AN ACT ESTABLISHING A CAPITAL GAINS TAX ON CERTAIN ENDOWMENT FUNDS OF INSTITUTIONS OF HIGHER EDUCATION AND CONCERNING THE USE OF THE REVENUE GENERATED.

Plain English Breakdown

The official text confirms the $500,000 per student ratio but does not define how 'student' is counted (e.g., full-time equivalent vs. total enrollment).

Tax on Large College Endowments for Leave Benefits

This bill creates a capital gains tax on college endowment funds valued at more than $500,000 per student and uses the money to lower payments required from participants in the Paid Family and Medical Leave Insurance Program.

What This Bill Does

• Imposes a capital gains tax on specific endowment funds of institutions of higher education if their value is more than $500,000 per student for that year.
• Dedicates all money collected from this new tax to reducing the amount participants must contribute to the Paid Family and Medical Leave Insurance Program.

Who It Names or Affects

• Institutions of higher education with endowment funds valued at more than $500,000 per student.
• Participants in the Paid Family and Medical Leave Insurance Program who are required to make contributions.

Terms To Know

Endowment fund

A pool of money held by a college or university that is taxed if its value exceeds $500,000 per student.

Capital gains tax

A tax imposed on the profit made when an asset in an endowment fund increases in value.

Limits and Unknowns

• The effective date for this law is not listed.
• The bill does not state how much money will be collected or exactly how much participant contributions will decrease.
• It is unclear if institutions can change their fund size to avoid meeting the $500,000 per student limit.

Official Summary Text

To impose a capital gains tax on certain endowment funds of institutions of higher education and dedicate the revenue from such tax to reducing the amount that participants in the Paid Family and Medical Leave Insurance Program are required to contribute under section 31-49g of the general statutes.

Current Bill Text

LCO No. 282 1 of 1

General Assembly Proposed Bill No. 38
February Session, 2026 LCO No. 282

Referred to Committee on FINANCE, REVENUE AND
BONDING

Introduced by:
SEN. FAZIO, 36th Dist.

AN ACT ESTABLISHING A CAPITAL GAINS TAX ON CERTAIN
ENDOWMENT FUNDS OF INSTITUTIONS OF HIGHER EDUCATION
AND CONCERNING THE USE OF THE REVENUE GENERATED.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:

That the general statutes be amended to (1) impose a capital gains tax 1
on any endowment fund of an institution of higher education, which 2
fund is valued at a ratio of more than five hundred thousand dollars per 3
student for a taxable year, and (2) dedicate the revenue from such tax to 4
reducing the amount that participants in the Paid Family and Medical 5
Leave Insurance Program are required to contribute under section 31 -6
49g of the general statutes. 7
Statement of Purpose:
To impose a capital gains tax on certain endowment funds of
institutions of higher education and dedicate the revenue from such tax
to reducing the amount that participants in the Paid Family and Medical
Leave Insurance Program are required to contribute under section 31 -
49g of the general statutes.