A Bill for an Act
Page 1, Line 101Concerning disbursements made to nongovernmental entities
Page 1, Line 102on behalf of state agencies.
Bill Summary
(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)
Currently, the controller is required to adopt fiscal rules requiring the state to make disbursements in the payment of any liability incurred on behalf of the executive branch of the state within 45 days of receiving a correct notice that this liability was incurred. The bill modifies this requirement so that either a correct notice of the state's liability or a demonstration of a good faith effort to provide a correct notice of the state's liability initiates the 45-day period.
A state agency that awards a grant generally requires the grant recipient to access the grant amount awarded by applying for the reimbursement of costs incurred in completing the activity for which the state agency awarded the grant. The bill directs the controller to adopt fiscal rules requiring a state agency to award a nonprofit organization a retainer when entering into a contract with or awarding a grant to a nonprofit organization. The retainer amount must equal at least 35% of the grant amount or 35% of the amount to be disbursed by the state to the nonprofit organization in the first year of a contract between the state and the nonprofit organization. A nonprofit organization is required to spend the retainer amount within a year of the state awarding the grant to or entering into the contract with the nonprofit organization. A nonprofit organization may only expend a retainer on expenses the nonprofit organization incurs in connection with the relevant grant or contract.
The bill also requires a nonprofit organization that receives disbursements from the state to provide the following information to the controller and requires the controller to make that information available upon request:
- The ethnicity of the nonprofit organization's leadership;
- The business structure of the nonprofit organization; and
- Whether the nonprofit organization has previously received a disbursement from the state.
Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:
Page 2, Line 2SECTION 1. In Colorado Revised Statutes, 24-30-202, amend (24)(b); and add (24)(c), (29), and (30) as follows:
Page 2, Line 324-30-202. Procedures - vouchers, warrants, and checks -
Page 2, Line 4rules - penalties - definitions - repeal. (24) (b) Before July 1, 2025,
Page 2, Line 5as used in subsection (24)(a) of this section, "liability incurred on behalf
Page 2, Line 6of the state" means the receipt of supplies, as defined in section
Page 2, Line 724-101-301 (47), or services, as defined in section 24-101-301 (42), and
Page 2, Line 8receipt of a correct notice of the amount due, by the state agency
Page 2, Line 9procuring such supplies or services from a nongovernmental entity. No
Page 2, Line 10liability is incurred on behalf of the state if a good faith dispute exists as
Page 2, Line 11to the state's obligation to pay all or a portion of the account. Nothing in
Page 3, Line 1this subsection (24) shall be construed to affect any provision for the time
Page 3, Line 2of payment in a written contract between a state agency procuring services or supplies and a nongovernmental entity.
Page 3, Line 3(c) Beginning July 1, 2025, as used in subsection (24)(a) of
Page 3, Line 4this section, "liability incurred on behalf of the state" means
Page 3, Line 5the receipt of supplies, as defined in section 24-101-301 (47), or
Page 3, Line 6services, as defined in section 24-101-301 (42), and receipt of
Page 3, Line 7either a correct notice of the amount due by the state agency
Page 3, Line 8procuring such supplies or services from a nonprofit
Page 3, Line 9organization or a demonstration of a good faith effort to
Page 3, Line 10provide a correct notice of the amount due by the state agency
Page 3, Line 11procuring such supplies or services from a nonprofit
Page 3, Line 12organization. If a good faith dispute exists as to the state's
Page 3, Line 13obligation to pay all or a portion of the account, the state does
Page 3, Line 14not incur liability in connection with the portion of the account
Page 3, Line 15for which there is a good faith dispute. Nothing in this
Page 3, Line 16subsection (24) shall be construed to affect any provision for
Page 3, Line 17the time of payment in a written contract between a state
Page 3, Line 18agency procuring services or supplies and a nonprofit organization.
Page 3, Line 19(29) (a) On or after December 31, 2025, the controller
Page 3, Line 20shall adopt fiscal rules requiring a state agency to award a
Page 3, Line 21nonprofit organization a retainer when entering into a
Page 3, Line 22contract with or awarding a grant to a nonprofit organization.
Page 3, Line 23A nonprofit organization is not required to complete any
Page 3, Line 24portion of the activity for which a state agency entered into a
Page 3, Line 25contract with the nonprofit organization or awarded a grant
Page 4, Line 1to the nonprofit organization, prior to receiving the retainer. A
Page 4, Line 2nonprofit organization shall spend a retainer within one year of
Page 4, Line 3receiving the retainer from a state agency. A nonprofit
Page 4, Line 4organization may submit a notice of an amount due to the state
Page 4, Line 5after the grant or contract has been in place for a month and
Page 4, Line 6before expending any amount of the retainer, but a nonprofit
Page 4, Line 7organization shall not submit a notice of amount due to the state for expenses covered by the retainer.
Page 4, Line 8(b) As used in this section, unless the context otherwise requires:
Page 4, Line 9(I) "Nonprofit organization" means an organization that
Page 4, Line 10is exempt from federal taxation under section 501 (c)(3) of the federal "Internal Revenue Code of 1986".
Page 4, Line 11(II) "Retainer" means an amount equal to either at least
Page 4, Line 12thirty-five percent of the value of a grant awarded by a state
Page 4, Line 13agency to the nonprofit organization or at least thirty-five
Page 4, Line 14percent of the amount to be disbursed by the state to the
Page 4, Line 15nonprofit organization in the first year of a contract between
Page 4, Line 16a state agency and a nonprofit organization. A nonprofit
Page 4, Line 17organization may only expend a retainer on expenses that the
Page 4, Line 18nonprofit organization incurs in connection with the relevant grant or contract.
Page 4, Line 19(III) "State agency" means any department, commission,
Page 4, Line 20council, board, bureau, committee, institution of higher
Page 4, Line 21education, agency, or other governmental unit of the executive,
Page 4, Line 22legislative, or judicial branch of state government, including
Page 4, Line 23the office of the governor.
Page 5, Line 1(30) (a) Beginning January 1, 2026, the controller shall
Page 5, Line 2require that each nonprofit organization that receives
Page 5, Line 3disbursements from the state provide the following information:
Page 5, Line 4(I) The ethnicity of the nonprofit organization's
Page 5, Line 5leadership, including the nonprofit organization's director or
Page 5, Line 6director equivalent, governing body, and any other leadership identified by the nonprofit organization;
Page 5, Line 7(II) The business structure of the nonprofit organization
Page 5, Line 8as that business structure is identified by the nonprofit organization; and
Page 5, Line 9(III) Whether the nonprofit organization has previously received a disbursement from the state.
Page 5, Line 10(b) Beginning June 1, 2026, the controller shall make the
Page 5, Line 11information that it collects pursuant to this subsection (30) available upon request.
Page 5, Line 12SECTION 2. Act subject to petition - effective date. This act
Page 5, Line 13takes effect at 12:01 a.m. on the day following the expiration of the
Page 5, Line 14ninety-day period after final adjournment of the general assembly; except
Page 5, Line 15that, if a referendum petition is filed pursuant to section 1 (3) of article V
Page 5, Line 16of the state constitution against this act or an item, section, or part of this
Page 5, Line 17act within such period, then the act, item, section, or part will not take
Page 5, Line 18effect unless approved by the people at the general election to be held in
Page 5, Line 19November 2026 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.