Staff Analysis — PCS for HB 679 Agreements of State Colleges and State Universities with Foreign Entities (3/3/2023)
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- Congressional materials
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- 2023 3247 Postsecondary Education Workforce Subcommittee Proposed Committee Bill Analyses
Summary
A Florida House of Representatives staff analysis dated March 3, 2023 of the PCS for HB 679, Agreements of State Colleges and State Universities with Foreign Entities, sponsored by the Postsecondary Education & Workforce Subcommittee and Canady. It states that, beginning July 1, 2023, the bill bars a state university or state college from accepting grants from or entering agreements with entities based in or controlled by a foreign country of concern without approval from the Board of Governors or the State Board of Education. The bill also bars these institutions from soliciting or accepting gifts from a foreign country of concern, subject to a civil penalty. The analysis reviews current federal and state foreign gift reporting rules, including the $50,000 state reporting threshold. Its section directory lists amendments to s. 286.101, F.S., and an effective date.
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Cite this document
“Staff Analysis — PCS for HB 679 Agreements of State Colleges and State Universities with Foreign Entities (3/3/2023).”
Original at www.flhouse.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2023-3247-postsecondary-education-workforce-subcommittee-proposed-committee-bill-analyses-fn-pcs0679-pew/
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: PCS for HB 679 Agreements of State Colleges and State Universities with Foreign Entities
SPONSOR(S): Postsecondary Education & Workforce Subcommittee; Canady
TIED BILLS: IDEN./SIM. BILLS: SB 846
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
Orig. Comm.: Postsecondary Education & Dixon Kiner
Workforce Subcommittee
SUMMARY ANALYSIS
According to a United States Senate Committee report, American taxpayers contribute over $150 billion each
year to scientific research in the United States through entities such as the National Science Foundation, the
National Institutes of Health, and the Department of Energy. Florida and other states contribute additional
millions in state tax dollars to support scientific discovery. As a result, the United States of America has some
of the most robust and scientifically advanced research institutions in the world. These institutions, their
talented researchers, and a culture of openness and collaboration have attracted researchers and built
collaborative networks across the world. Florida’s state universities and state colleges also facilitate open and
publicly accessible research and scholarly activities. Federal and state funding agencies share concerns
regarding the protection of federal and state investments in research from undue foreign influence. Additional
concerns arise when those involved in federal or state funded research projects fail to disclose outside
activities or financial interest, which may adversely affect the integrity of the research and research institution.
Beginning July 1, 2023, the bill prohibits a state university or state college, authorized to expend state-
appropriate funds, from accepting any grant from or participating in any agreement or partnership with any
college, university, or entity that is based in or controlled by a foreign country of concern unless the state
university or state college, has received approval from the Board of Governors (BOG) or the State Board of
Education (SBE). The agreement must otherwise be legal and deemed by the BOG or SBE, as applicable, to
be valuable to students, the state university or state college, and not detrimental to the safety or security of the
United States or United States residents. Should a state university or state college enter into a partnership or
agreement with a foreign country of concern or an entity that is located in or controlled by a foreign country of
concern without approval, then the BOG or SBE will exercise its authority to sanction the state university or
state college and may withhold additional performance funding. The foreign countries of concern include:
People's Republic of China, the Russian Federation, the Islamic Republic of Iran, the Democratic People's
Republic of Korea, the Republic of Cuba, the Venezuelan regime of Nicolás Maduro, and the Syrian Arab
Republic.
The bill also prohibits a state university, state college, or any employee or representative of such entities, from
soliciting or accepting a gift – regardless of value – from a foreign country of concern, entity located in or
controlled by a foreign country of concern, or associated individuals or employees. Acceptance of such gift will
subject the state college or university to a civil penalty, enforced by the BOG or SBE. Pursuant to current law,
these and other institutions of higher education must disclose foreign gifts and contracts from non-foreign
countries of concern that are valued at $50,000 or more.
