Amended

April 29, 2026

 

H. 5504

 

Introduced by Reps. Crawford, G. M. Smith, Teeple, C. Mitchell and Bernstein

 

S. Printed 4/29/26--H.                                                                         [SEC 4/30/2026 10:54 AM]

Read the first time April 2, 2026

 

________

 

statement of estimated fiscal impact

Explanation of Fiscal Impact

State Expenditure

This bill establishes the "Foreign Influence Operations Out of American Education Act," to prohibit state institutions of higher learning and affiliated groups or associations from certain actions related to a foreign adversary nation, a foreign principal of that nation, or a foreign terrorist organization as defined by the bill. Institutions and their personnel or affiliate organizations may not solicit or accept a gift from, engage in professional travel to, or enter into cultural exchange agreements with these foreign adversary groups. Under the bill, a gift is defined as a transfer of money or property of any kind, including a gift, grant, contract, research sponsorship, endowment, award, program agreement, formal partnership, or donation, whether direct or indirect, and whether conditional or unconditional. The bill defines foreign adversary nation as the government of one or more countries, one or more nations, one or more provinces, or a political subdivision or agency, instrumentality, or other person acting on its behalf, including a foreign government designated as a foreign adversary by the United States Department of Commerce pursuant to 15 C.F.R. section 791.4. Student or scholar organizations may not coordinate activities with these groups, and any such coordination must result in a termination of the affiliation by the institution. No foreign adversary nation or agent may be permitted to hire staff, define curriculum or educational content, establish school policies, or restrict the free expression of students or faculty under the bill.

Institutions must also report to the STO any gift or contract from any foreign country or foreign principal that is valued at $10,000 or more or aggregating $50,000 or more within a twelve-month period as well as specified information regarding the donation or contract funding source, country of origin, and any purposes or stipulations for the use of the funds. The bill requires the report to be submitted to the STO within one month of receiving the gift or executing the contract and must be submitted in a digital format that is searchable and sortable. The STO must maintain a public online database containing the information required under this section. The bill then requires the STO to provide a summary report containing information received by the institutions of higher learning to the Speaker of the House of Representatives, the President of the Senate, the OIG, and the SCAG by October 1 of each year. The bill provides that the OIG may investigate and address or enforce an alleged violation of the section and must develop a process and platform for filing complaints regarding potential violations, and the SCAG may enforce the section and bring an action for injunctive or declaratory relief in a court of competent jurisdiction. The bill requires the STO to annually inspect or audit a random sample of at least 10 percent of institutions of higher learning, including any institution that did not submit a report under this section, to determine compliance with the requirements of this section.

The bill further establishes the Committee to Review Foreign Contributions, membership of which consists of nine appointees, three appointed by the House of Representatives, three members appointed by the Senate, and three members appointed by the Governor. The bill requires members to serve conterminously with the appointing official, with vacancies filled in the manner of appointment. The bill states that members may be reimbursed for per diem and travel expenses as provided for state commissions and boards. Under the bill, the committee must establish criteria to be used for the designations outlined in the section prior to July 1, 2027, and must report to the General Assembly the names of foreign nations or principals that are funding any institution of higher learning by July 31, 2027, and annually by July 31 each year thereafter. The committee must also designate any additions to the list of entities that should be prohibited from funding institutions of higher learning by these dates. The bill provides that an institution of higher learning may apply to the committee for a waiver to accept a gift from a country or foreign principal of a foreign nation which must explain the terms of the proposed donation and how the institution will ensure the gift does not enable any foreign influence. Any waivers granted must be included in the annual report to the General Assembly. The bill also includes a severability clause in the event that any portion is found unconstitutional or invalid. The bill takes effect on July 1, 2027, and is applicable to all funding relationships entered on or after that date.

