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131 STAT. 2167 PUBLIC LAW 115–97—DEC. 22, 2017 PART VIII—EXEMPT ORGANIZATIONS SEC. 13701. EXCISE TAX BASED ON INVESTMENT INCOME OF PRIVATE COLLEGES AND UNIVERSITIES. (a) IN GENERAL.—Chapter 42 is amended by adding at the end the following new subchapter: ‘‘Subchapter H—Excise Tax Based on Investment Income of Private Colleges and Universities ‘‘Sec. 4968. Excise tax based on investment income of private colleges and univer- sities. ‘‘SEC. 4968. EXCISE TAX BASED ON INVESTMENT INCOME OF PRIVATE COLLEGES AND UNIVERSITIES. ‘‘(a) TAX IMPOSED.—There is hereby imposed on each applicable educational institution for the taxable year a tax equal to 1.4 percent of the net investment income of such institution for the taxable year. ‘‘(b) APPLICABLE EDUCATIONAL INSTITUTION.—For purposes of this subchapter— ‘‘(1) IN GENERAL.—The term ‘applicable educational institu- tion’ means an eligible educational institution (as defined in section 25A(f)(2))— ‘‘(A) which had at least 500 students during the pre- ceding taxable year, ‘‘(B) more than 50 percent of the students of which are located in the United States, ‘‘(C) which is not described in the first sentence of section 511(a)(2)(B) (relating to State colleges and univer- sities), and ‘‘(D) 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 at least $500,000 per student of the institution. ‘‘(2) STUDENTS.—For purposes of paragraph (1), the number of students of an institution (including for purposes of deter- mining 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 students taken into account on a full-time student equivalent basis). ‘‘(c) NET INVESTMENT INCOME.—For purposes of this section, net investment income shall be determined under rules similar to the rules of section 4940(c). ‘‘(d) ASSETS AND NET INVESTMENT INCOME OF RELATED ORGANIZATIONS.— ‘‘(1) IN GENERAL.—For purposes of subsections (b)(1)(C) and (c), assets and net investment income of any related organiza- tion with respect to an educational institution shall be treated as assets and 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 26 USC 4968. 26 USC prec. 4968. VerDate Sep 11 2014 10:09 Oct 18, 2018 Jkt 079139 PO 00097 Frm 00115 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL097.115 PUBL097 dkrause on DSKBC28HB2PROD with PUBLAWS