[House Report 118-949]
[From the U.S. Government Publishing Office]
118th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 118-949
======================================================================
PROTECTING AMERICAN STUDENTS ACT
_______
December 24, 2024.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Smith of Missouri, from the Committee on Ways and Means, submitted
the following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 8913]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 8913) to amend the Internal Revenue Code of 1986 to
exclude certain students from the calculation to determine if
certain private colleges and universities are subject to the
excise tax on net investment income, and for other purposes,
having considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
CONTENTS
Page
I. SUMMARY AND BACKGROUND...........................................2
A. Purpose and Summary................................. 2
B. Background and Need for Legislation................. 3
C. Legislative History................................. 3
D. Designated Hearing.................................. 4
II. EXPLANATION OF THE BILL..........................................4
A. Certain Students Not Taken into Account for Purposes
of Calculation to Determine if Certain Private
Colleges and Universities are Subject to Excise Tax
on Net Investment Income; Requirement to Report
Certain Information with Respect to Application of
Excise Tax Based on Investment Income of Private
Colleges and Universities (secs. 2 and 3 of the
bill and secs. 4968 and 6033 of the Code).......... 4
III. VOTE OF THE COMMITTEE............................................7
IV. BUDGET EFFECTS OF THE BILL.......................................7
A. Committee Estimate of Budgetary Effects............. 7
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority...................... 8
C. Cost Estimate Prepared by the Congressional Budget
Office............................................. 8
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE......10
A. Committee Oversight Findings and Recommendations.... 10
B. Statement of General Performance Goals and
Objectives......................................... 10
C. Applicability of House Rule XXI, Clause 5(b)........ 10
D. Information Relating to Unfunded Mandates........... 10
E. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits............................ 10
F. Duplication of Federal Programs..................... 11
G. Tax Complexity Analysis............................. 11
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED...........11
A. Changes in Existing Law Proposed by the Bill, as
Reported........................................... 11
VII. DISSENTING VIEWS................................................22
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Protecting American Students Act''.
SEC. 2. CERTAIN STUDENTS NOT TAKEN INTO ACCOUNT FOR PURPOSES OF
CALCULATION TO DETERMINE IF CERTAIN PRIVATE
COLLEGES AND UNIVERSITIES ARE SUBJECT TO EXCISE TAX
ON NET INVESTMENT INCOME.
(a) In General.--Section 4968(b) of the Internal Revenue Code of 1986
is amended by adding at the end the following new paragraph:
``(3) Certain students not taken into account in determining
endowment threshold.--For purposes of paragraph (1)(D), a
student shall not be taken into account with respect to an
eligible educational institution unless such student meets the
student eligibility requirements under section 484(a)(5) of the
Higher Education Act of 1965 (20 U.S.C. 1091(a)(5)).''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2024.
SEC. 3. REQUIREMENT TO REPORT CERTAIN INFORMATION WITH RESPECT TO
APPLICATION OF EXCISE TAX BASED ON INVESTMENT
INCOME OF PRIVATE COLLEGES AND UNIVERSITIES.
(a) In General.--Section 6033 of the Internal Revenue Code of 1986 is
amended by redesignating subsection (o) as subsection (p) and by
inserting after subsection (n) the following new subsection:
``(o) Requirement to Report Certain Information With Respect to
Excise Tax Based on Investment Income of Private Colleges and
Universities.--Each applicable educational institution described in
section 4968(b) which is subject to the requirements of subsection (a)
shall include on the return required under subsection (a)--
``(1) the number of students taken into account for purposes
of the calculation in paragraph (1)(D) of section 4968(b)
(determined before the application of paragraph (3) of such
section), and
``(2) the number of students taken into account for purposes
of the calculation in paragraph (1)(D) of section 4968(b)
(determined after the application of paragraph (3) of such
section).''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2024.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The bill, H.R. 8913, the ``Protecting American Students
Act,'' as ordered by the Committee on Ways and Means on July 9,
2024, modifies the excise tax based on investment income of
private colleges and universities under section 4968 of the
Internal Revenue Code (``IRC''). Under the bill, an institution
is an applicable educational institution subject to the excise
tax if it has assets with a fair market value of at least
$500,000 per student, and only those students who meet the
eligibility requirements of section 484(a)(5) of the Higher
Education Act of 1965 are taken into account.
B. Background and Need for Legislation
To promote tax fairness among private foundations and tax-
exempt organizations--particularly private colleges and
universities--the 2017 Trump tax cuts established the
``Endowment Tax.'' Currently, the Endowment Tax is a 1.4
percent excise tax on the net investment income (``NII'') of a
private college or university endowment above a certain size.
To be within scope of the tax, the institution must have (among
other criteria) (1) at least 500 ``tuition-paying'' students;
and (2) an endowment value of at least $500,000 per ``full-
time'' student. Roughly 30 to 60 institutions fall into scope
of the Endowment Tax in any given year. According to the most
recently available data from the Internal Revenue Service
(``IRS''), in 2022, the Endowment Tax raised $244 million from
58 schools after raising just $68 million from 33 schools in
2021.
As the Committee's investigation into antisemitism has
shown, America's supposedly elite institutions--which receive
generous federal tax benefits--have harbored and promoted
antisemitic behavior while allowing Jewish students to be
threatened, harassed, and assaulted on campus. Data and public
reporting make clear that malign foreign influence, including
some students present in the United States on temporary student
visas, have directly contributed to the rise in antisemitic
behavior on college campuses.
At the same time, public reporting indicates that the
number of foreign students at American universities, especially
at Ivy League schools, has grown significantly in recent years.
Over the last decade, the number of foreign students in the
United States has increased by nearly 30 percent. Reporting
indicates that the average number of foreign students at Ivy
League schools is around 25 percent, reaching as high as 50
percent at some institutions. H.R. 8913 amends the Endowment
Tax formula to only account for students eligible for federal
financial assistance under section 484(a)(5) of the Higher
Education Act of 1965. This includes students who are (1) a
citizen, national, or permanent resident of the United States;
or (2) able to provide evidence from the Immigration and
Naturalization Service that they are in the United States for
other than a temporary purpose with the intention of becoming a
citizen or permanent resident. This would not include students
who are in the U.S. temporarily or on a student visa. H.R. 8913
would incentivize private colleges and universities to either
enroll more students eligible for federal financial assistance
or spend more of their endowment funds on those students to
avoid being subject to the Endowment Tax.
