MD
Maryland Senate Bill SB127

Maryland 2025 Regular Session

Maryland Senate Bill SB127 Compare Versions

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1- WES MOORE, Governor Ch. 163
21
3-– 1 –
4-Chapter 163
5-(Senate Bill 127)
62
7-AN ACT concerning
3+EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4+ [Brackets] indicate matter deleted from existing law.
5+ Underlining indicates amendments to bill.
6+ Strike out indicates matter stricken from the bill by amendment or deleted from the law by
7+amendment.
8+ Italics indicate opposite chamber/conference committee amendments.
9+ *sb0127*
810
9-State Government – Grants and Contracts – Reimbursement of Indirect Costs
11+SENATE BILL 127
12+P2, P1 EMERGENCY BILL (5lr0680)
13+ENROLLED BILL
14+— Budget and Taxation/Health and Government Operations —
15+Introduced by Senator Kagan
1016
11-FOR the purpose of altering the rate at which certain nonprofit organizations receiving
12-State–funded grants or contracts may be reimbursed for indirect costs; and generally
13-relating to State–funded grants and contracts.
17+Read and Examined by Proofreaders:
1418
15-BY repealing and reenacting, with amendments,
16- Article – State Finance and Procurement
17- Section 2–208
18- Annotated Code of Maryland
19- (2021 Replacement Volume and 2024 Supplement)
19+_______________________________________________
20+Proofreader.
21+_______________________________________________
22+Proofreader.
2023
21-BY repealing and reenacting, without amendments,
22- Article – State Finance and Procurement
23- Section 2–210(a)(1), (2), (3), and (6), (b)(1)(iii), and (c)
24- Annotated Code of Maryland
25- (2021 Replacement Volume and 2024 Supplement)
24+Sealed with the Great Seal and presented to the Governor, for his approval this
2625
27- SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
28-That the Laws of Maryland read as follows:
26+_______ day of _______________ at ________________________ o’clock, ________M.
2927
30-Article – State Finance and Procurement
28+______________________________________________
29+President.
3130
32-2–208.
31+CHAPTER ______
3332
34- (a) (1) In this section the following words have the meanings indicated.
33+AN ACT concerning 1
3534
36- (2) “Indirect costs” means any costs that would be considered to be indirect
37-costs under OMB Uniform Guidance.
35+State Government – Grants and Contracts – Reimbursement of Indirect Costs 2
3836
39- (3) “Nonprofit organization” means an organization that is tax exempt
40-under § 501(c)(3), (4), or (6) of the Internal Revenue Code.
37+FOR the purpose of altering the rate at which certain nonprofit organizations receiving 3
38+State–funded grants or contracts may be reimbursed for indirect costs; and generally 4
39+relating to State–funded grants and contracts. 5
4140
42- (4) “OMB Uniform Guidance” means the Uniform Administrative
43-Requirements, Cost Principles, and Audit Requirements for Federal Awards adopted by the
44-Office of Management and Budget in 2 C.F.R. 200 and any related guidance published by
45-the Office of Management and Budget.
41+BY repealing and reenacting, with amendments, 6
42+ Article – State Finance and Procurement 7
43+ Section 2–208 8
44+ Annotated Code of Maryland 9
45+ (2021 Replacement Volume and 2024 Supplement) 10
4646
47- (b) (1) This section applies only to:
47+BY repealing and reenacting, without amendments, 11
48+ Article – State Finance and Procurement 12
49+ Section 2–210(a)(1), (2), (3), and (6), (b)(1)(iii), and (c) 13 2 SENATE BILL 127
4850
49- (i) a grant or contract awarded on or after October 1, 2018; Ch. 163 2025 LAWS OF MARYLAND
5051
51-– 2 –
52+ Annotated Code of Maryland 1
53+ (2021 Replacement Volume and 2024 Supplement) 2
5254
53- (ii) a multi–year grant or contract awarded before October 1, 2018,
54-if:
55+ SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 3
56+That the Laws of Maryland read as follows: 4
5557
56- 1. the grant or contract continues to be in effect on or after
57-October 1, 2018; and
58+Article – State Finance and Procurement 5
5859
59- 2. funding for the grant or contract is required to be
60-authorized separately for each fiscal year; and
60+2–208. 6
6161
62- (iii) an extension or a renewal of a grant or contract if the extension
63-or renewal is awarded on or after July 1, 2019.
