H.R. 7387: Stop Settlement Slush Funds Act of 2026

This bill, known as the Stop Settlement Slush Funds Act of 2026, aims to amend how settlement agreements involving the United States are handled, particularly concerning required donations. Here are the key points of the bill:

Limitation on Required Donations

The bill stipulates that government officials cannot enter into or enforce any settlement agreement that directs payments to any person or entity other than the United States, except in specific cases. These exceptions include:

• Payments that provide restitution for actual harm caused, such as environmental damage.
• Payments for services rendered in connection with the case.

Penalties for Violations

If a government official violates this provision, they will face penalties equal to those applicable for violations of certain financial accountability standards under U.S. law.

Effective Date

The rules set by this bill would apply only to settlement agreements entered into after the bill becomes law.

Definition of Settlement Agreement

The term "settlement agreement" is defined as any agreement that resolves a civil action or the potential for one.

Reporting Requirements

The heads of federal agencies must submit annual electronic reports to the Congressional Budget Office detailing any settlement agreements made. The reports must include:

• The parties involved in each settlement agreement.
• The source of settlement funds.
• Where and how the funds were or will be distributed.

This reporting requirement is set to begin in the first fiscal year following the enactment of the bill and will continue annually. However, no additional funds will be provided to carry out this requirement, and it will cease to be effective seven years after enactment.

Annual Audit Requirement

Each federal agency's Inspector General is required to conduct an annual audit and report on any settlement agreements that violate the provisions of this bill. These reports will be made available publicly and submitted to several congressional committees.

Prohibition on Additional Funding

Similar to the reporting requirement, the audit requirement will not be allocated any additional funds for implementation.

Sunset Clause

The reporting requirement for federal agencies will only remain effective for seven years after the bill's enactment, after which it will expire.

Relevant Companies

None found.