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.
This Unofficial Version Includes Committee
Amendments Not Yet Adopted on Second Reading
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(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) (I) As used in subsection
Page 2, Line 5(24)(a) of this section, "liability incurred on behalf of the state" means the
Page 2, Line 6receipt of supplies, as defined in section 24-101-301 (47), or services, as
Page 2, Line 7defined in section 24-101-301 (42), and receipt of a correct notice of the
Page 2, Line 8amount due, by the state agency procuring such supplies or services from
Page 2, Line 9a nongovernmental entity. No liability is incurred on behalf of the state
Page 2, Line 10if a good faith dispute exists as to the state's obligation to pay all or a
Page 2, Line 11portion of the account. Nothing in this subsection (24) shall be construed
Page 3, Line 1to affect any provision for the time of payment in a written contract
Page 3, Line 2between a state agency procuring services or supplies and a nongovernmental entity.
Page 3, Line 3(II) Beginning July 1, 2026, as used in subsection (24)(a) of
Page 3, Line 4this section, in connection with the procurement of supplies and
Page 3, Line 5services from a nonprofit organization to be paid for with state,
Page 3, Line 6rather than federal, funds, "liability incurred on behalf of the
Page 3, Line 7state" means the receipt of supplies, as defined in section
Page 3, Line 824-101-301 (47), or services, as defined in section 24-101-301 (42),
Page 3, Line 9and receipt of either a correct notice of the amount due by the
Page 3, Line 10state agency procuring such supplies or services from a
Page 3, Line 11nonprofit organization or a demonstration of a good faith
Page 3, Line 12effort to provide a correct notice of the amount due by the
Page 3, Line 13state agency procuring such supplies or services from a
Page 3, Line 14nonprofit organization. If a good faith dispute exists as to the
Page 3, Line 15state's obligation to pay all or a portion of the account, the
Page 3, Line 16state does not incur liability in connection with the portion of
Page 3, Line 17the account for which there is a good faith dispute. Nothing in
Page 3, Line 18this subsection (24) shall be construed to affect any provision
Page 3, Line 19for the time of payment in a written contract between a state
Page 3, Line 20agency procuring services or supplies and a nonprofit organization.
Page 3, Line 21(29) (a) On or after December 31, 2026, the controller
Page 3, Line 22shall adopt fiscal rules requiring a state agency to award a
Page 3, Line 23nonprofit organization a retainer when entering into a
Page 3, Line 24contract with or awarding a grant to a nonprofit organization.
Page 3, Line 25A nonprofit organization is not required to complete any
Page 4, Line 1portion of the activity for which a state agency entered into a
Page 4, Line 2contract with the nonprofit organization or awarded a grant
Page 4, Line 3to the nonprofit organization, prior to receiving the retainer. A
Page 4, Line 4nonprofit organization shall spend a retainer within one year of
Page 4, Line 5receiving the retainer from a state agency. A nonprofit
Page 4, Line 6organization may submit a notice of an amount due to the state
Page 4, Line 7after the grant or contract has been in place for a month and
Page 4, Line 8before expending any amount of the retainer, but a nonprofit
Page 4, Line 9organization shall not submit a notice of amount due to the state for expenses covered by the retainer.
Page 4, Line 10(b) As used in this section, unless the context otherwise requires:
Page 4, Line 11(I) "Nonprofit organization" means an organization that
Page 4, Line 12is exempt from federal taxation under section 501 (c)(3) of the federal "Internal Revenue Code of 1986".
Page 4, Line 13(II) "Retainer" means an amount equal to either at least
Page 4, Line 14thirty-five percent of the value of a grant awarded by a state
Page 4, Line 15agency to the nonprofit organization or at least thirty-five
Page 4, Line 16percent of the amount to be disbursed by the state to the
Page 4, Line 17nonprofit organization in the first year of a contract between
Page 4, Line 18a state agency and a nonprofit organization. A nonprofit
Page 4, Line 19organization may only expend a retainer on expenses that the
Page 4, Line 20nonprofit organization incurs in connection with the relevant grant or contract.
Page 4, Line 21(III) "State agency" means any department, commission,
Page 4, Line 22council, board, bureau, committee, institution of higher
Page 4, Line 23education, agency, or other governmental unit of the executive,
Page 5, Line 1legislative, or judicial branch of state government, including the office of the governor.
Page 5, Line 2(30) (a) Beginning January 1, 2026, the controller shall
Page 5, Line 3request that each nonprofit organization that receives
Page 5, Line 4disbursements from the state provide the following information:
Page 5, Line 5(I) The ethnicity of the nonprofit organization's
Page 5, Line 6leadership, including the nonprofit organization's director or
Page 5, Line 7director equivalent, governing body, and any other leadership identified by the nonprofit organization;
Page 5, Line 8(II) The business structure of the nonprofit organization
Page 5, Line 9as that business structure is identified by the nonprofit organization; and
Page 5, Line 10(III) Whether the nonprofit organization has previously received a disbursement from the state.
Page 5, Line 11(b) Beginning June 1, 2026, the controller shall make the
Page 5, Line 12information that it collects pursuant to this subsection (30) available upon request.
Page 5, Line 13SECTION 2. Act subject to petition - effective date. This act
Page 5, Line 14takes effect at 12:01 a.m. on the day following the expiration of the
Page 5, Line 15ninety-day period after final adjournment of the general assembly; except
Page 5, Line 16that, if a referendum petition is filed pursuant to section 1 (3) of article V
Page 5, Line 17of the state constitution against this act or an item, section, or part of this
Page 5, Line 18act within such period, then the act, item, section, or part will not take
Page 5, Line 19effect unless approved by the people at the general election to be held in
Page 5, Line 20November 2026 and, in such case, will take effect on the date of the
Page 5, Line 21official declaration of the vote thereon by the governor.