Spending Requirements for Federally Qualified Health Centers Initiative

Type: Citizen-initiated state statute
Subject: Business;Healthcare governance
Election: June 2, 2026 statewide primary

Overview

Prohibit healthcare clinics, specifically federally-qualified health centers and related organizations, from spending less than 90% of their annual revenue on mission-related purposes

Measure Design

See also: Text of measure Click on the following sections for summaries of the different provisions of the ballot measure. Expand All Spending requirements The initiative would require nonprofit federally qualified health centers (FQHCs) and FQHC Look-Alikes to spend at least 90% of their annual total revenue on expenses that advance the FQHC’s mission. The initiative defines this as the mission spend ratio , which would be calculated annually by the California Attorney General . A FQHC is defined in federal law as a community-based healthcare center that provides primary care and other services in underserved areas and qualifies for certain reimbursement systems under Medicaid and Medicare. An FQHC Look-Alike is an organization designated by the federal Health Resources and Services Administration as meeting FQHC program requirements. [1] Each FQHC or a look-alike would be required to submit to the Registry of Charities and Fundraisers the total expenditures on the clinic’s exempt purpose and total revenue for the clinic, to calculate the mission spend ratio. The initiative would authorize the attorney general to issue binding guidance on how to report the figures and additional reporting standards for penalties, reimbursements, and expenditures. The initiative would also require the attorney general to make the data publicly available on its website within 90 days of receipt, along with the calculated mission spend ratio. The initiative would authorize the attorney general to conduct audits to verify the accuracy of submitted information and ensure compliance with reporting requirements. [1] The initiative would require the health centers to submit an additional registration fee to fund the new law. Failure to meet the reporting requirements would result in a fine of $5,000 for the first violation and $10,000 for each subsequent violation. [1] The mission spend ratio would apply to each clinic’s first full fiscal year beginning at least six months after approval of the initiative. Penalty for not meeting mission spend ratio The initiative would authorize the state Department of Public Health to levy penalties for not meeting the 90% mission spend ratio. The penalty would be equal to the difference between the 90% requirement and the amount the clinic spent on mission-related expenses in that year. The initiative would create the Mission Spend Ratio Penalty Account within the state’s Special Deposit Fund, where penalty funds would be deposited. The violating clinic could be reimbursed for part of the penalty if the clinic comes into compliance with the 90% mission spend ratio and submits an approved plan to spend all of the money reimbursed on mission-directed expenses. The Department of Public Health would be authorized to subtract operating and enforcement expenses from the penalty amount for reimbursement. [1] Money in the fund not reimbursed after five years would be allocated by the legislature to clinical worker training, recruitment, and retention. Clinics would be authorized to dispute the mission spend ratio calculation within 30 days of receiving a penalty for noncompliance by submitting an appeal to the attorney general and the Department of Public Health. Clinics would also be authorized to file for a temporary waiver of the mission spend ratio for unexpected circumstances or poor economic conditions. [1] The initiative would also create criminal penalties for any director, officer, or agent of a clinic that falsifies information to increase their mission spend ratio. [1]

Ballot Title

The ballot title is as follows: [1] “ Require community health clinics spend 90% of revenue on program services. Initiative statute. [2] ”

Petition Summary

The summary provided for inclusion on signature petition sheets is as follows: [1] “ Requires nonprofit Federally Qualified Health Centers (community clinics that provide primary care to medically underserved areas and populations) to spend at least 90% of their revenue on program services advancing their charitable purpose, including but not limited to patient services, rather than management and overhead. Department of Public Health may waive spending requirement in exceptional circumstances. Authorizes Attorney General to publish guidance defining qualifying expenditures. Imposes monetary penalties for noncompliance, which may be refunded if centers become compliant within five years. Authorizes criminal charges for false reports and schemes to artificially increase spending ratio. [2] ”

Full Text

The full text of the ballot measure is below: [1]

Support

Californians for Responsible Healthcare , sponsored by SEIU-UHW West , is leading the campaign in support of the initiative. [3] [4]

Supporters

Unions SEIU-UHW West

Arguments

Brisa Barrera, a healthcare worker at a community clinic in Santa Rosa: “We’re calling for accountability because frontline workers and patients at community clinics deserve better. Clinics receive public dollars to serve vulnerable populations, but when that money is siphoned off for bloated administrative costs, it’s the patients and workers who suffer. This measure ensures that resources go where they’re needed most: into the clinics and toward care.” Renée Saldaña, spokesperson for SEIU-UHW: “The measure is designed to direct more funding into patient services and programs that are key to (a federally qualified health center’s) mission. That is not merely patient care, but encompasses all the ancillary services they provide in addition to direct patient care. There is no limitation that it be only direct patient care spending in the initiative.”

Opposition

Ballotpedia has not located a campaign in opposition to the ballot measure. You can share campaign information or arguments, along with source links for this information, with us at editor@ballotpedia.org .

Opponents

Organizations California Hospital Association

Campaign Finance

See also: Ballot measure campaign finance, 2026 The campaign finance information on this page reflects the most recent scheduled reports that Ballotpedia has processed , which covered through March 31, 2026 . The deadline for the next scheduled reports is July 31, 2026. Californians for Responsible Healthcare registered in support of the initiative and #25-0009 . It reported more than $13.9 million in contributions. [5] Cash Contributions In-Kind Contributions Total Contributions Cash Expenditures Total Expenditures Support $0.00 $13,973,828.04 $13,973,828.04 $0.00 $13,973,828.04 Oppose $0.00 $0.00 $0.00 $0.00 $0.00 Total $0.00 $13,973,828.04 $13,973,828.04 $0.00 $13,973,828.04

Donors

The following were the top donors who contributed to the support committee. [5] Donor Cash Contributions In-Kind Contributions Total Contributions SEIU United Health Care Workers West Political Issues Committee $0.00 $13,973,828.04 $13,973,828.04

Path To The Ballot

See also: Laws governing the initiative process in California An initiated state statute is a citizen-initiated ballot measure that amends state statute. There are 21 states that allow citizens to initiate state statutes, including 14 that provide for direct initiatives and nine (9) that provide for indirect initiatives (two provide for both). An indirect initiated state statute goes to the legislature after a successful signature drive. The legislatures in these states have the option of approving the initiative itself, rather than the initiative appearing on the ballot. In California, the number of signatures required for an initiated state statute is equal to 5% of the votes cast in the last gubernatorial election. A simple majority vote is required for voter approval. The requirements to get initiated state statutes certified for the 2026 ballot: Signatures : 546,651 valid signatures are required. Deadline : The deadline for signature verification is June 25, 2026. However, the secretary of state suggested deadlines for turning in signatures of January 12, 2026, for initiatives needing a full check of signatures and April 17, 2026, for initiatives needing a random sample of signatures verified.

Sources

• Ballotpedia — measure detail page
• Upstream: https://ballotpedia.org/California_Spending_Requirements_for_Federally_Qualified_Health_Centers_Initiative_(2026)