Although Harvard’s coffers seem to be overflowing this year, as the endowment approaches $35 billion, a new bill proposed by Rep. Sander Levin, D-Mich., may allow the cache to accumulate even faster.

The bill would allow tax-exempt organizations—a category that includes university endowments—to invest directly in U.S. hedge funds while retaining their freedom from Internal Revenue Service dues on leveraged investments.

“[Universities] are currently taxed as though they are leveraging, when it’s actually the hedge fund’s strategy,” said Kevin Casey, Harvard’s senior director of federal and state relations. “The universities are not the ones utilizing leverage.”

Currently, many organizations in the tax-exempt category use offshore tax sanctuaries such as the Cayman Islands to invest in U.S. hedge funds.

“There is no reason to force tax-exempt entities offshore when they invest in hedge funds,” Levin said in a statement. “These rules were never meant to apply to this kind of transaction, and there is little reason to fear abuse.”

Harvard’s endowment, which has roughly 15 percent of its holdings invested in hedge funds, according to publicly released financial documents, would receive a “tangible benefit,” according to Levin.

Matt Hamill, senior vice president of the National Association of College and University Business Officers, said the bill “has the potential for making the investment process more efficient.”

But, he added, the bill would have a “modest,” but “not significant,” impact.

The bill will likely be introduced as part of a suite of Congressional revisions to tax codes governing U.S. hedge funds and those who run them.

“Individually, no, [the bill] is a simplification, not a dramatic structural change,” Hamill said. “The bill would be a part of broader changes.”

­—Staff writer Maxwell L. Child can be reached at mchild@fas.harvard.edu.

—Staff writer Maxwell L. Child can be reached at mchild@fas.harvard.edu.