[House Report 118-278]
[From the U.S. Government Publishing Office]


118th Congress }                                               {   Report
                        HOUSE OF REPRESENTATIVES
 1st Session   }                                               {  118-278

======================================================================



 
 DEFENDING EDUCATION TRANSPARENCY AND ENDING ROGUE REGIMES ENGAGING IN 
                       NEFARIOUS TRANSACTIONS ACT

                                _______
                                

 November 24, 2023.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

Ms. Foxx, from the Committee on Education and the Workforce, submitted 
                             the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 5933]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Education and the Workforce, to whom was 
referred the bill (H.R. 5933) to amend the Higher Education Act 
of 1965 to require additional information in disclosures of 
foreign gifts and contracts from foreign sources, restrict 
contracts with certain foreign entities and foreign countries 
of concern, require certain staff and faculty to report foreign 
gifts and contracts, and require disclosure of certain foreign 
investments within endowments, having considered the same, 
reports favorably thereon with an amendment and recommends that 
the bill as amended do pass.
    The amendment is as follows:
  Strike all after the resolving clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Defending Education Transparency and 
Ending Rogue Regimes Engaging in Nefarious Transactions Act'' or the 
``DETERRENT Act''.

SEC. 2. DISCLOSURES OF FOREIGN GIFTS.

  (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.

  ``(a) Disclosure Reports.--
          ``(1) Aggregate gifts and contract disclosures.--An 
        institution shall file a disclosure report in accordance with 
        subsection (b)(1) with the Secretary on July 31 of the calendar 
        year immediately following any calendar year in which--
                  ``(A) the institution receives a gift from, or enters 
                into a contract with, a foreign source (other than a 
                foreign country of concern or foreign entity of 
                concern)--
                          ``(i) 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 the calendar year; or
                          ``(ii) the value of which is undetermined; or
                  ``(B) the institution receives a gift from a foreign 
                country of concern or foreign entity of concern, or, 
                upon receiving a waiver under section 117A to enter 
                into a contract with such a country or entity, enters 
                into such contract, without regard to the value of such 
                gift or contract.
          ``(2) Foreign source ownership or control disclosures.--In 
        the case of an institution that is substantially controlled (as 
        described in section 668.174(c)(3) of title 34, Code of Federal 
        Regulations) (or successor regulations)) by a foreign source, 
        the institution shall file a disclosure report in accordance 
        with subsection (b)(2) with the Secretary on July 31 of each 
        year.
          ``(3) Treatment of affiliated entities.--For purposes of this 
        section, any gift to, or contract with, an affiliated entity of 
        an institution shall be considered a gift to or contract with, 
        respectively, such institution.
  ``(b) Contents of Report.--
          ``(1) Gifts and contracts.--Each report to the Secretary 
        required under subsection (a)(1) shall contain the following:
                  ``(A) With respect to a gift received from, or a 
                contract entered into with, any foreign source--
                          ``(i) the terms of such gift or contract, 
                        including--
                                  ``(I) the name of the individual, 
                                department, or benefactor at the 
                                institution receiving the gift or 
                                carrying out the contract;
                                  ``(II) the intended purpose of such 
                                gift or contract, as provided to the 
                                institution by such foreign source, or 
                                if no such purpose is provided by such 
                                foreign source, the intended use of 
                                such gift or contract, as provided by 
                                the institution; and
                                  ``(III) in the case of a restricted 
                                or conditional gift or contract, a 
                                description of the restrictions or 
                                conditions of such gift or contract;
                          ``(ii) with respect to a gift--
                                  ``(I) the total fair market dollar 
                                amount or dollar value of the gift, as 
                                of the date of submission of such 
                                report; and
                                  ``(II) the date on which the 
                                institution received such gift;
                          ``(iii) with respect to a contract--
                                  ``(I) the date on which such contract 
                                commences;
                                  ``(II) as applicable, the date on 
                                which such contract terminates; and
                                  ``(III) an assurance that the 
                                institution will--
                                          ``(aa) maintain an unredacted 
                                        copy of the contract until the 
                                        latest of--
                                                  ``(AA) the date that 
                                                is 4 years after the 
                                                date on which the 
                                                contract commences;
                                                  ``(BB) the date on 
                                                which the contract 
                                                terminates; or
                                                  ``(CC) the last day 
                                                of any period that 
                                                applicable State law 
                                                requires a copy of such 
                                                contract to be 
                                                maintained; and
                                          ``(bb) upon request of the 
                                        Secretary during an 
                                        investigation under subsection 
                                        (f)(1), produce such an 
                                        unredacted copy of the 
                                        contract; and
                          ``(iv) an assurance that in a case in which 
                        information is required to be disclosed under 
                        this section with respect to a gift or contract 
                        that is not in English, such information is 
                        translated into English in compliance with the 
                        requirements of subsection (c)(1).
                  ``(B) With respect to a gift received from, or a 
                contract entered into with, a foreign source that is a 
                foreign government (other than the government of a 
                foreign country of concern)--
                          ``(i) the name of such foreign government;
                          ``(ii) the department, agency, office, or 
                        division of such foreign government that 
                        approved such gift or contract, as applicable; 
                        and
                          ``(iii) the physical mailing address of such 
                        department, agency, office, or division.
                  ``(C) With respect to a gift received from, or 
                contract entered into with, a foreign source (other 
                than a foreign government subject to the requirements 
                of subparagraph (B))--
                          ``(i) the legal name of the foreign source, 
                        or, if such name is not available, a statement 
                        certified by the compliance officer in 
                        accordance with subsection (f)(2) that the 
                        institution has reasonably attempted to obtain 
                        such name;
                          ``(ii) in the case of a foreign source that 
                        is a natural person, the country of citizenship 
                        of such person, or, if such country is not 
                        known, the principal country of residence of 
                        such person;
                          ``(iii) in the case of a foreign source that 
                        is a legal entity, the country in which such 
                        entity is incorporated, or if such information 
                        is not available, the principal place of 
                        business of such entity; and
                          ``(iv) the physical mailing address of such 
                        foreign source, or if such address is not 
                        available, a statement certified by the 
                        compliance officer in accordance with 
                        subsection (f)(2) that the institution has 
                        reasonably attempted to obtain such address.
                  ``(D) With respect to a contract entered into with a 
                foreign source that is a foreign country of concern or 
                a foreign entity of concern--
                          ``(i) a complete and unredacted text of the 
                        original contract, and if such original 
                        contract is not in English, a translated copy 
                        of the text into English;
                          ``(ii) a copy of the waiver received under 
                        section 117A for such contract; and
                          ``(iii) the statement submitted by the 
                        institution for purposes of receiving such a 
                        waiver under section 117A(b)(1).
          ``(2) Foreign source ownership or control.--Each report to 
        the Secretary required under subsection (a)(2) shall contain--
                  ``(A) the legal name and address of the foreign 
                source that owns or controls the institution;
                  ``(B) the date on which the foreign source assumed 
                ownership or control; and
                  ``(C) any changes in program or structure resulting 
                from the change in ownership or control.
  ``(c)  Translation Requirements.--Any information required to be 
disclosed under this section with respect to a gift or 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 foreign 
source involved with such gift or contract.
  ``(d) Public Inspection.--
          ``(1) Database requirement.--Beginning not later than 60 days 
        before the July 31 immediately following the date of the 
        enactment of the DETERRENT Act, the Secretary shall--
                  ``(A) establish and maintain a searchable database on 
                a website of the Department, under which all reports 
                submitted under this section (including any report 
                submitted under this section before the date of the 
                enactment of the DETERRENT Act)--
                          ``(i) are made publicly available (in 
                        electronic and downloadable format), including 
                        any information provided in such reports (other 
                        than the information prohibited from being 
                        publicly disclosed pursuant to paragraph (2));
                          ``(ii) can be individually identified and 
                        compared; and
                          ``(iii) are searchable and sortable by--
                                  ``(I) the date the institution filed 
                                such report;
                                  ``(II) the date on which the 
                                institution received the gift, or 
                                entered into the contract, which is the 
                                subject of the report;
                                  ``(III) the attributable country of 
                                such gift or contract; and
                                  ``(IV) the name of the foreign source 
                                (other than a foreign source that is a 
                                natural person);
                  ``(B) not later than 30 days after receipt of a 
                disclosure report under this section, include such 
                report in such database;
                  ``(C) indicate, as part of the public record of a 
                report included in such database, whether the report is 
                with respect to a gift received from, or a contract 
                entered into with--
                          ``(i) a foreign source that is a foreign 
                        government; or
                          ``(ii) a foreign source that is not a foreign 
                        government; and
                  ``(D) with respect to a disclosure report that does 
                not include the name or address of a foreign source, 
                indicate, as part of the public record of such report 
                included in such database, that such report did not 
                include such information.
          ``(2) Name and address of foreign source.--The Secretary 
        shall not disclose the name or address of a foreign source that 
        is a natural person (other than the attributable country of 
        such foreign source) included in a disclosure report--
                  ``(A) as part of the public record of such disclosure 
                report described in paragraph (1); or
                  ``(B) in response to a request under section 552 of 
                title 5, United States Code (commonly known as the 
                `Freedom of Information Act'), pursuant to subsection 
                (b)(3) of such section.
  ``(e) Interagency Information Sharing.--Not later than 30 days after 
receiving a disclosure report from an institution in compliance with 
this section, the Secretary shall transmit an unredacted copy of such 
report (that includes the name and address of a foreign source 
disclosed in such report) to the Director of the Federal Bureau of 
Investigation, the Director of National Intelligence, the Director of 
the Central Intelligence Agency, the Secretary of State, the Secretary 
of Defense, the Attorney General, the Secretary of Commerce, the 
Secretary of Homeland Security, the Secretary of Energy, the Director 
of the National Science Foundation, and the Director of the National 
Institutes of Health.
  ``(f) Compliance Officer.--Any institution that is required to file a 
disclosure report under subsection (a) shall designate, before the 
filing deadline for such report, and maintain a compliance officer, who 
shall--
          ``(1) be a current employee or legally authorized agent of 
        such institution; and
          ``(2) be responsible, on behalf of the institution, for 
        personally certifying accurate compliance with the foreign gift 
        reporting requirement under this section.
  ``(g) Definitions.--In this section:
          ``(1) Affiliated entity.--The term `affiliated entity', when 
        used with respect to an institution, means an entity or 
        organization that operates primarily for the benefit of, or 
        under the auspices of, such institution, including a foundation 
        of the institution or a related entity (such as any 
        educational, cultural, or language entity).
          ``(2) Attributable country.--The term `attributable country' 
        means--
                  ``(A) the country of citizenship of a foreign source 
                who is a natural person, or, if such country is 
                unknown, the principal residence (as applicable) of 
                such foreign source; or
                  ``(B) the country of incorporation of a foreign 
                source that is a legal entity, or, if such country is 
                unknown, the principal place of business (as 
                applicable) of such foreign source.
          ``(3) Contract.--The term `contract'--
                  ``(A) means--
                          ``(i) any agreement for the acquisition by 
                        purchase, lease, or barter of property or 
                        services by the foreign source;
                          ``(ii) any affiliation, agreement, or similar 
                        transaction with a foreign source that involves 
                        the use or exchange of an institution's name, 
                        likeness, time, services, or resources; and
                          ``(iii) any agreement for the acquisition by 
                        purchase, lease, or barter, of property or 
                        services from a foreign source (other than an 
                        arms-length agreement for such acquisition from 
                        a foreign source that is not a foreign country 
                        of concern or a foreign entity of concern); and
                  ``(B) does not include an agreement made between an 
                institution and a foreign source regarding any payment 
                of one or more elements of a student's cost of 
                attendance (as such term is defined in section 472), 
                unless such an agreement is made for more than 15 
                students or is made under a restricted or conditional 
                contract.
          ``(4) Foreign source.--The term `foreign source' means--
                  ``(A) a foreign government, including an agency of a 
                foreign government;
                  ``(B) a legal entity, governmental or otherwise, 
                created under the laws of a foreign state or states;
                  ``(C) a legal entity, governmental or otherwise, 
                substantially controlled (as described in section 
                668.174(c)(3) of title 34, Code of Federal Regulations) 
                (or successor regulations)) by a foreign source;
                  ``(D) a natural person who is not a citizen or a 
                national of the United States or a trust territory or 
                protectorate thereof; and
                  ``(E) an agent of a foreign source, including--
                          ``(i) a subsidiary or affiliate of a foreign 
                        legal entity, acting on behalf of a foreign 
                        source;
                          ``(ii) a person that operates primarily for 
                        the benefit of, or under the auspices of, a 
                        foreign source, including a foundation or a 
                        related entity (such as any educational, 
                        cultural, or language entity); and
                          ``(iii) a person who is an agent of a foreign 
                        principal (as such term is defined in section 1 
                        of the Foreign Agents Registration Act of 1938 
                        (22 U.S.C. 611).
          ``(5) Gift.--The term `gift'--
                  ``(A) means any gift of money, property, resources, 
                staff, or services; and
                  ``(B) does not include--
                          ``(i) any payment of one or more elements of 
                        a student's cost of attendance (as such term is 
                        defined in section 472) to an institution by, 
                        or scholarship from, a foreign source who is a 
                        natural person, acting in their individual 
                        capacity and not as an agent for, at the 
                        request or direction of, or on behalf of, any 
                        person or entity (except the student), made for 
                        not more than 15 students, and that is not made 
                        under a restricted or conditional contract with 
                        such foreign source; or
                          ``(ii) assignment or license of registered 
                        industrial and intellectual property rights, 
                        such as patents, utility models, trademarks, or 
                        copyrights, or technical assistance, that are 
                        not identified as being associated with a 
                        national security risk or concern by the 
                        Federal Research Security Council as described 
                        under section 7902 of title 31, United States 
                        Code; or
                          ``(iii) decorations (as such term is defined 
                        in section 7342(a) of title 5, United States 
                        Code).
          ``(6) Restricted or conditional gift or contract.--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, 
                institutes, instructional programs, research or lecture 
                programs, or new faculty positions;
                  ``(C) the selection, admission, or education of 
                students;
                  ``(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; or
                  ``(E) any other restriction on the use of a gift or 
                contract.''.
  (b) Prohibition on Contracts With Certain Foreign Entities and 
Countries.--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. PROHIBITION ON CONTRACTS WITH CERTAIN FOREIGN ENTITIES AND 
                    COUNTRIES.

  ``(a) In General.--An institution shall not enter into a contract 
with a foreign country of concern or a foreign entity of concern.
  ``(b) Waivers.--
          ``(1) Submission.--
                  ``(A) First waiver requests.--
                          ``(i) In general.--An institution that 
                        desires to enter into a contract with a foreign 
                        entity of concern or a foreign country of 
                        concern may submit to the Secretary, not later 
                        than 120 days before the institution enters 
                        into such a contract, a request to waive the 
                        prohibition under subsection (a) with respect 
                        to such contract.
                          ``(ii) Contents of waiver request.--A waiver 
                        request submitted by an institution 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 section 117(c)); and
                                  ``(II) a statement that--
                                          ``(aa) is signed by the point 
                                        of contact of the institution 
                                        described in section 117(h); 
                                        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.--An institution 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 the institution 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.
          ``(2) Waiver issuance.--The Secretary--
                  ``(A) not later than 60 days before an institution 
                enters into a contract pursuant to a waiver request 
                under paragraph (1)(A), or before a contract described 
                in paragraph (1)(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; and
                  ``(B) may only issue a waiver under this section to 
                an institution if the Secretary determines, in 
                consultation with the heads of each agency and 
                department listed in section 117(e), that the contract 
                for which the waiver is being requested is for the 
                benefit of the institution's mission and students and 
                will promote the security, stability, and economic 
                vitality of the United States.
          ``(3) Disclosure.--Not less than 2 weeks prior to issuing a 
        waiver under paragraph (2), the Secretary shall notify the--
                  ``(A) the Committee on Education and the Workforce of 
                the House of Representatives; and
                  ``(B) the Committee on Health, Education, Labor, and 
                Pensions of the Senate,
        of the intent to issue the waiver, including a justification 
        for the waiver.
          ``(4) Application of waivers.--A waiver issued under this 
        section to an institution with respect to a contract shall 
        only--
                  ``(A) waive the prohibition under subsection (a) 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.
  ``(c) Designation During Contract Term.--In the case of an 
institution that enters into a contract with a foreign source that is 
not a foreign country of concern or a foreign entity of concern but 
which, during the term of such contract, is designated as a foreign 
country of concern or foreign entity of concern, such institution shall 
terminate such contract not later than 60 days after the Secretary 
notifies the institution of such designation.
  ``(d) Contracts Prior to Date of Enactment.--
          ``(1) In general.--In the case of an institution that has 
        entered into a contract with a foreign country of concern or 
        foreign entity of concern prior to the date of the enactment of 
        the DETERRENT Act--
                  ``(A) the institution shall immediately submit to the 
                Secretary a waiver request in accordance with 
                subsection (b)(1)(A)(ii); and
                  ``(B) the Secretary shall, upon receipt of the 
                request submitted under paragraph (1), immediately 
                issue a waiver to the institution for a period 
                beginning on the date on which the waiver is issued and 
                ending on the sooner of--
                          ``(i) the date that is 1 year after the date 
                        of the enactment of the DETERRENT Act; or
                          ``(ii) the date on which the contract 
                        terminates.
          ``(2) Renewal.--An institution 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 (b)(1)(B).
  ``(e) Contract Defined.--The term `contract' has the meaning given 
such term in section 117(g).''.
  (c) Interagency Information Sharing.--Not later than 90 days after 
the date of the enactment of this Act, the Secretary of Education shall 
transmit to the heads of each agency and department listed in section 
117(e) of the Higher Education Act of 1965, as amended by this Act--
          (1) any report received by the Department of Education under 
        section 117 of the Higher Education Act of 1965 (20 U.S.C. 
        1011f) prior to the date of the enactment of this Act; and
          (2) any report, document, or other record generated by the 
        Department of Education in the course of an investigation--
                  (A) of an institution with respect to the compliance 
                of such institution with such section; and
                  (B) initiated prior to the date of the enactment of 
                this Act.

SEC. 3. POLICY REGARDING CONFLICTS OF INTEREST FROM FOREIGN GIFTS AND 
                    CONTRACTS.

  The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.), as amended 
by section 2 of this Act, is further amended by inserting after section 
117A the following:

``SEC. 117B. INSTITUTIONAL POLICY REGARDING FOREIGN GIFTS AND CONTRACTS 
                    TO FACULTY AND STAFF.

  ``(a) Requirement to Maintain Policy and Database.--Beginning not 
later than 90 days after the date of the enactment of the DETERRENT 
Act, each institution described in subsection (b) shall maintain--
          ``(1) a policy requiring covered individuals employed at the 
        institution to disclose in a report to such institution on July 
        31 of each calendar year that begins after the year in which 
        such enactment date occurs--
                  ``(A) any gift received from a foreign source in the 
                previous calendar year, the value of which is greater 
                than the minimal value (as such term is defined in 
                section 7342(a) of title 5, United States Code) or is 
                of undetermined value, and including the date on which 
                the gift was received;
                  ``(B) any contract entered into with a foreign source 
                in the previous calendar year, the value of which is 
                $5,000 or more, considered alone or in combination with 
                all other contracts with that foreign source within the 
                calendar year, and including the date on which such 
                contract commences and, as applicable, the date on 
                which such contract terminates;
                  ``(C) any contract with a foreign source in force 
                during the previous calendar year that has an 
                undetermined monetary value, and including the date on 
                which such contract commences and, as applicable, the 
                date on which such contract terminates; and
                  ``(D) any contract entered into with a foreign 
                country of concern or foreign entity of concern in the 
                previous calendar year, the value of which is $0 or 
                more, and including the beginning and ending dates of 
                such contract and the full text of such contract and 
                any addenda;
          ``(2) a publicly available and searchable database (in 
        electronic and downloadable format), on a website of the 
        institution, of the information required to be disclosed under 
        paragraph (1) that--
                  ``(A) makes available the information disclosed under 
                paragraph (1) beginning on the date that is 30 days 
                after receipt of the report under such paragraph 
                containing such information and until the latest of--
                          ``(i) the date that is 4 years after the date 
                        on which--
                                  ``(I) a gift referred to in paragraph 
                                (1)(A) is received; or
                                  ``(II) a contract referred to in 
                                subparagraph (B), (C) or (D) of 
                                paragraph (1) begins; or
                          ``(ii) the date on which a contract referred 
                        to in subparagraph (B), (C) or (D) of paragraph 
                        (1) terminates; and
                  ``(B) is searchable and sortable by--
                          ``(i) the date received (if a gift) or the 
                        date commenced (if a contract);
                          ``(ii) the attributable country with respect 
                        to which information is being disclosed;
                          ``(iii) name of the individual making the 
                        disclosure; and
                          ``(iv) the name of the foreign source (other 
                        than a foreign source who is a natural person);
          ``(3) a plan effectively to identify and manage potential 
        information gathering by foreign sources through espionage 
        targeting covered individuals that may arise from gifts 
        received from, or contracts entered into with, a foreign 
        source, including through the use of--
                  ``(A) periodic communications;
                  ``(B) accurate reporting under paragraph (2) of the 
                information required to be disclosed under paragraph 
                (1); and
                  ``(C) enforcement of the policy described in 
                paragraph (1).
  ``(b) Institutions.--An institution shall be subject to the 
requirements of this section if such institution--
          ``(1) is an eligible institution for the purposes of any 
        program authorized under title IV; and
          ``(2)(A) received more than $50,000,000 in Federal funds in 
        any of the previous five calendar years to support (in whole or 
        in part) research and development (as determined by the 
        institution and measured by the Higher Education Research and 
        Development Survey of the National Center for Science and 
        Engineering Statistics); or
          ``(B) receives funds under title VI.
  ``(c) Definitions.--In this section--
          ``(1) the terms `foreign source' and `gift' have the meanings 
        given such terms in section 117(g);
          ``(2) the term `contract'--
                  ``(A) means any--
                          ``(i) agreement for the acquisition, by 
                        purchase, lease, or barter, of property or 
                        services by a foreign source;
                          ``(ii) affiliation, agreement, or similar 
                        transaction with a foreign source involving the 
                        use or exchange of the name, likeness, time, 
                        services, or resources of covered individuals 
                        employed at an institution described in 
                        subsection (b); or
                          ``(iii) purchase, lease, or barter of 
                        property or services from a foreign source that 
                        is a foreign country of concern or a foreign 
                        entity of concern; and
                  ``(B) does not include any fair-market, arms-length 
                agreement made by covered individuals for the 
                acquisition, by purchase, lease, or barter of property 
                or services from a foreign source other than such a 
                foreign source that is a foreign country of concern or 
                a foreign entity of concern;
          ``(3) the term `covered individual'--
                  ``(A) has the meaning given such term in section 
                223(d) of the William M. (Mac) Thornberry National 
                Defense Authorization Act for Fiscal Year 2021 (42 
                U.S.C. 6605); and
                  ``(B) shall be interpreted in accordance with the 
                Guidance for Implementing National Security 
                Presidential Memorandum 33 (NSPM-33) on National 
                Security Strategy for United States Government-
                supported Research and Development published by the 
                Subcommittee on Research Security and the Joint 
                Committee on the Research Environment in January 2022; 
                and
          ``(4) the term `professional staff' means professional 
        employees, as defined in section 3 of the Fair Labor Standards 
        Act of 1938 (29 U.S.C. 203).''.

SEC. 4. INVESTMENT DISCLOSURE REPORT.

  The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.), as amended 
by section 3 of this Act, is further amended by inserting after section 
117B the following:

``SEC. 117C. INVESTMENT DISCLOSURE REPORT.