C. Legislative History
Background
H.R. 8913 was introduced on July 2, 2024, and was referred
to the Committee on Ways and Means.
Committee Hearings
On November 15, 2023, the Committee held a hearing
entitled, ``From Ivory Towers to Dark Corners: Investigating
the Nexus Between Antisemitism, Tax-Exempt Universities, and
Terror Financing.''\1\
---------------------------------------------------------------------------
\1\H. Comm. on Ways and Means, Hearing: From Ivory Towers to Dark
Corners: Investigating the Nexus Between Antisemitism, Tax-Exempt
Universities, and Terror Financing (Nov. 15, 2023), https://
waysandmeans.house.gov/event/hearing-from-ivory-towers-to-dark-corners-
investigating-the-nexus-between-antisemitism-tax-exempt-universities-
and-terror-financing/.
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On June 13, 2024, the Committee held a hearing entitled,
``Crisis on Campus: Antisemitism, Radical Faculty, and Failure
of University Leadership.''\2\
---------------------------------------------------------------------------
\2\H. Comm. on Ways and Means, Hearing on the Crisis on Campus:
Antisemitism, Radical Faculty, and the Failure of University Leadership
(June 13, 2024), https://waysandmeans.house.gov/event/hearing-on-the-
crisis-on-campus-antisemitism-radical-faculty-and-the-failure-of-
university-leadership/.
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Committee Action
The Committee on Ways and Means marked up H.R. 8913, the
``Protecting American Students Act,'' on July 9, 2024, and
ordered the bill, as amended, favorably reported (with a quorum
being present).\3\
---------------------------------------------------------------------------
\3\H. Comm. on Ways and Means, Markup of H.R. 8914, H.R. 8913, H.R.
8915, and H.J.Res. 148 (July 9, 2024), https://waysandmeans.house.gov/
event/markup-of-h-r-8914-h-r-8913-h-r-8915-and-h-j-res-148/.
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D. Designated Hearing
Pursuant to clause 3(c)(6) of rule XIII, the following
hearings were used to develop and consider H.R. 8913:
On November 15, 2023, the Committee held a hearing
entitled, ``From Ivory Towers to Dark Corners: Investigating
the Nexus Between Antisemitism, Tax-Exempt Universities, and
Terror Financing.''\4\
---------------------------------------------------------------------------
\4\H. Comm. on Ways and Means, Hearing: From Ivory Towers to Dark
Corners: Investigating the Nexus Between Antisemitism, Tax-Exempt
Universities, and Terror Financing (Nov. 15, 2023), https://
waysandmeans.house.gov/event/hearing-from-ivory-towers-to-dark-corners-
investigating-the-nexus-between-antisemitism-tax-exempt-universities-
and-terror-financing/.
---------------------------------------------------------------------------
On June 13, 2024, the Committee held a hearing entitled,
``Crisis on Campus: Antisemitism, Radical Faculty, and Failure
of University Leadership.''\5\
---------------------------------------------------------------------------
\5\H. Comm. on Ways and Means, Hearing on the Crisis on Campus:
Antisemitism, Radical Faculty, and the Failure of University Leadership
(June 13, 2024), https://waysandmeans.house.gov/event/hearing-on-the-
crisis-on-campus-antisemitism-radical-faculty-and-the-failure-of-
university-leadership/.
---------------------------------------------------------------------------
II. EXPLANATION OF THE BILL
A. Certain Students Not Taken Into Account for Purposes of Calculation
To Determine if Certain Private Colleges and Universities are Subject
to Excise Tax on Net Investment Income; Requirement To Report Certain
Information With Respect to Application of Excise Tax Based on
Investment Income of Private Colleges and Universities (Secs. 2 and 3
of the Bill and Secs. 4968 and 6033 of the Code)
PRESENT LAW
In general
Section 4968 imposes an excise tax on an applicable
educational institution for each taxable year equal to 1.4
percent of the net investment income of the institution for the
taxable year. Net investment income is determined using rules
similar to the rules of section 4940(c) (relating to the net
investment income of a private foundation).
An applicable educational institution is an eligible
education institution (as defined in section 25A):\6\ (1) that
has at least 500 tuition-paying students during the preceding
taxable year; (2) more than 50 percent of the tuition-paying
students of which are located in the United States; (3) that is
not described in the first sentence of section 511(a)(2)(B) of
the Code (generally describing State colleges and
universities); and (4) the aggregate fair market value of the
assets of which at the end of the preceding taxable year (other
than those assets that are used directly in carrying out the
institution's exempt purpose)\7\ is at least $500,000 per
student (the ``asset-per-student threshold''). For these
purposes, the number of students of an institution is based on
the average daily number of full-time students attending the
institution, with part-time students being taken into account
on a full-time student equivalent basis.
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\6\Section 25A(f)(2) defines an eligible educational institution as
an institution that (1) is described in section 481 of the Higher
Education Act of 1965 (20 U.S.C. sec. 1088), as in effect on August 5,
1997, and (2) is eligible to participate in a program under title IV of
such Act.
\7\Assets used directly in carrying out the institution's exempt
purpose include, for example, classroom buildings and physical
facilities used for educational activities and office equipment, or
other administrative assets used by employees of the institution in
carrying out exempt activities, among other assets.
---------------------------------------------------------------------------
For purposes of determining whether an educational
institution meets the asset-per-student threshold\8\ and for
purposes of determining net investment income, assets and net
investment income of a related organization with respect to the
educational institution are treated as assets and net
investment income, respectively, of the educational
institution, except that:
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\8\In cross-referencing the asset-per-student threshold for this
purpose, section 4968(d)(1) includes a reference to subsection
``(b)(1)(C)'' that should instead read ``(b)(1)(D).'' A clerical
correction may be necessary to correct this cross-reference.
