To provide a substitute to title III.

SA 4177. Mr. GRASSLEY (for himself, Mr. Obama, Mr. Baucus, and Mr.
Kennedy) submitted an amendment intended to be proposed by him to the
bill S. 2611, to provide for comprehensive immigration reform and for
other purposes, as follows:

Strike title III and insert the following:

TITLE III--UNLAWFUL EMPLOYMENT OF ALIENS

SEC. 301. UNLAWFUL EMPLOYMENT OF ALIENS.

(a) In General.--Section 274A (8 U.S.C. 1324a) is amended
to read as follows:

``SEC. 274A. UNLAWFUL EMPLOYMENT OF ALIENS.

``(a) Making Employment of Unauthorized Aliens Unlawful.--
``(1) In general.--It is unlawful for an employer--
``(A) to hire, or to recruit or refer for a fee, an alien
for employment in the United States knowing, or with reckless
disregard, that the alien is an unauthorized alien with
respect to such employment; or
``(B) to hire, or to recruit or refer for a fee, for
employment in the United States an individual unless such
employer meets the requirements of subsections (c) and (d).
``(2) Continuing employment.--It is unlawful for an
employer, after lawfully hiring an alien for employment, to
continue to employ the alien in the United States knowing
that the alien is (or has become) an unauthorized alien with
respect to such employment.
``(3) Use of labor through contract.--
``(A) In general.--An employer who uses a contract,
subcontract, or exchange to obtain the labor of an alien in
the United States knowing, or with reckless disregard--
``(i) that the alien is an unauthorized alien with respect
to performing such labor, shall be considered to have hired
the alien in violation of paragraph (1)(A); or
``(ii) that the person hiring such alien failed to comply
with the requirements of subsections (c) and (d) shall be
considered to have hired the alien in violation of paragraph
(1)(B).
``(B) Information sharing.--The person hiring the alien
shall provide to the employer, who obtains the labor of the
alien, the employer identification number assigned to such
person by the Commissioner of Internal Revenue. Failure to
provide such number shall be considered a recordkeeping
violation under subsection (e)(4)(B).
``(C) Reporting requirement.--The employer shall submit to
the Electronic Verification System established under
subsection (d), in a manner prescribed by the Secretary, the
employer identification number provided by the person hiring
the alien. Failure to submit such number shall be considered
a recordkeeping violation under subsection (e)(4)(B).

[[Page S5014]]

``(D) Enforcement.--The Secretary shall implement
procedures to utilize the information obtained under
subparagraphs (B) and (C) to identify employers who use a
contract, subcontract, or exchange to obtain the labor of an
alien from another person, where such person hiring such
alien fails to comply with the requirements of subsections
(c) and (d).
``(4) Defense.--
``(A) In general.--Subject to subparagraph (B), an employer
that establishes that the employer has complied in good faith
with the requirements of subsections (c) and (d) has
established an affirmative defense that the employer has not
violated paragraph (1)(A) with respect to such hiring,
recruiting, or referral.
``(B) Exception.--Until the date that an employer is
required to participate in the Electronic Employment
Verification System under subsection (d) or is participating
in such System on a voluntary basis, the employer may
establish an affirmative defense under subparagraph (A) by
complying with the requirements of subsection (c).
``(b) Order of Internal Review and Certification of
Compliance.--
``(1) Authority to require certification.--If the Secretary
has reasonable cause to believe that an employer has failed
to comply with this section, the Secretary is authorized, at
any time, to require that the employer certify that the
employer is in compliance with this section, or has
instituted a program to come into compliance.
``(2) Content of certification.--Not later than 60 days
after the date an employer receives a request for a
certification under paragraph (1) the employer shall certify
under penalty of perjury that--
``(A) the employer is in compliance with the requirements
of subsections (c) and (d); or
``(B) that the employer has instituted a program to come
into compliance with such requirements.
``(3) Extension.--The 60-day period referred to in
paragraph (2), may be extended by the Secretary for good
cause, at the request of the employer.
``(4) Publication.--The Secretary is authorized to publish
in the Federal Register standards or methods for
certification under paragraph (1) and for specific
recordkeeping practices with respect to such certification,
and procedures for the audit of any records related to such
certification.
``(c) Document Verification Requirements.--An employer
hiring, or recruiting or referring for a fee, an individual
for employment in the United States shall verify that the
individual is eligible for such employment by meeting the
following requirements:
``(1) Attestation by employer.--
``(A) Requirements.--
``(i) In general.--The employer shall attest, under penalty
of perjury and on a form prescribed by the Secretary, that
the employer has verified the identity and eligibility for
employment of the individual by examining a document
described in subparagraph (B).
``(ii) Signature requirements.--An attestation required by
clause (i) may be manifested by a handwritten or electronic
signature.
``(iii) Standards for examination.--The employer has
complied with the requirement of this paragraph with respect
to examination of documentation if a reasonable person would
conclude that the document examined is genuine and relates to
the individual whose identity and eligibility for employment
in the United States is being verified. If the individual
provides a document sufficient to meet the requirements of
this paragraph, nothing in this paragraph shall be construed
as requiring an employer to solicit any other document or as
requiring the individual to produce any other document.
``(B) Identification documents.--A document described in
this subparagraph is--
``(i) in the case of an individual who is a national of the
United States--

``(I) a United States passport; or
``(II) a driver's license or identity card issued by a
State, the Commonwealth of the Northern Mariana Islands, or
an outlying possession of the United States that satisfies
the requirements of division B of Public Law 109-13 (119
Stat. 302);

``(ii) in the case of an alien lawfully admitted for
permanent residence in the United States, a permanent
resident card, as specified by the Secretary;
``(iii) in the case of an alien who is authorized under
this Act or by the Secretary to be employed in the United
States, an employment authorization card, as specified by the
Secretary that--

``(I) contains a photograph of the individual or other
identifying information, including name, date of birth,
gender, and address; and
``(II) contains security features to make the document
resistant to tampering, counterfeiting, and fraudulent use;

``(iv) in the case of an individual who is unable to obtain
a document described in clause (i), (ii), or (iii), a
document designated by the Secretary that--

``(I) contains a photograph of the individual or other
identifying information, including name, date of birth,
gender, and address; and
``(II) contains security features to make the document
resistant to tampering, counterfeiting, and fraudulent use;
or

