HR7638-119

What This Bill Does

The FAIR Act of 2026 bars federal seizing agencies from conducting nonjudicial forfeitures. Property may be forfeited only through a judicial process, and only a United States district court may enter the forfeiture order. The government generally must send seizure notice within seven days, use new seven-day rules for later-identified interests, and file the civil complaint on an accelerated timetable tied to the seizure.

Courts may appoint counsel when a claimant cannot afford representation or when counsel would cost more than the seized property. The bill raises the government's civil-forfeiture burden from preponderance to clear and convincing evidence. When property allegedly facilitated an offense, the government must prove a substantial connection and that the owner intended, knowingly consented to, or was willfully blind to the use. The government bears the burden of proving a claimant is not an innocent owner, subject to rebuttal.

Proportionality review must consider the offense, property nexus, available sentences, fair-market value, and hardship to owners and dependents. The bill removes the word “grossly” from the statutory disproportionality standard, making relief available under a less demanding proportionality formulation.

The bill removes or revises several routes for federal agencies to retain, transfer, share, or deposit forfeited property and proceeds. Specified proceeds go to the Treasury General Fund instead of an agency forfeiture fund, and listed Department of Justice Assets Forfeiture Fund deposit categories are deleted. Related Controlled Substances Act, title 18, customs, and Treasury forfeiture provisions are conformed.

For structuring offenses, the bill adds a knowledge requirement and narrows the transaction prohibition to funds not derived from a legitimate source. A person whose property is seized or restrained for alleged structuring must receive notice of a probable-cause hearing. The court must hold the hearing within 14 days after notice and return the property unless probable cause is found. DOJ fund reports must separately identify criminal and civil forfeiture deposits.

Who Benefits and How

Property owners gain judicial review before forfeiture, faster notice, a higher government proof standard, an expanded innocent-owner defense, and hardship-sensitive proportionality review. Low-income claimants and owners facing legal fees above the property's value gain access to appointed counsel. People whose property is seized for alleged structuring gain a prompt probable-cause hearing and mandatory return absent probable cause. The Treasury General Fund receives proceeds redirected from agency-controlled funds.

Who Bears the Burden and How

Federal seizing agencies lose administrative forfeiture authority and face shorter notice periods, stronger evidence requirements, and district-court review. Federal prosecutors must file and prove cases faster. District courts and appointed counsel programs receive more forfeiture proceedings and hearings. DOJ, Treasury, and customs forfeiture funds lose deposit or transfer routes, while state and local agencies may lose sharing opportunities. Forfeiture reporting staff must distinguish civil from criminal deposits. Owners still must contest seizures and comply with judicial procedures.

Key Provisions

• Prohibits federal nonjudicial forfeiture.
• Requires district-court forfeiture orders and accelerated notice.
• Expands appointed-counsel eligibility for property claimants.
• Raises the government proof standard to clear and convincing evidence.
• Strengthens substantial-connection and innocent-owner requirements.
• Broadens proportionality review to hardship and property value.
• Redirects specified proceeds to the Treasury General Fund.
• Removes listed agency forfeiture-fund and sharing routes.
• Adds knowing-conduct limits to structuring liability.
• Requires a probable-cause hearing within 14 days of notice.
• Requires separate reporting of criminal and civil forfeiture deposits.