Making Government Meet Its Obligations
Nevada’s non-profit organizations provide critical services to our communities – from helping domestic violence victims to supporting the homeless. Yet when these organizations perform work under state grants, they often wait months for reimbursement, forcing them to drain reserves or take out loans just to keep helping people.
Assembly Bill 442 aims to fix this problem by requiring state agencies to process grant payments within 30 days or face interest penalties—just like anyone else who fails to pay on time in the private sector.
Over 100 non-profit leaders gathered at the Nevada Legislature on March 19 to support this reform. The bill was introduced on March 17, 2025, with eight Assembly sponsors (Watts, Nguyen, Mosca, Brown-May, D’Silva, Gallant, O’Neill, and Roth) and three Senate joint sponsors (Nguyen, Flores, and Stone).
Republican Assemblywoman Danielle Gallant, one of the bill’s cosponsors, put it plainly:
“If the government makes a commitment to help support a nonprofit then they need to make those payments within an agreed time frame or be subjected to interest just like any other entity in the business world.”
Why This Matters to Limited-Government Conservatives
Fiscal conservatives should support this bill for three simple reasons:
First, it holds government accountable. The bill makes state agencies pay interest from their own operating budgets when they’re late—creating real incentives for bureaucrats to process payments efficiently.
Second, it applies market discipline to government. When non-profits have to borrow money while waiting for reimbursements, taxpayers ultimately foot the bill through higher grant requests. Making agencies pay interest at the prime rate introduces market pressure for efficiency.
Third, it cuts red tape. The bill allows electronic invoicing and requires agencies to quickly review submissions, slashing the paperwork that causes delays.
Real Impact on Community Services
The current grant reimbursement system forces vital community organizations to front their own money for months while waiting for the state to pay them back. This creates real hardships that directly impact services to Nevada’s most vulnerable residents.
Samuel Rudd, CEO of United Way of Southern Nevada, highlighted a specific concern during the March 19 gathering:
“The Emergency Food and Shelter Program is currently on indefinite hold.”
This delay impacts Nevadans needing assistance with rent, food, and shelter.
How The Bill Fixes The Problem
AB442 introduces several specific reforms to make grant administration more efficient and accountable:
- Section 8 establishes a clear 30-day deadline for the state to process and authorize grant payments after receiving a proper invoice.
- Section 11 allows non-profits to request advance payments when justified. For state-funded grants, advances are limited to 25% of the annual grant amount. For federal pass-through grants, advances are limited to “the minimum amount to cover immediate cash requirements.”
- Section 9 holds state agencies accountable by requiring interest payments on late reimbursements, with that money coming from the agency’s own operating budget—creating a real incentive for prompt processing.
- Section 10 modernizes payment processes by allowing electronic invoicing and establishing clear timelines for reviewing invoices.
- The bill includes oversight provisions requiring the State Board of Examiners to adopt policies and procedures, and the Director of the Office of Finance to submit annual reports to the Interim Finance Committee.
These reforms apply standard business practices to government operations while maintaining fiscal safeguards. The bill specifically excludes direct cash assistance programs, subsidies, loans, and insurance from its provisions.
Looking Ahead
Assembly Bill 442 has been referred to the Committee on Government Affairs, with strong bipartisan support. There is no hearing scheduled yet. If passed, it won’t take effect until July 1, 2026, giving state agencies time to adapt their systems.
The timing is significant as lawmakers shape Nevada’s 2025-2027 biennial budget. The state operates on a two-year budget cycle, and this legislative session represents a critical opportunity to build accountability mechanisms into the next budget period.
It’s time for Nevada’s government agencies to meet their grant obligations promptly or face the same consequences that would apply to any business that fails to pay on time. After all, efficiency and accountability should be expected from government, especially when it impacts services to the most vulnerable members of our communities.
This article was written with the assistance of AI. Please verify information and consult additional sources as needed.