``(v) until the date that an employer is required to
participate in the Electronic Employment Verification System
under subsection (d) or is participating in such System on a
voluntary basis, a document, or a combination of documents,
of such type that, as of the date of the enactment of the
Comprehensive Immigration Reform Act of 2006, the Secretary
had established by regulation were sufficient for purposes of
this section.
``(C) Authority to prohibit use of certain documents.--
``(i) Authority.--If the Secretary finds that a document or
class of documents described in subparagraph (B) is not
reliable to establish identity or is being used fraudulently
to an unacceptable degree, the Secretary shall prohibit, or
impose conditions, on the use of such document or class of
documents for purposes of this subsection.
``(ii) Requirement for publication.--The Secretary shall
publish notice of any findings under clause (i) in the
Federal Register.
``(2) Attestation of employee.--
``(A) Requirements.--
``(i) In general.--The individual shall attest, under
penalty of perjury on the form described in paragraph
(1)(A)(i), that the individual is a national of the United
States, an alien lawfully admitted for permanent residence,
or an alien who is authorized under this Act or by the
Secretary to be hired, or to be recruited or referred for a
fee, in the United States.
``(ii) Signature for examination.--An attestation required
by clause (i) may be manifested by a handwritten or
electronic signature.
``(B) Penalties.--An individual who falsely represents that
the individual is eligible for employment in the United
States in an attestation required by subparagraph (A) shall,
for each such violation, be subject to a fine of not more
than $5,000, a term of imprisonment not to exceed 3 years, or
both.
``(3) Retention of attestation.--The employer shall retain
a paper, microfiche, microfilm, or electronic version of the
attestations made under paragraph (1) and (2) and make such
attestations available for inspection by an officer of the
Department of Homeland Security, any other person designated
by the Secretary, the Special Counsel for Immigration-Related
Unfair Employment Practices of the Department of Justice, or
the Secretary of Labor during a period beginning on the date
of the hiring, or recruiting or referring for a fee, of the
individual and ending--
``(A) in the case of the recruiting or referral for a fee
(without hiring) of an individual, 5 years after the date of
the recruiting or referral; or
``(B) in the case of the hiring of an individual the later
of--
``(i) 5 years after the date of such hiring;
``(ii) 1 year after the date the individual's employment is
terminated; or
``(iii) in the case of an employer or class of employers, a
period that is less than the applicable period described in
clause (i) or (ii) if the Secretary reduces such period for
such employer or class of employers.
``(4) Document retention and recordkeeping requirements.--
``(A) Retention of documents.--Notwithstanding any other
provision of law, an employer shall retain, for the
applicable period described in paragraph (3), the following
documents:
``(i) In general.--The employer shall copy all documents
presented by an individual described in paragraph (1)(B) and
shall retain paper, microfiche, microfilm, or electronic
copies of such documents. Such copies shall be designated as
copied documents.
``(ii) Other documents.--The employer shall maintain
records of any action taken and copies of any correspondence
written or received with respect to the verification of an
individual's identity or eligibility for employment in the
United States.
``(B) Use of retained documents.--An employer shall use
copies retained under clause (i) or (ii) of subparagraph (A)
only for the purposes of complying with the requirements of
this subsection, except as otherwise permitted under law.
``(5) Penalties.--An employer that fails to comply with the
recordkeeping requirements of this subsection shall be
subject to the penalties described in subsection (e)(4)(B).
``(6) No authorization of national identification cards.--
Nothing in this section may be construed to authorize,
directly or indirectly, the issuance, use, or establishment
of a national identification card.
``(d) Electronic Employment Verification System.--
``(1) Requirement for system.--The Secretary, in
cooperation with the Commissioner of Social Security, shall
implement an Electronic Employment Verification System
(referred to in this subsection as the `System') to determine
whether--
``(A) the identifying information submitted by an
individual is consistent with the information maintained by
the Secretary or the Commissioner of Social Security; and
``(B) such individual is eligible for employment in the
United States.
``(2) Requirement for participation.--The Secretary shall
require all employers in the United States to participate in
the System, with respect to all employees hired by the
employer on or after the date that is 18 months after the
date that not less than $400,000,000 have been appropriated
and made available to implement this subsection.
``(3) Other participation in system.--Notwithstanding
paragraph (2), the Secretary has the authority--
``(A) to permit any employer that is not required to
participate in the System under

[[Page S5015]]

paragraph (2) to participate in the System on a voluntary
basis; and
``(B) to require any employer or class of employers to
participate on a priority basis in the System with respect to
individuals employed as of, or hired after, the date of
enactment of the Comprehensive Immigration Reform Act of
2006--
``(i) if the Secretary designates such employer or class of
employers as a critical employer based on an assessment of
homeland security or national security needs; or
``(ii) if the Secretary has reasonable cause to believe
that the employer has engaged in material violations of
paragraph (1), (2), or (3) of subsection (a).
``(4) Requirement to notify.--The Secretary shall notify
the employer or class of employers in writing regarding the
requirement for participation in the System under paragraph
(3)(B) not less than 60 days prior to the effective date of
such requirement. Such notice shall include the training
materials described in paragraph (8)(E)(v).
``(5) Registration of employers.--An employer shall
register the employer's participation in the System in the
manner prescribed by the Secretary prior to the date the
employer is required or permitted to submit information with
respect to an employee under this subsection.
``(6) Additional guidance.--A registered employer shall be
permitted to utilize any technology that is consistent with
this section and with any regulation or guidance from the
Secretary to streamline the procedures to facilitate
compliance with--
``(A) the attestation requirement in subsection (c); and
``(B) the employment eligibility verification requirements
in this subsection.
``(7) Consequence of failure to participate.--If an
employer is required to participate in the System and fails
to comply with the requirements of the System with respect to
an employee--
``(A) such failure shall be treated as a violation of
subsection (a)(1)(B); and
``(B) a rebuttable presumption is created that the employer
has violated subsection (a)(1)(A), however, such presumption
may not apply to a prosecution under subsection (f)(1).
``(8) Design and operation of system.--
``(A) In general.--The Secretary shall, through the
System--
``(i) respond to each inquiry made by a registered employer
through the Internet or other electronic media, or over a
toll-free telephone line regarding an individual's identity
and eligibility for employment in the United States; and
``(ii) maintain a record of each such inquiry and the
information provided in response to such inquiry.
``(B) Initial inquiry.--
``(i) Information required.--A registered employer shall,
with respect to the hiring, or recruiting or referring for a
fee, any individual for employment in the United States,
obtain from the individual and record on the form described
in subsection (c)(1)(A)(i)--

``(I) the individual's name and date of birth and, if the
individual was born in the United States, the State in which
such individual was born;
``(II) the individual's social security account number;
``(III) the employment identification number of the
individual's employer during any one of the 5 most recently
completed calendar years; and
``(IV) in the case of an individual who does not attest
that the individual is a national of the United States under
subsection (c)(2), such alien identification or authorization
number that the Secretary shall require.

``(ii) Submission to system.--A registered employer shall
submit an inquiry through the System to seek confirmation of
the individual's identity and eligibility for employment in
the United States--

``(I) not later than 3 days after the date of the hiring,
or recruiting or referring for a fee, of the individual (as
the case may be); or
``(II) in the case of an employee hired by a critical
employer designated by the Secretary under paragraph (3)(B)
at such time as the Secretary shall specify.

``(iii) EIN requirements.--

``(I) Requirement to provide.--An employer shall provide
the employer identification number issued to such employer to
the individual, upon request, for purposes of providing the
information under clause (i)(III).
``(II) Requirement to affirmatively state a lack of recent
employment.--An individual providing information under clause
(i)(III) who was not employed in the United States during any
of the 5 most recently completed calendar years shall
affirmatively state on the form described in subsection
(c)(1)(A)(i) that no employer identification number is
provided because the individual was not employed in the
United States during such period.

