This bill would impose new federal excise taxes on private colleges and universities with endowments exceeding $1 billion that invest in companies deemed threats to national security. Specifically, it creates a 50 percent tax on the purchase of securities, debt, or derivatives connected to entities on Commerce Department lists (including those with national security concerns) and a 100 percent tax on net investment income earned from such holdings held for at least one year. The bill affects a limited group of well-endowed private institutions—not public universities or smaller colleges—and applies to investments in foreign entities and companies flagged as security risks. The Treasury Department must establish and maintain a list of restricted investment entities within 60 days of enactment, with the tax taking effect the following calendar year, though the bill grandfathers in investments made before that effective date. The legislation provides limited exceptions for pooled investment funds that certify they hold no listed investments.
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