House bill 133 sponsor says committee will request substitute after status update on late state payments to grantees

Representative Rebecca Himshute, co‑sponsor of House Bill 133, told the House Community and Regional Affairs Committee that the office will request a committee substitute and seek to delay the bill's effective date to give state agencies time to adjust.

"This bill is seeking to address delayed payments to nonprofits, tribes, and municipalities, who often don't have the means to weather the storm that's created when the state is late in making a payment to an awarded grant or contract," Himshute said when she opened the update.

The update explained why departments have struggled to pay grantees on time. Ella Lubin, staff to Representative Himshute, said the Department of Health identified two primary causes: high staff turnover that impedes training and an accounting system implemented in 2018 that does not integrate with other department IT systems. "The department explained that they are currently rebuilding their workforce after COVID burnout increased vacancies," Lubin said.

Himshute said the sponsor team is working with agencies and the Department of Law to draft a committee substitute that will include technical edits and, likely, a delayed effective date. "We think the bill is still exceedingly necessary. We need to do this," she said, adding the delay would give departments time to hire and train staff and bring systems into compliance.

Hannah Lager, administrative services director at the Department of Commerce, Community and Economic Development (DCCED), told the committee the fiscal note tied to one section of the bill would reduce general‑fund interest revenue if advances were required automatically. "The impact of section 3 on the department really is it requires advances for a number of grants ... that would result in us outlaying funds earlier in the year ... which results in lost interest revenue to the general fund," Lager said.

Committee members pressed agencies on whether the problems were systemic across departments and whether a single, cross‑agency approach to IT and workflow modernization would help. DCCED staff said the department is replacing portions of its grants system with commercial software as a service and launching phased rollouts to integrate grants and financial systems. "We really do look at, if there's something out there that we can just buy ... but there are some things that do need to be more bespoke," Lager said.

No formal action or vote was taken on House Bill 133 at this meeting. The sponsor said she expects to request a committee substitute and return the bill for further consideration at the committee's next meeting, and staff said an amendment deadline will be announced by email.

Ending

The committee set House Bill 133 aside pending a committee substitute and additional fiscal information from state agencies. Members asked staff to circulate any newly filed fiscal notes and the sponsor to circulate the proposed CS before the next meeting.