On June 2, in the last list of bills in her term, Governor Reynolds vetoed five bills, including SF 2453, which would have created new requirements for Iowa’s three regent universities to invest their endowments into Iowa venture capital. Governor Reynolds also vetoed line items in four different budget bills. These were the only vetoes of the year, with Governor Reynolds signing over 200 bills into law in 2026.
The topline of SF 2453 is that the regents would have to invest at least 1% of their endowments into qualified Iowa innovation funds. Dentons previously covered the passage of the bill and provided analysis of different sections of the bill, which can be found here.
The Governor’s veto was accompanied by a letter which outlined why she vetoed the bill. She highlighted the work already being done to promote innovation in Iowa at Iowa State University, the University of Iowa, and the University of Northern Iowa. But the Governor outlined concerns with SF 2453 relating to the abrogation of the fiduciary responsibilities of university foundations and their duty to balance donor intent, institutional priorities, market conditions, and long-term financial performance. Governor Reynolds also noted general uncertainty with how the bill would have worked in practice.
The bill and the other vetoed legislation now return to the legislature, which could convene and override vetoes with a two-thirds vote in each chamber. However there have been no indications from legislative leaders that they will act to overturn any of this week’s vetoes, and such an action would be highly unusual in Iowa. Dentons will continue to monitor upcoming changes and proposals that impact Iowa’s venture capital and innovation economy.
