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[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1732 Introduced in Senate (IS)]

<DOC>

116th CONGRESS
  1st Session
                                S. 1732

  To amend the Internal Revenue Code of 1986 to provide rules for the 
   disallowance and recapture of certain charitable contributions to 
           colleges and universities, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              June 5, 2019

   Mr. Wyden introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
  To amend the Internal Revenue Code of 1986 to provide rules for the 
   disallowance and recapture of certain charitable contributions to 
           colleges and universities, and for other purposes.

    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 ``College Admissions Fairness Act''.

SEC. 2. TREATMENT OF CERTAIN CHARITABLE CONTRIBUTIONS TO COLLEGES AND 
              UNIVERSITIES.

    (a) In General.--Section 170(f) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new paragraph:
            ``(19) Denial of deduction and recapture for certain 
        charitable contributions to colleges and universities.--
                    ``(A) In general.--In any taxable year in which the 
                taxpayer is a restricted contributor--
                            ``(i) the deduction under subsection (a) 
                        shall be reduced (but not below zero) by the 
                        disallowed amount, and
                            ``(ii) any disallowed amount that exceeds 
                        the amount of the reduction under clause (i) 
                        shall be included in the income of such 
                        restricted contributor in such taxable year.
                    ``(B) Restricted contributor.--For purposes of this 
                paragraph, the term `restricted contributor' means, 
                with respect to any taxable year, any individual--
                            ``(i) who made any specified contribution 
                        to a specified college or university or to any 
                        related organization of such specified college 
                        or university during the applicable period, and
                            ``(ii) who has an applicable child who is 
                        enrolled at such specified college or 
                        university during such taxable year.
                    ``(C) Disallowed amount.--For purposes of this 
                paragraph, with respect to any specified college or 
                university for any taxable year, the disallowed amount 
                is the amount equal to the excess (if any) of--
                            ``(i) the amount of specified contributions 
                        of the taxpayer to such specified college or 
                        university during the applicable period, over
                            ``(ii) the sum of--
                                    ``(I) $100,000, plus
                                    ``(II) the aggregate amount of the 
                                reductions under subparagraph (A)(i) 
                                and inclusions under subparagraph 
                                (A)(ii) for all taxable years in the 
                                applicable period preceding the taxable 
                                year for which the determination is 
                                being made.
                    ``(D) Specified contribution.--For purposes of this 
                paragraph, the term `specified contribution' means, 
                with respect to any specified college or university at 
                which an applicable child of a restricted contributor 
                is enrolled during the taxable year--
                            ``(i) any contribution for which a 
                        deduction is allowed under this section (or 
                        would have been allowed but for this paragraph 
                        or subsection (b)) and which is made, directly 
                        or indirectly, during the applicable period to 
                        such specified college or university or to any 
                        related organization by--
                                    ``(I) the restricted contributor, 
                                or
                                    ``(II) a partnership, corporation, 
                                trust, or other entity for the benefit 
                                of or at the direction of the 
                                restricted contributor,
                            ``(ii) any contribution which is made 
                        during the applicable period to such specified 
                        college or university or to any related 
                        organization by--
                                    ``(I) a donor advised fund (as 
                                defined in section 4966(d)(2)) with 
                                respect to which the restricted 
                                contributor is a person described in 
                                section 4966(d)(2)(A)(iii), or
                                    ``(II) a private foundation with 
                                respect to which the restricted 
                                contributor is a disqualified person 
                                (as defined in section 4946(a)), and
                            ``(iii) any legally binding pledge which is 
                        made during the applicable period to such 
                        specified college or university or to any 
                        related organization by a person described in 
                        clause (i) or (ii).
                    ``(E) Applicable period.--For purposes of this 
                subsection, the term `applicable period' means, with 
                respect to any taxable year, the 6-year period ending 
                with the last day of the taxable year.
                    ``(F) Applicable child.--For purposes of this 
                subsection, the term `applicable child' means, with 
                respect to any restricted contributor, any individual 
                who bears a relationship to such restricted contributor 
                that is described in section 152(c)(2)(A).
                    ``(G) Specified college or university; related 
                organization.--For purposes of this section--
                            ``(i) Specified college or university.--The 
                        term `specified college or university' means 
                        any institution of higher education (as defined 
                        in section 101 of the Higher Education Act of 
                        1965) other than an institution which--
                                    ``(I) has a written policy that 
                                prohibits as a factor in admissions 
                                decisions the consideration of--
                                            ``(aa) direct or indirect 
                                        donations from an applicant or 
                                        family member of an applicant, 
                                        and
                                            ``(bb) the financial 
                                        ability of an applicant or 
                                        family member of an applicant 
                                        to make a donation, and
                                    ``(II) demonstrates to the 
                                satisfaction of the Secretary that such 
                                policy is properly enforced.
                            ``(ii) Related organization.--The term 
                        `related organization' means, with respect to 
                        any specified college or university, an 
                        organization which--
                                    ``(I) controls, or is controlled 
                                by, such specified college or 
                                university,
                                    ``(II) is controlled by one or more 
                                persons which also control such 
                                specified college or university, or
                                    ``(III) 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 specified college or 
                                university.
                    ``(H) No double taxation.--Any specified 
                contribution which is taken into account under 
                subsection (a) with respect to an applicable child for 
                any taxable year shall not be taken into account with 
                respect to another applicable child in any subsequent 
                year.
                    ``(I) Regulations.--The Secretary shall prescribe 
                such regulations as may be necessary or appropriate to 
                carry out the purposes of this paragraph, including 
                regulations that provide for the proper treatment of 
                legally binding pledges and other types of specified 
                contributions.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning 1 year or more after the date of the 
enactment of this Act.

