California AB 1113 Would Require Nonprofits to Spend 90% on Mission, FQHCs with Holding Companies or Pharmacy Subsidiaries Face Compliance Risk
AB 1113, advancing in the California Legislature, would require nonprofit health organizations to spend at least 90% of revenue on their stated mission, with penalties for excess executive compensation and administrative overhead. FQHCs with holding company structures, real estate subsidiaries, or 340B pharmacy operations could face dual-status compliance exposure.
CPCA and CCALAC are monitoring the bill, which passed committee in early April and advances to the full Assembly. Health center CFOs should model the 90% threshold against current expense allocation.
Part of
- State health elections and ballot measures
Proposition 44 (clinic spending requirement)
- 340B drug pricing
Key points
- Run a preliminary 90% mission spend analysis before AB 1113 advances — FQHCs with pharmacy subsidiaries or management company arrangements are most at risk
- Engage your CPCA or CCALAC lobbyist contact to flag operational concerns before the full Assembly vote — the bill is moving faster than expected
Sources for this story
California LegislatureSources for your board packet
This story's source plus 4 related stories and their sources, ready to print for your team or board.
Free. Unlocking the packet subscribes you to Intel Brief. You'll be subscribed right away, with no confirmation email. Unsubscribe with one click in any issue. If you unsubscribed before, we won't re-add you. We never sell your email. You can open each source above without an email.
FQHC Talent. (2026, April 10). California AB 1113 Would Require Nonprofits to Spend 90% on Mission, FQHCs with Holding Companies or Pharmacy Subsidiaries Face Compliance Risk. Source: California Legislature. Retrieved September 28, 2026, from https://www.fqhctalent.com/intel/ca-ab-1113-nonprofit-mission-spend-fqhc-risk-2026
More in Legislation
Sep 20
California signs AB 1307
Sep 18
California's health trailer bill AB 173 is law (Chapter 252): clinics lose their exemption from Medi-Cal enrollment moratoriums, and immigrant full-scope eligibility is restructured from October 1
Sep 18
Enrollees, physician groups and the City of Columbus sue HHS over the work-requirement rule's medical-frailty provisions, Taylor v. Kennedy, D. Md.
Sep 18
California AB 2756 is now law, Chapter 309 creates public Medi-Cal vision performance reporting, with no FQHC payment change