  ``(a) Investment Disclosure Report.--A specified institution shall 
file a disclosure report in accordance with subsection (b) with the 
Secretary on July 31 immediately following any calendar year in which 
the specified institution purchases, sells, or holds (directly or 
indirectly through any chain of ownership) one or more investments of 
concern.
  ``(b) Contents of Report.--Each report to the Secretary required by 
subsection (a) with respect to any calendar year shall contain the 
following:
          ``(1) A list of the investments of concern purchased, sold, 
        or held during such calendar year.
          ``(2) The aggregate fair market value of all investments of 
        concern held as of the close of such calendar year.
          ``(3) The combined value of all investments of concern sold 
        over the course of such calendar year, as measured by the fair 
        market value of such investments at the time of the sale.
          ``(4) The combined value of all capital gains from such sales 
        of investments of concern.
  ``(c) Inclusion of Certain Pooled Funds.--
          ``(1) In general.--An investment of concern acquired through 
        a regulated investment company, exchange traded fund, or any 
        other pooled investment shall be treated as acquired through a 
        chain of ownership referred to in subsection (a), unless such 
        pooled investment is certified by the Secretary as not holding 
        any listed investments in accordance with subparagraph (B) of 
        paragraph (2).
          ``(2) Certifications of pooled funds.--The Secretary, after 
        consultation with the Secretary of the Treasury, shall 
        establish procedures under which certain regulated investment 
        companies, exchange traded funds, and other pooled 
        investments--
                  ``(A) shall be reported in accordance with the 
                requirements under subsection (b); and
                  ``(B) may be certified by the Secretary as not 
                holding any listed investments.
  ``(d) Treatment of Related Organizations.--For purposes of this 
section, assets held by any related organization (as defined in section 
4968(d)(2) of the Internal Revenue Code of 1986) with respect to a 
specified institution shall be treated as held by such specified 
institution, except that--
          ``(1) such assets shall not be taken into account with 
        respect to more than 1 specified institution; and
          ``(2) unless such organization is controlled by such 
        institution or is described in section 509(a)(3) of the 
        Internal Revenue Code of 1986 with respect to such institution, 
        assets which are not intended or available for the use or 
        benefit of such specified institution shall not be taken into 
        account.
  ``(e) Valuation of Debt.--For purposes of this section, the fair 
market value of any debt shall be the principal amount of such debt.
  ``(f) Regulations.--The Secretary, after consultation with the 
Secretary of the Treasury, may issue such regulations or other guidance 
as may be necessary or appropriate to carry out the purposes of this 
section, including regulations or other guidance providing for the 
proper application of this section with respect to certain regulated 
investment companies, exchange traded funds, and pooled investments.
  ``(g) Compliance Officer.--Any specified institution that is required 
to submit a report under subsection (a) shall designate, before the 
submission of such report, and maintain a compliance officer, who 
shall--
          ``(1) be a current employee or legally authorized agent of 
        such institution;
          ``(2) be responsible, on behalf of the institution, for 
        personally certifying accurate compliance with the reporting 
        requirements under this section; and
          ``(3) certify the institution has, for purposes of filing 
        such report under subsection (a), followed an established 
        institutional policy and conducted good faith efforts and 
        reasonable due diligence to determine the accuracy and 
        valuations of the assets reported.
  ``(h) Database Requirement.--Beginning not later than 60 days before 
the July 31 immediately following the date of the enactment of the 
DETERRENT Act, the Secretary shall--
          ``(1) establish and maintain a searchable database on a 
        website of the Department, under which all reports submitted 
        under this section--
                  ``(A) are made publicly available (in electronic and 
                downloadable format), including any information 
                provided in such reports;
                  ``(B) can be individually identified and compared; 
                and
                  ``(C) are searchable and sortable; and
          ``(2) not later than 30 days after receipt of a disclosure 
        report under this section, include such report in such 
        database.
  ``(i) Definitions.--In this section:
          ``(1) Investment of concern.--
                  ``(A) In general.--The term `investment of concern' 
                means any specified interest with respect to any of the 
                following:
                          ``(i) A foreign country of concern.
                          ``(ii) A foreign entity of concern.
                  ``(B) Specified interest.--The term `specified 
                interest' means, with respect to any entity--
                          ``(i) stock or any other equity or profits 
                        interest of such entity;
                          ``(ii) debt issued by such entity; and
                          ``(iii) any contract or derivative with 
                        respect to any property described in clause (i) 
                        or (ii).
          ``(2) Specified institution.--
                  ``(A) In general.--The term `specified institution', 
                as determined with respect to any calendar year, means 
                an institution if--
                          ``(i) such institution is not a public 
                        institution; and
                          ``(ii) the aggregate fair market value of--
                                  ``(I) the assets held by such 
                                institution at the end of such calendar 
                                year (other than those assets which are 
                                used directly in carrying out the 
                                institution's exempt purpose) is in 
                                excess of $6,000,000,000; or
                                  ``(II) the investments of concern 
                                held by such institution at the end of 
                                such calendar year is in excess of 
                                $250,000,000
                  ``(B) References to certain terms.--For the purpose 
                of applying the definition under subparagraph (A), the 
                terms `aggregate fair market value' and `assets which 
                are used directly in carrying out the institution's 
                exempt purpose' shall be applied in the same manner as 
                such terms are applied for the purposes of section 
                4968(b)(1)(D) of the Internal Revenue Code of 1986.''.

SEC. 5. ENFORCEMENT AND OTHER GENERAL PROVISIONS.

  (a) Enforcement and Other General Provisions.--The Higher Education 
Act of 1965 (20 U.S.C. 1001 et seq.), as amended by section 4 of this 
Act, is further amended by inserting after section 117C the following:

``SEC. 117D. ENFORCEMENT; SINGLE POINT-OF-CONTACT.

  ``(a) Enforcement.--
          ``(1) Investigation.--The Secretary (acting through the 
        General Counsel of the Department) shall conduct investigations 
        of possible violations of sections 117, 117A, 117B, and 117C by 
        institutions.
          ``(2) Civil action.--Whenever it appears that an institution 
        has knowingly or willfully failed to comply with a requirement 
        of any of the sections listed in paragraph (1) (including any 
        rule or regulation promulgated under any such section) based on 
        such an investigation, 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 to compel compliance with the requirement of the 
        section that has been violated.
          ``(3) Costs and other fines.--An institution that is 
        compelled to comply with a requirement of a section listed in 
        paragraph (1) pursuant to paragraph (2) shall--
                  ``(A) pay to the Treasury of the United States the 
                full costs to the United States of obtaining compliance 
                with the requirement of such section, including all 
                associated costs of investigation and enforcement; and
                  ``(B) be subject to the applicable fines described in 
                paragraph (4).
          ``(4) Fines for violations.--The Secretary shall impose a 
        fine on an institution that knowingly or willfully fails to 
        comply with a requirement of a section listed in paragraph (1) 
        as follows:
                  ``(A) Section 117.--
                          ``(i) First-time violations.--In the case of 
                        an institution that knowingly or willfully 
                        fails to comply with a requirement of section 
                        117 with respect to a calendar year, and that 
                        has not previously knowingly or willfully 
                        failed to comply with such a requirement, the 
                        Secretary shall impose a fine on the 
                        institution for such violation as follows:
                                  ``(I) In the case of an institution 
                                that knowingly or willfully fails to 
                                comply with a reporting requirement 
                                under subsection (a)(1) of section 117, 
                                such fine shall be in an amount that 
                                is--
                                          ``(aa) not less than $50,000 
                                        but not more than the monetary 
                                        value of the gift from, or 
                                        contract with, the foreign 
                                        source; or
                                          ``(bb) in the case of a gift 
                                        or contract of no value or of 
                                        indeterminable value, not less 
                                        than 1 percent, and not more 
                                        than 10 percent of the total 
                                        amount of Federal funds 
                                        received by the institution 
                                        under this Act for the most 
                                        recent fiscal year.
                                  ``(II) In the case of an institution 
                                that knowingly or willfully fails to 
                                comply with the reporting requirement 
                                under subsection (a)(2) of section 117, 
                                such fine shall be in an amount that is 
                                not less than 10 percent of the total 
                                amount of Federal funds received by the 
                                institution under this Act for the most 
                                recent fiscal year.
                          ``(ii) Subsequent violations.--In the case of 
                        an institution that has been fined pursuant to 
                        clause (i) with respect to a calendar year, and 
                        that knowingly or willfully fails to comply 
                        with a requirement of section 117 with respect 
                        to any additional calendar year, the Secretary 
                        shall impose a fine on the institution with 
                        respect to any such additional calendar year as 
                        follows:
                                  ``(I) In the case of an institution 
                                that knowingly or willfully fails to 
                                comply with a reporting requirement 
                                under subsection (a)(1) of section 117 
                                with respect to an additional calendar 
                                year, such fine shall be in an amount 
                                that is--
                                          ``(aa) not less than $100,000 
                                        but not more than twice the 
                                        monetary value of the gift 
                                        from, or contract with, the 
                                        foreign source; or
                                          ``(bb) in the case of a gift 
                                        or contract of no value or of 
                                        indeterminable value, not less 
                                        than 1 percent, but not more 
                                        than 10 percent, of the total 
                                        amount of Federal funds 
                                        received by the institution 
                                        under this Act for the most 
                                        recent fiscal year.
                                  ``(II) In the case of an institution 
                                that knowingly or willfully fails to 
                                comply with a reporting requirement 
                                under subsection (a)(2) of section 117 
                                with respect to an additional calendar 
                                year, such fine shall be in an amount 
                                that is not less than 20 percent of the 
                                total amount of Federal funds received 
                                by the institution under this Act for 
                                the most recent fiscal year.
                  ``(B) Section 117a.--
                          ``(i) First-time violations.--In the case of 
                        an institution that knowingly or willfully 
                        fails to comply with a requirement of section 
                        117A for the first time, the Secretary shall 
                        impose a fine on the institution in an amount 
                        that is not less than 5 percent, but not more 
                        than 10 percent, of the total amount of Federal 
                        funds received by the institution under this 
                        Act for the most recent fiscal year.
                          ``(ii) Subsequent violations.--In the case of 
                        an institution that has been fined pursuant to 
                        clause (i), the Secretary shall impose a fine 
                        on the institution for each subsequent time the 
                        institution knowingly or willfully fails to 
                        comply with a requirement of section 117A in an 
                        amount that is not less than 20 percent of the 
                        total amount of Federal funds received by the 
                        institution under this Act for the most recent 
                        fiscal year.
                  ``(C) Section 117b.--
                          ``(i) First-time violations.--In the case of 
                        an institution that knowingly or willfully 
                        fails to comply with a requirement of section 
                        117B with respect to a calendar year, and that 
                        has not previously knowingly or willfully 
                        failed to comply with such a requirement, the 
                        Secretary shall impose a fine on the 
                        institution of not less than $250,000, but not 
                        more than the total amount of gifts or 
                        contracts reported by such institution in the 
                        database required under section 117B(a)(2).
                          ``(ii) Subsequent violations.--In the case of 
                        an institution that has been fined pursuant to 
                        clause (i) with respect to a calendar year, and 
                        that knowingly or willfully fails to comply 
                        with a requirement of section 117B with respect 
                        to any additional calendar year, the Secretary 
                        shall impose a fine on the institution with 
                        respect to any such additional calendar year in 
                        an amount that is not less than $500,000, but 
                        not more than twice the total amount of gifts 
                        or contracts reported by such institution in 
                        the database required under section 117B(a)(2).
                  ``(D) Section 117c.--
                          ``(i) First-time violations.--In the case of 
                        a specified institution that knowingly or 
                        willfully fails to comply with a requirement of 
                        section 117C with respect to a calendar year, 
                        and that has not previously knowingly or 
                        willfully failed to comply with such a 
                        requirement, the Secretary shall impose a fine 
                        on the institution in an amount that is not 
                        less than 50 percent and not more than 100 
                        percent of the sum of--
                                  ``(I) the aggregate fair market value 
                                of all investments of concern held by 
                                such institution as of the close of 
                                such calendar year; and
                                  ``(II) the combined value of all 
                                investments of concern sold over the 
                                course of such calendar year, as 
                                measured by the fair market value of 
                                such investments at the time of the 
                                sale.
                          ``(ii) Subsequent violations.--In the case of 
                        a specified institution that has been fined 
                        pursuant to clause (i) with respect to a 
                        calendar year, and that knowingly or willfully 
                        fails to comply with a requirement of section 
                        117C with respect to any additional calendar 
                        year, the Secretary shall impose a fine on the 
                        institution with respect to any such additional 
                        calendar year in an amount that is not less 
                        than 100 percent and not more than 200 percent 
                        of the sum of--
                                  ``(I) the aggregate fair market value 
                                of all investments of concern held by 
                                such institution as of the close of 
                                such additional calendar year; and
                                  ``(II) the combined value of all 
                                investments of concern sold over the 
                                course of such additional calendar 
                                year, as measured by the fair market 
                                value of such investments at the time 
                                of the sale.
  ``(b) Single Point-of-contact at the Department.--The Secretary shall 
maintain a single point-of-contact at the Department to--
          ``(1) receive and respond to inquiries and requests for 
        technical assistance from institutions regarding compliance 
        with the requirements of sections 117, 117A, 117B, and 117C;
          ``(2) coordinate and implement technical improvements to the 
        database described in section 117(d)(1), including--
                  ``(A) improving upload functionality by allowing for 
                batch reporting, including by allowing institutions to 
                upload one file with all required information into the 
                database;
                  ``(B) publishing and maintaining a database users 
                guide annually, including information on how to edit an 
                entry and how to report errors;
                  ``(C) creating a standing user group (to which 
                chapter 10 of title 5, United States Code, shall not 
                apply) to discuss possible database improvements, which 
                group shall--
                          ``(i) include at least--
                                  ``(I) 3 members representing public 
                                institutions with high or very high 
                                levels of research activity (as defined 
                                by the National Center for Education 
                                Statistics);
                                  ``(II) 2 members representing 
                                private, nonprofit institutions with 
                                high or very high levels of research 
                                activity (as so defined);
                                  ``(III) 2 members representing 
                                proprietary institutions of higher 
                                education (as defined in section 
                                102(b)); and
                                  ``(IV) 2 members representing area 
                                career and technical education schools 
                                (as defined in subparagraph (C) or (D) 
                                of section 3(3) of the Carl D. Perkins 
                                Career and Technical Education Act of 
                                2006 (20 U.S.C. 2302(3)); and
                          ``(ii) meet at least twice a year with 
                        officials from the Department to discuss 
                        possible database improvements;
                  ``(D) publishing, on a publicly available website, 
                recommended database improvements following each 
                meeting described in subparagraph (C)(ii); and
                  ``(E) responding, on a publicly available website, to 
                each recommendation published under subparagraph (D) as 
                to whether or not the Department will implement the 
                recommendation, including the rationale for either 
                approving or rejecting the recommendation;
          ``(3) provide, every 90 days after the date of enactment of 
        the DETERRENT Act, status updates on any pending or completed 
        investigations and civil actions under subsection (a)(1) to--
                  ``(A) the authorizing committees; and
                  ``(B) any institution that is the subject of such 
                investigation or action;
          ``(4) maintain, on a publicly accessible website--
                  ``(A) a full comprehensive list of all foreign 
                countries of concern and foreign entities of concern; 
                and
                  ``(B) the date on which the last update was made to 
                such list; and
          ``(5) not later than 7 days after making an update to the 
        list maintained in paragraph (4)(A), notify each institution 
        required to comply with the sections listed in paragraph (1) of 
        such update.
  ``(c) Definitions.--For purposes of sections 117, 117A, 117B, 117C, 
and this section:
          ``(1) Foreign country of concern.--The term `foreign country 
        of concern' includes the following:
                  ``(A) A country that is a covered nation (as defined 
                in section 4872(d) of title 10, United States Code).
                  ``(B) Any country that the Secretary, in consultation 
                with the Secretary of Defense, the Secretary of State, 
                and the Director of National Intelligence, determines 
                to be engaged in conduct that is detrimental to the 
                national security or foreign policy of the United 
                States.
          ``(2) Foreign entity of concern.--The term `foreign entity of 
        concern' has the meaning given such 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)(8)(A) of 
        the John S. McCain National Defense Authorization Act for 
        Fiscal Year 2019 (10 U.S.C. 22 4001 note; Public Law 115-232).
          ``(3) Institution.--The term `institution' means an 
        institution of higher education (as such term is defined in 
        section 102, other than an institution described in subsection 
        (a)(1)(c) of such section).''.
  (b) Program Participation Agreement.--Section 487(a) of the Higher 
Education Act of 1965 (20 U.S.C. 1094) is amended by adding at the end 
the following:
          ``(30)(A) An institution will comply with the requirements of 
        sections 117, 117A, 117B, and 117C.
          ``(B) An institution that, for 3 consecutive institutional 
        fiscal years, violates any requirement of any of the sections 
        listed in subparagraph (A), shall--
                  ``(i) be ineligible to participate in the programs 
                authorized by this title for a period of not less than 
                2 institutional fiscal years; and
                  ``(ii) in order to regain eligibility to participate 
                in such programs, demonstrate compliance with all 
                requirements of each such section for not less than 2 
                institutional fiscal years after the institutional 
                fiscal year in which such institution became 
                ineligible.''.
  (c) GAO Study.--Not later than one year after the date of the 
enactment of this Act, the Comptroller General of the United States--
          (1) shall conduct a study to identify ways to improve 
        intergovernmental agency coordination regarding implementation 
        and enforcement of sections 117, 117A, 117B, and 117C of the 
        Higher Education Act of 1965 (20 U.S.C. 1011f), as amended or 
        added by this Act, including increasing information sharing, 
        increasing compliance rates, and establishing processes for 
        enforcement; and
          (2) shall submit to the Congress, and make public, a report 
        containing the results of such study.

                                Purpose

    To amend the Higher Education Act of 1965 to require 
additional information in disclosures of foreign gifts and 
contracts from foreign sources, restrict contracts with certain 
foreign entities and foreign countries of concern, require 
certain staff and faculty to report foreign gifts and 
contracts, and require disclosure of certain foreign 
investments within endowments.

                            Committee Action


                             117TH CONGRESS

First Session--Hearing

    On June 24, 2021, the Committee on Education and Labor held 
a hearing on ``Examining the Policies and Priorities of the 
U.S. Department of Education.'' The purpose of the hearing was 
to examine the policies and priorities of the U.S. Department 
of Education. During the hearing, Representatives Virginia Foxx 
(R-North Carolina), Joe Wilson (R-South Carolina), Elise 
Stefanik (R-New York), Jim Banks (R-Indiana), and Burgess Owens 
(R-Utah) made comments and asked questions regarding foreign 
influence in postsecondary education. Testifying before the 
Committee was Department of Education Secretary Miguel Cardona, 
Washington, DC.

                             118TH CONGRESS

First Session--Hearing

    On May 16, 2023, the Committee on Education and the 
Workforce held a hearing on ``Examining the Policies and 
Priorities of the U.S. Department of Education.'' The purpose 
of the hearing was to examine the policies and priorities of 
the U.S. Department of Education. During the hearing, 
Representatives Michelle Steel (R-California), James Comer (R-
Kentucky), and Eric Burlison (R- Missouri) made comments and 
asked questions regarding foreign influence in postsecondary 
education. Testifying before the Committee was Miguel Cardona, 
Secretary, U.S. Department of Education, Washington, D.C.
    On May 24, 2023, the Committee on Education and the 
Workforce held a hearing on ``Breaking the System Part II: 
Examining the Implications of Biden's Student Loan Policies for 
Students and Taxpayers.'' The purpose of the hearing was to 
examine the Biden administration's policies surrounding student 
loans and the Office of Federal Student Aid. During the 
hearing, Representative Banks asked whether the Biden 
administration has opened any new investigations into foreign 
funding in postsecondary education. Testifying before the 
Committee was the Honorable James Kvaal, Under Secretary of 
Education, U.S. Department of Education, Washington D.C., and 
Mr. Richard Cordray, Chief Operating Officer, Office of Federal 
Student Aid, U.S. Department of Education, D.C.
    On July 13, 2023, the Committee on Education and the 
Workforce held a hearing on ``Exposing the Dangers of the 
Influence of Foreign Adversaries on College Campuses.'' The 
purpose of the hearing was to examine the state of foreign 
influence in the American postsecondary education system. The 
hearing investigated how to prevent foreign adversaries from 
abusing America's academic system to steal sensitive 
intellectual property, limit free expression, control 
curriculum, and indoctrinate students. Testifying before the 
Committee was Mr. Paul Moore, J.D., Senior Counsel, Defense of 
Freedom Institute, Washington, D.C; Mr. John C. Yang, President 
and Executive Director, Asian Americans Advancing Justice, 
Washington, D.C; Mr. Craig Singleton, China Program Deputy 
Director and Senior Fellow, Foundation for Defense of 
Democracies, Washington, D.C.

Legislative Action

    On October 11, 2023, Representative Steel introduced the 
Defending Education Transparency and Ending Rogue Regimes 
Engaging in Nefarious Transactions (DETERRENT) Act (H.R. 5933) 
with Representatives Foxx, Owens, Joe Wilson, Glenn Thompson 
(R-Pennsylvania), Glenn Grothman (R-Wisconsin), Stefanik, Lloyd 
Smucker (R-Pennsylvania), Lisa McClain (R-Michigan), Julia 
Letlow (R- Louisiana), Brandon Williams (R-New York), Erin 
Houchin (R-Indiana), Ron Estes (R-Kansas), and Tim Walberg (R-
Michigan).
    The bill was referred solely to the Committee on Education 
and the Workforce. On November 8, 2023, the Committee 
considered H.R. 5933 in legislative session and reported it 
favorably, as amended, to the House of Representatives by a 
recorded vote of 27-11. The Committee considered the following 
amendments to H.R. 5933:
          1. Representative Steel offered an Amendment in the 
        Nature of a Substitute (ANS) that made changes to 
        better align the bill with other federal laws and 
        ensure more transparency around all types of donations 
        among other changes. The amendment was adopted by voice 
        vote.
          2. Representative Thompson offered an amendment to 
        clarify the definition of batch reporting and define 
        the frequency, participants, and reports from the 
        standing user group. The amendment was adopted by voice 
        vote.
          3. Representative Nathaniel Moran (R-Texas) offered 
        an amendment to clarify the waiver process for existing 
        contracts between an institution of higher education 
        (IHE) and a country or foreign entity of concern and to 
        adjust the time deadlines for submission and approval 
        of waivers. The amendment was adopted by voice vote.
          4. Representative Kathy Manning (D North Carolina) 
        offered an amendment to strike the requirement that 
        gifts and contracts to faculty be made publicly 
        available. The amendment failed by a recorded vote of 
        11-22.
          5. Ranking Member Robert C. ``Bobby'' Scott (D-
        Virgnia) offered an amendment to exclude receptions, 
        widely-attended events, charity events, and gifts of 
        personal hospitality from being classified as ``gifts'' 
        for purposes of reporting gifts and contracts to 
        faculty and staff. The amendment failed by a recorded 
        vote of 14-24.
          6. Ranking Member Scott offered an amendment to 
        increase the threshold for reporting by faculty and 
        staff to $25,000 (instead of $5,000) and to eliminate 
        the $0 reporting threshold for countries of concern. 
        The amendment failed by a recorded vote of 14-24.
          7. Ranking Member Scott offered an Amendment in the 
        Nature of a Substitute that provided a higher threshold 
        for reporting for all foreign gifts or contracts and 
        provided fewer public disclosures about the nature of 
        the gifts and contracts. The amendment failed by a 
        recorded vote of 14-24.

                            Committee Views


                              INTRODUCTION

    Foreign enemies, like the Chinese Communist Party, are 
infiltrating America's colleges and universities to subvert 
United States' interests. Foreign adversaries recognize the 
value of American education and research and continually seek 
to exert their influence on students and faculty. To combat 
these threats, section 117 of the Higher Education Act (HEA) 
requires institutions that receive federal financial assistance 
to disclose semiannually to the U.S. Department of Education 
(ED or Department) any gifts received from and/or contracts 
with a foreign source or foreign government that are valued at 
$250,000 or more in a calendar year. These revisions are 
necessary due to section 117's current loose legislative 
language, the Biden administration's blatant crippling of 
enforcement efforts, and institutions' refusal to adhere to the 
law which have resulted in billions of dollars in foreign funds 
infiltrating the country undetected. The DETERRENT Act brings 
much-needed transparency, accountability, and clarity to 
foreign gift reporting requirements for colleges and 
universities across the nation.

Section 117 Background

    Section 117 was enacted during the HEA reauthorization in 
1986. The American Jewish Congress drafted and sponsored what 
was then-called section 1207 in response to large gifts from 
foreign governments, particularly a gift from Arab governments 
to Georgetown University for the purpose of creating a Center 
for Contemporary Arab Studies.\1\
---------------------------------------------------------------------------
    \1\https://www.nytimes.com/1986/10/16/opinion/l-education-act-
would-curb-foreign-gifts- 148386.html?searchResultPosition=1.
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    Section 117 details the contents of required disclosures as 
well as penalties. Each reported gift or contract from a 
foreign source needs to contain the aggregate dollar amount as 
well as the country of origin.\2\ The statute also requires 
institutions owned or controlled by a foreign entity to report 
additional information.\3\
---------------------------------------------------------------------------
    \2\https://www.govinfo.gov/content/pkg/COMPS-765/pdf/COMPS-765.pdf, 
page 27.
    \3\https://fsapartners.ed.gov/knowledge-center/topics/section-117-
foreign-gift-and-contract-reporting.
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    If an institution fails to properly disclose foreign gifts, 
the Attorney General may open a civil action to compel 
compliance and institutions can be found liable to pay for the 
subsequent investigation and enforcement costs.

