State Disbursement Process

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