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House
File
2240
-
Introduced
HOUSE
FILE
2240
BY
COMMITTEE
ON
HIGHER
EDUCATION
(SUCCESSOR
TO
HSB
544)
A
BILL
FOR
An
Act
creating
an
endowment
tax
on
the
endowment
value
of
1
certain
Iowa
colleges
and
universities,
limiting
charges
2
relating
to
certain
endowment
funds,
making
appropriations
3
to
workforce
grant
and
incentive
programs,
and
making
4
appropriations
to
supplement
tuition
grants
for
high-wage
5
and
high-demand
jobs.
6
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
7
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Section
1.
SHORT
TITLE.
This
Act
shall
be
known
as
the
“Tax
1
the
Endowments
Act”.
2
Sec.
2.
Section
256.189,
subsection
1,
Code
2026,
is
amended
3
by
adding
the
following
new
paragraph:
4
NEW
PARAGRAPH
.
d.
(1)
Approve
and
award
supplemental
5
tuition
grants
after
January
1,
2028.
6
(2)
The
commission
shall
adopt
rules
pursuant
to
chapter
17A
7
to
administer
the
approval
and
awarding
of
supplemental
tuition
8
grants.
9
Sec.
3.
Section
256.189,
subsection
3,
Code
2026,
is
amended
10
to
read
as
follows:
11
3.
a.
An
Iowa
tuition
grants
fund
is
established
in
12
the
state
treasury.
The
fund
shall
be
administered
by
13
the
commission
and
shall
consist
of
moneys
appropriated
14
by
the
general
assembly
and
other
moneys
received
by
the
15
commission
for
deposit
in
the
fund.
The
moneys
in
the
fund
16
are
appropriated
to
the
commission
for
purposes
of
providing
17
tuition
grants
to
qualified
students
who
are
enrolled
in
18
accredited
private
institutions.
Notwithstanding
section
19
8.33
,
moneys
in
the
fund
at
the
close
of
the
fiscal
year
20
shall
not
revert
to
the
general
fund
of
the
state
but
shall
21
remain
available
for
expenditure
for
purposes
of
providing
22
tuition
grants
to
qualified
students
who
are
enrolled
in
23
accredited
private
institutions
for
subsequent
fiscal
years.
24
Notwithstanding
section
12C.7,
subsection
2
,
interest
or
25
earnings
on
moneys
in
the
fund
shall
be
credited
to
the
26
fund
and
are
appropriated
to
the
commission
for
purposes
of
27
administering
any
scholarship
or
grant
program
described
in
28
this
subchapter
VII,
part
4
.
29
b.
After
January
1,
2028,
a
high-wage
and
high-demand
jobs
30
account
shall
be
created
within
the
fund.
Moneys
credited
to
31
the
account
from
the
tax,
interest,
and
penalties
collected
32
under
section
422B.1,
subsection
3,
paragraph
“b”
,
shall
be
used
33
to
supplement
tuition
grants
to
qualified
students
enrolled
in
34
accredited
private
institutions
in
majors
that
correspond
with
35
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high-wage
and
high-demand
jobs
identified
pursuant
to
section
1
84A.1B,
subsection
5.
2
Sec.
4.
NEW
SECTION
.
262.29
Endowment
——
fees.
3
1.
As
used
in
this
section:
4
a.
“Endowment”
means
the
same
as
defined
in
section
422B.1.
5
b.
“Endowment
value”
means
the
same
as
defined
in
section
6
422B.1.
7
c.
“Institution”
means
an
institution
of
higher
education
8
governed
by
the
board.
9
2.
An
institution
shall
not
charge
or
pay
another
entity
10
more
than
five
percent
of
the
gross
proceeds
of
any
gift
made
11
to
the
institution.
12
3.
An
institution
shall
not
charge
an
annual
fee
in
excess
13
of
one
percent
of
the
endowment
value
for
the
management
and
14
administration
of
the
endowment
of
the
institution.
15
Sec.
5.
NEW
SECTION
.
422B.1
Endowment
tax.
16
1.
For
purposes
of
this
chapter:
17
a.
“Department”
means
the
department
of
revenue.
18
b.
“Educational
institution”
means
any
institution
of
19
higher
education
governed
by
the
state
board
of
regents
or
an
20
accredited
private
institution
as
defined
in
section
256.183,
21
with
an
endowment
value
in
excess
of
five
hundred
million
22
dollars.
23
c.
“Endowment”
means
the
unrestricted
corpus
of
funds
24
or
other
unrestricted
assets
held
and
administered
by
an
25
educational
institution
or
a
related
organization
to
the
26
educational
institution,
the
principal
of
which
is
intended
27
to
be
preserved
and
invested
for
the
purpose
of
generating
28
income
to
support
the
educational
institution’s
operations,
29
scholarships,
research,
or
other
institutional
purposes.
30
d.
“Endowment
value”
means
the
total
aggregate
fair
market
31
value
of
all
assets
constituting
the
endowment
at
the
close
of
32
the
preceding
tax
year.
33
e.