``(C) Initial response.--Not later than 10 days after an
employer submits an inquiry to the System regarding an
individual, the Secretary shall provide, through the System,
to the employer--
``(i) if the System is able to confirm the individual's
identity and eligibility for employment in the United States,
a confirmation notice, including the appropriate codes on
such confirmation notice; or
``(ii) if the System is unable to confirm the individual's
identity or eligibility for employment in the United States,
and after a secondary manual verification has been conducted,
a tentative nonconfirmation notice, including the appropriate
codes on such tentative nonconfirmation notice.
``(D) Confirmation or nonconfirmation.--
``(i) Confirmation upon initial inquiry.--If an employer
receives a confirmation notice under paragraph (C)(i) for an
individual, the employer shall record, on the form described
in subsection (c)(1)(A)(i), the appropriate code provided in
such notice.
``(ii) Tentative nonconfirmation.--If an employer receives
a tentative nonconfirmation notice under paragraph (C)(ii)
for an individual, the employer shall inform such individual
of the issuance of such notice in writing, on a form
prescribed by the Secretary not later than 3 days after
receiving such notice. Such individual shall acknowledge
receipt of such notice in writing on the form described in
subsection (c)((1)(A)(i).
``(iii) No contest.--If the individual does not contest the
tentative nonconfirmation notice within 10 days of receiving
notice from the individual's employer, the notice shall
become final and the employer shall record on the form
described in subsection (c)(2), the appropriate code provided
through the System to indicate the individual did not contest
the tentative nonconfirmation. An individual's failure to
contest a tentative nonconfirmation shall not be considered
an admission of guilt with respect to any violation of this
Act or any other provision of law.
``(iv) Contest.--If the individual contests the tentative
nonconfirmation notice, the individual shall submit
appropriate information to contest such notice under the
procedures established in subparagraph (E)(iii) not later
than 10 days after receiving the notice from the individual's
employer.
``(v) Effective period of tentative nonconfirmation
notice.--A tentative nonconfirmation notice shall remain in
effect until such notice becomes final under clause (iii), or
the earlier of--

``(I) a final confirmation notice or final nonconfirmation
notice is issued through the System; or
``(II) 30 days after the individual contests a tentative
nonconfirmation under clause (iv).

``(vi) Automatic final notice.--

``(I) In general.--If a final notice is not issued within
the 30-day period described in clause (v)(II), the Secretary
shall automatically provide to the employer, through the
System, the appropriate code indicating a final notice.
``(II) Period prior to initial certification.--During the
period beginning on the date of the enactment of the
Comprehensive Immigration Reform Act of 2006 and ending on
the date the Secretary submits the initial report described
in subparagraph (E)(ii), an automatic notice issued under
subclause (I) shall be a final confirmation notice.
``(III) Period after initial certification.--After the date
that the Secretary submits the initial report described in
subparagraph (E)(ii), an automatic notice issued under
subclause (I) shall be a final confirmation notice unless the
most recent such report includes a certification that the
System is able to correctly issue, within the period
beginning on the date an employer submits an inquiry to the
System and ending on the date an automatic default notice
would be issued by the System, a final notice in at least 99
percent of the cases in which the notice relates to an
individual who is eligible for employment in the United
States. If the most recent such report includes such a
certification, the automatic notice issued under subclause
(I) shall be a final nonconfirmation notice.
``(IV) Additional authority.--Notwithstanding the second
sentence of subclause (III), the Secretary shall have the
authority to issue a final confirmation notice for an
individual who would be subject to a final nonconfirmation
notice under such sentence. In such a case, the Secretary
shall determine the individual's eligibility for employment
in the United States and record the results of such
determination in the System within 12 months.

``(vii) Effective period of final notice.--A final
confirmation notice issued under this paragraph for an
individual shall remain in effect--

``(I) during any continuous period of employment of such
individual by such employer, unless the Secretary determines
the final confirmation was the result of identity fraud; or
``(II) in the case of an alien authorized to be employed in
the United States for a temporary period, during such period.

``(viii) Prohibition on termination.--An employer may not
terminate the employment of an individual based on a
tentative nonconfirmation notice until such notice becomes
final under clause (iii) or a final nonconfirmation notice is
issued for the individual by the System. Nothing in this
clause shall prohibit the termination of employment for any
reason other than such tentative nonconfirmation.
``(ix) Recording of contest resolution.--The employer shall
record on the form described in subsection (c)(1)(A)(i) the
appropriate code that is provided through the System to
indicate a final confirmation notice or final nonconfirmation
notice.
``(x) Consequences of nonconfirmation.--If the employer has
received a final nonconfirmation regarding an individual, the
employer shall terminate the employment, recruitment, or
referral of the individual. Such employer shall provide to
the Secretary any information relating to the individual that
the Secretary determines would assist the

[[Page S5016]]

Secretary in enforcing or administering the immigration laws.
If the employer continues to employ, recruit, or refer the
individual after receiving final nonconfirmation, a
rebuttable presumption is created that the employer has
violated subsections (a)(1)(A) and (a)(2). Such presumption
may not apply to a prosecution under subsection (f)(1).
``(E) Responsibilities of the secretary.--
``(i) In general.--The Secretary shall establish a
reliable, secure method to provide through the System, within
the time periods required by this subsection--

``(I) a determination of whether the name and alien
identification or authorization number provided in an inquiry
by an employer is consistent with such information maintained
by the Secretary in order to confirm the validity of the
information provided; and
``(II) a determination of whether the individual is
authorized to be employed in the United States.

``(ii) Annual report and certification.--Not later than the
date that is 24 months after the date that not less than
$400,000,000 have been appropriated and made available to the
Secretary to implement this subsection, and annually
thereafter, the Secretary shall submit to Congress a report
that includes--

``(I) an assessment of whether the System is able to
correctly issue, within the period described in subparagraph
(D)(v)(II), a final notice in at least 99 percent of the
cases in which the final notice relates to an individual who
is eligible for employment in the United States (excluding an
individual who fails to contest a tentative nonconfirmation
notice); and
``(II) if the assessment under subclause (I) is that the
System is able to correctly issue within the specified time
period a final notice in at least 99 percent of the cases
described in such subclause, a certification of such
assessment.

``(iii) Contest and self-verification.--The Secretary in
consultation with the Commissioner of Social Security, shall
establish procedures to permit an individual who contests a
tentative or final nonconfirmation notice, or seeks to verify
the individual's own employment eligibility prior to
obtaining or changing employment, to contact the appropriate
agency and, in a timely manner, correct or update the
information used by the System.
``(iv) Information to employee.--The Secretary shall
develop a written form for employers to provide to
individuals who receive a tentative or final nonconfirmation
notice. Such form shall be made available in a language other
than English, as necessary and reasonable, and shall
include--

``(I) information about the reason for such notice;
``(II) the right to contest such notice;
``(III) contact information for the appropriate agency and
instructions for initiating such contest; and
``(IV) a 24-hour toll-free telephone number to respond to
inquiries related to such notice.

