This amendment adds a rule that stops state agencies from giving early grant payments to nonprofit groups if current lawmakers or their family members work for those groups.
Colorado2026Enacted
HB26-1274
Rules for State Agencies to Give Advance Grant Payments
Last scannedAug 24, 2026, 8:22 AM
In one sentence
This law allows state agencies to give nonprofit organizations a portion of their grant money upfront instead of waiting for reimbursement, but only if the organization is low-risk and meets specific reporting requirements.
What it does
- Allows state agencies to pay grants in advance rather than requiring nonprofits to spend money first and get reimbursed later.
- Requires agencies to use a risk assessment tool approved by the State Controller before giving any advance payment.
- Limits advance payments only to nonprofit organizations that are classified as low-risk for financial problems.
- Mandates that grantees provide detailed budgets, spending timelines, and proof of their need for immediate cash.
- Requires agencies to give a written explanation if they deny an organization's request for an advance payment.
Who it affects
- State government agencies that manage grant programs
- Nonprofit organizations receiving state-funded grants
Limits and unknowns
- Advance payments are only allowed for state-funded grants and must be the minimum amount needed for immediate cash needs.
- The law does not change existing rules that allow agencies to use federal waiver processes or other current payment powers.
- Organizations must return any unused advance money if they do not spend it within the time set by their grant agreement.
Plain language
Terms to know
- Advance Payment
- Money given to a grant recipient before they have spent it on project costs.
- Reimbursement
- The standard method where an organization spends its own money first and gets paid back later by the state.
- Risk Assessment Tool
- A system used to decide if a nonprofit is low, medium, or high risk for financial issues before giving them early funds.
Official record
Sources
Official summary
Pursuant to existing law, when an administering state agency awards a grant to a nonprofit organization (grantee), the grantee is generally required to access the grant award by applying for the reimbursement of costs incurred in completing the activity for which the administering state agency awarded the grant. Notwithstanding any provision of law to the contrary, the act allows an administering state agency to advance a payment to a grantee only for a state-funded grant subject to certain requirements. The administering state agency shall: Have an existing process or develop a new process that is approved by the state controller to dispense an advance payment; 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; 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 Use the office of the state controller's risk assessment 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. The grantee shall: 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 as specified by the administering state agency; Submit documentation to support the need for advance payment; 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 ; Establish procedures to minimize the amount of time that elapses between the transfer of money and the expenditure of the money by the grantee; Provide a progress report to the administering state agency following the expenditure of an advance payment; and Disclose certain internal controls to the administering state agency. 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. The controller of the administering state agency shall forward advance payment requests to the state controller for approval. 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. A grantee that is paid a percentage of the total value of the payments under a grant agreement immediately upon executing the grant agreement must comply with all of the reporting requirements specified in the grant agreement. If an administering state agency or the office of the state controller denies a grantee's request for advance payment, 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 available to the grantee. The act does not prevent an administering state agency, in providing advance payment to a grantee, 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. Nothing in the act limits, prohibits, or supersedes any existing payment or grant-making authority or powers of a state agency. For the 2026-27 state fiscal year, the act appropriates $34,146 from the general fund to the department of personnel for use by the division of accounts and control to implement the act. (Note: This summary applies to this bill as enacted.)
Official activity
Bill history
- Governor SignedGovernor
- Sent to the GovernorGovernor
- Signed by the President of the SenateSenate
- Signed by the Speaker of the HouseHouse
- Senate Considered House Adherence - Result was to RecedeSenate
- House Considered Senate Amendments - Result was to AdhereHouse
- Senate Third Reading Passed with Amendments - FloorSenate
- Senate Second Reading Special Order - Passed - No AmendmentsSenate
- Senate Committee on Appropriations Refer Unamended to Senate Committee of the WholeSenate
- Senate Committee on State, Veterans, & Military Affairs Refer Unamended to AppropriationsSenate
- Introduced In Senate - Assigned to State, Veterans, & Military AffairsSenate
- House Third Reading Passed - No AmendmentsHouse
- House Second Reading Special Order - Passed with Amendments - FloorHouse
- House Committee on Appropriations Refer Amended to House Committee of the WholeHouse
- House Committee on Finance Refer Amended to AppropriationsHouse
- Introduced In House - Assigned to FinanceHouse
Changes
Amendments
6 stored
This amendment adds funding to pay for extra staff and operating costs needed to manage new grant payment rules.
This amendment limits a rule about how nonprofits get paid to only apply when the grant money comes entirely from the state.
This amendment creates a new rule allowing state agencies to give nonprofit organizations money upfront for grants if they prove they are low-risk and need the cash immediately.
This amendment would stop state agencies from giving early grant payments to nonprofit groups if a current lawmaker or their immediate family member works for that group.
This amendment stops state agencies from giving early grant payments to nonprofit groups if a member of the Colorado General Assembly works for or is paid by that group.