Model Policy
Section I. Short Title.

This Act may be cited as the “Public Transparency on Foreign Grants and Gifts Act.”

Section II. Preamble.

WHEREAS, globalization has increased the number of interactions between foreign governments and state agencies; and

WHEREAS, these interactions often involve highly sensitive technological research initiatives and government policy; and

WHEREAS, public research initiatives, especially in public colleges and research institutes, can be funded by foreign governments with few restrictions; and

WHEREAS, these funds might be used to export sensitive research findings to foreign governments and influence public policy in the United States; and

WHEREAS, there is nearly universal consensus among American policymakers that the United States needs to assess and reduce undue foreign influence in public activities; and

WHEREAS, state law imposes few restrictions on relationships between foreign governments and state agencies; and

WHEREAS, the security of the United States and its people would be improved by greater public transparency regarding the current role of foreign funding in public institutions.

Section III. Definitions.

As used in this Act, the term:
(a) “Affiliate organization” means any entity under the control of or established for the benefit of an organization required to report under this Act, including a direct-support organization.
(b) “Contract” means any agreement for the direct benefit or use of any party to such agreement, including an agreement for the sale of commodities or services. “Contract” also means any agreement for the acquisition by purchase, lease, or barter of property or services by the foreign source, for the direct benefit or use of either the parties, and any purchase, lease, or barter of property or services from a foreign country of concern as defined here.
(c) “Foreign country of concern” means the People’s Republic of China, the Russian Federation, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, the Venezuelan regime of Nicolas Maduro, or the Syrian Arab Republic, including any agency of or any other entity under significant control of such foreign country of concern.
(d) “Foreign government” means the government of any country, nation, or group of nations, or any province or other political subdivision of any country or nation, other than the government of the United States or the government of a state or political subdivision, including any agent of such foreign government.
(e) “Foreign source” means any of the following:
(1) A foreign government or an agency of a foreign government.
(2) A legal entity, governmental or otherwise, created solely under the laws of a foreign state or states.
(3) An individual who is not a citizen or a national of the United States or a territory or protectorate of the United States.
(4) An agent, including a subsidiary or an affiliate of a foreign legal entity, acting on behalf of a foreign source.
(f) “Gift” means any transfer of money or property from one entity to another without compensation.
(g) “Grant” means a transfer of money for a specified purpose, including a conditional gift.
(h) “Institution of higher education” means a state university, an independent nonprofit college or university that is located in and charted by the state and grants baccalaureate or higher degrees, any other institution that has a physical presence in the state and is required to report foreign gifts or contracts pursuant to 20 U.S.S s. 1011f, or an affiliate organization of an institution of higher education.
(i) “Interest” in an entity means any direct or indirect investment in or loan to the entity valued at 5 percent or more of the entity’s net worth or any form of direct or indirect control exerting similar or greater influence on the governance of the entity.
(j) “Public school” means any education institution under the supervision of a school district and any entity under the control of or established for the benefit of a public school or school district.
(k) “State agency” means any agency or unit of state government created or established by law and any entity under the control of or established for the benefit of a state agency.
(l) “State college” means any postsecondary education institution under the supervision of the State Board of Education or other relevant state department, including any entity under the control of or established for the benefit of a state college.
(m) “State university” means any state university under the supervision of the Board of Governors, including any entity under the control of or established for the benefit of a state university.

Section IV. The Act

Be it enacted by this state legislative chamber that:

Foreign Gifts and Contracts

(1) Any state agency or political subdivision that receives directly or indirectly any gift or grant with a value of $50,000 or more from any foreign source shall disclose such gift or grant to the Department of Financial Services or other relevant state agency within 30 days after receiving such gift or grant. Such disclosure shall include the date of the gift or grant, the amount of the gift or grant, and the name and country of residence or domicile of the foreign source.