 

State Institutions of Higher Learning. This bill is not expected to have a material impact on Clemson, CofC, or Winthrop. Clemson indicates that a minimal but undetermined expenditure impact would be incurred to ensure compliance with the bill, which would be managed with existing institutional resources. Winthrop reports that some ancillary effects related to the university's ability to engage an agent for the recruitment of international students may occur under the bill but indicates that no immediate fiscal impact is anticipated. CofC indicates that no impact is anticipated as a result of the bill. USC indicates that the bill will create additional review and compliance processes that could increase administrative workloads and delay existing approval timelines, resulting in an undetermined increase in expenses for the institution. MUSC indicates that the bill is expected to impact the MUSC Foundation by requiring the foundation to implement enhanced donor screening and due diligence protocols and to expand documentation and tracking related to gift terms under the requirements of the bill.

State Board for Technical and Comprehensive Education. The Tech Board indicates that managing the requirements of the bill, including the determination of contract compliance and reporting to the STO will be managed with existing resources for state technical colleges.

 

State Treasurer's Office. The STO indicates that routine audits of state institutions of higher learning as required by the bill to ensure compliance will require 2.0 FTEs (internal auditors) for the office. The STO reports that salary, fringe, and travel expenses for the new FTEs are estimated to total $300,000 beginning in FY 2026-27. The office indicates that additional General Fund appropriations will be required for these expenses.

 

Inspector General's Office. The OIG indicates that investigating and addressing or enforcing an alleged violation of the bill and developing a process and platform for filing complaints regarding potential violations as required by the bill will be managed with existing resources.

 

Attorney General's Office. The SCAG indicates that enforcing the provisions of the bill, including bringing an action for injunctive or declaratory relief in a court as required by the bill will be managed with existing resources.

 

House of Representatives and the Senate. Under the bill, members of the Committee to Review Foreign Contributions, three of whom are appointed by specified members of the House of Representatives and three of whom are appointed by specified members of the Senate, may receive per diem and travel expenses as provided for state commissions and boards. Under the FY 2025-26 Appropriations Act, this equates to per diem of $50 per day, subsistence of $42 per day for any member who is not also a member of the General Assembly, and travel reimbursement of 72.5 cents per mile as established by the IRS. The House of Representatives and the Senate indicate that managing these expenses for the three appointees to the committee appointed by members of each respective body would be managed with existing operational resources.

 

Governor's Office. Under the bill, the three appointees of the Governor to the Committee to Review Foreign Contributions may also receive per diem of $50 per day, subsistence of $42 per day, and travel expense reimbursement of 72.5 cents per mile as established by the IRS. The Governor's Office indicates that the appointment of the committee members would be managed with existing office resources and personnel.

This section of the fiscal impact statement has been updated to include a response from the State Board for Technical and Comprehensive Education and the State Treasurer's Office. 

 

State Revenue

This bill establishes the "Foreign Influence Operations Out of American Education Act," to prohibit state institutions of higher learning and affiliated groups or associations from certain actions related to a foreign adversary nation, a foreign principal of that nation, or a foreign terrorist organization as defined by the bill. Under the bill, a gift is defined as a transfer of money or property of any kind, including a gift, grant, contract, research sponsorship, endowment, award, program agreement, formal partnership, or donation, whether direct or indirect, and whether conditional or unconditional. The bill defines foreign adversary nation as the government of one or more countries, one or more nations, one or more provinces, or a political subdivision or agency, instrumentality, or other person acting on its behalf, including a foreign government designated as a foreign adversary by the United States Department of Commerce pursuant to 15 C.F.R. section 791.4.

USC reports that this bill will reduce tuition revenue for the institution by approximately $400,000 beginning in FY 2026-27 as a result of the bill's limitations on the transfer of money and other contractual agreements with certain foreign principals.

 

 

Frank A. Rainwater, Executive Director

Revenue and Fiscal Affairs Office

 

_______

 

 

 

 

 

 

 

 

A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ENACTING THE "FOREIGN INFLUENCE OPERATIONS OUT OF AMERICAN EDUCATION ACT" BY ADDING SECTION 59-101-425 SO AS TO PROHIBIT PUBLIC INSTITUTIONS OF HIGHER LEARNING FROM SOLICITING OR ACCEPTING CERTAIN GIFTS OR TRAVEL FROM FOREIGN ADVERSARY NATIONS, FOREIGN PRINCIPALS, OR FOREIGN TERRORIST ORGANIZATIONS, TO RESTRICT FOREIGN INFLUENCE ON HIRING, CURRICULUM, AND CAMPUS ORGANIZATIONS, AND TO REQUIRE DISCLOSURE OF GIFTS AND CONTRACTS FROM FOREIGN COUNTRIES AND FOREIGN PRINCIPALS TO THE OFFICE OF THE STATE TREASURER.

