Foreign Funding Accountability Act of 2021

II 117TH CONGRESS 1ST SESSION S. 2060 To amend disclosure requirements of foreign gifts and contracts under the Higher Education Act of 1965. IN THE SENATE OF THE UNITED STATES JUNE 15, 2021 Mr. COTTON introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend disclosure requirements of foreign gifts and contracts under the Higher Education Act of 1965. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Foreign Funding Ac- 4 countability Act of 2021’’. 5 SEC. 2. AMENDMENTS TO DISCLOSURES OF FOREIGN GIFTS 6 AND CONTRACTS. 7 Section 117 of the Higher Education Act of 1965 (20 8 U.S.C. 1011f) is amended— 9 VerDate Sep 11 2014 20:09 Jul 01, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2060.IS S2060 jbell on DSKJLSW7X2PROD with BILLS 2 •S 2060 IS (1) by striking subsections (a) and (b) and in- 1 serting the following: 2 ‘‘(a) DISCLOSURE REPORT.— 3 ‘‘(1) FILING.—An institution shall file a disclo- 4 sure report with the Department of Education on 5 January 31 or July 31, whichever is sooner, if the 6 institution— 7 ‘‘(A) is owned or controlled by a foreign 8 source; or 9 ‘‘(B) receives a gift or enters into a con- 10 tract with a foreign source, the value of which 11 is $25,000 or more (including in-kind gifts, 12 gifts to institution foundations, and gifts to any 13 other legal entities that operate substantially 14 for the benefit or under the auspieces of the in- 15 stitution), considered alone or in combination 16 with all other gifts from or contracts with that 17 foreign source within a calendar year. 18 ‘‘(2) TUITION.—A tuition payment to an insti- 19 tution on behalf of an enrolled student by a foreign 20 government or foundation shall be considered a gift 21 from or contract with a foreign source under this 22 subsection. 23 ‘‘(3) DESIGNATED INDIVIDUAL.—Each institu- 24 tion that is required to file a disclosure report under 25 VerDate Sep 11 2014 20:09 Jul 01, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2060.IS S2060 jbell on DSKJLSW7X2PROD with BILLS 3 •S 2060 IS this section shall designate an officer at the institu- 1 tion who shall be responsible for ensuring the verac- 2 ity of the disclosure report. 3 ‘‘(b) CONTENTS OF DISCLOSURE REPORT.— 4 ‘‘(1) OWNED OR CONTROLLED BY A FOREIGN 5 SOURCE.—An institution that is required to file a 6 disclosure report under subsection (a)(1)(A) shall in- 7 clude in the report: 8 ‘‘(A) The identity of the foreign source. 9 ‘‘(B) The date on which the foreign source 10 assumed ownership or control. 11 ‘‘(C) Any changes in program or structure 12 resulting from the change in ownership or con- 13 trol. 14 ‘‘(2) GIFTS OR CONTRACTS.—An institution 15 that is required to file a disclosure report under sub- 16 section (a)(1)(B) shall include in the report: 17 ‘‘(A) The amount of the gift or contract. 18 ‘‘(B) The country of origin of the gift or 19 contract. 20 ‘‘(C) A statement from the foreign source 21 providing the gift or entering into the contract, 22 including, in the case of a foreign source that 23 is— 24 ‘‘(i) an individual, the individual’s— 25 VerDate Sep 11 2014 20:09 Jul 01, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2060.IS S2060 jbell on DSKJLSW7X2PROD with BILLS 4 •S 2060 IS ‘‘(I) name; 1 ‘‘(II) nationality 2 ‘‘(III) principal business address; 3 and 4 ‘‘(IV) all business and residential 5 addresses in the United States or else- 6 where; 7 ‘‘(ii) a partnership— 8 ‘‘(I) the information described in 9 subclause (I) through (IV) of clause 10 (i) with respect to each member of the 11 partnership; and 12 ‘‘(II) a true and complete copy of 13 its articles of copartnership; or 14 ‘‘(iii) an association, corporation, or- 15 ganization, or any other combination of in- 16 dividuals— 17 ‘‘(I) the information described in 18 subclauses (I) through (IV) of clause 19 (i) with respect to each director, offi- 20 cer, and each individual performing 21 the functions of a director or officer 22 for that entity; and 23 VerDate Sep 11 2014 20:09 Jul 01, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2060.IS S2060 jbell on DSKJLSW7X2PROD with BILLS 5 •S 2060 IS ‘‘(II) a statement of the entity’s 1 ownership and control, and the pub- 2 licly listed name of the entity. 3 ‘‘(D) The explicit and intended purpose 4 and function of the gift or contract, including— 5 ‘‘(i) the name (and position if applica- 6 ble) of the recipient individual, depart- 7 ment, or benefactor at the institution re- 8 ceiving the gift or contract; 9 ‘‘(ii) any terms or conditions of the 10 gift or contract; 11 ‘‘(iii) copies of each written agreement 12 and the terms and conditions of each oral 13 agreement, including all modifications of 14 such agreements, relating to the gift or 15 contract; or 16 ‘‘(iv) where no written or oral agree- 17 ment exists, a full statement of all the cir- 18 cumstances relating to the gift or contract. 