HB 1274

HOUSE BILL 26-1274
BY REPRESENTATIVE(S) Lindsay and Duran, Bacon, Boesenecker,
Clifford, Espenoza, Nguyen, Rutinel, Sirota, Story, Zokaie, McCluskie;
also SENATOR(S) Wallace and Weissman, Benavidez, Cutter, Gonzales J.,
Jodeh, Kipp, Snyder, Coleman.
CONCERNING AUTHORIZATION FOR A STATE AGENCY TO AWARD A
         PERCENTAGE OF THE TOTAL VALUE OF A GRANT AGREEMENT TO A
         NONPROFIT GRANTEE OF A GRANT PROGRAM OF THE AGENCY UPON
         THE EXECUTION OR RENEWAL OF THE GRANT AGREEMENT, AND, IN
         CONNECTION THEREWITH, MAKING AN APPROPRIATION.
Be it enacted by the General Assembly of the State of Colorado:
         SECTION 1. In Colorado Revised Statutes, add part 3 to article 17
of title 24 as follows:
                              PART3
                PAYMENTS TO NONPROFIT GRANTEES
         24-17-301. Definitions.
        AS USED IN THIS PART 3, UNLESS THE CONTEXT OTHER WISE REQUIRES:
Capital letters or bold & italic numbers indicate new material added to existing law; dashes
through words or numbers indicate deletions from existing law and such material is not part of
the act.
      (1)    "ADMINISTERING STATE AGENCY" MEANS ANY DEPARTMENT,
COMMISSION, COUNCIL, BOARD, BUREAU, COMMITTEE, INSTITUTION OF
HIGHER EDUCATION, AGENCY, OR OTHER GOVERNMENTAL UNIT OF THE
EXECUTIVE, LEGISLATIVE, OR JUDICIAL BRANCH OF STATE GOVERNMENT,
INCLUDING THE OFFICE OF THE GOVERNOR, THAT ADMINISTERS A GRANT.
      (2) "GRANT" MEANS AN AGREEMENT IN WHICH AN ADMINISTERING
STATE AGENCY AS GRANTOR TRANSFERS ANYTHING OF VALUE TO A GRANTEE
TO CARRY OUT A PUBLIC PURPOSE OF SUPPORT OR STIMULATION AUTHORIZED
BY LAW INSTEAD OF ACQUIRING PROPERTY OR SERVICES FOR THE DIRECT
BENEFIT OR USE OF THE ADMINISTERING STATE AGENCY. A GRANT MAY
INCLUDE A DISTRIBUTION OF MONEY. A GRANT DOES NOT INCLUDE
DONATIONS.
      (3)    "GRANTEE" MEANS A RECIPIENT OF A GRANT THAT IS A
NONPROFIT ORGANIZATION AND THAT HAS SUBMITTED WRITTEN PROOF OF
SUCH CLASSIFICATION TO THE ADMINISTERING STATE AGENCY THAT
AWARDED THE GRANT.
      (4)      "NONPROFIT   ORGANIZATION"   MEANS      A   CHARITABLE
ORGANIZATION, AS DEFINED IN SECTION 39-26-102 (2.5).
      24-17-302. Dispensation of payments under grant agreements
with nonprofit grantees.
      (1) NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY,
AN ADMINISTERING STATE AGENCY MAY ADVANCE A PAYMENT TO A
GRANTEE ONLY FOR A STATE-FUNDED GRANT SUBJECT TO THE FOLLOWING
REQUIREMENTS:
      (a) THE ADMINISTER£NG STATE AGENCY SHALL:
      (I) HA VE AN EXISTING PROCESS OR DEVELOP A NEW PROCESS THAT
IS APPROVED BY THE STATE CONTROLLER TO DISPENSE AN ADVANCE
PAYMENT PURSUANT TO THIS SECTION;
      (II)   DISCLOSE THE AVAILABILITY OF ADVANCE PAYMENT IN ANY
NOTICE OF A GRANT FUNDING OPPORTUNITY, GRANT SOLICITATION, REQUEST
FOR APPLICATIONS, OR OTHER ANNOUNCEMENT ISSUED TO PROSPECTIVE
GRANTEES. THE DISCLOSURE MUST INCLUDE:
PAGE 2-HOUSE BILL 26-1274
      (A) THE ELIGIBILITY CRITERIA AND DOCUMENTATION REQUIRED TO
REQUEST AN ADVANCE PAYMENT PURSUANT TO THIS SECTION;
     (B) THE PROCESS BY WHICH A GRANTEE MAY REQUEST AN ADVANCE
PAYMENT FROM THE ADMINISTERING STATE AGENCY; AND
      (C) THE APPROVAL PROCESS OF THE ADVANCE PAYMENT REQUEST;
      (Ill) ENSURE THAT ANY ADVANCE PAYMENT TO A GRANTEE IS THE
MINIMUM AMOUNT NEEDED TO ACHIEVE THE OUTCOME OF ACTUAL,
IMMEDIATE CASH REQUIREMENTS OF THE GRANTEE IN CARRYING OUT THE
GRANT OBJECTIVE; AND
      (IV) USETHEOFFICEOFTHESTATECONTROLLER'SRISKASSESSMENT
TOOL TO DETERMINE WHETHER A GRANTEE IS HIGH, MEDIUM, OR LOW RISK
AND ALLOW ADVANCE PAYMENT ONLY TO A GRANTEE THAT IS DETERMINED
TO BE LOW RISK. AN ADMINISTERING STATE AGENCY MAY MODIFY THE
CONSIDERATIONS IN THE RISK ASSESSMENT TOOL DEPENDING ON THE
SPECIFIC SITUATION.