Section 117 Limitations

    Congress first required IHEs to publicly report their 
foreign gifts and contracts to ED in 1986. Although the 
requirements of section 117 have been in place for over 30 
years, the loose language in statute, poor federal enforcement, 
and lack of congressional oversight have resulted in very few 
and vague disclosures from institutions.
    Most institutions fail to disclose the majority of foreign 
gifts they have received. A 2019 Senate report found that up to 
70 percent of all institutions failed to comply with section 
117 and that those that do comply often underreport.\4\ 
Investigations by the Trump administration discovered $6.5 
billion in previously undisclosed gifts and contributions 
provided to elite colleges from countries that pose serious 
national security threats.\5\ A recent study by the Network 
Contagion Research Institute further analyzed data between 2014 
and 2019 and found that approximately $13 billion in foreign 
gifts were undisclosed.\6\
---------------------------------------------------------------------------
    \4\https://www.hsgac.senate.gov/wp-content/uploads/imo/media/doc/
PSI%20Report%20China's
%20Impact%20on%20the%20US%20Education%20Syst em.pdf.
    \5\https://www2.ed.gov/policy/highered/leg/institutional-
compliance-section-117.pdf.
    \6\https://networkcontagion.us/reports/11-6-23-the-corruption-of-
the-american-mind/.
---------------------------------------------------------------------------
    Even when data is submitted, the accuracy of the amounts of 
funding and the breadth of relationships are unclear. All data 
submitted is self-reported by institutions and there is no 
requirement that the numbers are audited for accuracy by an 
independent body such as the Department's Inspector General or 
the Government Accountability Office (GAO).\7\ In 2022, 
research from the Lincoln Policy Network found that nearly 30 
percent of reported payments had no receipt date, making it 
hard to discern when payments began or to notice any changes 
over time.\8\ The statute also allows institutions to report 
gift sources as ``anonymous.'' In 2020, the Department 
estimated that schools had anonymized $8.4 billion in foreign 
money over the past decade.\9\ Finally, several colleges and 
universities have affiliated nonprofit foundations or other 
entities that receive gifts for the university, and section 117 
does not mention such entities explicitly.\10\
---------------------------------------------------------------------------
    \7\https://www.pogo.org/investigation/2019/02/universities-on-the-
foreign-payrol.
    \8\https://lincolnpolicy.org/wp-content/uploads/2022/10/Foreign-
Influence-in-American-Higher-Education.pdf.
    \9\https://www.washingtonexaminer.com/news/stanford-and-fordham-
swept-up-in-education-department-investigation-into-chinese-influence.
    \10\https://www.hsgac.senate.gov/wp-content/uploads/imo/media/doc/
2019-02-28%20Zais%20Testimony%20-%20PSI.pdf.
---------------------------------------------------------------------------

Problems of Foreign Influence

    American universities often resemble multinational 
corporations and collaborate with global partners. 
International partnerships may have academic and research 
advantages; however, not all foreign partnerships are 
innocuous. Over 60 percent of foreign money given to U.S. 
universities comes from four sources: China, Saudi Arabia, the 
United Arab Emirates, and Qatar.\11\ Nations that pose a 
heightened security risk shroud their contracts and gifts in 
secrecy, enabling these intellectual property, restricting 
academic freedom, recruiting foreign agents, and monitoring 
students on campus.
---------------------------------------------------------------------------
    \11\https://www.meforum.org/64411/reed-rubinstein-on-foreign-
influence-on-campus.
---------------------------------------------------------------------------
            China
    China is one of the largest contributors to universities, 
with partnerships occurring in many forms. One of the most 
common is Confucius Institutes (CIs), Chinese government-funded 
centers on college campuses that claim to foster intercultural 
exchange through language classes and cultural celebrations. 
The Chinese government provides American campuses with funding 
and partnerships with Chinese institutions in return for 
hosting CIs. At the program's peak in 2017 there were nearly 
120 CIs in the United States, with China spending over $158 
million on CIs between 2006 and 2019.\12\
---------------------------------------------------------------------------
    \12\https://crsreports.congress.gov/product/pdf/IF/IF11180.
---------------------------------------------------------------------------
    Because the Chinese government provides the funding for 
CIs, they pose risks for U.S. host institutions regarding 
academic freedom, freedom of expression, governance, and 
national security.\13\ A 2019 Senate report further found that 
the Chinese government ``approves all teachers, events, and 
speakers'' at CIs and sometimes limits discussion of political 
topics unfavorable to China such as the independence of Taiwan 
or the Tiananmen Square massacre.\14\ A 2019 GAO report also 
revealed that some schools were hesitant to reveal details of 
CI contracts and that some of these contracts even included 
nondisclosure agreements.\15\
---------------------------------------------------------------------------
    \13\https://nap.nationalacademies.org/catalog/27065/foreign-funded-
language-and-culture-institutes-at-us-institutions-of-higher-education.
    \14\https://www.hsgac.senate.gov/wp-content/uploads/imo/media/doc/
PSI%20Report%20
China's%20Impact%20on%20the%20US%20Education%20System.pdf.
    \15\https://www.gao.gov/assets/gao-19-278-highlights.pdf.
---------------------------------------------------------------------------
    Increased political attention to CIs at the state and 
federal levels caused a vast majority to close, leaving an 
estimated fewer than five still operating in the United States 
as of October 2023.\16\ However, the National Association of 
Scholars estimates that at least 28 schools simply replaced 
their CI with a similar program and at least 58 still have 
close relationships with their former CI partner.\17\
---------------------------------------------------------------------------
    \16\https://www.gao.gov/assets/d24105981.pdf.
    \17\https://www.nas.org/blogs/article/
how_many_confucius_institutes_are_in_the_united_states.
---------------------------------------------------------------------------
    American institutions also have extensive partnerships with 
Chinese businesses and academic institutions. In June 2020, a 
Bloomberg analysis found that 115 schools received nearly $1 
billion from Chinese sources between 2013 and 2020.\18\ Many 
schools maintain relationships and exchange programs with 
Chinese universities that are linked to the Chinese 
military.\19\ China has continually blurred the lines between 
its military and civilian research through self-proclaimed 
``military-civil fusion.''\20\
---------------------------------------------------------------------------
    \18\https://www.bloomberg.com/news/articles/2020-02-06/harvard-
leads-u-s-colleges-that-received-1-billion-from-china#xj4y7vzkg.
    \19\https://www.washingtonexaminer.com/news/rubio-calls-on-us-
universities-to-cut-ties-with-china-military-industrial-complex/.
    \20\https://www.nytimes.com/2023/02/16/world/asia/spy-balloon-
military-china.html.
---------------------------------------------------------------------------
            Middle East
    Countries in the Middle East such as Saudi Arabia and Qatar 
also are some of the largest foreign contributors to American 
universities. In 2017 alone, Saudi individuals, companies, and 
the Kingdom itself spent over $89 million on gifts and 
contracts to IHEs including Columbia University, Tufts 
University, and the University of Southern California.\21\
---------------------------------------------------------------------------
    \21\https://www.pogo.org/investigation/2019/02/universities-on-the-
foreign-payroll.
---------------------------------------------------------------------------
    Countries from the Middle East have a history of large 
contributions to fund academic centers (often known as Middle 
East Studies Centers, or MESCs) on college campuses. MESCs, 
whose stated goal is to promote Middle Eastern studies, have 
been criticized for giving students a biased perspective on 
issues pertaining to the Middle East, including Islam, women's 
rights, terrorism, and slavery.\22\ Additionally, the Network 
Contagion Research Institute found that institutions that 
received and did not report funding from Middle Eastern donors 
had, on average, 300 percent more antisemitic incidents than 
other institutions.\23\
---------------------------------------------------------------------------
    \22\https://www.nas.org/reports/hijacked/full-report.
    \23\https://networkcontagion.us/reports/11-6-23-the-corruption-of-
the-american-mind/.
---------------------------------------------------------------------------

Administration Response

    Under the Trump administration, then-Secretary Betsy DeVos 
took many steps to increase transparency and combat foreign 
influence. Secretary DeVos opened over a dozen section 117 
investigations, issued guidance on section 117 reporting, and 
modernized the online section 117 portal to make compliance 
easier.\24\ The Trump administration also issued improved 
disclosure requirements, including requiring the names of 
foreign sources to be listed.\25\
---------------------------------------------------------------------------
    \24\https://www2.ed.gov/policy/highered/leg/institutional-
compliance-section-117.pdf.
    \25\https://www.highereddive.com/news/ed-dept-steps-up-scrutiny-of-
college-foreign-gifts-reporting/580376/.
---------------------------------------------------------------------------
    Despite foreign influence continuing to be a major issue on 
American campuses, the Biden administration has failed to view 
foreign influence as a serious threat. Secretary Cardona has 
said little on this issue and has failed to build on the work 
done in the previous administration. The Department's most 
recent notice of investigation was in January 2021.\26\
---------------------------------------------------------------------------
    \26\https://www.dailysignal.com/2023/02/06/two-years-later-little-
evidence-biden-admin-enforcing-law-higher-ed- gifts-foreign-countries-
china/.
---------------------------------------------------------------------------
    The Biden administration also has failed to open any 
additional section 117 investigations since taking office.\27\ 
In August 2022, the American Council on Education issued a 
letter thanking President Biden after learning ``ED plans to 
close the outstanding section 117 investigations that remain 
open.''\28\ In April 2023, ED announced an investigation into 
the University of Nevada, Las Vegas was closed.\29\ While the 
other investigations are not closed officially yet, no clear 
indication has been given that these investigations have 
continued.
---------------------------------------------------------------------------
    \27\https://www.nationalreview.com/corner/biden-admin-winds-down-
probes-into-universities-foreign-gifts/.
    \28\https://www.cogr.edu/sites/default/files/
081622%20FINAL%20August%202022%20ED%
20letter%20on%20117%20follow%20up.pdf.
    \29\https://www2.ed.gov/policy/highered/leg/20230411-un-
closeout.pdf.
---------------------------------------------------------------------------
    The Biden administration also plans to transfer section 117 
enforcement away from the Office of General Counsel and into 
the Office of Federal Student Aid (FSA).\30\ Due to FSA's 
workload, the move of section 117 enforcement raises concerns 
about the Department's resource allocation and prioritization.
---------------------------------------------------------------------------
    \30\https://www.federalregister.gov/documents/2023/05/04/2023-
09503/agency-information-collection-activities-submission-to-the-
office-of-management-and-budget-for.
---------------------------------------------------------------------------

DETERRENT Act

    On October 11, 2023, Representative Steel and Chairwoman 
Foxx introduced the DETERRENT Act. The legislation brings much-
needed transparency, accountability, and clarity to foreign 
gift reporting requirements for colleges and universities 
across the nation in five key policies.
    First, the bill slashes the foreign gift reporting 
threshold. The bill lowers the annual threshold from $250,000 
to $50,000 for all foreign sources and lowers the threshold 
further to $0 for countries of concern\31\ (China, Russia, 
Iran, and North Korea) or foreign entities of concern\32\ such 
as foreign terrorist organizations, individuals engaged in 
espionage, and academic institutions violating research 
integrity. The bill also prohibits all contracts with a foreign 
country of concern or entity of concern, except with an annual 
waiver from ED.
---------------------------------------------------------------------------
    \31\As defined in 10 U.S.C. 4872.
    \32\As defined in 42 U.S.C. 19221.
---------------------------------------------------------------------------
    Second, the bill closes reporting loopholes and provides 
transparency. The bill requires institutions to submit names 
and addresses of foreign donors. Institutions also must submit 
the intended use of the gift or contract and maintain a 
compliance officer who personally certifies the accuracy of 
reports. The bill also requires institutions to report foreign 
gifts given to their affiliated entities, such as university 
foundations.
    Third, the bill requires disclosures of foreign gifts or 
contracts to individual research faculty at institutions 
receiving more than $50 million annually in federal funds or 
receiving international education funds under Title VI by 
requiring their faculty involved in research to report foreign 
gifts and contracts. These individual faculty reports would be 
published on the institution's website.
    Fourth, the bill reveals troubling foreign investments in 
private endowments. The bill requires private institutions with 
endowments above $6 billion or with investments of concern 
above $250 million to report the value of those investments 
annually. Investments of concern are defined as investments in 
a country of concern or an entity of concern.
    Finally, the bill enacts increasing penalties for 
noncompliance. If an institution is found to be in willful 
violation after an ED investigation and subsequent court order, 
the institution is required to pay the full cost of the court 
fees as well as a financial penalty that increases after the 
first violation. After three consecutive years of any 
violations, an institution loses HEA Title IV eligibility for a 
minimum of two years.
    Comments of support for H.R. 5933 were received by the 
Defense of Freedom Institute, Foundation for Defense of 
Democracies Action, America First Policy Institute, the Middle 
East Forum, and National Association of Scholars.

                               CONCLUSION

    America's foreign adversaries are targeting the nation's 
students. They attempt to steal research, push propaganda, and 
censor free speech. Colleges and universities are on the 
frontlines facing this malign foreign interference. Section 117 
of the HEA is a key tool for combatting the threats posed by 
foreign adversaries, but the Biden administration and many of 
the most prominent U.S. institutions have failed to take the 
threat of foreign influence seriously. The DETERRENT Act brings 
much needed transparency to the financial ties between 
postsecondary education and foreign entities. This bill will 
keep America's adversaries at bay and hold U.S. institutions to 
a higher standard.

                                Summary


                  H.R. 5933 SECTION-BY-SECTION SUMMARY

Section 117. Disclosures of foreign gifts

    The bill strikes and replaces the existing section 117, 
which requires biannual reports for gifts or contracts above 
$250,000. The new section 117 created by the bill includes the 
following new requirements.
           An institution shall file a disclosure 
        report annually on July 31 following a year when:
                  An institution received a gift 
                from, or entered into a contract with, a 
                foreign source (other than a foreign country of 
                concern or foreign entity of concern) with a 
                value of $50,000 or more, or an undetermined 
                value.
                  An institution receives a gift of 
                any dollar amount from a foreign country of 
                concern or from a foreign entity of concern.
                  An institution enters into a 
                contract with a foreign country of concern or 
                foreign entity of concern after receiving a 
                waiver for such contract.
                  An institution is substantially 
                controlled by a foreign source.
           A gift to, or contract with, an affiliated 
        entity of an institution shall be considered a gift to 
        or contract with such institution.
           All disclosure reports will contain the 
        following:
                  the name of the individual, 
                department, or benefactor at the institution 
                receiving the gift or carrying out the 
                contract;
                  the intended purpose of the gift 
                or contract;
                  a description of any restrictions 
                or conditions on the contract;
                  if a gift, the date received and 
                the fair market dollar amount of the gift; and,
                  if a contract, the start and end 
                date of the contract.
                          D Institutions will also be required 
                        to maintain copies of contracts 
                        translated into English.
           A In addition to other requirements, gifts 
        from or contracts with foreign governments will also 
        contain:
                   the name of the government;
                   the department, agency, office, 
                or division of the foreign government that 
                approved the gift or contract;
                   the physical mailing address of 
                the relevant foreign government department, 
                agency, office, or division.
           In addition to other requirements, gifts 
        from or contracts with foreign sources that are not 
        foreign governments or foreign entities of concern will 
        also contain the following:
                   the legal name of the source or, 
                if unavailable, a signed statement that the 
                institution has reasonably attempted to obtain 
                such a name;
                   if the source is a person, the 
                country of citizenship or, if not known, the 
                principal country of residence;
                   if the source is a legal entity, 
                the country of incorporation or, if not known, 
                the principal place of business; and
                   the physical mailing address of 
                the source or, if unavailable, a signed 
                statement that the institution has reasonably 
                attempted to obtain such address.
           In addition to all other requirements, 
        contracts with foreign governments of concern or 
        foreign entities of concern will also contain the 
        following:
                   a complete and unredacted text 
                of the original contract translated into 
                English;
                   a copy of the waiver from the 
                Secretary allowing such a contract; and
                   the statement submitted by the 
                institution to receive such a waiver.
           In addition to all other requirements, 
        institutions substantially controlled by a foreign 
        source must also report:
                   the legal name and address of 
                the foreign source that owns or controls the 
                institution;
                   the date on which the foreign 
                source assumed ownership or control; and
                   any changes in program or 
                structure resulting from the change in 
                ownership or control.
           Any translations must be done by a person 
        who is not affiliated with the foreign source.
           Not later than 60 days before the July 31 
        immediately following the date of enactment of the 
        DETERRENT Act, the Secretary shall establish and 
        maintain a searchable, public database on a website of 
        the Department. This database shall:
                   contain all reports submitted, 
                uploaded to the database by the Secretary no 
                later than 30 days after submission;
                   include, in electronic and 
                downloadable format, any information provided 
                in such reports, excluding the names and 
                addresses prohibited from being disclosed;
                   be searchable and sortable by 
                date filed, by date of the gift received or 
                contract entered into, by attributable country 
                of the gift or contract, and by institution;
                   indicate whether a gift is from 
                a foreign government or from a foreign source 
                that is not a foreign government; and
                   indicate when a report does not 
                contain the name or address of a foreign 
                source.
           Names and addresses of foreign sources that 
        are natural persons shall not be disclosed under such 
        public database or under FOIA requests.
           Within 30 days of receiving a disclosure 
        report, the Secretary shall transmit an unredacted copy 
        of such report (that includes the name and addresses) 
        to the Director of the Federal Bureau of Investigation, 
        the Director of National Intelligence, the Director of 
        the Central Intelligence Agency, the Secretary of 
        State, the Secretary of Defense, the Attorney General, 
        the Secretary of Commerce, the Secretary of Homeland 
        Security, the Secretary of Energy, the Director of the 
        National Science Foundation, and the Director of the 
        National Institutes of Health.
           Institutions must designate a compliance 
        officer who is a current employee or legally authorized 
        agent and is responsible for personally certifying 
        compliance.
           The bill defines the following terms: 
        affiliated entity; attributable country; contract; 
        foreign country of concern; foreign entity of concern; 
        foreign source; gift; institution; restricted or 
        conditional gift or contract.

Section 117a. Prohibitions on contracts with certain foreign entities 
        and countries

           Prohibits an institution from entering into 
        any contracts with foreign entities of concern or 
        countries of concern.
           Sets the following parameters regulating 
        waivers:
                   Institutions may, not later than 
                120 days prior to entering into a contract, 
                submit a waiver request to the Secretary.
                   Waivers shall last for one year. 
                Institutions may apply for renewals of waivers 
                for contracts that remain unchanged.
                   If an institution is not granted 
                a waiver, it must not enter into the contract 
                or terminate it.
                   The Secretary shall notify the 
                institution not later than 60 days before the 
                institution enters into the contract of the 
                waiver approval or denial.
                   The Secretary shall consult with 
                the Director of the Federal Bureau of 
                Investigation, the Director of National 
                Intelligence, the Director of the Central 
                Intelligence Agency, the Secretary of State, 
                the Secretary of Defense, the Attorney General, 
                the Secretary of Commerce, the Secretary of 
                Homeland Security, the Secretary of Energy, the 
                Director of the National Science Foundation, 
                and the Director of the National Institutes of 
                Health regarding the waiver.
                   Not less than two weeks prior to 
                issuing the waiver, the Secretary shall notify 
                the authorizing committees regarding the intent 
                of and justification for the waiver.
           If an institution has a contract with an 
        entity that is designated as an entity of concern 
        during the contract, the institution has 60 days to 
        withdraw from the contract.
           If an institution has a contract with an 
        entity of concern prior to the enactment of the 
        DETERRENT Act, the institution shall submit a waiver 
        request and shall immediately be granted a waiver 
        ending one year after the date of enactment of the Act 
        or the date of the existing contract, whichever is 
        sooner.
           All past reports and information shall be 
        shared with the Director of the Federal Bureau of 
        Investigation, the Director of National Intelligence, 
        the Director of the Central Intelligence Agency, the 
        Secretary of State, the Secretary of Defense, the 
        Attorney General, the Secretary of Commerce, the 
        Secretary of Homeland Security, the Secretary of 
        Energy, the Director of the National Science 
        Foundation, and the Director of the National Institutes 
        of Health.

Section 117b. Institutional policy regarding foreign gifts and 
        contracts to faculty and staff

           Institutions receiving more than $50,000,000 
        in federal funds in any given year in the last five 
        years, or institutions receiving funds under Title VI 
        of HEA, are required to maintain the following items.
                   A policy requiring faculty, 
                professional staff, and other staff engaged in 
                research and development to report on July 31 
                the following:
                          D any gift from a foreign source 
                        greater than a minimal value (defined 
                        in section 7342(a) of title 5, United 
                        States Code) or of undetermined value, 
                        including the date received;
                          D any contract with a foreign source 
                        with a value above $5,000 or of 
                        undetermined value; and
                          D any contract with a foreign source 
                        or country of concern of any value.
                          D A publicly available and searchable 
                        database on the website of the 
                        institution, sortable and searchable by 
                        date received (if a gift), date 
                        commenced (if a contract), and the 
                        attributable country.
                   A plan to identify and manage 
                potential information gathering by foreign 
                sources through espionage. Such a plan shall 
                include:
                          D periodic communications;
                          D accurate reporting; and
                          D enforcement.

Section 117c. Investment disclosure report

           Private institutions with endowments above 
        $6 billion or with investments of concern above $250 
        million shall report the following on July 31:
                   a list of the investments of 
                concern purchased, sold, or held during such 
                calendar year;
                   the aggregate fair market value 
                of all investments of concern held as of the 
                close of such calendar year;
                   the combined value of all 
                investments of concern sold over the course of 
                such calendar year, as measured by the fair 
                market value of such investments at the time of 
                the sale;
                   the combined value of all 
                capital gains from such sales of investments of 
                concern.
           Investments acquired through a regulated 
        investment company, exchange traded fund, or any other 
        pooled investment shall be treated as owned, unless 
        otherwise noted.
           The Secretary, in consultation with the 
        Department of the Treasury, will establish procedures 
        for the exclusion of a regulated investment company, 
        exchange traded fund, or any other pooled investment.
           Not later than 60 days before the July 31 
        immediately following the date of enactment of the 
        DETERRENT Act, the Secretary shall establish and 
        maintain a searchable, public database on a website of 
        the Department. This database shall:
                   contain all reports submitted, 
                uploaded to the database by the Secretary no 
                later than 30 days after submission;
                   include, in electronic and 
                downloadable format, any information provided 
                in such reports; and
                   be searchable and sortable, and 
                able to be individually identified and 
                compared.
           Defines investment of concern and specified 
        interest.

Section 117d. Enforcement

           Requires the Secretary (acting through the 
        General Counsel of the Department) to conduct 
        investigations of possible violations.
           Whenever it appears that an institution has 
        knowingly or willfully failed to comply, 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 to compel compliance.
           Maintains the current law requirement that 
        an institution that is compelled to comply shall pay 
        the full costs to the United States of obtaining 
        compliance with the requirement of such section, 
        including all associated costs of investigation and 
        enforcement.
           In addition to paying the cost of 
        enforcement, an institution shall also be subject to 
        the following fines from the Secretary:
                   Violations of Section 117
                          D First time violations shall be no 
                        less than $50,000 but not more than the 
                        monetary value of the gift from, or 
                        contract with, the foreign source.
                          D In the case of a gift or contract 
                        of no value or of indeterminable value, 
                        the fine shall be not less than 1 
                        percent and not more than 10 percent of 
                        the total amount of federal funds 
                        received.
                          D Violations from institutions 
                        substantially controlled by a foreign 
                        source shall be no less than 10 percent 
                        of the total amount of federal funds 
                        received.
                          D Subsequent violations shall be no 
                        less than $100,000 but not more than 
                        twice the monetary value of the gift 
                        from, or contract with, the foreign 
                        source.
                          D In the case of a gift or contract 
                        of no value or of indeterminable value, 
                        the subsequent fine shall be not less 
                        than 10 percent of the total amount of 
                        federal funds received.
                          D Subsequent violations from 
                        institutions substantially controlled 
                        by a foreign source shall be no less 
                        than 20 percent of the total amount of 
                        federal funds received.
                   Violations of Section 117A
                          D First time violations shall be not 
                        less than 5 percent and not more than 
                        10 percent of the total amount of 
                        federal funds received by the 
                        institution.
                          D Subsequent violations shall be not 
                        less than 20 percent of the total 
                        amount of federal funds received.
                   Violations of Section 117B
                          D First time violations shall be not 
                        less than $250,000 and not more than 
                        the total amount of gifts and contracts 
                        reported by faculty and staff.
                          D Subsequent violations shall be not 
                        less than $500,000 and not more than 
                        twice the total amount of gifts and 
                        contracts reported by faculty and 
                        staff.
                   Violations of Section 117C
                          D First time violations shall be not 
                        less than 50 percent and not more than 
                        100 percent of the sum of the aggregate 
                        fair value market value of all 
                        investments of concern held and sold by 
                        such institution at the close of the 
                        calendar year.
                          D Subsequent violations shall be not 
                        less than 100 percent and not more than 
                        200 percent of the sum of the aggregate 
                        fair value market value of all 
                        investments of concern held and sold by 
                        such institution at the close of the 
                        calendar year.
           ED shall maintain a single point of contact 
        to:
                   receive and respond to inquiries 
                and requests for technical assistance from IHEs 
                regarding compliance;
                   coordinate and implement 
                technical improvements to the database, 
                including:
                          D improving upload functionality by 
                        allowing for batch reporting;
                          D publishing and maintaining a 
                        database users guide annually, 
                        including areas such as how to edit an 
                        entry and how to report errors; and
                          D creating a standing user group, 
                        meeting biannually, to discuss possible 
                        database improvements, which will 
                        include members from a range of 
                        institutions and issue recommendations 
                        for technical improvements.
                   provide, every 90 days, updates 
                on active and pending investigations to 
                authorizing committees and the institution 
                being investigated; and
                   maintain a publicly accessible 
                list of all foreign countries and entities of 
                concern and notify all schools of any changes 
                within seven days.
           Institutions with any violations of this 
        section in three consecutive years shall be considered 
        in violation of the Program Participation Agreement.
                   Such violation will result in 
                the loss of eligibility to participate in Title 
                IV programs for two institutional years.
                   Institutions must demonstrate 
                compliance in two subsequent institutional 
                years to regain eligibility.
           The Government Accountability Office shall 
        conduct a study identifying ways to improve 
        intergovernmental agency coordination regarding 
        implementation and enforcement.

