State Agency Payments to Grant Recipients

Currently, when a state agency awards a grant to a nonprofit organization (grantee), the grantee is generally required to access the grant award by applying for the reimbursement of costs incurred in completing the activity for which the state agency awarded the grant.

The bill allows a state agency, in contracting with any grantee, to dispense up to 25% of the total value of the payments under the contract to the grantee immediately upon executing or renewing the contract. A grantee may only expend money from such a payment on expenses that the grantee incurs in connection with the relevant contract.

The bill does not prevent a state agency, in contracting with a grantee, from:

• Using a waiver process available through state or federal rules to dispense a percentage of the total value of the payments under a contract to a grantee immediately upon the execution or renewal of the contact; or
• For a state agency that, as of the effective date of the bill, already dispenses a percentage of the total value of the payments under a contract to a grantee immediately upon executing or renewing the contract, continuing to dispense the payments as it did before the effective date of the bill.

A grantee that is paid a percentage of the total value of the payments under a contract with a state agency immediately upon executing or renewing the contract is required to comply with all of the reporting requirements specified in the contract.

(Note: This summary applies to this bill as introduced.)