Protecting Endowments from Our Adversaries Act

This bill would tax certain investments made by large private colleges and universities. If a covered school buys an investment tied to a company on specific federal risk lists, it would owe a tax equal to 50% of what it paid. If the school earns money from such an investment that stayed on a list for a full year, it would owe a tax equal to all of that net income (100%) for that year .

“Listed investments” include stocks, bonds, or related contracts connected to companies named on the Commerce Department’s Entity List, Military End User List, Unverified List, or the FCC’s “Covered List.” The Treasury Department must keep an updated list of these companies within 60 days of the law taking effect. Investments made through funds like mutual funds or ETFs still count, unless those funds are certified as not holding listed investments .

• Who is covered: Private, nonprofit colleges and universities (not state schools) with more than $1 billion in assets, not counting assets used directly for teaching and research. Certain related organizations’ assets can also count toward that total .

Key points

• Who is affected: Large private colleges/universities with over $1B in assets; related organizations may be included
• What changes: 50% tax on purchases of listed investments; 100% tax on net income from listed investments held on a list for a full year
• What counts as “listed”: Ties to companies on Commerce’s Entity, MEU, Unverified Lists, or the FCC Covered List; includes holdings via pooled funds unless certified clean
• When: Applies in taxable years when schools make or earn from these investments; federal list to be set up within 60 days of enactment