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No such amount is taken into account with
respect to more than one educational institution; and
Unless the related organization is
controlled by the educational institution or is a
supporting organization (described in section
509(a)(3)) with respect to the institution for the
taxable year, assets and net investment income that are
not intended or available for the use or benefit of the
educational institution are not taken into account. For
example, assets of a related organization that are
earmarked or restricted for (or fairly attributable to)
the educational institution would be treated as assets
of the educational institution, whereas assets of a
related organization that are held for unrelated
purposes (and are not fairly attributable to the
educational institution) would be disregarded.
An organization is treated as related to the institution
for this purpose if the organization: (1) controls, or is
controlled by, the institution; (2) is controlled by one or
more persons that control the institution; or (3) is a
supported organization\9\ or a supporting organization\10\
during the taxable year with respect to the institution.
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\9\Sec. 509(f)(3).
\10\Sec. 509(a)(3).
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It is intended that the Secretary of the Treasury
promulgate regulations to carry out the intent of the
provision, including regulations that describe: (1) assets that
are used directly in carrying out the educational institution's
exempt purpose; (2) the computation of net investment income;
and (3) assets that are intended or available for the use or
benefit of the educational institution.
The IRS and Treasury Department have issued regulations
addressing this provision.\11\
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\11\Treas. Reg. sec. 53.4968-1 through -4.
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Reporting requirements
A private college or university generally must file an
annual information return with the IRS using IRS Form 990,
``Return of Organization Exempt from Income Tax.'' Part V,
question 16 of the Form 990 for the year 2023 asks whether the
filing organization is an educational institution that is
subject to the section 4968 excise tax on net investment
income. The instructions to the form include a worksheet to
assist the organization in making this determination.\12\
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\12\See 2023 Instructions for Form 990, pp. 18-19. The student
counts used in determining whether an institution is an applicable
educational institution are referenced in the worksheet but are not
provided to the IRS.
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An organization that answers ``yes'' to question 16 is
required to complete Schedule O of IRS Form 4720, ``Return of
Certain Excise Taxes Under Chapters 41 and 42 of the Internal
Revenue Code.'' Form 4720 is used to report certain excise
taxes that apply to tax-exempt organizations, including the
section 4968 excise tax on the net investment income of private
colleges and universities. On Schedule O, the organization must
provide information about the net investment income of the
filing organization and its related organizations and compute
the amount of section 4968 excise tax owed by the organization.
REASONS FOR CHANGE
The Committee believes that the tax laws should incentivize
colleges and universities that do not pay Federal income tax to
enroll more American students and to spend more of their
endowment funds to provide services for and educate students.
In describing students that qualify for Federal financial aid,
the Higher Education Act of 1965 generally requires that a
student be a U.S. citizen or national, a permanent resident, or
able to provide evidence that the student is in the United
States for other than a temporary purpose with the intention of
becoming a citizen or permanent resident. The Committee
believes that the same requirement should apply under the tax
laws in determining whether a student is counted when
calculating an institution's assets-perstudent ratio under the
endowment excise tax.
EXPLANATION OF PROVISION
The provision modifies the asset-per-student calculation
used in determining whether an institution is an applicable
educational institution. Specifically, a student is not taken
into account with respect to an educational institution for
this purpose unless the student meets the eligibility
requirements under section 484(a)(5) of the Higher Education
Act of 1965.\13\ That section requires that the student ``be a
citizen or national of the United States, a permanent resident
of the United States, or able to provide evidence from the
Immigration and Naturalization Service that he or she is in the
United States for other than a temporary purpose with the
intention of becoming a citizen or permanent resident.''
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\13\20 U.S.C. sec. 1091(a)(5).
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The provision also requires an applicable educational
institution that is required to file an annual information
return (Form 990) to include on the return the number of
students taken into account for purposes of the asset-per-
student calculation, determined both before and after
application of the rule that limits the student count to
students who meet the eligibility requirements under section
484(a)(5) of the Higher Education Act of 1965.
EFFECTIVE DATE
The provision is effective for taxable years beginning
after December 31, 2024.
III. VOTE OF THE COMMITTEE
In compliance with the Rules of the House of
Representatives, the following statement is made concerning the
vote of the Committee on Ways and Means during the markup
consideration of H.R. 8913, the ``Protecting American Students
Act,'' on July 9, 2024.
H.R. 8913 was ordered favorably reported to the House of
Representatives as amended by a roll call vote of 24 yeas to 13
nays (with a quorum being present). The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO)..................... X ...... ......... Mr. Neal............. ...... X .........
Mr. Buchanan....................... X ...... ......... Mr. Doggett.......... ...... X .........
Mr. Smith (NE)..................... X ...... ......... Mr. Thompson......... ...... X .........
Mr. Kelly.......................... X ...... ......... Mr. Larson........... ...... X .........
Mr. Schweikert..................... X ...... ......... Mr. Blumenauer....... ...... X .........
Mr. LaHood......................... X ...... ......... Mr. Pascrell......... ...... ...... .........
Dr. Wenstrup....................... X ...... ......... Mr. Davis............ ...... ...... .........
Mr. Arrington...................... X ...... ......... Ms. Sanchez.......... ...... ...... .........
Dr. Ferguson....................... X ...... ......... Ms. Sewell........... ...... X .........
Mr. Estes.......................... X ...... ......... Ms. DelBene.......... ...... X .........
Mr. Smucker........................ X ...... ......... Ms. Chu.............. ...... X .........
Mr. Hern........................... X ...... ......... Ms. Moore............ ...... ...... .........
Ms. Miller......................... X ...... ......... Mr. Kildee........... ...... X .........
Dr. Murphy......................... ...... ...... ......... Mr. Beyer............ ...... X .........
Mr. Kustoff........................ X ...... ......... Mr. Evans............ ...... ...... .........
Mr. Fitzpatrick.................... X ...... ......... Mr. Schneider........ ...... X .........
Mr. Steube......................... X ...... ......... Mr. Panetta.......... ...... X .........
Ms. Tenney......................... X ...... ......... Mr. Gomez............ ...... X .........
Mrs. Fischbach..................... X ...... .........
Mr. Moore.......................... X ...... .........
Mrs. Steel......................... X ...... .........
Ms. Van Duyne...................... X ...... .........
