[House Report 118-34]
[From the U.S. Government Publishing Office]


118th Congress    }                                     {      Report
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                     {      118-34

======================================================================



 
       PROTECTING TAXPAYERS AND VICTIMS OF UNEMPLOYMENT FRAUD ACT

                                _______
                                

 April 6, 2023.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Smith of Missouri, from the Committee on Ways and Means, submitted 
                             the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 1163]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 1163) to provide incentives for States to recover 
fraudulently paid Federal and State unemployment compensation, 
and for other purposes, having considered the same, reports 
favorably thereon with an amendment and recommends that the 
bill as amended do pass.

                                CONTENTS

                                                                   Page
  I. SUMMARY AND BACKGROUND...........................................5
          A. PURPOSE AND SUMMARY.................................     5
          B. BACKGROUND AND NEED FOR LEGISLATION.................     5
          C. LEGISLATIVE HISTORY.................................    12
          D. DESIGNATED HEARING..................................    13
 II. EXPLANATION OF THE BILL.........................................13
          A. THE PROTECTING TAXPAYERS AND VICTIMS OF UNEMPLOYMENT 
              FRAUD ACT..........................................    13
III. VOTES OF THE COMMITTEE..........................................18
 IV. BUDGET EFFECTS OF THE BILL......................................25
          A. COMMITTEE ESTIMATE OF BUDGETARY EFFECTS.............    25
          B. STATEMENT REGARDING NEW BUDGET AUTHORITY AND TAX 
              EXPENDITURES BUDGET AUTHORITY......................    25
  V. COST ESTIMATE PREPARED BY THE CONGRESSIONAL BUDGET OFFICE.......25
 VI. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE......32
          A. COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS....    32
          B. STATEMENT OF GENERAL PERFORMANCE GOALS AND 
              OBJECTIVES.........................................    33
          C. INFORMATION RELATING TO UNFUNDED MANDATES...........    33
          D. CONGRESSIONAL EARMARKS, LIMITED TAX BENEFITS, AND 
              LIMITED TARIFF BENEFITS............................    33
          E. DUPLICATION OF FEDERAL PROGRAMS.....................    33
VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED...........33
          A. TEXT OF EXISTING LAW AMENDED OR REPEALED BY THE 
              BILL, AS REPORTED..................................    33
          B. CHANGES IN EXISTING LAW PROPOSED BY THE BILL, AS 
              REPORTED...........................................    33
VIII.DISSENTING VIEWS................................................34


    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Protecting Taxpayers and Victims of 
Unemployment Fraud Act''.

SEC. 2. RECOVERING FEDERAL FRAUDULENT COVID UNEMPLOYMENT COMPENSATION 
                    PAYMENTS.

  (a) Allowing States to Retain Percentage of Overpayments for Program 
Integrity.--
          (1) Pandemic unemployment assistance.--Section 2102(d) of the 
        CARES Act (15 U.S.C. 9021(d)) is amended by amending paragraph 
        (4) to read as follows:
          ``(4) Fraud and overpayments.--Section 2107(e) shall apply 
        with respect to pandemic unemployment assistance under this 
        section by substituting `pandemic unemployment assistance' for 
        `pandemic emergency unemployment compensation' each place it 
        appears in such section 2107(e).''.
          (2) Federal pandemic unemployment compensation.--Section 
        2104(f)(3) of such Act (15 U.S.C. 9023(f)(3)) is amended--
                  (A) in subparagraph (A)--
                          (i) by striking ``3-year'' and inserting 
                        ``10-year''; and
                          (ii) by inserting ``, except that a State may 
                        retain a percentage of any amounts recovered as 
                        described in subparagraph (C)'' before the 
                        period at the end; and
                  (B) by adding at the end the following:
                  ``(C) Retention of percentage of recovered funds.--
                The State agency may retain 25 percent of any amount 
                recovered from overpayments of Federal Pandemic 
                Unemployment Compensation or Mixed Earner Unemployment 
                Compensation that were determined to be made due to 
                fraud. Amounts so retained by the State agency shall be 
                used for any of following:
                          ``(i) Modernizing unemployment compensation 
                        systems and information technology to improve 
                        identity verification and validation of 
                        applicants.
                          ``(ii) Reimbursement of administrative costs 
                        incurred by the State to identify and pursue 
                        recovery of fraudulent overpayments.
                          ``(iii) Hiring fraud investigators and 
                        prosecutors.
                          ``(iv) Other program integrity activities as 
                        determined by the State.'';
          (3) Pandemic emergency unemployment compensation.--Section 
        2107(e)(3) of such Act (15 U.S.C. 9025(e)(3)) is amended--
                  (A) in subparagraph (A)--
                          (i) by striking ``3-year'' and inserting 
                        ``10-year''; and
                          (ii) by inserting ``, except that a State may 
                        retain a percentage of any amounts recovered as 
                        described in subparagraph (C)'' before the 
                        period at the end; and
                  (B) by adding at the end the following:
                  ``(C) Retention of percentage of recovered funds.--
                The State agency may retain 25 percent of any amount 
                recovered from overpayments of pandemic emergency 
                unemployment compensation that were determined to be 
                made due to fraud. Amounts so retained by the State 
                agency shall be used for any of following:
                          ``(i) Modernizing unemployment compensation 
                        systems and information technology to improve 
                        identity verification and validation of 
                        applicants.
                          ``(ii) Reimbursement of administrative costs 
                        incurred by the State to identify and pursue 
                        recovery of fraudulent overpayments.
                          ``(iii) Hiring fraud investigators and 
                        prosecutors.
                          ``(iv) Other program integrity activities as 
                        determined by the State.''.
          (4) Extended unemployment compensation.--A State to which 
        section 4105 of the Families First Coronavirus Response Act (26 
        U.S.C. 3304 note) applied may retain 25 percent of any amount 
        recovered from overpayments of sharable extended compensation 
        and sharable regular compensation (as such terms are defined in 
        section 204 of the Federal-State Extended Unemployment 
        Compensation Act of 1970) paid for weeks of unemployment 
        described in such section 4105 that were determined to be made 
        due to fraud. Amounts so retained by the State agency shall be 
        used for any of the purposes described in section 2107(e)(3)(C) 
        of the CARES Act (15 U.S.C. 9025(e)(3)(C)).
          (5) First week of regular compensation.--A State that was a 
        party to an agreement under section 4105 of the CARES Act (15 
        U.S.C. 9024) may retain 25 percent of any amount recovered from 
        overpayments of regular compensation paid to individuals by the 
        State for their first week of regular unemployment for which 
        the State received full Federal funding under such agreement in 
        any case in which such overpayments were determined to be made 
        due to fraud. Amounts so retained by the State agency shall be 
        used for any of the purposes described in section 2107(e)(3)(C) 
        of the CARES Act (15 U.S.C. 9025(e)(3)(C)).
  (b) Treatment Under Withdrawal Standard and Immediate Deposit 
Requirements.--Any amount retained by a State pursuant to paragraph (4) 
or (5) of subsection (a) or under section 2102(d)(4), section 
2104(f)(3)(C), or 2107(e)(3)(C) of the CARES Act, and used for the 
purposes described therein, shall not be considered to violate the 
withdrawal standard and immediate deposit requirements of paragraph (4) 
or (5) of section 303(a) of the Social Security Act (42 U.S.C. 503(a)) 
or paragraph (3) or (4) of section 3304(a) of the Internal Revenue Code 
of 1986.
  (c) Limitation on Retention Authority.--The authority of a State to 
retain any amount pursuant to paragraph (4) or (5) of subsection (a) 
and under section 2102(d)(4), section 2104(f)(3)(C), and 2107(e)(3)(C) 
of the CARES Act shall apply only--
          (1) with respect to an amount recovered on or after the date 
        of enactment of this Act; and
          (2) during the 10-year period beginning on the date on which 
        such amount was received by an individual not entitled to such 
        amount.

SEC. 3. PERMISSIBLE USES OF UNEMPLOYMENT FUND FOR PROGRAM 
                    ADMINISTRATION.

  (a) Withdrawal Standard in the Internal Revenue Code.--Section 
3304(a)(4) of the Internal Revenue Code of 1986 is amended--
          (1) in subparagraph (F), by striking ``and'' after the 
        semicolon; and
          (2) by inserting after subparagraph (G) the following new 
        subparagraphs:
                  ``(H) provided the certifications made by the State 
                as described in section 4 of the Protecting Taxpayers 
                and Victims of Unemployment Fraud Act are in effect at 
                the time of approval of the State law under this 
                subsection, an amount, not to exceed 5 percent, of any 
                overpayment of compensation recovered by the State 
                (other than an overpayment made as the result of agency 
                error) may, immediately following the State's receipt 
                of such recovered amount, be deposited in a State fund 
                from which money may be withdrawn for--
                          ``(i) the payment of costs of deterring, 
                        detecting, and preventing improper payments;
                          ``(ii) purposes relating to the proper 
                        classification of employees and the provisions 
                        of State law implementing section 303(k) of the 
                        Social Security Act;
                          ``(iii) the payment to the Secretary of the 
                        Treasury to the credit of the account of the 
                        State in the Unemployment Trust Fund;
                          ``(iv) modernizing the State's unemployment 
                        insurance technology infrastructure; or
                          ``(v) otherwise assisting the State in 
                        improving the timely and accurate 
                        administration of the State's unemployment 
                        compensation law; and
                  ``(I) provided the certifications made by the State 
                as described in section 4 of the Protecting Taxpayers 
                and Victims of Unemployment Fraud Act are in effect at 
                the time of approval of the State law under this 
                subsection, an amount, not to exceed 5 percent, of any 
                payments of contributions, or payments in lieu of 
                contributions, that are collected as a result of an 
                investigation and assessment by the State agency may, 
                immediately following receipt of such payments, be 
                deposited in a State fund from which moneys may be 
                withdrawn for the purposes specified in subparagraph 
                (H);''.
  (b) Definition of Unemployment Fund.--Section 3306(f) of the Internal 
Revenue Code of 1986 is amended by striking ``and for refunds of sums'' 
and all that follows and inserting ``, except as otherwise provided in 
section 3304(a)(4), section 303(a)(5) of the Social Security Act, or 
any other provision of Federal unemployment compensation law.''.
  (c) Withdrawal Standard in Social Security Act.--Section 303(a)(5) of 
the Social Security Act (42 U.S.C. 503(a)(5)) is amended by striking 
``and for refunds of sums'' and all that follows and inserting ``except 
as otherwise provided in this section, section 3304(a)(4) of the 
Internal Revenue Code of 1986, or any other provisions of Federal 
unemployment compensation law; and''.
  (d) Immediate Deposit Requirements in the Internal Revenue Code.--
Section 3304(a)(3) of the Internal Revenue Code of 1986 is amended to 
read as follows:
          ``(3) all money received in the unemployment fund shall 
        immediately upon such receipt be paid over to the Secretary of 
        the Treasury to the credit of the Unemployment Trust Fund 
        established by section 904 of the Social Security Act (42 
        U.S.C. 1104), except for--
                  ``(A) refunds of sums improperly paid into such fund;
                  ``(B) refunds paid in accordance with the provisions 
                of section 3305(b); and
                  ``(C) amounts deposited in a State fund in accordance 
                with subparagraph (H) or (I) of paragraph (4);''.
  (e) Immediate Deposit Requirement in Social Security Act 
Requirement.--Section 303(a)(4) of the Social Security Act (42 U.S.C. 
503(a)(4)) is amended by striking the parenthetical and inserting 
``(except as otherwise provided in this section, section 3304(a)(3) of 
the Internal Revenue Code of 1986, or any other provisions of Federal 
unemployment compensation law)''.
  (f) Application to Federal Payments.--When administering any Federal 
program providing compensation (as defined in section 3306 of the 
Internal Revenue Code of 1986), the State shall use the authority 
provided under subparagraphs (H) and (I) of section 3304(a)(4) of such 
Code in the same manner as such authority is used with respect to 
improper payments made under the State unemployment compensation law. 
With respect to improper Federal payments recovered consistent with the 
authority under subparagraphs (H) and (I) of such section, the State 
shall immediately deposit the same percentage of the recovered payments 
into the same State fund as provided in the State law implementing that 
section.
  (g) Effective Date.--The amendments made by this section shall apply 
to overpayments or payments or contributions (or payments in lieu of 
contributions) that are collected as a result of an investigation and 
assessment by the State agency after the end of the 2-year period 
beginning on the date of the enactment of this Act, except that nothing 
in this section shall be interpreted to prevent a State from amending 
its law before the end of the 2-year period beginning on the date of 
the enactment of this Act.

SEC. 4. PREVENTING UNEMPLOYMENT COMPENSATION FRAUD THROUGH DATA 
                    MATCHING.

