Senate File 2453 - Reprinted SENATE FILE 2453 BY COMMITTEE ON COMMERCE (SUCCESSOR TO SSB 3180) (As Amended and Passed by the Senate March 10, 2026 ) A BILL FOR An Act providing for investment by regents institutions in 1 certified innovation funds and including effective date 2 provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 SF 2453 (3) 91 je/ns/mb

S.F. 2453 Section 1. NEW SECTION . 262C.1 Findings and purpose. 1 1. Legislative findings. The general assembly finds and 2 declares all of the following: 3 a. The state of Iowa has established state-certified 4 innovation funds to promote the growth of high-potential 5 early-stage companies, commercialize research, expand Iowa’s 6 technology ecosystem, and enhance economic competitiveness. 7 b. Iowa’s three public universities collectively steward 8 sizeable endowments that support the long-term missions of the 9 institutions. 10 c. A modest, risk-appropriate allocation of endowment 11 assets into state-certified innovation funds will do all of the 12 following: 13 (1) Expand commercialization pathways for 14 institution-developed technologies. 15 (2) Increase research to market conversions. 16 (3) Strengthen Iowa’s innovation ecosystem. 17 (4) Generate economic benefits for communities throughout 18 Iowa. 19 d. A one percent allocation of endowment assets represents 20 a small, diversified portion of institution endowments, 21 consistent with commonly accepted endowment investment 22 practices and long-term portfolio strategies. 23 2. Purpose. The purpose of this chapter is to support 24 economic growth in Iowa by requiring institutions to deploy a 25 limited portion of their endowment assets into state-certified 26 innovation funds while maintaining prudent investment standards 27 and fiduciary responsibility to the endowment beneficiaries. 28 Sec. 2. NEW SECTION . 262C.2 Definitions. 29 As used in this chapter, unless the context otherwise 30 requires: 31 1. “Board” means the state board of regents. 32 2. “Endowment assets” means all pooled, investable assets 33 held for the benefit of an institution, including but not 34 limited to foundation-managed endowments, quasi-endowments, 35 -1- SF 2453 (3) 91 je/ns/mb 1/ 4

S.F. 2453 long-term investment pools, and assets held subject to 1 donor-imposed restrictions. 2 3. “Innovation fund” means the same as defined in section 3 15E.52. 4 4. “Institution” means a regents institution specified in 5 section 262.7, subsections 1 through 3. 6 Sec. 3. NEW SECTION . 262C.3 Investment in innovation funds. 7 1. By July 1, 2027, each institution shall ensure that 8 no less than one percent of its total endowment assets are 9 invested in one or more innovation funds. The one percent 10 allocation shall not include any portion of its total 11 endowment assets that is subject to donor restrictions or 12 other expressions of donor intent that expressly prohibit such 13 investment. The one percent allocation shall not include any 14 portion of its total endowment assets that is subject to donor 15 restrictions or other expressions of donor intent that are 16 contrary to such investment. The one percent allocation shall 17 be calculated based on the average quarterly market value of 18 endowment assets for the most recently completed fiscal year. 19 2. An institution shall retain discretion to determine all 20 of the following: 21 a. Which innovation funds to invest in. 22 b. When investments are made, subject to the requirements of 23 this chapter. 24 c. The structure of commitments, provided that all 25 investments comply with prudent investor standards. 26 3. An institution may implement investments required by 27 this chapter through any of the following means: 28 a. Direct commitments. 29 b. Reallocation of existing assets. 30 c. Rolling commitments as capital is called, provided full 31 compliance is achieved by the date provided in subsection 1. 32 4. Investments made pursuant to this chapter shall be 33 managed in accordance with generally accepted institutional 34 fiduciary standards applicable to endowment funds. 35 -2- SF 2453 (3) 91 je/ns/mb 2/ 4

S.F. 2453 Sec. 4. NEW SECTION . 262C.4 Waiver —— penalty for 1 noncompliance. 2 1. The board may grant an institution a one-year waiver from 3 the requirements of this chapter if adequate innovation fund 4 capacity is not available or market conditions would materially 5 impair prudent investment. 6 2. If an institution fails to comply with this chapter 7 without receiving a waiver, the board may do any of the 8 following: 9 a. Direct the institution to carry out corrective action 10 within a specified time frame. 11 b. If the institution fails to complete the corrective 12 action required under paragraph “a” within the time frame 13 specified by the board, withhold up to one-half of one percent 14 of the moneys appropriated to the institution through the 15 board in the fiscal year until the institution becomes fully 16 compliant. 17 Sec. 5. NEW SECTION . 262C.5 Reports. 18 1. Each institution shall submit an annual report to the 19 board that includes all of the following: 20 a. The total endowment assets held by the institution. 21 b. The amount and percentage of total endowment assets 22 invested in innovation funds. 23 c. The names of innovation funds the institution is invested 24 in and the total commitments and capital deployed in each fund. 25 d. The expected or realized economic impact in Iowa of the 26 investments. 27 2. The board shall compile the reports received pursuant 28 to subsection 1 and submit a consolidated annual report to the 29 general assembly by December 1 of each year. 30 Sec. 6. NEW SECTION . 262C.6 Standards for innovation funds. 31 Innovation funds receiving investment under this chapter 32 must support the commercialization of institution technologies, 33 spinouts, or research-derived innovations and report such 34 efforts through existing reporting and compliance obligations 35 -3- SF 2453 (3) 91 je/ns/mb 3/ 4

S.F. 2453 under section 15E.52 and rules adopted pursuant to that 1 section. This section shall not be construed to require 2 additional reporting beyond that required under section 15E.52 3 and rules adopted pursuant to that section. 4 Sec. 7. NEW SECTION . 262C.7 List of innovation funds. 5 The economic development authority shall maintain a public 6 list of all innovation funds eligible for investment by an 7 institution pursuant to this chapter. The authority shall 8 notify the board of any changes to the list. 9 Sec. 8. NEW SECTION . 262C.8 Implementation and construction 10 of chapter. 11 Implementation of this chapter shall not alter donor intent 12 and shall be carried out in a manner consistent with applicable 13 restrictions and fiduciary obligations. This chapter shall not 14 be construed to alter donor intent, beneficiary designation, 15 an institution’s spending policy, or the permissible use 16 of endowment distributions. This chapter addresses only 17 investment allocation and implementation consistent with 18 applicable fiduciary standards. 19 Sec. 9. EFFECTIVE DATE. This Act, being deemed of immediate 20 importance, takes effect upon enactment. 21 -4- SF 2453 (3) 91 je/ns/mb 4/ 4