19 ‘‘(3) ATTESTATION.—Each disclosure report 20 under this section shall include a written statement 21 from the individual designated under subsection 22 (a)(3) attesting that the disclosure report is true 23 and complete.’’; 24 (2) by striking subsections (c) and (d); 25 VerDate Sep 11 2014 20:09 Jul 01, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2060.IS S2060 jbell on DSKJLSW7X2PROD with BILLS 6 •S 2060 IS (3) by redesignating subsections (e) through (h) 1 as subsections (c) through (f), respectively; 2 (4) in subsection (c), as redesignated by para- 3 graph (3), by adding at the end the following: ‘‘All 4 disclosure reports required by this section, including 5 copies of agreements required under subsection 6 (b)(2)(D)(iii), shall be publicly available, including 7 by electronic means.’’; 8 (5) by striking subsection (d), as redesignated 9 by paragraph (3), and inserting the following: 10 ‘‘(d) ENFORCEMENT.— 11 ‘‘(1) CIVIL PENALTIES.—Upon determination, 12 after reasonable notice and opportunity for a hear- 13 ing, that an institution— 14 ‘‘(A) has violated or failed to carry out any 15 provision of this section or any regulation pre- 16 scribed under this section (including by submit- 17 ting a disclosure report with a material 18 misstatement or omission), the Secretary may 19 impose a civil penalty upon such institution of 20 not to exceed, the greater of— 21 ‘‘(i) $250,000 for an initial violation 22 or failure; or 23 VerDate Sep 11 2014 20:09 Jul 01, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2060.IS S2060 jbell on DSKJLSW7X2PROD with BILLS 7 •S 2060 IS ‘‘(ii) the value of the unreported gift 1 or contract for an initial violation or fail- 2 ure; 3 ‘‘(B) commits a second violation or failure 4 as described in subparagraph (A), the Secretary 5 may impose a civil penalty upon such institu- 6 tion of not to exceed, the greater of— 7 ‘‘(i) $750,000; or 8 ‘‘(ii) the value of the unreported gift 9 or contract; 10 ‘‘(C) commits 3 or more violations or fail- 11 ures as described in subparagraph (A)— 12 ‘‘(i) the Secretary may impose a civil 13 penalty upon such institution of not to ex- 14 ceed, the greater of— 15 ‘‘(I) $1,000,000; or 16 ‘‘(II) the value of the unreported 17 gift or contract; and 18 ‘‘(ii) the institution may be subject to 19 penalties relating to the Student and Ex- 20 change Visitor Program and the institu- 21 tion’s tax exempt status, as described in 22 sections 4 and 5 of the Foreign Funding 23 Accountability Act of 2021; or 24 VerDate Sep 11 2014 20:09 Jul 01, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2060.IS S2060 jbell on DSKJLSW7X2PROD with BILLS 8 •S 2060 IS ‘‘(D) commits 3 or more violations or fail- 1 ures as described in subparagraph (A) and has 2 demonstrated a pattern of willful violations, the 3 Secretary may determine that the institution is 4 no longer eligible to receive funds under this 5 Act. 6 ‘‘(2) COURT ORDERS.—Whenever it appears 7 that an institution has failed to comply with the re- 8 quirements of this section, including any rule or reg- 9 ulation promulgated under this section, a civil action 10 may be brought by the Attorney General, at the re- 11 quest of the Secretary, in an appropriate district 12 court of the United States, or the appropriate 13 United States court of any territory or other place 14 subject to the jurisdiction of the United States, to 15 request such court to compel compliance with the re- 16 quirements of this section (including for the collec- 17 tion of civil penalties under this subsection). In case 18 of contumacy by, or refusal to obey a subpoena 19 issued to, any person, the Secretary may request the 20 Attorney General to invoke the aid of any court of 21 the United States where such person resides or 22 transacts business for a court order for the enforce- 23 ment of this section. 24 VerDate Sep 11 2014 20:09 Jul 01, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2060.IS S2060 jbell on DSKJLSW7X2PROD with BILLS 9 •S 2060 IS ‘‘(3) COSTS.—For knowing or willful failure to 1 comply with the requirements of this section, includ- 2 ing any rule or regulation promulgated thereunder, 3 an institution shall pay to the Treasury of the 4 United States the full costs to the United States of 5 obtaining compliance, including all associated costs 6 of investigation and enforcement. 7 ‘‘(4) INVESTIGATION; SUBPOENA AUTHORITY.