``(v) Training materials.--The Secretary shall make
available or provide to the employer, upon request, not later
than 60 days prior to such employer's participation in the
System, appropriate training materials to facilitate
compliance with this subsection, and sections 274B(a)(7) and
274C(a).
``(F) Responsibilities of the commissioner of social
security.--The responsibilities of the Commissioner of Social
Security with respect to the System are set out in section
205(c)(2) of the Social Security Act.
``(9) Protection from liability.--No employer that
participates in the System shall be liable under any law for
any employment-related action taken with respect to an
individual in good faith reliance on information provided by
the System.
``(10) Administrative review.--
``(A) In general.--An individual who is terminated from
employment as a result of a final nonconfirmation notice may,
not later than 60 days after the date of such termination,
file an appeal of such notice.
``(B) Procedures.--The Secretary and Commissioner of Social
Security shall develop procedures to review appeals filed
under subparagraph (A) and to make final determinations on
such appeals.
``(C) Review for errors.--If a final determination on an
appeal filed under subparagraph (A) results in a confirmation
of an individual's eligibility to work in the United States,
the administrative review process shall require the Secretary
to determine if the final nonconfirmation notice issued for
the individual was the result of--
``(i) an error or negligence on the part of an employee or
official operating or responsible for the System;
``(ii) the decision rules, processes, or procedures
utilized by the System; or
``(iii) erroneous system information that was not the
result of acts or omissions of the individual.
``(D) Compensation for error.--
``(i) In general.--If the Secretary makes a determination
under subparagraph (C) that the final nonconfirmation notice
issued for an individual was not caused by an act or omission
of the individual, the Secretary shall compensate the
individual for lost wages.
``(ii) Calculation of lost wages.--Lost wages shall be
calculated based on the wage rate and work schedule that
prevailed prior to termination. The individual shall be
compensated for wages lost beginning on the first scheduled
work day after employment was terminated and ending 180 days
after completion of the administrative review process
described in this paragraph or the day after the individual
is reinstated or obtains employment elsewhere, whichever
occurs first.
``(E) Limitation on compensation.--For purposes of
determining an individual's compensation for the loss of
employment, such compensation shall not include any period in
which the individual was ineligible for employment in the
United States.
``(F) Source of funds.--Compensation or reimbursement
provided under this paragraph shall not be provided from
funds appropriated in annual appropriations Acts to the
Secretary for the Department of Homeland Security.
``(11) Judicial review.--
``(A) In general.--After the Secretary makes a final
determination on an appeal filed by an individual under the
administrative review process described in paragraph (10),
the individual may obtain judicial review of such
determination by a civil action commenced not later than 60
days after the date of such decision, or such further time as
the Secretary may allow.
``(B) Jurisdiction.--A civil action for such judicial
review shall be brought in the district court of the United
States for the judicial district in which the plaintiff
resides, or has a principal place of business, or, if the
plaintiff does not reside or have a principal place of
business within any such judicial district, in the District
Court of the United States for the District of Columbia.
``(C) Answer.--As part of the Secretary's answer to a
complaint for such judicial review, the Secretary shall file
a certified copy of the administrative record compiled during
the administrative review under paragraph (10), including the
evidence upon which the findings and decision complained of
are based. The court shall have power to enter, upon the
pleadings and transcript of the record, a judgment affirming
or reversing the result of that administrative review, with
or without remanding the cause for a rehearing.
``(D) Compensation for error.--
``(i) In general.--In cases in which such judicial review
reverses the final determination of the Secretary made under
paragraph (10), the court shall compensate the individual for
lost wages.
``(ii) Calculation of lost wages.--Lost wages shall be
calculated based on the wage rate and work scheduled that
prevailed prior to termination. The individual shall be
compensated for wages lost beginning on the first scheduled
work day after employment was terminated and ending 180 days
after completion of the judicial review described in this
paragraph or the day after the individual is reinstated or
obtains employment elsewhere, whichever occurs first.
``(12) Limitation on collection and use of data.--
``(A) Limitation on collection of data.--
``(i) In general.--The System shall collect and maintain
only the minimum data necessary to facilitate the successful
operation of the System, and in no case shall the data be
other than--

``(I) information necessary to register employers under
paragraph (5);

``(II) information necessary to initiate and respond to
inquiries or contests under paragraph (8);
``(III) information necessary to establish and enforce
compliance with paragraphs (5) and (8);
``(IV) information necessary to detect and prevent
employment related identity fraud; and
``(V) such other information the Secretary determines is
necessary, subject to a 180 day notice and comment period in
the Federal Register.

``(ii) Penalties.--Any officer, employee, or contractor who
willfully and knowingly collects and maintains data in the
System other than data described in clause (i) shall be
guilty of a misdemeanor and fined not more than $1,000 for
each violation.
``(B) Limitation on use of data.--Whoever willfully and
knowingly accesses, discloses, or uses any information
obtained or maintained by the System--
``(i) for the purpose of committing identity fraud, or
assisting another person in committing identity fraud, as
defined in section 1028 of title 18, United States Code;
``(ii) for the purpose of unlawfully obtaining employment
in the United States or unlawfully obtaining employment in
the United States for any other person; or
``(iii) for any purpose other than as provided for under
any provision of law;
shall be guilty of a felony and upon conviction shall be
fined under title 18, United States Code, or imprisoned for
not more than 5 years, or both.
``(C) Exceptions.--Nothing in subparagraph (A) or (B) may
be construed to limit the collection, maintenance, or use of
data by the Commissioner of Internal Revenue or the
Commissioner of Social Security as provided by law.
``(13) Modification authority.--The Secretary, after notice
is submitted to Congress and provided to the public in the
Federal Register, is authorized to modify the requirements of
this subsection with respect to completion of forms, method
of storage, attestations, copying of documents, signatures,
methods of transmitting information, and other operational
and technical aspects to improve the efficiency, accuracy,
and security of the System.
``(14) Annual gao study and report.--

[[Page S5017]]

