,,ii #aaith ,,congress #ast ,session ,s4 #bjde ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,june #ab1 #bjbe ,mr4 ,ricketts 7for himself1 ,mr4 ,cotton1 and ,mrs4 ,fischer7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to impose an excise tax on certain investments of private colleges and universities4 #a4 ,short title ,this ,act may be cited as the ,protecting ,endowments from ,our ,adversaries ,act4 #b4 ,excise tax on certain investments of private colleges and universities 7a7 ,in general ,subchapter ,h of chapter #db of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #difi4 ,excise tax on certain investments of private colleges and universities 7a7 ,tax on acquisition of listed investments ,in the case of any specified educational institution which acquires 7directly or indirectly through any chain of ownership7 one or more listed investments during any taxable year1 there is hereby imposed for such taxable year a tax equal to #ej percent of the fair market values of such investments determined as of the dates of such acquisitions4 7b7 ,tax on net income from #a-,year listed investments 7#a7 ,in general ,there is hereby imposed on each specified educational institution for the taxable year a tax equal to #ajj percent of the excess 7if any7 of-- 7,a7 the sum of-- 7i7 all income received with respect to any #a-year listed investment during such taxable year1 plus 7ii7 all gains recognized with respect to the sale or other disposition of any #a-year listed investments during such taxable year1 over 7,b7 the sum of-- 7i7 all deductions properly allocable to income described in subparagraph 7,a77i71 plus 7ii7 all losses recognized with respect to the sale or other disposition of any #a-year listed investments during such taxable year4 7#b7 #a-year listed investment ,for purposes of this section1 with respect to any income received or gain or loss recognized1 the term #a-year listed investment means any listed investment which was such a listed investment at all times during the #a-year period ending on the date such income was received or such gain or loss was recognized4 7c7 ,listed investment ,for purposes of this section-- 7#a7 ,in general ,the term listed investment means any specified interest with respect to any person listed on one or more of-- 7,a7 the ,entity ,list maintained by the ,secretary of ,commerce1 7,b7 the ,military ,end ,user 7,,meu7 ,list maintained by the ,secretary of ,commerce1 7,c7 the ,unverified ,list maintained by the ,secretary of ,commerce1 or 7,d7 the list maintained by the ,federal ,communications ,commission of equipment and services covered by section #b of the ,secure and ,trusted ,communications ,networks ,act of #bjai 7commonly referred to as the ,,fcc ,covered ,list74 7#b7 ,listed persons list ,the ,secretary shall establish 7not later than #fj days after the date of the enactment of this section71 update1 and maintain a list of the persons which are listed on one or more of the lists described in paragraph 7#a74 7#c7 ,specified interest ,the term specified interest means1 with respect to any person-- 7,a7 stock or any other equity or profits interest of such person1 7,b7 debt issued by such person1 or 7,c7 any contract or derivative with respect to any interest described in subparagraph 7,a7 or 7,b74 7#d7 ,inclusion of certain pooled funds 7,a7 ,in general ,any specified interest acquired through a regulated investment company1 exchange traded fund1 or any other pooled investment shall not fail to be treated as acquired through a chain of ownership described in subsection 7a74 7,b7 ,certifications of pooled funds ,the ,secretary shall establish procedures under which regulated investment companies1 exchange traded funds1 and other pooled investments may be certified by the ,secretary as not holding any listed investments4 7d7 ,specified educational institution ,for purposes of this section-- 7#a7 ,in general ,the term specified educational institution means1 with respect to any taxable year1 any eligible educational institution 7as defined in section #be;,a7f77#b77-- 7,a7 which is not described in the first sentence of section #eaa7;a77#b77;,b7 7relating to ,state colleges and universities71 and 7,b7 the aggregate fair market value of the assets of which at the end of the preceding taxable year 7other than those assets which are used directly in carrying out the institution's exempt purpose7 is in excess of #a1jjj1jjj1jjj4 7#b7 ,treatment of related organizations ,for purposes of subsections 7a7 and 7b71 assets held by any related organization 7as defined in section #difh7;d77#b77 with respect to an educational institution shall be treated as held by such educational institution1 except that-- 7,a7 such assets shall not be taken into account with respect to more than #a educational institution1 and 7,b7 unless such organization is controlled by such institution or is described in section #eji7;a77#c7 with respect to such institution1 assets which are not intended or available for the use or benefit of such educational institution shall not be taken into account4 7e7 ,valuation of debt ,for purposes of subsection 7a71 the fair market value of any debt shall be treated as being the principal amount of such debt4 7f7 ,regulations ,the ,secretary may issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section1 including regulations or other guidance providing for the proper application of this section with respect to institutionally related foundations and pooled investments4 4 7b7 ,clerical amendments 7#a7 ,the table of sections for subchapter ,h of chapter #db of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new item3 ,sec4 #difi4 ,excise tax on certain investments of private colleges and universities4 4 7#b7 ,the heading of subchapter ,h of chapter #db of such ,code 7and the item relating to such subchapter in the table of subchapters for such chapter7 are each amended by striking ,tax ,based on ,investment ,income and inserting ,taxes ,based on ,investments4 7c7 ,effective dates 7#a7 ,in general ,except as otherwise provided in this subsection1 the amendments made by this section shall apply to taxable years ending after the earlier of-- 7,a7 the end of the first calendar year beginning after the date of the enactment of this ,act1 or 7,b7 the end of the #a-year period beginning on the date on which the ,secretary of the ,treasury 7or the ,secretary's delegate7 establishes the listed persons list under section #difi7;c77#b7 of the ,internal ,revenue ,code of #aihf 7as added by this section74 7#b7 ,certain prior acquisitions ,section #difi7;a7 of the ,internal ,revenue ,code of #aihf 7as added by this section7 shall not apply to investments acquired before the end of the calendar year referred to in paragraph 7#a77;,a74 7#c7 ,certain prior income and gains ,section #difi7;b7 of the ,internal ,revenue ,code of #aihf 7as added by this section7 shall not apply to income received1 or gains or losses recognized1 before the end of the #a-year period referred to in paragraph 7#a77;,b74