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.
Bill: H.R.7150 | Sponsor: Rep. Banks, Jim (R-IN)
Policy area: Education

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.

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.

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

SECTION 1. DISCLOSURES OF FOREIGN GIFTS AND CONTRACTS.

    (a) In General.--Section 117 of the Higher Education Act of 1965 
(20 U.S.C. 1011f) is amended to read as follows:

``SEC. 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' means--
                    ``(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' means any legally binding 
        agreement, including any agreement for the acquisition by 
        purchase, lease, or barter of property or services by the 
        foreign source, for the direct benefit or use of either of the 
        parties.
            ``(3) The term `critical technologies' has the meaning 
        given that term section 801.204 of title 31, Code of Federal 
        Regulations (or any successor to such regulation).
            ``(4) The term `foreign adversary' means--
                    ``(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', 
                and dated May 15, 2019.
            ``(5) The term `foreign source' means--
                    ``(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' means any gift of money, property, or 
        services;
            ``(7) the term `institution' means--
                    ``(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) of the Internal Revenue Code of 1986) 
                or a nonprofit organization (as described in section 
                501(c)(3) of the Internal Revenue Code of 1986);
            ``(8) the term `restricted or conditional gift or contract' 
        means any endowment, gift, grant, contract, award, present, or 
        property of any kind which includes provisions regarding--
                    ``(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), as 
amended by subsection (a).

SEC. 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.) is amended by inserting after section 
117 the following:

``SEC. 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).

SEC. 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)) is amended--
            (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)) is amended--
                    (A) in subparagraph (A)(i), by striking 
                ``subparagraph (B)(i)'' and inserting ``clauses (i) or 
                (vi) of subparagraph (B)''; and
                    (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)) is amended--
                    (A) by redesignating subparagraphs (A) and (B) as 
                clauses (i) and (ii), respectively;
                    (B) by striking ``The Secretary'' and inserting the 
                following:
                    ``(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)), 
        the review or investigation of which is initiated under section 
        721 of such Act on or after the date of the enactment of this 
        section.
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