ENTITLEMENTS OF LOCAL GOVERNMENTS.

SEC. 108. ENTITLEMENTS OF LOCAL GOVERNMENTS. (a) Allocation Among County Areas.— The amount to be allocated to the units of local government within a State for any entitlement period shall be allocated among the county areas located in that State so that each county area will receive an amount which tears the same ratio to the total amount to be allocated to the units of local government within that State as— (1) the population of that county area, multiplied by the general tax effort factor of that county area, multiplied by the relative income factor of that county area, bears to (2) the sum of the products determined under paragraph (1) for all county areas within that State. (b) Allocation to County Governments, Municipalities, Townships, Etc.— (1) County governments.— The county government shall be allocated that portion of the amount allocated to the county area for the entitlement period under subsection (a) which bears the same ratio to such amount as the adjusted taxes of the county government bear to the adjusted taxes of the county government and all other units of local government located in the county area. (2) Other units of local government.— The amount remaining for allocation within a county area after the application of paragraph (1) shall be allocated among the units of local government (other than the county government and other than township governments) located in that county area so that each unit of local government will receive an amount which bears the same ratio to the total amount to be allocated to all such units as— (A) the population of that local government, multiplied by the general tax effort factor of that local government, multiplied by the relative income factor of that local government, bears to (B) the sum of the products determined under subparagraph (A) for all such units. (3) Township governments.— If the county area includes one or more township governments, then before applying paragraph (2)— (A) there shall be set aside for allocation under subparagraph (B) to such township governments that portion of the amount allocated to the county area for the entitlement period which bears the same ratio to such amount as the sum86 Stat. 925 of the adjusted taxes of all such township governments bears to the aggregate adjusted taxes of the county government, such township governments, and all other units of local government located in the county area, and (B) that portion of each amount set aside under subparagraph (A) shall be allocated to each township government on the same basis as amounts are allocated to units of local government under paragraph (2). If this paragraph applies with respect to any county area for any entitlement period, the remaining portion allocated under paragraph (2) to the units of local government located in the county area (other than the county government and the township governments) shall be appropriately reduced to reflect the amounts set aside under subparagraph (A). (4) Indian tribes and Alaskan native villages.— If within a, county area there is an Indian tribe or Alaskan native village which has a recognized governing body which performs substantial governmental functions, then before applying paragraph (1) there shall be allocated to such tribe or village a portion of the amount allocated to the comity area for the entitlement period which bears the same ratio to such amount as the population of that tribe or village within that county area bears to the population of that county area. If this paragraph applies with respect to any county area for any entitlement period, the amount to be allocated under paragraph (1) shall be appropriately reduced to reflect the amount allocated under the preceding sentence. If the entitlement of any such tribe or village is waived for any entitlement period by the governing body of that tribe or village, then the provisions of this paragraph shall not apply with respect to the amount of such entitlement for such period. (5) Rule for small units of government.— If the Secretary determines that in any comity area the data available for any entitlement period are not adequate for the application of the formulas set forth in paragraphs (2) and (3)(B) with respect to units of local government (other than a county government) with a population below a number (not more than 500) prescribed for that county area by the Secretary, he may apply paragraph (2) or (3)(B) by allocating for such entitlement period to each such unit located in that county area an amount which beats the same ratio to the total amount to be allocated tinder paragraph (2) or (3)(B) for such entitlement period as the popillation of such unit bears to the population of all units of local government, in that county area to which allocations are made under such paragraph. If the preceding sentence applies with respect to any county area, the total amount to be allocated under paragraph (2) or (3)(B) to other units of local government in that county area for the entitlement period shall be appropriately reduced to reflect the amounts allocated under the preceding sentence. (6) Entitlement.— (A) In general.— Except as otherwise provided in this paragraph, the entitlement of any unit of local government for any entitlement period shall be the amount allocated to such unit under this subsection (after taking into account any applicable modification under subsection (c)). (B) Maximum and minimum per capita entitlement.— Subject to the provisions of subparagraphs (C) and (D),the per capita amount allocated to any county area or any unit of local government (other than a county government) within a86 Stat. 926 State under this section for any entitlement period shall not be less than 20 percent, nor more than 145 percent, of two-thirds of the amount allocated to the State under section 106, divided by tire population of that State. (C) Limitation.— The amount allocated to any writ of local government under this section for any entitlement period shall not exceed 50 percent of the sum of (i) such government’s adjusted taxes, and (ii) the intergovernmental transfers of revenue to such government (other than transfers to such government under this subtitle). (D) Entitlement less than zoo, or governing body waives entitlement.