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SB-1069 State grant programs: negotiated cost rate agreements.(2021-2022)

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Date Published: 03/24/2022 09:00 PM
SB1069:v98#DOCUMENT

Amended  IN  Senate  March 24, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 1069

Introduced by Senator Umberg

February 15, 2022

An act to add Chapter 17 (commencing with Section 8900) to Division 1 of Title 2 of the Government Code, to add Sections 116760.47 and 116766.5 to the Health and Safety Code, and to add Sections 189.7 and 13477.7 to the Water Code, relating to state grants.


LEGISLATIVE COUNSEL'S DIGEST


SB 1069, as amended, Umberg. State grant programs: negotiated cost rate agreements.

Existing law establishes the State Water Resources Control Board (SWRCB), consisting of 5 members, in the California Environmental Protection Agency to exercise certain powers relating to water rights, water quality, and safe and reliable drinking water. Existing law establishes various programs authorizing the board to provide financial assistance for water quality and drinking water purposes, including, among other programs, all of the following: (1) the State Water Pollution Control Revolving Fund for loans and other financial assistance for purposes related to the federal Clean Water Act; (2) the State Water Pollution Control Revolving Fund Small Community Grant Fund for grants for specified wastewater treatment projects; (3) the Safe Drinking Water State Revolving Fund for grants or revolving fund loans for the design and construction of projects for public water systems that will enable those systems to meet safe drinking water standards; (4) the Safe Drinking Water Small Community Emergency Grant Fund for grants for specified water projects that serve disadvantaged and severely disadvantaged communities; and (5) the Safe and Affordable Drinking Water Fund for grants, loans, contracts, or services to help water systems provide an adequate and affordable supply of safe drinking water.

This bill would require SWRCB to establish and use a standard negotiated cost agreement for awarding grants or permit compensation of indirect costs, as described and to the extent possible and permitted by federal law, with moneys from those specified funds to nonprofit organizations that do not have an existing negotiated indirect cost rate agreement and cost allocation policy approved by the federal government. In expending moneys from those specified funds for grants to nonprofit organizations that have an existing negotiated indirect cost rate agreement and cost allocation policy approved by the federal government, the bill would require the board, to the extent possible and permitted by federal law, to use the same terms as contained in the nonprofit organization’s existing negotiated indirect cost rate agreement and cost allocation policy approved by the federal government.

Existing law establishes the Department of General Services in the Government Operations Agency for purposes of providing centralized services of state government. Existing law establishes various state grant programs.
This bill would also require, to the extent possible and permitted by federal law, but except as provided, law, the Department of General Services to establish, by July 1, 2023, a state standard negotiated cost agreement for awarding state grants that are created on or after July 1, 2023, to grantees that do not have an existing negotiated indirect cost rate agreement and cost allocation policy approved by the federal government. The bill would require, to the extent possible and permitted by federal law, any state grant program that is created on or after January 1, 2023, to require the state agency or other state entity administering the grant to use the same terms as contained in the grantee’s existing negotiated indirect cost rate agreements and cost allocation policies approved by the federal government. The bill would require a state agency or other state entity administering those programs to use, commencing on and after July 1, 2023, the same terms as contained in the grantee’s state standard negotiated cost agreement. The bill would require, to the extent possible and permitted by federal law, these state agencies or other state entities to authorize a grantee that is a nonprofit organization and that does not have an existing federal negotiated indirect cost rate agreement or existing state standard negotiated cost agreement to instead be compensated for indirect costs pursuant to specified methods.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 It is the intent of the Legislature in enacting this act to ensure that nonprofit organizations are fairly compensated by the state for the full cost of providing services funded by grants. For grant programs using state funds, the Legislature finds and declares that California state agencies should allow for reimbursement of administrative expenses for nonprofit organizations that are consistent with each nonprofit organization’s federally approved negotiated indirect cost rate agreement and cost allocation policy.

SEC. 2.

 Chapter 17 (commencing with Section 8900) is added to Division 1 of Title 2 of the Government Code, to read:
CHAPTER  17. Uniform Cost Agreement for State Grants

8900.
 (a) (1) To the extent possible and permitted by federal law, any state grant program that is created on or after January 1, 2023, shall require the state agency or other state entity administering the grant to use the same terms as contained in the grantee’s existing negotiated indirect cost rate agreements and cost allocation policies approved by the federal government.
(2) To the extent possible and permitted by federal law, the state agency or other state entity administering the state grant program described in paragraph (1) shall use, commencing on and after July 1, 2023, the same terms as contained in the grantee’s state standard negotiated cost agreement, as created pursuant to subdivision (b), for grantees that do not have an existing negotiated indirect cost rate agreement and cost allocation policy approved by the federal government.
(3) (A) Notwithstanding paragraphs (1) and (2), to the extent possible and permitted by federal law, the state agency or other state entity administering the state grant program described in paragraph (1) shall authorize a grantee that is a nonprofit organization and that does not have an existing federal negotiated indirect cost rate agreement or existing state standard negotiated cost agreement to be compensated for indirect costs pursuant to one of the following methods:
(i) By using a de minimis rate of 10 percent of all direct costs under the grant or contract.
(ii) By negotiating a new percentage for the indirect cost rate with the awarding agency.
(iii) By using the same percentage for the indirect cost rate as the grantee negotiated with the agency within the past two years.
(B) This paragraph shall not preclude a grantee described in subparagraph (A) from renegotiating indirect cost rates with the state agency.
(b) To the extent possible and permitted by federal law, but except as provided in subdivision (c), the Department of General Services shall establish, by July 1, 2023, a state standard negotiated cost agreement for awarding state grants that are created on or after July 1, 2023, to grantees that do not have an existing negotiated indirect cost rate agreement and cost allocation policy approved by the federal government.

