Regular Session 2019-2020 Senate Bill 1034 P.N. 1718

PRIOR PRINTER'S NO. 1539

PRINTER'S NO. 1718

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

1034

Session of

2020

INTRODUCED BY PHILLIPS-HILL AND MENSCH, FEBRUARY 13, 2020

SENATOR MASTRIANO, INTERGOVERNMENTAL OPERATIONS, AS AMENDED,

MAY 27, 2020

AN ACT

Amending the act of April 9, 1929 (P.L.343, No.176), entitled,

as amended, "An act relating to the finances of the State

government; providing for cancer control, prevention and

research, for ambulatory surgical center data collection, for

the Joint Underwriting Association, for entertainment

business financial management firms, for private dam

financial assurance and for reinstatement of item vetoes;

providing for the settlement, assessment, collection, and

lien of taxes, bonus, and all other accounts due the

Commonwealth, the collection and recovery of fees and other

money or property due or belonging to the Commonwealth, or

any agency thereof, including escheated property and the

proceeds of its sale, the custody and disbursement or other

disposition of funds and securities belonging to or in the

possession of the Commonwealth, and the settlement of claims

against the Commonwealth, the resettlement of accounts and

appeals to the courts, refunds of moneys erroneously paid to

the Commonwealth, auditing the accounts of the Commonwealth

and all agencies thereof, of all public officers collecting

moneys payable to the Commonwealth, or any agency thereof,

and all receipts of appropriations from the Commonwealth,

authorizing the Commonwealth to issue tax anticipation notes

to defray current expenses, implementing the provisions of

section 7(a) of Article VIII of the Constitution of

Pennsylvania authorizing and restricting the incurring of

certain debt and imposing penalties; affecting every

department, board, commission, and officer of the State

government, every political subdivision of the State, and

certain officers of such subdivisions, every person,

association, and corporation required to pay, assess, or

collect taxes, or to make returns or reports under the laws

imposing taxes for State purposes, or to pay license fees or

other moneys to the Commonwealth, or any agency thereof,

every State depository and every debtor or creditor of the

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Commonwealth," providing for grant oversight.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The act of April 9, 1929 (P.L.343, No.176), known

as The Fiscal Code, is amended by adding an article to read:

ARTICLE XVIII

GRANT OVERSIGHT

SUBARTICLE A

PRELIMINARY PROVISIONS

Section 1801. Scope of article.

This article relates to grant oversight.

Section 1802. Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Commonwealth agency." Any of the following:

(1) The Governor's Office.

(2) A department, board, commission, authority or other

agency of the Commonwealth that is subject to the policy

supervision and control of the Governor.

(3) The Office of Lieutenant Governor.

(4) An independent department.

(5) An independent agency.

"Grant." As follows:

(1) A commitment of money and programmatic authority by

a Commonwealth agency serving as the grantor to an outside

entity for the purpose of carrying out public policy or

implementing program service delivery.

(2) The term does not include a procurement in which the

grantor receives specific goods or services for the grantor's

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direct benefit or use.

"Grantee." An outside entity that contracts with a

Commonwealth agency to receive grant funding.

"Grantor." A Commonwealth agency administering a grant.

"Independent agency." As follows:

(1) A board, commission, authority or other agency of

the Commonwealth that is not subject to the policy

supervision and control of the Governor.

(2) The term does not include:

(i) A court or agency of the unified judicial

system.

(ii) T he General Assembly or an agency of the

General Assembly.

"Independent department." Any of the following:

(1) The Department of the Auditor General.

(2) The Treasury Department.

(3) The Office of Attorney General.

(4) A board or commission of an entity under paragraph

(1), (2) or (3).

"Municipality." A county, city, borough, incorporated town

or township.

"Outside entity." As follows:

(1) A person that is not a Commonwealth agency.

(2) The term includes, but is not limited to, the

following:

(i) An individual.

(ii) A municipality.

(iii) A school district.

(iv) A nonprofit organization.

(v) A service provider.

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"Project." An activity, program or task that is funded

through a grant.

SUBARTICLE B

REQUIREMENTS FOR GRANTS

Section 1811. Applicability.

This article is subject to Subarticle C.

Section 1812. Disclosure of additional funding sources.

If money for a grant is paid by a Commonwealth agency to a

grantee but the amount is insufficient to cover the total cost

of the project and other money is being sought to fully fund the

project, the grantee shall disclose to the Commonwealth agency

the additional funding sources and identify the specific grant

subproject or category to which Commonwealth grant money will be

applied.

Section 1813. Use of Commonwealth funds.

Money provided by a Commonwealth agency for a grant to a

grantee shall only be used after the grantee exhausts other

sources of funding for the project that was the subject of the

grant, unless the Commonwealth agency specifically waives this

requirement in writing.

