This bill, titled the "Cost of Police Misconduct Act of 2026," establishes a comprehensive reporting system for law enforcement misconduct across federal, state, and local agencies. Its primary goal is to enhance transparency and accountability by requiring detailed data collection on allegations of misconduct that result in judgments or settlements . Federal law enforcement agencies are directly subject to these requirements, while state and local agencies must comply to remain eligible for certain federal grant programs. Specifically, agencies must collect information on the total number of judgments and settlements related to misconduct, including the race, ethnicity, sex, and age of involved officers and civilians, if known. The data also covers the type of allegation, such as use of force or racial profiling, and any personnel actions taken against the officer or by the agency. Crucially, it requires reporting the total amount paid for judgments and settlements, the source of these funds, and any injunctive relief awarded. State and local law enforcement agencies receiving Byrne JAG program funds must collect substantially similar information and report it annually to the Attorney General. These agencies must also disclose specific funding sources for settlements, including general operating budgets, insurance, and risk management funds. Non-compliant state or local governments face a reduction of up to 10 percent in their Byrne JAG and "Cops on the Beat" program funds, with reallocated funds going to compliant entities. The Attorney General is tasked with identifying federal agencies, establishing reporting guidelines, and verifying state and local data using open-source information. After two years of data collection, the Comptroller General will conduct a study to identify leading causes of misconduct, analyze relationships between actions and settlements, and recommend ways to reduce misconduct. The Department of Justice will also issue annual reports with recommendations for best practices and an analysis of the collected data. A public, searchable database containing all reported data, excluding personally identifiable information of officers, will be created and maintained by the Attorney General on the Department of Justice website. This database will be updated annually to ensure ongoing transparency. The bill defines "allegation of misconduct" as an unlawful, tortious, or otherwise inappropriate action by an officer, and clarifies that its provisions do not supersede the Privacy Act of 1974.