State Tax Freedom Act

I 117TH CONGRESS 1ST SESSION H. R. 2189 To eliminate the prohibition on States and territories receiving Coronavirus State Fiscal Recovery funds from lowering taxes. IN THE HOUSE OF REPRESENTATIVES MARCH 26, 2021 Mr. BRADY (for himself, Mr. COMER, Mr. SMITH of Missouri, Mrs. WALORSKI, Mr. ARRINGTON, Mr. JORDAN, Mr. C. SCOTT FRANKLIN of Florida, Mr. ESTES, Mr. NUNES, Mr. SCHWEIKERT, Mr. WENSTRUP, Mr. HERN, Ms. HERRELL, Mr. BIGGS, Mr. GOSAR, Mr. KELLER, Ms. FOXX, Mr. HIG- GINS of Louisiana, Mr. HICE of Georgia, Mr. CLOUD, Mr. SESSIONS, Mr. GROTHMAN, Mr. LATURNER, and Mr. GIBBS) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Oversight and Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee con- cerned A BILL To eliminate the prohibition on States and territories receiv- ing Coronavirus State Fiscal Recovery funds from low- ering taxes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘State Tax Freedom 4 Act’’. 5 VerDate Sep 11 2014 01:06 May 21, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2189.IH H2189 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 2189 IH SEC. 2. REFUNDS TO OFFSET CORONAVIRUS STATE FISCAL 1 RECOVERY FUNDS ALREADY REPAID BY REA- 2 SON LOWERING TAXES. 3 (a) IN GENERAL.—Subchapter B of chapter 65 of the 4 Internal Revenue Code of 1986 is amended by inserting 5 after section 6423 the following new section: 6 ‘‘SEC. 6424. REFUNDS TO STATES TO OFFSET CERTAIN RE- 7 QUIRED REPAYMENTS OF CORONAVIRUS 8 STATE FISCAL RECOVERY FUNDS. 9 ‘‘(a) IN GENERAL.—As soon as practicable after any 10 specified State pays any specified repayment, the Sec- 11 retary shall make a payment to such specified State in 12 an amount equal to such specified repayment. 13 ‘‘(b) SPECIFIED REPAYMENT.—For purposes of this 14 section, the term ‘specified repayment’ means any repay- 15 ment required to be made under subsection (e) of section 16 602 of the Social Security Act by reason of subsection 17 (c)(2)(A) thereof. 18 ‘‘(c) SPECIFIED STATE.—The term ‘specified State’ 19 means any State, territory, or Tribal government which 20 is required to make to any specified repayment. 21 ‘‘(d) OTHER TERMS.—The terms ‘State’, ‘territory’, 22 and ‘Tribal government’ shall have the same respective 23 meanings as when used in section 602 of the Social Secu- 24 rity Act. 25 VerDate Sep 11 2014 01:06 May 21, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2189.IH H2189 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 2189 IH ‘‘(e) TREATMENT OF PAYMENTS.—For purposes of 1 section 1324 of title 31, United States Code, the payments 2 under this subsection shall be treated in the same manner 3 as a refund due from a credit provision referred to in sub- 4 section (b)(2) of such section.’’. 5 (b) CLERICAL AMENDMENT.—The table of sections 6 for subchapter B of chapter 65 of such Code is amended 7 by inserting after the item relating to section 6423 the 8 following new item: 9 ‘‘Sec. 6424. Refunds to States to offset certain required repayments of coronavirus State and local fiscal recovery funds.’’. (c) EFFECTIVE DATE.—The amendments made by 10 this section shall apply to repayments paid after the date 11 of the enactment of the American Rescue Plan Act of 12 2021. 13 SEC. 3. ELIMINATION OF PROHIBITION ON STATES RECEIV- 14 ING CORONAVIRUS STATE FISCAL RECOVERY 15 FUNDS FROM LOWERING TAXES. 16 (a) IN GENERAL.—Paragraph (2) of section 602(c) 17 of the Social Security Act, as added by section 9901 of 18 the American Rescue Plan Act of 2021, is amended to 19 read as follows: 20 ‘‘(2) FURTHER RESTRICTION ON USE OF 21 FUNDS.—No State or territory may use funds made 22 available under this section for deposit into any pen- 23 sion fund.’’. 24 VerDate Sep 11 2014 01:06 May 21, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2189.IH H2189 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 2189 IH (b) CONFORMING AMENDMENTS.—Section 602 of 1 such Act is further amended— 2 (1) in subsection (d)(2)(A), by striking ‘‘, in- 3 cluding, in the case of a State or a territory, all 4 modifications to the State’s or territory’s tax rev- 5 enue sources during the covered period’’; 6 (2) in subsection (e), by striking ‘‘such sub- 7 section,’’ and all that follows through the period and 8 inserting ‘‘such subsection.’’; and 9 (3) in subsection (g)— 10 (A) by striking paragraph (1); and 11 (B) by redesignating paragraphs (2) 12 through (7) as paragraphs (1) through (6), re- 13 spectively. 14 (c) EFFECTIVE DATE.—The amendments made by 15 this section shall apply with respect to repayments which 16 would (but for such amendments) be required to be paid 17 after the date of the enactment of this Act. 18 Æ VerDate Sep 11 2014 01:06 May 21, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H2189.IH H2189 pbinns on DSKJLVW7X2PROD with BILLS