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HB26-1274 • 2026

State Agency Payments to Grant Recipients

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 reimb

Budget Labor Taxes
Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor
Rep. M. Duran, Rep. M. Lindsay, Sen. K. Wallace, Sen. M. Weissman, Rep. J. Bacon, Rep. A. Boesenecker, Rep. C. Clifford, Rep. C. Espenoza, Rep. J. McCluskie, Rep. K. Nguyen, Rep. M. Rutinel, Rep. E. Sirota, Rep. T. Story, Rep. Y. Zokaie, Sen. A. Benavidez, Sen. J. Coleman, Sen. L. Cutter, Sen. J. Gonzales, Sen. I. Jodeh, Sen. C. Kipp, Sen. M. Snyder
Last action
2026-06-04
Official status
Governor Signed
Effective date
Not listed

Plain English Breakdown

The effective date depends on whether a referendum petition is filed within ninety days of adjournment; if not, it takes effect August 12, 2026.

Rules for State Agencies to Give Advance Grant Payments

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 This Bill 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 Names or Affects

  • State government agencies that manage grant programs
  • Nonprofit organizations receiving state-funded grants

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.

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.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

S.001

Committee of the Whole

Passed

Plain English: 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.

  • State agencies cannot give advance (early) payment of grants to nonprofits where a current member of the General Assembly works as an employee, officer, director, contractor, or paid consultant.
  • State agencies also cannot give advance payments if an immediate family member of a lawmaker receives any money from the nonprofit grant recipient.
  • The amendment text does not define what counts as 'immediate family' for this rule.
  • This change only affects rules about giving early payment; it does not mention how regular reimbursement payments are handled in these situations.
J.001

HOU Appropriations

Passed [*]

Plain English: This amendment adds funding to pay for extra staff and operating costs needed to manage new grant payment rules.

  • It sets aside $34,146 from the general fund for the Department of Personnel's Division of Accounts and Control for the 2026-27 fiscal year.
  • $26,634 is designated to pay for half a new full-time employee (0.5 FTE) who will handle financial operations and reporting.
  • $7,512 is set aside for other operating expenses related to managing these finances.
  • The amendment text does not explain the specific details of how grant payments work or what changes are being made to those rules beyond adding funding.
L.001

HOU Finance

Passed [*]

Plain English: This amendment limits a rule about how nonprofits get paid to only apply when the grant money comes entirely from the state.

  • The bill now specifies that its payment rules only affect grants funded solely with state money.
L.003

Second Reading

Passed [**]

Plain English: 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.

  • State agencies can now pay nonprofits before work is done, but only if the State Controller approves their payment process.
  • Agencies must check a risk tool and only allow advance payments to nonprofits rated as 'low risk'.
  • Nonprofits must provide detailed budgets, proof of immediate cash needs, and reports on how they spend the money.
  • If an agency denies a request for early payment, it must give the nonprofit a written explanation of why.
  • The official text provided is cut off at the end, so some details about waivers or exceptions are missing.
  • Specific rules on how much money can be advanced depend on future decisions by state agencies and the State Controller.
L.006

Second Reading

Lost [**]

Plain English: 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.

  • State agencies cannot give advance payment grants if a current General Assembly member is an employee, officer, director, contractor, or paid consultant of the receiving organization.
  • Advance payments are also blocked if an immediate family member of a lawmaker receives any money from the grant recipient.
  • The amendment text does not define who counts as an 'immediate family member.'
  • This specific version of the amendment was marked as lost, meaning it did not pass in this form.
  • The official bill title provided is cut off and incomplete.
L.007

Third Reading

Passed

Plain English: 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.

  • State agencies cannot give advance (early) money grants to nonprofits when a legislator has a job, leadership role, contract, or consulting work with them.

