Existing law establishes various grant programs. Existing law, the Grant Information Act of 2018, requires the California State Library to create an internet web portal to provide a centralized location for grant seekers to find state grant opportunities and requires the California State Library to report to the Legislature on the effectiveness of the portal, including, among other things, the utilization rate by state agencies.

This bill would impose minimum requirements for the administration of covered grants that meet maximum size and duration requirements and are available to nonprofit organizations, as defined. The bill would require administrators, as defined, to post eligibility, application, and other information for covered grants on their internet website and the above-described grant portal created by the California State Library. The bill would require administrators to provide eligible recipients with the ability to apply for a covered grant online. The bill would require administrators for grant programs totaling $200,000 or more to conduct outreach to eligible nonprofits, nonprofit organizations eligible for covered grants, as specified. The bill would impose minimum requirements on the distribution of grant funds. The bill would impose limitations on specified reporting requirements for covered grant recipients and would prohibit an administrator from requiring a grant recipient to carry insurance coverage limits in excess of the risk associated with the covered grant activity.

Existing law establishes procedures for state agencies to enter into contracts for goods and services, including generally requiring that certain contracts by a state agency be approved by the Department of General Services. various grant programs. Existing law, the Grant Information Act of 2018, requires the California State Library to create an internet web portal to provide a centralized location for grant seekers to find state grant opportunities and requires the California State Library to report to the Legislature on the effectiveness of the portal, including, among other things, the utilization rate by state agencies.

This bill would state the intent of the Legislature to enact subsequent legislation that would simplify reporting requirements for smaller nonprofits contracting with the state. impose minimum requirements for the administration of covered grants that meet maximum size and duration requirements and are available to nonprofit organizations, as defined. The bill would require administrators, as defined, to post eligibility, application, and other information for covered grants on their internet website and the above-described grant portal created by the California State Library. The bill would require administrators to provide eligible recipients with the ability to apply for a covered grant online. The bill would require administrators for grant programs totaling $200,000 or more to conduct outreach to eligible nonprofits, as specified. The bill would impose minimum requirements on the distribution of grant funds. The bill would impose limitations on specified reporting requirements for covered grant recipients and would prohibit an administrator from requiring a grant recipient to carry insurance coverage limits in excess of the risk associated with the covered grant activity.

Existing law establishes procedures for state agencies to enter into contracts for goods and services, including generally requiring that certain contracts by a state agency be approved by the Department of General Services.

This bill would state the intent of the Legislature to enact subsequent legislation that would simplify reporting requirements for smaller nonprofits contracting with the state.

SENATE COMMITTEE ON

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

AB 860 (Valencia) - Grant programs: administration

Bill Summary:

AB 860 imposes requirements on the administration of covered grants by state agencies and third-party contractors, as specified.

Fiscal Impact:

• Unknown, potentially significant fiscal impact to affected state agencies administering covered grants under this bill to conduct outreach, answer public and grant applicant inquiries, and post information online (General Fund and special funds).
• The California State Library (CSL) anticipates costs to make changes to the Grants Portal to be absorbable within existing resources. CSL notes that if it continues its current practice of requiring state agency contractors serving as grant administrators to work with the awarding state agency to get an account for the California Grants Portal, no additional costs are indicated.

However, this bill adds third-party contractors, a user base of unknown size, to the current users of the portal. CSL notes potential, but indeterminate fiscal impacts for enhanced outreach to the new user group and the creation of new workflows given the undefined scope of users and contractors. The current portal only hosts competitive, first-come grant award programs administered by state agencies as well as loans and federal assistance funds. The portal was built in collaboration with state agencies and is designed to accommodate their processes, adhering to reporting structures agreed upon through stakeholder meetings and collaboration with other state agencies during the design-build phase of the portal.

Background:

The California Grant Information Act of 2018 enacted by AB 2252 (Limon, Chapter 318, Statutes of 2018) seeks to streamline the process of grant discovery and application, thereby enhancing the ability of nonprofit organizations to secure necessary funding.

Central to the Act is the establishment of the California Grants Portal, and online portal overseen by the CSL. This portal is mandated to provide a comprehensive and centralized repository of state grant opportunities, thereby simplifying the process of identifying relevant funding sources for nonprofit organizations.

Moreover, the Act mandates that each state agency provide a detailed account of each grant they administer. This includes critical information such as the purpose of the grant, eligibility requirements, and the total available funding. This level of detail and transparency is instrumental in enabling nonprofit organizations to strategically target grants that align with their mission and operational needs.

The Act also emphasizes inclusivity, requiring the portal to be accessible and provide valuable information to a diverse array of potential applicants. This includes community-based organizations and entities that work to support and uplift disadvantaged and low-income communities. This provision ensures that the benefits of the Act are widespread and reach organizations that are often at the forefront of addressing critical societal issues.

Furthermore, the Act modernizes the grant application process by requiring state agencies to accept electronic proposals. This provision not only streamlines the application process but also reduces the administrative burden on nonprofits, allowing them to focus more resources on their core mission.

