[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1096 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 1096

 To create an electronic employment eligibility verification system to 
ensure that all workers in the United States are legally able to work, 
                        and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 13, 2009

 Mr. Marshall (for himself, Mr. DeFazio, Mr. Bartlett, Mr. Barrow, and 
 Mr. Taylor) introduced the following bill; which was referred to the 
 Committee on the Judiciary, and in addition to the Committees on Ways 
  and Means and Education and Labor, 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 create an electronic employment eligibility verification system to 
ensure that all workers in the United States are legally able to work, 
                        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 ``Electronic Employment Eligibility 
Verification and Illegal Immigration Control Act''.

SEC. 2. EMPLOYMENT ELIGIBILITY VERIFICATION SYSTEM.

    (a) In General.--Section 274A(b) of the Immigration and Nationality 
Act (8 U.S.C. 1324a(b)) is amended by adding at the end the following:
            ``(7) Employment eligibility verification system.--
                    ``(A) In general.--The Secretary of Homeland 
                Security shall establish and administer a verification 
                system through which the Secretary (or a designee of 
                the Secretary)--
                            ``(i) responds to inquiries made by persons 
                        at any time through a toll-free telephone line 
                        and other toll-free electronic media concerning 
                        an individual's identity and whether the 
                        individual is authorized to be employed; and
                            ``(ii) maintains records of the inquiries 
                        that were made, of verifications provided (or 
                        not provided), and of the codes provided to 
                        inquirers as evidence of their compliance with 
                        their obligations under this section.
                    ``(B) Design and operation of system.--The 
                verification system shall be designed and operated--
                            ``(i) to maximize its reliability and ease 
                        of use by persons and other entities consistent 
                        with insulating and protecting the privacy and 
                        security of the underlying information;
                            ``(ii) to respond to all inquiries made by 
                        such persons and entities on whether 
                        individuals are authorized to be employed and 
                        to register all times when such inquiries are 
                        not received;
                            ``(iii) with appropriate administrative, 
                        technical, and physical safeguards to prevent 
                        unauthorized disclosure of personal 
                        information; and
                            ``(iv) to have reasonable safeguards 
                        against the system's resulting in unlawful 
                        discriminatory practices based on national 
                        origin or citizenship status, including--
                                    ``(I) the selective or unauthorized 
                                use of the system to verify 
                                eligibility;
                                    ``(II) the use of the system prior 
                                to an offer of employment; or
                                    ``(III) the exclusion of certain 
                                individuals from consideration for 
                                employment as a result of a perceived 
                                likelihood that additional verification 
                                will be required, beyond what is 
                                required for most job applicants.
                    ``(C) Responsibilities of the commissioner of 
                social security.--As part of the verification system, 
                the Commissioner of Social Security, in consultation 
                with the Secretary of Homeland Security (and any 
                designee of the Secretary selected to establish and 
                administer the verification system), shall establish a 
                reliable, secure method, which, within the time periods 
                specified under subparagraphs (B) and (C) of paragraph 
                (3), compares the name and Social Security account 
                number provided in an inquiry against such information 
                maintained by the Commissioner in order to validate (or 
                not validate) the information provided regarding an 
                individual whose identity and employment eligibility 
                must be confirmed, the correspondence of the name and 
                number, and whether the individual has presented a 
                Social Security account number that is not valid for 
                employment. The Commissioner shall not disclose or 
                release Social Security information (other than such 
                verification or nonverification) except as provided for 
                in this section or section 205(c)(2)(I) of the Social 
                Security Act.
                    ``(D) Responsibilities of the secretary of homeland 
                security.--
                            ``(i) As part of the verification system, 
                        the Secretary of Homeland Security (in 
                        consultation with any designee of the Secretary 
                        selected to establish and administer the 
                        verification system), shall establish a 
                        reliable, secure method, which, within the time 
                        periods specified under subparagraphs (B) and 
                        (C) of paragraph (3), compares the name and 
                        alien identification or authorization number 
                        which are provided in an inquiry against such 
                        information maintained by the Secretary in 
                        order to validate (or not validate) the 
                        information provided, the correspondence of the 
                        name and number, and whether the alien is 
                        authorized to be employed in the United States.
                            ``(ii) When a single employer has submitted 
                        to the verification system pursuant to 
                        subparagraphs (B) and (C) of paragraph (3) the 
                        identical Social Security account number in 
                        more than one instance, or when multiple 
                        employers have submitted to the verification 
                        system pursuant to such paragraph the identical 
                        Social Security account number, in a manner 
                        which indicates the possible fraudulent use of 
                        that number, the Secretary of Homeland Security 
                        shall conduct an investigation, within the time 
                        periods specified in such subparagraphs, in 
                        order to ensure that no fraudulent use of a 
                        Social Security account number has taken place. 
                        If the Secretary has selected a designee to 
                        establish and administer the verification 
                        system, the designee shall notify the Secretary 
                        when a single employer has submitted to the 
                        verification system pursuant to such 
                        subparagraphs the identical Social Security 
                        account number in more than one instance, or 
                        when multiple employers have submitted to the 
                        verification system pursuant to such paragraph 
                        the identical Social Security account number, 
                        in a manner which indicates the possible 
                        fraudulent use of that number. The designee 
                        shall also provide the Secretary with all 
                        pertinent information, including the name and 
                        address of the employer or employers who 
                        submitted the relevant Social Security account 
                        number, the relevant Social Security account 
                        number submitted by the employer or employers, 
                        and the relevant name and date of birth of the 
                        employee submitted by the employer or 
                        employers.
                            ``(iii) The Secretary in consultation with 
                        the Commissioner of Social Security, shall 
                        establish procedures to permit an individual 
                        who contests a tentative or final 
                        nonverification notice, or seeks to verify the 
                        individual's own employment, to contact the 
                        appropriate agency and, in a timely manner, 
                        correct or update the information used by the 
                        system.
                            ``(iv) The Secretary shall prescribe a 
                        system to register employer participation prior 
                        to the date the employer is required or 
                        permitted to submit information with respect to 
                        an employee.
                    ``(E) Updating information.--The Commissioner of 
                Social Security and the Secretary of Homeland Security 
                shall update their information in a manner that 
                promotes the maximum accuracy and shall provide a 
                process for the prompt correction of erroneous 
                information, including instances in which it is brought 
                to their attention in the secondary verification 
                process described in paragraph (3)(C).
                    ``(F) Federal tort claims act.--If an individual 
                alleges that the individual would not have been 
                dismissed from a job but for an error of the 
                verification mechanism, the individual may seek 
                compensation only through the mechanism of the Federal 
                Tort Claims Act, and injunctive relief to correct such 
                error. No class action may be brought under this 
                subparagraph.
                    ``(G) Protection from liability for actions taken 
                on the basis of information.--No person or entity shall 
                be civilly or criminally liable for any action taken in 
                good faith reliance on information provided through the 
                employment eligibility verification mechanism 
                established under this paragraph.''.
    (b) Repeal of Provision Relating to Evaluations and Changes in 
Employment Verification.--Section 274A(d) of such Act (8 U.S.C. 
1324a(d)) is repealed.