Bill History

  1. 2026-06-04 Governor

    Governor Signed

  2. 2026-06-03 Governor

    Sent to the Governor

  3. 2026-06-03 Senate

    Signed by the President of the Senate

  4. 2026-06-03 House

    Signed by the Speaker of the House

  5. 2026-05-13 Senate

    Senate Considered House Adherence - Result was to Recede

  6. 2026-05-13 House

    House Considered Senate Amendments - Result was to Adhere

  7. 2026-05-12 Senate

    Senate Third Reading Passed with Amendments - Floor

  8. 2026-05-11 Senate

    Senate Second Reading Special Order - Passed - No Amendments

  9. 2026-05-11 Senate

    Senate Committee on Appropriations Refer Unamended to Senate Committee of the Whole

  10. 2026-05-11 Senate

    Senate Committee on State, Veterans, & Military Affairs Refer Unamended to Appropriations

  11. 2026-05-11 Senate

    Introduced In Senate - Assigned to State, Veterans, & Military Affairs

  12. 2026-05-09 House

    House Third Reading Passed - No Amendments

  13. 2026-05-08 House

    House Second Reading Special Order - Passed with Amendments - Floor

  14. 2026-05-08 House

    House Committee on Appropriations Refer Amended to House Committee of the Whole

  15. 2026-03-19 House

    House Committee on Finance Refer Amended to Appropriations

  16. 2026-02-19 House

    Introduced In House - Assigned to Finance

Official Summary Text

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.)