— If (but for this subparagraph) the entitlement of any unit of local government below the level of the county government— (i) would be less than $200 for any entitlement period ($100 for an entitlement period of 6 months), or (ii) is waived for any entitlement period by the governing body of such unit, then the amount of such entitlement for such period shall (in lieu of being paid to such unit) be added to, and shall become a part of, the entitlement for such period of the county government of the county area in which such unit is located. (7) Adjustment of entitlement.— (A) In general.— In adjusting the allocation of any comity area or unit of local government, the Secretary shall make any adjustment required under paragraph (6)(B) first, any adjustment required under paragraph (6)(C) next, and any adjustment required under paragraph (6)(D) last. (B) Adjustment for application of maximum or minimum per capita entitlement.— The Secretary shall adjust the allocations made under this section to county areas or to units of local governments in any State in order to bring those allocations into compliance with the provisions of paragraph (6)(B). In making such adjustments he shall make any necessary adjustments with respect to county areas before making any necessary adjustments with respect to units of local government. (C) Adjustment for application of limitation.— In any case in which the amount allocated to a unit of local government is reduced under paragraph (6)(C) by the Secretary, the amount of that reduction— (i) in the case of a unit of local government (other than a county government), shall be added to and increase the allocation of the county government of the county area in which it is located, unless (on account of the application of paragraph (6)) that county government may not receive it, in which case the amount of the reduction shall be added to and increase the entitlement of the State government of the State in which that unit of local government is located; and (ii) in the case of a county government, shall be added to and increase the entitlement of the State government of the State in which it is located. (c) Special Allocation Rules.— (1) Optional formula.— A State may by law provide for the allocation of funds among county areas, or among units of local government (other than county governments), on the basis of the population multiplied by the general tax effort factors of such areas or units of local government, on the basis of the population86 Stat. 927 multiplied by the relative income factors of such areas or units of local government, or on the basis of a combination of those two factors. Any State which provides by law for such a variation in the allocation formula provided by subsection (a), or by paragraphs (2) and (3) of subsection (b), shall notify the Secretary of such law not later than 30 days before the beginning of the first entitlement period to which such law is to apply. Any such law shall— (A) provide for allocating 100 percent of the aggregate amount to be allocated under subsection (a), or under paragraphs (2) and (3) of subsection (b): (B) apply uniformly throughout the State; and (C) apply during the period beginning on the first day of the first entitlement period to which it applies and ending on December 31, 1976. (2) Certification.— Paragraph (1) shall apply within a State only if the Secretary certifies that the State law complies with the requirements of such paragraph. The Secretary shall not certify any such law with respect to which he receives notification later than 30 days prior to the first, entitlement period during which it is to apply. (d) Governmental Definitions and Related Rules.— For purposes of this title— (1) Units of local government.— The term “unit of local government” means the government of a county, municipality, township, or other unit, of government below the State which is a unit of general government (determined on the basis of the same principles as are used by the Bureau of the Census for general statistical purposes). Such term also means, except for purposes of paragraphs (1), (2), (3), (5), (6)(C), and (6)(D) of subsection (b), and, except for purposes of subsection (c), the recognized governing body of an Indian tribe or Alaskan native village which performs substantial governmental functions. (2) Certain areas treated as counties.— In any State in which any unit of local government (other than a county government) constitutes the next level of government below the State government level, then, except as provided in the next sentence, the geographic area of such unit of government shall be treated as a county area (and such unit of government shall be treated as a county government) with respect to that portion of the State’s geographic area. In any State, in which any county area is not governed by a county government but contains two or more units of local government, such units shall not be treated as county governments and the geographic areas of such units shall not be treated as county areas. (3) Townships.— The term “township” includes equivalent subdivisions of government having different designations (such as “towns”), and shall be determined on the basis of the same principles as are used by the Bureau of the Census for general statistical purposes. (4) Units of local government located in larger entity.— A unit of local government shall be treated as located in a larger entity if part or all of its geographic area is located in the larger entity. (5) Only part of unit located in larger entity.— If only part of a unit of local government is located in a larger entity, such part shall lie treated for allocation purposes as a separate unit of86 Stat. 928 local government, and all computations shall, except as otherwise provided in regulations, be made on the basis of the ratio which the estimated population of such part bears to the population of the entirety of such unit. (6) Boundary changes, governmental reorganization, etc.— If, by reason of boundary line changes, by reason of State statutory or constitutional changes, by reason of annexations or other governmental reorganizations, or by reason of other circumstances, the application of any provision of this section to units of local government does not carry out the purposes of this subtitle, the application of such provision shall be made, under regulations prescribed by the Secretary, in a manner which is consistent with such purposes.