A bill for an act providing for investment by regents institutions in certified innovation funds and including effective date provisions. (Formerly SSB 3180 .) Effective date: 12/31/2026

Senate

File

2453

-

Enrolled

Senate

File

2453

AN

ACT

PROVIDING

FOR

INVESTMENT

BY

REGENTS

INSTITUTIONS

IN

CERTIFIED

INNOVATION

FUNDS

AND

INCLUDING

EFFECTIVE

DATE

PROVISIONS.

BE

IT

ENACTED

BY

THE

GENERAL

ASSEMBLY

OF

THE

STATE

OF

IOWA:

Section

1.

NEW

SECTION

.

262C.1

Findings

and

purpose.

1.

Legislative

findings.

The

general

assembly

finds

and

declares

all

of

the

following:

a.

The

state

of

Iowa

has

established

state-certified

innovation

funds

to

promote

the

growth

of

high-potential

early-stage

companies,

commercialize

research,

expand

Iowa’s

technology

ecosystem,

and

enhance

economic

competitiveness.

b.

Iowa’s

three

public

universities

collectively

steward

sizeable

endowments

that

support

the

long-term

missions

of

the

institutions.

c.

A

modest,

risk-appropriate

allocation

of

endowment

assets

into

state-certified

innovation

funds

will

do

all

of

the

following:

(1)

Expand

commercialization

pathways

for

institution-developed

technologies.

(2)

Increase

research

to

market

conversions.

(3)

Strengthen

Iowa’s

innovation

ecosystem.

(4)

Generate

economic

benefits

for

communities

throughout

Iowa.

d.

A

one

percent

allocation

of

endowment

assets

represents

a

small,

diversified

portion

of

institution

endowments,

consistent

with

commonly

accepted

endowment

investment

Senate

File

2453,

p.

2

practices

and

long-term

portfolio

strategies.

2.

Purpose.

The

purpose

of

this

chapter

is

to

support

economic

growth

in

Iowa

by

requiring

institutions

to

deploy

a

limited

portion

of

their

endowment

assets

into

state-certified

innovation

funds

while

maintaining

prudent

investment

standards

and

fiduciary

responsibility

to

the

endowment

beneficiaries.

Sec.

2.

NEW

SECTION

.

262C.2

Definitions.

As

used

in

this

chapter,

unless

the

context

otherwise

requires:

1.

“Endowment

assets”

means

all

unrestricted

pooled,

long-term

investment

assets

held

by

or

for

the

benefit

of

an

institution,

including

foundation-managed

endowments,

quasi-endowments,

and

long-term

investment

pools,

as

such

assets

are

reported

in

the

foundation’s

audited

financial

statements.

“Endowment

assets”

does

not

include

assets

not

treated

as

endowment

funds

under

applicable

fiduciary

and

accounting

standards.

2.

“Innovation

fund”

means

the

same

as

defined

in

section

15E.52.

3.

“Institution”

means

a

regents

institution

specified

in

section

262.7,

subsections

1

through

3.

Sec.

3.

NEW

SECTION

.

262C.3

Investment

in

innovation

funds.

1.

By

July

1,

2027,

each

foundation

affiliated

with

an

institution

shall

ensure

that

no

less

than

one

percent

of

its

total

endowment

assets

are

invested

in

one

or

more

innovation

funds.

The

one

percent

allocation

shall

be

calculated

based

on

the

average

quarterly

market

value

of

endowment

assets

for

the

most

recently

completed

fiscal

year.

2.

A

foundation

affiliated

with

an

institution

may

determine

which

innovation

funds

to

invest

in,

the

timing

of

such

investments,

and

the

structure

of

investment

commitments,

provided

the

foundation

remains

responsible

for

compliance

with

this

chapter.

3.

A

foundation

affiliated

with

an

institution

may

implement

investments

required

under

this

chapter

through

direct

commitments,

reallocation

of

existing

assets,

or

rolling

commitments

as

capital

is

called,

subject

to

compliance

with

subsection

1.

