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ENROLLED ORIGINAL
AN ACT
D.C. ACT 26-345
IN THE COUNCIL OF THE DISTRICT OF COLUMBIA,
JULY 2, 2026
‘ToamendtheNonprofitFairCompensationActof2020torequiregrantsandcontractsbetweentheDistrictandnonprofitorganizationstocompensatenonprofitorganizationsforindirectcostsincurredinadditiontodirectservicecosts,toestablishademinimis
indirectcostrateof15%ofdirectcosts,torequiretheinclusionof@ plainlanguageindirectcostcompensationclauseinallnonprofitcontractandgrantsolicitationsandawards,torequiretheMayorandtheOfficeofContractingandProcurementtoissueguidanceonthecalculation,negotiation,award,andpaymentprocessofindirectcost
rates,torequireannualtrainingsforagencystaff,toestablishtimelinesforapplicabilitybasedongrantandcontractamounts,andtoestablishareliefgrantprogramfornonprofitorganizations.
BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this
actmay be citedasthe“NonprofitServicesPreservationAmendment Act of 2026”.
Sec.2.TheNonprofitFairCompensationActof2020,effectiveMarch16,2021(D.C.Law23-185;D.C.OfficialCode§2-22.01etseq.),isamendedasfollows:(a)Section2(D.C.OfficialCode§2-222.01)isamendedasfollows:
(1)Newparagraphs(1A)and(1B)areaddedtoreadasfollows:“(IA)"ConsumerPriceIndex"meanstheaverageoftheConsumerPriceIndexforAllUrbanConsumersfortheWashington-Arlington-Alexandria,DC-MD-VA-WVMetropolitanStatisticalArea(orsuchsuccessormetropolitanstatisticalareathatincludestheDistrict),oranysuccessorindex,asofthecloseofthe12-monthperiodendingonJuly31ofsuchcalendaryear.“(1B)“Costestimate”meansanindependentgovernmentestimatesolicitationorsimilarsolicitationcostestimate.”.(2)Paragraph(2)isamendedtoreadasfollows:(2)“Indirectcost”means:(A)A costincurredbyanonprofitorganizationasaDistrictgranteeorcontractorthatcannotbereadilyattributedtoaspecificprogram,grantaward,orcontract;or
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ENROLLED ORIGINAL
“(B) Expenses consideredan indirectcostas providedin2 C.F.R.§
200.56,oranysuccessorregulations.”.
(b)Section3(D.C.OfficialCode§2-222.02)isamendedasfollows:
(1)Subsection(a)isamendedasfollows:
(A)Theleadinlanguageisamendedbystrikingthephrase“indirectcosts
incurredinprovisionof goods or performanceof services”and insertingthephrase“indirect
costs,inadditiontodirectservicecostsandwithoutsupplantinganyportionofa grantor
contractawarded,incurredfortheprovisionofgoodsorperformanceofservices,providedthere
isfundingavailable,”initsplace.
(B)Paragraph(1)isamendedbystrikingthephrase“10%ofalldirect
costsunderthegrantorcontract”andinsertingthephrase“15%,adjustedannuallytoreflect
adjustmentstotheConsumerPriceIndex,ofalldirectcostsunderthegrantorcontract;
provided,thatan annualCPI adjustmentshallnot be inexcessof 3% more thanthede minimis
rateofthepreviousyear”initsplace.
(C)Paragraph(3)isamendedbystrikingthephrase“2years;however
nonprofitorganizationsmay requesttorenegotiateindirectcostratespursuanttosubsection(c)
ofthissection;”andinsertingthephrase“3years;however,nonprofitorganizationsmayrequest
torenegotiateindirectcostrateswiththeDistrictpursuanttoparagraphs(1),(2),or(4)ofthis
subsectionorsubsection(b)ofthissection;”initsplace.
