Nevada panel hears bill to speed state grant payments, allow limited advances to nonprofits

CARSON CITY — Lawmakers heard testimony on Assembly Bill 442 on Thursday, a measure that would require state agencies to make prompt payments to nonprofits and authorize limited advance payments to qualified grantees.

Assemblymember Howard Watts (D-Assembly District 15), sponsor of AB 442, told the Assembly Committee on Government Affairs the bill would allow nonprofits that meet statutorily prescribed requirements to receive up to 25% of a grant up front and would require agencies to pay a "proper invoice" within 30 days or face interest penalties. "We have heard many stories about folks who cannot get paid in a timely manner," Watts said. "This bill looks to address that through two fundamental elements: allowing nonprofits who meet certain requirements to get up to 25% of a grant advanced…and requiring prompt payment."

Supporters said slow reimbursement has become a practical barrier to nonprofits accepting state contracts. Miles Dixon, CEO of Nevada Grant Lab, said AB 442 aligns state statute with federal grant rules in 2 CFR Part 200 (the Uniform Guidance), including recent changes that emphasize timely payment and, in certain circumstances, advanced payment. "Part of the uniform guidance that I want to highlight here is section 203.05, which addresses federal payment processes. This requires timely payment and advanced payment. Those are the core concepts included in 442," Dixon said.

United Way of Southern Nevada's Henry Rosas told the committee that a sector survey and direct outreach indicate many Nevada nonprofits carry little cash on hand; the bill's advance and prompt-payment provisions respond to two common obstacles, he said — delayed reimbursements and front-loaded startup costs for programs. Rosas summarized results from a December sector survey in which roughly a quarter of participating nonprofits reported waiting more than 60 days for reimbursement.

Under the bill as presented, the state would: - Define what constitutes a "proper invoice" that starts the 30‑day payment clock; - Require agencies to pay a proper invoice within 30 calendar days or begin paying interest as specified in statute (interest rate to be set by agreement or, if not agreed, calculated using the prime rate consistent with NRS 99.040 as referenced in testimony); - Authorize agencies to provide advance payments to eligible grantees, capped depending on the funding source (federal or state) and subject to documented financial controls, subrecipient monitoring, and other eligibility requirements; - Require agencies to notify grantees within 14 days if an invoice is not "proper," listing deficiencies to allow correction before interest accrues; and - Direct reporting of advance-payment activity and policy adoption to the Governor’s Finance Office and the Board of Examiners.

Dixon and other presenters emphasized that the advance-payment option is permissive and retains agency discretion and subrecipient-monitoring responsibilities. Dixon said the Uniform Guidance requires documentation, monitoring and justification for advances and that the bill tries to balance nonprofit cash needs with state fiduciary concerns.

Nonprofit leaders and intermediaries testified in strong support. Speakers from the Vegas Chamber, Food Bank of Northern Nevada, NAMI Nevada, United Way of Northern Nevada and the Sierra, UNLV, the Tahoe Rim Trail Association, and numerous smaller providers described situations in which delayed state payments strained payroll, forced organizations to use lines of credit, or interrupted service delivery. Trevor Parish of the Vegas Chamber said the bill would "streamline the grant process for nonprofits" and increase accountability. NAMI Nevada's Robin Rady said delays had reached six months in some cases and described the burden of holding several hundred thousand dollars in receivables while covering payroll.

Agency capacity and implementation questions were raised by committee members. Witnesses and the sponsor acknowledged that many state agencies operate with limited personnel and aging financial systems, and the bill includes exceptions (for state IT outages, weather closures and similar events) so agencies will not be unfairly penalized for circumstances beyond their control. The sponsors said they have continued conversations with agency staff and expect technical amendments to clarify implementation details.

No formal vote was taken on AB 442 during the hearing. The committee received a substantial number of written exhibits and oral statements in support; opponents did not present organized opposition during the time allotted.

Why it matters: Supporters said AB 442 could make state‑contracted services more reliable by ensuring providers can start work without crippling cash constraints and by reducing reimbursements that cross fiscal years and become state claims. Opponents and some agency interlocutors (in earlier conversations referenced in testimony) had worried about agency exposure if they were required to advance funds for federal pass‑through grants that remain reimbursement‑based; sponsors said the bill preserves agency discretion in those circumstances.

What happens next: The bill's sponsors said they expect technical amendments as agencies continue review. Committee members asked for clarifications on how earned interest would be treated and how recovery would proceed if advanced funds are misused; sponsors pointed to existing grant‑agreement remedies (audit, termination, recovery) and said policies adopted by the Board of Examiners would further clarify these details.

No formal committee action was recorded at the hearing; AB 442 remains before the Assembly Committee on Government Affairs for further consideration.