SB 222 — An Act amending the act of April 9, 1929 (P.L.343, No.176), known as The Fiscal Code, providing for grant oversight.

PRINTER'S NO.   171

                  THE GENERAL ASSEMBLY OF PENNSYLVANIA



                      SENATE BILL
                      No. 222
                                             Session of
                                               2025

     INTRODUCED BY PHILLIPS-HILL, PENNYCUICK, J. WARD AND DUSH,
        FEBRUARY 3, 2025

     REFERRED TO INTERGOVERNMENTAL OPERATIONS, FEBRUARY 3, 2025


                                  AN ACT
 1   Amending the act of April 9, 1929 (P.L.343, No.176), entitled
 2      "An act relating to the finances of the State government;
 3      providing for cancer control, prevention and research, for
 4      ambulatory surgical center data collection, for the Joint
 5      Underwriting Association, for entertainment business
 6      financial management firms, for private dam financial
 7      assurance and for reinstatement of item vetoes; providing for
 8      the settlement, assessment, collection, and lien of taxes,
 9      bonus, and all other accounts due the Commonwealth, the
10      collection and recovery of fees and other money or property
11      due or belonging to the Commonwealth, or any agency thereof,
12      including escheated property and the proceeds of its sale,
13      the custody and disbursement or other disposition of funds
14      and securities belonging to or in the possession of the
15      Commonwealth, and the settlement of claims against the
16      Commonwealth, the resettlement of accounts and appeals to the
17      courts, refunds of moneys erroneously paid to the
18      Commonwealth, auditing the accounts of the Commonwealth and
19      all agencies thereof, of all public officers collecting
20      moneys payable to the Commonwealth, or any agency thereof,
21      and all receipts of appropriations from the Commonwealth,
22      authorizing the Commonwealth to issue tax anticipation notes
23      to defray current expenses, implementing the provisions of
24      section 7(a) of Article VIII of the Constitution of
25      Pennsylvania authorizing and restricting the incurring of
26      certain debt and imposing penalties; affecting every
27      department, board, commission, and officer of the State
28      government, every political subdivision of the State, and
29      certain officers of such subdivisions, every person,
30      association, and corporation required to pay, assess, or
31      collect taxes, or to make returns or reports under the laws
32      imposing taxes for State purposes, or to pay license fees or
33      other moneys to the Commonwealth, or any agency thereof,
34      every State depository and every debtor or creditor of the
 1      Commonwealth," providing for grant oversight.
 2      The General Assembly of the Commonwealth of Pennsylvania
 3   hereby enacts as follows:
 4      Section 1.     The act of April 9, 1929 (P.L.343, No.176), known
 5   as The Fiscal Code, is amended by adding an article to read:
 6                               ARTICLE XVIII-B
 7                               GRANT OVERSIGHT
 8                                SUBARTICLE A
 9                           PRELIMINARY PROVISIONS
10   Section 1801-B.    Scope of article.
11      This article relates to grant oversight.
12   Section 1802-B.    Definitions.
13      The following words and phrases when used in this article
14   shall have the meanings given to them in this section unless the
15   context clearly indicates otherwise:
16      "Commonwealth agency."     Any of the following:
17          (1)    The Governor's Office.
18          (2)    A department, board, commission, authority or other
19      agency of the Commonwealth that is subject to the policy
20      supervision and control of the Governor.
21          (3)    The Office of Lieutenant Governor.
22          (4)    An independent department.
23          (5)    An independent agency.
24      "Grant."   As follows:
25          (1)    A commitment of money and programmatic authority by
26      a Commonwealth agency serving as the grantor to an outside
27      entity for the purpose of carrying out public policy or
28      implementing program service delivery.
29          (2)    The term does not include a procurement in which the
30      grantor receives specific goods or services for the grantor's


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 1      direct benefit or use.
 2      "Grantee."      An outside entity that contracts with a
 3   Commonwealth agency to receive grant funding.
 4      "Grantor."      A Commonwealth agency administering a grant.
 5      "Independent agency."      As follows:
 6          (1)     A board, commission, authority or other agency of
 7      the Commonwealth that is not subject to the policy
 8      supervision and control of the Governor.
 9          (2)     The term does not include:
10                (i)    A court or agency of the unified judicial
11          system.
12                (ii)    The General Assembly or an agency of the
13          General Assembly.
14      "Independent department."      Any of the following:
15          (1)     The Department of the Auditor General.
16          (2)     The Treasury Department.
17          (3)     The Office of Attorney General.
18          (4)     A board or commission of an entity under paragraph
19      (1), (2) or (3).
20      "Municipality."      A county, city, borough, incorporated town
21   or township.
22      "Outside entity."      As follows:
23          (1)     A person that is not a Commonwealth agency.
24          (2)     The term includes the following:
25                (i)    An individual.
26                (ii)    A municipality.
27                (iii)    A school district.
28                (iv)    A nonprofit organization.
29                (v)    A service provider.
30      "Project."      An activity, program or task that is funded

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 1   through a grant.
 2                                 SUBARTICLE B
 3                           REQUIREMENTS FOR GRANTS
 4   Section 1811-B.     Applicability.
 5      This subarticle is subject to Subarticle C.
 6   Section 1812-B.     Disclosure of additional funding sources.
 7      If money for a grant is paid by a Commonwealth agency to a
 8   grantee but the amount is insufficient to cover the total cost
 9   of the project and other money is being sought to fully fund the
10   project, the grantee shall disclose to the Commonwealth agency
11   the additional funding sources and identify the specific grant
12   subproject or category to which Commonwealth grant money will be
13   applied.
14   Section 1813-B.     Use of Commonwealth funds.
15      Money provided by a Commonwealth agency for a grant to a
16   grantee shall only be used after the grantee exhausts other
17   sources of funding for the project that was the subject of the
18   grant, unless the Commonwealth agency specifically waives this
19   requirement in writing.
20   Section 1814-B.     Bonuses prohibited.
21      (a)     Prohibition.--A bonus to an individual or entity may not
22   be paid with any part of grant money provided by a Commonwealth
23   agency.
24      (b)     Penalty.--The payment of a bonus under subsection (a)
25   shall automatically trigger the immediate repayment of the grant
26   money.
27   Section 1815-B.     Monitoring and reporting.
28      A grant award shall specify the following:
29             (1)   Regular monitoring by the Commonwealth agency
30      providing the grant.

