Illinois General Assembly - Full Text of SB1917

LRB104 09647 LNS 19713 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB1917

Introduced 2/6/2025, by Sen. Chris Balkema

SYNOPSIS AS INTRODUCED:

New Act

Creates the Illinois Defending Education Transparency and Ending Rogue Regimes Engaging in Nefarious Transactions (DETERRENT) Act. Requires an institution to file a disclosure report annually on July 1 when: (1) an institution received a gift from, or entered into a contract with, a foreign source, other than a foreign country of concern or foreign entity of concern, with a value of $50,000 or more, or an undetermined value; (2) an institution receives a gift from a foreign country of concern or foreign entity of concern of any dollar amount; (3) an institution enters into a contract with a foreign country of concern or foreign entity of concern after receiving a waiver for such contract; or (4) an institution is substantially controlled by a foreign source. Requires the Board of Higher Education to establish and maintain a searchable, public database on the Board's website that: (1) contains all reports submitted; (2) includes any information provided in such reports; (3) is searchable and sortable by date filed, date of the gift received or contract entered into, by attributable country of the gift or contract, and by institution; (4) indicates whether a gift is from a foreign government or from a foreign source that is not a foreign government; and (5) indicates when a report does not contain the name or address of a foreign source. Prohibits an institution from entering into any contracts with foreign entities of concern or countries of concern. Provides that private institutions with endowments above $6,000,000,000 or with investments of concern above $250,000,000 shall report: (1) a list of the investments of concern; (2) the aggregate fair market value of all investments of concern; (3) the combined value of all investments of concern; and (4) the combined value of all capital gains from such sales of investments of concern. Sets forth how the Act may be enforced, including fines for violations.

A BILL FOR

AN ACT concerning education.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Illinois Defending Education Transparency and Ending Rogue Regimes Engaging in Nefarious Transactions (DETERRENT) Act.

Section 5. Definitions. In this Act:

"Affiliated entity" means an entity or organization that operates primarily for the benefit of, or under the auspices of, such institution, including a foundation of the institution or a related entity, including, but not limited to, any educational, cultural, or language entity.

"Attributable country" means:

(1) the country of citizenship of a foreign source who is a natural person, or, if such country is unknown, the principal residence, as applicable, of such foreign source; or

(2) the country of incorporation of a foreign source that is a legal entity, or, if such country is unknown, the principal place of business, as applicable, of such foreign source.

"Contract" means:

(1) any agreement for the acquisition by purchase, lease, or barter of property or services by the foreign source;

(2) any affiliation, agreement, or similar transaction with a foreign source that involves the use or exchange of an institution's name, likeness, time, services, or resources; and

(3) any agreement for the acquisition by purchase, lease, or barter, of property or services from a foreign source, other than an arms-length agreement for such acquisition from a foreign source that is not a foreign country of concern or a foreign entity of concern; and "Contract" does not include an agreement made between an institution and a foreign source regarding any payment of one or more elements of a student's cost of attendance, unless such an agreement is made for more than 15 students or is made under a restricted or conditional contract.

"Board" means the Board of Higher Education.

"Foreign county of concern" means:

(1) a country that is a covered nation, as defined in Section 4872(d) of Title 10 of the United States Code;

(2) any country that the United States Secretary of Education, in consultation with the United States Secretary of Defense, the United States Secretary of State, and the United States Director of National Intelligence, determines to be engaged in conduct that is detrimental to the national security or foreign policy of the United States.

"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).

"Foreign source" means

(1) a foreign government, including an agency of a foreign government;

(2) a legal entity, governmental or otherwise, created under the laws of a foreign state or states;

(3) a legal entity, governmental or otherwise, substantially controlled by a foreign source, as described in Section 668.174(c)(3) of Title 34 of the Code of Federal Regulations or successor regulations;

(4) a natural person who is not a citizen or a national of the United States or a trust territory or protectorate thereof;

(5) an agent of a foreign source, including:

(A) a subsidiary or affiliate of a foreign legal entity, acting on behalf of a foreign source;

(B) a person that operates primarily for the benefit of, or under the auspices of, a foreign source, including a foundation or a related entity, such as any educational, cultural, or language entity; and

(C) a person who is an agent of a foreign principal, as defined in Section 1 of the federal Foreign Agents Registration Act of 1938; and

(6) an international organization, as such term is defined in the federal International Organizations Immunities Act.

