Title: Pandemic Unemployment Assistance Fraud Protection Act
Policy area: Labor and Employment

Summary:
Pandemic Unemployment Assistance Fraud Protection Act
This bill creates several requirements for states to address fraudulent claims for Pandemic Unemployment Assistance (PUA), temporarily increases penalties for fraud related to PUA, and requires each state to establish a hotline for victims of unemployment fraud.
Specifically, the bill requires states to
The bill also temporarily enhances the maximum penalty for fraud related to PUA through December 31, 2021, so that the offense is classified as fraud in relation to a presidentially declared major disaster or emergency and punishable by up to 30 years imprisonment, a fine of up to $1,000,000, or both.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4190 Introduced in House (IH)]

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117th CONGRESS
  1st Session
                                H. R. 4190

To impose anti-fraud requirements with respect to certain unemployment 
    benefits authorized under the CARES Act, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 25, 2021

 Mrs. Steel (for herself, Mr. McCarthy, Mr. Harder of California, Mr. 
 Lamborn, Mr. LaMalfa, Mr. Nunes, Mr. Issa, Mr. Garcia of California, 
Mr. Calvert, Mr. McClintock, and Mr. Van Drew) introduced the following 
  bill; which was referred to the Committee on Ways and Means, and in 
    addition to the Committee on the Judiciary, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

_______________________________________________________________________

                                 A BILL


 
To impose anti-fraud requirements with respect to certain unemployment 
    benefits authorized under the CARES Act, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Pandemic Unemployment Assistance 
Fraud Protection Act''.

           TITLE I--TAXPAYER AND UNEMPLOYED WORKER PROTECTION

SEC. 101. STATE ANTI-FRAUD REQUIREMENTS.

    (a) In General.--Section 2118 of the CARES Act (15 U.S.C. 9034) is 
amended--
            (1) in subsection (b)(3), by inserting ``the development 
        and implementation of a recovery plan and the establishment of 
        an anti-fraud task force as described in subsection (d) and'' 
        after ``including'';
            (2) by adding at the end the following:
    ``(d) Anti-Fraud Requirements.--
            ``(1) In general.--As a condition of receiving a grant 
        under subsection (b)(3), the Secretary of Labor shall require 
        that each State or territory receiving such a grant take the 
        following actions:
                    ``(A) Recovery plan.--Not later than 30 days after 
                the date of enactment of this subsection, each such 
                State or territory shall submit to the Secretary of 
                Labor a plan to recover all amounts of pandemic 
                unemployment assistance paid under section 2102 to 
                individuals who fraudulently obtained such assistance.
                    ``(B) Task force.--Not later than 90 days after the 
                date of enactment of this subsection, each such State 
                or territory shall establish an anti-fraud task force 
                to investigate and recover amounts described in 
                paragraph (1), and to develop a strategy for the 
                implementation of the plan described in such paragraph. 
                Such task force shall seek the cooperation of relevant 
                entities in the State or territory, including local law 
                enforcement, State law enforcement, and the State 
                Office of the Inspector General.
                    ``(C) Reports by state or territory.--
                            ``(i) In general.--At such times and in 
                        such manner as the Secretary of Labor may 
                        provide, each such State or territory shall 
                        submit to the Secretary of Labor a report 
                        specifying the ratio (expressed as a 
                        percentage) of--
                                    ``(I) amounts described in 
                                paragraph (1) that have not been 
                                recovered as of the date of such 
                                report, to
                                    ``(II) the total amounts of 
                                pandemic unemployment assistance that 
                                have been paid to individuals under 
                                section 2102 by such State or 
                                territory.
                            ``(ii) Enforcement.--In any case in which 
                        the Secretary of Labor determines that a State 
                        or territory has failed to submit any report 
                        under clause (i), section 1202(b)(10)(A) of the 
                        Social Security Act shall not apply with 
                        respect to such State or territory for any 
                        period after the date of such failure.
            ``(2) Reports by secretary of labor.--
                    ``(A) Relating to state recovery plans.--Not later 
                than 45 days after the date of enactment of this 
                subsection, the Secretary of Labor, in consultation 
                with the Secretary of the Treasury, shall provide 
                Congress with each plan submitted under paragraph 
                (1)(A) and shall certify which such States and 
                territories have submitted such a plan.
                    ``(B) Relating to state reporting.--
                            ``(i) In general.--For each month beginning 
                        after the date of enactment of this subsection 
                        and ending on or before the termination date 
                        specified in clause (ii), the Secretary of 
                        Labor shall submit to the Committee on Ways and 
                        Means of the House of Representatives and the 
                        Committee on Finance of the Senate a report 
                        that includes, subject to clause (ii), the 
                        percentage described in paragraph (1)(C)(i) for 
                        each State or territory that has received a 
                        grant under subsection (b)(3).
                            ``(ii) Termination date.--The termination 
                        date specified in this clause is the earlier of 
                        December 31, 2025, or, with respect to each 
                        State or territory required to submit reports 
                        under paragraph (1)(C), the date of the first 
                        such report in which the percentage specified 
                        in such report does not exceed 5 percent.''.
    (b) Authorization of Funds for Federal Law Enforcement.--There are 
authorized to be appropriated to the Attorney General $50,000,000 for 
each of fiscal years 2022 and 2023 for purposes of partnering with 
State anti-fraud task forces and State and local law enforcement to 
implement section 2118(d) of the CARES Act.

