SF 2453

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