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Ways and Means to Markup Legislation to Hold Universities Accountable, Expand Educational Freedom, and Block Tax Dollars to China 

July 05, 2024

WASHINGTON, D.C. –  The Ways and Means Committee will take action to hold universities accountable for failing to protect Jewish students, support families investing in their children’s educations, and block American taxpayer dollars from flowing to China, with new legislation to be marked up on Tuesday, July 9, 2024.

Ways and Means Committee Chairman Jason Smith (MO-08) said, “The Committee’s work over the last year has highlighted key areas of concern both foreign and domestic that we must address. China is currently poised to rake in billions of American tax dollars as the result of the Biden Administration’s weak on China regulations. Congress has a duty to protect our supply chains from foreign control and ensure that no tax dollars flow to foreign entities of concern like China. Additionally, the Committees investigation has demonstrated firsthand the transformation of our once elite universities into incubators for extremism and harassment and has made it clear that college campuses may not be fulfilling their educational purposes and are not as safe as once thought. Congress must take action to protect students on campus, hold accountable college administrators who refuse to act, and realign colleges who receive generous tax benefits with our national interest.

“The legislation the Committee will consider Tuesday will address the safety of students on college campuses, educational freedom for parents and students, and the interests of American taxpayers while ensuring that no new money flows to China or their affiliates.”

Legislation Under Consideration:

H.R. 8914, the University Accountability Act
Read one-pager here.

  • The bill levies a financial penalty against schools that have a civil judgment entered against them by a federal court for violating a student’s civil rights under Title VI of the Civil Rights Act.
  • Colleges and universities that meet the penalty criteria would be required to pay a fine of either 5 percent of the school’s aggregate administrative compensation as reported on the school’s Form 990 or $100,000, whichever is greater.
  • After three civil rights violations, the IRS would be automatically required to review the college or university’s tax-exempt status for possible revocation.

H.R. 8913, the Protecting American Students Act
Read one-pager here.

  • The bill amends the formula of the Endowment Tax calculation to match the definition used in the Higher Education Act to determine whether a student is eligible for federal financial assistance. 
  • This would not include students who are in the U.S. temporarily or on a student visa.
  • This bill incentivizes universities that receive generous U.S. federal tax benefits to either enroll more American students or spend more of their endowment funds on those students to avoid being subject to the endowment tax.
  • This bill would subject roughly 10 to 12 additional schools to the Endowment Tax, all of which could avoid the tax by admitting more American students or spending down their endowments.   

H.R. 8915, the Education and Workforce Freedom Act
Read one-pager here.

  • Empowers American families, students, and workers with the ability to choose an education most suited to their needs by allowing tax-exempt distributions from 529 plans to be used for additional educational expenses in connection with attendance at K-12 school (including homeschool).
  • It also allows for 529s to be used to pay for expenses associated with obtaining or maintaining recognized postsecondary credentials and licenses.

Congressional Review Act on EV Tax Credit Regs (H.J. Res 148)
Read one-pager here.

  • The Biden Treasury Department has finalized lenient rules that allow Chinese billionaires with unofficial ties to the Chinese Communist Party and Chinese battery manufacturers to receive U.S. tax subsidies.
  • Under the final rule released by the Biden Administration, Chinese materials can be used for the manufacturing of electric vehicles and still qualify for the credit directly contradicting the clear language and intent of the law.
  • Under H.J.Res. 148, the Biden Administration’s China favorable EV regulations from the so-called Inflation Reduction Act would be voided, including the new rules promulgated in the final regulations as well as previously proposed regulations.