PRINTER'S NO. 819
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
842
Session of
2023
INTRODUCED BY KENYATTA, MADDEN, O'MARA, SANCHEZ, KINSEY,
N. NELSON, RABB, PROBST, SALISBURY, HILL-EVANS, GREEN,
FIEDLER, SCHLOSSBERG, DELLOSO, D. WILLIAMS, BRENNAN, CEPHAS,
SHUSTERMAN, CONKLIN, CIRESI, YOUNG, McANDREW, OTTEN, TAKAC
AND CEPEDA-FREYTIZ, APRIL 10, 2023
REFERRED TO COMMITTEE ON COMMERCE, APRIL 10, 2023
AN ACT
Providing for mandatory contract provisions to prevent misuse of
State grants or loans.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Clawback Act.
Section 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Awarding agency." A Commonwealth agency that awards a State
grant or loan under a State grant or loan program.
"Commonwealth agency." An executive agency or independent
agency.
"Executive agency." The Governor and any department, board,
commission, authority or other agency or officer of the
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Commonwealth. The term does not include a court or other agency
or officer of the unified judicial system or the General
Assembly and its agencies or officers.
"Independent agency." A board, commission, authority or
other agency or officer of the Commonwealth which is not subject
to the policy supervision and control of the Governor. The term
does not include a court or other agency or officer of the
unified judicial system or the General Assembly and its agencies
or officers.
"Recipient." A person or entity that receives a State grant
or loan award from an awarding agency.
"State grant or loan." A State grant or loan authorized by a
law of this Commonwealth. The term does not include any of the
following:
(1) A tax benefit or tax credit as defined in section
1701-A.1 of the act of March 4, 1971 (P.L.6, No.2), known as
the Tax Reform Code of 1971.
(2) A procurement as defined in 62 Pa.C.S. ยง 103
(relating to definitions).
(3) Money appropriated or transferred for any other
purpose other than a State grant or loan.
Section 3. Mandatory contract provisions to prevent misuse of
State grants or loans.
A contract executed for a State grant or loan between an
awarding agency and a recipient on or after the effective date
of this section shall include, at a minimum, the following:
(1) The awarding agency shall notify the recipient in
writing upon determining any of the following:
(i) The awarding agency improperly awarded the State
grant or loan to the recipient.
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(ii) The benefits of the State grant or loan were
improperly conferred.
(iii) The recipient failed to comply with the terms
of the contract.
(2) The determination under paragraph (1) may be
appealed in accordance with 2 Pa.C.S. Ch. 5 Subch. A
(relating to practice and procedure of Commonwealth
agencies).
(3) The recipient shall repay the proceeds of the State
grant or loan to the awarding agency upon receipt of the
notice under paragraph (1) or final disposition of the appeal
under paragraph (2), if applicable, and no later than the
deadline for repayment specified in the contract.
(4) The repayment under paragraph (3) shall be in the
form of a check payable to the Commonwealth. The recipient
shall forward the check to the awarding agency via first
class mail in a manner specified in the contract.
(5) The repayment under paragraph (3) shall include the
amount of the State grant or loan and all interest, income,
accumulations and the monetary equivalent of any appreciation
in value of real, personal or mixed property purchased with
the proceeds of the State grant or loan.
(6) Upon the failure of the recipient to make the
repayment under paragraph (3) in a timely manner in
accordance with the contract, the awarding agency may assess
a civil penalty equal to the repayment required under
paragraph (5) plus an additional amount specified in the
contract as determined by the awarding agency.
(7) In the case of an inability to collect the civil
penalty under paragraph (6) or failure of a recipient to pay
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all or a portion of the civil penalty, the awarding agency
may refer the matter to the Office of Attorney General, which
shall institute an action in the appropriate court to recover
the penalty.
Section 4. Construction.
Nothing in this act shall be construed to prohibit a contract
executed for a State grant or loan between an awarding agency
and a recipient on or after the effective date of this section
from containing conditions, requirements or limitations that are
more stringent than required under this act.
Section 5. Applicability.
This act shall only apply to a contract executed for a State
grant or loan between an awarding agency and a recipient on or
after the effective date of this section.
Section 6. Effective date.
This act shall take effect in 60 days.
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