Proposed Law:

• Requires an administrator to promote equity in and facilitate the effectiveness of distribution of grant funds for covered grants by:
  • Posting eligibility requirements and application information of a covered grant on its website for the Grants Portal. Requires the application information to include a section covering frequently asked questions and a telephone number which applicants can contact the administrator with questions.
  • Providing eligible recipients with the ability to complete an application for a covered grant online.
  • For grants totaling $200,000 or more, conducting outreach to nonprofit organizations eligible for a covered grant at least 90 days before the application deadline.
• Requires an administrator to distribute at least 50 percent of a grant award upon execution of a covered grant. Authorizes an administrator to distribute 100 percent of a grant award upon execution of a covered grant.
• Prohibits an administrator from requiring any of the following:
  • A covered grant recipient to provide receipts for any expense other than nonpayroll expenses paid to a single vendor for 50 percent or more of the grant award.
  • In any progress report required by the administrator from the recipient nonprofit, the total word count of narrative sections to be more than 600 words.
  • A grant recipient to carry insurance coverage limits that exceed the risk associated with covered grant activity.
• Defines “administrator” as a state agency or third-party contractor administering a grant program using state funds.
• Defines “covered grant” to mean a grant, made by an administrator, that is under $20,000 with a duration period under one year and eligible recipients include nonprofits.
• Defines “third-party contractor” to mean either a nonprofit or other organization that contracts with a state agency to administer a grant program if the grant conditions require the recipient to redistribute a portion of funds to nonprofit organizations.

Related Legislation:

AB 590 (Hart, 2023) authorizes a state agency administering a grant program to provide an advance payment to a recipient 501(c)(3) non-profit organization. AB 590 is pending in this committee.

AB 619 (Vince Fong, 2023) authorizes a process for nonprofit entities contracted with the state to request an alteration to the services provided in the event of a state of war, state of emergency, or other disruption. AB 619 is pending in this committee.

AB 696 establishes the California State Grants and Contracts Modernization Act, which beginning July 1, 2025, requires a state agency that administers a grant or enters into contracts with eligible entities to provide for and accept electronic signatures and offer electronic payment options. AB 696 is pending in this committee.

Staff Comments: While the fiscal impact to all affected state agencies is unknown at this time, it may be significant. For example, the California Air Resources Board (CARB) reports total costs of $2.13 million in Fiscal Year (FY) 2023-24 and $1.63 million in FY 2024-25 and ongoing for 6.0 positions and other contract costs (various special funds). CARB notes that the amount of grant funding available for awards could be impacted by the bill in an unknown amount depending on the resources needed by a third-party contractor to fulfill the requirements of the bill. This could result in less funding to covered grant recipients.

While not all impacted state entities will require the same resources, to the extent that other agencies experience similar workload pressures, the cost of the bill may total into at least the hundreds of thousands of dollars.

-- END --

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

AB 860 (Valencia) - Grant programs: administration

Bill Summary:

AB 860 imposes requirements on the administration of covered grants by state agencies and third-party contractors, as specified.

Fiscal Impact:

• Unknown, potentially significant fiscal impact to affected state agencies administering covered grants under this bill to conduct outreach, answer public and grant applicant inquiries, and post information online (General Fund and special funds).
• The California State Library (CSL) anticipates costs to make changes to the Grants Portal to be absorbable within existing resources. CSL notes that if it continues its current practice of requiring state agency contractors serving as grant administrators to work with the awarding state agency to get an account for the California Grants Portal, no additional costs are indicated.

However, this bill adds third-party contractors, a user base of unknown size, to the current users of the portal. CSL notes potential, but indeterminate fiscal impacts for enhanced outreach to the new user group and the creation of new workflows given the undefined scope of users and contractors. The current portal only hosts competitive, first-come grant award programs administered by state agencies as well as loans and federal assistance funds. The portal was built in collaboration with state agencies and is designed to accommodate their processes, adhering to reporting structures agreed upon through stakeholder meetings and collaboration with other state agencies during the design-build phase of the portal.

Background:

The California Grant Information Act of 2018 enacted by AB 2252 (Limon, Chapter 318, Statutes of 2018) seeks to streamline the process of grant discovery and application, thereby enhancing the ability of nonprofit organizations to secure necessary funding.

Central to the Act is the establishment of the California Grants Portal, and online portal overseen by the CSL. This portal is mandated to provide a comprehensive and centralized repository of state grant opportunities, thereby simplifying the process of identifying relevant funding sources for nonprofit organizations.

Moreover, the Act mandates that each state agency provide a detailed account of each grant they administer. This includes critical information such as the purpose of the grant, eligibility requirements, and the total available funding. This level of detail and transparency is instrumental in enabling nonprofit organizations to strategically target grants that align with their mission and operational needs.

The Act also emphasizes inclusivity, requiring the portal to be accessible and provide valuable information to a diverse array of potential applicants. This includes community-based organizations and entities that work to support and uplift disadvantaged and low-income communities. This provision ensures that the benefits of the Act are widespread and reach organizations that are often at the forefront of addressing critical societal issues.

Furthermore, the Act modernizes the grant application process by requiring state agencies to accept electronic proposals. This provision not only streamlines the application process but also reduces the administrative burden on nonprofits, allowing them to focus more resources on their core mission.

