I 
113TH CONGRESS 
2D SESSION 
H. R. 4324 
To require adequate information regarding the tax treatment of payments 
under settlement agreements entered into by Federal agencies, and for 
other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 27, 2014 
Mr. CARTWRIGHT (for himself, Mr. NUGENT, Ms. LOFGREN, Mr. COLE, Mrs. 
LUMMIS, and Mr. ENYART) introduced the following bill; which was re-
ferred to the Committee on Oversight and Government Reform, and in 
addition to the Committee on Financial Services, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such 
provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To require adequate information regarding the tax treatment 
of payments under settlement agreements entered into 
by Federal agencies, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Truth in Settlements 
Act of 2014’’. 
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SEC. 2. INFORMATION REGARDING SETTLEMENT AGREE-
MENTS ENTERED INTO BY FEDERAL AGEN-
CIES. 
(a) REQUIREMENTS
FOR
SETTLEMENT
AGREE-
MENTS.— 
(1) IN GENERAL.—Chapter 3 of title 5, United 
States Code, is amended by adding at the end the 
following: 
‘‘§ 307. Information regarding settlement agreements 
‘‘(a) DEFINITIONS.—In this section— 
‘‘(1) the term ‘covered settlement agreement’ 
means a settlement agreement (including a consent 
decree) that— 
‘‘(A) is entered into by an Executive agen-
cy; 
‘‘(B) relates to an alleged violation of Fed-
eral civil or criminal law; and 
‘‘(C) requires the payment of a total of not 
less than $1,000,000 by one or more non-Fed-
eral persons; 
‘‘(2) the term ‘entity within the Federal Gov-
ernment’ includes an officer or employee of the Fed-
eral Government acting in an official capacity; and 
‘‘(3) the term ‘non-Federal person’ means a 
person that is not an entity within the Federal Gov-
ernment. 
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‘‘(b) INFORMATION TO BE POSTED ONLINE.— 
‘‘(1) REQUIREMENT.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the head of each Executive agency 
shall make publicly available in a searchable 
format in a prominent location on the Web site 
of the Executive agency— 
‘‘(i) a list of each covered settlement 
agreement entered into by the Executive 
agency, which shall include, for each cov-
ered settlement agreement— 
‘‘(I) the date on which the par-
ties entered into the covered settle-
ment agreement; 
‘‘(II) the names of the parties 
that settled claims under the covered 
settlement agreement; 
‘‘(III) a description of the claims 
each party settled under the covered 
settlement agreement; 
‘‘(IV) the amount each party set-
tling a claim under the covered settle-
ment agreement is obligated to pay 
under the settlement agreement; 
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‘‘(V) the total amount the set-
tling parties are obligated to pay 
under the settlement agreement; and 
‘‘(VI) for each settling party, the 
amount the settling party is obligated 
to pay that has been designated as a 
civil penalty or fine, or otherwise spec-
ified as not tax deductible under the 
covered settlement agreement; and 
‘‘(ii) a copy of each covered settlement 
agreement entered into by the Executive 
agency. 
‘‘(B) CONFIDENTIALITY PROVISIONS.—The 
requirement to disclose information or a copy of 
a covered settlement agreement under subpara-
graph (A) shall apply to the extent that the in-
formation or copy (or portion thereof) is not 
subject to a confidentiality provision that pro-
hibits disclosure of the information or copy (or 
portion thereof). 
‘‘(2) PERIOD.—The head of each Executive 
agency shall ensure that— 
‘‘(A) information regarding a covered set-
tlement agreement is publicly available on the 
list described in paragraph (1)(A)(i) until at 
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least the date that is 5 years after the date of 
the covered settlement agreement; and 
‘‘(B) a copy of a covered settlement agree-
ment made available under paragraph (1)(A)(ii) 
is publicly available until— 
‘‘(i) at least the date that is 1 year 
after the date of the covered settlement 
agreement; or 
‘‘(ii) for a covered settlement agree-
ment under which a non-Federal person is 
required to pay not less than $50,000,000, 
at least the date that is 5 years after the 
date of the covered settlement agreement. 