SEC. 102. RECOVERY OF OVERPAYMENTS ATTRIBUTABLE TO FRAUD.

    (a) Recovery of Overpayments by the Treasury.--
            (1) In general.--Section 2102(f)(3) of the CARES Act (15 
        U.S.C. 9021(f)(3)) is amended by adding at the end the 
        following: ``In any case in which a State agency makes an 
        overpayment of assistance to any individual under an agreement 
        under this section, the State shall make restitution to the 
        Secretary for the amount of such overpayment.''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall take effect as if included in the enactment of the CARES 
        Act (Public Law 116-136).
    (b) Processing Fee for Unrecovered Overpayments Attributable to 
Fraud.--
            (1) In general.--Section 3304(a) of the Internal Revenue 
        Code of 1986 is amended--
                    (A) in paragraph (4), by striking ``and'' at the 
                end of subparagraph (F), by inserting ``and'' at the 
                end of subparagraph (G), and by adding at the end the 
                following:
                    ``(H) amounts may be withdrawn for the payment of 
                fees in accordance with paragraph (19);''; and
                    (B) by striking ``and'' at the end of paragraph 
                (18), by redesignating paragraph (19) as paragraph 
                (20), and by inserting after paragraph (18) the 
                following:
            ``(19) in the case of any State that fails to recover at 
        least 75 percent of amounts of pandemic unemployment assistance 
        paid to individuals who fraudulently obtained such assistance 
        under section 2102 of the CARES Act prior to December 31, 2022, 
        the payment of a processing fee to the Secretary of the 
        Treasury, for each withdrawal made from the unemployment fund 
        of the State, in a total amount equal to the amounts of such 
        assistance unrecovered as of such date, to be amortized, as 
        determined by the Secretary of Labor, over a 5-year period 
        beginning on January 1, 2023, except that in no case may the 
        method governing the computation of regular compensation (as 
        defined in section 205(2) of the Federal-State Extended 
        Unemployment Compensation Act of 1970) under the State law be 
        modified in a manner such that the number of weeks, or the 
        average weekly benefit amount, of regular compensation (as so 
        defined) which will be payable after any such withdrawal be 
        less than the number of weeks, or the average weekly benefit 
        amount, of the average weekly benefit amount of regular 
        compensation (as so defined) which would otherwise have been 
        payable at such time under the State law, as in effect on 
        January 1, 2020; and''.
            (2) Conforming amendment to social security act.--Section 
        303(a)(5) of the Social Security Act (42 U.S.C. 503(a)(5)) is 
        amended by striking ``; and'' at the end and inserting ``: 
        Provided further; That amounts may be withdrawn for the payment 
        of fees in accordance with paragraph (19) of section 3304(a) of 
        the Internal Revenue Code of 1986''.

        TITLE II--PAYMENTS FOR ENTITLED AMERICANS AND ANTI-FRAUD

SEC. 201. STATE CROSS-CHECK REQUIREMENTS.

