted under subsection (b) for the fiscal year for which the projects receive assistance under this title. (2) Waiver.--The Council may waive the 25 percent matching requirement under paragraph (1) upon making a determination that a waiver is equitable in view of the financial circumstances affecting the ability of the applicant to meet that requirement. (3) Non-federal share.--The non-Federal share of such costs may be in cash or in kind, fairly evaluated, including plant, equipment, and services. (4) Nonsupplanting requirement.--Funds made available under this title to a governmental entity shall not be used to supplant State or local funds, or in the case of Indian tribal governments, funds supplied by the Bureau of Indian Affairs, but shall be used to increase the amount of funds that would, in the absence of Federal funds received under this title, be made available from State or local sources, or in the case of Indian tribal governments, from funds supplied by the Bureau of Indian Affairs. (5) Evaluation.--The Council shall conduct a thorough evaluation of the programs assisted under this title. SEC. 30103. DEFINITION. In this subtitle, ``Indian tribe'' means a tribe, band, pueblo, nation, or other organized group or community of Indians, including an Alaska Native village (as defined in or established under the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.), that is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians. SEC. 30104. AUTHORIZATION OF APPROPRIATIONS. There are authorized to be appropriated to carry out this subtitle-- (1) $1,500,000 for fiscal year 1995; (2) $14,700,000 for fiscal year 1996; (3) $18,000,000 for fiscal year 1997; (4) $18,000,000 for fiscal year 1998; (5) $18,900,000 for fiscal year 1999; and (6) $18,900,000 for fiscal year 2000. Subtitle B--Local Crime Prevention Block Grant Program SEC. 30201. PAYMENTS TO LOCAL GOVERNMENTS. (a) Payment and Use.-- (1) Payment.--The Attorney General, shall pay to each unit of general local government which qualifies for a payment under this subtitle an amount equal to the sum of any amounts allocated to the government under this subtitle for each payment period. The Attorney General shall pay such amount from amounts appropriated under section 30202. (2) Use.--Amounts paid to a unit of general local government under this section shall be used by that unit for carrying out one or more of the following purposes: (A) Education, training, research, prevention, diversion, treatment, and rehabilitation programs to prevent juvenile violence, juvenile gangs, and the use and sale of illegal drugs by juveniles. (B) Programs to prevent crimes against the elderly based on the concepts of the Triad model. (C) Programs that prevent young children from becoming gang involved, including the award of grants or contracts to community-based service providers that have a proven track record of providing services to children ages 5 to 18. (D) Saturation jobs programs, offered either separately or in conjunction with the services provided for under the Youth Fair Chance Program, that provide employment opportunities leading to permanent unsubsidized employment for disadvantaged young adults 16 through 25 years of age. (E) Midnight sports league programs that shall require each player in the league to attend employment counseling, job training, and other educational classes provided under the program, which shall be held in conjunction with league sports games at or near the site of the games. (F) Supervised sports and recreation programs, including Olympic Youth Development Centers established in cooperation with the United States Olympic Committee, that are offered-- (i) after school and on weekends and holidays, during the school year; and (ii) as daily (or weeklong) full- day programs (to the extent available resources permit) or as part-day programs, during the summer months. (G) Prevention and enforcement programs to reduce-- (i) the formation or continuation of juvenile gangs; and (ii) the use and sale of illegal drugs by juveniles. (H) Youth anticrime councils to give intermediate and secondary school students a structured forum through which to work with community organizations, law enforcement officials, government and media representatives, and school administrators and faculty to address issues regarding youth and violence. (I) Award of grants or contracts to the Boys and Girls Clubs of America, a national nonprofit youth organization, to establish Boys and Girls Clubs in public housing. (J) Supervised visitation centers for children who have been removed from their parents and placed outside the home as a result of abuse or neglect or other risk of harm to them and for children whose parents are separated or divorced and the children are at risk because-- (i) there is documented sexual, physical, or emotional abuse as determined by a court of competent jurisdiction; (ii) there is suspected or elevated risk of sexual, physical, or emotional abuse, or there have been threats of parental abduction of the child; (iii) due to domestic violence, there is an ongoing risk of harm to a parent or child; (iv) a parent is impaired because of substance abuse or mental illness; (v) there are allegations that a child is at risk for any of the reasons stated in clauses (i), (ii), (iii), and (iv), pending an investigation of the allegations; or (vi) other circumstances, as determined by a court of competent jurisdiction, point to the existence of such a risk. (K) Family Outreach Teams which provide a youth worker, a parent worker, and a school- parent organizer to provide training in outreach, mentoring, community organizing and peer counseling and mentoring to locally recruited volunteers in a particular area. (L) To establish corridors of safety for senior citizens by increasing the numbers, presence, and watchfulness of law enforcement officers, community groups, and business owners and employees. (M) Teams or units involving both specially trained law enforcement professionals and child or family services professionals that on a 24- hour basis respond to or deal with violent incidents in which a child is involved as a perpetrator, witness, or victim. (N) Dwelling units to law enforcement officers without charge or at a substantially reduced rent for the purpose of providing greater security for residents of high crime areas. (b) Timing of Payments.--The Attorney General shall pay each amount allocated under this subtitle to a unit of general local government for a payment period by the later of 90 days after the date the amount is available or the first day of the payment period if the unit of general local government has provided the Attorney General with the assurances required by section 30203(d). (c) Adjustments.-- (1) In general.--Subject to paragraph (2), the Attorney General shall adjust a payment under this subtitle to a unit of general local government to the extent that a prior payment to the government was more or less than the amount required to be paid. (2) Considerations.--The Attorney General may increase or decrease under this subsection a payment to a unit of general local government only if the Attorney General determines the need for the increase or decrease, or the unit requests the increase or decrease, within one year after the end of the payment period for which the payment was made. (d) Reservation for Adjustments.--The Attorney General may reserve a percentage of not more than 2 percent of the amount under this section for a payment period for all units of general local government in a State if the Attorney General considers the reserve is necessary to ensure the availability of sufficient amounts to pay adjustments after the final allocation of amounts among the units of general local government in the State. (e) Repayment of Unexpended Amounts.-- (1) Repayment required.--A unit of general local government shall repay to the Attorney General, by not later than 15 months after receipt from the Attorney General, any amount that is-- (A) paid to the unit from amounts appropriated under the authority of this section; and (B) not expended by the unit within one year after receipt from the Attorney General. (2) Penalty for failure to repay.--If the amount required to be repaid is not repaid, the Attorney General shall reduce payments in future payment periods accordingly. (3) Deposit of amounts repaid.--Amounts received by the Attorney General as repayments under this subsection shall be deposited in a designated fund for future payments to units of general local government. (f) Nonsupplanting Requirement.--Funds made available under this subtitle to units of local government shall not be used to supplant State or local funds, but will be used to increase the amount of funds that would, in the absence of funds under this subtitle, be made available from State or local sources. SEC. 30202. AUTHORIZATION OF APPROPRIATIONS. (a) Authorization of Appropriations.--There are authorized to be appropriated to carry out this subtitle-- (1) $75,940,000 for fiscal year 1996; (2) $75,940,000 for fiscal year 1997; (3) $75,940,000 for fiscal year 1998; (4) $75,940,000 for fiscal year 1999; and (5) $73,240,000 for fiscal year 2000. Such sums are to remain available until expended. (b) Administrative Costs.--Up to 2.5 percent of the amount authorized to be appropriated under subsection (b) is authorized to be appropriated for the period fiscal year 1995 through fiscal year 2000 to be available for administrative costs by the Attorney General in furtherance of the purposes of the program. Such sums are to remain available until expended. SEC. 30203. QUALIFICATION FOR PAYMENT. (a) In General.--The Attorney General shall issue regulations establishing procedures under which eligible units of general local government are required to provide notice to the Attorney General of the units' proposed use of assistance under this subtitle. (b) General Requirements for Qualification.--A unit of general local government qualifies for a payment under this subtitle for a payment period only after establishing to the satisfaction of the Attorney General that-- (1) the government will establish a trust fund in which the government will deposit all payments received under this subtitle; (2) the government will use amounts in the trust fund (including interest) during a reasonable period; (3) the government will expend the payments so received, in accordance with the laws and procedures that are applicable to the expenditure of revenues of the government; (4) if at least 25 percent of the pay of individuals employed by the government in a public employee occupation is paid out of the trust fund, individuals in the occupation any part of whose pay is paid out of the trust fund will receive pay at least equal to the prevailing rate of pay for individuals employed in similar public employee occupations by the government; (5) the government will use accounting, audit, and fiscal procedures that conform to guidelines which shall be prescribed by the Attorney General after consultation with the Comptroller General of the United States. As applicable, amounts received under this subtitle shall be audited in compliance with the Single Audit Act of 1984; (6) after reasonable notice to the government, the government will make available to the Attorney General and the Comptroller General of the United States, with the right to inspect, records the Attorney General reasonably requires to review compliance with this subtitle or the Comptroller General of the United States reasonably requires to review compliance and operations; (7) the government will make reports the Attorney General reasonably requires, in addition to the annual reports required under this subtitle; and (8) the government will spend the funds only for the purposes set forth in section 30201(a)(2). (c) Review by Governors.--A unit of general local government shall give the chief executive officer of the State in which the government is located an opportunity for review and comment before establishing compliance with subsection (d). (d) Sanctions for Noncompliance.