[Federal Register Volume 85, Number 220 (Friday, November 13, 2020)]
[Rules and Regulations]
[Pages 72567-72569]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-23526]
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DEPARTMENT OF EDUCATION
34 CFR Part 668
[Docket ID ED-2020-OGC-0165]
The Department's Enforcement Authority for Failure to Adequately
Report Under Section 117 of the Higher Education Act of 1965, as
Amended
AGENCY: Office of the General Counsel, Department of Education.
ACTION: Notification of interpretation; request for comments.
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SUMMARY: The U.S. Department of Education (Department) issues this
interpretation to clarify the Department's enforcement authority for
failure to adequately report under section 117 of the Higher Education
Act of 1965, as amended (HEA).
DATES: This interpretation is effective November 13, 2020. Comments
must be received by the Department on or before December 14, 2020.
ADDRESSES: Submit your comments through the Federal eRulemaking Portal
or via postal mail, commercial delivery, or hand delivery. We will not
accept comments submitted by fax or by email or those submitted after
the comment period. To ensure that we do not receive duplicate copies,
please submit your comments only once. In addition, please include the
Docket ID at the top of your comments.
Federal eRulemaking Portal: Go to www.regulations.gov to
submit your comments electronically. Information on using
Regulations.gov, including instructions for accessing agency documents,
submitting comments, and viewing the docket, is available on the site
under ``Help.''
Postal Mail, Commercial Delivery, or Hand Delivery: The
Department strongly encourages commenters to submit their comments
electronically. However, if you mail or deliver your comments about the
interpretation, address them to Levon Schlichter, U.S. Department of
Education, 400 Maryland Avenue SW, 6E-235, Washington, DC 20202.
Privacy Note: The Department's policy is to make all comments
received from members of the public available for public viewing in
their entirety on the Federal eRulemaking Portal at
www.regulations.gov. Therefore, commenters should be careful to include
in their comments only information that they wish to make publicly
available.
FOR FURTHER INFORMATION CONTACT: Levon Schlichter, U.S. Department of
Education, 400 Maryland Avenue SW, Room 6E-235, Washington, DC 20202-
5076. Telephone: (202) 453-6387. Email: Levon.Schlichter@ed.gov.
SUPPLEMENTARY INFORMATION:
Invitation to Comment: We invite you to submit comments regarding
this interpretation. We will consider these comments in determining
whether to take any future action. See ADDRESSES for instructions on
how to submit public comments.
During and after the comment period, you may inspect all public
comments about the interpretation by accessing Regulations.gov. Due to
the novel coronavirus 2019 pandemic, the Department buildings are
currently not open to the public. However, upon reopening, you may also
inspect the comments in person at 400 Maryland Ave. SW, 6E-251,
Washington, DC, between 8:30 a.m. and 4:00 p.m., Eastern Time, Monday
through Friday of each week except Federal holidays. To schedule a time
to inspect comments, please contact the person listed under FOR FURTHER
INFORMATION CONTACT.
Assistance to Individuals with Disabilities in Reviewing the
Rulemaking Record: On request, we will provide an appropriate
accommodation or auxiliary aid to an individual with a disability who
needs assistance to review the comments or other documents in the
public rulemaking record for the interpretation. To schedule an
appointment for this type of accommodation or auxiliary aid, please
contact the person listed under FOR FURTHER INFORMATION CONTACT.
Background: Section 117 of the HEA (20 U.S.C. 1011f) provides that
institutions of higher education (IHEs) must file a disclosure report
with the Secretary of Education, on January 31 or July 31, whichever is
sooner, whenever the institution is owned or controlled by a foreign
source or receives a gift from or enters into a contract with a foreign
source, the value of which is $250,000 or more, considered alone or in
combination with all other gifts from or contracts with that foreign
source within a calendar year.
The current version of this disclosure requirement was adopted in
1998, see Public Law 105-244, Higher Education Amendments of 1998,
Title I, sec. 102(a), adding HEA Title I, sec. 117 (Oct. 7, 1998); but
a substantially similar disclosure requirement has been in place since
1986. See Public Law 99-498, Higher Education Amendments of 1986, Title
XII, sec. 1206, adding HEA Title XII, sec. 1207 (Oct. 17, 1986) (then
codified at 20 U.S.C. 1145d).
