1004 
‘‘(2) QUALIFIED RELIGIOUS INSTITUTION.—For 
purposes of this subsection, the term ‘qualified reli-
gious institution’ means any institution— 
‘‘(A) established after July 4, 1776, 
‘‘(B) that was established by or in associa-
tion with and has continuously maintained an 
affiliation with an organization described in sec-
tion 170(b)(1)(A)(i), and 
‘‘(C) which maintains a published institu-
tional mission that is approved by the governing 
body of such institution and that includes, re-
fers to, or is predicated upon religious tenets, 
beliefs, or teachings. 
‘‘(d) STUDENT ADJUSTED ENDOWMENT.—For pur-
poses of this section— 
‘‘(1) IN GENERAL.—The term ‘student adjusted 
endowment’ means, with respect to any institution 
for any taxable year— 
‘‘(A) the aggregate fair market value of 
the assets of such institution (determined as of 
the end of the preceding taxable year), other 
than those assets which are used directly in car-
rying out the institution’s exempt purpose, di-
vided by 
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‘‘(B) the number of eligible students of 
such institution. 
‘‘(2) ELIGIBLE
STUDENT.—For purposes of 
this subsection, the term ‘eligible student’ means a 
student of the institution that meets the student eli-
gibility requirements under section 484(a)(5) of the 
Higher Education Act of 1965. 
‘‘(e) DETERMINATION OF NUMBER OF STUDENTS.— 
For purposes of subsections (c)(1) and (d), the number 
of students of an institution (including for purposes of de-
termining 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 stu-
dents taken into account on a full-time student equivalent 
basis). 
‘‘(f) NET INVESTMENT INCOME.—For purposes of 
this section— 
‘‘(1) IN
GENERAL.—Net investment income 
shall be determined under rules similar to the rules 
of section 4940(c). 
‘‘(2) OVERRIDE OF CERTAIN REGULATORY EX-
CEPTIONS.— 
‘‘(A) STUDENT LOAN INTEREST.—Net in-
vestment income shall be determined by taking 
into account any interest income from a student 
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loan made by the applicable educational institu-
tion (or any related organization) as gross in-
vestment income. 
‘‘(B) FEDERALLY-SUBSIDIZED
ROYALTY 
INCOME.— 
‘‘(i) IN GENERAL.—Net investment in-
come shall be determined by taking into 
account any Federally-subsidized royalty 
income as gross investment income. 
‘‘(ii) FEDERALLY-SUBSIDIZED
ROY-
ALTY INCOME.—For purposes of this sub-
paragraph— 
‘‘(I) IN
GENERAL.—The term 
‘Federally-subsidized royalty income’ 
means any otherwise-regulatory-ex-
empt royalty income if any Federal 
funds were used in the research, de-
velopment, or creation of the patent, 
copyright, or other intellectual or in-
tangible property from which such 
royalty income is derived. 
‘‘(II) OTHERWISE-REGULATORY- 
EXEMPT ROYALTY INCOME.—For pur-
poses of this subparagraph, the term 
‘otherwise-regulatory-exempt 
royalty 
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1007 
income’ means royalty income which 
(but for this subparagraph) would not 
be taken into account as gross invest-
ment income by reason of being de-
rived from patents, copyrights, or 
other intellectual or intangible prop-
erty which resulted from the work of 
students or faculty members in their 
capacities as such with the applicable 
educational institution. 
‘‘(III) FEDERAL
FUNDS.—The 
term ‘Federal funds’ includes any 
grant made by, and any payment 
made under any contract with, any 
Federal agency to the applicable edu-
cational institution, any related orga-
nization, or any student or faculty 
member referred to in subclause (II). 
‘‘(g) ASSETS AND NET INVSTEMENT INCOME OF RE-
LATED ORGANIZATIONS.— 
‘‘(1) IN
GENERAL.—For purposes of sub-
sections (d) and (f), assets and net investment in-
come of any related organization with respect to an 
educational institution shall be treated as assets and 
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1008 
net investment income, respectively, of the edu-
cational 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 in-
come 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 in-
stitution, 
‘‘(B) is controlled by 1 or more persons 
which also control such institution, or 
‘‘(C) is a supported organization (as de-
fined in section 509(f)(3)), or an organization 
described in section 509(a)(3), during the tax-
able year with respect to such institution. 