Proposed Law:

• Requires an administrator to promote equity in and facilitate the effectiveness of distribution of grant funds for covered grants by:
  • Posting eligibility requirements and application information of a covered grant on its website for the Grants Portal. Requires the application information to include a section covering frequently asked questions and a telephone number which applicants can contact the administrator with questions.
  • Providing eligible recipients with the ability to complete an application for a covered grant online.
  • For grants totaling $200,000 or more, conducting outreach to nonprofit organizations eligible for a covered grant at least 90 days before the application deadline.
• Requires an administrator to distribute at least 50 percent of a grant award upon execution of a covered grant. Authorizes an administrator to distribute 100 percent of a grant award upon execution of a covered grant.
• Prohibits an administrator from requiring any of the following:
  • A covered grant recipient to provide receipts for any expense other than nonpayroll expenses paid to a single vendor for 50 percent or more of the grant award.
  • In any progress report required by the administrator from the recipient nonprofit, the total word count of narrative sections to be more than 600 words.
  • A grant recipient to carry insurance coverage limits that exceed the risk associated with covered grant activity.
• Defines “administrator” as a state agency or third-party contractor administering a grant program using state funds.
• Defines “covered grant” to mean a grant, made by an administrator, that is under $20,000 with a duration period under one year and eligible recipients include nonprofits.
• Defines “third-party contractor” to mean either a nonprofit or other organization that contracts with a state agency to administer a grant program if the grant conditions require the recipient to redistribute a portion of funds to nonprofit organizations.

Related Legislation:

AB 590 (Hart, 2023) authorizes a state agency administering a grant program to provide an advance payment to a recipient 501(c)(3) non-profit organization. AB 590 is pending in this committee.

AB 619 (Vince Fong, 2023) authorizes a process for nonprofit entities contracted with the state to request an alteration to the services provided in the event of a state of war, state of emergency, or other disruption. AB 619 is pending in this committee.

AB 696 establishes the California State Grants and Contracts Modernization Act, which beginning July 1, 2025, requires a state agency that administers a grant or enters into contracts with eligible entities to provide for and accept electronic signatures and offer electronic payment options. AB 696 is pending in this committee.

-- END --

SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION

Senator Bill Dodd

Chair

2023 - 2024 Regular

Bill No: 860 Hearing Date: 6/27/2023

SUBJECT: Grant programs: administration

DIGEST: This bill streamlines the process of applying for and receiving small state grants, particularly those not exceeding $20,000 and with a duration of less than 12 months, and requires the creation of a more accessible and equitable grant application process, as specified.

ANALYSIS:

Existing law:

1. The California Grant Information Act of 2018 (Act), requires the California State Library to create an internet web portal to provide a centralized location for grant seekers to find state grant opportunities and requires the California State Library to report to the Legislature on the effectiveness of the portal, including, among other things, the utilization rate by state agencies.
2. Establishes various grant programs.

This bill:

1. Requires an administrator, defined to mean either a state agency or third-party contractor administering a grant program using state funds, to promote equity in and facilitate the effectiveness of distribution of grant funds for covered grants by doing all of the following:
   1. Post the eligibility requirements and application information of a covered grant on their internet website and the internet website for the California Grants Portal. The application information must include a section covering frequently asked questions and must provide a telephone number that applicants can use to contact the administrator for questions regarding the grant and application.
   2. Provide eligible recipients with the ability to complete an application for a covered grant online.
   3. For grant programs totaling $200,000 or more, an administrator must conduct outreach to nonprofit organizations eligible for a covered grant at least 90 days before the application deadline, including outreach to rural, low-income, and disadvantaged communities.

1. Requires an administrator to distribute at least 50% of a grant award and authorizes up to 100% of a grant award upon execution of a covered grant.
2. Prohibits an administrator from requiring any of the following:
   1. A recipient of a covered grant to provide receipts for any expense other than nonpayroll expenses paid to a single vendor for 50% or more of the grant award.
   2. In any report required by the administrator from the recipient nonprofit related to progress or completion of the award, the total word count of narrative sections to be more than 600 words.
   3. A grant recipient to carry insurance coverage limits that exceed the risk associated with the covered grant activity.
3. Defines “covered grant” to mean a grant made by a state agency or administrator that meets all of the following requirements:
   1. The grant amount is not greater than $20,000.
   2. The duration of the grant period is not greater than one year.
   3. Eligible recipients of the grant program include nonprofit organizations.
4. Defines “nonprofit organization” to mean an organization exempt from federal income taxation pursuant to Section 501(c)(3) of the internal Revenue Code.
5. Defines “third-party contractor” to mean either a nonprofit or other organization that contracts with a state agency to administer a grant program funded by state funds or a grant recipient if the conditions of the grant require the grant recipient to redistribute a portion of those funds to nonprofit organizations.

Background

Author Statement. According to the author’s office, “AB 860 is a timely bill that will improve and streamline nonprofits’ ability to access state grants by reducing the effort and expense associated with applying for and receiving state funds pursuant to very small grants.”

Further, the author’s office notes that, “AB 860 will ensure California partners equitably with small nonprofits, so they may thrive as both service providers and employers. Nonprofits have continuously stepped up to provide services to our communities and our most needy, particularly during the COVID pandemic. As demonstrated by the testimony from the Joint Informational Hearing from last session, nonprofits are struggling to stay afloat, afford basic necessities, and are unable to recruit and retain qualified staff. California is well positioned to improve how it contracts and provides small grants to nonprofits. AB 860 will streamline access to small grants by reducing barriers and over burdensome administrative requirements.”