"Gift" means any gift of money, property, resources, staff, or services. "Gift" does not include:

(1) any payment of one or more elements of a student's cost of attendance, as defined in Section 472 of the federal Higher Education Act, to an institution by, or scholarship from, a foreign source who is a natural person, acting in their individual capacity and not as an agent for, at the request or direction of, or on behalf of, any person or entity, except the student, made for not more than 15 students, and that is not made under a restricted or conditional contract with such foreign source;

(2) assignment or license of registered industrial and intellectual property rights, such as patents, utility models, trademarks, or copyrights, or technical assistance, that are not associated with a category listed in the Commerce Control List maintained by the Bureau of Industry and Security of the Department of Commerce and set forth in Supplement No. 1 to Part 774 of Title 15 of the Code of Federal Regulations; or

(3) decorations, as defined in Section 7342(a) of Title 5 of the United States Code.

"Institution" includes, but is not limited to, institutions falling under the Private Business and Vocational Schools Act of 2012, the Private College Act, and public institutions of higher education as defined in Section 1 of the Board of Higher Education Act.

"Investment of concern" means any specified interest with a foreign country of concern or a foreign entity of concern.

"Private institution" means a privately-operated college, junior college or university offering degrees and instruction above the high school level either in residence or by correspondence.

"Restricted or conditional gift or contract" means any endowment, gift, grant, contract, award, present, or property of any kind which includes provisions regarding:

(1) the employment, assignment, or termination of faculty;

(2) the establishment of departments, centers, institutes, instructional programs, research or lecture programs, or new faculty positions;

(3) the selection, admission, or education of students;

(4) the award of grants, loans, scholarships, fellowships, or other forms of financial aid restricted to students of a specified country, religion, sex, ethnic origin, or political opinion; or

(5) any other restriction on the use of a gift or contract.

"Specified interest" means:

(1) stock or any other equity or profits interest of such entity;

(2) debt issued by such entity; and

(3) any contract or derivative with respect to any property described in paragraph (1) or (2) of this definition.

Section 10. Disclosures of foreign gifts.

(a) An institution shall file a disclosure report annually on July 1 following a year when:

(1) an institution received a gift from, or entered into a contract with, a foreign source, other than a foreign country of concern or foreign entity of concern, with a value of $50,000 or more, or an undetermined value;

(2) an institution receives a gift from a foreign country of concern or foreign entity of concern of any dollar amount;

(3) an institution enters into a contract with a foreign country of concern or foreign entity of concern after receiving a waiver for such contract; or

(4) an institution is substantially controlled by a foreign source.

A gift to, or contract with, an affiliated entity of an institution shall be considered a gift to or contract with such institution.

(b) All disclosure reports shall contain the following:

(1) the name of the individual, department, or benefactor at the institution receiving the gift or carrying out the contract;

(2) the intended purpose of the gift or contract;

(3) a description of any restrictions or conditions on the contract;

(4) if a gift, the date received and the fair market dollar amount of the gift; and

(5) if a contract, the start and end date of the contract.

(c) In addition to other requirements, disclosure reports regarding gifts from or contracts with foreign governments shall contain:

(1) the name of the government;

(2) the department, agency, office, or division of the foreign government that approved the gift or contract;

(3) the physical mailing address of the relevant foreign government department, agency, office, or division.

(d) In addition to other requirements, disclosure reports regarding gifts from or contracts with foreign sources that are not foreign governments or foreign entities of concern shall contain the following:

(1) the legal name of the source, or if unavailable, a signed statement that the institution has reasonably attempted to obtain such a name;

(2) if the source is a person, the country of citizenship or, if not known, the principal country of residence;

(3) if the source is a legal entity, the country of incorporation or, if not known, the principal place of business; and

(4) the physical mailing address of the source, or if unavailable, a signed statement that the institution has reasonably attempted to obtain such address.