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1009 
‘‘(h) REGULATIONS.—The Secretary shall prescribe 
such regulations or other guidance as may be necessary 
to prevent avoidance of the tax under this section, includ-
ing regulations or other guidance to prevent avoidance of 
such tax through the restructuring of endowment funds 
or other arrangements designed to reduce or eliminate the 
value of net investment income or assets subject to the 
tax imposed by this section.’’. 
(b) REQUIREMENT TO REPORT CERTAIN INFORMA-
TION WITH RESPECT TO APPLICATION OF EXCISE TAX 
BASED ON INVESTMENT INCOME OF PRIVATE COLLEGES 
AND UNIVERSITIES.—Section 6033 is amended by redes-
ignating subsection (o) as subsection (p) and by inserting 
after subsection (n) the following new subsection: 
‘‘(o) REQUIREMENT TO REPORT CERTAIN INFORMA-
TION WITH RESPECT TO EXCISE TAX BASED ON INVEST-
MENT INCOME
OF PRIVATE COLLEGES
AND UNIVER-
SITIES.—Each applicable educational institution described 
in section 4968(c) which is subject to the requirements 
of subsection (a) shall include on the return required 
under subsection (a)— 
‘‘(1) the number of eligible students taken into 
account under section 4968(c)(1)(D), and 
‘‘(2) the number of students of such institution 
(determined after application of section 4968(e)).’’. 
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1010 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 112022. INCREASE IN RATE OF TAX ON NET INVEST-
MENT INCOME OF CERTAIN PRIVATE FOUN-
DATIONS. 
(a) IN GENERAL.—Section 4940(a) is amended by 
striking ‘‘1.39 percent’’ and inserting ‘‘the applicable per-
centage’’. 
(b) APPLICABLE PERCENTAGE.—Section 4940(a) is 
amended— 
(1) by striking ‘‘There is hereby’’ and inserting 
the following: 
‘‘(1) IMPOSITION OF TAX.—There is hereby’’, 
and 
(2) by adding at the end the following new 
paragraphs: 
‘‘(2) APPLICABLE PERCENTAGE.—For purposes 
of this subsection, the term ‘applicable percentage’ 
means, with respect to any taxable year— 
‘‘(A) in the case of a private foundation 
with assets of less than $50,000,000, 1.39 per-
cent, 
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1011 
‘‘(B) in the case of a private foundation 
with assets of at least $50,000,000, and less 
than $250,000,000, 2.78 percent, 
‘‘(C) in the case of a private foundation 
with assets of at least $250,000,000, and less 
than $5,000,000,000, 5 percent, and 
‘‘(D) in the case of a private foundation 
with assets of at least $5,000,000,000, 10 per-
cent. 
‘‘(3) ASSETS.—For purposes of this subsection, 
the assets of any private foundation shall be deter-
mined with respect to any taxable year as being the 
aggregate fair market value of all assets of such pri-
vate foundation, as determined as of the close of 
such taxable year. The preceding sentence shall be 
applied without reduction for any liabilities. 
‘‘(4) AGGREGATION.— 
‘‘(A) IN GENERAL.—For purposes of para-
graphs (2) and (3), assets of any related orga-
nization with respect to a private foundation 
shall be treated as assets of the private founda-
tion, except that— 
‘‘(i) no such assets shall be taken into 
account with respect to more than 1 pri-
vate foundation, and 
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1012 
‘‘(ii) unless such organization is con-
trolled by such private foundation, assets 
which are not intended or available for the 
use or benefit of the private foundation 
shall not be taken into account. 
‘‘(B) RELATED ORGANIZATION.—For pur-
poses of this paragraph, the term ‘related orga-
nization’ means, with respect to a private foun-
dation, any organization which— 
‘‘(i) controls, or is controlled by, such 
private foundation, or 
‘‘(ii) is controlled by 1 or more per-
sons which also control such private foun-
dation.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 112023. CERTAIN PURCHASES OF EMPLOYEE-OWNED 
STOCK DISREGARDED FOR PURPOSES OF 
FOUNDATION 
TAX 
ON 
EXCESS 
BUSINESS 
HOLDINGS. 