Beginning August, 1, 2024, the bill contains reporting requirements and penalties for non-compliance.
The bill does not appear to have a fiscal impact.
The bill has an effective date of July 1, 2023.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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DATE: 3/3/2023
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
According to a United States Senate Committee report, American taxpayers contribute over $150 billion
each year to scientific research in the United States through entities such as the National Science
Foundation, the National Institutes of Health, and the Department of Energy. 1 Florida and other states
contribute additional millions in state tax dollars to support scientific discovery. As a result, the United
States of America has some of the most robust and scientifically advanced research institutions in the
world. These institutions, their talented researchers, and a culture of openness and collaboration have
attracted researchers and built collaborative networks across the world.
Board of Governors
The Board of Governors (BOG) of the State University System (SUS) oversees the performance of
state university boards of trustees in the enforcement of laws, rules, and regulations. The BOG is also
responsible for operating, regulating, controlling and being fully responsible for the management of the
SUS. However, pursuant to Florida’s Constitution, the BOG’s management is subject to the powers of
the Legislature to appropriate for the expenditure of funds.2 The state university presidents are
responsible for the accuracy of the information and data reported to the BOG.3 In addition, like other
state agencies, the BOG has an Office of Inspector General (IG) charged with promoting accountability,
financial integrity and efficiency required by law. The BOG IG is also charged with detecting fraud and
abuse within state universities.
For state university board of trustees that are in noncompliance with any law or BOG regulation or audit
recommendation, the BOG may initiate any of the following actions: 4
Withhold state funds, discretionary grant funds, discretionary lottery funds, or other funds
appropriated to the BOG, until compliance is met.
Declare the state university ineligible for competitive grants disbursed by the BOG.
Require monthly or periodic reporting on the noncompliance situation until it is remedied.
Report to the Legislature that the state university is unwilling or unable to comply with the law or
BOG’s rule or regulation and will recommend action to be taken by the Legislature.
State Board of Education
The State Board of Education (SBE) oversees the performance of early learning coalitions, district
school boards, and Florida College System institution boards of trustees in enforcement of all laws and
rules. The SBE has the authority to request and receive information, data, and reports from early
learning coalitions, school districts, and Florida College System institutions. For Florida College System
institutions, the president of the institution is responsible for the accuracy of the information and data
reported to the state board.5
With respect to allegations of non-compliance with law or SBE rule, the Commissioner of Education
(Commissioner) may investigate, determine probable cause, and report findings to the SBE. In addition,
1 United States Senate Permanent Subcommittee on Investigations, Committee on Homeland Security and Governmental Affairs,
Threats to the U.S. Research Enterprise: China’s Talent Recruitment Plans, Staff Report, United States Senate (2019), available at
https://www.hsgac.senate.gov/wp-content/uploads/imo/media/doc/2019-11-18%20PSI%20Staff%20Report%20-
%20China's%20Talent%20Recruit ment%20Plans%20Updated2.pdf
2 FLA. CONST., Art. IX, s. 7(d).
3 Section 1008.322(1) and (2), F.S.
4 Section 1008.322(5)(a) – (d), F.S.
5 Section 1008.32(1), F.S.
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the Commissioner must report to the SBE any finding by the Auditor General that an institution is acting
without statutory authority or contrary to general law.6
Relationships with Foreign Entities
Florida’s state universities 7 and state colleges 8 facilitate open and publicly accessible research and
scholarly activities, both domestically and internationally. These research endeavors can be externally
funded by taxpayers through various entities, including granting agencies, or governments, as well as
industry agreements, or private foundations. Federal and state funding agencies share concerns
regarding the protection of federal and state investments in research from undue foreign influence.
Additional concerns arise when those involved in federal or state funded research projects fail to
disclose outside activities or financial interest, which may adversely affect the integrity of the research
and research institution.