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 1            (2)   Reporting by the grantee to the Commonwealth agency
 2      providing the grant, at least on a semiannual basis,
 3      regarding expenditures, performance and progress associated
 4      with the grant.
 5   Section 1816-B.    Specific purpose.
 6      Grant money that is not expended for the specific tasks for
 7   which the grant was awarded shall be returned to the
 8   Commonwealth, with interest, within 30 days of the final
 9   closeout audit regarding the grant.
10   Section 1817-B.    Remaining money.
11      The following shall apply to money designated for a project,
12   after the period for the grant has concluded or if the project
13   has been completed:
14            (1)   If a grantee obtains money from a funding source
15      other than a Commonwealth agency, after the payment of grant
16      money by the Commonwealth agency, and if money paid by the
17      Commonwealth agency remains unspent, the grantee shall
18      reimburse the Commonwealth an amount equal to the money
19      received from the other funding source, up to the amount of
20      the grant provided by the Commonwealth agency, with interest.
21            (2)   If a grantee obtains money from a funding source
22      other than a Commonwealth agency and that money remains
23      unspent, the grantee shall pay the Commonwealth that unspent
24      amount as a reimbursement of the grant money provided by the
25      Commonwealth agency, up to the amount of the grant provided
26      by the Commonwealth agency, with interest.
27                                SUBARTICLE C
28                             COMPETITIVE GRANTS
29   Section 1821-B.    Scope of subarticle.
30      (a)   Competitive application process.--This subarticle shall

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 1   apply to grants awarded by a Commonwealth agency through a
 2   competitive application process.
 3      (b)   Excluded entities.--This subarticle shall not apply to
 4   the following:
 5            (1)   A municipality.
 6            (2)   A school district.
 7            (3)   A community college.
 8            (4)   An institution within the State System of Higher
 9      Education.
10            (5)   A State-related university.
11   Section 1822-B.    Contents of grant agreement.
12      An agreement underlying a grant award shall contain the
13   following:
14            (1)   A statement that the grantee agrees to repay the
15      Commonwealth the balance of the grant money paid by the
16      Commonwealth agency that is not expended by the grantee for
17      the specific purpose for which the grant was awarded.
18            (2)   A statement that the grantee agrees, if the grantee
19      obtains money for the project from a funding source other
20      than the Commonwealth agency after payment of the grant money
21      by the Commonwealth agency, to reimburse the Commonwealth an
22      amount equal to the money received from the other funding
23      source. The amount shall not exceed the amount of the grant
24      provided by the Commonwealth agency but shall include
25      interest.
26            (3)   A statement that the grantee agrees, if the
27      Commonwealth agency determines that the grantee
28      misrepresented the grantee's efforts to obtain funding as
29      specified under section 1823-B(1)(ii), to repay the
30      Commonwealth the full amount of the grant plus a 10% penalty

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 1      on the face amount of the grant.
 2             (4)   A statement that the grantee agrees that the
 3      Commonwealth agency may set off the amount of any State tax
 4      liability or other obligation of the grantee or its
 5      subsidiaries to the Commonwealth against any payments due to
 6      the grantee under the grant.
 7             (5)   Clear procedures for the Commonwealth agency to
 8      enforce the agreement and obtain repayment in light of a
 9      breach of the agreement or failure of the grantee to comply
10      with this article.
11   Section 1823-B.         Payment to grantee.
12      A grant may not be paid by a Commonwealth agency to a grantee
13   unless:
14             (1)   The grantee has demonstrated the following to the
15      satisfaction of the Commonwealth agency through written
16      documentation:
17                   (i)    That the grantee has exercised due diligence in
18             making reasonable efforts to obtain funding from other
19             sources for the expenses for which the grant is being
20             requested.
21                   (ii)    The results of the grantee's efforts under
22             subparagraph (i).
23                   (iii)    The projected total cost of the project that
24             is subject to the grant.
25             (2)   The grantee has acted in accordance with the
26      conditions specified under section 1822-B(1), (2), (3) and
27      (4).
28   Section 1824-B.         Competitive application process.
29      Subject to 62 Pa.C.S. (relating to procurement) and unless
30   otherwise provided in enabling legislation for the allocation of

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 1   grants, an award of a grant by a Commonwealth agency that will
 2   involve a project for construction, production, machinery,
 3   equipment or services exceeding $10,000 shall be made only after
 4   a competitive application process.
 5   Section 1825-B.    Misrepresentation.
 6      If a Commonwealth agency determines that a grantee
 7   misrepresented the grantee's efforts to obtain funding as
 8   provided under section 1823-B(1)(ii), the grantee shall repay
 9   the Commonwealth the full amount of the grant plus a 10% penalty
10   on the face amount of the grant.
11      Section 2.     This act shall apply to an agreement underlying a
12   grant award that is made on or after the effective date of this
13   section.
14      Section 3.     This act shall take effect in 60 days.




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