119-hr2686

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2686 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 2686

 To amend the Internal Revenue Code of 1986 to impose penalties with 
 respect to civil rights violations by certain tax-exempt educational 
 institutions.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 April 7, 2025

Ms. Malliotakis (for herself, Ms. Stefanik, and Ms. Tenney) introduced 
 the following bill; which was referred to the Committee on Ways and 
 Means

_______________________________________________________________________

 A BILL

 To amend the Internal Revenue Code of 1986 to impose penalties with 
 respect to civil rights violations by certain tax-exempt educational 
 institutions.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``University Accountability Act''.

SEC. 2. PENALTIES WITH RESPECT TO CIVIL RIGHTS VIOLATIONS BY CERTAIN 
 TAX-EXEMPT EDUCATIONAL INSTITUTIONS.

    (a) In General.--Part I of subchapter B of chapter 68 of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new section:

``

SEC. 6720D. CIVIL RIGHTS VIOLATIONS BY CERTAIN TAX-EXEMPT EDUCATIONAL 
 INSTITUTIONS.

 ``

    (a) In General.--There is hereby imposed a penalty equal to the 
applicable penalty amount on a specified tax-exempt educational 
institution with respect to each determination of civil rights 
violation with respect to such institution.
 ``

    (b) Timing of Liability.--
 ``

    (1) In general.--A specified tax-exempt educational 
 institution shall be liable for the penalty imposed under 
 subsection

    (a) with respect to any determination of civil 
 rights violation on the date of the judgment referred to in 
 subsection
            (c) .
 ``

    (2) Reversal of determinations.--In the event that any 
 determination of civil rights violation is vacated, overturned, 
 or otherwise reversed, the Secretary shall refund any penalty 
 paid with respect to the determination of civil rights 
 violation. The preceding sentence shall not be interpreted to 
 prevent the application of this section with respect to any 
 determination of civil rights violation that is reinstated or 
 otherwise redetermined following any such reversal.
 ``
            (c) Determination of Civil Rights Violation.--For purposes of 
this section--
 ``

    (1) In general.--The term `determination of civil rights 
 violation' means, with respect to any specified tax-exempt 
 educational institution, any civil judgment of a Federal court 
 of competent jurisdiction that such institution violated any 
 provision of title VI of the Civil Rights Act of 1964.
 ``

    (2) Authority to treat certain judgments as a single 
 determination of civil rights violation.--If the Secretary 
 determines that two or more judgments are based on the same set 
 of facts and circumstances, such judgments shall be treated as 
 a single determination of civil rights violation for purposes 
 of this section, 

section 501

    (s) , and such provisions of 

section 6033

    (o) as the Secretary determines appropriate.
 ``
            (d) Applicable Penalty Amount.--For purposes of this section--
 ``

    (1) In general.--The term `applicable penalty amount' 
 means, with respect to each determination of civil rights 
 violation made with respect to any specified tax-exempt 
 educational institution, the greater of--
 ``
        (A) $100,000, or
 ``
        (B) in the case of an institution subject to the 
 requirements of 

section 6033

    (a) , 5 percent of the 
 aggregate administrative compensation paid by such 
 specified tax-exempt educational institution during the 
 taxable year in which such violation occurred.
 ``

    (2) Administrative compensation.--The term 
 `administrative compensation' means, with respect to any 
 specified tax-exempt educational institution, the compensation 
 and other payments described in 

section 6033

    (b)

    (7) made by such 
 institution.
 ``

    (e) Specified Tax-Exempt Educational Institution.--For purposes 
of this section, the term `specified tax-exempt educational 
institution' means any eligible educational institution (as defined in 

section 25A

    (f)

    (2) ) which is described in 

section 501
            (c) or 

section 511

    (a)

    (2)
        (B) .
 ``

    (f) Waiver of Limitations on Assessment and Refund.--Sections 
6501 and 6511 shall not apply to any penalty imposed under subsection

    (a) or refund made under subsection

    (b)

    (2) .''.

    (b) Mandatory Review of Exempt Status Upon Repeated Civil Rights 
Violations.--

Section 501 of such Code is amended by adding at the end 
the following new subsection:
 ``

    (s) Mandatory Review of Exempt Status of Certain Educational 
Institutions With Repeated Civil Rights Violations.--Upon any 
determination of civil right violation (as defined in 

section 6720D
            (c) ) 
with respect to any specified tax-exempt educational institution (as 
defined in 

section 6720D

    (e) ), if such determination is not one of the 
first 2 such determinations (made after the date of the enactment of 
this subsection) with respect to such institution, the Secretary shall 
conduct a review to determine if such institution remains an 
organization described in subsection
            (c) which is entitled to exemption 
from tax under subsection

    (a) . Any determination which is vacated, 
overturned, or otherwise reversed shall not be taken into account under 
the preceding sentence (unless subsequently reinstated or otherwise 
redetermined).''.
            (c) Reporting by Specified Tax-Exempt Educational Institutions of 
Determinations of Civil Rights Violation.--

Section 6033 of such Code is 
amended by redesignating subsection

    (o) as subsection

    (p) and by 
inserting after subsection

    (n) the following new subsection:
 ``

    (o) Additional Provisions Relating to Specified Tax-Exempt 
Educational Institutions.--
 ``

    (1) In general.--Every specified tax-exempt educational 
 institution (as defined in 

section 6720D
            (c) ) which is subject 
 to the requirements of subsection

    (a) shall, on the return 
 required under subsection

    (a) for the taxable year, include the 
 following:
 ``
        (A) With respect to each determination of civil 
 rights violation (as defined in 

section 6720D
            (c) ) made 
 with respect to such institution during such taxable 
 year:
 ``
            (i) A description of such determination 
 (including the date of such determination) and 
 of the civil rights violation to which such 
 determination relates.
 ``
            (ii) The number of determinations of 
 civil rights violation (determined by 
 disregarding determinations not taken into 
 account under the last sentence of 

section 501

    (s) ) made with respect to such institution 
 before such determination (and after the date 
 of the enactment of this subsection).
 ``
            (iii) Such other information as the 
 Secretary may require.
 ``
        (B) With respect to each determination of civil 
 rights violation (as defined in 

section 6720D
            (c) ) which 
 is vacated, overturned, or otherwise reversed during 
 such taxable year:
 ``
            (i) A description of the order or 
 judgment which so reversed such determination, 
 including the date of such order or judgment.
 ``
            (ii) The information described in 
 subparagraph
        (A)
            (i) with respect to the 
 determination so reversed.
 ``
            (iii) Such other information as the 
 Secretary may require.
 ``

    (2) Application to state colleges and universities.--
 Every specified tax-exempt educational institution (as defined 
 in 

section 6720D
            (c) ) which is described in 

section 511

    (a)

    (2)
        (B) shall, for any taxable year with respect to which there is a 
 determination of civil rights violation described in 
 subparagraph
        (A) or
        (B) of paragraph

    (1) with respect to such 
 institution, file an annual return that contains the 
 information described in such subparagraphs. The penalties 
 applicable to returns required under subsection

    (a) shall apply 
 to returns required under this paragraph.''.
            (d) Clerical Amendment.--The table of sections for part I of 
subchapter B of chapter 68 of such Code is amended by adding at the end 
the following new item:

``

Sec. 6720D. Civil rights violations by certain tax-exempt educational 
 institutions.''.

    (e) Effective Date.--The amendments made by this subsection shall 
apply with respect to determinations of civil rights violation made 
after the date of the enactment of this Act.
 <all>