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