  (a) In General.--As a condition for the eligibility of a State to 
implement the exceptions to the withdrawal standard described in 
subparagraphs (H) and (I) of section 3304(a)(4) of the Internal Revenue 
Code, the State shall certify each of the following:
          (1) Integrity data hub.--The State uses the system designated 
        by the Secretary of Labor (or another system at the discretion 
        of the State) for cross-matching claimants of unemployment 
        compensation to prevent and detect fraud and improper payments.
          (2) Use of fraud prevention and detection systems.--The State 
        has established procedures to do the following:
                  (A) National directory of new hires.--Use the 
                National Directory of New Hires established under 
                section 453(i) of the Social Security Act--
                          (i) to compare information in such Directory 
                        against information about individuals claiming 
                        unemployment compensation to identify any such 
                        individuals who may have become employed;
                          (ii) to take timely action to verify whether 
                        the individuals identified pursuant to clause 
                        (i) are employed; and
                          (iii) upon verification pursuant to clause 
                        (ii), to take appropriate action to suspend or 
                        modify unemployment compensation payments, and 
                        to initiate recovery of any improper payments 
                        that have been made.
                  (B) State information data exchange system.--Use the 
                State Information Data Exchange System (or another 
                system at the discretion of the State) to facilitate 
                employer responses to requests for information from 
                State workforce agencies.
                  (C) Incarcerated individuals.--Seek information from 
                the Commissioner of Social Security under sections 
                202(x)(3)(B)(iv) and 1611(e)(1)(I)(iii) of the Social 
                Security Act, or from such other sources as the State 
                agency determines appropriate, to obtain the 
                information necessary to carry out the provisions of a 
                State law under which an individual who is confined in 
                a jail, prison, or other penal institution or 
                correctional facility is ineligible for unemployment 
                compensation on account of such individuals inability 
                to satisfy the requirement under section 303(a)(12) of 
                such Act.
                  (D) Deceased individuals.--Compare information of 
                individuals claiming unemployment compensation against 
                the information regarding deceased individuals 
                furnished to or maintained by the Commissioner of 
                Social Security under section 205(r) of the Social 
                Security Act.
  (b) Unemployment Compensation.--For the purposes of this section, any 
reference to unemployment compensation shall be considered to refer to 
compensation as defined in section 3306 of the Internal Revenue Code of 
1986.

SEC. 5. EXTENSION OF EMERGENCY STATE STAFFING FLEXIBILITY.

  If a State modifies its unemployment compensation law and policies 
with respect to personnel standards on a merit basis on an emergency 
temporary basis as determined by the Secretary, including for 
detection, pursuit, and recovery of fraudulent overpayments under 
Federal pandemic unemployment compensation programs authorized under 
the CARES Act (15 U.S.C. 9021 et seq.), subject to the succeeding 
sentence, such modifications shall be disregarded for the purposes of 
applying section 303 of the Social Security Act (42 U.S.C. 503) and 
section 3304 of the Internal Revenue Code of 1986 to such State law. 
Such modifications may continue through December 31, 2030.

SEC. 6. FRAUD ENFORCEMENT HARMONIZATION.

  Notwithstanding any other provision of law, any criminal charge or 
civil enforcement action alleging that an individual engaged in fraud 
with respect to compensation (as defined in section 3306 of the 
Internal Revenue Code of 1986) shall be filed not later than 10 years 
after the offense was committed.

SEC. 7. BUDGET OFFSET.

   Section 2118 of the CARES Act (15 U.S.C. 9034) is repealed.

                       I. SUMMARY AND BACKGROUND


                         A. Purpose and Summary

    The bill, H.R. 1163, the ``Protecting Taxpayers and Victims 
of Unemployment Fraud Act,'' as ordered reported by the 
Committee on Ways and Means on February 28, 2023, recovers 
potentially billions of dollars in stolen pandemic unemployment 
benefits. The legislation provides states with incentives to 
investigate and recover lost funds, improves program integrity 
to prevent future fraud, and extends the statute of limitations 
for prosecuting fraud.

                 B. Background and Need for Legislation

    Unemployment Insurance (UI) is a joint state-federal 
partnership created under the Social Security Act of 1935 (P.L. 
74-271). In most states, the program provides up to 26 weeks of 
partial wage replacement to workers who become unemployed 
through no fault of their own and meet state-established 
eligibility rules while they seek work. Federal laws and 
regulations provide funding for the administration of state 
programs and broad guidelines on benefit coverage, financing, 
eligibility, and benefit determination; however, each state 
operates their own UI program. States fund UI benefits through 
payroll taxes on employers under the authority of State 
Unemployment Tax Acts. Federal funding for state administration 
of UI programs is supported by payroll taxes on employers under 
the authority of the Federal Unemployment Tax Act. These taxes 
are deposited in accounts within the Unemployment Trust Fund 
(UTF).
    The U.S. Department of Labor (DOL) provides oversight of 
state programs and any temporary federal UI benefits or 
expansions of benefits during a recession or emergencies. 
Federal law includes an automatic expansion of regular state UI 
benefits with the Extended Benefit (EB) program established by 
the Federal-State Extended Unemployment Compensation Act of 
1970 (P.L. 91-373). States that meet certain economic 
conditions can trigger EB ``on'' and may provide up to an 
additional 13 or 20 weeks of benefits once regular state 
benefits are exhausted, depending on worker eligibility, state 
law, and additional federal eligibility requirements. The EB 
program is funded 50 percent by the federal government and 50 
percent by the states.
    Congress massively expanded UI benefits during the COVID-19 
pandemic as businesses shut down in response to the public 
health emergency and millions of Americans lost their jobs. On 
March 18, 2020, Congress passed the Families First Coronavirus 
Response Act (FFCRA) (P.L. 116-127) to provide states with 
support to address surging unemployment claims through staffing 
flexibility, 100 percent federal financing of EB, $1 billion in 
emergency administrative funding, and other temporary UI 
measures. This was followed by the creation of several new 
federally funded UI programs on March 27, 2020, in the 
Coronavirus Aid, Relief, and Economic Security (CARES) Act 
(P.L. 116-136). These programs included: Pandemic Unemployment 
Assistance (PUA), Pandemic Emergency Unemployment Compensation 
(PEUC), Federal Pandemic Unemployment Compensation (FPUC), and 
included emergency relief for government entities and non-
profits. The Consolidated Appropriations Act of 2021 (P.L. 116-
260), extended the authorization of these programs and created 
the Mixed Earner Unemployment Compensation (MEUC) program. The 
American Rescue Plan Act (ARPA) of 2021 (P.L. 117-2) further 
extended these programs through September 6, 2021.\1\
---------------------------------------------------------------------------
    \1\For more detailed information see: ``Unemployment Insurance (UI) 
Benefits: Permanent-Law Programs and the COVID-19 Pandemic Response,'' 
Congressional Research Service; January 31, 2022, R46687.
---------------------------------------------------------------------------
           FPUC: Provided an additional $600/week from 
        March 2020 through July 31, 2020; then $300/week from 
        January 2021 through September 4, 2021.
           PEUC: Provided an extra 13 weeks of benefits 
        after state benefits and EB ended. State benefits 
        typically cover 26 weeks.
           PUA: Provided benefits to gig workers, 
        freelancers, and other self-employed individuals not 
        covered by regular state UI systems.
           100 percent federally funded EB: Provided an 
        extra 13 or 30 weeks, depending on worker eligibility, 
        state law, and economic conditions in the state, after 
        state benefits expired.
           MEUC: Provided an additional $100/week in 
        benefits to mixed earner self-employed and W 2 workers.
    Federal and state spending on unemployment benefits totaled 
$878 billion over a period of less than two years.\2\ This 
includes approximately $209 billion from state UI trust funds 
and $669 billion in federal general revenue funds. The amount 
of unemployment spending during the pandemic was grossly out of 
proportion compared to past recessions. As shown in Figure 
1\3\, combined federal unemployment spending in 2020 was three 
times the next-highest year--in 2010. During the 2009 
recession, an additional $25 per week was made available 
through a federal UI supplement. During the COVID-19 pandemic, 
an additional $600 per week federal UI supplement was made 
available (on top of any state weekly benefit amount) for a 
six-month period, this was subsequently lowered to $300 per 
week. Congress also provided 75 additional weeks of federally 
funded benefits for those who exhausted state benefits and 
expanded coverage to self-employed and gig workers not covered 
by state programs.
---------------------------------------------------------------------------
    \2\U.S. Department of Labor; https://oui.doleta.gov/unemploy/docs/
cares_act_funding_state.html.
    \3\``Lessons from the Unprecedented Fraud and Abuse of the 
Unemployment Benefits System during the Pandemic,'' Matt Weidinger, 
American Enterprise Institute, September 21, 2022.
---------------------------------------------------------------------------
    At the beginning of the pandemic, CARES Act unemployment 
programs provided critical support to unemployed workers to 
make sure temporary job losses didn't turn into permanent ones. 
In February 2020, there were 5.7 million unemployed workers in 
the United States and the unemployment rate was 3.5 percent. By 
April 2020, that jumped to over 23 million and the unemployment 
rate reached an all-time high of 14.7 percent. However, over 
time, as the economy began to reopen, it became clear that 
enhanced benefits discouraged Americans from returning to work, 
making it harder for employers to hire, and provided an easy 
target for fraudsters and organized criminal enterprises.
    Under the not so watchful eye of Committee Democrats, 
pandemic unemployment fraud became the greatest theft of 
taxpayer dollars in American history.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    UI fraud was not a victimless crime. Unchecked fraud 
delayed legitimate payments and diverted funding away from 
unemployed workers who truly needed the benefit during the 
economic downturn. Many unemployed workers who applied for 
benefits found themselves unable to get assistance because 
someone else had stolen their identity and filed a fraudulent 
claim in their name. It also turned thousands of Americans into 
unwitting identity theft victims. In addition, it became 
increasingly clear that groups that perpetrated UI fraud posed 
a potential national security risk. As fraud cases work their 
way through the court system, we are learning more about the 
involvement of foreign actors and international organized crime 
groups persistently targeting state systems. Some of these 
groups used American citizens as ``money mules'' to launder 
funds through the U.S. financial system to offshore bank 
accounts. For example:
           In July 2021, the U.S. Attorney's Office in 
        Massachusetts charged two Nigerian nationals with 
        conspiracy to commit bank and wire fraud and engaging 
        in unlawful monetary transactions in connection with 
        expansive online fraud schemes, including romance 
        scams, and unemployment assistance fraud.\4\
---------------------------------------------------------------------------
    \4\``Two Nigerian Nationals Indicted for Romance and Pandemic 
Unemployment Fraud Schemes,'' U.S. Attorney's Office, District of 
Massachusetts, July 26, 2021.
---------------------------------------------------------------------------
           In November 2021, the U.S. Attorney's office 
        in Pennsylvania brought an indictment against a Turkish 
        citizen charged with mail fraud, wire fraud, and money 
        laundering in connection with UI fraud.\5\
---------------------------------------------------------------------------
    \5\``Turkish Citizen Living in the Pittsburgh Area Indicted on 
Fraud Charges,'' U.S. Attorney's Office, Western District of 
Pennsylvania, November 30, 2021.
---------------------------------------------------------------------------
    Americans hit hard by the pandemic struggled to reclaim 
stolen identities and get assistance, as criminal organizations 
and foreign fraudsters exploited a national crisis to steal 
hundreds of billions in benefits. Based on flags raised by the 
Department of Labor Inspector General (DOL-OIG) and Government 
Accountability Office (GAO), Committee Republicans worked 
diligently to shine a spotlight on the extent of pandemic UI 
fraud, including holding two roundtables to hear from state 
workforce directors, victims of identity theft, and employers 
to learn about the consequences of unchecked unemployment 
fraud.\6\ Additionally:
---------------------------------------------------------------------------
    \6\Committee on Ways and Means Republican roundtable, 
``Consequences of Unchecked Unemployment Fraud,'' May 10, 2021; 
Committee on Ways and Means Republican roundtable ``Pandemic 
Unemployment Fraud: $80 Billion and Counting,'' February 22, 2022.
---------------------------------------------------------------------------
           In August 2021, Committee Republicans 
        requested GAO investigate fraudulent activities in 
        COVID-19 unemployment programs.\7\
---------------------------------------------------------------------------
    \7\Letter: Republican Leaders Urge GAO to Investigate Fraudulent 
Activity in COVID Unemployment Insurance Programs, August 31, 2021.
---------------------------------------------------------------------------
           In May 2022, House Republican leaders on the 
        Ways and Means, Budget, Small Business, and Judiciary 
        Committees sent a letter to Attorney General Merrick 
        Garland inquiring about the lack of action taken by the 
        Director for COVID-19 Fraud Enforcement charged with 
        leading criminal and civil enforcement efforts to 
        combat COVID-19-related fraud.\8\
---------------------------------------------------------------------------
    \8\Letter: Republican Leaders Demand Answers on Billions of 
Taxpayer Dollars Stolen Due to COVID Era Fraud, May 31, 2022.
---------------------------------------------------------------------------
           In February 2023, under the new Republican 
        majority, Chairman Jason Smith (R-MO) held the first 
        full committee hearing to investigate the size, scope, 
        and severity of pandemic unemployment fraud.
    Meanwhile, during the 117th Congress, despite having ample 
knowledge of the egregious pandemic fraud and the countless 
incidents of identity theft on Americans, Congressional 
Democrats walked away from their oversight responsibilities and 
ignored repeated calls for oversight hearings, leaving 
criminals to profit off the backs of taxpayers.
    In March 2021, and again in February 2022, Committee 
Republicans sent letters to then-Chairman Richard Neal (D-MA) 
requesting the Committee immediately schedule an oversight 
hearing to investigate the size, scope, and severity of 
criminal fraud in pandemic unemployment insurance programs in 
response to COVID-19.\9\ These letters received no response. 
These requests were ignored despite multiple early warnings and 
alerts from non-partisan oversight and watchdog agencies. For 
example, as early as May 2020, DOL-OIG issued an alert 
memorandum describing concerns regarding claimant self-
certification in the PUA program saying, ``reliance on such 
self-certifications rendered the PUA program highly vulnerable 
to improper payments, including fraud.''\10\ In the same month, 
the Secret Service circulated a memo to its field offices 
saying an international crime ring was filing unemployment 
claims in different states using Social Security numbers 
belonging to identity theft victims, including first 
responders, government personnel, and school employees.\11\ In 
August 2020, DOL-OIG issued another alert memorandum reporting 
that states were not using existing tools effectively to combat 
fraud and other improper payments. GAO also issued repeated 
warnings about the vulnerability for abuse of CARES Act 
unemployment insurance programs.\12\
---------------------------------------------------------------------------
    \9\Ways and Means Republicans sent two letters to Chairman Neal 
requesting a hearing on reports of fraud in COVID unemployment programs 
on March 12, 2021, and February 22, 2022.
    \10\``Alert Memorandum: The Pandemic Unemployment Assistance 
Program Needs Proactive Measures to Detect and Prevent Improper 
Payments and Fraud,'' DOL-OIG, Report No. 19-20-002-03-315, May 26, 
2020.
    \11\``Massive Fraud Against Unemployment Insurance Programs,'' U.S. 
Secret Service, Information Only Alert, May 5, 2020.
    \12\``COVID-19: Critical Vaccine Distribution, Supply Chain, 
Program Integrity, and other Challenges Require Focused Federal 
Attention,'' GAO-21-265, January 28, 2021.
---------------------------------------------------------------------------
    What's worse, Democrats made it easier to defraud taxpayers 
by voting to end phaseouts of emergency UI programs they had 
previously supported while rejecting Republican amendments to 
prevent fraud. During consideration of ARPA in Committee, 
Democrats rejected Republican amendments that would have 
stopped the ``pay and chase'' model of benefit delivery. Rep. 
Devin Nunes (R-CA) offered an amendment to verify identity and 
prior wages of applicants prior to authorizing benefits, 
applied retroactively. Rep. Brad Wenstrup (R-OH) offered an 
amendment to hold harmless taxpayers that had their identities 
stolen to claim UI benefits fraudulently.\13\ Most recently, in 
September 2022, Democrats voted against a Resolution of Inquiry 
demanding communications showing the DOL knowledge of UI 
benefits flowing to international crime syndicates.\14\ Figure 
2 provides a timeline of early warnings and calls for action.
---------------------------------------------------------------------------
    \13\Dissenting Views on Subtitle A. Budget Reconciliation 
Legislative Recommendations Relating to Crisis Support for Unemployed 
Workers, Committee on Ways and Means, February 16, 2021.
    \14\``Democrats Vote to Blatantly Ignore Greatest Theft of American 
Tax Dollars in History,'' Ways and Means Republicans Press Release; 
September 27, 2022.
---------------------------------------------------------------------------
    The Biden Administration has offered few public details 
about its efforts to recover potentially hundreds of billions 
of stolen COVID-19 relief funds and issued guidance making it 
easy for states to sweep fraud under the rug. In February 2022, 
the Biden Administration issued guidance\15\ to let states off 
the hook for due diligence and fact finding for large volumes 
of suspicious claims--potentially involving billions of 
fraudulently obtained taxpayer dollars.\16\ The guidance 
provides multiple loopholes for how ``states may apply blanket 
waivers of recovery of overpayments.'' For example, a state may 
accept without challenge that an individual who responded 
``no'' to being available for work is entitled to a waiver of 
recovery of overpayments with no determination as to whether 
the individual was truthful in their response. This allows 
those perpetrating fraud within the UI system to continue, and 
leaves hundreds of thousands of unresolved claims involving 
stolen identities belonging to identity theft victims, 
including first responders, government personnel, and school 
employees. In his 2022 State of the Union address, President 
Biden announced the creation of a ``Chief Pandemic 
Prosecutor,'' saying ``the watchdogs are back'' and ``we're 
going after the criminals who stole billions of relief money.'' 
On March 10, 2022, the Department of Justice announced the 
appointment of Associate Deputy Attorney General Kevin Chambers 
to serve as Director for COVID-19 Fraud Enforcement. Mr. 
Chambers was to lead criminal and civil enforcement activities 
to combat COVID-19 related fraud, however, Mr. Chambers left 
his position in December 2022, and this critical post remains 
unfilled.