SEC. 3. EMPLOYMENT ELIGIBILITY VERIFICATION PROCESS.

    Section 274A of the Immigration and Nationality Act (8 U.S.C. 
1324a) is amended--
            (1) in subsection (a)(3), by inserting ``(A)'' after 
        ``Defense.--'', and by adding at the end the following:
                    ``(B) Failure to seek and obtain verification.--In 
                the case of a person or entity in the United States 
                that hires, or continues to employ, an individual, or 
                recruits or refers an individual for employment, the 
                following requirements apply:
                            ``(i) Failure to seek verification.--
                                    ``(I) In general.--If the person or 
                                entity has not made an inquiry, under 
                                the mechanism established under 
                                subsection (b)(7), seeking verification 
                                of the identity and work eligibility of 
                                the individual, by not later than the 
                                end of 3 working days (as specified by 
                                the Secretary of Homeland Security) 
                                after the date of the hiring, the date 
                                specified in subsection (b)(8)(B) for 
                                previously hired individuals, or before 
                                the recruiting or referring commences, 
                                the defense under subparagraph (A) 
                                shall not be considered to apply with 
                                respect to any employment, except as 
                                provided in subclause (II).
                                    ``(II) Special rule for failure of 
                                verification mechanism.--If such a 
                                person or entity in good faith attempts 
                                to make an inquiry in order to qualify 
                                for the defense under subparagraph (A) 
                                and the verification mechanism has 
                                registered that not all inquiries were 
                                responded to during the relevant time, 
                                the person or entity can make an 
                                inquiry until the end of the first 
                                subsequent working day in which the 
                                verification mechanism registers no 
                                nonresponses and qualify for such 
                                defense.
                            ``(ii) Failure to obtain verification.--If 
                        the person or entity has made the inquiry 
                        described in clause (i)(I) but has not received 
                        an appropriate verification of such identity 
                        and work eligibility under such mechanism 
                        within the time period specified under 
                        subsection (b)(7)(B) after the time the 
                        verification inquiry was received, the defense 
                        under subparagraph (A) shall not be considered 
                        to apply with respect to any employment after 
                        the end of such time period.'';
            (2) by amending subparagraph (A) of subsection (b)(1) to 
        read as follows:
                    ``(A) In general.--The person or entity must 
                attest, under penalty of perjury and on a form 
                designated or established by the Secretary by 
                regulation, that it has verified that the individual is 
                not an unauthorized alien by--
                            ``(i) obtaining from the individual the 
                        individual's Social Security account number and 
                        recording the number on the form (if the 
                        individual claims to have been issued such a 
                        number), and, if the individual does not attest 
                        to United States citizenship under paragraph 
                        (2), obtaining such identification or 
                        authorization number established by the 
                        Department of Homeland Security for the alien 
                        as the Secretary of Homeland Security may 
                        specify, and recording such number on the form; 
                        and
                            ``(ii)(I) examining a document described in 
                        subparagraph (B); or
                            ``(II) examining a document described in 
                        subparagraph (C) and a document described in 
                        subparagraph (D).
                        A person or entity has complied with the 
                        requirement of this paragraph with respect to 
                        examination of a document if the document 
                        reasonably appears on its face to be genuine, 
                        reasonably appears to pertain to the individual 
                        whose identity and work eligibility is being 
                        verified, and, if the document bears an 
                        expiration date, that expiration date has not 
                        elapsed. If an individual provides a document 
                        (or combination of documents) that reasonably 
                        appears on its face to be genuine, reasonably 
                        appears to pertain to the individual whose 
                        identity and work eligibility is being 
                        verified, and is sufficient to meet the first 
                        sentence of this paragraph, nothing in this 
                        paragraph shall be construed as requiring the 
                        person or entity to solicit the production of 
                        any other document or as requiring the 
                        individual to produce another document.'';
            (3) in subsection (b)(1)(D)--
                    (A) in clause (i), by striking ``or such other 
                personal identification information relating to the 
                individual as the Attorney General finds, by 
                regulation, sufficient for purposes of this section''; 
                and
                    (B) in clause (ii), by inserting before the period 
                ``and that contains a photograph of the individual'';
            (4) in subsection (b)(2), by adding at the end the 
        following: ``The individual must also provide that individual's 
        Social Security account number (if the individual claims to 
        have been issued such a number), and, if the individual does 
        not attest to United States citizenship under this paragraph, 
        such identification or authorization number established by the 
        Department of Homeland Security for the alien as the Secretary 
        may specify.''; and
            (5) by amending paragraph (3) of subsection (b) to read as 
        follows:
            ``(3) Retention of verification form and verification.--
                    ``(A) In general.--After completion of such form in 
                accordance with paragraphs (1) and (2), the person or 
                entity must--
                            ``(i) retain a paper, microfiche, 
                        microfilm, or electronic version of the form 
                        and make it available for inspection by 