-- (1) In general.--If the Attorney General decides that a unit of general local government has not complied substantially with subsection (b) or regulations prescribed under subsection (b), the Attorney General shall notify the government. The notice shall state that if the government does not take corrective action by the 60th day after the date the government receives the notice, the Attorney General will withhold additional payments to the government for the current payment period and later payment periods until the Attorney General is satisfied that the government-- (A) has taken the appropriate corrective action; and (B) will comply with subsection (b) and regulations prescribed under subsection (b). (2) Notice.--Before giving notice under paragraph (1), the Attorney General shall give the chief executive officer of the unit of general local government reasonable notice and an opportunity for comment. (3) Payment conditions.--The Attorney General may make a payment to a unit of general local government notified under paragraph (1) only if the Attorney General is satisfied that the government-- (A) has taken the appropriate corrective action; and (B) will comply with subsection (b) and regulations prescribed under subsection (b). SEC. 30204. ALLOCATION AND DISTRIBUTION OF FUNDS. (a) State Distribution.--For each payment period, the Attorney General shall allocate out of the amount appropriated for the period under the authority of section 30202-- (1) 0.25 percent to each State; and (2) Of the total amount of funds remaining after allocation under paragraph (1), an amount that is equal to-- the ratio that the number of part 1 violent crimes reported by such State to the Federal Bureau of Investigation for 1993 bears to the number of part 1 violent crimes reported by all States to the Federal Bureau of Investigation for 1993 (b) Local Distribution.--(1) The Attorney General shall allocate among the units of general local government in a State the amount allocated to the State under paragraphs (1) and (2) of subsection (a). (2) The Attorney General shall allocate to each unit of general local government an amount which bears the ratio that the number of part 1 violent crimes reported by such unit to the Federal Bureau of Investigation for 1993 bears to the number of part 1 violent crimes reported by all units in the State in which the unit is located to the Federal Bureau of Investigation for 1993 multiplied by the ratio of the population living in all units in the State in which the unit is located that reported part 1 violent crimes to the Federal Bureau of Investigation for 1993 bears to the population of the State; or if such data are not available for a unit, the ratio that the population of such unit bears to the population of all units in the State in which the unit is located for which data are not available multiplied by the ratio of the population living in units in the State in which the unit is located for which data are not available bears to the population of the State. (3) If under paragraph (2) a unit is allotted less than $5,000 for the payment period, the amount allotted shall be transferred to the Governor of the State who shall equitably distribute the allocation to all such units or consortia thereof. (4) If there is in a State a unit of general local government that has been incorporated since the date of the collection of the data used by the Attorney General in making allocations pursuant to this section, the Attorney General shall allocate to this newly incorporated local government, out of the amount allocated to the State under this section, an amount bearing the same ratio to the amount allocated to the State as the population of the newly incorporated local government bears to the population of the State. If there is in the State a unit of general local government that has been annexed since the date of the collection of the data used by the Attorney General in making allocations pursuant to this section, the Attorney General shall pay the amount that would have been allocated to this local government to the unit of general local government that annexed it. (c) Unavailability of Information.--For purposes of this section, if data regarding part 1 violent crimes in any State for 1993 is unavailable or substantially inaccurate, the Attorney General shall utilize the best available comparable data regarding the number of violent crimes for 1993 for such State for the purposes of allocation of any funds under this subtitle. SEC. 30205. UTILIZATION OF PRIVATE SECTOR. Funds or a portion of funds allocated under this subtitle may be utilized to contract with private, nonprofit entities or community-based organizations to carry out the uses specified under section 30201(a)(2). SEC. 30206. PUBLIC PARTICIPATION. A unit of general local government expending payments under this subtitle shall hold at least one public hearing on the proposed use of the payment in relation to its entire budget. At the hearing, persons shall be given an opportunity to provide written and oral views to the governmental authority responsible for enacting the budget and to ask questions about the entire budget and the relation of the payment to the entire budget. The government shall hold the hearing at a time and a place that allows and encourages public attendance and participation. SEC. 30207. ADMINISTRATIVE PROVISIONS. The administrative provisions of part H of the Omnibus Crime Control and Safe Streets Act of 1968, shall apply to the Attorney General for purposes of carrying out this subtitle. SEC. 30208. DEFINITIONS. For purposes of this subtitle: (1) The term ``unit of general local government'' means-- (A) a county, township, city, or political subdivision of a county, township, or city, that is a unit of general local government as determined by the Secretary of Commerce for general statistical purposes; and (B) the District of Columbia and the recognized governing body of an Indian tribe or Alaskan Native village that carries out substantial governmental duties and powers. (2) The term ``payment period'' means each 1-year period beginning on October 1 of the years 1995 through 2000. (3) The term ``State'' means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, American Samoa, Guam, and the Northern Mariana Islands, except that American Samoa, Guam, and the Northern Mariana Islands shall be considered as one State and that, for purposes of 30204(a), 33 per centum of the amounts allocated shall be allocated to American Samoa, 50 per centum to Guam, and 17 per centum to the Northern Mariana Islands. (4) The term ``children'' means persons who are not younger than 5 and not older than 18 years old. (5) The term ``part 1 violent crimes'' means murder and non-negligent manslaughter, forcible rape, robbery, and aggravated assault as reported to the Federal Bureau of Investigation for purposes of the Uniform Crime Reports. Subtitle C--Model Intensive Grant Programs SEC. 30301. GRANT AUTHORIZATION. (a) Establishment.-- (1) In general.--The Attorney General may award grants to not more than 15 chronic high intensive crime areas to develop comprehensive model crime prevention programs that-- (A) involve and utilize a broad spectrum of community resources, including nonprofit community organizations, law enforcement organizations, and appropriate State and Federal agencies, including the State educational agencies; (B) attempt to relieve conditions that encourage crime; and (C) provide meaningful and lasting alternatives to involvement in crime. (2) Consultation with the ounce of prevention council.--The Attorney General may consult with the Ounce of Prevention Council in awarding grants under paragraph (1). (b) Priority.--In awarding grants under subsection (a), the Attorney General shall give priority to proposals that-- (1) are innovative in approach to the prevention of crime in a specific area; (2) vary in approach to ensure that comparisons of different models may be made; and (3) coordinate crime prevention programs funded under this program with other existing Federal programs to address the overall needs of communities that benefit from grants received under this title. SEC. 30302. USES OF FUNDS. (a) In General.--Funds awarded under this subtitle may be used only for purposes described in an approved application. The intent of grants under this subtitle is to fund intensively comprehensive crime prevention programs in chronic high intensive crime areas. (b) Guidelines.--The Attorney General shall issue and publish in the Federal Register guidelines that describe suggested purposes for which funds under approved programs may be used. (c) Equitable Distribution of Funds.--In disbursing funds under this subtitle, the Attorney General shall ensure the distribution of awards equitably on a geographic basis, including urban and rural areas of varying population and geographic size. SEC. 30303. PROGRAM REQUIREMENTS. (a) Description.--An applicant shall include a description of the distinctive factors that contribute to chronic violent crime within the area proposed to be served by the grant. Such factors may include lack of alternative activities and programs for youth, deterioration or lack of public facilities, inadequate public services such as public transportation, street lighting, community-based substance abuse treatment facilities, or employment services offices, and inadequate police or public safety services, equipment, or facilities. (b) Comprehensive Plan.--An applicant shall include a comprehensive, community-based plan to attack intensively the principal factors identified in subsection (a). Such plans shall describe the specific purposes for which funds are proposed to be used and how each purpose will address specific factors. The plan also shall specify how local nonprofit organizations, government agencies, private businesses, citizens groups, volunteer organizations, and interested citizens will cooperate in carrying out the purposes of the grant. (c) Evaluation.--An applicant shall include an evaluation plan by which the success of the plan will be measured, including the articulation of specific, objective indicia of performance, how the indicia will be evaluated, and a projected timetable for carrying out the evaluation. SEC. 30304. APPLICATIONS. To request a grant under this subtitle the chief local elected official of an area shall-- (1) prepare and submit to the Attorney General an application in such form, at such time, and in accordance with such procedures, as the Attorney General shall establish; and (2) provide an assurance that funds received under this subtitle shall be used to supplement, not supplant, non-Federal funds that would otherwise be available for programs funded under this subtitle. SEC. 30305. REPORTS. Not later than December 31, 1998, the Attorney General shall prepare and submit to the Committees on the Judiciary of the House and Senate an evaluation of the model programs developed under this subtitle and make recommendations regarding the implementation of a national crime prevention program. SEC. 30306. DEFINITIONS. In this subtitle-- ``chief local elected official'' means an official designated under regulations issued by the Attorney General. The criteria used by the Attorney General in promulgating such regulations shall ensure administrative efficiency and accountability in the expenditure of funds and execution of funded projects under this subtitle. ``chronic high intensity crime area'' means an area meeting criteria adopted by the Attorney General by regulation that, at a minimum, define areas with-- (A) consistently high rates of violent crime as reported in the Federal Bureau of Investigation's ``Uniform Crime Reports'', and (B) chronically high rates of poverty as determined by the Bureau of the Census. ``State'' means a State, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, American Samoa, Guam, and the Northern Mariana Islands. SEC. 30307. AUTHORIZATION OF APPROPRIATIONS. There are authorized to be appropriated to carry out this subtitle-- (1) $100,000,000 for fiscal year 1996; (2) $125,100,000 for fiscal year 1997; (3) $125,100,000 for fiscal year 1998; (4) $125,100,000 for fiscal year 1999; and (5) $150,200,000 for fiscal year 2000. Subtitle D--Family and Community Endeavor Schools Grant Program SEC. 30401. COMMUNITY SCHOOLS YOUTH SERVICES AND SUPERVISION GRANT PROGRAM. (a) Short Title.