A bill for an act relating to indirect costs charged to state-funded grants, and including applicability provisions.

2025-2026 Regular Session

The bill sets or revises how indirect costs are calculated and charged to state-funded grants, including applicability, administration, and rate methods.

Committee report approving bill, renumbered as HF 2304.

#grants

Summary of Bill: HSB 642 (Session 2025-2026, Iowa)

Purpose and intent

HSB 642 pertains to indirect costs charged to state-funded grants and includes applicability provisions. The primary aim is to address how indirect costs are allocated and billed to grants funded with state dollars, potentially adjusting rules, caps, or methods for calculating these indirect costs.

Key provisions and changes (as indicated by the bill’s summary and action history)

Indirect cost allocations: The bill would establish or modify the framework for determining indirect costs applied to state-funded grant programs. Indirect costs typically cover administrative overhead and shared services necessary to administer grant-funded activities.

Applicability provisions: The bill includes provisions that determine when and how its rules apply, potentially specifying which grants, agencies, or programs are subject to the new indirect cost rules, and whether the changes apply retroactively or prospectively.

Compliance and administration: The bill is likely to address administrative responsibilities for state agencies when calculating, reporting, and auditing indirect cost charges to grants, including any required documentation or reporting timelines.

Potential adjustments to rate setting: There may be changes to the methodology for setting indirect cost rates, caps, or negotiation processes with grant recipients, though the exact details would be in the bill text.

Who would be affected

State agencies and departments that administer grant programs funded with state dollars.

Entities receiving state-funded grants that would be charged indirect costs, including universities, non-profits, or other grant recipients.

Administrative offices responsible for grant accounting, compliance, and audits within state government.

Procedural and timeline aspects

Introduction and referral: The bill was introduced on 2026-01-29 and referred to the State Government committee.

Subcommittee action: A subcommittee (Lundgren, McBurney, and Windschitl) recommended passage on 2026-02-04.

Committee action: The committee reported favorably, recommending passage, with a committee vote of Yeas 14, Nays 9, on 2026-02-04.

Floor action: The committee report indicates the bill was renumbered as HF 2304 on 2026-02-06, suggesting a procedural shift to House File 2304 for potential floor consideration.

Notes on status

The legislation shows progressing committee action with a favorable recommendation and a renumbering event, indicating active movement toward potential floor debate and passage in the Iowa General Assembly during the 2025-2026 session. The final policy details and exact numerical changes (rates, caps, or applicability lists) would be found in the bill text and any amendments adopted during further proceedings.

If you’d like, I can extract the exact statutory changes, any fiscal impact statements, or create a side-by-side comparison with current Iowa law once the full bill text (HF 2304) is available.