Attached is the proposed DC MOU. This is being circulated for interagency
and EXOP review under LRM# MJG56. Please provide any comments to Jill
Gibbons by COB Tuesday, April 8th. Thanks
---------------------- Forwarded by M. Jill Gibbons/OMB/EOP on 04/07/97
07:15 PM ---------------------------
Scott Quehl
04/07/97 07:07:20 PM
Record Type: Record
To: See the distribution list at the bottom of this message
cc:
Subject: DC MOU: 4. 7. 97 Drafts
The attached drafts of the MOU will be sent to agencies and EXOP tonight
for comments due tomorrow cob. The first draft reflects new language from
the EDC working group in Section IV and revised conditions for the
District in Section V. The second draft reflects all of the legislative
and MOU condition language, which Treasury would like to have circulated
as part of the MOU.
Scott
Message Sent
TO:~~--~~~--~---------------------------------------------
Michael Deich/OMB/EOP
G. E. DeSeve/OMB/EOP
Carol Thompson-Cole/OMB/EOP
James J. Jukes/OMB/EOP
M. Jill Gibbons/OMB/EOP
Daniel M. Tangherlini/OMB/EOP
Patricia E. Romani/OMB/EOP
Ellen S. Seidman/OPD/EOP
HexDump Conversioil
Draft 4. 7. 1997
This draft reflects only the District's conditions for the Economic Development section under
the MOU.
MEMORANDUM OF UNDERSTANDING BETWEEN:
THE DISTRICT OF COLUMBIA
Marion Barry, Jr., Mayor
Charlene Drew Jarvis, Council Chairperson Pro Tempore
DISTRICT OF COLUMBIA FINANCIAL RESPONSIBILITY AND MANAGEMENT
ASSISTANCE AUTHORITY
Andrew Brimmer, Chairman
OFFICE OF MANAGEMENT AND BUDGET, EXECUTIVE OFFICE OF THE
PRESIDENT
Franklin D. Raines
Chair, Federal District of Columbia Task Force
Dated: - - - - - - - -
SECTION I. PURPOSE Hex-Dump Conversioi1 .
The parties respect the Home Rule Center as the fundamental basis for governance in the
District. The purpose of this memorandum is to strengthen Home Rule and to agree to work
toward the revitalization of the District of Columbia.
This memorandum is intended only to improve the management of, and the relationship between,
the District of Columbia and the Federal government, and is not intended to and does not create
any right, benefit, trust or responsibility, substantive or procedural, enforceable at law or equity
by a party against the United States, its agencies, its officers, or any person.
SECTION II. PUBLIC LAW 104-8, "THE DISTRICT OF COLUMBIA FINANCIAL
RESPONSIBILITY AND MANAGEMENT ASSISTANCE ACT OF
1995"
The parties recognize the effectiveness of PL 104-8 and dedicate themselves to the cooperative
implementation of its provisions. Among these provisions:
Finance.
For each Fiscal Year for which the District is in a control period, the Mayor shall develop
and submit to the Financial Responsibility and Management Assistance Authority (the
"Authority") and District Council a Budget and Financial Plan for the applicable Fiscal
Year and the next three Fiscal Years.
Expenditures for the District government for each Fiscal Year, beginning in FY1999, may
not exceed revenues for that Fiscal Year.
During Fiscal Years 1996, 1997, and 1998, the District government shall make
continuous, substantial progress toward equalizing its expenditures and revenues.
The District may not borrow money during a control year unless the Authority provides
prior certification that the borrowing is consistent with the financial plan and budget for
the year.
For the Secretary of the Treasury to make a short-term advance to the District, an
Authority-approved Budget and Financial Plan must be in place, the Mayor must submit a
requisition for an advance including a schedule for timing and amounts for advances, the
Inspector General must certify the accuracy of the information provided to the Secretary,
and the Secretary determines -- and the Authority certifies -- that the District lacks market
access on reasonable terms, and that the Treasury has reasonable assurance of being
reimbursed.
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Management.
An Office of the Chief Financial Officer will be established in the Executive Branch of
the District government, headed by the Chief Financial Officer, and including the Office
of the Treasurer, Controller, Budget, Financial Information Services, and Finance and
Revenue.
An Office of the Inspector General will be established in the Executive Branch of the
District government.
During the control period, the Mayor shall submit proposed contracts and leases to the
Authority for review, and cannot enter into a contract or a lease unless the Authority
determines it is consistent with the Budget and Financial Plan.
The Authority may submit recommendations to the Mayor, the Council, the President,
and
Congre
ss on
actions
the
District
or
Federal
govern
ments
may
take to
ensure
the
District
's
compli
ance
with a
Budget
and
Financi
al Plan
and
promot
e its
financi
al
stabilit
y,
2
Hex-Dump COiive:'sioil
manag
ement
respon
sibility
and
service
deliver
y
efficie
ncy.
The
Mayor
and the
Counci
I shall
submit
a
statem
ent to
the
Author
ity,
Preside
nt, and
Congre
ss
providi
ng
notice
as to
whethe
r the
District
will
adopt
the
recom
mendat
ions.
An
affirma
tive
statem
ent
must
include
3
Hex-Dump COilve;'sioil .
a
written
imple
mentati
on
plan,
with
perfor
mance
measur
es and
a
schedu
Ie for
audit
compli
ance,
If the
statem
ent
rejects
the
recom
mendat
ions,
the
Author
ity may
vote to
take
what
actions
it
deems
approp
riate,
after
consult
ing
with
Govern
mental
Affairs
Comm
ittee of
the
4
HexD~mp COlii';;;"~iOil . Senate
and the
House
Govern
ment
Refor
m and
Oversi
ght
Comm
ittee.
SECTION III .. GENERAL PROVISIONS
1. Balanced Budget. PL 104-8 requires that the District balance its budget by FY1999.
By this agreement, the District agrees to present and/or approve a balanced budget for the
Fiscal Year beginning October 1, 1997.
2. Agreement to be Bound. The District agrees to be bound by and to use its offices and
best efforts to implement this agreement.
SECTION IV. SUBMISSION OF LEGISLATION & FEDERALLY ASSUMED
FUNCTIONS
On behalf of the Executive Office of the President, the Director of the Office
Management and Budget intends to recommend the submission of legislation to the Congress
that is consistent with the National Capital Revitalization and Self Government Improvement
Plan (the "Plan") announced by the President on January 14, 1997.
Once implemented, the Plan will provide the District substantial relief from its operating
expenditures, relief which will grow over time. It will also invest considerable resources to
improve the District's criminal justice systems and capital infrastructure. If this legislation is
enacted, the Federal government will undertake the functions described below. The Federal
government will not undertake a function until the District government meets the conditions for
that function, described in Section V.
1. Medicaid. The Federal government will increase its share of the District's Medicaid
payments to 70 percent, thereby reducing the District's share to 30 percent. The
Department of Health and Human Services will continue to provide more intensive
technical assistance to help the District improve the management of its Medicaid
program.
2. Pensions. The Federal government will take financial and administrative
responsibility for virtually all pension benefits accrued under the plans for all active
5
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and retired police and firefighters, and teachers, and will take full responsibility for
the pensions of judges. The bulk of the assets of the retirement plans will be
transferred to the Federal government. The Federal government will pledge its full faith
and credit to meet its responsibilities to pay these benefits. Benefits payable to current
employees will be "frozen" based on service earned as of the date the legislation is
introduced, and the Federal government will pay future retirement, death and some of
their disability benefits to the extent they are earned based on the frozen service. While
the Federal government will not be responsible for benefits earned during future years of
service by members of the current retirement programs (other than judges), these
members will get the benefit of pay increases on the frozen benefits. Frozen benefits will
continue to be subject to cost-of-Iiving adjustments under the terms of the existing
programs. All future employee contributions (except for judges) will be paid into the
new plans. The Secretary of the Treasury will appoint a third-party Trustee to administer
the existing plans and manage pension assets.
3. Intermediate-Term and Short-Term Lending. The United States Treasury will provide
an intermediate-term loan (IS-year term) to assist the District to eliminate its accumulated
fund balance deficit. The Treasury may also provide inter-year loans for liquidity
purposes. The combined amount of the intermediate-term and inter-year liquidity loans
may not exceed $500 million. Both ofthese loans will have an interest rate of Treasuries
of comparable maturity plus 118th of one percent. The Treasury may also provide
intra-year loans for the purposes of liquidity.
4. Criminal Justice. The Federal and District governments will develop and
implement a transition plan which transfers responsibility over a three-to-five-year
period for incarcerating felons. The Federal Bureau of Prisons (BOP) will house
adult felons convicted of D.C. Code violations and designated in the same manner as
Federal inmates in correctional institutions operated or contracted by the BOP.
This will occur after BOP's capacity has been increased through new construction
at Lorton and other locations selected by BOP, and through renovation of existing
facilities at Lorton, Virginia. After October 1,2001, the BOP will also designate to
Federal correctional institutions sentenced D.C. felons in the custody of the D.C.
Department of Corrections, as the Director of BOP deems appropriate, in
accordance with available capacity, until they have all been designated to Federal
institutions. The BOP will accept employment applications from persons currently
employed by the D.C. Department of Corrections for existing BOP vacancies, and
will process such applications in accordance with existing Federal procedures and
standards.
The Attorney General will select, after consultation with the Mayor, the D.C. City
Council, and the Chair of the D.C. Financial Responsibility and Management
Assistance Authority, a Trustee to oversee operations of the D.C. Department of
Corrections until the BOP assumes responsibility for all incarcerated District felons.
The Federal and District governments will develop and implement a framework for
changes to the D.C. sentencing system, including the abolition of parole, institution of
6
H~xDump COJliI~;'3iun
detenninate guideline sentencing and the enactment of the new mandatory minimum drug
sentences, which are a prerequisite for the Federal Government accepting responsibility
for the incarceration of felons convicted of D.C. Code violations. The sentencing system
will be enacted within 24 months, or the Federal Government will not be required to
obligate any funds appropriated for the purpose of incarcerating D.C. Code felons and
will have no responsibility for housing such persons.
Consulting with representatives of the Federal and District judiciary, the Federal
and District governments will also develop and implement a transition plan
transferring responsibility for D.C. Code violation offender pretrial, public defender,
parole, probation, and post-adjudication/post-conviction adult offender supervision
from the District government to the Federal government over a three-to-five-year
period. The United States Parole Commission will continue to assume
responsibility for all D.C. felons housed in Federal Correctional Institutions who
have sentences subject to provisions of parole.
The Federal government will take direct responsibility (in consultation with the
D.C. judiciary) for funding the D.C. court system and related services (including
plans relating to retirement benefits and other personnel matters), and establishing
an independent budgetary, financial oversight, and administrative support system for the
D.C. courts. The Courts will remain self-managed.
5. Economic Development. The Federal government will make tax benefits available to the
District both to encourage hiring by finns in the District of residents of distressed areas in
D.C., and to encourage economic revitalization throughout the District.
An economic development corporation (EDC) will be established as a non-Federal public
authority in the District of Columbia, with the mission of revitalizing the nation's capital
city and benefitting the District's residents and businesses. The Federal government
intends (a) to capitalize the EDC with a $50 million grant; (b) provide $250 million in tax
incentives to encourage business investment both downtown and in distressed
communities, and to help businesses increase employment of residents of the District of
Columbia; and (c) improve the District government's borrowing authority by removing
impediments in its borrowing statutes so that the District government will have the same
ability to finance projects as other cities have.
6. Infrastructure. The National Capital Infrastructure Commission (NCIC) will be
established to assume certain State-like responsibilities for selection, funding, and
oversight of National Highway System capital projects (including roads, bridges, and
transit) and NHS operations and maintenance projects (excluding police authority,
National Park Service roads, and transit) within the District. The NCIC will be governed
by a five-member board to be composed of three representatives from the District and one
representative from the Department of Transportation and one representative from the
Economic Development Corporation. Contract administration will be perfonned by the
Federal Highway Administration. In addition, eligibility for Surface Transportation
Program (STP) funds will be expanded to include local public roads. T9 support NCIC
7
Hex-Dump C;o~vi;;sioil .
projects, the National Capital Infrastructure Fund (NCIF) will be established in FYI998
with $108 million for road, bridge, and transit capital projects. An additional $17
million will be provided in FY1998-03 for NHS operations and maintenance.
Federal-aid funds for the District's NHS, Interstate Maintenance, and Bridge programs
will be transferred to the NCIC in FYI998-03. The Administration also proposes that
the NCIC be authorized to accepted contributions from other sources.
7. Personal Income Tax Collection. At the request of the District, the Internal Revenue
Service will assume responsibility from the District of Columbia for administering and
enforcing D.C. individual income and payroll taxes. This would include the processing
of those taxes paid by individuals, as well as the payment of related employment and
payroll taxes. The District government will maintain processing and collection
responsibility for all other taxes collected for the District.
Upon enactment of the legislation to implement the Plan, the parties to the MOU will
review the legislation and confer on whether any revisions to the MOU are necessary to ensure
its consistency with the legislation.
SECTION V. DISTRICT CONDITIONS
The District government understands that it will be expected to undertake significant
actions as part of the National Capital Revitalization and Self-Government Improvement Plan
(the "Plan"). This section sets out the actions that the District government agrees to take as a
condition of the Federal government actions under the legislation to carry out the Plan.
1. Medicaid. The District agrees to develop and implement plans satisfactory to the
Secretary of Health and Human Services to accomplish each of the following:
1.1. To develop an effective system for the identification and collection of amounts owed by
third parties for medical care and services furnished to individuals under the District's
Medicaid plan; and
1.2. To ensure the timely audit and settlement of cost reports of institutional providers
(including hospitals, nursing facilities, and intermediate care facilities for the mentally
retarded) under the District's Medicaid plan, including prompt elimination of the backlog
of such audits and settlements.
1.3. To develop and implement, directly or under contract, a comprehensive health care
management information system that will standardize data base development and
management, and integrate health care delivery with a public health data system. Such a
system shall at a minimurnhave the capacity to accomplish the following functions:
1.3. I. To assist eligibility verification;
1.3.2. To create utilization and financial profiles of providers;
8
HeX-DJmp (;Oil'v';;;;;;ioil
1.3.3. To identify services (including preventive services) received by program beneficiaries;
1.3.4. To monitor the claims processing and other Medicaid operations of the fiscal agent;
1.3.5. To monitor the quality of care provided under managed care contracts; and
1.3.6. To coordinate information management with respect to the District's Medicaid program
and other public health programs and functions.
1.4. To develop a comprehensive behavioral managed health care system, which combines
substance abuse and mental health grant programs. Development of such a plan shall
include a pilot project for better evaluation of in-patient acute psychiatric patient
admissions, and the purchase of a comprehensive, risk-based system for managed care of
behavioral health which covers all eligible populations and services.
2. Pensions. The District Government agrees (see Appendix One for definitions):
2.1. To establish a Replacement Plan for the current Retirement Program
2.1.1. The Replacement Plan will cover all existing and new employees (except for judges) who
are, or would be, covered by the Retirement Program, if the Retirement Program
continued unchanged, and will be established by the date specified in legislation.
2.1.2. To the extent required by current law, the Replacement Plan will be established through
collective bargaining.
2.1.3. After the Adoption Date, the Replacement Plan may not be amended in any manner that
materially increases the cost of the Replacement Plan without provision of a mechanism
for funding such increases, in accordance with Section 2.2.
2.2 That the Replacement Plan will use appropriate funding methods and costs that do not
exceed the sum available in the District of Columbia Budget and Financial Plan.
2.2.1. The cost of any defined benefit plan will be determined in accordance with the
measurement standards of Governmental Accounting Standards Board Statement No. 27
(GASB 27), with the following additional restrictions:
2.2.1.1. funding methods will be limited to entry age or frozen entry age; and
2.2.1.2. amortization of any unfunded actuarial liability is required over no more than 30
years on a closed basis.
2.2.2. The cost of any defined contribution plan is the employer contribution required under the
provisions of the plan.
9
Hex-Dump COiivi;;3ioi1 -
2.2.3. All costs of the Replacement Plan must be reflected in the D.C. Budget and Financial
Plan in accordance with the standards described above.
2.2.4. All costs of the Replacement Plan must be paid in accordance with the D.C. Code 1981,
Title 1, Chapter 7, subchapter III.
2.2.5. Contributions of all existing and new employees (except judges) will be paid into the
Replacement Plan.
2.3. To transfer copies of books and records of the Retirement Program and the Fund and to
be financially responsible for errors and omissions, including all necessary records of
individual employees.
2.3.1. Copies of any books and records pertaining to the Retirement Program and the Fund
required by the Secretary of the Treasury or the Trustee must be made available to the
Secretary or Trustee within 30 days after the Secretary or Trustee requests them.
2.3.2. The District will reimburse the Trustee for all costs, including benefit payments, resulting
from errors or omissions in the books and records pertaining to the Fund.
2.4. To transfer assets from the Fund
2.4.1. Any and all assets of the Fund required to be transferred to the Trustee shall be
transferred on the Transfer Date in a form specified by the Trustee.
2.4.2. The District of Columbia Retirement Board will administer the retirement programs until
the Trustee assumes these responsibilities. The District government will reimburse the
Fund for any benefits paid out of the Fund between the Freeze Date and the transfer date
that exceed payments that would have been the responsibility of the Federal government
if the transfer had occurred simultaneously with the freeze.
3. Intermediate-Term and Sltort-Term Lending. The District agrees that:
3.1. Any intermediate-term loan to eliminate the accumulated fund balance deficit would be
for no more than 15 years, with an interest rate of Treasuries of comparable maturities
plus 1/8 of one percent.
3.2. Any inter-year loan for liquidity purposes and/or intermediate-term loan to eliminate the
accumulated fund balance deficit will not exceed the amount of $500 million.
3.3. The Secretary of the Treasury may require early reimbursement if the District can obtain
credit on the commercial market on favorable terms for refinancing as determined by the
Secretary.
10
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3.4. The District must be in compliance with the approved Budget and Financial Plan
before any lending can occur.
3.5. The District must provide a requisition for an advance of funds and a promissory
note to reimburse the Treasury for the advance.
3.6. The Financial Responsibility and Management Assistance Authority must certify
that there is an approved Budget and Financial Plan in effect for the District for the
Fiscal Year that the requisition is made.
3.7. The Secretary of the Treasury must receive certification that the District is unable
to obtain enough credit elsewhere to meet the District government's need for
financing.
3.8. The Federal government will work with the District government to amend its debt limit
provisions in order to allow implementation of the District's capital plan in an orderly and
sustainable manner.
4. Criminal Justice. This subsection of the Memorandum of Understanding (MOU)
between the Federal government and the District of Columbia government (D.C.) outlines the
offer of the Federal government, wholly on appropriations and D.C.'s acceptance and satisfaction
of all other conditions and predicates identified and described herein, to assist D.C. by assuming
responsibility for certain traditionally State responsibilities and the conditions that D.C. must agree
to and fulfill should it choose to accept that offer as it relates to criminal justice functions,
including, but not limited to, certain defendant and offender services, corrections and the
judiciary. The MOU sets forth the expectations and responsibilities relating to proposed
changes and reforms in the D.C. criminal justice and judicial system and the procedures
(including new statutory and regulatory provisions) the Federal Government and D.C. will use to
implement the MOU.
In particular, the MOU is designed to:
4.i. provide a framework for changes to the D.C. sentencing system, including the abolition
of parole, institution of determinate guideline sentencing and the enactment of the new
mandatory minimum drug sentences, which are a prerequisite for the Federal
Government accepting responsibility for the incarceration of felons convicted of D.C.
Code violations.
4.ii. ensure that such sentencing system is to be enacted within 24 months, or the Federal
Gover~ment will not be required to obligate any funds appropriated for the purpose of
incarcerating D.C. Code felons and will have no responsibility for housing such persons.
11
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4.iii. ensure an appropriate transfer and transition of responsibility from D.C. to the Federal
Government for pretrial, public defender, parole, probation, and post-conviction
supervision and services for adult D.C. Code defendants and offenders.
4.iv. ensure an appropriate transfer of responsibility from D.C. to the Federal Government for
the incarceration of sentenced felons convicted of D.C. Code violations, assuming
sufficient resources are provided by Congress to develop necessary bed space to
accommodate the resulting increase in the Federal Bureau of Prisons (BOP) population
and D.C. Code violators are designated in the same manner as Federal inmates.
4.v. provide the basis for establishing an independent budgetary, financial oversight, and
administrative support system for the D.C. courts.
4.vi. define the respective roles of the D.C. and Federal Governments in relation to lawsuits
and resulting liability, as they may be affected by the reforms agreed to in this MOU.
4.vii. ensure the development by D.C. and the Federal Governments of transition plans
4.vii.a. (in consultation with the Federal and D.C. judiciaries) for transferring
responsibility for pretrial, public defender, parole, probation, and
post-conviction supervision and services for adult D.C. Code defendants
and offenders over a transition period of one to three years from the
enactment of the federal implementing legislation.
4.vii.b. for transferring responsibility for incarcerating sentenced felons convicted of D.C.
code violations over a period of approximately three to five years.
4.vii.c. (in consultation with the D.C. judiciary) for transferring responsibility for funding
the D.C. court system and related services, including plans relating to
retirement benefits and other personnel matters.
4.vii.d. for transferring control of the property at Lorton, Virginia to the Federal
Government.
4.1. Administration of District of Columbia Pretrial, Parole, Probation, and Post-Conviction
Offender Supervision, Housing, and Public Defender Services
4.1.1. Federal Government Responsibilities
4.1.1.1. After consultation with the Mayor of D.C., representatives of the D.C. Council,
the Chairman of the D.C. Financial Responsibility and Management
Assistance Authority (Financial Authority), and members of the affected
12
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Federal and D.C. judiciaries, the Attorney General will select an Offender
Supervision, Defender and Courts Services Trustee to:
a) assure the smooth transition and continued operations of D.C.'s
Pretrial Services Agency and Public Defender Service;
b) implement an orderly shutdown of the D.C. Board of Parole in
coordination with the U.S. Parole Commission and the Superior
Court for the District of Columbia;
c) establish and operate a new D.C. Offender Supervision, Defender
and Courts Services Agency; and
d) accomplish, without disruption of services, the transfer of the adult
offender probation supervision functions of the D.C. Courts Social
Services Division,
until the Federal Government assumes responsibility for each of these
functions.
4.1.1.2. During the transition period, under the general auspices of the Trustee, the D.C.
Pretrial Services Agency will continue uninterrupted to provide services
and support for both juvenile and adult D.C. Code and Federal defendants
and offenders to the U.S. District Court for the District of Columbia, the
U.S. Court of Appeals for the District of Columbia, the Superior Court for
the District of Columbia, and the District of Columbia Court of Appeals.
The Director of Pretrial Services may employ such personnel as shall be
necessary pursuant to procedures and standards established by the Trustee
to facilitate transition to Federal status.
4.1.1.3. Following the transition period, the D.C. Pretrial Services Agency and the
D.C. Public Defender Service will be organizationally housed in a new
Federal D.C. Offender Supervision, Defender and Courts Services Agency.
4.1.1.4. The D.C. Board of Parole will be terminated after the Trustee establishes a
transition agency with the capacity to provide adequate field supervision to
adult D.C. offenders on parole, probation or supervised release, and the
U.S. Parole Commission is capable of carrying out parole functions for
D.C. Code felony offenders. Subject to appropriations, the D.C. Board
of Parole's functions and jurisdiction vis a vis felon parolees will be
assumed by the U.S. Parole Commission. Similarly, its functions and
jurisdiction vis a vis misdemeanant parolees will be assumed by the D.C.
court system. Substantive D.C. law will continue to apply to parole
13
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determinations for all D.C. Code offenders. The District of Columbia
Superior Court Division of Social Services will continue to provide
supervision to D.C. Code juvenile offenders and will assume responsibility
for the supervision of misdemeanant parolees.
4.1.1.5. The Trustee will accept employment applications for new offender field
supervIsIon positions in the transition agency from persons currently
employed by the D.C. court system and the D.C. Board of Parole.
Applications will be processed in accordance with procedures and
standards established by the Trustee to facilitate transition to subsequent
Federal law enforcement employment in the successor Offender
Supervision, Defender and Courts Services Agency. Positions will be
advertised prior to hiring.
4.1.1.6. During the transition period, the Federal Government will transfer funds for the
Pretrial Services Agency, the Public Defender Service and the supervision
of D.C. offenders to the Trustee. The head of any Federal department or
agency may provide the services of any personnel to the Trusteeship to
assist in carrying out the Trustee's duties.
4.1.1.7. During the transition period, under the general auspices of the Trustee, the Public
Defender Service will continue uninterrupted to provide services to D.C.
Code defendants and the D.C. court system. The Director of the Public
Defender Service may employ such personnel as shall be necessary
pursuant to procedures and standards established by the Trustee to facilitate
transition to Federal status.
4.1.1.8. During the transition period, the employees of and funds allocated to the Trustee
and the agencies for which the Trustee is responsible shall not be counted
against the personnel and budget ceilings imposed on D.C. by the
Financial Authority or Congress.
4.1.1.9. The U.S. Marshals Service (USMS) will contract with D.C., at a mutually
agreeable rate, to obtain space not needed by D.C. at D.C.'s Correctional
Treatment Facility (CfF), to house persons in the custody of the USMS
for whom the USMS requires bed space in the D.C. area.
4.1.1.10. Subject to appropriations, the Federal Government will provide funds to
support the D.C. Board of Parole functions during the one to three year
transition period culminating in the termination of the D.C. Board of
Parole.
4.1.2. Djstrict of Co/umbja Responsjbj/jfjes
14
He;.;-DiJm~ GO,Tv';':3Iilil
4.1.2.1. The District of Columbia will maintain responsibility for all D.C. Code juvenile
offenders not prosecuted as adults.
4.1.2.2. The District of Columbia will have responsibility for housing and supervIsmg
persons charged with and/or convicted of misdemeanor violations in the
Superior Court for the District of Columbia, both before and after
sentencing.
4.1.2.3. The District of Columbia will continue to house persons charged with felonies
under the D.C. Code and persons convicted of felonies under the D.C.
Code but not yet sentenced, in the Superior Court for the District of
Columbia. To the extent beds are available, D.C. will continue to
house persons charged with felonies under the U.S. Code, and persons
convicted of felonies under the U.S. Code but not yet sentenced in the
U.S. District Court. D.C. will continue to receive reimbursement, at a
mutually negotiated rate, from the Federal Government for the costs of
housing such persons. "House" and "housing" include subsistence,
transportation of persons to and from court appearances, revocation
hearings, medical facilities, and the maintenance of necessary prisoner
records.
4.1.2.4. The District of Columbia will continue to house persons sentenced by the
Superior Court and detained pending a hearing for revocation of parole,
probation, or supervised release, and will provide suitable facilities for such
hearings. To the extent beds are available, D.C. will house persons
sentenced by the U.S. District Court and detained pending a hearing for
revocation of parole, probation, or supervised release, will provide suitable
facilities for such hearings, and will continue to receive reimbursement by
the Federal Government at a mutually negotiated rate for the costs of
housing such persons and for providing such facilities. "House" and
"housing" include subsistence, transportation of persons to and from court
appearances, revocation hearings, and medical facilities, and the
maintenance of necessary prisoner records.
4.1.2.5. The Trustee will be an independent officer of the D.C. Government and can be
removed by the Mayor only with the concurrence of the Attorney General.
The Attorney General has authority to remove the Trustee only for
misfeasance or malfeasance in office.
4.1.2.6. The Trustee will propose funding requests for offender supervision and services
for inclusion in the President's budget for each fiscal year of the transition.
15
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4.1.2.7. The Trustee will allocate funds for offender supervision (including adult felon
parole and probation) in D.C., including funds for short term
improvements, equipment contracts, and salary increases necessary to retain
key personnel, maintain and enhance current levels of service, including
offender drug testing, and provide for the safety arid security of the
community.
4.1.2.8. Upon receipt of funds identified by Congress or other entities for Pretrial Services,
the Trustee will immediately transfer such funds to the Pretrial Services
Agency.
4.1.2.9. Upon receipt of funds identified by Congress or other entities for the D.C. Public
Defender Service, the Trustee will immediately transfer such funds to the
Public Defender Service.
4.1.2.10. Effectively immediately and in view of the responsibility to be undertaken
by the U.S. Parole Commission to carry out the functions of the D.C.
Board of Parole pursuant to the parole laws and regulations of D.C., the
D.C. Council will not enact legislation that changes or modifies parole
laws and regulations as applicable to felony offenders without the
concurrence of the Attorney General. D.C. will immediately take steps to
modify parole as applicable to misdemeanants to provide for D.C. court
supervision of D.C. misdemeanant parolees and the elimination of the
D.C. Board of Parole. Following the assumption by the U.S. Parole
Commission of the functions of the D.C. Board of Parole, the D.C.
Council will cede to Congress the sole authority to legislate changes to the
D.C. Code pertaining to the parole of D.C. felony offenders.
4.1.2.11. It is expected that the transition period for these offender, defender and
court services will end no sooner than one year but not later than three
years after the enactment of the related legislation.
4.1.2.12. The D.C. Corporation Counsel will provide representation for the Trustee
and Trustee supervised agencies. (see litigation and liability section)
4.2. Administration of District of Columbia and Federal Prisons
4.2.1. Federal Government Responsibilities
4.2.1.1. The Federal Government will take administrative control of the nine parcels of
land, collectively located at or in the vicinity of Lorton, Virginia (lithe
Lorton property"), and other appropriate sites. After the BOP's capacity
has been increased through renovation of existing facilities and new
16
HexD~mp (,;oily~;sioi\ .
construction at the corrections complex in Lorton and other locations
selected by BOP, BOP will house felons who were convicted of D.C.
Code violations and sentenced to terms of imprisonment. (A recently
completed Congressionally mandated study of the D.C. Department of
Corrections revealed that most of the institutions at Lorton have exceeded
their useful lifespan and need major renovations or demolition.)
4.2.1.2. BOP will conduct a thorough preliminary assessment of the Lorton property
to determine its environmental condition, including a study of the
contamination on the property and an estimation of the costs
associated with bringing the property into compliance with
. environmental and other applicable regulations. Based on
preliminary information gathered pursuant to a review of the
environmental conditions of a portion of the Lorton property, BOP
could begin planning for renovation and construction immediately;
actual physical renovations would not begin until Fiscal Year 1998.
The estimated date for the completion of the preliminary
environmental assessment process is March 21, 1998.
4.2.1.3. BOP will oversee the operation of community corrections centers in .
D.C. as necessary to provide an appropriate transition for inmates
who are nearing release from Federal prisons, including those
convicted of D.C. Code violations. BOP intends to use existing
community corrections centers in D.C. to the extent practicable and
will work with D.C. officials to identify prospective sites, as needed to
establish new community corrections facilities.
4.2.1.4. D.C. Code offenders will be housed together with Federal offenders in
facilities operated by BOP in Lorton, Virginia and elsewhere. Every
effort will be made to house D.C. felons at facilities as close to D.C. as
permitted by inmate program and security needs and BOP population
management requirements. D.C. felons will be designated in the
same manner as Federal inmates, and ordinarily initially assigned to
institutions located within a 500-mile radius of their release residence.
BOP anticipates that many of the initial designations for D.C.
offenders will be within a significantly closer radius. BOP also will
work with D.C. officials to identify sites for possible Federal
correctional facility construction within D.C.
4.2.1.5. During the transition period, based upon assurances from D.C. that
felons convicted of violating the D.C. Code will, in the future, receive
sentences similar to those received by comparable offenders convicted
of comparable Federal offenses, BOP will house those sentenced D.C.
felons in the custody of the D.C. Department of Corrections as the
Director of the BOP deems appropriate in accordance with available
17
' .
H 0\1Ir.~ Cunvt;i~iJn
ex-
capacity. If such a new structure for sentencing under the D.C. Code
is in place as of October 1, 2001, BOP will accept D.C. felons
sentenced under the new sentencing structure in accordance with the
capacity of BOP. By October 1, 2002, and assuming fulfillment of all
requisite conditions, BOP will have assumed responsibility for
incarcerating all sentenced D.C. felons.
4.2.1.6. BOP will accept employment applications from persons currently
employed by the D.C. Department of Corrections for BOP vacancies
and will make hiring selections in accordance with existing Federal
procedures and standards. Positions for new BOP facilities will be
advertised prior to hiring.
4.2.1.7. After consultation with the Mayor, representatives of the D.C.
Council, the Chair of the Financial Authority, members of the
judiciary and others, the Attorney General will select a Corrections
Trustee to oversee expenditures of the D.C. Department of
Corrections relating to sentenced, incarcerated felons, until BOP
assumes responsibility for all incarcerated sentenced D.C. felons.
4.2.1.8. The Federal Government will provide funds for the incarceration of
sentenced D.C. felons through the Trustee to the D.C. Department of
Corrections. The head of any Federal department or agency may
provide the services of any personnel to the Trustee to assist in
carrying out the Trustee's duties.
4.2.1.9. Of the Federal funds received by the Trustee, the Trustee will
reimburse BOP for those funds identified by Congress to be used for
the construction of new facilities and the major renovation of existing
facilities. BOP will be responsible and accountable for determining
how these funds will be used, including the type, security level, and
location of new facilities.
4.2.1.10. During the transition period, the employees of and appropriations
allocated to the Trustee and the agencies for which the Trustee is
responsible shall not be scored or counted against the personnel and
budget ceilings imposed on D.C. by the Financial Authority or
Congress.
4.2.2. District of Columbia Responsibilities
4.2.2.1. Offenders convicted of D.C. Code violations will be sentenced
pursuant to a new D.C. sentencing system, described below. BOP
shall not be required to obligate any funds appropriated for the
absorption of D.C. Code felons into the Federal prison system and will
have no responsibility to house any persons convicted of felony
18
n~xDull.lJ Cvnv~:::;i;m .
offenses, if the new sentencing system is not enacted within 24 months
of the authorizing legislation's enactment.
4.2.2.2. D.C. will continue to house felons sentenced to terms of imprisonment
by the Superior Court for the District of Columbia until such persons
have been designated by BOP. To the extent beds are available, D.C.
will continue to house felons sentenced to terms of imprisonment by
the U.S. District Court until such persons have been designated by
BOP and will continue to receive reimbursement by the Federal
Government, at a mutually negotiated rate, for costs of housing
persons sentenced by the U.S. District Court.
4.2.2.3. The Trustee will be an independent officer of the D.C. government
and can be removed by the Mayor only with the concurrence of the
Attorney General. The Attorney General has authority to remove
the Trustee only for misfeasance or malfeasance in office.
4.2.2.4. The Trustee will propose funding requests for the incarceration of
sentenced D.C. felons, for inclusion in the budget submitted by the
President to Congress for each fiscal year of the transition.
4.2.2.5. The Trustee will allocate funds to the D.C. Department of
Corrections, including such sums as may be appropriated for short
term improvements that are necessary for the safety and security of
staff, inmates, and the community.
4.2.2.6. The D.C. Department of Corrections will implement the short term
improvements in physical security identified in the "District of
Columbia Department of Corrections Short-Term Improvements Plan
(September, 1996)."
4.2.2.7. Upon receipt of Federal funds identified by Congress for constructing
new prisons and making major renovations to existing facilities for
the incarceration of D.C. felons, the Trustee will immediately
reimburse BOP for such funds.
4.2.2.8. The D.C. Corporation Counsel will provide representation for the
Trustee and Trustee supervised agencies. (see litigation and liability
section)
4.2.2.9. During the transition, D.C. will transfer control of the property at
Lorton, Virginia to the Federal Government, though the D.C.
Department of Corrections may continue to house D.C. felons at
facilities located at Lorton until such time as BOP absorbs such
offenders into the Federal prison system.
19
Hex-DuiIiP Cuflll~iOiJn .
4.3. Sentencing. The District of Columbia understands and agrees that the D.C. sentencing
system will be changed pursuant to proposed legislation in the following manner:
4.3.1. Congress will amend the D.C. Code to abolish parole for all persons convicted of
D.C. felony offenses committed on or after 3 years from the enactment of the
Federal authorizing legislation.
4.3.2. Congress will amend the D.C. Code so that good time calculations for all persons
convicted of D.C. felony offenses committed on or after 3 years from the
enactment of the Federal authorizing legislation will be made according to the
Federal requirements.
4.3.3. Congress will establish a new D.C. Board of Criminal Sentences (the Board) as an
independent body within the D.C. Government. All persons convicted of D.C.
felonies committed on or after 3 years from the enactment of the Act will be
sentenced according to a determinate sentencing system promulgated by the Board
and transmitted by the Board to the D.C. Council no later than 18 months after
enactment of the Federal authorizing legislation.
4.3.4. The Board will develop a sentencing system which shall include binding
guidelines and may include such amendments or repeals of provisions in the D.C.
Code relating to the maximum and minimum prison terms as are necessary to
accomplish the purposes of the Act. Ninety days after the Board promulgates
and transmits the sentencing system to the D.C. Council, the sentencing system, its
guidelines, amendments and repeals will become effective unless disapproved in its
entirety by a majority of the Council. If disapproved by the Council, the system
may be enacted by Congress.
4.3.5. The promulgated sentencing system will supersede any inconsistent provision of
the D.C. Code.
4.3.6. Congress will repeal certain other provisions of the D.C. Code to conform with
the new sentencing system (D.C. Code Title 24, Chapters 2 and 8), including the
Youth Rehabilitation Act.
4.3.7. Congress will amend D.C. Code Title 33, Section 541 to adopt certain mandatory
penalties necessary to further the Superior Court of the District of Columbia's
Drug Intervention Program and effective local law enforcement. The new
sentencing system will incorporate these mandatory penalties, thereby excluding
local narcotics offenses from the mandate that sentences be similar to those that
would be imposed upon comparable offenders in the Federal system.
20
H.. n,." . . .
I;;I\-uui"P l.Iuilv"i~f()il
4.3.8. The Board will not have the authority to provide for capital punishment under any
law applicable exclusively in D.C.
4.3.9. The Board will have seven voting members. All the members of the Board shall
have knowledge and responsibilities with respect to criminal justice matters. The
Attorney General (or her designee) will chair the Board. The other members
will include two judges of the Superior Court for the District of Columbia and
one representative each of the following entities: the D.C. Council, the Executive
Branch of the D.C. Government, the D.C. Public Defender Service, and the U.S.
Attorney for the District of Columbia. One representative each of the D.C.
Corporation Counsel and BOP will serve as non-voting, ex officio members.
4.3.10. An affirmative vote of at least six Board members will be necessary to promulgate the
sentencing system.
4.3.11. In developing the sentencing system, the Board will hold two or more public hearings,
review other sentencing guideline system models, consult with sentencing reform
experts, and solicit written comments from the public.
4.3.12. If the Board fails to promulgate a sentencing system within 18 months, the Board will
terminate, and the Attorney General will develop a sentencing system to be
transmitted to the D.C. Council for approval. Ninety days after the Attorney
General transmits the sentencing system to the D.C. Council, the sentencing
system, its guidelines, amendments, and repeals will become effective, unless the
Council disapproves the system in its entirety and Congress, in turn, does not
approve it.
4.3.13. The Board will have the mandate to ensure that the sentencing system it establishes,
among other things:
4.3.13.1. will result in sentences for those convicted of D.C. felony offenses similar
to those that would be imposed upon comparable offenders convicted of
comparable offenses in the Federal system;
4.3.13.2. will result in sentences that reflect the seriousness of the offense and
provide for just punishment, afford adequate deterrence to potential future
criminal conduct of the offender and others, and provide the defendant
with needed educational or vocational training, medical care, and other
correctional treatment;
4.3.13.3. will provide certainty and fairness in meeting the purposes of sentencing,
avoiding unwarranted sentencing disparities among similar defendants,
while maintaining sufficient flexibility to permit individualized sentences;
21
Hex-Dump Cony-don
4.3.13.4. will take into account the high volume of sentencing proceedings in the
D.G Superior Court as bearing upon the degree of complexity of the
sentencing system; and
4.3.13.5. will ensure that the system is neutral as to the race, sex, marital status,
ethnic origin, religious affiliation, national origin, creed, socioeconomic
status, and sexual orientation of offenders, if not related to the commission
of the offense.
4.3.14. As part of the sentencing system, the Board will develop binding guidelines for use in
determining the sentence to be imposed upon convicted felons. The guidelines
will specify:
4.3.14.1. when to impose a sentence of probation, a fine, or a term of imprisonment
and the appropriate amount or length, thereof, as well as intermediate
sanctions;
4.3.14.2. when to impose a term of supervised release following imprisonment, and
the appropriate length, thereof; and
4.3.14.3. whether multiple sentences to terms of imprisonment should run
concurrently or consecutively.
4.3.15. Ninety days after promulgation of the sentencing system, the Board will be terminated.
There will be established a successor, Federally funded agency to amend the
guidelines as necessary to achieve the purposes of the Act. The D.G Council
may recommend to Congress whether or not these amendments should be
approved. However, the amendments will take effect as prescribed by the
successor agency, unless they are modified or disapproved by Congress. The
successor agency will have no powers to revise the D.G Code but will
recommend changes to the Code as may be necessary to further the purposes of
the Act.
4.3.16. The Superior Court for the District of Columbia, D.G Department of Corrections, and
any other agency will submit information about convicted felons as required by
the Board and the U.S: Department of Justice. This would permit an assessment
of the extent to which sentences imposed by the Superior Court of the District of
Columbia are similar to those imposed for comparable offenders in the Federal
system. The results of this assessment would be used by the Board in developing
the new sentencing system for D.G
22
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4.3.17. Four years after the enactment of the new sentencing system, there will be an evaluation
to determine the extent to which the sentencing system has succeeded in
accomplishing the goals set forth in the Act.
4.4. Liability and Litigation Responsibility and Authority
4.4.1. Federal Government ResponsibJliries
4.4.1.1. The Federal Government will be responsible for the defense of any claim arising
from any alleged act or failure to act on the part of the United States, its
agencies and personnel, in connection with pretrial, defender, offender
supervision, sentencing reform, corrections, probation and parole services,
and for any resulting liability, after responsibility for these services has
passed to the Federal Government at the end of the transition period.
4.4.1.2. The Federal Government's assumption of responsibility for the defense of claims,
and any resulting liability, set forth in paragraph 4.4.1.1. above shall
include claims arising from any alleged act or failure to act of BOP, its
agencies and personnel in connection with the demolition, repair,
renovation, or construction of any building, structure, or other
improvement of any kind at the Lorton, Virginia property.
4.4.1.3. The Attorney General, in her discretion, may direct any litigation involving the
Trustees appointed pursuant to sections 4.1.1.1. and 4.2.1.6. above, pretrial
services, offender supervision services, or sentencing reform during the
transitional period, and may provide litigation services for the Trustees and
the agencies responsible for pretrial services, offender supervision services,
and sentencing reform during the transitional period in lieu of
representation by D.C. Exercise of the Attorney General's discretion shall
not change the terms of this agreement and shall not otherwise enlarge the
liability of the United States, its agencies, or personnel. However, D.C.
may petition the Attorney General to request reimbursement for litigation
costs and liability arising from actions of the Trustees.
4.4.2. District of Columbia Responsibilities and Liability
4.4.2.1. D.C. will be responsible for the defense of any claim that has arisen or may arise
from any act or alleged failure to act by D.C., its agencies or personnel, in
connection with D.C's pretrial, defender, offender supervision,
sentencing reform, corrections, or probation and parole services, and for
any resulting liability. D.C. will remain responsible for defending and
bearing any liability resulting from any such claim even if responsibility for
the pertinent service has passed to the Federal Government. D.C. will
23
Ht:x-Di.lm~ (,Ojlv'~;JiOil .
also be responsible for the defense of any claim arising from any activity of
D.C., its agencies or personnel as a result of any action agreed to in this
MOU, and for any resulting liability.
4.4.2.2.D.C. is, and will remain, responsible for the defense of any and all claims
described in paragraph 4.4.2.1. above, including the defense of claims
arising from any alleged act or failure to act of the Trustees (see sections
4.1.1.1. and 4.2.1.6.). Except as provided in paragraph 4.5.3. and in
paragraph 4.1.3.) above, the D.C. Corporation Counsel will provide
litigation services as required to carry out this responsibility.
4.4.2.3.Notwithstanding paragraph 4.4.2.2. above, the Trustees and the agencIes
responsible for pretrial, defender, offender supervision services, and
sentencing reform may choose not to utilize the Corporation Counsel and
to engage other litigation services.
4.5. District of Columbia Courts
4.5.1. Congress will make all necessary amendments to the D.C. Code and other laws to
terminate budgetary control and other involvement of the D.C. Government in the
finances and administration of the D.C. court system, including the Superior Court of the
District of Columbia and the District of Columbia Court of Appeals.
4.5.2. The Joint Committee on Judicial Administration' of the D.C. courts will prepare and
submit the budget for the D.C. court system. The budgetary requests of the D.C. courts
system will not be subject to revision by the D.C. Government or the Executive Branch of
the Federal Government.
4.5.3. The D.C. court system, through its Executive Office, will be authorized to contract with
D.C. agencies, Federal agencies, and other public and private entities, for necessary
supplies, equipment, and services.
4.5.4. Expenditures of the D.C. court system will be paid out of funds appropriated for those
courts and credited to a Treasury account established for that purpose. Funds received
by the D.C. court system will not be part of the funds or budget of D.C.
5. Economic Development. The District government will:
5.1. Implement timely and efficient zoning, permitting, and licensing processes by the end of
fiscal year 1997.
24
Hex-DiJmp C(jfli'i;,~ion .
5.2. Offer personnel resources and fully cooperate with the Corporation in its review and
evaluation of existing economic development plans, in the development of the
Corporation strategic plan, and in subsequent implementation of the plan.
5.3. Support a legislative allocation to the Corporation of 50 percent of the applicable State
ceiling on the authority of the District government to issue private activity bonds in each
calendar year under section 141 of the Internal Revenue Code.
5.4. Support a legislative authorization to the Corporation of the right to exercise eminent
domain in the name of the District of Columbia, and certain other powers specified
above.
5.5. Give expedited consideration to the Corporation's requests for land transfers (including
transfers from the Redevelopment Land Agen(;y), zoning adjustments (including
variances and special exceptions), and building and other permits and licenses for
projects and activities as requested by the Corporation.
5.6. Support legislation that provides that all powers, rights, assets, duties, obligations, and
liabilities of the Corporation will transfer to the District government upon the
Corporation's dissolution
6. Infrastructure.
6.1. Secretary of Transportation Responsibilities. The Secretary of Transportation (hereinafter
in this section referred to as the Secretary) agrees that:
6.1.1. Beginning on October 1, 1997, the Secretary shall assume responsibilities generally
carried out by a State under Title 23 of the U.S.C. relating to selection (consistent with
the planning requirements of 23 U.S.C. 134 and 135), funding and oversight of the
National Highway System (NHS) capital projects and shall assume responsibilities for
funding the operations and maintenance of the NHS within the District of Columbia
(exclusive of police authority and exclusive of funding those NHS routes currently under
the jurisdiction of the National Park Service) with funds made available under the
National Capital Revitalization and Self-Government Improvement Act of 1997, to be
referred to henceforth in this section as the "Act."
6.1.2. The Secretary shall advance NHS projects through the Federal Highway Administration
(FHW A). The FHW A shall consult and coordinate NHS project responsibilities with the
District of Columbia. In selecting projects, the FHW A shall give consideration to the
District of Columbia Needs Assessment currently being developed by the Federal
Highway Administration in cooperation with the District of Columbia Department of
Public Works and the District of Columbia Strategic Transportation Plan.
6.1.3. Beginning on October 1, 1997, the Secretary shall assume responsibility for advancing
those NHS projects approved prior to that date that are not under construction or under a
contract for such construction by October 1, 1997, unless the Secretary and the District of
25
Hex-Dump COilY'(;;~ioi\
Columbia agree to continue to vest responsibility for such project advancement with the
District of Columbia. Such projects that are transferred under this section shall also be
governed by the requirements contained in section 6.2.4.
6.1.4. The Secretary may transfer National Capital Infrastructure Funds authorized under this
Act and available for capital expenditures and NHS apportioned funds authorized to be
transferred under this Act to other Federal-aid highway funding categories, consistent
with title 23, United States Code provisions governing the transfer ofNHS funds.
6.1.5. Funds made available to the Secretary for obligation on NHS projects under this Act shall
be administered by FHW A. From time to time as work progresses on a project,
payments shall be made by FHW A for the costs of construction, operations, maintenance,
and other eligible activities under this Act in accordance with applicable procedures
under Title 23, United States Code, or as established by the Secretary.
6.1.6. For Fiscal Year 1998, $108 million shall be authorized to be appropriated to the National
Capital Infrastructure Fund which shall be used for construction, reconstruction, and
rehabilitation of the NHS in accordance with 23 U.S.c. 103 ( i ), including transit capital
projects eligible for funding under section 103 ( i ).
6.1. 7. In each of the fiscal years 1998 through 2003, the Secretary shall retain and deposit into
the National Capital Infrastructure Fund:
(a) 100 percent of the District of Columbia's apportionment for the NHS;
(b) 100 percent of the apportionments for Interstate Maintenance; and
(c) 75 percent of the apportionment for the Highway Bridge and Replacement for use
consistent with 23 U.S.C. 103 ( i ).
6.1.8. In each of the Fiscal Years 1998 through 2003, $17 million shall be authorized to be
appropriated to fund the operations and maintenance of the NHS within the District of
Columbia, exclusive of those NHS routes under the jurisdiction and control of the
National Park Service.
