AB75 - Revises provisions governing grants made by the State. (BDR 31-433)

A.B. 75 - *AB75* ASSEMBLY BILL NO. 75–COMMITTEE ON GOVERNMENT AFFAIRS (ON BEHALF OF THE CLARK REGIONAL BEHAVIORAL HEALTH POLICY BOARD) PREFILED NOVEMBER 20, 2024 ____________ Referred to Committee on Government Affairs SUMMARY—Revises provisions governing grants made by the State. (BDR 31-433) FISCAL NOTE: Effect on Local Government: No. Effect on the State: Yes. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to grants; declaring the policy of this State to make payments under a grant agreement within a certain period of time; imposing interest on amounts due under a written grant agreement which are not timely paid after the receipt of a proper invoice; requiring State entities that make grants to take certain actions upon receipt of an invoice; authorizing use of media other than original paper documents to process grant payments; and providing other matters properly relating thereto. Legislative Counsel’s Digest: This bill enacts requirements governing payments by State agencies to certain 1 nonprofit organizations that receive grants from those agencies and are reimbursed 2 by State agencies for services or other performance under a grant agreement. 3 Section 3 of this bill defines the term “grant” to establish the types of financial 4 assistance to which these requirements apply. Section 6 of this bill establishes that 5 the requirements of this bill do not apply to the Judicial Branch or Legislative 6 Branch of State Government, the Nevada System of Higher Education or any 7 institution within the System, or certain grants that support the State Public Works 8 Division of the Department of Administration in carrying out a program of capital 9 improvements. Section 10 of this bill excludes from the requirements of this bill 10 payments under grants which are executed, renewed or extended before July 1, 11 2025. 12 Section 7 of this bill declares that it is the policy of this State to complete all 13 processing and authorizations required by law to make a payment, as set forth in 14 – 2 – - *AB75* section 4 of this bill, within 37 days after the later of the date on which the payment 15 becomes due under the grant agreement or the date on which the State entity that 16 made the grant receives a proper invoice, as defined in section 5 of this bill. 17 Section 8 of this bill provides that, with certain exceptions, a State grant-making 18 entity is liable for interest at a rate of 9 percent per annum on amounts which are 19 due and payable under a written grant agreement and which the State grant-making 20 entity has failed to submit for payment within 30 days after receipt of a proper 21 invoice. Section 8 provides that interest begins accruing on the 38th day after the 22 date on which the State grant-making entity receives a proper invoice and requires 23 interest to be paid from the operating budget of the State grant-making entity, not 24 including funds appropriated to fund a grant. 25 Section 9 of this bill requires a State grant-making entity to mark an invoice 26 with the date the invoice was received and review the invoice as soon as practicable 27 to determine whether the invoice is a proper invoice. Section 9 authorizes a State 28 grant-making entity to use media that produce tangible recordings of information to 29 expedite payment, rather than requiring original paper documents, but requires a 30 State grant-making entity to provide adequate safeguards and controls to ensure the 31 integrity of the data and to prevent duplicate processing. 32 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. Chapter 353 of NRS is hereby amended by adding 1 thereto the provisions set forth as sections 2 to 9, inclusive, of this 2 act. 3 Sec. 2. As used in sections 2 to 9, inclusive, of this act, unless 4 the context otherwise requires, the words and terms defined in 5 sections 3, 4 and 5 of this act have the meanings ascribed to them 6 in those sections. 7 Sec. 3. 1. “Grant” means a legal instrument of financial 8 assistance between a State grant-making entity and a nonprofit 9 organization exempt from taxation under section 501(c) of the 10 Internal Revenue Code, 26 U.S.C. § 501(c), that is: 11 (a) Used to enter into a relationship the principal purpose of 12 which is to transfer anything of value from the State grant-making 13 entity to the grant recipient to carry out a public purpose 14 authorized by law and not to acquire property or services for the 15 direct benefit or use of the State grant-making entity; 16 (b) Used to provide for one or more payments in 17 reimbursement for services or other performance under the 18 agreement on a scheduled or other incremental basis; and 19 (c) Distinguished from a cooperative agreement in that it does 20 not provide for substantial involvement between the State grant- 21 making entity and the grant recipient in carrying out the activity 22 contemplated by the award. 23 2. The term does not include an instrument that provides 24 only: 25 – 3 – - *AB75* (a) Direct government cash assistance to a person; 1 (b) A subsidy; 2 (c) A loan; 3 (d) A loan guarantee; 4 (e) Insurance; or 5 (f) State funding that is required annually and is calculated 6 through a formula set in statute. 