Substitute House Bill No. 5255 aims to improve the oversight and management of legislatively earmarked grants (LEGs) by establishing specific requirements for state agencies, recipients, and subrecipients. The bill defines LEGs as state funds authorized by the General Assembly through special or public acts, including appropriated and bond funds. Key provisions include the requirement for the Office of Policy and Management (OPM) to develop a standard contract template for LEGs, which must be utilized by all state agencies starting January 1, 2027. OPM is also tasked with creating eligibility verification processes for subrecipients, developing a best practices training program for state agencies, and mandating annual reporting on LEGs and subawards.

The bill introduces new legal language defining terms such as "subaward" and "subrecipient," and specifies that the Secretary of OPM must develop these requirements by December 1, 2026. It establishes new reporting requirements for state agencies to submit annual reports detailing all LEG awards and subawards disbursed, starting December 1, 2027, which must include evaluations of recipients and any concerns from the state agencies. OPM is required to compile these reports into an annual summary for submission to relevant legislative committees beginning January 1, 2028. Overall, the bill enhances accountability and transparency in the management of state grants while ensuring that state agencies are equipped with the necessary tools and training to comply with the new regulations.