I 
118TH CONGRESS 
1ST SESSION H. R. 4380 
To amend the Internal Revenue Code of 1986 to impose an excise tax 
on certain investments of private colleges and universities. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 27, 2023 
Mr. MURPHY (for himself, Mr. SMITH of Nebraska, Ms. STEFANIK, Mr. DUNN 
of Florida, Mr. SMUCKER, Mr. C. SCOTT FRANKLIN of Florida, Mr. 
BURCHETT, and Mr. HUIZENGA) introduced the following bill; which was 
referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to impose 
an excise tax on certain investments of private colleges 
and universities. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Protecting Endow-
ments from Our Adversaries Act’’. 
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SEC. 2. EXCISE TAX ON CERTAIN INVESTMENTS OF PRI-
VATE COLLEGES AND UNIVERSITIES. 
(a) IN GENERAL.—Subchapter H of chapter 42 of 
the Internal Revenue Code of 1986 is amended by adding 
at the end the following new section: 
‘‘SEC. 4969. EXCISE TAX ON CERTAIN INVESTMENTS OF PRI-
VATE COLLEGES AND UNIVERSITIES. 
‘‘(a) TAX
ON ACQUISITION
OF LISTED INVEST-
MENTS.—In the case of any specified educational institu-
tion which acquires (directly or indirectly through any 
chain of ownership) one or more listed investments during 
any taxable year, there is hereby imposed for such taxable 
year a tax equal to 50 percent of the fair market values 
of such investments determined as of the dates of such 
acquisitions. 
‘‘(b) TAX ON NET INCOME FROM 1-YEAR LISTED IN-
VESTMENTS.— 
‘‘(1) IN GENERAL.—There is hereby imposed on 
each specified educational institution for the taxable 
year a tax equal to 100 percent of the excess (if 
any) of— 
‘‘(A) the sum of— 
‘‘(i) all income received with respect 
to any 1-year listed investment during such 
taxable year, plus 
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‘‘(ii) all gains recognized with respect 
to the sale or other disposition of any 1- 
year listed investments during such taxable 
year, over 
‘‘(B) the sum of— 
‘‘(i) all deductions properly allocable 
to income described in subparagraph 
(A)(i), plus 
‘‘(ii) all losses recognized with respect 
to the sale or other disposition of any 1- 
year listed investments during such taxable 
year. 
‘‘(2) 1-YEAR LISTED INVESTMENT.—For pur-
poses of this section, the term ‘1-year listed invest-
ment’ means, as of any date, any listed investment 
which was a listed investment at all times during the 
1-year period ending on such date. 
‘‘(c) LISTED INVESTMENT.—For purposes of this 
section— 
‘‘(1) IN
GENERAL.—The term ‘listed invest-
ment’ means any specified interest with respect to 
any person listed on the listed persons list estab-
lished and maintained by the Secretary under para-
graph (2). 
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‘‘(2) LISTED
PERSONS
LIST.—The Secretary 
shall establish (not later than 60 days after the date 
of the enactment of this section), update, and main-
tain a list of the persons which are listed on one or 
more of— 
‘‘(A) the Entity List maintained by the 
Secretary of Commerce, 
‘‘(B) the Military End User (MEU) List 
maintained by the Secretary of Commerce, 
‘‘(C) the Unverified List maintained by the 
Secretary of Commerce, 
‘‘(D) the list maintained by the Federal 
Communications Commission of equipment and 
services covered by section 2 of the Secure and 
Trusted Communications Networks Act of 2019 
(commonly referred to as the FCC Covered 
List), 
‘‘(E) the unclassified list of Chinese mili-
tary companies operating in the United States 
published by the Secretary of Defense under 
section 1260H of division A of the William M. 
(Mac) Thornberry National Defense Authoriza-
tion Act for Fiscal Year 2021, and 
‘‘(F) the Non-SDN Chinese Military-In-
dustrial Complex Companies List (NS–CMIC 
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List) published by the Secretary of the Treas-
ury. 