Mr. Feenstra....................... X ...... .........
Ms. Malliotakis.................... X ...... .........
Mr. Carey.......................... X ...... .........
----------------------------------------------------------------------------------------------------------------
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the effects on the budget of the bill, H.R. 8913 as
reported. The estimate prepared by the Joint Committee on
Taxation (``JCT'') is included below.
The provision is estimated to have the following effect on
Federal fiscal year budget receipts. Because the first tax year
following the effective date for most applicable educational
institutions begins July 1, 2025, and ends on June 30, 2026,
changes to excise tax receipts under section 4968 resulting
from this provision generally will not occur until such
institutions file the Form 990 and Form 4270 returns for such
tax year. In general, not including extensions, these returns
have a filing deadline of the 15th day of the 5th month after
the institution's accounting period ends. For this reason, the
provision is not expected to have significant revenue effects
relative to the present law baseline until Federal fiscal year
2027.
Assuming an enactment date of July 31, 2024, the provision
is estimated to have the following effect on Federal fiscal
year budget receipts:
FISCAL YEARS
[Millions of dollars]
----------------------------------------------------------------------------------------------------------------
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2024-28 2024-34
----------------------------------------------------------------------------------------------------------------
...... [1] 26 28 30 33 35 37 40 43 55 273
----------------------------------------------------------------------------------------------------------------
NOTE: Details may not add to totals due to rounding.
[1] Gain of less than $500,000.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority.
C. Cost Estimate Prepared by the
Congressional Budget Office
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the CBO, the following statement by CBO is
provided.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
H.R. 8913 would change the definition of ``student'' for
purposes of determining whether a postsecondary institution is
subject to the excise tax that applies to net investment income
earned on endowment assets. Under current law, that tax applies
to institutions with endowment assets of $500,000 or more per
student. The number of students is the daily average number of
full-time students, with part-time students considered on a
full-time-equivalent basis. H.R. 8913 would specify that the
accounting include only those students who are U.S. citizens,
permanent residents, or able to provide evidence of being in
the country with the intention of becoming a citizen or
permanent resident.
The Congressional Budget Act of 1974, as amended,
stipulates that revenue estimates provided by the staff of the
Joint Committee on Taxation (JCT) will be the official
estimates for all tax legislation considered by the Congress.
As such, CBO incorporates those estimates into its cost
estimates of the effects of legislation. The estimates for the
revenue provisions of H.R. 8913 were provided by JCT.\1\
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\1\Joint Committee on Taxation, Estimated Revenue Effects of H.R.
8913, the ``Protecting American Students Act,'' JCX-28-24 (July 8,
2024), www.jct.gov/publications/2024/jcx-28-24.
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The estimated budgetary effect of H.R. 8913 is shown in
Table 1. The costs of the legislation fall within budget
function 800 (general government).
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 8913
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
--------------------------------------------------------------------------------------------------
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2024-2029 2024-2034
--------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES IN REVENUES
Estimated Revenues................................... 0 0 * 26 28 30 33 35 37 40 43 84 273
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sources: Congressional Budget Office; staff of the Joint Committee on Taxation.
Components may not sum to totals because of rounding; * = between zero and $500,000.
CBO also estimates that implementing H.R. 8913 would increase the administrative costs of the Internal Revenue Service by less than $500,000 over the
2024-2034 period; any related spending would be subject to the availability of appropriated funds.
For this estimate, CBO and JCT assume that the bill will be
treated as if enacted on July 31, 2024. JCT estimates that
enacting H.R. 8913 would increase revenues by $273 million over
the 2024-2034 period because more institutions would be subject
to the excise tax if fewer students were counted in the
determination of the $500,000 per student threshold.
CBO estimates that implementing the bill would increase
federal costs by less than $500,000 over the 2025-2029 period
for the Internal Revenue Service to make those changes; any
related spending would be subject to the availability of
appropriated funds.
The CBO staff contact for this estimate is Molly Sherlock.
The estimate was reviewed by John McClelland, Director of Tax
Analysis.
Phillip L. Swagel,
Director, Congressional Budget Office.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives, the Committee made findings and
recommendations that are reflected in this report.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill does not authorize funding, so no statement of general
performance goals and objectives is required.
C. Applicability of House Rule XXI, Clause 5(b)
Rule XXI 5(b) of the Rules of the House of Representatives
provides, in part, that ``A bill or joint resolution,
amendment, or conference report carrying a Federal income tax
rate increase may not be considered as passed or agreed to
unless so determined by a vote of not less than three-fifths of
the Members voting, a quorum being present.'' The Committee has
carefully reviewed the bill, and states that the bill does not
provide such a Federal income tax rate increase.
D. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
E. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill, and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
F. Duplication of Federal Programs
In compliance with clause 3(c)(5) of rule XIII of the Rules
of the House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes: (1) a
program of the Federal Government known to be duplicative of
another Federal program; (2) a program included in any report
from the Government Accountability Office to Congress pursuant
to section 21 of Public Law 111-139; or (3) a program related
to a program identified in the most recent Catalog of Federal
Domestic Assistance, published pursuant to the Federal Program
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No.
98-169).
G. Tax Complexity Analysis
Section 4022(b) of the Internal Revenue Service Reform and
Restructuring Act of 1998 (the ``IRS Reform Act'') requires the
staff of the Joint Committee on Taxation (in consultation with
the IRS and the Treasury Department) to provide a tax
complexity analysis. The complexity analysis is required for
all legislation reported by the Senate Committee on Finance,
the House Committee on Ways and Means, or any committee of
conference if the legislation includes a provision that
directly or indirectly amends the IRC and has widespread
applicability to individuals or small businesses. The staff of
the Joint Committee on Taxation has determined that there are
no provisions that are of widespread applicability to
individuals or small businesses.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
A. Changes in Existing Law Proposed by the Bill, as Reported
Pursuant to clause 3(e) of rule XIII of the Rules of the
House of Representatives, changes in existing law proposed by
the bill are shown as follows:
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
INTERNAL REVENUE CODE OF 1986
* * * * * * *
Subtitle D--Miscellaneous Excise Taxes
* * * * * * *
CHAPTER 42--PRIVATE FOUNDATIONS; AND CERTAIN OTHER TAX-EXEMPT
ORGANIZATIONS
* * * * * * *
Subchapter H--EXCISE TAX BASED ON INVESTMENT INCOME OF PRIVATE COLLEGES
AND UNIVERSITIES
* * * * * * *
SEC. 4968. EXCISE TAX BASED ON INVESTMENT INCOME OF PRIVATE COLLEGES
AND UNIVERSITIES.
