Lawrence County v. Lead-Deadwood School District No. 40-1

The issue presented in this appeal is whether a State may regulate the distribution of funds that units of local govern*258ment in that State receive from the Federal Government in lieu of taxes under 31 U. S. C. §6902. The Supreme Court of South Dakota sustained a state statute requiring local governments to spend these moneys in the same manner as they distribute taxes, holding that it was not inconsistent with the federal law. Because the language and legislative history of the federal statute indicate that Congress intended local governments to have more discretion in spending federal aid…