    \15\Unemployment Insurance Program Letter No. 20-21, Change 1, DOL, 
Employment and Training Administration, February 7, 2022.
    \16\Ways and Means Republicans Letter to DOL Secretary Marty Walsh, 
February 22, 2022.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    The actual amount of unemployment fraud during the pandemic 
is not known. According to testimony provided to the Committee 
by DOL-OIG, improper payments in pandemic unemployment programs 
have left taxpayers on the hook for at least $191 billion, with 
a substantial portion due to fraud.\17\ Outside experts put the 
number much higher at $400 billion.\18\ Just over $5 billion 
has been recovered.
---------------------------------------------------------------------------
    \17\``Testimony before the U.S. House of Representatives Committee 
on Ways and Means,'' DOL-OIG, February 8, 2023.
    \18\ID.Me. Insights Report, ``Calculating the Road to Losing $400 
Billion Dollars,'' January 20, 2022.
---------------------------------------------------------------------------
    Figure 3 shows that estimates are wide ranging, with some 
encompassing only improper payments due to fraud, and others 
focused on all improper payments, including those resulting 
from administrative error. A December report from GAO, 
requested by Committee Republicans, found at least $60 billion 
solely in fraud.\19\ According to the report, ``available 
estimates provide additional evidence of substantial levels of 
UI fraud and potential fraud during the pandemic, but none 
completely or reliably indicates the extent of fraud in UI 
programs.'' The extent of the theft is so great that GAO has 
committed to build on existing evidence with its own 
independent modeling to calculate a more precise estimate.
---------------------------------------------------------------------------
    \19\GAO, ``UNEMPLOYMENT INSURANCE: Data Indicate Substantial Levels 
of Fraud during the Pandemic; DOL Should Implement an Antifraud 
Strategy,'' GAO-23-105523; December 2022.
---------------------------------------------------------------------------
    The White House estimated a 22.2 percent improper payment 
rate in the federal-state UI program in fiscal year 2022. This 
partial estimate does not include estimates of improper 
payments in the PUA program. DO-OIG identified PUA as the most 
susceptible to fraud due to its reliance on self-certification. 
Pre-pandemic improper payment levels for regular state UI 
programs were between 10-13 percent largely due to failure of 
individuals to comply with work search requirements, payments 
to individuals who returned to work, and failure of employers 
to provide timely information about individual's reason for 
separation from employment.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    This Committee has a responsibility to conduct oversight, 
take action to prevent future fraud, and bring restitution for 
taxpayers in the face of such staggering amounts of fraud. UI 
fraud has put American families in a terrible position, and 
taxpayers expect Congress to go after and recover every single 
possible dollar that was stolen by criminals and international 
crime rings. This legislation is needed to recover stolen 
taxpayer money, help ensure fraud risks do not carry over into 
the regular UI program and help bring to justice those who 
committed these crimes.

                         C. Legislative History


Background

    H.R. 1163 was introduced on February 24, 2023, and was 
referred to the Committee on Ways and Means.

Committee hearings

    On February 8, 2023, the Committee on Ways and Means held a 
hearing titled ``The Greatest Theft of Taxpayer Dollars: 
Unchecked Unemployment Fraud.'' The purpose of the hearing was 
to investigate the size and scope of fraud in federal 
unemployment programs, which skyrocketed during the pandemic. 
The witnesses were Mr. Gene Dodaro, Comptroller General, GAO; 
Mr. Larry Turner, Inspector General, DOL-OIG; and Mr. Michael 
Horowitz, Director, Pandemic Response Accountability Committee 
(PRAC).

Committee action

    The Committee on Ways and Means marked up H.R. 1163, the 
``Protecting Taxpayers and Victims of Unemployment Fraud Act,'' 
on February 28, 2023, and ordered the bill, as amended, 
favorably reported (with a quorum being present) by a vote of 
20 yeas and 17 nays.

                         D. Designated Hearing

    Pursuant to clause 3(c)(6) of rule XIII, the following 
hearing was used to develop and consider H.R. 1163: Committee 
on Ways and Means hearing which took place on February 8, 2023, 
entitled ``The Greatest Theft of Taxpayer Dollars: Unchecked 
Unemployment Fraud''.

                      II. EXPLANATION OF THE BILL


   A. The Protecting Taxpayers and Victims of Unemployment Fraud Act


Section 1: Short title

                              PRESENT LAW

    No provision.

                        EXPLANATION OF PROVISION

    This section provides the short title, ``Protecting 
Taxpayers and Victims of Unemployment Fraud Act''.

                           REASON FOR CHANGE

    The Committee believes the title accurately reflects the 
content of the bill.

                             EFFECTIVE DATE

    Upon enactment.

Section 2. Recovering federal fraudulent COVID unemployment payments

                              PRESENT LAW

    The CARES Act requires states to recoup overpayments from 
individuals that received a payment to which they were not 
entitled through offsets to UI benefits for up to a three-year 
period. The exception to this policy is PUA, which otherwise 
follows overpayment recovery rules at 20 CFR Part 625 
applicable to the Disaster Unemployment Assistance (DUA) 
program administered by the Federal Emergency Management 
Agency. DUA does not have a time limit for benefit offset 
recovery.

                        EXPLANATION OF PROVISION

    This section amends the CARES Act to allow states to retain 
25 percent of any recovered fraudulent overpayments of pandemic 
unemployment funds from PUA, FPUC, PEUC, and MEUC. The section 
also applies this policy to EB and the first week of regular 
unemployment compensation during the period in which such 
benefits were 100 percent federally funded.
    The section provides that states may use recovered funds 
for the following purposes: modernizing unemployment systems 
and information technology to improve verification and 
validation of applicants; administrative costs incurred by the 
state to identify and pursue recovery of fraudulent payments; 
hiring fraud investigators and prosecutors; and other program 
integrity activities as determined by the state to deter, 
detect, and prevent improper payments.
    This section also extends the period to recoup overpayments 
through benefit offsets from three to 10 years for FPUC, PEUC, 
and MEUC, and adds a benefit offset period of 10 years to PUA.

                           REASON FOR CHANGE

    Under current law, states have little incentive to pursue 
costly investigations and prosecutions that do not pay out to 
states. States otherwise must spend state funds to recover 
federal dollars that must be returned to the UTF account at 
Treasury, with no reimbursement of administrative costs 
incurred to recover such funds. In addition, many states are in 
the process of re-evaluating their UI technology and making 
systems enhancements to strengthen program integrity. Ensuring 
states invest in systems to prevent further instances of fraud 
is the best way this Committee can protect taxpayers and future 
UI recipients. These provisions provide a potential source of 
funding for those efforts. Finally, many states have laws in 
place to recover unemployment benefit overpayments through 
offsetting benefit policies. In recognition of the size and 
scope of pandemic UI fraud, and the time it takes to 
investigate and prosecute cases, the provision extends this 
period to 10 years.

                             EFFECTIVE DATE

    The section becomes effective on or after the date of 
enactment and no later than 10 years from the date the amount 
was fraudulently received by an individual.

Section 3. Permissible uses of unemployment fund for program 
        administration

                              PRESENT LAW

    There is no provision in current law for states to retain a 
percentage of recovered UI overpayments. Under current law, 
states must re-deposit any recovered overpayments of regular 
state unemployment funds directly into their state trust fund 
account in compliance with the withdrawal standard and 
immediate deposit requirements in Section 3304(a) of Title 26 
of the Internal Revenue Code and Section 303(a) of the Social 
Security Act.

                        EXPLANATION OF PROVISION

    This section allows states to retain five percent of funds 
recovered from overpayments made (that are not the result of 
agency error) for use in the administration of the state's 
regular unemployment compensation program. Currently, states 
must deposit recovered overpayments into their state 
unemployment trust fund.
    The section provides that states may use funds for the 
following purposes: costs of deterring, detecting, and 
preventing improper payments; purposes relating to the proper 
classification of employees and application of state 
unemployment experience tax ratings; payments on a state loan 
from the UTF; modernizing the state's unemployment compensation 
technology infrastructure; and otherwise assisting the state in 
improving the timely and accurate administration of the state's 
unemployment compensation law.
    This policy is contingent on a state certifying they meet 
UI data integrity conditions outlined in Section 4.

                           REASON FOR CHANGE

    This provision provides an incentive for states to pursue 
recovery of regular state UI overpayments as a source of 
additional funding for the administration of the UI program and 
for strengthening program integrity to prevent future fraud and 
improper payments.

                             EFFECTIVE DATE

    The provisions in this section shall apply to overpayments 
that are collected as a result of an investigation and 
assessment by the state agency after the two-year period 
beginning on the date of enactment, except that nothing shall 
prevent a state from amending its law before the end of the 
two-year period beginning on the date of enactment.

Section 4. Preventing unemployment compensation fraud through data 
        matching

                              PRESENT LAW

    No provision.

                        EXPLANATION OF PROVISION

    As a condition to retain five percent of overpayments 
described in Section 3, this section requires a state to 
certify that they meet the following data matching integrity 
conditions:
           The state uses the Integrity Data Hub (IDH), 
        a fraud alert center designated by DOL, or another 
        system at the discretion of the state, to crossmatch 
        unemployment claimants to prevent and detect fraud.
           The state has established procedures for:
                   Use the National Directory of 
                New Hires (NDNH).
                   Use the State Information Data 
                Exchange System (SIDES).
                   Prevent payment of unemployment 
                benefits to incarcerated individuals.
                   Prevent payment of unemployment 
                benefits to deceased individuals.