Grant Information Act of 2018. The California Grant Information Act of 2018, AB 2252 (Limon, Chapter 318, Statutes of 2018), in its essence, seeks to streamline the process of grant discovery and application, thereby enhancing the ability of nonprofit organizations to secure necessary funding.

Central to the Act is the establishment of the California Grants Portal, and online portal overseen by the California State Library. This portal is mandated to provide a comprehensive and centralized repository of state grant opportunities, thereby simplifying the process of identifying relevant funding sources for nonprofit organizations.

Moreover, the Act mandates that each state agency provide a detailed account of each grant they administer. This includes critical information such as the purpose of the grant, eligibility requirements, and the total available funding. This level of detail and transparency is instrumental in enabling nonprofit organizations to strategically target grants that align with their mission and operational needs.

The Act also emphasizes inclusivity, requiring the portal to be accessible and provide valuable information to a diverse array of potential applicants. This includes community-based organizations and entities that work to support and uplift disadvantaged and low-income communities. This provision ensures that the benefits of the Act are widespread and reach organizations that are often at the forefront of addressing critical societal issues.

Furthermore, the Act modernizes the grant application process by requiring state agencies to accept electronic proposals. This provision not only streamlines the application process but also reduces the administrative burden on nonprofits, allowing them to focus more resources on their core mission.

Small Grant Programs. This bill is designed to further streamline the process of applying for and receiving covered grants, defined as those not exceeding $20,000 and with a duration of less than one year and involving nonprofits.

The state of California relies heavily on nonprofits to implement critical policies and provide essential services to its communities. These organizations play a pivotal role in addressing homelessness, building affordable housing, responding to climate change impacts, supporting victims of domestic violence, and improving the lives of vulnerable community members in countless ways.

This bill requires an administrator – defined to mean either a state agency or third-party contractor administering a grant program using state funds – to distribute at least 50% of a grant award upon execution of a covered grant. It also sets limitations on what an administrator can require from a recipient of a covered grant, such as not requiring receipts for any expense other than nonprayroll expenses paid to a single vendor for 50% or more of the grant award, not requiring the total word count of narrative sections in any report to be more than 600 words, and not requiring a grant recipient to carry insurance coverage limits that exceed the risk associated with the covered grant activity.

Executive Order N-16-22. In September of 2022, Governor Newsom issued Executive Order (EO) N-16-22, which represents a comprehensive effort by the State of California to address disparities in opportunities and outcomes, and to advance equity through the design and delivery of state services and programs. It calls for explicit consideration of equity in policies and practices, improved data analysis tools, and enhanced community engagement strategies. The order underscores the state's commitment to achieving equal opportunity for all Californians and addressing persistent disparities in outcomes.

The order emphasizes the need for state agencies to embed explicit equity considerations in their policies and practices. This includes analyzing demographic and geographic gaps in outcomes and access to funding and services, developing data analysis tools to understand these gaps, and reviewing community engagement strategies with a focus on Californians residing in historically underserved and marginalized communities.

This bill requires administrators to promote equity in and facilitate the effectiveness of distribution of grant funds for covered grants. This includes posting eligibility requirements and application information on their website and the California Grants Portal, providing eligible recipients with the ability to complete an application for a covered grant online, and conducing outreach to eligible nonprofit organizations at least 90 days before the application deadline for grant programs totally $200,000 or more.

Prior/Related Legislation

SB 336 (Umberg, 2023) requires the Department of General Services to establish a process for nonprofits to negotiate a state standard negotiated cost agreement, as defined, and requires state agencies administering grant programs to use the same terms as contained in a grantee’s existing negotiated indirect cost rate agreement policies approved by the federal government, or the same terms contained in the state standard negotiated cost agreement, as specified. (Pending in the Assembly Accountability and Administrative Review Committee)

SB 557 (Limon, 2023) expands the definition of a grant for the purposes of the California Prompt Payment Act requiring timely payments to include nonprofits by changing what is considered a grant and sets a specific monetary threshold of $250 or 5% of the invoiced amount (whichever is lower) for when a state agency can dispute a bill related to property or services delivered. (Pending in the Assembly Accountability and Administrative Review Committee)

AB 590 (Hart, 2023) authorizes a state agency administering a grant program to provide an advance payment to a recipient 501(c)(3) non-profit organization. (Pending in the Senate Governmental Organization Committee)

AB 619 (V. Fong, 2023) authorizes a process for nonprofit entities contracted with the state to request an alteration to the services provided in the event of a state of war, state of emergency, or other disruption. (Pending in the Senate Governmental Organization Committee)

AB 696 (Lowenthal, 2023) enacts the California State Grants and Contracts Modernization Act to require all state agencies to provide for, but not require, all state grant and contract transactions to occur online. (Pending in the Senate Governmental Organization Committee)

AB 885 (L. Rivas, 2023) establishes the “California Nonprofit Fairness in Contracting Act” which would provide nonprofits preferential treatment when contracting with the state for goods or services or when contracting with a local agency using state funds. (Never heard in the Assembly Accountability and Administrative Review Committee)