6.1.9. The Secretary shall be responsible for funding those operations and maintenance
activities and costs, excluding police services (except for those construction zone,
incident management and other police activities that are eligible for Federal-aid highway
reimbursement under title 23, United States Code) associated with the management and
operations of NHS highways including the following activities: routine maintenance of
roadways and rights-of-way, road repair, snow removal, lighting, signage, and those
utilities necessary for the NHS operations. The Secretary shall not be responsible for
funding the District of Columbia share of operating expenses for any transit activities.
26
Hex-Dum~ C;oili~;Ji()il .
6.1.10. The Secretary shall continue to provide oversight and technical assistance to the District
of Columbia for all Federal-aid projects that remain the responsibility of the District of
Columbia.
6.1.11. The Secretary through the FHW A will enter into any agreements or contracts with any
entity to advance, construct, reconstruct, rehabilitate, repair, maintain, or operate the NHS
within the District of Columbia excluding those NHS roadways under the jurisdiction and
control of the National Park Service, consistent with 23 U.S.C. 103 ( i ).
6.1.12. The Secretary shall encourage the hiring of local labor by contractors awarded contracts
including welfare to work labor, on NHS projects financed under this Act to the
maximum extent possible and consistent with federal law.
6.1.13. Unless reauthorized by Congress on, or prior to, September 30, 2003, the Secretary of
Transportation's responsibilities, other than the completion of ongoing projects funded
through this Act, would cease and no new deposits of Federal funds would be made into
the National Capital Infrastructure Fund after September 30, 2003.
6.1.14. The Secretary shall provide the District of Columbia with the technical assistance
necessary to reassume its NHS responsibilities by September 30, 2003. The April 1996
findings of FHWA's review of the organizational capacity of the District of Columbia's
Department of Public Works shall guide the assistance.
6.2. District of Columbia Responsibilities. The District of Columbia agrees that:
6.2.1. The District of Columbia shall continue to be responsible for providing police services on
NHS highways (including, but not limited to civil police functions, crime prevention,
investigations including traffic and accident investigation, and emergency traffic
direction). The District shall continue to own the right-of-way ofNHS highways that are
located within the District of Columbia.
6.2.2. The District of Columbia will continue to be responsible for all utilities and utility work
that is not necessary for operation of the NHS even if such utilities are located within the
right-of-way of the NHS.
6.2.3. The District of Columbia shall continue to be responsible for non-NHS projects funded
with Federal-aid highway funds. The authority to use Surface Transportation Program
funds on local streets, highways, and roadways (except alleys) does not relieve the
District of Columbia of the responsibility for the non-federal matching share. The use of
other Federal-aid highway apportioned funds by the District of Columbia, other than as
provided herein, also requires a non-Federal matching share.
6.2.4. Beginning on October 1, 1997, the District of Columbia is relieved of the responsibility to
provide the non-Federal match for NHS projects that are funded by the Secretary with
monies made available for NHS projects under this Act. The relief from providing the
non-federal match shall not include those projects that were approved by FHWA prior to
27
HexDiJm~ C()n~'~; Jioi1 .
October 1, 1997 for which Federal-aid highway funds have been obligated. The District
of Columbia is responsible for providing the non-Federal match, the Federal-aid funds,
and any obligation authority for any such projects transferred to the Secretary for project
administration, oversight, or contracting.
6.2.5. The District of Columbia shall continue to be responsible for any liability incurred on the
basis of the activities of the District of Columbia, its agencies, or personnel as a result of
any acts or omissions in carrying out this Act. The United States, its agencies, and
personnel will not incur any liability for any such acts or omissions.
6.2.6. The District of Columbia shall cooperate with the Federal Highway Administration in its
technical assistance efforts in order to assure that the District of Columbia can reassume
its NHS responsibilities by September 30, 2003. The goal of the effort shall be to satisfy
the April 1996 findings of FHWA's review of the organizational capacity of the District
of Columbia's Department of Public Works.
7. Personal Income Tax Administration The District agrees that:
7.1. General
7.1.1. The IRS shall administer and enforce the District's individual income and employment
taxes.
7.1.2. The District shall continue to administer its unemployment benefits program.
7.2. Tax Codes
7.2.1. The IRS will administer the District's existing individual income and employment tax
laws. The only provision the IRS cannot administer is the District's refundable property
tax credit. If the District wishes to retain this provision, it must be transferred to its real
estate tax administration.
7.2.2. All of the administrative, procedural, and enforcement provisions of the Internal Revenue
Code of 1986 and related statutes will govern IRS administration of District taxes. The
District will have to amend its own tax code to achieve this to the satisfaction of the
Secretary of the Treasury.
7.2.3. To avoid the possibility of any inconsistent interpretations of similar provisions, the
District will have to amend its definitional provisions to conform them to the Internal
Revenue Code to the satisfaction of the Secretary of the Treasury.
7.2.4. The District must notify the Secretary of the Treasury of any future changes to its
individual income and employment tax laws. The Secretary may object if, in his
judgement, the prospective change would prove overly burdensome to the IRS, in which
case such change shall not be administered or enforced by the IRS. If the Secretary does
28
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not object within 60 days after notification, the IRS will administer the provision within a
reasonable time after enactment.
7.3. Transfers to the District
7.3.1. The IRS will set up separate accounting and deposit systems for its collections of District
taxes. The District must, in tum, identify the person and/or office authorized to receive
transfers of collected amounts and set up related deposit accounts.
7.4. Effective Date
7.4.1. The IRS administration of District taxes shall be prospective, starting on January 1 of the
calendar year that is at least 18 months after the Secretary certifies that the District of
Columbia has met the conditions set forth in the Memorandum of Understanding between
the United States and the District of Columbia.
29
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Appendix One
DEFINITIONS FOR THE PENSIONS SECTION OF THE MOU
"Adoption Date" means the date the Replacement Plan is adopted by the District Government or,
if later, October 1, 1997.
"District Government" means, as appropriate, the "District government" as defined by section
305(5) of the District of Columbia Financial Responsibility and Management Assistance Act of
1995 (Pub. L 104-8) or the District of Columbia Retirement Board as defined in section 102(5)
of the Reform Act.
"Freeze Date" means the date of introduction of the Revitalization Act.
"Fund" means the District of Columbia Police Officers and Fire Fighters' Retirement Fund, the
District of Columbia Teachers' Retirement Fund, and the District of Columbia Judges'
Retirement Fund as defined in section 102( 10) of the Reform Act.
"Reform Act" means the District of Columbia Retirement Reform Act (Pub. L. 96-122).
"Replacement Plan" means the plan or plans described under Title I of the Revitalization Act.
"Retirement Program" means any of the retirement programs as described in section 102(7) of
the Reform Act as in effect on the day before the freeze date.
"Revitalization Act" means the "District of Columbia Revitalization Act of 1997."
"Secretary" means the Secretary of the Treasury or the Secretary's designee.
"Transfer Date" means the date on which the assets and obligations of the Fund are transferred to
the Trust. .
"Trust" means the District of Columbia Retirement Trust created under Title I of the
Revitalization Act.
"Trustee" means the firm designated by the Secretary of the Treasury under Title I of the
Revitalization Act.
30
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Draft 4. 7. 1997
Tlris draft reflects tlreful/legislative language for tire Economic Development section of tire
MOU.
MEMORANDUM OF UNDERSTANDING BETWEEN:
THE DISTRICT OF COLUMBIA
Marion Barry, Jr., Mayor
Charlene Drew Jarvis, Council Chairperson Pro Tempore
DISTRICT OF COLUMBIA FINANCIAL RESPONSIBILITY AND MANAGEMENT
ASSISTANCE AUTHORITY
Andrew Brimmer, Chairman
OFFICE OF MANAGEMENT AND BUDGET, EXECUTIVE OFFICE OF THE
PRESIDENT
Franklin D. Raines
Chair, Federal District of Columbia Task Force
Dated: _ _ _ _ _ _ __
31
HexDuilljJ (,o;I"~,JiJn .
SECTION I. PURPOSE
The parties respect the Home Rule Center as the fundamental basis for governance in the
District. The purpose of this memorandum is to strengthen Home Rule and to agree to work
toward the revitalization of the District of Columbia.
This memorandum is intended only to improve the management of, and the relationship between,
the District of Columbia and the Federal government, and is not intended to and does not create
any right, benefit, trust or responsibility, substantive or procedural, enforceable at law or equity
by a party against the United States, its agencies, its officers, or any person.
SECTION II. PUBLIC LAW 104-8, "THE DISTRICT OF COLUMBIA FINANCIAL
RESPONSIBILITY AND MANAGEMENT ASSISTANCE ACT OF
1995"
The parties recognize the effectiveness of PL 104-8 and dedicate themselves to the cooperative
implementation of its provisions. Among these provisions:
Finance.
For each Fiscal Year for which the District is in a control period, the Mayor shall develop
and submit to the Financial Responsibility and Management Assistance Authority (the
"Authority") and District Council a Budget and Financial Plan for the applicable Fiscal
Year and the next three Fiscal Years.
Expenditures for the District government for each Fiscal Year, beginning in FY1999, may
not exceed revenues for that Fiscal Year.
During Fiscal Years 1996, 1997, and 1998, the District government shall make
continuous, substantial progress toward equalizing its expenditures and revenues.
The District may not borrow money during a control year unless the Authority provides
prior certification that the borrowing is consistent with the financial plan and budget for
the year.
For the Secretary of the Treasury to make a short-term advance to the District, an
Authority-approved Budget and Financial Plan must be in place, the Mayor must submit a
requisition for an advance including a schedule for timing and amounts for advances, the
Inspector General must certifY the accuracy of the information provided to the Secretary,
and the Secretary determines -- and the Authority certifies -- that the District lacks market
access on reasonable terms, and that the Treasury has reasonable assurance of being
reimbursed.
..
r'\ ... ~
f .. ..... ",'
Management. H t;X-UUI .. ~ v~"'I,~,~:Uil
An Office of the Chief Financial Officer will be established in the Executive Branch of
the District government, headed by the Chief Financial Officer, and including the Office
of the Treasurer, Controller, Budget, Financial Information Services, and Finance and
Revenue.
An Office of the Inspector General will be established in the Executive Branch of the
District government.
During the control period, the Mayor shall submit proposed contracts and leases to the
Authority for review, and cannot enter into a contract or a lease unless the Authority
determines it is consistent with the Budget and Financial Plan.
The Authority may submit recommendations to the Mayor, the Council, the President,
and
Congre
ss on
actions
the
District
or
Federal
govern
ments
may.
take to
ensure
the
District
's
compli
ance
with a
Budget
and
Financi
al Plan
and
promot
e its
financi
al
stabilit
y,
2
Hax-Dum~ (;oilv~;~ioi\ . manag
ement
respon
sibility
and
service
deliver
y
efficie
ncy.
The
Mayor
and the
Counci
I shall
submit
a
statem
ent to
the
Author
ity,
Preside
nt, and
Congre
ss
providi
ng
notice
as to
whethe
r the
District
will
adopt
the
recom
mendat
IOns.
An
affirma
tive
statem
ent
must
include
3
Hex-Dum~ (,onw~.Jioi1 - a
written
imple
mentati
on
plan,
with
perfor
mance
measur
es and
a
schedu
Ie for
audit
compli
ance.
If the
statem
ent
rejects
the
recom
mendat
ions,
the
Author
ity may
vote to
take
what
actions
it
deems
approp
riate,
after
consult
ing
with
Govern
mental
Affairs
Comm
ittee of
the
4
H~x-Duir.p (;Oliv;';Ji()i\
Senate
and the
House
Govern
ment
Refor
m and
Oversi
ght
Comm
ittee.
SECTION III. GENERAL PROVISIONS
1. Balanced Budget. PL 104-8 requires that the District balance its budget by FY1999.
By this agreement, the District agrees to present and/or approve a balanced budget for the
Fiscal Year beginning October 1, 1997.
2. Agreement to be Bound. The District agrees to be bound by and to use its offices and
best efforts to imple.ment this agreement.
SECTION IV. SUBMISSION OF LEGISLATION & FEDERALLY ASSUMED
FUNCTIONS
On behalf of the Executive Office of the President, the Director of the Office
Management and Budget intends to recommend the submission of legislation to the Congress
that is consistent with the National Capital Revitalization and Self Government Improvement
Plan (the "Plan") announced by the President on January 14, 1997.
Once implemented, the Plan will provide the District substantial relief from its operating
expenditures, relief which will grow over time. It will also invest considerable resources to
improve the District's criminal justice systems and capital infrastructure. If this legislation is
enacted, the Federal government will undertake the functions described below. The Federal
government will not undertake a function until the District government meets the conditions for
that function, described in Section V.
1. Medicaid. The Federal government will increase its share of the District's Medicaid
payments to 70 percent, thereby reducing the District's share to 30 percent. The
Department of Health and Human Services will continue to provide more intensive
technical assistance to help the District improve the management of its Medicaid
program.
2. Pensions. The Federal government will take financial and administrative
responsibility for virtually all pension benefits accrued under the plans for all active
5
_:
H-v ""''''r. r o ";"il -
CA'""UUllll" v !I\,..;,;.M,,1
and retired police and firefighters, and teachers, and will take full responsibility for
the pensions of judges. The bulk of the assets of the retirement plans will be
transferred to the Federal government. The Federal government will pledge its full faith
and credit to meet its responsibilities to pay these benefits. Benefits payable to current
employees will be "frozen" based on service earned as of the date the legislation is
introduced, and the Federal government will pay future retirement, death and some of
their disability benefits to the extent they are earned based on the frozen service. While
the Federal government will not be responsible for benefits earned during future years of
service by members of the current retirement programs (other than judges), these
members will get the benefit of pay increases on the frozen benefits. Frozen benefits will
continue to be subject to cost-of-living adjustments under the terms of the existing
programs. All future employee contributions (except for judges) will be paid into the
new plans. The Secretary of the Treasury will appoint a third-party Trustee to administer
the existing plans and manage pension assets.
3. Intermediate-Term and Short-Term Lending. The United States Treasury will provide
an intermediate-term loan (IS-year term) to assist the District to eliminate its accumulated
fund balance deficit. The Treasury may also provide inter-year loans for liquidity
purposes. The combined amount of the intermediate-term and inter-year liquidity loans
may not exceed $500 million. Both of these loans will have an interest rate of Treasuries
of comparable maturity plus 1I8th of one percent. The Treasury may also provide
intra-year loans for the purposes of liquidity.
4. Criminal Justice. The Federal and District governments will develop and
implement a transition plan which transfers responsibility over a three-to-five-year
period for incarcerating felons. The Federal Bureau of Prisons (BOP) will house
adult felons convicted of D.C. Code violations and designated in the same manner as
Federal inmates in correctional institutions operated or contracted by the BOP.
This will occur after BOP's capacity has been increased through new construction
at Lorton and other locations selected by BOP, and through renovation of existing
facilities at Lorton, Virginia. After October 1, 2001, the BOP will also designate to
Federal correctional institutions sentenced D.C. felons in the custody of the D.C.
Department of Corrections, as the Director of BOP deems appropriate, in
accordance with available capacity, until they have all been designated to Federal
institutions. The BOP will accept employment applications from persons currently
employed by the D.C. Department of Corrections for existing BOP vacancies, and
will process such applications in accordance with existing Federal procedures and
standards.
The Attorney General will select, after consultation with the Mayor, the D.C. City
Council, and the Chair of the D.C. Financial Responsibility and Management
Assistance Authority, a Trustee to oversee operations of the D.C. Department of
Corrections until the BOP assumes responsibility for all incarcerated District felons.
The Federal and District governments will develop and implement a framework for
changes to the D.C. sentencing system, including the abolition of parole, institution of
6
Hex-Dum~ COilv~;3ion
detenninate guideline sentencing and the enactment of the new mandatory minimum drug
sentences, which are a prerequisite for the Federal Government accepting responsibility
for the incarceration of felons convicted of D.C. Code violations. The sentencing system
will be enacted within 24 months, or the Federal Government will not be required to
obligate any funds appropriated for the purpose of incarcerating D.C. Code felons and
will have no responsibility for housing such persons.
Consulting with representatives of the Federal and District judiciary, the Federal
and District governments will also develop and implement a transition plan
transferring responsibility for D.C. Code violation offender pretrial, public defender,
parole, probation, and post-adjudication/post-conviction adult offender supervision
from the District government to the Federal government over a three-to-five-year
period. The United States Parole Commission will continue to assume
responsibility for all D.C. felons housed in Federal Correctional Institutions who
have sentences subject to provisions of parole.
The Federal government will take direct responsibility (in consultation with the
D.C. judiciary) for funding the D.C. court system and related services (including
plans relating to retirement benefits and other personnel matters), and establishing
an independent budgetary, financial oversight, and administrative support system for the
D.C. courts. The Courts will remain self-managed.
5. Economic Development. The Federal government will make tax benefits available to the
District both to encourage hiring by finns in the District of residents of distressed areas in
D.C., and to encourage economic revitalization throughout the District.
An economic development corporation (EDC) will be established as a non-Federal public
authority in the District of Columbia, with the mission of revitalizing the nation's capital
city and benefitting the District's residents and businesses. The Federal government
intends (a) to capitalize the EDC with a $50 million grant; (b) provide $250 million in tax
incentives to encourage business investment both downtown and in distressed
communities, and to help businesses increase employment of residents of the District of
Columbia; and (c) improve the District government's borrowing authority by removing
impediments in its borrowing statutes so that the District government will have the same
ability to finance projects as other cities have.
6. Infrastructure. The National Capital Infrastructure Commission (NCIC) will be
established to assume certain State-like responsibilities for selection, funding, and
oversight of National Highway System capital projects (including roads, bridges, and
transit) and NHS operations and maintenance projects (excluding police authority,
National Park Service roads, and transit) within the District. The NCIC will be governed
by a five-member board to be composed of three representatives from the District and one
representative from the Department of Transportation and one representative from the
Economic Development Corporation. Contract administration will be performed by the
Federal Highway Administration. In addition, eligibility for Surface Transportation
Program (STP) funds will be expanded to include local public roads. To support NCIC
7
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projects, the National Capital Infrastructure Fund (NCIF) will be established in FYI998
with $108 million for road, bridge, and transit capital projects. An additional $17
million will be provided in FY1998-03 for NHS operations and maintenance.
Federal-aid funds for the District's NHS, Interstate Maintenance, and Bridge programs
will be transferred to the NCIC in FYI998-03. The Administration also proposes that
the NCIC be authorized to accepted contributions from other sources.
7. Personal Income Tax Collection. At the request of the District, the Internal Revenue
Service will assume responsibility from the District of Columbia for administering and
enforcing D.C. individual income and payroll taxes. This would include the processing
of those taxes paid by individuals, as well as the payment of related employment and
payroll taxes. The District government will maintain processing and collection
responsibility for all other taxes collected for the District.
Upon enactment of the legislation to implement the Plan, the parties to the MOU will
review the legislation and confer on whether any revisions to the MOU are necessary to ensure
its consistency with the legislation.
SECTION V. DISTRICT CONDITIONS
The District government understands that it will be expected to undertake significant
actions as part of the National Capital Revitalization and Self-Government Improvement Plan
(the "Plan"). This section sets out the actions that the District government agrees to take as a
condition of the Federal government actions under the legislation to carry out the Plan.
1. Medicaid. The District agrees to develop and implement plans satisfactory to the
Secretary of Health and Human Services to accomplish each of the following:
1.1. To develop an effective system for the identification and collection of amounts owed by
third parties for medical care and services furnished to individuals under the District's
Medicaid plan; and
1.2. To ensure the timely audit and settlement of cost reports of institutional providers
(including hospitals, nursing facilities, and intermediate care facilities for the mentally
retarded) under the District's Medicaid plan, including prompt elimination of the backlog
of such audits and settlements.
1.3. To develop and implement, directly or under contract, a comprehensive health care
management information system that will standardize data base development and
management, and integrate health care delivery with a public health data system. Such a
system shall at a minimum have the capacity to accomplish the following functions:
1.3.1. To assist eligibility verification;
1.3 .2. To create utilization and financial profiles of providers;
8
Hcx-Dum~ COilv~;Jion
1.3.3. To identify services (including preventive services) received by program beneficiaries;
1.3.4. To monitor the claims processing and other Medicaid operations of the fiscal agent;
1.3.5. To monitor the quality of care provided under managed care contracts; and
1.3.6. To coordinate information management with respect to the District's Medicaid program
and other public health programs and functions.
1.4. To develop a comprehensive behavioral managed health care system, which combines
substance abuse and mental health grant programs. Development of such a plan shall
include a pilot project for better evaluation of in-patient acute psychiatric patient
admissions, and the purchase of a comprehensive, risk-based system for managed care of
behavioral health which covers all eligible populations and services.
2. Pensions. The District Government agrees (see Appendix One for definitions):
2.1. To establish a Replacement Plan for the current Retirement Program
2.1.1. The Replacement Plan will cover all existing and new employees (except for judges) who
are, or would be, covered by the Retirement Program, if the Retirement Program
continued unchanged, and will be established by the date specified in legislation.
2.1.2. To the extent required by current law, the Replacement Plan will be established through
collective bargaining.
2.1.3. After the Adoption Date, the Replacement Plan may not be amended in any manner that
materially increases the cost of the Replacement Plan without provision of a mechanism
for funding such increases, in accordance with Section 2.2.
2.2 That the Replacement Plan will use appropriate funding methods and costs that do not
exceed the sum available in the District of Columbia Budget and Financial Plan.
2.2.1. The cost of any defined benefit plan will be determined in accordance with the
measurement standards of Governmental Accounting Standards Board Statement No. 27
(GASB 27), with the following additional restrictions:
2.2.1.1. funding methods will be limited to entry age or frozen entry age; and
2.2.1.2. amortization of any unfunded actuarial liability is required over no more than 30
years on a closed basis.
2.2.2. The cost of any defined contribution plan is the employer contribution required under the
provisions of the plan.
9
Hex-DiJi1I~ COflv~;~illfl
2.2.3. All costs of the Replacement Plan must be reflected in the D.C. Budget and Financial
Plan in accordance with the standards described above.
2.2.4. All costs of the Replacement Plan must be paid in accordance with the D.C. Code 1981,
Title 1, Chapter 7, subchapter III.
2.2.5. Contributions of all existing and new employees (except judges) will be paid into the
Replacement Plan.
2.3. To transfer copies of books and records of the Retirement Program and the Fund and to
be financially responsible for errors and omissions, including all necessary records of
individual employees.
2.3.1. Copies of any books and records pertaining to the Retirement Program and the Fund
required by the Secretary of the Treasury or the Trustee must be made available to the
Secretary or Trustee within 30 days after the Secretary or Trustee requests them.
2.3.2. The District will reimburse the Trustee for all costs, including benefit payments, resulting
from errors or omissions in the books and records pertaining to the Fund.
2.4. To transfer assets from the Fund
2.4.1. Any and all assets of the Fund required to be transferred to the Trustee shall be
transferred on the Transfer Date in a form specified by the Trustee.
2.4.2. The District of Columbia Retirement Board will administer the retirement programs until
the Trustee assumes these responsibilities. The District government will reimburse the
Fund for any benefits paid out of the Fund between the Freeze Date and the transfer date
that exceed payments that would have been the responsibility of the Federal government
if the transfer had occurred simultaneously with the freeze.
3. Intermediate-Term and Short-Term Lending. The District agrees that:
3.1. Any intermediate-term loan to eliminate the accumulated fund balance deficit would be
for no more than 15 years, with an interest rate of Treasuries of comparable maturities
plus 1/8 of one percent.
3.2. Any inter-year loan for liquidity purposes and/or intermediate-term loan to eliminate the
accumulated fund balance deficit will not exceed the amount of $500 million.
3.3. The Secretary of the Treasury may require early reimbursement if the District can obtain
credit on the commercial market on favorable terms for refinancing as determined by the
Secretary.
10
Ht;xDui1l~ (,;O.lv'~; JiOil .
3.4. The District must be in compliance with the approved Budget and Financial Plan
before any lending can occur.
3.5. The District must provide a requisition for an advance of funds and a promissory
note to reimburse the Treasury for the advance.
3.6. The Financial Responsibility and Management Assistance Authority must certify
that there is an approved Budget and Financial Plan in effect for the District for the
Fiscal Year that the requisition is made.
3.7. The Secretary of the Treasury must receive certification that the District is unable
to obtain enough credit elsewhere to meet the District government's need for
financing.
3.8. The Federal government will work with the District government to amend its debt limit
provisions in order to allow implementation of the District's capital plan in an orderly and
sustainable manner.
4. Criminal Justice. This subsection of the Memorandum of Understanding (MOU)
between the Federal government and the District of Columbia' government (D.C.) outlines the
offer of the Federal government, wholly on appropriations and D.C.'s acceptance and satisfaction
of all other conditions and predicates identified and described herein, to assist D.C. by assuming
responsibility for certain traditionally State responsibilities and the conditions that D.C. must agree
to and fulfill should it choose to accept that offer as it relates to criminal justice functions,
including, but not limited to, certain defendant and offender services, corrections and the
judiciary. The MOU sets forth the expectations and responsibilities relating to proposed
changes and reforms in the D.C. criminal justice and judicial system and the procedures
(including new statutory and regulatory provisions) the Federal Government and D.C. will use to
implement the MOU.
In particular, the MOU is designed to:
4.i. provide a framework for changes to the D.C. sentencing system, including the abolition
of parole, institution of determinate guideline sentencing and the enactment of the new
mandatory minimum drug sentences, which are a prerequisite for the Federal
Government accepting responsibility for the incarceration of felons convicted of D.C.
Code violations.
4.ii. ensure that such sentencing system is to be enacted within 24 months, or the Federal
Government will not be required to obligate any funds appropriated for the purpose of
incarcerating D.C. Code felons and will have no responsibility for housing such persons.
II
Hex-Dult~ C;Oilv':;Jiun
4.iii. ensure an appropriate transfer and transition of responsibility from D.C. to the Federal
Government for pretrial, public defender, parole, probation, and post-conviction
supervision and services for adult D.C. Code defendants and offenders.
4.iv. ensure an appropriate transfer of responsibility from D.C. to the Federal Government for
the incarceration of sentenced felons convicted of D.C. Code violations, assuming
sufficient resources are provided by Congress to develop necessary bed space to
accommodate the resulting increase in the Federal Bureau of Prisons (BOP) population
and D.C. Code violators are designated in the same manner as Federal inmates.
4.v. provide the basis for establishing an independent budgetary, financial oversight, and
administrative support system for the D.C. courts.
4.vi. define the respective roles of the D.C. and Federal Governments in relation to lawsuits
and resulting liability, as they may be affected by the reforms agreed to in this MOU.
4.vii. ensure the development by D.C. and the Federal Governments of transition plans
4.vii.a. (in consultation with the Federal and D.C. judiciaries) for transferring
responsibility for pretrial, public defender, parole, probation, and
post-conviction supervision and services for adult D.C. Code defendants
and offenders over a transition period of one to three years from the
enactment of the federal implementing legislation.
4.vii.b. for transferring responsibility for incarcerating sentenced felons convicted of D.C.
code violations over a period of approximately three to five years.
4.vii.c. (in consultation with the D.C. judiciary) for transferring responsibility for funding
the D.C. court system and related services, including plans relating to
retirement benefits and other personnel matters.
4.vii.d. for transferring control of the property at Lorton, Virginia to the Federal
Government.
4.1. Administration of District of Columbia Pretrial, Parole, Probation, and Post-Conviction
Offender Supervision, Housing, and Public Defender Services
4.1.1. Federal Government Responsibilities
4.1.1.1. After consultation with the Mayor of D.C., representatives of the D.C. Council,
the Chairman of the D.C. Financial Responsibility and Management
Assistance Authority (Financial Authority), and members of the affected
12
HcX-uUir.~ \'vil ..:,,,):Jil -
Federal and D.C. judiciaries, the Attorney General will select an Offender
Supervision, Defender and Courts Services Trustee to:
a) assure the smooth transition and continued operations of D.C.'s
Pretrial Services Agency and Public Defender Service;
b) implement an orderly shutdown of the D.C. Board of Parole in
coordination with the U.S. Parole Commission and the Superior
Court for the District of Columbia;
c) establish and operate a new D.C. Offender Supervision, Defender
and Courts Services Agency; and
d) accomplish, without disruption of services, the transfer of the adult
offender probation supervision functions of the D.C. Courts Social
Services Division,
until the Federal Government assumes responsibility for each of these
functions.
4.1.1.2. During the transition period, under the general auspices of the Trustee, the D.C.
Pretrial Services Agency will continue uninterrupted to provide services
and support for both juvenile and adult D.C. Code and Federal defendants
and offenders to the U.S. District Court for the District of Columbia, the
U.S. Court of Appeals for the District of Columbia, the Superior Court for
the District of Columbia, and the District of Columbia Court of Appeals.
The Director of Pretrial Services may employ such personnel as shall be
necessary pursuant to procedures and standards established by the Trustee
to facilitate transition to Federal status.
4.1.1.3. Following the transition period, the D.C. Pretrial Services Agency and the
D.C. Public Defender Service will be organizationally housed in a new
Federal D.C. Offender Supervision, Defender and Courts Services Agency.
4.1.1.4. The D.C. Board of Parole will be terminated after the Trustee establishes a
transition agency with the capacity to provide adequate field supervision to
adult D.C. offenders on parole, probation or supervised release, and the
U.S. Parole Commission is capable of carrying out parole functions for
D.C. Code felony offenders. Subject to appropriations, the D.C. Board
of Parole's functions and jurisdiction vis a vis felon parolees will be
assumed by the U.S. Parole Commission. Similarly, its functions and
jurisdiction vis a vis misdemeanant parolees will be assumed by the D.C.
court system. Substantive D.C. law will continue to apply to parole
13
HcxDuln~ CV'-II~;Jioi\ .
detenninations for all D.C Code offenders. The District of Columbia
Superior Court Division of Social Services will continue to provide
supervision to D.C Code juvenile offenders and will assume responsibility
for the supervision of misdemeanant parolees.
4.1.1.5. The Tmstee will accept employment applications for new offender field
supervISIOn positions in the transition agency from persons currently
employed by the D.C court system and the D.C Board of Parole.
Applications will be processed in accordance with procedures and
standards established by the Tmstee to facilitate transition to subsequent
Federal law enforcement employment in the successor Offender
Supervision, Defender and Courts Services Agency. Positions will be
advertised prior to hiring.
4.1.1.6. During the transition period, the Federal Government will transfer funds for the
Pretrial Services Agency, the Public Defender Service and the supervision
of D.C. offenders to the Tmstee. The head of any Federal department or
agency may provide the services of any personnel to the Tmsteeship to
assist in carrying out the Tmstee's duties.
4.1.1.7. During the transition period, under the general auspices of the Tmstee, the Public
Defender Service will continue unintermpted to provide services to D.C
Code defendants and the D.C court system. The Director of the Public
Defender Service may employ such personnel as shall be necessary
pursuant to procedures and standards established by the Tmstee to facilitate
transition to Federal status.
4.1.1.8. During the transition period, the employees of and funds allocated to the Tmstee
and the agencies for which the Tmstee is responsible shall not be counted
against the personnel and budget ceilings imposed on D.C by the
Financial Authority or Congress.
4.1.1.9. The U.S. Marshals Service (USMS) will contract with D.C., at a mutually
agreeable rate, to obtain space not needed by D.C. at D.C's Correctional
Treatment Facility (CTF) , to house persons in the custody of the USMS
for whom the USMS requires bed space in the D.C area.
4.1.1.10. Subject to appropriations, the Federal Government will provide funds to
support the D.C Board of Parole functions during the one to three year
transition period culminating in the termination of the D.C Board of
Parole.
4.1.2. District of Columbia Responsibilities
14
HeXuuliltJ (,v;I''i'~;J:Jfi ~
4.1.2.1. The District of Columbia will maintain responsibility for all D.C Code juvenile
offenders not prosecuted as adults.
4.1.2.2. The District of Columbia will have responsibility for housing and supervISing
persons charged with and/or convicted of misdemeanor violations in the
Superior Court for .the District of Columbia, both before and after
sentencing.
4.1.2.3. The District of Columbia will continue to house persons charged with felonies
under the D.C Code and persons convicted of felonies under the D.C
Code but not yet sentenced, in the Superior Court for the District of
Columbia. To the extent beds are available, D.C will continue to
house persons charged with felonies under the U.S. Code, and persons
convicted of felonies under the U.S. Code but not yet sentenced in the
U.S. District Court. D.C. will continue to receive reimbursement, at a
mutually negotiated rate, from the Federal Government for the costs of
housing such persons. "House" and "housing" include subsistence,
transportation of persons to and from court appearances, revocation
hearings, medical facilities, and the maintenance of necessary prisoner
records.
4.1.2.4. The District of Columbia will continue to house persons sentenced by the
Superior Court and detained pending a hearing for revocation of parole,
probation, or supervised release, and will provide suitable facilities for such
hearings. To the extent beds are available, D.C will house persons
sentenced by the U.S. District Court and detained pending a hearing for
revocation of parole, probation, or supervised release, will provide suitable
facilities for such hearings, and will continue to receive reimbursement by
the Federal Government at a mutually negotiated rate for the costs of
housing such persons and for providing such facilities. "House" and
"housing" include subsistence, transportation of persons to and from court
appearances, revocation hearings, and medical facilities, and the
maintenance of necessary prisoner records.
4.1.2.5. The Trustee will be an independent officer of the D.C Government and can be
removed by the Mayor only with the concurrence of the Attorney General.
The Attorney General has authority to remove the Trustee only for
misfeasance or malfeasance in office.
4.1.2.6. The Trustee will propose funding requests for offender supervision and services
for inclusion in the President's budget for each fiscal year of the transition.
15
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4.1.2.7. The Trustee will allocate funds for offender supervision (including adult felon
parole and probation) in D.C., including funds for short term
improvements, equipment contracts, and salary increases necessary to retain
key personnel, maintain and enhance current levels of service, including
offender drug testing, and provide for the safety and security of the
community.
4.1.2.8. Upon receipt of funds identified by Congress or other entities for Pretrial Services,
the Trustee will immediately transfer such funds to the Pretrial Services
Agency.
4.1.2.9. Upon receipt of funds identified by Congress or other entities for the D.C. Public
Defender Service, the Trustee will immediately transfer such funds to the
Public Defender Service.
4.1.2.10. Effectively immediately and in view of the' responsibility to be undertaken
by the U.S. Parole Commission to carry out the functions of the D.C.
Board of Parole pursuant to the parole laws and regulations of D.C., the
D.C. Council will not enact legislation that changes or modifies parole
laws and regulations as applicable to felony offenders without the
concurrence of the Attorney General. D.C. will immediately take steps to
modify parole as applicable to misdemeanants to provide for D.C. court
supervision of D.C. misdemeanant parolees and the elimination of the
D.C. Board of Parole. Following the assumption by the U.S. Parole
Commission of the functions of the D.C. Board of Parole, the D.C.
Council will cede to Congress the sole authority to legislate changes to the
D.C. Code pertaining to the parole of D.C. felony offenders.
4.1.2.11. It is expected that the transition period for these offender, defender and
court services will end no sooner than one year but not later than three
years after the enactment of the related legislation.
4.1.2.12. The D.C. Corporation Counsel will provide representation for the Trustee
and Trustee supervised agencies. (see litigation and liability section)
4.2. Administration of District of Columbia and Federal Prisons
4.2.1. Federal Government Responsibilities
4.2.1.1. The Federal Government will take administrative control of the nine parcels of
land, collectively located at or in the vicinity of Lorton, Virginia ("the
Lorton property"), and other appropriate sites. Mter the BOP's capacity
has been in'creased through renovation of existing facilities and new
16
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construction at the corrections complex in Lorton and other locations
selected by BOP, BOP will house felons who were convicted of D.C.
Code violations and sentenced to terms of imprisonment. (A recently
completed Congressionally mandated study of the D.C. Department of
Corrections revealed that most of the institutions at Lorton have exceeded
their useful lifespan and need major renovations or demolition.)
4.2.1.2. BOP will conduct a thorough preliminary assessment of the Lorton property
to determine its environmental condition, including a study of the
contamination on the property and an estimation of the costs
associated with bringing the property into compliance with
environmental and other applicable regulations. Based on
preliminary information gathered pursuant to a review of the
environmental conditions of a portion of the Lorton property, BOP
could begin planning for renovation and construction immediately;
actual physical renovations would not begin until Fiscal Year 1998.
The estimated date for the completion of the preliminary
environmental assessment process is March 21, 1998.
4.2.1.3. BOP will oversee the operation of community corrections. centers in
D.C. as necessary to provide an appropriate transition for inmates
who are nearing release from Federal prisons, including those
convicted of D.C. Code violations. BOP intends to use existing
community corrections centers in D.C. to the extent practicable and
will work with D.C. officials to identify prospective sites, as needed to
establish new community corrections facilities.
4.2.1.4. D.C. Code offenders will be housed together with Federal offenders in
facilities operated by BOP in Lorton, Virginia and elsewhere. Every
effort will be made to house D.C. felons at facilities as close to D.C. as
permitted by inmate program and security needs and BOP population
management requirements. D.C. felons will be designated in the
same manner as Federal inmates, and ordinarily initially assigned to
institutions located within a 500-mile radius of their release residence.
BOP anticipates that many of the initial designations for D.C.
offenders will be within a significantly closer radius. BOP also will
work with D.C. officials to identify sites for possible Federal
correctional facility construction within D.C.
4.2.1.5. During the transition period, based upon assurances from D.C. that
felons convicted of violating the D.C. Code will, in the future, receive
sentences similar to those received by comparable offenders convicted
of comparable Federal offenses, BOP will house those sentenced D.C.
felons in the custody of the D.C. Department of Corrections as the
Director of the BOP deems appropriate in accordance with available
17
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capacity. If such a new structure for sentencing under the D.C. Code
is in place as of October 1, 2001, BOP will accept D.C. felons
sentenced under the new sentencing structure in accordance with the
capacity of BOP. By October 1, 2002, and assuming fulfillment of all
requisite conditions, BOP will have assumed responsibility for
incarcerating all sentenced D.C. felons.
4.2.1.6. BOP will accept employment applications from persons currently
employed by the D.C. Department of Corrections for BOP vacancies
and will make hiring selections in accordance with existing Federal
procedures and standards. Positions for new BOP facilities will be
advertised prior to hiring.
4.2.1.7. After consultation with the Mayor, representatives of the D.C.
Council, the Chair of the Financial Authority, members of the
judiciary and others, the Attorney General will select a Corrections
Trustee to oversee expenditures of the D.C. Department of
Corrections relating to sentenced, incarcerated felons, until BOP
assumes responsibility for all incarcerated sentenced D.C. felons.
4.2.1.8. The Federal Government will provide funds for the incarceration of
sentenced D.C. felons through the Trustee to the D.C. Department of
Corrections. The head of any Federal department or agency may
provide the services of any personnel to the Trustee to assist in
carrying out the Trustee's duties.
4.2.1.9. Of the Federal funds received by the Trustee, the Trustee will
reimburse BOP for those funds identified by Congress to be used for
the construction of new facilities and the major renovation of existing
facilities. BOP will be responsible and accountable for determining
how these funds will be used, including the type, security level, and
location of new facilities.
4.2.1.10. During the transition period, the employees of and appropriations
allocated to the Trustee and the agencies for which the Trustee is
responsible shall not be scored or counted against the personnel and
budget ceilings imposed on D.C. by the Financial Authority or
Congress.
4.2.2. District of Columbia Responsibilities
4.2.2.1. Offenders convicted of D.C. Code violations will be sentenced
pursuant to a new D.C. sentencing system, described below. BOP
shall not be required to obligate any funds appropriated for the
absorption of D.C. Code felons into the Federal prison system and will
have no responsibility to house any persons convicted of felony
18
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offenses, if the new sentencing system is not enacted within 24 months
of the authorizing legislation's enactment.
4.2.2.2. D.C. will continue to house felons sentenced to terms of imprisonment
by the Superior Court for the District of Columbia until such persons
have been designated by BOP. To the extent beds are available, D.C.
will continue to house felons sentenced to terms of imprisonment by
the U.S. District Court until such persons have been designated by
BOP and will continue to receive reimbursement by the Federal
Government, at a mutually negotiated rate, for costs of housing
persons sentenced by the U.S. District Court.
4.2.2.3. The Trustee will be an independent officer of the D.C. government
and can be removed by the Mayor only with the concurrence of the
Attorney General. The Attorney General has authority to remove
the Trustee only for misfeasance or malfeasance in office.
4.2.2.4. The Trustee will propose funding requests for the incarceration of
sentenced D.C. felons, for inclusion in the budget submitted by the
President to Congress for each fiscal year of the transition.
4.2.2.5. The Trustee will allocate funds to the D.C. Department of
Corrections, .including such sums as may be appropriated for short
term improvements that are necessary for the safety and security of
staff, inmates, and the community.
4.2.2.6. The D.C. Department of Corrections will implement the short term
improvements in physical security identified in the "District of
Columbia Department of Corrections Short-Term Improvements Plan
(September, 1996)."
4.2.2.7. Upon receipt of Federal funds identified by Congress for constructing
new prisons and making major renovations to existing facilities for
the incarceration of D.C. felons, the Trustee will immediately
reimburse BOP for such funds.
4.2.2.8. The D.C. Corporation Counsel will provide representation for the
Trustee and Trustee supervised agencies. (see litigation and liability
section)
4.2.2.9. During the transition, D.C. will transfer control of the property at
Lorton, Virginia to the Federal Government, though the D.C.
Department of Corrections may continue to house D.C. felons at
facilities located at Lorton until such time as BOP absorbs such
offenders into the Federal prison system.
19
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4.3. Sentencing. The District of Columbia understands and agrees that the D.C. sentencing
system will be changed pursuant to proposed legislation in the following manner:
4.3.1. Congress will amend the D.C. Code to abolish parole for all persons convicted of
D.C. felony offenses committed on or after 3 years from the enactment of the
Federal authorizing legislation.
4.3.2. Congress will amend the D.C. Code so that good time calculations for all persons
convicted of D.C. felony offenses committed on or after 3 years from the
enactment of the Federal authorizing legislation will be made according to the
Federal requirements.
4.3.3. Congress will establish a new D.C. Board of Criminal Sentences (the Board) as an
independent body within the D.C. Government. All persons convicted of D.C.
felonies committed on or after 3 years from the enactment of the Act will be
sentenced according to a determinate sentencing system promulgated by the Board
and transmitted by the Board to the D.C. Council no later than 18 months after
enactment of the Federal authorizing legislation.
4.3.4. The Board will develop a sentencing system which shall include binding
guidelines and may include such amendments or repeals of provisions in the D.C.
Code relating to the maximum and minimum prison terms as are necessary to
accomplish the purposes of the Act. Ninety days after the Board promulgates
and transmits the sentencing system to the D.C. Council, the sentencing system, its
guidelines, amendments and repeals will become effective unless disapproved in its
entirety by a majority of the Council. If disapproved by the Council, the system
may be enacted by Congress.
4.3.5. The promulgated sentencing system will supersede any inconsistent provision of
the D.C. Code.
4.3.6. Congress will repeal certain other provisions of the D.C. Code to conform with
the new sentencing system (D.C. Code Title 24, Chapters 2 and 8), including the
Youth Rehabilitation Act.
4.3.7. Congress will amend D.C. Code Title 33, Section 541 to adopt certain mandatory
penalties necessary to further the Superior Court of the District of Columbia's
Drug Intervention Program and effective local law enforcement. The new
sentencing system will incorporate these mandatory penalties, thereby excluding
local narcotics offenses from the mandate that sentences be similar to those that
would be imposed upon comparable offenders in the Federal system.
20
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4.3.8. The Board will not have the authority to provide for capital punishment under any
law applicable exclusively in D.C.
4.3.9. The Board will have seven voting members. All the members of the Board shall
have knowledge and responsibilities with respect to criminal justice matters. The
Attorney General (or her designee) will chair the Board. The other members
will include two judges of the Superior Court for the District of Columbia and
one representative each of the following entities: the D.C. Council, the Executive
Branch of the D.C. Government, the D.C. Public Defender Service, and the U.S.
Attorney for the District of Columbia. One representative each of the D.C.
Corporation Counsel and BOP will serve as non-voting, ex officio members.
4.3.10. An affirmative vote of at least six Board members will be necessary to promulgate the
sentencing system.
4.3.11. In developing the sentencing system, the Board will hold two or more public hearings,
review other sentencing guideline system models, consult with sentencing reform
experts, and solicit written comments from the public.
4.3.12. If the Board fails to promulgate a sentencing system within 18 months, the Board will
terminate, and the Attorney General will develop a sentencing system to be
transmitted to the D.C. Council for approval. Ninety days after the Attorney
General transmits the sentencing system to the D.C. Council, the sentencing
system, its guidelines, amendments, and repeals will become effective, unless the
Council disapproves the system in its entirety and Congress, in turn, does not
approve it.
4.3.13. The Board will have the mandate to ensure that the sentencing system it establishes,
among other things:
4.3.13.1. will result in sentences for those convicted of D.C. felony offenses similar
to those that would be imposed upon comparable offenders convicted of
comparable offenses in the Federal system;
4.3.13.2. will result in sentences that reflect the seriousness of the offense and
provide for just punishment, afford adequate deterrence to potential future
criminal conduct of the offender and others, and provide the defendant
with needed educational or vocational training, medical care, and other
correctional treatment;
4.3.13.3. will provide certainty and fairness in meeting the purposes of sentencing,
avoiding unwarranted sentencing disparities among similar defendants,
while maintaining sufficient flexibility to permit individualized sentences;
21
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1;;1\"1,)1oI11lt' \J";.td~~;,J I
4.3.13.4. will take into account the high volume of sentencing proceedings in the
D.C. Superior Court as bearing upon the degree of complexity of the
sentencing system; and
4.3.13.5. will ensure that the system is neutral as to the race, sex, marital status,
ethnic origin, religious affiliation, national origin, creed, socioeconomic
status, and sexual orientation of offenders, if not related to the commission
of the offense.
4.3.14. As part of the sentencing system, the Board will develop binding guidelines for use in
determining the sentence to be imposed upon convicted felons. The guidelines
will specify:
4.3.14.1. when to impose a sentence of probation, a fine, or a term of imprisonment
and the appropriate amount or length, thereof, as well as intermediate
sanctions;
4.3.14.2. when to impose a term of supervised release following imprisonment, and
the appropriate length, thereof; and
4.3.14.3. whether multiple sentences to terms of imprisonment should run
concurrently or consecutively.
4.3.15. Ninety days after promulgation of the sentencing system, the Board will be terminated.
There will be established a successor, Federally funded agency to amend the
guidelines as necessary to achieve the purposes of the Act. The D.C. Council
may recommend to Congress whether or not these amendments should be
approved. However, the amendments will take effect as prescribed by the
successor agency, unless they are modified or disapproved by Congress. The
successor agency will have no powers to revise the D.C. Code but will
recommend changes to the Code as may be necessary to further the purposes of
the Act.
4.3.16. The Superior Court for the District of Columbia, D.C. Department of Corrections, and
any other agency will submit information about convicted felons as required by
the Board and the U.S. Department of Justice. This would permit an assessment
of the extent to which sentences imposed by the Superior Court of the District of
Columbia are similar to those imposed for comparable offenders in the Federal
system. The results of this assessment would be used by the Board in developing
the new sentencing system for D.C.
22
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4.3.17. Four years after the enactment of the new sentencing system, ther,e will be an evaluation
to determine the extent to which the sentencing system has succeeded in
accomplishing the goals set forth in the Act.
4.4. Liability and Litigation Responsibility and Authority
4.4.1. Federal Government Responsibilities
4.4.1.1. The Federal Government will be responsible for the defense of any claim arising
from any alleged act or failure to act on the part of the United States, its
agencies and personnel, in connection with pretrial, defender, offender
supervision, sentencing reform, corrections, probation and parole services,
and for any resulting liability, after responsibility for these services has
passed to the Federal Government at the end of the transition period.
4.4.1.2. The Federal Government's assumption of responsibility for the defense of claims,
and any resulting liability, set forth in paragraph 4.4.1.1. above shall
include claims arising from any alleged act or failure to act of BOP, its
agencies and personnel in connection with the demotition, repair,
renovation, or construction of any building, structure, or other
improvement of any kind at the Lorton, Virginia property.
4.4.1.3. The Attorney General, in her discretion, may direct any litigation involving the
Trustees appointed pursuant to sections 4.1.1.1. and 4.2.1.6. above, pretrial
services, offender supervision services, or sentencing reform during the
transitional period, and may provide litigation services for the Trustees and
the agencies responsible for pretrial services, offender supervision services,
and sentencing reform during the transitional period in lieu of
representation by D.C. Exercise of the Attorney General's discretion shall
not change the terms of this agreement and shall not otherwise enlarge the
liability of the United States, its agencies, or personnel. However, D.C.
may petition the Attorney General to request reimbursement for litigation
costs and liability arising from actions of the Trustees.
4.4.2. District of Columbia Responsibilities and Liability
4.4.2.1. D.C. will be responsible for the defense of any claim that has arisen or may arise
from any act or alleged failure to act by D.C., its agencies or personnel, in
connection with D.C.'s pretrial, defender, offender supervision,
sentencing reform, corrections, or probation and parole services, and for
any resutting liability. D.C. will remain responsible for defending and
bearing any liability resulting from any such claim even if responsibility for
the pertinent service has passed to the Federal Government. D.C. will
23
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also be responsible for the defense of any claim arising from any activity of
D.C., its agencies or personnel as a result of any action agreed to in this
MOU, and for any resulting liability.
4.4.2.2. D.C. is, and will remain, responsible for the defense of any and all claims
described in paragraph 4.4.2.1. above, including the defense of claims
arising from any alleged act or failure to act of the Trustees (see sections
4.1.1.1. and 4.2.1.6.). Except as provided in paragraph 4.5.3. and in
paragraph 4.1.3.) above, the D.C. Corporation Counsel will provide
litigation services as required to carry out this responsibility.
