In this section the following words have the meanings indicated. “Grant” means a legal instrument of financial assistance between a State grant–making entity and a nonprofit organization exempt from taxation under § 501(c) of the Internal Revenue Code that is: used to enter into a relationship the principal purpose of which is to transfer anything of value from the State grant–making entity to the grant recipient to carry out a public purpose authorized by law and not to acquire property or services for the direct benefit or use of the State grant–making entity; used to provide for one or more payments in reimbursement for services or other performance under the agreement on a scheduled or other incremental basis; distinguished from a cooperative agreement in that it does not provide for substantial involvement between the State grant–making entity and the grant recipient in carrying out the activity contemplated by the award; and executed, renewed, or extended on or after June 1, 2023. “Grant” does not include an instrument that provides only: direct government cash assistance to an individual; a subsidy; a loan; a loan guarantee; insurance; or State funding that is required annually and is calculated through a formula set in statute. “Payment” includes all required processing and authorization by the Comptroller, as provided under State regulations. “Proper invoice” means a bill, a written document, or an electronic transmission readable by the State grant–making entity, provided by a grant recipient, that: requests an amount that is due and payable by law under a written grant agreement; and meets the requirements of subsection (e) of this section. This section does not apply to grants: made by a unit in the Judicial Branch of State government; or funded from general obligation bond proceeds or from a General Fund capital appropriation to the Board of Public Works. It is the policy of the State to make a payment under a grant agreement within 37 days after: the day on which the payment becomes due under the grant agreement; or if later, the day on which the State grant–making entity receives a proper invoice. Except as provided in paragraph (3) of this subsection, a grant–making entity shall be liable for interest that shall accrue at the rate of 9% a year on any amount: that is due and payable by law and under a written grant agreement; and for which the grant–making entity has received, and failed to submit to the Comptroller within 30 days of its receipt, a proper invoice. Interest shall accrue beginning on the 38th day after the day on which the State grant–making entity receives a proper invoice. A State grant–making entity is not liable for interest: unless within 30 days after the date on the State’s check for the amount on which the interest accrued, the grant recipient submits an invoice for the interest; if the State grant–making entity has initiated legal proceedings to dispute the amount owed to the grant recipient; accruing more than 1 year after the 31st day after the State grant–making entity receives an invoice; or on an amount that represents unpaid interest. Interest for which a State grant–making entity is liable under this subsection: shall be paid from the State grant–making entity’s operating budget; and may not be paid from funds appropriated to fund a grant. A proper invoice, required as payment documentation, shall include without error: the grant recipient’s federal employer identification number or Social Security number; the grant agreement identification number or another adequate description of the grant agreement; and any documentation required by regulation or the grant agreement. For the purposes of determining a payment due date and the date on which interest will begin to accrue if a payment is late, an invoice shall be deemed to be received: for invoices that are mailed, when a proper invoice is received by the State grant–making entity, as of the date the State grant–making entity annotates the invoice with the date and time of receipt; or for invoices electronically transmitted, on the date the transmission is received by the State grant–making entity, or the next business day if received after 5 p.m. On receipt of an invoice, a State grant–making entity shall: mark the invoice with the date the invoice was received; and review the invoice as soon as practicable to determine whether the invoice is a proper invoice. If the State grant–making entity determines that the invoice is a proper invoice and submits the invoice to the Comptroller, the Comptroller shall make payment within 5 business days. If the State grant–making entity determines that the invoice is not a proper invoice, the State grant–making entity shall notify the grant recipient of all defects that prevent processing and specify all reasons why the invoice is not proper within 2 business days after the determination. It is the responsibility of the grant recipient to submit a corrected invoice. State grant–making entities: may use media that produce tangible recordings of information to expedite the payment process, rather than delaying the process by requiring original paper documents; and shall provide adequate safeguards and controls to ensure the integrity of the data and to prevent duplicate processing. Failure by a State grant–making entity to comply with the procedural requirements of this subsection does not constitute a late payment. This section does not create liability on the Comptroller for interest accrued on a late payment.