(D)Paragraph(4)isamendedtoreadasfollows:
“(4)Ascalculatedwithapercentagerateandbaseamount,asdeterminedby:
“(A)Acertifiedpublicaccountantusingthenonprofitorganization’smost
recentlycompletedauditedfinancialstatementsfora fiscalyearthatconcludednotmore than3
yearsprior,pursuanttotheOMB UniformGuidance,andcertifiedinwritingbythecertified
publicaccountant;or
*(B)Ifanonprofitorganization’sannualrevenuetotalslessthan$250,000
and certifiedpublicaccountant-conductedauditdocuments arenotavailable,an independent
bookkeepingorfinancialservicesfirmusingthenonprofitorganization’send-of-yearincomeor
activitiesstatementsfrom theimmediatelyprecedingfiscalyear.”.
(2)A newsubsection(a-1)isaddedtoreadasfollows:
“(a-1)(1)(A)A nonprofitorganization’srequestforpaymentbasedonanunexpired
NICRAorDistrict-negotiatedindirectcostrate,asdeterminedpursuanttosubsection(a)(2).(3),or (4)of thissection,shallnotbe used asthesoleordeterminativefactorina decisiontodeny,
reduce,orterminateagrantorcontract.
“(B) When making a grantor contractaward decision,theDistrictshall
onlyuseanonprofitorganization’srequestedornegotiatedindirectcostrateasascreening
criteriaafierassessingthattheorganizationcan meet thedesiredqualitystandards.
“(2)TheMayormayrequireanonprofitorganizationtoprovidereasonable
financialdocumentationwhennegotiatingwithaDistrictagencypursuanttosubsection(a)(2),
(3),or(4)ofthissection,suchas:
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ENROLLED ORIGINAL
“(A) Financialauditstatementsfrom theimmediatelyprecedingfiscal
year;
“(B) End-of-fiscal-yearincome oractivitiesstatements,datingback not
morethan3years,showinganonprofitorganization’stotalrevenueandexpenditures;or
“(C) Expense sheetsdetailingoperatingcostsand salariesthatmeet the
definitionof indirectcosts,”.
(3)Subsection(c)isamendedtoreadasfollows:
“(c)\(1)EachDistrictcontractandgrantsolicitationandawardforservicestobe
performedbyanonprofitorganizationshallincludeanindirectcostcompensationclause,in
plainlanguage,that:
“(A) ObligatestheDistricttocompensate forindirectcostsinadditionto
directservicecostsif theapplicantdisclosestheirrequestedrateamount calculatedpursuantto
subsection(a)ofthissectionintheirapplication;
“(B)Fulfillstherequirementofsubsection(a-1)ofthissection;
“(C)Providesanawardingagencypointofcontact,email,andphone
number fora granteeor contractortocommunicate with regardingindirectcostrates,
negotiations,orappealprocessesifanorganizationbelievestheDistrictisinviolationofthisact;
and
“(D) Obligatesthegranteeor contractortopay an indirectcostratetoany
nonprofitorganizationsubcontractororsubgranteeatthesameratethenonprofitorganization
would receiveas a directcontractoror granteewith theDistrict.”.
(4)Subsection(e)isrepealed.
(c)New sections3a,3b,and 3c areadded to readas follows:
“Sec.3a.Implementation.
“(a)(1)No laterthan 180 businessdays aftertheapplicabilitydateof thissubsection,the
Mayor,pursuanttoTitleIoftheDistrictofColumbiaAdministrativeProcedureAct,approved
October21, 1968 (82 Stat.1204;D.C. OfficialCode § 2-501 erseq.),shallpromulgaterulesfor
Districtagenciesto fairlyand uniformlycalculate,negotiate,award,and pay indirectcostrates
fornonprofitorganizationsreceivingDistrictgrants.
“(2)TheMayorshallmakeavailableonlinea plainlanguageexplanationof the
regulations.TheMayorshallconsultnon-profitstakeholderswhendraftingtheexplanationto
ensureclarityandreadability.
“(b)(1)No laterthan 180 businessdays aftertheapplicabilitydateof thissubsection,the
Officeof Contractingand Procurement(“Office”)shallpromulgaterulesforDistrictagenciesto
fairlyand uniformlycalculate,negotiate,award,and pay indirectcostratestononprofit
organizationsreceivingDistrictcontracts.