4.4.2.3.Notwithstanding paragraph 4.4.2.2. above, the Trustees and the agencies
responsible for pretrial, defender, offender supervision services, and
sentencing reform may choose not to utilize the Corporation Counsel and
to engage other litigation services.
4.5. District of Columbia Courts
4.5.1. Congress will make all necessary amendments to the D.C. Code and other laws to
terminate budgetary control and other involvement of the D.C. Government in the
finances and administration of the D.C. court system, including the Superior Court of the
District of Columbia and the District of Columbia Court of Appeals.
4.5.2. The Joint Committee on Judicial Administration of the D.C. courts will prepare and
submit the budget for the D.C. court system. The budgetary requests of the D.C. courts
system will not be subject to revision by the D.C. Government or the Executive Branch of
the Federal Government.
4.5.3. The D.C. court system, through its Executive Office, will be authorized to contract with
D.C. agencies, Federal agencies, and other public and private entities, for necessary
supplies, equipment, and services.
4.5.4. Expenditures of the D.C. court system will be paid out of funds appropriated for those
courts and credited to a Treasury account established for that purpose. Funds received
by the D.C. court system will not be part of the funds or budget of D.C.
S. Economic Development.
This Memorandum of Understanding between the Federal government and the District
government outlines (i) legislation that the Federal government intends to support, and (ii) the
conditions that District government must agree to and fulfill before the Federal government will
support the legislation.
24
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S.i. Outline of Legislation
The Federal government intends to support legislation that will (A) provide the District
government with a new vehicle to spur economic development in the District of Columbia, and
capitalize the new vehicle with a $50 million grant; (B) provide $250 million in tax incentives to
encourage business investment both downtown and in distressed communities, and to help
businesses increase employment of residents of the District of Columbia; and (C) improve the
District government's borrowing authority by removing impediments in its borrowing statutes so
that the District government will have the same ability to finance projects as other cities have.
5.i.a. The Economic Development Corporation
Overview. The legislation will include congressional findings recogmzmg the
need for economic development in the District of Columbia, the unique
disadvantages that the District government faces, when compared to other cities,
in its efforts to finance economic development from local tax revenues because
Federal law limits the tax base and taxing authority of the District government,
and the national interest in having the Federal government assist the District of
Columbia in becoming a safe, clean, and beautiful city worthy of the seat of the
Federal government, which is a goal that will be realized only through the
development ofa strong local economy.
The legislation will state the purposes for the part of the legislation pertaining to
economic development, which focus on expanding employment and business
opportunities in the District of Columbia, increasing the rate of private sector
investment in the District of Columbia, developing comprehensive strategies for
the economic development of the District of Columbia, assisting the
implementation of projects throughout the District of Columbia, and enhancing
the institutional capacity of the District government to accomplish and realize
economic development.
The legislation will establish the District of Columbia Economic Development
Corporation (the Corporation) under Article I, section 8, clause 17 of the
Constitution of the United States. The Corporation will be established as a
corporate body and instrumentality of the District government, and will not be
part of the Federal government.
Board of Directors. Officers and Employees. Reports. The powers of the
Corporation will be vested in a board of directors (the Board) consisting of nine
voting members. Six of the Board members will be appointed by the President in
consultation with the Congress. Of those six, four will be selected from the
for-profit business community, such as persons involved in real estate
development, retailing, manufacturing, construction, or financial services, and two
will be selected from community-based organizations. The eligibility
requirements for being appointed as one of the six appointed Board members will
be that the person maintains a primary residence or has a primary place of
25
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business in the District of Columbia and that the person not be an officer or
employee of the Federal government or the District government. The remaining
three Board members will be ex officio members. Of those three, one will be
chosen by the President from a Federal agency, a second will be senior officer of
the District government chosen by the Mayor, and a third will be senior officer of
the District government chosen by the Council. The appointed Board members
will have six-year terms, with four of the first six appointed Board members
having shorter, staggered terms. The President will have the authority to remove
any appointed Board member for cause. Each ex officio member will serve at the
pleasure of the official who designated that member. The President will choose
one of the appointed Board members to serve as the Chair of the Board.
The Board will appoint a Chief Executive Officer of the Corporation who will
direct and supervise the general management and administrative affairs of the
Corporation as prescribed by the Board. The Chief Executive Officer will
appoint a Chief Financial Officer and a General Counsel with the approval of the
Board, and may appoint additional officers and employees as appropriate. The
Board will fix the pay for the Chief Executive Officer, the Chief Financial Officer,
and the General Counsel; the Chief Executive Officer will fix the pay for all other
officers and employees of the Corporation. No officer or employee of the
Corporation will be paid more than the Executive Schedule level III annual pay
rate under 5 V.S.c. 5312. Neither the Civil Service laws governing competitive
appointments, position classifications, and pay rates, nor the District of Columbia
employment laws governing appointments and salaries, will apply to the
appointment of the officers and employees of the Corporation. The Corporation
will be authorized to establish its own employment benefit plans; however, an
employee of the Federal government or the rest of the District government who
leaves the Federal government or the rest of the District government to work for
the Corporation may remain enrolled in the retirement, life insurance, and health
insurance programs of the Federal government or the rest of the District
government, as the case may be, and the Corporation will make the required
employer contributions to those programs. No political test or qualification may
be used with regard to hiring or taking any other personnel action regarding the
officers and employees of the Corporation
The Corporation will be prohibited from spending any funds to influence
legislation or in connection with any political campaign on behalf of or in opposi-
tion to any candidate for public office.
The Corporation will submit a report by April 1 of each year to the Mayor, the
Council, the Authority, the President, the Congress, and the public concerning its -
operations for the prior fiscal year. This annual report will include a financial
statement audited by an independent auditor.
The Corporation will prepare an annual performance plan for the operations of the
Corporation. The elements of the performance plan will include performance
26
and a methodology for comparing performance results with performance goals.
The annual report of the Corporation will also include information regarding the
performance results achieved by the Corporation in the fiscal year being reported
compared with the performance goals established in the performance plan for that
year.
The Corporation will engage an independent consultant to perform in fiscal years
2001 and 2005 an evaluation of the efficacy of the authorities granted and the
changes in law made in the tax provisions of the legislation as aids to the
Corporation in carrying out the purposes of the legislation. The Corporation will
submit a report to the Mayor, the Council, the Authority, the President, and the
Congress on the conclusions of these evaluations 30 days after the close of the
fiscal years in which the evaluation is performed.
The Corporation will establish written rules and procedures to ensure that the
solicitation, acceptance, use, and disposition of gifts, grants, and subsidies will not
reflect unfavorably upon the ability of the Corporation, or of any its officers or
employees, to carry out the responsibilities of the Corporation in a fair and objec-
tive manner. The Corporation will establish written rules and procedures to
ensure that the procurement of goods and services by the Corporation and the
acquisition and disposition of property by the Corporation will produce the best
value for the Corporation, in the judgment of the Corporation, and will not reflect
unfavorably upon the ability of the Corporation, or of any its officers or
employees, to carry out the functions of the Corporation in a fair and objective
manner. The procedures governing dispositions of property by the Corporation
will include public notice.
General Powers. The Corporation will have numerous general powers, including
the power to sue and be sued; to adopt, amend, and repeal bylaws and procedures
for its governance; to make and perform contracts; to solicit, accept, use, and
dispose of gifts of money, services, and property from any source; and to lease,
purchase, use, improve, and dispose of any property. Some of the powers of the
Corporation will be limited by other provisions of the legislation, such as the
power to employ officers and employees and to fix their salaries and the power to
enter into financial assistance agreements. The Corporation will also be granted
the power to exercise any other power usually possessed by public enterprises or
private corporations performing similar functions that is not inconsistent with
applicable Federal of District law.
Economic Development Plans. The Corporation will be directed initially to give
priority to reviewing and evaluating existing economic development plans for the
District of Columbia, followed by the development of a comprehensive strategic
plan for carrying out the purposes of the part of the legislation pertaining to
economic development. The Corporation will be required to consult with the rest
of the District government in strategic planning.
27
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Financial Assistance. The Corporation will be authorized to provide financial
assistance for economic development projects directly or in participation with any
other source of financing, private or public, including any agency or
instrumentality of the rest of the District government. Financial assistance may
take the form of a loan, extension of credit, equity investment, grant, fixed
contribution to a loan loss or debt service reserve fund, or any other similar form
of financing or refinancing, but may not be a guarantee, insurance of payment of
principal and interest, or any other similar form of credit support that provides
recourse to the Corporation, and may include an exchange, lease, or sale of land.
The total amount of financial assistance that will be permitted to be provided or
committed under the legislation will be limited to the total amount of the capital
and land of the Corporation, and financial assistance to anyone person or project
will be limited to 15 percent of the total capital and land of the Corporation.
There also will be a procedure for waiving the limits on the amount of financial
assistance to one person or project.
The Corporation will be authorized to establish one or more for-profit or
not-for-profit corporate subsidiaries. No subsidiary of the Corporation will have
any power that the Corporation does not have. The Corporation will also be
authorized to establish one or more revolving funds for providing different types
of financial assistance. Funds from any source, including returns on financial
assistance, will be permitted to be deposited into any revolving fund and
transferred between revolving funds, and will be available for providing additional
financial assistance and for paying the expenses of the Corporation.
The Corporation will establish criteria for selecting the type of financial assistance
that is most appropriate for different types of economic development projects,
including criteria that include a preference for the type of financial assistance that
represents the least commitment of the capital of the Corporation.
The Corporation will also establish procedures to provide the rest of the District
government with a reasonable opportunity to review and comment on economic
development projects to which the Corporation is considering providing financial
assistance.
The Corporation will consider certain factors when reviewing applications for
financial assistance, such as the likelihood the project can be expected to create or
retain private sector jobs in the District of Columbia, the contribution of the
project to the economy of the District, whether the project will serve the interests
of the community where it will be located, whether the project is consistent with
the comprehensive strategic plan developed by the Corporation, and whether the
project will improve links between the economy of the District of Columbia and
the economy of the region.
28
H&xDuiTi~ ("Vill:,JiJiI .
The legislation will establish conditions precedent to the Corporation's approval
of any application for financial assistance for any economic development project,
such as the Corporation determining that there is a strong probability that the
project would not be undertaken without financial assistance from the Corpora-
tion, that financial assistance from the Corporation will not compete with or
supplant funds from sources other than the Corporation, including the rest of the
District government, that are otherwise available for the project, and that the rest
of the District government has been provided a reasonable opportunity to review
and comment on the project. A project's compliance with applicable Federal and
District of Columbia law will also be a condition precedent to the Corporation's
approval of the project's application for financial assistance.
Eminent Domain. The Corporation will be authorized to exercise, in the name of
the District of Columbia, the power of eminent domain to aid in carrying out the
purposes of the part of the legislation relating to economic development. The
provisions of the District of Columbia Code that govern condemnation
proceedings for the acquisition of property by the Mayor shall apply to the
Corporation.
Regulatorv Relief The Corporation will be authorized to request that the
Authority use its powers under section 103 of the District of Columbia Financial
Responsibility and Management Assistance Act of 1995 to order appropriate
officers or employees of appropriate regulatory authorities of the District
government to give expedited consideration to applications for District of
Columbia regulatory licenses, permits, and approvals of economic development
projects provided financial assistance by the Corporation. The Corporation will
be authorized to request the Mayor to cause any delayed or denied permit, license,
or approval to be issued or to demonstrate good cause for the delay or denial. If
the Mayor does not cause the necessary license, permit, or approval to be issued or
demonstrate in writing good cause for the delay or denial within 30 days of the
Corporation's request, the Corporation will be authorized to request that the
Authority use its powers to order appropriate officers or employees of appropriate
regulatory authorities of the D.C. government to take the action necessary to cause
the license, permit, or approval to be issued.
Appropriations. The legislation will authorize appropriations of $50,000,000 in
no-year funds to carry out the purposes of the economic provisions of the
legislation in fiscal year 1998. The Corporation will be required to provide at
least $20,000,000 or 40 percent of the amount appropriated, whichever is less,
either directly to non-profit organizations for job training, placement, and related
activities in those organizations for targeted residents of the District of Columbia,
or to non-profit third-party intermediaries to promote and finance such job
training, placement, and related activities in for-profit and not-for-profit
organizations. There will be a procedure for the Corporation to waive the
minimum amount requirement for financial assistance to non-profit organizations
for job training and placement.
29
HCA-DuiTI~ c,u,-I":;J:':lii .
Project Revenue Obligations. The Corporation will be given authority to issue
project revenue obligations, including refunding obligations, and to use the
proceeds to provide financial assistance for economic development projects. The
Corporation will have the duty to consult with the rest of the District government
so that the Corporation and the rest of the District government together make the
most effective use of available resources and authorities, avoid to the extent
practicable competition and duplication of efforts, and maximize the benefit to the
District of Columbia.
The project revenue obligations issued by the Corporation will be special obliga-
tions of the Corporation payable solely from the revenues, assets, and property of
the economic development project for which financial assistance is provided, to
the extent such revenues, assets, and property are pledged therefor. The
resolution of the Board authorizing the issuance of any project revenue obligations
will be permitted to prescribe such matters as the form and terms of the
obligations, the method of issuance, the rights and remedies of the holders, and
the security for the obligations. The Board will be permitted to authorize the Chief
Executive Officer to enter into agreements providing security for the repayment of
the project revenue obligations that the Corporation issues. The Corporation will
be permitted to establish reserve funds for the project revenue obligations and to
manage those reserve funds.
The amount of any project revenue obligations that the Corporation issues will be
excluded from the limitations on the amount of general obligation bonds that the
District of Columbia is authorized to issue. The resolution of the Corporation
authorizing the issuance of project revenue bonds will not be considered to be an
act of the Council subject to the 30-day congressional review period provided in
section 602(c) of the District of Columbia Self-Government and Governmental
Reorganization Act. The issuance by the Corporation of project revenue bonds
shall not be considered to be a borrowing of money by the District government for
purposes of the prior certification requirement of section 204 of the District of
Columbia Project Financial Responsibility and Management Assistance Act of
1995. Project revenue obligations issued by the Corporation will not be obliga-
tions of the District of Columbia or the United States, and neither the faith and
credit nor the taxing power of the District of Columbia nor the full faith and credit
of the United States will be pledged for the payment of any project revenue
obligation issued by the Corporation. Each project revenue obligation issued by
the Corporation will be required to contain on its face a statement that effect.
Other Matters. All funds and revenues of the Corporation that are not required to
be otherwise disposed will be held and invested by the Corporation or deposited
with and invested by a custodian selected by the Corporation.
The Corporation will not have any power to impose or collect taxes or to pledge
or create any lien on taxes imposed or collected by the rest of the District
government.
30
pertaining to the part of the legislation relating to the Corporation must be brought
in the United States District Court for the District of Columbia, with appeals
heard in the United States Court of Appeals for the District of Columbia Circuit.
Any petition for review of a regulation or procedure adopted by the Corporation
under the legislation with respect to providing financial assistance must be filed
within 90 days after the date of publication of notice of adoption of the regulation
or, if the permitted petition for review is based solely on grounds arising after
such ninetieth day, within 90 days of the date on which the grounds arise. No
judicial review of a regulation with respect to providing financial assistance will
be permitted in a proceeding reviewing any determination by the Corporation to
make, deny, or take no action with respect to an application for financial
assistance.
The provisions of the District of Columbia Code governing procurement,
disposition of property, and open meetings will not apply to the Corporation.
The Corporation will be exclusively administered by its Board and not the Mayor
nor the Council.
In any action brought by or on behalf of the Corporation, or against the Corpo-
ration, the Corporation will be permitted to be represented by the counsel that it
selects.
Dissolution. The Corporation will not be permitted to award or commit to award
any new financial assistance or to issue any new revenue obligations after
September 30, 2007. The Corporation will be permitted to meet existing
financial assistance commitments to provide financial assistance under
commitments entered into on or before September 30, 2007.
Beginning on October 1, 2007, the Board will be required to diligently pursue an
orderly termination of the affairs of the Corporation on or before September 30,
2010. The corporation will liquidate the assets of the Corporation unless the
Council elects to have some or all of the Corporation's assets transferred to an
agency or instrumentality of the rest of the District government. The Corporation
will be required to transfer the proceeds of all liquidations to the Mayor for
deposit into such account of the District government as the Mayor determines
appropriate. The Council will be permitted to direct the Corporation to transfer
some or all of the assets of the Corporation to an agency or instrumentality of the
rest of the District government and to direct to Corporation to deposit some or all
of the moneys of the Corporation (other than moneys reserved to fulfill financial
assistance commitments) to one or more accounts of the District government.
31
Hcx~Du~~ (;Ojll"~ .,JiJfl ~
If the Board completes the tennination of the affairs of the Corporation on or
before September 30, 2010, the Board will transfer to the Mayor the moneys of
the Corporation reserved to fulfill financial assistance commitments, will transfer
assets and deposit moneys of the Corporation as directed by Council, will transfer
to the Mayor the balance of the moneys of the Corporation for deposit into such
account of the District government as the Mayor detennines appropriate, and will
submit a final report on the Corporation to the Council, the Authority (if it is still
in operation), the President, and the Congress.
If the Board has not completed the tennination of the affairs of the Corporation on
or before September 30, 2010, the Mayor will succeed to all of the powers, assets,
duties, and liabilities of the Corporation and the Board on October 1, 2010,
including the duties to complete the tennination of the affairs of the Corporation,
to liquidate or transfer assets of the Corporation and deposit moneys of the
Corporation, and to submit a final report on the Corporation to the Council, the
Authority (if it is still in operation), the President, and the Congress.
For purposes of any outstanding project revenue obligation issued by the
Corporation on or before October 1, 2070, the District government will be deemed
to be the issuer after the dissolution of the Corporation.
5.ii.b. Tax Provisions of the Legislation
Overview. The legislation wilt add six new provisions to the Internal Revenue
Code of 1986 (the Code). These provisions are described below. The new tax
provisions will take effect on the date the legislation is enacted.
The District of Columbia Employment Credit. New section 1400A of the Code
will provide for a tax credit to employers in the District of Columbia that hire
certain residents of the District of Columbia. The credit will be equal to 40
percent of up to $10,000 in wages paid to a qualified employee during the
employee's first year of employment with the employer. Thus, the maximum
credit per employee will be $4,000. Generally, qualified employees will include
any individual that meets a residence test, a work-location test, and an income
test. For purposes of the $10,000 ceiling, certain non-cash benefits such as health
insurance, educational assistance, and dependant care assistance will be pennitted
to be taken into account.
To meet the residence test, the employee must reside in the District of Columbia
and either be a member of one of the Work Opportunity Tax Credit (WOTC)
targeted groups (including the new food stamp recipient group proposed in the
President's fiscal year 1998 budget) or live in a population census tract that has a
poverty rate of 15 percent or more. The work-location test will be satisfied if
either substantially all of the services provided by the employee for the employer
during the year are in District of Columbia or the employer's principal place of
business is in District of Columbia. Thus, for example, an employee of a
32
Hi:x-Di.lir.~ (,;(J'-I"~;3iJj\
construction company that has its principal place of business in District of
Columbia will qualify even if the employee works on projects in Maryland or
Virginia during the year. The income test, which only will apply if the employee
is not a member of a WOTC targeted group, will be satisfied if the employer does
not expect to pay the employee more than $28,500 during the employee's first year
of employment.
This employment credit will be available with respect to qualified employees
hired after the date of enactment and before October 1, 2002. In addition, the
WOTC and the welfare-to-work tax credit proposed in the President's fiscal year
1998 budget will be extended an additional two years, through September 30,
2002, with respect to individuals who reside in the District of Columbia, satisfy
the work-location test, and are either members of a WOTC targeted group or
long-term family assistance recipients.
Additional Section 179 Expensing. Under current section 179 of the Code,
businesses with less than $200,000 of investments in business equipment and
machinery during a year are eligible to take a current deduction, or "expense," up
to $18,000 of the cost of such property each year, rather than capitalizing that cost
and taking depreciation deductions over several years (the $18,000 annual cap
increases gradually to $25,000 between 1998 and 2003). The $18,000 is reduced
for each dollar of investment over $200,000, so that no expensing is available for
businesses with annual investments of $218,000 or more.
Under new section 1400B of the Code, businesses that have a significant portion
of their activities in higher poverty areas in the District of Columbia and that have
a work force at least 35 percent of which is made up of District of Columbia
residents, will be eligible for expensing for an additional $20,000 of business
equipment and machinery acquired each year. In addition, to the extent the
equipment and machinery is to be used in the District of Columbia, an expanded
ceiling will be available to businesses acquiring up to $400,000 in such property
during the year (the $38,000 amount available in 1997 phases out for businesses
with between $400,000 and $476,000 in investment). For purposes of this
incentive (as well as the Tax-exempt Economic Development Bonds discussed
below), higher poverty areas of the District of Columbia will mean any population
census tract with a poverty rate of 15 percent or more.
This additional expensing will be available for business equipment and machinery
placed in service between January I, 1998, and December 31, 2002.
Tax-exempt Economic Development Bonds. New section 1400C of the Code will
make a new category of tax-exempt, private activity bonds available in District of
Columbia. Under these rules, the bond proceeds will be permitted to be used to
finance a broader range of business property --including commercial and retail
facilities, as well as the underlying land --than under the laws currently applicable
to the District of Columbia. The businesses eligible to borrow the proceeds of
33
HcxDuffi~ (,Ojh':.JiJo .
these bonds will be limited to those that have a significant portion of their
activities in higher poverty areas of the District of Columbia and that have a work
force at least 35 percent of which is made up of District of Columbia residents
(i.e., the businesses eligible for additional section 179 expensing except that there
is no cap on the annual investment in business equipment and machinery). The
aggregate amount of these bonds per eligible District of Columbia business will
not be allowed to exceed $15 million, and these bonds will be subject to the
District of Columbia's annual $150 million private activity bond volume cap.
These special tax-exempt bond provisions will apply to bonds issued after the date
of enactment and before January 1, 2003. During that period, the legislation will
allocate to the Corporation 50 percent of applicable State ceiling on the authority
of the District government to issue private activity bonds in each calendar year
under section 141 of the Code.
Allocable Tax Credits {or Eauitv Investments in and Loans to District o(
Columbia Businesses. The Economic Development Corporation (The
Corporation) will be authorized by new section 1400D of the Code to allocate $95
million in nonrefundable credits to taxpayers that make equity investments in and
loans to District of Columbia businesses. The equity credit, which will not be
permitted to exceed 25 percent of the amount invested, will be available with
respect to investments in corporations or partnerships. This credit will be subject
to recapture if the equity interest is disposed of within 5 years. The lender credit
will be available with respect to loans made to District of Columbia businesses for
purchasing depreciable tangible property and any functionally related and
subordinate land. The maximum amount of the credit that the Corporation will
be authorized to allocate with respect to a loan is 25 percent of the principal
amount of the loan (measured by the cost of the property purchased). The
Corporation will allocate the credits pursuant to criteria it establishes, including
the degree to which the business borrowing the funds or receiving the equity will
provide job opportunities for low-and moderate-income residents, and whether the
business receiving the loan or equity infusion is located in a high-poverty area of
the District of Columbia.
These credits may be allocated and claimed between January 1, 1998, and
December 31, 2002.
Status o(The Corporation {or Federal Income Tax Purposes. New section
1400F of the Code will clarify the status of the Corporation for federal income tax
purposes so that, for example, charitable contributions to the Corporation will be
deductible and the Corporation will have the ability to issue tax-exempt bonds.
5.i.c. Improvements to the District government's borrowing authority.
34
the District government's borrowing statutes so that the District government will
have the same ability to finance projects as other cities have.
Outline of District Conditions
5.1. The District government will implement timely and efficient zoning, permitting, and
licensing processes by the end of fiscal year 1997.
5.2. The District government will offer personnel resources and fully cooperate with the
Corporation in its review and evaluation of existing economic development plans, in the
development of the Corporation strategic plan, and in subsequent implementation of the
plan.
5.3. The District government will support a legislative allocation to the Corporation of 50
percent of the applicable State ceiling on the authority of the District government to issue
private activity bonds in each calendar year under section 141 of the Internal Revenue
Code.
5.4. The District government will support a legislative authorization to the Corporation of the
right to exercise eminent domain in the name of the District of Columbia, and certain
other powers specified above.
5.5. The District government will give expedited consideration to the Corporation's requests
for land transfers (including transfers from the Redevelopment Land Agency), zoning
adjustments (including variances and special exceptions), and building and other permits
and licenses for projects and activities as requested by the Corporation.
5.6. The District government will support legislation that provides that all powers, rights,
assets, duties, obligations, and liabilities of the Corporation will transfer to the District
government upon the Corporation's dissolution
6. Infrastructure.
6.1. Secretary o/Transportation Responsibilities. The Secretary of Transportation (hereinafter
in this section referred to as the Secretary) agrees that:
6.1.1. Beginning on October 1, 1997, the Secretary shall assume responsibilities generally
carried out by a State under Title 23 of the U.S.C. relating to selection (consistent with
the planning requirements of 23 U.S.C. 134 and 135), funding and oversight of the
National Highway System (NHS) capital projects and shall assume responsibilities for
funding the operations and maintenance of the NHS within the District of Columbia
(exclusive of police authority and exclusive of funding those NHS routes currently under
the jurisdiction of the National Park Service) with funds made available under the
National Capital Revitalization and Self-Government Improvement Act of 1997, to be
referred to henceforth in this section as the "Act."
35
(FHW A). The FHW A shall consult and coordinate NHS project responsibilities with the
District of Columbia. In selecting projects, the FHW A shall give consideration to the
District of Columbia Needs Assessment currently being developed by the Federal
Highway Administration in cooperation with the District of Columbia Department of
Public Works and the District of Columbia Strategic Transportation Plan.
6.1.3. Beginning on October 1, 1997, the Secretary shall assume responsibility for advancing
those NHS projects approved prior to that date that are not under construction or under a
contract for such construction by October 1, 1997, unless the Secretary and the District of
Columbia agree to continue to vest responsibility for such project advancement with the
District of Columbia. Such projects that are transferred under this section shall also be
governed by the requirements contained in section 6.2.4.
6.1.4. The Secretary may transfer National Capital Infrastructure Funds authorized under this
Act and available for capital expenditures and NHS apportioned funds authorized to be
transferred under this Act to other Federal-aid highway funding categories, consistent
with title 23, United States Code provisions governing the transfer ofNHS funds.
6.1.5. Funds made available to the Secretary for obligation on NHS projects under this Act shall
be administered by FHW A. From time to time as work progresses on a project,
payments shall be made by FHWA for the costs of construction, operations, maintenance,
and other eligible activities under this Act in accordance with applicable procedures
under Title 23, United States Code, or as established by the Secretary.
6.1.6. For Fiscal Year 1998, $108 million shall be authorized to be appropriated to the National
Capital Infrastructure Fund which shall be used for construction, reconstruction, and
rehabilitation of the NHS in accordance with 23 U.S.c. 103 ( i ), including transit capital
projects eligible for funding under section 103 ( i ).
6.1.7. In each of the fiscal years 1998 through 2003, the Secretary shall retain and deposit into
the National Capital Infrastructure Fund:
(a) 100 percent ofthe District of Columbia's apportionment for the NHS;
(b) 100 percent of the apportionments for Interstate Maintenance; and
(c ) 75 percent of the apportionment for the Highway Bridge and Replacement for use
consistent with 23 U.S.C. 103 ( i ).
6.1.8. In each of the Fiscal Years 1998 through 2003, $17 million shall be authorized to be
appropriated to fund the operations and maintenance of the NHS within the District of
Columbia, exclusive of those NHS routes under the jurisdiction and control of the
National Park Service.
36
activities and costs, excluding police services (except for those construction zone,
incident management and other police activities that are eligible for Federal-aid highway
reimbursement under title 23, United States Code) associated with the management and
operations of NHS highways including the following activities: routine maintenance of
roadways and rights-of-way, road repair, snow removal, lighting, signage, and those
utilities necessary for the NHS operations. The Secretary shall not be responsible for
funding the District of Columbia share of operating expenses for any transit activities.
6.1.10. The Secretary shall continue to provide oversight and technical assistance to the District
of Columbia for all Federal-aid projects that remain the responsibility of the District of
Columbia.
6.1.11. The Secretary through the FHW A will enter into any agreements or contracts with any
entity to advance, construct, reconstruct, rehabilitate, repair, maintain, or operate the NHS
within the District of Columbia excluding those NHS roadways under the jurisdiction and
control of the National Park Service, consistent with 23 U.S.C. 103 ( i ).
6.1.12. The Secretary shall encourage the hiring of local labor by contractors awarded contracts
including welfare to work labor, on NHS projects financed under this Act to the
maximum extent possible and consistent with federal law.
6.1.13. Unless reauthorized by Congress on, or prior to, September 30, 2003, the Secretary of
Transportation's responsibilities, other than the completion of ongoing projects funded
through this Act, would cease and no new deposits of Federal funds would be made into
the National Capital Infrastructure Fund after September 30,2003.
6.1.14. The Secretary shall provide the District of Columbia with the technical assistance
necessary to reassume its NHS responsibilities by September 30, 2003. The April 1996
findings of FHWA's review of the organizational capacity of the District of Columbia's
Department of Public Works shall guide the assistance.
6.2. District o/Columbia Responsibilities. The District of Columbia agrees that:
6.2.1. The District of Columbia shall continue to be responsible for providing police services on
NHS highways (including, but not limited to civil police functions, crime prevention,
investigations including traffic and accident investigation, and emergency traffic
direction). The District shall continue to own the right-of-way ofNHS highways that are
located within the District of Columbia.
6.2.2. The District of Columbia will continue to be responsible for all utilities and utility work
that is not necessary for operation of the NHS even if such utilities are located within the
right-of-way of the NHS.
6.2.3. The District of Columbia shall continue to be responsible for non-NHS projects funded
with Federal-aid highway funds. The authority to use Surface Transportation Program
37
Hex-Di.li1'i~ CO;li:;JiJil .
funds on local streets, highways, and roadways (except alleys) does not relieve the
District of Columbia of the responsibility for the non-federal matching share. The use of
other Federal-aid highway apportioned funds by the District of Columbia, other than as
provided herein, also requires a non-Federal matching share.
6.2.4. Beginning on October I, 1997, the District of Columbia is relieved of the responsibility to
provide the non-Federal match for NHS projects that are funded by the Secretary with
monies made available for NHS projects under this Act. The relief from providing the
non-federal match shall not include those projects that were approved by FHWA prior to
October 1, 1997 for which Federal-aid highway funds have been obligated. The District
of Columbia is responsible for providing the non-Federal match, the Federal-aid funds,
and any obligation authority for any such projects transferred to the Secretary for project
administration, oversight, or contracting.
6.2.5. The District of Columbia shall continue to be-responsible for any liability incurred on the
basis of the activities of the District of Columbia, its agencies, or personnel as a result of
any acts or omissions in carrying out this Act. The United States, its agencies, and
personnel will not incur any liability for any such acts or omissions.
6.2.6. The District of Columbia shall cooperate with the Federal Highway Administration in its
technical assistance efforts in order to assure that the District of Columbia can reassume
its NHS responsibilities by September 30, 2003. The goal of the effort shall be to satisfy
the April 1996 findings of FHWA's review of the organizational capacity of the District
of Columbia's Department of Public Works.
7. Personal Income Tax Administration The District agrees that:
7.1. General
7.1.1. The IRS shall administer and eqforce the District's individual income and employment
taxes.
7.1.2. The District shall continue to administer its unemployment benefits program.
7.2. Tax Codes
7.2.1. The IRS will administer the District's existing individual income and employment tax
laws. The only provision the IRS cannot administer is the District's refundable property
tax credit. If the District wishes to retain this provision, it must be transferred to its real
estate tax administration.
7.2.2. All of the administrative, procedural, and enforcement provisions of the Internal Revenue
Code of 1986 and related statutes will govern IRS administration of District taxes. The
District will have to amend its own tax code to achieve this to the satisfaction of the
Secretary of the Treasury.
38
H~xDurr:~ C;):I"~,JiJi1 .
7.2.3. To avoid the possibility of any inconsistent interpretations of similar provisions, the
District will have to amend its definitional provisions to conform them to the Internal
Revenue Code to the satisfaction of the Secretary of the Treasury.
7.2.4. The District must notify the Secretary of the Treasury of any future changes to its
individual income and employment tax laws. The Secretary may object if, in his
judgement, the prospective change would prove overly burdensome to the IRS, in which
case such change shall not be administered or enforced by the IRS. If the Secretary does
not object within 60 days after notification, the IRS will administer the provision within a
reasonable time after enactment.
7.3. Transfers to the District
7.3.1. The IRS will set up separate accounting and deposit systems for its collections of District
taxes. The District must, in turn, identify the person and/or office authorized to receive
transfers of collected amounts and set up related deposit accounts.
7.4. Effective Date
7.4.1. The IRS administration of District taxes shall'be prospective, starting on January 1 of the
calendar year that is at least 18 months after the Secretary certifies that the District of
Columbia has met the conditions set forth in the Memorandum of Understanding between
the United States and the District of Columbia.
39
Appendix One HeX-DiJir.~ (;ojrv'~;Ji()il
DEFINITIONS FOR THE PENSIONS SECTION OF THE MOU
"Adoption Date" means the date the Replacement Plan is adopted by the District Government or,
if later, October 1, 1997.
"District Government" means, as appropriate, the "District government" as defined by section
305(5) of the District of Columbia Financial Responsibility and Management Assistance Act of
1995 (Pub. L 104-8) or the District of Columbia Retirement Board as defined in section 102(5)
of the Reform Act.
"Freeze Date" means the date of introduction of the Revitalization Act.
"Fund" means the District of Columbia Police Officers and Fire Fighters' Retirement Fund, the
District of Columbia Teachers' Retirement Fund, and the District. of Columbia Judges'
Retirement Fund as defined in section 102( 10) of the Reform Act.
"Reform Act" means the District of Columbia Retirement Reform Act (Pub. L. 96-122).
"Replacement Plan" means the plan or plans described under Title I of the Revitalization Act.
"Retirement Program" means any of the retirement programs as described in section 102(7) of
the Reform Act as in effect on the day before the freeze date.
"Revitalization Act" means the "District of Columbia Revitalization Act of 1997."
"Secretary" means the Secretary of the Treasury or the Secretary's designee.
"Transfer Date" means the date on which the assets and obligations of the Fund are transferred to
the Trust.
"Trust" means the District of Columbia Retirement Trust created under Title I of the
Revitalization Act.
"Trustee" means the firm designated by the Secretary of the Treasury under Title I of the
Revitalization Act.
40
Message Creation Date was at 7-APR-1997 19:17:00
Attached is the proposed DC MOU. This is being circulated for interagency and
EXOP review under LRM# MJG56. Please provide any comments to Jill Gibbons by
COB Tuesday, April 8th. Thanks
---------------------- Forwarded by M. Jill Gibbons/OMB/EOP on 04/07/97 07:15 PM
Scott Quehl
04/07/97 07:07:20 PM
Record Type: Record
To: See the distribution list at the bottom of this message
cc:
Subject: DC MOU: 4. 7. 97 Drafts
The attached drafts of the MOU will be sent to agencies and EXOP tonight for
comments due tomorrow cob. The first draft reflects new language from the EDC
working group in Section IV and revised conditions for the District in Section
V. The second draft reflects all of the legislative and MOU condition
language, which Treasury would like to have circulated as part of the MOU.
Scott
Message Sent TO:~-------------------------------------------------------------
Michael Deich/OMB/EOP
G. E. DeSeve/OMB/EOP
Carol Thompson-Cole/OMB/EOP
James J. Jukes/OMB/EOP
M. Jill Gibbons/OMB/EOP
Daniel M. Tangherlini/OMB/EOP
Patricia E. Romani/OMB/EOP
Ellen S. Seidman/OPD/EOP
The following attachments were included with this message:
TYPE FILE
NAME DCMOU.A7
================== END ATTACHMENT 1 ==================
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Draft 4.7. 1997
This draft reflects only the District's conditions for the Economic Development section under
theMOU.
MEMORANDUM OF UNDERSTANDING BETWEEN:
THE DISTRICT OF COLUMBIA
Marion Barry, Jr., Mayor
Charlene Drew Jarvis, Council Chairperson Pro Tempore
DISTRICT OF COLUMBIA FINANCIAL RESPONSIBILITY AND MANAGEMENT
ASSISTANCE AUTHORITY
Andrew Brimmer, Chairman
OFFICE OF MANAGEMENT AND BUDGET, EXECUTIVE OFFICE OF THE
PRESIDENT
Franklin D. Raines
Chair, Federal District of Columbia Task Force
Dated: _ _ _ _ _ __
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SECTION I. PURPOSE
The parties respect the Home Rule Center as the fundamental basis for governance in the
District. The purpose of this memorandum is to strengthen Home Rule and to agree to work
toward the revitalization of the District of Columbia.
This memorandum is intended only to improve the management of, and the relationship between,
the District of Columbia and the Federal government, and is not intended to and does not create
any right, benefit, trust or responsibility, substantive or procedural, enforceable at law or equity
by a party against the United States, its agencies, its officers, or any person.
SECTION II. PUBLIC LAW 104-8, "THE DISTRICT OF COLUMBIA FINANCIAL
RESPONSIBILITY AND MANAGEMENT ASSISTANCE ACT OF
1995"
The parties recognize the effectiveness of PL 1048 and dedicate themselves to the cooperative
implementation of its provisions. Among these provisions:
Finance.
For each Fiscal Year for which the District is in a control period, the Mayor shall develop
and submit to the Financial Responsibility and Management Assistance Authority (the
"Authority") and District Council a Budget and Financial Plan for the applicable Fiscal
Year and the next three Fiscal Years.
Expenditures for the District government for each Fiscal Year, beginning in FY1999, may
not exceed revenues for that Fiscal Year.
During Fiscal Years 1996, 1997, and 1998, the District government shall make
continuous, substantial progress toward equalizing its expenditures and revenues.
The District may not borrow money during a control year unless the Authority provides
prior certification that the borrowing is consistent with the financial plan and budget for
the year.
For the Secretary of the Treasury to make a short-term advance to the District, an
Authority-approved Budget and Financial Plan must be in place, the Mayor must submit a
requisition for an advance including a schedule for timing and amounts for advances, the
Inspector General must certify the accuracy of the information provided to the Secretary,
and the Secretary determines -- and the Authority certifies -- that the District lacks market
access on reasonable terms, and that the Treasury has reasonable assurance of being
reimbursed.
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Management.
An Office of the Chief Financial Officer will be established in the Executive Branch of
the District government, headed by the Chief Financial Officer, and including the Office
of the Treasurer, Controller, Budget, Financial Infonnation Services, and Finance and
Revenue.
An Office of the Inspector General will be established in the Executive Branch of the
District government.
During the control period, the Mayor shall submit proposed contracts and leases to the
Authority for review, and cannot enter into a contract or a lease unless the Authority
detennines it is consistent with the Budget and Financial Plan.
The Authority may submit recommendations to the Mayor, the Council, the President,
and
Congre
ss on
actions
the
District
or
Federal
govern
ments
may
take to
ensure
the
District
's
compli
ance
with a
Budget
and
Financi
al Plan
and
promot
e its
financi
al
stabilit
y,
2
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manag
ement
respon
sibility
and
service
deliver
y
efficie
ncy.
The
Mayor
and the
Counci
1 shall
submit
a
statem
ent to
the
Author
ity,
Preside
nt, and
Congre
ss
providi
ng
notice
as to
whethe
r the
District
will
adopt
the
recom
mendat
1Ons.
An
affirma
tive
statem
ent
must
include
3
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a
written
imple
mentati
on
plan,
with
perfor
mance
measur
es and
a
schedu
Ie for
audit
compli
ance.
If the
statern
ent
rejects
the
recom
mendat
ions,
the
Author
itymay
vote to
take
what
actions
it
deems
approp
riate,
after
consult
ing
with
Govern
mental
Affairs
Comrn
ittee of
the
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Senate
and the
House
Govern
rnent
Refor
m and
Oversi
ght
Comm
ittee.
SECTION III. GENERAL PROVISIONS
1. Balanced Budget. PL 104-8 requires that the District balance its budget by FY1999.
By this agreement, the District agrees to present and/or approve a balanced budget for the
Fiscal Year beginning October 1, 1997.
2. Agreement to be Bound. The District agrees to be bound by and to use its offices and
best efforts to implement this agreement.
SECTION IV. SUBMISSION OF LEGISLATION & FEDERALLY ASSUMED
FUNCTIONS
On behalf of the Executive Office of the President, the Director of the Office
Management and Budget intends to recommend the submission of legislation to the Congress
that is consistent with the National Capital Revitalization and Self Government Improvement
Plan (the "Plan") announced by the President on January 14, 1997.
Once implemented, the Plan will provide the District substantial relief from its operating
expenditures, relief which will grow over time. It will also invest considerable resources to
improve the District's criminal justice systems and capital infrastructure. If this legislation is
enacted, the Federal government will undertake the functions described below. The Federal
government will not undertake a function until the District government meets the conditions for
that function, described in Section V.
1. Medicaid. The Federal government will increase its share of the District's Medicaid
payments to 70 percent, thereby reducing the District's share to 30 percent. The
Department of Health and Human Services will continue to provide more intensive
technical assistance to help the District improve the management of its Medicaid
program.
2. Pensions. The Federal government will take fmancial and administrative
responsibility for virtually all pension benefits accrued under the plans for all active
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and retired police and fIrefIghters, and teachers, and will take full responsibility for
the pensions of judges. The bulk of the assets of the retirement plans will be
transferred to the Federal government. The Federal government will pledge its full faith
and credit to meet its responsibilities to pay these benefits. Benefits payable to current
employees will be "frozen" based on service earned as of the date the legislation is
introduced, and the Federal government will pay future retirement, death and some of
their disability benefits to the extent they are earned based on the frozen service. While
the Federal government will not be responsible for benefits earned during future years of
service by members of the current retirement programs (other than judges), these
members will get the benefit of pay increases on the frozen benefits. Frozen benefits will
continue to be subject to cost-of-living adjustments under the terms of the existing
programs. All future employee contributions (except for judges) will be paid into the
new plans. The Secretary of the Treasury will appoint a third-party Trustee to administer
the existing plans and manage pension assets.
3. Intermediate-Term and Short-Term Lending. The United States Treasury will provide
an intermediate-term loan (IS-year term) to assist the District to eliminate its accumulated
fund balance deficit. The Treasury may also provide inter-year loans for liquidity
purposes. The combined amount of the intermediate-term and inter-year liquidity loans
may not exceed $500 million. Both of these loans will have an interest rate of Treasuries
of comparable maturity plus 1I8th of one percent. The Treasury may also provide
intra-year loans for the purposes ofliquidity.
4. Criminal Justice. The Federal and District governments will develop and
implement a transition plan which transfers responsibility over a three-to-fIve-year
period for incarcerating felons. The Federal Bureau of Prisons (BOP) will house
adult felons convicted of D.C. Code violations and designated in the same manner as
I
Federal inmates in correctional institutions operated or contracted by the BOP.
This will occur after BOP's capacity has been increased through new construction
at Lorton and other locations selected by BOP, and through renovation of existing
facilities at Lorton, Virginia. After October 1, 2001, the BOP will also designate to
Federal correctional institutions sentenced D.C. felons in the custody of the D.C.
Department of Corrections, as the Director of BOP deems appropriate, in
accordance with available capacity, until they have all been designated to Federal
institutions. The BOP will accept employment applications from persons currently
employed by the D.C. Department of Corrections for existing BOP vacancies, and
will process such applications in accordance with existing Federal procedures and
standards.
The Attorney General will select, after consultation with the Mayor, the D.C. City
Council, and the Chair of the D.C. Financial Responsibility and Management
Assistance Authority, a Trustee to oversee operations of the D.C. Department of
Corrections until the BOP assumes responsibility for all incarcerated District felons.
The Federal and District governments will develop and implement a framework for
changes to the D.C. sentencing system, including the abolition of parole, institution of
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detenninate guideline sentencing and the enactment of the new mandatory minimum drug
sentences, which are a prerequisite for the Federal Government accepting responsibility
for the incarceration of felons convicted of D.C. Code violations. The sentencing system
will be enacted within 24 months, or the Federal Government will not be required to
obligate any funds appropriated for the purpose of incarcerating D.C. Code felons and
will have no responsibility for housing such persons.
Consulting with representatives of the Federal and District judiciary, the Federal
and District governments will also develop and implement a transition plan
transferring responsibility for D.C. Code violation offender pretrial, public defender,
parole, probation, and post-adjudicationlpost-conviction adult offender supervision
from the District government to the Federal government over a three-to-five-year
period. The United States Parole Commission will continue to assume
responsibility for all D.C. felons housed in Federal Correctional Institutions who
have sentences subject to provisions of parole.
The Federal government will take direct responsibility (in consultation with the
D.C. judiciary) for funding the D.C. court system and related services (including
plans relating to retirement benefits and other personnel matters), and establishing
an independent budgetary, financial oversight, and administrative support system for the
D.C. courts. The Courts will remain self-managed.
5. Economic Development. The Federal government will make tax benefits available to the
District both to encourage hiring by finns in the District of residents of distressed areas in
D.C., and to encourage economic revitalization throughout the District.
An economic development corporation (EDC) will be established as a non-Federal public
authority in the District of Columbia, with the mission of revitalizing the nation's capital
city and benefitting the District's residents and businesses. The Federal government
intends (a) to capitalize the EDC with a $50 million grant; (b) provide $250 million in tax
incentives to encourage business investment both downtown and in distressed
communities, and to help businesses increase employment of residents of the District of
Columbia; and (c) improve the District government's borrowing authority by removing
impediments in its borrowing statutes so that the District government will have the same
ability to finance projects as other cities have.
6. Infrastructure. The National Capital Infrastructure Commission (NCIC) will be
established to assume certain State-like responsibilities for selection, funding, and
oversight of National Highway System capital projects (including roads, bridges, and
transit) and NHS operations and maintenance projects (excluding police authority,
National Park Service roads, and transit) within the District. The NCIC will be governed
by a five-member board to be composed of three representatives from the District and one
representative from the Department of Transportation and one representative from the
Economic Development Corporation. Contract administration will be perfonned by the
Federal Highway Administration. In addition, eligibility for Surface Transportation
Program (STP) funds will be expanded to include local public roads. To support NCIC
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projects, the National Capital Infrastructure Fund (NCIF) will be established in FYI998
with $108 million for road, bridge, and transit capital projects. An additional $17
million will be provided in FY1998-03 for NHS operations and maintenance.
Federal-aid funds for the District's NHS, Interstate Maintenance, and Bridge programs
will be transferred to the NCIC in FYI998-03. The Administration also proposes that
the NCIC be authorized to accepted contributions from other sources.
7. Personal Income Tax Collection. At the request of the District, the Internal Revenue
Service will assume responsibility from the District of Columbia for administering and
enforcing D.C. individual income and payroll taxes. This would include the processing
of those taxes paid by individuals, as well as the payment of related employment and
payroll taxes. The District government will maintain processing and collection
responsibility for all other taxes collected for the District.
Upon enactment of the legislation to implement the Plan, the parties to the MOU will
review the legislation and confer on whether any revisions to the MOU are necessary to ensure
its consistency with the legislation.
SECTION V. DISTRICT CONDITIONS
The District government understands that it will be expected to undertake significant
actions as part of the National Capital Revitalization and Self-Government Improvement Plan
(the "Plan"). This section sets out the actions that the District government agrees to take as a
condition of the Federal government actions under the legislation to carry out the Plan.
1. Medicaid. The District agrees to develop and implement plans satisfactory to the
Secretary of Health and Human Services to accomplish each of the following:
1.1. To develop an effective system for the identification and collection of amounts owed by
third parties for medical care and services furnished to individuals under the District's
Medicaid plan; and
1.2. To ensure the timely audit and settlement of cost reports of institutional providers
(including hospitals, nursing facilities, and intermediate care facilities for the mentally
retarded) under the District's Medicaid plan, including prompt elimination of the backlog
of such audits and settlements.
1.3. To develop and implement, directly or under contract, a comprehensive health care
management information system that will standardize data base development and
management, and integrate health care delivery with a public health data system. Such a
system shall at a minimum have the capacity to accomplish the following functions:
1.3.1. To assist eligibility verification;
1.3 .2. To create utilization and financial profiles of providers;
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1.3.3. To identify services (including preventive services) received by program beneficiaries;
1.3.4. To monitor the claims processing and other Medicaid operations of the fiscal agent;
1.3.5. To monitor the quality of care provided under managed care contracts; and
1.3.6. To coordinate information management with respect to the District's Medicaid program
and other public health programs and functions.
1.4. To develop a comprehensive behavioral managed health care system, which combines
substance abuse and mental health grant programs. Development of such a plan shall
include a pilot project for better evaluation of in-patient acute psychiatric patient
admissions, and the purchase of a comprehensive, risk-based system for managed care of
behavioral health which covers all eligible populations and services.
2. Pensions. The District Government agrees (see Appendix One for definitions):
2.1. To establish a Replacement Plan for the current Retirement Program
2.1.1. The Replacement Plan will cover all existing and new employees (except for judges) who
are, or would be, covered by the Retirement Program, if the Retirement Program
continued unchanged, and will be established by the date specified in legislation.
2.1.2. To the extent required by current law, the Replacement Plan will be established through
collective bargaining.
2.1.3. After the Adoption Date, the Replacement Plan may not be amended in any manner that
materially increases the cost of the Replacement Plan without provision of a mechanism
for funding such increases, in accordance with Section 2.2.