(a) Tax imposed.--There is hereby imposed on each applicable
educational institution for the taxable year a tax equal to 1.4
percent of the net investment income of such institution for
the taxable year.
(b) Applicable educational institution.--For purposes of this
subchapter--
(1) In general.--The term ``applicable educational
institution'' means an eligible educational institution
(as defined in section 25A(f)(2))--
(A) which had at least 500 tuition-paying
students during the preceding taxable year,
(B) more than 50 percent of the tuition-
paying students of which are located in the
United States,
(C) which is not described in the first
sentence of section 511(a)(2)(B) (relating to
State colleges and universities), and
(D) 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 at least $500,000 per
student of the institution.
(2) Students.--For purposes of paragraph (1), the
number of students of an institution (including for
purposes of determining the number of students at a
particular location) shall be based on the daily
average number of full-time students attending such
institution (with part-time students taken into account
on a full-time student equivalent basis).
(3) Certain students not taken into account in
determining endowment threshold.--For purposes of
paragraph (1)(D), a student shall not be taken into
account with respect to an eligible educational
institution unless such student meets the student
eligibility requirements under section 484(a)(5) of the
Higher Education Act of 1965 (20 U.S.C. 1091(a)(5)).
(c) Net investment income.--For purposes of this section, net
investment income shall be determined under rules similar to
the rules of section 4940(c).
(d) Assets and net investment income of related
organizations.--
(1) In general.--For purposes of subsections
(b)(1)(C) and (c), assets and net investment income of
any related organization with respect to an educational
institution shall be treated as assets and net
investment income, respectively, of the educational
institution, except that--
(A) no such amount shall 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 for
the taxable year, assets and net investment
income which are not intended or available for
the use or benefit of the educational
institution shall not be taken into account.
(2) Related organization.--For purposes of this
subsection, the term ``related organization'' means,
with respect to an educational institution, any
organization which--
(A) controls, or is controlled by, such
institution,
(B) is controlled by 1 or more persons which
also control such institution, or
(C) is a supported organization (as defined
in section 509(f)(3)), or an organization
described in section 509(a)(3), during the
taxable year with respect to such institution.
* * * * * * *
Subtitle F--Procedure and Administration
* * * * * * *
CHAPTER 61--INFORMATION AND RETURNS
* * * * * * *
Subchapter A--RETURNS AND RECORDS
* * * * * * *
PART III--INFORMATION RETURNS
* * * * * * *
Subpart A--INFORMATION CONCERNING PERSONS SUBJECT TO SPECIAL PROVISIONS
* * * * * * *
SEC. 6033. RETURNS BY EXEMPT ORGANIZATIONS.
(a) Organizations required to file.--
(1) In general.--Except as provided in paragraph (3),
every organization exempt from taxation under section
501(a) shall file an annual return, stating
specifically the items of gross income, receipts, and
disbursements, and such other information for the
purpose of carrying out the internal revenue laws as
the Secretary may by forms or regulations prescribe,
and shall keep such records, render under oath such
statements, make such other returns, and comply with
such rules and regulations as the Secretary may from
time to time prescribe; except that, in the discretion
of the Secretary, any organization described in section
401(a) may be relieved from stating in its return any
information which is reported in returns filed by the
employer which established such organization.
(2) Being a party to certain reportable
transactions.--Every tax-exempt entity described in
section 4965(c) shall file (in such form and manner and
at such time as determined by the Secretary) a
disclosure of--
(A) such entity's being a party to any
prohibited tax shelter transaction (as defined
in section 4965(e)), and
(B) the identity of any other party to such
transaction which is known by such tax-exempt
entity.
(3) Exceptions from filing.--
(A) Mandatory exceptions.--Paragraph (1)
shall not apply to--
(i) churches, their integrated
auxiliaries, and conventions or
associations of churches,
(ii) any organization (other than a
private foundation, as defined in
section 509(a)) described in
subparagraph (C), the gross receipts of
which in each taxable year are normally
not more than $5,000, or
(iii) the exclusively religious
activities of any religious order.
(B) Discretionary exceptions.--The Secretary
may relieve any organization required under
paragraph (1) (other than an organization
described in section 509(a)(3)) to file an
information return from filing such a return
where he determines that such filing is not
necessary to the efficient administration of
the internal revenue laws.
(C) Certain organizations.--The organizations
referred to in subparagraph (A)(ii) are--
(i) a religious organization
described in section 501(c)(3);
(ii) an educational organization
described in section 170(b)(1)(A)(ii);
(iii) a charitable organization, or
an organization for the prevention of
cruelty to children or animals,
described in section 501(c)(3), if such
organization is supported, in whole or
in part, by funds contributed by the
United States or any State or political
subdivision thereof, or is primarily
supported by contributions of the
general public;
(iv) an organization described in
section 501(c)(3), if such organization
is operated, supervised, or controlled
by or in connection with a religious
organization described in clause (i);
(v) an organization described in
section 501(c)(8); and
(vi) an organization described in
section 501(c)(1), if such organization
is a corporation wholly owned by the
United States or any agency or
instrumentality thereof, or a wholly-
owned subsidiary of such a corporation.
