[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 2060 Introduced in Senate (IS)]
<DOC>
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.
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 ``Foreign Funding Accountability Act
of 2021''.
SEC. 2. AMENDMENTS TO DISCLOSURES OF FOREIGN GIFTS AND CONTRACTS.
Section 117 of the Higher Education Act of 1965 (20 U.S.C. 1011f)
is amended--
(1) by striking subsections (a) and (b) and inserting the
following:
``(a) Disclosure Report.--
``(1) Filing.--An institution shall file a disclosure
report with the Department of Education on January 31 or July
31, whichever is sooner, if the institution--
``(A) is owned or controlled by a foreign source;
or
``(B) receives a gift or enters into a contract
with a foreign source, the value of which is $25,000 or
more (including in-kind gifts, gifts to institution
foundations, and gifts to any other legal entities that
operate substantially for the benefit or under the
auspieces of the institution), considered alone or in
combination with all other gifts from or contracts with
that foreign source within a calendar year.
``(2) Tuition.--A tuition payment to an institution on
behalf of an enrolled student by a foreign government or
foundation shall be considered a gift from or contract with a
foreign source under this subsection.
``(3) Designated individual.--Each institution that is
required to file a disclosure report under this section shall
designate an officer at the institution who shall be
responsible for ensuring the veracity of the disclosure report.
``(b) Contents of Disclosure Report.--
``(1) Owned or controlled by a foreign source.--An
institution that is required to file a disclosure report under
subsection (a)(1)(A) shall include in the report:
``(A) The identity of the foreign source.
``(B) The date on which the foreign source assumed
ownership or control.
``(C) Any changes in program or structure resulting
from the change in ownership or control.
``(2) Gifts or contracts.--An institution that is required
to file a disclosure report under subsection (a)(1)(B) shall
include in the report:
``(A) The amount of the gift or contract.
``(B) The country of origin of the gift or
contract.
``(C) A statement from the foreign source providing
the gift or entering into the contract, including, in
the case of a foreign source that is--
``(i) an individual, the individual's--
``(I) name;
``(II) nationality
``(III) principal business address;
and
``(IV) all business and residential
addresses in the United States or
elsewhere;
``(ii) a partnership--
``(I) the information described in
subclause (I) through (IV) of clause
(i) with respect to each member of the
partnership; and
``(II) a true and complete copy of
its articles of copartnership; or
``(iii) an association, corporation,
organization, or any other combination of
individuals--
``(I) the information described in
subclauses (I) through (IV) of clause
(i) with respect to each director,
officer, and each individual performing
the functions of a director or officer
for that entity; and
``(II) a statement of the entity's
ownership and control, and the publicly
listed name of the entity.
``(D) The explicit and intended purpose and
function of the gift or contract, including--
``(i) the name (and position if applicable)
of the recipient individual, department, or
benefactor at the institution receiving the
gift or contract;
``(ii) any terms or conditions of the gift
or contract;
``(iii) copies of each written agreement
and the terms and conditions of each oral
agreement, including all modifications of such
agreements, relating to the gift or contract;
or
``(iv) where no written or oral agreement
exists, a full statement of all the
circumstances relating to the gift or contract.
``(3) Attestation.--Each disclosure report under this
section shall include a written statement from the individual
designated under subsection (a)(3) attesting that the
disclosure report is true and complete.'';
(2) by striking subsections (c) and (d);
(3) by redesignating subsections (e) through (h) as
subsections (c) through (f), respectively;
(4) in subsection (c), as redesignated by paragraph (3), by
adding at the end the following: ``All disclosure reports
required by this section, including copies of agreements
required under subsection (b)(2)(D)(iii), shall be publicly
available, including by electronic means.'';
(5) by striking subsection (d), as redesignated by
paragraph (3), and inserting the following:
``(d) Enforcement.--
``(1) Civil penalties.--Upon determination, after
reasonable notice and opportunity for a hearing, that an
institution--
``(A) has violated or failed to carry out any
provision of this section or any regulation prescribed
under this section (including by submitting a
disclosure report with a material misstatement or
omission), the Secretary may impose a civil penalty
upon such institution of not to exceed, the greater
of--
``(i) $250,000 for an initial violation or
failure; or
``(ii) the value of the unreported gift or
contract for an initial violation or failure;
``(B) commits a second violation or failure as
described in subparagraph (A), the Secretary may impose
a civil penalty upon such institution of not to exceed,
the greater of--
``(i) $750,000; or
``(ii) the value of the unreported gift or
contract;
``(C) commits 3 or more violations or failures as
described in subparagraph (A)--
``(i) the Secretary may impose a civil
penalty upon such institution of not to exceed,
the greater of--
``(I) $1,000,000; or
``(II) the value of the unreported
gift or contract; and
``(ii) the institution may be subject to
penalties relating to the Student and Exchange
Visitor Program and the institution's tax
exempt status, as described in sections 4 and 5
of the Foreign Funding Accountability Act of
2021; or
``(D) commits 3 or more violations or failures as
described in subparagraph (A) and has demonstrated a
pattern of willful violations, the Secretary may
determine that the institution is no longer eligible to
receive funds under this Act.