``(A) Requirement.--The Comptroller General of the United
States shall conduct an annual study of the System.
``(B) Purpose.--The study shall evaluate the accuracy,
efficiency, integrity, and impact of the System.
``(C) Report.--Not later than the date that is 24 months
after the date that not less than $400,000,000 have been
appropriated and made available to the Secretary to implement
this subsection, and annually thereafter, the Comptroller
General shall submit to Congress a report containing the
findings of the study carried out under this paragraph. Each
such report shall include, at a minimum, the following:
``(i) An assessment of the annual report and certification
described in paragraph (8)(E)(ii).
``(ii) An assessment of System performance with respect to
the rate at which individuals who are eligible for employment
in the United States are correctly approved within each of
the periods specified in paragraph (8), including a separate
assessment of such rate for nationals and aliens.
``(iii) An assessment of the privacy and security of the
System and its effects on identity fraud or the misuse of
personal data.
``(iv) An assessment of the effects of the System on the
employment of unauthorized aliens.
``(v) An assessment of the effects of the System, including
the effects of tentative confirmations, on unfair
immigration-related employment practices and employment
discrimination based on national origin or citizenship
status.
``(vi) An assessment of whether the Secretary and the
Commissioner of Social Security have adequate resources to
carry out the duties and responsibilities of this section.
``(e) Compliance.--
``(1) Complaints and investigations.--The Secretary shall
establish procedures--
``(A) for individuals and entities to file complaints
regarding potential violations of subsection (a);
``(B) for the investigation of such complaints that the
Secretary determines are appropriate to investigate; and
``(C) for the investigation of other violations of
subsection (a) that the Secretary determines is appropriate.
``(2) Authority in investigations.--
``(A) In general.--In conducting investigations and
hearings under this subsection, officers and employees of the
Department of Homeland Security--
``(i) shall have reasonable access to examine evidence
regarding any employer being investigated; and
``(ii) if designated by the Secretary, may compel by
subpoena the attendance of witnesses and the production of
evidence at any designated place in an investigation or case
under this subsection.
``(B) Failure to cooperate.--In case of refusal to obey a
subpoena lawfully issued under subparagraph (A)(ii), the
Secretary may request that the Attorney General apply in an
appropriate district court of the United States for an order
requiring compliance with such subpoena, and any failure to
obey such order may be punished by such court as contempt.
``(C) Department of labor.--The Secretary of Labor shall
have the investigative authority provided under section 11(a)
of the Fair Labor Standards Act of 1938 (29 U.S.C. 211(a)) to
ensure compliance with the provisions of this section.
``(3) Compliance procedures.--
``(A) Prepenalty notice.--If the Secretary has reasonable
cause to believe that there has been a violation of a
requirement of this section and determines that further
proceedings related to such violation are warranted, the
Secretary shall issue to the employer concerned a written
notice of the Secretary's intention to issue a claim for a
fine or other penalty. Such notice shall--
``(i) describe the violation;
``(ii) specify the laws and regulations allegedly violated;
``(iii) specify the amount of fines or other penalties to
be imposed;
``(iv) disclose the material facts which establish the
alleged violation; and
``(v) inform such employer that the employer shall have a
reasonable opportunity to make representations as to why a
claim for a monetary or other penalty should not be imposed.
``(B) Remission or mitigation of penalties.--
``(i) Review by secretary.--If the Secretary determines
that such fine or other penalty was incurred erroneously, or
determines the existence of such mitigating circumstances as
to justify the remission or mitigation of such fine or
penalty, the Secretary may remit or mitigate such fine or
other penalty on the terms and conditions as the Secretary
determines are reasonable and just, or order termination of
any proceedings related to the notice.
``(ii) Applicability.--This subparagraph may not apply to
an employer that has or is engaged in a pattern or practice
of violations of paragraph (1), (2), or (3) of subsection (a)
or of any other requirements of this section.
``(C) Penalty claim.--After considering evidence and
representations offered by the employer, the Secretary shall
determine whether there was a violation and promptly issue a
written final determination setting forth the findings of
fact and conclusions of law on which the determination is
based and the appropriate penalty.
``(4) Civil penalties.--
``(A) Hiring or continuing to employ unauthorized aliens.--
Any employer that violates any provision of paragraph (1),
(2), or (3) of subsection (a) shall pay civil penalties as
follows:
``(i) Pay a civil penalty of not less than $500 and not
more than $4,000 for each unauthorized alien with respect to
each such violation.
``(ii) If the employer has previously been fined 1 time
during the 12-month period preceding the violation under this
subparagraph, pay a civil penalty of not less than $4,000 and
not more than $10,000 for each unauthorized alien with
respect to each such violation.
``(iii) If the employer has previously been fined more than
1 time during the 24-month period preceding the violation
under this subparagraph or has failed to comply with a
previously issued and final order related to any such
provision, pay a civil penalty of not less than $6,000 and
not more than $20,000 for each unauthorized alien with
respect to each such violation.
``(B) Recordkeeping or verification practices.--Any
employer that violates or fails to comply with the
recordkeeping requirements of subsections (a), (c), and (d),
shall pay a civil penalty as follows:
``(i) Pay a civil penalty of not less than $200 and not
more than $2,000 for each such violation.
``(ii) If the employer has previously been fined 1 time
during the 12-month period preceding the violation under this
subparagraph, pay a civil penalty of not less than $400 and
not more than $4,000 for each such violation.
``(iii) If the employer has previously been fined more than
1 time during the 24-month period preceding the violation
under this subparagraph or has failed to comply with a
previously issued and final order related to such
requirements, pay a civil penalty of not less than $600 and
not more than $6,000 for each such violation.
``(C) Other penalties.--Notwithstanding subparagraphs (A)
and (B), the Secretary may impose additional penalties for
violations, including violations of cease and desist orders,
specially designed compliance plans to prevent further
violations, suspended fines to take effect in the event of a
further violation, and in appropriate cases, the criminal
penalty described in subsection (f).
``(5) Judicial review.--An employer adversely affected by a
final determination may, within 45 days after the date the
final determination is issued, file a petition in any
appropriate district court of the United States. The filing
of a petition as provided in this paragraph shall stay the
Secretary's determination until entry of judgment by the
court. The burden shall be on the employer to show that the
final determination was not supported by substantial
evidence. The Secretary is authorized to require that the
petitioner provide, prior to filing for review, security for
payment of fines and penalties through bond or other
guarantee of payment acceptable to the Secretary.
``(6) Enforcement of orders.--If an employer fails to
comply with a final determination issued against that
employer under this subsection, and the final determination
is not subject to review as provided in paragraph (5), the
Attorney General may file suit to enforce compliance with the
final determination, not earlier than 46 days and not later
than 180 days after the date the final determination is
issued, in any appropriate district court of the United
States. In any such suit, the validity and appropriateness of
the final determination shall not be subject to review.
``(7) Recovery of costs and attorney's fees.--In any appeal
brought under paragraph (5) or suit brought under paragraph
(6) of this section the employer shall be entitled to recover
from the Secretary reasonable costs and attorney's fees if
such employer substantially prevails on the merits of the
case. Such an award of attorney's fees may not exceed
$25,000. Any such costs and attorney's fees assessed against
the Secretary shall be charged against the operating expenses
of the Department for the fiscal year in which the assessment
is made, and may not be reimbursed from any other source.
``(f) Criminal Penalties and Injunctions for Pattern or
Practice Violations.--
``(1) Criminal penalty.--An employer that engages in a
pattern or practice of knowing violations of subsection
(a)(1)(A) or (a)(2) shall be fined not more than $20,000 for
each unauthorized alien with respect to whom such a violation
occurs, imprisoned for not more than 3 years for the entire
pattern or practice, or both.
``(2) Enjoining of pattern or practice violations.--If the
Secretary or the Attorney General has reasonable cause to
believe that an employer is engaged in a pattern or practice
of employment, recruitment, or referral in violation of
paragraph (1)(A) or (2) of subsection (a), the Attorney
General may bring a civil action in the appropriate district
court of the United States requesting a permanent or
temporary injunction, restraining order, or other order
against the employer, as the Secretary deems necessary.
``(g) Adjustment for Inflation.--All penalties and
limitations on the recovery of costs and attorney's fees in
this section shall be increased every 4 years beginning
January 2010 to reflect the percentage increase in the
consumer price index for all urban consumers (all items; U.S.
city average) for the 48 month period ending with September
of the year preceding the year such adjustment