If

the

percentage

of

allocation

falls

below

the

amount

required

by

subsection

1

after

that

date,

the

foundation

Senate

File

2453,

p.

3

shall

increase

its

investment

in

one

or

more

innovation

funds

as

provided

in

this

chapter

as

necessary

in

order

to

meet

the

required

percentage

of

allocation.

4.

Investments

made

pursuant

to

this

chapter

shall

be

managed

in

accordance

with

generally

accepted

institutional

fiduciary

standards

applicable

to

endowment

funds.

Sec.

4.

NEW

SECTION

.

262C.4

Waiver.

1.

A

foundation

board

may

grant

a

foundation

a

one-year

waiver

from

the

requirements

of

this

chapter

if

adequate

innovation

fund

capacity

is

not

available

or

market

conditions

would

materially

impair

prudent

investment.

2.

A

foundation

board

shall

not

grant

a

waiver

under

this

section

unless

the

foundation

submits

an

explanation

for

its

waiver

request

and

a

plan

for

coming

into

compliance

with

the

requirements

of

this

chapter

in

writing

to

the

state

board

of

regents

and

provides

a

copy

to

the

foundation

board.

3.

If

a

foundation

is

granted

two

consecutive

waivers

by

a

foundation

board,

the

foundation

shall

submit

written

notice

to

that

effect

to

the

state

board

of

regents

when

the

second

consecutive

waiver

is

granted.

The

state

board

shall

provide

such

notice

in

a

report

to

the

general

assembly.

Sec.

5.

NEW

SECTION

.

262C.5

Reports.

1.

Each

institution

shall

submit

an

annual

report

to

the

state

board

of

regents

that

includes

all

of

the

following:

a.

The

total

endowment

assets

held

by

the

institution.

b.

The

amount

and

percentage

of

total

endowment

assets

invested

in

innovation

funds.

2.

The

state

board

shall

compile

the

reports

received

pursuant

to

subsection

1

and

submit

a

consolidated

annual

report

to

the

general

assembly

by

December

1

of

each

year.

Sec.

6.

NEW

SECTION

.

262C.6

Standards

for

innovation

funds.

Innovation

funds

receiving

investment

under

this

chapter

must

support

the

commercialization

of

institution

technologies,

spinouts,

or

research-derived

innovations

and

report

such

efforts

through

existing

reporting

and

compliance

obligations

under

section

15E.52

and

rules

adopted

pursuant

to

that

section.

This

section

shall

not

be

construed

to

require

additional

reporting

beyond

that

required

under

section

15E.52

and

rules

adopted

pursuant

to

that

section.

Senate

File

2453,

p.

4

Sec.

7.

NEW

SECTION

.

262C.7

List

of

innovation

funds.

The

economic

development

authority

shall

maintain

a

public

list

of

all

innovation

funds

eligible

for

investment

by

a

foundation

pursuant

to

this

chapter.

The

authority

shall

notify

each

foundation

of

any

changes

to

the

list.

Sec.

8.

NEW

SECTION

.

262C.8

Implementation

and

construction

of

chapter.

Implementation

of

this

chapter

shall

not

alter

donor

intent

and

shall

be

carried

out

in

a

manner

consistent

with

applicable

restrictions

and

fiduciary

obligations.

This

chapter

shall

not

be

construed

to

alter

donor

intent,

beneficiary

designation,

an

institution’s

spending

policy,

or

the

permissible

use

of

endowment

distributions.

This

chapter

addresses

only

investment

allocation

and

implementation

consistent

with

applicable

fiduciary

standards.

Sec.

9.

EFFECTIVE

DATE.

This

Act

takes

effect

December

31,

2026.

______________________________

AMY

SINCLAIR

President

of

the

Senate

______________________________

PAT

GRASSLEY

Speaker

of

the

House

I

hereby

certify

that

this

bill

originated

in

the

Senate

and

is

known

as

Senate

File

2453,

Ninety-first

General

Assembly.

______________________________

W.

CHARLES

SMITHSON

Secretary

of

the

Senate

Approved

_______________,

2026

______________________________

KIM

REYNOLDS

Governor