                       Explanation of Amendments

    The amendments, including the amendment in the nature of a 
substitute, are explained in the body of this report.

              Aplication of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch. H.R. 5933 brings much-needed transparency, 
accountability, and clarity to foreign gift reporting 
requirements for colleges and universities across the nation to 
protect our nation's interests against adversarial countries.

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act, P.L. 104-4) requires a statement of 
whether the provisions of the reported bill include unfunded 
mandates. This issue is addressed in the CBO letter.

                           Earmark Statement

    H.R. 5933 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of House rule XXI.

                            Roll Call Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee Report to include for 
each record vote on a motion to report the measure or matter 
and on any amendments offered to the measure or matter the 
total number of votes for and against and the names of the 
Members voting for and against.


         Statement of General Performance Goals and Objectives

    In accordance with clause (3)(c) of House rule XIII, the 
goal of H.R. 5933, the DETERRENT Act, is to protect our 
nation's interests against adversarial foreign countries by 
bringing transparency, accountability, and clarity to foreign 
gift reporting requirements for colleges and universities.

                    Duplication of Federal Programs

    No provision of H.R. 5933 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the committee's oversight findings and recommendations are 
reflected in the body of this report.

                       Required Committee Hearing

    In compliance with clause 3(c)(6) of rule XIII the 
following hearing held during the 118th Congress was used to 
develop or consider H.R. 5933: On July 13, 2023, the Committee 
on Education and the Workforce held a hearing on ``Exposing the 
Dangers of the Influence of Foreign Adversaries on College 
Campuses.''

               New Budget Authority and CBO Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause 3(c)(3) of rule XIII of the Rules of 
the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the committee has received 
the following estimate for H.R. 5933 from the Director of the 
Congressional Budget Office:




    H.R. 5933 would expand disclosure and reporting 
requirements for institutions of higher education that receive 
gifts from or enter into contracts with foreign countries or 
entities. Institutions that fail to meet the new requirements 
could be assessed civil penalties or lose eligibility for 
federal student financial aid. Specifically, H.R. 5933 would:
           Reduce from $250,000 to $50,000 the value of 
        gifts and contracts from foreign sources that 
        institutions would need to disclose annually in reports 
        to the Department of Education,
           Prohibit institutions from entering into 
        contracts with any foreign entity of concern (China or 
        Russia, for example) without obtaining a waiver,
           Require certain institutions to report on 
        gifts or contracts between faculty members and foreign 
        entities, and
           Require private institutions with endowments 
        greater than $6 billion or more than $250 million in 
        specified investments to file investment disclosure 
        reports annually.
    In addition, H.R. 5933 would require the department to 
create a searchable database with information about 
institutions' foreign gifts, contracts, and investments. 
Finally, the bill would require the Government Accountability 
Office (GAO) to study how to improve coordination among federal 
agencies for implementing and enforcing the bill's provisions.
    H.R. 5933 would authorize the Secretary of Education to 
assess civil penalties and fines on institutions that fail to 
meet the new requirements; such penalties are recorded in the 
federal budget as revenues. Additionally, institutions that 
fail to meet the new requirements for three consecutive years 
would lose access to federal student financial aid for two 
years. Outlays for some federal student aid programs, such as 
the federal student loan program, are recorded in the budget as 
direct spending; spending for other programs, such as the 
Federal Work-Study Program, is funded through annual 
appropriations. CBO expects that institutions would generally 
comply with the new requirements, and that any decreases in 
spending on federal student aid or increases in revenues from 
civil penalties over the 2024-2033 period would be 
insignificant.
    Using information about the cost of similar activities, CBO 
estimates that it would cost the Department of Education and 
GAO less than $500,000, in total, over the 2024-2028 period to 
implement the bill. That spending would be subject to the 
availability of appropriated funds.
    The CBO staff contact for this estimate is Leah Koestner. 
The estimate was reviewed by H. Samuel Papenfuss, Deputy 
Director of Budget Analysis.
                                         Phillip L. Swagel,
                             Director, Congressional Budget Office.

                        Committee Cost Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.R. 5933. 
However, clause 3(d)(2)(B) of that rule provides that this 
requirement does not apply when, as with the present report, 
the committee has included in its report a timely submitted 
cost estimate of the bill prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

                      HIGHER EDUCATION ACT OF 1965



           *       *       *       *       *       *       *
TITLE I--GENERAL PROVISIONS

           *       *       *       *       *       *       *


PART B--ADDITIONAL GENERAL PROVISIONS

           *       *       *       *       *       *       *


[SEC. 117. DISCLOSURES OF FOREIGN GIFTS.

  [(a) Disclosure Report.--Whenever any institution is owned or 
controlled by a foreign source or receives a gift from or 
enters into a contract with a foreign source, 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, the institution shall file a disclosure 
report with the Secretary on January 31 or July 31, whichever 
is sooner.
  [(b) Contents of Report.--Each report to the Secretary 
required by this section shall contain the following:
          [(1) 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 
        country to which a gift is attributable is 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.
          [(2) 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.
          [(3) In the case of an institution which is owned or 
        controlled by a foreign source, the identity of the 
        foreign source, the date on which the foreign source 
        assumed ownership or control, and any changes in 
        program or structure resulting from the change in 
        ownership or control.
  [(c) Additional Disclosures for Restricted and Conditional 
Gifts.--Notwithstanding the provisions of subsection (b), 
whenever any institution receives a restricted or conditional 
gift or contract from a foreign source, the institution shall 
disclose the following:
          [(1) For such 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 which 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.
          [(2) 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.
  [(d) Relation to Other Reporting Requirements.--
          [(1) State requirements.--If an institution described 
        under 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 subsection (a). 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).
  [(e) Public Inspection.--All disclosure reports required by 
this section shall be public records open to inspection and 
copying during business hours.
  [(f) Enforcement.--
          [(1) 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.
          [(2) 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.
  [(g) Regulations.--The Secretary may promulgate regulations 
to carry out this section.
  [(h) Definitions.--For the purpose of this section--
          [(1) the term ``contract'' means 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;
          [(2) 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; and
                  [(D) an agent, including a subsidiary or 
                affiliate of a foreign legal entity, acting on 
                behalf of a foreign source;
          [(3) the term ``gift'' means any gift of money or 
        property;
          [(4) the term ``institution'' means any institution, 
        public or private, or, if a multicampus institution, 
        any single campus of such institution, in any State, 
        that--
                  [(A) is legally authorized within such State 
                to provide a program of education beyond 
                secondary school;
                  [(B) 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
                  [(C) 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
          [(5) 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.]

SEC. 117. DISCLOSURES OF FOREIGN GIFTS.

  (a) Disclosure Reports.--
          (1) Aggregate gifts and contract disclosures.--An 
        institution shall file a disclosure report in 
        accordance with subsection (b)(1) with the Secretary on 
        July 31 of the calendar year immediately following any 
        calendar year in which--
                  (A) the institution receives a gift from, or 
                enters into a contract with, a foreign source 
                (other than a foreign country of concern or 
                foreign entity of concern)--
                          (i) 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 the calendar year; or
                          (ii) the value of which is 
                        undetermined; or
                  (B) the institution receives a gift from a 
                foreign country of concern or foreign entity of 
                concern, or, upon receiving a waiver under 
                section 117A to enter into a contract with such 
                a country or entity, enters into such contract, 
                without regard to the value of such gift or 
                contract.
          (2) Foreign source ownership or control 
        disclosures.--In the case of an institution that is 
        substantially controlled (as described in section 
        668.174(c)(3) of title 34, Code of Federal Regulations) 
        (or successor regulations)) by a foreign source, the 
        institution shall file a disclosure report in 
        accordance with subsection (b)(2) with the Secretary on 
        July 31 of each year.
          (3) Treatment of affiliated entities.--For purposes 
        of this section, any gift to, or contract with, an 
        affiliated entity of an institution shall be considered 
        a gift to or contract with, respectively, such 
        institution.
  (b) Contents of Report.--
          (1) Gifts and contracts.--Each report to the 
        Secretary required under subsection (a)(1) shall 
        contain the following:
                  (A) With respect to a gift received from, or 
                a contract entered into with, any foreign 
                source--
                          (i) the terms of such gift or 
                        contract, including--
                                  (I) the name of the 
                                individual, department, or 
                                benefactor at the institution 
                                receiving the gift or carrying 
                                out the contract;
                                  (II) the intended purpose of 
                                such gift or contract, as 
                                provided to the institution by 
                                such foreign source, or if no 
                                such purpose is provided by 
                                such foreign source, the 
                                intended use of such gift or 
                                contract, as provided by the 
                                institution; and
                                  (III) in the case of a 
                                restricted or conditional gift 
                                or contract, a description of 
                                the restrictions or conditions 
                                of such gift or contract;
                          (ii) with respect to a gift--
                                  (I) the total fair market 
                                dollar amount or dollar value 
                                of the gift, as of the date of 
                                submission of such report; and
                                  (II) the date on which the 
                                institution received such gift;
                          (iii) with respect to a contract--
                                  (I) the date on which such 
                                contract commences;
                                  (II) as applicable, the date 
                                on which such contract 
                                terminates; and
                                  (III) an assurance that the 
                                institution will--
                                          (aa) maintain an 
                                        unredacted copy of the 
                                        contract until the 
                                        latest of--
                                                  (AA) the date 
                                                that is 4 years 
                                                after the date 
                                                on which the 
                                                contract 
                                                commences;
                                                  (BB) the date 
                                                on which the 
                                                contract 
                                                terminates; or
                                                  (CC) the last 
                                                day of any 
                                                period that 
                                                applicable 
                                                State law 
                                                requires a copy 
                                                of such 
                                                contract to be 
                                                maintained; and
                                          (bb) upon request of 
                                        the Secretary during an 
                                        investigation under 
                                        subsection (f)(1), 
                                        produce such an 
                                        unredacted copy of the 
                                        contract; and
                          (iv) an assurance that in a case in 
                        which information is required to be 
                        disclosed under this section with 
                        respect to a gift or contract that is 
                        not in English, such information is 
                        translated into English in compliance 
                        with the requirements of subsection 
                        (c)(1).
                  (B) With respect to a gift received from, or 
                a contract entered into with, a foreign source 
                that is a foreign government (other than the 
                government of a foreign country of concern)--
                          (i) the name of such foreign 
                        government;
                          (ii) the department, agency, office, 
                        or division of such foreign government 
                        that approved such gift or contract, as 
                        applicable; and
                          (iii) the physical mailing address of 
                        such department, agency, office, or 
                        division.
                  (C) With respect to a gift received from, or 
                contract entered into with, a foreign source 
                (other than a foreign government subject to the 
                requirements of subparagraph (B))--
                          (i) the legal name of the foreign 
                        source, or, if such name is not 
                        available, a statement certified by the 
                        compliance officer in accordance with 
                        subsection (f)(2) that the institution 
                        has reasonably attempted to obtain such 
                        name;
                          (ii) in the case of a foreign source 
                        that is a natural person, the country 
                        of citizenship of such person, or, if 
                        such country is not known, the 
                        principal country of residence of such 
                        person;
                          (iii) in the case of a foreign source 
                        that is a legal entity, the country in 
                        which such entity is incorporated, or 
                        if such information is not available, 
                        the principal place of business of such 
                        entity; and
                          (iv) the physical mailing address of 
                        such foreign source, or if such address 
                        is not available, a statement certified 
                        by the compliance officer in accordance 
                        with subsection (f)(2) that the 
                        institution has reasonably attempted to 
                        obtain such address.
                  (D) With respect to a contract entered into 
                with a foreign source that is a foreign country 
                of concern or a foreign entity of concern--
                          (i) a complete and unredacted text of 
                        the original contract, and if such 
                        original contract is not in English, a 
                        translated copy of the text into 
                        English;
                          (ii) a copy of the waiver received 
                        under section 117A for such contract; 
                        and
                          (iii) the statement submitted by the 
                        institution for purposes of receiving 
                        such a waiver under section 117A(b)(1).
          (2) Foreign source ownership or control.--Each report 
        to the Secretary required under subsection (a)(2) shall 
        contain--
                  (A) the legal name and address of the foreign 
                source that owns or controls the institution;
                  (B) the date on which the foreign source 
                assumed ownership or control; and
                  (C) any changes in program or structure 
                resulting from the change in ownership or 
                control.
  (c)  Translation Requirements.--Any information required to 
be disclosed under this section with respect to a gift or 
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 foreign source involved with 
such gift or contract.
  (d) Public Inspection.--
          (1) Database requirement.--Beginning not later than 
        60 days before the July 31 immediately following the 
        date of the enactment of the DETERRENT Act, the 
        Secretary shall--
                  (A) establish and maintain a searchable 
                database on a website of the Department, under 
                which all reports submitted under this section 
                (including any report submitted under this 
                section before the date of the enactment of the 
                DETERRENT Act)--
                          (i) are made publicly available (in 
                        electronic and downloadable format), 
                        including any information provided in 
                        such reports (other than the 
                        information prohibited from being 
                        publicly disclosed pursuant to 
                        paragraph (2));
                          (ii) can be individually identified 
                        and compared; and
                          (iii) are searchable and sortable 
                        by--
                                  (I) the date the institution 
                                filed such report;
                                  (II) the date on which the 
                                institution received the gift, 
                                or entered into the contract, 
                                which is the subject of the 
                                report;
                                  (III) the attributable 
                                country of such gift or 
                                contract; and
                                  (IV) the name of the foreign 
                                source (other than a foreign 
                                source that is a natural 
                                person);
                  (B) not later than 30 days after receipt of a 
                disclosure report under this section, include 
                such report in such database;
                  (C) indicate, as part of the public record of 
                a report included in such database, whether the 
                report is with respect to a gift received from, 
                or a contract entered into with--
                          (i) a foreign source that is a 
                        foreign government; or
                          (ii) a foreign source that is not a 
                        foreign government; and
                  (D) with respect to a disclosure report that 
                does not include the name or address of a 
                foreign source, indicate, as part of the public 
                record of such report included in such 
                database, that such report did not include such 
                information.
          (2) Name and address of foreign source.--The 
        Secretary shall not disclose the name or address of a 
        foreign source that is a natural person (other than the 
        attributable country of such foreign source) included 
        in a disclosure report--
                  (A) as part of the public record of such 
                disclosure report described in paragraph (1); 
                or
                  (B) in response to a request under section 
                552 of title 5, United States Code (commonly 
                known as the ``Freedom of Information Act''), 
                pursuant to subsection (b)(3) of such section.
  (e) Interagency Information Sharing.--Not later than 30 days 
after receiving a disclosure report from an institution in 
compliance with this section, the Secretary shall transmit an 
unredacted copy of such report (that includes the name and 
address of a foreign source disclosed in such report) to the 
Director of the Federal Bureau of Investigation, the Director 
of National Intelligence, the Director of the Central 
Intelligence Agency, the Secretary of State, the Secretary of 
Defense, the Attorney General, the Secretary of Commerce, the 
Secretary of Homeland Security, the Secretary of Energy, the 
Director of the National Science Foundation, and the Director 
of the National Institutes of Health.
  (f) Compliance Officer.--Any institution that is required to 
file a disclosure report under subsection (a) shall designate, 
before the filing deadline for such report, and maintain a 
compliance officer, who shall--
          (1) be a current employee or legally authorized agent 
        of such institution; and
          (2) be responsible, on behalf of the institution, for 
        personally certifying accurate compliance with the 
        foreign gift reporting requirement under this section.
  (g) Definitions.--In this section:
          (1) Affiliated entity.--The term ``affiliated 
        entity'', when used with respect to an institution, 
        means an entity or organization that operates primarily 
        for the benefit of, or under the auspices of, such 
        institution, including a foundation of the institution 
        or a related entity (such as any educational, cultural, 
        or language entity).
          (2) Attributable country.--The term ``attributable 
        country'' means--
                  (A) the country of citizenship of a foreign 
                source who is a natural person, or, if such 
                country is unknown, the principal residence (as 
                applicable) of such foreign source; or
                  (B) the country of incorporation of a foreign 
                source that is a legal entity, or, if such 
                country is unknown, the principal place of 
                business (as applicable) of such foreign 
                source.
          (3) Contract.--The term ``contract''--
                  (A) means--
                          (i) any agreement for the acquisition 
                        by purchase, lease, or barter of 
                        property or services by the foreign 
                        source;
                          (ii) any affiliation, agreement, or 
                        similar transaction with a foreign 
                        source that involves the use or 
                        exchange of an institution's name, 
                        likeness, time, services, or resources; 
                        and
                          (iii) any agreement for the 
                        acquisition by purchase, lease, or 
                        barter, of property or services from a 
                        foreign source (other than an arms-
                        length agreement for such acquisition 
                        from a foreign source that is not a 
                        foreign country of concern or a foreign 
                        entity of concern); and
                  (B) does not include an agreement made 
                between an institution and a foreign source 
                regarding any payment of one or more elements 
                of a student's cost of attendance (as such term 
                is defined in section 472), unless such an 
                agreement is made for more than 15 students or 
                is made under a restricted or conditional 
                contract.
          (4) Foreign source.--The term ``foreign source'' 
        means--
                  (A) a foreign government, including an agency 
                of a foreign government;
                  (B) a legal entity, governmental or 
                otherwise, created under the laws of a foreign 
                state or states;
                  (C) a legal entity, governmental or 
                otherwise, substantially controlled (as 
                described in section 668.174(c)(3) of title 34, 
                Code of Federal Regulations) (or successor 
                regulations)) by a foreign source;
                  (D) a natural person who is not a citizen or 
                a national of the United States or a trust 
                territory or protectorate thereof; and
                  (E) an agent of a foreign source, including--
                          (i) a subsidiary or affiliate of a 
                        foreign legal entity, acting on behalf 
                        of a foreign source;
                          (ii) a person that operates primarily 
                        for the benefit of, or under the 
                        auspices of, a foreign source, 
                        including a foundation or a related 
                        entity (such as any educational, 
                        cultural, or language entity); and
                          (iii) a person who is an agent of a 
                        foreign principal (as such term is 
                        defined in section 1 of the Foreign 
                        Agents Registration Act of 1938 (22 
                        U.S.C. 611).
          (5) Gift.--The term ``gift''--
                  (A) means any gift of money, property, 
                resources, staff, or services; and
                  (B) does not include--
                          (i) any payment of one or more 
                        elements of a student's cost of 
                        attendance (as such term is defined in 
                        section 472) to an institution by, or 
                        scholarship from, a foreign source who 
                        is a natural person, acting in their 
                        individual capacity and not as an agent 
                        for, at the request or direction of, or 
                        on behalf of, any person or entity 
                        (except the student), made for not more 
                        than 15 students, and that is not made 
                        under a restricted or conditional 
                        contract with such foreign source; or
                          (ii) assignment or license of 
                        registered industrial and intellectual 
                        property rights, such as patents, 
                        utility models, trademarks, or 
                        copyrights, or technical assistance, 
                        that are not identified as being 
                        associated with a national security 
                        risk or concern by the Federal Research 
                        Security Council as described under 
                        section 7902 of title 31, United States 
                        Code; or
                          (iii) decorations (as such term is 
                        defined in section 7342(a) of title 5, 
                        United States Code).
          (6) Restricted or conditional gift or contract.--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, institutes, instructional programs, 
                research or lecture programs, or new faculty 
                positions;
                  (C) the selection, admission, or education of 
                students;
                  (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; or
                  (E) any other restriction on the use of a 
                gift or contract.

SEC. 117A. PROHIBITION ON CONTRACTS WITH CERTAIN FOREIGN ENTITIES AND 
                    COUNTRIES.

  (a) In General.--An institution shall not enter into a 
contract with a foreign country of concern or a foreign entity 
of concern.
  (b) Waivers.--
          (1) Submission.--
                  (A) First waiver requests.--
                          (i) In general.--An institution that 
                        desires to enter into a contract with a 
                        foreign entity of concern or a foreign 
                        country of concern may submit to the 
                        Secretary, not later than 120 days 
                        before the institution enters into such 
                        a contract, a request to waive the 
                        prohibition under subsection (a) with 
                        respect to such contract.
                          (ii) Contents of waiver request.--A 
                        waiver request submitted by an 
                        institution 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 
                                section 117(c)); and
                                  (II) a statement that--
                                          (aa) is signed by the 
                                        point of contact of the 
                                        institution described 
                                        in section 117(h); 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.--An institution 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 the institution 
                        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.
          (2) Waiver issuance.--The Secretary--
                  (A) not later than 60 days before an 
                institution enters into a contract pursuant to 
                a waiver request under paragraph (1)(A), or 
                before a contract described in paragraph 
                (1)(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; 
                        and
                  (B) may only issue a waiver under this 
                section to an institution if the Secretary 
                determines, in consultation with the heads of 
                each agency and department listed in section 
                117(e), that the contract for which the waiver 
                is being requested is for the benefit of the 
                institution's mission and students and will 
                promote the security, stability, and economic 
                vitality of the United States.
          (3) Disclosure.--Not less than 2 weeks prior to 
        issuing a waiver under paragraph (2), the Secretary 
        shall notify the--
                  (A) the Committee on Education and the 
                Workforce of the House of Representatives; and
                  (B) the Committee on Health, Education, 
                Labor, and Pensions of the Senate,
        of the intent to issue the waiver, including a 
        justification for the waiver.
          (4) Application of waivers.--A waiver issued under 
        this section to an institution with respect to a 
        contract shall only--
                  (A) waive the prohibition under subsection 
                (a) 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.
  (c) Designation During Contract Term.--In the case of an 
institution that enters into a contract with a foreign source 
that is not a foreign country of concern or a foreign entity of 
concern but which, during the term of such contract, is 
designated as a foreign country of concern or foreign entity of 
concern, such institution shall terminate such contract not 
later than 60 days after the Secretary notifies the institution 
of such designation.
  (d) Contracts Prior to Date of Enactment.--
          (1) In general.--In the case of an institution that 
        has entered into a contract with a foreign country of 
        concern or foreign entity of concern prior to the date 
        of the enactment of the DETERRENT Act--
                  (A) the institution shall immediately submit 
                to the Secretary a waiver request in accordance 
                with subsection (b)(1)(A)(ii); and
                  (B) the Secretary shall, upon receipt of the 
                request submitted under paragraph (1), 
                immediately issue a waiver to the institution 
                for a period beginning on the date on which the 
                waiver is issued and ending on the sooner of--
                          (i) the date that is 1 year after the 
                        date of the enactment of the DETERRENT 
                        Act; or
                          (ii) the date on which the contract 
                        terminates.
          (2) Renewal.--An institution 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 (b)(1)(B).
  (e) Contract Defined.--The term ``contract'' has the meaning 
given such term in section 117(g).

SEC. 117B. INSTITUTIONAL POLICY REGARDING FOREIGN GIFTS AND CONTRACTS 
                    TO FACULTY AND STAFF.