--This section may be cited as the ``Community Schools Youth Services and Supervision Grant Program Act of 1994''. (b) Definitions.--In this section-- ``child'' means a person who is not younger than 5 and not older than 18 years old. ``community-based organization'' means a private, locally initiated, community-based organization that-- (A) is a nonprofit organization, as defined in section 103(23) of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5603(23)); and (B) is operated by a consortium of service providers, consisting of representatives of 5 or more of the following categories of persons: (i) Residents of the community. (ii) Business and civic leaders actively involved in providing employment and business development opportunities in the community. (iii) Educators. (iv) Religious organizations (which shall not provide any sectarian instruction or sectarian worship in connection with an activity funded under this title). (v) Law enforcement agencies. (vi) Public housing agencies. (vii) Other public agencies. (viii) Other interested parties. ``eligible community'' means an area identified pursuant to subsection (e). ``Indian tribe'' means a tribe, band, pueblo, nation, or other organized group or community of Indians, including an Alaska Native village (as defined in or established under the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.), that is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians. ``poverty line'' means the income official poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)) applicable to a family of the size involved. ``public school'' means a public elementary school, as defined in section 1201(i) of the Higher Education Act of 1965 (20 U.S.C. 1141(i)), and a public secondary school, as defined in section 1201(d) of that Act. ``Secretary'' means the Secretary of Health and Human Services, in consultation and coordination with the Attorney General. ``State'' means a State, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, American Samoa, Guam, and the United States Virgin Islands. (c) Program Authority.-- (1) In general.-- (A) Allocations for states and indian country.--For any fiscal year in which the sums appropriated to carry out this section equal or exceed $20,000,000, from the sums appropriated to carry out this subsection, the Secretary shall allocate, for grants under subparagraph (B) to community-based organizations in each State, an amount bearing the same ratio to such sums as the number of children in the State who are from families with incomes below the poverty line bears to the number of children in all States who are from families with incomes below the poverty line. In view of the extraordinary need for assistance in Indian country, an appropriate amount of funds available under this subtitle shall be made available for such grants in Indian country. (B) Grants to community-based organizations from allocations.--For such a fiscal year, the Secretary may award grants from the appropriate State or Indian country allocation determined under subparagraph (A) on a competitive basis to eligible community-based organizations to pay for the Federal share of assisting eligible communities to develop and carry out programs in accordance with this section. (C) Reallocation.--If, at the end of such a fiscal year, the Secretary determines that funds allocated for community-based organizations in a State or Indian country under subparagraph (B) remain unobligated, the Secretary may use such funds to award grants to eligible community-based organizations in another State or Indian country to pay for such Federal share. In awarding such grants, the Secretary shall consider the need to maintain geographic diversity among the recipients of such grants. Amounts made available through such grants shall remain available until expended. (2) Other fiscal years.--For any fiscal year in which the sums appropriated to carry out this section are less than $20,000,000, the Secretary may award grants on a competitive basis to eligible community- based organizations to pay for the Federal share of assisting eligible communities to develop and carry out programs in accordance with this section. (3) Administrative costs.--The Secretary may use not more than 3 percent of the funds appropriated to carry out this section in any fiscal year for administrative costs. (d) Program Requirements.-- (1) Location.--A community-based organization that receives a grant under this section to assist in carrying out such a program shall ensure that the program is carried out-- (A) when appropriate, in the facilities of a public school during nonschool hours; or (B) in another appropriate local facility in a State or Indian country, such as a college or university, a local or State park or recreation center, church, or military base, that is-- (i) in a location that is easily accessible to children in the community; and (ii) in compliance with all applicable local ordinances. (2) Use of funds.--Such community-based organization-- (A) shall use funds made available through the grant to provide, to children in the eligible community, services and activities that-- (i) shall include supervised sports programs, and extracurricular and academic programs, that are offered-- (I) after school and on weekends and holidays, during the school year; and (II) as daily full-day programs (to the extent available resources permit) or as part-day programs, during the summer months; (B) in providing such extracurricular and academic programs, shall provide programs such as curriculum-based supervised educational, work force preparation, entrepreneurship, cultural, health programs, social activities, arts and crafts programs, dance programs, tutorial and mentoring programs, and other related activities; (C) may use-- (i) such funds for minor renovation of facilities that are in existence prior to the operation of the program and that are necessary for the operation of the program for which the organization receives the grant, purchase of sporting and recreational equipment and supplies, reasonable costs for the transportation of participants in the program, hiring of staff, provision of meals for such participants, provision of health services consisting of an initial basic physical examination, provision of first aid and nutrition guidance, family counselling, parental training, and substance abuse treatment where appropriate; and (ii) not more than 5 percent of such funds to pay for the administrative costs of the program; and (D) may not use such funds to provide sectarian worship or sectarian instruction. (e) Eligible Community Identification.-- (1) Identification.--To be eligible to receive a grant under this section, a community-based organization shall identify an eligible community to be assisted under this section. (2) Criteria.--Such eligible community shall be an area that meets such criteria with respect to significant poverty and significant juvenile delinquency, and such additional criteria, as the Secretary may by regulation require. (f) Applications.-- (1) Application required.--To be eligible to receive a grant under this section, a community-based organization shall submit an application to the Secretary at such time, in such manner, and accompanied by such information, as the Secretary may reasonably require, and obtain approval of such application. (2) Contents of application.--Each application submitted pursuant to paragraph (1) shall-- (A) describe the activities and services to be provided through the program for which the grant is sought; (B) contain an assurance that the community-based organization will spend grant funds received under this section in a manner that the community-based organization determines will best accomplish the objectives of this section; (C) contain a comprehensive plan for the program that is designed to achieve identifiable goals for children in the eligible community; (D) set forth measurable goals and outcomes for the program that-- (i) will-- (I) where appropriate, make a public school the focal point of the eligible community; or (II) make a local facility described in subsection (d)(1)(B) such a focal point; and (ii) may include reducing the percentage of children in the eligible community that enter the juvenile justice system, increasing the graduation rates, school attendance, and academic success of children in the eligible community, and improving the skills of program participants; (E) provide evidence of support for accomplishing such goals and outcomes from-- (i) community leaders; (ii) businesses; (iii) local educational agencies; (iv) local officials; (v) State officials; (vi) Indian tribal government officials; and (vii) other organizations that the community-based organization determines to be appropriate; (F) contain an assurance that the community-based organization will use grant funds received under this section to provide children in the eligible community with activities and services that shall include supervised sports programs, and extracurricular and academic programs, in accordance with subparagraphs (A) and (B) of subsection (d)(2); (G) contain a list of the activities and services that will be offered through the program for which the grant is sought and sponsored by private nonprofit organizations, individuals, and groups serving the eligible community, including-- (i) extracurricular and academic programs, such as programs described in subsection (d)(2)(B); and (ii) activities that address specific needs in the community; (H) demonstrate the manner in which the community-based organization will make use of the resources, expertise, and commitment of private entities in carrying out the program for which the grant is sought; (I) include an estimate of the number of children in the eligible community expected to be served pursuant to the program; (J) include a description of charitable private resources, and all other resources, that will be made available to achieve the goals of the program; (K) contain an assurance that the community-based organization will use competitive procedures when purchasing, contracting, or otherwise providing for goods, activities, or services to carry out programs under this section; (L) contain an assurance that the program will maintain a staff-to-participant ratio (including volunteers) that is appropriate to the activity or services provided by the program; (M) contain an assurance that the program will maintain an average attendance rate of not less than 75 percent of the participants enrolled in the program, or will enroll additional participants in the program; (N) contain an assurance that the community-based organization will comply with any evaluation under subsection (m), any research effort authorized under Federal law, and any investigation by the Secretary; (O) contain an assurance that the community-based organization shall prepare and submit to the Secretary an annual report regarding any program conducted under this section; (P) contain an assurance that the program for which the grant is sought will, to the maximum extent possible, incorporate services that are provided solely through non-Federal private or nonprofit sources; and (Q) contain an assurance that the community-based organization will maintain separate accounting records for the program. (3) Priority.--In awarding grants to carry out programs under this section, the Secretary shall give priority to community-based organizations who submit applications that demonstrate the greatest effort in generating local support for the programs. (g) Eligibility of Participants.-- (1) In general.