Bill > HF2240

Introduced Session

This bill creates an endowment tax on the endowment value of certain Iowa colleges and universities, limits charges relating to certain endowment funds, makes appropriations to workforce grant and incentive programs, and makes appropriations to supplemental tuition grants for high-wage and high-demand jobs. The bill shall be known as the “Tax the Endowments Act”. The bill imposes an endowment tax annually upon an educational institution’s endowment value in excess of $500 million at the close of the preceding tax year at a rate equal to the highest corporate income tax rate as calculated under Code section 422.33(1), which is currently 7.1 percent. The bill specifies the department of revenue may adopt rules to administer the tax. The bill defines “educational institution” to mean any institution of higher education governed by the state board of regents or an accredited private institution as defined in Code section 256.183. The bill defines “endowment” to mean the unrestricted corpus of any fund or account held and administered by an educational institution or a related organization to the educational institution, the principal of which is intended to be preserved and invested for the purpose of generating income to support the educational institution’s operations, scholarships, research, or other institutional purposes. The bill defines “endowment value” to mean the total aggregate fair market value of all assets constituting the endowment at the close of the preceding tax year. The endowment tax collected from educational institutions governed by the state board of regents are credited to the Iowa workforce grant incentive fund established in Code section 256.230(8), for the uses specified in the fund. The bill creates a high-wage and high-demand job account within the Iowa tuition grants fund created in Code section 256.189(3) (private colleges). The bill specifies the endowment tax collected from educational institutions that are accredited private institutions are to be deposited into to the high-wage and high-demand job account established in new Code section 256.189(3)(b). The moneys in the high-wage and high-demand job account are to be used to supplement Iowa tuition grants to students enrolled at private colleges in majors that correspond with the high-wage and high-demand jobs identified by the workforce development board and state board of regents pursuant to Code section 84A.1B(5). The bill requires the college student aid commission to adopt rules to administer the approval and awarding of supplemental tuition grants. The bill limits the amount a higher education institution governed by the state board of regents may charge another entity for gifts made to the institution to 5 percent of the gross proceeds of the gift. The bill also limits such an institution from annually charging more than 1 percent of the endowment value for the management and administration of the endowment.

AI Summary

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No sponsors listed

Other Sponsors (1)

Introduced, referred to Ways and Means. H.J. 188. (on 01/30/2026)

Official Document