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S3924
SENATE, No. 3924
STATE OF NEW JERSEY
222nd LEGISLATURE
�
INTRODUCED MARCH 12, 2026
Sponsored by:
Senator� ANGELA V. MCKNIGHT
District 31 (Hudson)
Senator� KRISTIN M. CORRADO
District 40 (Bergen, Essex and Passaic)
SYNOPSIS
���� Establishes certain requirements for State and local
governments awarding contracts or grants to nonprofit organizations.
CURRENT VERSION OF TEXT
���� As introduced.
��
An Act
concerning contracts and grants issued by the State or
local governments to nonprofit organizations and supplementing Title 52 of the
Revised Statutes.
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
���� 1.� Notwithstanding any law,
rule or regulation to the contrary, the State and local governments shall
implement requirements for contracts and grants awarded to nonprofit
organizations as set forth in this section.
���� a.� (1)� There shall be
established a de minimis indirect cost rate of 15 percent of the modified total
direct costs to nonprofit organizations that have been awarded a contract by a
State agency or local government agency.� This rate shall apply when the source
of funding is from federal funds or State funds.
���� (2)� No State agency or local
government agency shall limit reimbursements of indirect, administrative, or
overhead costs for nonprofit organizations participating in a contract or grant
with such agency on or after the effective date of P.L.�� , c.�� (pending
before the Legislature as this bill).
���� b.� (1)� The Department of the
Treasury shall oversee and manage the development and maintenance of a database
which may be used by nonprofit organizations that intend to participate in
contracts or grants offered by State agencies or local government agencies.�
All such organizations may submit to the database any general documents
specified under paragraph (2) of this subsection required for State or local
contracts or grants.
���� (2)� The documents submitted
and maintained in the database may include the following, within the discretion
of the State Treasurer:
���� the organization's charter,
articles of organization, certificate of incorporation, agreement of
association, instrument of trust, constitution or other organizational
instrument and bylaws.
���� valid standing certificate or
certificate of business registration issued by the appropriate agency.
���� proof of the nonprofit
organization's tax-exempt status, such as copies of federal or State tax
exemption determination or exemption ruling letters.
���� proof of registration with the
Attorney General if required pursuant to the New Jersey Charitable Registration
and Investigation Act, P.L.1994, c.16 (C.45:17A-18 et seq.), or documentation
of exemption from such registration.
���� audited financial statements,
if required by State or federal law.
���� affidavit that the nonprofit
organization has not participated in any collusion with any other bidder or
owner representative or otherwise taken any action in restraint of free and
competitive bidding.
���� disclosure of investigations,
litigation, complaints, or other administrative proceedings involving any
public sector clients.
���� certificate or disclosure
concerning investments, operations, or activities in foreign countries as may
be required by law and compliance with such laws.
���� names of the nonprofit
organization�s current directors, officers, and trustees.
���� proof of all relevant
insurance.
���� acknowledgement that the
nonprofit organization complies with all provisions of the Americans with
Disabilities Act of 1990.
���� certificate or disclosure of
equal employment opportunity and affirmative action compliance.
���� certificate or disclosure
indicating that no political contributions prohibited by law have been made by
the nonprofit organization with regard to public contracts.
���� form
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���� certificate or disclosure of
non-debarment for federal government contracts and of non-debarment for State
contracts.
���� The State Treasurer may permit
the submission of other documents relevant to bids for and awards of public
contracts and grants as the State Treasurer may determine to be appropriate for
the purpose of the database.
���� The information maintained in
the database shall exclude personal identifying information of individuals to
prevent compromising personal privacy and security as such information is
permitted or required to be redacted in accordance with P.L.1963, c.73 (C.47:1A-1
et seq.).
���� State agencies or local
government agencies seeking to award a contract or grant shall utilize the
documentation submitted to the database by a nonprofit organization pursuant to
this subsection.� The State agency or local government agency may request any
documentation not held by the database for such nonprofit organization.
���� c.� State agencies and local
government agencies shall review and adopt the cost principles and federal
grant reforms contained in the federal Office of Management and Budget�s
Uniform Guidance standards with regard to nonprofit organizations to the extent
permitted by law.
���� d.� The State Treasurer and
local government agencies may create a list of common terminology relevant to
contracts or grants for nonprofit organizations to define services, processes,
and client populations and a list of common terminology for contracts or grants
to be accessible to all State and local government agencies.
���� e.� The amount of any
contract, awarded by a State agency or local government agency, determined for
the prior calendar year shall be adjusted annually in direct proportion to the
percent change in the Consumer Price Index over a 12-month period beginning
November 1 and ending October 31.� For the purpose of this section,
"Consumer Price Index" means the Consumer Price Index for All Urban
Consumers, New York-Northern New Jersey-Long Island Metropolitan Area, All
Items (1982-84=100), as published by the Bureau of Labor Statistics in the
United States Department of Labor.� The amount of the adjustment should be
determined by December 1 of each year and the adjustment shall become effective
for payments to be made during the calendar year following the determination,
beginning with payments made on or after January 1 of each calendar year.� An
adjustment in the amount of such contract shall be made only if the percent
change in the Consumer Price Index for the period specified is greater than
zero.� If the reference base of the index is changed, the index used to
determine the Consumer Price Index shall be the index converted to the new base
by standard statistical methods.
���� f.� A contract awarded by a
State agency or local government agency shall automatically be extended for a
period of three months if the extension or renewal process is not completed
within 10 days of expiration of such contract.
���� g.� No unilateral change of
contract language or terms shall be permitted by a State agency or local
government agency for a contract awarded to a nonprofit organization.
