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.
Key takeaways
- 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
Primary source
California LegislatureFQHC 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. Primary source: California Legislature. Retrieved June 12, 2026, from https://www.fqhctalent.com/intel/ca-ab-1113-nonprofit-mission-spend-fqhc-risk-2026
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