                        officers of the Department of Homeland 
                        Security, the Special Counsel for Immigration-
                        Related Unfair Employment Practices, or the 
                        Department of Labor during a period beginning 
                        on the date of the hiring, recruiting, or 
                        referral of the individual or the date of the 
                        completion of verification of a previously 
                        hired individual and ending--
                                    ``(I) in the case of the recruiting 
                                or referral of an individual, 3 years 
                                after the date of the recruiting or 
                                referral;
                                    ``(II) in the case of the hiring of 
                                an individual, the later of--
                                            ``(aa) 3 years after the 
                                        date of such hiring; or
                                            ``(bb) 1 year after the 
                                        date the individual's 
                                        employment is terminated; and
                                    ``(III) in the case of the 
                                verification of a previously hired 
                                individual, the later of--
                                            ``(aa) 3 years after the 
                                        date of the completion of 
                                        verification; or
                                            ``(bb) 1 year after the 
                                        date the individual's 
                                        employment is terminated;
                            ``(ii) make an inquiry, as provided in 
                        paragraph (7), using the verification system to 
                        seek verification of the identity and 
                        employment eligibility of an individual, by not 
                        later than the end of 3 working days (as 
                        specified by the Secretary of Homeland 
                        Security) after the date of the hiring or in 
                        the case of previously hired individuals, the 
                        date specified in paragraph (8)(B), or before 
                        the recruiting or referring commences; and
                            ``(iii) not commence recruitment or 
                        referral of the individual until the person or 
                        entity receives verification under clause (i) 
                        or (ii) of subparagraph (D).
                    ``(B) Initial response.--The verification system 
                shall provide verification or a tentative 
                nonverification of an individual's identity and 
                employment eligibility within 3 working days of the 
                initial inquiry. If providing verification or tentative 
                nonverification, the verification system shall provide 
                an appropriate code indicating such verification or 
                such nonverification.
                    ``(C) Secondary verification process in case of 
                tentative nonverification.--In cases of tentative 
                nonverification, the Secretary shall specify, in 
                consultation with the Commissioner of Social Security, 
                an available secondary verification process to confirm 
                the validity of information provided and to provide a 
                final verification or nonverification within 10 working 
                days after the date of the tentative nonverification. 
                When final verification or nonverification is provided, 
                the verification system shall provide an appropriate 
                code indicating such verification or nonverification.
                    ``(D) Verification or nonverification.--
                            ``(i) Verification upon initial inquiry.--
                        If an employer receives a verification notice 
                        under subparagraph (B) for an individual, the 
                        employer shall record, as described in 
                        subparagraph (A)(i), the appropriate code 
                        provided in such notice.
                            ``(ii) Tentative nonverification.--If an 
                        employer receives a tentative nonverification 
                        notice under subparagraph (B) for an 
                        individual, the employer shall inform such 
                        individual of the issuance of such notice in 
                        writing, on a form prescribed by the Secretary 
                        not later than 3 days after receiving such 
                        notice. Such individual shall acknowledge 
                        receipt of such notice in writing as described 
                        in paragraph (1)(A). If the individual refuses 
                        to acknowledge receipt of notice, the 
                        individual's employment must be terminated 
                        immediately.
                            ``(iii) No contest.--If the individual does 
                        not contest the tentative nonverification 
                        notice within 10 days of receiving notice from 
                        the individual's employer, the notice shall 
                        become final and the employer shall record, as 
                        described in subparagraph (A)(i), the 
                        appropriate code provided through the system to 
                        indicate the individual did not contest the 
                        tentative nonverification. An individual's 
                        failure to contest a tentative nonverification 
                        shall not be considered an admission of guilt 
                        with respect to any violation of this Act or 
                        any other provision of law.
                            ``(iv) Contest.--If the individual contests 
                        the tentative nonverification notice, the 
                        individual shall submit appropriate information 
                        to contest such notice under the procedures 
                        established in subparagraph (E) not later than 
                        10 days after receiving the notice from the 
                        individual's employer.
                            ``(v) Effective period of tentative 
                        nonverification notice.--A tentative 
                        nonverification notice shall remain in effect 
                        until such notice becomes final under clause 
                        (iii), or the earlier of--
                                    ``(I) a final verification notice 
                                or final nonverification notice is 
                                issued through the system; or
                                    ``(II) 10 working days after the 
                                individual contests a tentative 
                                nonverification under clause (iv).
                            ``(vi) Additional authority.--The Secretary 
                        shall have the authority to issue a final 
                        verification notice for an individual. In such 
                        a case, the Secretary shall determine the 
                        individual's eligibility for employment in the 
