TRADES Act

Bill Number

S. 4907

Origin Chamber

Senate

Congress

119th Congress, Session 2

Status

Introduced

Latest Action

2026-06-24: Read twice and referred to the Committee on Finance.

Last Updated

2026-07-07T04:53:29Z

AI-Generated Summary

Purpose The legislation aims to raise revenue by increasing an existing excise tax on the investment income of certain private colleges and universities, then direct that additional revenue to expand support for career and technical education programs.

Key Provisions

• Amends Section 4968(b)(3) of the Internal Revenue Code of 1986 by replacing the current 8 percent rate with a 15 percent rate on applicable investment income.
• Requires the Secretary of the Treasury to transfer an amount equal to the revenue increase from the higher tax rate into the existing grant program under Title I of the Carl D. Perkins Career and Technical Education Act of 2006.
• Applies the changes to taxable years beginning 12 months after the date the bill becomes law.

Significant Changes to Existing Law The bill modifies the current 8 percent excise tax on net investment income of private colleges and universities that meet specific endowment and tuition thresholds. It raises this rate to 15 percent and creates a mandatory annual transfer of the resulting new revenue directly to career and technical education funding, rather than leaving all proceeds in the general Treasury fund.

Potential Impacts

• Increases tax payments for qualifying private colleges and universities with large endowments.
• Provides additional annual funding to states and local programs that deliver career and technical education, potentially expanding training opportunities for students.
• Requires the Treasury Department to calculate and execute the annual transfers from general revenue.
• No direct effects on international relations are addressed in the bill.

Main Stakeholders Affected

• Private colleges and universities subject to the excise tax.
• States, schools, and students participating in career and technical education programs funded by the Perkins Act.
• The Department of the Treasury, which administers both the tax collection and the required transfers.
• Congress, as the body that would oversee the new funding mechanism.

Notable Legal, Constitutional, or Political Implications The bill expands an existing tax on the investment earnings of nonprofit educational institutions. It does not alter the underlying constitutional authority for excise taxes but ties the new revenue directly to a specific domestic education program. Implementation depends on annual revenue estimates by the Treasury, creating an automatic link between tax collections and education spending.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Sen. Moody, Ashley [R-FL]

Recent Actions

• 2026-06-24: Read twice and referred to the Committee on Finance.
• 2026-06-24: Introduced in Senate

Bill Versions

• Technical Reinvestment and Apprenticeship Development through Endowment Sharing Act — issued 2026-06-24 — PDF (2 pages)