Current Bill Text

Read the full stored bill text
HOUSE BILL 26-1274
BY REPRESENTATIVE(S) Lindsay and Duran, Bacon, Boesenecker,
Clifford, Espenoza, Nguyen, Rutinel, Sirota, Story, Zokaie, McCluskie;
also SENATOR(S) Wallace and Weissman, Benavidez, Cutter, Gonzales J.,
Jodeh, Kipp, Snyder, Coleman.
CONCERNING AUTHORIZATION FOR A STATE AGENCY TO AWARD A
PERCENTAGE OF THE TOTAL VALUE OF A GRANT AGREEMENT TO A
NONPROFIT GRANTEE OF A GRANT PROGRAM OF THE AGENCY UPON
THE EXECUTION OR RENEWAL OF THE GRANT AGREEMENT, AND, IN
CONNECTION THEREWITH, MAKING AN APPROPRIATION.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. In Colorado Revised Statutes, add part 3 to article 17
of title 24 as follows:
PART3
PAYMENTS TO NONPROFIT GRANTEES
24-17-301. Definitions.
AS USED IN THIS PART 3, UNLESS THE CONTEXT OTHER WISE REQUIRES:
Capital letters or bold & italic numbers indicate new material added to existing law; dashes
through words or numbers indicate deletions from existing law and such material is not part of
the act.
(1) "ADMINISTERING STATE AGENCY" MEANS ANY DEPARTMENT,
COMMISSION, COUNCIL, BOARD, BUREAU, COMMITTEE, INSTITUTION OF
HIGHER EDUCATION, AGENCY, OR OTHER GOVERNMENTAL UNIT OF THE
EXECUTIVE, LEGISLATIVE, OR JUDICIAL BRANCH OF STATE GOVERNMENT,
INCLUDING THE OFFICE OF THE GOVERNOR, THAT ADMINISTERS A GRANT.
(2) "GRANT" MEANS AN AGREEMENT IN WHICH AN ADMINISTERING
STATE AGENCY AS GRANTOR TRANSFERS ANYTHING OF VALUE TO A GRANTEE
TO CARRY OUT A PUBLIC PURPOSE OF SUPPORT OR STIMULATION AUTHORIZED
BY LAW INSTEAD OF ACQUIRING PROPERTY OR SERVICES FOR THE DIRECT
BENEFIT OR USE OF THE ADMINISTERING ST A TE AGENCY. A GRANT MAY
INCLUDE A DISTRIBUTION OF MONEY. A GRANT DOES NOT INCLUDE
DONATIONS.
(3) "GRANTEE" MEANS A RECIPIENT OF A GRANT THAT IS A
NONPROFIT ORGANIZATION AND THAT HAS SUBMITTED WRITTEN PROOF OF
SUCH CLASSIFICATION TO THE ADMINISTERING STATE AGENCY THAT
AWARDED THE GRANT.
(4) "NONPROFIT ORGANIZATION" MEANS A CHARITABLE
ORGANIZATION, AS DEFINED IN SECTION 39-26-102 (2.5).
24-17-302. Dispensation of payments under grant agreements
with nonprofit grantees.
(1) NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY,
AN ADMINISTERING STATE AGENCY MAY ADVANCE A PAYMENT TO A
GRANTEE ONLY FOR A STATE-FUNDED GRANT SUBJECT TO THE FOLLOWING
REQUIREMENTS:
(a) THE ADMINISTER£ N G STATE AGENCY SHALL:
(I) HA VE AN EXISTING PROCESS OR DEVELOP A NEW PROCESS THAT
IS APPROVED BY THE ST ATE CONTROLLER TO DISPENSE AN ADVANCE
PAYMENT PURSUANT TO THIS SECTION;
(II) 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. THE DISCLOSURE MUST INCLUDE:
PAGE 2-HOUSE BILL 26-1274
(A) THE ELIGIBILITY CRITERIA AND DOCUMENTATION REQUIRED TO
REQUEST AN ADVANCE PAYMENT PURSUANT TO THIS SECTION;
(B) THE PROCESS BY WHICH A GRANTEE MAY REQUEST AN ADVANCE
PAYMENT FROM THE ADMINISTERING STATE AGENCY; AND
(C) THE APPROVAL PROCESS OF THE ADVANCE PAYMENT REQUEST;
(Ill) 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
(IV) USETHEOFFICEOFTHESTATECONTROLLER'SRISKASSESSMENT
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.
(b) THE GRANTEE SHALL:
(I) 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
OPERA TE, A SPENDING TIMELINE, AND A WORKPLAN DEVELOPED IN A FORM
AND MANNER SPECIFIED BY THE ADMINISTERING STATE AGENCY;
(II) SUBMIT DOCUMENTATION, AS REQUIRED BY THE ADMINISTERING
STATEAGENCY,TOSUPPORTTHENEEDFORADVANCEPAYMENT, WHICH MAY
INCLUDE INVOICES, CONTRACTS, ESTIMATES, PAYROLL RECORDS, AND
FINANCIAL RECORDS TO DEMONSTRATE THE MINIMUM AMOUNT NEEDED TO
ACHIEVE THE GRANT OBJECTIVE AND BE TIMED WITH ACTUAL, IMMEDIATE,
CASH REQUIREMENTS OF THE GRANTEE;
(Ill) IF REQUIRED BY THE ADMINISTERING ST ATE AGENCY AND
STIPULATED WITHIN THE GRANT AGREEMENT, OBTAIN INSURANCE IN AN
AMOUNT COMMENSURATE WITH THE ASSESSED RISK DETERMINED BY THE
ADMINISTERING STATE AGENCY PURSUANT TO SUBSECTION (l)(a)(IV) OF
THIS SECTION;
PAGE 3-HOUSE BILL 26-1274
(IV) ESTABLISH PROCEDURES TO MINIMIZE THE AMOUNT OF TIME