--To the extent possible, each child who resides in an eligible community shall be eligible to participate in a program carried out in such community that receives assistance under this section. (2) Eligibility.--To be eligible to participate in a program that receives assistance under this section, a child shall provide the express written approval of a parent or guardian, and shall submit an official application and agree to the terms and conditions of participation in the program. (3) Nondiscrimination.--In selecting children to participate in a program that receives assistance under this section, a community-based organization shall not discriminate on the basis of race, color, religion, sex, national origin, or disability. (h) Peer Review Panel.-- (1) Establishment.--The Secretary may establish a peer review panel that shall be comprised of individuals with demonstrated experience in designing and implementing community-based programs. (2) Composition.--A peer review panel shall include at least 1 representative from each of the following: (A) A community-based organization. (B) A local government. (C) A school district. (D) The private sector. (E) A charitable organization. (F) A representative of the United States Olympic Committee, at the option of the Secretary. (3) Functions.--A peer review panel shall conduct the initial review of all grant applications received by the Secretary under subsection (f), make recommendations to the Secretary regarding-- (A) grant funding under this section; and (B) a design for the evaluation of programs assisted under this section. (i) Investigations and Inspections.--The Secretary may conduct such investigations and inspections as may be necessary to ensure compliance with the provisions of this section. (j) Payments; Federal Share; Non-Federal Share.-- (1) Payments.--The Secretary shall, subject to the availability of appropriations, pay to each community- based organization having an application approved under subsection (f) the Federal share of the costs of developing and carrying out programs described in subsection (c). (2) Federal share.--The Federal share of such costs shall be no more than-- (A) 75 percent for each of fiscal years 1995 and 1996; (B) 70 percent for fiscal year 1997; and (C) 60 percent for fiscal year 1998 and thereafter. (3) Non-federal share.-- (A) In general.--The non-Federal share of such costs may be in cash or in kind, fairly evaluated, including plant, equipment, and services (including the services described in subsection (f)(2)(P)), and funds appropriated by the Congress for the activity of any agency of an Indian tribal government or the Bureau of Indian Affairs on any Indian lands may be used to provide the non-Federal share of the costs of programs or projects funded under this subtitle. (B) Special rule.--At least 15 percent of the non-Federal share of such costs shall be provided from private or nonprofit sources. (k) Evaluation.--The Secretary shall conduct a thorough evaluation of the programs assisted under this section, which shall include an assessment of-- (1) the number of children participating in each program assisted under this section; (2) the academic achievement of such children; (3) school attendance and graduation rates of such children; and (4) the number of such children being processed by the juvenile justice system. SEC. 30402. FAMILY AND COMMUNITY ENDEAVOR SCHOOLS GRANT PROGRAM. (a) Short Title.--This section may be cited as the ``Family and Community Endeavor Schools Act''. (b) Purpose.--It is the purpose of this section to improve the overall development of at-risk children who reside in eligible communities as defined in subsection (l)(3). (c) Program Authority.--The Secretary may award grants on a competitive basis to eligible local entities to pay for the Federal share of assisting eligible communities to develop and carry out programs in accordance with this section. No local entity shall receive a grant of less than $250,000 in a fiscal year. Amounts made available through such grants shall remain available until expended. (d) Program Requirements.-- (1) Improvement programs.--A local entity that receives funds under this section shall develop or expand programs that are designed to improve academic and social development by instituting a collaborative structure that trains and coordinates the efforts of teachers, administrators, social workers, guidance counselors, parents, and school volunteers to provide concurrent social services for at-risk students at selected public schools in eligible communities. (2) Optional activities.--A local entity that receives funds under this section may develop a variety of programs to serve the comprehensive needs of students, including-- (A) homework assistance and after-school programs, including educational, social, and athletic activities; (B) nutrition services; (C) mentoring programs; (D) family counseling; and (E) parental training programs. (e) Eligible Community Identification.--The Secretary through regulation shall define the criteria necessary to qualify as an eligible community as defined in subsection (l)(3). (f) Grant Eligibility.--To be eligible to receive a grant under this section, a local entity shall-- (1) identify an eligible community to be assisted; (2) develop a community planning process that includes-- (A) parents and family members; (B) local school officials; (C) teachers employed at schools within the eligible community; (D) public housing resident organization members, where applicable; and (E) public and private nonprofit organizations that provide education, child protective services, or other human services to low-income, at-risk children and their families; and (3) develop a concentrated strategy for implementation of the community planning process developed under paragraph (2) that targets clusters of at-risk children in the eligible community. (g) Applications.-- (1) Application required.--To be eligible to receive a grant under this section, a local entity shall submit an application to the Secretary at such time, in such manner, and accompanied by such information, as the Secretary may reasonably require, and obtain approval of such application. (2) Contents of application.--Each application submitted under paragraph (1) shall-- (A) contain a comprehensive plan for the program that is designed to improve the academic and social development of at-risk children in schools in the eligible community; (B) provide evidence of support for accomplishing the objectives of such plan from-- (i) community leaders; (ii) a school district; (iii) local officials; and (iv) other organizations that the local entity determines to be appropriate; (C) provide an assurance that the local entity will use grant funds received under this subsection to implement the program requirements listed in subsection (d); (D) include an estimate of the number of children in the eligible community expected to be served under the program; (E) provide an assurance that the local entity will comply with any evaluation requested under subsection (k), any research effort authorized under Federal law, and any investigation by the Secretary; (F) provide an assurance that the local entity shall prepare and submit to the Secretary an annual report regarding any program conducted under this section; (G) provide an assurance that funds made available under this section shall be used to supplement, not supplant, other Federal funds that would otherwise be available for activities funded under this section; and (H) provide an assurance that the local entity will maintain separate accounting records for the program. (3) Priority.--In awarding grants to carry out programs under this section, the Secretary shall give priority to local entities which submit applications that demonstrate the greatest effort in generating local support for the programs. (h) Peer Review Panel.-- (1) Establishment.--The Secretary shall establish a peer review panel not to exceed 8 members that shall be comprised of individuals with demonstrated experience in designing and implementing programs to improve the academic and social development of at-risk children. (2) Functions.--Such panel shall make recommendations to the Secretary regarding-- (A) an illustrative model that effectively achieves the program requirements indicated in subsection (d) and a process whereby local entities can request such model; and (B) a design for the evaluation of programs assisted under this section. (i) Investigations and Inspections.--The Secretary may conduct such investigations and inspections as may be necessary to ensure compliance with the provisions of this section. (j) Federal Share.-- (1) Payments.--The Secretary shall, subject to the availability of appropriations, pay to each local entity having an application approved under subsection (g) the Federal share of the costs of developing and carrying out programs referred to in subsection (d). (2) Federal share.--The Federal share of such costs shall be 70 percent. (3) Non-federal share.-- (A) In general.--The non-Federal share of such costs may be in cash or in kind, fairly evaluated, including personnel, plant, equipment, and services. (B) Special rule.--Not less than 15 percent of the non-Federal share of such costs shall be provided from private or nonprofit sources. (k) Evaluation.--The Secretary shall require a thorough evaluation of the programs assisted under this section, which shall include an assessment of the academic and social achievement of children assisted with funds provided under this section. (l) Definitions.--For purposes of this section-- (1) the term ``Secretary'' means to the Secretary of the Department of Education; (2) the term ``local entity'' means-- (A) a local educational agency, or (B) a community-based organization as defined in section 1471(3) of the Elementary and Secondary Education Act of 1965; (3) the term ``eligible community'' means an area which meets criteria with respect to significant poverty and significant violent crime, and such additional criteria, as the Secretary may by regulation require; and (4) the term ``public school'' means an elementary school (as defined in section 1471(8) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 2891(8))) and a secondary school (as defined in section 1471(21) of that Act). SEC. 30403. AUTHORIZATION OF APPROPRIATIONS. (a) In General.--There are authorized to be appropriated to carry out this subtitle-- (1) $37,000,000 for fiscal year 1995; (2) $103,500,000 for fiscal year 1996; (3) $121,500,000 for fiscal year 1997; (4) $153,000,000 for fiscal year 1998; (5) $193,500,000 for fiscal year 1999; and (6) $201,500,000 for fiscal year 2000. (b) Programs.--Of the amounts appropriated under subsection (a) for any fiscal year-- (1) 70 percent shall be made available to carry out section 30401; and (2) 30 percent shall be made available to carry out section 30402. Subtitle G--Assistance for Delinquent and At-Risk Youth SEC. 30701. GRANT AUTHORITY. (a) Grants.-- (1) In general.--In order to prevent the commission of crimes or delinquent acts by juveniles, the Attorney General may make grants to public or private nonprofit organizations to support the development and operation of projects to provide residential services to youth, aged 11 to 19, who-- (A) have dropped out of school; (B) have come into contact with the juvenile justice system; or (C) are at risk of dropping out of school or coming into contact with the juvenile justice system. (2) Consultation with the ounce of prevention council.--The Attorney General may consult with the Ounce of Prevention Council in making grants under paragraph (1). (3) Services.--Such services shall include activities designed to-- (A) increase the self-esteem of such youth; (B) assist such youth in making healthy and responsible choices; (C) improve the academic performance of such youth pursuant to a plan jointly developed by the applicant and the school which each such youth attends or should attend; and (D) provide such youth with vocational and life skills. (b) Applications.