Protecting Federal Funds from Human Trafficking and Smuggling Act of 2025
This bill, titled the Protecting Federal Funds from Human Trafficking and Smuggling Act of 2025, would tighten federal oversight of nonprofit organizations that receive federal funding. It requires all future recipients to certify that they comply with federal laws related to human trafficking, alien smuggling, fraud, bribery, or gratuity and that they have not been convicted under the Immigration and Nationality Act’s human-smuggling provision. Current and prior recipients would also have to certify within a set timeframe or risk having awarded funds taken back. In addition, the bill would deny tax-exemption under 501(c)(3) status to organizations that fail to certify or are found to have violated the immigration-related provision, with a one-year waiting period before reapplying for exemption. The Department of Homeland Security would develop guidance for nonprofits on compliance and publish information on violations, while seeking to improve cooperation with law enforcement. The Comptroller General would periodically report to Congress on violations of the certification. The bill applies to any nonprofit entity receiving federal funds, including those with existing agreements at the time of enactment. It also amends a provision of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) related to verification requirements for nonprofit organizations.
Key Points
- 1Mandatory certifications for nonprofit recipients: Beginning within 120 days, new federal-funding recipients must certify they comply with federal law on human trafficking, alien smuggling, fraud, bribery, or gratuity, and that they have not been convicted under INA section 274 (8 U.S.C. 1324).
- 2Certification deadline for current/prior recipients: Within 60 days of enactment, nonprofits with existing or prior federal funding must certify; failure to certify or a finding of violation requires repayment of funds.
- 3Tax-exemption consequence: The bill adds a provision denying 501(c)(3) tax exemption to organizations that do not certify or that are found to have violated INA section 274; after denial, organizations may reapply for exemption after at least one year.
- 4DHS duties and public reporting: DHS must develop compliance guidance for nonprofits, post information about violations on its website, and improve cooperation with nonprofits and law enforcement on deterring, detecting, reporting, and removing aliens.
- 5Government accountability: The Comptroller General must report to Congress on any certification violations within 180 days of enactment and annually thereafter.
- 6Scope and applicability: The certification requirement covers any nonprofit entity awarded federal funding, including those with existing agreements as of enactment.
- 7PRWORA modification: The bill would strike subsection (d) of section 432 of PRWORA, altering existing verification requirements for nonprofit organizations’ eligibility related to federal public benefits.