Recently, it was discovered that researchers at state research institutions had undisclosed relationships
with foreign research institutions from a foreign country of concern. 9 The undisclosed relationships
resulted in an investigation conducted by the Florida House of Representatives in 2020. During the
investigation, the investigating committee ascertained that Florida state research grants often lacked
requirements deemed reasonably necessary to ensure research integrity. As a result, the Legislature
required greater disclosure of foreign gifts, contracts, and support for public entities, scrutiny of grant
applicants and vendors of goods and services with certain foreign connections, and thorough scrutiny
of foreign applicants for research positions and of foreign travel and activities of employees of major
research institutions.10
Present Situation
Reporting Foreign Gifts and Contracts with Institutions of Higher Education
Universities’ international partnerships and collaborations have contributed significantly to academic
and scientific progress and innovation. Federal and state funding agencies have concerns regarding
failure to disclose foreign relationships and activities, which could not only jeopardize funding eligibility,
but may compromise the United States national security and weaken the United States’
competitiveness. Current federal and state laws mandate specific requirements for reporting receipts of
gifts or grants from foreign entities.
Federal and State Requirements
The Higher Education Act of 1965 requires institutions of postsecondary education to report on January
31 and July 31, each year, all foreign gifts and grants received from or contracts entered into with a
value of $250,000 or more.11 Between 2018 and 2021, the U.S. Department of Education (USDOE)
carefully scrutinized the reporting program.12 USDOE discovered billions of dollars of unreported
foreign gifts from many of the best-funded institutions.13
6 Section 1008.32(2), F.S.
7 Section 288.860(1)(f), F.S. defines “state university” to mean 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.
8 Section 288.860(1)(e), F.S. defines “state college” to mean any postsecondary education institution under the supervision of the State
Board of Education, including any entity under the control of or established for the benefit of a state college.
9 Section 288.860(1)(a), F.S. defines “foreign country of concern” to mean the People’s Republic of China, the Russian Federation,
the Islamic Republic of Iran, the Democratic People’s Republic of Korea, the Republic of Cuba, the Venezuelan regime of Nicolás
Maduro, or the Syrian Arab Republic, including any agen cy of or any other entity under significant control of such foreign country of
concern.
10 Sections 288.860, F.S. and 1010.25, F.S.
11 See 20 U.S.C. § 1011f.
12 Institutional Compliance with Section 117 of the Higher Education Act of 1965, USDOE Office of General Counsel (Oct. 2020),
available at https://www2.ed.gov/policy/highered/leg/institutional-compliance-section-117.pdf.
13 Id.
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In recognition of USDOE’s discovery, the Florida Legislature passed legislation that was later enacted
to require institutions of higher education14 to semiannually report, each January 31 and July 31, all
foreign gifts 15 or contracts,16 valued at $50,000 or more, received directly or indirectly17 from the same
foreign source,18 including its subsidiaries and affiliates, alone or collectively in the fiscal year. The
institution of higher education may consolidate its report with all of its affiliate organizations.19
State universities must disclose reportable foreign gifts and contracts to the BOG. 20 All other institutions
of higher education must disclose their reportable foreign gifts and contracts to the SBE. 21
For each gift subject to the reporting requirement, the disclosure to the BOG or SBE must include: 22
The amount of the gift and the date it was received.
The contract start and end date if the gift is a contract.
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.
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 the institution of higher
education, or their respective designees. The agreement 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 conditions,
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. If an agreement
includes certain information protected from disclosure, 23 then an abstract and redacted copy
providing all required information may be submitted in lieu of a copy of the agreement.
The Inspector General of the BOG and the Inspector General of the FDOE, is required to randomly
inspect or audit at least five percent of the total number of gifts disclosed by, or gift agreements
received from, institutions of higher education during the previous year for the purpose of determining
an institution’s compliance with the reporting requirements.24
14 Section 1010.25(g), F.S., defines “institution of higher learning” to mean a state university, an entity listed in subpart B of part II of
chapter 1004 that has its own governing board, a Florida College System institution, an independent nonprofit colleg e or university
that is located in and chartered by the state and grants baccalaureate or higher degrees, any other institution that has a ph ysical
presence in the state and is required to report foreign gifts or contracts pursuant to 20 U.S.C. s. 1011f, o r an affiliate organization of an
institution of higher education.
