House committee advances bill to require upfront retainers, faster reimbursement for nonprofits

The Colorado House Finance Committee advanced House Bill 11‑01 to the Committee on Appropriations on a 9‑4 vote after testimony from nonprofit leaders, state finance officials and agency staff about long reimbursement delays for state grants and contracts.

Sponsors said the bill aims to prevent smaller and mid‑size nonprofits from being forced to front months of operating costs while waiting for state reimbursements. Representative Rob Garcia, a co‑prime sponsor, told the committee that many community organizations “cannot afford to go three months, four months, even six months without receiving payment” and framed the measure as a way to let nonprofits “do the good work we entrust them to do.”

The bill would require an upfront retainer of 35% on state grants and contracts for organizations that qualify as 501(c)(3) nonprofits, limit the requirement to state (not federal) dollars, change invoicing rules so payments are made for the portion of an invoice that reaches “substantial compliance,” and start the statutory payment clock when a correct invoice is submitted. Sponsors also amended the bill to change a mandatory data collection about nonprofit leadership to a request.

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