Bill > H3428

This bill aims to improve nonprofit organizations' financial stability by ensuring they can be fully reimbursed for their operational costs when receiving state grants or contracts. Specifically, the bill allows nonprofit organizations (defined as tax-exempt entities under certain IRS code sections) to recover their indirect costs - which are expenses not directly tied to a specific program but necessary for an organization's overall functioning, such as administrative overhead - through two primary mechanisms. First, if a nonprofit has a Negotiated Indirect Cost Rate Agreement (NICRA) from a federal award, they can use that same rate for state-funded grants. If they do not have a NICRA, they can either receive a minimum reimbursement of 15% of their modified total direct costs or negotiate a new indirect cost rate with the state's Executive Office of Administration and Finance. The bill applies to grants funded entirely by state money or a combination of state and non-federal funds, and covers situations where funds are transferred directly by the state or through a third party. By allowing these cost recoveries, the legislation seeks to help nonprofits better sustain their core mission work by ensuring they can be compensated for the full operational costs of delivering services.

Budget and Finance, Government Affairs

https://malegislature.gov/Bills/194/H3428