                           REASON FOR CHANGE

    Ensuring states implement and certify systems to conduct 
data-matching of claimants before benefits are disbursed is 
vital to stop the ``pay and chase'' model of benefit delivery 
and ensure this level of fraud never happens again. The IDH 
helps states to identify people claiming benefits in multiple 
states and other emergent fraud schemes. The NDNH allows the 
state to verify when someone receiving unemployment becomes 
employed and to take timely action to ensure benefits are 
discontinued. The SIDES facilitates employer responses to state 
requests to verify an individual's previous employment. These 
provisions provide states with the resources needed to improve 
their systems for data matching, prevent fraud, and deliver 
benefits faster and more efficiently.

                             EFFECTIVE DATE

    Upon enactment.

Section 5. Extension of emergency state staffing flexibility

                              CURRENT LAW

    Section 303(a)(1) of the Social Security Act provides that 
state law must include a provision for ``[s]uch methods of 
administration relating to the establishment and maintenance of 
personnel standards on a merit basis.'' The responsibility for 
the establishment of these standards was transferred to the 
Office of Personnel Administration by the Intergovernmental 
Personnel Act of 1970 (Pub. L. 91-648). Standards for a merit 
system of personnel administration are codified at 5 C.F.R. 
900.603.
    Section 2106 of the CARES Act amends Section 4102(b) of the 
Emergency Unemployment Insurance Stabilization and Access Act 
of 2020, set out in Division D of the FFCRA (Pub. L. 116-127), 
to allow states to exercise emergency temporary flexibility of 
``personnel standards on a merit basis'' through December 31, 
2020, to respond to the spread of COVID-19. Such flexibility 
was limited to ``engaging of temporary staff, rehiring of 
retirees or former employees on a non-competitive basis, and 
other temporary actions to quickly process applications and 
claims.'' The Consolidated Appropriations Act, 2021, including 
the Continued Assistance for Unemployed Workers Act of 2020 
(Continued Assistance Act) at Division N, Title II, Subtitle A, 
was signed into law by the President on December 27, 2020. The 
Continued Assistance Act extended this temporary staffing 
flexibility to March 14, 2021. ARPA subsequently extended this 
flexibility through September 6, 2021.

                        EXPLANATION OF PROVISION

    This section reinstates and extends flexibility for states 
to hire temporary staff on a non-competitive basis to identify, 
prosecute, and recover fraudulent unemployment compensation 
benefits through December 31, 2030.

                           REASON FOR CHANGE

    States have used emergency flexibility to hire contractors 
to take on more critical roles over the course of the pandemic, 
from the initial surge of providing simple relief to more 
complicated fact finding. According to the Center for 
Accountability, Modernization, and Innovation, during the 
pandemic, 41 states used the staffing flexibility provided by 
the CARES Act,\20\ and state workforce agencies have repeatedly 
asked Congress to extend the states' authority to use 
contractors. In addition, the National Association of State 
Workforce Agencies endorses staffing flexibility. This 
provision ensures that states have maximum flexibility to 
utilize non-merit staff through December 31, 2030. The staffing 
flexibilities provided in the bipartisan CARES Act were vital 
for states to meet the sudden and drastic staffing needs to 
process UI benefits. Extending this flexibility is equally as 
vital to ensure states can staff up and have the manpower to go 
after these criminals that have defrauded the American people.
---------------------------------------------------------------------------
    \20\``Unemployment Insurance, Staffing Flexibility,'' Center for 
Accountability, Modernization, and Innovation (CAMI), updated May 2021.
---------------------------------------------------------------------------

                             EFFECTIVE DATE

    Upon enactment.

Section 6. Fraud enforcement harmonization

    Current Law Current law includes a five-year statute of 
limitations for criminal charges or civil enforcement actions 
related to bank or wire fraud and is codified at 18 U.S.C. 
3282.

                        EXPLANATION OF PROVISION

    Extends the statute of limitations for criminal charges or 
civil enforcement action alleging that an individual engaged in 
fraud from five to 10 years after the offense was committed.

                           REASON FOR CHANGE

    Initial UI payments under the CARES Act started going out 
in early 2020, nearly three years ago. This section extends the 
statute of limitations so criminals cannot get away with their 
crimes just because the clock runs out. This provision is 
similar to two laws enacted in 2022 to extend the statute of 
limitations for prosecuting criminals in relation to fraudulent 
overpayments in the Paycheck Protection Program (PPP)\21\ and 
the Economic Injury Disaster Loan (EIDL)\22\ programs, and was 
a recommendation made by PRAC in testimony provided to the 
Committee on Ways and Means.
---------------------------------------------------------------------------
    \21\The ``PPP and Bank Fraud Enforcement Harmonization Act of 
2022,'' (P.L. 117-166).
    \22\The ``COVID-19 EIDL Fraud Statute of Limitations Act of 2022,'' 
(P.L. 117-327).
---------------------------------------------------------------------------

Section 7. Budget offset

                              CURRENT LAW

    Section 2118 of the CARES Act, as amended by ARPA, provided 
DOL $2 billion in funding ``to detect and prevent fraud, 
promote equitable access, and ensure the timely payment of 
benefits with respect to unemployment compensation programs.''

                        EXPLANATION OF PROVISION

    This provision repeals Section 2118 of the CARES Act, as 
amended by ARPA.

                           REASON FOR CHANGE

    This provision has the practical effect of rescinding 
approximately $400 million in unobligated funds remaining from 
the allocation provided in Section 2118. DOL has yet to provide 
a full accounting of this funding and failed to respond to a 
letter from Committee Republicans sent in May 2021 inquiring 
about the lack of focus on recovering fraud.\23\ Available 
information shows DOL has used only approximately $365 million, 
or 18 percent, of the $2 billion provided for fraud 
identification and recovery.
---------------------------------------------------------------------------
    \23\Letter: ``Brady, Crapo to Labor Secretary Walsh: Stop 
Unemployment Fraud Now: Top Republican leaders urge greater protection 
of hardworking taxpayer dollars,'' May 10, 2021.
---------------------------------------------------------------------------

                             EFFECTIVE DATE

    Upon enactment.

                      III. VOTES OF THE COMMITTEE

    In compliance with the Rules of the House of 
Representatives, the following statement is made concerning the 
vote of the Committee on Ways and Means during the markup 
consideration of H.R. 1163, the ``Protecting Taxpayers and 
Victims of Unemployment Fraud Act,'' on February 28, 2023.
    The vote on the amendment offered by Mr. Higgins to the 
amendment in the nature of a substitute to H.R. 1163, which 
would strike Section 7, was not agreed to by a roll call vote 
of 17 yeas to 22 nays (with a quorum being present). The vote 
was as follows:

----------------------------------------------------------------------------------------------------------------
           Representative              Yea     Nay    Present       Representative       Yea     Nay    Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO).....................  ......      X   .........  Mr. Neal.............      X   ......  .........
Mr. Buchanan.......................  ......      X   .........  Mr. Doggett..........      X   ......  .........
Mr. Smith (NE).....................  ......      X   .........  Mr. Thompson.........      X   ......  .........
Mr. Kelly..........................  ......      X   .........  Mr. Larson...........      X   ......  .........
Mr. Schweikert.....................  ......      X   .........  Mr. Blumenauer.......      X   ......  .........
Mr. LaHood.........................  ......      X   .........  Mr. Pascrell.........      X   ......  .........
Dr. Wenstrup.......................  ......      X   .........  Mr. Davis............  ......  ......  .........
Mr. Arrington......................  ......      X   .........  Ms. Sanchez..........      X   ......  .........
Dr. Ferguson.......................  ......      X   .........  Mr. Higgins..........      X   ......  .........
 Mr. Estes.........................  ......      X   .........  Ms. Sewell...........      X   ......  .........
Mr. Smucker........................  ......      X   .........  Ms. DelBene..........      X   ......  .........
Mr. Hern...........................  ......  ......  .........  Ms. Chu..............      X   ......  .........
Mrs. Miller........................  ......      X   .........   Ms. Moore...........      X   ......  .........
Dr. Murphy.........................  ......      X   .........  Mr. Kildee...........      X   ......  .........
Mr. Kustoff........................  ......      X   .........  Mr. Beyer............      X   ......  .........
Mr. Fitzpatrick....................  ......      X   .........  Mr. Evans............      X   ......  .........
Mr. Steube.........................  ......  ......  .........  Mr. Schneider........      X   ......  .........
Ms. Tenney.........................  ......  ......  .........  Mr. Panetta..........      X   ......  .........
Mrs. Fischbach.....................  ......      X
Mr. Moore..........................  ......      X
Mrs. Steel.........................  ......      X
Ms. Van Duyne......................  ......      X
Mr. Feenstra.......................  ......      X
Ms. Malliotakis....................  ......      X
Mr. Carey..........................  ......      X
----------------------------------------------------------------------------------------------------------------

    In compliance with the Rules of the House of 
Representatives, the following statement is made concerning the 
vote of the Committee on Ways and Means during the markup 
consideration of H.R. 1163, the ``Protecting Taxpayers and 
Victims of Unemployment Fraud Act,'' on February 28, 2023.
    The vote on the amendment offered by Mr. Larson to the 
amendment in the nature of a substitute to H.R. 1163, which 
would prohibit states from recovering non-fraudulent UI 
overpayments from workers aged 60 or older receiving Social 
Security benefits, was not agreed to by a roll call vote of 16 
yeas to 23 nays (with a quorum being present). The vote was as 
follows:

----------------------------------------------------------------------------------------------------------------
           Representative              Yea     Nay    Present       Representative       Yea     Nay    Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO).....................  ......      X   .........  Mr. Neal.............      X   ......  .........
Mr. Buchanan.......................  ......      X   .........  Mr. Doggett..........  ......  ......  .........
Mr. Smith (NE).....................  ......      X   .........  Mr. Thompson.........      X   ......  .........
Mr. Kelly..........................  ......      X   .........  Mr. Larson...........      X   ......  .........
Mr. Schweikert.....................  ......      X   .........  Mr. Blumenauer.......      X   ......  .........
Mr. LaHood.........................  ......      X   .........  Mr. Pascrell.........      X   ......  .........
Dr. Wenstrup.......................  ......      X   .........  Mr. Davis............  ......  ......  .........
Mr. Arrington......................  ......      X   .........  Ms. Sanchez..........      X   ......  .........
Dr. Ferguson.......................  ......      X   .........  Mr. Higgins..........      X   ......  .........
 Mr. Estes.........................  ......      X   .........  Ms. Sewell...........      X   ......  .........
Mr. Smucker........................  ......      X   .........  Ms. DelBene..........      X   ......  .........
Mr. Hern...........................  ......  ......  .........  Ms. Chu..............      X   ......  .........
Mrs. Miller........................  ......      X   .........   Ms. Moore...........      X   ......  .........
Dr. Murphy.........................  ......      X   .........  Mr. Kildee...........      X   ......  .........
Mr. Kustoff........................  ......      X   .........  Mr. Beyer............      X   ......  .........
Mr. Fitzpatrick....................  ......      X   .........  Mr. Evans............      X   ......  .........
Mr. Steube.........................  ......  ......  .........  Mr. Schneider........      X   ......  .........
Ms. Tenney.........................  ......      X   .........  Mr. Panetta..........      X   ......  .........
Mrs. Fischbach.....................  ......      X
Mr. Moore..........................  ......      X
Mrs. Steel.........................  ......      X
Ms. Van Duyne......................  ......      X
Mr. Feenstra.......................  ......      X
Ms. Malliotakis....................  ......      X
Mr. Carey..........................  ......      X
----------------------------------------------------------------------------------------------------------------

    In compliance with the Rules of the House of 
Representatives, the following statement is made concerning the 
vote of the Committee on Ways and Means during the markup 
consideration of H.R. 1163, the ``Protecting Taxpayers and 
Victims of Unemployment Fraud Act,'' on February 28, 2023.
    The vote on the amendment offered by Ms. Sanchez to the 
amendment in the nature of a substitute to H.R. 1163, which 
would strike Section 5, was not agreed to by a roll call vote 
of 17 yeas to 23 nays (with a quorum being present). The vote 
was as follows:

----------------------------------------------------------------------------------------------------------------
           Representative              Yea     Nay    Present       Representative       Yea     Nay    Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO).....................  ......      X   .........  Mr. Neal.............      X   ......  .........
Mr. Buchanan.......................  ......      X   .........  Mr. Doggett..........      X   ......  .........
Mr. Smith (NE).....................  ......      X   .........  Mr. Thompson.........      X   ......  .........
Mr. Kelly..........................  ......      X   .........  Mr. Larson...........      X   ......  .........
Mr. Schweikert.....................  ......      X   .........  Mr. Blumenauer.......      X   ......  .........
Mr. LaHood.........................  ......      X   .........  Mr. Pascrell.........      X   ......  .........
Dr. Wenstrup.......................  ......      X   .........  Mr. Davis............  ......  ......  .........
Mr. Arrington......................  ......      X   .........  Ms. Sanchez..........      X   ......  .........
Dr. Ferguson.......................  ......      X   .........  Mr. Higgins..........      X   ......  .........
 Mr. Estes.........................  ......      X   .........  Ms. Sewell...........      X   ......  .........
Mr. Smucker........................  ......      X   .........  Ms. DelBene..........      X   ......  .........
Mr. Hern...........................  ......  ......  .........  Ms. Chu..............      X   ......  .........
Mrs. Miller........................  ......      X   .........   Ms. Moore...........      X   ......  .........
Dr. Murphy.........................  ......      X   .........  Mr. Kildee...........      X   ......  .........
Mr. Kustoff........................  ......      X   .........  Mr. Beyer............      X   ......  .........
Mr. Fitzpatrick....................  ......      X   .........  Mr. Evans............      X   ......  .........
Mr. Steube.........................  ......  ......  .........  Mr. Schneider........      X   ......  .........
Ms. Tenney.........................  ......      X   .........  Mr. Panetta..........      X   ......  .........
Mrs. Fischbach.....................  ......      X
Mr. Moore..........................  ......      X
Mrs. Steel.........................  ......      X
Ms. Van Duyne......................  ......      X
Mr. Feenstra.......................  ......      X
Ms. Malliotakis....................  ......      X
Mr. Carey..........................  ......      X
----------------------------------------------------------------------------------------------------------------

