To amend the Higher Education Act of 1965 to strengthen oversight and disclosures relating to foreign support for institutions of higher education, and for other purposes.

To amend the Higher Education Act of 1965 to strengthen oversight and disclosures relating to foreign support for institutions of higher education, and for other purposes. 1. Disclosures of foreign gifts and contracts (a) In general Section 117 of the Higher Education Act of 1965 ( 20 U.S.C. 1011f 117. Disclosures of foreign gifts and contracts (a) Disclosures (1) Aggregate gifts and contracts (A) Disclosure required Except as provided in subsection (b), whenever an institution receives a gift from or enters into a contract with a foreign source, the value of which is $50,000 or more, considered alone or in combination with all other gifts from or contracts with that foreign source within a calendar year the institution shall file a disclosure report with the Office for Foreign Gifts and Contracts Oversight on January 31 or July 31, whichever is sooner. (B) Contents of disclosure Each report under subparagraph (A) shall include the following: (i) For gifts received from or contracts entered into with a foreign government, the aggregate amount of such gifts and contracts received from each foreign government, including the content of each such contract. (ii) For gifts received from or contracts entered into with a foreign source other than a foreign government, the aggregate dollar amount of such gifts and contracts attributable to a particular country, the legal or formal name of the foreign sources, and the content of each such contract. (C) Attribution For purposes of subparagraph (B)(ii), the country to which a gift or contract is attributable is— (i) in the case of a gift from or contract entered into with a foreign source who is a natural person, that person’s country of citizenship, or if unknown, that person’s principal country residence; or (ii) in the case of a gift from or contract entered into with a foreign source which is a legal entity, the entity’s principal place of business or, if unknown, the entity’s country of incorporation. (2) Gifts or contracts with undetermined monetary value (A) Disclosure required Except as provided in subsection (b), whenever an institution receives a gift from or enters into a contract with a foreign source the value of which is not readily ascertainable, the institution shall file a disclosure report with the Office for Foreign Gifts and Contracts Oversight on January 31 or July 31, whichever is sooner. (B) Contents of disclosure Each report under subparagraph (A) shall include the information described in paragraph (1)(B). (3) Ownership or control by foreign source (A) Disclosure required Whenever an institution is owned or controlled by a foreign source the institution shall file a disclosure report with the Office for Foreign Gifts and Contracts Oversight on January 31 or July 31, whichever is sooner. (B) Contents of disclosure Each report under subparagraph (A) shall include the following: (i) the information described in paragraph (1)(B) (without regard to any gift or contract threshold described in paragraph (1)(A)); (ii) the identity of the foreign source that owns or controls the institution; (iii) the date on which the foreign source assumed ownership or control; and (iv) any changes in the programs or organizational structure of the institution resulting from the change in ownership or control. (4) Restricted and conditional gifts (A) Disclosure required Except as provided in subsection (b), whenever any institution receives a restricted or conditional gift from or enters into a restricted or conditional contract with a foreign source (regardless of the value of such gift or contract) the institution shall file a disclosure report with the Office for Foreign Gifts and Contracts Oversight on January 31 or July 31, whichever is sooner. (B) Contents of disclosure Each report under subparagraph (A) shall include the following: (i) Nongovernmental sources For gifts received from or contracts entered into with a foreign source other than a foreign government, the amount, the date, and a description of such conditions or restrictions. The report shall also disclose the country of citizenship, or if unknown, the principal residence for a foreign source who is a natural person, and the country of incorporation, or if unknown, the principal place of business for a foreign source which is a legal entity. (ii) Governmental sources For gifts received from or contracts entered into with a foreign government, the amount, the date, a description of such conditions or restrictions, and the name of the foreign government. (b) Limitation on acceptance of certain gifts and contracts (1) Approval required An institution may not accept a gift or enter into a contract described in paragraph (3) unless— (A) the institution files a disclosure report with the Office for Foreign Gifts and Contracts Oversight that includes— (i) the dollar amount of the intended gift or contract; (ii) all terms and conditions of the intended gift or contract; and (iii) the legal or formal name of the foreign source or associate of a foreign adversary that intends to make the gift or enter into the contract and— (I) in the case of a foreign source or associate of a foreign adversary who is a natural person, that person’s country of citizenship, or if unknown, that person’s principal country of residence; or (II) in the case of a foreign source or associate of a foreign adversary which is a legal entity, the entity’s principal place of business, if unknown, the entity’s country of incorporation; (B) an authorized official of the institution certifies to the Secretary that