-- (1) In general.--A public agency or private nonprofit organization which desires a grant under this section shall submit an application at such time and in such manner as the Attorney General may prescribe. (2) Contents.--An application under paragraph (1) shall include-- (A) a description of the program developed by the applicant, including the activities to be offered; (B) a detailed discussion of how such program will prevent youth from committing crimes or delinquent acts; (C) evidence that such program-- (i) will be carried out in facilities which meet applicable State and local laws with regard to safety; (ii) will include academic instruction, approved by the State, Indian tribal government, or local educational agency, which meets or exceeds State, Indian tribal government, and local standards and curricular requirements; and (iii) will include instructors and other personnel who possess such qualifications as may be required by applicable State or local laws; and (D) specific, measurable outcomes for youth served by the program. (c) Consideration of Applications.--Not later than 60 days following the submission of applications, the Attorney General shall-- (1) approve each application and disburse the funding for each such application; or (2) disapprove the application and inform the applicant of such disapproval and the reasons therefor. (d) Reports.--A grantee under this section shall annually submit a report to the Attorney General that describes the activities and accomplishments of such program, including the degree to which the specific youth outcomes are met. (e) Definitions.--In this subtitle-- ``Indian tribe'' means a tribe, band, pueblo, nation, or other organized group or community of Indians, including Alaska Native village (as defined in or established under the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.)), that is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians. ``State'' means a State, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, American Samoa, Guam, and the Northern Mariana Islands. SEC. 30702. AUTHORIZATION OF APPROPRIATIONS. There are authorized to be appropriated for grants under section 30701-- (1) $5,400,000 for fiscal year 1996; (2) $6,300,000 for fiscal year 1997; (3) $7,200,000 for fiscal year 1998; (4) $8,100,000 for fiscal year 1999; and (5) $9,000,000 for fiscal year 2000. Subtitle H--Police Recruitment SEC. 30801. GRANT AUTHORITY. (a) Grants.-- (1) In general.--The Attorney General may make grants to qualified community organizations to assist in meeting the costs of qualified programs which are designed to recruit and retain applicants to police departments. (2) Consultation with the ounce of prevention council.--The Attorney General may consult with the Ounce of Prevention Council in making grants under paragraph (1). (b) Qualified Community Organizations.--An organization is a qualified community organization which is eligible to receive a grant under subsection (a) if the organization-- (1) is a nonprofit organization; and (2) has training and experience in-- (A) working with a police department and with teachers, counselors, and similar personnel, (B) providing services to the community in which the organization is located, (C) developing and managing services and techniques to recruit individuals to become members of a police department and to assist such individuals in meeting the membership requirements of police departments, (D) developing and managing services and techniques to assist in the retention of applicants to police departments, and (E) developing other programs that contribute to the community. (c) Qualified Programs.--A program is a qualified program for which a grant may be made under subsection (a) if the program is designed to recruit and train individuals from underrepresented neighborhoods and localities and if-- (1) the overall design of the program is to recruit and retain applicants to a police department; (2) the program provides recruiting services which include tutorial programs to enable individuals to meet police force academic requirements and to pass entrance examinations; (3) the program provides counseling to applicants to police departments who may encounter problems throughout the application process; and (4) the program provides retention services to assist in retaining individuals to stay in the application process of a police department. (d) Applications.--To qualify for a grant under subsection (a), a qualified organization shall submit an application to the Attorney General in such form as the Attorney General may prescribe. Such application shall-- (1) include documentation from the applicant showing-- (A) the need for the grant; (B) the intended use of grant funds; (C) expected results from the use of grant funds; and (D) demographic characteristics of the population to be served, including age, disability, race, ethnicity, and languages used; and (2) contain assurances satisfactory to the Attorney General that the program for which a grant is made will meet the applicable requirements of the program guidelines prescribed by the Attorney General under subsection (i). (e) Action by the Attorney General.--Not later than 60 days after the date that an application for a grant under subsection (a) is received, the Attorney General shall consult with the police department which will be involved with the applicant and shall-- (1) approve the application and disburse the grant funds applied for; or (2) disapprove the application and inform the applicant that the application is not approved and provide the applicant with the reasons for the disapproval. (f) Grant Disbursement.--The Attorney General shall disburse funds under a grant under subsection (a) in accordance with regulations of the Attorney General which shall ensure-- (1) priority is given to applications for areas and organizations with the greatest showing of need; (2) that grant funds are equitably distributed on a geographic basis; and (3) the needs of underserved populations are recognized and addressed. (g) Grant Period.--A grant under subsection (a) shall be made for a period not longer than 3 years. (h) Grantee Reporting.--(1) For each year of a grant period for a grant under subsection (a), the recipient of the grant shall file a performance report with the Attorney General explaining the activities carried out with the funds received and assessing the effectiveness of such activities in meeting the purpose of the recipient's qualified program. (2) If there was more than one recipient of a grant, each recipient shall file such report. (3) The Attorney General shall suspend the funding of a grant, pending compliance, if the recipient of the grant does not file the report required by this subsection or uses the grant for a purpose not authorized by this section. (i) Guidelines.--The Attorney General shall, by regulation, prescribe guidelines on content and results for programs receiving a grant under subsection (a). Such guidelines shall be designed to establish programs which will be effective in training individuals to enter instructional programs for police departments and shall include requirements for-- (1) individuals providing recruiting services; (2) individuals providing tutorials and other academic assistance programs; (3) individuals providing retention services; and (4) the content and duration of recruitment, retention, and counseling programs and the means and devices used to publicize such programs. SEC. 30802. AUTHORIZATION OF APPROPRIATIONS. There are authorized to be appropriated for grants under section 30801-- (1) $2,000,000 for fiscal year 1996; (2) $4,000,000 for fiscal year 1997; (3) $5,000,000 for fiscal year 1998; (4) $6,000,000 for fiscal year 1999; and (5) $7,000,000 for fiscal year 2000. Subtitle J--Local Partnership Act SEC. 31001. ESTABLISHMENT OF PAYMENT PROGRAM. (a) Establishment of Program.--Title 31, United States Code, is amended by inserting after chapter 65 the following new chapter: ``CHAPTER 67--FEDERAL PAYMENTS ``Sec. ``6701. Payments to local governments. ``6702. Local Government Fiscal Assistance Fund. ``6703. Qualification for payment. ``6704. State area allocations; allocations and payments to territorial governments. ``6705. Local government allocations. ``6706. Income gap multiplier. ``6707. State variation of local government allocations. ``6708. Adjustments of local government allocations. ``6709. Information used in allocation formulas. ``6710. Public participation. ``6711. Prohibited discrimination. ``6712. Discrimination proceedings. ``6713. Suspension and termination of payments in discrimination proceedings. ``6714. Compliance agreements. ``6715. Enforcement by the Attorney General of prohibitions on discrimination. ``6716. Civil action by a person adversely affected. ``6717. Judicial review. ``6718. Investigations and reviews. ``6719. Reports. ``6720. Definitions, application, and administration. ``Sec. 6701. Payments to local governments ``(a) Payment and Use.-- ``(1) Payment.--The Secretary shall pay to each unit of general local government which qualifies for a payment under this chapter an amount equal to the sum of any amounts allocated to the government under this chapter for each payment period. The Secretary shall pay such amount out of the Local Government Fiscal Assistance Fund under section 6702. ``(2) Use.--Amounts paid to a unit of general local government under this section shall be used by that unit for carrying out one or more programs of the unit related to-- ``(A) education to prevent crime; ``(B) substance abuse treatment to prevent crime; or ``(C) job programs to prevent crime. ``(3) Coordination.--Programs funded under this title shall be coordinated with other existing Federal programs to meet the overall needs of communities that benefit from funds received under this section. ``(b) Timing of Payments.--The Secretary shall pay each amount allocated under this chapter to a unit of general local government for a payment period by the later of 90 days after the date the amount is available or the first day of the payment period provided that the unit of general local government has provided the Secretary with the assurances required by section 6703(d). ``(c) Adjustments.-- ``(1) In general.--Subject to paragraph (2), the Secretary shall adjust a payment under this chapter to a unit of general local government to the extent that a prior payment to the government was more or less than the amount required to be paid. ``(2) Considerations.--The Secretary may increase or decrease under this subsection a payment to a unit of local government only if the Secretary determines the need for the increase or decrease, or the unit requests the increase or decrease, within one year after the end of the payment period for which the payment was made. ``(d) Reservation for Adjustments.--The Secretary may reserve a percentage of not more than 2 percent of the amount under this section for a payment period for all units of general local government in a State if the Secretary considers the reserve is necessary to ensure the availability of sufficient amounts to pay adjustments after the final allocation of amounts among the units of general local government in the State. ``(e) Repayment of Unexpended Amounts.-- ``(1) Repayment required.--A unit of general local government shall repay to the Secretary, by not later than 15 months after receipt from the Secretary, any amount that is-- ``(A) paid to the unit from amounts appropriated under the authority of this section; and ``(B) not expended by the unit within one year after receipt from the Secretary. ``(2) Penalty for failure to repay.--If the amount required to be repaid is not repaid, the Secretary shall reduce payments in future payment periods accordingly. ``(3) Deposit of amounts repaid.--Amounts received by the Secretary as repayments under this subsection shall be deposited in the Local Government Fiscal Assistance Fund for future payments to units of general local government. ``(f) Expenditure With Disadvantaged Business Enterprises.