This bill restricts federal funds to non-profits that fail to certify compliance with laws against human trafficking and alien smuggling, and directs the Department of Homeland Security to develop strategies to combat these issues.
Lance Gooden
Representative
TX-5
The "Protecting Federal Funds from Human Trafficking and Smuggling Act of 2025" restricts federal funding to non-profit organizations that do not certify compliance with federal laws on human trafficking, alien smuggling, fraud, and bribery. It also directs the Secretary of Homeland Security to develop strategies and best practices for non-profits to comply with federal law, detect and report violations, and improve cooperation with law enforcement. Additionally, the Comptroller General is required to report to Congress on any violations by non-profit entities.
New Bill Cracks Down on Nonprofits: Certify Compliance or Lose Federal Funding
The "Protecting Federal Funds from Human Trafficking and Smuggling Act of 2025" aims to ensure that no federal money ends up supporting human trafficking or alien smuggling. It does this by putting some serious requirements on non-profit organizations that receive federal funds.
New Rules of the Road
This bill, if passed, would require all nonprofits receiving federal money to certify that they're following federal laws related to human trafficking, alien smuggling, fraud, and bribery. This isn't just for new applicants – organizations already getting federal funds, or that received them before January 1, 2025, also have to certify within 60 days of the law's enactment. If they don't, or if they're found in violation of section 274 of the Immigration and Nationality Act (which deals with bringing in and harboring certain aliens), they'll have to pay back the funds. Per Sec. 2, an organization described in section 501(c) will not be exempt from taxation if it fails to submit the required certification.
Real-World Radar
Imagine a local soup kitchen that gets a federal grant to expand its meal program. Under this law, they'd have to formally certify they're not involved in any illegal activities covered by the bill. If they've been compliant all along, it's mostly paperwork. But if they can't certify, or if they're later found to have violated the relevant laws, they could lose their funding and have to return money – potentially shutting down their services. The bill also tasks the Secretary of Homeland Security with creating a guide to help nonprofits stay on the right side of the law, including how to spot and report trafficking and smuggling (Sec. 2).
Paperwork and Penalties
Beyond the certification, the bill has some teeth. Nonprofits that don't certify or are found in violation of immigration law will lose their tax-exempt status (Sec. 2). They can reapply, but not for a full year after being denied. The Comptroller General is also required to report to Congress on every nonprofit that fails to certify, starting 180 days after the law goes into effect and continuing annually (Sec. 2). The goal is clearly to increase accountability and make sure taxpayer money isn't going to organizations involved in illegal activities.