PostgreSQL Permissions – Replacing Function Body by Users from Same Group

It is true that you cannot grant EXEC permissions on a function that returns a table. This type of function is effectively more of a view than a function. You need to grant SELECT instead, e.g.:

GRANT SELECT ON dbo.Table_Valued_Function TO [testuser];

So your script would look more like this (sorry, but I absolutely loathe INFORMATION_SCHEMA and much prefer to use the catalog views, which also don't need functions like OBJECTPROPERTY):

DECLARE 
    @sql      NVARCHAR(MAX) = N'',
    @username VARCHAR(255)  = 'testuser';

SELECT @sql += CHAR(13) + CHAR(10) + N'GRANT ' + CASE 
    WHEN type_desc LIKE 'SQL_%TABLE_VALUED_FUNCTION'
      OR type_desc = 'VIEW'
    THEN ' SELECT ' ELSE ' EXEC ' END 
    + ' ON ' + QUOTENAME(SCHEMA_NAME([schema_id])) 
    + '.' + QUOTENAME(name) 
    + ' TO ' + @username + ';'
 FROM sys.all_objects
WHERE is_ms_shipped = 0 AND
( 
    type_desc LIKE '%PROCEDURE' 
    OR type_desc LIKE '%FUNCTION'
    OR type_desc = 'VIEW'
);

PRINT @sql;
-- EXEC sp_executesql @sql;

Now you can grant EXEC on a schema, and always create these procedures in that schema (actually one of the purposes of schemas!), which @jgardner04 already suggested, however in order for this solution to apply to table-valued functions as well, you'd also have to grant SELECT. Which is okay if you're not storing any data in tables in that schema (or at least that you want to hide from them), but it will apply to any tables and views as well, which might not be your intention.

Another idea (e.g. if you can't, or don't want to, use schemas) is to write a DDL Trigger that captures the CREATE_PROCEDURE, CREATE_FUNCTION and CREATE_VIEW events, and grants permissions to a user (or a set of users, if you want to store them in a table):

CREATE TRIGGER ApplyPermissionsToAllProceduressAndFunctions -- be more creative!
    ON DATABASE FOR CREATE_PROCEDURE, CREATE_FUNCTION, CREATE_VIEW
AS
BEGIN
    SET NOCOUNT ON;

    DECLARE
        @sql       NVARCHAR(MAX),
        @EventData XML = EVENTDATA();

    ;WITH x ( sch, obj ) 
    AS
    (
        SELECT
          @EventData.value('(/EVENT_INSTANCE/SchemaName)[1]',  'NVARCHAR(255)'), 
          @EventData.value('(/EVENT_INSTANCE/ObjectName)[1]',  'NVARCHAR(255)')
    )
    SELECT @sql = N'GRANT ' + CASE 
      WHEN o.type_desc LIKE 'SQL_%TABLE_VALUED_FUNCTION' 
        OR o.type_desc = 'VIEW'
      THEN ' SELECT ' 
      ELSE ' EXEC ' END 
        + ' ON ' + QUOTENAME(x.sch) 
        + '.' + QUOTENAME(x.obj) 
        + ' TO testuser;' -- hard-code this, use a variable, or store in a table
    FROM x
    INNER JOIN sys.objects AS o
    ON o.[object_id] = OBJECT_ID(QUOTENAME(x.sch) + '.' + QUOTENAME(x.obj));

    EXEC sp_executesql @sql;
END
GO

The drawback I find with DDL Triggers is that you can quickly forget that they're there. So a year down the road when you decide to stop granting these permissions to all new objects, it might take a while to troubleshoot why it's still happening. At my last job we logged all actions invoked by DDL triggers to a central "event log" of sorts, and that was our go-to place for tracking down any actions that happened on the server that nobody seems to remember (and it was a DDL trigger about half the time). So you may consider adding some additional logic that will help with that.

EDIT

Adding code for schema-based, and I'll mention again that this will grant permissions on any procedures, functions and tables created in the foo schema.

CREATE SCHEMA foo;
GRANT EXEC, SELECT ON SCHEMA::foo TO testuser;

Now if you create the following procedure, testuser will be able to execute:

CREATE PROCEDURE foo.proc1
AS 
BEGIN
    SET NOCOUNT ON;
    SELECT 1;
END
GO

Two queries - two replies:

a) Placing business logic to database has strong defenders and strong opponents. Lot of arguments for/against are volatile and valid only for some configurations and environment. Some databases has not good capabilities for stored procedural programming, some companies has not good personal resources for programming in relative different environments. Some projects doesn't require really effective data processing and more valuable is simply monolithic deployment. There are a some arguments for placing business logic to database (only processes that are not INTERACTIVE!). You have to divide application to interactive (presentation) layer and non interactive layer (what is usually a best way, what you can do):

• natural decomposition of your application between data processing and data presentation layers
• very well accessible API in heterogeneous environment - logic in database is accessible from shell scripts, all languages, ...
• very efficient data processing due closeness data and processing unit (in PostgreSQL it is same process). It removes a network latency, conversions between protocols, layers, drivers - PL/pgSQL runs in same process as PostgreSQL core database engine and it use same data types.
• you can create a API based on stored procedures, so any changes on database layer are transparent for you and for your application.

Generally I can say, a power of stored procedures is more significant in heterogenous environment and less in monolititic single application environment.

b) PostgreSQL has a CREATE OR REPLACE FUNCTION statement and data visibility based on snapshots - so update in production usually is not problem. You can update database dictionary (with functions) under transaction.