119-hr1023

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1023 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 1023

 To amend the Higher Education Act of 1965 to require disclosure of 
 certain foreign investments within endowments, and for other purposes.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 February 5, 2025

Mr. Owens (for himself and Mr. Harris of North Carolina) introduced the 
 following bill; which was referred to the Committee on Education and 
 Workforce

_______________________________________________________________________

 A BILL

 To amend the Higher Education Act of 1965 to require disclosure of 
 certain foreign investments within endowments, and for other purposes.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Reporting on Investments in Foreign 
Adversaries Act'' or the ``RIFA Act''.

SEC. 2. INVESTMENT DISCLOSURE REPORT.

    (a) In General.--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. INVESTMENT DISCLOSURE REPORT.

 ``

    (a) Investment Disclosure Report.--A specified institution shall 
file a disclosure report in accordance with subsection

    (b) with the 
Secretary on each 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) shall contain, with respect to the calendar year 
preceding the calendar year in which such report is filed, the 
following information:
 ``

    (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) Treatment of Certain Pooled Investments.--
 ``

    (1) Pooled investment classification.--
 ``
        (A) In general.--For purposes of this section, 
 except as provided in subparagraph
        (B) , a specified 
 interest acquired by a specified institution in a 
 regulated investment company, exchange traded fund, or 
 any other pooled investment that holds an investment of 
 concern shall be treated as an investment of concern 
 and shall be reported pursuant to paragraph

    (2)
        (A) .
 ``
        (B) Certification of pooled investment.--
 Notwithstanding subparagraph
        (A) , such specified 
 interest shall not be subject to subparagraph
        (A) if 
 the Secretary certifies, pursuant to paragraph

    (2)
        (B) , 
 that such pooled investment is not holding an 
 investment of concern.
 ``

    (2) Procedures.--The Secretary, after consultation with 
 the Secretary of the Treasury and the Securities and Exchange 
 Commission, shall establish procedures under which a pooled 
 investment described in paragraph

    (1) --
 ``
        (A) shall be reported in accordance with the 
 requirements of subsection

    (b) ; and
 ``
        (B) may be certified under paragraph

    (1)
        (B) as 
 not holding an investment of concern.
 ``
            (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 and the Securities and Exchange Commission, 
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; and
 ``

    (2) be responsible, on behalf of the institution, for 
 personally certifying accurate compliance with the reporting 
 requirements under this section.
 ``

    (h) Database Requirement.--Beginning not later than the May 31 of 
the calendar year following the date of enactment of the RIFA 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) Enforcement.--
 ``

    (1) Investigation.--The Secretary (acting through the 
 General Counsel of the Department) shall conduct investigations 
 of possible violations of this section by institutions and, 
 whenever it appears that an institution has knowingly or 
 willfully failed to comply with a requirement of this section 
 (including any rule or regulation promulgated under such 
 section), shall request that the Attorney General bring a civil 
 action in accordance with paragraph

    (2) .
 ``

    (2) Civil action.--Whenever it appears that an 
 institution has knowingly or willfully failed to comply with a 
 requirement of this section (including any rule or regulation 
 promulgated under any such section) based on an investigation 
 under paragraph

    (1) , 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 this 
 section.
 ``

    (3) Costs and other fines.--An institution that is 
 compelled to comply with a requirement of this section 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 this 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 is compelled to comply with a 
 requirement of this section pursuant to paragraph

    (2) as 
 follows:
 ``
        (A) First-time violations.--In the case of a 
 specified institution that knowingly or willfully fails 
 to comply with a requirement of this section 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.
 ``
        (B) Subsequent violations.--In the case of a 
 specified institution that has been fined pursuant to 
 subparagraph
        (A) with respect to a calendar year, and 
 that knowingly or willfully fails to comply with a 
 requirement of this section 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.
 ``

    (j) 

=== Definitions. ===
-In this section:
 ``

    (1) Foreign country of concern.--The term `foreign 
 country of concern' means the following:
 ``
        (A) Any covered nation defined in 

section 4872 of 
 title 10, United States Code.
 ``
        (B) Any country the Secretary, in consultation 
 with the Secretary of Defense, the Secretary of State, 
 and the Director of National Intelligence, determines, 
 for purposes of this section, 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).
 ``

    (4) 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) .
 ``

    (5) 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.''.

    (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 

section 117A.
 ``
        (B) An institution that, for 3 consecutive institutional 
 fiscal years, violates any requirement of 

section 117A 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 such section for not less than 
 2 institutional fiscal years after the institutional 
 fiscal year in which such institution became 
 ineligible.''.
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