---
kind: "section"
citation: "31 U.S.C. § 6704"
title: "31"
title_heading: "Money and Finance"
number: "6704"
heading: "State area allocations; allocations and payments to territorial governments"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/31/6704"
units:
  - "Subtitle V — General Assistance Administration"
  - "Chapter 67 — Federal Payments"
---

# §6704. State area allocations; allocations and payments to territorial governments

- (a) **Formula Allocation by State.—** For each [payment period](/usc/31/6720.md?p=a-2), the [Secretary](/usc/31/6401.md?p=6) shall allocate to each [State](/usc/31/6201.md?p=2) out of the amount appropriated for the period under the authority of [section 6702(b)](/usc/31/6702.md?p=b) (minus the amounts allocated to territorial governments under [subsection (e)](#e) for the [payment period](/usc/31/6720.md?p=a-2)) an amount bearing the same ratio to the amount appropriated (minus such amounts allocated under [subsection (e)](#e)) as the amount allocated to the [State](/usc/31/6201.md?p=2) under this section bears to the total amount allocated to all [States](/usc/31/6201.md?p=2) under this section. The [Secretary](/usc/31/6401.md?p=6) shall—
  - (1) determine the amount allocated to the [State](/usc/31/6201.md?p=2) under subsection [(b)](#b) or [(c)](#c) of this section and allocate the larger amount to the [State](/usc/31/6201.md?p=2); and
  - (2) allocate the amount allocated to the [State](/usc/31/6201.md?p=2) to units of general [local government](/usc/31/6302.md?p=3) in the [State](/usc/31/6201.md?p=2) under sections [6705](/usc/31/6705.md) and 6706.
- (b) **General Formula.—**
  - (1) **In general.—** For the [payment period](/usc/31/6720.md?p=a-2) beginning October 1, 1994, the amount allocated to a [State](/usc/31/6201.md?p=2) under this subsection for a [payment period](/usc/31/6720.md?p=a-2) is the amount bearing the same ratio to $5,300,000,000 as—
    - (A) the population of the [State](/usc/31/6201.md?p=2), multiplied by the general tax effort factor of the [State](/usc/31/6201.md?p=2) (determined under [paragraph (2)](#b-2)), multiplied by the relative [income](/usc/31/6720.md?p=a-5) factor of the [State](/usc/31/6201.md?p=2) (determined under [paragraph (3)](#b-3)), multiplied by the relative rate of the labor force unemployed in the [State](/usc/31/6201.md?p=2) (determined under [paragraph (4)](#b-4)); bears to
    - (B) the sum of the products determined under subparagraph (A) of this paragraph for all [States](/usc/31/6201.md?p=2).
  - (2) **General tax effort factor.—** The general tax effort factor of a [State](/usc/31/6201.md?p=2) for a [payment period](/usc/31/6720.md?p=a-2) is—
    - (A) the net amount of [State and local taxes](/usc/31/6720.md?p=a-3) of the [State](/usc/31/6201.md?p=2) collected during the year 1991 as reported by the Bureau of the Census in the publication Government Finances 1990–1991; divided by
    - (B) the total [income](/usc/31/6720.md?p=a-5) of individuals, as determined by the [Secretary](/usc/31/6401.md?p=6) of Commerce for national accounts purposes for 1992 as reported in the publication Survey of Current Business (August 1993), attributed to the [State](/usc/31/6201.md?p=2) for the same year.
  - (3) **Relative income factor.—** The relative [income](/usc/31/6720.md?p=a-5) factor of a [State](/usc/31/6201.md?p=2) is a fraction in which—
    - (A) the numerator is the [per capita income](/usc/31/6720.md?p=a-6) of the United States; and
    - (B) the denominator is the [per capita income](/usc/31/6720.md?p=a-6) of the [State](/usc/31/6201.md?p=2).
  - (4) **Relative rate of labor force.—** The relative rate of the labor force unemployed in a [State](/usc/31/6201.md?p=2) is a fraction in which—
