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STATE OF IOWA
KIM REYNOLDS
GOVERNOR
June 2, 2026
The Honorable Paul Pate
Secretary of State of Iowa
State Capitol Building
LOCAL
Dear Mr. Secretary:
I hereby transmit Senate File 2453, an Act providing for investment by regents institutions in
certified innovation funds and including effective date provisions.
Iowa’s regent universities and their affiliated foundations play an important role in supporting
research, innovation, workforce development, and economic opportunity across our state. Iowa
should continue encouraging strong partnerships between higher education, entrepreneurs, and
private investment to support innovation and economic growth.
However, I am concerned Senate File 2453 creates a statewide investment mandate on university
foundation assets without adequately recognizing the independent fiduciary responsibilities of
foundation boards and investment professionals based on donor intent, institutional priorities,
market conditions, and long-term financial performance. Recent concerns raised by university
stakeholders also demonstrate the uncertainty that may result from requiring specific investment
allocations through statute.
Iowa should continue supporting innovation and economic development while preserving the
flexibility necessary for university foundations to responsibly manage long-term investments in
support of students, research, and institutional priorities.
For the above reasons, I respectfully disapprove Senate File 2453 as specified above, in accordance
with Article III, Section 16, of the Constitution of the State of Iowa.
Governor
cc: Secretary of the Senate
Clerk of the House
STATE CAPITOL DES MOINES, IOWA 50319 515.281.5211 FAX 515.725.3527 WWVCGOVERNOR.IOWA.GOV '
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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 PAT GRASSLEY/
President of the Senate 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.
uz cWAw _ W. CHARLES SMITHSON
Secreta^r of tÿ^^nate
KIM R^^OLDS J \
Governor