A04998
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2481
Session of
2022
INTRODUCED BY GROVE, STAMBAUGH, KAUFFMAN, MILLARD, RYAN,
PICKETT, HAMM, SMITH, SAYLOR, COX AND MOUL, APRIL 4, 2022
REFERRED TO COMMITTEE ON STATE GOVERNMENT, APRIL 4, 2022
AN ACT
Amending Title 62 (Procurement) of the Pennsylvania Consolidated
Statutes, providing for sanction-free procurement.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 62 of the Pennsylvania Consolidated
Statutes is amended by adding a chapter to read:
CHAPTER 35A
SANCTION-FREE PROCUREMENT
Sec.
35A01. Definitions.
35A02. Engaging in investment activities.
35A03. List of persons engaged in investment activities.
35A04. Certification.
35A05. Penalties for false certification.
35A06. Exceptions.
§ 35A01. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
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context clearly indicates otherwise:
"Department." The Department of General Services of the
Commonwealth.
"Financial institution." The term as defined in section 14
of the Iran Sanctions Act of 1996 (Public Law 104-172, 50 U.S.C.
§ 1701).
"Person." An individual, organization, financial
institution, sole proprietorship, association, corporation,
partnership, joint venture, limited partnership, limited
liability partnership, limited liability company or other entity
or business association that exists for the purpose of making a
profit, or government entity that includes a multilateral
development institution as defined in section 1701 of the
International Financial Institutions Act (Public Law 95-118, 22
U.S.C. § 262r).
"Prohibited state." A nation state, a government or an
agency or instrumentality of a nation state that appears on the
United States list of State Sponsors of Terrorism or the United
States Economic Sanctions Programs list.
"Social development company." A company whose primary
purpose in a prohibited state is to provide humanitarian goods
or services, including:
(1) Medicine or medical equipment.
(2) Agricultural supplies or infrastructure.
(3) Educational opportunities.
(4) Journalism-related activities.
(5) Information or information materials.
(6) Spiritual-related activities.
(7) Services of a purely clerical or reporting nature.
(8) Food, clothing or general consumer goods.
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§ 35A02. Engaging in investment activities.
A person or financial institution engages in an investment
activity by doing any of the following:
(1) Providing goods or services worth $20,000,000 to a
prohibited state.
(2) Extending at least $20,000,000 in credit to a person
for 45 days or more if all of the following apply:
(i) The person uses the credit to provide goods or
services to a prohibited state.
(ii) The person is, at the time the financial
institution or person extends credit, identified on a
list created under section 35A03 (relating to list of
persons engaged in investment activities).
§ 35A03. List of persons engaged in investment activities.
(a) List.--The department shall develop a list of persons
that the department determines are engaged in investment
activities in a prohibited state as described under section
35A02 (relating to engaging in investment activities). The
department shall make its determination based on publicly
available, credible information. The department shall update the
list every 180 days. Ninety days prior to adding a person to the
list, the department shall do all of the following:
(1) Provide notice to the person of the department's
intention to add the person to the list. The notice shall
inform the person that inclusion on the list makes the person
ineligible to enter into a contract with a Commonwealth
entity for goods or services worth at least $1,000,000. The
notice shall specify that if the person ceases to engage in
investment activities in a prohibited state, the person may
regain eligibility upon removal from the list.
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(2) Provide the person an opportunity to comment in
writing to the department. The person shall maintain
eligibility if the person demonstrates no engagement in
investment activities in a prohibited state.
(b) Ineligibility of persons on list.--A person identified
on a list under subsection (a) shall be ineligible to enter into
a contract with a Commonwealth entity to provide for goods or
services worth at least $1,000,000.
(c) Provision of list.--The department shall post the list
on its publicly accessible Internet website. Upon request, the
department shall provide the list free of charge to the General
Assembly or a public entity.
(d) Investment service contracts.--Service contracts entered
into by Commonwealth entities for the management and investment
of a fund for which there is a fiduciary responsibility and for
which compliance with the act of July 2, 2010 (P.L.266, No.44),
known as the Protecting Pennsylvania's Investments Act, is
required shall be exempt from the provisions of this chapter.
(e) Exception.--On a case-by-case basis, the department may
permit a person engaging in investment activities in a
prohibited state to enter into a contract with a Commonwealth
entity for goods or services worth at least $1,000,000 if any of
the following apply:
(1) The investment activities in the prohibited state
were made before and were not expanded after July 1, 2015.
(2) The person refrains from entering into new
agreements to engage in any future investment activities in a
prohibited state.
(3) The department determines that the Commonwealth
entity has no other cost-effective method of obtaining the
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goods or services than entering into a contract with the
person.
§ 35A04. Certification.
(a) General rule.--The department shall make available a
certification form indicating that a person is not on the list
under section 35A03(a) (relating to list of persons engaged in
investment activities) and is eligible under this chapter to
contract with the Commonwealth. Prior to entering into a
contract with a Commonwealth entity, a person shall provide a
certification form to the Commonwealth entity unless the person
is exempt under section 35A03(e).
(b) Right to cure.--The following shall apply:
(1) If the department determines, using credible
information available to the public, that a person has
submitted a false certification under subsection (a), the
person shall be provided with written notice and an
opportunity to demonstrate to the department that the person
has ceased its engagement in investment activities in a
prohibited state within 90 days of the notice.
(2) A person that reasonably demonstrates to the
department that the person has ceased its engagement in
investment activities in a prohibited state within 90 days
after the written notice shall not be subject to the
penalties under section 35A05 (relating to penalties for
false certification).
§ 35A05. Penalties for false certification.
(a) Penalties.--Subject to the provisions of section
35A04(b) (relating to certification), if the department
determines that a person has provided a false certification form
to a Commonwealth entity under section 35A04, the person shall
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be subject to the following:
(1) A civil penalty in the amount of $250,000, or twice
the amount of the contract, whichever is greater. Only one
civil penalty may be imposed upon a person per investment.
(2) Suspension of the existing contract with the
Commonwealth entity for a period of three years from the date
of the determination that the person submitted the false
certification. Following the three-year suspension period,
the Commonwealth entity or the department may terminate the
contract.
(b) Report of false certification.--The department shall
report to the Attorney General the name of the person that
submitted the false certification and the pertinent information
that led to the department's determination. No later than three
years after the department makes a determination under
subsection (a), the Attorney General shall determine whether to
bring a civil action against the person to collect the penalty
described in subsection (a). If a court determines the person
submitted a false certification, the person shall pay all
reasonable costs and fees incurred in the civil action.
Reasonable costs shall include the reasonable costs incurred by
the Commonwealth entity in investigating the authenticity of the
certification. Only one civil action against the person may be
brought for a false certification on a contract.
(c) No private right of action.--Nothing in this section may
be construed to create or authorize a private right of action.
§ 35A06. Exceptions.
The department shall have no obligations under this chapter
with respect to a person engaged in investment activities in a
prohibited state upon the occurrence of any of the following:
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(1) The prohibited state does not appear on the United
States list of State Sponsors of Terrorism.
(2) The prohibited state does not appear on the United
States Economic Sanctions Programs list.
(3) The President or Congress of the United States,
through legislation or executive order, declares that
mandatory divestment of the type provided for in this chapter
interferes with the conduct of United States foreign policy.
Section 2. This act shall take effect in 60 days.
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