(e) In addition to all other requirements, disclosure reports regarding contracts with foreign governments of concern or foreign entities of concern shall contain the following:

(1) a complete and unredacted text of the original contract translated into English;

(2) a copy of the waiver from the Secretary allowing such a contract; and

(3) the statement submitted by the institution to receive such a waiver.

(f) In addition to all other requirements, disclosure reports regarding institutions substantially controlled by a foreign source must also report:

(1) the legal name and address of the foreign source that owns or controls the institution;

(2) the date on which the foreign source assumed ownership or control; and

(3) any changes in program or structure resulting from the change in ownership or control.

Any translations must be done by a person who is not affiliated with the foreign source.

(g) No later than 60 days before the July 1 immediately following the date of effective date of this Act, the Board shall establish and maintain a searchable, public database on the Board's website. This database shall:

(1) contain all reports submitted, uploaded to the database by the Board no later than 30 days after submission;

(2) include, in electronic and downloadable format, any information provided in such reports, excluding the names and addresses prohibited from being disclosed;

(3) be searchable and sortable by date filed, date of the gift received or contract entered into, by attributable country of the gift or contract, and by institution;

(4) indicate whether a gift is from a foreign government or from a foreign source that is not a foreign government; and

(5) indicate when a report does not contain the name or address of a foreign source.

Names and addresses of foreign sources shall not be disclosed under such public database or under Freedom of Information Act requests.

(h) Institutions must designate a compliance officer who is a current employee or legally authorized agent and is responsible for personally certifying compliance.

Section 15. Prohibitions on contracts with certain foreign entities and countries. An institution may not enter into any contracts with foreign entities of concern or countries of concern. Institutions may, 60 days prior to entering into a contract, submit a waiver request to the Board. Waivers shall last for one year. Institutions may apply for renewals of waivers for contracts that remain unchanged. If an institution is not granted a waiver, it must not enter into the contract or terminate it. The Board shall notify the institution within 60 days of the waiver approval or denial.

If an institution has a contract with an entity that is designated as an entity of concern during the contract, the institution has 60 days to withdraw from the contract.

Section 20. Investment disclosure report. Private institutions with endowments above $6,000,000,000 or with investments of concern above $250,000,000 shall report the following:

(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; and

(4) the combined value of all capital gains from such sales of investments of concern.

Section 25. Enforcement. If it appears that an institution has knowingly or willfully failed to comply, a civil action may be brought by the Attorney General, at the request of the Board, 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.

An institution that is compelled to comply shall pay the full costs to the Board of obtaining compliance with the requirement of such section, including all associated costs of investigation and enforcement.

In addition to paying the cost of enforcement, an institution shall also be subject to the following fines from the Board.

Section 30. Violations of Section 10.

(1) First time violations shall be no less than $50,000 but not more than the monetary value of the gift from, or contract with, the foreign source.

(2) In the case of a gift or contract of no value or of indeterminable value, the fine shall be not less than 1% and not more than 10% of the total amount of federal funds received. Violations from institutions substantially controlled by a foreign source shall be no less than 10% of the total amount of federal funds received.

(3) Subsequent violations shall be no less than $100,000 but not more than twice the monetary value of the gift from, or contract with, the foreign source.

(4) In the case of a gift or contract of no value or of indeterminable value, the subsequent fine shall be not less than 10% of the total amount of federal funds received.

(5) Subsequent violations from institutions substantially controlled by a foreign source shall be no less than 20% of the total amount of federal funds received.

Section 35. Violations of Section 15.

(1) First time violations shall be not less than 5% and not more than 10% of the total amount of federal funds received by the institution.

(2) Subsequent violations shall be not less than 20% of the total amount of federal funds received.

Section 40. Violations of Section 20.

(1) First time violations shall be not less than 50% and not more than 100% of the sum of the aggregate fair value market value of all investments of concern held and sold by such institution at the close of the calendar year.

(2) Subsequent violations shall be not less than 100% and not more than 200% of the sum of the aggregate fair value market value of all investments of concern held and sold by such institution at the close of the calendar year.