7 Sec. 4. “Payment” includes all processing and authorization 8 required by law from the State Board of Examiners, the Director 9 of the Office of Finance and the State Controller. 10 Sec. 5. “Proper invoice” means a bill, a written document or 11 an electronic transmission readable by the State grant-making 12 entity, provided by a grant recipient, that: 13 1. Requests an amount that is due and payable by law under 14 a written grant agreement; and 15 2. Includes: 16 (a) The federal employer identification number or social 17 security number of the grant recipient; 18 (b) Sufficient information to identify the grant agreement; and 19 (c) Any additional documentation the grant agreement 20 requires. 21 Sec. 6. The provisions of sections 2 to 9, inclusive, of this act 22 do not apply to: 23 1. The Legislative Department or Judicial Department of 24 State Government; 25 2. The Nevada System of Higher Education or any institution 26 of the Nevada System of Higher Education; or 27 3. Grants funded from general obligation bond proceeds or 28 from an appropriation made to the State Public Works Division of 29 the Department of Administration to support the Division in 30 carrying out a program of capital improvements. 31 Sec. 7. The Legislature declares that it is the policy of this 32 State to make a payment under a grant agreement within 37 days 33 after the later of: 34 1. The date on which the payment becomes due under the 35 grant agreement; or 36 2. The date on which the State grant-making entity receives a 37 proper invoice. 38 Sec. 8. 1. A State grant-making entity shall be liable for 39 interest at a rate of 9 percent per annum on any amount: 40 (a) That is due and payable by law under a written grant 41 agreement; and 42 (b) Which the State grant-making entity has failed, within 30 43 days after receipt of a proper invoice, to submit for payment in the 44 same manner as other claims against the State are paid. 45 – 4 – - *AB75* 2. Interest under this section shall accrue beginning on the 1 38th day after the date on which the State grant-making entity 2 receives a proper invoice. 3 3. A State grant-making entity is not liable for interest 4 pursuant to this section: 5 (a) Unless the grant recipient submits an invoice for the 6 interest within 30 days after receiving payment for the amount on 7 which the interest accrued; 8 (b) If the State grant-making entity has initiated legal 9 proceedings to dispute the amount owed to the grant recipient; 10 (c) Accruing more than 1 year after the 31st day after the State 11 grant-making entity receives a proper invoice; or 12 (d) On an amount that represents unpaid interest. 13 4. Interest for which a State grant-making entity is liable 14 pursuant to this section: 15 (a) Must be paid from the operating budget of the State grant- 16 making entity; and 17 (b) May not be paid from funds appropriated to fund a grant. 18 5. For the purposes of determining the due date of a payment 19 and the date on which interest begins to accrue, an invoice is 20 deemed to be received: 21 (a) For invoices that are mailed, when a proper invoice is 22 received by the State grant-making entity, as of the date the State 23 grant-making entity annotates the invoice with the date and time 24 of receipt; or 25 (b) For invoices that are transmitted electronically, on the date 26 the transmission is received by the State grant-making entity or the 27 next business day if the transmission is received after 5 p.m. 28 Sec. 9. 1. Upon receipt of an invoice, a State grant-making 29 entity shall: 30 (a) Mark the invoice with the date the invoice was received; 31 and 32 (b) Review the invoice as soon as practicable to determine 33 whether the invoice is a proper invoice. 34 2. If the State grant-making entity determines that the 35 invoice: 36 (a) Is a proper invoice, the State grant-making entity shall 37 submit the invoice for payment in the same manner as other 38 claims against the State are paid. 39 (b) Is not a proper invoice, within 2 business days after making 40 such a determination, the State grant-making entity shall notify 41 the grant recipient of all defects that prevent the invoice from 42 being a proper invoice. It is the responsibility of the grant recipient 43 to submit a corrected invoice. 44 3. A State grant-making entity: 45 – 5 – - *AB75* (a) May use media that produce tangible recordings of 1 information to expedite the payment process, rather than delaying 2 the processes by requiring original paper documents; and 3 (b) Shall provide adequate safeguards and controls to ensure 4 the integrity of the data and to prevent duplicate processing. 5 4. Failure by a State grant-making entity to comply with the 6 procedural requirements of this section does not constitute a late 7 payment. 8 Sec. 10. The provisions of this act apply only to a grant, as 9 defined in section 3 of this act, which is executed, renewed or 10 extended on or after July 1, 2025. 11 Sec. 11. This act becomes effective on July 1, 2025. 12 H