119-hr3284

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3284 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 3284

 To require audits of institutions with respect to disclosures of 
 foreign gifts, and for other purposes.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 May 8, 2025

Mr. Gill of Texas introduced the following bill; which was referred to 
 the Committee on Ways and Means, and in addition to the Committee on 
Education and Workforce, for a period to be subsequently determined by 
the Speaker, in each case for consideration of such provisions as fall 
 within the jurisdiction of the committee concerned

_______________________________________________________________________

 A BILL

 To require audits of institutions with respect to disclosures of 
 foreign gifts, 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. AUDITS OF INSTITUTIONS WITH RESPECT TO DISCLOSURES OF 
 FOREIGN GIFTS.

 

Section 117 of the Higher Education Act of 1965 (20 U.S.C. 1011f) 
is amended--

    (1) by redesignating subsections

    (g) and

    (h) as subsections

    (h) and
            (i) , respectively; and

    (2) by inserting after subsection

    (f) the following:
 ``

    (g) Audit.--
 ``

    (1) In general.--Beginning not later than 60 days after 
 the date of enactment of this subsection, and every 2 years 
 thereafter, the Secretary shall conduct an audit of no fewer 
 than 30 institutions to assess compliance with the reporting 
 requirements under this section.
 ``

    (2) Determination of institutions to audit.--In 
 determining which institutions to audit under this subsection, 
 the Secretary shall prioritize audits for institutions that 
 meet 1 or more of the following criteria:
 ``
        (A) Institutions that are in the top 1 percent 
 when the endowments of all institutions are ranked from 
 largest to smallest.
 ``
        (B) Institutions with a previous history of 
 receiving a substantial gift from, or entering into a 
 substantial contract with, a foreign source.
 ``
            (C) Institutions that have previously been 
 noncompliant with the requirements of this section.
 ``
            (D) Institutions that publicly report receiving 
 contributions from a foreign entity of concern (as 
 defined in 

section 10612

    (a) of the Research and 
 Development, Competition, and Innovation Act (42 U.S.C. 
 19221

    (a) )).
 ``
        (E) Institutions that have a formal agreement, 
 including a memorandum of understanding, with a Federal 
 agency.
 ``

    (3) Contents of audit.--As part of each audit conducted 
 under this subsection, the Secretary shall determine--
 ``
        (A) if the institution was in compliance with 
 requirements of this section for the 2 reporting years 
 prior to the year in which the audit is conducted; and
 ``
        (B) in the case of noncompliance, the gifts from, 
 or contracts with, foreign sources whose amounts the 
 institution under reported or over reported in the 
 prior 2 reporting years, along with the following 
 information for each of these gifts or contracts:
 ``
            (i) The amount under reported or over 
 reported.
 ``
            (ii) The foreign source.
 ``
            (iii) The country of origin.
 ``
            (iv) The receipt date or contract start 
 and end dates.
 ``

    (4) Report.--Not later than 30 days after the date on 
 which the audit under this subsection is completed, the 
 Secretary shall--
 ``
        (A) submit to Congress a report on the results of 
 the audit; and
 ``
        (B) make the report described in subparagraph
        (A) --
 ``
            (i) available to the Speaker of the 
 House, the majority and minority leaders of the 
 House of Representatives, the majority and 
 minority leaders of the Senate, the Chair and 
 Ranking Member of the committee and each 
 subcommittee of jurisdiction in the House of 
 Representatives and the Senate, and any other 
 Member of Congress who requests the report; and
 ``
            (ii) publicly available on the Department 
 of Education website.''.

SEC. 2. EXCISE TAXES ON CERTAIN CONTRIBUTIONS BY FOREIGN ENTITIES.

    (a) In General.--Subchapter H of chapter 42 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new 
sections:

``

SEC. 4969. EXCISE TAX ON CONTRIBUTIONS TO COLLEGES AND UNIVERSITIES 
 BY FOREIGN COUNTRIES OF CONCERN.

 ``

    (a) Tax Imposed.--There is hereby imposed on each applicable 
institution for the taxable year a tax equal to 300 percent of the 
income of such institution received from any foreign country of concern 
during the taxable year.
 ``

    (b) Applicable Institution.--For purposes of this section, the 
term `applicable institution' means an eligible educational institution 
(as defined in 

section 25A

    (f)

    (2) )--
 ``

    (1) which had at least 500 tuition-paying students during 
 the preceding taxable year, and
 ``

    (2) more than 50 percent of the tuition-paying students 
 of which are located in the United States,
determined according to the rules of 

section 4968

    (b)

    (2) .
 ``
            (c) Foreign Country of Concern.--For purposes of this section, 
the term `foreign country of concern' has the meaning given such term 
by 

section 10612

    (a) of the Research and Development, Competition, and 
Innovation Act.
 ``
            (d) Related Organizations.--Rules similar to the rules of 

section 4968
            (d) shall apply in determining income of an applicable institution 
for purposes of this section.

``

SEC. 4970. EXCISE TAX ON FAILURE TO REPORT CONTRIBUTIONS BY FOREIGN 
 ENTITIES.

 ``

    (a) Tax Imposed.--There is hereby imposed on each institution for 
the taxable year a tax equal to 110 percent of the unreported foreign 
funding received by such institution during the taxable year.
 ``

    (b) Unreported Foreign Funding.--For purposes of this section, 
the term `unreported foreign funding' means an amount equal to the 
value of any gift or contract, or any amount received pursuant to a 
change in ownership or control, required to be reported under 

section 117 of the Higher Education Act of 1965 which is determined not to have 
been so reported by an audit under subsection

    (g) of such section.
 ``
            (c) Timing of Tax.--The tax imposed by subsection

    (a) shall be 
due not later than 180 days after the institution is notified of the 
results of the audit under 

section 117

    (g) of the Higher Education Act 
of 1965.
 ``
            (d) Coordination With 

Section 4969.--In the case of any 
unreported foreign funding which is received from a foreign country of 
concern (as defined in 

section 4969
            (c) ), the tax imposed by subsection

    (a) shall be in addition to any tax imposed by 

section 4969 on such 
funding.
 ``

    (e) Institution; Other Terms.--For purposes of this section, the 
term `institution', and any other term used in this section which is 
used in 

section 117 of the Higher Education Act of 1965, has the same 
meaning as when used in such section.''.

    (b) Clerical Amendments.--

    (1) The table of sections for subchapter H of chapter 42 of 
 the Internal Revenue Code of 1986 is amended by adding at the 
 end the following new items:

``

Sec. 4969. Excise tax on contributions to colleges and universities 
 by foreign countries of concern.
``

Sec. 4970. Excise tax on failure to report contributions by foreign 
 entities.''.

    (2) The heading of subchapter H of chapter 42 of such Code 
 (and the item relating to such subchapter in the table of 
 subchapters for such chapter) are each amended by striking 
 ``Tax Based on Investment Income of'' and inserting ``Taxes 
 on''.
            (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date which is 60 days after 
the date of the enactment of this Act.
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