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Bill

HB 300

State Government - Grants and Contracts - Reimbursement of Indirect Costs

2025 Regular Session Introduced by Heather Bagnall Tudball and 14 co-sponsors

Maryland law now requires the state to reimburse indirect costs for grant and contract recipients, increasing organizational overhead funding to sustain operations and expand service delivery capacity.

Approved by the Governor - Chapter 162
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Bill Summary · HB 300

Legislative bill overview

HB 300 modifies Maryland's policy on reimbursing indirect costs (overhead expenses like administration, facilities, and utilities) for organizations receiving state grants and contracts. The bill establishes or adjusts the rate at which the state reimburses these administrative expenses, likely increasing from previous levels or establishing new methodologies for calculation across different types of grantees.

Why is this important

Indirect cost reimbursement directly affects the financial viability of nonprofits, universities, and other organizations that contract with the state. Higher reimbursement rates allow these organizations to sustain operations and expand services without depleting program funds, while lower rates shift costs onto the organizations themselves or their other funding sources, potentially reducing service capacity.

Potential points of contention

  • Cost to state budget: Higher indirect cost reimbursement rates increase state expenditures across multiple agencies and grant programs, competing with direct program spending
  • Equity across sectors: Different organizations (nonprofits vs. universities vs. for-profits) may be treated differently, raising questions about fairness and market competition
  • Program funding displacement: Money allocated to indirect costs is money not directly supporting services, raising concerns about efficiency and accountability to beneficiaries

Compiled from official sources — confirm details with the bill’s official record.

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