  (a) Requirement to Maintain Policy and Database.--Beginning 
not later than 90 days after the date of the enactment of the 
DETERRENT Act, each institution described in subsection (b) 
shall maintain--
          (1) a policy requiring covered individuals employed 
        at the institution to disclose in a report to such 
        institution on July 31 of each calendar year that 
        begins after the year in which such enactment date 
        occurs--
                  (A) any gift received from a foreign source 
                in the previous calendar year, the value of 
                which is greater than the minimal value (as 
                such term is defined in section 7342(a) of 
                title 5, United States Code) or is of 
                undetermined value, and including the date on 
                which the gift was received;
                  (B) any contract entered into with a foreign 
                source in the previous calendar year, the value 
                of which is $5,000 or more, considered alone or 
                in combination with all other contracts with 
                that foreign source within the calendar year, 
                and including the date on which such contract 
                commences and, as applicable, the date on which 
                such contract terminates;
                  (C) any contract with a foreign source in 
                force during the previous calendar year that 
                has an undetermined monetary value, and 
                including the date on which such contract 
                commences and, as applicable, the date on which 
                such contract terminates; and
                  (D) any contract entered into with a foreign 
                country of concern or foreign entity of concern 
                in the previous calendar year, the value of 
                which is $0 or more, and including the 
                beginning and ending dates of such contract and 
                the full text of such contract and any addenda;
          (2) a publicly available and searchable database (in 
        electronic and downloadable format), on a website of 
        the institution, of the information required to be 
        disclosed under paragraph (1) that--
                  (A) makes available the information disclosed 
                under paragraph (1) beginning on the date that 
                is 30 days after receipt of the report under 
                such paragraph containing such information and 
                until the latest of--
                          (i) the date that is 4 years after 
                        the date on which--
                                  (I) a gift referred to in 
                                paragraph (1)(A) is received; 
                                or
                                  (II) a contract referred to 
                                in subparagraph (B), (C) or (D) 
                                of paragraph (1) begins; or
                          (ii) the date on which a contract 
                        referred to in subparagraph (B), (C) or 
                        (D) of paragraph (1) terminates; and
                  (B) is searchable and sortable by--
                          (i) the date received (if a gift) or 
                        the date commenced (if a contract);
                          (ii) the attributable country with 
                        respect to which information is being 
                        disclosed;
                          (iii) name of the individual making 
                        the disclosure; and
                          (iv) the name of the foreign source 
                        (other than a foreign source who is a 
                        natural person);
          (3) a plan effectively to identify and manage 
        potential information gathering by foreign sources 
        through espionage targeting covered individuals that 
        may arise from gifts received from, or contracts 
        entered into with, a foreign source, including through 
        the use of--
                  (A) periodic communications;
                  (B) accurate reporting under paragraph (2) of 
                the information required to be disclosed under 
                paragraph (1); and
                  (C) enforcement of the policy described in 
                paragraph (1).
  (b) Institutions.--An institution shall be subject to the 
requirements of this section if such institution--
          (1) is an eligible institution for the purposes of 
        any program authorized under title IV; and
          (2)(A) received more than $50,000,000 in Federal 
        funds in any of the previous five calendar years to 
        support (in whole or in part) research and development 
        (as determined by the institution and measured by the 
        Higher Education Research and Development Survey of the 
        National Center for Science and Engineering 
        Statistics); or
          (B) receives funds under title VI.
  (c) Definitions.--In this section--
          (1) the terms ``foreign source'' and ``gift'' have 
        the meanings given such terms in section 117(g);
          (2) the term ``contract''--
                  (A) means any--
                          (i) agreement for the acquisition, by 
                        purchase, lease, or barter, of property 
                        or services by a foreign source;
                          (ii) affiliation, agreement, or 
                        similar transaction with a foreign 
                        source involving the use or exchange of 
                        the name, likeness, time, services, or 
                        resources of covered individuals 
                        employed at an institution described in 
                        subsection (b); or
                          (iii) purchase, lease, or barter of 
                        property or services from a foreign 
                        source that is a foreign country of 
                        concern or a foreign entity of concern; 
                        and
                  (B) does not include any fair-market, arms-
                length agreement made by covered individuals 
                for the acquisition, by purchase, lease, or 
                barter of property or services from a foreign 
                source other than such a foreign source that is 
                a foreign country of concern or a foreign 
                entity of concern;
          (3) the term ``covered individual''--
                  (A) has the meaning given such term in 
                section 223(d) of the William M. (Mac) 
                Thornberry National Defense Authorization Act 
                for Fiscal Year 2021 (42 U.S.C. 6605); and
                  (B) shall be interpreted in accordance with 
                the Guidance for Implementing National Security 
                Presidential Memorandum 33 (NSPM-33) on 
                National Security Strategy for United States 
                Government-supported Research and Development 
                published by the Subcommittee on Research 
                Security and the Joint Committee on the 
                Research Environment in January 2022; and
          (4) the term ``professional staff'' means 
        professional employees, as defined in section 3 of the 
        Fair Labor Standards Act of 1938 (29 U.S.C. 203).

SEC. 117C. INVESTMENT DISCLOSURE REPORT.

  (a) Investment Disclosure Report.--A specified institution 
shall file a disclosure report in accordance with subsection 
(b) with the Secretary on July 31 immediately following any 
calendar year in which the specified institution purchases, 
sells, or holds (directly or indirectly through any chain of 
ownership) one or more investments of concern.
  (b) Contents of Report.--Each report to the Secretary 
required by subsection (a) with respect to any calendar year 
shall contain the following:
          (1) A list of the investments of concern purchased, 
        sold, or held during such calendar year.
          (2) The aggregate fair market value of all 
        investments of concern held as of the close of such 
        calendar year.
          (3) The combined value of all investments of concern 
        sold over the course of such calendar year, as measured 
        by the fair market value of such investments at the 
        time of the sale.
          (4) The combined value of all capital gains from such 
        sales of investments of concern.
  (c) Inclusion of Certain Pooled Funds.--
          (1) In general.--An investment of concern acquired 
        through a regulated investment company, exchange traded 
        fund, or any other pooled investment shall be treated 
        as acquired through a chain of ownership referred to in 
        subsection (a), unless such pooled investment is 
        certified by the Secretary as not holding any listed 
        investments in accordance with subparagraph (B) of 
        paragraph (2).
          (2) Certifications of pooled funds.--The Secretary, 
        after consultation with the Secretary of the Treasury, 
        shall establish procedures under which certain 
        regulated investment companies, exchange traded funds, 
        and other pooled investments--
                  (A) shall be reported in accordance with the 
                requirements under subsection (b); and
                  (B) may be certified by the Secretary as not 
                holding any listed investments.
  (d) Treatment of Related Organizations.--For purposes of this 
section, assets held by any related organization (as defined in 
section 4968(d)(2) of the Internal Revenue Code of 1986) with 
respect to a specified institution shall be treated as held by 
such specified institution, except that--
          (1) such assets shall not be taken into account with 
        respect to more than 1 specified institution; and
          (2) unless such organization is controlled by such 
        institution or is described in section 509(a)(3) of the 
        Internal Revenue Code of 1986 with respect to such 
        institution, assets which are not intended or available 
        for the use or benefit of such specified institution 
        shall not be taken into account.
  (e) Valuation of Debt.--For purposes of this section, the 
fair market value of any debt shall be the principal amount of 
such debt.
  (f) Regulations.--The Secretary, after consultation with the 
Secretary of the Treasury, may issue such regulations or other 
guidance as may be necessary or appropriate to carry out the 
purposes of this section, including regulations or other 
guidance providing for the proper application of this section 
with respect to certain regulated investment companies, 
exchange traded funds, and pooled investments.
  (g) Compliance Officer.--Any specified institution that is 
required to submit a report under subsection (a) shall 
designate, before the submission of such report, and maintain a 
compliance officer, who shall--
          (1) be a current employee or legally authorized agent 
        of such institution;
          (2) be responsible, on behalf of the institution, for 
        personally certifying accurate compliance with the 
        reporting requirements under this section; and
          (3) certify the institution has, for purposes of 
        filing such report under subsection (a), followed an 
        established institutional policy and conducted good 
        faith efforts and reasonable due diligence to determine 
        the accuracy and valuations of the assets reported.
  (h) Database Requirement.--Beginning not later than 60 days 
before the July 31 immediately following the date of the 
enactment of the DETERRENT Act, the Secretary shall--
          (1) establish and maintain a searchable database on a 
        website of the Department, under which all reports 
        submitted under this section--
                  (A) are made publicly available (in 
                electronic and downloadable format), including 
                any information provided in such reports;
                  (B) can be individually identified and 
                compared; and
                  (C) are searchable and sortable; and
          (2) not later than 30 days after receipt of a 
        disclosure report under this section, include such 
        report in such database.
  (i) Definitions.--In this section:
          (1) Investment of concern.--
                  (A) In general.--The term ``investment of 
                concern'' means any specified interest with 
                respect to any of the following:
                          (i) A foreign country of concern.
                          (ii) A foreign entity of concern.
                  (B) Specified interest.--The term ``specified 
                interest'' means, with respect to any entity--
                          (i) stock or any other equity or 
                        profits interest of such entity;
                          (ii) debt issued by such entity; and
                          (iii) any contract or derivative with 
                        respect to any property described in 
                        clause (i) or (ii).
          (2) Specified institution.--
                  (A) In general.--The term ``specified 
                institution'', as determined with respect to 
                any calendar year, means an institution if--
                          (i) such institution is not a public 
                        institution; and
                          (ii) the aggregate fair market value 
                        of--
                                  (I) the assets held by such 
                                institution at the end of such 
                                calendar year (other than those 
                                assets which are used directly 
                                in carrying out the 
                                institution's exempt purpose) 
                                is in excess of $6,000,000,000; 
                                or
                                  (II) the investments of 
                                concern held by such 
                                institution at the end of such 
                                calendar year is in excess of 
                                $250,000,000
                  (B) References to certain terms.--For the 
                purpose of applying the definition under 
                subparagraph (A), the terms ``aggregate fair 
                market value'' and ``assets which are used 
                directly in carrying out the institution's 
                exempt purpose'' shall be applied in the same 
                manner as such terms are applied for the 
                purposes of section 4968(b)(1)(D) of the 
                Internal Revenue Code of 1986.

SEC. 117D. ENFORCEMENT; SINGLE POINT-OF-CONTACT.

  (a) Enforcement.--
          (1) Investigation.--The Secretary (acting through the 
        General Counsel of the Department) shall conduct 
        investigations of possible violations of sections 117, 
        117A, 117B, and 117C by institutions.
          (2) Civil action.--Whenever it appears that an 
        institution has knowingly or willfully failed to comply 
        with a requirement of any of the sections listed in 
        paragraph (1) (including any rule or regulation 
        promulgated under any such section) based on such an 
        investigation, 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 to compel compliance with 
        the requirement of the section that has been violated.
          (3) Costs and other fines.--An institution that is 
        compelled to comply with a requirement of a section 
        listed in paragraph (1) pursuant to paragraph (2) 
        shall--
                  (A) pay to the Treasury of the United States 
                the full costs to the United States of 
                obtaining compliance with the requirement of 
                such section, including all associated costs of 
                investigation and enforcement; and
                  (B) be subject to the applicable fines 
                described in paragraph (4).
          (4) Fines for violations.--The Secretary shall impose 
        a fine on an institution that knowingly or willfully 
        fails to comply with a requirement of a section listed 
        in paragraph (1) as follows:
                  (A) Section 117.--
                          (i) First-time violations.--In the 
                        case of an institution that knowingly 
                        or willfully fails to comply with a 
                        requirement of section 117 with respect 
                        to a calendar year, and that has not 
                        previously knowingly or willfully 
                        failed to comply with such a 
                        requirement, the Secretary shall impose 
                        a fine on the institution for such 
                        violation as follows:
                                  (I) In the case of an 
                                institution that knowingly or 
                                willfully fails to comply with 
                                a reporting requirement under 
                                subsection (a)(1) of section 
                                117, such fine shall be in an 
                                amount that is--
                                          (aa) not less than 
                                        $50,000 but not more 
                                        than the monetary value 
                                        of the gift from, or 
                                        contract with, the 
                                        foreign source; or
                                          (bb) in the case of a 
                                        gift or contract of no 
                                        value or of 
                                        indeterminable value, 
                                        not less than 1 
                                        percent, and not more 
                                        than 10 percent of the 
                                        total amount of Federal 
                                        funds received by the 
                                        institution under this 
                                        Act for the most recent 
                                        fiscal year.
                                  (II) In the case of an 
                                institution that knowingly or 
                                willfully fails to comply with 
                                the reporting requirement under 
                                subsection (a)(2) of section 
                                117, such fine shall be in an 
                                amount that is not less than 10 
                                percent of the total amount of 
                                Federal funds received by the 
                                institution under this Act for 
                                the most recent fiscal year.
                          (ii) Subsequent violations.--In the 
                        case of an institution that has been 
                        fined pursuant to clause (i) with 
                        respect to a calendar year, and that 
                        knowingly or willfully fails to comply 
                        with a requirement of section 117 with 
                        respect to any additional calendar 
                        year, the Secretary shall impose a fine 
                        on the institution with respect to any 
                        such additional calendar year as 
                        follows:
                                  (I) In the case of an 
                                institution that knowingly or 
                                willfully fails to comply with 
                                a reporting requirement under 
                                subsection (a)(1) of section 
                                117 with respect to an 
                                additional calendar year, such 
                                fine shall be in an amount that 
                                is--
                                          (aa) not less than 
                                        $100,000 but not more 
                                        than twice the monetary 
                                        value of the gift from, 
                                        or contract with, the 
                                        foreign source; or
                                          (bb) in the case of a 
                                        gift or contract of no 
                                        value or of 
                                        indeterminable value, 
                                        not less than 1 
                                        percent, but not more 
                                        than 10 percent, of the 
                                        total amount of Federal 
                                        funds received by the 
                                        institution under this 
                                        Act for the most recent 
                                        fiscal year.
                                  (II) In the case of an 
                                institution that knowingly or 
                                willfully fails to comply with 
                                a reporting requirement under 
                                subsection (a)(2) of section 
                                117 with respect to an 
                                additional calendar year, such 
                                fine shall be in an amount that 
                                is not less than 20 percent of 
                                the total amount of Federal 
                                funds received by the 
                                institution under this Act for 
                                the most recent fiscal year.
                  (B) Section 117a.--
                          (i) First-time violations.--In the 
                        case of an institution that knowingly 
                        or willfully fails to comply with a 
                        requirement of section 117A for the 
                        first time, the Secretary shall impose 
                        a fine on the institution in an amount 
                        that is not less than 5 percent, but 
                        not more than 10 percent, of the total 
                        amount of Federal funds received by the 
                        institution under this Act for the most 
                        recent fiscal year.
                          (ii) Subsequent violations.--In the 
                        case of an institution that has been 
                        fined pursuant to clause (i), the 
                        Secretary shall impose a fine on the 
                        institution for each subsequent time 
                        the institution knowingly or willfully 
                        fails to comply with a requirement of 
                        section 117A in an amount that is not 
                        less than 20 percent of the total 
                        amount of Federal funds received by the 
                        institution under this Act for the most 
                        recent fiscal year.
                  (C) Section 117b.--
                          (i) First-time violations.--In the 
                        case of an institution that knowingly 
                        or willfully fails to comply with a 
                        requirement of section 117B with 
                        respect to a calendar year, and that 
                        has not previously knowingly or 
                        willfully failed to comply with such a 
                        requirement, the Secretary shall impose 
                        a fine on the institution of not less 
                        than $250,000, but not more than the 
                        total amount of gifts or contracts 
                        reported by such institution in the 
                        database required under section 
                        117B(a)(2).
                          (ii) Subsequent violations.--In the 
                        case of an institution that has been 
                        fined pursuant to clause (i) with 
                        respect to a calendar year, and that 
                        knowingly or willfully fails to comply 
                        with a requirement of section 117B with 
                        respect to any additional calendar 
                        year, the Secretary shall impose a fine 
                        on the institution with respect to any 
                        such additional calendar year in an 
                        amount that is not less than $500,000, 
                        but not more than twice the total 
                        amount of gifts or contracts reported 
                        by such institution in the database 
                        required under section 117B(a)(2).
                  (D) Section 117c.--
                          (i) First-time violations.--In the 
                        case of a specified institution that 
                        knowingly or willfully fails to comply 
                        with a requirement of section 117C with 
                        respect to a calendar year, and that 
                        has not previously knowingly or 
                        willfully failed to comply with such a 
                        requirement, the Secretary shall impose 
                        a fine on the institution in an amount 
                        that is not less than 50 percent and 
                        not more than 100 percent of the sum 
                        of--
                                  (I) the aggregate fair market 
                                value of all investments of 
                                concern held by such 
                                institution as of the close of 
                                such calendar year; and
                                  (II) the combined value of 
                                all investments of concern sold 
                                over the course of such 
                                calendar year, as measured by 
                                the fair market value of such 
                                investments at the time of the 
                                sale.
                          (ii) Subsequent violations.--In the 
                        case of a specified institution that 
                        has been fined pursuant to clause (i) 
                        with respect to a calendar year, and 
                        that knowingly or willfully fails to 
                        comply with a requirement of section 
                        117C with respect to any additional 
                        calendar year, the Secretary shall 
                        impose a fine on the institution with 
                        respect to any such additional calendar 
                        year in an amount that is not less than 
                        100 percent and not more than 200 
                        percent of the sum of--
                                  (I) the aggregate fair market 
                                value of all investments of 
                                concern held by such 
                                institution as of the close of 
                                such additional calendar year; 
                                and
                                  (II) the combined value of 
                                all investments of concern sold 
                                over the course of such 
                                additional calendar year, as 
                                measured by the fair market 
                                value of such investments at 
                                the time of the sale.
  (b) Single Point-of-contact at the Department.--The Secretary 
shall maintain a single point-of-contact at the Department to--
          (1) receive and respond to inquiries and requests for 
        technical assistance from institutions regarding 
        compliance with the requirements of sections 117, 117A, 
        117B, and 117C;
          (2) coordinate and implement technical improvements 
        to the database described in section 117(d)(1), 
        including--
                  (A) improving upload functionality by 
                allowing for batch reporting, including by 
                allowing institutions to upload one file with 
                all required information into the database;
                  (B) publishing and maintaining a database 
                users guide annually, including information on 
                how to edit an entry and how to report errors;
                  (C) creating a standing user group (to which 
                chapter 10 of title 5, United States Code, 
                shall not apply) to discuss possible database 
                improvements, which group shall--
                          (i) include at least--
                                  (I) 3 members representing 
                                public institutions with high 
                                or very high levels of research 
                                activity (as defined by the 
                                National Center for Education 
                                Statistics);
                                  (II) 2 members representing 
                                private, nonprofit institutions 
                                with high or very high levels 
                                of research activity (as so 
                                defined);
                                  (III) 2 members representing 
                                proprietary institutions of 
                                higher education (as defined in 
                                section 102(b)); and
                                  (IV) 2 members representing 
                                area career and technical 
                                education schools (as defined 
                                in subparagraph (C) or (D) of 
                                section 3(3) of the Carl D. 
                                Perkins Career and Technical 
                                Education Act of 2006 (20 
                                U.S.C. 2302(3)); and
                          (ii) meet at least twice a year with 
                        officials from the Department to 
                        discuss possible database improvements;
                  (D) publishing, on a publicly available 
                website, recommended database improvements 
                following each meeting described in 
                subparagraph (C)(ii); and
                  (E) responding, on a publicly available 
                website, to each recommendation published under 
                subparagraph (D) as to whether or not the 
                Department will implement the recommendation, 
                including the rationale for either approving or 
                rejecting the recommendation;
          (3) provide, every 90 days after the date of 
        enactment of the DETERRENT Act, status updates on any 
        pending or completed investigations and civil actions 
        under subsection (a)(1) to--
                  (A) the authorizing committees; and
                  (B) any institution that is the subject of 
                such investigation or action;
          (4) maintain, on a publicly accessible website--
                  (A) a full comprehensive list of all foreign 
                countries of concern and foreign entities of 
                concern; and
                  (B) the date on which the last update was 
                made to such list; and
          (5) not later than 7 days after making an update to 
        the list maintained in paragraph (4)(A), notify each 
        institution required to comply with the sections listed 
        in paragraph (1) of such update.
  (c) Definitions.--For purposes of sections 117, 117A, 117B, 
117C, and this section:
          (1) Foreign country of concern.--The term ``foreign 
        country of concern'' includes the following:
                  (A) A country that is a covered nation (as 
                defined in section 4872(d) of title 10, United 
                States Code).
                  (B) Any country that the Secretary, in 
                consultation with the Secretary of Defense, the 
                Secretary of State, and the Director of 
                National Intelligence, determines to be engaged 
                in conduct that is detrimental to the national 
                security or foreign policy of the United 
                States.
          (2) Foreign entity of concern.--The term ``foreign 
        entity of concern'' has the meaning given such 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)(8)(A) of the John 
        S. McCain National Defense Authorization Act for Fiscal 
        Year 2019 (10 U.S.C. 22 4001 note; Public Law 115-232).
          (3) Institution.--The term ``institution'' means an 
        institution of higher education (as such term is 
        defined in section 102, other than an institution 
        described in subsection (a)(1)(c) of such section).

           *       *       *       *       *       *       *


TITLE IV--STUDENT ASSISTANCE

           *       *       *       *       *       *       *


Part G--General Provisions Relating to Student Assistance Programs

           *       *       *       *       *       *       *


SEC. 487. PROGRAM PARTICIPATION AGREEMENTS.