We have attempted to collect Section 117 information via our
approved Application to Participate in Federal Student Financial Aid
Program (e-App), Office of Management and Budget (OMB) Control Number
1845-0012, but did not receive sufficient information to faithfully
enforce the statute. Consequently, on February 10, 2020, we established
a new information collection request (ICR) pursuant to the Paperwork
Reduction Act (OMB Number 1801-0006). This new collection is necessary
to ensure institutions provide congressionally mandated transparency
with respect to covered gifts from and contracts with foreign sources,
the public has ready and meaningful access to this information, and the
Secretary receives more detailed information about covered gifts or
contracts involving a foreign source and ownership or control of the
institution by a foreign source, to determine whether it appears an
institution has failed to comply with the requirements of 20 U.S.C.
1011f.
The prior reporting by institutions through the e-App plainly did
not collect sufficient information to determine compliance with 20
U.S.C. 1011f, to encourage institutions full reporting of covered gifts
and contracts from foreign sources, and to provide members of the
public with statutorily mandated access to accurate information
regarding institutions' gifts from and contracts with foreign sources.
Government Accountability Office reports (see https://www.gao.gov/assets/700/696859.pdf; https://www.gao.gov/assets/700/697156.pdf; and
https://www.gao.gov/assets/680/679322.pdf); a comprehensive
congressional report regarding the operation of Chinese government
propaganda centers on U.S. campuses (see http://www.hsgac.senate.gov/download/majority-and-minority-staff-report_-chinas-impact-on-the-us-education-system); and evidence obtained by the Department through its
civil investigations, confirm the majority, and perhaps the vast
majority, of institutions failed to file required disclosures to the
Department when institutions were using the e-App to submit Section 117
information. For example, our investigations regarding potential
noncompliance with Section 117 have preliminarily shown that
institutions have failed to disclose approximately $6.5 billion of
gifts from and contracts with foreign sources. Therefore, we issued an
ICR to ensure that institutions comply with the statutory disclosure
requirement and provide the public with information as Congress has
intended.
Through this notification of interpretation, the Department
clarifies
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its enforcement authority with respect to institutions that fail to
report accurate and complete Section 117 information.
Interpretation:
Institutions Are Required Under Their Program Participation Agreements
(PPA) To Report Section 117 Data
Section 20 U.S.C. 1094(a)(17) of the HEA provides that in order to
be an eligible institution for the purposes of any program authorized
under the subchapter, an institution must enter into a program
participation agreement with the Secretary. The agreement shall
condition the initial and continuing eligibility of an institution to
participate in a program upon compliance with the following
requirement: The institution will complete surveys conducted as a part
of the Integrated Postsecondary Education Data System (IPEDS) or any
other Federal postsecondary institution data collection effort, as
designated by the Secretary, in a timely manner and to the satisfaction
of the Secretary.
The program participation agreement requirement was adopted in
1986, see Public Law 99-498, Higher Education Amendments of 1986, Title
IV, sec. 407(a), adding HEA Title IV, sec. 487 (Oct. 17, 1986); and
subsection (a)(17) was added in 1992, see Public Law 102-325, Higher
Education Amendments of 1992, Title IV, sec. 490 (July 23, 1992).
On April 29, 1994, the Department promulgated 34 CFR 668.14 to
implement the 1992 amendments. See 59 FR 22425; see also 59 FR 9526,
9538 (Feb. 28, 1994) (notice of proposed rulemaking explaining that the
regulatory text is ``without substantive modifications'' from 20 U.S.C.
1094(a)(17)). Section 668.14(b)(19) provides that by entering into a
program participation agreement, an institution agrees that it will
complete, in a timely manner and to the satisfaction of the Secretary,
surveys conducted as a part of the Integrated Postsecondary Education
Data System (IPEDS) or any other Federal collection effort, as
designated by the Secretary, regarding data on postsecondary
institutions.