(2)(a) Any entity that applies to a state agency or political subdivision for a grant or proposes a contract having a value of $100,000 or more shall disclose to the state agency or political subdivision any current or prior interest of, any contract with, or any grant or gift received from a foreign country of concern if such interest, contract, or grant or gift has a value of $50,000 or more and such interest existed at any time or such contract or grant or gift was received or in force at any time during the previous five years. Such disclosure shall include the name and mailing address of the disclosing entity, the amount of the contract or grant or gift or the value of the interest disclosed, the applicable foreign country of concern and, if applicable, the date of termination of the contract or interest, the date of receipt of the grant or gift, and the name of the agent or controlled entity that is the source or interest holder. Within one year before applying for any grant or proposing any contract, such entity must provide a copy of such disclosure to the Department of Financial Services or relevant state department.

(2)(b) Disclosure under this subsection is not required with respect to:

1. An application or proposal from public or not-for-profit research institutions with respect to research funded by any federal agency.
2. An application or proposal from an entity that discloses foreign gifts or grants under subsection (1) or relevant state law.
3. An application or proposal from a foreign source that, if granted or accepted, would be disclosed under subsection (1) or relevant state law.

(2)(c) A disclosure published online pursuant to subsection (4) is deemed disclosed to every state agency and political subdivision for purposes of paragraph (2)(a). From the time a disclosure is made under paragraph 2(a) through the term of any awarded state grant or contract, the entity must revise its disclosure within 30 days after entering into a contract with or receiving a grant or gift from a foreign country of concern or within 30 days after the acquisition of any interest in the entity by a foreign country of concern.

(3) At least once every five years, the relevant state department shall screen each vendor of commodities participating in the online procurement system if such vendor has the capacity to fill an order of $100,000 or more. Screening must be conducted through federal agencies responsible for identifying persons and organizations subject to trade sanctions, embargoes, or other restrictions under federal law. If a vendor is identified as being subject to any such sanctions, embargoes, or other restrictions, the vendor must make the disclosures required under subsection (2) until such restriction expires. A notification regarding the applicability of the disclosure requirement in subsection (2) to the vendor must be included on the online procurement system when applicable. The Department of Management Services or relevant state department must ensure that purchasers through the online procurement system may easily access all disclosures made by vendors participating in the system.

(4) The Department of Financial Services or other relevant state agency must establish and maintain an Internet website to publish the disclosures required under this section. The Department of Financial Services or other relevant state agency may establish an online system for making such disclosures. The Department of Management Services or other relevant state agency may coordinate with the Department of Financial Services or other relevant state agency to establish the online system.

(5)(a) Upon receiving a referral from an inspector general or other compliance officer of a state agency or political subdivision or any sworn complaint based upon substantive information and reasonable belief, the Department of Financial Services or other relevant state agency must investigate an allegation of a violation of this section.

(5)(b) The Department of Financial Services or other relevant state agency, an inspector general, or any other agent or compliance officer authorized by a state agency or political subdivision may request records relevant to any reasonable suspicion of a violation of this section. An entity must provide the required records within 30 days after such request or at a later time agreed to by the investigating state agency or political subdivision.

(6)(a) Failure to make a disclosure required under this section or failure to provide records requested under paragraph (5)(b) constitutes a civil violation punishable upon a final order of the Department of Financial Services or other relevant state agency by an administrative fine of $5,000 for a first violation or $10,000 for any subsequent violation.

(6)(b) In addition to any fine assessed under paragraph (6)(a), a final order determining a third or subsequent violation by a state agency or political subdivision must include a determination of the identity of the officer responsible for acceptance of the undisclosed grant or gift. Such order must also include a referral by the Department of Financial Services or other relevant state agency to the Governor or another officer authorized to suspend or remove the officer responsible for acceptance of the undisclosed grant or gift from public office. A copy of such referral must be provided to the President of the Senate and the Speaker of the House of Representatives for oversight of such suspension and removal authority.