62+ (a) (1) In this section the following words have the meanings indicated. 7
6463
65- (2) This section applies whether or not the funds awarded through the
66-grant or contract are transferred directly by the State or through a third party to the
67-nonprofit organization.
64+ (2) “Indirect costs” means any costs that would be considered to be indirect 8
65+costs under OMB Uniform Guidance. 9
6866
69- (3) This section does not require the reimbursement of indirect costs
70-incurred under a multi–year grant or contract described under paragraph (1)(ii) of this
71-subsection during any fiscal year that begins before July 1, 2019.
67+ (3) “Nonprofit organization” means an organization that is tax exempt 10
68+under § 501(c)(3), (4), or (6) of the Internal Revenue Code. 11
7269
73- (c) If a nonprofit organization is a direct recipient or subrecipient of a grant or
74-contract for the provision of services that is funded wholly with State funds or with a
75-combination of State and other nonfederal funds, the terms of the grant or contract shall
76-allow for reimbursement of indirect costs:
70+ (4) “OMB Uniform Guidance” means the Uniform Administrative 12
71+Requirements, Cost Principles, and Audit Requirements for Federal Awards adopted by the 13
72+Office of Management and Budget in 2 C.F.R. 200 and any related guidance published by 14
73+the Office of Management and Budget. 15
7774
78- (1) at the same rate the nonprofit organization has negotiated and
79-received:
75+ (b) (1) This section applies only to: 16
8076
81- (i) for indirect costs under a direct federal award; or
77+ (i) a grant or contract awarded on or after October 1, 2018; 17
8278
83- (ii) from a nonfederal entity based on the cost principles in Subpart
84-E of OMB Uniform Guidance; or
79+ (ii) a multi–year grant or contract awarded before October 1, 2018, 18
80+if: 19
8581
86- (2) if the nonprofit organization has not negotiated and received an indirect
87-cost rate described in item (1) of this subsection, at a rate [of at least 10%] EQUAL TO THE
88-GREATER OF THE DE MINIMIS RATE ESTABLISHED IN SUBPART E OF OMB UNIFORM
89-GUIDANCE OR 15% of the costs that would be considered modified total direct costs under
90-OMB Uniform Guidance.
82+ 1. the grant or contract continues to be in effect on or after 20
83+October 1, 2018; and 21
9184
92-2–210.
85+ 2. funding for the grant or contract is required to be 22
86+authorized separately for each fiscal year; and 23
9387
94- (a) (1) In this section the following words have the meanings indicated.
88+ (iii) an extension or a renewal of a grant or contract if the extension 24
89+or renewal is awarded on or after July 1, 2019. 25
9590
96- (2) “Council” means the Maryland Efficient Grant Application Council
97-established under § 2–209 of this subtitle. WES MOORE, Governor Ch. 163
91+ (2) This section applies whether or not the funds awarded through the 26
92+grant or contract are transferred directly by the State or through a third party to the 27
93+nonprofit organization. 28
9894
99-– 3 –
95+ (3) This section does not require the reimbursement of indirect costs 29
96+incurred under a multi–year grant or contract described under paragraph (1)(ii) of this 30
97+subsection during any fiscal year that begins before July 1, 2019. 31
98+ SENATE BILL 127 3
10099
101- (3) “Department” means the Department of Budget and Management.
102100
103- (6) “Uniform Guidance” means the Office of Management and Budget
104-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
105-Federal Awards, 2 C.F.R. Part 200.
