California Air Resources Board

Would have required a State agency providing a grant or contract to a federally recognized tribe or private nonprofit, under certain conditions, to pay a portion of the money to the grantee in advance. The bill would have required State agencies to state the percentage that may be given in advance in the solicitation for the grant or contract. This bill requires, by July 1, 2027, the Strategic Growth Council to develop a Statewide Advance Funds and Reconciliation Guide (Master Guide), as specified. The bill requires every State agency to adopt the Master Guide as its standard operating procedure for the disbursement, tracking, and reconciliation of advance payments, as provided.

View full bill text here  

Governor’s Veto Message

To the Members of the California State Assembly:

I am returning Assembly Bill 1039 without my signature.

This bill would require state agencies to provide advance payments for certain grants and contracts awarded to eligible nonprofit organizations and federally recognized tribes, and establish a statewide3 framework to administer and reconcile those payments.

While I appreciate the author's goal of reducing financial barriers for nonprofits and tribes, imposing a new statewide requirement would severely limit the state's oversight and protection of public funds. I signed AB 590 in 2023 and AB 3017 in 2024, which provided agencies with authority to process advance payments for these entities. It is important to ensure agencies maintain discretion to evaluate the financial and programmatic risks of each request for advance payments. I encourage the author and stakeholders to continue engaging with administering agencies to help ensure they are utilizing the existing authorization to the fullest extent possible when appropriate.

For these reasons, I cannot sign this bill.

Sincerely,

Gavin Newsom

View Governor’s veto message here