California2026Active

AB-1039

Changes to Rules for Advance Payments on State Grants and Contracts

Last scannedAug 24, 2026, 7:05 AM

In one sentence

This law requires state agencies to make early payments, called advance payments, to eligible groups for new grants starting in 2026, while changing rules about prioritizing certain communities and how payment details are shared.

Requires state agencies to give an advance payment instead of just allowing it for all grants and contracts advertised on or after January 1, 2026.
Limits the rule that requires prioritizing disadvantaged and low-income communities only to grants and contracts advertised before January 1, 2026.
Removes the requirement to write a specific advance payment structure in every contract and instead asks agencies to consider using specified best practices for these payments.
Changes the rule about depositing funds into federally insured accounts so it applies only to grants or contracts larger than $10,000.
Requires grant announcements to state what percentage of total funds may be given as an advance payment.
Asks agencies to include the advance payment percentage when they register their grants with the California State Library.

The bill does not list the specific 'best practices' agencies must consider, only that they are specified.
The official effective date is not listed in the provided source material.
Exceptions to rules mentioned as 'specified' or 'except as specified' are not detailed in this summary.

Plain language

Advance payment: Money given to a recipient before they finish the work required by the grant or contract, which cannot exceed 25% of the total amount unless specified otherwise.
Recipient entity: A private nonprofit group qualified under federal law or a federally recognized Indian tribe in California that receives state funding.

Official record

Source attached

State-funded assistance grants and contracts: advance payments.

Official activity