Excise taxes on certain contributions by foreign entities

(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 sections: 4969. Excise tax on contributions to colleges and universities by foreign countries of concern (a) Tax imposed There is hereby imposed on each applicable institution for the taxable year a tax equal to 300 percent of the income of such institution received from any foreign country of concern during the taxable year. (b) Applicable institution For purposes of this section, the term applicable institution means an eligible educational institution (as defined in section 25A(f)(2))— (1) which had at least 500 tuition-paying students during the preceding taxable year, and (2) more than 50 percent of the tuition-paying students of which are located in the United States, determined according to the rules of section 4968(b)(2). (c) Foreign country of concern For purposes of this section, the term foreign country of concern has the meaning given such term by section 10612(a) of the Research and Development, Competition, and Innovation Act. (d) Related organizations Rules similar to the rules of section 4968(d) shall apply in determining income of an applicable institution for purposes of this section. 4970. Excise tax on failure to report contributions by foreign entities (a) Tax imposed There is hereby imposed on each institution for the taxable year a tax equal to 110 percent of the unreported foreign funding received by such institution during the taxable year. (b) Unreported foreign funding For purposes of this section, the term unreported foreign funding means an amount equal to the value of any gift or contract, or any amount received pursuant to a change in ownership or control, required to be reported under section 117 of the Higher Education Act of 1965 which is determined not to have been so reported by an audit under subsection (g) of such section. (c) Timing of tax The tax imposed by subsection (a) shall be due not later than 180 days after the institution is notified of the results of the audit under section 117(g) of the Higher Education Act of 1965. (d) Coordination with section 4969 In the case of any unreported foreign funding which is received from a foreign country of concern (as defined in section 4969(c)), the tax imposed by subsection (a) shall be in addition to any tax imposed by section 4969 on such funding. (e) Institution; other terms For purposes of this section, the term institution, and any other term used in this section which is used in section 117 of the Higher Education Act of 1965, has the same meaning as when used in such section.. (b) Clerical amendments (1) The table of sections for subchapter H of chapter 42 of the Internal Revenue Code of 1986 is amended by adding at the end the following new items: Sec. 4969. Excise tax on contributions to colleges and universities by foreign countries of concern. Sec. 4970. Excise tax on failure to report contributions by foreign entities.. (2) The heading of subchapter H of chapter 42 of such Code (and the item relating to such subchapter in the table of subchapters for such chapter) are each amended by striking Tax Based on Investment Income of and inserting Taxes on. (c) Effective date The amendments made by this section shall apply to taxable years beginning after the date which is 60 days after the date of the enactment of this Act.