H.R. 4462

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4462 Introduced in House (IH)]

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119th CONGRESS
1st Session
H. R. 4462

To amend the Internal Revenue Code of 1986 to impose an excise tax on 
certain investments of private colleges and universities.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

July 16, 2025

Mr. Murphy introduced the following bill; which was referred to the 
Committee on Ways and Means

_______________________________________________________________________

A BILL

To amend the Internal Revenue Code of 1986 to impose an excise tax on 
certain investments of private colleges and universities.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Protecting Endowments from Our 
Adversaries Act''.

SEC. 2. EXCISE TAX ON CERTAIN INVESTMENTS OF PRIVATE COLLEGES AND 
UNIVERSITIES.

(a) In General.--Subchapter H of chapter 42 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new section:

``SEC. 4969. EXCISE TAX ON CERTAIN INVESTMENTS OF PRIVATE COLLEGES AND 
UNIVERSITIES.

``(a) Tax on Acquisition of Listed Investments.--In the case of any 
specified educational institution which acquires (directly or 
indirectly through any chain of ownership) one or more listed 
investments during any taxable year, there is hereby imposed for such 
taxable year a tax equal to 50 percent of the fair market values of 
such investments determined as of the dates of such acquisitions.
``(b) Tax on Net Income From 1-Year Listed Investments.--
``(1) In general.--There is hereby imposed on each 
specified educational institution for the taxable year a tax 
equal to 100 percent of the excess (if any) of--
``(A) the sum of--
``(i) all income received with respect to 
any 1-year listed investment during such 
taxable year, plus
``(ii) all gains recognized with respect to 
the sale or other disposition of any 1-year 
listed investments during such taxable year, 
over
``(B) the sum of--
``(i) all deductions properly allocable to 
income described in subparagraph (A)(i), plus
``(ii) all losses recognized with respect 
to the sale or other disposition of any 1-year 
listed investments during such taxable year.
``(2) 1-year listed investment.--For purposes of this 
section, with respect to any income received or gain or loss 
recognized, the term `1-year listed investment' means any 
listed investment which was such a listed investment at all 
times during the 1-year period ending on the date such income 
was received or such gain or loss was recognized.
``(c) Listed Investment.--For purposes of this section--
``(1) In general.--The term `listed investment' means any 
specified interest with respect to any person listed on one or 
more of--
``(A) the Entity List maintained by the Secretary 
of Commerce,
``(B) the Military End User (MEU) List maintained 
by the Secretary of Commerce,
``(C) the Unverified List maintained by the 
Secretary of Commerce, or
``(D) the list maintained by the Federal 
Communications Commission of equipment and services 
covered by section 2 of the Secure and Trusted 
Communications Networks Act of 2019 (commonly referred 
to as the FCC Covered List).
``(2) Listed persons list.--The Secretary shall establish 
(not later than 60 days after the date of the enactment of this 
section), update, and maintain a list of the persons which are 
listed on one or more of the lists described in paragraph (1).
``(3) Specified interest.--The term `specified interest' 
means, with respect to any person--
``(A) stock or any other equity or profits interest 
of such person,
``(B) debt issued by such person, or
``(C) any contract or derivative with respect to 
any interest described in subparagraph (A) or (B).
``(4) Inclusion of certain pooled funds.--
``(A) In general.--Any specified interest acquired 
through a regulated investment company, exchange traded 
fund, or any other pooled investment shall not fail to 
be treated as acquired through a chain of ownership 
described in subsection (a).
``(B) Certifications of pooled funds.--The 
Secretary shall establish procedures under which 
regulated investment companies, exchange traded funds, 
and other pooled investments may be certified by the 
Secretary as not holding any listed investments.
``(d) Specified Educational Institution.--For purposes of this 
section--
``(1) In general.--The term `specified educational 
institution' means, with respect to any taxable year, any 
eligible educational institution (as defined in section 
25A(f)(2))--
``(A) which is not described in the first sentence 
of section 511(a)(2)(B) (relating to State colleges and 
universities), and
``(B) the aggregate fair market value of the assets 
of which at the end of the preceding taxable year 
(other than those assets which are used directly in 
carrying out the institution's exempt purpose) is in 
excess of $1,000,000,000.
``(2) Treatment of related organizations.--For purposes of 
subsections (a) and (b), assets held by any related 
organization (as defined in section 4968(d)(2)) with respect to 
an educational institution shall be treated as held by such 
educational institution, except that--
``(A) such assets shall not be taken into account 
with respect to more than 1 educational institution, 
and
``(B) unless such organization is controlled by 
such institution or is described in section 509(a)(3) 
with respect to such institution, assets which are not 
intended or available for the use or benefit of such 
educational institution shall not be taken into 
account.
``(e) Valuation of Debt.--For purposes of subsection (a), the fair 
market value of any debt shall be treated as being the principal amount 
of such debt.
``(f) Regulations.--The Secretary may issue such regulations or 
other guidance as may be necessary or appropriate to carry out the 
purposes of this section, including regulations or other guidance 
providing for the proper application of this section with respect to 
institutionally related foundations and pooled investments.''.
(b) Clerical Amendments.--
(1) The table of sections for subchapter H of chapter 42 of 
such Code is amended by adding at the end the following new 
item:

``Sec. 4969. Excise tax on certain investments of private colleges and 
universities.''.
(2) The heading of subchapter H of chapter 42 of such Code 
(and the item relating to such subchapter in the table of 
subchapters for such chapter) are each amended by striking 
``Tax Based on Investment Income'' and inserting ``Taxes Based 
on Investments''.
(c) Effective Dates.--
(1) In general.--Except as otherwise provided in this 
subsection, the amendments made by this section shall apply to 
taxable years ending after the earlier of--
(A) the end of the first calendar year beginning 
after the date of the enactment of this Act, or
(B) the end of the 1-year period beginning on the 
date on which the Secretary of the Treasury (or the 
Secretary's delegate) establishes the listed persons 
list under section 4969(c)(2) of the Internal Revenue 
Code of 1986 (as added by this section).
(2) Certain prior acquisitions.--Section 4969(a) of the 
Internal Revenue Code of 1986 (as added by this section) shall 
not apply to investments acquired before the end of the 
calendar year referred to in paragraph (1)(A).
(3) Certain prior income and gains.--Section 4969(b) of the 
Internal Revenue Code of 1986 (as added by this section) shall 
not apply to income received, or gains or losses recognized, 
before the end of the 1-year period referred to in paragraph 
(1)(B).
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