    Amend Title To Conform

 

Be it enacted by the General Assembly of the State of South Carolina:

 

SECTION 1.  This act may be cited as the "Foreign Influence Operations Out of American Education Act."

 

SECTION 2.  Article 1, Chapter 101, Title 59 of the S.C. Code is amended by adding:

 

    Section 59-101-425.  (A) For purposes of this section:

       (1) "Public institution of higher learning" means:

           (a) a state-supported college or university enumerated in Section 59-101-10; and

           (b) a state-supported technical institution under the jurisdiction of the State Board for Technical and Comprehensive Education.

       (2) "Affiliate organization" means an entity established for the benefit of a public institution of higher learning, including:

           (a) a foundation, including an institutional foundation organized pursuant to Section 501(c)(3) of the Internal Revenue Code;

           (b) a research institute;

           (c) a direct-support organization; or

           (d) a contracting entity.

       (3) "Foreign adversary nation" means:

           (a) the government of one or more countries, one or more nations, one or more provinces, or a political subdivision of them; and

           (b) an agency, instrumentality, or other person acting on behalf of a government described in subitem (a), including a foreign government designated as a foreign adversary by the United States Department of Commerce pursuant to 15 C.F.R. Section 791.4.

       (4) "Foreign nations funding American public schools" means countries that, individually or collectively, have provided one billion dollars or more in gifts, grants, or contracts, including funds transmitted through offshore accounts, to institutions of higher learning in the United States, as identified in Section 117 Foreign Gift and Contract Disclosure Dashboard maintained by the United States Department of Education pursuant to 20 U.S.C. Section 1011f, Section 117 of the Higher Education Act of 1965, as in effect on January first of each year.

       (5) "Foreign principal" means:

           (a) an individual or entity domiciled in, organized under the laws of, or having its principal place of business in a foreign country; or

           (b) an individual or entity acting, directly or indirectly, for or on behalf of a foreign country or an entity described in subitem (a), including through a subsidiary, nonprofit organization, or other intermediary.

       (6) "Foreign terrorist organization" means an organization:

           (a) designated as such by the United States Secretary of State pursuant to Section 219 of the Immigration and Nationality Act, 8 U.S.C. Section 1189; or

           (b) designated as a Specially Designated Global Terrorist by the United States Department of the Treasury pursuant to Executive Order No. 13224, 50 U.S.C. Section 1701 note.

       (7) "Gift" means a transfer of money or property of any kind, including a gift, grant, contract, research sponsorship, endowment, award, program agreement, formal partnership, or donation, whether direct or indirect, and whether conditional or unconditional. The term includes a pledge of the transfer described in this section. For purposes of this item, "pledge" means a promise, agreement, or expressed intention to make a transfer described in this section.

    (B)(1) A public institution of higher learning, or its personnel or affiliate organization, may not solicit or accept a gift from, or engage in professional travel to, a foreign adversary nation, a foreign principal of that nation, or a foreign terrorist organization.

       (2) The prohibition in item (1) applies to gifts or travel received directly or indirectly, including through a United States intermediary.

       (3) Funds received in violation of this section must be returned to the donor or otherwise surrendered to the State.

       (4) A public institution of higher learning is prohibited from entering into cultural exchange agreements with a foreign adversary nation or a foreign principal of that nation.

       (5) A student or scholar association affiliated with or operating at a public institution of higher learning may not coordinate activities with a foreign adversary nation, a foreign principal of that nation, or a foreign terrorist organization. A public institution of higher learning immediately shall terminate its affiliation with any association that coordinates activities in violation of this section. Member dues or fees may not be considered gifts for purposes of this section.

       (6) No public institution of higher learning may permit a foreign adversary nation, a foreign principal of that nation, or an agent thereof to participate in hiring staff, defining curriculum or educational content, establishing school policies, or restricting the free expression of students or faculty.

