of such State's general revenue received by its local governments for the three fiscal years of such State next preceding the date of enactment of this Act. A State may show to the satisfaction of the Secretary that it should not be required to meet this maintenance standard where there has been a transfer from local governments to the State of financial responsibility for direct support of facilities or services.

SECTION 601-QUALIFICATIONS

In general.—Section 601 provides that participation by any State in this Act is a waiver by any such State of its immunity from suit by its local governments pursuant to section 801. The Governor must give the Secretary such other assurances as he may require that the State and its local governments will use and account for such revenue sharing funds in accordance with this Act.

Governmental purposes

Subsection (a) provides that payments received pursuant to this Act shall be used for a State or local government's governmental bill. Accounting and disbursement

Subsection (b) provides that a State (and its local governments) shall use procedures necessary to assure property accounting for payments received under this Act and proper disbursement of amounts to which the local governments are entitled.

Compliance

Subsection (c) provides that a State and its local governments must provide the Secretary, on reasonable notice, access to, and the right to examine, any book, document, paper, or record that he may reasonably require for the purpose of reviewing compliance with this Act.

Reports

Subsection (d) provides that a State and its local governments shall make such reports to the Secretary as he may reasonably require, including any computations made pursuant to section 501.

SECTION 701-POWERS OF THE SECRETARY

(a) Regulations.-Subsection (a) of section 701 provides that the Secretary is authorized to prescribe reasonable rules and regulations for carrying out the provisions of this Act and to request from any Federal agency statistical data, reports, and such other information as he may deem necessary for the purpose of carrying out his functions under this Act.

(b) Failure of compliance by State government

In general.-Subsection (b) of section 701 provides that if, after giving reasonable notice and an opportunity for a hearing, the Secretary determines that a State has failed to comply with any provision of the Act (other than section 1101) or any rule or regulation issued pursuant thereto, he shall proceed as specified in this section.

Referral

The Secretary may refer the matter to the Attorney General with a recommendation that appropriate action be taken.

Notification

The Secretary may notify the Governor that if the State fails to take corrective action within 60 days from the date of a notification that it has failed to comply, further payments to such State in excess of the amounts to which the local governments of such State are entitled under section 501 will be withheld for the remainder of the fiscal year and for any subsequent fiscal year, until such time as the Secretary is satisfied that appropriate corrective action has been taken and that there will no longer be any failure to comply. Until he is satisfied the Secretary shall make no further payments of such amounts. Cancellation of payments

Section 701 also provides that if a State fails to comply for a period of six months after the expiration of a 60-day notice that its payments will be withheld. the Secretary shall cancel any payment withheld pursuant to subsection (b) for the current and for any subsequent.fiscal year.

Reapportionment of payments.-The Secretary shall reapportion any canceled payments to all other States then entitled to receive payments under section 401 of this act, in proportion to the original installments paid to such States for the fiscal year to which such canceled payments pertain. Amounts redistributed to States pursuant to section 701 are considered payments made pursuant to section 401.

(c) Payments to local governments.-Subsection (c) of section 701 provides that if payments to a State are withheld or canceled pursuant to this section, the Secretary shall continue to pay to such State the amount to which the local governments of such State are entitled under section 501 (computed as if the payment to such State had been made) and such State shall continue to distribute such amount among its local governments.

(d) Power of the Attorney General.-Subsection (d) provides that when a violation is referred to the Attorney General under section 701(b), he may bring a civil action in any appropriate United States district court for such relief as may be appropriate, including injunctive relief.

(e) Failure of compliance by local government

In general.-Subsection (e) of section 701 provides that the Governor shall be responsible for determining that local governments within his State have complied with the requirements of this act (other than section 1101) and the rules and regulations issued pursuant thereto.

Notice of failure of compliance.-Subsection (e) also provides that if after giving reasonable notice and an opportunity for a hearing to the chief executive officer of a local government, a Governor determines that a local government within his State has failed to comply, he shall notify such local government that if it fails to take corrective action within 60 days from the date of such notification, further payments to such local government will be withheld for the remainder of the fiscal year and for any subsequent fiscal year until such time as he is satisfied that appropriate corrective action has been taken.

Notification to Secretary. The Governor shall notify the Secretary of his

action.

(f) Cancellation of payments.-Subsection (f) provides that if a local government fails to comply for a period of 6 months after the expiration of the 60day notice, the Governor shall cancel any payments withheld for the current and for any subsequent fiscal year.

Reapportionment. The Governor shall reapportion and pay any cancelled payment to all other local governments of such State then entitled to receive payments pursuant to section 501, in proportion to the original payments made to such local governments for the fiscal year to which the cancelled payments pertain.

SECTION 801.-JUDICIAL REVIEW

(a) Filing of a petition for review. Subsection (a) of section 801 provides that any State or local government which receives a 60-day notice under section 701 pursuant to a determination that payments to it will be withheld may, within 60 days after receiving such notice, file with the U.S. Court of Appeals for the circuit in which such State or local government is located, or in the U.S. Court of Appeals for the District of Columbia, a petition for review of the Secretary's action. A copy of the petition shall be transmitted to the Secretary and the Attorney General.

(b) Objections to Secretary's action.-Subsection (b) of section 801 provides that no objection to the action of the Secretary shall be considered by the Court unless such objection has been urged before the Secretary.

(c) Jurisdiction of court.-Subsection (c) of section 801 provides that the Court may affirm or modify the Secretary's action, or set it aside, in whole or in part.