[[Page S5018]]

is made. Any adjustment under this subparagraph shall be
rounded to the nearest dollar.
``(h) Prohibition of Indemnity Bonds.--
``(1) Prohibition.--It is unlawful for an employer, in the
hiring, recruiting, or referring for a fee, of an individual,
to require the individual to post a bond or security, to pay
or agree to pay an amount, or otherwise to provide a
financial guarantee or indemnity, against any potential
liability arising under this section relating to such hiring,
recruiting, or referring of the individual.
``(2) Civil penalty.--Any employer which is determined,
after notice and opportunity for mitigation of the monetary
penalty under subsection (e), to have violated paragraph (1)
of this subsection shall be subject to a civil penalty of
$10,000 for each violation and to an administrative order
requiring the return of any amounts received in violation of
such paragraph to the employee or, if the employee cannot be
located, to the Employer Compliance Fund established under
section 286(w).
``(i) Prohibition on Award of Government Contracts, Grants,
and Agreements.--
``(1) Employers with no contracts, grants, or agreements.--
``(A) In general.--If an employer who does not hold a
Federal contract, grant, or cooperative agreement is
determined by the Secretary to be a repeat violator of this
section or is convicted of a crime under this section, the
employer shall be debarred from the receipt of a Federal
contract, grant, or cooperative agreement for a period of 5
years. The Secretary or the Attorney General shall advise the
Administrator of General Services of such a debarment, and
the Administrator of General Services shall list the employer
on the List of Parties Excluded from Federal Procurement and
Nonprocurement Programs for a period of 5 years.
``(B) Waiver.--The Administrator of General Services, in
consultation with the Secretary and the Attorney General, may
waive operation of this subsection or may limit the duration
or scope of the debarment.
``(2) Employers with contracts, grants, or agreements.--
``(A) In general.--An employer who holds a Federal
contract, grant, or cooperative agreement and is determined
by the Secretary to be a repeat violator of this section or
is convicted of a crime under this section, shall be debarred
from the receipt of new Federal contracts, grants, or
cooperative agreements for a period of 5 years.
``(B) Notice to agencies.--Prior to debarring the employer
under subparagraph (A), the Secretary, in cooperation with
the Administrator of General Services, shall advise any
agency or department holding a contract, grant, or
cooperative agreement with the employer of the Government's
intention to debar the employer from the receipt of new
Federal contracts, grants, or cooperative agreements for a
period of 5 years.
``(C) Waiver.--After consideration of the views of any
agency or department that holds a contract, grant, or
cooperative agreement with the employer, the Secretary may,
in lieu of debarring the employer from the receipt of new
Federal contracts, grants, or cooperative agreements for a
period of 5 years, waive operation of this subsection, limit
the duration or scope of the debarment, or may refer to an
appropriate lead agency the decision of whether to debar the
employer, for what duration, and under what scope in
accordance with the procedures and standards prescribed by
the Federal Acquisition Regulation. However, any proposed
debarment predicated on an administrative determination of
liability for civil penalty by the Secretary or the Attorney
General shall not be reviewable in any debarment proceeding.
The decision of whether to debar or take alternate action
under this subparagraph shall not be judicially reviewed.
``(3) Suspension.--Indictments for violations of this
section or adequate evidence of actions that could form the
basis for debarment under this subsection shall be considered
a cause for suspension under the procedures and standards for
suspension prescribed by the Federal Acquisition Regulation.
``(j) Miscellaneous Provisions.--
``(1) Documentation.--In providing documentation or
endorsement of authorization of aliens eligible to be
employed in the United States, the Secretary shall provide
that any limitations with respect to the period or type of
employment or employer shall be conspicuously stated on the
documentation or endorsement (other than aliens lawfully
admitted for permanent residence).
``(2) Preemption.--The provisions of this section preempt
any State or local law imposing civil or criminal sanctions
(other than through licensing and similar laws) upon those
who employ, or recruit or refer for a fee for employment,
unauthorized aliens.
``(k) Deposit of Amounts Received.--Except as otherwise
specified, civil penalties collected under this section shall
be deposited by the Secretary into the Employer Compliance
Fund established under section 286(w).
``(l) Definitions.--In this section:
``(1) Employer.--The term `employer' means any person or
entity, including any entity of the Government of the United
States, hiring, recruiting, or referring an individual for
employment in the United States.
``(2) Secretary.--Except as otherwise provided, the term
`Secretary' means the Secretary of Homeland Security.
``(3) Unauthorized alien.--The term `unauthorized alien'
means, with respect to the employment of an alien at a
particular time, that the alien is not at that time either--
``(A) an alien lawfully admitted for permanent residence;
or
``(B) authorized to be so employed by this Act or by the
Secretary.''.
(b) Conforming Amendments.--
(1) Amendments.--
(A) Repeal of basic pilot.--Sections 401, 402, 403, 404,
and 405 of the Illegal Immigration Reform and Immigrant
Responsibility Act of 1996 (division C of Public Law 104-208;
8 U.S.C. 1324a note) are repealed.
(B) Repeal of reporting requirements.--
(i) Report on earnings of aliens not authorized to work.--
Subsection (c) of section 290 (8 U.S.C. 1360) is repealed.
(ii) Report on fraudulent use of social security account
numbers.--Subsection (b) of section 414 of the Illegal
Immigration Reform and Immigrant Responsibility Act of 1996
(division C of Public Law 104-208; 8 U.S.C. 1360 note) is
repealed.
(2) Construction.--Nothing in this subsection or in
subsection (d) of section 274A, as amended by subsection (a),
may be construed to limit the authority of the Secretary to
allow or continue to allow the participation of employers who
participated in the basic pilot program under sections 401,
402, 403, 404, and 405 of the Illegal Immigration Reform and
Immigrant Responsibility Act of 1996 (division C of Public
Law 104-208; 8 U.S.C. 1324a note) in the Electronic
Employment Verification System established pursuant to such
subsection (d).
(c) Technical Amendments.--
(1) Definition of unauthorized alien.--Sections 218(i)(1)
(8 U.S.C. 1188(i)(1)), 245(c)(8) (8 U.S.C. 1255(c)(8)),
274(a)(3)(B)(i) (8 U.S.C. 1324(a)(3)(B)(i)), and 274B(a)(1)
(8 U.S.C. 1324b(a)(1)) are amended by striking ``274A(h)(3)''
and inserting ``274A''.
(2) Document requirements.--Section 274B (8 U.S.C. 1324b)
is amended--
(A) in subsections (a)(6) and (g)(2)(B), by striking
``274A(b)'' and inserting ``274A(d)''; and
(B) in subsection (g)(2)(B)(ii), by striking ``274A(b)(5)''
and inserting ``274A(d)''.
(d) Amendments to the Social Security Act.--Section
205(c)(2) of the Social Security Act (42 U.S.C. 405(c)(2)) is
amended by adding at the end the following new subparagraphs:
``(I)(i) The Commissioner of Social Security shall, subject
to the provisions of section 301(f)(2) of the Comprehensive
Immigration Reform Act of 2006, establish a reliable, secure
method to provide through the Electronic Employment
Verification System established pursuant to subsection (d) of
section 274A of the Immigration and Nationality Act (referred
to in this subparagraph as the `System'), within the time
periods required by paragraph (8) of such subsection--
``(I) a determination of whether the name, date of birth,
employer identification number, and social security account
number of an individual provided in an inquiry made to the
System by an employer is consistent with such information
maintained by the Commissioner in order to confirm the
validity of the information provided;
``(II) a determination of the citizenship status associated
with such name and social security account number, according
to the records maintained by the Commissioner;
``(III) a determination of whether the name and number
belongs to an individual who is deceased, according to the
records maintained by the Commissioner;
``(IV) a determination of whether the name and number is
blocked in accordance with clause (ii); and
``(V) a confirmation notice or a nonconfirmation notice
described in such paragraph (8), in a manner that ensures
that other information maintained by the Commissioner is not
disclosed or released to employers through the System.
``(ii) The Commissioner of Social Security shall prevent
the fraudulent or other misuse of a social security account
number by establishing procedures under which an individual
who has been assigned a social security account number may
block the use of such number under the System and remove such
block.
``(J) In assigning social security account numbers to
aliens who are authorized to work in the United States under
section 218A of the Immigration and Nationality Act, the
Commissioner of Social Security shall, to the maximum extent
practicable, assign such numbers by employing the enumeration
procedure administered jointly by the Commissioner, the
Secretary of State, and the Secretary.''.
(e) Disclosure of Certain Taxpayer Identity Information.--
(1) In general.--Section 6103(l) of the Internal Revenue
Code of 1986 is amended by adding at the end the following
new paragraph:
``(21) Disclosure of certain taxpayer identity information
by social security administration to department of homeland
security.--
``(A) In general.--From taxpayer identity information which
has been disclosed to the Social Security Administration and
upon written request by the Secretary of Homeland Security,
the Commissioner of Social Security shall disclose directly
to officers, employees, and contractors of the Department of
Homeland Security the following information:
``(i) Disclosure of employer no-match notices.--Taxpayer
identity information of