The Secretary, in light of widespread underreporting, clarifies via
this notification that the Section 117 information collection is part
of a 1094(a)(17) ``Federal data collection effort, as designated by the
Secretary'' to ensure the public understands ED's enforcement
authority. The requirement that institutions ``file a disclosure report
with the Secretary'' comes within the plain and ordinary public meaning
of 20 U.S.C. 1094(a)(17) at the time of its enactment. See Bostock v.
Clayton County, 140 S.Ct. 1731, 1749 (2020). Indeed, a substantially
similar foreign gift reporting requirement had already been in place
for six years when Congress added Section 1094(a)(17) in 1992. See
Public Law 99-498, Higher Education Amendments of 1986, Title XII, sec.
1206, adding HEA Title XII, sec. 1207 (Oct. 17, 1986) (then codified at
20 U.S.C. 1145d). And when Congress expanded that reporting requirement
in 1998, it did not exempt the new Section 117 from Section 1094(a)'s
requirements. Congress' consistent understanding is reflected in
statutory language adopted in 2008, when Congress incorporated Section
117 standards into Title VI, and expressly referred to Section 117
reporting as a ``data requirement.'' See 20 U.S.C. 1132-7; Public Law
110-315, Higher Education Opportunity Act, Title VI, sec. 622, adding
HEA sec. 638 (Aug. 14, 2008). Finally, to the extent it is relevant, we
note that there is nothing in the legislative history of 20 U.S.C.
1094(a)(17) suggesting that Congress intended to narrow the plain
meaning of the words ``any other Federal postsecondary institution data
collection effort.''
Under 20 U.S.C. 1094(a)(17), where an institution fails to report
Section 117 information timely and accurately, the institution has
failed to comply with its reporting obligations under 20 U.S.C. 1011f
and failed to comply with a requirement in its PPA. Under 20 U.S.C.
1094(a), the Department has authority to implement a range of
corrective measures for an institution that violates its PPA, including
termination of the institution's Title IV participation. We note that
under 34 CFR 668.81 through 668.99 institutions have administrative
appeal rights when the Department imposes fines, limitations,
suspensions, or termination of the institution's Title IV
participation.
The Department Has Authority to Administratively Subpoena Information
From Parties When Investigating Possible Violations of Section 117
An institution's failure to adequately report Section 117 gifts and
contracts is a violation of an institution's participation in the HEA
programs and PPA under 20 U.S.C. 1094(a)(17). Therefore, in addition to
obtaining records and employee interviews under 34 CFR 668.24 in
furtherance of any investigation about the sufficiency of an
institution's Section 117 reporting, under 20 U.S.C. 1097a, ``the
Secretary is authorized to require by subpoena the production of
information, documents, reports, answers, records, accounts, papers,
and other documentary evidence pertaining to participation in any
program under [Title IV of the HEA].'' Consistent with applicable law,
the Secretary is also authorized to share such evidence with other
agencies of the U.S. Government for law enforcement and other lawful
purposes.
Title VI Reporting
For institutions that receive Title VI funds, 20 U.S.C. 1132-7
imposes a reporting obligation that is similar to Section 117. While
the monetary threshold is almost identical in Section 117 and 20 U.S.C.
1132-7, they reference different time periods. Section 117 requires
IHEs to disclose reportable transactions greater or equal to $250,000
occurring within a calendar year while 20 U.S.C. 1132-7 requires IHEs
to disclose reportable transactions greater than $250,000 occurring
during a fiscal year. Institutions that receive Title VI funds and
participate in the HEA programs are advised to be mindful of this
temporal difference when designing corporate compliance processes since
failure to adequately report under 20 U.S.C. 1132-7 may result in
administrative enforcement actions similar to those described above for
failure to comply with Section 117 reporting requirements and 20 U.S.C.
1094(a)(17).
Accessible Format: Individuals with disabilities can obtain this
document in an accessible format (e.g., braille, large print,
audiotape, or compact disc) on request to the program contact person
listed under FOR FURTHER INFORMATION CONTACT.
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your search to documents published by the Department.
Reed D. Rubinstein,
Principal Deputy General Counsel delegated the authority to perform the
functions and duties of the General Counsel for the Office of the
General Counsel.
[FR Doc. 2020-23526 Filed 11-12-20; 8:45 am]
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