This bill establishes new requirements for State and local governments when awarding contracts or grants to nonprofit organizations. It introduces a de minimis indirect cost rate of 15 percent of modified total direct costs for these organizations, applicable when funding comes from federal or State sources. Additionally, it prohibits State and local agencies from limiting reimbursements for indirect, administrative, or overhead costs. The Department of the Treasury is tasked with creating and managing a database for nonprofit organizations to submit necessary documentation for contract or grant participation, ensuring that personal identifying information is protected.

Furthermore, the bill mandates that State and local agencies adopt cost principles and federal grant reforms as outlined in the federal Office of Management and Budget's Uniform Guidance standards. It also includes provisions for automatic contract extensions, prohibits unilateral changes to contract terms, and requires standardized reporting procedures to reduce redundant monitoring of nonprofits. Payment timelines are established, requiring agencies to pay nonprofits within 30 days of specified dates, with interest on late payments set at 1 percent. The bill defines key terms such as "local government," "nonprofit organization," and "State agency" to clarify its scope and application.