                        United States and record the results of such 
                        determination in the system within 12 months.
                            ``(vii) Effective period of final notice.--
                        A final verification notice issued under this 
                        paragraph for an individual shall remain in 
                        effect--
                                    ``(I) during any continuous period 
                                of employment of such individual by 
                                such employer, unless the Secretary 
                                determines the final verification was 
                                the result of identity fraud; or
                                    ``(II) in the case of an alien 
                                authorized to be employed in the United 
                                States for a temporary period, during 
                                such period.
                            ``(viii) Prohibition on termination.--An 
                        employer may not terminate the employment of an 
                        individual based on a tentative nonverification 
                        notice until such notice becomes final under 
                        clause (iii), an individual refuses to 
                        acknowledge receipt of tentative 
                        nonverification under clause (ii), or a final 
                        nonverification notice is issued for the 
                        individual by the System. Nothing in this 
                        clause shall prohibit the termination of 
                        employment for any other reason other than such 
                        tentative nonverification.
                            ``(ix) Recording of contest resolution.--
                        The employer shall record the appropriate code 
                        that is provided through the system to indicate 
                        a final verification notice or final 
                        nonverification notice as described in 
                        paragraph (1)(A).
                            ``(x) Consequences of nonverification.--If 
                        the employer has received a final 
                        nonverification regarding an individual, the 
                        employer shall terminate the employment, 
                        recruitment, or referral of the individual. 
                        Such employer shall provide to the Secretary 
                        any information relating to the individual that 
                        the Secretary determines would assist the 
                        Secretary in enforcing or administering the 
                        immigration laws. If the employer continues to 
                        employ, recruit or refer the individual after 
                        receiving final nonverification, a rebuttable 
                        presumption is created that the employer has 
                        violated subsections (a)(1)(A) and (a)(2). Such 
                        presumption may not apply to a prosecution 
                        under subsection (f)(1).
                    ``(E) Administrative review.--
                            ``(i) In general.--An individual who is 
                        terminated from employment as a result of a 
                        final nonverification notice may, not later 
                        than 60 days after the date of such 
                        termination, file an appeal of such notice.
                            ``(ii) Procedures.--The Secretary and 
                        Commissioner of Social Security shall develop 
                        procedures to review appeals filed under clause 
                        (i) and to make final determinations on such 
                        appeals.
                            ``(iii) Review for errors.--If a final 
                        determination on an appeal filed under clause 
                        (i) results in verification of an individual's 
                        eligibility to work in the United States, the 
                        administrative review process shall require the 
                        Secretary to determine if the final 
                        nonverification notice issued for the 
                        individual was the result of--
                                    ``(I) an error or negligence on the 
                                part of an employee or official 
                                operating or responsible for the 
                                System;
                                    ``(II) the decision rules, 
                                processes, or procedures utilized by 
                                the system; or
                                    ``(III) erroneous system 
                                information that was not the result of 
                                acts or omissions of the individual.
                            ``(iv) Compensation for error.--
                                    ``(I) In general.--If the Secretary 
                                makes a determination under clause 
                                (iii) that the final nonverification 
                                notice issued for an individual was not 
                                caused by an act or omission of the 
                                individual, the Secretary shall 
                                compensate the individual for lost 
                                wages.
                                    ``(II) Calculation of lost wages.--
                                Lost wages shall be calculated based on 
                                the wage rate and work schedule that 
                                prevailed prior to termination. The 
                                individual shall be compensated for 
                                wages lost beginning on the first 
                                scheduled work day after employment was 
                                terminated and ending 180 days after 
                                completion of the administrative review 
                                process described in this paragraph or 
                                the day after the individual is 
                                reinstated or obtains employment 
                                elsewhere, whichever occurs first.
                            ``(v) Limitation on compensation.--For 
                        purposes of determining an individual's 
                        compensation for the loss of employment, such 
                        compensation shall not include any period in 
                        which the individual was ineligible for 
                        employment in the United States.
                            ``(vi) Source of funds.--Compensation or 
                        reimbursement provided under this paragraph 
                        shall be provided from the Employment 
                        Verification Compensation Fund established 
                        under section 8 and shall not be provided from 
                        appropriated funds.
                    ``(F) Judicial review.--
                            ``(i) In general.--After the Secretary 
                        makes a final determination on an appeal filed 
                        by an individual under the administrative 
                        review process described in subparagraph (E), 
                        the individual may obtain judicial review of 
