employee as a result of the subcontractor employee’s 
previous employment on behalf of the person or enti-
ty as an employee of the subcontractor.’’; 
(4) by amending paragraph (1) of subsection (f) 
to read as follows: 
‘‘(1) CRIMINAL PENALTY.—Any person or enti-
ty which engages in a pattern or practice of viola-
tions of subsection (a) (1) or (2) shall be fined not 
more than $50,000 for each unauthorized alien with 
respect to which such a violation occurs, imprisoned 
for not less than 1 year, or both, notwithstanding 
the provisions of any other Federal law relating to 
fine levels.’’; 
(5) in subsection (f)(2), by striking ‘‘Attorney 
General’’ each place it appears and inserting ‘‘Sec-
retary of Homeland Security’’; 
(6) by redesignating subsection (h) as sub-
section (j); 
(7) by inserting after subsection (g) the fol-
lowing: 
‘‘(h) PROHIBITION
ON AWARD
OF GOVERNMENT 
CONTRACTS, GRANTS AND AGREEMENTS.— 
‘‘(1) 
EMPLOYERS
WITH
NO
CONTRACTS, 
GRANTS, OR AGREEMENTS.— 
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‘‘(A) IN GENERAL.—If an employer who 
does not hold a Federal contract, grant, or co-
operative agreement is determined by the Sec-
retary to be a repeat violator of this section or 
is convicted of a crime under this section, the 
employer shall be debarred from the receipt of 
a Federal contract, grant, or cooperative agree-
ment for a period of 5 years. The Secretary or 
the Attorney General shall advise the Adminis-
trator of General Services of such a debarment, 
and the Administrator of General Services shall 
list the employer on the List of Parties Ex-
cluded from Federal Procurement and Non-
procurement Programs for a period of 5 years. 
‘‘(B) WAIVER.—The Administrator of Gen-
eral Services, in consultation with the Secretary 
and the Attorney General, may waive operation 
of this subsection or may limit the duration or 
scope of the debarment. 
‘‘(2) EMPLOYERS
WITH
CONTRACTS, GRANTS, 
OR AGREEMENTS.—An employer who holds a Fed-
eral contract, grant, or cooperative agreement and is 
determined by the Secretary to be a repeat violator 
of this section or is convicted of a crime under this 
section, shall be debarred from the receipt of new 
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Federal contracts, grants, or cooperative agreements 
for a period of 5 years. 
‘‘(i) PENALTY FOR FALSE ATTESTATION BY EM-
PLOYEE.—An individual who falsely represents that the 
individual is eligible for employment in the United States 
in an attestation required by this shall, for each such viola-
tion, be subject to a fine of not less than $5,000, a term 
of imprisonment not to exceed 3 years, or both.’’; and 
(8) by inserting after subsection (j) (as so re-
designated) the following: 
‘‘(k) SPECIAL
CRIMINAL
PENALTIES
FOR
SUB-
CONTRACTORS
AND LABOR BROKERS.—Any person or 
subcontracting entity which engages in a pattern or prac-
tice of violations of subsection (a)(1)(A) or (a)(2) shall 
be fined not less than $100,000 for each unauthorized 
alien with respect to whom such a violation occurs, impris-
oned for not less than 5 years for the entire pattern or 
practice, or both, notwithstanding the provisions of any 
other law relating to fine levels.’’. 
SEC. 8. COMPENSATION FUND. 
(a) ESTABLISHMENT.—There is established in the 
Treasury a separate account to be known as the ‘‘Employ-
ment Verification Compensation Fund’’ (in this section re-
ferred to as the ‘‘Fund’’). 
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(b) TRANSFERS TO THE FUND.—There shall be de-
posited in the Fund all fines and penalties collected under 
section 274A of the Immigration and Nationality Act (8 
U.S.C. 1324a). 
(c) EXPENDITURES.—Subject to appropriations Acts, 
amounts in the Fund shall be available for compensation 
pursuant to subparagraphs (E) and (F) of section 
274A(b)(3) of the Immigration and Nationality Act (8 
U.S.C. 1324a(b)(3)), as amended by section 3 of this Act. 
SEC. 9. CONTRACTOR DATABASE AND AUDITS. 
(a) DATABASE.—The Secretary of Homeland Secu-
rity shall create and maintain a publicly available and ac-
cessible online database of contracting and subcontracting 
individuals or entities which discloses the number of em-
ployment eligibility violations and employment eligibility 
verification rejections each contracting or subcontracting 
individual or entity has received. The database shall also 
disclose the total number of verification attempts each 
contracting or subcontracting individual or entity has 
made. 
(b) AUDIT.—The Secretary of Homeland Security 
shall audit and investigate any contracting or subcon-
tracting individual or entity which has a 10% or greater 
employment verification rejection rate. 
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SEC. 10. REPORT ON SOCIAL SECURITY CARD-BASED EM-
PLOYMENT ELIGIBILITY VERIFICATION. 