“(2)TheOfficeshallpostaplainlanguageexplanationoftheregulationsonthe
Office’swebsite.The Officeshallconsultnon-profitstakeholderswhen draftingtheexplanation
toensureclarityandreadability.
ENROLLED ORIGINAL
“(c)(1)Beginningnotlaterthan90 businessdays afterthepromulgationof the rules
requiredby subsection(b)ofthis section,the Mayor shallconductannualtrainingsessionsforall
Districtagencieson thecalculation,negotiation,award,and paymentofgrant and contract
indirectcostratesfornonprofitorganizations.Completionof such trainingon an annualbasis
shallbe mandatory forallagency employees directlyinvolvedinthesolicitationor management
of Districtgrantsor contractswith nonprofitorganizations.
“(2)TheMayorshalldeveloptrainingsessionsforsubordinateagenciesregarding
agency compliancewith therequirementsof thisact,which shallinclude:
(A) Explanationof costseligibletobe classifiedas an indirectcost;
“(B)GuidanceonDistrictproceduresregardingfairlycalculatingor
negotiatingindirectcostrates;
“(C)ExplanationoftheDistrict’sappealsprocessrelatedtonegotiatingor
awardinganindirectcostrate;and
“(D)Othertopicsdeemedappropriatetoensureaccurateimplementation
and compliancewiththisact.
“(d)No laterthan120businessdaysafterthepromulgationoftherulesrequiredby
subsection(b)of thissection,Districtagenciesshallincludeplainlanguageclausesinallgrant
andcontractsolicitationsandawardstononprofitorganizationsexplainingtheirrighttopayment
forindirectcostratespursuanttosection3.
“See.3b.Non-profitreliefgrantmaking,
“@
(1)TheMayormayissuegeneraloperatingreliefgrantstononprofit
organizationsinvolvedinthedeliveryofhumanservicesandothercommunity-basedactivitiesintheDistrict.
“(2)Applicationsforsuchgrantsmaybeopenonarollingbasis.
“(3)The applicationshallinclude:
“(A)A listofanycontractsorgrantagreementsthattheapplicantis
seekingor holdswith theDistrictgovernment;
“(B)Expensesheetsdetailingoperatingcostsandsalariesthatmeetthe
definitionofindirectcosts;
“(C)Explanationoforganizationalgeneraloperatinghardshipand
intendedusesof the reliefgrant;
“(D)Financialauditstatementsfromtheimmediatelyprecedingfiscal
year;and
“(E)End-of-fiscal-yearincome or activitiesstatements,datingback not
morethan3years,showinganonprofitorganization’stotalrevenueandexpenditures.
“(b)Reliefgrantsissuedpursuanttothissectionmaybeintheformofmatchingfunds
fororganizationsthatreceivefundsfrom nongovernmentalsourcestocoverindirectcostsand
othernonprogrammaticorganizationalexpenses.
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ENROLLED ORIGINAL
“(c)Forthepurposesofthissection,theterm“reliefgrants”shallmeanagrantissuedby
theMayorforthepurposeofstrengtheninganonprofitorganization’sfinancialviability,
enablingtheorganizationtomeetindirectcostswhenprovidingservicestoDistrictresidentsand
encouragingprivatepartnershipinsupportofmeetingnonprofitgeneraloperatingexpenses.
“Sec.3c,Rules.
“The Mayor, pursuantto TitleIof theDistrictof Columbia AdministrativeProcedure
Act,approved October21, 1968 (82 Stat.1204;D.C. OfficialCode § 2-501 etseq.),may issue
rulestoimplementtheprovisionsofthisact.
(d)Section4 (D.C.OfficialCode § 2-222.03)isamended toreadas follows:
“Sec.4.Applicability.