2.2 That the Replacement Plan will use appropriate funding methods and costs that do not
exceed the sum available in the District of Columbia Budget and Financial Plan.
2.2.1. The cost of any defined benefit plan will be determined in accordance with the
measurement standards of Governmental Accounting Standards Board Statement No. 27
(GASB 27), with the following additional restrictions:
2.2.1.1. funding methods will be limited to entry age or frozen entry age; and
2.2.1.2. amortization of any unfunded actuarial liability is required over no more than 30
years on a closed basis.
2.2.2. The cost of any defined contribution plan is the employer contribution required under the
provisions of the plan.
9
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2.2.3. All costs of the Replacement Plan must be reflected in the D.C. Budget and Financial
Plan in accordance with the standards described above.
2.2.4. All costs of the Replacement Plan must be paid in accordance with the D.C. Code 1981,
Title 1, Chapter 7, subchapter III.
2.2.5. Contributions of all existing and new employees (except judges) will be paid into the
Replacement Plan.
2.3. To transfer copies of books and records of the Retirement Program and the Fund and to
be financially responsible for errors and omissions, including all necessary records of
individual employees.
2.3.1. Copies of any books and records pertaining to the Retirement Program and the Fund
required by the Secretary of the Treasury or the Trustee must be made available to the
Secretary or Trustee within 30 days after the Secretary or Trustee requests them.
2.3.2. The District will reimburse the Trustee for all costs, including benefit payments, resulting
from errors or omissions in the books and records pertaining to the Fund.
2.4. To transfer assets from the Fund
2.4.1. Any and all assets of the Fund required to be transferred to the Trustee shall be
transferred on the Transfer Date in a form specified by the Trustee.
2.4.2. The District of Columbia Retirement Board will administer the retirement programs until
the Trustee assumes these responsibilities. The District government will reimburse the
Fund for any benefits paid out of the Fund between the Freeze Date and the transfer date
that exceed payments that would have been the responsibility of the Federal government
if the transfer had occurred simultaneously with the freeze.
3. Intermediate-Term and Short-Term Lending. !he District agrees that:
3.1. Any intermediate-term loan to eliminate the accumulated fund balance deficit would be
for no more than 15 years, with an interest rate of Treasuries of comparable maturities
plus 118 of one percent.
3.2. Any inter-year loan for liquidity purposes and/or intermediate-term loan to eliminate the
accumulated fund balance deficit will not exceed the amount of $500 million.
3.3. The Secretary of the Treasury may require early reimbursement if the District can obtain
credit on the commercial market on favorable terms for refinancing as determined by the
Secretary.
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3.4. The District must be in compliance with the approved Budget and Financial Plan
before any lending can occur.
3.5. The District must provide a requisition for an advance of funds and a promissory
note to reimburse the Treasury for the advance.
3.6. The Financial Responsibility and Management Assistance Authority must certify
that there is an approved Budget and Financial Plan in effect for the District for the
Fiscal Year that the requisition is made.
3.7. The Secretary ofthe Treasury must receive certification that the District is unable
to obtain enough credit elsewhere to meet the District government's need for
fmancing.
3.8. The Federal government will work with the District government to amend its debt limit
provisions in order to allow implementation of the District's capital plan in an orderly and
sustainable manner.
4. Criminal Justice. This subsection of the Memorandum of Understanding (MOU)
between the Federal government and the District of Columbia government (D.C.) outlines the
offer of the Federal government, wholly on appropriations and D.C.'s acceptance and satisfaction
of all other conditions and predicates identified and described herein, to assist D.C. by assuming
responsibility for certain traditionally State responsibilities and the conditions that D.C. must agree
to and fulfill should it choose to accept that offer as it relates to criminal justice functions,
including, but not limited to, certain defendant and offender services, corrections and the
judiciary. The MOU sets forth the expectations and responsibilities relating to proposed
changes and reforms in the D.C. criminal justice and judicial system and the procedures
(including new statutory and regulatory provisions) the Federal Government and D.C. will use to
implement the MOU.
In particular, the MOU is designed to:
4.i. provide a framework for changes to the D.C. sentencing system, including the abolition
of parole, institution of determinate guideline sentencing and the enactment of the new
mandatory minimum drug sentences, which are a prerequisite for the Federal
Government accepting responsibility for the incarceration of felons convicted of D.C.
Code violations.
4.ii. ensure that such sentencing system is to be enacted within 24 months, or the Federal
Government will not be required to obligate any funds appropriated for the purpose of
incarcerating D.C. Code felons and will have no responsibility for housing such persons.
11
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4.iii. ensure an appropriate transfer and transition of responsibility from D.C. to the Federal
Government for pretrial, public defender, parole, probation, and post-conviction
supervision and services for adult D.C. Code defendants and offenders.
4.iv. ensure an appropriate transfer of responsibility from D.C. to the Federal Government for
the incarceration of sentenced felons convided of D.C. Code violations, assuming
sufficient resources are provided by Congress to develop necessary bed space to
accommodate the resulting increase in the Federal Bureau of Prisons (BOP) population
and D.C. Code violators are designated in the same manner as Federal inmates.
4.v. provide the basis for establishing an independent budgetary, financial oversight, and
administrative support system for the D.C. courts.
4.vi. define the respective roles of the D.C. and Federal Governments in relation to lawsuits
and resulting liability, as they may be affeded by the reforms agreed to in this MOU.
4.vii. ensure the development by D.C. and the Federal Governments of transition plans
4.vii.a. (in consultation with the Federal and D.C. judiciaries) for transferring
responsibility for pretrial, public defender, parole, probation, and
post-conviction supervision and services for adult D.C. Code defendants
and offenders over a transition period of one to three years from the
enadment of the federal implementing legislation.
4.vii.b. for transferring responsibility for incarcerating sentenced felons convided of D.C.
code violations over a period of approximately three to five years.
4.vii.c. (in consultation with the D.C. judiciary) for transferring responsibility for funding
the D.C. court system and related services, including plans relating to
retirement benefits and other personnel matters.
4.vii.d. for transferring control of the property at Lorton, Virginia to the Federal
Government.
4.1. Administration of Distrid of Columbia Pretrial. Parole. Probation, and Post-Conviction
Offender Supervision, Housing, and Public Defender Services
4.1.1. Federal Government Responsibilities
4.1.1.1. Mter consultation with the Mayor of D.C., representatives of the D.C. Council,
the Chairman of the D.C. Financial Responsibility and Management
Assistance Authority (Financial Authority), and members of the affeded
12
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Federal and D.C. judiciaries, the Attorney General will select an Offender
Supervision, Defender and Courts Services Trustee to:
a) assure the smooth transition and continued operations of D.C.'s
Pretrial Services Agency and Public Defender Service;
b) implement an orderly shutdown of the D.C. Board of Parole in
coordination with the U.S. Parole. Commission and the Superior
Court for the District of Columbia;
c) establish and operate a new D.C. Offender Supervision, Defender
and Courts Services Agency; and
d) accomplish, without disruption of services, the transfer of the adult
offender probation supervision functions of the D.C. Courts Social
Services Division,
until the Federal Government assumes responsibility for each of these
functions.
4.1.1.2. During the transition period, under the general auspices of the Trustee, the D.C.
Pretrial Services Agency will continue uninterrupted to provide services
and support for both juvenile and adult D.C. Code and Federal defendants
and offenders to the U.S. District Court for the District of Columbia, the
U.S. Court of Appeals for the District of Columbia, the Superior Court for
the District of Columbia, and the District of Columbia Court of Appeals.
The Director of Pretrial Services may employ such personnel as shall be
necessary pursuant to procedures and standards established by the Trustee
to facilitate transition to Federal status.
4.1.1.3. Following the transition period, the D.C. Pretrial Services Agency and the
D.C. Public Defender Service will be organizationally housed in a new
Federal D.C. Offender Supervision, Defender and Courts Services Agency.
4.1.1.4. The D.C. Board of Parole will be terminated after the Trustee establishes a
transition agency with the capacity to provide adequate field supervision to
adult D.C. offenders on parole, probation or supervised release, and the
U.S. Parole Commission is capable of carrying out parole functions for
D.C. Code felony offenders. Subject to appropriations, the D.C. Board
of Parole's functions and jurisdiction vis a vis felon parolees will be
assumed by the U.S. Parole Commission. Similarly, its functions and
jurisdiction vis a vis misdemeanant parolees will be assumed by the D.C.
court system. Substantive D.C. law will continue to apply to parole
13
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detenninations for all D.C. Code offenders. The District of Columbia
Superior Court Division of Social Services will continue to provide
supervision to D.C. Code juvenile offenders and will assume responsibility
for the supervision of misdemeanant parolees.
4.1.1.5. The Trustee will accept employment applications for new offender field
supervISIon positions in the transition agency from persons currently
employed by the D.C. court system and the D.C. Board of Parole.
Applications will be processed in accordance with procedures and
standards established by the Trustee to facilitate transition to subsequent
Federal law enforcement employment in the successor Offender
Supervision, Defender and Courts Services Agency. Positions will be
advertised prior to hiring.
4.1.1.6. During the transition period, the Federal Government will transfer funds for the
Pretrial Services Agency, the Public Defender Service and the supervision
of D.C. offenders to the Trustee. The head of any Federal department or
agency may provide the services of any personnel to the Trusteeship to
assist in carrying out the Trustee's duties.
4.1.1.7. During the transition period, under the general auspices of the Trustee, the Public
Defender Service will continue uninterrupted to provide services to D.C.
Code defendants and the D.C. court system. The Director of the Public
Defender Service may employ such personnel as shall be necessary
pursuant to procedures and standards established by the Trustee to facilitate
transition to Federal status.
4.1.1.8. During the transition period, the employees of and funds allocated to the Trustee
and the agencies for which the Trustee is responsible shall not be counted
against the personnel and budget ceilings imposed on D.C. by the
Financial Authority or Congress.
4.1.1.9. The U.S. Marshals Service (USMS) will contract with D.C., at a mutually
agreeable rate, to obtain space not needed by D.C. at D.C.'s Correctional
Treatment Facility (CTF), to house persons in the custody of the USMS
for whom the USMS requires bed space in the D.C. area.
4.1.1.10. Subject to appropriations, the Federal Government will provide funds to
support the D.C. Board of Parole functions during the one to three year
transition period culminating in the tennination of the D.C. Board of
Parole.
4.1.2. District of Columbia Responsibilities
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4.1.2.1. The District of Columbia will maintain responsibility for all D.C. Code juvenile
offenders not prosecuted as adults.
4.1.2.2. The District of Columbia will have responsibility for housing and supel'Vlsmg
persons charged with and/or convicted of misdemeanor violations in the
Superior Court for the District of Columbia, both before and after
sentencing.
4.1.2.3. The District of Columbia will continue to house persons charged with felonies
under the D.C. Code and persons convicted of felonies under the D.C.
Code but not yet sentenced, in the Superior Court for the District of
Columbia. To the extent beds are available, D.C. will continue to
house persons charged with felonies under the U.S: Code, and persons
convicted of felonies under the U.S. Code but not yet sentenced in the
U.S. District Court. D.C. will continue to receive reimbursement, at a
mutually negotiated rate, from the Federal Government for the costs of
housing such persons. "House" and "housing" include subsistence,
transportation of persons to and from court appearances, revocation
hearings, medical facilities, and the maintenance of necessary prisoner
records.
4.1.2.4. The District of Columbia will continue to house persons sentenced by the
Superior Court and detained pending a hearing for revocation of parole,
probation, or supervised release, and will provide suitable facilities for such
hearings. To the extent beds are available, D.C. will house persons
sentenced by the U.S. District Court and detained pending a hearing for
revocation of parole, probation, or supervised release, will provide suitable
facilities for such hearings, and will continue to receive reimbursement by
the Federal Government at a mutually negotiated rate for the costs of
housing such persons and for providing such facilities. "House" and
"housing" include subsistence, transportation of persons to and from court
appearances, revocation hearings, and medical facilities, and the
maintenance of necessary prisoner records.
4.1.2.5. The Trustee will be an independent officer of the D.C. Government and can be
removed by the Mayor only with the concurrence of the Attorney General.
The Attorney General has authority to remove the Trustee only for
misfeasance or malfeasance in office.
4.1.2.6. The Trustee will propose funding requests for offender supervision and services
for inclusion in the President's budget for each fiscal year of the transition.
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4.1.2.7. The Trustee will allocate funds for offender supervision (including adult felon
parole and probation) in D.C., including funds for short term
improvements, equipment contracts, and salary increases necessary to retain
key personnel, maintain and enhance current levels of service, including
offender drug testing, and provide for the safety and security of the
community.
4.1.2.8. Upon receipt of funds identified by Congress or other entities for Pretrial Services,
the Trustee will immediately transfer such funds to the Pretrial Services
Agency.
4.1.2.9. Upon receipt of funds identified by Congress or other entities for the D.C. Public
Defender Service, the Trustee will immediately transfer such funds to the
Public Defender Service.
4.1.2.10. Effectively immediately and in view of the responsibility to be undertaken
by the U.S. Parole Commission to carry out the functions of the D.C.
Board of Parole pursuant to the parole laws and regulations of D.C., the
D.C. Council will not enact legislation that changes or modifies parole
laws and regulations as applicable to felony offenders without the
concurrence of the Attorney General. D.C. will immediately take steps to
modify parole as applicable to misdemeanants to provide for D.C. court
supervision of D.C. misdemeanant parolees and the elimination of the
D.C. Board of Parole. Following the assumption by the U.S. Parole
Commission of the functions of the D.C. Board of Parole, the D.C.
Council will cede to Congress the sole authority to legislate changes to the
D.C. Code pertaining to the parole of D.C. felony offenders.
4.1.2.11. It is expected that the transition period for these offender, defender and
court services will end no sooner than one year but not later than three
years after the enactment of the related legislation.
4.1.2.12. The D.C. Corporation Counsel will provide representation for the Trustee
and Trustee supervised agencies. (see litigation and liability section)
4.2. Administration of District of Columbia and Federal Prisons
4.2.1. Federal Government Responsibilities
4.2.1.1. The Federal Government will take administrative control of the nine parcels of
land, collectively located at or in the vicinity of Lorton, Virginia (lithe
Lorton property"), and other appropriate sites. Mter the BOP's capacity
has been increased through renovation of existing facilities and new
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construction at the corrections complex in Lorton and other locations
selected by BOP, BOP will house felons who were convicted of D.C.
Code violations and sentenced to terms of imprisonment. (A recently
completed Congressionally mandated study of the D.C. Department of
Corrections revealed that most of the institutions at Lorton have exceeded
their useful lifespan and need major renovations or demolition.)
4.2.1.2. BOP will conduct a thorough preliminary assessment of the Lorton property
to determine its environmental condition, including a study of the
contamination on the property and an estimation of the costs
associated with bringing the property into compliance with
environmental and other applicable regulations. Based on
preliminary information gathered pursuant to a review of the
environmental conditions of a portion of the Lorton property, BOP
could begin planning for renovation and construction immediately;
actual physical renovations would not begin until Fiscal Year 1998.
The estimated date for the completion of the preliminary
environmental assessment process is March 21, 1998.
4.2.1.3. BOP will oversee the operation of community corrections centers in
D.C. as necessary to provide an appropriate transition for inmates
who are nearing release from Federal prisons, including those
convicted of D.C. Code violations. BOP intends to use existing
community corrections centers in D.C. to the extent practicable and
will work with D.C. officials to identify prospective sites, as needed to
establish new community corrections facilities.
4.2.1.4. D.C. Code offenders will be housed together with Federal offenders in
facilities operated by BOP in Lorton, Virginia and elsewhere. Every
effort will be made to house D.C. felons at facilities as close to D.C. as
permitted by inmate program and security needs and BOP population
management requirements. D.C. felons will be designated in the
same manner as Federal inmates, and ordinarily initially assigned to
institutions located within a 500-mile radius of their release residence.
BOP anticipates that many of the initial designations for D.C.
offenders will be within a significantly closer radius. BOP also will
work with D.C. officials to identify sites for possible Federal
correctional facility construction within D.C.
4.2.1.5. During the transition period, based upon assurances from D.C. that
felons convicted of violating the D.C. Code will, in the future, receive
sentences similar to those received by comparable offenders convicted
of comparable Federal offenses, BOP will house those sentenced D.C.
felons in the custody of the D.C. Department of Corrections as the
Director of the BOP deems appropriate in accordance with available
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capacity. If such a new structure for sentencing under the D.C. Code
is in place as of October 1, 2001, BOP will accept D.C. felons
sentenced under the new sentencing structure in accordance with the
capacity of BOP. By October 1, 2002, and assuming fulfillment of all
requisite conditions, BOP will have assumed responsibility for
incarcerating all sentenced D.C. felons.
4.2.1.6. BOP will accept employment applications from persons currently
employed by the D.C. Department of Corrections for BOP vacancies
and will make hiring selections in accordance with existing Federal
procedures and standards. Positions for new BOP facilities will be
advertised prior to hiring.
4.2.1.7. After consultation with the Mayor, representatives of the D.C.
Council, the Chair of the Financial Authority, members of the
judiciary and others, the Attorney General will select a Corrections
Trustee to oversee expenditures of the D.C. Department of
Corrections relating to sentenced, incarcerated felons, until BOP
assumes responsibility for all incarcerated sentenced D.C. felons.
4.2.1.8. The Federal Government will provide funds for the incarceration of
sentenced D.C. felons through the Trustee to the D.C. Department of
Corrections. The head of any Federal department or agency may
provide the services of any personnel to the Trustee to assist in
carrying out the Trustee's duties.
4.2.1.9. Of the Federal funds received by the Trustee, the Trustee will
reimburse BOP for those funds identified by Congress to be used for
the construction of new facilities and the major renovation of existing
facilities. BOP will be responsible and accountable for determining
how these funds will be used, including the type, security level, and
location of new facilities.
4.2.1.10. During the transition period, the employees of and appropriations
allocated to the Trustee and the agencies for which the Trustee is
responsible shall not be scored or counted against the personnel and
budget ceilings imposed on D.C. by the Financial Authority or
Congress.
4.2.2. District of Columbia Responsibilities
4.2.2.1. Offenders convicted of D.C. Code violations will be sentenced
pursuant to a new D.C. sentencing system, described below. BOP
shall not be required to obligate any funds appropriated for the
absorption of D.C. Code felons into the Federal prison system and will
have no responsibility to house any persons convicted of felony
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offenses, if the new sentencing system is not enacted within 24 months
of the authorizing legislation's enactment.
4.2.2.2. D.C. will continue to house felons sentenced to terms of imprisonment
by the Superior Court for the District of Columbia until such persons
have been designated by BOP. To the extent beds are available, D.C.
will continue to house felons sentenced to terms of imprisonment by
the U.S. District Court until such persons have been designated by
BOP and will continue to receive reimbursement by the Federal
Government, at a mutually negotiated rate, for costs of housing
persons sentenced by the U.S. District Court.
4.2.2.3. The Trustee will be an independent officer of the D.C. government
and can be removed by the Mayor only with the concurrence of the
Attorney General. The Attorney General has authority to remove
the Trustee only for misfeasance or malfeasance in office.
4.2.2.4. The Trustee will propose funding requests for the incarceration of
sentenced D.C. felons, for inclusion in the budget submitted by the
President to Congress for each fiscal year of the transition.
4.2.2.5. The Trustee will allocate funds to the D.C. Department of
Corrections, including such sums as may be appropriated for short
term improvements that are necessary for the safety and security of
staff, inmates, and the community.
4.2.2.6. The D.C. Department of Corrections will implement the short term
improvements in physical security identified in the "District of
Columbia Department of Corrections Short-Term Improvements Plan
(September, 1996)."
4.2.2.7. Upon receipt of Federal funds identified by Congress for constructing
new prisons and making major renovations to existing facilities for
the incarceration of D.C. felons, the Trustee will immediately
reimburse BOP for such funds.
4.2.2.8. The D.C. Corporation Counsel will provide representation for the
Trustee and Trustee supervised agencies. (see litigation and liability
section)
4.2.2.9. During the transition, D.C. will transfer control of the property at
Lorton, Virginia to the Federal Government, though the D.C.
Department of Corrections may continue to house D.C. felons at
facilities located at Lorton until such time as BOP absorbs such
offenders into the Federal prison system.
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4.3. Sentencing. The District of Columbia understands and agrees that the D.C. sentencing
system will be changed pursuant to proposed legislation in the following manner:
4.3.1. Congress will amend the D.C. Code to abolish parole for all persons convicted of
D.C. felony offenses committed on or after 3 years from the enactment of the
Federal authorizing legislation.
4.3.2. Congress will amend the D.C. Code so that good time calculations for all persons
convicted of D.C. felony offenses committed on or after 3 years from the
enactment of the Federal authorizing legislation will be made according to the
Federal requirements.
4.3.3. Congress will establish a new D.C. Board of Criminal Sentences (the Board) as an
independent body within the D.C. Government. All persons convicted of D.C.
felonies committed on or after 3 years from the enactment of the Act will be
sentenced according to a determinate sentencing system promulgated by the Board
and transmitted by the Board to the D.C. Council no later than 18 months after
enactment of the Federal authorizing legislation.
4.3.4. The Board will develop a sentencing system which shall include binding
guidelines and may include such amendments or repeals of provisions in the D.C.
Code relating to the maximum and minimum prison terms as are necessary to
accomplish the purposes of the Act. Ninety days after the Board promulgates
and transmits the sentencing system to the D.C. Council, the sentencing system, its
guidelines, amendments and repeals will become effective unless disapproved in its
entirety by a majority of the Council. If disapproved by the Council, the system
may be enacted by Congress.
4.3.5. The promulgated sentencing system will supersede any inconsistent provision of
the D.C. Code.
4.3.6. Congress will repeal certain other provisions of the D.C. Code to conform with
the new sentencing system (D.C. Code Title 24, Chapters 2 and 8), including the
Youth Rehabilitation Act.
4.3.7. Congress will amend D.C. Code Title 33, Section 541 to adopt certain mandatory
penalties necessary to further the Superior Court of the District of Columbia's
Drug Intervention Program and effective local law enforcement. The new
sentencing system will incorporate these mandatory penalties, thereby excluding
local narcotics offenses from the mandate that sentences be similar to those that
would be imposed upon comparable offenders in the Federal system.
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4.3.8. The Board will not have the authority to provide for capital punishment under any
law applicable exclusively in D.C.
4.3.9. The Board will have seven voting members. All the members of the Board shall
have knowledge and responsibilities with respect to criminal justice matters. The
Attorney General (or her designee) will chair the Board. The other members
will include two judges of the Superior Court for the District of Columbia and
one representative each of the following entities: the D.C. Council, the Executive
Branch of the D.C. Government, the D.C. Public Defender Service, and the U.S.
Attorney for the District of Columbia. One representative each of the D.C.
Corporation Counsel and BOP will serve as non-voting, ex officio members.
4.3.10. An affirmative vote of at least six Board members will be necessary to promulgate the
sentencing system.
4.3.11. In developing the sentencing system, the Board will hold two or more public hearings,
review other sentencing guideline system models, consult with sentencing reform
experts, and solicit written comments from the public.
4.3.12. If the Board fails to promulgate a sentencing system within 18 months, the Board will
terminate, and the Attorney General will develop a sentencing system to be
transmitted to the D.C. Council for approval. Ninety days after the Attorney
General transmits the sentencing system to the D.C. Council, the sentencing
system, its guidelines, amendments, and repeals will become effective, unless the
Council disapproves the system in its entirety and Congress, in turn, does not
approve it.
4.3.13. The Board will have the mandate to ensure that the sentencing system it establishes,
among other things:
4.3.13.1. will result in sentences for those convicted of D.C. felony offenses similar
to those that would be imposed upon comparable offenders convicted of
comparable offenses in the Federal system;
4.3.13.2. will result in sentences that reflect the seriousness of the offense and
provide for just punishment, afford adequate deterrence to potential future
criminal conduct of the offender and others, and provide the defendant
with needed educational or vocational training, medical care, and other
correctional treatment;
4.3.13.3. will provide certainty and fairness in meeting the purposes of sentencing,
avoiding unwarranted sentencing disparities among similar defendants,
while maintaining sufficient flexibility to permit individualized sentences;
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4.3.13.4. will take into account the high volume of sentencing proceedings in the
D.C. Superior Court as bearing upon the degree of complexity of the
sentencing system; and
4.3.13.5. will ensure that the system is neutral as to the race, sex, marital status,
ethnic origin, religious affiliation, national origin, creed, socioeconomic
status, and sexual orientation of offenders, if not related to the commission
of the offense.
4.3.14. As part of the sentencing system, the Board will develop binding guidelines for use in
determining the sentence to be imposed upon convicted felons. The guidelines
will specify:
4.3.14.1. when to impose a sentence of probation, a fine, or a term of imprisonment
and the appropriate amount or length, thereof, as well as intermediate
sanctions;
4.3.14.2. when to impose a term of supervised release following imprisonment, and
the appropriate length, thereof; and
4.3.14.3. whether multiple sentences to terms of imprisonment should run
concurrently or consecutively.
4.3.15. Ninety days after promulgation of the sentencing system, the Board will be terminated.
There will be established a successor, Federally funded agency to amend the
guidelines as necessary to achieve the purposes of the Act. The D.C. Council
may recommend to Congress whether or not these amendments should be
approved. However, the amendments will take effect as prescribed by the
successor agency, unless they are modified or disapproved by Congress. The
successor agency will have no powers to revise the D.C. Code but will
recommend changes to the Code as may be necessary to further the purposes of
the Act.
4.3.16. The Superior Court for the District of Columbia, D.C. Department of Corrections, and
any other agency will submit information about convicted felons as required by
the Board and the u.s. Department of Justice. This would permit an assessment
of the extent to which sentences imposed by the Superior Court of the District of
Columbia are similar to those imposed for comparable offenders in the Federal
system. The results of this assessment would be used by the Board in developing
the new sentencing system for D.C.
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4.3.17. Four years after the enactment of the new sentencing system, there will be an evaluation
to determine the extent to which the sentencing system has succeeded in
accomplishing the goals set forth in the Act.
4.4. Liability and Litigation Responsibility and Authority
4.4.1. Federal Government Responsibilities
4.4.1.1. The Federal Government will be responsible for the defense of any claim arising
from any alleged act or failure to act on the part of the United States, its
agencies and personnel, in connection with pretrial, defender, offender
supervision, sentencing reform, corrections, probation and parole services,
and for any resulting liability, after responsibility for these services has
passed to the Federal Government at the end of the transition period.
4.4.1.2. The Federal Government's assumption of responsibility for the defense of claims,
and any resulting liability, set forth in paragraph 4.4.1.1. above shall
include claims arising from any alleged act or failure to act of BOP, its
agencies and personnel in connection with the demolition, repair,
renovation, or construction of any building, structure, or other
improvement of any kind at the Lorton, Virginia property.
4.4.1.3. The Attorney General, in her discretion, may direct any litigation involving the
Trustees appointed pursuant to sections 4.1.1.1. and 4.2.1.6. above, pretrial
services, offender supervision services, or sentencing reform during the
transitional period, and may provide litigation services for the Trustees and
the agencies responsible for pretrial services, offender supervision services,
and sentencing reform during t~e transitional period in lieu of
representation by D.C. Exercise of the Attorney General's discretion shall
not change the terms of this agreement and shall not otherwise enlarge the
liability of the United States, its agencies, or personnel. However, D.C.
may petition the Attorney General to request reimbursement for litigation
costs and liability arising from actions of the Trustees.
4.4.2 District of Columbia Responsibilities and Liability
4.4.2.1. D.C. will be responsible for the defense of any claim that has arisen or may arise
from any act or alleged failure to act by D.C., its agencies or personnel, in
connection with D.G's pretrial, defender, offender supervision,
sentencing reform,. corrections, or probation and parole services, and for
any resulting liability. D.C. will remain responsible for defending and
bearing any liability resulting from any such claim even if responsibility for
the pertinent service has passed to the Federal Government. D.C. will
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also be responsible for the defense of any claim arising from any activity of
D.C., its agencies or personnel as a result of any action agreed to in this
MOO, and for any resulting liability.
4.4.2.2.D.C. is, and will remain, responsible for the defense of any and all claims
described in paragraph 4.4.2.1. above, including the defense of claims
arising from any alleged act or failure to act of the Trustees (see sections
4.1.1.1. and 4.2.1.6.). Except" as provided in paragraph 4.5.3. and in
paragraph 4.1.3.) above, the D.C. Corporation Counsel will provide
litigation services as required to carry out this responsibility.
4.4.2.3.Notwithstanding paragraph 4.4.2.2. above, the Trustees and the agencIes
responsible for pretrial, defender, offender supervision services, and
sentencing reform may choose not to utilize the Corporation Counsel and
to engage other litigation services.
4.5. District of Columbia Courts
4.5.1. Congress will make all necessary amendments to the D.C. Code and other laws to
terminate budgetary control and other involvement of the D.C. Government in the
finances and administration of the D.C. court system, including the Superior Court of the
District of Columbia and the District of Columbia Court of Appeals.
4.5.2. The Joint Committee on Judicial Administration of the D.C. courts will prepare and
submit the budget for the D.C. court system. The budgetary requests of the D.C. courts
system will not be subject to revision by the D.C. Government or the Executive Branch of
the Federal Government.
4.5.3. The D.C. court system, through its Executive Office, will be authorized to contract with
D.C. agencies, Federal agencies, and other public and private entities, for necessary
supplies, equipment, and services.
4.5.4. Expenditures of the D.C. court system will be paid out of funds appropriated for those
courts and credited to a Treasury account established for that purpose. Funds received
by the D.C. court system will not be part of the funds or budget of D.C.
5. Economic Development. The District government will:
5.1. Implement timely and efficient zoning, pennitting, and licensing processes by the end of
fiscal year 1997.
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5.2. Offer personnel resoUrces and fully cooperate with the Corporation in its review and
evaluation of existing economic development plans, in the development of the
Corporation strategic plan, and in subsequent implementation of the plan.
5.3. Support a legislative allocation to the Corporation of 50 percent of the applicable State
ceiling on the authority of the District government to issue private activity bonds in each
calendar year under section 141 of the Internal Revenue Code.
5.4. Support a legislative authorization to the Corporation of the right to exercise eminent
domain in the name of the District of Columbia, and certain other powers specified
above.
5.5. Give expedited consideration to the Corporation's requests for land transfers (including
transfers from the Redevelopment Land Agency), zoning adjustments (including
variances and special exceptions), and building and other permits and licenses for
projects and activities as requested by the Corporation.
5.6. Support legislation that provides that all powers, rights, assets, duties, obligations, and
liabilities of the Corporation will transfer to the District government upon the
Corporation's dissolution
6. Infrastructure.
6.1. Secretary ojTransportation Responsibilities. The Secretary of Transportation (hereinafter
in this section referred to as the Secretary) agrees that:
6.1.1. Beginning on October 1, 1997, the Secretary shall assume responsibilities generally
carried out by a State under Title 23 of the U.S.C. relating to selection (consistent with
the planning requirements of 23 U.S.C. 134 and 135), funding and oversight of the
National Highway System (NHS) capital projects and shall assume responsibilities for
funding the operations and maintenance of the NHS within the District of Columbia
(exclusive of police authority and exclusive of funding those NHS routes currently under
the jurisdiction of the National Park Service) with funds made available under the
National Capital Revitalization and Self-Government Improvement Act of 1997, to be
referred to henceforth in this section as the "Act."
6.1.2. The Secretary shall advance NHS projects through the Federal Highway Administration
(FHWA). The FHWA shall consult and coordinate NHS project responsibilities with the
District of Columbia. In selecting projects, the FHWA shall give consideration to the
District of Columbia Needs Assessment currently being developed by the Federal
Highway Administration in cooperation with the District of Columbia Department of
Public Works and the District of Columbia Strategic Transportation Plan.
6.1.3. Beginning on October 1, 1997, the Secretary shall assume responsibility for advancing
those NHS projects approved prior to that date that are not under construction or under a
contract for such construction by October 1, 1997, unless the Secretary and the District of
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Columbia agree to continue to vest responsibility for such project advancement with the
District of Columbia. Such projects that are transferred under this section shall also be
governed by the requirements contained in section 6.2.4.
6.1.4. The Secretary may transfer National Capital Infrastructure Funds authorized under this
Act and available for capital expenditures and NHS apportioned funds authorized to be
transferred under this Act to other Federal-aid highway funding categories, consistent
with title 23, United States Code provisions governing the transfer ofNHS funds.
6.1.5. Funds made available to the Secretary for obligation on NHS projects under this Act shall
be administered by FHWA. From time to time as work progresses on a project,
payments shall be made by FHWA for the costs of construction, operations, maintenance,
and other eligible activities under this Act in accordance with applicable procedures
under Title 23, United States Code, or as established by the Secretary.
6.1.6. For Fiscal Year 1998, $108 million shall be authorized to be appropriated to the National
Capital Infrastructure Fund which shall be used for construction, reconstruction, and
rehabilitation of the NHS in accordance with 23 U.S.C. 103 ( i ), including transit capital
projects eligible for funding under section 103 ( i ).
6.1. 7. In each of the fiscal years 1998 through 2003, the Secretary shall retain and deposit into
the National Capital Infrastructure Fund:
(a) 100 percent of the District of Columbia's apportionment for the NHS;
(b) 100 percent of the apportionments for Interstate Maintenance; and
(c) 75 percent of the apportionment for the Highway Bridge and Replacement for use
consistent with 23 U.S.C. 103 (i ).
6.1.8. In each of the Fiscal Years 1998 through 2003, $17 million shall be authorized to be
appropriated to fund the operations and maintenance of the NHS within the District of
Columbia, exclusive of those NHS routes under the jurisdiction and control of the
National Park Service.
6.1.9. The Secretary shall be responsible for funding those operations and maintenance
activities and costs, excluding police services (except for those construction zone,
incident management and other police activities that are eligible for Federal-aid highway
reimbursement under title 23, United States Code) associated with the. management and
operations of NHS highways including the following activities: routine maintenance of
roadways and rights-of-way, road repair, snow removal, lighting, signage, and those
utilities necessary for the NHS operations. The Secretary shall not be responsible for
funding the District of Columbia share of operating expenses for any transit activities.
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6.1.10. The Secretary shall continue to provide oversight and technical assistance to the District
of Columbia for all Federal-aid projects that remain the responsibility of the District of
Columbia.
6.1.11. The Secretary through the FHWA will enter into any agreements or contracts with any
entity to advance, construct, reconstruct, rehabilitate, repair, maintain, or operate the NHS
within the District of Columbia excluding those NHS roadways under the jurisdiction and
control of the National Park Service, consistent with 23 U.S.C. 103 (i).
6.1.12. The Secretary shall encourage the hiring of local labor by contractors awarded contracts
including welfare to work labor, on NHS projects financed under this Act to the
maximum extent possible and consistent with federal law.
6.1.13. Unless reauthorized by Congress on, or prior to, September 30, 2003, the Secretary of
Transportation's responsibilities, other than the completion of ongoing projects funded
through this Act, would cease and no new deposits of Federal funds would be made into
the National Capital Infrastructure Fund after September 30, 2003.
6.1.14. The Secretary shall provide the District of Columbia with the technical assistance
necessary to reassume its NHS responsibilities by September 30, 2003. The April 1996
findings of FHWA's review of the organizational capacity of the District of Columbia's
Department of Public Works shall guide the assistance.
6.2. District a/Columbia Responsibilities. The District of Columbia agrees that:
6.2.1. The District of Columbia shall continue to be responsible for providing police services on
NHS highways (including, but not limited to civil police functions, crime prevention,
investigations including traffic and accident investigation, and em.ergency traffic
direction). The District shall continue to own the right-of-way ofNHS highways that are
located within the District of Columbia.
6.2.2. The District of Columbia will continue to be responsible for all utilities and utility work
that is not necessary for operation of the NHS even if such utilities are located within the
right-of-way of the NHS.
6.2.3. The District of Columbia shall continue to be responsible for non-NHS projects funded
with Federal-aid highway funds. The authority to use Surface Transportation Program
funds on local streets, highways, and roadways (except alleys) does not relieve the
District of Columbia of the responsibility for the non-federal matching share. The use of
other Federal-aid highway apportioned funds by the District of Columbia, other than as
provided herein, also requires a non-Federal matching share.
6.2.4. Beginning on October 1, 1997, the District of Columbia is relieved of the responsibility to
provide the non-Federal match for NHS projects that are funded by the Secretary with
monies made available for NHS projects under this Act. The relief from providing the
non-federal match shall not include those projects that were approved by FHWA prior to
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October 1, 1997 for which Federal-aid highway funds have been obligated_ The District
of Columbia is responsible for providing the non-Federal match, the Federal-aid funds,
and any obligation authority for any such projects transferred to the Secretary for project
administration, oversight, or contracting.
6.2.5. The District of Columbia shall continue to be responsible for any liability incurred on the
basis of the activities of the District of Columbia, its agencies, or personnel as a result of
any acts or omissions in carrying out this Act. The United States, its agencies, and
personnel will not incur any liability for any such acts or omissions.
6.2.6. The District of Columbia shall cooperate with the Federal Highway Administration in its
technical assistance efforts in order to assure that the District of Columbia can reassume
its NHS responsibilities by September 30,2003. The goal of the effort shall be to satisfy
the April 1996 findings of FHWA's review of the organizational capacity of the District
of Columbia's Department of Public Works.
7. Personal Income Tax Administration The District agrees that:
7.1. General
7.1.1. The IRS shall administer and enforce the District's individual income and employment
taxes.
7.1.2. The District shall continue to administer its unemployment benefits program.
7.2. Tax Codes
7.2.1. The IRS will administer the District's existing individual income and employment tax
laws. The only provision the IRS cannot administer is the District's refundable property
tax credit. If the District wishes to retain this provision, it must be transferred to its real
estate tax administration.
7.2.2. All of the administrative, procedural, and enforcement provisions of the Intemal Revenue
Code of 1986 and related statutes will govern IRS administration of District taxes. The
District will have to amend its own tax code to achieve this to the satisfaction of the
Secretary of the Treasury.
7.2.3. To avoid the possibility of any inconsistent interpretations of similar provisions, the
District will have to amend its definitional provisions to conform them to the Internal
Revenue Code to the satisfaction of the Secretary of the Treasury.
7.2.4. The District must notify the Secretary of the Treasury of any future changes to its
individual income and employment tax laws_ The Secretary may object if, in his
judgement, the prospective change would prove overly burdensome to the IRS, in which
case such change shall not be administered or enforced by the IRS. If the Secretary does
28
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not object within 60 days after notification, the IRS will administer the provision within a
reasonable time after enactment.
7.3. Transfers to the District
7.3.1. The IRS will set up separate accounting and deposit systems for its collections of District
taxes. The District must, in turn, identify the person and/or office authorized to receive
transfers of collected amounts and set up related deposit accounts.
704. Effective Date
704.1. The IRS administration of District taxes shall be prospective, starting on January 1 of the
calendar year that is at least 18 months after the Secretary certifies that the District of
Columbia has met the conditions set forth in the Memorandum of Understanding between
the United States and the District of Columbia.
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Appendix One
DEFINITIONS FOR THE PENSIONS SECTION OF THE MOU
"Adoption Date" means the date the Replacement Plan is adopted by the District Government or,
iflater, October 1, 1997.
"District Government" means, as appropriate, the "District government" as defined by section
305(5) of the District of Columbia Financial Responsibility and Management Assistance Act of
1995 (Pub. L 104-8) or the District of Columbia Retirement Board as defined in section 102(5)
of the Reform Act.
"Freeze Date" means the date of introduction of the Revitalization Act.
"Fund" means the District of Columbia Police Officers and Fire Fighters' Retirement Fund, the
District of Columbia Teachers' Retirement Fund, and the District of Columbia Judges'
Retirement Fund as defined in section 102(10) of the Reform Act.
"Reform Act" means the District of Columbia Retirement Reform Act (Pub. L. 96-122).
"Replacement Plan" means the plan or plans described under Title I of the Revitalization Act.
"Retirement Program" means any of the retirement programs as described in section 102(7) of
the Reform Act as in effect on the day before the freeze date.
"Revitalization Act" means the "District of Columbia Revitalization Act of 1997."
"Secretary" means the Secretary of the Treasury or the Secretary's designee.
"Transfer Date" means the date on which the assets and obligations of the Fund are transferred to
the Trust.
''Trust'' means the District of Columbia Retirement Trust created under Title I of the
Revitalization Act.
''Trustee'' means the firm designated by the Secretary of the Treasury under Title I of the
Revitalization Act.
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Draft 4.7.1997
This draft reflects the full legislative language for the Economic Development section of the
MOU.
MEMORANDUM OF UNDERSTANDING BETWEEN:
THE DISTRICT OF COLUMBIA
Marion Barry, Jr., Mayor
Charlene Drew Jarvis, Council Chairperson Pro Tempore
DISTRICT OF COLUMBIA FINANCIAL RESPONSIBILITY AND MANAGEMENT
ASSISTANCE AUTHORITY
Andrew Brimmer, Chairman
OFFICE OF MANAGEMENT AND BUDGET, EXECUTIVE OFFICE OF THE
PRESIDENT
Franklin D. Raines
Chair, Federal District of Columbia Task Force
Dated: - - - - - - -
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SECTION!. PURPOSE
The parties respect the Home Rule Center as the fundamental basis for governance in the
District. The purpose of this memorandum is to strengthen Home Rule and to agree to \;york
toward the revitalization of the District of Columbia.
This memorandum is intended only to improve the management of, and the relationship between,
the District of Columbia and the Federal government, and is not intended to and does not create
any right, benefit, trust or responsibility, substantive or procedural, enforceable at law or equity
by a party against the United States, its agencies, its officers, or any person.
SECTION II. PUBLIC LAW 104-8, "THE DISTRICT OF COLUMBIA FINANCIAL
RESPONSIBILITY AND MANAGEMENT ASSISTANCE ACT OF
1995"
The parties recognize the effectiveness of PL 104-8 and dedicate themselves to the cooperative
implementation of its provisions. Among these provisions:
Finance.
For each Fiscal Year for which the District is in a control period, the Mayor shall develop
and submit to the Financial Responsibility and Management Assistance Authority (the
"Authority") and District Council a Budget and Financial Plan for the applicable Fiscal
Year and the next three Fiscal Years.
Expenditures for the District government for each Fiscal Year, beginning in FY1999, may
not exceed revenues for that Fiscal Year.
During Fiscal Years 1996, 1997, and 1998, the District government shall make
continuous, substantial progress toward equalizing its expenditures and revenues.
The District may not borrow money during a control year unless the Authority provides
prior certification that the borrowing is consistent with the financial plan and budget for
the year.
For the Secretary of the Treasury to make a short-term advance to the District, an
Authority-approved Budget and Financial Plan must be in place, the Mayor must submit a
requisition for an advance including a schedule for timing and amounts for advances, the
Inspector General must certify the accuracy of the information provided to the Secretary,
and the Secretary determines -- and the Authority certifies -- that the District lacks market
access on reasonable terms, and that the Treasury has reasonable. assurance of being
reimbursed.
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Management.
An Office of the Chief Financial Officer will be established in the Executive Branch of
the District government, headed by the Chief Financial Officer, and including the Office
of the Treasurer, Controller, Budget, Financial Infonnation Services, and Finance and
Revenue.
An Office of the Inspector General will be established in the Executive Branch of the
District government.
During the control period, the Mayor shall submit proposed contracts and leases to the
Authority for review, and cannot enter into a contract or a lease unless the Authority
determines it is consistent with the Budget and Financial Plan.
The Authority may submit recommendations to the Mayor, the Council, the President,
and
Congre
ss on
actions
the
District
or
Federal
govern
ments
may
take to
ensure
the
District
's
compli
ance
with a
Budget
and
Financi
aI Plan
and
promot
e its
financi
al
stabilit
y,
2
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manag
ement
respon
sibility
and
service
deliver
y
efficie
ncy.
The
Mayor
and the
Counci
I shall
submit
a
statem
ent to
the
Author
ity,
Preside
nt, and
Congre
ss
providi
ng
notice
as to
whethe
r .the
District
will
adopt
the
recom
mendat
ions.
An
affirma
tive
statem
ent
must
include
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a
written
imple
mentati
on
plan,
with
perfor
mance
measur
es and
a
schedu
Ie for
audit
compli
ance.
If the
statem
ent
rejects
the
recom
mendat
ions,
the
Author
itymay
vote to
take
what
actions
it
deems
approp
riate,
after
consult
mg
with
Govern
mental
Affairs
Comm
ittee of
the
4
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and the
House
Govern
ment
Refor
m and
Oversi
ght
Comm
ittee.
SECTION III. GENERAL PROVISIONS
1. Balanced Budget. PL 104-8 requires that the District balance its budget by FY1999.
By this agreement, the District agrees to present and/or approve a balanced budget for the
Fiscal Year beginning October 1, 1997.
2. Agreement to be Bound. The District agrees to be bound by and to use its offices and
best efforts to implement this agreement.
SECTION IV. SUBMISSION OF LEGISLATION & FEDERALLY ASSUMED
FUNCTIONS
On behalf of the Executive Office of the President, the Director of the Office
Management and Budget intends to recommend the submission of legislation to the Congress
that is consistent with the National Capital Revitalization and Self Government Improvement
Plan (the "Plan") announced by the President on January 14, 1997.
Once implemented, the Plan will provide the District substantial relief from its operating
expenditures, relief which will grow over time. It will also invest considerable resources to
improve the District's criminal justice systems and capital infrastructure. If this legislation is
enacted, the Federal government will undertake the functions described below. The Federal
government will not undertake a function until the District government meets the conditions for
that function, described in Section V.
1. Medicaid. The Federal government will increase its share of the District's Medicaid
payments to 70 percent, thereby reducing the District's share to 30 percent. The
Department of Health and Human Services will continue to provide more intensive
technical assistance to help the District improve the management of its Medicaid
program.
2. Pensions. The Federal government will take fmancial and administrative
responsibility for virtually all pension benefits accrued under the plans for all active
5
the pensions of judges. The bulk of the assets of the retirement plans will be
transferred to the Federal government. The Federal government will pledge its full faith
and credit to meet its responsibilities to pay these benefits. Benefits payable to current
employees will be "frozen" based on service earned as of the date the legislation is
introduced, and the Federal government will pay future retirement, death and some of
their disability benefits to the extent they are earned based on the frozen service. While
the Federal government will not be responsible for benefits earned during future years of
service by members of the current retirement programs (other than judges), these
members will get the benefit of pay increases on the frozen benefits. Frozen benefits will
continue to be subject to cost-of-living adjustments under the terms of the existing
programs. All future employee contributions (except for judges) will be paid into the
new plans. The Secretary of the Treasury will appoint a third-party Trustee to administer
the existing plans and manage pension assets.
3. Intermediate-Term and Short-Term Lending. The United States Treasury will provide
an intermediate-term loan (I5-year term) to assist the District to eliminate its accumulated
fund balance deficit. The Treasury may also provide inter-year loans for liquidity
purposes. The combined amount of the intermediate-term and inter-year liquidity loans
may not exceed $500 million. Both of these loans will have an interest rate of Treasuries
of comparable maturity plus 1I8th of one percent. The Treasury may also provide
intra-year loans for the purposes ofliquidity.
4. Criminal Justice. The Federal and District government~ will develop and
implement a transition plan which transfers responsibility over a three-to-five-year
period for incarcerating felons. The Federal Bureau of Prisons (BOP) will house
adult felons convicted of D.C. Code violations and designated in the same manner as
Federal inmates in correctional institutions operated or contracted by the BOP.
This will occur after BOP's capacity has been increased through new construction
at Lorton and other locations selected by BOP, and through renovation of existing'
facilities at Lorton, Virginia. After October 1, 2001, the BOP will also.designate to
Federal correctional institutions sentenced D.C. felons in the custody of the D.C.
Department of Corrections, as the Director of BOP deems appropriate, in
accordance with available capacity, until they have all been designated to Federal
institutions. The BOP will accept employment applications from persons currently
employed by the D.C. Department of Corrections for existing BOP vacancies, and
will process such applications in accordance with existing Federal procedures and
standards.
The Attorney General will select, after consultation with the Mayor, the D.C. City
Council, and the Chair of the D.C. Financial Responsibility and Management
Assistance Authority, a Trustee to oversee operations of the D.C. Department of
Corrections until the BOP assumes responsibility for all incarcerated District felons.
The Federal and District governments will develop and implement a framework for
changes to the D.C. sentencing system, including the abolition of parole, institution of
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detenninate guideline sentencing and the enactment of the new mandatory minimum drug
sentences, which are a prerequisite for the Federal Government accepting responsibility
for the incarceration of felons convicted of D.C. Code violations. The sentencing system
will be enacted within 24 months, or the Federal Government will not be required to
obligate any funds appropriated for the purpose of incarcerating D.C. Code felons and
will have no responsibility for housing such persons.
Consulting with representatives of the Federal and District judiciary, the Federal
and District governments will also develop and implement a transition plan
transferring responsibility for D.C. Code violation offender pretrial, public defender,
parole, probation, and post-adjudicationlpost-conviction adult offender supervision
from the District government to the Federal government over a three-to-five-year
period. The United States Parole Commission will continue to assume
responsibility for all D.C. felons housed in Federal Correctional Institutions who
have sentences subject to provisions of parole.
The Federal government will take direct responsibility (in consultation with the
D.C. judiciary) for funding the D.C. court system and related services (including
plans relating to retirement benefits and other personnel matters), and establishing
an independent budgetary, financial oversight, and administrative support system for the
D.C. courts. The Courts will remain self-managed.