15 Section 1010.25(f), F.S., defines “gifts” to mean any contract, gift, grant, endowment, award, or donation of money or property of
any kind, or any combination thereof, including a conditional or an unconditional pledge of such contract, gift, grant, endowment,
award, or donation. For purposes of s. 1010.25(f), F.S., the term “pledge” means a promise, an agreement, or an expressed int ention to
give a gift.
16 Section 1010.25(b), F.S. defines “contract” to mean any agreement for the acquisition by purchase, lease, or barter or property or
services by the foreign source, for the direct benefit or use of either of the parties, and any purchase, lease, or barter of property or
services from a foreign country of concern.
17 For the purpose of s. 1010.25(1), F.S., the term “indirectly” a gift received from a foreign source through an intermediary shall be
considered an indirect gift to the institution of higher education.
18 Section 1010.25(e), F.S. defines “foreign source” to mean a foreign government or an agency of a foreign government; a legal
entity, governmental or otherwise, created solely under the laws of a foreign state or states; an individual who is not a cit izen or a
national of the United States or a territory or protectorate of the United States; or an agent, including a subsidiary or an affiliate of a
foreign legal entity, acting on behalf of a foreign source.
19 Section 101.25(1)(a), F.S. defines “affiliated organization” to mean any entity under the control of or established for the benefit of
an organization required to report under this section, including a direct -support organization.
20 Section 1010.25(2)(a), F.S. and Subpart B, Part II, ch. 1004, F.S.
21 Section 1010.25(2)(b), F.S. and Subpart B, Part III, ch. 1004, F.S.
22 Section 1010.25(3), information reporting is required unless otherwise deemed confidential under federal law having no exempt ion
applicable to reporting.
23 Section 1004.22, F.S.
24 Section 1010.25(3), F.S.
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In 2022, the Office of Inspect General and Director of Compliance (OIGC) conducted the required
compliance review of foreign gifts. The review consisted of 689 foreign gift disclosures received from
eight SUS Institutions of Higher Education (IHE)25 for the 2021-2022 Fiscal Year (FY). 26
The review found that the total amount of foreign gifts reported for the 2021-2022 FY equaled
approximately $116.6 million. The foreign gifts reported included contracts for goods, services, or
clinical research trials; awards, pledges, or donations of money or property; and student sponsorships.
The countries with the most reported gifts 27 were received from Germany (80 gifts), Switzerland (77
gifts), United Kingdom (59 gifts), Japan (51 gifts) and Ireland (37 gifts).
Twenty-one, or 3.05 percent, of the foreign gifts reported came from foreign countries of concerns.
There were 19 reported gifts from the People’s Republic of China and two gifts reported from Russia,
which equaled approximately $5.2 million or 4.47 percent of the total amount reported for all foreign
gifts. The categorical information on the purpose, volume, and related values of the reported foreign
gifts from the People’s Republic of China and Russia are shown in the table below.
