Reporting on Investments in Foreign Adversaries Act or the RIFA Act
This bill requires private institutions of higher education (IHEs) with specified assets or investments involving foreign countries or entities of concern to file annual investment disclosure reports. The bill applies to a private IHE with (1) assets in excess of $6 billion, or (2) investments of concern in excess of $250 million.
Specifically, the bill requires such a private IHE to file a disclosure report with the Department of Education (ED) for a year in which the IHE purchases, sells, or holds one or more investments of concern. Investment of concern means any specified interest (e.g., stock or debt) with respect to a foreign country of concern (e.g., North Korea, China, Russia, or Iran) or a foreign entity of concern (e.g., a foreign entity that is designated as a foreign terrorist organization).
Additionally, the bill requires ED to establish and maintain a publicly available and searchable database with these disclosure reports.
The bill requires ED to investigate possible violations of this bill and outlines the various penalties for each violation. Penalties may include losing eligibility for federal student financial aid.
[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.''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Education and Workforce.
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