                        such determination by a civil action commenced 
                        not later than 60 days after the date of such 
                        decision, or such further time as the Secretary 
                        may allow.
                            ``(ii) Jurisdiction.--A civil action for 
                        such judicial review shall be brought in the 
                        district court of the United States for the 
                        judicial district in which the plaintiff 
                        resides, or has a principal place of business, 
                        or, if the plaintiff does not reside or have a 
                        principal place of business within any such 
                        judicial district, in the District Court of the 
                        United States for the District of Columbia.
                            ``(iii) Answer.--As part of the Secretary's 
                        answer to a complaint for such judicial review, 
                        the Secretary shall file a certified copy of 
                        the administrative record compiled during the 
                        administrative review under subparagraph (E), 
                        including the evidence upon which the findings 
                        and decision complained of are based. The court 
                        shall have power to enter, upon the pleadings 
                        and transcript of the record, a judgment 
                        affirming or reversing the result of that 
                        administrative review, with or without 
                        remanding the cause for a rehearing.
                            ``(iv) Compensation for error.--
                                    ``(I) In general.--In cases in 
                                which such judicial review reverses the 
                                final determination of the Secretary 
                                made under subparagraph (E), the court 
                                shall compensate the individual for 
                                lost wages.
                                    ``(II) Calculation of lost wages.--
                                Lost wages shall be calculated based on 
                                the wage rate and work scheduled that 
                                prevailed prior to termination. The 
                                individual shall be compensated for 
                                wages lost beginning on the first 
                                scheduled work day after employment was 
                                terminated and ending 180 days after 
                                completion of the judicial review 
                                described in this paragraph or the day 
                                after the individual is reinstated or 
                                obtains employment elsewhere, whichever 
                                occurs first.
                    ``(G) Limitation on use of the verification system 
                and any related systems.--Notwithstanding any other 
                provision of law, nothing in this paragraph shall be 
                construed to permit or allow any department, bureau, or 
                other agency of the United States Government to utilize 
                any information, database, or other records assembled 
                under this paragraph for any other purpose other than 
                as provided for.
                    ``(H) Limitation on collection and use of data.--
                            ``(i) Limitation on collection of data.--
                                    ``(I) In general.--The System shall 
                                collect and maintain only the minimum 
                                data necessary to facilitate the 
                                successful operation of the System, and 
                                in no case shall the data be other 
                                than--
                                            ``(aa) information 
                                        necessary to register employers 
                                        under paragraph (7)(D)(iv);
                                            ``(bb) information 
                                        necessary to initiate and 
                                        respond to inquiries or 
                                        contests under subparagraph 
                                        (E);
                                            ``(cc) information 
                                        necessary to establish and 
                                        enforce compliance with 
                                        paragraph (7)(D)(iv) and 
                                        subparagraph (E);
                                            ``(dd) information 
                                        necessary to detect and prevent 
                                        employment related identity 
                                        fraud; and
                                            ``(ee) such other 
                                        information the Secretary 
                                        determines is necessary, 
                                        subject to a 180 day notice and 
                                        comment period in the Federal 
                                        Register.
                                    ``(II) Penalties.--Any officer, 
                                employee, or contractor who willfully 
                                and knowingly collects and maintains 
                                data in the system other than data 
                                described in clause (i) shall be guilty 
                                of a misdemeanor and fined not more 
                                than $1,000 for each violation.
                            ``(ii) Limitation on use of data.--Whoever 
                        willfully and knowingly accesses, discloses, or 
                        uses any information obtained or maintained by 
                        the system--
                                    ``(I) for the purpose of committing 
                                identity fraud, or assisting another 
                                person in committing identity fraud, as 
                                defined in section 1028 of title 18, 
                                United States Code;
                                    ``(II) for the purpose of 
                                unlawfully obtaining employment in the 
                                United States or unlawfully obtaining 
                                employment in the United States for any 
                                other person; or
                                    ``(III) for any purpose other than 
                                as provided for under any provision of 
                                law;
                        shall be guilty of a felony and upon conviction 
                        shall be fined under title 18, United States 
                        Code, or imprisoned for not less than 5 years, 
                        or both.
                            ``(iii) Exceptions.--Nothing in clauses (i) 
                        or (ii) may be construed to limit the 
                        collection, maintenance, or use of data by the 
                        Commissioner of Internal Revenue or the 
                        Commissioner of Social Security as provided by 
                        law.''.

