District Of Columbia 2023-2024 Regular Session

District Of Columbia Council Bill B25-0659 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	COUNCIL OF THE DISTRICT OF COLUMBIA
2	2	The John A. Wilson Building
3	3	1350 Pennsylvania Avenue, NW
4	4	Washington, D.C. 20004
5	5	1
6	6	Statement of Introduction
7	7	Public Incentive Transparency and Accountability Act of 2024
8	8	January 8, 2024
9	9	Today, along with Councilmembers
10	10	Brianne K. Nadeau, Charles Allen, Kenyan R. McDuffie,
11	11	Anita Bonds, Zachary Parker, and Robert C. White, Jr., I am introducing the Public Incentive
12	12	Transparency and Accountability Act of 202
13	13	4. This legislation would give the District tools to
14	14	recapture public funds that are awarded to a non-governmental entity that violates the terms of a
15	15	contract, grant, incentive, subsidy, or tax relief agreement with the District.
16	16	Each year, the District pays millions of dollars of taxpayer monies to contractors, grantees,
17	17	organizations, and individuals with the expectation that the services and goods that these entities
18	18	agreed to provide to the District will be delivered according to the terms of the agreement.
19	19	However, the District government does not holistically review recipients’ compliance with the
20	20	terms of an agreement. Currently, when recipients fail to satisfy the terms or goals of an
21	21	incentive agreement, the District may bar that entity from being awarded additional District
22	22	contracts in the future, but the squandered public funds cannot be recovered easily. There is not a
23	23	universally applicable mechanism by which the District can claw back the misspent taxpayer
24	24	dollars from the recipient.
25	25	In addition to rectifying these
26	26	gaps by establishing recapture criteria for public incentives and
27	27	requiring the Mayor to collect publicly funded incentives eligible for recapture, this bill would
28	28	establish a reporting requirement that will include recaptured amounts organized by awarding
29	29	body, amount recaptured, and recipient information. It also establishes a timeline for the Mayor
30	30	to submit a report to Council outlining all recaptures in process. This bill would require the
31	31	District government to closely review repeat recipients’ records and institute accountability tools
32	32	for new
33	33	potential recipients.
34	34	An Office of the Inspector General evaluation noted that inadequate monitoring of contracts and
35	35	deliverables increases the likelihood that services are inefficiently administered, may require
36	36	rework, and lead to program delays. Furthermore, a review of the DC Main Streets program also
37	37	found that a lack of internal controls made the program more exposed to fraud, waste, or abuse.
38	38	It is a basic good government practice to hold individuals paid with public funds accountable to
39	39	the agreements that they made. This protects residents and can lead to better service delivery for
40	40	the District. North Carolina passed a law that requires the state’s Department of Commerce to
41	41	reclaim mismanaged public incentives that impact services to residents and its program has been
42	42	quite successful at recapturing public funds. Such programs recognize that public fund recapture
43	43	Christina Henderson Committee Member
44	44	Councilmember, At-Large Hospital and Health Equity
45	45	Chairperson, Committee on Health Judiciary and Public Safety
46	46	Transportation and the Environment 2
47	47	provisions contribute to the overall stability of government services, protect residents, and
48	48	promote a culture of responsibility within organizations.
49	49	When a government awards public funds to non-governmental entities with the intent of
50	50	stimulating economic development, building infrastructure or community amenities, or providing
51	51	services to residents, it must monitor the recipient’s use of those public funds. This is important
52	52	not only for building residents’ trust in their government, but also for building trust with the
53	53	private and non-profit partners that the District partners with. I look forward to working with my
54	54	Council colleagues and the public to refine and advance this legislation during this Council
55	55	Period.