(b) Certain organizations described in section 501(c)(3).--
Every organization described in section 501(c)(3) which is
subject to the requirements of subsection (a) shall furnish
annually information, at such time and in such manner as the
Secretary may by forms or regulations prescribe, setting
forth--
(1) its gross income for the year,
(2) its expenses attributable to such income and
incurred within the year,
(3) its disbursements within the year for the
purposes for which it is exempt,
(4) a balance sheet showing its assets, liabilities,
and net worth as of the beginning of such year,
(5) the total of the contributions and gifts received
by it during the year, and the names and addresses of
all substantial contributors,
(6) the names and addresses of its foundation
managers (within the meaning of section 4946(b)(1)) and
highly compensated employees,
(7) the compensation and other payments made during
the year to each individual described in paragraph (6),
(8) in the case of an organization with respect to
which an election under section 501(h) is effective for
the taxable year, the following amounts for such
organization for such taxable year:
(A) the lobbying expenditures (as defined in
section 4911(c)(1)),
(B) the lobbying nontaxable amount (as
defined in section 4911(c)(2)),
(C) the grass roots expenditures (as defined
in section 4911(c)(3)), and
(D) the grass roots nontaxable amount (as
defined in section 4911(c)(4)),
(9) such other information with respect to direct or
indirect transfers to, and other direct or indirect
transactions and relationships with, other
organizations described in section 501(c) (other than
paragraph (3) thereof) or section 527 as the Secretary
may require to prevent--
(A) diversion of funds from the
organization's exempt purpose, or
(B) misallocation of revenues or expenses,
(10) the respective amounts (if any) of the taxes
imposed on the organization, or any organization
manager of the organization, during the taxable year
under any of the following provisions (and the
respective amounts (if any) of reimbursements paid by
the organization during the taxable year with respect
to taxes imposed on any such organization manager under
any of such provisions):
(A) section 4911 (relating to tax on excess
expenditures to influence legislation),
(B) section 4912 (relating to tax on
disqualifying lobbying expenditures of certain
organizations),
(C) section 4955 (relating to taxes on
political expenditures of section 501(c)(3)
organizations), except to the extent that, by
reason of section 4962, the taxes imposed under
such section are not required to be paid or are
credited or refunded, and
(D) section 4959 (relating to taxes on
failures by hospital organizations),
(11) the respective amounts (if any) of--
(A) the taxes imposed with respect to the
organization on any organization manager, or
any disqualified person, during the taxable
year under section 4958 (relating to taxes on
private excess benefit from certain charitable
organizations), and
(B) reimbursements paid by the organization
during the taxable year with respect to taxes
imposed under such section,
except to the extent that, by reason of section 4962,
the taxes imposed under such section are not required
to be paid or are credited or refunded,
(12) such information as the Secretary may require
with respect to any excess benefit transaction (as
defined in section 4958),
(13) such information with respect to disqualified
persons as the Secretary may prescribe,
(14) such information as the Secretary may require
with respect to disaster relief activities,
(15) in the case of an organization to which the
requirements of section 501(r) apply for the taxable
year--
(A) a description of how the organization is
addressing the needs identified in each
community health needs assessment conducted
under section 501(r)(3) and a description of
any such needs that are not being addressed
together with the reasons why such needs are
not being addressed, and
(B) the audited financial statements of such
organization (or, in the case of an
organization the financial statements of which
are included in a consolidated financial
statement with other organizations, such
consolidated financial statement), and
(16) such other information for purposes of carrying
out the internal revenue laws as the Secretary may
require.
For purposes of paragraph (8), if section 4911(f) applies to
the organization for the taxable year, such organization shall
furnish the amounts with respect to the affiliated group as
well as with respect to such organization.
(c) Additional provisions relating to private foundations.--
In the case of an organization which is a private foundation
(within the meaning of section 509(a))--
(1) the Secretary shall by regulations provide that
the private foundation shall include in its annual
return under this section such information (not
required to be furnished by subsection (b) or the forms
or regulations prescribed thereunder) as would have
been required to be furnished under section 6056
(relating to annual reports by private foundations) as
such section 6056 was in effect on January 1, 1979, and
(2) the foundation managers shall furnish copies of
the annual return under this section to such State
officials, at such times, and under such conditions, as
the Secretary may by regulations prescribe.
Nothing in paragraph (1) shall require the inclusion of the
name and address of any recipient (other than a disqualified
person within the meaning of section 4946) of 1 or more
charitable gifts or grants made by the foundation to such
recipient as an indigent or needy person if the aggregate of
such gifts or grants made by the foundation to such recipient
during the year does not exceed $1,000.
(d) Section to apply to nonexempt charitable trusts and
nonexempt private foundations.--The following organizations
shall comply with the requirements of this section in the same
manner as organizations described in section 501(c)(3) which
are exempt from tax under section 501(a):
(1) Nonexempt charitable trusts.--A trust described
in section 4947(a)(1) (relating to nonexempt charitable
trusts).
(2) Nonexempt private foundations.--A private
foundation which is not exempt from tax under section
501(a).
(e) Special rules relating to lobbying activities.--
(1) Reporting requirements.--
(A) In general.--If this subsection applies
to an organization for any taxable year, such
organization--
(i) shall include on any return
required to be filed under subsection
(a) for such year information setting
forth the total expenditures of the
organization to which section 162(e)(1)
applies and the total amount of the
dues or other similar amounts paid to
the organization to which such
expenditures are allocable, and
(ii) except as provided in paragraphs
(2)(A)(i) and (3), shall, at the time
of assessment or payment of such dues
or other similar amounts, provide
notice to each person making such
payment which contains a reasonable
estimate of the portion of such dues or
other similar amounts to which such
expenditures are so allocable.
(B) Organizations to which subsection
applies.--
(i) In general.--This subsection
shall apply to any organization which
is exempt from taxation under section
501 other than an organization
described in section 501(c)(3).
(ii) Special rule for in-house
expenditures.--This subsection shall
not apply to the in-house expenditures
(within the meaning of section
162(e)(4)(B)(ii)) of an organization
for a taxable year if such expenditures
do not exceed $2,000. In determining
whether a taxpayer exceeds the $2,000
limit under this clause, there shall
not be taken into account overhead
costs otherwise allocable to activities
described in subparagraphs (A) and (D)
of section 162(e)(1).
(iii) Coordination with section
527(f).--This subsection shall not
apply to any amount on which tax is
imposed by reason of section 527(f).
(C) Allocation.--For purposes of this
paragraph--
(i) In general.--Expenditures to
which section 162(e)(1) applies shall
be treated as paid out of dues or other
similar amounts to the extent thereof.