``(2) Court orders.--Whenever it appears that an
institution has failed to comply with the requirements of this
section, including any rule or regulation promulgated under
this section, a civil action may 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 to
compel compliance with the requirements of this section
(including for the collection of civil penalties under this
subsection). In case of contumacy by, or refusal to obey a
subpoena issued to, any person, the Secretary may request the
Attorney General to invoke the aid of any court of the United
States where such person resides or transacts business for a
court order for the enforcement of this section.
``(3) Costs.--For knowing or willful failure to comply with
the requirements of this section, including any rule or
regulation promulgated thereunder, an 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.
``(4) Investigation; subpoena authority.--The Secretary
shall establish an investigative process to identify gifts or
contracts with respect to which a disclosure report under this
section is required and has not been submitted. To assist the
Secretary in the conduct of investigations of possible
violations of this section, the Secretary is authorized to
require by subpoena the production of information, documents,
reports, answers, records, accounts, papers, and other
documentary evidence pertaining to this section. The production
of any such records may be required from any place in a
State.'';
(6) in subsection (f)(2), as redesignated by paragraph
(3)--
(A) in subparagraph (C), by striking ``and'' after
the semicolon;
(B) in subparagraph (D), by adding ``and'' after
the semicolon; and
(C) by adding at the end the following:
``(E) any person registered under the Foreign
Agents Registration Act of 1938 (22 U.S.C. 611 et
seq.)''.
SEC. 3. REPORT ON PAST YEARS REQUIRED.
(a) In General.--Not later than 1 year after the date of enactment
of this Act, each institution shall prepare and submit to the Secretary
of Education a disclosure report containing the information described
in subsection (b) of section 117 of the Higher Education Act of 1965
(20 U.S.C. 1011f(b)) (as amended by section 2 of this Act) as required
under subsection (a) of such section 117 (as amended by section 2 of
this Act) for every qualifying event that has occurred on or after the
date of enactment of the Higher Education Amendments of 1998 (Public
Law 105-244) and before the date of enactment of this Act.
(b) Institutions Unable To Comply.--In the case of an institution
that is unable to comply with the requirements of subsection (a) with
respect to a qualifying event, that institution shall submit a
statement to the Secretary of Education, for each such qualifying
event, describing in detail in detail why the institution cannot comply
with respect to that qualifying event.
(c) Waiver.--An institution may request, and the Secretary of
Education may grant, a waiver with respect to the report required under
this section if the institution demonstrates good cause for requiring
such a waiver.
(d) Enforcement.--
(1) In general.--Upon determination, after reasonable
notice and opportunity for a hearing, that an institution has
violated or failed to carry out any provision of this section
or any regulation prescribed under this section (including by
submitting a disclosure report with a material misstatement or
omission), the Secretary of Education may impose a civil
penalty upon such institution not to exceed $25,000 for each
qualifying event that the institution has failed to report in
accordance with this section.
(2) Court orders.--Whenever it appears that an institution
has failed to comply with the requirements of this section,
including any rule or regulation promulgated under this
section, a civil action may be brought by the Attorney General,
at the request of the Secretary of Education, 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 to
compel compliance with the requirements of this section
(including for the collection of civil penalties under this
subsection).
(3) Costs.--For knowing or willful failure to comply with
the requirements of this section, including any rule or
regulation promulgated thereunder, an 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.
(4) Investigation; subpoena authority.--The Secretary of
Education shall establish an investigative process to identify
gifts or contracts with respect to which a disclosure under
this section is required and has not been submitted. The
Secretary of Education may use administrative subpoena
authority as authorized under law to conduct such
investigations.
(e) Definitions.--In this section:
(1) Institution.--The term ``institution'' has the meaning
given that term in section 117 of the Higher Education Act of
1965 (20 U.S.C. 1011f).
(2) Qualifying event.--In this section the term
``qualifying event'' means an institution--
(A) being owned or controlled by a foreign source;
or
(B) receiving a gift or entering into a contract
with a foreign source, the value of which is $25,000 or
more (including in-kind gifts, or gifts to university
or college foundations), considered alone or in
combination with all other gifts from or contracts with
that foreign source within a calendar year.
SEC. 4. DISQUALIFICATION FROM THE STUDENT AND EXCHANGE VISITOR PROGRAM.
Any institution of higher education that is found to have violated
the disclosure requirements set forth in section 117 of the Higher
Education Act of 1965 (20 U.S.C. 1011f) on 3 or more occasions shall be
ineligible to enroll foreign students under the Student and Exchange
Visitor Program.
SEC. 5. LOSS OF TAX-EXEMPT STATUS.
Section 501 of the Internal Revenue Code of 1986 is amended by
adding at the end the following new subsection:
``(s) Loss of Exempt Status for Certain Institutions of Higher
Education.--An organization which is described in section 501(c)(3) and
which is an institution (as defined in section 117 of the Higher
Education Act of 1965 (20 U.S.C. 1011f)) shall not be exempt from
taxation under section 501(a) if there has been a determination under
section 117(d) of the Higher Education Act of 1965 that such
institution has committed, after the date of the enactment of this
section, 3 or more violations or failures described in section 117(d)
of the Higher Education Act of 1965.''.
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