-- ``(1) General rule.--Of amounts paid to a unit of general local government under this chapter for a payment period, not less than 10 percent of the total combined amounts obligated by the unit for contracts and subcontracts shall be expended with-- ``(A) small business concerns controlled by socially and economically disadvantaged individuals and women; and ``(B) historically Black colleges and universities and colleges and universities having a student body in which more than 20 percent of the students are Hispanic Americans or Native Americans. ``(2) Exception.--Paragraph (1) shall not apply to amounts paid to a unit of general local government to the extent the unit determines that the paragraph does not apply through a process that provides for public participation. ``(3) Definitions.--For purposes of this subsection-- ``(A) the term `small business concern' has the meaning such term has under section 3 of the Small Business Act; and ``(B) the term `socially and economically disadvantaged individuals' has the meaning such term has under section 8(d) of the Small Business Act and relevant subcontracting regulations promulgated pursuant to that section. ``(g) Nonsupplanting Requirement.-- ``(1) In general.--Funds made available under this chapter to units of local government shall not be used to supplant State or local funds, but will be used to increase the amount of funds that would, in the absence of funds under this chapter, be made available from State or local sources. ``(2) Base level amount.--The total level of funding available to a unit of local government for accounts serving eligible purposes under this chapter in the fiscal year immediately preceding receipt of a grant under this chapter shall be designated the `base level account' for the fiscal year in which grant is received. Grants under this chapter in a given fiscal year shall be reduced on a dollar for dollar basis to the extent that a unit of local government reduces its base level account in that fiscal year. ``Sec. 6702. Local Government Fiscal Assistance Fund ``(a) Administration of Fund.--The Department of the Treasury has a Local Government Fiscal Assistance Fund, which consists of amounts appropriated to the Fund. ``(b) Authorization of Appropriations.--There are authorized to be appropriated to the Fund-- ``(1) $270,000,000 for fiscal year 1996; ``(2) $283,500,000 for fiscal year 1997; ``(3) $355,500,000 for fiscal year 1998; ``(4) $355,500,000 for fiscal year 1999; and ``(5) $355,500,000 for fiscal year 2000. Such sums are to remain available until expended. ``(c) Administrative Costs.--Up to 2.5 percent of the amount authorized to be appropriated under subsection (b) is authorized to be appropriated for the period fiscal year 1995 through fiscal year 2000 to be available for administrative costs by the Secretary in furtherance of the purposes of the program. Such sums are to remain available until expended. ``Sec. 6703. Qualification for payment ``(a) In General.--The Secretary shall issue regulations establishing procedures under which eligible units of general local government are required to provide notice to the Secretary of the units' proposed use of assistance under this chapter. Subject to subsection (c), the assistance provided shall be used, in amounts determined by the unit, for activities under, or for activities that are substantially similar to an activity under, 1 or more of the following programs and the notice shall identify 1 or more of the following programs for each such use: ``(1) The Drug Abuse Resistance Education Program under section 5122 of the Elementary and Secondary Education Act of 1965. ``(2) The National Youth Sports Program under section 682 of the Community Services Block Grant Act (Public Law 97-35) as amended by section 205, Public Law 103-252. ``(3) The Gang Resistance Education and Training Program under the Act entitled `An Act making appropriations for the Treasury Department, the United States Postal Service, the Executive Office of the President, and certain Independent Agencies, for the fiscal year ending September 30, 1991, and for other purposes', approved November 5, 1990 (Public Law 101- 509). ``(4) Programs under title II or IV of the Job Training Partnership Act (29 U.S.C. 1601 et seq.). ``(5) Programs under subtitle C of title I of the National and Community Service Act of 1990 (42 U.S.C. 12571 et seq.) as amended. ``(6) Programs under the School to Work Opportunities Act (Public Law 103-239). ``(7) Substance Abuse Treatment and Prevention programs authorized under title V or XIX of the Public Health Services Act (43 U.S.C. 201 et seq.). ``(8) Programs under the Head Start Act (42 U.S.C. 9831 et seq.). ``(9) Programs under part A or B of chapter 1 of title I of the Elementary and Secondary Education Act of 1965. ``(10) The TRIO programs under part A of title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.). ``(11) Programs under the National Literacy Act of 1991. ``(12) Programs under the Carl Perkins Vocational Educational and Applied Technology Education Act (20 U.S.C. 2301 et seq.). ``(13) The demonstration partnership programs including the community initiative targeted to minority youth under section 203 of the Human Services Reauthorization of 1994 (Public Law 103-232). ``(14) The runaway and homeless youth program and the transitional living program for homeless youth under title III of the Juvenile Justice and Delinquency Prevention Act (Public Law 102-586). ``(15) The family support program under subtitle F of title VII of the Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 1148 et seq.). ``(16) After-school activities for school aged children under the Child Care and Development Block Grant Act (42 U.S.C. 9858 et seq.). ``(17) The community-based family resource programs under section 401 of the Human Services Reauthorization Act of 1994 (Public Law 103-232). ``(18) The family violence programs under the Child Abuse Prevention and Treatment Act Amendments of 1984. ``(19) Job training programs administered by the Department of Agriculture, the Department of Defense, or the Department of Housing and Urban Development. ``(b) Notice to Agency.--Upon receipt of notice under subsection (a) from an eligible unit of general local government, the Secretary shall notify the head of the appropriate Federal agency for each program listed in subsection (a) that is identified in the notice as a program under which an activity will be conducted with assistance under this chapter. The notification shall state that the unit has elected to use some or all of its assistance under this chapter for activities under that program. The head of a Federal agency that receives such a notification shall ensure that such use is in compliance with the laws and regulations applicable to that program, except that any requirement to provide matching funds shall not apply to that use. ``(c) Alternative Uses of Funds.-- ``(1) Alternative uses authorized.--In lieu of, or in addition to, use for an activity described in subsection (a) and notice for that use under subsection (a), an eligible unit of general local government may use assistance under this chapter, and shall provide notice of that use to the Secretary under subsection (a), for any other activity that is consistent with 1 or more of the purposes described in section 6701(a)(2). ``(2) Notice deemed to describe consistent use.-- Notice by a unit of general local government that it intends to use assistance under this chapter for an activity other than an activity described in subsection (a) is deemed to describe an activity that is consistent with 1 or more of the purposes described in section 6701(a)(2) unless the Secretary provides to the unit, within 30 days after receipt of that notice of intent from the unit, written notice (including an explanation) that the use is not consistent with those purposes. ``(d) General Requirements for Qualification.--A unit of general local government qualifies for a payment under this chapter for a payment period only after establishing to the satisfaction of the Secretary that-- ``(1) the government will establish a trust fund in which the government will deposit all payments received under this chapter; ``(2) the government will use amounts in the trust fund (including interest) during a reasonable period; ``(3) the government will expend the payments so received, in accordance with the laws and procedures that are applicable to the expenditure of revenues of the government; ``(4) if at least 25 percent of the pay of individuals employed by the government in a public employee occupation is paid out of the trust fund, individuals in the occupation any part of whose pay is paid out of the trust fund will receive pay at least equal to the prevailing rate of pay for individuals employed in similar public employee occupations by the government; ``(5) All laborers and mechanics employed by contractors or subcontractors in the performance of any contract and subcontract for the repair, renovation, alteration, or construction, including painting and decorating, of any building or work that is financed in whole or in part by a grant under this title, shall be paid wages not less than those determined by the Secretary of Labor in accordance with the Act of March 3, 1931 (commonly known as the Davis-Bacon Act); as amended (40 U.S.C. 276a-276a-5). The Secretary of Labor shall have the authority and functions set forth in reorganization plan of No. 14 of 1950 (15 FR 3176; 64 Stat. 1267) and section 2 of the Act of June 1, 1934 (commonly known as the Copeland Anti-Kickback Act) as amended (40 U.S.C. 276c, 48 Stat. 948). ``(5) the government will use accounting, audit, and fiscal procedures that conform to guidelines which shall be prescribed by the Secretary after consultation with the Comptroller General of the United States. As applicable, amounts received under this chapter shall be audited in compliance with the Single Audit Act of 1984; ``(6) after reasonable notice to the government, the government will make available to the Secretary and the Comptroller General of the United States, with the right to inspect, records the Secretary reasonably requires to review compliance with this chapter or the Comptroller General of the United States reasonably requires to review compliance and operations under section 6718(b); ``(7) the government will make reports the Secretary reasonably requires, in addition to the annual reports required under section 6719(b); and ``(8) the government will spend the funds only for the purposes set forth in section 6701(a)(2). ``(e) Review by Governors.--A unit of general local government shall give the chief executive officer of the State in which the government is located an opportunity for review and comment before establishing compliance with subsection (d). ``(f) Sanctions for Noncompliance.-- ``(1) In general.--If the Secretary decides that a unit of general local government has not complied substantially with subsection (d) or regulations prescribed under subsection (d), the Secretary shall notify the government. The notice shall state that if the government does not take corrective action by the 60th day after the date the government receives the notice, the Secretary will withhold additional payments to the government for the current payment period and later payment periods until the Secretary is satisfied that the government-- ``(A) has taken the appropriate corrective action; and ``(B) will comply with subsection (d) and regulations prescribed under subsection (d). ``(2) Notice.--Before giving notice under paragraph (1), the Secretary shall give the chief executive officer of the unit of general local government reasonable notice and an opportunity for comment. ``(3) Payment conditions.--The Secretary may make a payment to a unit of general local government notified under paragraph (1) only if the Secretary is satisfied that the government-- ``(A) has taken the appropriate corrective action; and ``(B) will comply with subsection (d) and regulations prescribed under subsection (d). ``Sec. 6704. State area allocations; allocations and payments to territorial governments ``(a) Formula Allocation by State.