acceptance of the gift or contract— (i) will not pose risks to the national security interests of the United States; (ii) will not compromise the competitiveness of the United States in the field to which the gift or contract pertains; and (iii) will not result in any restrictions on academic freedom or discourse, including by influencing the hiring of faculty, the acceptance of students, or the content of instruction in a manner favorable to the interests of the foreign source or associate of a foreign adversary that intends to make the gift or enter into the contract; and (C) the Secretary, acting through the Office for Foreign Gifts and Contracts Oversight— (i) thoroughly reviews and verifies the information submitted by the institution under subparagraphs (A) and (B); (ii) makes a determination, in writing, to approve the gift or contract; and (iii) transmits such approval to the institution. (2) Notice of disapproval If the Secretary disapproves a gift or contract under paragraph (1)(C) the Secretary shall transmit notice of such disapproval to the institution. (3) Gifts and contracts described The gifts and contracts described in this paragraph are the following: (A) Any gift from or contract with an associate of a foreign adversary the value of which is $10,000 or more, considered alone or in combination with all other gifts from or contracts with such person or entity. (B) Any gift from or contract with a foreign source (regardless of the value of such gift or contract) that relates to the research, development, or production of critical technologies and, in consideration for which, a foreign source would be granted access to material nonpublic technical information held by an institution. (4) Criteria for heightened scrutiny In making a determination whether to approve or disapprove a gift or contract under paragraph (1)(C), the Secretary shall apply a heightened standard of scrutiny to any gift or contract that relates to one or more of the following: (A) Critical technologies. (B) Biotechnology. (C) Pharmaceuticals. (D) Artificial intelligence. (E) Quantum computing. (F) Machine learning. (G) Technologies with military applications. (H) Any other area of science, technology, engineering, or mathematics. (d) Availability of documentation As part of each disclosure required under this section, an institution shall provide to the Secretary an assurance that the institution will, upon request of the Secretary, produce true copies of any documentation relating to any gift, contract, or change in ownership or control subject to such disclosure requirements. (e) Translations Each report required to be submitted under this section and any documentation made available under subsection (d) shall be provided in the English language. If any part of such report or documentation requires translation from another language into English for purposes of meeting the requirements of this subsection, the institution shall ensure that the translation is performed by a third party unaffiliated with institution or the foreign source concerned. (f) Relation to other reporting requirements (1) State requirements If an institution subject to the disclosure requirements of subsection (a) is within a State which has enacted requirements for public disclosure of gifts from or contracts with a foreign source that are substantially similar to the requirements of this section, a copy of the disclosure report filed with the State may be filed with the Secretary in lieu of a report required under such subsection. The State in which the institution is located shall provide to the Secretary such assurances as the Secretary may require to establish that the institution has met the requirements for public disclosure under State law if the State report is filed. (2) Use of other Federal reports If an institution receives a gift from, or enters into a contract with, a foreign source, where any other department, agency, or bureau of the executive branch requires a report containing requirements substantially similar to those required under this section, a copy of the report may be filed with the Secretary in lieu of a report required under subsection (a). (g) Public Disclosure and Modification of Reports (1) In general Not later than 30 days after receiving a disclosure report under this section, the Secretary shall make the full text of the report publicly available on the database established under paragraph (2). (2) Database The Secretary of Education shall establish a database of the reports submitted to the Secretary under this section. The database shall be hosted on a publicly accessible website of the Department of Education and the reports posted to the database shall be made available in an electronic format that— (A) includes the full text of each report and any supporting documentation relating to the report; (B) is downloadable, searchable, and sortable; and (C) allows a user of the database to compare institutions based on the types and amounts of foreign support received by such institutions. (h) Modifications The Secretary shall establish a process to enable institutions to revise and update previously filed disclosure reports under this section to ensure accuracy, compliance, and ability to cure. (i) Sanctions for Noncompliance (1) In general As a sanction for noncompliance with the requirements of this section, the Secretary of Education shall impose a fine on an institution that, in any year, knowingly or willfully violates this section, that is— (A) in an amount equal to at least 10 percent of the value of the gift or contract but not more than the total amount of the gift or contract with the foreign source in the case of— (i) a failure to disclose a gift or