II 

117TH CONGRESS 

1ST SESSION S. 2060 

To amend disclosure requirements of foreign gifts and contracts under the 

Higher Education Act of 1965. 

IN THE SENATE OF THE UNITED STATES 

JUNE 15, 2021 

Mr. COTTON introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend disclosure requirements of foreign gifts and 

contracts under the Higher Education Act of 1965. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Foreign Funding Ac5 countability Act of 2021’’. 

6 SEC. 2. AMENDMENTS TO DISCLOSURES OF FOREIGN GIFTS 

7 AND CONTRACTS. 

8 Section 117 of the Higher Education Act of 1965 (20 

9 U.S.C. 1011f) is amended— 


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1 (1) by striking subsections (a) and (b) and in2 serting the following: 

3 ‘‘(a) DISCLOSURE REPORT.— 

4 ‘‘(1) FILING.—An institution shall file a disclo5 sure report with the Department of Education on 

6 January 31 or July 31, whichever is sooner, if the 

7 institution— 

8 ‘‘(A) is owned or controlled by a foreign 

9 source; or 

10 ‘‘(B) receives a gift or enters into a con11 tract with a foreign source, the value of which 

12 is $25,000 or more (including in-kind gifts, 

13 gifts to institution foundations, and gifts to any 

14 other legal entities that operate substantially 

15 for the benefit or under the auspieces of the in16 stitution), considered alone or in combination 

17 with all other gifts from or contracts with that 

18 foreign source within a calendar year. 

19 ‘‘(2) TUITION.—A tuition payment to an insti20 tution on behalf of an enrolled student by a foreign 

21 government or foundation shall be considered a gift 

22 from or contract with a foreign source under this 

23 subsection. 

24 ‘‘(3) DESIGNATED INDIVIDUAL.—Each institu25 tion that is required to file a disclosure report under 


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1 this section shall designate an officer at the institu2 tion who shall be responsible for ensuring the verac3 ity of the disclosure report. 

4 ‘‘(b) CONTENTS OF DISCLOSURE REPORT.— 

5 ‘‘(1) OWNED OR CONTROLLED BY A FOREIGN

6 SOURCE.—An institution that is required to file a 

7 disclosure report under subsection (a)(1)(A) shall in8 clude in the report: 

9 ‘‘(A) The identity of the foreign source. 

10 ‘‘(B) The date on which the foreign source 

11 assumed ownership or control. 

12 ‘‘(C) Any changes in program or structure 

13 resulting from the change in ownership or con14 trol. 

15 ‘‘(2) GIFTS OR CONTRACTS.—An institution 

16 that is required to file a disclosure report under sub17 section (a)(1)(B) shall include in the report: 

18 ‘‘(A) The amount of the gift or contract. 

19 ‘‘(B) The country of origin of the gift or 

20 contract. 

21 ‘‘(C) A statement from the foreign source 

22 providing the gift or entering into the contract, 

23 including, in the case of a foreign source that 

24 is— 

25 ‘‘(i) an individual, the individual’s— 


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1 ‘‘(I) name; 

2 ‘‘(II) nationality 

3 ‘‘(III) principal business address; 

4 and 

5 ‘‘(IV) all business and residential 

6 addresses in the United States or else7 where; 

8 ‘‘(ii) a partnership— 

9 ‘‘(I) the information described in 

10 subclause (I) through (IV) of clause 

11 (i) with respect to each member of the 

12 partnership; and 

13 ‘‘(II) a true and complete copy of 

14 its articles of copartnership; or 

15 ‘‘(iii) an association, corporation, or16 ganization, or any other combination of in17 dividuals— 

18 ‘‘(I) the information described in 

19 subclauses (I) through (IV) of clause 

20 (i) with respect to each director, offi21 cer, and each individual performing 

22 the functions of a director or officer 

23 for that entity; and 


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1 ‘‘(II) a statement of the entity’s 

2 ownership and control, and the pub3 licly listed name of the entity. 

4 ‘‘(D) The explicit and intended purpose 

5 and function of the gift or contract, including— 

6 ‘‘(i) the name (and position if applica7 ble) of the recipient individual, depart8 ment, or benefactor at the institution re9 ceiving the gift or contract; 

10 ‘‘(ii) any terms or conditions of the 

11 gift or contract; 

12 ‘‘(iii) copies of each written agreement 

13 and the terms and conditions of each oral 

14 agreement, including all modifications of 

15 such agreements, relating to the gift or 

16 contract; or 

17 ‘‘(iv) where no written or oral agree18 ment exists, a full statement of all the cir19 cumstances relating to the gift or contract. 