    In compliance with the Rules of the House of 
Representatives, the following statement is made concerning the 
vote of the Committee on Ways and Means during the markup 
consideration of H.R. 1163, the ``Protecting Taxpayers and 
Victims of Unemployment Fraud Act,'' on February 28, 2023.
    The vote on the amendment offered by Ms. DelBene to the 
amendment in the nature of a substitute to H.R. 1163, which 
would prohibit states from recovering non-fraudulent UI 
overpayments from workers who had at least one dependent under 
age 19 in 2020 or 2021, was not agreed to by a roll call vote 
of 17 yeas to 22 nays (with a quorum being present). The vote 
was as follows:

----------------------------------------------------------------------------------------------------------------
           Representative              Yea     Nay    Present       Representative       Yea     Nay    Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO).....................  ......      X   .........  Mr. Neal.............      X   ......  .........
Mr. Buchanan.......................  ......      X   .........  Mr. Doggett..........      X   ......  .........
Mr. Smith (NE).....................  ......      X   .........  Mr. Thompson.........      X   ......  .........
Mr. Kelly..........................  ......      X   .........  Mr. Larson...........      X   ......  .........
Mr. Schweikert.....................  ......      X   .........  Mr. Blumenauer.......      X   ......  .........
Mr. LaHood.........................  ......      X   .........  Mr. Pascrell.........      X   ......  .........
Dr. Wenstrup.......................  ......      X   .........  Mr. Davis............  ......  ......  .........
Mr. Arrington......................  ......      X   .........  Ms. Sanchez..........      X   ......  .........
Dr. Ferguson.......................  ......      X   .........  Mr. Higgins..........      X   ......  .........
 Mr. Estes.........................  ......      X   .........  Ms. Sewell...........      X   ......  .........
Mr. Smucker........................  ......      X   .........  Ms. DelBene..........      X   ......  .........
Mr. Hern...........................  ......  ......  .........  Ms. Chu..............      X   ......  .........
Mrs. Miller........................  ......  ......  .........   Ms. Moore...........      X   ......  .........
Dr. Murphy.........................  ......      X   .........  Mr. Kildee...........      X   ......  .........
Mr. Kustoff........................  ......      X   .........  Mr. Beyer............      X   ......  .........
Mr. Fitzpatrick....................  ......      X   .........  Mr. Evans............      X   ......  .........
Mr. Steube.........................  ......  ......  .........  Mr. Schneider........      X   ......  .........
Ms. Tenney.........................  ......      X   .........  Mr. Panetta..........      X   ......  .........
Mrs. Fischbach.....................  ......      X
Mr. Moore..........................  ......      X
Mrs. Steel.........................  ......      X
Ms. Van Duyne......................  ......      X
Mr. Feenstra.......................  ......      X
Ms. Malliotakis....................  ......      X
Mr. Carey..........................  ......      X
----------------------------------------------------------------------------------------------------------------

    In compliance with the Rules of the House of 
Representatives, the following statement is made concerning the 
vote of the Committee on Ways and Means during the markup 
consideration of H.R. 1163, the ``Protecting Taxpayers and 
Victims of Unemployment Fraud Act,'' on February 28, 2023.
    The vote on the amendment offered by Mr. Panetta to the 
amendment in the nature of a substitute to H.R. 1163, which 
would prohibit states from recovering non-fraudulent UI 
overpayments from Medicare beneficiaries, was not agreed to by 
a roll call vote of 17 yeas to 22 nays (with a quorum being 
present). The vote was as follows:

----------------------------------------------------------------------------------------------------------------
           Representative              Yea     Nay    Present       Representative       Yea     Nay    Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO).....................  ......      X   .........  Mr. Neal.............      X   ......  .........
Mr. Buchanan.......................  ......      X   .........  Mr. Doggett..........      X   ......  .........
Mr. Smith (NE).....................  ......      X   .........  Mr. Thompson.........      X   ......  .........
Mr. Kelly..........................  ......      X   .........  Mr. Larson...........      X   ......  .........
Mr. Schweikert.....................  ......      X   .........  Mr. Blumenauer.......      X   ......  .........
Mr. LaHood.........................  ......      X   .........  Mr. Pascrell.........      X   ......  .........
Dr. Wenstrup.......................  ......      X   .........  Mr. Davis............  ......  ......  .........
Mr. Arrington......................  ......      X   .........  Ms. Sanchez..........      X   ......  .........
Dr. Ferguson.......................  ......      X   .........  Mr. Higgins..........      X   ......  .........
 Mr. Estes.........................  ......      X   .........  Ms. Sewell...........      X   ......  .........
Mr. Smucker........................  ......      X   .........  Ms. DelBene..........      X   ......  .........
Mr. Hern...........................  ......  ......  .........  Ms. Chu..............      X   ......  .........
Mrs. Miller........................  ......  ......  .........   Ms. Moore...........      X   ......  .........
Dr. Murphy.........................  ......      X   .........  Mr. Kildee...........      X   ......  .........
Mr. Kustoff........................  ......      X   .........  Mr. Beyer............      X   ......  .........
Mr. Fitzpatrick....................  ......      X   .........  Mr. Evans............      X   ......  .........
Mr. Steube.........................  ......  ......  .........  Mr. Schneider........      X   ......  .........
Ms. Tenney.........................  ......      X   .........  Mr. Panetta..........      X   ......  .........
Mrs. Fischbach.....................  ......      X
Mr. Moore..........................  ......      X
Mrs. Steel.........................  ......      X
Ms. Van Duyne......................  ......      X
Mr. Feenstra.......................  ......      X
Ms. Malliotakis....................  ......      X
Mr. Carey..........................  ......      X
----------------------------------------------------------------------------------------------------------------

    In compliance with the Rules of the House of 
Representatives, the following statement is made concerning the 
vote of the Committee on Ways and Means during the markup 
consideration of H.R. 1163, the ``Protecting Taxpayers and 
Victims of Unemployment Fraud Act,'' on February 28, 2023.
    The vote on the amendment offered by Ms. Chu to the 
amendment in the nature of a substitute to H.R. 1163, which 
would prohibit states from recovering non-fraudulent UI 
overpayments from workers with income below the national median 
income, was not agreed to by a roll call vote of 17 yeas to 22 
nays (with a quorum being present). The vote was as follows:

----------------------------------------------------------------------------------------------------------------
           Representative              Yea     Nay    Present       Representative       Yea     Nay    Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO).....................  ......      X   .........  Mr. Neal.............      X   ......  .........
Mr. Buchanan.......................  ......      X   .........  Mr. Doggett..........      X   ......  .........
Mr. Smith (NE).....................  ......      X   .........  Mr. Thompson.........      X   ......  .........
Mr. Kelly..........................  ......  ......  .........  Mr. Larson...........      X   ......  .........
Mr. Schweikert.....................  ......      X   .........  Mr. Blumenauer.......      X   ......  .........
Mr. LaHood.........................  ......      X   .........  Mr. Pascrell.........      X   ......  .........
Dr. Wenstrup.......................  ......      X   .........  Mr. Davis............  ......  ......  .........
Mr. Arrington......................  ......      X   .........  Ms. Sanchez..........      X   ......  .........
Dr. Ferguson.......................  ......      X   .........  Mr. Higgins..........      X   ......  .........
 Mr. Estes.........................  ......      X   .........  Ms. Sewell...........      X   ......  .........
Mr. Smucker........................  ......      X   .........  Ms. DelBene..........      X   ......  .........
Mr. Hern...........................  ......      X   .........  Ms. Chu..............      X   ......  .........
Mrs. Miller........................  ......      X   .........   Ms. Moore...........      X   ......  .........
Dr. Murphy.........................  ......      X   .........  Mr. Kildee...........      X   ......  .........
Mr. Kustoff........................  ......      X   .........  Mr. Beyer............      X   ......  .........
Mr. Fitzpatrick....................  ......      X   .........  Mr. Evans............      X   ......  .........
Mr. Steube.........................  ......  ......  .........  Mr. Schneider........      X   ......  .........
Ms. Tenney.........................  ......      X   .........  Mr. Panetta..........      X   ......  .........
Mrs. Fischbach.....................  ......  ......
Mr. Moore..........................  ......      X
Mrs. Steel.........................  ......      X
Ms. Van Duyne......................  ......      X
Mr. Feenstra.......................  ......      X
Ms. Malliotakis....................  ......      X
Mr. Carey..........................  ......      X
----------------------------------------------------------------------------------------------------------------

    In compliance with the Rules of the House of 
Representatives, the following statement is made concerning the 
vote of the Committee on Ways and Means during the markup 
consideration of H.R. 1163, the ``Protecting Taxpayers and 
Victims of Unemployment Fraud Act,'' on February 28, 2023.
    The vote on the amendment offered by Ms. Sewell to the 
amendment in the nature of a substitute to H.R. 1163, which 
would prohibit states from recovering non-fraudulent UI 
overpayments from workers enrolled in Medicaid, was not agreed 
to by a roll call vote of 17 yeas to 21 nays (with a quorum 
being present). The vote was as follows:

----------------------------------------------------------------------------------------------------------------
           Representative              Yea     Nay    Present       Representative       Yea     Nay    Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO).....................  ......      X   .........  Mr. Neal.............      X   ......  .........
Mr. Buchanan.......................  ......      X   .........  Mr. Doggett..........      X   ......  .........
Mr. Smith (NE).....................  ......      X   .........  Mr. Thompson.........      X   ......  .........
Mr. Kelly..........................  ......      X   .........  Mr. Larson...........      X   ......  .........
Mr. Schweikert.....................  ......      X   .........  Mr. Blumenauer.......      X   ......  .........
Mr. LaHood.........................  ......      X   .........  Mr. Pascrell.........      X   ......  .........
Dr. Wenstrup.......................  ......  ......  .........  Mr. Davis............  ......  ......  .........
Mr. Arrington......................  ......      X   .........  Ms. Sanchez..........      X   ......  .........
Dr. Ferguson.......................  ......      X   .........  Mr. Higgins..........      X   ......  .........
 Mr. Estes.........................  ......      X   .........  Ms. Sewell...........      X   ......  .........
Mr. Smucker........................  ......      X   .........  Ms. DelBene..........      X   ......  .........
Mr. Hern...........................  ......      X   .........  Ms. Chu..............      X   ......  .........
Mrs. Miller........................  ......      X   .........   Ms. Moore...........      X   ......  .........
Dr. Murphy.........................  ......      X   .........  Mr. Kildee...........      X   ......  .........
Mr. Kustoff........................  ......  ......  .........  Mr. Beyer............      X   ......  .........
Mr. Fitzpatrick....................  ......      X   .........  Mr. Evans............      X   ......  .........
Mr. Steube.........................  ......  ......  .........  Mr. Schneider........      X   ......  .........
Ms. Tenney.........................  ......      X   .........  Mr. Panetta..........      X   ......  .........
Mrs. Fischbach.....................  ......  ......
Mr. Moore..........................  ......      X
Mrs. Steel.........................  ......      X
Ms. Van Duyne......................  ......      X
Mr. Feenstra.......................  ......      X
Ms. Malliotakis....................  ......      X
Mr. Carey..........................  ......      X
----------------------------------------------------------------------------------------------------------------

    In compliance with the Rules of the House of 
Representatives, the following statement is made concerning the 
vote of the Committee on Ways and Means during the markup 
consideration of H.R. 1163, the ``Protecting Taxpayers and 
Victims of Unemployment Fraud Act,'' on February 28, 2023.
    The vote on the amendment offered by Mr. Evans to the 
amendment in the nature of a substitute to H.R. 1163, which 
would prohibit states from recovering non-fraudulent UI 
overpayments if such overpayment was due to an error by a 
contractor, was not agreed to by a roll call vote of 16 yeas to 
21 nays (with a quorum being present). The vote was as follows:

----------------------------------------------------------------------------------------------------------------
           Representative              Yea     Nay    Present       Representative       Yea     Nay    Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO).....................  ......      X   .........  Mr. Neal.............      X   ......  .........
Mr. Buchanan.......................  ......      X   .........  Mr. Doggett..........      X   ......  .........
Mr. Smith (NE).....................  ......      X   .........  Mr. Thompson.........      X   ......  .........
Mr. Kelly..........................  ......      X   .........  Mr. Larson...........      X   ......  .........
Mr. Schweikert.....................  ......      X   .........  Mr. Blumenauer.......      X   ......  .........
Mr. LaHood.........................  ......      X   .........  Mr. Pascrell.........      X   ......  .........
Dr. Wenstrup.......................  ......  ......  .........  Mr. Davis............  ......  ......  .........
Mr. Arrington......................  ......      X   .........  Ms. Sanchez..........      X   ......  .........
Dr. Ferguson.......................  ......      X   .........  Mr. Higgins..........      X   ......  .........
 Mr. Estes.........................  ......      X   .........  Ms. Sewell...........  ......  ......  .........
Mr. Smucker........................  ......      X   .........  Ms. DelBene..........      X   ......  .........
Mr. Hern...........................  ......      X   .........  Ms. Chu..............      X   ......  .........
Mrs. Miller........................  ......      X   .........   Ms. Moore...........      X   ......  .........
Dr. Murphy.........................  ......      X   .........  Mr. Kildee...........      X   ......  .........
Mr. Kustoff........................  ......  ......  .........  Mr. Beyer............      X   ......  .........
Mr. Fitzpatrick....................  ......      X   .........  Mr. Evans............      X   ......  .........
Mr. Steube.........................  ......  ......  .........  Mr. Schneider........      X   ......  .........
Ms. Tenney.........................  ......      X   .........  Mr. Panetta..........      X   ......  .........
Mrs. Fischbach.....................  ......  ......
Mr. Moore..........................  ......      X
Mrs. Steel.........................  ......      X
Ms. Van Duyne......................  ......      X
Mr. Feenstra.......................  ......      X
Ms. Malliotakis....................  ......      X
Mr. Carey..........................  ......      X
----------------------------------------------------------------------------------------------------------------

