II 119th CONGRESS 1st Session S. 418 IN THE SENATE OF THE UNITED STATES February 5, 2025 Mr. Banks introduced the following bill; which was read twice and referred to the Committee on Armed Services A BILL To prohibit contracts between certain foreign entities and institutions of higher education conducting Department of Defense-funded research and to impose post-employment restrictions for participants in certain research funded by the Department, and for other purposes.

1. Short title This Act may be cited as the Defending Defense Research from Chinese Communist Party Espionage Act of 2025 . 2. Prohibition on contracts between certain foreign entities and institutions of higher education conducting Department of Defense-funded research (a) In general None of the funds authorized to be appropriated or otherwise made available for any fiscal year for the Department of Defense may be provided to a covered institution of higher education that— (1) fails to comply with the prohibition set forth in subsection (b); and (2) has not received a waiver under subsection (c). (b) Prohibition Beginning on January 1, 2027, a covered institution of higher education may not enter into a contract with a covered nation or a foreign entity of concern. (c) Waivers (1) Authority Subject to the provisions of this subsection and subsection (d), the Secretary of Defense may, pursuant to a request submitted under paragraph (2) of this subsection, issue a waiver of the prohibition set forth in subsection (b). (2) Submission (A) First waiver requests (i) In general A covered institution of higher education that desires to enter into a contract with a foreign entity of concern or a covered nation may submit to the Secretary of Defense, not later than 120 days before the institution enters into such a contract, a request to waive the prohibition set forth in subsection (b) with respect to such contract. (ii) Contents of waiver request A waiver request submitted by a covered institution of higher education under clause (i) shall include— (I) the complete and unredacted text of the proposed contract for which the waiver is being requested, and if such original contract is not in English, a translated copy of the text into English (in a manner that complies with subsection (f)); and (II) a statement that— (aa) is signed by the President or compliance officer of the institution designated in accordance with subsection (g); and (bb) includes information that demonstrates that such contract is for the benefit of the institution’s mission and students and will promote the security, stability, and economic vitality of the United States. (B) Renewal waiver requests (i) In general A covered institution of higher education that has entered into a contract pursuant to a waiver issued under this section, the term of which is longer than the 1-year waiver period and the terms and conditions of which remain the same as the proposed contract submitted as part of the request for such waiver, may submit, not later than 120 days before the expiration of such waiver period, a request for a renewal of such waiver for an additional 1-year period (which shall include any information requested by the Secretary). (ii) Termination If a covered institution of higher education fails to submit a request under clause (i) or is not granted a renewal under such clause, such institution shall terminate such contract on the last day of the original 1-year waiver period. (3) Waiver issuance The Secretary of Defense— (A) not later than 60 days before a covered institution of higher education enters into a contract pursuant to a waiver request under paragraph (2)(A), or before a contract described in paragraph (2)(B)(i) is renewed pursuant to a renewal request under such paragraph, shall notify the institution— (i) if the waiver or renewal will be issued by the Secretary; and (ii) in a case in which the waiver or renewal will be issued, the date on which the 1-year waiver period starts; (B) may only issue a waiver under this subsection to an institution if the Secretary of Defense determines, in consultation with the Secretary of Education, that the contract for which the waiver is being requested will both— (i) benefit of the institution’s mission and students; and (ii) promote the security, stability, and economic vitality of the United States; and (C) shall, when making the determination described in subparagraph (B)(ii), base such determination on the following factors: (i) The economic situation of the United States. (ii) The economic situation of the foreign entity of concern or covered nation with which a contract is sought. (iii) The reasons for which the foreign entity of concern or covered nation has been so designated, and why those reasons do not apply to the contract for which waiver is being sought. (iv) The foreign entity of concern or covered nation’s interest in being involved with covered institutions of higher education. (v) The foreign entity of concern or covered nation’s history of involvement with covered institutions of higher education. (vi) The degree to which such a contract could provide access to information or technology which could materially benefit the national security of a covered nation or harm the national security of the United States. (4) Notification to Congress Not later than 2 weeks prior to issuing a waiver under this subsection, the Secretary of Defense shall submit to the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives written notice of the intent of the Secretary to issue such waiver together with a justification for such waiver. (5) Application of waivers A waiver issued under this subsection to a covered institution of higher education with respect to a contract shall only— (A) waive the prohibition under subsection (b) for a 1-year period; and (B) apply to the terms and conditions of the proposed contract submitted as part of the request for such waiver. (d) Contracts prior to date of enactment (1) In general In the case of a covered institution of higher education that entered into contract with a covered nation or foreign entity of concern prior to January 1, 2026, and which contract remains in effect on such date— (A) the institution shall, not later than 120 days before such date, submit to the Secretary a waiver request in accordance with subsection (c)(2)(A)(ii); and (B) the Secretary shall, upon receipt of the request submitted under subparagraph (A), immediately issue a waiver under subsection (c) to the institution for a period beginning on the date on which the waiver is issued and ending on the sooner of— (i) January 1, 2028; or (ii) the date on which the contract terminates. (2) Renewal A covered institution of