5. Economic Development. The Federal government will make tax benefits available to the
District both to encourage hiring by finns in the District of residents of distressed areas in
D.C., and to encourage economic revitalization throughout the District.
An economic development corporation (EDC) will be established as a non-Federal public
authority in the District of Columbia, with the mission of revitalizing the nation's capital
city and benefitting the District's residents and businesses. The Federal government
intends (a) to capitalize the EDC with a $50 million grant; (b) provide $250 million in tax
incentives to encourage business investment both downtown and in distressed
communities, and to help businesses increase employment of residents of the District of
Columbia; and (c) improve the District government's borrowing authority by removing
impediments in its borrowing statutes so that the District government will have the same
ability to finance projects as other cities have.
6. Infrastructure. The National Capital Infrastructure Commission (NCIC) will be
established to assume certain State-like responsibilities for selection, funding, and
oversight of National Highway System capital projects (including roads, bridges, and
transit) and NHS operations and maintenance projects (excluding police authority,
National Park Service roads, and transit) within the District. The NCIC will be governed
by a five-member board to be composed of three representatives from the District and one
representative from the Department of Transportation and one representative from the
Economic Development Corporation. Contract administration will be perfonned by the
Federal Highway Administration. In addition, eligibility for Surface Transportation
Program (STP) funds will be expanded to include local public roads. To support NCIC
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projects, the National Capital Infrastructure Fund (NCIF) will be established in FY1998
with $108 million for road, bridge, and transit capital projects. An additional $17
million will be provided in FY1998-03 for NHS operations and maintenance.
Federal-aid funds for the District's NHS, Interstate Maintenance, and Bridge programs
will be transferred to the NCIC in FYI998-03. The Administration also proposes that
the NCIC be authorized to accepted contributions from other sources.
7. Personal Income Tax Collection. At the request of the District, the Internal Revenue
Service will assume responsibility from the District of Columbia for administering and
enforcing D.C. individual income and payroll taxes. This would include the processing
of those taxes paid by individuals, as well as the payment of related employment and
payroll taxes. The District government will maintain processing and collection
responsibility for all other taxes collected for the District.
Upon enactment of the legislation to implement the Plan, the parties to the MOU will
review the legislation and confer on whether any revisions to the MOU are necessary to ensure
its consistency with the legislation.
SECTION V. DISTRICT CONDITIONS
The District government understands that it will be expected to undertake significant
actions as part of the National Capital Revitalization and Self-Government Improvement Plan
(the "Plan"). This section sets out the actions that the District government agrees to take as a
condition of the Federal government actions under the legislation to carry out the Plan.
1. Medicaid. The District agrees to develop and implement plans satisfactory to the
Secretary of Health and Human Services to accomplish each of the following:
1.1. To develop an effective system for the identification and collection of amounts owed by
third parties for medical care and services furnished to individuals under the District's
Medicaid plan; and
1.2. To ensure the timely audit and settlement of cost reports of institutional providers
(including hospitals, nursing facilities, and intermediate care facilities for the mentally
retarded) under the District's Medicaid plan, including prompt elimination of the backlog
of such audits and settlements.
1.3. To develop and implement, directly or under contract, a comprehensive health care
management information system that will standardize data base development and
management, and integrate health care delivery with a public health data system. Such a
system shall at a minimum have the capacity to accomplish the following functions:
1.3.1. To assist eligibility verification;
1.3.2. To create utilization and financial profiles of providers;
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1.3.3. To identify services (including preventive services) received by program beneficiaries;
1.3.4. To monitor the claims processing and other Medicaid operations of the fiscal agent;
1.3.5. To monitor the quality of care provided under managed care contracts; and
1.3.6. To coordinate information management with respect to the District's Medicaid program
and other public health programs and functions.
1.4. To develop a comprehensive behavioral managed health care system, which combines
.substance abuse and mental health grant programs. Development of such a plan shall
include a pilot project for better evaluation of in-patient acute psychiatric patient
admissions, and the purchase of a comprehensive, risk-based system for managed care of
behavioral health which covers all eligible populations and services.
2. Pensions. The District Government agrees (see Appendix One for definitions):
2.1. To establish a Replacement Plan for the current Retirement Program
2.1.1. The Replacement Plan will cover all existing and new employees (except for judges) who
are, or would be, covered by the Retirement Program, if the Retirement Program
continued unchanged, and will be established by the date specified in legislation.
2.1.2. To the extent required by current law, the Replacement Plan will be established through
collective bargaining.
2.1.3. After the Adoption Date, the Replacement Plan may not be amended in any manner that
materially increases the cost of the Replacement Plan without provision of a mechanism
for funding such increases, in accordance with Section 2.2.
2.2 That the Replacement Plan will use appropriate funding methods and costs that do not
exceed the sum available in the District of Columbia Budget and Financial Plan.
2.2.1. The cost of any defined benefit plan will be determined in accordance with the
measurement standards of Governmental Accounting Standards Board Statement No. 27
(GASB 27), with the following additional restrictions:
2.2.1.1. funding methods will be limited to entry age or frozen entry age; and
2.2.1.2. amortization of any unfunded actuarial liability is required over no more than 30
years on a closed basis.
2.2.2. The cost of any defined contribution plan is the employer contribution required under the
provisions of the plan.
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2.2.3. All costs of the Replacement Plan must be reflected in the D.C. Budget and Financial
Plan in accordance with the standards described above.
2.2.4. All costs of the Replacement Plan must be paid in accordance with the D.C. Code 1981,
Title I, Chapter 7, subchapter III.
2.2.5 .. Contributions of all existing and new employees (except judges) will be paid into the
Replacement Plan.
2.3. To transfer copies of books and records of the Retirement Program and the Fund and to
be financially responsible for errors and omissions, including all necessary records of
individual employees.
2.3.1. Copies of any books and records pertaining to the Retirement Program and the Fund
required by the Secretary of the Treasury or the Trustee must be made available to the
Secretary or Trustee within 30 days after the Secretary or Trustee requests them.
2.3.2. The District will reimburse the Trustee for all costs, including benefit payments, resulting
from errors or omissions in the books and records pertaining to the Fund.
2.4. To transfer assets from the Fund
2.4.1. Any and all assets of the Fund required to be transferred to the Trustee shall be
transferred on the Transfer Date in a form specified by the Trustee.
2.4.2. The District of Columbia Retirement Board will administer the retirement programs until
the Trustee assumes these responsibilities. The District government will reimburse the
Fund for any benefits paid out of the Fund between the Freeze Date and the transfer date
that exceed payments that would have been the responsibility of the Federal government
if the transfer had occurred simultaneously with the freeze.
3. Intermediate-Term and Short-Term Lending. The District agrees that:
3.1. Any intermediate-tenn loan to eliminate the accumulated fund balance deficit would be
for no more than 15 years, with an interest rate of Treasuries of comparable maturities
plus 1/8 of one percent.
3.2. Any intercyear loan for liquidity purposes and/or intermediate-tenn loan to eliminate the
accumulated fund balance deficit will not exceed the amount of $500 million.
3.3. . The Secretary of the Treasury may require early reimbursement if the District can obtain
credit on the commercial market on favorable tenns for refinancing as determined by the
Secretary.
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3.4. The District must be in compliance with the approved Budget and Financial Plan
before any lending can occur.
3.5. The District must provide a requisition for an advance of funds and a promissory
note to reimburse the Treasury for the advance.
3.6. The Financial Responsibility and Management Assistance Authority must certify
that there is an approved Budget and Financial Plan in effect for the District for the
Fiscal Year that the requisition is made.
3.7. The Secretary of the Treasury must receive certification that the District is unable
to obtain enough credit elsewhere to meet the District government's need for
fmancing .
. 3.8. The Federal government will work with the District government to amend its debt limit
provisions in order to allow implementation of the District's capital plan in an orderly and
sustainable manner.
4. Criminal Justice. This subsection of the Memorandum of Understanding (MOU)
between the Federal government and the District of Columbia government (D.C.) outlines the
offer of the Federal government, wholly on appropriations and D.C.'s acceptance and satisfaction
of all other conditions and predicates identified and described herein, to assist D.C. by assuming
responsibility for certain traditionally State responsibilities and the conditions that D.C. must agree
to and fulfill should it choose to accept that offer as it relates to criminal justice functions,
including, but not limited to, certain defendant and offender services, corrections and the
judiciary. The MOU sets forth the expectations and responsibilities relating to proposed
changes and refonns in the D.C. criminal justice and judicial system and the procedures
(including new statutory and regulatory provisions) the Federal Government and D.C. will use to
implement the MOU.
In particular, the MOU is designed to:
4.i. provide a framework for changes to the D.C. sentencing system, including the abolition
of parole, institution of detenninate guideline sentencing and the enactment of the new
mandatory minimum drug sentences, which are a prerequisite for the Federal
Government accepting responsibility for the incarceration of felons convicted of D.C.
Code violations.
4.ii. ensure that such sentencing system is to be enacted within 24 months, or the Federal
Government will not be required to obligate any funds appropriated for the purpose of
incarcerating D.C. Code felons and will have no responsibility for housing such persons.
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4.iii. ensure an appropriate transfer and transition of responsibility from D.C. to the Federal
Government for pretrial, public defender, parole, probation, and post-conviction
supervision and services for adult D.C. Code defendants and offenders.
4.iv. ensure an appropriate transfer of responsibility from D.C. to the Federal Government for
the incarceration of sentenced felons convicted of D.C. Code violations, assuming
sufficient resources are provided by Congress to develop necessary bed space to
accommodate the resulting increase in the Federal Bureau of Prisons (BOP) population
and D.C. Code violators are designated in the same manner as Federal inmates.
4.v. provide the basis for establishing an independent budgetary, financial oversight, and
administrative support system for the D.C. courts.
4.vi. define the respective roles of the D.C. and Federal Governments in relation to lawsuits
and resulting liability, as they may be affected by the reforms agreed to in this MOU.
4.vii. ensure the development by D.C. and the Federal Governments of transition plans
4.vii.a. (in consultation with the Federal and D.C. judiciaries) for transferring
responsibility for pretrial, public defender, parole, probation, and
post-conviction supervision and services for adult D.C. Code defendants
and offenders over a transition period of one to three years from the
enactment of the federal implementing legislation.
4.vii.b. for transferring responsibility for incarcerating sentenced felons convicted of D.C.
code violations over a period of approximately three to five years.
4.vii.c. (in consultation with the D.C. judiciary) for transferring responsibility for funding
the D.C. court system and related services, including plans relating to
retirement benefits and other personnel matters.
4.vii.d. for transferring control of the property at Lorton, Virginia to the Federal
Government.
4.1. Administration of District of Columbia Pretrial, Parole, Probation, and Post-Conviction
Offender Supervision, Housing, and Public Defender Services
4.1.1. Federal Government Responsibilities
4.1.1.1. After consultation with the Mayor of D.C., representatives of the D.C. Council,
the Chairman of the D.C. Financial Responsibility and Management
Assistance Authority (Financial Authority), and members of the affected
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Federal and D.C. judiciaries, the Attorney General will select an Offender
Supervision, Defender and Courts Services Trustee to:
a) assure the smooth transition and continued operations of D.C.'s
Pretrial Services Agency and Public Defender Service;
b) implement an orderly shutdown of the D.C. Board of Parole in
coordination with the U.S. Parole Commission and the Superior
Court for the Distrid of Columbia;
c) establish and operate a new D.C. Offender Supervision, Defender
and Courts Services Agency; and
d) accomplish, without disruption of services, the transfer of the adult
offender probation supervision functions of the D.C. Courts Social
Services Division,
until the Federal Government assumes responsibility for each of these
functions.
4.1.1.2. During the transition period, under the general auspices of the Trustee, the D.C.
Pretrial Services Agency will continue uninterrupted to provide services
and support for both juvenile and adult D.C. Code and Federal defendants
and offenders to the U.S. Distrid Court for the Distrid of Columbia, the
U.S. Court of Appeals for the Distrid of Columbia, the Superior Court for
the Distrid of Columbia, and the Distrid of Columbia Court of Appeals.
The Diredor of Pretrial Services may employ such personnel as shall be
necessary pursuant to procedures and standards established by the Trustee
to facilitate transition to Federal status.
4.l.l.3. Following the transition period, the D.C. Pretrial Services Agency and the
D.C. Public Defender Service will be organizationally housed in a new
Federal D.C. Offender Supervision, Defender and Courts Services Agency.
4.1.1.4. The D.C. Board of Parole will be terminated after the Trustee establishes a
transition agency with the capacity to provide adequate field supervision to
adult D.C. offenders on parole, probation or supervised release, and the
U.S. Parole Commission is capable of carrying out parole functions for
D.C. Code felony offenders. Subject to appropriations, the D.C. Board
of Parole's functions and jurisdiction vis a vis felon parolees will be
assumed by the U.S. Parole Commission. Similarly, its functions and
jurisdiction vis a vis misdemeanant parolees will be assumed by the D.C.
court system. Substantive D.C. law will continue to apply to parole
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determinations for all D.C. Code offenders. The District of Columbia
Superior Court Division of Social Services will continue to provide
supervision to D.C. Code juvenile offenders and will assume responsibility
for the supervision of misdemeanant parolees.
4.1.1.5. The Trustee will accept employment applications for new offender field
SUpel'VlSIOn positions in the transition agency from persons currently
employed by the D.C. court system and the D.C. Board of Parole.
Applications will be processed in accordance with procedures and
standards established by the Trustee to facilitate transition to subsequent
Federal law enforcement employment in the successor Offender
Supervision, Defender and Courts Services Agency. Positions will be
advertised prior to hiring.
4.1.1.6. During the transition period, the Federal Government will transfer funds for the
Pretrial Services Agency, the Public Defender Service and the supervision
of D.C. offenders to the Trustee. The head of any Federal department or
agency may provide the services of any personnel to the Trusteeship to
assist in carrying out the Trustee's duties.
4.1.1.7. During the transition period, under the general auspices of the Trustee, the Public
Defender Service will continue uninterrupted to provide services to D.C.
Code defendants and the D.C. court system. The Director of the Public
Defender Service may employ such personnel as shall be necessary
pursuant to procedures and standards established by the Trustee to facilitate
transition to Federal status.
4.1.1.8. During the transition period, the employees of and funds allocated to the Trustee
and the agencies for which the Trustee is responsible shall not be counted
against the personnel and budget ceilings imposed on D.C. by the
Financial Authority or Congress.
4.1.1.9. The U.S. Marshals Service (USMS) will contract with D.C., at a mutually
agreeable rate, to obtain space not needed by D.C. at D.C.'s Correctional
Treatment Facility (CTF), to house persons in the custody of the USMS
for whom the USMS requires bed space in the D.C. area.
4.1.1.10. Subject to appropriations, the Federal Government will provide funds to
support the D.C. Board of Parole functions during the one to three year
transition period culminating in the termination of the D.C. Board of
Parole.
4.1.2. District of Columbia Responsibilities
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4.1.2.1. The District of Columbia will maintain responsibility for all D.C. Code juvenile
offenders not prosecuted as adults.
4.1.2.2. The District of Columbia will have responsibility for housing and supervISIng
persons charged with and/or convicted of misdemeanor violations in the
Superior Court for the District of Columbia, both before and after
sentencing.
4.1.2.3. The District of Columbia will continue to house persons charged with felonies
under the D.C. Code and persons convicted of felonies under the D.C.
Code but not yet sentenced, in the Superior Court for the District of
Columbia. To the extent beds are available, D.C. will continue to
house persons charged with felonies under the U.S. Code, and persons
convicted of felonies under the U.S. Code but not yet sentenced in the
U.S. District Court. D.C. will continue to receive reimbursement, at a
mutually negotiated rate, from the Federal Government for the costs of
housing such persons. "House" and "housing" include subsistence,
transportation of persons to and from court appearances, revocation
hearings, medical facilities, and the maintenance of necessary prisoner
records.
4.1.2.4. The District of Columbia will continue to house persons sentenced by the
Superior Court and detained pending a hearing for revocation of parole,
probation, or supervised release, and will provide suitable facilities for such
hearings. To the extent beds are available, D.C. will house persons
sentenced by the U.S. District Court and detained pending a hearing for .
revocation of parole, probation, or supervised release, will provide suitable
facilities for such hearings, and will continue to receive reimbursement by
the Federal Government at a mutually negotiated rate for the costs of
housing such persons and for providing such facilities. "House" and
"housing" include subsistence, transportation of persons to and from court
appearances, revocation hearings, and medical facilities, and the
maintenance of necessary prisoner records.
4.1.2.5. The Trustee will be an independent officer of the D.C. Government and can be
removed by the Mayor only with the concurrence of the Attorney General.
The Attorney General has authority to remove the Trustee only for
misfeasance or malfeasance in office.
4.1.2.6. The Trustee will propose funding requests for offender supervision and services
for inclusion in the President's budget for each fiscal year of the transition.
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4.1.2.7. The Trustee will allocate funds for offender supervision (including adult felon
parole and probation) in D.C., including funds for short term
improvements, equipment contracts, and salary increases necessary to retain
key personnel, maintain and enhance current levels of service, including
offender drug testing, and provide for the safety and security of the
community.
4.1.2.8. Upon receipt of funds identified by Congress or other entities for Pretrial Services,
the Trustee will immediately transfer such funds to the Pretrial Services
Agency.
4.1.2.9. Upon receipt of funds identified by Congress or other entities for the D.C. Public
Defender Service, the Trustee will immediately transfer such funds to the
Public Defender Service.
4.1.2.10. Effectively immediately and in view of the responsibility to be undertaken
by the U.S. Parole Commission to carry out the functions of the D.C.
Board of Parole pursuant to the parole laws and regulations of D.C., the
D.C. Council will not enact legislation that changes or modifies parole
laws and regulations as applicable to felony offenders without the
concurrence of the Attorney General. D.C. will immediately take steps to
modify parole as applicable to misdemeanants to provide for D.C. court
supervision of D.C. misdemeanant parolees and the elimination of the
D.C. Board of Parole. Following the assumption by the U.S. Parole
Commission of the functions of the D.C. Board of Parole, the D.C.
Council will cede to Congress the sole authority to legislate changes to the
D.C. Code pertaining to the parole of D.C. felony offenders.
4.1.2.11. It is expected that the transition period for these offender, defender and
court services will end no sooner than one year but not later than three
years after the enactment of the related legislation.
4.1.2.12. The D.C. Corporation Counsel will provide representation for the Trustee
and Trustee supervised agencies. (see litigation and liability section)
4.2. Administration of District of Columbia and Federal Prisons
4.2.1. Federal Government Responsibilities
4.2.1.1. The Federal Government will take administrative control of the nine parcels of
land, collectively located at or in the vicinity of Lorton, Virginia ("the
Lorton property"), and other appropriate sites. Mter the BOP's capacity
has been increased through renovation of existing facilities and new
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construction at the corrections complex in Lorton and other locations
selected by BOP, BOP will house felons who were convicted of D.C.
Code violations and sentenced to terms of imprisonment. (A recently
completed Congressionally mandated study of the D.C. Department of
Corrections revealed that most of the institutions at Lorton have exceeded
their useful lifespan and need major renovations or demolition.)
4.2.1.2. BOP will conduct a thorough preliminary assessment of the Lorton property
to determine its environmental condition, including a study of the
contamination on the property and an estimation of the costs
associated with bringing the property into compliance with
environmental and other applicable regulations. Based on
preliminary information gathered pursuant to a review of the
environmental conditions of a portion of the Lorton property, BOP
could begin planning for renovation and construction immediately;
actual physical renovations would not begin until Fiscal Year 1998.
The estimated date for the completion of the preliminary
environmental assessment process is March 21, 1998.
4.2.1.3. BOP will oversee the operation of community corrections centers in
D.C. as necessary to provide an appropriate transition for inmates
who are nearing release from Federal prisons, including those
convicted of D.C. Code violations. BOP intends to use existing
community corrections centers in D.C. to the extent practicable and
will work with D.C. officials to identify prospective sites, as needed to
establish new community corrections facilities.
4.2.1.4. D.C. Code offenders will be housed together with Federal offenders in
facilities operated by BOP in Lorton, Virginia and elsewhere. Every
effort will be made to house D.C. felons at facilities as close to D.C. as
permitted by inmate program and security needs and BOP popUlation
management requirements. D.C. felons will be designated in the
same manner as Federal inmates, and ordinarily initially assigned to
institutions located within a SOO-mile radius of their release residence.
BOP anticipates that many of the initial designations for D.C.
offenders will be within a significantly closer radius. BOP also will
work with D.C. officials to identify sites for possible Federal
correctional facility construction within D.C.
4.2.1.5. During the transition period, based upon assurances from D.C. that
felons convicted of violating the D.C. Code will, in the future, receive
sentences similar to those received by comparable offenders convicted
of comparable Federal offenses, BOP will house those sentenced D.C.
felons in the custody of the D.C. Department of Corrections as the
Director of the BOP deems appropriate in accordance with available
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capacity. If such a new structure for sentencing under the D.C. Code
is in place as of October 1, 2001, BOP will accept D.C. felons
sentenced under the new sentencing structure in accordance with the
capacity of BOP. By October 1, 2002, and assuming fulmlment of all
requisite conditions, BOP will have assumed responsibility for
incarcerating all sentenced D.C. felons.
4.2.1.6. BOP will accept employment applications from persons currently
employed by the D.C. Department of Corrections for BOP vacancies
and will make hiring selections in accordance with existing Federal
procedures and standards. Positions for new BOP facilities will be
advertised prior to hiring.
4.2.1.7. After consultation with the Mayor, representatives of the D.C.
Council, the Chair of the Financial Authority, members of the
judiciary and others, the Attorney General will select a Corrections
Trustee to oversee expenditures of the D.C. Department of
Corrections relating to sentenced, incarcerated felons, until BOP
assumes responsibility for all incarcerated sentenced D.C. felons.
4.2.1.8. The Federal Government will provide funds for the incarceration of
sentenced D.C. felons through the Trustee to the D.C. Department of
Corrections. The head of any Federal department or agency may
provide the services of any personnel to the Trustee to assist in
carrying out the Trustee's duties.
4.2.1.9. Of the Federal funds received by the Trustee, the Trustee will
reimburse BOP for those funds identified by Congress to be used for
the construction of new facilities and the major renovation of existing
facilities. BOP will be responsible and accountable for determining
how these funds will be used, including the type, security level, and
location of new facilities.
4.2.1.10. During the transition period, the employees of and appropriations
allocated to the Trustee and the agencies for which the Trustee is
responsible shall not be scored or counted against the personnel and
budget ceilings imposed on D.C. by the Financial Authority or
Congress.
4.2.2. District of Columbia Responsibilities
4.2.2.1. Offenders convicted of D.C. Code violations will be sentenced
pursuant to a new D.C. sentencing system, described below. BOP
shall not be required to obligate any funds appropriated for the
absorption of D.C. Code felons into the Federal prison system and will
have no responsibility to house any persons convicted of felony
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offenses, if the new sentencing system is not enacted within 24 months
ofthe authorizing legislation's enactment.
4.2.2.2. D.C. will continue to house felons sentenced to terms of imprisonment
by the Superior Court for the District of Columbia until such persons
have been designated by BOP. To the extent beds are available, D.C.
will continue to house felons sentenced to terms of imprisonment by
the U.S. District Court until such persons have been designated by
BOP and will continue to receive reimbursement by the Federal
Government, at a mutually negotiated rate, for costs of housing
persons sentenced by the U.S. District Court.
4.2.2.3. The Trustee will be an independent officer of the D.C. government
and can be removed by the Mayor only with the concurrence of the
AttQrney General. The Attorney General has authority to remove
the Trustee only for misfeasance or malfeasance in office.
4.2.2.4. The Trustee will propose funding requests for the incarceration of
sentenced D.C. felons, for inclusion in the budget submitted by the
President to Congress for each fiscal year of the transition.
4.2.2.5. The Trustee will allocate funds to the D.C. Department of
Corrections, including such sums as may be appropriated for short
term improvements that are necessary for the safety and security of
staff, inmates, and the community.
4.2.2.6. The D.C. Department of Corrections will implement the short term
improvements in physical security identified in the "District of
Columbia Department of Corrections Short-Term Improvements Plan
(September, 1996)."
4.2.2.7. Upon receipt of Federal funds identified by Congress for constructing
new prisons and making major renovations to existing facilities for
the incarceration of D.C. felons, the Trustee will immediately
reimburse BOP for such funds.
4.2.2.8. The D.C. Corporation Counsel will provide representation for the
Trustee and Trustee supervised agencies. (see litigation and liability
section)
4.2.2.9. During the transition, D.C. will transfer control of the property at
Lorton, Virginia to the Federal Government, though the D.C.
Department of Corrections may continue to house D.C. felons at
facilities located at Lorton until such time as BOP absorbs such
offenders into the Federal prison system.
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4.3. Sentencing. The District of Columbia understands and agrees that the D.C. sentencing
system will be changed pursuant to proposed legislation in the following manner:
4.3.1. Congress will amend the D.C. Code to abolish parole for all persons convicted of
D.C. felony offenses committed on or after 3 years from the enactment of the
Federal authorizing legislation.
4.3.2. Congress will amend the D.C. Code so that good time calculations for all persons
convicted of D.C. felony offenses committed on or after 3 years from the
enactment of the Federal authorizing legislation will be made according to the
Federal requirements.
4.3.3. Congress will establish a new D.C. Board of Criminal Sentences (the Board) as an
independent body within the D.C. Government. All persons convicted of D.C.
felonies committed on or after 3 years from the enactment of the Act will be
sentenced according to a determinate sentencing system promulgated by the Board
and transmitted by the Board to the D.C. Council no later than 18 months after
enactment of the Federal authorizing legislation.
4.3.4. The Board will develop a sentencing system which shall include binding
guidelines and may include such amendments or repeals of provisions in the D.C.
Code relating to the maximum and minimum prison terms as are necessary to
accomplish the purposes of the Act. Ninety days after the Board promulgates
and transmits the sentencing system to the D.C. Council, the sentencing system, its
guidelines, amendments and repeals will become effective unless disapproved in its
entirety by a majority of the Council. If disapproved by the Council, the system
may be enacted by Congress.
4.3.5. The promulgated sentencing system will supersede any inconsistent provision of
the D.C. Code.
4.3.6. Congress will repeal certain other provisions of the D.C. Code to conform with
the new sentencing system (D.C. Code Title 24, Chapters 2 and 8), including the
Youth Rehabilitation Act.
4.3.7. Congress will amend D.C. Code Title 33, Section 541 to adopt certain mandatory
penalties necessary to further the Superior Court of the District of Columbia's
Drug Intervention Program and effective local law enforcement. The new
sentencing system will incorporate these mandatory penalties, thereby excluding
local narcotics offenses from the mandate that sentences be similar to those that
would be imposed upon comparable offenders in the Federal system.
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4.3.8. The Board will not have the authority to provide for capital punishment under any
law applicable exclusively in D.C.
4.3.9. The Board will have seven voting members. All the members of the Board shall
have knowledge and responsibilities with respect to criminal justice matters. The
Attorney General (or her designee) will chair the Board. The other members
will include two judges of the Superior Court for. the District of Columbia and
one representative each of the following entities: the D.C. Council, the Executive
Branch of the D.C. Government, the D.C. Public Defender Service, and the U.S.
Attorney for the District of Columbia. One representative each of the D.C.
Corporation Counsel and BOP will serve as non-voting, ex officio members.
4.3.10. An affirmative vote of at least six Board members will be necessary to promulgate the
sentencing system.
4.3.11. In developing the sentencing system, the Board will hold two or more public hearings,
review other sentencing guideline system models, consult with sentencing reform
experts, and solicit written comments from the public.
4.3.12. If the Board fails to promulgate a sentencing system within 18 months, the Board will
terminate, and the Attorney General will develop a sentencing system to be
transmitted to the D.C. Council for approval. Ninety days after the Attorney
General transmits the sentencing system to the D.C. Council, the sentencing
system, its guidelines, amendments, and repeals will become effective, unless the
Council disapproves the system in its entirety and Congress, in tum, does not
approve it.
4.3.13. The Board will have the mandate to ensure that the sentencing system it establishes,
among other things:
4.3.13.1. will result in sentences for those convicted of D.C. felony offenses similar
to those that would be imposed upon comparable offenders convicted of
comparable offenses in the Federal system;
4.3.13.2. will result in sentences that reflect the seriousness of the offense and
provide for just punishment, afford adequate deterrence to potential future
criminal conduct of the offender and others, and provide the defendant
with needed educational or vocational training, medical care, and other
correctional treatment;
4.3.13.3. will provide certainty and fairness in meeting the purposes of sentencing,
avoiding unwarranted sentencing disparities among similar defendants,
while maintaining sufficient flexibility to permit individualized sentences;
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4.3.13.4. will take into account the high volume of sentencing proceedings in the
D.C. Superior Court as bearing upon the degree of complexity of the
sentencing system; and
4.3.13.5. will ensure that the system is neutral as to the race, sex, marital status,
ethnic origin, religious affiliation, national origin, creed, socioeconomic
status, and sexual orientation of offenders, if not related to the commission
of the offense.
4.3.14. As part of the sentencing system, the Board will develop binding guidelines for use in
determining the sentence to be imposed upon convicted felons. The guidelines
will specify:
4.3.14.1. when to impose a sentence of probation, a fine, or a term of imprisonment
and the appropriate amount or length, thereof, as well as intermediate
sanctions;
4.3.14.2. when to impose a term of supervised release following imprisonment, and
the appropriate length, thereof; and
4.3.14.3. whether multiple sentences to terms of imprisonment should run
concurrently or consecutively.
4.3.15. Ninety days after promulgation of the sentencing system, the Board will be terminated.
There will be established a successor, Federally funded agency to amend the
guidelines as necessary to achieve the purposes of the Act. The D.C. Council
may recommend to Congress whether or not these amendments should be
approved. However, the amendments will take effect as prescribed by the
successor agency, unless they are modified or disapproved by Congress. The
successor agency will have no powers to revise the D.C. Code but will
recommend changes to the Code as may be necessary to further the purposes of
the Act.
4.3.16. The Superior Court for the District of Columbia, D.C. Department of Corrections, and
any other agency will submit information about convicted felons as required by
the Board and the U.S. Department of Justice. This would permit an assessment
of the extent to which sentences imposed by the Superior Court of the District of
Columbia are similar to those imposed for comparable offenders in the Federal
system. The results of this assessment would be used by the Board in developing
the new sentencing system for D.C.
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4.3.17. Four years after the enactment of the new sentencing system, there will be an evaluation
to determine the extent to which the sentencing system has succeeded in
accomplishing the goals set forth in the Act.
4.4. Liability and Litigation Responsibility and Authority
4.4.1. Federal Government Responsibilities
4.4.1.1. The Federal Government will be responsible for the defense of any claim arising
from any alleged act or failure to act on the part of the United States, its
agencies and personnel, in connection with pretrial, defender, offender
supervision, sentencing reform, corrections, probation and parole services,
and for any resulting liability, after responsibility for these services has
passed to the Federal Government at the end of the transition period.
4.4.1.2. The Federal Government's assumption of responsibility for the defense of claims,
and any resulting liability, set forth in paragraph 4.4.1.1. above shall
include claims arising from any alleged act or failure to act of BOP, its
agencies and personnel in connection with the demolition, repair,
renovation, or construction of any building, structure, or other
improvement of any kind at the Lorton, Virginia property.
4.4.1.3. The Attorney General, in her discretion, may direct any litigation involving the
Trustees appointed pursuant to sections 4.1.1.1. and 4.2.1.6. above, pretrial
services, offender supervision services, or sentencing reform during the
transitional period, and may provide litigation services for the Trustees and
the agencies responsible for pretrial services, offender supervision services,
and sentencing reform during the transitional period in lieu of
representation by D.C. Exercise of the Attorney General's discretion shall
not change the terms of this agreement and shall not otherwise enlarge the
liability of the United States, its agencies, or personnel. However, D.C.
may petition the Attorney General to request reimbursement for litigation
costs and liability arising from actions of the Trustees.
4.4.2. District of Columbia Responsibilities and Liabihty
4.4.2.1. D.C. will be responsible for the defense of any claim that has arisen or may arise
from any act or alleged failure to act by D.C., its agencies or personnel, in
connection with D.C.'s pretrial, defender, offender supervision,
sentencing reform, corrections, or probation and parole services, and for
any resulting liability. D.C. will remain responsible for defending and
bearing any liability resulting from any such claim even if responsibility for
the pertinent service has passed to the Federal Government. D.C. will
23
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also be responsible for the defense of any claim arising from any activity of
D.C., its agencies or personnel as a result of any action agreed to in this
MOU, and for any resulting liability.
4.4.2.2. D.C. is, and will remain, responsible for the defense of any and all claims
described in paragraph 4.4.2.1. above, including the defense of claims
arising from any alleged act or failure to act of the Trustees (see sections
4.1.l.l. and 4.2.1.6.). Except as provided in paragraph 4.5.3. and in
paragraph 4.1.3.} above, the D.C. Corporation Counsel will provide
litigation services as required to carry out this responsibility.
4.4.2.3.Notwithstanding paragraph 4.4.2.2. above, the Trustees and the agencIes
responsible for pretrial, defender, offender supervision services, and
sentencing reform may choose not to utilize the Corporation Counsel and
to engage other litigation services.
4.5. District of Columbia Courts
4.5.1. Congress will make all necessary amendments to the D.C. Code and other laws to
terminate budgetary control anq other involvement of the D.C. Government in the
finances and administration of the D.C. court system, including the Superior Court of the
District of Columbia and the District of Columbia Court of Appeals.
4.5.2. The Joint Committee on Judicial Administration of the D.C. courts will prepare and
submit the budget for the D.C. court system. The budgetary requests of the D.C. courts
system will not be subject to revision by the D.C. Government or the Executive Branch of
the Federal Government.
4.5.3. The D.C. court system, through its Executive Office, will be authorized to contract with
D.C. agencies, Federal agencies, and other public and private entities, for necessary
supplies, equipment, and services.
4.5.4. Expenditures of the D.C. court system will be paid out of funds appropriated for those
courts and credited to a Treasury account established for that purpose. Funds received
by the D.C. court system will not be part of the funds or budget of D.C.
5. Economic Development.
This Memorandum of Understanding between the Federal government and the District
government outlines (i) legislation that the Federal government intends to support, and (ii) the
conditions that District government must agree to and fulfill before the Federal government will
support the legislation.
24
Hex4J!lffi~'~'
S.i. Outline of Legislation
The Federal government intends to support legislation that will (A) provide the District
government with a new vehicle to spur economic development in the District of Columbia, and
capitalize the new vehicle with a $50 million grant; (B) provide $250 million in tax incentives to
encourage business investment both downtown and in distressed communities, and to help
businesses increase employment of residents of the District of Columbia; and (C) improve the
District government's borrowing authority by removing impediments in its borrowing statutes so
that the District government will have the same ability to finance projects as other cities have.
5.i.a. The Economic Development Corporation
Overview. The legislation will include congressional findings recognizing the
need for economic development in the District of Columbia, the unique
disadvantages that the District government faces, when compared to other cities,
in its efforts to finance economic development from local tax revenues because
Federal law limits the tax base and taxing authority of the District government,
and the national interest in having the Federal government assist the District of
Columbia in becoming a safe, clean, and beautiful city worthy of the seat of the
Federal government, which is a goal that will be realized only through the
development of a strong local economy.
The legislation will state the purposes for the part of the legislation pertaining to
economic development, which focus on expanding employment and business
opportunities in the District of Columbia, increasing the rate of private sector
investment in the District of Columbia, developing comprehensive strategies for
the economic development of the District of Columbia, assisting the
implementation of projects throughout the District of Columbia, and enhancing
the institutional capacity of the District government to accomplish and realize
economic development.
The legislation will establish the District of Columbia Economic Development
Corporation (the Corporation) under Article I, section 8, clause 17 of the
Constitution of the United States. The Corporation will be established as a
corporate body and instrumentality of the District government, and will not be
part of the Federal government.
Board of Directors. Officers and Employees. Reports. The powers of the
Corporation will be vested in a board of directors (the Board) consisting of nine
voting members. Six of the Board members will be appointed by the President in
consultation with the Congress. Of those six, four will be selected from the
for-profit business community, such .as persons involved in real estate
development, retailing, manufacturing, construction, or financial services, and two
will be selected from community-based organizations. The eligibility
requirements for being appointed as one of the six appointed Board members will
be that the person maintains a primary residence or has a primary place of
25
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business in the District of Columbia and that the person not be an officer or
employee of the Federal government or the District government. The remaining
three Board members will be ex officio members. Of those three, one will be
chosen by the President from a Federal agency, a second will be senior officer of
the District government chosen by the Mayor, and a third will be senior officer of
the District government chosen by the Council. The appointed Board members
will have six-year terms, with four of the first six appointed Board members
having shorter, staggered terms. The President will have the authority to remove
any appointed Board member for cause. Each ex officio member will serve at the
pleasure of the official who designated that member. The President will choose
one of the appointed Board members to serve as the Chair ofthe Board.
The Board will appoint a Chief Executive Officer of the Corporation who will
direct and supervise the general management and administrative affairs of the
Corporation as prescribed by the Board. The Chief Executive Officer will
appoint a Chief Financial Officer and a General Counsel with the approval of the
Board, and may appoint additional officers and employees as appropriate. The
Board will fix the pay for the Chief Executive Officer, the Chief Financial Officer,
and the General Counsel; the Chief Executive Officer will fix the pay for all other
officers and employees of the Corporation. No officer or employee of the
Corporation will be paid more than the Executive Schedule level III annual pay
rate under 5 U.S.C. 5312. Neither the Civil Service laws governing competitive
appointments, position classifications, and pay rates, nor the District of Columbia
employment laws governing appointments and salaries, will apply to the
appointment of the officers and employees of the Corporation. The Corporation
will be authorized to establish its own employment benefit plans; however, an
employee of the Federal government or the rest of the District government who
leaves the Federal government or the rest of the District government to work for
the Corporation may remain enrolled in the retirement, life insurance, and health
insurance programs of the Federal government or the rest of the District
government, as the case may be, and the Corporation will make the required
employer contributions to those programs. No political test or qualification may
be used with regard to hiring or taking any other personnel action regarding the
officers and employees ofthe Corporation
The Corporation will be prohibited from spending any funds to influence
legislation or in connection with any political campaign on behalf of or in opposi-
tion to any candidate for public office.
The Corporation will submit a report by April 1 of each year to the Mayor, the
Council, the Authority, the President, the Congress, and the public concerning its -
'operations for the prior fiscal year. This annual report will include a financial
statement audited by an independent auditor.
The Corporation will prepare an annual performance plan for the operations of the
Corporation. The elements of the performance plan will include performance
26
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goals, perfonnance benchmarks to measure the Corporation's perfonnance results,
and a methodology for comparing perfonnance results with perfonnance goals.
The annual report of the Corporation will also include infonnation regarding the
perfonnance results achieved by the Corporation in the fiscal year being reported
compared with the perfonnance goals established in the perfonnance plan for that
year.
The Corporation will engage an independent consultant to perfonn in fiscal years
2001 and 2005 an evaluation of the efficacy of the authorities granted and the
changes in law made in the tax provisions of the legislation as aids to the
Corporation in carrying out the purposes of the legislation. The Corporation will
submit a report to the Mayor, the Council, the Authority, the President, and the
Congress on the conclusions of these evaluations 30 days after the close of the
fiscal years in which the evaluation is perfonned.
The Corporation will establish written rules and procedures to ensure that the
solicitation, acceptance, use, and disposition of gifts, grants, and subsidies will not
reflect unfavorably upon the ability of the Corporation, or of any its officers or
employees, to carry out the responsibilities of the Corporation in a fair and objec-
tive manner. The Corporation will establish written rules and procedures to
ensure that the procurement of goods and services by the Corporation and the
acquisition and disposition of property by the Corporation will produce the best
value for the Corporation, in the judgment of the Corporation, and will not reflect
unfavorably upon the ability of the Corporation, or of any its officers or
employees, to carry out the functions of the Corporation in a fair and objective
manner. The procedures governing dispositions of property by the Corporation
will include public notice.
General Powers. The Corporation will have numerous general powers, including
the power to sue and be sued; to adopt, amend, and repeal bylaws and procedures
for its governance; to make and perfonn. contracts; to solicit, accept, use, and
dispose of gifts of money, services, and property from any source; and to lease,
purchase, use, improve, and dispose of any property. Some of the powers of the
Corporation will be limited by other provisions of the legislation, such as the
power to employ officers and employees and to fix their salaries and the power to
enter into financial assistance agreements. The Corporation will also be granted
the power to exercise any other power usually possessed by public enterprises or
private corporations perfonning similar functions that is not inconsistent with
applicable Federal of District law.
Economic Development Plans. The Corporation will be directed initially to give
priority to reviewing and evaluating existing economic development plans for the
District of Columbia, followed by the development of a comprehensive strategic
plan for carrying out the purposes of the part of the legislation pertaining to
economic development. The Corporation will be required to consult with the rest
of the District government in strategic planning.
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Financial Assistance. The Corporation will be authorized to provide financial
assistance for economic development projects directly or in participation with any
other source of financing, private or public, including any agency or
instrumentality of the rest of the District government. Financial assistance may
take the form of a loan, extension of credit, equity investment, grant, fixed
contribution to a loan loss or debt service reserve fund, or any other similar form
of financing or refinancing, but may not be a guarantee, insurance of payment of
principal and interest, or any other similar form of credit support that provides
recourse to the Corporation, and may include an exchange, lease, or sale ofland.
The total amount of financial assistance that will be permitted to be provided or
committed under the legislation will be limited to the total amount of the capital
and land of the Corporation, and financial assistance to anyone person or project
will be limited to 15 percent of the total capital and land of the Corporation.
There also will be a procedure for waiving the limits on the amount of financial
assistance to one person or project.
The Corporation will be authorized to establish one or more for-profit or
not-for-profit corporate subsidiaries. No subsidiary of the Corporation will have
any power that the Corporation does not have. The Corporation will also be
authorized to establish one or more revolving funds for providing different types
of financial assistance. Funds from any source, including returns on financial
assistance, will be permitted to be deposited into any revolving fund and
transferred between revolving funds, and will be available for providing additional
financial assistance and for paying the expenses of the Corporation.
The Corporation will establish criteria for selecting the type of financial assistance
that is most appropriate for different types of economic development projects,
including criteria that include a preference for the type of financial assistance that
represents the least commitment of the capital of the Corporation.
The Corporation will also establish procedures to provide the rest of the District
government with a reasonable opportunity to review and comment on economic
development projects to which the Corporation is considering providing financial
assistance.
The Corporation will consider certain factors when reviewing applications for
financial assistance, such as the likelihood the project can be expected to create or
retain private sector jobs in the District of Columbia, the contribution of the
project to the economy of the District, whether the project will serve the interests
of the community where it will be located, whether the project is consistent with
the comprehensive strategic plan developed by the Corporation, and whether the
project will improve links between the economy of the District of Columbia and
the economy of the region.
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The legislation will establish conditions precedent to the Corporation's approval
of any application for financial assistance for any economic development project,
such as the Corporation determining that there is a strong probability that the
project would not be undertaken without financial assistance from the Corpora-
tion, that financial assistance from the Corporation will not compete with or
supplant funds from sources other than the Corporation, including the rest of the
District government, that are otherwise available for the project, and that the rest
of the District government has been provided a reasonable opportunity to review
and comment on the project. A project's compliance with applicable Federal and
District of Columbia law will also be a condition precedent to the Corporation's
approval of the project's application for financial assistance.
Eminent Domain. The Corporation will be authorized to exercise, in the name of
the District of Columbia, the power of eminent domain to aid in carrying out the
purposes of the part of the legislation relating to economic development. The.
provisions of the District of Columbia Code that govern condemnation
proceedings for the acquisition of property by the Mayor shall apply to the
Corporation.
Regulatory Relief The Corporation will be authorized to request that the
Authority use its powers under section 103 of the District of Columbia Financial
Responsibility and Management Assistance Act of 1995 to order appropriate
officers or employees of appropriate regulatory authorities of the District
government to give expedited consideration to applications for District of
Columbia regulatory licenses, permits, and approvals of economic development
projects provided financial assistance by the Corporation. The Corporation will
be authorized to request the Mayor to cause any delayed or denied permit, license,
or approval to be issued or to demonstrate good cause for the delay or denial. If
the Mayor does not cause the necessary license, permit, or approval to be issued or
demonstrate in writing good cause for the delay or denial within 30 days of the
Corporation's request, the Corporation will be authorized to request that the
Authority use its powers to order appropriate officers or employees of appropriate
regulatory authorities of the D.C. government to take the action necessary to cause
the license, permit, or approval to be issued.
AI!Propriations. The legislation will authorize appropriations of $50,000,000 in
no-year funds to carry out the purposes of the economic provisions of the
legislation in fiscal year 1998. The Corporation will be required to provide at
least $20,000,000 or 40 percent of the amount appropriated, whichever is less,
either directly to non-profit organizations for job training, placement, and related
activities in those organizations for targeted residents of the District of Columbia,
or to non-profit third-party intermediaries to promote and finance such job
training, placement, and related activities in for-profit and not-for-profit
organizations. There will be a procedure for the Corporation to waive the
minimum amount requirement for financial assistance to non-profit organizations
for job training and placement.
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Project Revenue Obligations. The Corporation will be given authority to issue
project revenue obligations, including refunding obligations, and to use the
proceeds to provide financial assistance for economic development projects. The
Corporation will have the duty to consult with the rest of the District government
so that the Corporation and the rest of the District government together make the
most effective use of available resources and authorities, avoid to the extent
practicable competition and duplication of efforts, and maximize the benefit to the
District of Columbia.
The project revenue obligations issued by the Corporation will be special obliga-
tions of the Corporation payable solely from the revenues, assets, and property of
the economic development project for which financial assistance is provided, to
the extent such revenues, assets, and property are pledged therefor. The
resolution of the Board authorizing the issuance of any project revenue obligations
will be permitted to prescribe such matters as the form and terms of the
obligations, the method of issuance, the rights and remedies of the holders, and
the security for the obligations. The Board will be permitted to authorize the Chief
Executive Officer to enter into agreements providing security for the repayment of
the project revenue obligations that the Corporation issues. The Corporation will
be permitted to establish reserve funds for the project revenue obligations and to
manage those reserve funds.
The amount of any project revenue obligations that the Corporation issues will be
excluded from the limitations on the amount of general obligation bonds that the
District of Columbia is authorized to issue. The resolution of the Corporation
authorizing the issuance of project revenue bonds will not be considered to be an
act of the Council subject to the 30-day congressional review period provided in
section 602(c) of the District of Columbia Self-Government and Governmental
Reorganization Act. The issuance by the Corporation of project revenue bonds
shall not be considered to be a borrowing of money by the District government for
purposes of the prior certification requirement of section 204 of the District of
Columbia Project Financial Responsibility and Management Assistance Act of
1995. Project revenue obligations issued by the Corporation will not be obliga-
tions of the District of Columbia or the United States, and neither the faith and
credit nor the taxing power of the District of Columbia nor the full faith and credit
of the United States will be pledged for the payment of any project revenue
obligation issued by the Corporation. Each project revenue obligation issued by
the Corporation will be required to contain on its face a statement that effect.
Other Matters. All funds and revenues of the Corporation that are not required to
be otherwise disposed will be held and invested by the Corporation or deposited
with and invested by a custodian selected by the Corporation.
The Corporation will not have any power to impose or collect taxes or to pledge
or create any lien on taxes imposed or collected by the rest of the District
government.
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Any action against the Corporation or any action otherwise arising out of or
. pertaining to the part of the legislation relating to the Corporation must be brought
in the United States District Court for the District of Columbia, with appeals
heard in the United States Court of Appeals for the District of Columbia Circuit.
Any petition for review of a regulation or procedure adopted by the Corporation
under the legislation with respect to providing financial assistance must be filed
within 90 days after the date of publication of notice of adoption of the regulation
or, if the permitted petition for review is based solely on grounds arising after
such ninetieth day, within 90 days of the date on which the grounds arise. No
judicial review of a regulation with respect to providing financial assistance will
be permitted in a proceeding reviewing any determination by the Corporation to
make, deny, or take no action with respect to an application for financial
assistance.
The provisions of the District of Columbia Code governing procurement,
disposition of property, and open meetings will not apply to the Corporation.
The Corporation will be exclusively administered by its Board and not the Mayor
nor the Council.
In any action brought by or on behalf of the Corporation, or against the Corpo-
ration, the Corporation will be permitted to be represented by the counsel that it
selects.
Dissolution. The Corporation will not be permitted to award or commit to award
any new financial assistance or to issue any new revenue obligations after
September 30, 2007. The Corporation will be permitted to meet existing
financial assistance commitments to provide financial assistance under
commitments entered into on or before September 30,2007.
Beginning on October 1, 2007, the Board will be required to diligently pursue an
orderly termination of the affairs of the Corporation on or before September 30,
2010. The corporation will liquidate the assets of the Corporation unless the
Council elects to have some or all of the Corporation's assets transferred to an
agency or instrumentality of the rest of the District government. The Corporation
will be required to transfer the proceeds of all liquidations to the Mayor for
deposit into such account of the District government as the Mayor determines
appropriate. The Council will be permitted to direct the Corporation to transfer
some or all of the assets of the Corporation to an agency or instrumentality of the
rest of the District government and to direct to Corporation to deposit some or all
of the moneys of the Corporation (other than moneys reserved to fulfill financial
assistance commitments) to one or more accounts of the District government.