(ii) Carryover of lobbying
expenditures in excess of dues.--If
expenditures to which section 162(e)(1)
applies exceed the dues or other
similar amounts for any taxable year,
such excess shall be treated as
expenditures to which section 162(e)(1)
applies which are paid or incurred by
the organization during the following
taxable year.
(2) Tax imposed where organization does not notify.--
(A) In general.--If an organization--
(i) elects not to provide the notices
described in paragraph (1)(A) for any
taxable year, or
(ii) fails to include in such notices
the amount allocable to expenditures to
which section 162(e)(1) applies
(determined on the basis of actual
amounts rather than the reasonable
estimates under paragraph (1)(A)(ii)),
then there is hereby imposed on such
organization for such taxable year a tax in an
amount equal to the product of the highest rate
of tax imposed by section 11 for the taxable
year and the aggregate amount not included in
such notices by reason of such election or
failure.
(B) Waiver where future adjustments made.--
The Secretary may waive the tax imposed by
subparagraph (A)(ii) for any taxable year if
the organization agrees to adjust its estimates
under paragraph (1)(A)(ii) for the following
taxable year to correct any failures.
(C) Tax treated as income tax.--For purposes
of this title, the tax imposed by subparagraph
(A) shall be treated in the same manner as a
tax imposed by chapter 1 (relating to income
taxes).
(3) Exception where dues generally nondeductible.--
Paragraph (1)(A) shall not apply to an organization
which establishes to the satisfaction of the Secretary
that substantially all of the dues or other similar
amounts paid by persons to such organization are not
deductible without regard to section 162(e).
(f) Certain organizations described in section 501(c)(4).--
Every organization described in section 501(c)(4) which is
subject to the requirements of subsection (a) shall include on
the return required under subsection (a)--
(1) the information referred to in paragraphs (11),
(12) and (13) of subsection (b) with respect to such
organization, and
(2) in the case of the first such return filed by
such an organization after submitting a notice to the
Secretary under section 506(a), such information as the
Secretary shall by regulation require in support of the
organization's treatment as an organization described
in section 501(c)(4).
(g) Returns required by political organizations.--
(1) In general.--This section shall apply to a
political organization (as defined by section
527(e)(1)) which has gross receipts of $25,000 or more
for the taxable year. In the case of a political
organization which is a qualified State or local
political organization (as defined in section
527(e)(5)), the preceding sentence shall be applied by
substituting ``$100,000'' for ``$25,000''.
(2) Annual returns.--Political organizations
described in paragraph (1) shall file an annual
return--
(A) containing the information required, and
complying with the other requirements, under
subsection (a)(1) for organizations exempt from
taxation under section 501(a), with such
modifications as the Secretary considers
appropriate to require only information which
is necessary for the purposes of carrying out
section 527, and
(B) containing such other information as the
Secretary deems necessary to carry out the
provisions of this subsection.
(3) Mandatory exceptions from filing.--Paragraph (2)
shall not apply to an organization--
(A) which is a State or local committee of a
political party, or political committee of a
State or local candidate,
(B) which is a caucus or association of State
or local officials,
(C) which is an authorized committee (as
defined in section 301(6) of the Federal
Election Campaign Act of 1971) of a candidate
for Federal office,
(D) which is a national committee (as defined
in section 301(14) of the Federal Election
Campaign Act of 1971) of a political party,
(E) which is a United States House of
Representatives or United States Senate
campaign committee of a political party
committee,
(F) which is required to report under the
Federal Election Campaign Act of 1971 as a
political committee (as defined in section
301(4) of such Act), or
(G) to which section 527 applies for the
taxable year solely by reason of subsection
(f)(1) of such section.
(4) Discretionary exception.--The Secretary may
relieve any organization required under paragraph (2)
to file an information return from filing such a return
if the Secretary determines that such filing is not
necessary to the efficient administration of the
internal revenue laws.
(h) Controlling organizations.--Each controlling organization
(within the meaning of section 512(b)(13)) which is subject to
the requirements of subsection (a) shall include on the return
required under subsection (a)--
(1) any interest, annuities, royalties, or rents
received from each controlled entity (within the
meaning of section 512(b)(13)),
(2) any loans made to each such controlled entity,
and
(3) any transfers of funds between such controlling
organization and each such controlled entity.
(i) Additional notification requirements.--Any organization
the gross receipts of which in any taxable year result in such
organization being referred to in subsection (a)(3)(A)(ii) or
(a)(3)(B)--
(1) shall furnish annually, in electronic form, and
at such time and in such manner as the Secretary may by
regulations prescribe, information setting forth--
(A) the legal name of the organization,
(B) any name under which such organization
operates or does business,
(C) the organization's mailing address and
Internet web site address (if any),
(D) the organization's taxpayer
identification number,
(E) the name and address of a principal
officer, and
(F) evidence of the continuing basis for the
organization's exemption from the filing
requirements under subsection (a)(1), and
(2) upon the termination of the existence of the
organization, shall furnish notice of such termination.
(j) Loss of exempt status for failure to file return or
notice.--
(1) In general.--
(A) Notice.--If an organization described in
subsection (a)(1) or (i) fails to file the
annual return or notice required under either
subsection for 2 consecutive years, the
Secretary shall notify the organization--
(i) that the Internal Revenue Service
has no record of such a return or
notice from such organization for 2
consecutive years, and
(ii) about the revocation that will
occur under subparagraph (B) if the
organization fails to file such a
return or notice by the due date for
the next such return or notice required
to be filed.
The notification under the preceding sentence
shall include information about how to comply
with the filing requirements under subsections
(a)(1) and (i).
(B) Revocation.--If an organization described
in subsection (a)(1) or (i) fails to file an
annual return or notice required under either
subsection for 3 consecutive years, such
organization's status as an organization exempt
from tax under section 501(a) shall be
considered revoked on and after the date set by
the Secretary for the filing of the third
annual return or notice. The Secretary shall
publish and maintain a list of any organization
the status of which is so revoked.
(2) Application necessary for reinstatement.--Any
organization the tax-exempt status of which is revoked
under paragraph (1) must apply in order to obtain
reinstatement of such status regardless of whether such
organization was originally required to make such an
application.
