EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*sb0127*
SENATE BILL 127
P2, P1 5lr0680
(PRE–FILED) CF HB 300
By: Senator Kagan
Requested: August 14, 2024
Introduced and read first time: January 8, 2025
Assigned to: Budget and Taxation
Committee Report: Favorable with amendments
Senate action: Adopted
Read second time: February 28, 2025
CHAPTER ______
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
BY repealing and reenacting, without amendments, 11
Article – State Finance and Procurement 12
Section 2–210(a)(1), (2), (3), and (6), (b)(1)(iii), and (c) 13
Annotated Code of Maryland 14
(2021 Replacement Volume and 2024 Supplement) 15
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 16
That the Laws of Maryland read as follows: 17
Article – State Finance and Procurement 18
2–208. 19 2 SENATE BILL 127
(a) (1) In this section the following words have the meanings indicated. 1
(2) “Indirect costs” means any costs that would be considered to be indirect 2
costs under OMB Uniform Guidance. 3
(3) “Nonprofit organization” means an organization that is tax exempt 4
under § 501(c)(3), (4), or (6) of the Internal Revenue Code. 5
(4) “OMB Uniform Guidance” means the Uniform Administrative 6
Requirements, Cost Principles, and Audit Requirements for Federal Awards adopted by the 7
Office of Management and Budget in 2 C.F.R. 200 and any related guidance published by 8
the Office of Management and Budget. 9
(b) (1) This section applies only to: 10
(i) a grant or contract awarded on or after October 1, 2018; 11
(ii) a multi–year grant or contract awarded before October 1, 2018, 12
if: 13
1. the grant or contract continues to be in effect on or after 14
October 1, 2018; and 15
2. funding for the grant or contract is required to be 16
authorized separately for each fiscal year; and 17
(iii) an extension or a renewal of a grant or contract if the extension 18
or renewal is awarded on or after July 1, 2019. 19
(2) This section applies whether or not the funds awarded through the 20
grant or contract are transferred directly by the State or through a third party to the 21
nonprofit organization. 22
(3) This section does not require the reimbursement of indirect costs 23
incurred under a multi–year grant or contract described under paragraph (1)(ii) of this 24
subsection during any fiscal year that begins before July 1, 2019. 25
(c) If a nonprofit organization is a direct recipient or subrecipient of a grant or 26
contract for the provision of services that is funded wholly with State funds or with a 27
combination of State and other nonfederal funds, the terms of the grant or contract shall 28
allow for reimbursement of indirect costs: 29
(1) at the same rate the nonprofit organization has negotiated and 30
received: 31
(i) for indirect costs under a direct federal award; or 32 SENATE BILL 127 3
(ii) from a nonfederal entity based on the cost principles in Subpart 1
E of OMB Uniform Guidance; or 2
(2) if the nonprofit organization has not negotiated and received an indirect 3
cost rate described in item (1) of this subsection, at a rate [of at least 10%] EQUAL TO THE 4
GREATER OF THE DE MINIMIS RATE ESTABLISHED IN SUBPART E OF OMB UNIFORM 5
GUIDANCE OR 15% of the costs that would be considered modified total direct costs under 6
OMB Uniform Guidance. 7
2–210. 8
(a) (1) In this section the following words have the meanings indicated. 9
(2) “Council” means the Maryland Efficient Grant Application Council 10
established under § 2–209 of this subtitle. 11
(3) “Department” means the Department of Budget and Management. 12
(6) “Uniform Guidance” means the Office of Management and Budget 13
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for 14
Federal Awards, 2 C.F.R. Part 200. 15
(b) (1) In order to improve efficiency, streamline and reduce redundant 16
processes, reduce paperwork and administrative burdens on both granting agencies and 17
grant recipients, and facilitate development and implementation of a statewide centralized 18
grants management and accountability system, the Council shall study and make 19
recommendations to the Department regarding the entire grants life cycle, including: 20
(iii) regulations adopting each part of the uniform guidance, with 21
appropriate modifications for its application to grant–making entities in the State, 22
including modifications or variances based on the scope or size of particular grant 23
programs, grant–making entities, or grantees; 24
(c) On or before July 1, 2027, the Council shall submit a report on its full 25
recommendations as required by subsection (b)(1) of this section to the Department and the 26
General Assembly, in accordance with § 2–1257 of the State Government Article. 27
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 28
October 1, 2025. It shall remain effective for a period of 2 years and 9 months and, at the 29
end of June 30, 2028, this Act, with no further action required by the General Assembly, 30
shall be abrogated and of no further force and effect. 31