AB 2252 (Limon, Chapter 318, Statutes of 2018) the California Grant Information Act of 2018, requires the California State Library to create an internet web portal to provide a centralized location for grant seekers to find state grant opportunities and requires the California State Library to report to the Legislature on the effectiveness of the portal, including, among other things, the utilization rate by state agencies.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT:

CalNonprofits (Source)

Breathe California

California Coalition for Community Investment

California Family Resource Association

California Partnership to End Domestic Violence

Center for nonprofit management

Child Abuse Prevention Center

Children’s Institute

Community Bridges

El Concilio of Stockton

Fresno Building Healthy Communities

HealthRight360

Inland Empire Community Collaborative

Koreatown youth + Community Center

Meals on Wheels California

Nonprofit Finance Fund

PATH

Rural Community Assistance Corporation

Santa Cruz Volunteer Center

Self-Help Enterprises

TreePeople

United Ways of California

OPPOSITION:

None received

ARGUMENTS IN SUPPORT: A coalition of nonprofits in support of the bill write that, “[a]ligned with the Governor’s ‘California for All’ vision, AB 860 responds to the impact the pandemic has had on our communities, the need to address equity and inequality in access to state resources, and the imperative to support strong and varied community-based organizations to address increased need. Passing AB 860 and the rest of the California Nonprofit Equity Initiative will strengthen the essential partnership between the state and nonprofits and our mutual efforts to deliver the highest quality services to the people of California. VaccinateAll58 - an outreach program from the California Department of Public Health – offers an example of a step in the right direction. The agency made dozens of outreach grants of $5,000 or less to both small and large nonprofits. The final report was simplified, requiring no more than 1,100 words in narrative, and no receipts. While not appropriate for large grants and contracts, this process was efficient, equitable and appropriate for small contracts.”

ASSEMBLY THIRD READING

ATR Bill Id:AB 860

Author:(Valencia)

As Amended Ver:May 18, 2023

Majority vote

SUMMARY

Imposes new requirements on the administration of short-term grants of $20,000 or less made by a state agency or third-party contractor using state funds. This bill also requires the expansion of the California Grants Portal to include specified information about such grants.

Major Provisions

1. Imposes new requirements for the administration of a "covered grant," meaning a grant made by a state agency or administrator meeting the following requirements:
   1. The grant amount is $20,000 or less.
   2. The duration of the grant is one year or less.
   3. A 501(c)(3) nonprofit organization is an eligible recipient of the grant program.

An "administrator" means a state agency or third-party contractor administering a grant program using state funds.

1. Requires an administrator to post eligibility and application information for covered grants on the administrator's website, as well as the online grant portal managed by the California State Library (CSL). Required application information includes frequently asked questions and a telephone number where applicants can contact the administrator questions. The administrator must provide an online application process for the covered grant.
2. Requires an administrator of a grant program of $200,000 or more to conduct outreach to eligible nonprofit organizations, including those in rural, low-income, and disadvantaged communities, at least 90 days before the application deadline.
3. Requires an administrator to distribute at least 50% of a grant award upon execution of a covered grant.
4. Prohibits an administrator from requiring a covered grant recipient to provide specified receipts or carry specified insurance coverage limits.

COMMENTS

>California Grants Portal. AB 2252 (Limón), Chapter 318, Statutes of 2018, required the CSL to create an online grant portal providing a centralized location for grant seekers to find state grant opportunities. Each state agency must register every grant administered with the CSL prior to commencing a solicitation or award process, provide a link to the CSL grant portal on the agency's website, and accept electronic grant proposal applications, as appropriate. The ensuing California Grants Portal (grants.ca.gov) facilitates the search of current grant opportunities filtered by applicant type (such as business, nonprofit, public agency), grant category (such as education, food and nutrition, veterans and military), and timeframe.

Streamlining the Administration of Grants. This bill is part of the California Nonprofit Equity Initiative, a package of legislation developed by the California Association of Nonprofits (CalNonprofits) intended to improve how state government contracts with nonprofits. This bill is supported by a number of individual nonprofit organizations.

This bill specifies how smaller grants of $20,000 or less, with a duration of one year or less, and for which a nonprofit organization is eligible, must be administered when state funds are utilized for the grant. While this bill will bolster nonprofit grantees, this bill's provisions also apply to other types of grant applicants, such as local agencies or for-profit entities, otherwise eligible for the grant.

This bill also requires an administrator to distribute at least 50% of a grant award upon execution of a covered grant, while also possibly authorizing distribution of the full award amount upon execution. Although the grants impacted by this bill are likely much smaller in scope than the majority of state-funded grants, thus resulting in a smaller advance payment amount overall, existing law generally allows an advance payment of up to 25% only. Additionally, only specified state agencies are permitted to provide advance payments under specified programs.

Related Legislation. AB 590 (Hart) authorizes a state agency administering a grant program or contract to provide an advance payment to a recipient 501(c)(3) non-profit organization. AB 590 is on the Assembly Floor.

According to the Author

"AB 860 is an important and timely bill that will improve and streamline nonprofits' ability to access state grants by reducing the effort and expense associated with applying for and receiving state funds pursuant to very small grants."