101+ (c) If a nonprofit organization is a direct recipient or subrecipient of a grant or 1
102+contract for the provision of services that is funded wholly with State funds or with a 2
103+combination of State and other nonfederal funds, the terms of the grant or contract shall 3
104+allow for reimbursement of indirect costs: 4
106105
107- (b) (1) In order to improve efficiency, streamline and reduce redundant
108-processes, reduce paperwork and administrative burdens on both granting agencies and
109-grant recipients, and facilitate development and implementation of a statewide centralized
110-grants management and accountability system, the Council shall study and make
111-recommendations to the Department regarding the entire grants life cycle, including:
106+ (1) at the same rate the nonprofit organization has negotiated and 5
107+received: 6
112108
113- (iii) regulations adopting each part of the uniform guidance, with
114-appropriate modifications for its application to grant–making entities in the State,
115-including modifications or variances based on the scope or size of particular grant
116-programs, grant–making entities, or grantees;
109+ (i) for indirect costs under a direct federal award; or 7
117110
118- (c) On or before July 1, 2027, the Council shall submit a report on its full
119-recommendations as required by subsection (b)(1) of this section to the Department and the
120-General Assembly, in accordance with § 2–1257 of the State Government Article.
111+ (ii) from a nonfederal entity based on the cost principles in Subpart 8
112+E of OMB Uniform Guidance; or 9
121113
122- SECTION 2. AND BE IT FURTHER ENACTED, That th is Act shall take effect
123-October 1, 2025. It shall remain effective for a period of 2 years and 9 months and, at the
124-end of June 30, 2028, this Act, with no further action required by the General Assembly,
125-shall be abrogated and of no further force and effect.
114+ (2) if the nonprofit organization has not negotiated and received an indirect 10
115+cost rate described in item (1) of this subsection, at a rate [of at least 10%] EQUAL TO THE 11
116+GREATER OF THE DE MINIMIS RATE ESTABLISHED IN SUBPART E OF OMB UNIFORM 12
117+GUIDANCE OR 15% of the costs that would be considered modified total direct costs under 13
118+OMB Uniform Guidance. 14
126119
127- SECTION 2. AND BE IT FURTHER ENACTED, That this Act is an emergency
128-measure, is necessary for the immediate preservation of the public health or safety, has been
129-passed by a yea and nay vote supported by three–fifths of all the members elected to each of
130-the two Houses of the General Assembly, and shall take effect from the date it is enacted.
120+2–210. 15
131121
132-Approved by the Governor, April 22, 2025.
122+ (a) (1) In this section the following words have the meanings indicated. 16
123+
124+ (2) “Council” means the Maryland Efficient Grant Application Council 17
125+established under § 2–209 of this subtitle. 18
126+
127+ (3) “Department” means the Department of Budget and Management. 19
128+
129+ (6) “Uniform Guidance” means the Office of Management and Budget 20
130+Uniform Administrative Requirements, Cost Principles, and Audit Requirements for 21
131+Federal Awards, 2 C.F.R. Part 200. 22
132+
133+ (b) (1) In order to improve efficiency, streamline and reduce redundant 23
134+processes, reduce paperwork and administrative burdens on both granting agencies and 24
135+grant recipients, and facilitate development and implementation of a statewide centralized 25
136+grants management and accountability system, the Council shall study and make 26
137+recommendations to the Department regarding the entire grants life cycle, including: 27
138+
139+ (iii) regulations adopting each part of the uniform guidance, with 28
140+appropriate modifications for its application to grant–making entities in the State, 29
141+including modifications or variances based on the scope or size of particular grant 30
142+programs, grant–making entities, or grantees; 31
143+
144+ (c) On or before July 1, 2027, the Council shall submit a report on its full 32
145+recommendations as required by subsection (b)(1) of this section to the Department and the 33
146+General Assembly, in accordance with § 2–1257 of the State Government Article. 34 4 SENATE BILL 127
147+
148+
149+
150+ SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 1
151+October 1, 2025. It shall remain effective for a period of 2 years and 9 months and, at the 2
152+end of June 30, 2028, this Act, with no further action required by the General Assembly, 3
153+shall be abrogated and of no further force and effect. 4
154+
155+ SECTION 2. AND BE IT FURTHER ENACTED, That this Act is an emergency 5
156+measure, is necessary for the immediate preservation of the public health or safety, has been 6
157+passed by a yea and nay vote supported by three–fifths of all the members elected to each of 7
158+the two Houses of the General Assembly, and shall take effect from the date it is enacted. 8
159+
160+
161+
162+Approved:
163+________________________________________________________________________________
164+ Governor.
165+________________________________________________________________________________
166+ President of the Senate.
167+________________________________________________________________________________
168+ Speaker of the House of Delegates.