EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*sb0127*
SENATE BILL 127
P2, P1 5lr0680
(PRE–FILED) CF 5lr0922
By: Senator Kagan
Requested: August 14, 2024
Introduced and read first time: January 8, 2025
Assigned to: Budget and Taxation
A BILL ENTITLED
AN ACT concerning 1
State Government – Grants and Contracts – Reimbursement of Indirect Costs 2
FOR the purpose of altering the rate at which certain nonprofit organizations receiving 3
State–funded grants or contracts may be reimbursed for indirect costs; and generally 4
relating to State–funded grants and contracts. 5
BY repealing and reenacting, with amendments, 6
Article – State Finance and Procurement 7
Section 2–208 8
Annotated Code of Maryland 9
(2021 Replacement Volume and 2024 Supplement) 10
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 11
That the Laws of Maryland read as follows: 12
Article – State Finance and Procurement 13
2–208. 14
(a) (1) In this section the following words have the meanings indicated. 15
(2) “Indirect costs” means any costs that would be considered to be indirect 16
costs under OMB Uniform Guidance. 17
(3) “Nonprofit organization” means an organization that is tax exempt 18
under § 501(c)(3), (4), or (6) of the Internal Revenue Code. 19
(4) “OMB Uniform Guidance” means the Uniform Administrative 20
Requirements, Cost Principles, and Audit Requirements for Federal Awards adopted by the 21 2 SENATE BILL 127
Office of Management and Budget in 2 C.F.R. 200 and any related guidance published by 1
the Office of Management and Budget. 2
(b) (1) This section applies only to: 3
(i) a grant or contract awarded on or after October 1, 2018; 4
(ii) a multi–year grant or contract awarded before October 1, 2018, 5
if: 6
1. the grant or contract continues to be in effect on or after 7
October 1, 2018; and 8
2. funding for the grant or contract is required to be 9
authorized separately for each fiscal year; and 10
(iii) an extension or a renewal of a grant or contract if the extension 11
or renewal is awarded on or after July 1, 2019. 12
(2) This section applies whether or not the funds awarded through the 13
grant or contract are transferred directly by the State or through a third party to the 14
nonprofit organization. 15
(3) This section does not require the reimbursement of indirect costs 16
incurred under a multi–year grant or contract described under paragraph (1)(ii) of this 17
subsection during any fiscal year that begins before July 1, 2019. 18
(c) If a nonprofit organization is a direct recipient or subrecipient of a grant or 19
contract for the provision of services that is funded wholly with State funds or with a 20
combination of State and other nonfederal funds, the terms of the grant or contract shall 21
allow for reimbursement of indirect costs: 22
(1) at the same rate the nonprofit organization has negotiated and 23
received: 24
(i) for indirect costs under a direct federal award; or 25
(ii) from a nonfederal entity based on the cost principles in Subpart 26
E of OMB Uniform Guidance; or 27
(2) if the nonprofit organization has not negotiated and received an indirect 28
cost rate described in item (1) of this subsection, at a rate [of at least 10%] EQUAL TO THE 29
DE MINIMIS RATE ESTABLISHED IN SUBPART E OF OMB UNIFORM GUIDANCE of the 30
costs that would be considered modified total direct costs under OMB Uniform Guidance. 31
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 32
October 1, 2025. 33