(c)Notwithstanding subdivisions (a) and (b), the requirements in Sections 116760.47 and 116766.5 of the Health and Safety Code and Sections 189.7 and 13477.7 of the Water Code shall prevail over the requirements of this section.

SEC. 3.Section 116760.47 is added to the Health and Safety Code, to read:
116760.47.

(a)On and after the date the board establishes a standard negotiated cost agreement pursuant to Section 189.7 of the Water Code, the board shall, in expending moneys from the fund or the Safe Drinking Water Small Community Emergency Grant Fund for grants to nonprofit organizations that do not have an existing negotiated indirect cost rate agreement and cost allocation policy approved by the federal government, use that standard negotiated cost agreement or permit compensation of indirect costs pursuant to paragraph (3) of subdivision (a) of Section 8900 of the Government Code to the extent possible and permitted by federal law.

(b)In expending moneys from the fund or the Safe Drinking Water Small Community Emergency Grant Fund for grants to nonprofit organizations that have an existing negotiated indirect cost rate agreement and cost allocation policy approved by the federal government, the board shall, to the extent possible and permitted by federal law, use the same terms as contained in the nonprofit organization’s existing negotiated indirect cost rate agreement and cost allocation policy approved by the federal government.

SEC. 4.Section 116766.5 is added to the Health and Safety Code, to read:
116766.5.

(a)On and after the date the board establishes a standard negotiated cost agreement pursuant to Section 189.7 of the Water Code, the board shall, in expending moneys from the fund pursuant to subdivision (b) of Section 116766 for grants to nonprofit organizations that do not have an existing negotiated indirect cost rate agreement and cost allocation policy approved by the federal government, use that standard negotiated cost agreement or permit compensation of indirect costs pursuant to paragraph (3) of subdivision (a) of Section 8900 of the Government Code to the extent possible.

(b)In expending moneys from the fund pursuant to subdivision (b) of Section 116766 for grants to nonprofit organizations that have an existing negotiated indirect cost rate agreement and cost allocation policy approved by the federal government, the board shall, to the extent possible, use the same terms as contained in the nonprofit organization’s existing negotiated indirect cost rate agreement and cost allocation policy approved by the federal government.

SEC. 5.Section 189.7 is added to the Water Code, to read:
189.7.

(a)The board shall establish, by July 1, 2023, a standard negotiated cost agreement for awarding grants, to the extent possible and permitted by federal law, with moneys from the following funds to nonprofit organizations that do not have an existing negotiated indirect cost rate agreement and cost allocation policy approved by the federal government:

(1)The Safe Drinking Water State Revolving Fund created pursuant to Section 116760.30 of the Health and Safety Code.

(2)The Safe Drinking Water Small Community Emergency Grant Fund created pursuant to Section 116760.46 of the Health and Safety Code.

(3)The Safe and Affordable Drinking Water Fund created pursuant to Section 116766 of the Health and Safety Code.

(4)The State Water Pollution Control Revolving Fund created pursuant to Section 13477.

(5)The State Water Pollution Control Revolving Fund Small Community Grant Fund created pursuant to Section 13477.6.

(b)The board may review and amend the standard negotiated cost agreement on a three- or five-year basis to minimize transaction costs.

SEC. 6.Section 13477.7 is added to the Water Code, to read:
13477.7.

(a)On and after the date the board establishes a standard negotiated cost agreement pursuant to Section 189.7, the board shall, in expending moneys from the fund or the grant fund for grants to nonprofit organizations that do not have an existing negotiated indirect cost rate agreement and cost allocation policy approved by the federal government, use that standard negotiated cost agreement or permit compensation of indirect costs pursuant to paragraph (3) of subdivision (a) of Section 8900 of the Government Code to the extent possible and permitted by federal law.

(b)In expending moneys from the fund or the grant fund for grants to nonprofit organizations that have an existing negotiated indirect cost rate agreement and cost allocation policy approved by the federal government, the board shall, to the extent possible and permitted by federal law, use the same terms as contained in the nonprofit organization’s existing negotiated indirect cost rate agreement and cost allocation policy approved by the federal government.