    In compliance with the Rules of the House of 
Representatives, the following statement is made concerning the 
vote of the Committee on Ways and Means during the markup 
consideration of H.R. 1163, the ``Protecting Taxpayers and 
Victims of Unemployment Fraud Act,'' on February 28, 2023.
    The vote on the amendment offered by Ms. Moore to the 
amendment in the nature of a substitute to H.R. 1163, which 
would prohibit states from recovering non-fraudulent UI 
overpayments from individuals in a household that included a 
foster child in 2020 or 2021, was not agreed to by a roll call 
vote of 16 yeas to 21 nays (with a quorum being present). The 
vote was as follows:

----------------------------------------------------------------------------------------------------------------
           Representative              Yea     Nay    Present       Representative       Yea     Nay    Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO).....................  ......      X   .........  Mr. Neal.............      X   ......  .........
Mr. Buchanan.......................  ......      X   .........  Mr. Doggett..........      X   ......  .........
Mr. Smith (NE).....................  ......      X   .........  Mr. Thompson.........      X   ......  .........
Mr. Kelly..........................  ......      X   .........  Mr. Larson...........      X   ......  .........
Mr. Schweikert.....................  ......      X   .........  Mr. Blumenauer.......      X   ......  .........
Mr. LaHood.........................  ......      X   .........  Mr. Pascrell.........      X   ......  .........
Dr. Wenstrup.......................  ......  ......  .........  Mr. Davis............  ......  ......  .........
Mr. Arrington......................  ......  ......  .........  Ms. Sanchez..........      X   ......  .........
Dr. Ferguson.......................  ......      X   .........  Mr. Higgins..........      X   ......  .........
 Mr. Estes.........................  ......      X   .........  Ms. Sewell...........  ......  ......  .........
Mr. Smucker........................  ......      X   .........  Ms. DelBene..........      X   ......  .........
Mr. Hern...........................  ......      X   .........  Ms. Chu..............      X   ......  .........
Mrs. Miller........................  ......      X   .........   Ms. Moore...........      X   ......  .........
Dr. Murphy.........................  ......      X   .........  Mr. Kildee...........      X   ......  .........
Mr. Kustoff........................  ......  ......  .........  Mr. Beyer............      X   ......  .........
Mr. Fitzpatrick....................  ......      X   .........  Mr. Evans............      X   ......  .........
Mr. Steube.........................  ......  ......  .........  Mr. Schneider........      X   ......  .........
Ms. Tenney.........................  ......      X   .........  Mr. Panetta..........      X   ......  .........
Mrs. Fischbach.....................  ......      X
Mr. Moore..........................  ......      X
Mrs. Steel.........................  ......      X
Ms. Van Duyne......................  ......      X
Mr. Feenstra.......................  ......      X
Ms. Malliotakis....................  ......      X
Mr. Carey..........................  ......      X
----------------------------------------------------------------------------------------------------------------

    In compliance with the Rules of the House of 
Representatives, the following statement is made concerning the 
vote of the Committee on Ways and Means during the markup 
consideration of H.R. 1163, the ``Protecting Taxpayers and 
Victims of Unemployment Fraud Act,'' on February 28, 2023.
    The vote on the amendment offered by Mr. Schneider to the 
amendment in the nature of a substitute to H.R. 1163, which 
would add bank verification to the list of required program 
integrity tools to be used by states, was not agreed to by a 
roll call vote of 15 yeas to 20 nays (with a quorum being 
present). The vote was as follows:

----------------------------------------------------------------------------------------------------------------
           Representative              Yea     Nay    Present       Representative       Yea     Nay    Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO).....................  ......      X   .........  Mr. Neal.............      X   ......  .........
Mr. Buchanan.......................  ......      X   .........  Mr. Doggett..........      X   ......  .........
Mr. Smith (NE).....................  ......      X   .........  Mr. Thompson.........      X   ......  .........
Mr. Kelly..........................  ......      X   .........  Mr. Larson...........      X   ......  .........
Mr. Schweikert.....................  ......      X   .........  Mr. Blumenauer.......      X   ......  .........
Mr. LaHood.........................  ......      X   .........  Mr. Pascrell.........      X   ......  .........
Dr. Wenstrup.......................  ......  ......  .........  Mr. Davis............  ......  ......  .........
Mr. Arrington......................  ......  ......  .........  Ms. Sanchez..........      X   ......  .........
Dr. Ferguson.......................  ......      X   .........  Mr. Higgins..........      X   ......  .........
 Mr. Estes.........................  ......      X   .........  Ms. Sewell...........  ......  ......  .........
Mr. Smucker........................  ......      X   .........  Ms. DelBene..........      X   ......  .........
Mr. Hern...........................  ......  ......  .........  Ms. Chu..............      X   ......  .........
Mrs. Miller........................  ......      X   .........   Ms. Moore...........      X   ......  .........
Dr. Murphy.........................  ......      X   .........  Mr. Kildee...........      X   ......  .........
Mr. Kustoff........................  ......  ......  .........  Mr. Beyer............  ......  ......  .........
Mr. Fitzpatrick....................  ......      X   .........  Mr. Evans............      X   ......  .........
Mr. Steube.........................  ......  ......  .........  Mr. Schneider........      X   ......  .........
Ms. Tenney.........................  ......      X   .........  Mr. Panetta..........      X   ......  .........
Mrs. Fischbach.....................  ......      X
Mr. Moore..........................  ......      X
Mrs. Steel.........................  ......      X
Ms. Van Duyne......................  ......      X
Mr. Feenstra.......................  ......      X
Ms. Malliotakis....................  ......      X
Mr. Carey..........................  ......      X
----------------------------------------------------------------------------------------------------------------

    In compliance with the Rules of the House of 
Representatives, the following statement is made concerning the 
vote of the Committee on Ways and Means during the markup 
consideration of H.R. 1163, the ``Protecting Taxpayers and 
Victims of Unemployment Fraud Act,'' on February 28, 2023.
    The vote on the amendment offered by Mr. Panetta to the 
amendment in the nature of a substitute to H.R. 1163, which 
would prohibit states from recovering non-fraudulent UI 
overpayments from farmers, was not agreed to by a roll call 
vote of 17 yeas to 20 nays (with a quorum being present). The 
vote was as follows:

----------------------------------------------------------------------------------------------------------------
           Representative              Yea     Nay    Present       Representative       Yea     Nay    Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO).....................  ......      X   .........  Mr. Neal.............      X   ......  .........
Mr. Buchanan.......................  ......      X   .........  Mr. Doggett..........      X   ......  .........
Mr. Smith (NE).....................  ......      X   .........  Mr. Thompson.........      X   ......  .........
Mr. Kelly..........................  ......      X   .........  Mr. Larson...........      X   ......  .........
Mr. Schweikert.....................  ......      X   .........  Mr. Blumenauer.......      X   ......  .........
Mr. LaHood.........................  ......      X   .........  Mr. Pascrell.........      X   ......  .........
Dr. Wenstrup.......................  ......  ......  .........  Mr. Davis............  ......  ......  .........
Mr. Arrington......................  ......  ......  .........  Ms. Sanchez..........      X   ......  .........
Dr. Ferguson.......................  ......      X   .........  Mr. Higgins..........      X   ......  .........
 Mr. Estes.........................  ......      X   .........  Ms. Sewell...........      X   ......  .........
Mr. Smucker........................  ......      X   .........  Ms. DelBene..........      X   ......  .........
Mr. Hern...........................  ......  ......  .........  Ms. Chu..............      X   ......  .........
Mrs. Miller........................  ......      X   .........   Ms. Moore...........      X   ......  .........
Dr. Murphy.........................  ......      X   .........  Mr. Kildee...........      X   ......  .........
Mr. Kustoff........................  ......  ......  .........  Mr. Beyer............      X   ......  .........
Mr. Fitzpatrick....................  ......      X   .........  Mr. Evans............      X   ......  .........
Mr. Steube.........................  ......  ......  .........  Mr. Schneider........      X   ......  .........
Ms. Tenney.........................  ......      X   .........  Mr. Panetta..........      X   ......  .........
Mrs. Fischbach.....................  ......      X
Mr. Moore..........................  ......      X
Mrs. Steel.........................  ......      X
Ms. Van Duyne......................  ......      X
Mr. Feenstra.......................  ......      X
Ms. Malliotakis....................  ......      X
Mr. Carey..........................  ......      X
----------------------------------------------------------------------------------------------------------------

    In compliance with the Rules of the House of 
Representatives, the following statement is made concerning the 
vote of the Committee on Ways and Means during the markup 
consideration of H.R. 1163, the ``Protecting Taxpayers and 
Victims of Unemployment Fraud Act'' on February 28, 2023.
    H.R. 1163 was ordered favorably reported to the House of 
Representatives as amended by a roll call vote of 20 yeas to 17 
nays (with a quorum being present). The vote was as follows:

----------------------------------------------------------------------------------------------------------------
           Representative              Yea     Nay    Present       Representative       Yea     Nay    Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO).....................      X   ......  .........  Mr. Neal.............  ......      X   .........
Mr. Buchanan.......................      X   ......  .........  Mr. Doggett..........  ......      X   .........
Mr. Smith (NE).....................      X   ......  .........  Mr. Thompson.........  ......      X   .........
Mr. Kelly..........................      X   ......  .........  Mr. Larson...........  ......      X   .........
Mr. Schweikert.....................      X   ......  .........  Mr. Blumenauer.......  ......      X   .........
Mr. LaHood.........................      X   ......  .........  Mr. Pascrell.........  ......      X   .........
Dr. Wenstrup.......................  ......  ......  .........  Mr. Davis............  ......  ......  .........
Mr. Arrington......................  ......  ......  .........  Ms. Sanchez..........  ......      X   .........
Dr. Ferguson.......................      X   ......  .........  Mr. Higgins..........  ......      X   .........
 Mr. Estes.........................      X   ......  .........  Ms. Sewell...........  ......      X   .........
Mr. Smucker........................      X   ......  .........  Ms. DelBene..........  ......      X   .........
Mr. Hern...........................  ......  ......  .........  Ms. Chu..............  ......      X   .........
Mrs. Miller........................      X   ......  .........   Ms. Moore...........  ......      X   .........
Dr. Murphy.........................      X   ......  .........  Mr. Kildee...........  ......      X   .........
Mr. Kustoff........................  ......  ......  .........  Mr. Beyer............  ......      X   .........
Mr. Fitzpatrick....................      X   ......  .........  Mr. Evans............  ......      X   .........
Mr. Steube.........................  ......  ......  .........  Mr. Schneider........  ......      X   .........
Ms. Tenney.........................      X   ......  .........  Mr. Panetta..........  ......      X   .........
Mrs. Fischbach.....................      X   ......
Mr. Moore..........................      X   ......
Mrs. Steel.........................      X   ......
Ms. Van Duyne......................      X   ......
Mr. Feenstra.......................      X   ......
Ms. Malliotakis....................      X   ......
Mr. Carey..........................      X   ......
----------------------------------------------------------------------------------------------------------------

                     IV. BUDGET EFFECTS OF THE BILL


               A. Committee Estimate of Budgetary Effects

     In compliance with clause 3(d) of rule XIII of the Rules 
of the House of Representatives, the following statement is 
made concerning the effects on the budget of the bill, H.R. 
1163, as reported. The Committee received the estimate prepared 
by the Congressional Budget Office (CBO), which is included 
below.

B. Statement Regarding New Budget Authority and Tax Expenditures Budget 
                               Authority

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that the 
bill involves no new or increased budget authority. The 
Committee states further that the revenue increasing tax 
provisions involve no new tax expenditures.

      V. COST ESTIMATE PREPARED BY THE CONGRESSIONAL BUDGET OFFICE

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, requiring a cost estimate 
prepared by the CBO, the following statement by CBO is 
provided.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    The bill would
           Allow states to spend a portion of recovered 
        overpayments of unemployment insurance (UI)
           Change the number of years that states could 
        recover overpaid amounts by reducing benefits
           Repeal funding for program integrity 
        activities in the Department of Labor (DOL)
           Require states to conduct data matching 
        using specific tools to verify UI claimants' identity 
        and eligibility
           Lengthen the statute of limitations for 
        federal criminal fraud charges related to unemployment 
        compensation
    Estimated budgetary effects would mainly stem from
           Allowing states to spend a portion of 
        recovered overpayments
           Repealing funding for program integrity 
        activities
    Areas of significant uncertainty include
           Projecting recoverable amounts of benefits 
        overpaid by pandemic-related unemployment programs
           Anticipating how DOL would interpret 
        provisions that repeal existing funding for program 
        integrity actions and that would allow states to spend 
        a portion of recovered overpayments
    Bill summary: H.R. 1163 would allow states to pay for 
program integrity activities with funds they recover from 
overpayment of unemployment insurance (UI) benefits, including 
fraud. The bill also would change the period during which 
states can reduce unemployment benefits in order to recover 
overpayments. Additionally, the bill would change the handling 
of fraud for the Pandemic Unemployment Assistance (PUA) 
program, require states to match claimant information and 
eligibility using specific tools, and generally extend the 
statute of limitations to bring federal criminal charges for 
fraudulently collected unemployment benefits from 5 years to 10 
years.
    Finally, the bill would repeal section 2118 of the 
Coronavirus Aid, Relief, and Economic Security Act, as added by 
the American Rescue Plan Act of 2021 (ARPA), which provided $2 
billion in funding for the Department of Labor (DOL) to prevent 
fraud and improve equitable access and timely payment of 
benefits for regular and pandemic-related UI programs.
    Estimated Federal cost: The estimated budgetary effect of 
H.R. 1163 is shown in Table 1. The costs of the legislation 
fall within budget function 600 (income security).