    (a) In General.--Section 2102(f) of the CARES Act (15 U.S.C. 
9021(f)) is amended by adding at the end the following:
            ``(4) Comparing information for fraud prevention.--As a 
        condition of any agreement under this section, a State shall--
                    ``(A) enter into an agreement with the Attorney 
                General under which the list of individuals receiving 
                pandemic unemployment assistance under this section 
                shall be regularly compared with a list of each 
                prisoner in Federal custody at a Federal correction 
                facility within that State;
                    ``(B) establish a regular comparison of such list 
                of individuals with a list of each prisoner in the 
                custody of that State at a correctional facility in 
                that State;
                    ``(C) participate in the E-Verify Program described 
                in section 403 of the Illegal Immigration Reform and 
                Immigrant Responsibility Act of 1996 (division C of 
                Public Law 104-208; 8 U.S.C. 1324a note) with respect 
                to applicants for pandemic unemployment assistance; and
                    ``(D) use the results of the comparisons and 
                participation described in subparagraphs (A), (B), and 
                (C) to investigate and prosecute fraud relating to 
                pandemic unemployment assistance under this section.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to pandemic unemployment assistance paid under 
section 2102 of the CARES Act on or after the date of enactment of this 
Act.

SEC. 202. TEMPORARY ENHANCED PENALTIES FOR FRAUD AND IDENTITY THEFT.

    Any violation of section 1341 or 1343 of title 18, U.S.C., 
occurring in connection with an application for, or continuing receipt 
of, pandemic unemployment assistance under section 2102 of the CARES 
Act (15 U.S.C. 9021) during the period beginning on the date of 
enactment of this Act and ending on December 31, 2021, shall be 
treated, for purposes of the final sentence of section 1341 or 1343 of 
such title, as a violation of such section 1341 or 1343 in relation to 
a presidentially declared major disaster or emergency.

SEC. 203. PROTECTIONS RELATING TO TAX LIABILITY.

    (a) In General.--Section 2118 of the CARES Act (15 U.S.C. 9034), as 
amended by section 101(a), is further amended--
            (1) in subsection (b)(3), by striking the period at the end 
        and inserting ``: Provided, That up to 10 percent of the amount 
        made available under subsection (a) may be used, pursuant to a 
        grant described in this paragraph, for the establishment of the 
        fraud hotline and claim processing procedures described in 
        subsection (e).''; and
            (2) by adding at the end the following:
    ``(e) Protections Relating to Tax Liability.--
            ``(1) In general.--As a condition of receiving a grant 
        under subsection (b)(3), the Secretary of Labor shall require 
        that each State or territory receiving such a grant take the 
        following actions, at such times and in such manner as the 
        Secretary of Labor may provide:
                    ``(A) Fraud hotline.--Each such State or territory 
                shall establish a fraud hotline designed to encourage 
                individuals who are the victims of unemployment fraud 
                and who have received an incorrect statement of 
                unemployment compensation furnished under section 6050B 
                of the Internal Revenue Code of 1986 for a calendar 
                year to report such fraud to the State or territory.
                    ``(B) Processing of claims.--Each such State or 
                territory shall--
                            ``(i) maintain a database of all reports 
                        made as described under paragraph (1);
                            ``(ii) investigate and make a final 
                        determination with respect to each such report;
                            ``(iii) notify the Commissioner of Internal 
                        Revenue--
                                    ``(I) of each such report received 
                                with respect to an individual for a 
                                calendar year; and
                                    ``(II) of the final determination 
                                made with respect to such report.
            ``(2) Report to congress.--Not later than 90 days after the 
        date of enactment of this subsection, the Secretary of Labor, 
        in consultation with the Secretary of the Treasury, shall 
        submit a report to Congress certifying whether each State or 
        territory receiving a grant under subsection (b)(3) has taken 
        the actions described in paragraph (1).''.
    (b) Timeliness of Tax Refunds.--If the Commissioner of Internal 
Revenue is notified by a State that an individual has filed a report 
under section 2118(e) of the CARES Act with respect to an incorrect 
statement of unemployment compensation furnished under section 6050B of 
the Internal Revenue Code of 1986--
            (1) the Commissioner shall not delay making any refund with 
        respect to a return of tax by such individual solely on account 
        of a difference between the amount of unemployment compensation 
        included on such return and furnished on such statement; and
            (2) except as otherwise provided in section 6851 or 6861 of 
        such Code, no assessment of any portion of a deficiency that is 
        attributable to such any difference may be made,
unless such delay or assessment is based on the final determination 
made by the State with respect to such report.
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