“Related
organization”
means
any
organization
which
34
controls
or
is
controlled
by
the
educational
institution,
is
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controlled
by
one
or
more
persons
which
also
controls
the
1
educational
institution,
or
is
a
supported
organization
as
2
defined
in
section
509(f)(3)
of
the
Internal
Revenue
Code
or
3
an
organization
described
in
section
509(a)(3)
of
the
Internal
4
Revenue
Code.
5
2.
A
tax
shall
be
imposed
annually
upon
an
educational
6
institution’s
endowment
value
in
excess
of
five
hundred
million
7
dollars
at
the
highest
corporate
income
tax
rate
as
calculated
8
pursuant
to
section
422.33,
subsection
1,
in
effect
at
the
9
close
of
the
educational
institution’s
tax
year.
10
3.
a.
Taxes,
interest,
and
penalties
collected
under
this
11
chapter
from
educational
institutions
governed
by
the
state
12
board
of
regents
shall
be
deposited
in
the
Iowa
workforce
grant
13
incentive
fund
established
in
section
256.230.
14
b.
Taxes,
interest,
and
penalties
collected
from
educational
15
institutions
that
are
accredited
private
institutions
shall
16
be
deposited
into
the
high-wage
and
high-demand
account
17
established
in
section
256.189,
subsection
3,
paragraph
“b”
.
18
4.
The
department
shall
adopt
rules
pursuant
to
chapter
17A
19
to
administer
this
chapter.
20
EXPLANATION
21
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
22
the
explanation’s
substance
by
the
members
of
the
general
assembly.
23
This
bill
creates
an
endowment
tax
on
the
endowment
value
of
24
certain
Iowa
colleges
and
universities,
limits
charges
relating
25
to
certain
endowment
funds,
makes
appropriations
to
workforce
26
grant
and
incentive
programs,
and
makes
appropriations
to
27
supplemental
tuition
grants
for
high-wage
and
high-demand
jobs.
28
The
bill
shall
be
known
as
the
“Tax
the
Endowments
Act”.
29
The
bill
imposes
an
endowment
tax
annually
upon
an
30
educational
institution’s
endowment
value
in
excess
of
$500
31
million
at
the
close
of
the
preceding
tax
year
at
a
rate
equal
32
to
the
highest
corporate
income
tax
rate
as
calculated
under
33
Code
section
422.33(1),
which
is
currently
7.1
percent.
The
34
bill
specifies
the
department
of
revenue
may
adopt
rules
to
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administer
the
tax.
1
The
bill
defines
“educational
institution”
to
mean
any
2
institution
of
higher
education
governed
by
the
state
board
of
3
regents
or
an
accredited
private
institution
as
defined
in
Code
4
section
256.183.
5
The
bill
defines
“endowment”
to
mean
the
unrestricted
corpus
6
of
any
fund
or
account
held
and
administered
by
an
educational
7
institution
or
a
related
organization
to
the
educational
8
institution,
the
principal
of
which
is
intended
to
be
preserved
9
and
invested
for
the
purpose
of
generating
income
to
support
10
the
educational
institution’s
operations,
scholarships,
11
research,
or
other
institutional
purposes.
12
The
bill
defines
“endowment
value”
to
mean
the
total
13
aggregate
fair
market
value
of
all
assets
constituting
the
14
endowment
at
the
close
of
the
preceding
tax
year.
15
The
endowment
tax
collected
from
educational
institutions
16
governed
by
the
state
board
of
regents
are
credited
to
the
Iowa
17
workforce
grant
incentive
fund
established
in
Code
section
18
256.230(8),
for
the
uses
specified
in
the
fund.
19
The
bill
creates
a
high-wage
and
high-demand
job
account
20
within
the
Iowa
tuition
grants
fund
created
in
Code
section
21
256.189(3)
(private
colleges).
The
bill
specifies
the
22
endowment
tax
collected
from
educational
institutions
that
23
are
accredited
private
institutions
are
to
be
deposited
into
24
to
the
high-wage
and
high-demand
job
account
established
in
25
new
Code
section
256.189(3)(b).
The
moneys
in
the
high-wage
26
and
high-demand
job
account
are
to
be
used
to
supplement
Iowa
27
tuition
grants
to
students
enrolled
at
private
colleges
in
28
majors
that
correspond
with
the
high-wage
and
high-demand
29
jobs
identified
by
the
workforce
development
board
and
state
30
board
of
regents
pursuant
to
Code
section
84A.1B(5).
The
bill
31
requires
the
college
student
aid
commission
to
adopt
rules
to
32
administer
the
approval
and
awarding
of
supplemental
tuition
33
grants.
34
The
bill
limits
the
amount
a
higher
education
institution
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governed
by
the
state
board
of
regents
may
charge
another
1
entity
for
gifts
made
to
the
institution
to
5
percent
of
the
2
gross
proceeds
of
the
gift.
The
bill
also
limits
such
an
3
institution
from
annually
charging
more
than
1
percent
of
the
4
endowment
value
for
the
management
and
administration
of
the
5
endowment.
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