State-funded assistance grants and contracts: advance payments.

Assembly Member Hart's legislation mandates advance payments for California state grants and contracts while establishing new transparency requirements for fund distribution. The bill requires state agencies to provide advance payments to qualified nonprofit organizations and tribal entities for all grants and contracts advertised after January 1, 2026, replacing the current optional advance payment system.

The measure modifies existing prioritization requirements for disadvantaged communities, limiting them to grants advertised before 2026. For subsequent grants, agencies must disclose the percentage of funds available as advance payments in both solicitation materials and grant registrations with the California State Library. While maintaining the standard 25% cap on advance payments, agencies may exceed this limit when recipient entities demonstrate sufficient need.

Recipients must meet specific requirements to qualify for advance payments, including providing detailed budgets, maintaining federally insured accounts for fund tracking, and submitting quarterly progress reports. The Department of Finance gains authority to audit both state agencies and recipients to verify proper fund utilization. The legislation preserves agencies' existing payment and grantmaking authorities while adding these new requirements for advance payments.