— 8 The Secretary shall establish an investigative process 9 to identify gifts or contracts with respect to which 10 a disclosure report under this section is required and 11 has not been submitted. To assist the Secretary in 12 the conduct of investigations of possible violations of 13 this section, the Secretary is authorized to require 14 by subpoena the production of information, docu- 15 ments, reports, answers, records, accounts, papers, 16 and other documentary evidence pertaining to this 17 section. The production of any such records may be 18 required from any place in a State.’’; 19 (6) in subsection (f)(2), as redesignated by 20 paragraph (3)— 21 (A) in subparagraph (C), by striking 22 ‘‘and’’ after the semicolon; 23 (B) in subparagraph (D), by adding ‘‘and’’ 24 after the semicolon; and 25 VerDate Sep 11 2014 20:09 Jul 01, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2060.IS S2060 jbell on DSKJLSW7X2PROD with BILLS 10 •S 2060 IS (C) by adding at the end the following: 1 ‘‘(E) any person registered under the For- 2 eign Agents Registration Act of 1938 (22 3 U.S.C. 611 et seq.)’’. 4 SEC. 3. REPORT ON PAST YEARS REQUIRED. 5 (a) IN GENERAL.—Not later than 1 year after the 6 date of enactment of this Act, each institution shall pre- 7 pare and submit to the Secretary of Education a disclo- 8 sure report containing the information described in sub- 9 section (b) of section 117 of the Higher Education Act 10 of 1965 (20 U.S.C. 1011f(b)) (as amended by section 2 11 of this Act) as required under subsection (a) of such sec- 12 tion 117 (as amended by section 2 of this Act) for every 13 qualifying event that has occurred on or after the date 14 of enactment of the Higher Education Amendments of 15 1998 (Public Law 105–244) and before the date of enact- 16 ment of this Act. 17 (b) INSTITUTIONS UNABLE TO COMPLY.—In the 18 case of an institution that is unable to comply with the 19 requirements of subsection (a) with respect to a qualifying 20 event, that institution shall submit a statement to the Sec- 21 retary of Education, for each such qualifying event, de- 22 scribing in detail in detail why the institution cannot com- 23 ply with respect to that qualifying event. 24 VerDate Sep 11 2014 20:09 Jul 01, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2060.IS S2060 jbell on DSKJLSW7X2PROD with BILLS 11 •S 2060 IS (c) WAIVER.—An institution may request, and the 1 Secretary of Education may grant, a waiver with respect 2 to the report required under this section if the institution 3 demonstrates good cause for requiring such a waiver. 4 (d) ENFORCEMENT.— 5 (1) IN GENERAL.—Upon determination, after 6 reasonable notice and opportunity for a hearing, that 7 an institution has violated or failed to carry out any 8 provision of this section or any regulation prescribed 9 under this section (including by submitting a disclo- 10 sure report with a material misstatement or omis- 11 sion), the Secretary of Education may impose a civil 12 penalty upon such institution not to exceed $25,000 13 for each qualifying event that the institution has 14 failed to report in accordance with this section. 15 (2) COURT ORDERS.—Whenever it appears that 16 an institution has failed to comply with the require- 17 ments of this section, including any rule or regula- 18 tion promulgated under this section, a civil action 19 may be brought by the Attorney General, at the re- 20 quest of the Secretary of Education, in an appro- 21 priate district court of the United States, or the ap- 22 propriate United States court of any territory or 23 other place subject to the jurisdiction of the United 24 States, to request such court to compel compliance 25 VerDate Sep 11 2014 20:09 Jul 01, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2060.IS S2060 jbell on DSKJLSW7X2PROD with BILLS 12 •S 2060 IS with the requirements of this section (including for 1 the collection of civil penalties under this sub- 2 section). 3 (3) COSTS.—For knowing or willful failure to 4 comply with the requirements of this section, includ- 5 ing any rule or regulation promulgated thereunder, 6 an institution shall pay to the Treasury of the 7 United States the full costs to the United States of 8 obtaining compliance, including all associated costs 9 of investigation and enforcement. 10 (4) INVESTIGATION; SUBPOENA AUTHORITY.— 11 The Secretary of Education shall establish an inves- 12 tigative process to identify gifts or contracts with re- 13 spect to which a disclosure under this section is re- 14 quired and has not been submitted. The Secretary of 15 Education may use administrative subpoena author- 16 ity as authorized under law to conduct such inves- 17 tigations. 18 (e) DEFINITIONS.—In this section: 19 (1) INSTITUTION.—The term ‘‘institution’’ has 20 the meaning given that term in section 117 of the 21 Higher Education Act of 1965 (20 U.S.C. 1011f). 22 (2) QUALIFYING EVENT.—In this section the 23 term ‘‘qualifying event’’ means an institution— 24 VerDate Sep 11 2014 20:09 Jul 01, 2021 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S2060.IS S2060 jbell on DSKJLSW7X2PROD with BILLS 13 •S 2060 IS (A) being owned or controlled by a f [Text truncated for display. Full text available on Congress.gov.]