‘‘(c) PUBLIC STATEMENT.—If the head of an Execu-
tive agency determines that a confidentiality provision in 
a covered settlement agreement, or the sealing of a covered 
settlement agreement, is required to protect the public in-
terest of the United States, the head of the Executive 
agency shall issue a public statement stating why such ac-
tion is required to protect the public interest of the United 
States, which shall explain— 
‘‘(1) what interests confidentiality protects; and 
‘‘(2) why the interests protected by confiden-
tiality outweigh the public’s interest in knowing 
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about the conduct of the Federal Government and 
the expenditure of Federal resources. 
‘‘(d) REQUIREMENTS FOR WRITTEN PUBLIC STATE-
MENTS.—Any written public statement issued by an Exec-
utive agency that refers to an amount to be paid by a 
non-Federal person under a covered settlement agreement 
shall— 
‘‘(1) specify which portion, if any, of the 
amount to be paid under the covered settlement 
agreement by a non-Federal person— 
‘‘(A) is a civil or criminal penalty or fine 
to be paid for a violation of Federal law; or 
‘‘(B) is expressly specified under the cov-
ered settlement agreement as not deductible for 
purposes of the Internal Revenue Code of 1986; 
and 
‘‘(2) describe in detail any actions the non-Fed-
eral person shall take under the covered settlement 
agreement— 
‘‘(A) in lieu of payment to the Federal 
Government or a State or local government; or 
‘‘(B) in addition to such a payment. 
‘‘(e) REPORTING.— 
‘‘(1) IN GENERAL.—Not later than January 15 
of each year, the head of an Executive agency that 
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entered into a covered settlement agreement during 
the previous fiscal year shall submit to each com-
mittee of Congress with jurisdiction over the activi-
ties of the Executive agency a report indicating— 
‘‘(A) how many covered settlement agree-
ments the Executive agency entered into during 
that fiscal year; 
‘‘(B) how many covered settlement agree-
ments the Executive agency entered into during 
that fiscal year had any terms or conditions 
that are required to be kept confidential; and 
‘‘(C) how many covered settlement agree-
ments the Executive agency entered into during 
that fiscal year for which all terms and condi-
tions are required to be kept confidential. 
‘‘(2) AVAILABILITY OF REPORTS.—The head of 
an Executive agency that is required to submit a re-
port under paragraph (1) shall make the report pub-
lically available in a searchable format in a promi-
nent location on the Web site of the Executive agen-
cy.’’. 
(2) TECHNICAL
AND
CONFORMING
AMEND-
MENT.—The table of sections for chapter 3 of title 
5, United States Code, is amended by adding at the 
end the following: 
‘‘307. Information regarding settlement agreements.’’. 
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(b) SECURITIES REPORTING.— 
(1) IN
GENERAL.—Each issuer of securities 
that is required to file annual or other periodic re-
ports with the Commission under section 13 or 
15(d) of the Securities Exchange Act of 1934 (15 
U.S.C. 78m, 78o(d)) shall describe in such a report 
any claim filed for a deduction under the Internal 
Revenue Code of 1986 during the reporting period 
that relates to a payment required under a covered 
settlement agreement. 
(2) DEFINITIONS.—As used in this sub-
section— 
(A) the term ‘‘Commission’’ means the Se-
curities and Exchange Commission; 
(B) the term ‘‘covered settlement agree-
ment’’ has the meaning given that term in sec-
tion 307 of title 5, United States Code, as 
added by subsection (a); and 
(C) the term ‘‘issuer’’ has the same mean-
ing as in section 3 of the Securities Exchange 
Act of 1934 (15 U.S.C. 78c). 
(c) REVIEW OF CONFIDENTIALITY OF SETTLEMENT 
AGREEMENTS.—Not later than 6 months after the date 
of enactment of this Act, the Comptroller General of the 
United States shall submit to Congress a report regarding 
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how Executive agencies (as defined under section 105 of 
title 5, United States Code) determine whether the terms 
of a settlement agreement or the existence of a settlement 
agreement will be treated as confidential, which shall in-
clude recommendations, if any, for legislative or adminis-
trative action to increase the transparency of Government 
settlements while continuing to protect the legitimate in-
terests that confidentiality provisions serve. 
Æ 
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