(6)(c) In addition to any fine assessed under paragraph (6)(a), a final order determining a third or subsequent violation by an entity other than a state agency or political subdivision shall automatically disqualify the entity from eligibility for any grant or contract funded by a state agency or any political subdivision until such ineligibility is lifted by the Administration Commission or other relevant entity for good cause. The Department of Financial Services or other relevant state agency shall include and maintain an active list of such ineligible entities on the Internet website maintained under subsection (4).

(7)(a) The Department of Management Services or other relevant state department may adopt rules necessary to carry out its responsibilities under this section. The rules may identify the federal agencies to be consulted under subsection (3) and the procedure for notifying a vendor of the disclosure requirements under this section when applicable. The Department of Management Services or other relevant state department may also adopt rules providing for the application of this section to the online procurement system.

(7)(b) The Department of Financial Services or other relevant state agency may adopt rules necessary to carry out its responsibilities under this section.

(7)(c) Any rules necessary to implement this section must be published by the date designated by this legislative chamber unless the applicable department head certifies in writing that a delay is necessary and the date by which the proposed rules will be published. Such certification must be published in the state’s Administrative Register and a copy provided to the Joint Administrative Procedures Committee or relevant committee.

International Cultural Agreements

(1) A state agency, political subdivision, public school, state college, or state university authorized to expend state-appropriated funds or levy ad valorem taxes may not participate in any agreement with or accept any grant from a foreign country of concern, or any entity controlled by a foreign country of concern, which:

(a) Constrains the freedom of contract of such public entity;
(b) Allows the curriculum or values of a program in the state to be directed or controlled by the foreign country of concern; or
(c) Promotes an agenda detrimental to the safety or security of the United States or its residents. Prior to the execution of any cultural exchange agreement with a foreign country of concern, the substance of the agreement shall be shared with the federal agencies concerned with protecting national security or enforcing trade sanctions, embargoes, or other restrictions under federal law. If such federal agency provides information suggesting that such agreement promotes an agenda detrimental to the safety or security of the United States or its residents, the public entity may not enter into the agreement.

(2) A state agency, political subdivision, public school, state college, or state university may not accept anything of value conditioned upon participating in a program or other endeavor to promote the language or culture of concern.

Foreign Gift Reporting

(1) Each institution of higher education must semiannually report any gift received directly or indirectly from a foreign source with a value of $50,000 or more during the fiscal year. If a foreign source provides more than one gift directly or indirectly to an institution of higher education in a single fiscal year and the total value of those gifts is $50,000 or more, all gifts received from that foreign source must be reported. For purposes of this subsection, a gift received from a foreign source through an intermediary shall be considered an indirect gift to the institution of higher education. An institution of higher education may consolidate its report with that of all its affiliate organizations. A report required under this subsection must be made to the following entities:

(a) The Board of Governors, if the recipient is a state university or an affiliate organization of such university or entity.
(b) Unless already reported to the Board of Governors pursuant to subsection (1)(a), the State Board of Education, if the recipient is any other institution of higher education or an affiliate organization of such institution.

(2) For each gift subject to the reporting requirement in subsection (1), the reporting of the institution of higher education must provide all the following information, unless otherwise prohibited or deemed confidential under federal law having no exemption applicable to such reporting:

(a) The amount of the gift and the date it was received.
(b) The contract start and end date if the gift is a contract.
(c) The name of the foreign source and, if not a foreign government, the country of citizenship, if known, and the country of principal residence or domicile of the foreign source.
(d) 1. A copy of a gift agreement between the foreign source and the institution of higher education, signed by the foreign source and the chief administrative officer of an institution of higher education, or their respective designees, which must include a detailed description of the purpose for which the gift will be used by the institution of higher education, the identification of the persons for whom the gift is explicitly intended to benefit, and any applicable condition, requirements, restrictions, or terms made a part of the gift regarding the control of curricula, faculty, student admissions, student fees, or contingencies placed upon the institution of higher education to take a specific public position or to award an honorary degree.