���� h.� The State Treasurer and
local government agencies shall develop procedures to reduce redundant
monitoring of nonprofit organizations that have been awarded contracts or
grants by standardizing and integrating reporting procedures across all State
or local government agencies.
���� i.� (1)� Interest shall be
paid on the amount due to a nonprofit organization pursuant to a properly
executed State agency or local government agency contract, when required, if
the required payment is not made on or before the required payment date.
���� The required payment date
shall be 30 calendar days from the date specified in the contract or, if no
required payment date is specified in the contract, then the required payment
date shall be 30 calendar days from the receipt of a properly executed State
agency or local government agency contract, or 30 calendar days from the
receipt of goods or services, whichever is later.� Interest shall not be paid
unless goods and services are rendered.
���� (2)� Interest on amounts due
shall be paid to the nonprofit organization pursuant to a properly executed
State agency or local government agency contract for the period beginning on
the day after the required payment date and ending on the date on which the
check for payment is drawn.� The interest shall be paid at a rate of 1 percent
of any amount approved and unpaid.
���� Interest may be paid by
separate payment to a nonprofit organization, but shall be paid within 30 days
of the late payment.
���� j.� As used in this act:
���� �Local government� means a
municipality, county, or other political subdivision of the State.
���� �Nonprofit organization� means
a private nonprofit organization that is exempt from federal taxation pursuant
to section 501(c)(3) of the federal Internal Revenue Code, 26 U.S.C. s.501(c)(3).
���� �State agency� means any of
the principal departments in the Executive Branch of the State Government, and
any division, board, bureau, office, commission, or other instrumentality
within or created by such department and any independent State authority,
commission, instrumentality, or agency which is authorized by law to award
contracts or grants.
���� 2.� This act shall take effect
120 days after the date of enactment, except that State agencies and local
government agencies may take any anticipatory administrative action in advance
as shall be necessary for the implementation of this act.
STATEMENT
���� This bill establishes certain
requirements for the State and local governments awarding contracts or grants
to nonprofit organizations.
���� This bill establishes a de minimis
indirect cost rate of 15 percent of the modified total direct costs to
nonprofit organizations that have been awarded a contract by a State agency or
local government agency.� This rate will apply when the source of funding is
from federal funds or State funds.� Any State agency or local government agency
will be prohibited from limiting reimbursements of indirect, administrative, or
overhead costs for nonprofit organizations participating in a contract or grant
with such agency on or after the effective date of this bill.
���� The Department of the Treasury
will be required to oversee and manage the development and maintenance of a
database which can be used by nonprofit organizations that intend to
participate in contracts or grants offered by State agencies or local
government agencies.� All such organizations can submit to the database any
general documents specified under this bill that are required for State or
local contracts or grants.� The State Treasurer can permit the submission of
other documents relevant to bids for and awards of public contracts and grants
as the State Treasurer determines to be appropriate for the purpose of the
database.� The information maintained in the database will exclude personal
identifying information of individuals to prevent compromising personal privacy
and security.� State agencies or local government agencies seeking to award a
contract or grant will be required to utilize the documentation submitted to
the database by a nonprofit organization, unless the documentation is not
available, in which case the agency can request the document from such
nonprofit organization.
���� This bill also requires State
agencies and local government agencies to review and adopt the cost principles
and federal grant reforms contained in the federal Office of Management and
Budget�s Uniform Guidance standards with regard to nonprofit organizations to
the extent permitted by law.
���� This bill permits the State
Treasurer and local government agencies to create a list of common terminology
relevant to contracts or grants for nonprofit organizations to define services,
processes, and client populations and a list of common terminology for
contracts or grants to be accessible to all State and local government agencies.
���� This bill also requires the
amount of any contract, awarded by a State agency or local government agency, determined
for the prior calendar year to be adjusted annually in direct proportion to the
percent change in the Consumer Price Index over a 12-month period beginning
November 1 and ending October 31.
���� This bill also requires a
contract awarded by a State agency or local government agency to be
automatically extended for a period of three months if the extension or renewal
process is not completed within 10 days of expiration of such contract.
���� This bill prohibits any
unilateral change of contract language or terms by a State agency or local
government agency for a contract awarded to a nonprofit organization.
���� This bill requires the State
Treasurer and local government agencies to develop procedures to reduce
redundant monitoring of nonprofit organizations that have been awarded
contracts or grants by standardizing and integrating reporting procedures
across all State or local government agencies.
���� This bill also requires that,
if goods and services are rendered, a State agency or local government agency
will be required to pay a nonprofit organization 30 calendar days from the date
specified in the contract.� If no required payment date is specified in the
contract, then the required payment date is 30 calendar days from the receipt
of a properly executed State agency or local government agency contract, or 30
calendar days from the receipt of goods or services, whichever is later.
���� This bill requires interest on
required payments that are not made on or before the required payment date
pursuant to a properly executed State agency or local government agency
contract to be paid at a rate of 1 percent of any amount approved and unpaid.� Interest
can be paid by separate payment to a nonprofit organization, but must be paid
within 30 days of the late payment.
���� This bill defines �local
government� to mean a municipality, county, or other political subdivision of
the State.
���� This bill defines �nonprofit
organization� to mean a private nonprofit organization that is exempt from
federal taxation pursuant to section 501(c)(3) of the federal Internal Revenue
Code, 26 U.S.C. s.501(c)(3).
���� This bill defines �State
agency� to mean any of the principal departments in the Executive Branch of the
State Government, and any division, board, bureau, office, commission, or other
instrumentality within or created by such department and any independent State
authority, commission, instrumentality, or agency which is authorized by law to
award contracts or grants.