  (a) Required for Programs of Assistance; Contents.--In order 
to be an eligible institution for the purposes of any program 
authorized under this title, an institution must be an 
institution of higher education or an eligible institution (as 
that term is defined for the purpose of that program) and 
shall, except with respect to a program under subpart 4 of part 
A, enter into a program participation agreement with the 
Secretary. The agreement shall condition the initial and 
continuing eligibility of an institution to participate in a 
program upon compliance with the following requirements:
          (1) The institution will use funds received by it for 
        any program under this title and any interest or other 
        earnings thereon solely for the purpose specified in 
        and in accordance with the provision of that program.
          (2) The institution shall not charge any student a 
        fee for processing or handling any application, form, 
        or data required to determine the student's eligibility 
        for assistance under this title or the amount of such 
        assistance.
          (3) The institution will establish and maintain such 
        administrative and fiscal procedures and records as may 
        be necessary to ensure proper and efficient 
        administration of funds received from the Secretary or 
        from students under this title, together with 
        assurances that the institution will provide, upon 
        request and in a timely fashion, information relating 
        to the administrative capability and financial 
        responsibility of the institution to--
                  (A) the Secretary;
                  (B) the appropriate guaranty agency; and
                  (C) the appropriate accrediting agency or 
                association.
          (4) The institution will comply with the provisions 
        of subsection (c) of this section and the regulations 
        prescribed under that subsection, relating to fiscal 
        eligibility.
          (5) The institution will submit reports to the 
        Secretary and, in the case of an institution 
        participating in a program under part B or part E, to 
        holders of loans made to the institution's students 
        under such parts at such times and containing such 
        information as the Secretary may reasonably require to 
        carry out the purpose of this title.
          (6) The institution will not provide any student with 
        any statement or certification to any lender under part 
        B that qualifies the student for a loan or loans in 
        excess of the amount that student is eligible to borrow 
        in accordance with sections 425(a), 428(a)(2), and 
        428(b)(1) (A) and (B).
          (7) The institution will comply with the requirements 
        of section 485.
          (8) In the case of an institution that advertises job 
        placement rates as a means of attracting students to 
        enroll in the institution, the institution will make 
        available to prospective students, at or before the 
        time of application (A) the most recent available data 
        concerning employment statistics, graduation 
        statistics, and any other information necessary to 
        substantiate the truthfulness of the advertisements, 
        and (B) relevant State licensing requirements of the 
        State in which such institution is located for any job 
        for which the course of instruction is designed to 
        prepare such prospective students.
          (9) In the case of an institution participating in a 
        program under part B or D, the institution will inform 
        all eligible borrowers enrolled in the institution 
        about the availability and eligibility of such 
        borrowers for State grant assistance from the State in 
        which the institution is located, and will inform such 
        borrowers from another State of the source for further 
        information concerning such assistance from that State.
          (10) The institution certifies that it has in 
        operation a drug abuse prevention program that is 
        determined by the institution to be accessible to any 
        officer, employee, or student at the institution.
          (11) In the case of any institution whose students 
        receive financial assistance pursuant to section 
        484(d), the institution will make available to such 
        students a program proven successful in assisting 
        students in obtaining a certificate of high school 
        equivalency.
          (12) The institution certifies that--
                  (A) the institution has established a campus 
                security policy; and
                  (B) the institution has complied with the 
                disclosure requirements of section 485(f).
          (13) The institution will not deny any form of 
        Federal financial aid to any student who meets the 
        eligibility requirements of this title on the grounds 
        that the student is participating in a program of study 
        abroad approved for credit by the institution.
          (14)(A) The institution, in order to participate as 
        an eligible institution under part B or D, will develop 
        a Default Management Plan for approval by the Secretary 
        as part of its initial application for certification as 
        an eligible institution and will implement such Plan 
        for two years thereafter.
          (B) Any institution of higher education which changes 
        ownership and any eligible institution which changes 
        its status as a parent or subordinate institution 
        shall, in order to participate as an eligible 
        institution under part B or D, develop a Default 
        Management Plan for approval by the Secretary and 
        implement such Plan for two years after its change of 
        ownership or status.
          (C) This paragraph shall not apply in the case of an 
        institution in which (i) neither the parent nor the 
        subordinate institution has a cohort default rate in 
        excess of 10 percent, and (ii) the new owner of such 
        parent or subordinate institution does not, and has 
        not, owned any other institution with a cohort default 
        rate in excess of 10 percent.
          (15) The institution acknowledges the authority of 
        the Secretary, guaranty agencies, lenders, accrediting 
        agencies, the Secretary of Veterans Affairs, and the 
        State agencies under subpart 1 of part H to share with 
        each other any information pertaining to the 
        institution's eligibility to participate in programs 
        under this title or any information on fraud and abuse.
          (16)(A) The institution will not knowingly employ an 
        individual in a capacity that involves the 
        administration of programs under this title, or the 
        receipt of program funds under this title, who has been 
        convicted of, or has pled nolo contendere or guilty to, 
        a crime involving the acquisition, use, or expenditure 
        of funds under this title, or has been judicially 
        determined to have committed fraud involving funds 
        under this title or contract with an institution or 
        third party servicer that has been terminated under 
        section 432 involving the acquisition, use, or 
        expenditure of funds under this title, or who has been 
        judicially determined to have committed fraud involving 
        funds under this title.
          (B) The institution will not knowingly contract with 
        or employ any individual, agency, or organization that 
        has been, or whose officers or employees have been--
                  (i) convicted of, or pled nolo contendere or 
                guilty to, a crime involving the acquisition, 
                use, or expenditure of funds under this title; 
                or
                  (ii) judicially determined to have committed 
                fraud involving funds under this title.
          (17) The institution will complete surveys conducted 
        as a part of the Integrated Postsecondary Education 
        Data System (IPEDS) or any other Federal postsecondary 
        institution data collection effort, as designated by 
        the Secretary, in a timely manner and to the 
        satisfaction of the Secretary.
          (18) The institution will meet the requirements 
        established pursuant to section 485(g).
          (19) The institution will not impose any penalty, 
        including the assessment of late fees, the denial of 
        access to classes, libraries, or other institutional 
        facilities, or the requirement that the student borrow 
        additional funds, on any student because of the 
        student's inability to meet his or her financial 
        obligations to the institution as a result of the 
        delayed disbursement of the proceeds of a loan made 
        under this title due to compliance with the provisions 
        of this title, or delays attributable to the 
        institution.
          (20) The institution will not provide any commission, 
        bonus, or other incentive payment based directly or 
        indirectly on success in securing enrollments or 
        financial aid to any persons or entities engaged in any 
        student recruiting or admission activities or in making 
        decisions regarding the award of student financial 
        assistance, except that this paragraph shall not apply 
        to the recruitment of foreign students residing in 
        foreign countries who are not eligible to receive 
        Federal student assistance.
          (21) The institution will meet the requirements 
        established by the Secretary and accrediting agencies 
        or associations, and will provide evidence to the 
        Secretary that the institution has the authority to 
        operate within a State.
          (22) The institution will comply with the refund 
        policy established pursuant to section 484B.
          (23)(A) The institution, if located in a State to 
        which section 4(b) of the National Voter Registration 
        Act of 1993 (42 U.S.C. 1973gg-2(b)) does not apply, 
        will make a good faith effort to distribute a mail 
        voter registration form, requested and received from 
        the State, to each student enrolled in a degree or 
        certificate program and physically in attendance at the 
        institution, and to make such forms widely available to 
        students at the institution.
          (B) The institution shall request the forms from the 
        State 120 days prior to the deadline for registering to 
        vote within the State. If an institution has not 
        received a sufficient quantity of forms to fulfill this 
        section from the State within 60 days prior to the 
        deadline for registering to vote in the State, the 
        institution shall not be held liable for not meeting 
        the requirements of this section during that election 
        year.
          (C) This paragraph shall apply to general and special 
        elections for Federal office, as defined in section 
        301(3) of the Federal Election Campaign Act of 1971 (2 
        U.S.C. 431(3)), and to the elections for Governor or 
        other chief executive within such State).
                  (D) The institution shall be considered in 
                compliance with the requirements of 
                subparagraph (A) for each student to whom the 
                institution electronically transmits a message 
                containing a voter registration form acceptable 
                for use in the State in which the institution 
                is located, or an Internet address where such a 
                form can be downloaded, if such information is 
                in an electronic message devoted exclusively to 
                voter registration.
          (24) In the case of a proprietary institution of 
        higher education (as defined in section 102(b)), such 
        institution will derive not less than ten percent of 
        such institution's revenues from sources other than 
        Federal funds that are disbursed or delivered to or on 
        behalf of a student to be used to attend such 
        institution (referred to in this paragraph and 
        subsection (d) as ``Federal education assistance 
        funds''), as calculated in accordance with subsection 
        (d)(1), or will be subject to the sanctions described 
        in subsection (d)(2).
          (25) In the case of an institution that participates 
        in a loan program under this title, the institution 
        will--
                  (A) develop a code of conduct with respect to 
                such loans with which the institution's 
                officers, employees, and agents shall comply, 
                that--
                          (i) prohibits a conflict of interest 
                        with the responsibilities of an 
                        officer, employee, or agent of an 
                        institution with respect to such loans; 
                        and
                          (ii) at a minimum, includes the 
                        provisions described in subsection (e);
                  (B) publish such code of conduct prominently 
                on the institution's website; and
                  (C) administer and enforce such code by, at a 
                minimum, requiring that all of the 
                institution's officers, employees, and agents 
                with responsibilities with respect to such 
                loans be annually informed of the provisions of 
                the code of conduct.
          (26) The institution will, upon written request, 
        disclose to the alleged victim of any crime of violence 
        (as that term is defined in section 16 of title 18, 
        United States Code), or a nonforcible sex offense, the 
        report on the results of any disciplinary proceeding 
        conducted by such institution against a student who is 
        the alleged perpetrator of such crime or offense with 
        respect to such crime or offense. If the alleged victim 
        of such crime or offense is deceased as a result of 
        such crime or offense, the next of kin of such victim 
        shall be treated as the alleged victim for purposes of 
        this paragraph.
          (27) In the case of an institution that has entered 
        into a preferred lender arrangement, the institution 
        will at least annually compile, maintain, and make 
        available for students attending the institution, and 
        the families of such students, a list, in print or 
        other medium, of the specific lenders for loans made, 
        insured, or guaranteed under this title or private 
        education loans that the institution recommends, 
        promotes, or endorses in accordance with such preferred 
        lender arrangement. In making such list, the 
        institution shall comply with the requirements of 
        subsection (h).
          (28)(A) The institution will, upon the request of an 
        applicant for a private education loan, provide to the 
        applicant the form required under section 128(e)(3) of 
        the Truth in Lending Act (15 U.S.C. 1638(e)(3)), and 
        the information required to complete such form, to the 
        extent the institution possesses such information.
          (B) For purposes of this paragraph, the term 
        ``private education loan'' has the meaning given such 
        term in section 140 of the Truth in Lending Act.
          (29) The institution certifies that the institution--
                  (A) has developed plans to effectively combat 
                the unauthorized distribution of copyrighted 
                material, including through the use of a 
                variety of technology-based deterrents; and
                  (B) will, to the extent practicable, offer 
                alternatives to illegal downloading or peer-to-
                peer distribution of intellectual property, as 
                determined by the institution in consultation 
                with the chief technology officer or other 
                designated officer of the institution.
          (30)(A) An institution will comply with the 
        requirements of sections 117, 117A, 117B, and 117C.
          (B) An institution that, for 3 consecutive 
        institutional fiscal years, violates any requirement of 
        any of the sections listed in subparagraph (A), shall--
                  (i) be ineligible to participate in the 
                programs authorized by this title for a period 
                of not less than 2 institutional fiscal years; 
                and
                  (ii) in order to regain eligibility to 
                participate in such programs, demonstrate 
                compliance with all requirements of each such 
                section for not less than 2 institutional 
                fiscal years after the institutional fiscal 
                year in which such institution became 
                ineligible.
  (b) Hearings.--(1) An institution that has received written 
notice of a final audit or program review determination and 
that desires to have such determination reviewed by the 
Secretary shall submit to the Secretary a written request for 
review not later than 45 days after receipt of notification of 
the final audit or program review determination.
  (2) The Secretary shall, upon receipt of written notice under 
paragraph (1), arrange for a hearing and notify the institution 
within 30 days of receipt of such notice the date, time, and 
place of such hearing. Such hearing shall take place not later 
than 120 days from the date upon which the Secretary notifies 
the institution.
  (c) Audits; Financial Responsibility; Enforcement of 
Standards.--(1) Notwithstanding any other provisions of this 
title, the Secretary shall prescribe such regulations as may be 
necessary to provide for--
          (A)(i) except as provided in clauses (ii) and (iii), 
        a financial audit of an eligible institution with 
        regard to the financial condition of the institution in 
        its entirety, and a compliance audit of such 
        institution with regard to any funds obtained by it 
        under this title or obtained from a student or a parent 
        who has a loan insured or guaranteed by the Secretary 
        under this title, on at least an annual basis and 
        covering the period since the most recent audit, 
        conducted by a qualified, independent organization or 
        person in accordance with standards established by the 
        Comptroller General for the audit of governmental 
        organizations, programs, and functions, and as 
        prescribed in regulations of the Secretary, the results 
        of which shall be submitted to the Secretary and shall 
        be available to cognizant guaranty agencies, eligible 
        lenders, State agencies, and the appropriate State 
        agency notifying the Secretary under subpart 1 of part 
        H, except that the Secretary may modify the 
        requirements of this clause with respect to 
        institutions of higher education that are foreign 
        institutions, and may waive such requirements with 
        respect to a foreign institution whose students receive 
        less than $500,000 in loans under this title during the 
        award year preceding the audit period;
          (ii) with regard to an eligible institution which is 
        audited under chapter 75 of title 31, United States 
        Code, deeming such audit to satisfy the requirements of 
        clause (i) for the period covered by such audit; or
          (iii) at the discretion of the Secretary, with regard 
        to an eligible institution (other than an eligible 
        institution described in section 102(a)(1)(C)) that has 
        obtained less than $200,000 in funds under this title 
        during each of the 2 award years that precede the audit 
        period and submits a letter of credit payable to the 
        Secretary equal to not less than \1/2\ of the annual 
        potential liabilities of such institution as determined 
        by the Secretary, deeming an audit conducted every 3 
        years to satisfy the requirements of clause (i), except 
        for the award year immediately preceding renewal of the 
        institution's eligibility under section 498(g);
          (B) in matters not governed by specific program 
        provisions, the establishment of reasonable standards 
        of financial responsibility and appropriate 
        institutional capability for the administration by an 
        eligible institution of a program of student financial 
        aid under this title, including any matter the 
        Secretary deems necessary to the sound administration 
        of the financial aid programs, such as the pertinent 
        actions of any owner, shareholder, or person exercising 
        control over an eligible institution;
          (C)(i) except as provided in clause (ii), a 
        compliance audit of a third party servicer (other than 
        with respect to the servicer's functions as a lender if 
        such functions are otherwise audited under this part 
        and such audits meet the requirements of this clause), 
        with regard to any contract with an eligible 
        institution, guaranty agency, or lender for 
        administering or servicing any aspect of the student 
        assistance programs under this title, at least once 
        every year and covering the period since the most 
        recent audit, conducted by a qualified, independent 
        organization or person in accordance with standards 
        established by the Comptroller General for the audit of 
        governmental organizations, programs, and functions, 
        and as prescribed in regulations of the Secretary, the 
        results of which shall be submitted to the Secretary; 
        or
          (ii) with regard to a third party servicer that is 
        audited under chapter 75 of title 31, United States 
        Code, such audit shall be deemed to satisfy the 
        requirements of clause (i) for the period covered by 
        such audit;
          (D)(i) a compliance audit of a secondary market with 
        regard to its transactions involving, and its servicing 
        and collection of, loans made under this title, at 
        least once a year and covering the period since the 
        most recent audit, conducted by a qualified, 
        independent organization or person in accordance with 
        standards established by the Comptroller General for 
        the audit of governmental organizations, programs, and 
        functions, and as prescribed in regulations of the 
        Secretary, the results of which shall be submitted to 
        the Secretary; or
          (ii) with regard to a secondary market that is 
        audited under chapter 75 of title 31, United States 
        Code, such audit shall be deemed to satisfy the 
        requirements of clause (i) for the period covered by 
        the audit;
          (E) the establishment, by each eligible institution 
        under part B responsible for furnishing to the lender 
        the statement required by section 428(a)(2)(A)(i), of 
        policies and procedures by which the latest known 
        address and enrollment status of any student who has 
        had a loan insured under this part and who has either 
        formally terminated his enrollment, or failed to re-
        enroll on at least a half-time basis, at such 
        institution, shall be furnished either to the holder 
        (or if unknown, the insurer) of the note, not later 
        than 60 days after such termination or failure to re-
        enroll;
          (F) the limitation, suspension, or termination of the 
        participation in any program under this title of an 
        eligible institution, or the imposition of a civil 
        penalty under paragraph (3)(B) whenever the Secretary 
        has determined, after reasonable notice and opportunity 
        for hearing, that such institution has violated or 
        failed to carry out any provision of this title, any 
        regulation prescribed under this title, or any 
        applicable special arrangement, agreement, or 
        limitation, except that no period of suspension under 
        this section shall exceed 60 days unless the 
        institution and the Secretary agree to an extension or 
        unless limitation or termination proceedings are 
        initiated by the Secretary within that period of time;
          (G) an emergency action against an institution, under 
        which the Secretary shall, effective on the date on 
        which a notice and statement of the basis of the action 
        is mailed to the institution (by registered mail, 
        return receipt requested), withhold funds from the 
        institution or its students and withdraw the 
        institution's authority to obligate funds under any 
        program under this title, if the Secretary--
                  (i) receives information, determined by the 
                Secretary to be reliable, that the institution 
                is violating any provision of this title, any 
                regulation prescribed under this title, or any 
                applicable special arrangement, agreement, or 
                limitation,
                  (ii) determines that immediate action is 
                necessary to prevent misuse of Federal funds, 
                and
                  (iii) determines that the likelihood of loss 
                outweighs the importance of the procedures 
                prescribed under subparagraph (D) for 
                limitation, suspension, or termination,
        except that an emergency action shall not exceed 30 
        days unless limitation, suspension, or termination 
        proceedings are initiated by the Secretary against the 
        institution within that period of time, and except that 
        the Secretary shall provide the institution an 
        opportunity to show cause, if it so requests, that the 
        emergency action is unwarranted;
          (H) the limitation, suspension, or termination of the 
        eligibility of a third party servicer to contract with 
        any institution to administer any aspect of an 
        institution's student assistance program under this 
        title, or the imposition of a civil penalty under 
        paragraph (3)(B), whenever the Secretary has 
        determined, after reasonable notice and opportunity for 
        a hearing, that such organization, acting on behalf of 
        an institution, has violated or failed to carry out any 
        provision of this title, any regulation prescribed 
        under this title, or any applicable special 
        arrangement, agreement, or limitation, except that no 
        period of suspension under this subparagraph shall 
        exceed 60 days unless the organization and the 
        Secretary agree to an extension, or unless limitation 
        or termination proceedings are initiated by the 
        Secretary against the individual or organization within 
        that period of time; and
          (I) an emergency action against a third party 
        servicer that has contracted with an institution to 
        administer any aspect of the institution's student 
        assistance program under this title, under which the 
        Secretary shall, effective on the date on which a 
        notice and statement of the basis of the action is 
        mailed to such individual or organization (by 
        registered mail, return receipt requested), withhold 
        funds from the individual or organization and withdraw 
        the individual or organization's authority to act on 
        behalf of an institution under any program under this 
        title, if the Secretary--
                  (i) receives information, determined by the 
                Secretary to be reliable, that the individual 
                or organization, acting on behalf of an 
                institution, is violating any provision of this 
                title, any regulation prescribed under this 
                title, or any applicable special arrangement, 
                agreement, or limitation,
                  (ii) determines that immediate action is 
                necessary to prevent misuse of Federal funds, 
                and
                  (iii) determines that the likelihood of loss 
                outweighs the importance of the procedures 
                prescribed under subparagraph (F), for 
                limitation, suspension, or termination,
        except that an emergency action shall not exceed 30 
        days unless the limitation, suspension, or termination 
        proceedings are initiated by the Secretary against the 
        individual or organization within that period of time, 
        and except that the Secretary shall provide the 
        individual or organization an opportunity to show 
        cause, if it so requests, that the emergency action is 
        unwarranted.
  (2) If an individual who, or entity that, exercises 
substantial control, as determined by the Secretary in 
accordance with the definition of substantial control in 
subpart 3 of part H, over one or more institutions 
participating in any program under this title, or, for purposes 
of paragraphs (1) (H) and (I), over one or more organizations 
that contract with an institution to administer any aspect of 
the institution's student assistance program under this title, 
is determined to have committed one or more violations of the 
requirements of any program under this title, or has been 
suspended or debarred in accordance with the regulations of the 
Secretary, the Secretary may use such determination, 
suspension, or debarment as the basis for imposing an emergency 
action on, or limiting, suspending, or terminating, in a single 
proceeding, the participation of any or all institutions under 
the substantial control of that individual or entity.
  (3)(A) Upon determination, after reasonable notice and 
opportunity for a hearing, that an eligible institution has 
engaged in substantial misrepresentation of the nature of its 
educational program, its financial charges, or the 
employability of its graduates, the Secretary may suspend or 
terminate the eligibility status for any or all programs under 
this title of any otherwise eligible institution, in accordance 
with procedures specified in paragraph (1)(D) of this 
subsection, until the Secretary finds that such practices have 
been corrected.
  (B)(i) Upon determination, after reasonable notice and 
opportunity for a hearing, that an eligible institution--
          (I) has violated or failed to carry out any provision 
        of this title or any regulation prescribed under this 
        title; or
          (II) has engaged in substantial misrepresentation of 
        the nature of its educational program, its financial 
        charges, and the employability of its graduates,
the Secretary may impose a civil penalty upon such institution 
of not to exceed $25,000 for each violation or 
misrepresentation.
  (ii) Any civil penalty may be compromised by the Secretary. 
In determining the amount of such penalty, or the amount agreed 
upon in compromise, the appropriateness of the penalty to the 
size of the institution of higher education subject to the 
determination, and the gravity of the violation, failure, or 
misrepresentation shall be considered. The amount of such 
penalty, when finally determined, or the amount agreed upon in 
compromise, may be deducted from any sums owing by the United 
States to the institution charged.
  (4) The Secretary shall publish a list of State agencies 
which the Secretary determines to be reliable authority as to 
the quality of public postsecondary vocational education in 
their respective States for the purpose of determining 
eligibility for all Federal student assistance programs.
  (5) The Secretary shall make readily available to appropriate 
guaranty agencies, eligible lenders, State agencies notifying 
the Secretary under subpart 1 of part H, and accrediting 
agencies or associations the results of the audits of eligible 
institutions conducted pursuant to paragraph (1)(A).
  (6) The Secretary is authorized to provide any information 
collected as a result of audits conducted under this section, 
together with audit information collected by guaranty agencies, 
to any Federal or State agency having responsibilities with 
respect to student financial assistance, including those 
referred to in subsection (a)(15) of this section.
  (7) Effective with respect to any audit conducted under this 
subsection after December 31, 1988, if, in the course of 
conducting any such audit, the personnel of the Department of 
Education discover, or are informed of, grants or other 
assistance provided by an institution in accordance with this 
title for which the institution has not received funds 
appropriated under this title (in the amount necessary to 
provide such assistance), including funds for which 
reimbursement was not requested prior to such discovery or 
information, such institution shall be permitted to offset that 
amount against any sums determined to be owed by the 
institution pursuant to such audit, or to receive reimbursement 
for that amount (if the institution does not owe any such 
sums).
  (d) Implementation of Non-Federal Revenue Requirement.--
          (1) Calculation.--In making calculations under 
        subsection (a)(24), a proprietary institution of higher 
        education shall--
                  (A) use the cash basis of accounting, except 
                in the case of loans described in subparagraph 
                (D)(i) that are made by the proprietary 
                institution of higher education;
                  (B) consider as revenue only those funds 
                generated by the institution from--
                          (i) tuition, fees, and other 
                        institutional charges for students 
                        enrolled in programs eligible for 
                        assistance under this title;
                          (ii) activities conducted by the 
                        institution that are necessary for the 
                        education and training of the 
                        institution's students, if such 
                        activities are--
                                  (I) conducted on campus or at 
                                a facility under the control of 
                                the institution;
                                  (II) performed under the 
                                supervision of a member of the 
                                institution's faculty; and
                                  (III) required to be 
                                performed by all students in a 
                                specific educational program at 
                                the institution; and
                          (iii) funds paid by a student, or on 
                        behalf of a student by a party other 
                        than the institution, for an education 
                        or training program that is not 
                        eligible for funds under this title, if 
                        the program--
                                  (I) is approved or licensed 
                                by the appropriate State 
                                agency;
                                  (II) is accredited by an 
                                accrediting agency recognized 
                                by the Secretary; or
                                  (III) provides an industry-
                                recognized credential or 
                                certification;
                  (C) presume that any Federal education 
                assistance funds that are disbursed or 
                delivered to or on behalf of a student will be 
                used to pay the student's tuition, fees, or 
                other institutional charges, regardless of 
                whether the institution credits those funds to 
                the student's account or pays those funds 
                directly to the student, except to the extent 
                that the student's tuition, fees, or other 
                institutional charges are satisfied by--
                          (i) grant funds provided by non-
                        Federal public agencies or private 
                        sources independent of the institution;
                          (ii) funds provided under a 
                        contractual arrangement with a Federal, 
                        State, or local government agency for 
                        the purpose of providing job training 
                        to low-income individuals who are in 
                        need of that training;
                          (iii) funds used by a student from 
                        savings plans for educational expenses 
                        established by or on behalf of the 
                        student and which qualify for special 
                        tax treatment under the Internal 
                        Revenue Code of 1986; or
                          (iv) institutional scholarships 
                        described in subparagraph (D)(iii);
                  (D) include institutional aid as revenue to 
                the school only as follows:
                          (i) in the case of loans made by a 
                        proprietary institution of higher 
                        education on or after July 1, 2008 and 
                        prior to July 1, 2012, the net present 
                        value of such loans made by the 
                        institution during the applicable 
                        institutional fiscal year accounted for 
                        on an accrual basis and estimated in 
                        accordance with generally accepted 
                        accounting principles and related 
                        standards and guidance, if the loans--
                                  (I) are bona fide as 
                                evidenced by enforceable 
                                promissory notes;
                                  (II) are issued at intervals 
                                related to the institution's 
                                enrollment periods; and
                                  (III) are subject to regular 
                                loan repayments and 
                                collections;
                          (ii) in the case of loans made by a 
                        proprietary institution of higher 
                        education on or after July 1, 2012, 
                        only the amount of loan repayments 
                        received during the applicable 
                        institutional fiscal year, excluding 
                        repayments on loans made and accounted 
                        for as specified in clause (i); and
                          (iii) in the case of scholarships 
                        provided by a proprietary institution 
                        of higher education, only those 
                        scholarships provided by the 
                        institution in the form of monetary aid 
                        or tuition discounts based upon the 
                        academic achievements or financial need 
                        of students, disbursed during each 
                        fiscal year from an established 
                        restricted account, and only to the 
                        extent that funds in that account 
                        represent designated funds from an 
                        outside source or from income earned on 
                        those funds;
                  (E) in the case of each student who receives 
                a loan on or after July 1, 2008, and prior to 
                July 1, 2011, that is authorized under section 
                428H or that is a Federal Direct Unsubsidized 
                Stafford Loan, treat as revenue received by the 
                institution from sources other than funds 
                received under this title, the amount by which 
                the disbursement of such loan received by the 
                institution exceeds the limit on such loan in 
                effect on the day before the date of enactment 
                of the Ensuring Continued Access to Student 
                Loans Act of 2008; and
                  (F) exclude from revenues--
                          (i) the amount of funds the 
                        institution received under part C, 
                        unless the institution used those funds 
                        to pay a student's institutional 
                        charges;
                          (ii) the amount of funds the 
                        institution received under subpart 4 of 
                        part A;
                          (iii) the amount of funds provided by 
                        the institution as matching funds for a 
                        program under this title;
                          (iv) the amount of funds provided by 
                        the institution for a program under 
                        this title that are required to be 
                        refunded or returned; and
                          (v) the amount charged for books, 
                        supplies, and equipment, unless the 
                        institution includes that amount as 
                        tuition, fees, or other institutional 
                        charges.
          (2) Sanctions.--
                  (A) Ineligibility.--A proprietary institution 
                of higher education that fails to meet a 
                requirement of subsection (a)(24) for two 
                consecutive institutional fiscal years shall be 
                ineligible to participate in the programs 
                authorized by this title for a period of not 
                less than two institutional fiscal years. To 
                regain eligibility to participate in the 
                programs authorized by this title, a 
                proprietary institution of higher education 
                shall demonstrate compliance with all 
                eligibility and certification requirements 
                under section 498 for a minimum of two 
                institutional fiscal years after the 
                institutional fiscal year in which the 
                institution became ineligible.
                  (B) Additional enforcement.--In addition to 
                such other means of enforcing the requirements 
                of this title as may be available to the 
                Secretary, if a proprietary institution of 
                higher education fails to meet a requirement of 
                subsection (a)(24) for any institutional fiscal 
                year, then the institution's eligibility to 
                participate in the programs authorized by this 
                title becomes provisional for the two 
                institutional fiscal years after the 
                institutional fiscal year in which the 
                institution failed to meet the requirement of 
                subsection (a)(24), except that such 
                provisional eligibility shall terminate--
                          (i) on the expiration date of the 
                        institution's program participation 
                        agreement under this subsection that is 
                        in effect on the date the Secretary 
                        determines that the institution failed 
                        to meet the requirement of subsection 
                        (a)(24); or
                          (ii) in the case that the Secretary 
                        determines that the institution failed 
                        to meet a requirement of subsection 
                        (a)(24) for two consecutive 
                        institutional fiscal years, on the date 
                        the institution is determined 
                        ineligible in accordance with 
                        subparagraph (A).
          (3) Publication on college navigator website.--The 
        Secretary shall publicly disclose on the College 
        Navigator website--
                  (A) the identity of any proprietary 
                institution of higher education that fails to 
                meet a requirement of subsection (a)(24); and
                  (B) the extent to which the institution 
                failed to meet such requirement.
          (4) Report to congress.--Not later than July 1, 2009, 
        and July 1 of each succeeding year, the Secretary shall 
        submit to the authorizing committees a report that 
        contains, for each proprietary institution of higher 
        education that receives assistance under this title, as 
        provided in the audited financial statements submitted 
        to the Secretary by each institution pursuant to the 
        requirements of subsection (a)(24)--
                  (A) the amount and percentage of such 
                institution's revenues received from sources 
                under this title; and
                  (B) the amount and percentage of such 
                institution's revenues received from other 
                sources.
  (e) Code of Conduct Requirements.--An institution of higher 
education's code of conduct, as required under subsection 
(a)(25), shall include the following requirements:
          (1) Ban on revenue-sharing arrangements.--
                  (A) Prohibition.--The institution shall not 
                enter into any revenue-sharing arrangement with 
                any lender.
                  (B) Definition.--For purposes of this 
                paragraph, the term ``revenue-sharing 
                arrangement'' means an arrangement between an 
                institution and a lender under which--
                          (i) a lender provides or issues a 
                        loan that is made, insured, or 
                        guaranteed under this title to students 
                        attending the institution or to the 
                        families of such students; and
                          (ii) the institution recommends the 
                        lender or the loan products of the 
                        lender and in exchange, the lender pays 
                        a fee or provides other material 
                        benefits, including revenue or profit 
                        sharing, to the institution, an officer 
                        or employee of the institution, or an 
                        agent.
          (2) Gift ban.--
                  (A) Prohibition.--No officer or employee of 
                the institution who is employed in the 
                financial aid office of the institution or who 
                otherwise has responsibilities with respect to 
                education loans, or agent who has 
                responsibilities with respect to education 
                loans, shall solicit or accept any gift from a 
                lender, guarantor, or servicer of education 
                loans.
                  (B) Definition of gift.--
                          (i) In general.--In this paragraph, 
                        the term ``gift'' means any gratuity, 
                        favor, discount, entertainment, 
                        hospitality, loan, or other item having 
                        a monetary value of more than a de 
                        minimus amount. The term includes a 
                        gift of services, transportation, 
                        lodging, or meals, whether provided in 
                        kind, by purchase of a ticket, payment 
                        in advance, or reimbursement after the 
                        expense has been incurred.
                          (ii) Exceptions.--The term ``gift'' 
                        shall not include any of the following:
                                  (I) Standard material, 
                                activities, or programs on 
                                issues related to a loan, 
                                default aversion, default 
                                prevention, or financial 
                                literacy, such as a brochure, a 
                                workshop, or training.
                                  (II) Food, refreshments, 
                                training, or informational 
                                material furnished to an 
                                officer or employee of an 
                                institution, or to an agent, as 
                                an integral part of a training 
                                session that is designed to 
                                improve the service of a 
                                lender, guarantor, or servicer 
                                of education loans to the 
                                institution, if such training 
                                contributes to the professional 
                                development of the officer, 
                                employee, or agent.
                                  (III) Favorable terms, 
                                conditions, and borrower 
                                benefits on an education loan 
                                provided to a student employed 
                                by the institution if such 
                                terms, conditions, or benefits 
                                are comparable to those 
                                provided to all students of the 
                                institution.
                                  (IV) Entrance and exit 
                                counseling services provided to 
                                borrowers to meet the 
                                institution's responsibilities 
                                for entrance and exit 
                                counseling as required by 
                                subsections (b) and (l) of 
                                section 485, as long as--
                                          (aa) the 
                                        institution's staff are 
                                        in control of the 
                                        counseling, (whether in 
                                        person or via 
                                        electronic 
                                        capabilities); and
                                          (bb) such counseling 
                                        does not promote the 
                                        products or services of 
                                        any specific lender.
                                  (V) Philanthropic 
                                contributions to an institution 
                                from a lender, servicer, or 
                                guarantor of education loans 
                                that are unrelated to education 
                                loans or any contribution from 
                                any lender, guarantor, or 
                                servicer that is not made in 
                                exchange for any advantage 
                                related to education loans.
                                  (VI) State education grants, 
                                scholarships, or financial aid 
                                funds administered by or on 
                                behalf of a State.
                          (iii) Rule for gifts to family 
                        members.--For purposes of this 
                        paragraph, a gift to a family member of 
                        an officer or employee of an 
                        institution, to a family member of an 
                        agent, or to any other individual based 
                        on that individual's relationship with 
                        the officer, employee, or agent, shall 
                        be considered a gift to the officer, 
                        employee, or agent if--
                                  (I) the gift is given with 
                                the knowledge and acquiescence 
                                of the officer, employee, or 
                                agent; and
                                  (II) the officer, employee, 
                                or agent has reason to believe 
                                the gift was given because of 
                                the official position of the 
                                officer, employee, or agent.
          (3) Contracting arrangements prohibited.--
                  (A) Prohibition.--An officer or employee who 
                is employed in the financial aid office of the 
                institution or who otherwise has 
                responsibilities with respect to education 
                loans, or an agent who has responsibilities 
                with respect to education loans, shall not 
                accept from any lender or affiliate of any 
                lender any fee, payment, or other financial 
                benefit (including the opportunity to purchase 
                stock) as compensation for any type of 
                consulting arrangement or other contract to 
                provide services to a lender or on behalf of a 
                lender relating to education loans.
                  (B) Exceptions.--Nothing in this subsection 
                shall be construed as prohibiting--
                          (i) an officer or employee of an 
                        institution who is not employed in the 
                        institution's financial aid office and 
                        who does not otherwise have 
                        responsibilities with respect to 
                        education loans, or an agent who does 
                        not have responsibilities with respect 
                        to education loans, from performing 
                        paid or unpaid service on a board of 
                        directors of a lender, guarantor, or 
                        servicer of education loans;
                          (ii) an officer or employee of the 
                        institution who is not employed in the 
                        institution's financial aid office but 
                        who has responsibility with respect to 
                        education loans as a result of a 
                        position held at the institution, or an 
                        agent who has responsibility with 
                        respect to education loans, from 
                        performing paid or unpaid service on a 
                        board of directors of a lender, 
                        guarantor, or servicer of education 
                        loans, if the institution has a written 
                        conflict of interest policy that 
                        clearly sets forth that officers, 
                        employees, or agents must recuse 
                        themselves from participating in any 
                        decision of the board regarding 
                        education loans at the institution; or
                          (iii) an officer, employee, or 
                        contractor of a lender, guarantor, or 
                        servicer of education loans from 
                        serving on a board of directors, or 
                        serving as a trustee, of an 
                        institution, if the institution has a 
                        written conflict of interest policy 
                        that the board member or trustee must 
                        recuse themselves from any decision 
                        regarding education loans at the 
                        institution.
          (4) Interaction with borrowers.--The institution 
        shall not--
                  (A) for any first-time borrower, assign, 
                through award packaging or other methods, the 
                borrower's loan to a particular lender; or
                  (B) refuse to certify, or delay certification 
                of, any loan based on the borrower's selection 
                of a particular lender or guaranty agency.
          (5) Prohibition on offers of funds for private 
        loans.--
                  (A) Prohibition.--The institution shall not 
                request or accept from any lender any offer of 
                funds to be used for private education loans 
                (as defined in section 140 of the Truth in 
                Lending Act), including funds for an 
                opportunity pool loan, to students in exchange 
                for the institution providing concessions or 
                promises regarding providing the lender with--
                          (i) a specified number of loans made, 
                        insured, or guaranteed under this 
                        title;
                          (ii) a specified loan volume of such 
                        loans; or
                          (iii) a preferred lender arrangement 
                        for such loans.
                  (B) Definition of opportunity pool loan.--In 
                this paragraph, the term ``opportunity pool 
                loan'' means a private education loan made by a 
                lender to a student attending the institution 
                or the family member of such a student that 
                involves a payment, directly or indirectly, by 
                such institution of points, premiums, 
                additional interest, or financial support to 
                such lender for the purpose of such lender 
                extending credit to the student or the family.
          (6) Ban on staffing assistance.--
                  (A) Prohibition.--The institution shall not 
                request or accept from any lender any 
                assistance with call center staffing or 
                financial aid office staffing.
                  (B) Certain assistance permitted.--Nothing in 
                paragraph (1) shall be construed to prohibit 
                the institution from requesting or accepting 
                assistance from a lender related to--
                          (i) professional development training 
                        for financial aid administrators;
                          (ii) providing educational counseling 
                        materials, financial literacy 
                        materials, or debt management materials 
                        to borrowers, provided that such 
                        materials disclose to borrowers the 
                        identification of any lender that 
                        assisted in preparing or providing such 
                        materials; or
                          (iii) staffing services on a short-
                        term, nonrecurring basis to assist the 
                        institution with financial aid-related 
                        functions during emergencies, including 
                        State-declared or federally declared 
                        natural disasters, federally declared 
                        national disasters, and other localized 
                        disasters and emergencies identified by 
                        the Secretary.
          (7) Advisory board compensation.--Any employee who is 
        employed in the financial aid office of the 
        institution, or who otherwise has responsibilities with 
        respect to education loans or other student financial 
        aid of the institution, and who serves on an advisory 
        board, commission, or group established by a lender, 
        guarantor, or group of lenders or guarantors, shall be 
        prohibited from receiving anything of value from the 
        lender, guarantor, or group of lenders or guarantors, 
        except that the employee may be reimbursed for 
        reasonable expenses incurred in serving on such 
        advisory board, commission, or group.
  (f) Institutional Requirements for Teach-Outs.--
          (1) In general.--In the event the Secretary initiates 
        the limitation, suspension, or termination of the 
        participation of an institution of higher education in 
        any program under this title under the authority of 
        subsection (c)(1)(F) or initiates an emergency action 
        under the authority of subsection (c)(1)(G) and its 
        prescribed regulations, the Secretary shall require 
        that institution to prepare a teach-out plan for 
        submission to the institution's accrediting agency or 
        association in compliance with section 496(c)(3), the 
        Secretary's regulations on teach-out plans, and the 
        standards of the institution's accrediting agency or 
        association.
          (2) Teach-out plan defined.--In this subsection, the 
        term ``teach-out plan'' means a written plan that 
        provides for the equitable treatment of students if an 
        institution of higher education ceases to operate 
        before all students have completed their program of 
        study, and may include, if required by the 
        institution's accrediting agency or association, an 
        agreement between institutions for such a teach-out 
        plan.
  (g) Inspector General Report on Gift Ban Violations.--The 
Inspector General of the Department shall--
          (1) submit an annual report to the authorizing 
        committees identifying all violations of an 
        institution's code of conduct that the Inspector 
        General has substantiated during the preceding year 
        relating to the gift ban provisions described in 
        subsection (e)(2); and
          (2) make the report available to the public through 
        the Department's website.
  (h) Preferred Lender List Requirements.--
          (1) In general.--In compiling, maintaining, and 
        making available a preferred lender list as required 
        under subsection (a)(27), the institution will--
                  (A) clearly and fully disclose on such 
                preferred lender list--
                          (i) not less than the information 
                        required to be disclosed under section 
                        153(a)(2)(A);
                          (ii) why the institution has entered 
                        into a preferred lender arrangement 
                        with each lender on the preferred 
                        lender list, particularly with respect 
                        to terms and conditions or provisions 
                        favorable to the borrower; and
                          (iii) that the students attending the 
                        institution, or the families of such 
                        students, do not have to borrow from a 
                        lender on the preferred lender list;
                  (B) ensure, through the use of the list of 
                lender affiliates provided by the Secretary 
                under paragraph (2), that--
                          (i) there are not less than three 
                        lenders of loans made under part B that 
                        are not affiliates of each other 
                        included on the preferred lender list 
                        and, if the institution recommends, 
                        promotes, or endorses private education 
                        loans, there are not less than two 
                        lenders of private education loans that 
                        are not affiliates of each other 
                        included on the preferred lender list; 
                        and
                          (ii) the preferred lender list under 
                        this paragraph--
                                  (I) specifically indicates, 
                                for each listed lender, whether 
                                the lender is or is not an 
                                affiliate of each other lender 
                                on the preferred lender list; 
                                and
                                  (II) if a lender is an 
                                affiliate of another lender on 
                                the preferred lender list, 
                                describes the details of such 
                                affiliation;
                  (C) prominently disclose the method and 
                criteria used by the institution in selecting 
                lenders with which to enter into preferred 
                lender arrangements to ensure that such lenders 
                are selected on the basis of the best interests 
                of the borrowers, including--
                          (i) payment of origination or other 
                        fees on behalf of the borrower;
                          (ii) highly competitive interest 
                        rates, or other terms and conditions or 
                        provisions of loans under this title or 
                        private education loans;
                          (iii) high-quality servicing for such 
                        loans; or
                          (iv) additional benefits beyond the 
                        standard terms and conditions or 
                        provisions for such loans;
                  (D) exercise a duty of care and a duty of 
                loyalty to compile the preferred lender list 
                under this paragraph without prejudice and for 
                the sole benefit of the students attending the 
                institution, or the families of such students;
                  (E) not deny or otherwise impede the 
                borrower's choice of a lender or cause 
                unnecessary delay in loan certification under 
                this title for those borrowers who choose a 
                lender that is not included on the preferred 
                lender list; and
                  (F) comply with such other requirements as 
                the Secretary may prescribe by regulation.
          (2) Lender affiliates list.--
                  (A) In general.--The Secretary shall maintain 
                and regularly update a list of lender 
                affiliates of all eligible lenders, and shall 
                provide such list to institutions for use in 
                carrying out paragraph (1)(B).
                  (B) Use of most recent list.--An institution 
                shall use the most recent list of lender 
                affiliates provided by the Secretary under 
                subparagraph (A) in carrying out paragraph 
                (1)(B).
  (i) Definitions.--For the purpose of this section:
          (1) Agent.--The term ``agent'' has the meaning given 
        the term in section 151.
          (2) Affiliate.--The term ``affiliate'' means a person 
        that controls, is controlled by, or is under common 
        control with another person. A person controls, is 
        controlled by, or is under common control with another 
        person if--
                  (A) the person directly or indirectly, or 
                acting through one or more others, owns, 
                controls, or has the power to vote five percent 
                or more of any class of voting securities of 
                such other person;
                  (B) the person controls, in any manner, the 
                election of a majority of the directors or 
                trustees of such other person; or
                  (C) the Secretary determines (after notice 
                and opportunity for a hearing) that the person 
                directly or indirectly exercises a controlling 
                interest over the management or policies of 
                such other person's education loans.
          (3) Education loan.--The term ``education loan'' has 
        the meaning given the term in section 151.
          (4) Eligible institution.--The term ``eligible 
        institution'' means any such institution described in 
        section 102 of this Act.
          (5) Officer.--The term ``officer'' has the meaning 
        given the term in section 151.
          (6) Preferred lender arrangement.--The term 
        ``preferred lender arrangement'' has the meaning given 
        the term in section 151.
  (j) Construction.--Nothing in the amendments made by the 
Higher Education Amendments of 1992 shall be construed to 
prohibit an institution from recording, at the cost of the 
institution, a hearing referred to in subsection (b)(2), 
subsection (c)(1)(D), or subparagraph (A) or (B)(i) of 
subsection (c)(2), of this section to create a record of the 
hearing, except the unavailability of a recording shall not 
serve to delay the completion of the proceeding. The Secretary 
shall allow the institution to use any reasonable means, 
including stenographers, of recording the hearing.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