(a) REPORT.— 
(1) IN
GENERAL.—Not later than 9 months 
after the date of the enactment of this Act, the 
Commissioner of Social Security, in consultation 
with the Secretary of Treasury, the Secretary of 
Homeland Security, and the Attorney General, shall 
submit a report to Congress that includes an evalua-
tion of the following requirements and changes: 
(A) A requirement that Social Security 
cards that are made of a durable plastic or 
similar material and that include an encrypted, 
machine-readable electronic identification strip 
and a digital photograph of the individual to 
whom the card is issued, be issued to each indi-
vidual (whether or not a United States citizen) 
who— 
(i) is authorized to be employed in the 
United States; 
(ii) is seeking employment in the 
United States; and 
(iii) files an application for such card, 
whether as a replacement of an existing 
Social Security card or as a card issued in 
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connection with the issuance of a new So-
cial Security account number. 
(B) The creation of a unified database to 
be maintained by the Department of Homeland 
Security and comprised of data from the Social 
Security Administration and the Department of 
Homeland Security specifying the work author-
ization of individuals (including both United 
States citizens and noncitizens) for the purpose 
of 
conducting 
employment 
eligibility 
verification. 
(C) A requirement that all employers verify 
the employment eligibility of all new hires using 
the Social Security cards described in subpara-
graph (A) and a phone, electronic card-reading, 
or other mechanism to seek verification of em-
ployment eligibility through the use of the uni-
fied database described in subparagraph (B). 
(2) ITEMS INCLUDED IN REPORT.—The report 
under paragraph (1) shall include an evaluation of 
each of the following: 
(A) Projected cost, including the cost to 
the Federal Government, State and local gov-
ernments, and the private sector. 
(B) Administrability. 
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(C) Potential effects on— 
(i) employers; 
(ii) employees, including employees 
who are United States citizens as well as 
those that are not citizens; 
(iii) tax revenue; and 
(iv) privacy. 
(D) The extent to which employer and em-
ployee compliance with immigration laws would 
be expected to improve. 
(E) Any other relevant information. 
(3) ALTERNATIVES.—The report under para-
graph (1) also shall examine any alternatives to 
achieve the same goals as the requirements and 
changes described in paragraph (1) but that involve 
lesser cost, lesser burden on those affected, or great-
er ease of administration. 
(b) INSPECTOR GENERAL REVIEW.—Not later than 
3 months after the report is submitted under subsection 
(a), the Inspector General of the Social Security Adminis-
tration, in consultation with the Inspectors General of the 
Department of Treasury, the Department of Homeland 
Security, and the Department of Justice, shall send to the 
Congress an evaluation of such report. 
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(c) CONGRESSIONAL CONSIDERATION.—Upon receipt 
of the Inspector General’s evaluation of the Commissioner 
of Social Security’s report, Congress shall consider legisla-
tion enacting a plan that best meets both the objectives 
outlined in this section as well as ease and feasibility of 
implementation based on the reports presented by the 
Commissioner of Social Security and the Inspector Gen-
eral. 
SEC. 11. EFFECTIVE DATE. 
This Act and the amendments made by this Act shall 
take effect on the date of enactment of this Act, except 
that the requirements of persons and entities to comply 
with the employment eligibility verification process shall 
take effect on the date that is 2 years after such date. 
SEC. 12. LIMITATION ON VERIFICATION RESPONSIBILITIES 
OF COMMISSIONER OF SOCIAL SECURITY. 
The Commissioner of Social Security is authorized to 
perform activities with respect to carrying out the Com-
missioner’s responsibilities in this Act or the amendments 
made by this Act, but only to the extent (except for the 
purpose of carrying out section 8) the Secretary of Home-
land Security has provided, in advance, funds to cover the 
Commissioner’s full costs in carrying out such responsibil-
ities. In no case shall funds from the Federal Old-Age and 
Survivors Insurance Trust Fund or the Federal Disability 
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Insurance Trust Fund be used to carry out such respon-
sibilities. 
SEC. 13. REPORT ON IMPACT ON CONTRACTING AND SUB-
CONTRACTING INDIVIDUALS AND ENTITIES. 
Not later than 12 months after the date of the enact-
ment of this Act, the Secretary of Homeland Security shall 
submit a report to Congress that determines whether the 
described employment eligibility verification system per-
mits contracting individuals and entities to determine the 
eligibility of subcontracting individuals or entities without 
unduly burdening contractors and without freeing subcon-
tracting individuals or entities to break employment laws. 
SEC. 
14. 
REPORT 
ON 
EMPLOYMENT 
ELIGIBILITY 
VERIFICATION SYSTEM. 
Not later than 1 year after the implementation of the 
employment eligibility verification system established 
under this Act, and 1 year thereafter, the Secretary of 
Homeland Security shall submit to Congress a report on 
the progress and problems associated with implementation 
of the system, including information relating to the most 
efficient use of the system by small businesses. 
Æ 
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