[[Page S5019]]

each person who has filed an information return required by
reason of section 6051 during calendar year 2006, 2007, or
2008 which contains--

``(I) more than 100 names and taxpayer identifying numbers
of employees (within the meaning of such section) that did
not match the records maintained by the Commissioner of
Social Security, or
``(II) more than 10 names of employees (within the meaning
of such section) with the same taxpayer identifying number.

``(ii) Disclosure of information regarding use of duplicate
employee taxpayer identifying information.--Taxpayer identity
information of each person who has filed an information
return required by reason of section 6051 which the
Commissioner of Social Security has reason to believe, based
on a comparison with information submitted by the Secretary
of Homeland Security, contains evidence of identity fraud due
to the multiple use of the same taxpayer identifying number
(assigned under section 6109) of an employee (within the
meaning of section 6051).
``(iii) Disclosure of information regarding
nonparticipating employers.--Taxpayer identity information of
each person who has filed an information return required by
reason of section 6051 which the Commissioner of Social
Security has reason to believe, based on a comparison with
information submitted by the Secretary of Homeland Security,
contains evidence of such person's failure to register and
participate in the Electronic Employment Verification System
authorized under section 274A(d) of the Immigration and
Nationality Act (hereafter in this paragraph referred to as
the `System').
``(iv) Disclosure of information regarding new employees of
nonparticipating employers.--Taxpayer identity information of
all employees (within the meaning of section 6051) hired
after the date a person identified in clause (iii) is
required to participate in the System under section
274A(d)(2) or section 274A(d)(3)(B) of the Immigration and
Nationality Act.
``(v) Disclosure of information regarding employees of
certain designated employers.--Taxpayer identity information
of all employees (within the meaning of section 6051) of each
person who is required to participate in the System under
section 274A(d)(3)(B) of the Immigration and Nationality Act.
``(vi) Disclosure of new hire taxpayer identity
information.--Taxpayer identity information of each person
participating in the System and taxpayer identity information
of all employees (within the meaning of section 6051) of such
person hired during the period beginning with the later of--

``(I) the date such person begins to participate in the
System, or
``(II) the date of the request immediately preceding the
most recent request under this clause,

ending with the date of the most recent request under this
clause.
``(B) Restriction on disclosure.--The Commissioner of
Social Security shall disclose taxpayer identity information
under subparagraph (A) only for purposes of, and to the
extent necessary in--
``(i) establishing and enforcing employer participation in
the System,
``(ii) carrying out, including through civil administrative
and civil judicial proceedings, of sections 212, 217, 235,
237, 238, 274A, 274B, and 274C of the Immigration and
Nationality Act, and
``(iii) the civil operation of the Alien Terrorist Removal
Court.
``(C) Reimbursement.--The Commissioner of Social Security
shall prescribe a reasonable fee schedule for furnishing
taxpayer identity information under this paragraph and
collect such fees in advance from the Secretary of Homeland
Security.
``(D) Termination.--This paragraph shall not apply to any
request made after the date which is 3 years after the date
of the enactment of this paragraph.''.
(2) Compliance by dhs contractors with confidentiality
safeguards.--
(A) In general.--Section 6103(p) of such Code is amended by
adding at the end the following new paragraph:
``(9) Disclosure to dhs contractors.--Notwithstanding any
other provision of this section, no return or return
information shall be disclosed to any contractor of the
Department of Homeland Security unless such Department, to
the satisfaction of the Secretary--
``(A) has requirements in effect which require each such
contractor which would have access to returns or return
information to provide safeguards (within the meaning of
paragraph (4)) to protect the confidentiality of such returns
or return information,
``(B) agrees to conduct an on-site review every 3 years
(mid-point review in the case of contracts or agreements of
less than 1 year in duration) of each contractor to determine
compliance with such requirements,
``(C) submits the findings of the most recent review
conducted under subparagraph (B) to the Secretary as part of
the report required by paragraph (4)(E), and
``(D) certifies to the Secretary for the most recent annual
period that such contractor is in compliance with all such
requirements.
The certification required by subparagraph (D) shall include
the name and address of each contractor, a description of the
contract or agreement with such contractor, and the duration
of such contract or agreement.''.
(3) Conforming amendments.--
(A) Section 6103(a)(3) of such Code is amended by striking
``or (20)'' and inserting ``(20), or (21)''.
(B) Section 6103(p)(3)(A) of such Code is amended by adding
at the end the following new sentence: ``The Commissioner of
Social Security shall provide to the Secretary such
information as the Secretary may require in carrying out this
paragraph with respect to return information inspected or
disclosed under the authority of subsection (l)(21).''.
(C) Section 6103(p)(4) of such Code is amended--
(i) by striking ``or (17)'' both places it appears and
inserting ``(17), or (21)'', and
(ii) by striking ``or (20)'' each place it appears and
inserting ``(20), or (21)''.
(D) Section 6103(p)(8)(B) of such Code is amended by
inserting ``or paragraph (9)'' after ``subparagraph (A)''.
(E) Section 7213(a)(2) of such Code is amended by striking
``or (20)'' and inserting ``(20), or (21)''.
(f) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated to
the Secretary such sums as are necessary to carry out the
amendments made by this section.
(2) Limitation on verification responsibilities of
commissioner of social security.--The Commissioner of Social
Security is authorized to perform activities with respect to
carrying out the Commissioner's responsibilities in this
title or the amendments made by this title, but only to the
extent the Secretary has provided, in advance, funds to cover
the Commissioner's full costs in carrying out such
responsibilities. In no case shall funds from the Federal
Old-Age and Survivors Insurance Trust Fund or the Federal
Disability Insurance Trust Fund be used to carry out such
responsibilities.
(g) Effective Dates.--
(1) In general.--The amendments made by subsections (a),
(b), (c), and (d) shall take effect on the date that is 180
days after the date of the enactment of this Act.
(2) Subsection (e).--
(A) In general.--The amendments made by subsection (e)
shall apply to disclosures made after the date of the
enactment of this Act.
(B) Certifications.--The first certification under section
6103(p)(9)(D) of the Internal Revenue Code of 1986, as added
by subsection (e)(2), shall be made with respect to calendar
year 2007.

