II 

118TH CONGRESS 

2D SESSION S. 4247 

To establish Federal research award reimbursement limits for indirect costs 

for institutions of higher education, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 2, 2024 

Mr. LEE (for himself, Mr. MARSHALL, and Mr. HAWLEY) introduced the following bill; which was read twice and referred to the Committee on 

Health, Education, Labor, and Pensions 

A BILL 

To establish Federal research award reimbursement limits 

for indirect costs for institutions of higher education, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘No Subsidies for 

5 Wealthy Universities Act’’. 

6 SEC. 2. DEFINITIONS. 

7 In this Act: 


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1 (1) AGENCY.—The term ‘‘agency’’ has the 

2 meaning given the term in section 551 of title 5, 

3 United States Code. 

4 (2) DIRECT COST.—The term ‘‘direct cost’’ has 

5 the meaning given the term in subpart E of part 

6 200 of title 2, Code of Federal Regulations (or any 

7 successor regulation). 

8 (3) ENDOWMENT FUND.—The term ‘‘endow9 ment fund’’ has the meaning given the term in sec10 tion 312(c) of the Higher Education Act of 1965 

11 (20 U.S.C. 1058(c)). 

12 (4) FEDERAL RESEARCH AWARD.—The term 

13 ‘‘Federal research award’’ means support provided 

14 to an individual or entity by an agency to carry out 

15 research activities, which may include support in the 

16 form of a grant, contract, cooperative agreement, or 

17 other transaction. 

18 (5) INDIRECT COST.—The term ‘‘indirect cost’’ 

19 has the meaning given the term in subpart E of part 

20 200 of title 2, Code of Federal Regulations (or any 

21 successor regulation). 

22 (6) INDIRECT COST RATE.—The term ‘‘indirect 

23 cost rate’’, with respect to a project supported under 

24 a Federal research award, means the ratio, ex25 pressed as a percentage, of the indirect costs of the 


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1 project to the direct costs of the project, as deter2 mined in accordance with subpart E of part 200 of 

3 title 2, Code of Federal Regulations (or any suc4 cessor regulation). 

5 (7) INSTITUTION OF HIGHER EDUCATION.—The 

6 term ‘‘institution of higher education’’ has the 

7 meaning given such term in section 102 of the High8 er Education Act of 1965 (20 U.S.C. 1002). 

9 SEC. 3. CAPPING INDIRECT COSTS ALLOWABLE UNDER 

10 FEDERAL RESEARCH AWARDS. 

11 (a) ENDOWMENT CALCULATIONS.— 

12 (1) COLLECTION BY NCES.—Not later than 

13 September 30 of each year, the Commissioner for 

14 Education Statistics shall— 

15 (A) collect information regarding the value 

16 of the endowment funds, as of September 30 of 

17 the preceding fiscal year, of each institution of 

18 higher education that has entered into a pro19 gram participation agreement with the Sec20 retary of Education under section 487(a) of the 

21 Higher Education Act of 1965 (20 U.S.C. 

22 1094(a)); 

23 (B) use the data described in subpara24 graph (A) to identify— 


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1 (i) each such institution of higher 

2 education with endowment funds that, in 

3 total, are valued at more than 

4 $5,000,000,000, as of September 30 of the 

5 preceding fiscal year; and 

6 (ii) each such institution of higher 

7 education with endowments funds that, in 

8 total, are valued at more than 

9 $2,000,000,000 but not more than 

10 $5,000,000,000, as of September 30 of the 

11 preceding fiscal year; and 

12 (C) make lists of the institutions identified 

13 under each of clauses (i) and (ii) of subpara14 graph (B) and submit such lists to the Director 

15 of the Office of Management and Budget. 

16 (2) DISTRIBUTION BY OMB.—Not later than 

17 September 30 of each year, the Director of the Of18 fice of Management and Budget shall make the lists 

19 described in paragraph (1)(C) available to— 

20 (A) the head of each agency; 

21 (B) Congress; and 

22 (C) the public. 

23 (b) LIMITS ON INDIRECT COST REIMBURSEMENTS

24 FOR INSTITUTIONS WITH SIGNIFICANT ENDOWMENT

25 FUNDS.— 


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1 (1) PROHIBITION FOR INSTITUTIONS WITH

2 HIGHEST ENDOWMENT FUNDS.—Notwithstanding 

3 any other provision of law, the head of an agency 

4 making a Federal research award for a fiscal year 

5 to an institution of higher education identified under 

6 subsection (a)(1)(B)(i) for the preceding fiscal year 

7 shall not allow any Federal research award funds to 

8 be used for indirect costs. 

9 (2) INDIRECT COST RATE LIMIT FOR INSTITU10 TIONS WITH SUBSTANTIAL ENDOWMENT FUNDS.— 

11 Notwithstanding any other provision of law, the 

12 head of an agency making a Federal research award 

13 for a fiscal year to an institution of higher education 

14 identified under subsection (a)(1)(B)(ii) for the pre15 ceding fiscal year shall establish an indirect cost rate 

16 for the Federal research award that is not more 

17 than 8 percent. 

18 (c) LIMITS ON INDIRECT COST REIMBURSEMENTS

19 RATES FOR OTHER INSTITUTIONS.—Notwithstanding any 

20 other provision of law, the head of an agency making a 

21 Federal research award for a fiscal year to an institution 

22 of higher education not identified under clause (i) or (ii) 

23 of subsection (a)(1)(B) for the preceding fiscal year shall 

24 establish an indirect cost rate for the Federal research 

25 award that is not more than 15 percent. 


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1 (d) PROGRAM PARTICIPATION AGREEMENT RE2 QUIREMENT.—Section 487(a) of the Higher Education 

3 Act of 1965 (20 U.S.C. 1094(a)) is amended by adding 

4 at the end the following: 

5 ‘‘(30) The institution will annually provide the 

6 Commissioner for Education Statistics with the en7 dowment fund information needed by the Commis8 sioner to carry out section 3(a)(1) of the No Sub9 sidies for Wealthy Universities Act.’’. 

10 SEC. 4. IMPROVING OVERSIGHT OF INDIRECT COST REIM11 BURSEMENT. 

12 The Comptroller General of the United States shall 

13 prepare and submit to Congress an annual report regard14 ing the indirect costs reimbursed under Federal research 

15 awards made to institutions of higher education for the 

16 preceding fiscal year. The report shall— 

17 (1) determine, to the extent practicable, for 

18 such fiscal year— 

19 (A) the amount of reimbursed indirect 

20 costs for Federal research awards that were 

21 used for administrative staff compensation at 

22 institutions of higher education; and 

23 (B) the amount of reimbursed indirect 

24 costs for Federal research awards that were 

25 used for compensation for administrative staff 


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1 members with responsibilities related to diver2 sity, equity, and inclusion; 

3 (2) identify the research fields that receive the 

4 highest levels of funding from Federal research 

5 awards made to institutions of higher education; and 

6 (3) identify— 

7 (A) the agencies that awarded the highest 

8 amount of Federal research award funds to in9 stitutions of higher education; and 

10 (B) the institutions of higher education 

11 that received Federal research awards from 

12 such agencies. 

13 SEC. 5. EFFECTIVE DATE; APPLICABILITY. 

14 This Act shall take effect on the date that is 1 year 

15 after the date of enactment on this Act and shall apply 

16 with respect to Federal research awards made on or after 

17 such date. 

Æ 


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