20 ‘‘(3) ATTESTATION.—Each disclosure report 

21 under this section shall include a written statement 

22 from the individual designated under subsection 

23 (a)(3) attesting that the disclosure report is true 

24 and complete.’’; 

25 (2) by striking subsections (c) and (d); 


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1 (3) by redesignating subsections (e) through (h) 

2 as subsections (c) through (f), respectively; 

3 (4) in subsection (c), as redesignated by para4 graph (3), by adding at the end the following: ‘‘All 

5 disclosure reports required by this section, including 

6 copies of agreements required under subsection 

7 (b)(2)(D)(iii), shall be publicly available, including 

8 by electronic means.’’; 

9 (5) by striking subsection (d), as redesignated 

10 by paragraph (3), and inserting the following: 

11 ‘‘(d) ENFORCEMENT.— 

12 ‘‘(1) CIVIL PENALTIES.—Upon determination, 

13 after reasonable notice and opportunity for a hear14 ing, that an institution— 

15 ‘‘(A) has violated or failed to carry out any 

16 provision of this section or any regulation pre17 scribed under this section (including by submit18 ting a disclosure report with a material 

19 misstatement or omission), the Secretary may 

20 impose a civil penalty upon such institution of 

21 not to exceed, the greater of— 

22 ‘‘(i) $250,000 for an initial violation 

23 or failure; or 


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1 ‘‘(ii) the value of the unreported gift 

2 or contract for an initial violation or fail3 ure; 

4 ‘‘(B) commits a second violation or failure 

5 as described in subparagraph (A), the Secretary 

6 may impose a civil penalty upon such institu7 tion of not to exceed, the greater of— 

8 ‘‘(i) $750,000; or 

9 ‘‘(ii) the value of the unreported gift 

10 or contract; 

11 ‘‘(C) commits 3 or more violations or fail12 ures as described in subparagraph (A)— 

13 ‘‘(i) the Secretary may impose a civil 

14 penalty upon such institution of not to ex15 ceed, the greater of— 

16 ‘‘(I) $1,000,000; or 

17 ‘‘(II) the value of the unreported 

18 gift or contract; and 

19 ‘‘(ii) the institution may be subject to 

20 penalties relating to the Student and Ex21 change Visitor Program and the institu22 tion’s tax exempt status, as described in 

23 sections 4 and 5 of the Foreign Funding 

24 Accountability Act of 2021; or 


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1 ‘‘(D) commits 3 or more violations or fail2 ures as described in subparagraph (A) and has 

3 demonstrated a pattern of willful violations, the 

4 Secretary may determine that the institution is 

5 no longer eligible to receive funds under this 

6 Act. 

7 ‘‘(2) COURT ORDERS.—Whenever it appears 

8 that an institution has failed to comply with the re9 quirements of this section, including any rule or reg10 ulation promulgated under this section, a civil action 

11 may be brought by the Attorney General, at the re12 quest of the Secretary, in an appropriate district 

13 court of the United States, or the appropriate 

14 United States court of any territory or other place 

15 subject to the jurisdiction of the United States, to 

16 request such court to compel compliance with the re17 quirements of this section (including for the collec18 tion of civil penalties under this subsection). In case 

19 of contumacy by, or refusal to obey a subpoena 

20 issued to, any person, the Secretary may request the 

21 Attorney General to invoke the aid of any court of 

22 the United States where such person resides or 

23 transacts business for a court order for the enforce24 ment of this section. 


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1 ‘‘(3) COSTS.—For knowing or willful failure to 

2 comply with the requirements of this section, includ3 ing any rule or regulation promulgated thereunder, 

4 an institution shall pay to the Treasury of the 

5 United States the full costs to the United States of 

6 obtaining compliance, including all associated costs 

7 of investigation and enforcement. 

8 ‘‘(4) INVESTIGATION; SUBPOENA AUTHORITY.— 

9 The Secretary shall establish an investigative process 

10 to identify gifts or contracts with respect to which 

11 a disclosure report under this section is required and 

12 has not been submitted. To assist the Secretary in 

13 the conduct of investigations of possible violations of 

14 this section, the Secretary is authorized to require 

15 by subpoena the production of information, docu16 ments, reports, answers, records, accounts, papers, 

17 and other documentary evidence pertaining to this 

18 section. The production of any such records may be 

19 required from any place in a State.’’; 

20 (6) in subsection (f)(2), as redesignated by 

21 paragraph (3)— 

22 (A) in subparagraph (C), by striking 

23 ‘‘and’’ after the semicolon; 

24 (B) in subparagraph (D), by adding ‘‘and’’ 

25 after the semicolon; and 


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1 (C) by adding at the end the following: 

2 ‘‘(E) any person registered under the For3 eign Agents Registration Act of 1938 (22 

4 U.S.C. 611 et seq.)’’. 

5 SEC. 3. REPORT ON PAST YEARS REQUIRED. 

6 (a) IN GENERAL.—Not later than 1 year after the 

7 date of enactment of this Act, each institution shall pre8 pare and submit to the Secretary of Education a disclo9 sure report containing the information described in sub10 section (b) of section 117 of the Higher Education Act 

11 of 1965 (20 U.S.C. 1011f(b)) (as amended by section 2 

12 of this Act) as required under subsection (a) of such sec13 tion 117 (as amended by section 2 of this Act) for every 

14 qualifying event that has occurred on or after the date 

15 of enactment of the Higher Education Amendments of 

16 1998 (Public Law 105–244) and before the date of enact17 ment of this Act. 