                              Introduction

    H.R. 5933, the Defending Education Transparency and Ending 
Rogue Regimes Engaging in Nefarious Transactions (DETERRENT) 
Act would amend the Higher Education Act of 1965 (HEA) to 
impose increased reporting requirements for foreign gifts and 
contracts. If enacted, H.R. 5933 would force institutions of 
higher education to comply with overly burdensome and 
duplicative reporting requirements with no discernable increase 
of security or oversight. Further, H.R. 5933 would jeopardize 
the essential global partnerships among institutions that play 
a critical role in the United States' social, economic, and 
technological progress.

              Research and Development in Higher Education

    Institutions of higher education have long been incubators 
of research and development that advances the scientific 
knowledge of the United States. Institutions conduct 
innovative, collaborative, multidisciplinary research with the 
goal to improve the economy, international competitiveness, and 
quality of life for individuals.\1\ Federal investment has 
played a key role in this collaborative process for over 80 
years: the National Science Foundation was established in 1950 
based federal government sponsorship of university research to 
aid the Allied effort in World War II; the first federal 
student loans were authorized to increase technical and 
scientific knowledge of U.S. scientists to help prevail in the 
Cold War.\2\ The system has evolved to a point where 
institutions heavily rely on federal investments to advance 
their research and development priorities. The federal 
government, via grants from a multitude of federal agencies, 
provides roughly $30 billion annually to institutions to 
support research and development efforts, and this federal 
funding accounts for roughly 60 percent of institutions' 
research and development budgets.\3\ Institutions also 
collaborate with a range of international entities on grants 
received from the federal government through partnerships with 
foreign universities and faculty. The research community and 
Committee Democrats agree: to successfully advance complex 
research, it is essential to have a ``diversity of research 
capabilities, perspectives, and access to resources.''\4\
---------------------------------------------------------------------------
    \1\See generally e.g., Ass'n of Pub. & Land-Grant Univs., Public 
Impact Research: APLU Impact, Our Work: Fostering Research & Innovation 
To Meet Societal Needs, https://www.aplu.org/our-work/2-fostering-
research-innovation/public-impact-research/ (last visited Nov. 13, 
2023); Ass'n of Pub. & Land-Grant Univ., University Innovation and 
Entrepreneurship Showcase: APLU Impact, Our Work: Econ. Dev. & Cmty. 
Engagement, https://www.aplu.org/our-work/5-archived-projects/economic-
development-and-community-engagement/university-innovation-and-
entrepreneurship-showcase/ (last visited Nov. 13, 2023).
    \2\National Science Foundation, History, https://new.nsf.gov/about/
history; National Defense Education Act of 1958, Title II, Pub. L. 85-
864; 72 Stat. 1580, Sept. 2, 1958.
    \3\See Am. Ass'n for the Advantage of Sci., R&D at Colleges and 
Universities, Programs: R D Budget And Pol'y (Oc. 2022) https://
www.aaas.org/programs/r-d-budget-and-policy/rd-colleges-and-
universities.
    \4\Id.
---------------------------------------------------------------------------

             Addressing Undue Foreign Influence in Research

    Due to the inherent international nature of research, 
protecting against undue foreign influence is important for 
institutions and the federal government.\5\ Institutions 
recognize they have a responsibility to safeguard research and 
protect against intellectual property theft, but unwarranted or 
overinflated concerns of undue foreign influence can inhibit 
the ability of institutions and individual scholars to develop 
a global perspective in their research and teaching. 
Unfortunately, these unjustifiable concerns may also often lead 
to the fueling of xenophobic rhetoric and behaviors, 
particularly towards Asians, Asian Americans, and Middle 
Eastern Americans conducting research in the United States or 
in collaboration with American partners. This rhetoric is 
extremely harmful, and it contributes to the diminishing of the 
United States' ``superpower of attracting global scientific 
talent.''\6\
---------------------------------------------------------------------------
    \5\See generally e.g., Candice N. Wright, Agency Actions Needed to 
Address Foreign Influence, U.S. Gov. Acct. Off.: Fed. Rsch. 1, 
Testimony before the Subcmte. on Investigation & Oversight, and the 
Subcmte. on Rsch. & Technology of the H. Comm. on Sci, Space & Tech. 
(Oct. 5, 2021) https://www.gao.gov/assets/gao-22-105434.pdf; Off. of 
the Chief of Rsch Section Strategy & Pol'y, Research Security at the 
National Science Foundation, Nat'l Sci. Found.: Rsch Section https://
new.nsf.gov/research-security (last visited Nov. 13, 2023).
    \6\Dr. Eric Lander, Guidance for U.S. Scientific Research Security 
That Preserves International Collaboration, The White House: OSTP Ostp 
Blog (Jan. 4, 2022) https://www.whitehouse.gov/ostp/news-updates/2022/
01/04/guidance-for-u-s-scientific-research-security-that-preserves-
international-collaboration/.
---------------------------------------------------------------------------
    Committee Republicans argue that institutions refuse ``to 
adhere to the law'' with respect to foreign influence,\7\ but 
this could not be further from reality. The country's leading 
research universities have proven they are committed to 
securing federally funded research and are demonstrating that 
commitment by constantly working to ensure compliance with 
foreign influence laws and regulations. In 2020, the 
Association of American Universities (AAU) and the Association 
of Public and Land-grant Universities (APLU) conducted a survey 
that found institutions are consistently working to improve 
their disclosure policies, enhancing training around foreign 
security risks, and developing robust risk mitigation 
strategies and assessments.\8\ Further, a recent letter signed 
by seventeen of the leading higher education organizations 
emphasized that institutions have increasingly strengthened 
relationships with the Federal Bureau of Investigations and 
other security agencies to ensure ``compliance with export-
control laws and other federal requirements.''\9\
---------------------------------------------------------------------------
    \7\See H. Comm. on Educ. & the Workforce, Fact Sheet, DETERRENT 
ACT, https://edworkforce.house.gov/uploadedfiles/
10.11.23_deterrent_act_118th_congress_bill_fact_sheet_
final_pdf.pdf.
    \8\See generally Ass'n of Am. Univ., University Actions to Address 
Concerns About Security Threats and Undue Foreign Government Influence 
on Campus, Actions Taken By Univ. To Address Sci. And Sec. Concerns 1-2 
(May 19, 2020) https://www.aau.edu/sites/default/files/AAU-Files/Key-
Issues/Science-Security/2020-Effective-Science-Security-Practices-
Summary.pdf.
    \9\Letter from Ted Mitchell, President, Am. Council on Educ., to 
Chairwoman Virginia Foxx & Ranking Member Bobby Scott, U.S. H. Comm. on 
Educ. & the Workforce 1-2 (Nov. 6, 2023) (on file with Comm. on Educ. & 
the Workforce, Minority Staff).
---------------------------------------------------------------------------

                 Federal Policies on Foreign Influence

    Institutions have expressed that to better address research 
security at institutions, intentional federal interagency 
coordination is essential.\10\ As described in detail below, 
the federal government has acted on this concern and 
established robust coordinated policies to ensure institutions 
can address undue foreign influence in a manner that is not 
overly duplicative or burdensome. While Committee Republicans 
argue the Department of Education should be leading the fight 
against foreign influence, this position fails to recognize 
that the overwhelming majority of research funding flowing to 
our institutions are coming from agencies and Departments other 
than the Department of Education. This push to centralize 
operations at the Department of Education ignores the multitude 
of policies and initiatives within the federal government that 
already exist to address research security and protect 
institutions from undue foreign influence. Through these 
policies and initiatives, most of which are outside the 
jurisdiction of this Committee, the Biden Administration is 
already establishing one cohesive compliance process across 
agencies, one that adoption of H.R. 5933 would needlessly 
complicate.
---------------------------------------------------------------------------
    \10\See generally Letter from Ass'n of Am. Univ., to Dr. Eric 
Lander, Assistant to the President & Dir., Off. of Sci. & Tech. Pol'y 
1-2 (Sept. 30, 2021) https://www.acenet.edu/Documents/Comments-OSTP-
Presidential-Memo-NSPM-33-093021.pdf.
---------------------------------------------------------------------------