Total Cumulative
Gift Purpose Number Monetary Value
Goods or Services Purchased from a Private Company 9 $887,900
Agreements for Donation of Artwork 1 $700,000
Collaborative Degree Programs with Chinese Universities 3 $1,922,840
Research Agreements with Chinese Companies and Universities 3 $944,846
Clinical Trial Agreements with Chinese Companies 5 $699,013
Other findings disclosed in the report included discrepancies between aggregate amount reporting and
individualized reporting, reports failed to include proper and/or correct gift agreements, incorrectly
executed pledge agreements, and challenges as to certain monetary reporting issues, such as those
related to royalties, education agreements, research or clinical trials.28
Institutions of higher education that fail to report a reportable gift or contract within 60 days after the
reporting deadline, are subject to penalties imposed by the SBE or the BOG.29 Additionally, an
institution of higher education that knowingly, willfully, or negligently fails to disclose the required
information in its report to the BOG or FDOE, is subject to a civil penalty of 105 percent of the amount
of the undisclosed gift or contract. The penalty must be paid from nonstate funds. The recovered funds
must be deposited into the General Revenue Fund. The BOG or the SBE, as applicable, may
administratively enforce the civil penalty as an administrative penalty. In lieu of the BOG or SBE, the
Attorney General or the Chief Financial Officer may bring a civil action to enforce the penalty. If such
action is successful, the Attorney General or the Chief Financial Officer, is entitled to reasonable
attorney fees and costs.30
A whistle-blower who reports an undisclosed foreign gift or contract to the appropriate inspector general
may also report the gift to the Attorney General or the Chief Financial Officer and retain statutory
whistle-blower protection.31 Such whistle-blower is entitled to a reward of 25 percent of any penalty
recovered. The Chief Financial Officer is authorized to make expenditures from the recovery to pay the
25 The eight institutions included Florida Agricultural and Mechanical University (FAMU), Florida Atlantic University (FAU), Florida
International University (FIU), Florida State University (FSU), Moffitt, University of Central Florida (UCF), University of Florida
(UF), and University of South Florida (USF).
26 State University System of Florida, Board of Governors, Compliance Review: Foreign Gifts Inspections, Office of Inspector
General and Director of Compliance, Project No. 23-002, (Dec. 15, 2022).
27 The gifts received from the top five countries accounted for approximately 44 percent of the disclosed foreign gifts.
28 State University System of Florida, Board of Governors, supra note 26.
29 Section 1010.25(4), F.S., see s. 1008.32, F.S defining the State Board of Education oversight enforcement authority, and s.
1008.332, F.S. defining the Board of Governors oversight enforcement authority.
30 Section 1010.25(a) and (b), F.S.
31 Section 112.3188, F.S.
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reward. The whistle-blower may designate an intermediary to receive the reward to preserve whistle-
blower confidentiality.32
Any information disclosed concerning gifts or contracts from foreign sources to institutions of higher
education is not confidential or exempt from public record requirements, unless it is a trade secret
pursuant to statute or information generated or discovered during the course of research conducted by
state universities.33
Effect of the Proposed Changes
Beginning July 1, 2023, the bill prohibits a state university or state college, authorized to expend state-
appropriated funds, from accepting any grant from or participate in any agreement or partnership with
any college, university, or entity that is based in or controlled by a foreign country of concern unless:
The state university has received approval by the Board of Governors to enter into an
agreement with a foreign country of concern or an entity located in or controlled by a foreign
country of concern and such agreement is deemed by the Board of Governors to be valuable to
students and the state university and is not detrimental to the safety or security of the United
States or its residents.
A state college has received approval by the State Board of Education to enter into an
agreement with a foreign country of concern or an entity located in or controlled by a foreign
country of concern and such agreement is deemed by the State Board of Education to be
valuable to students and the state university and is not detrimental to the safety or security of
the United States or its residents.
Beginning July 1, 2023, the bill requires the Board of Governors to sanction a state university that
enters into a partnership or agreement with a foreign country of concern or an entity that is located in or
controlled by a foreign country of concern without approval from the board.
The bill also provides that if a state university enters into an agreement with a foreign country of
concern or an entity that is located in or controlled by a foreign country of concern without approval
from the Board of Governors then the board may withhold additional performance funding for the state
university. The funds must be deposited into the General Revenue Fund. The Board of Governors may
administratively enforce the withholding of the performance funding.
Beginning July 1, 2023, the bill requires the State Board of Education to sanction a state college that
enters into a partnership or agreement with a foreign country of concern or an entity that is located in or
controlled by a foreign country of concern without approval from the state board.
This bill also provides that if a state college enters into an agreement with a foreign country of concern
or an entity that is located in or controlled by a foreign country of concern without approval from the
State Board of Education then the board may withhold additional performance funding for the state
college. The funds must be deposited into the General Revenue Fund. The State Board of Education
may administratively enforce the withholding of the performance funding.
