S. 1296 — DETERRENT Act

This section revises foreign gift and contract disclosure requirements for higher education institutions under Section 117 of the Higher Education Act of 1965 (20 U.S.C. 1011f), lowering the reporting threshold to $50,000 (from $250,000) or indeterminate value for gifts or contracts from foreign sources other than a foreign country of concern or foreign entity of concern; requiring reports for any value gifts from or waived contracts with such countries or entities; shifting reporting from semiannual (January 31 or July 31, whichever sooner) to annual on July 31 for the prior calendar year; and mandating annual reports for institutions substantially controlled by a foreign source. (As background, these disclosures promote transparency regarding potential foreign influence on U.S. higher education institutions that receive federal student aid.) It also deems gifts or contracts with an institution's affiliated entities as received or entered into by the institution and expands report contents to include, for all such transactions, the recipient's name, communicated and intended purposes, restriction descriptions, amounts or values, dates, and—for contracts—effective and termination dates plus assurances of retaining unredacted copies for at least five years or longer as required by state law. Additional details cover foreign governments (name, approving entity, address), nongovernmental foreign sources (legal name, citizenship or incorporation country, address, terrorist organization affiliations), and contracts with countries or entities of concern (unredacted copies and waiver documentation).

This section establishes new requirements under the Higher Education Act of 1965 for certain institutions—those receiving more than $50 million in federal research and development funds in any of the previous five calendar years (per the Higher Education Research and Development Survey) or funds under title VI (International Education Programs)—to maintain, beginning 90 days after enactment: (1) a policy requiring covered individuals at the institution and its affiliates to disclose annually by July 31 certain foreign gifts (exceeding the minimal value in 5 U.S.C. 7342(a) or of indeterminate value) and contracts (thresholds of $5,000 or more, any value, or indeterminate, with full text required for contracts with a foreign country or entity of concern); (2) a publicly available, searchable, downloadable online database of such disclosures (retained up to five years, contract term, or longer per state law), sortable by gift/contract dates, attributable country, institutional division or affiliate, and foreign source; (3) a plan to identify and manage espionage risks from such gifts and contracts via communications, reporting, and enforcement; and (4) records of disclosures for investigations. Disclosures are generally not subject to federal privacy laws but prohibit public release of names or personally identifiable information of natural person foreign sources (except attributable country) or covered individuals, with exceptions for contracts involving foreign countries or entities of concern.

This section establishes a new section 117C of the Higher Education Act of 1965 (HEA) to enforce reporting requirements under HEA sections 117, 117A, and 117B (i.e., disclosure of foreign gifts, contracts, and related arrangements received by institutions of higher education). It requires the Secretary of Education, acting through the General Counsel, to investigate possible violations and, for any knowing or willful noncompliance (including with related rules or regulations), to request the Attorney General to bring a civil action in federal district court to compel compliance. Institutions compelled to comply must reimburse the full costs of investigation and enforcement to the U.S. Treasury and pay fines imposed by the Secretary, structured as follows: (1) For section 117 violations— (A) first-time—greater of $50,000 or the gift/contract value (or 1-10% of the institution's total HEA federal funds for the prior fiscal year if indeterminable value) per unreported item under 117(a)(1), or at least 10% of such funds under 117(a)(2); (B) subsequent—greater of $100,000 or twice the value (or 5-10% of such funds if indeterminable) per item under 117(a)(1), or at least 20% under 117(a)(2); (2) for section 117A violations—5-10% of such funds for first-time, or at least 20% for subsequent; (3) for section 117B violations—[structure begins with first-time fines but is not fully specified in provided text].