contract with a foreign source as required under this section; or (ii) a failure to comply with subsection (d) or (e) with respect to such gift or contract; (B) in an amount that is not more than 25 percent of the total amount of funding received by the institution under this Act, as described in paragraph (3), for the year in which the violation occurred in the case of— (i) a failure to disclose ownership or control by a foreign source in violation of the requirements of subsection (a)(3); or (ii) a failure to comply with subsection (d) or (e) with respect to such disclosure; or (C) in the case of a failure to comply with subsection (b)— (i) in an amount equal to the value of the gift or contract; or (ii) not less than $50,000 if the gift or contract is of undetermined monetary value. (2) Repeated failures (A) Knowing and willful failures In addition to a fine for a violation in any year in accordance with paragraph (1), the Secretary of Education shall impose a fine on an institution that knowingly and willfully fails in two consecutive years to comply with the requirements of this section, that is— (i) in an amount that is not less than $100,000 but not more than twice the amount of the gift or contract with the foreign source, in the case of— (I) a failure to disclose a gift or contract with a foreign source as required under this section; or (II) a failure to comply with subsection (d) or (e) with respect to such gift or contract; or (ii) in an amount that is not more than 25 percent of the total amount of funding received by the institution under this Act for the year in which the violation occurred in the case of— (I) a failure to disclose ownership or control by a foreign source in violation of the requirements of subsection (a)(3); or (II) a failure to comply with subsection (d) or (e) with respect to such disclosure. (B) Sanction for repeated violation of gift and contract acceptance rules If an institution knowingly and willfully violates a provision of subsection (b) more than once in a period of two consecutive years, as determined by the Secretary, the Secretary shall declare the institution to be ineligible to receive funds and participate in programs under this Act for a period of up to five years. (3) Calculation of penalty For purposes of paragraphs (1)(B) and (2)(A)(ii), the total amount of funding received by an institution under this Act does not include any amounts received by the institution from or on behalf of an individual student that are derived from a grant or student loan made under this Act. (j) Authority To terminate or modify transactions As a condition of receiving a gift from or entering into a contract with a foreign source or an associate of a foreign adversary, an institution and any other party to such gift or contract shall agree that the Office for Foreign Gifts and Contracts Oversight shall have the authority— (1) to review such gift or contract at any time; and (2) if the Office determines that such gift or contract poses a risk to the national security interests of the United States, the Office may— (A) terminate or modify such gift or contract; or (B) require the institution to pay to the Secretary an amount equal to the value of such gift or contract. (k) Rule of construction Nothing in this section shall be construed to require the disclosure or approval by the Department of Education of a tuition agreement or other agreement entered into between an institution and an individual student in the regular course of the student’s enrollment at the institution. (l) Definitions In this section: (1) The term associate of a foreign adversary (A) a natural person (regardless of the person’s citizenship, nationality, or principal place of residence) who derives a substantial amount of income from business activities with a foreign adversary; and (B) a legal entity (regardless of entity’s country of incorporation or principal place of business) that derives a substantial amount of revenue or income from business activities with a foreign adversary. (2) The term contract (3) The term critical technologies (4) The term foreign adversary (A) Cuba; (B) the Democratic People’s Republic of North Korea; (C) the Islamic Republic of Iran; (D) the People’s Republic of China (including the Hong Kong Special Administrative Region and the Macau Special Administrative Region); (E) the Russian Federation; and (F) any other nation designated as a foreign adversary by the Department of Commerce for purposes of the implementation of Executive Order 13873 (84 Fed. Reg. 22689), titled Securing the Information and Communications Technology and Services Supply Chain (5) The term foreign source (A) a foreign government, including an agency of a foreign government; (B) a legal entity, governmental or otherwise, created solely under the laws of a foreign state or states; (C) an individual who is not a citizen or a national of the United States or a trust territory or protectorate thereof; (D) an agent, including a subsidiary or affiliate of a foreign legal entity, acting on behalf of a foreign source; or (E) any individual or legal entity that, in the period of one year preceding the date on which the individual or entity made a gift to or entered into a contract with an institution— (i) received a total of $100,000 or more in funds or subsidies from a foreign government; or (ii) generated at least 40 percent of the individual or entity’s income or revenue in a foreign country and the principal place of residence or business of such individual or entity is in that foreign country; (6) the term gift (7) the term institution (A) any institution, public or private, or, if a multicampus institution, any single campus of such institution, in any