AB 860 will ensure California partners equitably with small nonprofits, so they may thrive as both service providers and employers. Nonprofits have continuously stepped up to provide services to our communities and our most needy, particularly during the COVID pandemic. As demonstrated by the testimony from the Joint Informational Hearing from last session, nonprofits are struggling to stay afloat, afford basic necessities, and are unable to recruit and retain qualified staff. We cannot provide these services at the expense of our nonprofit partners. California is well positioned to improve how it contracts and provides small grants to nonprofits.

AB 860 will streamline access to small grants by reducing barriers and over burdensome administrative requirements. AB 860 is part of the California Nonprofit Contracting Equity Initiative legislative package aimed at strengthening the essential partnership between the state and nonprofits to benefit all Californians, particularly our most vulnerable residents.

Arguments in Support

According to the California Association of Nonprofits (CalNonprofits), the "size of state grants…vary significantly. Opportunities currently listed on the state's grants portal – grants.ca.gov – include grants as large as $22 million and as small as $320. Using the same application, qualifications and reporting processes for small contracts is unnecessary and expensive."

As an example of how the administration of smaller grants should differ from larger grants, CalNonprofits highlights "VaccinateAll58," a California Department of Public Health outreach program that made grants of $5,000 or less to both small and large nonprofits. CalNonprofits notes the "final report was simplified, requiring no more than 1,100 words in narrative, and no receipts. While not appropriate for large grants and contracts, this process was efficient, equitable and appropriate for small [grants]."

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Appropriations Committee:

1. One-time and ongoing costs of an unknown amount, potentially in the low hundreds of thousands of dollars to CSL in staff time and technology upgrades to modify the California Grants Portal to include information required by this bill (General Fund). CSL notes the current portal hosts competitive, first-come grant award programs administered by state agencies, as well as loans and federal assistance funds. The portal was built in collaboration with state agencies to accommodate state processes. This bill adds grants administered by third-party contractors to the portal, a universe of unknown size with differing data needs than the state grants currently listed on the portal. Anticipated CSL workload to expand the portal includes meeting with third-party grant administrators and applicants to gather information regarding their grantmaking needs and testing updated portal functionality.
2. Costs of an unknown, but potentially significant, amount to the state by creating new requirements for state agencies administering smaller grants, as well as for other entities administering such grants with state funds (General Fund and special fund). The magnitude of costs depends on the volume of impacted grants and may be minor and absorbable for a state agency with few impacted grant programs (whether the state agency is the direct administrator or oversees administration of a state-funded grants by a third-party entity), but significant for other state agencies. Anticipated state agency workload costs include posting grant information on the agency's website, conducting outreach to nonprofit organizations, and distributing advanced payments.

VOTES

ASM ACCOUNTABILITY AND ADMINISTRATIVE REVIEW: 7-0-0

YES: Petrie-Norris, Dixon, Bains, Davies, Stephanie Nguyen, Rodriguez, Wilson

ASM APPROPRIATIONS: 11-0-5

YES: Holden, Bryan, Calderon, Wendy Carrillo, Mike Fong, Hart, Lowenthal, Papan, Pellerin, Weber, Ortega

ABS, ABST OR NV: Megan Dahle, Dixon, Mathis, Robert Rivas, Sanchez

UPDATED

VERSION: May 18, 2023

CONSULTANT: Bernie Orozco / A. & A.R. / (916) 319-3600 FN: 0000898

Date of Hearing: April 19, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 860

Author:(Valencia) – As Amended Ver:March 13, 2023

Urgency: No State Mandated Local Program: Yes Reimbursable: Yes

SUMMARY:

This bill imposes requirements on the administration of short-term grants of $20,000 or less made by a state agency, local agency, or third-party contractor using state funds. This bill also requires expansion of the California Grants Portal to include specified information about such grants.

Specifically, this bill:

1. Imposes requirements for the administration of a “covered grant,” meaning a grant made by a state agency or administrator meeting the following requirements:
2. The grant amount is $20,000 or less.
3. The duration of the grant is one year or less.
4. A 501(c)(3) nonprofit organization is an eligible recipient of the grant program.

An “administrator” means a state agency, local agency, or third-party contractor administering a grant program using state funds.

1. Requires an administrator to post eligibility and application information for covered grants on the administrator’s website, as well as the online grant portal managed by the California State Library (CSL). Required application information includes frequently asked questions and a telephone number where applicants can contact the administrator with questions. The administrator must provide an online application process for the covered grant.
2. Requires an administrator of a grant program of $200,000 or more to conduct outreach to eligible nonprofit organizations, including those in rural, low-income, and disadvantaged communities, at least 90 days before the application deadline.
3. Requires an administrator to distribute at least 50% of a grant award upon execution of a covered grant.
4. Prohibits an administrator from requiring a covered grant recipient to provide specified receipts or carry specified insurance coverage limits.