higher education that has entered into a contract described in paragraph (1), the term of which is longer than the waiver period described in subparagraph (B) of such paragraph and the terms and conditions of which remain the same as the contract submitted as part of the request required under subparagraph (A) of such paragraph, may submit a request for renewal of the waiver issued under such paragraph in accordance with subsection (c)(2)(B). (e) Designation during contract term In the case of a covered institution of higher education that enters into a contract with a foreign source that is not a covered nation or a foreign entity of concern but which, during the term of such contract, is designated as a covered nation or foreign entity of concern, such institution shall terminate such contract not later than 120 days after the Secretary notifies the institution of such designation. (f) Translation requirement Any information required to be disclosed under this section with respect to a contract that is not in English shall be translated, for purposes of such disclosure, by a person that is not an affiliated entity or agent of the covered nation or foreign entity of concern involved with such contract. (g) Compliance officer Each covered institution of higher education applying for a waiver under subsection (c), shall identify a compliance officer, who shall— (1) be a current employee or legally authorized agent of such institution; and (2) be responsible, on behalf of such institution, for personally certifying— (A) compliance with the prohibition under this section; and (B) the truth and accuracy of any information contained in such a waiver request. (h) Public database Not later than 90 days after issuing a waiver under subsection (c), the Secretary of Defense shall publish a copy of the order granting the waiver and the contents of the waiver request on a publicly available website of the Department of Defense. Such information shall be made available on such website in the form of a searchable database that includes links to the text of all contracts to which the waiver pertains. (i) Annual reports Not later than June 1, 2027, and on an annual basis thereafter, the Secretary of Defense shall submit to the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives a report that includes a description of— (1) the terms and contents of any waivers issued under this section in the period covered by the report; (2) any trends in— (A) the number of waivers issued under this section over time; and (B) the types of contracts to which such waivers pertain; and (3) the processes used by the Secretary to verify that covered institutions of higher education are in compliance with the requirements of this section. (j) Definitions In this section: (1) The term contract means— (A) any agreement or memorandum of understanding for the acquisition, by purchase, lease, or barter, of property or services by or from a covered nation or foreign entity of concern; or (B) any affiliation, agreement, or similar transaction with a covered nation or foreign entity of concern that involves the use or exchange of the name, likeness, time, services, or resources of a covered institution of higher education. (2) The term covered institution of higher education means an institution of higher education that conducts research funded by the Department of Defense. (3) The term foreign entity of concern has the meaning given that term in section 10612(a) of the Research and Development, Competition, and Innovation Act ( 42 U.S.C. 19221(a) ) and includes a foreign entity that is identified on the list published under section 1286(c)(9)(A) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 ( Public Law 115–232 ; 10 U.S.C. 4001 note). (4) The term covered nation has the meaning given that term in section 4872(d) of title 10, United States Code. (5) The term institution of higher education has the meaning given that term in section 102 of the Higher Education Act of 1965 ( 20 U.S.C. 1002 ). 3. Post-employment restrictions for participants in certain research funded by the Department of Defense (a) In general Except as provided under subsection (c), as a condition of becoming or remaining a principal investigator of a covered defense research project, a person shall agree that during the 10-year period beginning on the last day the person is a principal investigator of such research, such person may not seek or accept employment, or conduct any activity, for which a foreign entity of concern provides financial compensation or in-kind benefits. (b) Critical or emerging technology For purposes of subsection (a), a critical or emerging technology is a technology that the Secretary of Defense determines to be critical or emerging. Not later than 270 days after the date of the enactment of this Act, and annually thereafter, the Secretary shall determine which technologies are critical or emerging from among the technologies for which the Department of Defense funds research, and shall make the results of such determination publicly available. (c) Waiver authority The Secretary may waive the restriction under subsection (a) with respect to a United States person if, not later than 30 days before issuing the waiver, the Secretary submits to the congressional defense committees a notice of the waiver that includes— (1) an unclassified justification for the waiver; and (2) a description of any Department of Defense funds provided to the person for which the waiver is issued or to the research in which the person participated. (d) Applicability This section shall apply with respect to research that begins on or after the date that is one year after the date of the enactment of this Act. (e) Definitions (1) Foreign entity of concern In this section, the term foreign entity of concern has the meaning given that term in section 10612(a) of the Research and Development, Competition, and Innovation Act ( 42 U.S.C. 19221(a) ) and includes a foreign entity that is identified on the list published under section 1286(c)(9)(A) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 ( Public Law 115–232 ; 10 U.S.C. 4001 note). (2) Covered defense research project The term covered defense research project means a research project that is— (A) operated by an institution of higher education or a subsidiary of an institution of higher education; (B) funded, in whole or in part, by the Department of Defense; and (C) which involves a critical or emerging technology, as defined in subsection (b) of this section. (3) Institution of higher education The term institution of higher education has the meaning given that term in section 102 of the Higher Education Act of 1965 ( 20 U.S.C. 1002 ).