      (b) THE GRANTEE SHALL:
      (I) PROVIDE AN ITEMIZED BUDGET TO THE ADMINISTERING STATE
AGENCY FOR THE ELIGIBLE COSTS THAT THE ADVANCE PAYMENT WILL
COVER, THE INDIRECT OR OTHER COSTS THAT THE GRANTEE NEEDS TO
OPERATE, A SPENDING TIMELINE, AND A WORKPLAN DEVELOPED IN A FORM
AND MANNER SPECIFIED BY THE ADMINISTERING STATE AGENCY;
      (II) SUBMIT DOCUMENTATION, AS REQUIRED BY THE ADMINISTERING
STATEAGENCY,TOSUPPORTTHENEEDFORADVANCEPAYMENT, WHICH MAY
INCLUDE INVOICES, CONTRACTS, ESTIMATES, PAYROLL RECORDS, AND
FINANCIAL RECORDS TO DEMONSTRATE THE MINIMUM AMOUNT NEEDED TO
ACHIEVE THE GRANT OBJECTIVE AND BE TIMED WITH ACTUAL, IMMEDIATE,
CASH REQUIREMENTS OF THE GRANTEE;
      (Ill) IF REQUIRED BY THE ADMINISTERING STATE AGENCY AND
STIPULATED WITHIN THE GRANT AGREEMENT, OBTAIN INSURANCE IN AN
AMOUNT COMMENSURATE WITH THE ASSESSED RISK DETERMINED BY THE
ADMINISTERING STATE AGENCY PURSUANT TO SUBSECTION (l)(a)(IV) OF
THIS SECTION;
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      (IV) ESTABLISH PROCEDURES TO MINIMIZE THE AMOUNT OF TIME
THAT ELAPSES BETWEEN THE TRANSFER OF MONEY AND THE EXPENDITURE
OF THE MONEY BY THE GRANTEE;
      (V)    PROVIDE A PROGRESS REPORT TO THE ADMINISTERING STATE
AGENCY FOLLOWING THE EXPENDITURE OF AN ADVANCE PAYMENT THAT
INCLUDES A SUMMARY OF WORK COMPLETED, PROOF OF EXPENDITURE, AND
OTHER ASSOCIATED INFORMATION AS DETERMINED BY THE ADMINISTERING
STATE AGENCY; AND
      (VI)      DISCLOSE    ITS   INTERNAL   CONTROLS   INCLUDING   THE
BACKGROUND OF THE GRANTEE'S MANAGEMENT, THE MANAGEMENT'S
COMMITMENT TO INTEGRITY AND ETHICAL VALUES, A RISK ASSESSMENT
THAT IDENTIFIES THE RISKS OF ACHIEVING THE OBJECTIVES OF THE GRANT,
CONTROL ACTIVITIES SUCH AS AUTHORIZATION AND SEGREGATION OF
DUTIES,     PREVENTATIVE,   DETECTIVE,   AND   CORRECTIVE   CONTROLS,
INFORMATION SYSTEMS INCLUDING THE FINANCIAL SYSTEM THAT WILL BE
USED TO TRACK AND REPORT GRANT SPENDING, AND MONITORING OF THE
GRANT.
