This legislation aims to limit the ability of federal agencies to establish policy through settlement agreements and consent decrees. It specifically prohibits the head of a federal agency from entering into a consent decree that exceeds the authority of the court issuing the related order. Additionally, any settlement agreement or consent decree that leads to the creation of a regulation or guidance document cannot include provisions for the payment of attorneys' fees or litigation costs by the agency. The bill provides detailed definitions for both "guidance document" and "regulation." A guidance document is broadly defined as an agency statement of general applicability that does not have the force of law but sets forth policy or interpretations, encompassing various forms like memoranda, bulletins, and speeches. A regulation is defined as an agency statement with the force and effect of law, including those from informal or formal rulemakings, with certain specified exemptions. A severability clause ensures that if any provision is deemed invalid, the remaining parts of the Act will still apply.