FISCAL EFFECT:

1. One-time costs of approximately $20,000 and ongoing costs of at least $553,000 to CSL in staff time and technology upgrades to modify the California Grants Portal to include information required by this bill (General Fund). CSL notes the current portal hosts competitive, first-come grant award programs administered by state agencies, as well as loans and federal assistance funds. The portal was built in collaboration with state agencies to accommodate state processes. This bill adds grants administered by local government agencies and third-party contractors to the portal, a universe of unknown size with differing data needs than the state grants currently listed on the portal. Anticipated CSL workload to expand the portal includes meeting with local government and third-party grant administrators and applicants to gather information regarding their grantmaking needs and testing updated portal functionality.
2. Costs of an unknown, but potentially significant, amount to the state by creating new requirements for state agencies administering smaller grants, as well as for other entities administering such grants with state funds (General Fund or special fund). The magnitude of costs depends on the volume of impacted grants and may be minor and absorbable for a state agency with few impacted grant programs (whether the state agency is the direct administrator or oversees administration of a state-funded grant by a local government or third-party entity), but significant for other state agencies. Anticipated state agency workload costs include posting grant information on the agency’s website, conducting outreach to nonprofit organizations, and distributing advanced payments.
3. By requiring a city, county, special district, authority, or other political subdivision of the state to administer state-funded grants in a specified manner, this bill may create a state-mandated local program. If the Commission on State Mandates determines the provisions of this bill create a new program or impose a higher level of service for which the state must reimburse local costs, the local agency could claim reimbursement from the state (General Fund or special fund). Anticipated local agency costs mirror the above-described state agency workload costs, but also include collaborating with CSL on portal expansion and ensuring an online application process for a covered grant.

COMMENTS:

1. Purpose. According to the author, this bill “will improve and streamline nonprofits’ ability to access state grants by reducing the effort and expense associated with applying for and receiving state funds pursuant to very small grants.”

This bill is part of the California Nonprofit Equity Initiative, a package of legislation developed by the California Association of Nonprofits (CalNonprofits) intended to improve how state government contracts with nonprofits. This bill is supported by CalNonprofits and a range of individual nonprofit organizations.

1. California Grants Portal. AB 2252 (Limon), Chapter 318, Statutes of 2018, required the CSL to create an online grant portal providing a centralized location for grant seekers to find state grant opportunities. Each state agency must register every grant administered with the CSL prior to commencing a solicitation or award process, provide a link to the CSL grant portal on the agency’s website, and accept electronic grant proposal applications, as appropriate. The ensuing California Grants Portal (grants.ca.gov) facilitates the search of current grant opportunities filtered by applicant type (such as business, nonprofit, public agency), grant category (such as education, food and nutrition, veterans and military), and timeframe.

According to CalNonprofits, the size of state grants and contracts vary significantly, with current grant opportunities listed on the portal ranging from $320 to $22 million. As an example of how the administration of smaller grants should differ from larger grants, CalNonprofits highlights VaccinateAll58, a California Department of Public Health outreach program that made grants of $5,000 or less to both small and large nonprofits. CalNonprofits notes “The final report was simplified, requiring no more than 1,100 words in narrative, and no receipts. While not appropriate for large grants and contracts, this process was efficient, equitable and appropriate for small contracts.”

This bill specifies how smaller grants of $20,000 or less, with a duration of one year or less, and for which a nonprofit organization is eligible, must be administered when state funds are utilized for the grant. While this bill will bolster nonprofit grantees, this bill’s provisions also apply to other types of grant applicants, such as local agencies or for-profit entities, otherwise eligible for the grant.

1. Advance Payments. This bill also requires an administrator to distribute at least 50% of a grant award upon execution of a covered grant, while also authorizing distribution of the full award amount upon execution. Although the grants impacted by this bill are likely much smaller in scope than the majority of state-funded grants, thus resulting in a smaller advance payment amount overall, existing law generally allows an advance payment of up to 25% only. Additionally, only specified state agencies are permitted to provide advance payments under specified programs.
2. Related Legislation. AB 590 (Hart) authorizes a state agency administering a grant program or contract to provide an advance payment to a recipient 501(c)(3) non-profit organization. AB 590 is pending hearing in this committee.

Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081

Date of Hearing: March 29, 2023

ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW

Cottie Petrie-Norris, Chair

ABPCA Bill Id:AB 860 (

Author:Valencia) – As Amended Ver:March 13, 2023

SUBJECT: Grant programs: administration

SUMMARY: > This bill would create the new Small Grants Program to impose minimum requirements for the administration of “covered grants” that meet maximum size and duration requirements and are available to nonprofit organizations, as defined. Specifically, this bill would:

1. Require state agency, local agency or third-party contract grant administrators to post eligibility, application, and other information for “covered grants” funded by the state on their internet website and the above-described grant portal created by the California State Library.
2. Define “covered grants” as a grant made by a state agency or administrator that meets all of the following requirements:
   1. The grant amount is not greater than twenty thousand dollars ($20,000).
   2. The duration of the grant period is not greater than one year.
   3. Eligible recipients of the grant program include nonprofit organizations.
3. Require administrators to provide eligible recipients with the ability to apply for a covered grant online.
4. Require administrators for grant programs totaling $200,000 or more to conduct outreach to eligible nonprofits, at least 90 days before the application deadline, including outreach to rural, low-income, and disadvantaged communities.
5. Impose minimum requirements on the distribution of grant funds. An administrator shall distribute at least 50 percent of a grant award and may distribute up to 100 percent of a grant award upon execution of a covered grant.
   1. Prohibit an administrator from requiring any of the following:
      A recipient of a covered grant to provide receipts for any expense other than nonpayroll expenses paid to a single vendor for 50 percent or more of the grant award.
   2. A narrative portion of a report for a covered grant to be more than 600 words.
   3. A grant recipient to carry insurance coverage limits that exceed the risk associated with the covered grant activity.

