Taxpayer Protection Act

Key Points

• This bill would ban the executive branch from punishing "donor states" by blocking or canceling federal grants, contracts, or agreements. Donor states are states where taxpayers pay more in federal income taxes than the state receives back in federal funding over a three-year average.
• Federal funding to donor states could only be revoked or suspended if the Comptroller General (head of the Government Accountability Office) determines the state committed fraud, waste, or abuse. This takes that decision out of the hands of the White House.
• The bill creates a massive trust fund called the Donor State Protection Trust Fund, filled with income tax revenue from donor state taxpayers. The fund could hold up to $4 trillion before excess money rolls back to the general Treasury.
• If the executive branch illegally cuts off a donor state's funding, that state can draw directly from the trust fund to cover its losses, without needing additional approval from Congress. The amount is limited to what the state would have received under the revoked or suspended grant or contract.
• The bill was introduced by Rep. Torres of California and referred to both the Committee on Oversight and Government Reform and the Committee on Ways and Means. It is currently in committee and would need to pass both chambers before becoming law.