(3) Retroactive reinstatement if reasonable cause
shown for failure.--If, upon application for
reinstatement of status as an organization exempt from
tax under section 501(a), an organization described in
paragraph (1) can show to the satisfaction of the
Secretary evidence of reasonable cause for the failure
described in such paragraph, the organization's exempt
status may, in the discretion of the Secretary, be
reinstated effective from the date of the revocation
under such paragraph.
(k) Additional provisions relating to sponsoring
organizations.--Every organization described in section
4966(d)(1) shall, on the return required under subsection (a)
for the taxable year--
(1) list the total number of donor advised funds (as
defined in section 4966(d)(2)) it owns at the end of
such taxable year,
(2) indicate the aggregate value of assets held in
such funds at the end of such taxable year, and
(3) indicate the aggregate contributions to and
grants made from such funds during such taxable year.
(l) Additional provisions relating to supporting
organizations.--Every organization described in section
509(a)(3) shall, on the return required under subsection (a)--
(1) list the supported organizations (as defined in
section 509(f)(3)) with respect to which such
organization provides support,
(2) indicate whether the organization meets the
requirements of clause (i), (ii), or (iii) of section
509(a)(3)(B), and
(3) certify that the organization meets the
requirements of section 509(a)(3)(C).
(m) Additional information required from CO-OP insurers.--An
organization described in section 501(c)(29) shall include on
the return required under subsection (a) the following
information:
(1) The amount of the reserves required by each State
in which the organization is licensed to issue
qualified health plans.
(2) The amount of reserves on hand.
(n) Mandatory electronic filing.--Any organization required
to file a return under this section shall file such return in
electronic form.
(o) Requirement to Report Certain Information With Respect to
Excise Tax Based on Investment Income of Private Colleges and
Universities.--Each applicable educational institution
described in section 4968(b) which is subject to the
requirements of subsection (a) shall include on the return
required under subsection (a)--
(1) the number of students taken into account for
purposes of the calculation in paragraph (1)(D) of
section 4968(b) (determined before the application of
paragraph (3) of such section), and
(2) the number of students taken into account for
purposes of the calculation in paragraph (1)(D) of
section 4968(b) (determined after the application of
paragraph (3) of such section).
[(o)] (p) Cross references.--For provisions relating to
statements, etc., regarding exempt status of organizations, see
section 6001.
For reporting requirements as to certain liquidations,
dissolutions, terminations, and contractions, see section
6043(b). For provisions relating to penalties for failure to
file a return required by this section, see section 6652(c).
For provisions relating to information required in connection
with certain plans of deferred compensation, see section 6058.
* * * * * * *
VII. DISSENTING VIEWS
Committee Democrats oppose H.R. 8913. This bill, which
modifies the formula for calculating the endowment tax, would
serve to penalize colleges and universities that enroll foreign
students.
Currently, the endowment tax is a 1.4 percent excise tax on
the net investment income of private colleges and universities
if they meet the following requirements: (1) the college or
university has more than 500 tuition-paying students; (2) more
than 50 percent of its tuition-paying students are located in
the United States; (3) it is not a public college or
university; and (4) it has assets valued at over $500,000 per
student.
The bill would change the endowment tax requirements from
$500,000 ``per student'' to $500,000 ``per U.S. student.'' More
specifically, this bill amends Internal Revenue Code Section
4968 to exclude ``certain students'' in the calculation of the
amount of endowment per student. These ``certain students'' are
those that ``are a citizen or national of the United States, a
permanent resident of the United States, or able to provide
evidence from the Immigration and Naturalization Service that
he or she is in the United States for other than a temporary
purpose with the intention of becoming a citizen or permanent
resident.'' To avoid triggering the endowment tax, colleges and
universities may substantially decrease the number foreign
students they accept going forward.
Our nation's higher education is strengthened by diversity.
International students have unique perspectives and experiences
that enrich U.S. universities, their surrounding communities,
and our scientific and other accomplishments around the world.
It would be a shame if Congress, through the tax code, sought
to discourage schools from providing such a diverse, multi-
cultural environment for their student body.
For these reasons, we oppose this bill.
Richard E. Neal.
DISSENTING VIEWS
Antisemitism, like all forms of discrimination, is
absolutely unacceptable. Whether on college campuses or
anywhere in our society, there is no excuse for hatred and
bigotry. Tackling these problems requires Congress to work
together on serious proposals to protect against discrimination
and uphold civil rights. That's what we did when we passed the
COVID-19 Hate Crimes Act during the pandemic, and it is what
the House can do now by passing bills like H.R. 7921, the
bipartisan Countering Antisemitism Act, led by Representatives
Kathy Manning and Chris Smith.
But instead of protecting victims of hate, this bill would
simply blame campus unrest on supposed foreign agitators, and
use this as an excuse to punish institutions that enroll
international students--regardless of where they come from.
Scapegoating these students does not represent a solution to
antisemitism or other forms of discrimination. In fact, it does
the exact opposite by blaming all foreigners for society's
ills. This is a fearmongering tactic that has been used
throughout history, and never with the goal of reducing hatred
and bigotry. It sadly reflects the same xenophobia that led to
shameful policies like the Chinese Exclusion Act and Trump's
Muslim Ban.
And this bill does not restrict its punishment to schools
who enroll international students. By limiting the definition
of students who count as full-time equivalents to only those
who qualify for federal student aid, it would categorize DACA
recipients the same as international students. These are young
people who were brought to this country as children and have no
other country to call home, yet this bill labels them as
foreigners and punishes the institutions that give them a
chance to further their education.
International students and DACA recipients are not our
enemies, and punishing universities for educating them will
only hurt us. During the 2022-2023 academic year, U.S. colleges
and universities hosted more than a million international
students who contributed more than $40 billion to the U.S.
economy. They include countless talented individuals who choose
to come to the United States to study with the goal of finding
a job, contributing to our economy, and making our country
their home. I am proud to represent many of these students at
institutions Caltech in my district, where international
students work on the cutting edge of science and technology and
help to make our economy the best in the world.
This is a misguided bill that would only make our country
weaker. I urge my colleagues to vote no.
Judy Chu.
[all]