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If the Board completes the tennination of the affairs of the Corporation on or
before September 30, 2010, the Board will transfer to the Mayor the moneys of
the Corporation reserved to fulfill financial assistance commitments, will transfer
assets and deposit moneys of the Corporation as directed by Council, will transfer
to the Mayor the balance of the moneys of the Corporation for deposit into such
account of the District government as the Mayor detennines appropriate, and will
submit a final report on the Corporation to the Council, the Authority (if it is still
in operation), the President, and the Congress.
If the Board has not completed the tennination of the affairs of the Corporation on
or before September 30, 2010, the Mayor will succeed to all of the powers, assets,
duties, and liabilities of the Corporation and the Board on October 1, 2010,
including the duties to complete the termination of the affairs of the Corporation,
to liquidate or transfer assets of the Corporation and deposit moneys of the
Corporation, and to submit a final report on the Corporation to the Council, the
Authority (if it is still in operation), the President, and the Congress.
For purposes of any outstanding project revenue obligation issued by the
Corporation on or before October 1, 2070, the District government will be deemed
to be the issuer after the dissolution of the Corporation.
S.ii.b. Tax Provisions of the Legislation
Overview. The legislation will add six new provisions to the Internal Revenue
Code of 1986 (the Code). These provisions are described below. The new tax
provisions will take effect on the date the legislation is enacted.
The District of Columbia Employment Credit. New section 1400A of the Code
will provide for a tax credit to employers in the District of Columbia that hire
certain residents of the District of Columbia. The credit will be equal to 40
percent of up to $10,000 in wages paid to a qualified employee during the
employee's first year of employment with the employer. Thus, the maximum
credit per employee will be $4,000. Generally, qualified employees will include
any individual that meets a residence test, a work-location test, and an income
test. For purposes of the $10,000 ceiling, certain non-cash benefits such as health
insurance, educational assistance, and dependant care assistance will be permitted
to be taken into account.
To meet the residence test, the employee must reside in the District of Columbia
and either be a member of one of the Work Opportunity Tax Credit (WOTC)
targeted groups (including the new food stamp recipient group proposed in the
President's fiscal year 1998 budget) or live in a population census tract that has a
poverty rate of 15 percent or more. The work-location test will be satisfied if
either substantially all of the services provided by the employee for the employer
during the year are in District of Columbia or the employer's principal place of
business is in District of Columbia. Thus, for example, an employee of a
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construction company that has its principal place of business in District of
Columbia will qualify even if the employee works on projects in Maryland or
Virginia during the year. The income test, which only will apply if the employee
is not a member of a WOTC targeted group, will be satisfied if the employer does
not expect to pay the employee more than $28,500 during the employee's first year
of employment.
This employment credit will be available with respect to qualified employees
hired after the date of enactment and before October 1, 2002. In addition, the
WOTC and the welfare-to-work tax credit proposed in the President's fiscal year
1998 budget will be extended an additional two years, through September 30,
2002, with respect to individuals who reside in the District of Columbia, satisfy
the work-location test, and are either members of a WOTC targeted group or
long-term family assistance recipients.
Additional Section 179 Expensing. Under current section 179 of the Code,
businesses with less than $200,000 of investments in business equipment and
machinery during a year are eligible to take a current deduction, or "expense," up
to $18,000 of the cost of such property each year, rather than capitalizing that cost
and taking depreciation deductions over several years (the $18,000 annual cap
increases gradually to $25,000 between 1998 and 2003). The $18,000 is reduced
for each dollar of investment over $200,000, so that no expensing is available for
businesses with annual investments of$218,000 or more.
Under new section 1400B of the Code, businesses that have a significant portion
of their activities in higher poverty areas in the District of Columbia and that have
a work force at least 35 percent of which is made up of District of Columbia
residents, will be eligible for expensing for an additional $20,000 of business
equipment and machinery acquired each year. In addition, to the extent the
equipment and machinery is to be used in the District of Columbia, an expanded
ceiling will be available to businesses acquiring up to $400,000 in such property
during the year (the $38,000 amount available in 1997 phases out for businesses
with between $400,000 and $476,000 in investment). For purposes of this
incentive (as well as the Tax-exempt Economic Development Bonds discussed
below), higher poverty areas of the District of Columbia will mean any population
census tract with a poverty rate of 15 percent or more.
This additional expensing will be available for business equipment and machinery
place~ in service between January 1,1998, and December 31, 2002.
Tax-exempt Economic Development Bonds. New section 1400Cofthe Code will
make a new category of tax-exempt, private activity bonds available in District of
Columbia. Under these rules, the bond proceeds will be permitted to be used to
finance a broader range of business property --including commercial and retail
facilities, as well as the underlying land --than under the laws currently applicable
to the District of Columbia. The businesses eligible to borrow the proceeds of
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these bonds will be limited to those that have a significant portion of their
activities in higher poverty areas of the District of Columbia and that have a work
force at least 35 percent of which is made up of District of Columbia residents
(i.e., the businesses eligible for additional section 179 expensing except that there
is no cap on the annual investment in business equipment and machinery). The
aggregate amount of these bonds per eligible District of Columbia business will
not be allowed to exceed $15 million, and these bonds will be subject to the
District of Columbia's annual $150 million private activity bond volume cap.
These special tax-exempt bond provisions will apply to bonds issued after the date
of enactment and before January 1,2003. During that period, the legislation will
allocate to the Corporation 50 percent of applicable State ceiling on the authority
of the District government to issue private activity bonds in each calendar year
under section 141 of the Code.
Allocable Tax Credits for Equity Investments in and Loans to District of
Columbia Businesses. The Economic Development Corporation (The
Corporation) will be authorized by new section 1400D of the Code to allocate $95
million in nonrefundable credits to taxpayers that make equity investments in and
loans to District of Columbia businesses. The equity credit, which will not be
permitted to exceed 25 percent of the amount invested, will be available with
respect to investments in corporations or partnerships. This credit will be subject
to recapture if the equity interest is disposed of within 5 years. The lender credit
will be available with respect to loans made to District of Columbia businesses for
purchasing depreciable tangible property and any functionally related and
subordinate land. The maximum amount of the credit that the Corporation will
be authorized to allocate with respect to a loan is 25 percent of the principal
amount of the loan (measured by the cost of the property purchased). The
Corporation will allocate the credits pursuant to criteria it establishes, including
the degree to which the business borrowing the funds or receiving the equity will
provide job opportunities for low-and moderate-income residents, and whether the
business receiving the loan or equity infusion is located in a high-poverty area of
the District of Columbia.
These credits may be allocated and claimed between January 1, 1998, and
December 31,2002.
Status of The Corporation for Federal Income Tax Purposes. New section
l400F of the Code will clarify the status of the Corporation for federal income tax
purposes so that, for example, charitable contributions to the Corporation will be
deductible and the Corporation will have the ability to issue tax-exempt bonds.
5.i.c. Improvements to the District goveinment's borrowing authority.
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The Federal government will support legislation that will remove impediments in
the District government's borrowing statutes so that the District government will
have the same ability to finance projects as other cities have.
Outline of District Conditions
5.1. The District government will implement timely and efficient zoning, permitting, and
licensing processes by the end of fiscal year 1997.
5.2. The District government will offer personnel resources and fully cooperate with the
Corporation in its review and evaluation of existing economic development plans, in the
development of the Corporation strategic plan, and in subsequent implementation of the
plan.
5.3. The District government will support a legislative allocation to the Corporation of 50
percent of the applicable State ceiling on the authority of the District government to issue
private activity bonds in each calendar year under section 141 of the Internal Revenue
Code.
5.4. The District government will support a legislative authorization to the Corporation of the
right to exercise eminent domain in the name of the District of Columbia, and certain
other powers specified above.
5.5. The District government will give expedited consideration to the Corporation's requests
for land transfers (including transfers from the Redevelopment Land Agency), zoning
adjustments (including variances and special exceptions), and building and other permits
and licenses for projects and activities as requested by the Corporation.
5.6. The District government will support legislation that provides that all powers, rights,
assets, duties, obligations, and liabilities of the Corporation will transfer to the District
government upon the Corporation's dissolution
6. Infrastructure.
6.1. Secretary o/Transportation Responsibilities. The Secretary of Transportation (hereinafter
in this section referred to as the Secretary) agrees that:
6.1.1. Beginning on October 1, 1997, the Secretary shall assume responsibilities generally
carried out by a State under Title 23 of the U.S.C. relating to selection (consistent with
the planning requirements of 23 U.S.C. 134 and 135), funding and oversight of the
National Highway System (NHS) capital projects and shall assume responsibilities for
funding the operations and maintenance of the NHS within the District of Columbia
(exclusive of police authority and exclusive of funding those NHS routes currently under
the jurisdiction of the National Park Service) with funds' made available under the
National Capital Revitalization and Self-Government Improvement Act of 1997, to be
referred to henceforth in this section as the "Act."
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6.1.2. The Secretary shall advance NHS projects through the Federal Highway Administration
(FHWA). The FHWA shall consult and coordinate NHS project responsibilities with the
District of Columbia. In selecting projects, the FHWA shall give consideration to the
District of Columbia Needs Assessment currently being developed by the Federal
Highway Administration in cooperation with the District of Columbia Department of .
Public Works and the District of Columbia Strategic Transportation Plan.
6.1.3. Beginning on October 1, 1997, the Secretary shall assume responsibility for advancing
those NHS projects approved prior to that date that are not under construction or under a
contract for such construction by October 1, 1997, unless the Secretary and the District of
Columbia agree to continue to vest responsibility for such project advancement with the
District of Columbia. Such projects that are transferred under this section shall also be
governed by the requirements contained in section 6.2.4.
6.1.4. The Secretary may transfer National Capital Infrastructure Funds authorized under this
Act and available for capital expenditures and NHS apportioned funds authorized to be
transferred under this Act to other Federal-aid highway funding categories, consistent
with title 23, United States Code provisions governing the transfer ofNHS funds.
6.1.5. Funds made available to the Secretary for obligation on NHS projects under this Act shall
be administered by FHWA. From time to time as work progresses on a project,
payments shall be made by FHWA for the costs of construction, operations, maintenance,
and other eligible activities under this Act in accordance with applicable procedures
under Title 23, United States Code, or as established by the Secretary.
6.1.6. For Fiscal Year 1998, $108 million shall be authorized to be appropriated to the National
Capital Infrastructure Fund which shall be used for construction, reconstruction, and
rehabilitation of the NHS in accordance with 23 U.S.C. 103 ( i ), including transit capital
projects eligible for funding under section 103 ( i ).
6.1.7. In each of the fiscal years 1998 through 2003, the Secretary shall retain and deposit into
the National Capital Infrastructure Fund:
(a) 100 percent of the District of Columbia's apportionment for the NHS;
(b) 100 percent of the apportionments for Interstate Maintenance; and
(c) 75 percent of the apportionment for the Highway Bridge and Replacement for use
consistent with 23 U.S.C. 103 ( i ).
6.1.8. In each of the Fiscal Years 1998 through 2003, $17 million shall be authorized to be
appropriated to fund the operations and maintenance of the NHS within the District of
Columbia, exclusive of those NHS routes under the jurisdiction and control of the
National Park Service.
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6.1.9. The Secretary shall be responsible for funding those operations and maintenance
activities and costs, excluding police services (except for those construction zone,
incident management and other police activities that are eligible for Federal-aid highway
reimbursement under title 23, United States Code) associated with the management and
operations of NHS highways including the following activities: routine maintenance of
roadways and rights-of-way, road repair, snow removal, lighting, signage, and those
utilities necessary for the NHS operations. The Secretary shall not be responsible for
funding the District of Columbia share of operating expenses for any transit activities.
6.1.10. The Secretary shall continue to provide oversight and technical assistance to the District
of Columbia for all Federal-aid projects that remain the responsibility of the District of
Columbia.
6.1.11. The Secretary through the FHWA will enter into any agreements or contracts with any
entity to advance, construct, reconstruct, rehabilitate, repair, maintain, or operate the NHS
within the District of Columbia excluding those NHS roadways under the jurisdiction and
control of the National Park Service, consistent with 23 U.S.C. 103 (i).
6.1.12. The Secretary shall encourage the hiring of local labor by contractors awarded contracts
including welfare to work labor, on NHS projects financed under this Act to the
maximum extent possible and consistent with federal law.
6.1.13. Unless reauthorized by Congress on, or prior to, September 30, 2003, the Secretary of
Transportation's responsibilities, other than the completion of ongoing projects funded
through this Act, would cease and no new deposits of Federal funds would be made into
the National Capital Infrastructure Fund after September 30, 2003.
6.1.14. The Secretary shall provide the District of Columbia with the technical assistance
necessary to reassume its NHS responsibilities by September 30,2003. The April 1996
findings of FHWA's review of the organizational capacity of the District of Columbia's
Department of Public Works shall guide the assistance.
6.2. District of Columbia Responsibilities. The District of Columbia agrees that:
6.2.1. The District of Columbia shall continue to be responsible for providing police services on
NHS highways (including, but not limited to civil police functions, crime prevention,
investigations including traffic and accident investigation, and emergency traffic
direction). The District shall continue to own the right-of-way ofNHS highways that are
located within the District of Columbia.
6.2.2. The District of Columbia will continue to be responsible for all utilities and utility work
that is not necessary for operation of the NHS even if such utilities are located within the
right-of-way of the NHS.
6.2.3. The District of Columbia shall continue to be responsible for non-NHS projects funded
with Federal-aid highway funds. The authority to use Surface Transportation Program
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funds on local streets, highways, and roadways (except alleys) does not relieve the
District of Columbia of the responsibility for the non-federal matching share. The use of
other Federal-aid highway apportioned funds by the District of Columbia, other than as
provided herein, also requires a non-Federal matching share.
6.2.4. Beginning on October 1, 1997, the District of Columbia is relieved of the responsibility to
provide the non-Federal match for NHS projects that are funded by the Secretary with
monies made available for NHS projects under this Act. The relief from providing the
non-federal match shall not include those projects that were approved by FHWA prior to
October 1, 1997 for which Federal-aid highway funds have been obligated. The District
of Columbia is responsible for providing the non-Federal match, the Federal-aid funds,
and any obligation authority for any such projects transferred to the Secretary for project
administration, oversight, or contracting.
6.2.5. The District of Columbia shall continue to be responsible for any liability incurred on the
basis of the activities of the District of Columbia, its agencies, or personnel as a result of
any acts or omissions in carrying out this Act. The United States, its agencies, and
personnel will not incur any liability for any such acts or omissions.
6.2.6. The District of Columbia shall cooperate with the Federal Highway Administration in its
technical assistance efforts in order to assure that the District of Columbia can reassume
its NHS responsibilities by September 30,2003. The goal of the effort shall be to satisfy
the April 1996 findings of FHWA's review of the organizational capacity of the District
of Columbia's Department of Public Works.
7. Personal Income Tax Administration The District agrees that:
7.1. General
7.1.1. The IRS shall administer and enforce the District's individual income and employment
taxes.
7.1.2. The District shall continue to administer its unemployment benefits program.
7.2. Tax Codes
7.2.1. The IRS will administer the District's existing individual income and employment tax
laws. The only provision the IRS cannot administer is the District's refundable property
tax credit. If the District wishes to retain this provision, it must be transferred to its real
estate tax administration.
7.2.2. All of the administrative, procedural, and enforcement provisions of the Internal Revenue
Code of 1986 and related statutes will govern IRS administration of District taxes. The
District will have to amend its own tax code to achieve this to the satisfaction of the
Secretary of the Treasury.
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7.2.3. To avoid the possibility of any inconsistent interpretations of similar provisions, the
District will have to amend its definitional provisions to conform them to the Internal
Revenue Code to the satisfaction of the Secretary of the Treasury.
7.2.4. The District must notify the Secretary of the Treasury of any future changes to its
individual income and employment tax laws. The Secretary may object if, in his
judgement, the prospective change would prove overly burdensome to the IRS, in which
case such change shall not be administered or enforced by the IRS. If the Secretary does
not object within 60 days after notification, the IRS will administer the provision within a
reasonable time after enactment.
7.3. Transfers to the District
7.3 .1. The IRS will set up separate accounting and deposit systems for its collections of District
taxes. The District must, in turn, identify the person and/or office authorized to receive
transfers of collected amounts and set up related deposit accounts.
7.4. Effective Date
7.4.1. The IRS administration of District taxes shall be prospective, starting on January 1 of the
calendar year that is at least 18 months after the Secretary certifies that the District of
Columbia has met the conditions set forth in the Memorandum of Understanding between
the United States and the District of Columbia.
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AppendiX One
DEFINITIONS FOR THE PENSIONS SECTION OF THE MOU
"Adoption Date" means the date the Replacement Plan is adopted by the District Government or,
iflater, October 1, 1997_
"District Government" means, as appropriate, the "District government" as defined by section
305(5) of the District of Columbia Financial Responsibility and Management Assistance Act of
1995 (Pub_ L 104-8) or the District of Columbia Retirement Board as defined in section 102(5)
of the Reform Act.
"Freeze Date" means the date of introduction of the Revitalization Act.
"Fund" means the District of Columbia Police Officers and Fire Fighters' Retirement Fund, the
District of Columbia Teachers' Retirement Fund, and the District of Columbia Judges'
Retirement Fund as defined in section 102(10) of the Reform Act.
"Reform Act" means the District of Columbia Retirement Reform Act (Pub. L. 96-122).
"Replacement Plan" means the plan or plans described under Title I of the Revitalization Act.
"Retirement Program" means any of the retirement programs as described in section 102(7) of
the Reform Act as in effect on the day before the freeze date_
"Revitalization Act" means the "District of Columbia Revitalization Act of 1997."
"Secretary" means the Secretary of the Treasury or the Secretary's designee.
"Transfer Date" means the date on which the assets and obligations of the Fund are transferred to
the Trust.
"Trust" means the District of Columbia Retirement Trust created under Title I of the
Revitalization Act.
"Trustee" means the firm designated by the Secretary of the Treasury under Title I of the
Revitalization Act.
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ATT BODYPART TYPE:D
TEXT:
The following attachments were included with this message:
TYPE FILE
NAME DCMOU.A7
==================== ATTACHMENT 2 ====================
ATT CREATION TIME/DATE: 7-APR-1997 19:24:00.00
ATT BODY PART TYPE:p
ATT SUBJECT: DCMOU
TEXT:
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Draft 4.7. 1997
This draft reflects only the District's conditions for the Economic Development section under
theMOU.
MEMORANDUM OF UNDERSTANDING BETWEEN:
THE DISTRICT OF COLUMBIA
Marion Barry, Jr., Mayor
Charlene Drew Jarvis, Council Chairperson Pro Tempore
DISTRICT OF COLUMBIA FINANCIAL RESPONSIBILITY AND MANAGEMENT
ASSISTANCE AUTHORITY
Andrew Brimmer, Chairman
OFFICE OF MANAGEMENT AND BUDGET, EXECUTIVE OFFICE OF THE
PRESIDENT
Franklin D. Raines
Chair, Federal District of Columbia Task Force
Dated: _ _ _ _ _ __
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SECTION I. PURPOSE
The parties respect the Home Rule Center as the fundamental basis for governance in the
District. The purpose of this memorandum is to strengthen Home Rule and to agree to work
toward the revitalization of the District of Columbia.
This memorandum is intended only to improve the management of, and the relationship between,
the District of Columbia and the Federal government, and is not intended to and does not create
any right, benefit, trust or responsibility, substantive or procedural, enforceable at law or equity
by a party against the United States, its agencies, its officers, or any person.
SECTION II. PUBLIC LAW 104-8, "THE DISTRICT OF COLUMBIA FINANCIAL
RESPONSIBILITY AND MANAGEMENT ASSISTANCE ACT OF
1995"
The parties recognize the effectiveness of PL 1048 and dedicate themselves to the cooperative
implementation of its provisions. Among these provisions:
Finance.
For each Fiscal Year for which the District is in a control period, the Mayor shall develop
and submit to the Financial Responsibility and Management Assistance Authority (the
"Authority") and District Council a Budget and Financial Plan for the applicable Fiscal
Year and the next three Fiscal Years.
Expenditures for the District government for each Fiscal Year, beginning in FY1999, may
not exceed revenues for that Fiscal Year.
During Fiscal Years 1996, 1997, and 1998, the District government shall make
continuous, substantial progress toward equalizing its expenditures and revenues.
The District may not borrow money during a control year unless the Authority provides
prior certification that the borrowing is consistent with the financial plan and budget for
the year.
For the Secretary of the Treasury to make a short-term advance to the District, an
Authority-approved Budget and Financial Plan must be in place, the Mayor must submit a
requisition for an advance including a schedule for timing and amounts for advances, the
Inspector General must certify the accuracy of the information provided to the Secretary,
and the Secretary determines -- and the Authority certifies -- that the District lacks market
access on reasonable terms, and that the Treasury has reasonable assurance of being
reimbursed.
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Management.
An Office of the Chief Financial Officer will be established in the Executive Branch of
the District government, headed by the Chief Financial Officer, and including the Office
of the Treasurer, Controller, Budget, Financial Infonnation Services, and Finance and
Revenue.
An Office of the Inspector General will be established in the Executive Branch of the
District government.
During the control period, the Mayor shall submit proposed contracts and leases to the
Authority for review, and cannot enter into a contract or a lease unless the Authority
detennines it is consistent with the Budget and Financial Plan.
The Authority may submit recommendations to the Mayor, the Council, the President,
and
Congre
ss on
actions
the
District
or
Federal
govern
ments
may
take to
ensure
the
District
's
compli
ance
with a
Budget
and
Financi
al Plan
and
promot
e its
financi
al
stabilit
y,
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manag
ement
respon
sibility
and
service
deliver
y
efficie
ncy.
The
Mayor
and the
Counci
1 shall
submit
a
statem
ent to
the
Author
ity,
Preside
nt, and
Congre
ss
providi
ng
notice
as to
whethe
r the
District
will
adopt
the
recom
mendat
1Ons.
An
affirma
tive
statem
ent
must
include
3
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a
written
imple
mentati
on
plan,
with
perfor
mance
measur
es and
a
schedu
Ie for
audit
compli
ance.
If the
statern
ent
rejects
the
recom
mendat
ions,
the
Author
itymay
vote to
take
what
actions
it
deems
approp
riate,
after
consult
ing
with
Govern
mental
Affairs
Comrn
ittee of
the
4
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Senate
and the
House
Govern
rnent
Refor
m and
Oversi
ght
Comm
ittee.
SECTION III. GENERAL PROVISIONS
1. Balanced Budget. PL 104-8 requires that the District balance its budget by FY1999.
By this agreement, the District agrees to present and/or approve a balanced budget for the
Fiscal Year beginning October 1, 1997.
2. Agreement to be Bound. The District agrees to be bound by and to use its offices and
best efforts to implement this agreement.
SECTION IV. SUBMISSION OF LEGISLATION & FEDERALLY ASSUMED
FUNCTIONS
On behalf of the Executive Office of the President, the Director of the Office
Management and Budget intends to recommend the submission of legislation to the Congress
that is consistent with the National Capital Revitalization and Self Government Improvement
Plan (the "Plan") announced by the President on January 14, 1997.
Once implemented, the Plan will provide the District substantial relief from its operating
expenditures, relief which will grow over time. It will also invest considerable resources to
improve the District's criminal justice systems and capital infrastructure. If this legislation is
enacted, the Federal government will undertake the functions described below. The Federal
government will not undertake a function until the District government meets the conditions for
that function, described in Section V.
1. Medicaid. The Federal government will increase its share of the District's Medicaid
payments to 70 percent, thereby reducing the District's share to 30 percent. The
Department of Health and Human Services will continue to provide more intensive
technical assistance to help the District improve the management of its Medicaid
program.
2. Pensions. The Federal government will take fmancial and administrative
responsibility for virtually all pension benefits accrued under the plans for all active
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and retired police and fIrefIghters, and teachers, and will take full responsibility for
the pensions of judges. The bulk of the assets of the retirement plans will be
transferred to the Federal government. The Federal government will pledge its full faith
and credit to meet its responsibilities to pay these benefits. Benefits payable to current
employees will be "frozen" based on service earned as of the date the legislation is
introduced, and the Federal government will pay future retirement, death and some of
their disability benefits to the extent they are earned based on the frozen service. While
the Federal government will not be responsible for benefits earned during future years of
service by members of the current retirement programs (other than judges), these
members will get the benefit of pay increases on the frozen benefits. Frozen benefits will
continue to be subject to cost-of-living adjustments under the terms of the existing
programs. All future employee contributions (except for judges) will be paid into the
new plans. The Secretary of the Treasury will appoint a third-party Trustee to administer
the existing plans and manage pension assets.
3. Intermediate-Term and Short-Term Lending. The United States Treasury will provide
an intermediate-term loan (IS-year term) to assist the District to eliminate its accumulated
fund balance deficit. The Treasury may also provide inter-year loans for liquidity
purposes. The combined amount of the intermediate-term and inter-year liquidity loans
may not exceed $500 million. Both of these loans will have an interest rate of Treasuries
of comparable maturity plus 1I8th of one percent. The Treasury may also provide
intra-year loans for the purposes ofliquidity.
4. Criminal Justice. The Federal and District governments will develop and
implement a transition plan which transfers responsibility over a three-to-fIve-year
period for incarcerating felons. The Federal Bureau of Prisons (BOP) will house
adult felons convicted of D.C. Code violations and designated in the same manner as
I
Federal inmates in correctional institutions operated or contracted by the BOP.
This will occur after BOP's capacity has been increased through new construction
at Lorton and other locations selected by BOP, and through renovation of existing
facilities at Lorton, Virginia. After October 1, 2001, the BOP will also designate to
Federal correctional institutions sentenced D.C. felons in the custody of the D.C.
Department of Corrections, as the Director of BOP deems appropriate, in
accordance with available capacity, until they have all been designated to Federal
institutions. The BOP will accept employment applications from persons currently
employed by the D.C. Department of Corrections for existing BOP vacancies, and
will process such applications in accordance with existing Federal procedures and
standards.
The Attorney General will select, after consultation with the Mayor, the D.C. City
Council, and the Chair of the D.C. Financial Responsibility and Management
Assistance Authority, a Trustee to oversee operations of the D.C. Department of
Corrections until the BOP assumes responsibility for all incarcerated District felons.
The Federal and District governments will develop and implement a framework for
changes to the D.C. sentencing system, including the abolition of parole, institution of
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detenninate guideline sentencing and the enactment of the new mandatory minimum drug
sentences, which are a prerequisite for the Federal Government accepting responsibility
for the incarceration of felons convicted of D.C. Code violations. The sentencing system
will be enacted within 24 months, or the Federal Government will not be required to
obligate any funds appropriated for the purpose of incarcerating D.C. Code felons and
will have no responsibility for housing such persons.
Consulting with representatives of the Federal and District judiciary, the Federal
and District governments will also develop and implement a transition plan
transferring responsibility for D.C. Code violation offender pretrial, public defender,
parole, probation, and post-adjudicationlpost-conviction adult offender supervision
from the District government to the Federal government over a three-to-five-year
period. The United States Parole Commission will continue to assume
responsibility for all D.C. felons housed in Federal Correctional Institutions who
have sentences subject to provisions of parole.
The Federal government will take direct responsibility (in consultation with the
D.C. judiciary) for funding the D.C. court system and related services (including
plans relating to retirement benefits and other personnel matters), and establishing
an independent budgetary, financial oversight, and administrative support system for the
D.C. courts. The Courts will remain self-managed.
5. Economic Development. The Federal government will make tax benefits available to the
District both to encourage hiring by finns in the District of residents of distressed areas in
D.C., and to encourage economic revitalization throughout the District.
An economic development corporation (EDC) will be established as a non-Federal public
authority in the District of Columbia, with the mission of revitalizing the nation's capital
city and benefitting the District's residents and businesses. The Federal government
intends (a) to capitalize the EDC with a $50 million grant; (b) provide $250 million in tax
incentives to encourage business investment both downtown and in distressed
communities, and to help businesses increase employment of residents of the District of
Columbia; and (c) improve the District government's borrowing authority by removing
impediments in its borrowing statutes so that the District government will have the same
ability to finance projects as other cities have.
6. Infrastructure. The National Capital Infrastructure Commission (NCIC) will be
established to assume certain State-like responsibilities for selection, funding, and
oversight of National Highway System capital projects (including roads, bridges, and
transit) and NHS operations and maintenance projects (excluding police authority,
National Park Service roads, and transit) within the District. The NCIC will be governed
by a five-member board to be composed of three representatives from the District and one
representative from the Department of Transportation and one representative from the
Economic Development Corporation. Contract administration will be perfonned by the
Federal Highway Administration. In addition, eligibility for Surface Transportation
Program (STP) funds will be expanded to include local public roads. To support NCIC
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projects, the National Capital Infrastructure Fund (NCIF) will be established in FYI998
with $108 million for road, bridge, and transit capital projects. An additional $17
million will be provided in FY1998-03 for NHS operations and maintenance.
Federal-aid funds for the District's NHS, Interstate Maintenance, and Bridge programs
will be transferred to the NCIC in FYI998-03. The Administration also proposes that
the NCIC be authorized to accepted contributions from other sources.
7. Personal Income Tax Collection. At the request of the District, the Internal Revenue
Service will assume responsibility from the District of Columbia for administering and
enforcing D.C. individual income and payroll taxes. This would include the processing
of those taxes paid by individuals, as well as the payment of related employment and
payroll taxes. The District government will maintain processing and collection
responsibility for all other taxes collected for the District.
Upon enactment of the legislation to implement the Plan, the parties to the MOU will
review the legislation and confer on whether any revisions to the MOU are necessary to ensure
its consistency with the legislation.
SECTION V. DISTRICT CONDITIONS
The District government understands that it will be expected to undertake significant
actions as part of the National Capital Revitalization and Self-Government Improvement Plan
(the "Plan"). This section sets out the actions that the District government agrees to take as a
condition of the Federal government actions under the legislation to carry out the Plan.
1. Medicaid. The District agrees to develop and implement plans satisfactory to the
Secretary of Health and Human Services to accomplish each of the following:
1.1. To develop an effective system for the identification and collection of amounts owed by
third parties for medical care and services furnished to individuals under the District's
Medicaid plan; and
1.2. To ensure the timely audit and settlement of cost reports of institutional providers
(including hospitals, nursing facilities, and intermediate care facilities for the mentally
retarded) under the District's Medicaid plan, including prompt elimination of the backlog
of such audits and settlements.
1.3. To develop and implement, directly or under contract, a comprehensive health care
management information system that will standardize data base development and
management, and integrate health care delivery with a public health data system. Such a
system shall at a minimum have the capacity to accomplish the following functions:
1.3.1. To assist eligibility verification;
1.3 .2. To create utilization and financial profiles of providers;
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1.3.3. To identify services (including preventive services) received by program beneficiaries;
1.3.4. To monitor the claims processing and other Medicaid operations of the fiscal agent;
1.3.5. To monitor the quality of care provided under managed care contracts; and
1.3.6. To coordinate information management with respect to the District's Medicaid program
and other public health programs and functions.
1.4. To develop a comprehensive behavioral managed health care system, which combines
substance abuse and mental health grant programs. Development of such a plan shall
include a pilot project for better evaluation of in-patient acute psychiatric patient
admissions, and the purchase of a comprehensive, risk-based system for managed care of
behavioral health which covers all eligible populations and services.
2. Pensions. The District Government agrees (see Appendix One for definitions):
2.1. To establish a Replacement Plan for the current Retirement Program
2.1.1. The Replacement Plan will cover all existing and new employees (except for judges) who
are, or would be, covered by the Retirement Program, if the Retirement Program
continued unchanged, and will be established by the date specified in legislation.
2.1.2. To the extent required by current law, the Replacement Plan will be established through
collective bargaining.
2.1.3. After the Adoption Date, the Replacement Plan may not be amended in any manner that
materially increases the cost of the Replacement Plan without provision of a mechanism
for funding such increases, in accordance with Section 2.2.
2.2 That the Replacement Plan will use appropriate funding methods and costs that do not
exceed the sum available in the District of Columbia Budget and Financial Plan.
2.2.1. The cost of any defined benefit plan will be determined in accordance with the
measurement standards of Governmental Accounting Standards Board Statement No. 27
(GASB 27), with the following additional restrictions:
2.2.1.1. funding methods will be limited to entry age or frozen entry age; and
2.2.1.2. amortization of any unfunded actuarial liability is required over no more than 30
years on a closed basis.
2.2.2. The cost of any defined contribution plan is the employer contribution required under the
provisions of the plan.
9
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2.2.3. All costs of the Replacement Plan must be reflected in the D.C. Budget and Financial
Plan in accordance with the standards described above.
2.2.4. All costs of the Replacement Plan must be paid in accordance with the D.C. Code 1981,
Title 1, Chapter 7, subchapter III.
2.2.5. Contributions of all existing and new employees (except judges) will be paid into the
Replacement Plan.
2.3. To transfer copies of books and records of the Retirement Program and the Fund and to
be financially responsible for errors and omissions, including all necessary records of
individual employees.
2.3.1. Copies of any books and records pertaining to the Retirement Program and the Fund
required by the Secretary of the Treasury or the Trustee must be made available to the
Secretary or Trustee within 30 days after the Secretary or Trustee requests them.
2.3.2. The District will reimburse the Trustee for all costs, including benefit payments, resulting
from errors or omissions in the books and records pertaining to the Fund.
2.4. To transfer assets from the Fund
2.4.1. Any and all assets of the Fund required to be transferred to the Trustee shall be
transferred on the Transfer Date in a form specified by the Trustee.
2.4.2. The District of Columbia Retirement Board will administer the retirement programs until
the Trustee assumes these responsibilities. The District government will reimburse the
Fund for any benefits paid out of the Fund between the Freeze Date and the transfer date
that exceed payments that would have been the responsibility of the Federal government
if the transfer had occurred simultaneously with the freeze.
3. Intermediate-Term and Short-Term Lending. !he District agrees that:
3.1. Any intermediate-term loan to eliminate the accumulated fund balance deficit would be
for no more than 15 years, with an interest rate of Treasuries of comparable maturities
plus 118 of one percent.
3.2. Any inter-year loan for liquidity purposes and/or intermediate-term loan to eliminate the
accumulated fund balance deficit will not exceed the amount of $500 million.
3.3. The Secretary of the Treasury may require early reimbursement if the District can obtain
credit on the commercial market on favorable terms for refinancing as determined by the
Secretary.
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3.4. The District must be in compliance with the approved Budget and Financial Plan
before any lending can occur.
3.5. The District must provide a requisition for an advance of funds and a promissory
note to reimburse the Treasury for the advance.
3.6. The Financial Responsibility and Management Assistance Authority must certify
that there is an approved Budget and Financial Plan in effect for the District for the
Fiscal Year that the requisition is made.
3.7. The Secretary ofthe Treasury must receive certification that the District is unable
to obtain enough credit elsewhere to meet the District government's need for
fmancing.
3.8. The Federal government will work with the District government to amend its debt limit
provisions in order to allow implementation of the District's capital plan in an orderly and
sustainable manner.
4. Criminal Justice. This subsection of the Memorandum of Understanding (MOU)
between the Federal government and the District of Columbia government (D.C.) outlines the
offer of the Federal government, wholly on appropriations and D.C.'s acceptance and satisfaction
of all other conditions and predicates identified and described herein, to assist D.C. by assuming
responsibility for certain traditionally State responsibilities and the conditions that D.C. must agree
to and fulfill should it choose to accept that offer as it relates to criminal justice functions,
including, but not limited to, certain defendant and offender services, corrections and the
judiciary. The MOU sets forth the expectations and responsibilities relating to proposed
changes and reforms in the D.C. criminal justice and judicial system and the procedures
(including new statutory and regulatory provisions) the Federal Government and D.C. will use to
implement the MOU.
In particular, the MOU is designed to:
4.i. provide a framework for changes to the D.C. sentencing system, including the abolition
of parole, institution of determinate guideline sentencing and the enactment of the new
mandatory minimum drug sentences, which are a prerequisite for the Federal
Government accepting responsibility for the incarceration of felons convicted of D.C.
Code violations.
4.ii. ensure that such sentencing system is to be enacted within 24 months, or the Federal
Government will not be required to obligate any funds appropriated for the purpose of
incarcerating D.C. Code felons and will have no responsibility for housing such persons.
11
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4.iii. ensure an appropriate transfer and transition of responsibility from D.C. to the Federal
Government for pretrial, public defender, parole, probation, and post-conviction
supervision and services for adult D.C. Code defendants and offenders.
4.iv. ensure an appropriate transfer of responsibility from D.C. to the Federal Government for
the incarceration of sentenced felons convided of D.C. Code violations, assuming
sufficient resources are provided by Congress to develop necessary bed space to
accommodate the resulting increase in the Federal Bureau of Prisons (BOP) population
and D.C. Code violators are designated in the same manner as Federal inmates.
4.v. provide the basis for establishing an independent budgetary, financial oversight, and
administrative support system for the D.C. courts.
4.vi. define the respective roles of the D.C. and Federal Governments in relation to lawsuits
and resulting liability, as they may be affeded by the reforms agreed to in this MOU.
4.vii. ensure the development by D.C. and the Federal Governments of transition plans
4.vii.a. (in consultation with the Federal and D.C. judiciaries) for transferring
responsibility for pretrial, public defender, parole, probation, and
post-conviction supervision and services for adult D.C. Code defendants
and offenders over a transition period of one to three years from the
enadment of the federal implementing legislation.
4.vii.b. for transferring responsibility for incarcerating sentenced felons convided of D.C.
code violations over a period of approximately three to five years.
4.vii.c. (in consultation with the D.C. judiciary) for transferring responsibility for funding
the D.C. court system and related services, including plans relating to
retirement benefits and other personnel matters.
4.vii.d. for transferring control of the property at Lorton, Virginia to the Federal
Government.
4.1. Administration of Distrid of Columbia Pretrial. Parole. Probation, and Post-Conviction
Offender Supervision, Housing, and Public Defender Services
4.1.1. Federal Government Responsibilities
4.1.1.1. Mter consultation with the Mayor of D.C., representatives of the D.C. Council,
the Chairman of the D.C. Financial Responsibility and Management
Assistance Authority (Financial Authority), and members of the affeded
12
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Federal and D.C. judiciaries, the Attorney General will select an Offender
Supervision, Defender and Courts Services Trustee to:
a) assure the smooth transition and continued operations of D.C.'s
Pretrial Services Agency and Public Defender Service;
b) implement an orderly shutdown of the D.C. Board of Parole in
coordination with the U.S. Parole. Commission and the Superior
Court for the District of Columbia;
c) establish and operate a new D.C. Offender Supervision, Defender
and Courts Services Agency; and
d) accomplish, without disruption of services, the transfer of the adult
offender probation supervision functions of the D.C. Courts Social
Services Division,
until the Federal Government assumes responsibility for each of these
functions.
4.1.1.2. During the transition period, under the general auspices of the Trustee, the D.C.
Pretrial Services Agency will continue uninterrupted to provide services
and support for both juvenile and adult D.C. Code and Federal defendants
and offenders to the U.S. District Court for the District of Columbia, the
U.S. Court of Appeals for the District of Columbia, the Superior Court for
the District of Columbia, and the District of Columbia Court of Appeals.
The Director of Pretrial Services may employ such personnel as shall be
necessary pursuant to procedures and standards established by the Trustee
to facilitate transition to Federal status.
4.1.1.3. Following the transition period, the D.C. Pretrial Services Agency and the
D.C. Public Defender Service will be organizationally housed in a new
Federal D.C. Offender Supervision, Defender and Courts Services Agency.
4.1.1.4. The D.C. Board of Parole will be terminated after the Trustee establishes a
transition agency with the capacity to provide adequate field supervision to
adult D.C. offenders on parole, probation or supervised release, and the
U.S. Parole Commission is capable of carrying out parole functions for
D.C. Code felony offenders. Subject to appropriations, the D.C. Board
of Parole's functions and jurisdiction vis a vis felon parolees will be
assumed by the U.S. Parole Commission. Similarly, its functions and
jurisdiction vis a vis misdemeanant parolees will be assumed by the D.C.
court system. Substantive D.C. law will continue to apply to parole
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detenninations for all D.C. Code offenders. The District of Columbia
Superior Court Division of Social Services will continue to provide
supervision to D.C. Code juvenile offenders and will assume responsibility
for the supervision of misdemeanant parolees.
4.1.1.5. The Trustee will accept employment applications for new offender field
supervISIon positions in the transition agency from persons currently
employed by the D.C. court system and the D.C. Board of Parole.
Applications will be processed in accordance with procedures and
standards established by the Trustee to facilitate transition to subsequent
Federal law enforcement employment in the successor Offender
Supervision, Defender and Courts Services Agency. Positions will be
advertised prior to hiring.
4.1.1.6. During the transition period, the Federal Government will transfer funds for the
Pretrial Services Agency, the Public Defender Service and the supervision
of D.C. offenders to the Trustee. The head of any Federal department or
agency may provide the services of any personnel to the Trusteeship to
assist in carrying out the Trustee's duties.
4.1.1.7. During the transition period, under the general auspices of the Trustee, the Public
Defender Service will continue uninterrupted to provide services to D.C.
Code defendants and the D.C. court system. The Director of the Public
Defender Service may employ such personnel as shall be necessary
pursuant to procedures and standards established by the Trustee to facilitate
transition to Federal status.
4.1.1.8. During the transition period, the employees of and funds allocated to the Trustee
and the agencies for which the Trustee is responsible shall not be counted
against the personnel and budget ceilings imposed on D.C. by the
Financial Authority or Congress.
4.1.1.9. The U.S. Marshals Service (USMS) will contract with D.C., at a mutually
agreeable rate, to obtain space not needed by D.C. at D.C.'s Correctional
Treatment Facility (CTF), to house persons in the custody of the USMS
for whom the USMS requires bed space in the D.C. area.
4.1.1.10. Subject to appropriations, the Federal Government will provide funds to
support the D.C. Board of Parole functions during the one to three year
transition period culminating in the tennination of the D.C. Board of
Parole.
4.1.2. District of Columbia Responsibilities
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4.1.2.1. The District of Columbia will maintain responsibility for all D.C. Code juvenile
offenders not prosecuted as adults.
4.1.2.2. The District of Columbia will have responsibility for housing and supel'Vlsmg
persons charged with and/or convicted of misdemeanor violations in the
Superior Court for the District of Columbia, both before and after
sentencing.
4.1.2.3. The District of Columbia will continue to house persons charged with felonies
under the D.C. Code and persons convicted of felonies under the D.C.
Code but not yet sentenced, in the Superior Court for the District of
Columbia. To the extent beds are available, D.C. will continue to
house persons charged with felonies under the U.S: Code, and persons
convicted of felonies under the U.S. Code but not yet sentenced in the
U.S. District Court. D.C. will continue to receive reimbursement, at a
mutually negotiated rate, from the Federal Government for the costs of
housing such persons. "House" and "housing" include subsistence,
transportation of persons to and from court appearances, revocation
hearings, medical facilities, and the maintenance of necessary prisoner
records.
4.1.2.4. The District of Columbia will continue to house persons sentenced by the
Superior Court and detained pending a hearing for revocation of parole,
probation, or supervised release, and will provide suitable facilities for such
hearings. To the extent beds are available, D.C. will house persons
sentenced by the U.S. District Court and detained pending a hearing for
revocation of parole, probation, or supervised release, will provide suitable
facilities for such hearings, and will continue to receive reimbursement by
the Federal Government at a mutually negotiated rate for the costs of
housing such persons and for providing such facilities. "House" and
"housing" include subsistence, transportation of persons to and from court
appearances, revocation hearings, and medical facilities, and the
maintenance of necessary prisoner records.
4.1.2.5. The Trustee will be an independent officer of the D.C. Government and can be
removed by the Mayor only with the concurrence of the Attorney General.
The Attorney General has authority to remove the Trustee only for
misfeasance or malfeasance in office.
4.1.2.6. The Trustee will propose funding requests for offender supervision and services
for inclusion in the President's budget for each fiscal year of the transition.
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4.1.2.7. The Trustee will allocate funds for offender supervision (including adult felon
parole and probation) in D.C., including funds for short term
improvements, equipment contracts, and salary increases necessary to retain
key personnel, maintain and enhance current levels of service, including
offender drug testing, and provide for the safety and security of the
community.
4.1.2.8. Upon receipt of funds identified by Congress or other entities for Pretrial Services,
the Trustee will immediately transfer such funds to the Pretrial Services
Agency.
4.1.2.9. Upon receipt of funds identified by Congress or other entities for the D.C. Public
Defender Service, the Trustee will immediately transfer such funds to the
Public Defender Service.
4.1.2.10. Effectively immediately and in view of the responsibility to be undertaken
by the U.S. Parole Commission to carry out the functions of the D.C.
Board of Parole pursuant to the parole laws and regulations of D.C., the
D.C. Council will not enact legislation that changes or modifies parole
laws and regulations as applicable to felony offenders without the
concurrence of the Attorney General. D.C. will immediately take steps to
modify parole as applicable to misdemeanants to provide for D.C. court
supervision of D.C. misdemeanant parolees and the elimination of the
D.C. Board of Parole. Following the assumption by the U.S. Parole
Commission of the functions of the D.C. Board of Parole, the D.C.
Council will cede to Congress the sole authority to legislate changes to the
D.C. Code pertaining to the parole of D.C. felony offenders.
4.1.2.11. It is expected that the transition period for these offender, defender and
court services will end no sooner than one year but not later than three
years after the enactment of the related legislation.
4.1.2.12. The D.C. Corporation Counsel will provide representation for the Trustee
and Trustee supervised agencies. (see litigation and liability section)
4.2. Administration of District of Columbia and Federal Prisons
4.2.1. Federal Government Responsibilities
4.2.1.1. The Federal Government will take administrative control of the nine parcels of
land, collectively located at or in the vicinity of Lorton, Virginia (lithe
Lorton property"), and other appropriate sites. Mter the BOP's capacity
has been increased through renovation of existing facilities and new
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construction at the corrections complex in Lorton and other locations
selected by BOP, BOP will house felons who were convicted of D.C.
Code violations and sentenced to terms of imprisonment. (A recently
completed Congressionally mandated study of the D.C. Department of
Corrections revealed that most of the institutions at Lorton have exceeded
their useful lifespan and need major renovations or demolition.)
4.2.1.2. BOP will conduct a thorough preliminary assessment of the Lorton property
to determine its environmental condition, including a study of the
contamination on the property and an estimation of the costs
associated with bringing the property into compliance with
environmental and other applicable regulations. Based on
preliminary information gathered pursuant to a review of the
environmental conditions of a portion of the Lorton property, BOP
could begin planning for renovation and construction immediately;
actual physical renovations would not begin until Fiscal Year 1998.
The estimated date for the completion of the preliminary
environmental assessment process is March 21, 1998.
4.2.1.3. BOP will oversee the operation of community corrections centers in
D.C. as necessary to provide an appropriate transition for inmates
who are nearing release from Federal prisons, including those
convicted of D.C. Code violations. BOP intends to use existing
community corrections centers in D.C. to the extent practicable and
will work with D.C. officials to identify prospective sites, as needed to
establish new community corrections facilities.
4.2.1.4. D.C. Code offenders will be housed together with Federal offenders in
facilities operated by BOP in Lorton, Virginia and elsewhere. Every
effort will be made to house D.C. felons at facilities as close to D.C. as
permitted by inmate program and security needs and BOP population
management requirements. D.C. felons will be designated in the
same manner as Federal inmates, and ordinarily initially assigned to
institutions located within a 500-mile radius of their release residence.
BOP anticipates that many of the initial designations for D.C.
offenders will be within a significantly closer radius. BOP also will
work with D.C. officials to identify sites for possible Federal
correctional facility construction within D.C.
4.2.1.5. During the transition period, based upon assurances from D.C. that
felons convicted of violating the D.C. Code will, in the future, receive
sentences similar to those received by comparable offenders convicted
of comparable Federal offenses, BOP will house those sentenced D.C.
felons in the custody of the D.C. Department of Corrections as the
Director of the BOP deems appropriate in accordance with available
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capacity. If such a new structure for sentencing under the D.C. Code
is in place as of October 1, 2001, BOP will accept D.C. felons
sentenced under the new sentencing structure in accordance with the
capacity of BOP. By October 1, 2002, and assuming fulfillment of all
requisite conditions, BOP will have assumed responsibility for
incarcerating all sentenced D.C. felons.
4.2.1.6. BOP will accept employment applications from persons currently
employed by the D.C. Department of Corrections for BOP vacancies
and will make hiring selections in accordance with existing Federal
procedures and standards. Positions for new BOP facilities will be
advertised prior to hiring.
4.2.1.7. After consultation with the Mayor, representatives of the D.C.
Council, the Chair of the Financial Authority, members of the
judiciary and others, the Attorney General will select a Corrections
Trustee to oversee expenditures of the D.C. Department of
Corrections relating to sentenced, incarcerated felons, until BOP
assumes responsibility for all incarcerated sentenced D.C. felons.
4.2.1.8. The Federal Government will provide funds for the incarceration of
sentenced D.C. felons through the Trustee to the D.C. Department of
Corrections. The head of any Federal department or agency may
provide the services of any personnel to the Trustee to assist in
carrying out the Trustee's duties.
4.2.1.9. Of the Federal funds received by the Trustee, the Trustee will
reimburse BOP for those funds identified by Congress to be used for
the construction of new facilities and the major renovation of existing
facilities. BOP will be responsible and accountable for determining
how these funds will be used, including the type, security level, and
location of new facilities.
4.2.1.10. During the transition period, the employees of and appropriations
allocated to the Trustee and the agencies for which the Trustee is
responsible shall not be scored or counted against the personnel and
budget ceilings imposed on D.C. by the Financial Authority or
Congress.