Office for Science and Technology Policy and NSPM-33 Federal Guidance

    The Office for Science and Technology Policy (OSTP) advises 
the President on matters related to Science and Technology.\11\ 
OSTP coordinates with federal agencies, Congress, and external 
partners, including institutions of higher education, to 
support research, regulation, and innovation.\12\ In 2021, 
President Biden issued the Presidential Memorandum on United 
States Government-Supported Research and Development National 
Security Policy (NSPM-33) to direct ``action to strengthen 
protections of United States Government-supported Research and 
Development against foreign government interference and 
exploitation.''\13\ This guidance establishes the priorities of 
OSTP and other agencies involved in enforcing disclosures of 
funds, foreign influence, and other research security 
risks.\14\ NSPM 33 outlines the central priorities of 
enforcement on foreign influence for all institutions 
including: sharing awareness of risks and disclosure 
requirements, limiting access and vetting foreign students, and 
providing research to ``protect federally funded R&D from 
foreign government interference.''\15\ NSPM-33 plays an 
integral role ``in advancing American competitiveness and 
keeping America at the forefront of innovation and 
technological development.'' For example, OSTP is currently 
working to standardize the forms utilized for reporting across 
all agencies, to ensure that institutions report accurate and 
consistent information.\16\ Through engaging with the U.S. 
research community, this guidance establishes robust 
requirements to safeguard against undue foreign influence.\17\
---------------------------------------------------------------------------
    \11\See generally Off. of Sci. & Tech. Pol'y, The White House: Off. 
Of Sci. & Tech. Pol'y, https://www.whitehouse.gov/ostp/ (2022) 
(explaining that how the OSTP was established by the National Science 
and Technology Policy, Organizations and Priorities Act of 1976).
    \12\Id. Six teams that steer the recommendations through the OSTP: 
Climate and Environment, Energy, Health Outcomes, National Security and 
Science and Society, Technology. For further specifics see Off. of Sci. 
& Tech. Pol'y, The White House: Off. Of Sci. & Tech. Pol'y, https://
www.whitehouse.gov/ostp/ (2022).
    \13\Exec. Off. of the President, Presidential Memorandum on United 
States Government: Supported Research and Development National Security 
Policy, Nat'l Section Presidential Memorandum 33, https://
trumpwhitehouse.archives.gov/presidential-actions/presidential-
memorandumunited-states-government-supported-research-development-
national-security-policy/ (Jan. 14, 2021) (calling on various Executive 
Officials to work on increasing roles, responsibilities and priorities 
to combat the significant influence from foreign entities on U.S. 
Research and Development).
    \14\See id. (elaborating on how the Secretary of Homeland Security, 
the Director of National Intelligence, and Director of the Office of 
Science and Technology Policy on the National Science and Technology 
Council to work as representative of their fields to develop 
coordinated activities for protection and outreach).
    \15\See generally Morgan Dwyer, Christina Ciocca Eller, & Ryan 
Donohue, An Update on Research Security: Streamlining Disclosure 
Standards to Enhance Clarity, Transparency, and Equity, The White 
House: OSTPstp Blog https://www.whitehouse.gov/ostp/news-updates/2022/
08/31/an-update-on-research-securitystreamlining-disclosure-standards-
to-enhance-clarity-transparency-and-equity/ (Aug. 31, 2022) 
(elaborating the other priorities include, information sharing amongst 
agencies, reviewing funding agencies, identifying risks and conduct 
analysis and promoting international research and development 
cooperation).
    \16\Id.
    \17\See id.
---------------------------------------------------------------------------

CHIPS and Science Act

    The CHIPS and Science Act of 2022 establishes the National 
Science Foundation (NSF) as the primary agency charged with 
coordinating research security initiatives, since it provides 
the relevant prohibitions, guidance, and disclosure 
requirements ``around foreign talent recruitment programs and 
potential conflicts of interest.''\18\ NSF is required to 
create policies, protocols, and resources to identify and 
address any potential security risks to research integrity for 
institutions.\19\ Furthermore, the Act requires NSF to create a 
Research Security and Policy Office in the Office of the 
Director to coordinate all security policies and conduct due 
diligence regarding compliance with any security standards set 
forth.\20\ Similarly, CHIPS and Science Act requires that all 
institutions must annually report to NSF in any financial 
information associated with a foreign country of concern and 
directs NSF to create guardrails around foreign talent 
programs.\21\
---------------------------------------------------------------------------
    \18\CHIPS and Science Act, Sec.  10631, Pub. L. 117-167, 72 Stat. 
1580, Aug. 9, 2022 (``Not later than 180 days after the date of 
enactment of this Act, the Director of the Office of Science and 
Technology Policy, in coordination with the interagency working group 
established under . . . [23 U.S.C. 6601] . . . shall publish and widely 
distribute a uniform set of guidelines for federal research agencies 
regarding foreign talent recruitment programs.''). The CHIPS and 
Science Act also requires that the N.S.F. establishes an independent 
risk assessment center to help institutions and researchers understand 
and mitigate security risks. See Nat'l Sci. Found., CHIPS and Science, 
Nat'l Sci. Found. https://new.nsf.gov/chips (last visited Nov. 13, 
2023).
    \19\CHIPS and Science Act Sec.  10331(1).
    \20\Id.; See Ass'n of Am. Univs. & Ass'n of Pub. & Land-Grant 
Univs., Research Security Provisions, The CHIPS & p And s And Sci. Act 
Of 2022 1 (H.R. 4346) (last updated Aug. 8, 2022) https://www.aau.edu/
sites/default/files/AAU-Files/Key-Issues/Science-Security/
CHIPSandScienceFinalResearchSecurityProvisions.pdf (quoting H.R. 4346, 
117th Cong. Sec.  10331 (2022)).
    \21\CHIPS and Science Act Sec.  10339B, 10631; See Ass'n of Am. 
Univs. & Ass'n of Pub. & Land-Grant Univs., Research Security 
Provisions, The THE CH& And Sci. Act Of 2022 022 1 (H.R. 4346) (last 
updated Aug. 8, 2022) https://www.aau.edu/sites/default/files/AAU-
Files/Key-Issues/Science-Security/
CHIPSandScienceFinalResearchSecurityProvisions.pdf.
---------------------------------------------------------------------------
    While Republicans argue that the Biden Administration is 
``crippling'' its enforcement of foreign influence,\22\ it is 
evident that the administration has already committed to 
implementing a cohesive, interagency plan to combat undue 
foreign influence by passing robust provisions doing so into 
law.
---------------------------------------------------------------------------
    \22\See Press Release, Congresswoman Michelle Steel Press Off., 
Steel, Foxx Bill Will Deter Foreign Adversaries' Influences in 
Postsecondary Education, (Oct. 11, 2023) https://steel.house.gov/media/
press-releases/steel-foxx-bill-will-deter-foreign-adversaries-
influence-postsecondary.
---------------------------------------------------------------------------

                Section 117 of the Higher Education Act

    While other federal agencies may dominate the research 
security space, the Department of Education (Department) does 
have a role to play. HEA section 117 requires institutions of 
higher education receiving federal financial assistance to 
disclose any gifts received from, and contracts with, foreign 
sources valued at $250,000 or more per year.\23\ This 
disclosure is designed to ``promote public transparency about 
the role of foreign funding in U.S. higher education'' and 
protect government-funded activities from foreign 
influence.\24\ Although Congress first required institutions to 
report foreign gifts and contracts to the Department in 1986, 
institutions only recently received formal guidance from the 
Department on Section 117 compliance through the creation of a 
website containing written guidance, webinars, and other 
resources to assist institutions.\25\
---------------------------------------------------------------------------
    \23\Higher Education Act of 1965, Sec.  117, 20 U.S.C. 1011f 
(2023); see Off. of Fed. Student Aid, Section 117 Foreign Gift and 
Contract Reporting, Knowledge Ctr Home: Topics: Fed. Student Aid (May 
15, 2023) https://fsapartners.ed.gov/knowledge-center/topics/section-
117-foreign-gift-and-contract-reporting.
    \24\Id.
    \25\See e.g., Pub. Law 99-498, Higher Education Amendments of 1986, 
Title XII, Section 1206, adding HEA Title XII, Sec.  1207 (Oct. 17, 
1986) (then codified at 20 U.S.C. 1145(d)); Off. of Fed. Student Aid, 
Section 117 Foreign Gift and Contract Reporting, Knowledge Ctr Home: 
Topics: Fed. Student Aid (May 15, 2023) https://fsapartners.ed.gov/
knowledge-center/topics/section-117-foreign-gift-and-contract-
reporting.
---------------------------------------------------------------------------

Section 117 Enforcement and Changes

    Under the Trump Administration, the Department's Office of 
General Counsel (OGC) initiated 12 civil investigations to 
ensure Section 117 compliance.\26\ These investigations did not 
ultimately lead to charges of criminal activity by any 
institution. In 2020, the Department created an online portal 
for institutions to submit reports on contracts with, and gifts 
from, foreign sources. Currently, gift and contract report 
submissions occur through the portal, rather than through the 
institution's process for accessing federal student aid program 
participation. This was a strong step forward for streamlining 
the reporting requirements.
---------------------------------------------------------------------------
    \26\Institutions investigated include Georgetown Univ, Texas A&M 
Univ., Rutgers Univ., Cornell Univ., Univ. of Maryland, Massachusetts 
Institute of Tech., Harvard Univ., Yale Univ., Univ. of Texas, Case 
Western Reserve Univ., Fordham Univ., and Stanford Univ. See for 
further information on institution actions, U.S. Dept. Of Educ., 
Institutional Compliance with Section 117 of the Higher Education Act 
of 1965 (Oct. 2020).
---------------------------------------------------------------------------
    Section 117 oversight was the sole responsibility of the 
Office of Federal Student Aid (FSA) at the Department until 
2020, at which time OGC assumed responsibility for most aspects 
of Section 117 administration. However, in June 2022, the 
Department moved oversight of this requirement back to FSA and 
assured stakeholders that FSA would work with OGC to ensure 
robust compliance.\27\ The Department believes that FSA is well 
positioned to execute this responsibility because it has robust 
auditing and review expertise, given that FSA has previously 
been responsible for the systems used to collect Section 117 
data and it already collects data from institutions 
participating in federal student aid programs.\28\ The 
Department has also committed to collaborating with other 
federal agencies to continue enhancing interagency initiatives 
through the NSPM-33 guidance.\29\ And while Committee 
Republicans argue that Section 117 is ``the single biggest 
enforcement tool to protect against the threats posed by 
foreign adversaries,'' Section 117 is merely one piece of the 
collective foreign influence work done across the federal 
government.\30\
---------------------------------------------------------------------------
    \27\See U.S. Dept. Of Educ., Section 117 of the Higher Education 
Act, Presentation by U.S. Dept Of Educ. (2020) https://www2.ed.gov/
policy/highered/leg/section117-webinar-202206.pdf; also James Kvaal, 
Undersecretary, U.S. Dept. Of Educ., Opinion Letter to Virginia Foxx, 
Ranking Member, Educ. and the Workforce Comm. to Response to Comm's 
Letter about Sec.  117 of HEA, U.S. H.R. 2-3 (May 15, 2023).
    \28\See James Kvaal, Undersecretary, U.S. DEPT. OF EDUC., Letter to 
Rep. Banks, U.S. H.R.: Comm. on Educ. and the Workforce as a Response 
to Comm's Letter about Sec.  117 of HEA 3 (April 3, 2023) https://
fsapartners.ed.gov/sites/default/files/2023-05/Letterto
RepresentativeBanksApril32023.pdf.
    \29\Exec. Off. of the President, Presidential Memorandum on United 
States Government: Supported Research and Development National Security 
Policy, Nat'l Section Presidential Memorandum 33 (Jan. 14, 2021) 
https://trumpwhitehouse.archives.gov/presidential-actions/presidential-
memorandum-united-states-government-supported-research-development-
national-security-policy/.
    \30\Press Release, Congresswoman Michelle Steel Press Office, 
Steel, Foxx Bill Will Deter Foreign Adversaries' Influences in 
Postsecondary Education, (Oct. 11, 2023) https://steel.house.gov/media/
press-releases/steel-foxx-bill-will-deter-foreign-adversaries-
influence-postsecondary.
---------------------------------------------------------------------------

Department of Education Has Seen an Increase in Section 117 Compliance

    Committee Republicans have also expressed concern over 
reports of unreported foreign gifts and continue to push the 
Department to more forcefully implement Section 117 
reporting.\31\ It is worth noting, however, that the Department 
under the Biden Administration is already overseeing the most 
robust compliance reporting ever with the effort led by FSA; 
over 30,000 transactions and $1.5 billion more of gifts and 
contracts have been reported under this administration compared 
to the previous administration.\32\ Further improvements of 
Section 117 enforcement under FSA include the conducting of 
investigations and initiating a data collection effort not 
undertaken before.\33\ Given these drastic improvements to 
institutional reporting, it is disingenuous at best to say that 
the administration and institutions are not committed to 
ensuring Section 117 compliance.
---------------------------------------------------------------------------
    \31\See generally H. Comm. on Educ. and Workforce Majority Party 
Members, Opinion Letter to Sec'y of Educ. on the Off. of Gen. Couns' 
Rep. re: Requirements of Foreign Gift Reporting (Apr. 7, 2023) https://
edworkforce.house.gov/uploadedfiles/letter_to_secretary_cardona_on_
Section_117_vf.pdf.
    \32\Examining the Policies and Priorities of the Department of 
Education: Hearing Before the H. Comm. On Educ. & the Workforce, 118th 
Cong. (May 16, 2023) (statement of Honorable Miguel Cardona, Sec'y U.S. 
Dept. Of Educ.) https://edworkforce.house.gov/calendar/
eventsingle.aspx?EventID=409132.
    \33\See James Kvaal, Undersecretary, U.S. Dept Of Educ., Opinion 
Letter to Virginia Foxx, Ranking Member, Educ. and the Workforce Comm. 
on Sec.  117 of the HEA Act, U.S. H.R. 3 (May 15, 2023) https://
fsapartners.ed.gov/sites/default/files/2023-05/
LettertoRepresentativeBanks
April32023.pdf.
---------------------------------------------------------------------------

         H.R. 5933 Partially Streamlines Section 117 Reporting

    Committee Republicans claim the DETERRENT Act will address 
what they argue are outstanding compliance issues caused by 
reporting failures of institutions and enforcement failures of 
the Department.\34\ While most of H.R. 5933 is cause for alarm, 
it is first worth noting the provisions that Committee 
Democrats were pleased to see included in the bill. First, the 
bill would make Section 117 reporting an annual requirement. 
This improves upon the current biannual reporting requirement 
and aligns with the new NSF reporting obligations.\35\ Second, 
H.R. 5933 would require the Department to establish and 
maintain a searchable, public database containing details on 
all disclosure reports submitted. The database, in conjunction 
with the new portal introduced in 2020, would streamline the 
reporting process for institutions. Finally, the bill would 
require the Department to designate a single point of contact 
for Section 117 communications. This would allow institutions 
to have a clear understanding of who they can reach out to for 
questions and concerns related to initial reporting, updates to 
reports, and any issues around the database. Unfortunately, 
these are the only components of H.R. 5933 that meaningfully 
improve Section 117. Committee Democrats offered a Democratic 
Amendment in the Nature of a Substitute (Substitute) that 
included these streamlined changes, in addition to other 
sensible updates to Section 117, but the amendment was 
defeated.
---------------------------------------------------------------------------
    \34\Press Release, H. Comm. On Educ. & Workforce, Steel, Foxx Bill 
Will Deter Foreign Adversaries' Influence in Postsecondary Education 
(Oct. 11, 2023) https://edworkforce.house.gov/news/
documentsingle.aspx?DocumentID=409661.
    \35\See generally Letter from Ted Michell, President of Am. Council 
on Educ., to Suzanne H. Plimpton, Reports Clearance Officer, Nat'l Sci. 
Found. (June 12, 2023) https://www.acenet.edu/Documents/Comments-NSF-
PAPPG-Foreign-Gifts-061223.pdf (elaborating within June 23 comment on 
N.S.F. Proposal and Awards Policies & Procedure Guide (PAPPG)).
---------------------------------------------------------------------------

           H.R. 5933 Does Not Promote Section 117 Compliance

    Despite its beneficial provisions, H.R. 5933 would pile on 
unnecessary and unmeaningful requirements that will make it 
harder for institutions to comply with Section 117, ignoring 
the significant strides taken by the Trump and Biden 
Administrations to align research security protocols across 
federal agencies.

Unworkable Waivers

    One example of the lack of workability of H.R. 5933 
surrounds the waiver process for collaborating with foreign 
entities of concerns outlined in the newly proposed HEA Section 
117a. The provision would require institutions to obtain a 
waiver from the Department before entering into any contracts 
with foreign entities of concern. This assumes that the 
Department has the expertise to review detailed contracts 
focused on scientific research in a uniform, timely fashion. It 
is strange to expect a federal agency focused on education to 
also have the technical expertise to assess potential risks 
associated with research and technologies at the center of 
these partnerships. Rather, Congress should be encouraging 
institutions to comply with the existing export-control 
requirements maintained by NSF and the Departments of Commerce, 
Treasury, and State.\36\
---------------------------------------------------------------------------
    \36\Bureau of Industry & Sec., Entity List, Dept. Of Com.: Bureau 
Of Indus. & Sec. https://www.bis.doc.gov/index.php/policy-guidance/
lists-of-parties-of-concern/entity-list (last visited Nov. 15, 2023); 
Off. of Foreign Assets Control, About OFAC, U.S. Dept. Of The Treasury: 
Off. Of Foreign Assets Control https://ofac.treasury.gov/about-ofac 
(last visited Nov. 15, 2023); Directorate of Def. Trade Controls, 
Announcements, About D.D.T.C. & Access D.E.C.C.S., U.S. Dept. Of State: 
Directorate Of Def. Trade Controls https://www.pmddtc.state.gov/
ddtc_public/ddtc_public (last visited Nov. 15, 2023).
---------------------------------------------------------------------------

Enforcement

    The enforcement structure under the newly proposed HEA 
Section 117d is also deeply concerning. The bill would force 
immediate and harsh enforcement penalties onto institutions 
without offering any measures to support institutions. For 
example, first-time violations of Section 117 would 
automatically trigger a fine not less than $50,000 and could 
lead to a sanction of millions of dollars for large scale 
contracts. These sanctions do not take into consideration the 
potential for mistakes, which are bound to occur; under the 
higher reporting standards mandated by H.R. 5933 including 
broader definitions of ``reportable gifts'' and ``contracts'', 
institutions could be submitting hundreds of reports to the 
Department every year. The Democratic Substitute offered a 
sensible enforcement policy that gives the Department 
discretion to determine fines and would require institutions to 
establish robust plans to address any compliance concerns 
identified by the Department.
    Another troubling component of the enforcement structure is 
that it ties violations of Section 117 to the loss of federal 
student aid funding under Title IV of the HEA. This means 
students, who often have limited connections to research 
decisions at institutions, could be punished for de minimis 
errors in foreign gift reporting. If the purpose of H.R. 5933 
is to improve the institutional compliance, it is hard to see 
how such inflexible and harsh sanctions, in conjunction with 
the misalignment with other federal policies, reach this goal.

H.R. 5933 Would Create a Chilling Effect for International Research and 
                                Scholars

    Institutions of higher education recognize the importance 
of creating diverse campus communities by supporting 
international students and scholars on their campuses. 
Fostering a positive campus climate helps create a learning and 
social environment which benefits all students and 
scholars.\37\ Additionally, it is clear xenophobic attitudes 
have contributed to the decreased safety of international 
students and scholars.\38\ Due to the continued, heightened 
discrimination against students of color and international 
scholars, it is imperative that we do not inadvertently 
perpetuate more hatred when developing policy to address 
foreign influence on college campuses.
---------------------------------------------------------------------------
    \37\Julia Starkey, Effective Strategies for Building and Sustaining 
a Positive School Culture and Climate, 27 ACAD. OF EDUC. LEADERSHIP J. 
2, 1-2 (2023) https://www.abacademies.org/articles/Effective-
strategies-for-building-and-sustaining-a-positive-school-culture-and-
climate-1528-2643-27-S2-004.pdf.
    \38\See Goldie Blumenstyk, How Xenophobia Affects Higher Education, 
The Chron. Of Higher Educ.: Glob. (May 29, 2019) https://
www.chronicle.com/article/how-xenophobia-affects-higher-education/.
---------------------------------------------------------------------------
    There have been a multitude of cases where international 
scholars have been wrongfully accused of inciting undue foreign 
influence, and the consequences are damning. A 2022 study 
published by the National Academy of Sciences surveying over 
1,300 Asian American faculty found that although the majority 
(89 percent) of these faculty desire to contribute to U.S. 
advancements in science and technology, many (72 percent) feel 
unsafe conducting research in the U.S.\39\ One poignant 
example--the experience of Dr. Greg Chen--highlights the 
significant negative impact these wrongful accusations. A 
former Massachusetts Institute of Technology professor, Dr. 
Chen, was wrongfully accused of espionage, and chose to no 
longer continue his research studies due to fear and anxiety 
around being racially profiled.\40\ As a Chinese immigrant, Dr. 
Chen emphasized how his wrongful accusation has caused damage 
and will be difficult to overcome.\41\
---------------------------------------------------------------------------
    \39\See Yu Xie, Xhihong Lin, & et. Al., Caught in the crossfire: 
Fears of Chinese-American scientists, Proc. Of Nat'l Acad. Of Sci. Of 
The U.S. Of Am.: Rsch Article: Soc. Sci. 3-5 (June 27, 2023) https://
www.pnas.org/doi/10.1073/pnas.2216248120#body-ref-r1.
    \40\See generally Kimmy Yam, MIT Professor Wrongfully Accused of 
Spying for China Helps Make a Major Discovery, NBC News: Asian Am. 
(Aug. 25, 2022) https://www.nbcnews.com/news/asian-america/mit-
professor-wrongfully-accused-spying-china-helps-make-major-discove-rcna
44637.
    \41\Id.
---------------------------------------------------------------------------
    H.R. 5933 would create a chilling effect for international 
scholars and research by encouraging these types of attacks. 
The newly proposed HEA Section 117b would require institutions 
to maintain a public database of gifts to, and contracts with, 
individual faculty and staff--a database that would include 
personal information of faculty and staff. Not only does this 
provision create an egregious amount of insignificant and 
unnecessary data collection, but it also raises serious privacy 
and security concerns. By listing individual names, faculty and 
staff can be easily targeted by foreign adversaries. Further, 
H.R. 5933 would perpetuate the misguided and heightened 
scrutiny of international scholars. Due to the lack of clarity 
in the bill, faculty and staff will struggle to know when to 
report common interactions with their international colleagues 
that don't pose national security threats, such as attending 
events in their personal capacity and accepting collegial 
hospitality. Ultimately, this will lead to international 
scholars being avoided by their colleagues merely for fear of 
being connected to international funding. This perpetuates the 
idea that collaborations with foreign partners are 
fundamentally problematic, which cannot be further from the 
goals of research at institutions.
    Committee Democrats are committed to maintaining a 
welcoming campus for all, including international students, 
faculty, and scholars. During the markup, Ranking Member Scott 
put forth two amendments to address this issue that would 
narrow the types of gifts and contracts needed to be reported 
under Section 117b, to ensure only meaningful data is being 
collected. Additionally, Ms. Manning offered an amendment that 
would protect faculty from the disclosure of their individual 
names on their public databases. Committee Republicans voted 
down these amendments, painting a clear picture that protecting 
scholars from foreign targeting or racial harassment is not a 
priority. Their refusal to accept these amendments shows that 
H.R. 5933 is not a serious attempt to address the serious topic 
of national security.

        Democratic Amendments Offered During Markup of H.R. 5933

    Committee Democrats put forward three discrete amendments 
to improve the underlying bill. These amendments would have 
streamlined Section 117 reporting and protected the privacy of 
faculty and staff. Democrats also offered an Amendment in the 
Nature of a Substitute to create a HEA Section 117 that 
recognizes its role as part of, but not the center of undue 
foreign influence and research security framework. Committee 
Republicans rejected all of the Democratic amendments that were 
considered.

------------------------------------------------------------------------
 Amendment       Offered By           Description         Action Taken
------------------------------------------------------------------------
#1.........  Ms. Manning......  To remove certain       Defeated
                                 requirements related
                                 to the database
                                 established under
                                 Sec. 117b.
#2.........  Mr. Scott........  To exclude from the     Defeated
                                 definition of a gift
                                 for the purposes of
                                 Sec. 117b any
                                 receptions, widely
                                 attended events,
                                 charity events, or
                                 personal hospitality.
#3.........  Mr. Scott........  To increase the gift    Defeated
                                 and contract
                                 reporting threshold
                                 for individual
                                 faculty in Sec. 117b
                                 to $25,000..
#4.........  Mr. Scott........  Democratic Amendment    Defeated
                                 in the Nature of a
                                 Substitute.
------------------------------------------------------------------------

                               Conclusion

    H.R. 5933 is an attempt to overcorrect problems that are 
currently being addressed across the federal government. 
Institutions of higher education have shown their efforts to 
comply with all federal foreign influence laws and regulations, 
including Section 117 of the Higher Education Act, and the 
Department of Education has indicated its commitment to help 
institutions remain in compliance. While Committee Republicans 
argue this legislation will deter nefarious actions, H.R. 5933 
merely deters institutions from making great strides on 
innovative research that impacts the global community and 
American competitiveness. For the reasons stated above, we urge 
the House of Representatives to oppose H.R. 5933.
                                   Robert C. ``Bobby'' Scott,
                                     Ranking Member.
                                   Gregorio Kilili Camacho Sablan.
                                   Mark DeSaulnier.
                                   Jahana Hayes.