      (c) ADVANCE PAYMENTS AUTHORIZED PURSUANT TO THIS SECTION
ARE LIMITED TO THE MINIMUM IMMEDIATE CASH REQUIREMENT OF THE
GRANTEE THAT ARE NECESSARY TO ACHIEVE THE GRANT OBJECTIVE. THE
GRANTEE SHALL PROPOSE THE MINIMUM AMOUNT NEEDED TO ACHIEVE THE
GRANT OBJECTIVE AND THE CONTROLLER OF THE ADMINISTERING STATE
AGENCY SHALL REVIEW AND DETERMINE WHETHER TO ACCEPT THE AMOUNT
OR PROPOSE AN ALTERNATIVE AMOUNT BASED ON THE REQUIREMENTS
SPECIFIED IN SUBSECTIONS      (l)(a) AND (l)(b) OF THIS SECTION. THE
CONTROLLER OF THE ADMINISTERING STATE AGENCY SHALL FORWARD
ADVANCE PAYMENT REQUESTS TO THE STATE CONTROLLER FOR AP PROV AL.
      (2)    A GRANTEE SHALL RETURN TO THE ADMINISTERING STATE
AGENCY ALL UNUSED MONEY PROVIDED AS AN ADVANCE PAYMENT BUT NOT
EXPENDED WITHIN THE GRANT AGREEMENT TIMELINE.
      (3) A GRANTEE THAT IS PAID A PERCENTAGE OF THE TOTAL VALUE OF
THE PAYMENTS UNDER A GRANT AGREEMENT WITH AN ADMINISTERING
STATE AGENCY IMMEDIATELY UPON EXECUTING THE GRANT AGREEMENT
MUST COMPLY WITH ALL OF THE REPORTING REQUIREMENTS SPECIFIED IN
THE GRANT AGREEMENT.
PAGE 4-HOUSE BILL 26-1274
       (4)   IF AN ADMINISTERING STATE AGENCY OR THE OFFICE OF THE
STATECONTROLLERDENIESAGRANTEE'SREQUESTFORADVANCEPAYMENT,
THE ADMINISTERING STATE AGENCY SHALL PROVIDE THE GRANTEE WITH A
WRITTEN EXPLANATION OF THE DEFICIENCIES IN THE APPLICATION FOR
ADVANCE PAYMENT THAT DETERMINED THE DECISION TO DENY THE
REQUEST. THE ADMINISTERING STATE AGENCY SHALL MAKE THE ELEMENTS
AND RESULTS OF THE RISK ASSESSMENT DETERMINED PURSUANT TO
SUBSECTION ( 1)( a)(IV) OF THIS SECTION AVAI LAB LE TO THE GRANTEE.
       (5) NOTHING IN THIS SECTION PREVENTS AN ADMINISTERING STATE
AGENCY, IN PROVIDING FUNDING TO A GRANTEE AS DESCRIBED IN THIS
SECTION, FROM USING A WAIVER PROCESS AVAILABLE THROUGH FISCAL
RULES ADOPTED BY THE STATE CONTROLLER OR RULES ADOPTED BY A
FEDERAL GOVERNMENTAL ENTITY TO DISPENSE A PERCENTAGE OF THE
TOTAL VALUE OF THE PAYMENTS UNDER THE GRANT AGREEMENT TO THE
GRANTEE IMMEDIATELY UPON EXECUTING OR RENEWING THE GRANT
AGREEMENT.
       (6) NOTHING IN THIS SECTION LIMITS, PROHIBITS, OR SUPERCEDES
ANY EXISTING PAYMENT OR GRANT-MAKING AUTHORITY OR POWERS OF A
STATE AGENCY.
       SECTION 2. Appropriation. ( 1) For the 2026-27 state fiscal year,
$34,146 is appropriated to the department of personnel for use by the
division of accounts and control. This appropriation is from the general
fund. To implement this act, the division may use this appropriation as
follows:
       (a) $26,634 for personal services related to financial operations and
reporting, which amount is based on an assumption that the division will
require an additional 0.5 FTE; and
       (b) $7,512 for operating expenses related to financial operations and
reporting.
       SECTION 3. Act subject to petition - effective date. This act
takes effect at 12:01 a.m. on the day following the expiration of the
ninety-day period after final adjournment of the general assembly (August
12, 2026, if adjournment sine die is on May 13, 2026); except that, if a
referendum petition is filed pursuant to section 1 (3) of article V of the state
PAGE 5-HOUSE BILL 26-1274
constitution against this act or an item, section, or part of this act within
such period, then the act, item, section, or part will not take effect unless
approved by the people at the general election to be held in November 2026
and, in such case, will take effect on the date of the official declaration of
the vote thereon by the governor.
Jul~  James Rashad Coleman, Sr.
SPEAKER OF THE HOUSE  PRESIDENT OF
OF REPRESENTATIVES  THE SENATE
Vanessa Reilly
                 fu!b  Esther van Mourik
CHIEF CLERK OF THE HOUSE  SECRETARY OF
OF REPRESENTATIVES  THE SENATE
       APPROVED "" 'T\..v<S.        ti 0-"""-
                                    (Dae and Time)
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