SEC. 3. INFORMATION TO BE COLLECTED.

    (a) Program Participation Agreements.--Section 487(a) of the Higher 
Education Act of 1965 (20 U.S.C. 1094(a)) is amended by adding at the 
end the following:
            ``(30) The institution has a written policy that prohibits 
        as a factor in admissions decisions the consideration of--
                    ``(A) direct or indirect donations from an 
                applicant or family member of an applicant; and
                    ``(B) the financial ability of an applicant or a 
                family member of an applicant to make a donation.''.
    (b) Title IV Audits.--Section 487(c) of the Higher Education Act of 
1965 (20 U.S.C. 1094(c)) is amended by adding at the end the following:
    ``(8) Notwithstanding any other provisions of this title, the 
Secretary shall prescribe such regulations as may be necessary to 
provide for a requirement that an eligible institution, in completing 
the compliance audit in accordance with paragraph (1)(A), shall submit 
a copy of the written policy described in subsection (a)(30).''.
    (c) Duties of Education Statistics Center.--
            (1) Higher education act of 1965.--Section 132(i)(1) of the 
        Higher Education Act of 1965 (20 U.S.C. 1015a(i)(1)) is amended 
        by adding at the end the following:
                    ``(AA) With respect to students who are applicable 
                children (as described in section 170(f)(19)(F) of the 
                Internal Revenue Code) of any person who has made a 
                direct or indirect donation to the institution or a 
                related organization (as defined in section 
                170(f)(19)(G)(ii) of such Code) during the 6-year 
                period ending with the calendar year in which the 
                student applied--
                            ``(i) the total number of such students who 
                        applied to the institution;
                            ``(ii) the total number of such students 
                        who were admitted by the institution; and
                            ``(iii) the total number of such students 
                        who enrolled at the institution.''.
            (2) Education sciences reform act of 2002.--Section 
        153(a)(1) of the Education Sciences Reform Act of 2002 (20 
        U.S.C. 9543(a)(1)) is amended--
                    (A) in subparagraph (N), by striking ``and'' after 
                the semicolon;
                    (B) in subparagraph (O), by inserting ``and'' after 
                the semicolon; and
                    (C) by adding at the end the following:
                    ``(P) with respect to students who are applicable 
                children (as described in section 170(f)(19)(F) of the 
                Internal Revenue Code) of any person who has made a 
                direct or indirect donation to the institution or a 
                related organization (as defined in section 
                170(f)(19)(G)(ii) of such Code) during the 6-year 
                period ending with the calendar year in which the 
                student applied--
                            ``(i) the total number of such students who 
                        applied to the institution;
                            ``(ii) the total number of such students 
                        who were admitted by the institution; and
                            ``(iii) the total number of such students 
                        who enrolled at the institution;''.
    (d) Institutional Dissemination Activities.--Section 485(a) of the 
Higher Education Act of 1965 (20 U.S.C. 1092(a)) is amended--
            (1) in subparagraph (U), by striking ``and'' after the 
        semicolon;
            (2) in subparagraph (V), by striking the period and 
        inserting a semicolon; and
            (3) by adding at the end the following:
            ``(W) the institution's written policy that prohibits as a 
        factor in admissions decisions the consideration of--
                    ``(i) direct or indirect donations from an 
                applicant or family member of an applicant; and
                    ``(ii) the financial ability of an applicant or a 
                family member of an applicant to make a donation; and
            ``(X) with respect to students who are applicable children 
        (as described in section 170(f)(19)(F) of the Internal Revenue 
        Code) of any person who has made a direct or indirect donation 
        to the institution or a related organization (as defined in 
        section 170(f)(19)(G)(ii) of such Code) during the 6-year 
        period ending with the calendar year in which the student 
        applied--
                    ``(i) the total number of such students who applied 
                to the institution;
                    ``(ii) the total number of such students who were 
                admitted by the institution; and
                    ``(iii) the total number of such students who 
                enrolled at the institution.''.
    (e) Information Included on Tax Information Returns.--
            (1) In general.--Section 6033 of the Internal Revenue Code 
        of 1986 is amended by redesignating subsection (n) as 
        subsection (o) and by inserting after subsection (m) the 
        following new subsection:
    ``(n) Additional Information Required for Institutions of Higher 
Education.--Every organization which is an institution of higher 
education (as defined in section 101 of the Higher Education Act of 
1965) and required to file a return under subsection (a) shall include 
with such return--
            ``(1) a copy of the written policy described in section 
        487(a)(30) of Higher Education Act of 1965, and
            ``(2) the information described in section 132(i)(1)(AA) of 
        such Act.''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply to returns filed for taxable years beginning 1 year 
        or more after the date of the enactment of this Act.
                                 <all>
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