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 be calculated 14 based on the average quarterly market value of endowment assets 15 for the most recently completed fiscal year. 16 2. An institution shall retain discretion to determine all 17 of the following: 18 a. Which innovation funds to invest in. 19 b. When investments are made, subject to the requirements of 20 this chapter. 21 c. The structure of commitments, provided that all 22 investments comply with prudent investor standards. 23 3. An institution may implement investments required by 24 this chapter through any of the following means: 25 a. Direct commitments. 26 b. Reallocation of existing assets. 27 c. Rolling commitments as capital is called, provided full 28 compliance is achieved by the date provided in subsection 1. 29 4. Investments made pursuant to this chapter shall be 30 managed in accordance with generally accepted institutional 31 fiduciary standards applicable to endowment funds. 32 Sec. 4. NEW SECTION . 262C.4 Waiver —— penalty for 33 noncompliance. 34 1. The board may grant an institution a one-year waiver from 35 -2- SF 2453 (3) 91 je/ns/mb 2/ 4

S.F. 2453 the requirements of this chapter if adequate innovation fund 1 capacity is not available or market conditions would materially 2 impair prudent investment. 3 2. If an institution fails to comply with this chapter 4 without receiving a waiver, the board may do any of the 5 following: 6 a. Direct the institution to carry out corrective action 7 within a specified time frame. 8 b. If the institution fails to complete the corrective 9 action required under paragraph “a” within the time frame 10 specified by the board, withhold up to one-half of one percent 11 of the moneys appropriated to the institution through the 12 board in the fiscal year until the institution becomes fully 13 compliant. 14 Sec. 5. NEW SECTION . 262C.5 Reports. 15 1. Each institution shall submit an annual report to the 16 board that includes all of the following: 17 a. The total endowment assets held by the institution. 18 b. The amount and percentage of total endowment assets 19 invested in innovation funds. 20 c. The names of innovation funds the institution is invested 21 in and the total commitments and capital deployed in each fund. 22 d. The expected or realized economic impact in Iowa of the 23 investments. 24 2. The board shall compile the reports received pursuant 25 to subsection 1 and submit a consolidated annual report to the 26 general assembly by December 1 of each year. 27 Sec. 6. NEW SECTION . 262C.6 Standards for innovation funds. 28 Innovation funds receiving investment under this chapter 29 must support the commercialization of institution technologies, 30 spinouts, or research-derived innovations and report such 31 efforts through existing reporting and compliance obligations 32 under section 15E.52 and rules adopted pursuant to that 33 section. This section shall not be construed to require 34 additional reporting beyond that required under section 15E.52 35 -3- SF 2453 (3) 91 je/ns/mb 3/ 4

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