EXISTING LAW:

The California State Library shall create an Internet Web portal that provides a centralized location for grant seekers to find state grant opportunities. (Government Code Section 8333.1)

Each state agency shall register every grant the state agency administers with the California State Library Internet Web portal prior to commencing a solicitation or award process for distribution of the grant. Each agency shall provide detail information about each grant to provide potential applicants with understandable and consistent information about available funding opportunities. (Government Code Section 8334)

FISCAL EFFECT: Unknown, this bill has not been analyzed by a fiscal committee.

COMMENTS:

On February 17, 2022, the Assembly and Senate Select Committees on the Nonprofit Sector held a joint hearing featuring panelists and public comment from nonprofit leaders across the state. The hearing, entitled, “A Blueprint to Ensure Nonprofits are Supported and Thrive during Future Emergencies” focused on the challenges nonprofits faced in implementing programs during the height of the COVID-19 Pandemic.

The committees concluded that government contracting challenges remain a key barrier for nonprofits providing needed services. “Strong government-nonprofit partnerships are vital to ensure Californians have access to quality services and programs, to support the nonprofit sector as key employers in the state, and to bolster economic recovery, particularly in historically underserved communities.”

One Size Does Not Fit All. Having the same administrative process for both a $1 million and a $20,000 grant or contract is clearly unreasonable and burdensome. According to proponents, some agencies have already begun to streamline administrative requirements for small grants. Specifically noted was the California Department of Public Health (CDPH). The California Association of Nonprofits and its’ coalition members noted in their Letter of Support that:

“CDPH “made a dozen of outreach grants of $5,000 or less to both small and large nonprofits. The final report was simplified, requiring no more than 1,100 words in narrative, and no receipts. While not appropriate for large grants and contracts, this process was efficient, equitable and appropriate for small contracts.”

AB 860 is similarly attempting to streamline overly burdensome administrative requirements for small grants and contracts.

According to the Author:

“AB 860 is an important and timely bill that will improve and streamline nonprofits’ ability to access state grants by reducing the effort and expense associated with applying for and receiving state funds pursuant to very small grants.”

“AB 860 will ensure California partners equitably with small nonprofits, so they may thrive as both service providers and employers. Nonprofits have continuously stepped up to provide services to our communities and our most needy, particularly during the COVID pandemic. As demonstrated by the testimony from the Joint Informational Hearing from last session, nonprofits are struggling to stay afloat, afford basic necessities, and are unable to recruit and retain qualified staff. We cannot provide these services at the expense of our nonprofit partners. California is well positioned to improve how it contracts and provides small grants to nonprofits.”

“AB 860 will streamline access to small grants by reducing barriers and over burdensome administrative requirements. AB 860 is part of the California Nonprofit Contracting Equity Initiative legislative package aimed at strengthening the essential partnership between the state and nonprofits to benefit all Californians, particularly our most vulnerable residents.”

Arguments in Support:

Proponents of the measure, including the California Association of Nonprofits (Sponsor), noted in their letter of support that the “size of state Grants and contracts vary significantly. Opportunities currently listed on the state’s grants portal – grants.ca.gov – include grants as large as $22 million and as small as $320. Using the same application, qualifications and reporting processes for small contracts is unnecessary and expensive.”

They further state that AB 860 will “support the state’s equity and access goals by reducing the effort and expense associated with very small state grants to nonprofits, including those administered by a third part.”

Arguments in Opposition:

None on File.

Prior/Related Legislation

AB 2252 (Limon), Chapter 318, Statutes of 2018, required the California State Library, by July 1, 2020, to create an online funding opportunity portal that provides grant seekers a central location for state grant information. Requires each state agency to provide to register every grant the state agency administers with the State Library prior to commencing a solicitation or award process for distribution of the grant. Require the State Library to provide an annual report to the Legislature on the effectiveness of the portal.

AB 1348 (Irwin), Chapter 444, Statutes of 2016, established the position of federal grant administrator within the State Clearinghouse, to serve as the state’s primary point of contact for information on federal grants related to community, economic, and local development.

AB 187 (Hertzberg), Chapter 405, Statutes of 1999, the Grant Information Act of 1999 authorized state agencies to make available on their Internet Web sites a listing of all grants administered by that agency, as specified.

REGISTERED SUPPORT / OPPOSITION:

Support

California Association of Nonprofits
California Council of Community Behavioral Health Agencies (CBHA)
California Partnership to End Domestic Violence
California Releaf
Center for Nonprofit Management
Children's Institute
Community Alliance With Family Farmers
Community Bridges
El Concilio
Fresno Building Healthy Communities
Healthright 360
Inland Empire Community Collaborative
Inland Southern California United Way
Koreatown Youth + Community Center
Meals on Wheels California
Nonprofit Finance Fund (NFF)
Path (people Assisting the Homeless)
Rural Community Assistance Corporation (RCAC)
Santa Cruz Volunteer Center
Self-help Enterprises
Treepeople
United Ways of California (UWCA)

Opposition

None on file.

Analysis Prepared by: Bernie Orozco / A. & A.R. / (916) 319-3600