SEC. 4. EXPANSION OF EMPLOYMENT ELIGIBILITY VERIFICATION SYSTEM TO 
              PREVIOUSLY HIRED INDIVIDUALS AND RECRUITING AND 
              REFERRING.

    (a) Application to Recruiting and Referring.--Section 274A of the 
Immigration and Nationality Act (8 U.S.C. 1324a) is amended--
            (1) in subsection (a)(1)(A), by striking ``for a fee'';
            (2) in subsection (a)(1), by amending subparagraph (B) to 
        read as follows:
                    ``(B) to hire, continue to employ, or to recruit or 
                refer for employment in the United States an individual 
                without complying with the requirements of subsection 
                (b).'';
            (3) in subsection (a)(2), by striking ``after hiring an 
        alien for employment in accordance with paragraph (1),'' and 
        inserting ``after complying with paragraph (1),''; and
            (4) in subsection (a)(3), as amended by section 3, is 
        further amended by striking ``hiring,'' and inserting ``hiring, 
        employing,'' each place it appears.
    (b) Employment Eligibility Verification for Previously Hired 
Individuals.--Section 274A(b) of such Act (8 U.S.C. 1324a(b)), as 
amended by section 2(a), is further amended by adding at the end the 
following:
            ``(8) Use of employment eligibility verification system for 
        previously hired individuals.--
                    ``(A) On a voluntary basis.--Beginning on the date 
                that is 2 years after the date of the enactment of the 
                Electronic Employment Eligibility Verification and 
                Illegal Immigration Control Act and until the date 
                specified in subparagraph (B)(iii), a person or entity 
                may make an inquiry, as provided in paragraph (7), 
                using the verification system to seek verification of 
                the identity and employment eligibility of any 
                individual employed by the person or entity, as long as 
                it is done on a nondiscriminatory basis.
                    ``(B) On a mandatory basis.--
                            ``(i) A person or entity described in 
                        clause (ii) must make an inquiry as provided in 
                        paragraph (7), using the verification system to 
                        seek verification of the identity and 
                        employment eligibility of all individuals 
                        employed by the person or entity who have not 
                        been previously subject to an inquiry by the 
                        person or entity by the date 3 years after the 
                        date of enactment of the Electronic Employment 
                        Eligibility Verification and Illegal 
                        Immigration Control Act.
                            ``(ii) A person or entity is described in 
                        this clause if it is a Federal, State, or local 
                        governmental body (including the Armed Forces 
                        of the United States), or if it employs 
                        individuals working in a location that is a 
                        Federal, State, or local government building, a 
                        military base, a nuclear energy site, a weapon 
                        site, an airport, or that contains critical 
                        infrastructure (as defined in section 1016(e) 
                        of the Critical Infrastructure Protection Act 
                        of 2001 (42 U.S.C. 5195c(e))), but only to the 
                        extent of such individuals.
                            ``(iii) All persons and entities other than 
                        those described in clause (ii) must make an 
                        inquiry, as provided in paragraph (7), using 
                        the verification system to seek verification of 
                        the identity and employment eligibility of all 
                        individuals employed by the person or entity 
                        who have not been previously subject to an 
                        inquiry by the person or entity by the date 6 
                        years after the date of enactment of the 
                        Electronic Employment Eligibility Verification 
                        and Illegal Immigration Control Act.''.