SEC. 302. EMPLOYER COMPLIANCE FUND.

Section 286 (8 U.S.C. 1356) is amended by adding at the end
the following new subsection:
``(w) Employer Compliance Fund.--
``(1) In general.--There is established in the general fund
of the Treasury, a separate account, which shall be known as
the `Employer Compliance Fund' (referred to in this
subsection as the `Fund').
``(2) Deposits.--There shall be deposited as offsetting
receipts into the Fund all civil monetary penalties collected
by the Secretary of Homeland Security under section 274A.
``(3) Purpose.--Amounts refunded to the Secretary from the
Fund shall be used for the purposes of enhancing and
enforcing employer compliance with section 274A.
``(4) Availability of funds.--Amounts deposited into the
Fund shall remain available until expended and shall be
refunded out of the Fund by the Secretary of the Treasury, at
least on a quarterly basis, to the Secretary of Homeland
Security.''.

SEC. 303. ADDITIONAL WORKSITE ENFORCEMENT AND FRAUD DETECTION
AGENTS.

(a) Increase in Number of Personnel.--The Secretary shall,
subject to the availability of appropriations for such
purpose, annually increase, by not less than 2,200, the
number of personnel of the Bureau of Immigration and Customs
Enforcement during the 5-year period beginning on the date of
the enactment of this Act.
(b) Use of Personnel.--The Secretary shall ensure that not
less than 25 percent of all the hours expended by personnel
of the Bureau of Immigration and Customs Enforcement shall be
used to enforce compliance with sections 274A and 274C of the
Immigration and Nationality Act (8 U.S.C. 1324a and 1324c).
(c) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary for each of the fiscal
years 2007 through 2011 such sums as may be necessary to
carry out this section.

SEC. 304. CLARIFICATION OF INELIGIBILITY FOR
MISREPRESENTATION.

Section 212(a)(6)(C)(ii)(I) (8 U.S.C.
1182(a)(6)(C)(ii)(I)), is amended by striking ``citizen'' and
inserting ``national''.

SEC. 305. ANTIDISCRIMINATION PROTECTIONS.

(a) Application of Prohibition of Discrimination to
Verification System.--Section 274B(a)(1) (8 U.S.C.
1324b(a)(1)) is amended by inserting ``, the verification of
the individual's work authorization through the Electronic
Employment Verification System described in section
274A(d),'' after ``the individual for employment''.
(b) Classes of Aliens as Protected Individuals.--Section
274B(a)(3)(B) (8 U.S.C. 1324b(a)(3)(B)) is amended to read as
follows:
``(B) is an alien who is--
``(i) lawfully admitted for permanent residence;
``(ii) granted the status of an alien lawfully admitted for
temporary residence under section 210(a) or 245(a)(1);
``(iii) admitted as a refugee under section 207;

[[Page S5020]]

``(iv) granted asylum under section 208;
``(v) granted the status of a nonimmigrant under section
101(a)(15)(H)(ii)(c);
``(vi) granted temporary protected status under section
244; or
``(vii) granted parole under section 212(d)(5).''.
(c) Requirements for Electronic Employment Verification.--
Section 274B(a) (8 U.S.C. 1324b(a)) is amended by adding at
the end the following:
``(7) Antidiscrimination requirements of the electronic
employment verification system.--It is an unfair immigration-
related employment practice for a person or other entity, in
the course of the electronic verification process described
in section 274A(d)--
``(A) to terminate or undertake any adverse employment
action due to a tentative nonconfirmation;
``(B) to use the verification system for screening of an
applicant prior to an offer of employment;
``(C) except as described in section 274A(d)(3)(B), to use
the verification system for a current employee after the
first 3 days of employment, or for the reverification of an
employee after the employee has satisfied the process
described in section 274A(d); or
``(D) to require an individual to make an inquiry under the
self-verification procedures established in section
274A(d)(8)(E)(iii).''.
(d) Increase in Civil Money Penalties.--Section 274B(g)(2)
(8 U.S.C. 1324b(g)(2)) is amended--
(1) in subparagraph (B)(iv)--
(A) in subclause (I), by striking ``$250 and not more than
$2,000'' and inserting ``$1,000 and not more than $4,000'';
(B) in subclause (II), by striking ``$2,000 and not more
than $5,000'' and inserting ``$4,000 and not more than
$10,000'';
(C) in subclause (III), by striking ``$3,000 and not more
than $10,000'' and inserting ``$6,000 and not more than
$20,000''; and
(D) in subclause (IV), by striking ``$100 and not more than
$1,000'' and inserting ``$500 and not more than $5,000''.
(e) Increased Funding of Information Campaign.--Section
274B(l)(3) (8 U.S.C. 1324b(l)(3)) is amended by inserting
``and an additional $40,000,000 for each of fiscal years 2007
through 2009'' before the period at the end.
(f) Effective Date.--The amendments made by this section
shall take effect on the date that is 180 days after the date
of the enactment of this Act and shall apply to violations
occurring on or after such date.
Subsection (b) of section 402 is amended to read as
follows:
(b) Effective Date and Application.--
(1) Effective date.--The amendment made by subsection (a)
shall take effect on the date that is 18 months after the
date that not less than $400,000,000 have been appropriated
and made available to the Secretary to implement the
Electronic Employment Verification System established under
274A(d) of the Immigration and Nationality Act, as amended by
section 301(a), with respect to aliens, who, on such
effective date, are outside of the United States.
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