State, that— (i) is legally authorized within such State to provide a program of education beyond secondary school; (ii) provides a program for which the institution awards a bachelor’s degree (or provides not less than a 2-year program which is acceptable for full credit toward such a degree) or more advanced degrees; and (iii) is accredited by a nationally recognized accrediting agency or association and to which institution Federal financial assistance is extended (directly or indirectly through another entity or person), or which institution receives support from the extension of Federal financial assistance to any of the institution’s subunits; and (B) any organization associated with or otherwise connected to an institution described in subparagraph (A), including a university foundation (as described in section 509(a)(3) section 501(c)(3) (8) the term restricted or conditional gift or contract (A) the employment, assignment, or termination of faculty; (B) the establishment of departments, centers, research or lecture programs, or new faculty positions; (C) the selection or admission of students; or (D) the award of grants, loans, scholarships, fellowships, or other forms of financial aid restricted to students of a specified country, religion, sex, ethnic origin, or political opinion. . (b) Effective date and applicability The amendments made by subsection (a) shall take effect 90 days after the date of enactment of this Act and shall apply with respect to gifts, contracts, and changes in the ownership or control of an institution occurring on or after such effective date. (c) Regulations Not later than the effective date specified in subsection (b), the President shall promulgate regulations implementing section 117 of the Higher Education Act of 1965 ( 20 U.S.C. 1011f 2. Office for Foreign Gifts and Contracts Oversight (a) Establishment Part B of title I of the Higher Education Act of 1965 ( 20 U.S.C. 1011 et seq. 117a. Office for Foreign Gifts and Contracts Oversight (a) Establishment There is established within the Office of the Secretary of Education an Office for Foreign Gifts and Contracts Oversight (referred to in this section as the Office (b) Head of Office The head of the Office shall be the designee of the Secretary. (c) Responsibilities The responsibilities of the Office shall be— (1) to monitor the compliance of institutions with section 117; (2) to enforce the requirements of such section with respect to such institutions; (3) to represent the Department of Education on the Committee on Foreign Investment in the United States; and (4) to carry out such other duties and responsibilities relating to foreign influence over institutions as the Secretary determines appropriate. (d) Staff The Secretary shall ensure that the Office is staffed by individuals with sufficient expertise to carry out the responsibilities specified in subsection (c). . (b) Effective date and applicability The amendments made by subsection (a) shall take effect 90 days after the date of enactment of this Act. (c) Regulations Not later than the effective date specified in subsection (b), the President shall promulgate regulations implementing section 117a of the Higher Education Act of 1965, as added by subsection (a). 3. Inclusion of Office for Foreign Gifts and Contracts Oversight in the Committee on Foreign Investment in the United States (a) Membership of the Committee on Foreign Investment in the United States Section 721(k)(2) of the Defense Production Act of 1950 ( 50 U.S.C. 4565(k)(2) (1) by redesignating subparagraph (J) as subparagraph (K); and (2) by inserting after subparagraph (I) the following new subparagraph: (J) The head of the Office for Foreign Gifts and Contracts Oversight of the Department of Education (as described in section 117a of the Higher Education Act of 1965). . (b) Covered transactions and lead agency (1) Covered transactions Section 721(a)(4) of the Defense Production Act of 1950 ( 50 U.S.C. 4565(a)(4) (A) in subparagraph (A)(i), by striking subparagraph (B)(i) clauses (i) or (vi) of subparagraph (B) (B) in subparagraph (B), by inserting after clause (v) the following new clause: (vi) Any gift or contract described in section 117(a)(1)(A) of the Higher Education Act of 1965. . (2) Lead agency Section 721(k)(5) of the Defense Production Act of 1950 ( 50 U.S.C. 4565(k)(5) (A) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively; (B) by striking The Secretary (A) In general The Secretary ; and (C) by adding at the end the following new subparagraph: (B) Certain gifts and contracts With respect to a covered transaction described in subsection (a)(4)(B)(v), the Secretary of the Treasury shall designate the head of the Office for Foreign Gifts and Contracts Oversight of the Department of Education (as described in section 117a of the Higher Education Act of 1965) as the lead agency on behalf of the Committee. . (3) Applicability This subsection and the amendments made by this subsection shall apply with respect to any covered transaction described in clause (v) of section 721(a)(4)(B) of the Defense Production Act of 1950 ( 50 U.S.C. 4565(a)(4)(B)

Summary: This bill revises oversight and disclosure requirements related to foreign sources and institutions of higher education (IHEs). For example, the bill establishes the Office for Foreign Gifts and Contracts Oversight within the Department of Education.  Additionally, the bill requires an IHE to disclose to the office any gift or contract from a foreign source that (1) is valued at $50,000 or more, considered alone or in combination with all other gifts or contracts within a calendar year (current disclosure threshold is $250,000 or more); or (2) has an undetermined monetary value.