Plagiarism of a co-author?
Re-using text from a previous paper on which one was an author is known as self plagiarism. Opinions vary on the gravity of this sin, but it is pretty clearly not best practice. In my opinion, re-use should be allowed for descriptions of methods or presentations of proofs, provided that they are adequately flagged as such with citation to the original paper. "Following our previous analysis (Smith et al 2013), our methods are as follows..." If no citation is provided, this seems to me to be a transgression. 

Authorship order is not relevant. Self-plagiarizing from a second author paper is no better or worse than doing so from a first author paper. Overall, you seem to have a misunderstanding of how collaboration works. Once two people collaborate on a paper, the output belongs to them jointly. One author does not have greater ownership over a particular paragraph what for having written the initial text of that paragraph.

I would hope you would directly discuss this with the PI before going to a funding body. 

Depending on the circumstances, using your text may or may not be plagiarism. If I am paying an RA to work on a paper but she does not rise to the level of authorship, I see no obvious reason why I cannot ask the RA to help draft portions of the text. Similarly, PIs routinely ask graduate students and postdocs to help prepare grant proposals on which the PI is the sole author. I've never heard this considered to be plagiarism.