--For each payment period, the Secretary shall allocate to each State out of the amount appropriated for the period under the authority of section 6702(b) (minus the amounts allocated to territorial governments under subsection (e) for the payment period) an amount bearing the same ratio to the amount appropriated (minus such amounts allocated under subsection (e)) as the amount allocated to the State under this section bears to the total amount allocated to all States under this section. The Secretary shall-- ``(1) determine the amount allocated to the State under subsection (b) or (c) of this section and allocate the larger amount to the State; and ``(2) allocate the amount allocated to the State to units of general local government in the State under sections 6705 and 6706. ``(b) General Formula.-- ``(1) In general.--For the payment period beginning October 1, 1994, the amount allocated to a State under this subsection for a payment period is the amount bearing the same ratio to $5,300,000,000 as-- ``(A) the population of the State, multiplied by the general tax effort factor of the State (determined under paragraph (2)), multiplied by the relative income factor of the State (determined under paragraph (3)), multiplied by the relative rate of the labor force unemployed in the State (determined under paragraph (4)); bears to ``(B) the sum of the products determined under subparagraph (A) of this paragraph for all States. ``(2) General tax effort factor.--The general tax effort factor of a State for a payment period is-- ``(A) the net amount of State and local taxes of the State collected during the year 1991 as reported by the Bureau of the Census in the publication Government Finances 1990-1991; divided by ``(B) the total income of individuals, as determined by the Secretary of Commerce for national accounts purposes for 1992 as reported in the publication Survey of Current Business (August 1993), attributed to the State for the same year. ``(3) Relative income factor.--The relative income factor of a State is a fraction in which-- ``(A) the numerator is the per capita income of the United States; and ``(B) the denominator is the per capita income of the State. ``(4) Relative rate of labor force.--The relative rate of the labor force unemployed in a State is a fraction in which-- ``(A) the numerator is the percentage of the labor force of the State that is unemployed in the calendar year preceding the payment period (as determined by the Secretary of Labor for general statistical purposes); and ``(B) the denominator is the percentage of the labor force of the United States that is unemployed in the calendar year preceding the payment period (as determined by the Secretary of Labor for general statistical purposes). ``(c) Alternative Formula.--For the payment period beginning October 1, 1994, the amount allocated to a State under this subsection for a payment period is the total amount the State would receive if-- ``(1) $1,166,666,667 were allocated among the States on the basis of population by allocating to each State an amount bearing the same ratio to the total amount to be allocated under this paragraph as the population of the State bears to the population of all States; ``(2) $1,166,666,667 were allocated among the States on the basis of population inversely weighted for per capita income, by allocating to each State an amount bearing the same ratio to the total amount to be allocated under this paragraph as-- ``(A) the population of the State, multiplied by a fraction in which-- ``(i) the numerator is the per capita income of all States; and ``(ii) the denominator is the per capita income of the State; bears to ``(B) the sum of the products determined under subparagraph (A) for all States; ``(3) $600,000,000 were allocated among the States on the basis of income tax collections by allocating to each State an amount bearing the same ratio to the total amount to be allocated under this paragraph as the income tax amount of the State (determined under subsection (d)(1)) bears to the sum of the income tax amounts of all States; ``(4) $600,000,000 were allocated among the States on the basis of general tax effort by allocating to each State an amount bearing the same ratio to the total amount to be allocated under this paragraph as the general tax effort amount of the State (determined under subsection (d)(2)) bears to the sum of the general tax effort amounts of all States; ``(5) $600,000,000 were allocated among the States on the basis of unemployment by allocating to each State an amount bearing the same ratio to the total amount to be allocated under this paragraph as-- ``(A) the labor force of the State, multiplied by a fraction in which-- ``(i) the numerator is the percentage of the labor force of the State that is unemployed in the calendar year preceding the payment period (as determined by the Secretary of Labor for general statistical purposes); and ``(ii) the denominator is the percentage of the labor force of the United States that is unemployed in the calendar year preceding the payment period (as determined by the Secretary of Labor for general statistical purposes) bears to ``(B) the sum of the products determined under subparagraph (A) for all States; and ``(6) $1,166,666,667 were allocated among the States on the basis of urbanized population by allocating to each State an amount bearing the same ratio to the total amount to be allocated under this paragraph as the urbanized population of the State bears to the urbanized population of all States. In this paragraph, the term `urbanized population' means the population of an area consisting of a central city or cities of at least 50,000 inhabitants and the surrounding closely settled area for the city or cities considered as an urbanized area as published by the Bureau of the Census for 1990 in the publication General Population Characteristics for Urbanized Areas. ``(d) Income Tax Amount and Tax Effort Amount.-- ``(1) Income tax amount.--The income tax amount of a State for a payment period is 15 percent of the net amount collected during the calendar year ending before the beginning of the payment period from the tax imposed on the income of individuals by the State and described as a State income tax under section 164(a)(3) of the Internal Revenue Code of 1986 (26 U.S.C. 164(a)(3)). The income tax amount for a payment period shall be at least 1 percent but not more than 6 percent of the United States Government individual income tax liability attributed to the State for the taxable year ending during the last calendar year ending before the beginning of the payment period. The Secretary shall determine the Government income tax liability attributed to the State by using the data published by the Secretary for 1991 in the publication Statistics of Income Bulletin (Winter 1993-1994). ``(2) General tax effort amount.--The general tax effort amount of a State for a payment period is the amount determined by multiplying-- ``(A) the net amount of State and local taxes of the State collected during the year 1991 as reported in the Bureau of Census in the publication Government Finances 1990-1991; and ``(B) the general tax effort factor of the State determined under subsection (b)(2). ``(e) Allocation for Puerto Rico, Guam, American Samoa, and the Virgin Islands.-- ``(1) In general.--(A) For each payment period for which funds are available for allocation under this chapter, the Secretary shall allocate to each territorial government an amount equal to the product of 1 percent of the amount of funds available for allocation multiplied by the applicable territorial percentage. ``(B) For the purposes of this paragraph, the applicable territorial percentage of a territory is equal to the quotient resulting from the division of the territorial population of such territory by the sum of the territorial population for all territories. ``(2) Payments to local governments.--The governments of the territories shall make payments to local governments within their jurisdiction from sums received under this subsection as they consider appropriate. ``(3) Definitions.--For purposes of this subsection-- ``(A) the term `territorial government' means the government of a territory; ``(B) the term `territory' means Puerto Rico, Guam, American Samoa, and the Virgin Islands; and ``(C) the term `territorial population' means the most recent population for each territory as determined by the Bureau of Census. ``Sec. 6705. Local government allocations ``(a) Indian Tribes and Alaskan Natives Villages.--If there is in a State an Indian tribe or Alaskan native village having a recognized governing body carrying out substantial governmental duties and powers, the Secretary shall allocate to the tribe or village, out of the amount allocated to the State under section 6704, an amount bearing the same ratio to the amount allocated to the State as the population of the tribe or village bears to the population of the State. The Secretary shall allocate amounts under this subsection to Indian tribes and Alaskan native villages in a State before allocating amounts to units of general local government in the State under subsection (c). For the payment period beginning October 1, 1994, the Secretary shall use as the population of each Indian tribe or Alaskan native village the population for 1991 as reported by the Bureau of Indian Affairs in the publication Indian Service Population and Labor Force Estimates (January 1991). In addition to uses authorized under section 6701(a)(2), amounts allocated under this subsection and paid to an Indian tribe or Alaskan native village under this chapter may be used for renovating or building prisons or other correctional facilities. ``(b) Newly Incorporated Local Governments and Annexed Governments.--If there is in a State a unit of general local government that has been incorporated since the date of the collection of the data used by the Secretary in making allocations pursuant to sections 6704 through 6706 and 6708, the Secretary shall allocate to this newly incorporated local government, out of the amount allocated to the State under section 6704, an amount bearing the same ratio to the amount allocated to the State as the population of the newly incorporated local government bears to the population of the State. If there is in the State a unit of general local government that has been annexed since the date of the collection of the data used by the Secretary in making allocations pursuant to sections 6704 through 6706 and 6708, the Secretary shall pay the amount that would have been allocated to this local government to the unit of general local government that annexed it. ``(c) Other Local Government Allocations.-- ``(1) In general.--The Secretary shall allocate among the units of general local government in a State (other than units receiving allocations under subsection (a)) the amount allocated to the State under section 6704 (as that amount is reduced by allocations under subsection (a)). Of the amount to be allocated, the Secretary shall allocate a portion equal to \1/2\ of such amount in accordance with section 6706(1), and shall allocate a portion equal to \1/2\ of such amount in accordance with section 6706(2). A unit of general local government shall receive an amount equal to the sum of amounts allocated to the unit from each portion. ``(2) Ratio.--From each portion to be allocated to units of local government in a State under paragraph (1), the Secretary shall allocate to a unit an amount bearing the same ratio to the funds to be allocated as-- ``(A) the population of the unit, multiplied by the general tax effort factor of the unit (determined under paragraph (3)), multiplied by the income gap of the unit (determined under paragraph (4)), bears to ``(B) the sum of the products determined under subparagraph (A) for all units in the State for which the income gap for that portion under paragraph (4) is greater than zero. ``(3) General tax effort factor.