PRIOR PRINTER'S NO. 819
PRINTER'S NO. 2167
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
AS REPORTED FROM COMMITTEE ON COMMERCE, HOUSE OF
REPRESENTATIVES, AS AMENDED, OCTOBER 18, 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 IF A State grant or loan AGREEMENT
between an awarding agency and a recipient DOES NOT PROVIDE
TERMS AND CONDITIONS ENSURING RECIPIENT ACCOUNTABILITY, A STATE
GRANT OR LOAN AGREEMENT EXECUTED 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:
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(i) The awarding agency improperly awarded the State
grant or loan to the recipient.
(ii) The benefits of the State grant or loan were
improperly conferred.
(iii) The recipient failed to comply with the
MATERIAL 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). STATE GRANT OR LOAN RESULTING IN FRAUD, ABUSE,
WASTE OR THE FRUSTRATION OF THE INTENDED PURPOSE OF A STATE
GRANT OR LOAN.
(3) (2) The recipient shall repay the proceeds of the
State grant or loan, SUBJECT TO THE DETERMINATION UNDER
PARAGRAPH (1), 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. AS
DETERMINED BY THE AWARDING AGENCY.
(4) (3) The repayment under paragraph (3) (2) 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. AND
MANNER DIRECTED BY THE AGENCY.
(5) (4) The repayment under paragraph (3) shall (2) MAY
include the amount of the State grant or loan SUBJECT TO THE
DETERMINATION UNDER PARAGRAPH (1) 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. AS DETERMINED BY THE
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AWARDING AGENCY.
(6) (5) Upon the failure of the recipient to make the
repayment under paragraph (3) in a timely manner (2) in
accordance with the contract STATE GRANT OR LOAN AGREEMENT,
the awarding agency may assess a civil penalty equal to the
repayment required under paragraph (5) (4) plus an additional
amount specified in the contract STATE GRANT OR LOAN
AGREEMENT as determined by the awarding agency., IN
ACCORDANCE WITH APPLICABLE FEDERAL AND STATE LAWS.
(7) (6) In the case of an inability to collect the civil
penalty under paragraph (6) (5) or failure of a recipient to
pay 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 AN EXECUTED State grant or loan AGREEMENT 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. THE FOLLOWING SHALL
APPLY:
(1) THIS ACT SHALL ONLY APPLY TO A STATE GRANT OR LOAN
AGREEMENT BETWEEN AN AWARDING AGENCY AND A RECIPIENT ON OR
AFTER THE EFFECTIVE DATE OF THIS SECTION.
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(2) THIS ACT SHALL NOT APPLY TO A STATE GRANT OR LOAN TO
THE EXTENT THIS ACT CONFLICTS WITH FEDERAL OR STATE LAW.
Section 6. Effective date.
This act shall take effect in 60 120 days.
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