The proposed legislation, known as the Tax the Endowments Act, establishes an annual endowment tax on the endowment value of certain Iowa colleges and universities with an endowment exceeding $250 million, set at a rate of 15% starting January 1, 2027. The bill defines key terms such as "educational institution," "endowment," and "endowment value," and mandates that the Department of Revenue adopt rules for administering the tax. Revenue generated from this tax will be allocated to the Iowa workforce grant incentive fund for institutions governed by the state board of regents, while funds from accredited private institutions will be directed to a newly created high-wage and high-demand jobs account within the Iowa tuition grants fund.

Additionally, the bill imposes restrictions on the fees that higher education institutions can charge related to endowment funds, limiting them to 5% of the gross proceeds of any gift and capping annual management fees at 1% of the endowment value. It also includes provisions for the approval and awarding of supplemental tuition grants for students enrolled in high-wage and high-demand job programs, with the college student aid commission responsible for administering these grants. The legislation aims to enhance funding for workforce development and support students pursuing careers in high-demand fields.

Statutes affected:
Introduced: 256.189