Section 1814. Bonuses prohibited.

(a) Prohibition.--A bonus to an individual or entity may not

be paid with any part of grant money provided by a Commonwealth

agency.

(b) Penalty.--The payment of a bonus under subsection (a)

shall automatically trigger the immediate repayment of the grant

money.

Section 1815. Monitoring and reporting.

A grant award shall specify the following:

(1) Regular monitoring by the Commonwealth agency

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providing the grant.

(2) Reporting by the grantee to the Commonwealth agency

providing the grant, at least on a semiannual basis,

regarding expenditures, performance and progress associated

with the grant.

Section 1816. Specific purpose.

Grant money that is not expended for the specific tasks for

which the grant was awarded shall be returned to the

Commonwealth, with interest, within 30 days of the final

closeout audit regarding the grant.

Section 1817. Remaining money.

The following shall apply to money designated for a project,

after the period for the grant has concluded or if the project

has been completed:

(1) If a grantee obtains money from a funding source

other than a Commonwealth agency, after the payment of grant

money by the Commonwealth agency, and if money paid by the

Commonwealth agency remains unspent, the grantee shall

reimburse the Commonwealth an amount equal to the money

received from the other funding source, up to the amount of

the grant provided by the Commonwealth agency, with interest.

(2) If EXCEPT AS PROVIDED UNDER THE REDEVELOPMENT

ASSISTANCE CAPITAL PROGRAM, IF a grantee obtains money from a

funding source other than a Commonwealth agency and that

money remains unspent, the grantee shall pay the Commonwealth

that unspent amount as a reimbursement of the grant money

provided by the Commonwealth agency, up to the amount of the

grant provided by the Commonwealth agency, with interest.

SUBARTICLE C

COMPETITIVE GRANTS

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Section 1821. Scope of subarticle.

(a) Competitive application process.--This subarticle shall

apply to grants awarded by a Commonwealth agency through a

competitive application process.

(b) Excluded entities.--This subarticle shall not apply to

the following:

(1) A municipality.

(2) A school district.

(3) A community college.

(4) An institution within the State System of Higher

Education.

(5) A State-related university.

Section 1822. Contents of grant agreement.

An agreement underlying a grant award shall contain the

following:

(1) A statement that the grantee agrees to repay the

Commonwealth the balance of the grant money paid by the

Commonwealth agency that is not expended by the grantee for

the specific purpose for which the grant was awarded.

(2) A statement that the grantee agrees, if the grantee

obtains money for the project from a funding source other

than the Commonwealth agency after payment of the grant money

by the Commonwealth agency, to reimburse the Commonwealth an

amount equal to the money received from the other funding

source. The amount shall not exceed the amount of the grant

provided by the Commonwealth agency but shall include

interest.

(3) A statement that the grantee agrees, if the

Commonwealth agency determines that the grantee

misrepresented the grantee's efforts to obtain funding as

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specified under section 1823(1)(ii), to repay the

Commonwealth the full amount of the grant plus a 10% penalty

on the face amount of the grant.

(4) A statement that the grantee agrees that the

Commonwealth agency may set off the amount of any State tax

liability or other obligation of the grantee or its

subsidiaries to the Commonwealth against any payments due to

the grantee under the grant.

(5) Clear procedures for the Commonwealth agency to

enforce the agreement and obtain repayment in light of a

breach of the agreement or failure of the grantee to comply

with this article.

Section 1823. Payment to grantee.

A grant may not be paid by a Commonwealth agency to a grantee

unless:

(1) The grantee has demonstrated the following to the

satisfaction of the Commonwealth agency through written

documentation:

(i) That the grantee has exercised due diligence in

making reasonable efforts to obtain funding from other

sources for the expenses for which the grant is being

requested.

(ii) The results of the grantee's efforts under

subparagraph (i).

(iii) The projected total cost of the project that

is subject to the grant.

(2) The grantee has acted in accordance with the

conditions specified under section 1822(1), (2), (3) and (4).

Section 1824. Competitive application process.

Subject to 62 Pa.C.S. (relating to procurement) and unless

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otherwise provided in enabling legislation for the allocation of

grants, an award of a grant by a Commonwealth agency that will

involve a project for construction, production, machinery,

equipment or services exceeding $10,000 shall be made only after

a competitive application process.

Section 1825. Misrepresentation.

If a Commonwealth agency determines that a grantee

misrepresented the grantee's efforts to obtain funding as

provided under section 1823(1)(ii), the grantee shall repay the

Commonwealth the full amount of the grant plus a 10% penalty on

the face amount of the grant.

Section 2. This act shall apply to an agreement underlying a

grant award that is made on or after the effective date of this

act.

Section 3. This act shall take effect in 60 days.

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