THAT ELAPSES BETWEEN THE TRANSFER OF MONEY AND THE EXPENDITURE
OF THE MONEY BY THE GRANTEE;
(V) PROVIDE A PROGRESS REPORT TO THE ADMINISTERING STATE
AGENCY FOLLOWING THE EXPENDITURE OF AN ADVANCE PAYMENT THAT
INCLUDES A SUMMARY OF WORK COMPLETED, PROOF OF EXPENDITURE, AND
OTHER ASSOCIATED INFORMATION AS DETERMINED BY THE ADMINISTERING
STATE AGENCY; AND
(VI) DISCLOSE ITS INTERNAL CONTROLS INCLUDING THE
BACKGROUND OF THE GRANTEE'S MANAGEMENT, THE MANAGEMENT'S
COMMITMENT TO INTEGRITY AND ETHICAL VALUES, A RISK ASSESSMENT
THAT IDENTIFIES THE RISKS OF ACHIEVING THE OBJECTIVES OF THE GRANT,
CONTROL ACTIVITIES SUCH AS AUTHORIZATION AND SEGREGATION OF
DUTIES, PREVENTATIVE, DETECTIVE, AND CORRECTIVE CONTROLS,
INFORMATION SYSTEMS INCLUDING THE FINANCIAL SYSTEM THAT WILL BE
USED TO TRACK AND REPORT GRANT SPENDING, AND MONITORING OF THE
GRANT.
( c) ADVANCE PAYMENTS AUTHORIZED PURSUANT TO THIS SECTION
ARE LIMITED TO THE MINIMUM IMMEDIATE CASH REQUIREMENT OF THE
GRANTEE THAT ARE NECESSARY TO ACHIEVE THE GRANT OBJECTIVE. 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 BASED ON THE REQUIREMENTS
SPECIFIED IN SUBSECTIONS (l)(a) AND (l)(b) OF THIS SECTION. THE
CONTROLLER OF THE ADMINISTERING ST A TE AGENCY SHALL FORWARD
ADVANCE PAYMENT REQUESTS TO THE ST A TE CONTROLLER FOR AP PROV AL.
(2) 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.
(3) A GRANTEE THAT IS PAID A PERCENT AGE OF THE TOT AL VALUE OF
THE PAYMENTS UNDER A GRANT AGREEMENT WITH AN ADMINISTERING
STATE AGENCY IMMEDIATELY UPON EXECUTING THE GRANT AGREEMENT
MUST COMPLY WITH ALL OF THE REPORTING REQUIREMENTS SPECIFIED IN
THE GRANT AGREEMENT.
PAGE 4-HOUSE BILL 26-1274
(4) IF AN ADMINISTERING STATE AGENCY OR THE OFFICE OF THE
STATECONTROLLERDENIESAGRANTEE'SREQUESTFORADVANCEPAYMENT,
THE ADMINISTERING ST A TE 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 ST A TE AGENCY SHALL MAKE THE ELEMENTS
AND RESULTS OF THE RISK ASSESSMENT DETERMINED PURSUANT TO
SUBSECTION ( 1 )( a )(IV) OF THIS SECTION AV AI LAB LE TO THE GRANTEE.
(5) NOTHING IN THIS SECTION PREVENTS AN ADMINISTERING STATE
AGENCY, IN PROVIDING FUNDING TO A GRANTEE AS DESCRIBED IN THIS
SECTION, 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 R ENEWING THE GRANT
AGREEMENT.
(6) NOTHING IN THIS SECTION LIMITS, PROHIBITS, OR SUPERCEDES
ANY EXISTING PAYMENT OR GRANT-MAKING AUTHORITY OR POWERS OF A
STATE AGENCY.
SECTION 2. Appropriation. ( 1) For the 2026-27 state fiscal year,
$34,146 is appropriated to the department of personnel for use by the
division of accounts and control. This appropriation is from the general
fund. To implement this act, the division may use this appropriation as
follows:
(a) $26,634 for personal services related to financial operations and
reporting, which amount is based on an assumption that the division will
require an additional 0.5 FTE; and
(b) $7,512 for operating expenses related to financial operations and
reporting.
SECTION 3. Act subject to petition - effective date. This act
takes effect at 12:01 a.m. on the day following the expiration of the
ninety-day period after final adjournment of the general assembly (August
12, 2026, if adjournment sine die is on May 13, 2026); except that, if a
referendum petition is filed pursuant to section 1 (3) of article V of the state
PAGE 5-HOUSE BILL 26-1274
constitution against this act or an item, section, or part of this act within
such period, then the act, item, section, or part will not take effect unless
approved by the people at the general election to be held in November 2026
and, in such case, will take effect on the date of the official declaration of
the vote thereon by the governor.
Jul~
SPEAKER OF THE HOUSE
OF REPRESENTATIVES
Vanessa Reilly
fu!b
CHIEF CLERK OF THE HOUSE
OF REPRESENTATIVES
James Rashad Coleman, Sr.
PRESIDENT OF
THE SENATE
Esther van Mourik
SECRETARY OF
THE SENATE
APPROVED "" 'T\..v<S. ti 0-"""-"'\-t1,-. 2.o2-(.. .,_-1, I 2! 30,1'\.
(Dae and Time) • 1
PAGE 6-1-IOUSE BILL 26-1274