Bans the use of federal funds to award grants or contracts to colleges and universities for fundamental research performed in collaboration with a defined set of foreign or other “covered entities,” unless an agency head issues a narrow, case-by-case waiver because doing so is in the national security interest. Agencies must notify Congress about waivers and provide annual reports on waivers and compliance. The law also defines key terms used to determine which collaborations and institutions are covered and eligible for waivers.