18 (b) INSTITUTIONS UNABLE TO COMPLY.—In the 

19 case of an institution that is unable to comply with the 

20 requirements of subsection (a) with respect to a qualifying 

21 event, that institution shall submit a statement to the Sec22 retary of Education, for each such qualifying event, de23 scribing in detail in detail why the institution cannot com24 ply with respect to that qualifying event. 


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1 (c) WAIVER.—An institution may request, and the 

2 Secretary of Education may grant, a waiver with respect 

3 to the report required under this section if the institution 

4 demonstrates good cause for requiring such a waiver. 

5 (d) ENFORCEMENT.— 

6 (1) IN GENERAL.—Upon determination, after 

7 reasonable notice and opportunity for a hearing, that 

8 an institution has violated or failed to carry out any 

9 provision of this section or any regulation prescribed 

10 under this section (including by submitting a disclo11 sure report with a material misstatement or omis12 sion), the Secretary of Education may impose a civil 

13 penalty upon such institution not to exceed $25,000 

14 for each qualifying event that the institution has 

15 failed to report in accordance with this section. 

16 (2) COURT ORDERS.—Whenever it appears that 

17 an institution has failed to comply with the require18 ments of this section, including any rule or regula19 tion promulgated under this section, a civil action 

20 may be brought by the Attorney General, at the re21 quest of the Secretary of Education, in an appro22 priate district court of the United States, or the ap23 propriate United States court of any territory or 

24 other place subject to the jurisdiction of the United 

25 States, to request such court to compel compliance 


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1 with the requirements of this section (including for 

2 the collection of civil penalties under this sub3 section). 

4 (3) COSTS.—For knowing or willful failure to 

5 comply with the requirements of this section, includ6 ing any rule or regulation promulgated thereunder, 

7 an institution shall pay to the Treasury of the 

8 United States the full costs to the United States of 

9 obtaining compliance, including all associated costs 

10 of investigation and enforcement. 

11 (4) INVESTIGATION; SUBPOENA AUTHORITY.— 

12 The Secretary of Education shall establish an inves13 tigative process to identify gifts or contracts with re14 spect to which a disclosure under this section is re15 quired and has not been submitted. The Secretary of 

16 Education may use administrative subpoena author17 ity as authorized under law to conduct such inves18 tigations. 

19 (e) DEFINITIONS.—In this section: 

20 (1) INSTITUTION.—The term ‘‘institution’’ has 

21 the meaning given that term in section 117 of the 

22 Higher Education Act of 1965 (20 U.S.C. 1011f). 

23 (2) QUALIFYING EVENT.—In this section the 

24 term ‘‘qualifying event’’ means an institution— 


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1 (A) being owned or controlled by a foreign 

2 source; or 

3 (B) receiving a gift or entering into a con4 tract with a foreign source, the value of which 

5 is $25,000 or more (including in-kind gifts, or 

6 gifts to university or college foundations), con7 sidered alone or in combination with all other 

8 gifts from or contracts with that foreign source 

9 within a calendar year. 

10 SEC. 4. DISQUALIFICATION FROM THE STUDENT AND EX11 CHANGE VISITOR PROGRAM. 

12 Any institution of higher education that is found to 

13 have violated the disclosure requirements set forth in sec14 tion 117 of the Higher Education Act of 1965 (20 U.S.C. 

15 1011f) on 3 or more occasions shall be ineligible to enroll 

16 foreign students under the Student and Exchange Visitor 

17 Program. 

18 SEC. 5. LOSS OF TAX-EXEMPT STATUS. 

19 Section 501 of the Internal Revenue Code of 1986 

20 is amended by adding at the end the following new sub21 section: 

22 ‘‘(s) LOSS OF EXEMPT STATUS FOR CERTAIN INSTI23 TUTIONS OF HIGHER EDUCATION.—An organization 

24 which is described in section 501(c)(3) and which is an 

25 institution (as defined in section 117 of the Higher EduVerDate Sep 11 2014 20:09 Jul 01, 2021 Jkt 019200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S2060.IS S2060

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1 cation Act of 1965 (20 U.S.C. 1011f)) shall not be exempt 

2 from taxation under section 501(a) if there has been a 

3 determination under section 117(d) of the Higher Edu4 cation Act of 1965 that such institution has committed, 

5 after the date of the enactment of this section, 3 or more 

6 violations or failures described in section 117(d) of the 

7 Higher Education Act of 1965.’’. 

Æ 


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