(a)Section3(a),(a-1),and(¢)shallapply:
“(1)For grantand contractsolicitationswitha costestimateator below $500,000,
beginninginFiscalYear2027;
“(2)For grantand contractsolicitationswith a costestimateator below $1
million,but greaterthan$500,000,beginningon thefirstday of thenew fiscalyearfollowingthe
applicabilityofparagraph(1)ofthissubsection;
“(3)For grantand contractsolicitationswith a costestimateator below $2
million,but greaterthan$1 million,beginningon thefirstdayof thenew fiscalyearfollowing
theapplicabilityofparagraph(2)ofthissubsection;
“(4)Forgrantandcontractsolicitationswithacostestimateatorbelow$5
million,but greaterthan$2 million,beginningon thefirstdayof thenew fiscalyearfollowing
theapplicabilityofparagraph(3)ofthissubsection;
“(5)For grantand contractsolicitationswitha costestimateatorbelow $10
million,butgreaterthan$5million,beginningonthefirstdayofthenewfiscalyearfollowing
theapplicabilityofparagraph(4)ofthissubsection;and
“(6)For grantand contractsolicitationswitha costestimateabove $10 million
beginningonthefirstdayofthenewfiscalyearfollowingtheapplicabilityofparagraph(5)of
thissubsection.
“(b)The provisionsof thisactshallnot applytothedisbursementof business
improvement districttaxespursuantto section16 oftheBusinessImprovement DistrictsAct of
1996,effectiveMay 29, 1996 (D.C.Law 11-134;D.C. OfficialCode § 2-1215.15).”.
Sec.3.Applicability.
(a)Thisactshallapplyuponthedateofinclusionofitsfiscaleffectinanapproved
budgetand financialplan.
(b)The ChiefFinancialOfficershallcertifythedateof theinclusionof the fiscaleffectin
anapprovedbudgetandfinancialplan,andprovidenoticetotheBudgetDirectoroftheCouncil
ofthe certification.
(c)(1)The Budget Directorshallcausethenoticeofthe certificationtobe publishedin
theDistrictof Columbia Register.
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ENROLLED ORIGINAL.
(2)Thedateofpublicationofthenoticeofthecertificationshallnotaffecttheapplicabilityofthisact.
Sec.4.Fiscalimpactstatement.TheCounciladoptsthefiscalimpactstatementinthecommitteereportasthefiscalimpactstatementrequiredbysection4aoftheGeneralLegislativeProceduresActof1975,approvedOctober16,2006(120Stat.2038;D.C.OfficialCode§ 1-301.47a).
Sec.5.Effectivedate.
ThisactshalltakeeffectfollowingapprovalbytheMayor(orintheeventofvetobytheMayor,actionbytheCounciltooverridetheveto)anda30-dayperiodofcongressionalreviewasprovidedinsection602(c)(1)oftheDistrictofColumbiaHomeRuleAct,approvedDecember24,1973(87Stat.813;D.C.OfficialCode§1-206.02(c)(1))
me
‘Chairman
Councilofthe Districtof Columbia
UNSIGNED
Mayor
OiaSeco
COUNCILOF THE DISTRICTOF COLUMBIA
WASHINGTON,DC,20004
DocketNo.826-0249
[DX]ITEMONCONSENTCALENDAR,
[XJACTION FirstReading,CC
[VOTE DATE May5,2026
[x]VOICEvoTE ‘Approved
RECORDEDVOTEONREQUEST
ABSENT
[]ROLLCALLVOTE~Resutt
(CouncilMember ‘CounciiMember[Aye|Nay|NV[AB[Rec|GounciMember[Aye[Nay|NV[AB[Rec
ChaimanMendelson)X Frumin x Pinto x
Alen x Henderson x R.White
Bonds x LewisGeorge| X T.White x
Crawford x Nadeau x
Felder x Parker x
X--IndicateVote i _AB-Absent NV Present,NotVoting
CERTIFICATIONRECORD
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DocketNo.526.0249,
(XJTEM ONCONSENTCALENDAR
[XJACTION FinalReading,CC
[qVOTEDATE ‘June2,2026
[XIVOICEVOTE Approved
RECORDEDVOTEONREQUEST
ABSENT
[]ROLLCALLVOTE—Resutt
‘CouncilMember__[aye[NayNV.|AB[Rec|CounciiMember_[Aye[Nay[NV[AB|Rec|CounciMember[Aye Rec
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CERTIFICATIONRECORD
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