--(A) Except as provided in subparagraph (C), the general tax effort factor of a unit of general local government for a payment period is-- ``(i) the adjusted taxes of the unit; divided by ``(ii) the total income attributed to the unit. ``(B) If the amount determined under subparagraphs (A) (i) and (ii) for a unit of general local government is less than zero, the general tax effort factor of the unit is deemed to be zero. ``(C)(i) Except as otherwise provided in this subparagraph, for the payment period beginning October 1, 1994, the adjusted taxes of a unit of general local government are the taxes imposed by the unit for public purposes (except employee and employer assessments and contributions to finance retirement and social insurance systems and other special assessments for capital outlay), as determined by the Bureau of the Census for the 1987 Census of Governments and adjusted as follows: ``(I) Adjusted taxes equals total taxes times a fraction in which the numerator is the sum of unrestricted revenues and revenues dedicated for spending on education minus total education spending and the denominator is total unrestricted revenues. ``(II) Total taxes is the sum of property tax; general sales tax; alcoholic beverage tax; amusement tax; insurance premium tax; motor fuels tax; parimutuels tax; public utilities tax; tobacco tax; other selective sales tax; alcoholic beverage licenses, amusement licenses; corporation licenses, hunting and fishing licenses; motor vehicle licenses; motor vehicle operator licenses; public utility licenses; occupation and business licenses, not elsewhere classified; other licenses, individual income tax; corporation net income tax; death and gift tax; documentary and stock transfer tax; severance tax; and taxes not elsewhere classified. ``(III) Unrestricted revenues is the sum of total taxes and intergovernmental revenue from Federal Government, general revenue sharing; intergovernmental revenue from Federal Government, other general support; intergovernmental revenue from Federal Government, other; intergovernmental revenue from State government, other general support; intergovernmental revenue from State government, other; intergovernmental revenue from local governments, other general support; intergovernmental revenue from local governments, other; miscellaneous general revenue, property sale-housing and community development; miscellaneous general revenue, property sale-other property; miscellaneous general revenue, interest earnings on investments; miscellaneous general revenue, fines and forfeits; miscellaneous general revenue, rents; miscellaneous general revenues, royalties; miscellaneous general revenue, donations from private sources; miscellaneous general revenue, net lottery revenue (after prizes and administrative expenses); miscellaneous general revenue, other miscellaneous general revenue; and all other general charges, not elsewhere classified. ``(IV) Revenues dedicated for spending on education is the sum of elementary and secondary education, school lunch; elementary and secondary education, tuition; elementary and secondary education, other; higher education, auxiliary enterprises; higher education, other; other education, not elsewhere classified; intergovernmental revenue from Federal Government, education; intergovernmental revenue from State government, education; intergovernmental revenue from local governments, interschool system revenue; intergovernmental revenue from local governments, education; interest earnings, higher education; interest earnings, elementary and secondary education; miscellaneous revenues, higher education; and miscellaneous revenues, elementary and secondary education. ``(V) Total education spending is the sum of elementary and secondary education, current operations; elementary and secondary education, construction; elementary and secondary education, other capital outlays; elementary and secondary education, to State governments; elementary and secondary education, to local governments, not elsewhere classified; elementary and secondary education, to counties; elementary and secondary education, to municipalities; elementary and secondary education, to townships; elementary and secondary education, to school districts; elementary and secondary education, to special districts; higher education-auxiliary enterprises, current operations; higher education-auxiliary enterprises, construction; higher education, auxiliary enterprises, other capital outlays; other higher education, current operations; other higher education, construction; other higher education, other capital outlays; other higher education, to State government; other higher education, to local governments, not elsewhere classified; other higher education, to counties; other higher education, to municipalities; other higher education, to townships; other higher education, to school districts; other higher education, to special districts; education assistance and subsidies; education, not elsewhere classified, current operations; education, not elsewhere classified, construction education, not elsewhere classified, other capital outlays; education, not elsewhere classified, to State government; education, not elsewhere classified, to local governments, not elsewhere classified; education, not elsewhere classified, to counties; education, not elsewhere classified, to municipalities; education, not elsewhere classified, to townships; education, not elsewhere classified, to school districts; education, not elsewhere classified, to special districts; and education, not elsewhere classified, to Federal Government. ``(VI) If the amount of adjusted taxes is less than zero, the amount of adjusted tax shall be deemed to be zero. ``(VII) If the amount of adjusted taxes exceeds the amount of total taxes, the amount of adjusted taxes is deemed to equal the amount of total taxes. ``(ii) The Secretary shall, for purposes of clause (i), include that part of sales taxes transferred to a unit of general local government that are imposed by a county government in the geographic area of which is located the unit of general local government as taxes imposed by the unit for public purposes if-- ``(I) the county government transfers any part of the revenue from the taxes to the unit of general local government without specifying the purpose for which the unit of general local government may expend the revenue; and ``(II) the chief executive officer of the State notifies the Secretary that the taxes satisfy the requirements of this clause. ``(iii) The adjusted taxes of a unit of general local government shall not exceed the maximum allowable adjusted taxes for that unit. ``(iv) The maximum allowable adjusted taxes for a unit of general local government is the allowable adjusted taxes of the unit minus the excess adjusted taxes of the unit. ``(v) The allowable adjusted taxes of a unit of general government is the greater of-- ``(I) the amount equal to 2.5, multiplied by the per capita adjusted taxes of all units of general local government of the same type in the State, multiplied by the population of the unit; or ``(II) the amount equal to the population of the unit, multiplied by the sum of the adjusted taxes of all units of municipal local government in the State, divided by the sum of the populations of all the units of municipal local government in the State. ``(vi) The excess adjusted taxes of a unit of general local government is the amount equal to-- ``(I) the adjusted taxes of the unit, minus ``(II) 1.5 multiplied by the allowable adjusted taxes of the unit; except that if this amount is less than zero then the excess adjusted taxes of the unit is deemed to be zero. ``(vii) For purposes of this subparagraph-- ``(I) the term `per capita adjusted taxes of all units of general local government of the same type' means the sum of the adjusted taxes of all units of general local government of the same type divided by the sum of the populations of all units of general local government of the same type; and ``(II) the term `units of general local government of the same type' means all townships if the unit of general local government is a township, all municipalities if the unit of general local government is a municipality, all counties if the unit of general local government is a county, or all unified city/county governments if the unit of general local government is a unified city/ county government. ``(4) Income gap.--(A) Except as provided in subparagraph (B), the income gap of a unit of general local government is-- ``(i) the number which applies under section 6706, multiplied by the per capita income of the State in which the unit is located; minus ``(ii) the per capita income of the geographic area of the unit. ``(B) If the amount determined under subparagraph (A) for a unit of general local government is less than zero, then the relative income factor of the unit is deemed to be zero. ``(d) Small Government Allocations.--If the Secretary decides that information available for a unit of general local government with a population below a number (of not more than 500) prescribed by the Secretary is inadequate, the Secretary may allocate to the unit, in lieu of any allocation under subsection (b) for a payment period, an amount bearing the same ratio to the total amount to be allocated under subsection (b) for the period for all units of general local government in the State as the population of the unit bears to the population of all units in the State. ``Sec. 6706. Income gap multiplier ``For purposes of determining the income gap of a unit of general local government under section 6705(b)(4)(A), the number which applies is-- ``(1) 1.6, with respect to \1/2\ of any amount allocated under section 6704 to the State in which the unit is located; and ``(2) 1.2, with respect to the remainder of such amount. ``Sec. 6707. State variation of local government allocations ``(a) State Formula.--A State government may provide by law for the allocation of amounts among units of general local government in the State on the basis of population multiplied by the general tax effort factors or income gaps of the units of general local government determined under sections 6705 (a) and (b) or a combination of those factors. A State government providing for a variation of an allocation formula provided under sections 6705 (a) and (b) shall notify the Secretary of the variation by the 30th day before the beginning of the first payment period in which the variation applies. A variation shall-- ``(1) provide for allocating the total amount allocated under sections 6705 (a) and (b); and ``(2) apply uniformly in the State. ``(b) Certification.--A variation by a State government under this section may apply only if the Secretary certifies that the variation complies with this section. The Secretary may certify a variation only if the Secretary is notified of the variation at least 30 days before the first payment period in which the variation applies. ``Sec. 6708. Adjustments of local government allocations ``(a) Maximum Amount.--The amount allocated to a unit of general local government for a payment period may not exceed the adjusted taxes imposed by the unit of general local government as determined under section 6705(b)(3). Amounts in excess of adjusted taxes shall be paid to the Governor of the State in which the unit of local government is located. ``(b) De Minimis Allocations to Units of General Local Government.--If the amount allocated to a unit of general local government (except an Indian tribe or an Alaskan native village) for a payment period would be less than $5,000 but for this subsection or is waived by the governing authority of the unit of general local government, the Secretary shall pay the amount to the Governor of the State in which the unit is located. ``(c) Use of Payments to States.--The Governor of a State shall use all amounts