A bill for an act creating an endowment tax on the endowment value of certain Iowa colleges and universities, limiting 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.

HF 2240, the "Tax the Endowments Act," imposes an annual tax of 7.1% on the endowment value exceeding $500 million held by Iowa public universities (governed by the state board of regents) and accredited private colleges. The tax revenue is directed to two specific programs: funds from public institutions support workforce grant programs, while funds from private institutions supplement tuition grants for students in high-wage, high-demand majors. The bill also limits institutions to charging no more than 5% on gift proceeds and 1% annual fees on endowment management. It directly affects large Iowa colleges with substantial endowments, redirecting tax revenue to workforce development and targeted student financial aid.