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— 
‘‘(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 
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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 
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: 
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‘‘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 
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 
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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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