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[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>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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