SEC. 5. BASIC PILOT PROGRAM.

    Section 401(b) of the Illegal Immigration Reform and Immigrant 
Responsibility Act of 1996 (8 U.S.C. 1324a note) is amended by striking 
``at the end of the 11-year period beginning on the first day the pilot 
program is in effect'' and inserting ``2 years after the enactment of 
the Electronic Employment Eligibility Verification and Illegal 
Immigration Control Act''.

SEC. 6. HIRING HALLS.

    Section 274A(h) of the Immigration and Nationality Act (8 U.S.C. 
1324a(h)) is amended by adding at the end the following:
            ``(4) Recruitment and referral.--As used in this section, 
        the term `refer' means the act of sending or directing a person 
        or transmitting documentation or information to another, 
        directly or indirectly, with the intent of obtaining employment 
        in the United States for such person. Generally, only persons 
        or entities referring for remuneration (whether on a retainer 
        or contingency basis) are included in the definition. However, 
        labor service agencies, whether public, private, for-profit, or 
        nonprofit, that refer, dispatch, or otherwise facilitate the 
        hiring of workers for any period of time by a third party are 
        included in the definition whether or not they receive 
        remuneration. As used in this section the term `recruit' means 
        the act of soliciting a person, directly or indirectly, and 
        referring the person to another with the intent of obtaining 
        employment for that person. Generally, only persons or entities 
        recruiting for remunerations (whether on a retainer or 
        contingency basis) are included in the definition. However, 
        labor service agencies, whether public, private, for-profit, or 
        nonprofit that refer, dispatch, or otherwise facilitate the 
        hiring of workers for any period of time by a third party are 
        included in the definition whether or not they receive 
        remuneration.''.

SEC. 7. PENALTIES.

