HSB 642: Relating to indirect costs charged to state-funded grants, and including applicability provisions

What it does

This bill provides that indirect costs, as defined in the bill, charged to a state-funded grant awarded or amended on or after July 1, 2026, must not exceed percent of the total grant amount and prohibits a department or establishment from approving a budget or reimbursement request that would exceed that limit unless expressly authorized by law. A grantee is prohibited from reclassifying an indirect cost as a direct cost and from charging an indirect cost on top of a direct cost that includes an allocable share of indirect costs.

House subcommittee · named January 29, 2026

• Rep. Shannon Lundgren (R) · shannon.lundgren@legis.iowa.gov
• Rep. Larry McBurney (D) · larry.mcburney@legis.iowa.gov
• Rep. Matt W. Windschitl (R) · matt.windschitl@legis.iowa.gov

Lobbying · 0 for, 19 against

Against: Coalition for Family and Children's Services in Iowa; Easterseals Iowa; Ellipsis; Four Oaks; Free Clinics of Iowa; Iowa Alliance of YMCA's; Iowa Association of Community Providers; Iowa Behavioral Health Association (IBHA); Iowa Coalition Against Domestic Violence; Iowa Community Action Association; Iowa Homeless Coalition; Iowa Housing Partnership; and 7 more

In plain words

1. January 29, 2026Filed in the House and sent to the State Government committee
2. January 29, 2026House subcommittee named: Lundgren, McBurney and Windschitl
3. February 4, 2026Subcommittee recommended passing it
4. February 4, 2026Approved by the House committee
5. February 4, 2026Committee vote: 14–9
6. February 6, 2026Approved by the House committee, and given a new number: HF 2304