    - (A) the numerator is the percentage of the labor force of the [State](/usc/31/6201.md?p=2) that is unemployed in the calendar year preceding the [payment period](/usc/31/6720.md?p=a-2) (as determined by the [Secretary](/usc/31/6401.md?p=6) of Labor for general statistical purposes); and
    - (B) the denominator is the percentage of the labor force of the United States that is unemployed in the calendar year preceding the [payment period](/usc/31/6720.md?p=a-2) (as determined by the [Secretary](/usc/31/6401.md?p=6) of Labor for general statistical purposes).
- (c) **Alternative Formula.—** For the [payment period](/usc/31/6720.md?p=a-2) beginning October 1, 1994, the amount allocated to a [State](/usc/31/6201.md?p=2) under this subsection for a [payment period](/usc/31/6720.md?p=a-2) is the total amount the [State](/usc/31/6201.md?p=2) would receive if—
  - (1) $1,166,666,667 were allocated among the [States](/usc/31/6201.md?p=2) on the basis of population by allocating to each [State](/usc/31/6201.md?p=2) an amount bearing the same ratio to the total amount to be allocated under this paragraph as the population of the [State](/usc/31/6201.md?p=2) bears to the population of all [States](/usc/31/6201.md?p=2);
  - (2) $1,166,666,667 were allocated among the [States](/usc/31/6201.md?p=2) on the basis of population inversely weighted for [per capita income](/usc/31/6720.md?p=a-6), by allocating to each [State](/usc/31/6201.md?p=2) an amount bearing the same ratio to the total amount to be allocated under this paragraph as—
    - (A) the population of the [State](/usc/31/6201.md?p=2), multiplied by a fraction in which—
      - (i) the numerator is the [per capita income](/usc/31/6720.md?p=a-6) of all [States](/usc/31/6201.md?p=2); and
      - (ii) the denominator is the [per capita income](/usc/31/6720.md?p=a-6) of the [State](/usc/31/6201.md?p=2); bears to
    - (B) the sum of the products determined under [subparagraph (A)](#c-2-A) for all [States](/usc/31/6201.md?p=2);
  - (3) $600,000,000 were allocated among the [States](/usc/31/6201.md?p=2) on the basis of [income](/usc/31/6720.md?p=a-5) tax collections by allocating to each [State](/usc/31/6201.md?p=2) an amount bearing the same ratio to the total amount to be allocated under this paragraph as the [income](/usc/31/6720.md?p=a-5) tax amount of the [State](/usc/31/6201.md?p=2) (determined under [subsection (d)(1)](#d-1)) bears to the sum of the [income](/usc/31/6720.md?p=a-5) tax amounts of all [States](/usc/31/6201.md?p=2);
  - (4) $600,000,000 were allocated among the [States](/usc/31/6201.md?p=2) on the basis of general tax effort by allocating to each [State](/usc/31/6201.md?p=2) an amount bearing the same ratio to the total amount to be allocated under this paragraph as the general tax effort amount of the [State](/usc/31/6201.md?p=2) (determined under [subsection (d)(2)](#d-2)) bears to the sum of the general tax effort amounts of all [States](/usc/31/6201.md?p=2);
  - (5) $600,000,000 were allocated among the [States](/usc/31/6201.md?p=2) on the basis of unemployment by allocating to each [State](/usc/31/6201.md?p=2) an amount bearing the same ratio to the total amount to be allocated under this paragraph as—
    - (A) the labor force of the [State](/usc/31/6201.md?p=2), multiplied by a fraction in which—
      - (i) the numerator is the percentage of the labor force of the [State](/usc/31/6201.md?p=2) that is unemployed in the calendar year preceding the [payment period](/usc/31/6720.md?p=a-2) (as determined by the [Secretary](/usc/31/6401.md?p=6) of Labor for general statistical purposes); and
      - (ii) the denominator is the percentage of the labor force of the United States that is unemployed in the calendar year preceding the [payment period](/usc/31/6720.md?p=a-2) (as determined by the [Secretary](/usc/31/6401.md?p=6) of Labor for general statistical purposes)

