20250SB__124098AMD INTRODUCED 2026-02-19 AMENDED_SENATE 2026-03-25 REVISED 2026-06-25 2025 SB AMD Introduced by Senator McNerney (Principal coauthor: Assembly Member Hart) (Coauthors: Senators Richardson and Valladares) LEAD_AUTHOR SENATE McNerney PRINCIPAL_COAUTHOR ASSEMBLY Hart COAUTHOR SENATE Richardson COAUTHOR SENATE Valladares

An act to add and repeal

Section of the Government Code, relating to state government. state government Office of Nonprofit Empowerment. Existing law contains numerous provisions authorizing state agencies to award grants or contracts to nonprofit organizations to carry out various services and programs. Existing law authorizes a state agency that administers a grant program or contract to advance funds to a private nonprofit organization to which it has awarded a grant or contract, subject to certain limitations and requirements, as specified.

This bill would create the Office of Nonprofit Empowerment with the primary responsibility of overseeing and coordinating state policy in support of California’s nonprofit organizations. The bill would specify various duties and functions of the office, including providing guidance, resources, and technical assistance to nonprofit organizations on procurement and grantmaking laws, regulations, and best practices.

The bill would also require the office to develop and administer training and materials to state entities on advance payment and other strategies to reduce hurdles for nonprofit organizations to access state funding and implement state projects, as specified. The bill would authorize the office to update the State Administrative Manual and State Contracting Manual, as specified.

The bill would establish the office within the state government, would place the office under the control of a director who would be appointed by the Governor, and would require the director to hire staff to assist in the fulfillment of its duties and responsibilities. The bill would also require the office to post on its internet website, on or before July 1, 2028, ways to improve how nonprofits and the state partner, as specified. The bill would repeal these provisions on January 1, 2037. The bill would include related legislative findings and declarations.

This bill would appropriate unspecified amounts from the General Fund to an unspecified agency for the costs of establishing the Office of Nonprofit Empowerment.</xhtml:p><xhtml:p>This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.</xhtml:p>"?> MAJORITY NO YES NO NO NO NO NO NO NO NO The people of the State of California do enact as follows:

SECTION 1. The Legislature finds and declares both of the following: (

a) Nonprofit organizations are critical to the well-being of California’s communities, providing essential services and programs in the areas of education, health care, social services, the arts, natural resources, the environment, public safety, and more. (

b) The creation of a centralized voice for nonprofits in state government is necessary to foster collaboration and partnership between the two sectors, to improve access to resources and technical assistance for nonprofits for the ultimate benefit of program recipients, and to ensure more equity and fairness in service delivery and payment for those services.

SEC. 2.

Section is added to the Government Code , to read: <caml:Num>12818.</caml:Num><caml:LawSectionVersion id="id_413D86B5-9BD1-4152-AB5D-77F71383CB31"><caml:Content><xhtml:p>(a)<xhtml:span class="EnSpace"/>The Legislature finds and declares all of the following:</xhtml:p><xhtml:p>(1)<xhtml:span class="EnSpace"/>Nonprofit organizations are critical to the well-being of California’s communities, providing essential services and programs in the areas of education, health care, social services, the arts, natural resources, the environment, public safety, and more.</xhtml:p><xhtml:p>(2)<xhtml:span class="EnSpace"/>The creation of a centralized voice for nonprofits in state government is necessary to foster collaboration and partnership between the two sectors, to improve access to resources and technical assistance for nonprofits for the ultimate benefit of program recipients, and to ensure more equity and fairness in service delivery and payment for those services.</xhtml:p><xhtml:p>(b)<xhtml:span class="EnSpace"/>The </xhtml:p></caml:Content></caml:LawSectionVersion></caml:LawSection>"?> 12818. (

a) Upon appropriation of the Legislature, the Office of Nonprofit Empowerment is hereby established within the state government, with the primary responsibility of overseeing and coordinating state-level policies and strategies that support California’s nonprofit organizations. (c)<xhtml:span class="EnSpace"/>There shall be a Director of the Office of Nonprofit Empowerment. The director</xhtml:p>"?> (

b) A director of the Office of Nonprofit Empowerment shall be appointed by, and serve at the pleasure of, the Governor. The director shall be responsible for managing the affairs of the office and shall perform all duties, exercise all powers and jurisdiction, and assume and discharge all responsibilities necessary to carry out the purposes of this section. (d)</xhtml:p>"?> (

c) For the purposes of this section: (1) “Director” means the Director of the Office of Nonprofit Empowerment. (2) “Nonprofit organization” means an organization that qualifies as an exempt organization under

