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 nonprofits receiving funding from federal or State sources, and prohibits agencies from limiting reimbursements for indirect, administrative, or overhead costs. Additionally, 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, while ensuring that personal identifying information is protected. State agencies and local governments are required to utilize this documentation and may request additional documents if needed.

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 annual adjustments of contract amounts based on the Consumer Price Index, automatic extensions of contracts if renewal processes are not completed in a timely manner, and prohibits unilateral changes to contract terms by agencies. Nonprofits are guaranteed payment within 30 days of specified contract dates, with interest on late payments set at 1 percent of the unpaid amount. Definitions for local government, nonprofit organization, and State agency are also provided to clarify the scope of the bill.