By August 1, 2024, the bill requires the Board of Governors and the Department of Education,
respectively, to annually submit a report to the Governor, the President of the Senate, and the Speaker
of the House of Representatives relating to agreements of state universities and state colleges,
respectively, with foreign entities. The report must be submitted by August 1, each year and at a
minimum, the reports must include the following information for the previous fiscal year:
Data reflecting any grant program, agreement, partnership, or contract between a state
university or state college and any college, university, or entity that is based in or controlled by a
foreign country and the date it is expected to terminate.
Data reflecting any office, campus, or physical location used or maintained by a state university
or state college in a foreign country.
32 Section 1010.25(5)(c), F.S.
33 Section 1010.25(6), F.S.
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The bill also requires that a state university or state college, or any employee or representative of a
state university or state college, may not solicit or accept any gift, including any physical object, loan,
reward, promise of future employment, favor, or service, from a foreign country of concern or an entity
that is located in or controlled by a foreign country of concern; or a person associated with or employed
by a foreign country of concern or an entity that is located in or controlled by a foreign country of
concern. Pursuant to current law, these and other institutions of higher education must disclose foreign
gifts and contracts from non-foreign countries of concern that are valued at $50,000 or more.
The bill also prohibits a state university or state college, or any employee or representative of a state
university or state college, from soliciting or accepting any gift, including any physical object, loan,
reward, promise of future employment, favor, or service, from:
A foreign country of concern or an entity that is located in or controlled by a foreign country of
concern.
A person associated with or employed by a foreign country of concern or an entity that is
located in or controlled by a foreign country of concern.
The bill also provides for the Board of Governors and the State Board of Education to adopt these rules
and regulations.
The bill defines the following terms with respect to international cultural agreements involving
international affairs:
Partnership means a faculty or student exchange program, a study abroad program, an
articulation program, a recruiting program or a dual degree program.
Agreement means a written statement of mutual interest in academic or research collaboration.
The bill also defines the following terms with respect to foreign gifts and contracts:
State College means any postsecondary education institution under the supervision of the State
Board of Education, including any entity under the control of or established for the benefit of a
state college.
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.
B. SECTION DIRECTORY:
Section 1: Amends s. 288.860, F.S.; defining terms; prohibiting state universities and state colleges
from accepting grants or participating in agreements with a foreign country of concern
unless specified conditions are met; authorizing state universities to enter into
agreements with a foreign country of concern if such agreement is approved by the
Board of Governors and specified requirements are met; authorizing the board to
sanction and to withhold performance funding from a state university for entering into an
unauthorized foreign agreement; authorizing a state college to enter into an agreement
with a foreign country of concern if such agreement is authorized by the State Board of
Education and specified requirements are met; authorizing the state board to sanction
and to withhold performance funding from a state college for entering into an
unauthorized agreement with a foreign country of concern; requiring each state
university and state college to annually submit specified information to the Board of
Governors and Department of Education if certain conditions are met; requiring the
Board of Governors and the department to annually submit a report to the Governor and
the Legislature; providing requirements for the report; requiring the Board of Governors
and the State Board of Education to adopt regulations and rules, respectively.
Section 2: Amends s. 286.101, F.S.; revising and defining terms; prohibiting a state university or
college from soliciting or accepting a gift from a foreign country of concern; requiring the
Board of Governors and the State Board of Education to adopt regulations and rules,
respectively.
Section 3: Provides an effective date.
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II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
See fiscal comments.
2. Expenditures:
See fiscal comments.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
See fiscal comments.
2. Expenditures:
See fiscal comments.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
See fiscal comments.
D. FISCAL COMMENTS:
The bill has a fiscal impact related to state colleges and state universities being prohibited from
accepting gifts from, and entering into partnerships or agreements with foreign countries of concern.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
None.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
Not applicable.
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