4.2.2. District of Columbia Responsibilities
4.2.2.1. Offenders convicted of D.C. Code violations will be sentenced
pursuant to a new D.C. sentencing system, described below. BOP
shall not be required to obligate any funds appropriated for the
absorption of D.C. Code felons into the Federal prison system and will
have no responsibility to house any persons convicted of felony
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offenses, if the new sentencing system is not enacted within 24 months
of the authorizing legislation's enactment.
4.2.2.2. D.C. will continue to house felons sentenced to terms of imprisonment
by the Superior Court for the District of Columbia until such persons
have been designated by BOP. To the extent beds are available, D.C.
will continue to house felons sentenced to terms of imprisonment by
the U.S. District Court until such persons have been designated by
BOP and will continue to receive reimbursement by the Federal
Government, at a mutually negotiated rate, for costs of housing
persons sentenced by the U.S. District Court.
4.2.2.3. The Trustee will be an independent officer of the D.C. government
and can be removed by the Mayor only with the concurrence of the
Attorney General. The Attorney General has authority to remove
the Trustee only for misfeasance or malfeasance in office.
4.2.2.4. The Trustee will propose funding requests for the incarceration of
sentenced D.C. felons, for inclusion in the budget submitted by the
President to Congress for each fiscal year of the transition.
4.2.2.5. The Trustee will allocate funds to the D.C. Department of
Corrections, including such sums as may be appropriated for short
term improvements that are necessary for the safety and security of
staff, inmates, and the community.
4.2.2.6. The D.C. Department of Corrections will implement the short term
improvements in physical security identified in the "District of
Columbia Department of Corrections Short-Term Improvements Plan
(September, 1996)."
4.2.2.7. Upon receipt of Federal funds identified by Congress for constructing
new prisons and making major renovations to existing facilities for
the incarceration of D.C. felons, the Trustee will immediately
reimburse BOP for such funds.
4.2.2.8. The D.C. Corporation Counsel will provide representation for the
Trustee and Trustee supervised agencies. (see litigation and liability
section)
4.2.2.9. During the transition, D.C. will transfer control of the property at
Lorton, Virginia to the Federal Government, though the D.C.
Department of Corrections may continue to house D.C. felons at
facilities located at Lorton until such time as BOP absorbs such
offenders into the Federal prison system.
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4.3. Sentencing. The District of Columbia understands and agrees that the D.C. sentencing
system will be changed pursuant to proposed legislation in the following manner:
4.3.1. Congress will amend the D.C. Code to abolish parole for all persons convicted of
D.C. felony offenses committed on or after 3 years from the enactment of the
Federal authorizing legislation.
4.3.2. Congress will amend the D.C. Code so that good time calculations for all persons
convicted of D.C. felony offenses committed on or after 3 years from the
enactment of the Federal authorizing legislation will be made according to the
Federal requirements.
4.3.3. Congress will establish a new D.C. Board of Criminal Sentences (the Board) as an
independent body within the D.C. Government. All persons convicted of D.C.
felonies committed on or after 3 years from the enactment of the Act will be
sentenced according to a determinate sentencing system promulgated by the Board
and transmitted by the Board to the D.C. Council no later than 18 months after
enactment of the Federal authorizing legislation.
4.3.4. The Board will develop a sentencing system which shall include binding
guidelines and may include such amendments or repeals of provisions in the D.C.
Code relating to the maximum and minimum prison terms as are necessary to
accomplish the purposes of the Act. Ninety days after the Board promulgates
and transmits the sentencing system to the D.C. Council, the sentencing system, its
guidelines, amendments and repeals will become effective unless disapproved in its
entirety by a majority of the Council. If disapproved by the Council, the system
may be enacted by Congress.
4.3.5. The promulgated sentencing system will supersede any inconsistent provision of
the D.C. Code.
4.3.6. Congress will repeal certain other provisions of the D.C. Code to conform with
the new sentencing system (D.C. Code Title 24, Chapters 2 and 8), including the
Youth Rehabilitation Act.
4.3.7. Congress will amend D.C. Code Title 33, Section 541 to adopt certain mandatory
penalties necessary to further the Superior Court of the District of Columbia's
Drug Intervention Program and effective local law enforcement. The new
sentencing system will incorporate these mandatory penalties, thereby excluding
local narcotics offenses from the mandate that sentences be similar to those that
would be imposed upon comparable offenders in the Federal system.
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4.3.8. The Board will not have the authority to provide for capital punishment under any
law applicable exclusively in D.C.
4.3.9. The Board will have seven voting members. All the members of the Board shall
have knowledge and responsibilities with respect to criminal justice matters. The
Attorney General (or her designee) will chair the Board. The other members
will include two judges of the Superior Court for the District of Columbia and
one representative each of the following entities: the D.C. Council, the Executive
Branch of the D.C. Government, the D.C. Public Defender Service, and the U.S.
Attorney for the District of Columbia. One representative each of the D.C.
Corporation Counsel and BOP will serve as non-voting, ex officio members.
4.3.10. An affirmative vote of at least six Board members will be necessary to promulgate the
sentencing system.
4.3.11. In developing the sentencing system, the Board will hold two or more public hearings,
review other sentencing guideline system models, consult with sentencing reform
experts, and solicit written comments from the public.
4.3.12. If the Board fails to promulgate a sentencing system within 18 months, the Board will
terminate, and the Attorney General will develop a sentencing system to be
transmitted to the D.C. Council for approval. Ninety days after the Attorney
General transmits the sentencing system to the D.C. Council, the sentencing
system, its guidelines, amendments, and repeals will become effective, unless the
Council disapproves the system in its entirety and Congress, in turn, does not
approve it.
4.3.13. The Board will have the mandate to ensure that the sentencing system it establishes,
among other things:
4.3.13.1. will result in sentences for those convicted of D.C. felony offenses similar
to those that would be imposed upon comparable offenders convicted of
comparable offenses in the Federal system;
4.3.13.2. will result in sentences that reflect the seriousness of the offense and
provide for just punishment, afford adequate deterrence to potential future
criminal conduct of the offender and others, and provide the defendant
with needed educational or vocational training, medical care, and other
correctional treatment;
4.3.13.3. will provide certainty and fairness in meeting the purposes of sentencing,
avoiding unwarranted sentencing disparities among similar defendants,
while maintaining sufficient flexibility to permit individualized sentences;
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4.3.13.4. will take into account the high volume of sentencing proceedings in the
D.C. Superior Court as bearing upon the degree of complexity of the
sentencing system; and
4.3.13.5. will ensure that the system is neutral as to the race, sex, marital status,
ethnic origin, religious affiliation, national origin, creed, socioeconomic
status, and sexual orientation of offenders, if not related to the commission
of the offense.
4.3.14. As part of the sentencing system, the Board will develop binding guidelines for use in
determining the sentence to be imposed upon convicted felons. The guidelines
will specify:
4.3.14.1. when to impose a sentence of probation, a fine, or a term of imprisonment
and the appropriate amount or length, thereof, as well as intermediate
sanctions;
4.3.14.2. when to impose a term of supervised release following imprisonment, and
the appropriate length, thereof; and
4.3.14.3. whether multiple sentences to terms of imprisonment should run
concurrently or consecutively.
4.3.15. Ninety days after promulgation of the sentencing system, the Board will be terminated.
There will be established a successor, Federally funded agency to amend the
guidelines as necessary to achieve the purposes of the Act. The D.C. Council
may recommend to Congress whether or not these amendments should be
approved. However, the amendments will take effect as prescribed by the
successor agency, unless they are modified or disapproved by Congress. The
successor agency will have no powers to revise the D.C. Code but will
recommend changes to the Code as may be necessary to further the purposes of
the Act.
4.3.16. The Superior Court for the District of Columbia, D.C. Department of Corrections, and
any other agency will submit information about convicted felons as required by
the Board and the u.s. Department of Justice. This would permit an assessment
of the extent to which sentences imposed by the Superior Court of the District of
Columbia are similar to those imposed for comparable offenders in the Federal
system. The results of this assessment would be used by the Board in developing
the new sentencing system for D.C.
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4.3.17. Four years after the enactment of the new sentencing system, there will be an evaluation
to determine the extent to which the sentencing system has succeeded in
accomplishing the goals set forth in the Act.
4.4. Liability and Litigation Responsibility and Authority
4.4.1. Federal Government Responsibilities
4.4.1.1. The Federal Government will be responsible for the defense of any claim arising
from any alleged act or failure to act on the part of the United States, its
agencies and personnel, in connection with pretrial, defender, offender
supervision, sentencing reform, corrections, probation and parole services,
and for any resulting liability, after responsibility for these services has
passed to the Federal Government at the end of the transition period.
4.4.1.2. The Federal Government's assumption of responsibility for the defense of claims,
and any resulting liability, set forth in paragraph 4.4.1.1. above shall
include claims arising from any alleged act or failure to act of BOP, its
agencies and personnel in connection with the demolition, repair,
renovation, or construction of any building, structure, or other
improvement of any kind at the Lorton, Virginia property.
4.4.1.3. The Attorney General, in her discretion, may direct any litigation involving the
Trustees appointed pursuant to sections 4.1.1.1. and 4.2.1.6. above, pretrial
services, offender supervision services, or sentencing reform during the
transitional period, and may provide litigation services for the Trustees and
the agencies responsible for pretrial services, offender supervision services,
and sentencing reform during t~e transitional period in lieu of
representation by D.C. Exercise of the Attorney General's discretion shall
not change the terms of this agreement and shall not otherwise enlarge the
liability of the United States, its agencies, or personnel. However, D.C.
may petition the Attorney General to request reimbursement for litigation
costs and liability arising from actions of the Trustees.
4.4.2 District of Columbia Responsibilities and Liability
4.4.2.1. D.C. will be responsible for the defense of any claim that has arisen or may arise
from any act or alleged failure to act by D.C., its agencies or personnel, in
connection with D.G's pretrial, defender, offender supervision,
sentencing reform,. corrections, or probation and parole services, and for
any resulting liability. D.C. will remain responsible for defending and
bearing any liability resulting from any such claim even if responsibility for
the pertinent service has passed to the Federal Government. D.C. will
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also be responsible for the defense of any claim arising from any activity of
D.C., its agencies or personnel as a result of any action agreed to in this
MOO, and for any resulting liability.
4.4.2.2.D.C. is, and will remain, responsible for the defense of any and all claims
described in paragraph 4.4.2.1. above, including the defense of claims
arising from any alleged act or failure to act of the Trustees (see sections
4.1.1.1. and 4.2.1.6.). Except" as provided in paragraph 4.5.3. and in
paragraph 4.1.3.) above, the D.C. Corporation Counsel will provide
litigation services as required to carry out this responsibility.
4.4.2.3.Notwithstanding paragraph 4.4.2.2. above, the Trustees and the agencIes
responsible for pretrial, defender, offender supervision services, and
sentencing reform may choose not to utilize the Corporation Counsel and
to engage other litigation services.
4.5. District of Columbia Courts
4.5.1. Congress will make all necessary amendments to the D.C. Code and other laws to
terminate budgetary control and other involvement of the D.C. Government in the
finances and administration of the D.C. court system, including the Superior Court of the
District of Columbia and the District of Columbia Court of Appeals.
4.5.2. The Joint Committee on Judicial Administration of the D.C. courts will prepare and
submit the budget for the D.C. court system. The budgetary requests of the D.C. courts
system will not be subject to revision by the D.C. Government or the Executive Branch of
the Federal Government.
4.5.3. The D.C. court system, through its Executive Office, will be authorized to contract with
D.C. agencies, Federal agencies, and other public and private entities, for necessary
supplies, equipment, and services.
4.5.4. Expenditures of the D.C. court system will be paid out of funds appropriated for those
courts and credited to a Treasury account established for that purpose. Funds received
by the D.C. court system will not be part of the funds or budget of D.C.
5. Economic Development. The District government will:
5.1. Implement timely and efficient zoning, pennitting, and licensing processes by the end of
fiscal year 1997.
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5.2. Offer personnel resoUrces and fully cooperate with the Corporation in its review and
evaluation of existing economic development plans, in the development of the
Corporation strategic plan, and in subsequent implementation of the plan.
5.3. Support a legislative allocation to the Corporation of 50 percent of the applicable State
ceiling on the authority of the District government to issue private activity bonds in each
calendar year under section 141 of the Internal Revenue Code.
5.4. Support a legislative authorization to the Corporation of the right to exercise eminent
domain in the name of the District of Columbia, and certain other powers specified
above.
5.5. Give expedited consideration to the Corporation's requests for land transfers (including
transfers from the Redevelopment Land Agency), zoning adjustments (including
variances and special exceptions), and building and other permits and licenses for
projects and activities as requested by the Corporation.
5.6. Support legislation that provides that all powers, rights, assets, duties, obligations, and
liabilities of the Corporation will transfer to the District government upon the
Corporation's dissolution
6. Infrastructure.
6.1. Secretary ojTransportation Responsibilities. The Secretary of Transportation (hereinafter
in this section referred to as the Secretary) agrees that:
6.1.1. Beginning on October 1, 1997, the Secretary shall assume responsibilities generally
carried out by a State under Title 23 of the U.S.C. relating to selection (consistent with
the planning requirements of 23 U.S.C. 134 and 135), funding and oversight of the
National Highway System (NHS) capital projects and shall assume responsibilities for
funding the operations and maintenance of the NHS within the District of Columbia
(exclusive of police authority and exclusive of funding those NHS routes currently under
the jurisdiction of the National Park Service) with funds made available under the
National Capital Revitalization and Self-Government Improvement Act of 1997, to be
referred to henceforth in this section as the "Act."
6.1.2. The Secretary shall advance NHS projects through the Federal Highway Administration
(FHWA). The FHWA shall consult and coordinate NHS project responsibilities with the
District of Columbia. In selecting projects, the FHWA shall give consideration to the
District of Columbia Needs Assessment currently being developed by the Federal
Highway Administration in cooperation with the District of Columbia Department of
Public Works and the District of Columbia Strategic Transportation Plan.
6.1.3. Beginning on October 1, 1997, the Secretary shall assume responsibility for advancing
those NHS projects approved prior to that date that are not under construction or under a
contract for such construction by October 1, 1997, unless the Secretary and the District of
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Columbia agree to continue to vest responsibility for such project advancement with the
District of Columbia. Such projects that are transferred under this section shall also be
governed by the requirements contained in section 6.2.4.
6.1.4. The Secretary may transfer National Capital Infrastructure Funds authorized under this
Act and available for capital expenditures and NHS apportioned funds authorized to be
transferred under this Act to other Federal-aid highway funding categories, consistent
with title 23, United States Code provisions governing the transfer ofNHS funds.
6.1.5. Funds made available to the Secretary for obligation on NHS projects under this Act shall
be administered by FHWA. From time to time as work progresses on a project,
payments shall be made by FHWA for the costs of construction, operations, maintenance,
and other eligible activities under this Act in accordance with applicable procedures
under Title 23, United States Code, or as established by the Secretary.
6.1.6. For Fiscal Year 1998, $108 million shall be authorized to be appropriated to the National
Capital Infrastructure Fund which shall be used for construction, reconstruction, and
rehabilitation of the NHS in accordance with 23 U.S.C. 103 ( i ), including transit capital
projects eligible for funding under section 103 ( i ).
6.1. 7. In each of the fiscal years 1998 through 2003, the Secretary shall retain and deposit into
the National Capital Infrastructure Fund:
(a) 100 percent of the District of Columbia's apportionment for the NHS;
(b) 100 percent of the apportionments for Interstate Maintenance; and
(c) 75 percent of the apportionment for the Highway Bridge and Replacement for use
consistent with 23 U.S.C. 103 (i ).
6.1.8. In each of the Fiscal Years 1998 through 2003, $17 million shall be authorized to be
appropriated to fund the operations and maintenance of the NHS within the District of
Columbia, exclusive of those NHS routes under the jurisdiction and control of the
National Park Service.
6.1.9. The Secretary shall be responsible for funding those operations and maintenance
activities and costs, excluding police services (except for those construction zone,
incident management and other police activities that are eligible for Federal-aid highway
reimbursement under title 23, United States Code) associated with the. management and
operations of NHS highways including the following activities: routine maintenance of
roadways and rights-of-way, road repair, snow removal, lighting, signage, and those
utilities necessary for the NHS operations. The Secretary shall not be responsible for
funding the District of Columbia share of operating expenses for any transit activities.
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6.1.10. The Secretary shall continue to provide oversight and technical assistance to the District
of Columbia for all Federal-aid projects that remain the responsibility of the District of
Columbia.
6.1.11. The Secretary through the FHWA will enter into any agreements or contracts with any
entity to advance, construct, reconstruct, rehabilitate, repair, maintain, or operate the NHS
within the District of Columbia excluding those NHS roadways under the jurisdiction and
control of the National Park Service, consistent with 23 U.S.C. 103 (i).
6.1.12. The Secretary shall encourage the hiring of local labor by contractors awarded contracts
including welfare to work labor, on NHS projects financed under this Act to the
maximum extent possible and consistent with federal law.
6.1.13. Unless reauthorized by Congress on, or prior to, September 30, 2003, the Secretary of
Transportation's responsibilities, other than the completion of ongoing projects funded
through this Act, would cease and no new deposits of Federal funds would be made into
the National Capital Infrastructure Fund after September 30, 2003.
6.1.14. The Secretary shall provide the District of Columbia with the technical assistance
necessary to reassume its NHS responsibilities by September 30, 2003. The April 1996
findings of FHWA's review of the organizational capacity of the District of Columbia's
Department of Public Works shall guide the assistance.
6.2. District a/Columbia Responsibilities. The District of Columbia agrees that:
6.2.1. The District of Columbia shall continue to be responsible for providing police services on
NHS highways (including, but not limited to civil police functions, crime prevention,
investigations including traffic and accident investigation, and em.ergency traffic
direction). The District shall continue to own the right-of-way ofNHS highways that are
located within the District of Columbia.
6.2.2. The District of Columbia will continue to be responsible for all utilities and utility work
that is not necessary for operation of the NHS even if such utilities are located within the
right-of-way of the NHS.
6.2.3. The District of Columbia shall continue to be responsible for non-NHS projects funded
with Federal-aid highway funds. The authority to use Surface Transportation Program
funds on local streets, highways, and roadways (except alleys) does not relieve the
District of Columbia of the responsibility for the non-federal matching share. The use of
other Federal-aid highway apportioned funds by the District of Columbia, other than as
provided herein, also requires a non-Federal matching share.
6.2.4. Beginning on October 1, 1997, the District of Columbia is relieved of the responsibility to
provide the non-Federal match for NHS projects that are funded by the Secretary with
monies made available for NHS projects under this Act. The relief from providing the
non-federal match shall not include those projects that were approved by FHWA prior to
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October 1, 1997 for which Federal-aid highway funds have been obligated_ The District
of Columbia is responsible for providing the non-Federal match, the Federal-aid funds,
and any obligation authority for any such projects transferred to the Secretary for project
administration, oversight, or contracting.
6.2.5. The District of Columbia shall continue to be responsible for any liability incurred on the
basis of the activities of the District of Columbia, its agencies, or personnel as a result of
any acts or omissions in carrying out this Act. The United States, its agencies, and
personnel will not incur any liability for any such acts or omissions.
6.2.6. The District of Columbia shall cooperate with the Federal Highway Administration in its
technical assistance efforts in order to assure that the District of Columbia can reassume
its NHS responsibilities by September 30,2003. The goal of the effort shall be to satisfy
the April 1996 findings of FHWA's review of the organizational capacity of the District
of Columbia's Department of Public Works.
7. Personal Income Tax Administration The District agrees that:
7.1. General
7.1.1. The IRS shall administer and enforce the District's individual income and employment
taxes.
7.1.2. The District shall continue to administer its unemployment benefits program.
7.2. Tax Codes
7.2.1. The IRS will administer the District's existing individual income and employment tax
laws. The only provision the IRS cannot administer is the District's refundable property
tax credit. If the District wishes to retain this provision, it must be transferred to its real
estate tax administration.
7.2.2. All of the administrative, procedural, and enforcement provisions of the Intemal Revenue
Code of 1986 and related statutes will govern IRS administration of District taxes. The
District will have to amend its own tax code to achieve this to the satisfaction of the
Secretary of the Treasury.
7.2.3. To avoid the possibility of any inconsistent interpretations of similar provisions, the
District will have to amend its definitional provisions to conform them to the Internal
Revenue Code to the satisfaction of the Secretary of the Treasury.
7.2.4. The District must notify the Secretary of the Treasury of any future changes to its
individual income and employment tax laws_ The Secretary may object if, in his
judgement, the prospective change would prove overly burdensome to the IRS, in which
case such change shall not be administered or enforced by the IRS. If the Secretary does
28
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not object within 60 days after notification, the IRS will administer the provision within a
reasonable time after enactment.
7.3. Transfers to the District
7.3.1. The IRS will set up separate accounting and deposit systems for its collections of District
taxes. The District must, in turn, identify the person and/or office authorized to receive
transfers of collected amounts and set up related deposit accounts.
704. Effective Date
704.1. The IRS administration of District taxes shall be prospective, starting on January 1 of the
calendar year that is at least 18 months after the Secretary certifies that the District of
Columbia has met the conditions set forth in the Memorandum of Understanding between
the United States and the District of Columbia.
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Appendix One
DEFINITIONS FOR THE PENSIONS SECTION OF THE MOU
"Adoption Date" means the date the Replacement Plan is adopted by the District Government or,
iflater, October 1, 1997.
"District Government" means, as appropriate, the "District government" as defined by section
305(5) of the District of Columbia Financial Responsibility and Management Assistance Act of
1995 (Pub. L 104-8) or the District of Columbia Retirement Board as defined in section 102(5)
of the Reform Act.
"Freeze Date" means the date of introduction of the Revitalization Act.
"Fund" means the District of Columbia Police Officers and Fire Fighters' Retirement Fund, the
District of Columbia Teachers' Retirement Fund, and the District of Columbia Judges'
Retirement Fund as defined in section 102(10) of the Reform Act.
"Reform Act" means the District of Columbia Retirement Reform Act (Pub. L. 96-122).
"Replacement Plan" means the plan or plans described under Title I of the Revitalization Act.
"Retirement Program" means any of the retirement programs as described in section 102(7) of
the Reform Act as in effect on the day before the freeze date.
"Revitalization Act" means the "District of Columbia Revitalization Act of 1997."
"Secretary" means the Secretary of the Treasury or the Secretary's designee.
"Transfer Date" means the date on which the assets and obligations of the Fund are transferred to
the Trust.
''Trust'' means the District of Columbia Retirement Trust created under Title I of the
Revitalization Act.
''Trustee'' means the firm designated by the Secretary of the Treasury under Title I of the
Revitalization Act.
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Draft 4.7.1997
This draft reflects the full legislative language for the Economic Development section of the
MOU.
MEMORANDUM OF UNDERSTANDING BETWEEN:
THE DISTRICT OF COLUMBIA
Marion Barry, Jr., Mayor
Charlene Drew Jarvis, Council Chairperson Pro Tempore
DISTRICT OF COLUMBIA FINANCIAL RESPONSIBILITY AND MANAGEMENT
ASSISTANCE AUTHORITY
Andrew Brimmer, Chairman
OFFICE OF MANAGEMENT AND BUDGET, EXECUTIVE OFFICE OF THE
PRESIDENT
Franklin D. Raines
Chair, Federal District of Columbia Task Force
Dated: - - - - - - -
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SECTION!. PURPOSE
The parties respect the Home Rule Center as the fundamental basis for governance in the
District. The purpose of this memorandum is to strengthen Home Rule and to agree to \;york
toward the revitalization of the District of Columbia.
This memorandum is intended only to improve the management of, and the relationship between,
the District of Columbia and the Federal government, and is not intended to and does not create
any right, benefit, trust or responsibility, substantive or procedural, enforceable at law or equity
by a party against the United States, its agencies, its officers, or any person.
SECTION II. PUBLIC LAW 104-8, "THE DISTRICT OF COLUMBIA FINANCIAL
RESPONSIBILITY AND MANAGEMENT ASSISTANCE ACT OF
1995"
The parties recognize the effectiveness of PL 104-8 and dedicate themselves to the cooperative
implementation of its provisions. Among these provisions:
Finance.
For each Fiscal Year for which the District is in a control period, the Mayor shall develop
and submit to the Financial Responsibility and Management Assistance Authority (the
"Authority") and District Council a Budget and Financial Plan for the applicable Fiscal
Year and the next three Fiscal Years.
Expenditures for the District government for each Fiscal Year, beginning in FY1999, may
not exceed revenues for that Fiscal Year.
During Fiscal Years 1996, 1997, and 1998, the District government shall make
continuous, substantial progress toward equalizing its expenditures and revenues.
The District may not borrow money during a control year unless the Authority provides
prior certification that the borrowing is consistent with the financial plan and budget for
the year.
For the Secretary of the Treasury to make a short-term advance to the District, an
Authority-approved Budget and Financial Plan must be in place, the Mayor must submit a
requisition for an advance including a schedule for timing and amounts for advances, the
Inspector General must certify the accuracy of the information provided to the Secretary,
and the Secretary determines -- and the Authority certifies -- that the District lacks market
access on reasonable terms, and that the Treasury has reasonable. assurance of being
reimbursed.
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Management.
An Office of the Chief Financial Officer will be established in the Executive Branch of
the District government, headed by the Chief Financial Officer, and including the Office
of the Treasurer, Controller, Budget, Financial Infonnation Services, and Finance and
Revenue.
An Office of the Inspector General will be established in the Executive Branch of the
District government.
During the control period, the Mayor shall submit proposed contracts and leases to the
Authority for review, and cannot enter into a contract or a lease unless the Authority
determines it is consistent with the Budget and Financial Plan.
The Authority may submit recommendations to the Mayor, the Council, the President,
and
Congre
ss on
actions
the
District
or
Federal
govern
ments
may
take to
ensure
the
District
's
compli
ance
with a
Budget
and
Financi
aI Plan
and
promot
e its
financi
al
stabilit
y,
2
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manag
ement
respon
sibility
and
service
deliver
y
efficie
ncy.
The
Mayor
and the
Counci
I shall
submit
a
statem
ent to
the
Author
ity,
Preside
nt, and
Congre
ss
providi
ng
notice
as to
whethe
r .the
District
will
adopt
the
recom
mendat
ions.
An
affirma
tive
statem
ent
must
include
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a
written
imple
mentati
on
plan,
with
perfor
mance
measur
es and
a
schedu
Ie for
audit
compli
ance.
If the
statem
ent
rejects
the
recom
mendat
ions,
the
Author
itymay
vote to
take
what
actions
it
deems
approp
riate,
after
consult
mg
with
Govern
mental
Affairs
Comm
ittee of
the
4
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and the
House
Govern
ment
Refor
m and
Oversi
ght
Comm
ittee.
SECTION III. GENERAL PROVISIONS
1. Balanced Budget. PL 104-8 requires that the District balance its budget by FY1999.
By this agreement, the District agrees to present and/or approve a balanced budget for the
Fiscal Year beginning October 1, 1997.
2. Agreement to be Bound. The District agrees to be bound by and to use its offices and
best efforts to implement this agreement.
SECTION IV. SUBMISSION OF LEGISLATION & FEDERALLY ASSUMED
FUNCTIONS
On behalf of the Executive Office of the President, the Director of the Office
Management and Budget intends to recommend the submission of legislation to the Congress
that is consistent with the National Capital Revitalization and Self Government Improvement
Plan (the "Plan") announced by the President on January 14, 1997.
Once implemented, the Plan will provide the District substantial relief from its operating
expenditures, relief which will grow over time. It will also invest considerable resources to
improve the District's criminal justice systems and capital infrastructure. If this legislation is
enacted, the Federal government will undertake the functions described below. The Federal
government will not undertake a function until the District government meets the conditions for
that function, described in Section V.
1. Medicaid. The Federal government will increase its share of the District's Medicaid
payments to 70 percent, thereby reducing the District's share to 30 percent. The
Department of Health and Human Services will continue to provide more intensive
technical assistance to help the District improve the management of its Medicaid
program.
2. Pensions. The Federal government will take fmancial and administrative
responsibility for virtually all pension benefits accrued under the plans for all active
5
the pensions of judges. The bulk of the assets of the retirement plans will be
transferred to the Federal government. The Federal government will pledge its full faith
and credit to meet its responsibilities to pay these benefits. Benefits payable to current
employees will be "frozen" based on service earned as of the date the legislation is
introduced, and the Federal government will pay future retirement, death and some of
their disability benefits to the extent they are earned based on the frozen service. While
the Federal government will not be responsible for benefits earned during future years of
service by members of the current retirement programs (other than judges), these
members will get the benefit of pay increases on the frozen benefits. Frozen benefits will
continue to be subject to cost-of-living adjustments under the terms of the existing
programs. All future employee contributions (except for judges) will be paid into the
new plans. The Secretary of the Treasury will appoint a third-party Trustee to administer
the existing plans and manage pension assets.
3. Intermediate-Term and Short-Term Lending. The United States Treasury will provide
an intermediate-term loan (I5-year term) to assist the District to eliminate its accumulated
fund balance deficit. The Treasury may also provide inter-year loans for liquidity
purposes. The combined amount of the intermediate-term and inter-year liquidity loans
may not exceed $500 million. Both of these loans will have an interest rate of Treasuries
of comparable maturity plus 1I8th of one percent. The Treasury may also provide
intra-year loans for the purposes ofliquidity.
4. Criminal Justice. The Federal and District government~ will develop and
implement a transition plan which transfers responsibility over a three-to-five-year
period for incarcerating felons. The Federal Bureau of Prisons (BOP) will house
adult felons convicted of D.C. Code violations and designated in the same manner as
Federal inmates in correctional institutions operated or contracted by the BOP.
This will occur after BOP's capacity has been increased through new construction
at Lorton and other locations selected by BOP, and through renovation of existing'
facilities at Lorton, Virginia. After October 1, 2001, the BOP will also.designate to
Federal correctional institutions sentenced D.C. felons in the custody of the D.C.
Department of Corrections, as the Director of BOP deems appropriate, in
accordance with available capacity, until they have all been designated to Federal
institutions. The BOP will accept employment applications from persons currently
employed by the D.C. Department of Corrections for existing BOP vacancies, and
will process such applications in accordance with existing Federal procedures and
standards.
The Attorney General will select, after consultation with the Mayor, the D.C. City
Council, and the Chair of the D.C. Financial Responsibility and Management
Assistance Authority, a Trustee to oversee operations of the D.C. Department of
Corrections until the BOP assumes responsibility for all incarcerated District felons.
The Federal and District governments will develop and implement a framework for
changes to the D.C. sentencing system, including the abolition of parole, institution of
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detenninate guideline sentencing and the enactment of the new mandatory minimum drug
sentences, which are a prerequisite for the Federal Government accepting responsibility
for the incarceration of felons convicted of D.C. Code violations. The sentencing system
will be enacted within 24 months, or the Federal Government will not be required to
obligate any funds appropriated for the purpose of incarcerating D.C. Code felons and
will have no responsibility for housing such persons.
Consulting with representatives of the Federal and District judiciary, the Federal
and District governments will also develop and implement a transition plan
transferring responsibility for D.C. Code violation offender pretrial, public defender,
parole, probation, and post-adjudicationlpost-conviction adult offender supervision
from the District government to the Federal government over a three-to-five-year
period. The United States Parole Commission will continue to assume
responsibility for all D.C. felons housed in Federal Correctional Institutions who
have sentences subject to provisions of parole.
The Federal government will take direct responsibility (in consultation with the
D.C. judiciary) for funding the D.C. court system and related services (including
plans relating to retirement benefits and other personnel matters), and establishing
an independent budgetary, financial oversight, and administrative support system for the
D.C. courts. The Courts will remain self-managed.
5. Economic Development. The Federal government will make tax benefits available to the
District both to encourage hiring by finns in the District of residents of distressed areas in
D.C., and to encourage economic revitalization throughout the District.
An economic development corporation (EDC) will be established as a non-Federal public
authority in the District of Columbia, with the mission of revitalizing the nation's capital
city and benefitting the District's residents and businesses. The Federal government
intends (a) to capitalize the EDC with a $50 million grant; (b) provide $250 million in tax
incentives to encourage business investment both downtown and in distressed
communities, and to help businesses increase employment of residents of the District of
Columbia; and (c) improve the District government's borrowing authority by removing
impediments in its borrowing statutes so that the District government will have the same
ability to finance projects as other cities have.
6. Infrastructure. The National Capital Infrastructure Commission (NCIC) will be
established to assume certain State-like responsibilities for selection, funding, and
oversight of National Highway System capital projects (including roads, bridges, and
transit) and NHS operations and maintenance projects (excluding police authority,
National Park Service roads, and transit) within the District. The NCIC will be governed
by a five-member board to be composed of three representatives from the District and one
representative from the Department of Transportation and one representative from the
Economic Development Corporation. Contract administration will be perfonned by the
Federal Highway Administration. In addition, eligibility for Surface Transportation
Program (STP) funds will be expanded to include local public roads. To support NCIC
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projects, the National Capital Infrastructure Fund (NCIF) will be established in FY1998
with $108 million for road, bridge, and transit capital projects. An additional $17
million will be provided in FY1998-03 for NHS operations and maintenance.
Federal-aid funds for the District's NHS, Interstate Maintenance, and Bridge programs
will be transferred to the NCIC in FYI998-03. The Administration also proposes that
the NCIC be authorized to accepted contributions from other sources.
7. Personal Income Tax Collection. At the request of the District, the Internal Revenue
Service will assume responsibility from the District of Columbia for administering and
enforcing D.C. individual income and payroll taxes. This would include the processing
of those taxes paid by individuals, as well as the payment of related employment and
payroll taxes. The District government will maintain processing and collection
responsibility for all other taxes collected for the District.
Upon enactment of the legislation to implement the Plan, the parties to the MOU will
review the legislation and confer on whether any revisions to the MOU are necessary to ensure
its consistency with the legislation.
SECTION V. DISTRICT CONDITIONS
The District government understands that it will be expected to undertake significant
actions as part of the National Capital Revitalization and Self-Government Improvement Plan
(the "Plan"). This section sets out the actions that the District government agrees to take as a
condition of the Federal government actions under the legislation to carry out the Plan.
1. Medicaid. The District agrees to develop and implement plans satisfactory to the
Secretary of Health and Human Services to accomplish each of the following:
1.1. To develop an effective system for the identification and collection of amounts owed by
third parties for medical care and services furnished to individuals under the District's
Medicaid plan; and
1.2. To ensure the timely audit and settlement of cost reports of institutional providers
(including hospitals, nursing facilities, and intermediate care facilities for the mentally
retarded) under the District's Medicaid plan, including prompt elimination of the backlog
of such audits and settlements.
1.3. To develop and implement, directly or under contract, a comprehensive health care
management information system that will standardize data base development and
management, and integrate health care delivery with a public health data system. Such a
system shall at a minimum have the capacity to accomplish the following functions:
1.3.1. To assist eligibility verification;
1.3.2. To create utilization and financial profiles of providers;
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1.3.3. To identify services (including preventive services) received by program beneficiaries;
1.3.4. To monitor the claims processing and other Medicaid operations of the fiscal agent;
1.3.5. To monitor the quality of care provided under managed care contracts; and
1.3.6. To coordinate information management with respect to the District's Medicaid program
and other public health programs and functions.
1.4. To develop a comprehensive behavioral managed health care system, which combines
.substance abuse and mental health grant programs. Development of such a plan shall
include a pilot project for better evaluation of in-patient acute psychiatric patient
admissions, and the purchase of a comprehensive, risk-based system for managed care of
behavioral health which covers all eligible populations and services.
2. Pensions. The District Government agrees (see Appendix One for definitions):
2.1. To establish a Replacement Plan for the current Retirement Program
2.1.1. The Replacement Plan will cover all existing and new employees (except for judges) who
are, or would be, covered by the Retirement Program, if the Retirement Program
continued unchanged, and will be established by the date specified in legislation.
2.1.2. To the extent required by current law, the Replacement Plan will be established through
collective bargaining.
2.1.3. After the Adoption Date, the Replacement Plan may not be amended in any manner that
materially increases the cost of the Replacement Plan without provision of a mechanism
for funding such increases, in accordance with Section 2.2.
2.2 That the Replacement Plan will use appropriate funding methods and costs that do not
exceed the sum available in the District of Columbia Budget and Financial Plan.
2.2.1. The cost of any defined benefit plan will be determined in accordance with the
measurement standards of Governmental Accounting Standards Board Statement No. 27
(GASB 27), with the following additional restrictions:
2.2.1.1. funding methods will be limited to entry age or frozen entry age; and
2.2.1.2. amortization of any unfunded actuarial liability is required over no more than 30
years on a closed basis.
2.2.2. The cost of any defined contribution plan is the employer contribution required under the
provisions of the plan.
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2.2.3. All costs of the Replacement Plan must be reflected in the D.C. Budget and Financial
Plan in accordance with the standards described above.
2.2.4. All costs of the Replacement Plan must be paid in accordance with the D.C. Code 1981,
Title I, Chapter 7, subchapter III.
2.2.5 .. Contributions of all existing and new employees (except judges) will be paid into the
Replacement Plan.
2.3. To transfer copies of books and records of the Retirement Program and the Fund and to
be financially responsible for errors and omissions, including all necessary records of
individual employees.
2.3.1. Copies of any books and records pertaining to the Retirement Program and the Fund
required by the Secretary of the Treasury or the Trustee must be made available to the
Secretary or Trustee within 30 days after the Secretary or Trustee requests them.
2.3.2. The District will reimburse the Trustee for all costs, including benefit payments, resulting
from errors or omissions in the books and records pertaining to the Fund.
2.4. To transfer assets from the Fund
2.4.1. Any and all assets of the Fund required to be transferred to the Trustee shall be
transferred on the Transfer Date in a form specified by the Trustee.
2.4.2. The District of Columbia Retirement Board will administer the retirement programs until
the Trustee assumes these responsibilities. The District government will reimburse the
Fund for any benefits paid out of the Fund between the Freeze Date and the transfer date
that exceed payments that would have been the responsibility of the Federal government
if the transfer had occurred simultaneously with the freeze.
3. Intermediate-Term and Short-Term Lending. The District agrees that:
3.1. Any intermediate-tenn loan to eliminate the accumulated fund balance deficit would be
for no more than 15 years, with an interest rate of Treasuries of comparable maturities
plus 1/8 of one percent.
3.2. Any intercyear loan for liquidity purposes and/or intermediate-tenn loan to eliminate the
accumulated fund balance deficit will not exceed the amount of $500 million.
3.3. . The Secretary of the Treasury may require early reimbursement if the District can obtain
credit on the commercial market on favorable tenns for refinancing as determined by the
Secretary.
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3.4. The District must be in compliance with the approved Budget and Financial Plan
before any lending can occur.
3.5. The District must provide a requisition for an advance of funds and a promissory
note to reimburse the Treasury for the advance.
3.6. The Financial Responsibility and Management Assistance Authority must certify
that there is an approved Budget and Financial Plan in effect for the District for the
Fiscal Year that the requisition is made.
3.7. The Secretary of the Treasury must receive certification that the District is unable
to obtain enough credit elsewhere to meet the District government's need for
fmancing .
. 3.8. The Federal government will work with the District government to amend its debt limit
provisions in order to allow implementation of the District's capital plan in an orderly and
sustainable manner.
4. Criminal Justice. This subsection of the Memorandum of Understanding (MOU)
between the Federal government and the District of Columbia government (D.C.) outlines the
offer of the Federal government, wholly on appropriations and D.C.'s acceptance and satisfaction
of all other conditions and predicates identified and described herein, to assist D.C. by assuming
responsibility for certain traditionally State responsibilities and the conditions that D.C. must agree
to and fulfill should it choose to accept that offer as it relates to criminal justice functions,
including, but not limited to, certain defendant and offender services, corrections and the
judiciary. The MOU sets forth the expectations and responsibilities relating to proposed
changes and refonns in the D.C. criminal justice and judicial system and the procedures
(including new statutory and regulatory provisions) the Federal Government and D.C. will use to
implement the MOU.
In particular, the MOU is designed to:
4.i. provide a framework for changes to the D.C. sentencing system, including the abolition
of parole, institution of detenninate guideline sentencing and the enactment of the new
mandatory minimum drug sentences, which are a prerequisite for the Federal
Government accepting responsibility for the incarceration of felons convicted of D.C.
Code violations.
4.ii. ensure that such sentencing system is to be enacted within 24 months, or the Federal
Government will not be required to obligate any funds appropriated for the purpose of
incarcerating D.C. Code felons and will have no responsibility for housing such persons.
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4.iii. ensure an appropriate transfer and transition of responsibility from D.C. to the Federal
Government for pretrial, public defender, parole, probation, and post-conviction
supervision and services for adult D.C. Code defendants and offenders.
4.iv. ensure an appropriate transfer of responsibility from D.C. to the Federal Government for
the incarceration of sentenced felons convicted of D.C. Code violations, assuming
sufficient resources are provided by Congress to develop necessary bed space to
accommodate the resulting increase in the Federal Bureau of Prisons (BOP) population
and D.C. Code violators are designated in the same manner as Federal inmates.
4.v. provide the basis for establishing an independent budgetary, financial oversight, and
administrative support system for the D.C. courts.
4.vi. define the respective roles of the D.C. and Federal Governments in relation to lawsuits
and resulting liability, as they may be affected by the reforms agreed to in this MOU.
4.vii. ensure the development by D.C. and the Federal Governments of transition plans
4.vii.a. (in consultation with the Federal and D.C. judiciaries) for transferring
responsibility for pretrial, public defender, parole, probation, and
post-conviction supervision and services for adult D.C. Code defendants
and offenders over a transition period of one to three years from the
enactment of the federal implementing legislation.
4.vii.b. for transferring responsibility for incarcerating sentenced felons convicted of D.C.
code violations over a period of approximately three to five years.
4.vii.c. (in consultation with the D.C. judiciary) for transferring responsibility for funding
the D.C. court system and related services, including plans relating to
retirement benefits and other personnel matters.
4.vii.d. for transferring control of the property at Lorton, Virginia to the Federal
Government.
4.1. Administration of District of Columbia Pretrial, Parole, Probation, and Post-Conviction
Offender Supervision, Housing, and Public Defender Services
4.1.1. Federal Government Responsibilities
4.1.1.1. After consultation with the Mayor of D.C., representatives of the D.C. Council,
the Chairman of the D.C. Financial Responsibility and Management
Assistance Authority (Financial Authority), and members of the affected
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Federal and D.C. judiciaries, the Attorney General will select an Offender
Supervision, Defender and Courts Services Trustee to:
a) assure the smooth transition and continued operations of D.C.'s
Pretrial Services Agency and Public Defender Service;
b) implement an orderly shutdown of the D.C. Board of Parole in
coordination with the U.S. Parole Commission and the Superior
Court for the Distrid of Columbia;
c) establish and operate a new D.C. Offender Supervision, Defender
and Courts Services Agency; and
d) accomplish, without disruption of services, the transfer of the adult
offender probation supervision functions of the D.C. Courts Social
Services Division,
until the Federal Government assumes responsibility for each of these
functions.
4.1.1.2. During the transition period, under the general auspices of the Trustee, the D.C.
Pretrial Services Agency will continue uninterrupted to provide services
and support for both juvenile and adult D.C. Code and Federal defendants
and offenders to the U.S. Distrid Court for the Distrid of Columbia, the
U.S. Court of Appeals for the Distrid of Columbia, the Superior Court for
the Distrid of Columbia, and the Distrid of Columbia Court of Appeals.
The Diredor of Pretrial Services may employ such personnel as shall be
necessary pursuant to procedures and standards established by the Trustee
to facilitate transition to Federal status.
4.l.l.3. Following the transition period, the D.C. Pretrial Services Agency and the
D.C. Public Defender Service will be organizationally housed in a new
Federal D.C. Offender Supervision, Defender and Courts Services Agency.
4.1.1.4. The D.C. Board of Parole will be terminated after the Trustee establishes a
transition agency with the capacity to provide adequate field supervision to
adult D.C. offenders on parole, probation or supervised release, and the
U.S. Parole Commission is capable of carrying out parole functions for
D.C. Code felony offenders. Subject to appropriations, the D.C. Board
of Parole's functions and jurisdiction vis a vis felon parolees will be
assumed by the U.S. Parole Commission. Similarly, its functions and
jurisdiction vis a vis misdemeanant parolees will be assumed by the D.C.
court system. Substantive D.C. law will continue to apply to parole
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determinations for all D.C. Code offenders. The District of Columbia
Superior Court Division of Social Services will continue to provide
supervision to D.C. Code juvenile offenders and will assume responsibility
for the supervision of misdemeanant parolees.
4.1.1.5. The Trustee will accept employment applications for new offender field
SUpel'VlSIOn positions in the transition agency from persons currently
employed by the D.C. court system and the D.C. Board of Parole.
Applications will be processed in accordance with procedures and
standards established by the Trustee to facilitate transition to subsequent
Federal law enforcement employment in the successor Offender
Supervision, Defender and Courts Services Agency. Positions will be
advertised prior to hiring.
4.1.1.6. During the transition period, the Federal Government will transfer funds for the
Pretrial Services Agency, the Public Defender Service and the supervision
of D.C. offenders to the Trustee. The head of any Federal department or
agency may provide the services of any personnel to the Trusteeship to
assist in carrying out the Trustee's duties.
4.1.1.7. During the transition period, under the general auspices of the Trustee, the Public
Defender Service will continue uninterrupted to provide services to D.C.
Code defendants and the D.C. court system. The Director of the Public
Defender Service may employ such personnel as shall be necessary
pursuant to procedures and standards established by the Trustee to facilitate
transition to Federal status.
4.1.1.8. During the transition period, the employees of and funds allocated to the Trustee
and the agencies for which the Trustee is responsible shall not be counted
against the personnel and budget ceilings imposed on D.C. by the
Financial Authority or Congress.
4.1.1.9. The U.S. Marshals Service (USMS) will contract with D.C., at a mutually
agreeable rate, to obtain space not needed by D.C. at D.C.'s Correctional
Treatment Facility (CTF), to house persons in the custody of the USMS
for whom the USMS requires bed space in the D.C. area.
4.1.1.10. Subject to appropriations, the Federal Government will provide funds to
support the D.C. Board of Parole functions during the one to three year
transition period culminating in the termination of the D.C. Board of
Parole.
4.1.2. District of Columbia Responsibilities
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4.1.2.1. The District of Columbia will maintain responsibility for all D.C. Code juvenile
offenders not prosecuted as adults.
4.1.2.2. The District of Columbia will have responsibility for housing and supervISIng
persons charged with and/or convicted of misdemeanor violations in the
Superior Court for the District of Columbia, both before and after
sentencing.
4.1.2.3. The District of Columbia will continue to house persons charged with felonies
under the D.C. Code and persons convicted of felonies under the D.C.
Code but not yet sentenced, in the Superior Court for the District of
Columbia. To the extent beds are available, D.C. will continue to
house persons charged with felonies under the U.S. Code, and persons
convicted of felonies under the U.S. Code but not yet sentenced in the
U.S. District Court. D.C. will continue to receive reimbursement, at a
mutually negotiated rate, from the Federal Government for the costs of
housing such persons. "House" and "housing" include subsistence,
transportation of persons to and from court appearances, revocation
hearings, medical facilities, and the maintenance of necessary prisoner
records.
4.1.2.4. The District of Columbia will continue to house persons sentenced by the
Superior Court and detained pending a hearing for revocation of parole,
probation, or supervised release, and will provide suitable facilities for such
hearings. To the extent beds are available, D.C. will house persons
sentenced by the U.S. District Court and detained pending a hearing for .
revocation of parole, probation, or supervised release, will provide suitable
facilities for such hearings, and will continue to receive reimbursement by
the Federal Government at a mutually negotiated rate for the costs of
housing such persons and for providing such facilities. "House" and
"housing" include subsistence, transportation of persons to and from court
appearances, revocation hearings, and medical facilities, and the
maintenance of necessary prisoner records.
4.1.2.5. The Trustee will be an independent officer of the D.C. Government and can be
removed by the Mayor only with the concurrence of the Attorney General.
The Attorney General has authority to remove the Trustee only for
misfeasance or malfeasance in office.
4.1.2.6. The Trustee will propose funding requests for offender supervision and services
for inclusion in the President's budget for each fiscal year of the transition.
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4.1.2.7. The Trustee will allocate funds for offender supervision (including adult felon
parole and probation) in D.C., including funds for short term
improvements, equipment contracts, and salary increases necessary to retain
key personnel, maintain and enhance current levels of service, including
offender drug testing, and provide for the safety and security of the
community.
4.1.2.8. Upon receipt of funds identified by Congress or other entities for Pretrial Services,
the Trustee will immediately transfer such funds to the Pretrial Services
Agency.
4.1.2.9. Upon receipt of funds identified by Congress or other entities for the D.C. Public
Defender Service, the Trustee will immediately transfer such funds to the
Public Defender Service.
4.1.2.10. Effectively immediately and in view of the responsibility to be undertaken
by the U.S. Parole Commission to carry out the functions of the D.C.
Board of Parole pursuant to the parole laws and regulations of D.C., the
D.C. Council will not enact legislation that changes or modifies parole
laws and regulations as applicable to felony offenders without the
concurrence of the Attorney General. D.C. will immediately take steps to
modify parole as applicable to misdemeanants to provide for D.C. court
supervision of D.C. misdemeanant parolees and the elimination of the
D.C. Board of Parole. Following the assumption by the U.S. Parole
Commission of the functions of the D.C. Board of Parole, the D.C.
Council will cede to Congress the sole authority to legislate changes to the
D.C. Code pertaining to the parole of D.C. felony offenders.
4.1.2.11. It is expected that the transition period for these offender, defender and
court services will end no sooner than one year but not later than three
years after the enactment of the related legislation.