Findings of fact

The findings of fact by the Secretary, if supported by substantial evidence, shall be conclusive. If any finding is not supported by substantial evidence, the Court may remand the case to the Secretary to take further evidence, and the Secretary may thereupon make new findings of fact and may modify his previous actions.

(d) Review.-Subsection (d) of section 801 provides that the judgment of the Court shall be subject to review by the Supreme Court of the United States upon certiorari or certification, as provided in section 1254 of Title 28 of the United States Code.

(e) Cancellation of Payments.-Subsection (e) of section 801 provides that, in the event that judicial proceedings are instituted pursuant to this section, the Secretary shall, after the expiration of the six months period provided in section 701 or the point at which any judicial decision becomes final, whichever is later, cancel, reapportion, and pay any payments withheld pursuant to section 701 for the current and any subsequent fiscal year.

(f) The term "Secretary".-Subsection (f) of section 801 provides that, for the purposes of section 801, the term "Secretary" means the Secretary of the Treasury, or the Governor of a State, whichever is appropriate.

SECTION 901.-REPORT BY THE SECRETARY

In general.-Section 901 provides that the Secretary of the Treasury shall report to the President of the United States and the Congress, as soon as is practicable after the end of the fiscal year, on the operation of this Act during the preceding fiscal year.

SECTION 1001.-ADMINISTRATIVE EXPENSES

In general.-Section 1001 authorizes an appropriation for general administrative expenses required by this Act.

SECTION 1101.-NONDISCRIMINATION PROVISION

(a) In general. Subsection (a) of section 1101 provides that no person shall be excluded from participation in, be denied the benefits of, or be subjected to discrimination on the basis of race, color or national origin under any program or activity funded in whole or in part with general revenue sharing funds.

(b) (1) Failure of compliance by State

When the Secretary determines that a State has failed to comply with this section, he shall attempt to secure compliance by voluntary means.

If the Secretary determines that compliance cannot be secured by voluntary means, he may-(1) refer the matter to the Attorney General with a recommendation that appropriate civil action be instituted, (2) exercise the powers and functions provided by Title VI of the Civil Rights Act of 1964 (42 U.S.C. § 2000d), or (3) take any other action as may be provided by law.

(2) Failure of compliance by local government

When the Secretary determines that a local government has failed to comply with this section, he shall notify the Governor of the State in which the local government is located that the local government is in violation of this section and he shall request the Governor to secure compliance. If the State is unable or refuses to secure compliance, the Secretary may—(1) refer the matter to the Attorney General with a recommendation that appropriate action be instituted, (2) exercise the powers and functions provided by Title VI of the Civil Rights of Act of 1964 (42 U.S.C. § 2000d), or (3) take such other action as may be provided by law.

(d) Power of the attorney general

When a violation is referred to the Attorney General or whenever he has reason to believe that a State or local government is engaged in a pattern or practice in violation of provisions of this section, he may bring a civil action in any appropriate United States district court for such relief as may be appropriate, including injunctive relief.

SECTION 1201.-EFFECTIVE DATE

The effective date of this Act shall be the date of enactment. The first payment shall be for the period beginning October 1, 1971.

Mr. MAHON. We could spend days debating the pros and cons of the philosophical aspects of the revenue-sharing proposals in this budgetboth the "general" revenue sharing and the so-called "special" revenue-sharing plans. That isn't practicable at this time, but I must pursue the matter a bit further.

The Ways and Means Committee will handle the general revenue plan, and as I understand, some six separate legislative bills may be submitted by the administration dealing with the special revenue plan-one bill for each of the six major categories of programs proposed.

As to the figures, $5 billion is the most widely used sum for the first full year of the general revenue plan. The budget authority request and the estimated expenditure in this fiscal year 1972 budget are both at $3,750 million.

The first full year budget authority figure for the special revenue plan is $11.1 billion. The amounts both appropriationwise and expenditurewise-in this fiscal year 1972 budget are set forth on page 36 of the budget.

I will ask the clerk to insert in the record pertinent material on the plan from the budget and from the President's special message. (The information follows:)

REVENUE SHARING

The revenue sharing plan being proposed by the President is the cornerstone of his belief that we must revitalize the American system of government. The plan, with its general and special revenue sharing programs, will provide $16.1 billion for State and local governments in a way that will:

• assign both revenues and management discretion to those levels of government closest to the problems;

• alleviate the fiscal problems of State and local governments by providing additional unrestricted revenues through general revenue sharing and by eliminating the present matching requirements of the categorical grants being absorbed into special revenue sharing; and

• make State and local elected officials responsible for and capable of dealing with their problems. This is good government and good sense.

State and local expenditures have increased faster than their tax revenues. From 1948 to 1969 total State and local expenditures increased from $21 billion to $119 billion. Total revenues rose from $20 billion to $98 billion. The property and consumer taxes on which these governments primarily rely generate revenues that do not grow as fast as the economy. Substantial increases in tax rates have therefore been necessary to raise the required revenues. State and local government debt has also risen rapidly during this period-from $19 billion to $135 billion, an increase of over 600%. In 1971, States and localities face a revenue gap of $10 billion, despite generous Federal grants and more than 450 major tax increases which have been adopted in the past dozen years by State governments alone.

The Federal Government has attempted to respond to the fiscal problems of the State and local governments since the end of World War II. That response was a massive increase in Federal aid from $2 billion in 1948 to $24 billion in 1970, mainly in the form of specifically targeted grants. However, it is now evident that assistance in the form of categorical grants, even of great magnitude, has not removed State and local fiscal problems, and in some cases these problems have been aggravated.