(d) 2. Beginning on the date designated by this legislative chamber, the Inspector General of the Board of Governors or the Inspector General of the Department of Education, as applicable, shall annually, within existing resources, randomly inspect or audit at least 5 percent of the total number of gifts disclosed by or gift agreements received from institutions of higher education pursuant to this paragraph during the previous year to determine an institution’s compliance with the requirements of this section with respect to the gifts and gift agreements reviewed.

(d) 3. Upon the request of the Governor, the President of the Senate, or the Speaker of the House of Representatives, the Inspector General of the Board of Governors or the Inspector General of the Department of Education, as applicable, must inspect or audit a gift or gift agreement.

(3) The Board of Governors, as applicable, shall exercise its authority to sanction an institution of higher education that fails to report a reportable gift within 60 days after the reporting deadlines established in subsection (1).

(4)(a) An institution of higher education that knowingly, willfully, or negligently fails to disclose the information required by this section shall be subject to a civil penalty of 105 percent of the amount of the undisclosed gift, payable only from nonstate funds of the institution of higher education or the affiliate organization that received such gift. The recovered funds must be deposited into the General Revenue Fund. The Board of Governors and the State Board of Education, as applicable, may administratively enforce this section and impose the civil penalty as an administrative penalty.

(4)(b) In the absence of enforcement by the Board of Governors or the State Board of Education, as applicable, the Attorney General or the Chief Financial Officer may bring a civil action to enforce this section. If such action is successful, the Attorney General or the Chief Financial Officer, as applicable, is entitled to reasonable attorney fees and costs.

(4)(c) A whistle-blower who reports an undisclosed foreign gift to the appropriate inspector general may also report such undisclosed foreign gift to the Attorney General or the Chief Financial Officer and retain whistle-blower protection as permissible by law. Such whistle-blower shall be entitled to receive a reward in the amount of 25 percent of any penalty recovered by the Board of Governors, the State Board of Education, the Attorney General, or the Chief Financial Officer under this section. The Chief Financial Officer is authorized to incur expenditures to provide such reward from the penalty recovery. The reward may be paid through an intermediary attorney or trustee designated by the whistle-blower.

(5) Information reported under subsection (2) is not confidential except as provided by state law or unless protected by any statue as a trade secret.

(6) The Board of Governors may adopt regulations, and the State Board of Education may adopt rules, to implement this section.

Screening Foreign Researchers

(1) Each state university or entity that receives state appropriations or state tax revenue and has a research budget of $10 million or more must screen applicants seeking employment in research or research-related support positions, graduate and undergraduate students applying for research or research-related support positions, and applicants for positions of visiting researchers who are citizens of a foreign country and who are not permanent residents of the United States, or who are citizens or permanent residents of the United States who have any affiliation with an institution or program, or at least one year of prior employment or training, excepting employment or training by an agency of the United States, in a foreign country of concern. Such screening is required prior to interviewing such applicant or offering to such applicant a position of employment or of visiting researcher. At the discretion of the university or entity, other applicants for such positions may be screened.

(2) In addition to satisfying all employment and enrollment qualifications imposed by federal law, the Board of Governors or the governing board of the applicable entity must require the following of applicants included in subsection (1):

(a) A foreign applicant must submit a complete copy of the applicant’s passport and most recently submitted Online Nonimmigrant Visa Application, DS-160. After extraction of all information relevant to the requirements of this section, a university or entity may destroy or return the copy of the DS-160 submitted by an applicant.
(b) All applicants described in subsection (1) must submit a complete resume and curriculum vitae, including every institution of higher education attended; all previous employment since the applicant’s 18th birthday; a list of all published materials for which the applicant received credit as an author, a researcher, or otherwise or to which the applicant contributed significant research, writing, or editorial support; a list of the applicant’s current and pending research funding from any source, including funder, amount, applicant’s role on the project, and brief description of the research; and a full disclosure of non-university professional activities, including any affiliation with an institution or program in a foreign country of concern. For applicants who have been continually employed or enrolled in a postsecondary education institution in the United States for 20 years or more, the resume may, but need not, include employment history before the most recent 20 years.