                                                   TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 1163
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     By fiscal year, millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                         2023     2024     2025    2026   2027  2028  2029  2030  2031  2032  2033  2023-2028  2023-2033
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Increases or Decreases (-) in Direct Spending
 
Estimated Budget Authority...........................     -400      -13      -18       5    15    17    17    18    21    22    22      -394       -294
Estimated Outlays....................................        0     -223     -161     -43    16    17    18    18    21    22    22      -394       -293
 
                                                                  Increases in Revenues
 
Estimated Revenues...................................        0        0        *       1     4     7    11    13    14    15    15        12         80
 
                                Net Increase or Decrease (-) in the Deficit From Changes in Direct Spending and Revenues
 
Effect on the Deficit................................        0     -223     -161     -44    12    10     7     5     7     7     7      -406       -373
--------------------------------------------------------------------------------------------------------------------------------------------------------
* = between zero and $500,000.

    Basis of estimate: CBO assumes that the bill will be 
enacted around the beginning of August 2023. Estimated outlays 
are based on historical patterns for existing and similar 
activities.
    Background: The permanent UI system is a joint federal-and-
state program that provides temporary weekly benefits 
(consisting of regular benefits and, in economic downturns, 
extended benefits) to qualified workers who are unemployed 
through no fault of their own. Funding for the program is drawn 
from payroll taxes imposed on employers by the states and by 
the federal government. Within the limits set by the federal 
government, states set eligibility criteria and benefit 
amounts, and states provide the funding for all regular UI and 
half of extended UI benefits. The federal government funds 
states' administrative activities and the other half of 
extended UI benefits. Both the benefits paid by states and the 
revenues from state employer payroll taxes are recorded in the 
Unemployment Trust Fund (UTF) on the federal budget. CBO treats 
recoveries of fraudulent and other overpayments as offsetting 
receipts (or reductions in direct spending) that are credited 
to the states' UTF for state-funded benefits or to the Treasury 
for federally funded benefits.
    Over time, CBO expects that states will maintain a balance 
in their UTF accounts, so that changes in benefits paid will be 
offset by changes in revenues collected. For example, when CBO 
estimates spending from state accounts would increase (for 
activities such as spending recovered overpayments on program 
integrity), we also estimate that deposits of state payroll 
taxes in those accounts over the following years also would 
increase. Those increases in revenues lag the increased 
spending by a few years. On net, CBO expects that changes in 
revenue would not completely offset changes in spending, 
because paying additional taxes for unemployment insurance 
would reduce the base of income taxes and other payroll taxes. 
That is, gross collections would be partially offset by a loss 
of other receipts.
    Laws enacted in 2020 and 2021 temporarily extended benefits 
to additional people, increased benefit amounts, and extended 
the duration of benefits. Those temporary programs, including 
PUA, Pandemic Emergency Unemployment Compensation (PEUC), 
Federal Pandemic Unemployment Compensation (FPUC), and Mixed 
Earners Unemployment Compensation (MEUC), which terminated on 
September 6, 2021, were fully funded by the federal government. 
Additionally, the federal government temporarily funded all of 
extended UI benefits (instead of half), and the first week of 
regular UI benefits.
    The states identify overpayments when they determine that 
beneficiaries have received a payment, or a portion of a 
payment, to which they are not entitled. Some overpayments are 
identified as fraud; the definition of fraud for the regular UI 
program varies from state to state but generally requires that 
an individual has knowingly concealed facts to obtain or 
increase benefits. Under current law, recoveries of regular and 
state-funded extended unemployment benefits are deposited into 
a state's UTF account.
    Direct spending: Various provisions in H.R. 1163 would 
affect direct spending in different ways. On net, CBO estimates 
that enacting the bill would decrease direct spending by $293 
million over the 2023 2033 period, as shown in Table 2.

                                             TABLE 2.--ESTIMATED CHANGES IN DIRECT SPENDING UNDER H.R. 1163
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     By fiscal year, millions of dollars--
                                                     ---------------------------------------------------------------------------------------------------
                                                      2023    2024     2025    2026    2027   2028   2029   2030  2031  2032  2033  2023-2028  2023-2033
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Increases or Decreases (-) in Direct Spending Outlays
 
Allow States to Spend Recovered Overpayments of
 Regular and Extended UI Benefits:
    Estimated Outlays...............................    0         4       11      17     18     19     19     19    20    21    22        69        170
Allow States to Spend Recovered Overpayments of
 Pandemic Unemployment Benefits:
    Estimated Outlays...............................    0         6        9       4      2      1      1      *     *     *     0        22         23
Change the Handling of Fraud Under the PUA Program:
    Estimated Outlays...............................    0         2        3       0      0      0      0      0     0     0     0         5          5
Repeal Program Integrity Funding Under ARPA:
    Estimated Outlays...............................    0      -200     -150     -50      0      0      0      0     0     0     0      -400       -400
Change Benefit Offset Periods:
    Estimated Outlays...............................    0       -35      -34     -14     -4     -3     -2     -1     1     1     *       -90        -91
    Total Changes:
        Estimated Outlays...........................    0      -223     -161     -43     16     17     18     18    21    22    22      -394       -293
--------------------------------------------------------------------------------------------------------------------------------------------------------
* = between zero and $500,000; ARPA = American Rescue Plan Act of 2021; PUA = Pandemic Unemployment Assistance; UI = unemployment insurance.

    Allow States to Spend Recovered Overpayments of Regular and 
Extended UI Benefits. H.R. 1163 would permanently allow states 
to spend 5 percent of whatever overpayments of regular and 
extended UI benefits they recover on program integrity 
activities. CBO expects that DOL also would allow states to 
spend the portion of recovered regular UI and extended benefits 
that were exclusively funded by the federal government during 
the pandemic, and this estimate incorporates that assumption.
    CBO expects that states that spend recovered amounts would 
need to increase employment taxes to maintain a positive 
balance in their UTF accounts. Not all states would spend those 
amounts because of the need to raise payroll taxes if they did, 
but CBO cannot generally determine which states would or would 
not spend those funds. Given that uncertainty, we estimate that 
about half of the states would spend recovered amounts from 
regular and extended UI overpayments. On that basis, CBO 
estimates that enacting this provision would increase direct 
spending by $170 million over the 2023-2033 period. That 
increase in spending would be partially offset by an increase 
in revenues, discussed below.
    Allow States to Spend Recovered Overpayments of Pandemic 
Unemployment Benefits. H.R. 1163 would allow states to retain 
and spend 25 percent of recovered overpayments that were 
identified as fraudulent under pandemic-related programs, along 
with amounts recovered from overpayment of regular UI and 
extended benefits that were federally funded during the 
pandemic. Those funds would be used for program integrity 
activities. Under current law, recoveries of federally funded 
benefits are ultimately credited back to the federal government 
and are not deposited into the states' UTF accounts. Therefore, 
CBO expects that allowing states to retain and spend recovered 
amounts that they otherwise could not use would result in all 
states undertaking these activities. States would only be 
allowed to retain amounts recovered after the bill is enacted 
and within 10 years of the date an overpayment was made.
    Data from DOL shows that by the end of fiscal year 2022, 
states had identified roughly $3 billion in fraudulent 
overpayments for FPUC, PUA, and PEUC. States have recovered 
about $130 million so far. Using that information and the 
recovery of similar overpayments of temporary unemployment 
benefits paid from 2008 through 2013, CBO estimates that 
roughly $100 million will be recovered between 2024 and 2031 
and that states would keep (and spend) about $23 million (or 25 
percent) of the amounts recovered over the 2023-2033 period. 
Because that $23 million would have been retained by the 
federal government, enacting this provision would increase 
direct spending.
    Change the Handling of Fraud Under the PUA Program. The 
bill would change the way fraud is handled for purposes of the 
PUA program. Rather than requiring states to handle fraud in 
the manner used for the Disaster Unemployment Assistance 
program, which is uniform across all states, H.R. 1163 would 
require states to use the procedures for identifying fraud and 
disqualifying claimants in accordance with state laws for 
regular unemployment compensation.
    CBO cannot determine whether the change would allow states 
to identify additional cases of people who collected benefits 
fraudulently in the past. CBO expects that states would require 
additional administrative funding to change their methods for 
identifying and processing potentially fraudulent payments. 
Under current law, DOL has the authority to fund those 
activities for pandemic-related programs using existing 
authorities and appropriations. Using information from DOL, CBO 
estimates that the department would provide $5 million in 
additional funding to states to administer the PUA program, 
increasing direct spending by the same amount over the 2023-
2033 period.
    Repeal Program Integrity Funding Under ARPA. The bill would 
repeal the section of ARPA that provided funding for program 
integrity activities for unemployment insurance. Using 
information from DOL, CBO estimates that $400 million of the 
funds provided for that purpose will remain unobligated by the 
beginning of August, the assumed enactment date. On that basis, 
CBO estimates that repealing that section of law would decrease 
direct spending by $400 million over the 2023-2033 period.
    Change Benefit Offset Periods. Under current law, states 
must recover overpayments of FPUC, MEUC, and PEUC benefits by 
reducing recipients' benefits over the subsequent three-year 
period. The PUA program does not limit the number of years over 
which states can reduce benefits to recover overpayments.
    H.R. 1163 would change the length of time during which 
states can recover overpayments of those pandemic unemployment 
benefits to 10 years following the overpayment. Based on the 
recovery history for regular UI benefits, CBO estimates that 
enacting the provision would decrease direct spending by $91 
million over the 2023-2033 period.
    Require States to Undertake Certain Program Integrity 
Initiatives. The bill would require states to use certain data-
matching and analytical tools to assess the validity of UI 
claimant information. CBO expects that the requirement would 
not significantly affect the amount of benefits paid or 
recovered because states already use most of those data sets or 
their equivalent to verify claimants' identity and eligibility.
    Spending of Criminal Penalties. H.R. 1163 would increase 
collections of criminal penalties by an insignificant amount; 
those collections would be credited to the Crime Victims Fund 
and spent without further appropriation. The penalties are 
discussed in the next section. CBO estimates that direct 
spending from that fund would increase by an insignificant 
amount over the 2026-2031 period.
    Revenues: Several provisions of H.R. 1163 would affect 
revenues. On net, CBO estimates that enacting the bill would 
increase revenues by $80 million over the 2023-2033 period.
    Allow States to Spend Recovered Overpayments of Regular and 
Extended UI Benefits. The bill would permit states to retain 
and spend a portion of recovered overpayments, which would, on 
net, decrease balances in the states' UTF accounts. As a 
result, CBO expects that states would increase their employer 
payroll taxes. CBO estimates that enacting this provision would 
increase revenues by $80 million over the 2023-2033 period.
    Extend the Statute of Limitations for Federal Criminal 
Fraud Charges. Section 6 would extend the statute of 
limitations for federal criminal fraud charges related to 
unemployment compensation from 5 years to 10 years. That change 
would not affect state laws or rules governing the recovery of 
overpayments. CBO estimates that the extension would increase 
revenues from criminal penalties by an insignificant amount 
after 2026. (Those penalties are credited to the Crime Victims 
Fund and spent without further appropriation.)
    DOL's Office of Inspector General estimates that there have 
been more than 500 convictions for criminal fraud related to UI 
benefits since March 2020. Neither that office nor the 
Department of Justice will generally be able to initiate fraud 
cases related to pandemic-related UI compensation after 2025 
because of the current five-year statute of limitations.
    Extending that period to 10 years would allow federal 
investigators and prosecutors more time to pursue cases that 
could result in additional successful prosecutions after 2025. 
Those prosecutions, in turn, could result in the collection of 
additional criminal penalties (and subsequent spending from the 
Crime Victims Fund) or the recovery of additional benefits paid 
fraudulently (those recoveries are classified as offsets to 
mandatory spending.)
    The additional amounts that may be collected by the 
government within the next decade, on net, are highly uncertain 
and, in CBO's estimation, would likely be small. Most federal 
convictions for fraud do not include the assessment of fines, 
and monetary penalties or amounts intended for restitution may 
not ultimately be collected. Moreover, the government's 
enforcement resources are limited and the additional time 
required to investigate and prosecute UI fraud cases that 
otherwise would be beyond the statute of limitations may come 
at the expense of other enforcement actions, which could result 
in the government's forgoing restitution payments or 
collections of criminal or civil penalties or damages.
    Uncertainty: The amount that states would recover from 
overpayments of pandemic-related unemployment benefits, either 
under current law or under the bill is uncertain. CBO's 
estimates of future recoveries are based on current data. 
States are still identifying overpayments and discerning 
whether they were obtained fraudulently, so the amount of 
overpayments susceptible to recovery could be larger than what 
is apparent today. Additional investigations would be necessary 
to establish that payments were the result of fraud, and then 
further effort to recover any of those amounts. Ultimately, 
recoveries from those programs are likely to be a small 
percentage of total suspected fraud.
    The amount of recoveries from pandemic unemployment 
programs also is uncertain because of the nature of the 
benefits. Those programs' benefits were substantially larger 
than regular UI benefits, and they were disbursed over a short 
time. In addition, the PUA program provided benefits to workers 
who were not previously covered by the UI system and who are 
not covered under current law. Some of the methods that states 
use to recover overpayments in the regular UI program--such as 
reducing future benefits or reducing income tax refunds--would 
probably be ineffective for recovering fraudulently received 
benefits. Therefore, the proportion of such amounts established 
and recovered would be significantly lower than recoveries of 
regular UI benefits, but the magnitude of that difference is 
uncertain.
    CBO expects that under the bill, DOL would allow states to 
spend 5 percent of recovered overpayments of regular and 
extended UI benefits exclusively funded by the federal 
government along with 25 percent of recovered fraudulent 
overpayments of those same benefits. Whether DOL would 
interpret that language the same way that we did is unclear.
    Additionally, H.R. 1163 repeals some funding for program 
integrity and administrative activities for pandemic-related 
unemployment programs. Because DOL has the authority to fund 
similar activities for the same programs under laws that would 
not be repealed by the bill, DOL could provide funding to 
partially or fully replace the amount of repealed funds.
    Pay-As-You-Go Considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays and revenues that are 
subject to those pay-as-you-go procedures are shown in Table 3.

