Requiring Education Providers to Observe Requirements or Trigger Fines Act
Bill: H.R.4264 | Sponsor: Rep. Harshbarger, Diana (R-TN)
Policy area: Education

Summary:
Requiring Education Providers to Observe Requirements or Trigger Fines Act or the REPORT Fines Act
This bill modifies the disclosure threshold regarding gifts or contracts from a foreign source that institutions of higher education (IHEs) must report to the Department of Education (ED). The bill also establishes new penalties for failure to report.
Under current law, an IHE is required to disclose to ED a gift or contract that is from a foreign source and is valued at $250,000 or more, considered alone or in combination with all other gifts from or contracts with that foreign source within a calendar year. The bill instead requires the IHE to disclose such a gift or contract that is valued at $50,000 or more within a calendar year.
In addition, the bill establishes new penalties for IHEs that fail to report to ED. These penalties include written warnings, civil penalties, and ineligibility for federal research funds. Further, the bill establishes accelerated penalties for IHEs that receive funding from certain countries (e.g., China or Russia).

To amend section 117 of the Higher Education Act of 1965 to clarify the 
          enforcement of such section, 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. SHORT TITLE.

    This Act may be cited as the ``Requiring Education Providers to 
Observe Requirements or Trigger Fines Act'' or the ``REPORT Fines 
Act''.

SEC. 2. DISCLOSURES OF FOREIGN GIFTS.

    (a) Disclosure Report.--Section 117(a) of the Higher Education Act 
of 1965 (20 U.S.C. 1011f(a)) is amended by striking ``the value of 
which is $250,000 or more, considered alone or in combination with all 
other gifts from or contracts with that foreign source within a 
calendar year'' and inserting ``the value of which is $50,000 or more 
within a calendar year''.
    (b) Enforcement.--Section 117(f) of the Higher Education Act of 
1965 (20 U.S.C. 1011f(f)) is amended to read as follows:
    ``(f) Enforcement.--
            ``(1) System of penalties.--
                    ``(A) First instance of failure.--Whenever it 
                appears that an institution has failed to comply with 
                the requirements of this section for the first time in 
                a 3-year period, and except in a case in which a civil 
                action is brought against an institution under 
                paragraph (3)--
                            ``(i) the Secretary shall issue a written 
                        warning to such institution that sets forth 
                        each failure of compliance, each corrective 
                        action that the institution shall take to be in 
                        compliance, and the requisite time period in 
                        which the institution must take such corrective 
                        action; and
                            ``(ii) the institution shall be provided 
                        the opportunity to respond to the Secretary not 
                        later than 60 days after the date on which the 
                        warning is received by the institution.
                    ``(B) Second instance of failure.--In a case in 
                which an institution received a written warning under 
                subparagraph (A), and the institution appears to have 
                failed to comply with the requirements of this section 
                for the second time during the 3-year period beginning 
                on the date on which such warning was received by the 
                institution under subparagraph (A), upon a judicial 
                finding that such institution has failed to comply with 
                the requirements of this section, including any rule or 
                regulation promulgated under this section, the Court 
                shall impose a civil penalty in an amount that does not 
                exceed amount of funds provided by the foreign source 
                to the institution and which is the subject of the 
                institution's failure under this subparagraph.
                    ``(C) Third or subsequent instance of failure.--
                            ``(i) Judicial finding.--In a case of an 
                        institution on which a civil penalty was 
                        imposed under subparagraph (B), and such 
                        institution appears to have failed to comply 
                        with the requirements of this section for a 
                        third time, or any time thereafter, during the 
                        3-year period beginning on the date on which a 
                        warning was received under subparagraph (A), 
                        upon a judicial finding that an institution has 
                        failed to comply with the requirements of this 
                        section, including any rule or regulation 
                        promulgated under this section, the Court shall 
                        impose a civil penalty in an amount equal to 
                        the amount of funds provided by the foreign 
                        source to the institution and which is the 
                        subject of the institution's failure under this 
                        subparagraph.
                            ``(ii) Ineligibility.--In a case in which 
                        the court finds that an institution has failed 
                        to comply with the requirements of this section 
                        for a third time, or any time thereafter, 
                        during the 3-year period beginning on the date 
                        on which a warning was received under 
                        subparagraph (A), including any rule or 
                        regulation promulgated under this section, the 
                        institution shall be ineligible for new Federal 
                        research funding during the fiscal year 
                        following such a finding.
            ``(2) Accelerated penalties.--
                    ``(A) In general.--In any instance in which a court 
                determines under subparagraph (B) or (C) of paragraph 
                (1) that an institution received funding, and the 
                funding was from a foreign adversary, or any entity 
                associated with a foreign adversary, such institution 
                shall immediately be assessed a civil penalty under 
                paragraph (1)(C).
                    ``(B) Foreign adversary defined.--For purposes of 
                this paragraph, the term `foreign adversary' has the 
                meaning given the term in the rule issued by the 
                Department of Commerce entitled `Securing the 
                Information and Communications Technology and Services 
                Supply Chain' (86 Fed. Reg. 4913 (January 19, 2021)). 
                Such foreign adversaries include--
                            ``(i) the People's Republic of China, 
                        including the Hong Kong Special Administrative 
                        Region (China);
                            ``(ii) the Republic of Cuba (Cuba);
                            ``(iii) the Islamic Republic of Iran 
                        (Iran);
                            ``(iv) the Democratic People's Republic of 
                        Korea (North Korea); the Russian Federation 
                        (Russia); and
                            ``(v) Venezuelan politician Nicolas Maduro 
                        (Maduro Regime).
            ``(3) Court orders.--Whenever it appears that an 
        institution violated this section, other than in a case in 
        which such institution receives a warning under paragraph 
        (1)(A), a civil action shall be brought by the Attorney 
        General, at the request of the Secretary, in an appropriate 
        district court of the United States, or the appropriate United 
        States court of any territory or other place subject to the 
        jurisdiction of the United States, to request such court compel 
        compliance with the requirements of this section and impose 
        civil penalties, as appropriate.
            ``(4) Costs.--For any failure to comply with the 
        requirements of this section, including any rule or regulation 
        promulgated thereunder, the institution shall pay to the 
        Treasury of the United States the full costs to the United 
        States of obtaining compliance, including all associated costs 
        of investigation and enforcement.''.

SEC. 3. RULES.

    (a) In General.--Not later than 120 days after the date of 
enactment of this Act, the Secretary of Education shall promulgate 
rules to clarify the amendments made by section 2.
    (b) Rulemaking Requirements.--The amendments made by section 2 
shall not--
            (1) be subject to the master calendar requirements under 
        section 482 of the Higher Education Act of 1965 (20 U.S.C. 
        1089); or
            (2) the public involvement and negotiated rulemaking 
        requirements under section 492 of the Higher Education Act of 
        1965 (20 U.S.C. 1098a).
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