4.1.2.12. The D.C. Corporation Counsel will provide representation for the Trustee
and Trustee supervised agencies. (see litigation and liability section)
4.2. Administration of District of Columbia and Federal Prisons
4.2.1. Federal Government Responsibilities
4.2.1.1. The Federal Government will take administrative control of the nine parcels of
land, collectively located at or in the vicinity of Lorton, Virginia ("the
Lorton property"), and other appropriate sites. Mter the BOP's capacity
has been increased through renovation of existing facilities and new
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construction at the corrections complex in Lorton and other locations
selected by BOP, BOP will house felons who were convicted of D.C.
Code violations and sentenced to terms of imprisonment. (A recently
completed Congressionally mandated study of the D.C. Department of
Corrections revealed that most of the institutions at Lorton have exceeded
their useful lifespan and need major renovations or demolition.)
4.2.1.2. BOP will conduct a thorough preliminary assessment of the Lorton property
to determine its environmental condition, including a study of the
contamination on the property and an estimation of the costs
associated with bringing the property into compliance with
environmental and other applicable regulations. Based on
preliminary information gathered pursuant to a review of the
environmental conditions of a portion of the Lorton property, BOP
could begin planning for renovation and construction immediately;
actual physical renovations would not begin until Fiscal Year 1998.
The estimated date for the completion of the preliminary
environmental assessment process is March 21, 1998.
4.2.1.3. BOP will oversee the operation of community corrections centers in
D.C. as necessary to provide an appropriate transition for inmates
who are nearing release from Federal prisons, including those
convicted of D.C. Code violations. BOP intends to use existing
community corrections centers in D.C. to the extent practicable and
will work with D.C. officials to identify prospective sites, as needed to
establish new community corrections facilities.
4.2.1.4. D.C. Code offenders will be housed together with Federal offenders in
facilities operated by BOP in Lorton, Virginia and elsewhere. Every
effort will be made to house D.C. felons at facilities as close to D.C. as
permitted by inmate program and security needs and BOP popUlation
management requirements. D.C. felons will be designated in the
same manner as Federal inmates, and ordinarily initially assigned to
institutions located within a SOO-mile radius of their release residence.
BOP anticipates that many of the initial designations for D.C.
offenders will be within a significantly closer radius. BOP also will
work with D.C. officials to identify sites for possible Federal
correctional facility construction within D.C.
4.2.1.5. During the transition period, based upon assurances from D.C. that
felons convicted of violating the D.C. Code will, in the future, receive
sentences similar to those received by comparable offenders convicted
of comparable Federal offenses, BOP will house those sentenced D.C.
felons in the custody of the D.C. Department of Corrections as the
Director of the BOP deems appropriate in accordance with available
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capacity. If such a new structure for sentencing under the D.C. Code
is in place as of October 1, 2001, BOP will accept D.C. felons
sentenced under the new sentencing structure in accordance with the
capacity of BOP. By October 1, 2002, and assuming fulmlment of all
requisite conditions, BOP will have assumed responsibility for
incarcerating all sentenced D.C. felons.
4.2.1.6. BOP will accept employment applications from persons currently
employed by the D.C. Department of Corrections for BOP vacancies
and will make hiring selections in accordance with existing Federal
procedures and standards. Positions for new BOP facilities will be
advertised prior to hiring.
4.2.1.7. After consultation with the Mayor, representatives of the D.C.
Council, the Chair of the Financial Authority, members of the
judiciary and others, the Attorney General will select a Corrections
Trustee to oversee expenditures of the D.C. Department of
Corrections relating to sentenced, incarcerated felons, until BOP
assumes responsibility for all incarcerated sentenced D.C. felons.
4.2.1.8. The Federal Government will provide funds for the incarceration of
sentenced D.C. felons through the Trustee to the D.C. Department of
Corrections. The head of any Federal department or agency may
provide the services of any personnel to the Trustee to assist in
carrying out the Trustee's duties.
4.2.1.9. Of the Federal funds received by the Trustee, the Trustee will
reimburse BOP for those funds identified by Congress to be used for
the construction of new facilities and the major renovation of existing
facilities. BOP will be responsible and accountable for determining
how these funds will be used, including the type, security level, and
location of new facilities.
4.2.1.10. During the transition period, the employees of and appropriations
allocated to the Trustee and the agencies for which the Trustee is
responsible shall not be scored or counted against the personnel and
budget ceilings imposed on D.C. by the Financial Authority or
Congress.
4.2.2. District of Columbia Responsibilities
4.2.2.1. Offenders convicted of D.C. Code violations will be sentenced
pursuant to a new D.C. sentencing system, described below. BOP
shall not be required to obligate any funds appropriated for the
absorption of D.C. Code felons into the Federal prison system and will
have no responsibility to house any persons convicted of felony
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offenses, if the new sentencing system is not enacted within 24 months
ofthe authorizing legislation's enactment.
4.2.2.2. D.C. will continue to house felons sentenced to terms of imprisonment
by the Superior Court for the District of Columbia until such persons
have been designated by BOP. To the extent beds are available, D.C.
will continue to house felons sentenced to terms of imprisonment by
the U.S. District Court until such persons have been designated by
BOP and will continue to receive reimbursement by the Federal
Government, at a mutually negotiated rate, for costs of housing
persons sentenced by the U.S. District Court.
4.2.2.3. The Trustee will be an independent officer of the D.C. government
and can be removed by the Mayor only with the concurrence of the
AttQrney General. The Attorney General has authority to remove
the Trustee only for misfeasance or malfeasance in office.
4.2.2.4. The Trustee will propose funding requests for the incarceration of
sentenced D.C. felons, for inclusion in the budget submitted by the
President to Congress for each fiscal year of the transition.
4.2.2.5. The Trustee will allocate funds to the D.C. Department of
Corrections, including such sums as may be appropriated for short
term improvements that are necessary for the safety and security of
staff, inmates, and the community.
4.2.2.6. The D.C. Department of Corrections will implement the short term
improvements in physical security identified in the "District of
Columbia Department of Corrections Short-Term Improvements Plan
(September, 1996)."
4.2.2.7. Upon receipt of Federal funds identified by Congress for constructing
new prisons and making major renovations to existing facilities for
the incarceration of D.C. felons, the Trustee will immediately
reimburse BOP for such funds.
4.2.2.8. The D.C. Corporation Counsel will provide representation for the
Trustee and Trustee supervised agencies. (see litigation and liability
section)
4.2.2.9. During the transition, D.C. will transfer control of the property at
Lorton, Virginia to the Federal Government, though the D.C.
Department of Corrections may continue to house D.C. felons at
facilities located at Lorton until such time as BOP absorbs such
offenders into the Federal prison system.
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4.3. Sentencing. The District of Columbia understands and agrees that the D.C. sentencing
system will be changed pursuant to proposed legislation in the following manner:
4.3.1. Congress will amend the D.C. Code to abolish parole for all persons convicted of
D.C. felony offenses committed on or after 3 years from the enactment of the
Federal authorizing legislation.
4.3.2. Congress will amend the D.C. Code so that good time calculations for all persons
convicted of D.C. felony offenses committed on or after 3 years from the
enactment of the Federal authorizing legislation will be made according to the
Federal requirements.
4.3.3. Congress will establish a new D.C. Board of Criminal Sentences (the Board) as an
independent body within the D.C. Government. All persons convicted of D.C.
felonies committed on or after 3 years from the enactment of the Act will be
sentenced according to a determinate sentencing system promulgated by the Board
and transmitted by the Board to the D.C. Council no later than 18 months after
enactment of the Federal authorizing legislation.
4.3.4. The Board will develop a sentencing system which shall include binding
guidelines and may include such amendments or repeals of provisions in the D.C.
Code relating to the maximum and minimum prison terms as are necessary to
accomplish the purposes of the Act. Ninety days after the Board promulgates
and transmits the sentencing system to the D.C. Council, the sentencing system, its
guidelines, amendments and repeals will become effective unless disapproved in its
entirety by a majority of the Council. If disapproved by the Council, the system
may be enacted by Congress.
4.3.5. The promulgated sentencing system will supersede any inconsistent provision of
the D.C. Code.
4.3.6. Congress will repeal certain other provisions of the D.C. Code to conform with
the new sentencing system (D.C. Code Title 24, Chapters 2 and 8), including the
Youth Rehabilitation Act.
4.3.7. Congress will amend D.C. Code Title 33, Section 541 to adopt certain mandatory
penalties necessary to further the Superior Court of the District of Columbia's
Drug Intervention Program and effective local law enforcement. The new
sentencing system will incorporate these mandatory penalties, thereby excluding
local narcotics offenses from the mandate that sentences be similar to those that
would be imposed upon comparable offenders in the Federal system.
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4.3.8. The Board will not have the authority to provide for capital punishment under any
law applicable exclusively in D.C.
4.3.9. The Board will have seven voting members. All the members of the Board shall
have knowledge and responsibilities with respect to criminal justice matters. The
Attorney General (or her designee) will chair the Board. The other members
will include two judges of the Superior Court for. the District of Columbia and
one representative each of the following entities: the D.C. Council, the Executive
Branch of the D.C. Government, the D.C. Public Defender Service, and the U.S.
Attorney for the District of Columbia. One representative each of the D.C.
Corporation Counsel and BOP will serve as non-voting, ex officio members.
4.3.10. An affirmative vote of at least six Board members will be necessary to promulgate the
sentencing system.
4.3.11. In developing the sentencing system, the Board will hold two or more public hearings,
review other sentencing guideline system models, consult with sentencing reform
experts, and solicit written comments from the public.
4.3.12. If the Board fails to promulgate a sentencing system within 18 months, the Board will
terminate, and the Attorney General will develop a sentencing system to be
transmitted to the D.C. Council for approval. Ninety days after the Attorney
General transmits the sentencing system to the D.C. Council, the sentencing
system, its guidelines, amendments, and repeals will become effective, unless the
Council disapproves the system in its entirety and Congress, in tum, does not
approve it.
4.3.13. The Board will have the mandate to ensure that the sentencing system it establishes,
among other things:
4.3.13.1. will result in sentences for those convicted of D.C. felony offenses similar
to those that would be imposed upon comparable offenders convicted of
comparable offenses in the Federal system;
4.3.13.2. will result in sentences that reflect the seriousness of the offense and
provide for just punishment, afford adequate deterrence to potential future
criminal conduct of the offender and others, and provide the defendant
with needed educational or vocational training, medical care, and other
correctional treatment;
4.3.13.3. will provide certainty and fairness in meeting the purposes of sentencing,
avoiding unwarranted sentencing disparities among similar defendants,
while maintaining sufficient flexibility to permit individualized sentences;
21
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4.3.13.4. will take into account the high volume of sentencing proceedings in the
D.C. Superior Court as bearing upon the degree of complexity of the
sentencing system; and
4.3.13.5. will ensure that the system is neutral as to the race, sex, marital status,
ethnic origin, religious affiliation, national origin, creed, socioeconomic
status, and sexual orientation of offenders, if not related to the commission
of the offense.
4.3.14. As part of the sentencing system, the Board will develop binding guidelines for use in
determining the sentence to be imposed upon convicted felons. The guidelines
will specify:
4.3.14.1. when to impose a sentence of probation, a fine, or a term of imprisonment
and the appropriate amount or length, thereof, as well as intermediate
sanctions;
4.3.14.2. when to impose a term of supervised release following imprisonment, and
the appropriate length, thereof; and
4.3.14.3. whether multiple sentences to terms of imprisonment should run
concurrently or consecutively.
4.3.15. Ninety days after promulgation of the sentencing system, the Board will be terminated.
There will be established a successor, Federally funded agency to amend the
guidelines as necessary to achieve the purposes of the Act. The D.C. Council
may recommend to Congress whether or not these amendments should be
approved. However, the amendments will take effect as prescribed by the
successor agency, unless they are modified or disapproved by Congress. The
successor agency will have no powers to revise the D.C. Code but will
recommend changes to the Code as may be necessary to further the purposes of
the Act.
4.3.16. The Superior Court for the District of Columbia, D.C. Department of Corrections, and
any other agency will submit information about convicted felons as required by
the Board and the U.S. Department of Justice. This would permit an assessment
of the extent to which sentences imposed by the Superior Court of the District of
Columbia are similar to those imposed for comparable offenders in the Federal
system. The results of this assessment would be used by the Board in developing
the new sentencing system for D.C.
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4.3.17. Four years after the enactment of the new sentencing system, there will be an evaluation
to determine the extent to which the sentencing system has succeeded in
accomplishing the goals set forth in the Act.
4.4. Liability and Litigation Responsibility and Authority
4.4.1. Federal Government Responsibilities
4.4.1.1. The Federal Government will be responsible for the defense of any claim arising
from any alleged act or failure to act on the part of the United States, its
agencies and personnel, in connection with pretrial, defender, offender
supervision, sentencing reform, corrections, probation and parole services,
and for any resulting liability, after responsibility for these services has
passed to the Federal Government at the end of the transition period.
4.4.1.2. The Federal Government's assumption of responsibility for the defense of claims,
and any resulting liability, set forth in paragraph 4.4.1.1. above shall
include claims arising from any alleged act or failure to act of BOP, its
agencies and personnel in connection with the demolition, repair,
renovation, or construction of any building, structure, or other
improvement of any kind at the Lorton, Virginia property.
4.4.1.3. The Attorney General, in her discretion, may direct any litigation involving the
Trustees appointed pursuant to sections 4.1.1.1. and 4.2.1.6. above, pretrial
services, offender supervision services, or sentencing reform during the
transitional period, and may provide litigation services for the Trustees and
the agencies responsible for pretrial services, offender supervision services,
and sentencing reform during the transitional period in lieu of
representation by D.C. Exercise of the Attorney General's discretion shall
not change the terms of this agreement and shall not otherwise enlarge the
liability of the United States, its agencies, or personnel. However, D.C.
may petition the Attorney General to request reimbursement for litigation
costs and liability arising from actions of the Trustees.
4.4.2. District of Columbia Responsibilities and Liabihty
4.4.2.1. D.C. will be responsible for the defense of any claim that has arisen or may arise
from any act or alleged failure to act by D.C., its agencies or personnel, in
connection with D.C.'s pretrial, defender, offender supervision,
sentencing reform, corrections, or probation and parole services, and for
any resulting liability. D.C. will remain responsible for defending and
bearing any liability resulting from any such claim even if responsibility for
the pertinent service has passed to the Federal Government. D.C. will
23
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also be responsible for the defense of any claim arising from any activity of
D.C., its agencies or personnel as a result of any action agreed to in this
MOU, and for any resulting liability.
4.4.2.2. D.C. is, and will remain, responsible for the defense of any and all claims
described in paragraph 4.4.2.1. above, including the defense of claims
arising from any alleged act or failure to act of the Trustees (see sections
4.1.l.l. and 4.2.1.6.). Except as provided in paragraph 4.5.3. and in
paragraph 4.1.3.} above, the D.C. Corporation Counsel will provide
litigation services as required to carry out this responsibility.
4.4.2.3.Notwithstanding paragraph 4.4.2.2. above, the Trustees and the agencIes
responsible for pretrial, defender, offender supervision services, and
sentencing reform may choose not to utilize the Corporation Counsel and
to engage other litigation services.
4.5. District of Columbia Courts
4.5.1. Congress will make all necessary amendments to the D.C. Code and other laws to
terminate budgetary control anq other involvement of the D.C. Government in the
finances and administration of the D.C. court system, including the Superior Court of the
District of Columbia and the District of Columbia Court of Appeals.
4.5.2. The Joint Committee on Judicial Administration of the D.C. courts will prepare and
submit the budget for the D.C. court system. The budgetary requests of the D.C. courts
system will not be subject to revision by the D.C. Government or the Executive Branch of
the Federal Government.
4.5.3. The D.C. court system, through its Executive Office, will be authorized to contract with
D.C. agencies, Federal agencies, and other public and private entities, for necessary
supplies, equipment, and services.
4.5.4. Expenditures of the D.C. court system will be paid out of funds appropriated for those
courts and credited to a Treasury account established for that purpose. Funds received
by the D.C. court system will not be part of the funds or budget of D.C.
5. Economic Development.
This Memorandum of Understanding between the Federal government and the District
government outlines (i) legislation that the Federal government intends to support, and (ii) the
conditions that District government must agree to and fulfill before the Federal government will
support the legislation.
24
Hex4J!lffi~'~'
S.i. Outline of Legislation
The Federal government intends to support legislation that will (A) provide the District
government with a new vehicle to spur economic development in the District of Columbia, and
capitalize the new vehicle with a $50 million grant; (B) provide $250 million in tax incentives to
encourage business investment both downtown and in distressed communities, and to help
businesses increase employment of residents of the District of Columbia; and (C) improve the
District government's borrowing authority by removing impediments in its borrowing statutes so
that the District government will have the same ability to finance projects as other cities have.
5.i.a. The Economic Development Corporation
Overview. The legislation will include congressional findings recognizing the
need for economic development in the District of Columbia, the unique
disadvantages that the District government faces, when compared to other cities,
in its efforts to finance economic development from local tax revenues because
Federal law limits the tax base and taxing authority of the District government,
and the national interest in having the Federal government assist the District of
Columbia in becoming a safe, clean, and beautiful city worthy of the seat of the
Federal government, which is a goal that will be realized only through the
development of a strong local economy.
The legislation will state the purposes for the part of the legislation pertaining to
economic development, which focus on expanding employment and business
opportunities in the District of Columbia, increasing the rate of private sector
investment in the District of Columbia, developing comprehensive strategies for
the economic development of the District of Columbia, assisting the
implementation of projects throughout the District of Columbia, and enhancing
the institutional capacity of the District government to accomplish and realize
economic development.
The legislation will establish the District of Columbia Economic Development
Corporation (the Corporation) under Article I, section 8, clause 17 of the
Constitution of the United States. The Corporation will be established as a
corporate body and instrumentality of the District government, and will not be
part of the Federal government.
Board of Directors. Officers and Employees. Reports. The powers of the
Corporation will be vested in a board of directors (the Board) consisting of nine
voting members. Six of the Board members will be appointed by the President in
consultation with the Congress. Of those six, four will be selected from the
for-profit business community, such .as persons involved in real estate
development, retailing, manufacturing, construction, or financial services, and two
will be selected from community-based organizations. The eligibility
requirements for being appointed as one of the six appointed Board members will
be that the person maintains a primary residence or has a primary place of
25
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business in the District of Columbia and that the person not be an officer or
employee of the Federal government or the District government. The remaining
three Board members will be ex officio members. Of those three, one will be
chosen by the President from a Federal agency, a second will be senior officer of
the District government chosen by the Mayor, and a third will be senior officer of
the District government chosen by the Council. The appointed Board members
will have six-year terms, with four of the first six appointed Board members
having shorter, staggered terms. The President will have the authority to remove
any appointed Board member for cause. Each ex officio member will serve at the
pleasure of the official who designated that member. The President will choose
one of the appointed Board members to serve as the Chair ofthe Board.
The Board will appoint a Chief Executive Officer of the Corporation who will
direct and supervise the general management and administrative affairs of the
Corporation as prescribed by the Board. The Chief Executive Officer will
appoint a Chief Financial Officer and a General Counsel with the approval of the
Board, and may appoint additional officers and employees as appropriate. The
Board will fix the pay for the Chief Executive Officer, the Chief Financial Officer,
and the General Counsel; the Chief Executive Officer will fix the pay for all other
officers and employees of the Corporation. No officer or employee of the
Corporation will be paid more than the Executive Schedule level III annual pay
rate under 5 U.S.C. 5312. Neither the Civil Service laws governing competitive
appointments, position classifications, and pay rates, nor the District of Columbia
employment laws governing appointments and salaries, will apply to the
appointment of the officers and employees of the Corporation. The Corporation
will be authorized to establish its own employment benefit plans; however, an
employee of the Federal government or the rest of the District government who
leaves the Federal government or the rest of the District government to work for
the Corporation may remain enrolled in the retirement, life insurance, and health
insurance programs of the Federal government or the rest of the District
government, as the case may be, and the Corporation will make the required
employer contributions to those programs. No political test or qualification may
be used with regard to hiring or taking any other personnel action regarding the
officers and employees ofthe Corporation
The Corporation will be prohibited from spending any funds to influence
legislation or in connection with any political campaign on behalf of or in opposi-
tion to any candidate for public office.
The Corporation will submit a report by April 1 of each year to the Mayor, the
Council, the Authority, the President, the Congress, and the public concerning its -
'operations for the prior fiscal year. This annual report will include a financial
statement audited by an independent auditor.
The Corporation will prepare an annual performance plan for the operations of the
Corporation. The elements of the performance plan will include performance
26
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goals, perfonnance benchmarks to measure the Corporation's perfonnance results,
and a methodology for comparing perfonnance results with perfonnance goals.
The annual report of the Corporation will also include infonnation regarding the
perfonnance results achieved by the Corporation in the fiscal year being reported
compared with the perfonnance goals established in the perfonnance plan for that
year.
The Corporation will engage an independent consultant to perfonn in fiscal years
2001 and 2005 an evaluation of the efficacy of the authorities granted and the
changes in law made in the tax provisions of the legislation as aids to the
Corporation in carrying out the purposes of the legislation. The Corporation will
submit a report to the Mayor, the Council, the Authority, the President, and the
Congress on the conclusions of these evaluations 30 days after the close of the
fiscal years in which the evaluation is perfonned.
The Corporation will establish written rules and procedures to ensure that the
solicitation, acceptance, use, and disposition of gifts, grants, and subsidies will not
reflect unfavorably upon the ability of the Corporation, or of any its officers or
employees, to carry out the responsibilities of the Corporation in a fair and objec-
tive manner. The Corporation will establish written rules and procedures to
ensure that the procurement of goods and services by the Corporation and the
acquisition and disposition of property by the Corporation will produce the best
value for the Corporation, in the judgment of the Corporation, and will not reflect
unfavorably upon the ability of the Corporation, or of any its officers or
employees, to carry out the functions of the Corporation in a fair and objective
manner. The procedures governing dispositions of property by the Corporation
will include public notice.
General Powers. The Corporation will have numerous general powers, including
the power to sue and be sued; to adopt, amend, and repeal bylaws and procedures
for its governance; to make and perfonn. contracts; to solicit, accept, use, and
dispose of gifts of money, services, and property from any source; and to lease,
purchase, use, improve, and dispose of any property. Some of the powers of the
Corporation will be limited by other provisions of the legislation, such as the
power to employ officers and employees and to fix their salaries and the power to
enter into financial assistance agreements. The Corporation will also be granted
the power to exercise any other power usually possessed by public enterprises or
private corporations perfonning similar functions that is not inconsistent with
applicable Federal of District law.
Economic Development Plans. The Corporation will be directed initially to give
priority to reviewing and evaluating existing economic development plans for the
District of Columbia, followed by the development of a comprehensive strategic
plan for carrying out the purposes of the part of the legislation pertaining to
economic development. The Corporation will be required to consult with the rest
of the District government in strategic planning.
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Financial Assistance. The Corporation will be authorized to provide financial
assistance for economic development projects directly or in participation with any
other source of financing, private or public, including any agency or
instrumentality of the rest of the District government. Financial assistance may
take the form of a loan, extension of credit, equity investment, grant, fixed
contribution to a loan loss or debt service reserve fund, or any other similar form
of financing or refinancing, but may not be a guarantee, insurance of payment of
principal and interest, or any other similar form of credit support that provides
recourse to the Corporation, and may include an exchange, lease, or sale ofland.
The total amount of financial assistance that will be permitted to be provided or
committed under the legislation will be limited to the total amount of the capital
and land of the Corporation, and financial assistance to anyone person or project
will be limited to 15 percent of the total capital and land of the Corporation.
There also will be a procedure for waiving the limits on the amount of financial
assistance to one person or project.
The Corporation will be authorized to establish one or more for-profit or
not-for-profit corporate subsidiaries. No subsidiary of the Corporation will have
any power that the Corporation does not have. The Corporation will also be
authorized to establish one or more revolving funds for providing different types
of financial assistance. Funds from any source, including returns on financial
assistance, will be permitted to be deposited into any revolving fund and
transferred between revolving funds, and will be available for providing additional
financial assistance and for paying the expenses of the Corporation.
The Corporation will establish criteria for selecting the type of financial assistance
that is most appropriate for different types of economic development projects,
including criteria that include a preference for the type of financial assistance that
represents the least commitment of the capital of the Corporation.
The Corporation will also establish procedures to provide the rest of the District
government with a reasonable opportunity to review and comment on economic
development projects to which the Corporation is considering providing financial
assistance.
The Corporation will consider certain factors when reviewing applications for
financial assistance, such as the likelihood the project can be expected to create or
retain private sector jobs in the District of Columbia, the contribution of the
project to the economy of the District, whether the project will serve the interests
of the community where it will be located, whether the project is consistent with
the comprehensive strategic plan developed by the Corporation, and whether the
project will improve links between the economy of the District of Columbia and
the economy of the region.
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The legislation will establish conditions precedent to the Corporation's approval
of any application for financial assistance for any economic development project,
such as the Corporation determining that there is a strong probability that the
project would not be undertaken without financial assistance from the Corpora-
tion, that financial assistance from the Corporation will not compete with or
supplant funds from sources other than the Corporation, including the rest of the
District government, that are otherwise available for the project, and that the rest
of the District government has been provided a reasonable opportunity to review
and comment on the project. A project's compliance with applicable Federal and
District of Columbia law will also be a condition precedent to the Corporation's
approval of the project's application for financial assistance.
Eminent Domain. The Corporation will be authorized to exercise, in the name of
the District of Columbia, the power of eminent domain to aid in carrying out the
purposes of the part of the legislation relating to economic development. The.
provisions of the District of Columbia Code that govern condemnation
proceedings for the acquisition of property by the Mayor shall apply to the
Corporation.
Regulatory Relief The Corporation will be authorized to request that the
Authority use its powers under section 103 of the District of Columbia Financial
Responsibility and Management Assistance Act of 1995 to order appropriate
officers or employees of appropriate regulatory authorities of the District
government to give expedited consideration to applications for District of
Columbia regulatory licenses, permits, and approvals of economic development
projects provided financial assistance by the Corporation. The Corporation will
be authorized to request the Mayor to cause any delayed or denied permit, license,
or approval to be issued or to demonstrate good cause for the delay or denial. If
the Mayor does not cause the necessary license, permit, or approval to be issued or
demonstrate in writing good cause for the delay or denial within 30 days of the
Corporation's request, the Corporation will be authorized to request that the
Authority use its powers to order appropriate officers or employees of appropriate
regulatory authorities of the D.C. government to take the action necessary to cause
the license, permit, or approval to be issued.
AI!Propriations. The legislation will authorize appropriations of $50,000,000 in
no-year funds to carry out the purposes of the economic provisions of the
legislation in fiscal year 1998. The Corporation will be required to provide at
least $20,000,000 or 40 percent of the amount appropriated, whichever is less,
either directly to non-profit organizations for job training, placement, and related
activities in those organizations for targeted residents of the District of Columbia,
or to non-profit third-party intermediaries to promote and finance such job
training, placement, and related activities in for-profit and not-for-profit
organizations. There will be a procedure for the Corporation to waive the
minimum amount requirement for financial assistance to non-profit organizations
for job training and placement.
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Project Revenue Obligations. The Corporation will be given authority to issue
project revenue obligations, including refunding obligations, and to use the
proceeds to provide financial assistance for economic development projects. The
Corporation will have the duty to consult with the rest of the District government
so that the Corporation and the rest of the District government together make the
most effective use of available resources and authorities, avoid to the extent
practicable competition and duplication of efforts, and maximize the benefit to the
District of Columbia.
The project revenue obligations issued by the Corporation will be special obliga-
tions of the Corporation payable solely from the revenues, assets, and property of
the economic development project for which financial assistance is provided, to
the extent such revenues, assets, and property are pledged therefor. The
resolution of the Board authorizing the issuance of any project revenue obligations
will be permitted to prescribe such matters as the form and terms of the
obligations, the method of issuance, the rights and remedies of the holders, and
the security for the obligations. The Board will be permitted to authorize the Chief
Executive Officer to enter into agreements providing security for the repayment of
the project revenue obligations that the Corporation issues. The Corporation will
be permitted to establish reserve funds for the project revenue obligations and to
manage those reserve funds.
The amount of any project revenue obligations that the Corporation issues will be
excluded from the limitations on the amount of general obligation bonds that the
District of Columbia is authorized to issue. The resolution of the Corporation
authorizing the issuance of project revenue bonds will not be considered to be an
act of the Council subject to the 30-day congressional review period provided in
section 602(c) of the District of Columbia Self-Government and Governmental
Reorganization Act. The issuance by the Corporation of project revenue bonds
shall not be considered to be a borrowing of money by the District government for
purposes of the prior certification requirement of section 204 of the District of
Columbia Project Financial Responsibility and Management Assistance Act of
1995. Project revenue obligations issued by the Corporation will not be obliga-
tions of the District of Columbia or the United States, and neither the faith and
credit nor the taxing power of the District of Columbia nor the full faith and credit
of the United States will be pledged for the payment of any project revenue
obligation issued by the Corporation. Each project revenue obligation issued by
the Corporation will be required to contain on its face a statement that effect.
Other Matters. All funds and revenues of the Corporation that are not required to
be otherwise disposed will be held and invested by the Corporation or deposited
with and invested by a custodian selected by the Corporation.
The Corporation will not have any power to impose or collect taxes or to pledge
or create any lien on taxes imposed or collected by the rest of the District
government.
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Any action against the Corporation or any action otherwise arising out of or
. pertaining to the part of the legislation relating to the Corporation must be brought
in the United States District Court for the District of Columbia, with appeals
heard in the United States Court of Appeals for the District of Columbia Circuit.
Any petition for review of a regulation or procedure adopted by the Corporation
under the legislation with respect to providing financial assistance must be filed
within 90 days after the date of publication of notice of adoption of the regulation
or, if the permitted petition for review is based solely on grounds arising after
such ninetieth day, within 90 days of the date on which the grounds arise. No
judicial review of a regulation with respect to providing financial assistance will
be permitted in a proceeding reviewing any determination by the Corporation to
make, deny, or take no action with respect to an application for financial
assistance.
The provisions of the District of Columbia Code governing procurement,
disposition of property, and open meetings will not apply to the Corporation.
The Corporation will be exclusively administered by its Board and not the Mayor
nor the Council.
In any action brought by or on behalf of the Corporation, or against the Corpo-
ration, the Corporation will be permitted to be represented by the counsel that it
selects.
Dissolution. The Corporation will not be permitted to award or commit to award
any new financial assistance or to issue any new revenue obligations after
September 30, 2007. The Corporation will be permitted to meet existing
financial assistance commitments to provide financial assistance under
commitments entered into on or before September 30,2007.
Beginning on October 1, 2007, the Board will be required to diligently pursue an
orderly termination of the affairs of the Corporation on or before September 30,
2010. The corporation will liquidate the assets of the Corporation unless the
Council elects to have some or all of the Corporation's assets transferred to an
agency or instrumentality of the rest of the District government. The Corporation
will be required to transfer the proceeds of all liquidations to the Mayor for
deposit into such account of the District government as the Mayor determines
appropriate. The Council will be permitted to direct the Corporation to transfer
some or all of the assets of the Corporation to an agency or instrumentality of the
rest of the District government and to direct to Corporation to deposit some or all
of the moneys of the Corporation (other than moneys reserved to fulfill financial
assistance commitments) to one or more accounts of the District government.
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If the Board completes the tennination of the affairs of the Corporation on or
before September 30, 2010, the Board will transfer to the Mayor the moneys of
the Corporation reserved to fulfill financial assistance commitments, will transfer
assets and deposit moneys of the Corporation as directed by Council, will transfer
to the Mayor the balance of the moneys of the Corporation for deposit into such
account of the District government as the Mayor detennines appropriate, and will
submit a final report on the Corporation to the Council, the Authority (if it is still
in operation), the President, and the Congress.
If the Board has not completed the tennination of the affairs of the Corporation on
or before September 30, 2010, the Mayor will succeed to all of the powers, assets,
duties, and liabilities of the Corporation and the Board on October 1, 2010,
including the duties to complete the termination of the affairs of the Corporation,
to liquidate or transfer assets of the Corporation and deposit moneys of the
Corporation, and to submit a final report on the Corporation to the Council, the
Authority (if it is still in operation), the President, and the Congress.
For purposes of any outstanding project revenue obligation issued by the
Corporation on or before October 1, 2070, the District government will be deemed
to be the issuer after the dissolution of the Corporation.
S.ii.b. Tax Provisions of the Legislation
Overview. The legislation will add six new provisions to the Internal Revenue
Code of 1986 (the Code). These provisions are described below. The new tax
provisions will take effect on the date the legislation is enacted.
The District of Columbia Employment Credit. New section 1400A of the Code
will provide for a tax credit to employers in the District of Columbia that hire
certain residents of the District of Columbia. The credit will be equal to 40
percent of up to $10,000 in wages paid to a qualified employee during the
employee's first year of employment with the employer. Thus, the maximum
credit per employee will be $4,000. Generally, qualified employees will include
any individual that meets a residence test, a work-location test, and an income
test. For purposes of the $10,000 ceiling, certain non-cash benefits such as health
insurance, educational assistance, and dependant care assistance will be permitted
to be taken into account.
To meet the residence test, the employee must reside in the District of Columbia
and either be a member of one of the Work Opportunity Tax Credit (WOTC)
targeted groups (including the new food stamp recipient group proposed in the
President's fiscal year 1998 budget) or live in a population census tract that has a
poverty rate of 15 percent or more. The work-location test will be satisfied if
either substantially all of the services provided by the employee for the employer
during the year are in District of Columbia or the employer's principal place of
business is in District of Columbia. Thus, for example, an employee of a
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construction company that has its principal place of business in District of
Columbia will qualify even if the employee works on projects in Maryland or
Virginia during the year. The income test, which only will apply if the employee
is not a member of a WOTC targeted group, will be satisfied if the employer does
not expect to pay the employee more than $28,500 during the employee's first year
of employment.
This employment credit will be available with respect to qualified employees
hired after the date of enactment and before October 1, 2002. In addition, the
WOTC and the welfare-to-work tax credit proposed in the President's fiscal year
1998 budget will be extended an additional two years, through September 30,
2002, with respect to individuals who reside in the District of Columbia, satisfy
the work-location test, and are either members of a WOTC targeted group or
long-term family assistance recipients.
Additional Section 179 Expensing. Under current section 179 of the Code,
businesses with less than $200,000 of investments in business equipment and
machinery during a year are eligible to take a current deduction, or "expense," up
to $18,000 of the cost of such property each year, rather than capitalizing that cost
and taking depreciation deductions over several years (the $18,000 annual cap
increases gradually to $25,000 between 1998 and 2003). The $18,000 is reduced
for each dollar of investment over $200,000, so that no expensing is available for
businesses with annual investments of$218,000 or more.
Under new section 1400B of the Code, businesses that have a significant portion
of their activities in higher poverty areas in the District of Columbia and that have
a work force at least 35 percent of which is made up of District of Columbia
residents, will be eligible for expensing for an additional $20,000 of business
equipment and machinery acquired each year. In addition, to the extent the
equipment and machinery is to be used in the District of Columbia, an expanded
ceiling will be available to businesses acquiring up to $400,000 in such property
during the year (the $38,000 amount available in 1997 phases out for businesses
with between $400,000 and $476,000 in investment). For purposes of this
incentive (as well as the Tax-exempt Economic Development Bonds discussed
below), higher poverty areas of the District of Columbia will mean any population
census tract with a poverty rate of 15 percent or more.
This additional expensing will be available for business equipment and machinery
place~ in service between January 1,1998, and December 31, 2002.
Tax-exempt Economic Development Bonds. New section 1400Cofthe Code will
make a new category of tax-exempt, private activity bonds available in District of
Columbia. Under these rules, the bond proceeds will be permitted to be used to
finance a broader range of business property --including commercial and retail
facilities, as well as the underlying land --than under the laws currently applicable
to the District of Columbia. The businesses eligible to borrow the proceeds of
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these bonds will be limited to those that have a significant portion of their
activities in higher poverty areas of the District of Columbia and that have a work
force at least 35 percent of which is made up of District of Columbia residents
(i.e., the businesses eligible for additional section 179 expensing except that there
is no cap on the annual investment in business equipment and machinery). The
aggregate amount of these bonds per eligible District of Columbia business will
not be allowed to exceed $15 million, and these bonds will be subject to the
District of Columbia's annual $150 million private activity bond volume cap.
These special tax-exempt bond provisions will apply to bonds issued after the date
of enactment and before January 1,2003. During that period, the legislation will
allocate to the Corporation 50 percent of applicable State ceiling on the authority
of the District government to issue private activity bonds in each calendar year
under section 141 of the Code.
Allocable Tax Credits for Equity Investments in and Loans to District of
Columbia Businesses. The Economic Development Corporation (The
Corporation) will be authorized by new section 1400D of the Code to allocate $95
million in nonrefundable credits to taxpayers that make equity investments in and
loans to District of Columbia businesses. The equity credit, which will not be
permitted to exceed 25 percent of the amount invested, will be available with
respect to investments in corporations or partnerships. This credit will be subject
to recapture if the equity interest is disposed of within 5 years. The lender credit
will be available with respect to loans made to District of Columbia businesses for
purchasing depreciable tangible property and any functionally related and
subordinate land. The maximum amount of the credit that the Corporation will
be authorized to allocate with respect to a loan is 25 percent of the principal
amount of the loan (measured by the cost of the property purchased). The
Corporation will allocate the credits pursuant to criteria it establishes, including
the degree to which the business borrowing the funds or receiving the equity will
provide job opportunities for low-and moderate-income residents, and whether the
business receiving the loan or equity infusion is located in a high-poverty area of
the District of Columbia.
These credits may be allocated and claimed between January 1, 1998, and
December 31,2002.
Status of The Corporation for Federal Income Tax Purposes. New section
l400F of the Code will clarify the status of the Corporation for federal income tax
purposes so that, for example, charitable contributions to the Corporation will be
deductible and the Corporation will have the ability to issue tax-exempt bonds.
5.i.c. Improvements to the District goveinment's borrowing authority.
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The Federal government will support legislation that will remove impediments in
the District government's borrowing statutes so that the District government will
have the same ability to finance projects as other cities have.
Outline of District Conditions
5.1. The District government will implement timely and efficient zoning, permitting, and
licensing processes by the end of fiscal year 1997.
5.2. The District government will offer personnel resources and fully cooperate with the
Corporation in its review and evaluation of existing economic development plans, in the
development of the Corporation strategic plan, and in subsequent implementation of the
plan.
5.3. The District government will support a legislative allocation to the Corporation of 50
percent of the applicable State ceiling on the authority of the District government to issue
private activity bonds in each calendar year under section 141 of the Internal Revenue
Code.
5.4. The District government will support a legislative authorization to the Corporation of the
right to exercise eminent domain in the name of the District of Columbia, and certain
other powers specified above.
5.5. The District government will give expedited consideration to the Corporation's requests
for land transfers (including transfers from the Redevelopment Land Agency), zoning
adjustments (including variances and special exceptions), and building and other permits
and licenses for projects and activities as requested by the Corporation.
5.6. The District government will support legislation that provides that all powers, rights,
assets, duties, obligations, and liabilities of the Corporation will transfer to the District
government upon the Corporation's dissolution
6. Infrastructure.
6.1. Secretary o/Transportation Responsibilities. The Secretary of Transportation (hereinafter
in this section referred to as the Secretary) agrees that:
6.1.1. Beginning on October 1, 1997, the Secretary shall assume responsibilities generally
carried out by a State under Title 23 of the U.S.C. relating to selection (consistent with
the planning requirements of 23 U.S.C. 134 and 135), funding and oversight of the
National Highway System (NHS) capital projects and shall assume responsibilities for
funding the operations and maintenance of the NHS within the District of Columbia
(exclusive of police authority and exclusive of funding those NHS routes currently under
the jurisdiction of the National Park Service) with funds' made available under the
National Capital Revitalization and Self-Government Improvement Act of 1997, to be
referred to henceforth in this section as the "Act."
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6.1.2. The Secretary shall advance NHS projects through the Federal Highway Administration
(FHWA). The FHWA shall consult and coordinate NHS project responsibilities with the
District of Columbia. In selecting projects, the FHWA shall give consideration to the
District of Columbia Needs Assessment currently being developed by the Federal
Highway Administration in cooperation with the District of Columbia Department of .
Public Works and the District of Columbia Strategic Transportation Plan.
6.1.3. Beginning on October 1, 1997, the Secretary shall assume responsibility for advancing
those NHS projects approved prior to that date that are not under construction or under a
contract for such construction by October 1, 1997, unless the Secretary and the District of
Columbia agree to continue to vest responsibility for such project advancement with the
District of Columbia. Such projects that are transferred under this section shall also be
governed by the requirements contained in section 6.2.4.
6.1.4. The Secretary may transfer National Capital Infrastructure Funds authorized under this
Act and available for capital expenditures and NHS apportioned funds authorized to be
transferred under this Act to other Federal-aid highway funding categories, consistent
with title 23, United States Code provisions governing the transfer ofNHS funds.
6.1.5. Funds made available to the Secretary for obligation on NHS projects under this Act shall
be administered by FHWA. From time to time as work progresses on a project,
payments shall be made by FHWA for the costs of construction, operations, maintenance,
and other eligible activities under this Act in accordance with applicable procedures
under Title 23, United States Code, or as established by the Secretary.
6.1.6. For Fiscal Year 1998, $108 million shall be authorized to be appropriated to the National
Capital Infrastructure Fund which shall be used for construction, reconstruction, and
rehabilitation of the NHS in accordance with 23 U.S.C. 103 ( i ), including transit capital
projects eligible for funding under section 103 ( i ).
6.1.7. In each of the fiscal years 1998 through 2003, the Secretary shall retain and deposit into
the National Capital Infrastructure Fund:
(a) 100 percent of the District of Columbia's apportionment for the NHS;
(b) 100 percent of the apportionments for Interstate Maintenance; and
(c) 75 percent of the apportionment for the Highway Bridge and Replacement for use
consistent with 23 U.S.C. 103 ( i ).
6.1.8. In each of the Fiscal Years 1998 through 2003, $17 million shall be authorized to be
appropriated to fund the operations and maintenance of the NHS within the District of
Columbia, exclusive of those NHS routes under the jurisdiction and control of the
National Park Service.
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6.1.9. The Secretary shall be responsible for funding those operations and maintenance
activities and costs, excluding police services (except for those construction zone,
incident management and other police activities that are eligible for Federal-aid highway
reimbursement under title 23, United States Code) associated with the management and
operations of NHS highways including the following activities: routine maintenance of
roadways and rights-of-way, road repair, snow removal, lighting, signage, and those
utilities necessary for the NHS operations. The Secretary shall not be responsible for
funding the District of Columbia share of operating expenses for any transit activities.
6.1.10. The Secretary shall continue to provide oversight and technical assistance to the District
of Columbia for all Federal-aid projects that remain the responsibility of the District of
Columbia.
6.1.11. The Secretary through the FHWA will enter into any agreements or contracts with any
entity to advance, construct, reconstruct, rehabilitate, repair, maintain, or operate the NHS
within the District of Columbia excluding those NHS roadways under the jurisdiction and
control of the National Park Service, consistent with 23 U.S.C. 103 (i).
6.1.12. The Secretary shall encourage the hiring of local labor by contractors awarded contracts
including welfare to work labor, on NHS projects financed under this Act to the
maximum extent possible and consistent with federal law.
6.1.13. Unless reauthorized by Congress on, or prior to, September 30, 2003, the Secretary of
Transportation's responsibilities, other than the completion of ongoing projects funded
through this Act, would cease and no new deposits of Federal funds would be made into
the National Capital Infrastructure Fund after September 30, 2003.
6.1.14. The Secretary shall provide the District of Columbia with the technical assistance
necessary to reassume its NHS responsibilities by September 30,2003. The April 1996
findings of FHWA's review of the organizational capacity of the District of Columbia's
Department of Public Works shall guide the assistance.
6.2. District of Columbia Responsibilities. The District of Columbia agrees that:
6.2.1. The District of Columbia shall continue to be responsible for providing police services on
NHS highways (including, but not limited to civil police functions, crime prevention,
investigations including traffic and accident investigation, and emergency traffic
direction). The District shall continue to own the right-of-way ofNHS highways that are
located within the District of Columbia.
6.2.2. The District of Columbia will continue to be responsible for all utilities and utility work
that is not necessary for operation of the NHS even if such utilities are located within the
right-of-way of the NHS.
6.2.3. The District of Columbia shall continue to be responsible for non-NHS projects funded
with Federal-aid highway funds. The authority to use Surface Transportation Program
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funds on local streets, highways, and roadways (except alleys) does not relieve the
District of Columbia of the responsibility for the non-federal matching share. The use of
other Federal-aid highway apportioned funds by the District of Columbia, other than as
provided herein, also requires a non-Federal matching share.
6.2.4. Beginning on October 1, 1997, the District of Columbia is relieved of the responsibility to
provide the non-Federal match for NHS projects that are funded by the Secretary with
monies made available for NHS projects under this Act. The relief from providing the
non-federal match shall not include those projects that were approved by FHWA prior to
October 1, 1997 for which Federal-aid highway funds have been obligated. The District
of Columbia is responsible for providing the non-Federal match, the Federal-aid funds,
and any obligation authority for any such projects transferred to the Secretary for project
administration, oversight, or contracting.
6.2.5. The District of Columbia shall continue to be responsible for any liability incurred on the
basis of the activities of the District of Columbia, its agencies, or personnel as a result of
any acts or omissions in carrying out this Act. The United States, its agencies, and
personnel will not incur any liability for any such acts or omissions.
6.2.6. The District of Columbia shall cooperate with the Federal Highway Administration in its
technical assistance efforts in order to assure that the District of Columbia can reassume
its NHS responsibilities by September 30,2003. The goal of the effort shall be to satisfy
the April 1996 findings of FHWA's review of the organizational capacity of the District
of Columbia's Department of Public Works.
7. Personal Income Tax Administration The District agrees that:
7.1. General
7.1.1. The IRS shall administer and enforce the District's individual income and employment
taxes.
7.1.2. The District shall continue to administer its unemployment benefits program.
7.2. Tax Codes
7.2.1. The IRS will administer the District's existing individual income and employment tax
laws. The only provision the IRS cannot administer is the District's refundable property
tax credit. If the District wishes to retain this provision, it must be transferred to its real
estate tax administration.
7.2.2. All of the administrative, procedural, and enforcement provisions of the Internal Revenue
Code of 1986 and related statutes will govern IRS administration of District taxes. The
District will have to amend its own tax code to achieve this to the satisfaction of the
Secretary of the Treasury.
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7.2.3. To avoid the possibility of any inconsistent interpretations of similar provisions, the
District will have to amend its definitional provisions to conform them to the Internal
Revenue Code to the satisfaction of the Secretary of the Treasury.
7.2.4. The District must notify the Secretary of the Treasury of any future changes to its
individual income and employment tax laws. The Secretary may object if, in his
judgement, the prospective change would prove overly burdensome to the IRS, in which
case such change shall not be administered or enforced by the IRS. If the Secretary does
not object within 60 days after notification, the IRS will administer the provision within a
reasonable time after enactment.
7.3. Transfers to the District
7.3 .1. The IRS will set up separate accounting and deposit systems for its collections of District
taxes. The District must, in turn, identify the person and/or office authorized to receive
transfers of collected amounts and set up related deposit accounts.
7.4. Effective Date
7.4.1. The IRS administration of District taxes shall be prospective, starting on January 1 of the
calendar year that is at least 18 months after the Secretary certifies that the District of
Columbia has met the conditions set forth in the Memorandum of Understanding between
the United States and the District of Columbia.
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AppendiX One
DEFINITIONS FOR THE PENSIONS SECTION OF THE MOU
"Adoption Date" means the date the Replacement Plan is adopted by the District Government or,
iflater, October 1, 1997_
"District Government" means, as appropriate, the "District government" as defined by section
305(5) of the District of Columbia Financial Responsibility and Management Assistance Act of
1995 (Pub_ L 104-8) or the District of Columbia Retirement Board as defined in section 102(5)
of the Reform Act.
"Freeze Date" means the date of introduction of the Revitalization Act.
"Fund" means the District of Columbia Police Officers and Fire Fighters' Retirement Fund, the
District of Columbia Teachers' Retirement Fund, and the District of Columbia Judges'
Retirement Fund as defined in section 102(10) of the Reform Act.
"Reform Act" means the District of Columbia Retirement Reform Act (Pub. L. 96-122).
"Replacement Plan" means the plan or plans described under Title I of the Revitalization Act.
"Retirement Program" means any of the retirement programs as described in section 102(7) of
the Reform Act as in effect on the day before the freeze date_
"Revitalization Act" means the "District of Columbia Revitalization Act of 1997."
"Secretary" means the Secretary of the Treasury or the Secretary's designee.
"Transfer Date" means the date on which the assets and obligations of the Fund are transferred to
the Trust.
"Trust" means the District of Columbia Retirement Trust created under Title I of the
Revitalization Act.
"Trustee" means the firm designated by the Secretary of the Treasury under Title I of the
Revitalization Act.
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This site parses the emails sent and received by Elena Kagan during her time in the Clinton administration and presents them in a more familiar interface.
You may find that some records are garbled or incomplete, or that conversations are fractured. Please bear with us: the source documents are extremely messy. We're working to improve the quality of the documents hosted here.
Due to the programmatic nature of the tools used to build this site, we recommend checking any research effort against the source files released by the Clinton Library.
You are able to view 26,108 of the 29,281 released emails (89.1%)