‘‘(3) SPECIFIED INTEREST.—The term ‘speci-
fied interest’ means, with respect to any person— 
‘‘(A) stock or any other equity or profits 
interest of such person, 
‘‘(B) debt issued by such person, or 
‘‘(C) any contract or derivative with re-
spect to any interest described in subparagraph 
(A) or (B). 
‘‘(4) INCLUSION OF CERTAIN POOLED FUNDS.— 
‘‘(A) IN GENERAL.—Any specified interest 
acquired through a regulated investment com-
pany, exchange traded fund, or any other 
pooled investment shall not fail to be treated as 
acquired through a chain of ownership de-
scribed in subsection (a). 
‘‘(B) 
CERTIFICATIONS
OF
POOLED 
FUNDS.—The Secretary shall establish proce-
dures under which regulated investment compa-
nies, exchange traded funds, and other pooled 
investments may be certified by the Secretary 
as not holding any listed investments. 
‘‘(d) SPECIFIED EDUCATIONAL INSTITUTION.—For 
purposes of this section— 
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‘‘(1) IN GENERAL.—The term ‘specified edu-
cational institution’ means, with respect to any tax-
able year, any eligible educational institution (as de-
fined in section 25A(f)(2))— 
‘‘(A) which is not described in the first 
sentence of section 511(a)(2)(B) (relating to 
State colleges and universities), and 
‘‘(B) the aggregate fair market value of 
the assets of which at the end of the preceding 
taxable year (other than those assets which are 
used directly in carrying out the institution’s 
exempt purpose) is in excess of $1,000,000,000. 
‘‘(2) TREATMENT
OF
RELATED
ORGANIZA-
TIONS.—For purposes of subsections (a) and (b), as-
sets held by any related organization (as defined in 
section 4968(d)(2)) with respect to an educational 
institution shall be treated as held by such edu-
cational institution, except that— 
‘‘(A) such assets shall not be taken into 
account with respect to more than 1 educational 
institution, and 
‘‘(B) unless such organization is controlled 
by such institution or is described in section 
509(a)(3) with respect to such institution, as-
sets which are not intended or available for the 
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use or benefit of such educational institution 
shall not be taken into account. 
‘‘(e) VALUATION OF DEBT.—For purposes of sub-
section (a), the fair market value of any debt shall be 
treated as being the principal amount of such debt. 
‘‘(f) REGULATIONS.—The Secretary may issue such 
regulations or other guidance as may be necessary or ap-
propriate to carry out the purposes of this section, includ-
ing regulations or other guidance providing for the proper 
application of this section with respect to institutionally 
related foundations and pooled investments.’’. 
(b) CLERICAL AMENDMENTS.— 
(1) The table of sections for subchapter H of 
chapter 42 of such Code is amended by adding at 
the end the following new item: 
‘‘Sec. 4969. Excise tax on certain investments of private colleges and univer-
sities.’’. 
(2) The heading of subchapter H of chapter 42 
of such Code (and the item relating to such sub-
chapter in the table of subchapters for such chapter) 
are each amended by striking ‘‘Tax Based on In-
vestment Income’’ and inserting ‘‘Taxes 
Based on Investments’’. 
(c) EFFECTIVE DATES.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
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this section shall apply to taxable years ending after 
the earlier of— 
(A) the end of the first calendar year be-
ginning after the date of the enactment of this 
Act, or 
(B) the end of the 1-year period beginning 
on the date on which the Secretary of the 
Treasury (or the Secretary’s delegate) estab-
lishes the listed persons list under section 
4969(c)(2) of the Internal Revenue Code of 
1986 (as added by this section). 
(2) CERTAIN
PRIOR
ACQUISITIONS.—Section 
4969(a) of the Internal Revenue Code of 1986 (as 
added by this section) shall not apply to investments 
acquired before the end of the calendar year referred 
to in paragraph (1)(A). 
(3) CERTAIN PRIOR INCOME AND GAINS.—Sec-
tion 4969(b) of the Internal Revenue Code of 1986 
(as added by this section) shall not apply to income 
received, or gains or losses recognized, before the 
end of the 1-year period referred to in paragraph 
(1)(B). 
Æ 
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