    (C)(1) A public institution of higher learning shall comply with 20 U.S.C. Section 1011f, Section 117 of the Higher Education Act of 1965.

       (2) A public institution of higher learning shall report and disclose to the Office of the State Treasurer a gift or contract from a foreign country or foreign principal that is:

           (a) valued at ten thousand dollars or more; or

           (b) aggregating fifty thousand dollars or more within a twelve-month period.

       (3) A public institution of higher learning must identify in its report the donor or entity, the country of origin, including the original source of funding if the gift or contract is routed through bank accounts in another country, the total value, the date received, the purpose of the gift or terms of the contract, and the outcome of a due diligence review.

       (4) A public institution of higher learning must identify in its report stipulations regarding the use of funding, including:

           (a) required nondisclosure agreements;

           (b) hiring requirements, including requirements to hire specific individuals or personnel of particular types, nationalities, or religions, or to consult with the donor or foreign principal before making hiring decisions;

           (c) requirements to admit specific students, or students from specific countries or religions;

           (d) restrictions on positive or negative discussion of the foreign country;

           (e) required actions by the institution regarding the foreign country or issues related to the foreign country;

           (f) requirements that certain student organizations or activities be permitted on campus or receive institutional funding or support.

       (5) A report must include a copy of a gift or contract agreement between the foreign source and the public institution of higher learning.

       (6) A report must be submitted within one month of receiving the gift or executing the contract and must be submitted in a digital format that is searchable and sortable.

       (7) The Office of the State Treasurer shall maintain a public transparency database containing the information required under this section and shall make the database accessible online.

    (D)(1) The Office of the State Treasurer shall provide a report to the Speaker of the House of Representatives, the President of the Senate, the Inspector General, and the Attorney General by October first of each year summarizing the information received from public institutions of higher learning.

       (2) This section does not create a private right or benefit, substantive or procedural, enforceable at law or in equity by a party against the State, its departments, agencies, or entities, its officers, employees, or agents, or another person.

       (3) The Inspector General may investigate and address or enforce an alleged violation of this section and shall develop a process and platform for filing complaints regarding potential violations. An individual who makes a report pursuant to this section is protected under the provisions of Chapter 27, Title 8.

       (4) The Attorney General may enforce the provisions of this section and may bring an action for injunctive or declaratory relief in a court of competent jurisdiction.

       (5) The Office of the State Treasurer shall annually inspect or audit a random sample of at least ten percent of institutions of higher learning, including any institution that did not submit a report under this section, to determine compliance with the requirements of this section.

    (E) No executive agency, commission, university board, or committee may waive a provision of this section.

    (F)(1) There is established the Committee to Review Foreign Contributions. Membership shall consist of nine members appointed as follows:

           (a) three by the House of Representatives, with one each appointed by the Speaker, the Chair of the Ways and Means Committee, and the Chair of the Education and Public Works Committee;

           (b) three by the Senate, with one each appointed by the President, the Chair of Senate Finance, and the Chair of the Senate Education Committee; and

           (c) three appointed by the Governor, one of whom shall serve as chair of the committee.

       (2) Members shall serve conterminously with the appointing official. A vacancy must be filled in the manner of appointment.

       (3) Members may be reimbursed for per diem and travel expenses as provided for commissions and boards.

       (4) Prior to July 1, 2027, the committee shall establish criteria to be used for the designations outlined in this section. By July 31, 2027, and annually by July thirty-first thereafter, the committee shall report to the General Assembly the names of foreign nations, or foreign principals of said nations, that are funding any public institution of higher learning in this State and which are prohibited entities for purposes of this section. The committee also shall designate any additions to the list of entities prohibited from funding public institutions of higher learning.

       (5) A public institution of higher learning may apply to the committee for a waiver to accept a gift from a country or foreign principal of a foreign nation funding American public schools. The waiver request must explain the terms of the proposed donation and how the institution of public education will ensure the gift does not enable any foreign influence. Any waivers granted must be included in the annual report to the General Assembly.

 

SECTION 3.  If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.

 

SECTION 4.  This act takes effect on July 1, 2027, and shall apply to all funding relationships entered on or after that date.

----XX----