TABLE 3.--CBO'S ESTIMATE OF THE STATUTORY PAY-AS-YOU-GO EFFECTS OF H.R. 1163, THE PROTECTING TAXPAYERS AND VICTIMS OF UNEMPLOYMENT FRAUD ACT, AS ORDERED
                                         REPORTED BY THE HOUSE COMMITTEE ON WAYS AND MEANS ON FEBRUARY 28, 2023
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       By fiscal year, millions of dollars--
                                                         -----------------------------------------------------------------------------------------------
                                                          2023    2024     2025    2026   2027  2028  2029  2030  2031  2032  2033  2023-2028  2023-2033
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Net Increase or Decrease (-) in the Deficit
 
Pay-As-You-Go Effect....................................    0      -223     -161     -44    12    10     7     5     7     7     7      -406       -373
Memorandum:
    Changes in Outlays..................................    0      -223     -161     -43    16    17    18    18    21    22    22      -394       -293
    Changes in Revenues.................................    0         0        0       1     4     7    11    13    14    15    15        12         80
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Increase in long-term net direct spending and deficits: CBO 
estimates that enacting H.R. 1163 would not increase net direct 
spending by more than $2.5 billion in any of the four 
consecutive 10-year periods beginning in 2034.
    CBO estimates that enacting H.R. 1163 would not increase 
on-budget deficits by more than $5 billion in any of the four 
consecutive 10-year periods beginning in 2034.
    Mandates: Rescinding unobligated balances that were 
provided by the American Rescue Plan Act of 2021 to make grants 
to states and territories for program integrity activities 
would reduce funds used by states and territories to comply 
with existing duties to prevent and to investigate UI fraud and 
overpayments. Under the Unfunded Mandates Reform Act (UMRA), a 
mandate occurs only when a provision would reduce or eliminate 
the amount of an authorization of appropriations. Thus, 
rescinding funds already provided would not impose 
intergovernmental or private-sector mandates as defined in 
UMRA.
    The additional authorities granted by the bill to states 
and territories to retain and spend a portion of UI fraud and 
overpayment recoveries would be beneficial and not a mandate.
    Estimate prepared by: Federal costs and revenues: Meredith 
Decker; Mandates: Andrew Laughlin.
    Estimate reviewed by: Elizabeth Cove Delisle, Chief, Income 
Security Cost Estimates Unit; Joshua Shakin, Chief, Revenue 
Estimating Unit; Kathleen FitzGerald, Chief, Public and Private 
Mandates Unit; H. Samuel Papenfuss, Deputy Director of Budget 
Analysis; Theresa Gullo, Director of Budget Analysis.

     VI. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE


          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives, the Committee made findings and 
recommendations that are reflected in this report.

        B. Statement of General Performance Goals and Objectives

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
bill does not authorize funding, so no statement of general 
performance goals and objectives is required.

              C. Information Relating to Unfunded Mandates

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

  D. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
                                Benefits

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill, and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                   E. Duplication of Federal Programs

    In compliance with clause 3(c)(5) of rule XIII of the Rules 
of the House of Representatives, the Committee states that no 
provision of the bill establishes or reauthorizes: (1) a 
program of the Federal Government known to be duplicative of 
another Federal program; (2) a program included in any report 
from the Government Accountability Office to Congress pursuant 
to section 21 of Public Law 111-139; or (3) a program related 
to a program identified in the most recent Catalog of Federal 
Domestic Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

            VII. CHANGES IN EXISTING LAW MADE BY THE BILL, 
                              AS REPORTED


       A. Text of Existing Law Amended or Repealed by the Bill, 
                              as Reported

    With respect to the requirement of clause 3(e) of rule XIII 
of the Rules of the House of Representatives, changes in 
existing law made by the bill, as reported, this section was 
not made available to the Committee in time for the filing of 
this report.

      B. Changes in Existing Law Proposed by the Bill, as Reported

    With respect to the requirement of clause 3(e) of rule XIII 
of the Rules of the House of Representatives, changes in 
existing law made by the bill, as reported, this section was 
not made available to the Committee in time for the filing of 
this report.

                         VIII. DISSENTING VIEWS

                       Committee on Ways and Means,
                                  House of Representatives,
                                     Washington, DC, March 9, 2023.

 DISSENTING VIEWS ON PROTECTING TAXPAYERS AND VICTIMS OF UNEMPLOYMENT 
                          FRAUD ACT, H.R. 1163

    Committee Democrats are strongly committed to ensuring that 
criminal rings that defrauded our pandemic unemployment 
programs are brought to justice, and also to preventing future 
fraud in our regular unemployment insurance (UI) program, which 
is a vital support for workers and our economy. Unfortunately, 
this legislation was rushed to markup without consulting state 
administrators, staff, or workers who received UL It would 
undermine current efforts to fight fraud and send surprise 
bills to innocent workers.
    According to preliminary estimates from the Congressional 
Budget Office, this bill would be a net cut in federal 
investment in strengthening UI and preventing fraud. First, the 
bill would rescind the critical American Rescue Plan Act 
funding provided to address fraud and strengthen state UI 
programs before the next recession. Every House Republican 
voted against this critical before, which the Government 
Accountability Office (GAO) has identified as funding a number 
of important responses to their concerns about UI program 
operations and fraud.
    Specifically, this bill would force the Department of Labor 
to cut off funding to fraud-fighting Tiger Teams in 30 states, 
as well as denying additional states access to consultative 
services and funding to address structural weaknesses and 
prevent fraud. H.R. 1163 would also halt in progress and 
planned pilots of identity verification systems and a rollout 
of in-person identify verification in partnership with the U.S. 
Post Office. The cut would claw back some funding already 
provided to states to upgrade their systems and participate in 
anti-fraud data matching systems (the same systems this bill 
purports to encourage states to join) and would prevent 
critical grants to states to upgrade the antiquated information 
technology systems that all of the witnesses at our Committee 
hearing said were one of the biggest reasons UT was vulnerable 
to fraud during the pandemic.
    Committee Republicans voted against our amendment to 
restore the critical ARPA funding and did not even allow a 
debate or a vote on an amendment to fully fund state 
unemployment office training, and staffing, a top 
recommendation of UI experts and our hearing witnesses, and 
something specifically requested by the State of Missouri. They 
also voted against an amendment to include cross-matching 
systems targeted at the fastest-growing types of UI fraud and 
allow the DOL to ensure their use in all states.
    The bill purports to replace the substantial funding cut by 
allowing states to keep a portion of recovered fraudulent 
payments, a slow and relatively unpredictable funding source 
largely out of state control. According to the Department o 
fLabor Inspector General, the primary prosecutor of UI fraud, 
this provision would create a disincentive for states to refer 
UI fraud cases for prosecution, and instead encourage them to 
not prosecute and instead administratively recover the funds so 
that they could plug funding gaps.
    The bill also opens up new fraud pathways by allowing 
states to contract out work currently done by carefully vetted 
and highly trained state staff.A similar policy temporarily 
implemented during the pandemic led to a flood of benefit and 
payment errors by contractors, including one situation where 
the contractor had to pay a $5 million settlement to workers in 
three states whose personally identifiable information was 
shared with fraudsters, and others where states outsourced to 
call centers in other states and other countries and did not 
run background checks on workers dealing with confidential 
information. One overseas contractor made payments to 
individuals in China, Russia, and Nigeria. Committee 
Republicans voted against our amendment to strike the 
contracting out provision.
    Finally, we are deeply concerned about the provisions in 
the bill which would send workers surprise bills for incorrect 
payments during the pandemic for as long as 10 years after the 
payment was made and encourages states to use funds to hire 
``investigators and prosecutors,'' even though pandemic UI 
fraud is a federal crime properly investigated and prosecuted 
by the Inspector General and the Department ofJustice. The 
workers who would receive Republican demand letters are people 
who lost their jobs during the pandemic, followed all of the 
rules and provided honest information when they applied for and 
received UI benefits, and went back to work when it was safe. 
They have no idea that the state made a mistake in their 
payments, and they spent the money that they received in good 
faith to pay for basic necessities like food, shelter, and 
medical expenses.
    The case-by-case individual waiver option for states 
Republicans pointed to would be wholly inadequate to protect 
these workers. It would first require the state to demand that 
the worker repay the overpayment and warn them that penalties 
or interest would accrue if they did not. The worker could then 
file an individual application for a waiver of repayment, but 
not all workers will understand the waiver process or be 
willing to risk a lengthy appeals process, especially since 
H.R. 1163 would allow demand letters long after they had 
discarded any documentation they needed for the application. 
And if workers did file for waivers, state administrators have 
said that processing them would take millions of hours of 
worker time, diverting resources from preventing fraud and 
paying benefits accurately, and also delaying their response to 
panicked workers.
    Democrats offered amendments to protect seniors, Medicare 
and Medicaid recipients, parents, low-wage workers, victims of 
contractor errors, foster families, and farmers from demand 
letters and surprise bills, but our amendments were rejected. 
We stand ready to work with anyone to ensure that criminal 
rings that targeted UI are brought to justice and to prevent 
them from stealing from taxpayers in the future. Unfortunately, 
this bill is a big step backward from that goal.
                                           Richard E. Neal,
                                                    Ranking Member.

        Ranking Member Richard Neal, Opening Statement, 
            Ways and Means Committee Markup of H.R. 1163,
                                           Tuesday, March 28, 2023.
    Democrats strongly agree that those who took advantage of 
the COVID crisis to commit fraud must be held accountable. 
Indeed, it was Ways and Means Democrats that put $2 billion in 
the American Rescue Plan to fight fraud. Every House Republican 
voted against those investments to prevent fraud and hold 
criminals accountable.
    With this funding, the Department of Labor has built 
important new tools to detect and prevent fraud, deployed 
crisis teams to help states investigate fraud, and is 
modernizing information technology systems that were at the 
heart of many of the pandemic challenges. Thanks to House 
Democrats' American Rescue Plan funding, the Department of 
Labor Inspector General has already quadrupled its 
investigations staff and prosecuted over a thousand criminals.
    Democrats took action to hold organized crime rings 
defrauding the federal government to account. Republicans' 
first bill addressing unemployment insurance cuts these 
investments, leaving states in deeper disarray.
    This legislation slashes the fraud fund from the American 
Rescue Plan. It favors contractors who enabled fraud during the 
pandemic over the hard-working state workers who were actually 
on the frontlines of getting benefits out during the pandemic. 
The bill completely ignores the recommendations from the 
Republicans' own hearing witnesses earlier this month to 
modernize state unemployment systems.
    That's what this bill would do about fraud. Needless to 
say, more harm than good.
    State UI systems have been underfunded for far too long, 
and Republicans' attempts to further weaken these systems only 
leave them more vulnerable to bad actors in the event of future 
recessions or crises. Instead of reinforcing these vital 
systems to 2 prevent future errors, the Majority has laid their 
focus on surprise-billing American workers while cutting 
funding to agencies actively holding those who committed 
identity theft and fraud accountable.
    Instead of punishing organized crime, this bill would 
punish America' s workers. It would tell states to hire 
``investigators'' and bill workers for state payment errors 
innocent workers did not know about and were not responsible 
for. And it would have states send those bills as long as 10 
years after the mistake was made. These surprise bills would 
punish America's families all while stunting accountability for 
actual criminals.
    I am proud of the work that this Committee did to help 
Americans when they needed it most. We stepped in when millions 
of workers found themselves jobless overnight through no fault 
of their own. Congress ensured they could feed their children 
and pay their rent. The numbers speak for themselves. These 
benefits kept millions out of poverty in 2020 and 2021, making 
the difference for families in communities in every corner of 
our country. And it served as the trampoline to enable our 
incredible economic recovery, with record job creation in both 
years of President Biden's term so far.
    This Committee should indeed remain committed to the work 
of preventing fraud, but this bill does the opposite: it cuts 
off ongoing federal efforts to prosecute criminals and hurts 
the very workers and families we are charged to protect in the 
first place.
    With that, I yield back the balance of my time.

                                  [all]