Creating an endowment tax on the endowment value of certain Iowa colleges and universities, limited charges relating to certain endowment funds, making appropriations to workforce grant and incentive programs, and making appropriations to supplement tuition grants for high-wage and high-demand jobs

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 $250 million at the close of the preceding tax year at a rate of percent for tax years beginning on or after January 1, 2027. The bill specifies the department of revenue may adopt rules to administer the tax.183. The bill defines “endowment” to mean the 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, whether unrestricted, temporarily restricted, or permanently restricted. 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.230(8), for the uses specified in the fund.189(3) (private colleges).189(3)(b).1B(5). The bill requires the college student aid commission to adopt rules to administer the approval and awarding of supplemental tuition grants. _____ governed by the state board of regents may charge another entity for gifts made to the institution to percent of the gross proceeds of the gift. The bill also limits such an institution from annually charging more than percent of the endowment value for the management and administration of the endowment.