Section 501(c)(3) of the Internal Revenue Code or under

Section 23701d of the Revenue and Taxation Code. (3) “Office” means the Office of Nonprofit Empowerment. (4) “State entity” means an entity within the executive branch that is under the direct authority of the Governor, including, but not limited to, all departments, boards, bureaus, commissions, councils, and agencies. (e)</xhtml:p>"?> (

d) The duties and functions of the office shall include all of the following:

(1) Serve as the principal advocate and centralized point of contact in the state for nonprofit organizations and foster partnerships and collaboration between nonprofit organizations and state entities.

(2) Provide guidance, resources, and technical assistance to nonprofit organizations on procurement and grantmaking laws, regulations, and best practices.

(3) Conduct research and make policy recommendations on innovative best practices to promote greater accountability, efficiency, equity, and fairness in procurement and grantmaking processes and requirements, with a focus on reducing barriers for small grants, small nonprofits, and nonprofits working with disadvantaged, low-income, and underresourced communities.

(4) Develop and administer training and materials to state entities on advance payment as provided in

Section 11019.3 and any other federal, state, or local law, and other strategies to reduce hurdles for nonprofit organizations to accessing state funding and implementing state projects while maintaining accountability to taxpayers.

(5) Strengthen coordination and alignment across state entities that have regular touchpoints with nonprofit organizations, especially during declared emergencies.

(6) Assist nonprofit organizations in identifying and applying for available state grants, funding opportunities, and technical assistance.

(7) Advocate to ensure that the nonprofit sector is properly represented in state policymaking, including by representing the views and interests of nonprofit organizations before other state entities whose policies and activities may impact nonprofit institutions.

(8) In implementing paragraphs (1) to (7), inclusive, regularly consult with nonprofit organizations and experts to ensure efforts are informed by the needs of nonprofit organizations. (f)</xhtml:p>"?> (

e) The director shall hire staff to assist in the fulfillment of the duties and responsibilities of the office. (g)</xhtml:p>"?> (

f) The office may create, update, or publish, in consultation with the appropriate control agency, policies, standards, and procedures for state entities in the State Administrative Manual or State Contracting Manual. (h)</xhtml:p>"?> (

g) The office may, subject to available resources and consistent with applicable laws and regulations, contract and consult with nonprofit organizations, external entities, and vendors to develop training, curricula, and other resources as determined appropriate by the office. (i)</xhtml:p>"?> (

h) On or before July 1, 2028, the office shall post on its internet website opportunities to improve the ways nonprofits and the state partner together while maintaining accountability to Californians and public resources. After the initial posting, the office shall review and update the information on the internet website regularly to ensure the contents remain current and reflective of evolving best practices. This internet website shall include, but not be limited to, policy recommendations, potential statutory and regulatory changes, and promising administrative best practices related to all of the following:

(1) Efforts to further encourage and expand use of advance payments.

(2) Mechanisms to reflect and compensate nonprofits for the true cost of doing business in contracts and grant programs.

(3) Reforms to ensure equitable, fair, and prompt payment to nonprofit institutions.

(4) Opportunities for greater consistency in grantmaking processes, application, and reporting across state entities.

(5) Other strategies to reduce complexity and barriers for nonprofits to enter into and implement contracts and grants with the State of California, with a focus on small grant programs, small nonprofits, and nonprofit institutions serving historically marginalized communities.

(6) Facilitate communication and coordination with nonprofit organizations during emergencies. (j)</xhtml:p>"?> (

i) This

section shall remain in effect only until January 1, 2037, and as of that date is repealed. <caml:Num>SEC. 2.</caml:Num><caml:Content><xhtml:p>The sum of ____ dollars ($____) is hereby appropriated from the General Fund to the ____ for the costs of establishing the Office of Nonprofit Empowerment.</xhtml:p></caml:Content></caml:BillSection><caml:BillSection id="id_FACC1725-45C8-4618-A906-F86F3D9AF30D"><caml:Num>SEC. 3.</caml:Num><caml:Content><xhtml:p>This act is a bill providing for appropriations related to the Budget Bill within the meaning of subdivision (

e) of

Section of

Article IV of the California Constitution, has been identified as related to the budget in the Budget Bill, and shall take effect immediately.</xhtml:p></caml:Content></caml:BillSection>"?> REVISIONS: Heading—Line 3.