(3) The president or chief administrative officer of the state university or applicable entity shall designate a research integrity office to review all materials required in subsection (2) and take responsible steps to verify all attendance, employment, publications, and contributions listed in the application required in subsection (2) prior to any interview of or offer of a position to the applicant. Reasonable steps include searching public databases for research publications and presentations and public conflict of interest records to identify any research publication or presentation that may have been omitted from the application, contacting all employers of the most recent 10 years to verify employment, contacting all institutions of higher education attended to verify enrollment and educational progress, search public listings of persons subject to sanctions or restrictions under federal law, submitting the applicant’s name and other identifying information to the Federal Bureau of Investigation or any federal agency reasonably willing to scrutinize such applicant for national security or counterespionage purposes, and any other steps deemed appropriate to the office. The state university or applicable entity may also direct the office to approve applicants for hire based on a risk-based determination considering the nature of the research and the background and ongoing affiliations of the applicant.

(4) The requirements of this section must be completed before interviewing or offering any position to an individual described in subsection (1) in any research or research-related support position and before granting such individual any access to research data or activities or other sensitive data. An applicant who must be screened under this section may not be employed in any research or research-related support position if he or she fails to disclose a substantial educational, employment, or research-related activity or publication or presentation at the time of submitting the application required in subsection (2), unless the department head, or a designee, certifies in writing the substance of the nondisclosure and the reasons for disregarding such failure to disclose. A copy of such certifications must be kept in the investigative file of the research integrity office and must be submitted to the nearest Federal Bureau of Investigation field office.

(5) The research integrity office must report to the nearest Federal Bureau of Investigation field office, and to any law enforcement agency designated by the governor or the Board of Governors and the governing board of the applicable entity described in subsection (1), the identity of any applicant who was rejected for employment based on the scrutiny required by this section or other risk-based screening.

(6) By a date designated by this legislative chamber the Inspector General of the Board of Governors, the inspector general of an entity described in subsection (1), or the Auditor General must perform an operational audit regarding the implementation of this section.

Foreign Travel; Research Institutions

(1) By a date designated by this legislative chamber, each state university or entity that receives state appropriations or state tax revenue and has a research budget of $10 million or more must establish an international travel approval and monitoring program. The program must require preapproval and screening by a research integrity office designated by the president or chief administrative officer of the state university or entity for any employment-related foreign travel and employment-related foreign activities engaged in by all faculty, researchers, and research department staff. Such requirement is in addition to any other travel approval process applicable to the state university or entity.

(2)(a) Preapproval by the research integrity office must be based on the applicant’s review and acknowledgment of guidance published by the employing state university or entity which relates to countries under sanctions or other restrictions of the state or the United States government, including any federal license requirement; customs rules; export controls; restrictions on taking state university or entity property, including intellectual property, abroad; restrictions on presentation, teaching, and interactions with foreign colleagues; and other subjects important to the research and academic integrity of the state university or entity.

(2)(b) Preapproval must be based on the binding commitment of the individual traveler not to violate the state university’s or entity’s limitations on travel and activities abroad and to obey all applicable federal laws.

(3) The state university or entity must maintain records of all foreign travel requests and approvals; expenses reimbursed by the university or entity during such travel, including for travel, food, and lodging; and payments and honoraria received during such travel and activities, including for travel, food, and lodging. The state university or entity must also keep records of the purpose of the travel and any record related to the foreign activity review. Such records must be retained for at least three years or any longer period of time required by any other applicable state or federal law.

(4) The state university or entity must provide an annual report of foreign travel to countries of concern listing individual travelers, foreign locations visited, and foreign institutions visited to the Board of Governors or the governing board of the applicable entity.

(5) By a date specified the Inspector General of the Board of Governors, the inspector general of an entity described in subsection (1), or the Auditor General must perform an operational audit regarding the implementation of this section.

This Act shall take effect on the date designated by this legislative chamber.