      bears to

    - (B) the sum of the products determined under [subparagraph (A)](#c-5-A) for all [States](/usc/31/6201.md?p=2); and
  - (6) $1,166,666,667 were allocated among the [States](/usc/31/6201.md?p=2) on the basis of urbanized population by allocating to each [State](/usc/31/6201.md?p=2) an amount bearing the same ratio to the total amount to be allocated under this paragraph as the urbanized population of the [State](/usc/31/6201.md?p=2) bears to the urbanized population of all [States](/usc/31/6201.md?p=2). In this paragraph, the term “urbanized population” means the population of an area consisting of a central city or cities of at least 50,000 inhabitants and the surrounding closely settled area for the city or cities considered as an urbanized area as published by the Bureau of the Census for 1990 in the publication General Population Characteristics for Urbanized Areas.
- (d) **Income Tax Amount and Tax Effort Amount.—**
  - (1) **Income tax amount.—** The [income](/usc/31/6720.md?p=a-5) tax amount of a [State](/usc/31/6201.md?p=2) for a [payment period](/usc/31/6720.md?p=a-2) is 15 percent of the net amount collected during the calendar year ending before the beginning of the [payment period](/usc/31/6720.md?p=a-2) from the tax imposed on the [income](/usc/31/6720.md?p=a-5) of individuals by the [State](/usc/31/6201.md?p=2) and described as a [State](/usc/31/6201.md?p=2) [income](/usc/31/6720.md?p=a-5) tax under section 164(a)(3) of the Internal Revenue Code of 1986 ([26 U.S.C. 164(a)(3)](/usc/26/164.md?p=a-3)). The [income](/usc/31/6720.md?p=a-5) tax amount for a [payment period](/usc/31/6720.md?p=a-2) shall be at least 1 percent but not more than 6 percent of the United States Government individual [income](/usc/31/6720.md?p=a-5) tax liability attributed to the [State](/usc/31/6201.md?p=2) for the taxable year ending during the last calendar year ending before the beginning of the [payment period](/usc/31/6720.md?p=a-2). The [Secretary](/usc/31/6401.md?p=6) shall determine the Government [income](/usc/31/6720.md?p=a-5) tax liability attributed to the [State](/usc/31/6201.md?p=2) by using the data published by the [Secretary](/usc/31/6401.md?p=6) for 1991 in the publication Statistics of [Income](/usc/31/6720.md?p=a-5) Bulletin (Winter 1993–1994).
  - (2) **General tax effort amount.—** The general tax effort amount of a [State](/usc/31/6201.md?p=2) for a [payment period](/usc/31/6720.md?p=a-2) is the amount determined by multiplying—
    - (A) the net amount of [State and local taxes](/usc/31/6720.md?p=a-3) of the [State](/usc/31/6201.md?p=2) collected during the year 1991 as reported in the Bureau of[^1] Census in the publication Government Finances 1990–1991; and
    - (B) the general tax effort factor of the [State](/usc/31/6201.md?p=2) determined under [subsection (b)(2)](#b-2).
- (e) **Allocation for Puerto Rico, Guam, American Samoa, and the Virgin Islands.—**
  - (1) **In general.—**
    - (A) For each [payment period](/usc/31/6720.md?p=a-2) for which funds are available for allocation under this chapter, the [Secretary](/usc/31/6401.md?p=6) shall allocate to each territorial government an amount equal to the product of 1 percent of the amount of funds available for allocation multiplied by the applicable territorial percentage.
    - (B) For the purposes of this paragraph, the applicable territorial percentage of a territory is equal to the quotient resulting from the division of the territorial population of such territory by the sum of the territorial population for all territories.
  - (2) **Payments to local governments.—** The governments of the territories shall make payments to [local governments](/usc/31/6302.md?p=3) within their jurisdiction from sums received under this subsection as they consider appropriate.
  - (3) **Definitions.—** For purposes of this subsection—
    - (A) the term “territorial government” means the government of a territory;
    - (B) the term “territory” means Puerto Rico, Guam, American Samoa, and the Virgin Islands; and
    - (C) the term “territorial population” means the most recent population for each territory as determined by the Bureau of[^1] Census.

## Footnotes

[^1]: So in original. Probably should be “of the”.

## Source credit

(Added Pub. L. 103–322, title III, § 31001(a), Sept. 13, 1994, 108 Stat. 1864.)

## Notes

### Editorial Notes

### Prior Provisions

A prior section 6704, Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 1013; Pub. L. 98–185, § 9(b), Nov. 30, 1983, 97 Stat. 1311, related to qualifications of State or local governments for payments under this chapter, prior to repeal by Pub. L. 99–272, title XIV, § 14001(a)(1), (e), Apr. 7, 1986, 100 Stat. 327, 329, eff. Oct. 18, 1986.