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IA HF2304
Bill
Status
Introduced
2/6/2026
Primary Sponsor
State Government
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AI Summary
- Caps indirect costs charged to state-funded grants at 5% of the total grant amount, applying uniformly across all state departments and establishments
- Defines "indirect costs" as shared administrative expenses like executive management, accounting, human resources, utilities, and IT services that cannot be directly assigned to a specific program
- Prohibits grantees from reclassifying indirect costs as direct costs to circumvent the cap, and bars charging indirect costs on top of direct costs that already include indirect cost allocations
- Requires grant budgets to separately identify direct and indirect costs, with grantees maintaining records for at least 10 years after final payment to substantiate all indirect cost charges
- Applies to grants awarded on or after July 1, 2025, covering recipients including nonprofits, local governments, tribal governments, higher education institutions, and for-profit entities
Legislative Description
A bill for an act relating to indirect costs charged to state-funded grants, and including applicability provisions.(Formerly HSB 642.)
Last Action
Amendment H-8059 filed. H.J. 461.
2/26/2026
Full Bill Text
No bill text available