56	56	______________________________ ______________________________ 1
57	57	Councilmember Brianne K. Nadeau Councilmember Christina Henderson 2
58	58	3
59	59	4
60	60	______________________________ ______________________________ 5
61	61	Councilmember Charles Allen Councilmember Kenyan R. McDuffie 6
62	62	7
63	63	8
64	64	______________________________ ______________________________ 9
65	65	Councilmember Anita Bonds Councilmember Zachary Parker 10
66	66	11
67	67	12
68	68	13
69	69	______________________________ 14
70	70	Councilmember Robert C. White, Jr. 15
71	71	16
72	72	17
73	73	18
74	74	19
75	75	A BILL 20
76	76	21
77	77	________ 22
78	78	23
79	79	IN THE COUNCIL OF THE DISTRICT OF COLUMBIA 24
80	80	25
81	81	________________ 26
82	82	27
83	83	28
84	84	To require awarding bodies to review public incentive requirements and recipient compliance, 29
85	85	provide a mechanism for recapture when public incentive recipients do not meet the 30
86	86	goals outlined, and establish reporting requirements for all recaptured subsidies. 31
87	87	32
88	88	BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That 33
89	89	this act may be cited as the “Public Incentive Transparency and Accountability Act of 2024”. 34
90	90	Sec. 2. Definitions. 35
91	91	For the purposes of this act, the term: 36
92	92	(1) “Awarding body” means a District agency, board, commission, 37
93	93	instrumentality, or program designated to award and authorize a public incentive. 38 2
94	94	(2) “Public incentive” means a payment made by an awarding body to a recipient 39
95	95	for purposes of economic development, the provision of community services, financial relief, or 40
96	96	payment for services rendered, including: 41
97	97	(A) Contracts; 42
98	98	(B) Grants; 43
99	99	(C) Incentives; 44
100	100	(D) Payments in lieu of taxes; 45
101	101	(E) Subsidies; 46
102	102	(F) Tax abatements; 47
103	103	(G) Tax credits; and 48
104	104	(H) Tax exemptions. 49
105	105	(3) “Recapture” means the process by which all or part of a public incentive is 50
106	106	returned to the awarding body if the recipient does not fulfill its responsibilities under the terms 51
107	107	of the public incentive. 52
108	108	(4)“Recipient” means a non-governmental entity or person that receives a public53
109	109	incentive. 54
110	110	Sec. 3. Determination of public incentive subject to recapture. 55
111	111	(a)An awarding body shall maintain all documentation submitted by a recipient,56
112	112	including application materials, documentation of the terms and conditions related to the 57
113	113	public incentive, and any reports submitted by the recipient as a condition of receiving a 58
114	114	public incentive. 59
115	115	(b) Recipients shall maintain copies of the documents outlined in subsection (a) of this60
116	116	section, and documents demonstrating its actions that satisfy the terms and conditions of the 61 3
117	117
118	118	public incentive throughout the term of the public incentive and for 5 years following the 62
119	119	conclusion of the term of the public incentive. 63
120	120	(c) An awarding body shall require recipients to submit documentation demonstrating 64
121	121	their satisfaction of the terms and conditions of the public incentive as a condition of receiving 65
122	122	the public incentive and shall conduct periodic audits of recipient submissions to ensure that 66
123	123	the recipient met or is meeting the objectives of the public incentive. 67
124	124	(d) A public incentive is subject to recapture if the awarding body determines that: 68
125	125	(1) The recipient has failed to achieve the requirements outlined in the contract, 69
126	126	agreement, grant, subgrant, or guidelines of the public incentive, or 70
127	127	(2) The recipient fails to achieve requirements while the public incentive is in 71
128	128	effect. 72
129	129	Sec. 4 Incentive recapture. 73
130	130	(a) If an awarding body determines that a public incentive is subject to recapture, it 74
131	131	shall provide written notification within 30 days of its determination to the recipient stating 75
132	132	the amount of the public incentive that is subject to recapture with the reasons for recapture. 76
133	133	An awarding body shall provide the recipient with the specific facts and documents used in 77
134	134	making the awarding body’s determination. 78
135	135	(b)(1) A recipient may appeal a recapture notice by filing a notice of appeal to the 79
136	136	Office of Administrative Hearings (“OAH”) within 10 days of receiving the notice. The notice 80
137	137	of appeal shall include the documentation outlined in subsection (b) of section 3 and any other 81
138	138	information required by the awarding body. 82
139	139	(2) OAH shall conduct a hearing on the appeal pursuant to the procedures 83
140	140	outlined in section 109 of the District of Columbia Administrative Procedure Act, approved 84 4
141	141
142	142	October 21, 1968 (82 Stat. 1208; D.C. Official Code § 2-509), and pursuant to the rules of 85
143	143	OAH. 86
144	144	(c) Any recaptured amount that is deemed final shall be due and payable to the 87
145	145	awarding body and shall be collected from the grantee by the Mayor in any manner authorized 88
146	146	by law. 89
147	147	(d) Amounts identified for recapture shall accrue interest. 90
148	148	(e) Awarding bodies shall notify all current public incentive recipients of the 91
149	149	provisions of this act within 30 days of the applicability date of this act. 92
150	150	Sec. 5. Reporting. 93
151	151	(a) The Mayor shall maintain publicly accessible records of all recaptured amounts, 94
152	152	organized by awarding body, including the amount recaptured, the type of public incentive 95
153	153	recaptured, and recipient information. 96
154	154	(b) By September 30 of each year after the year this act is applicable, the Mayor shall 97
155	155	submit a report to the Council describing all recaptures in the previous Fiscal Year and all 98
156	156	recaptures in progress, which shall be organized by awarding body and include the amount of 99
157	157	public incentive sought for recapture, the type of public incentive sought for recapture, recipient 100
158	158	information, and the event that triggered the recapture. 101
159	159	Sec. 6. Fiscal impact statement. 102
160	160	The Council adopts the fiscal impact statement in the committee report as the fiscal 103
161	161	impact statement required by section 4a of the General Legislative Procedures Act of 1975, 104
162	162	approved October 16, 2006 (120 Stat. 2038; D.C. Official Code § 1-301.47a). 105
163	163	Sec. 7. Effective date. 106 5
164	164
165	165	This act shall take effect after approval by the Mayor (or in the event of veto by the 107
166	166	Mayor, action by the Council to override the veto), a 30-day period of congressional review as 108
167	167	provided in section 602(c)(1) of the District of Columbia Home Rule Act, approved December 109
168	168	24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(1)), and publication in the District of 110
169	169	Columbia Register. 111