    Section 274A of the Immigration and Nationality Act (8 U.S.C. 
1324a) is amended--
            (1) in subsection (e)(4)--
                    (A) in subparagraph (A), in the matter before 
                clause (i), by inserting ``, subject to paragraphs (10) 
                through (12),'' after ``in an amount'';
                    (B) in subparagraph (A)(i), by striking ``not less 
                than $250 and not more than $2,000'' and inserting 
                ``not less than $5,000 and not more than $15,000'';
                    (C) in subparagraph (A)(ii), by striking ``not less 
                than $2,000 and not more than $5,000'' and inserting 
                ``not less than $10,000 and not more than $15,000'';
                    (D) in subparagraph (A)(iii), by striking ``not 
                less than $3,000 and not more than $10,000'' and 
                inserting ``not less than $25,000 and not more than 
                $40,000''; and
                    (E) by amending subparagraph (B) to read as 
                follows:
                    ``(B) may require the person or entity to take such 
                other remedial action as is appropriate.'';
            (2) in subsection (e)(5)--
                    (A) by inserting ``, subject to paragraphs (10) 
                through (12),'' after ``in an amount'';
                    (B) by striking ``$100'' and inserting ``$1,000'';
                    (C) by striking ``$1,000'' and inserting 
                ``$25,000'';
                    (D) by striking ``the size of the business of the 
                employer being charged, the good faith of the 
                employer'' and inserting ``the good faith of the 
                employer being charged''; and
                    (E) by adding at the end the following sentence: 
                ``Failure by a person or entity to utilize the 
                employment eligibility verification system as required 
                by law, or providing information to the system that the 
                person or entity knows or reasonably believes to be 
                false, shall be treated as a violation of subsection 
                (a)(1)(A).'';
            (3) by adding at the end of subsection (e) the following 
        new paragraphs:
            ``(10) Mitigation of civil money penalties for smaller 
        employers.--In the case of imposition of a civil penalty under 
        paragraph (4)(A) with respect to a violation of subsection 
        (a)(1)(A) or (a)(2) for hiring or continuation of employment by 
        an employer and in the case of imposition of a civil penalty 
        under paragraph (5) for a violation of subsection (a)(1)(B) for 
        hiring by an employer, the dollar amounts otherwise specified 
        in the respective paragraph shall be reduced as follows:
                    ``(A) In the case of an employer with an average of 
                fewer than 26 full-time equivalent employees (as 
                defined by the Secretary of Homeland Security), the 
                amounts shall be reduced by 60 percent.
                    ``(B) In the case of an employer with an average of 
                at least 26, but fewer than 101, full-time equivalent 
                employees (as so defined), the amounts shall be reduced 
                by 40 percent.
                    ``(C) In the case of an employer with an average of 
                at least 101, but fewer than 251, full-time equivalent 
                employees (as so defined), the amounts shall be reduced 
                by 20 percent.
        The last sentence of paragraph (4) shall apply under this 
        paragraph in the same manner as it applies under such 
        paragraph.
            ``(11) Exemption from penalty for initial good faith 
        violation.--In the case of imposition of a civil penalty under 
        paragraph (4)(A) with respect to a violation of subsection 
        (a)(1)(A) or (a)(2) for hiring or continuation of employment or 
        recruitment or referral by person or entity and in the case of 
        imposition of a civil penalty under paragraph (5) for a 
        violation of subsection (a)(1)(B) for hiring or recruitment or 
        referral by a person or entity, the penalty otherwise imposed 
        shall be waived if the violator establishes that it was the 
        first such violation of such provision by the violator and the 
        violator acted in good faith.
            ``(12) Safe harbor for contractors.--A person or other 
        entity shall be liable for a penalty under paragraph (4)(A) 
        with respect to the violation of subsection (a)(1)(A), 
        (a)(1)(B), or (a)(2) with respect to the hiring or continuation 
        of employment of an unauthorized alien by a subcontractor of 
        that person or entity unless the person or entity verifies 
        through the employment eligibility verification system that all 
        subcontractor employees and entities participating in the 
        subcontracted employment are eligible for employment prior to 
        beginning employment for the contracting person or entity. A 
        contracting person or entity shall not be required to verify a 
        subcontractor if the contracting person or entity has 
        previously verified the employment eligibility of that 
        subcontractor. A contracting person or entity shall not be 
        required to verify the employment eligibility of a 
        subcontractor employee if the person or entity has previously 
        verified the subcontractor employee as a result of the 
        subcontractor employee's previous employment on behalf of the 
        person or entity as an employee of the subcontractor.'';
            (4) by amending paragraph (1) of subsection (f) to read as 
        follows:
            ``(1) Criminal penalty.--Any person or entity which engages 
        in a pattern or practice of violations 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 ``Secretary of Homeland 
        Security'';
            (6) by redesignating subsection (h) as subsection (j);
            (7) by inserting after subsection (g) the following:
    ``(h) Prohibition on Award of Government Contracts, Grants and 
Agreements.--
            ``(1) Employers with no contracts, grants, or agreements.--
                    ``(A) In general.--If an employer who does not hold 
                a Federal contract, grant, or cooperative agreement is 
                determined by the Secretary 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 
                agreement for a period of 5 years. The Secretary or the 
                Attorney General shall advise the Administrator of 
                General Services of such a debarment, and the 
                Administrator of General Services shall list the 
                employer on the List of Parties Excluded from Federal 
                Procurement and Nonprocurement Programs for a period of 
                5 years.
                    ``(B) Waiver.--The Administrator of General 
                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 Federal 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 Federal 
        contracts, grants, or cooperative agreements for a period of 5 
        years.
    ``(i) Penalty for False Attestation by Employee.--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 violation, 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 redesignated) 
        the following:
    ``(k) Special Criminal Penalties for Subcontractors and Labor 
Brokers.--Any person or subcontracting entity which engages in a 
pattern or practice 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, imprisoned 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 ``Employment Verification Compensation 
Fund'' (in this section referred to as the ``Fund'').
    (b) Transfers to the Fund.--There shall be deposited 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 Department of Homeland Security shall create and 
maintain a publicly available and accessible online database of 
contracting and subcontracting individuals or entities which discloses 
the number of employment 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 Department of Homeland Security shall audit and 
investigate any contracting or subcontracting individual or entity 
which has a 10% or greater employment verification rejection rate.

SEC. 10. REPORT ON SOCIAL SECURITY CARD-BASED EMPLOYMENT 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 evaluation 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 individual (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 connection 
                        with the issuance of a new Social 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 authorization 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 subparagraph (A) and 
                a phone, electronic card-reading, or other mechanism to 
                seek verification of employment eligibility through the 
                use of the unified 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 governments, and 
                the private sector.
                    (B) Administrability.
                    (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 employee 
                compliance with immigration laws would be expected to 
                improve.
                    (E) Any other relevant information.
            (3) Alternatives.--The report under paragraph (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 
        greater 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 Administration, 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.
    (c) Congressional Consideration.--Upon receipt of the Inspector 
General's evaluation of the Commissioner of Social Security's report, 
Congress shall consider legislation 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 General.

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 Commissioner'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 Homeland Security has provided, in advance, funds to 
cover the Commissioner's full costs in carrying out such 
responsibilities. In no case shall funds from the Federal Old-Age and 
Survivors Insurance Trust Fund or the Federal Disability Insurance 
Trust Fund be used to carry out such responsibilities.

SEC. 13. REPORT ON IMPACT ON CONTRACTING AND SUBCONTRACTING INDIVIDUALS 
              AND ENTITIES.

    Not later than 12 months after the date of the enactment of this 
Act, the Secretary of Homeland Security shall submit a report to 
Congress that determines whether the described employment eligibility 
verification system permits contracting individuals and entities to 
determine the eligibility of subcontracting individuals or entities 
without unduly burdening contractors and without freeing subcontracting 
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.
                                 <all>