Bill > S2203

This bill aims to improve nonprofit organizations' financial sustainability by ensuring they receive fair compensation for indirect costs when receiving state grants or contracts. The legislation defines key terms such as "indirect costs" (expenses that support overall organizational operations), "NICRA" (a federally negotiated indirect cost rate), and specifies that it applies to tax-exempt nonprofits under specific IRS code sections. Under the proposed law, when a nonprofit receives a state-funded grant or contract, they will be reimbursed for indirect costs either at their existing federally negotiated rate or, if no such rate exists, at a minimum of 15% of their modified total direct costs. If no rate is established, nonprofits can negotiate a new percentage with the Executive Office of Administration and Finance. This bill is significant because it recognizes that nonprofits incur administrative and operational expenses beyond direct program costs, and ensures they can be fairly compensated for these essential supporting expenses. The legislation applies to grants funded entirely by state money or a combination of state and non-federal funds, and covers both direct and indirect grant recipients.

Budget and Finance, Government Affairs

https://malegislature.gov/Bills/194/S2203