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139 STAT. 222 PUBLIC LAW 119–21—JULY 4, 2025 ‘‘(B) FEDERALLY-SUBSIDIZED ROYALTY INCOME.— ‘‘(i) IN GENERAL.—Net investment income shall be determined by taking into account any Federally-sub- sidized royalty income as gross investment income. ‘‘(ii) FEDERALLY-SUBSIDIZED ROYALTY INCOME.—For purposes of this subparagraph— ‘‘(I) IN GENERAL.—The term ‘Federally-sub- sidized royalty income’ means any otherwise-regu- latory-exempt royalty income if any Federal funds were used in the research, development, or cre- ation of the patent, copyright, or other intellectual or intangible property from which such royalty income is derived. ‘‘(II) OTHERWISE-REGULATORY-EXEMPT ROYALTY INCOME.—For purposes of this subparagraph, the term ‘otherwise-regulatory-exempt royalty income’ means royalty income which (but for this subpara- graph) would not be taken into account as gross investment income by reason of being derived from patents, copyrights, or other intellectual or intan- gible property 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 pay- ment made under any contract with, any Federal agency to the applicable educational institution, any related organization, or any student or faculty member referred to in subclause (II). ‘‘(g) ASSETS AND NET INVESTMENT INCOME OF RELATED ORGANIZATIONS.— ‘‘(1) IN GENERAL.—For purposes of subsections (d) and (f), assets and net investment income of any related organization 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 investment income 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 sub- section, the term ‘related organization’ means, with respect to an educational institution, any organization which— ‘‘(A) controls, or is controlled by, such institution, ‘‘(B) is controlled by 1 or more persons which also control such institution, or ‘‘(C) is a supported organization (as defined in section 509(f)(3)), or an organization described in section 509(a)(3), during the taxable year with respect to such institution. ‘‘(h) REGULATIONS.—The Secretary shall prescribe such regula- tions or other guidance as may be necessary to prevent avoidance of the tax under this section, including regulations or other guidance Guidance.