(a) IN GENERAL.—Section 4943(c)(4)(A) is amended 
by adding at the end the following new clauses: 
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1013 
‘‘(v) For purposes of clause (i), subpara-
graph (D), and paragraph (2), any voting stock 
which— 
‘‘(I) is not readily tradable on an es-
tablished securities market, 
‘‘(II) is purchased by the business en-
terprise on or after January 1, 2020, from 
an employee stock ownership plan (as de-
fined in section 4975(e)(7)) in which em-
ployees of such business enterprise partici-
pate, in connection with a distribution 
from such plan, and 
‘‘(III) is held by the business enter-
prise as treasury stock, cancelled, or re-
tired, 
shall be treated as outstanding voting stock, but 
only to the extent so treating such stock would 
not result in permitted holdings exceeding 49 
percent (determined without regard to this 
clause). The preceding sentence shall not apply 
with respect to the purchase of stock from a 
plan during the 10-year period beginning on the 
date the plan is established. 
‘‘(vi) Section 4943(c)(4)(A)(ii) shall not 
apply with respect to any decrease in the per-
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1014 
centage of holdings in a business enterprise by 
reason of the application of clause (v).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years ending after the 
date of the enactment of this Act and to purchases by 
a business enterprise of voting stock in taxable years be-
ginning after December 31, 2019. 
SEC. 112024. UNRELATED BUSINESS TAXABLE INCOME IN-
CREASED BY AMOUNT OF CERTAIN FRINGE 
BENEFIT EXPENSES FOR WHICH DEDUCTION 
IS DISALLOWED. 
(a) IN GENERAL.—Section 512(a) is amended by 
adding at the end the following new paragraph: 
‘‘(7) INCREASE IN UNRELATED BUSINESS TAX-
ABLE INCOME BY DISALLOWED FRINGE.— 
‘‘(A) IN
GENERAL.—Unrelated business 
taxable income of an organization shall be in-
creased by any amount— 
‘‘(i) which is paid or incurred by such 
organization for any qualified transpor-
tation fringe (as defined in section 132(f)) 
or any parking facility used in connection 
with qualified parking (as defined in sec-
tion 132(f)(5)(C)), 
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‘‘(ii) which is not directly connected 
with an unrelated trade or business which 
is regularly carried on by the organization, 
and 
‘‘(iii) for which a deduction is not al-
lowable under this chapter by reason of 
section 274. 
‘‘(B) EXCEPTION FOR CHURCH ORGANIZA-
TIONS.—Subparagraph (A) shall not apply to— 
‘‘(i) any organization to which section 
6033(a)(1) does not apply by reason of 
clause (i) or (iii) of section 6033(a)(3)(A), 
and 
‘‘(ii) any church-affiliated organiza-
tion described in section 501(c) which is 
not required to file an annual return under 
section 6033(a)(1) by reason of section 
6033(a)(3)(B). 
‘‘(C) TREATMENT AS INCOME FROM SEPA-
RATE TRADE OR BUSINESS.—For purposes of 
paragraph (6), any increase under subpara-
graph (A) shall be treated as unrelated business 
taxable income with respect to an unrelated 
trade or business separate from any other unre-
lated trade or business of the organization. 
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1022 
‘‘SEC. 899. ENFORCEMENT OF REMEDIES AGAINST UNFAIR 
FOREIGN TAXES. 
‘‘(a) INCREASED RATES OF TAX ON FOREIGN PER-
SONS OF DISCRIMINATORY FOREIGN COUNTRIES.— 
‘‘(1) 
TAXES
OTHER
THAN
WITHHOLDING 
TAXES.— 
‘‘(A) IN GENERAL.—In the case of any ap-
plicable person, each specified rate of tax (or 
any rate of tax applicable in lieu of such statu-
tory rate) shall be increased by the applicable 
number of percentage points. 
‘‘(B) SPECIFIED RATE OF TAX.—For pur-
poses of this paragraph, the term ‘specified rate 
of tax’ means— 
‘‘(i) the rates of tax specified in para-
graphs (1) and (2) of section 871(a), 
‘‘(ii) in the case of any applicable per-
son to which section 871(b) applies, each 
rate of tax in effect under section 1, 
‘‘(iii) the rate of tax specified in sec-
tion 881(a), 
‘‘(iv) in the case of any applicable per-
son to which section 882(a) applies, the 
rate of tax specified in section 11(b), 
‘‘(v) the rate of tax specified in sec-
tion 884(a), and 
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