H.R. 1163House118th Congress (2023-2025)Passed House

Protecting Taxpayers and Victims of Unemployment Fraud Act

Introduced February 24, 2023

AI-Generated Summary

Updated January 20, 2026 at 3:55 AM UTC

The Protecting Taxpayers and Victims of Unemployment Fraud Act gives states a financial incentive to chase down fraudulently paid unemployment benefits. It lets states keep a portion of recovered funds and use them for fraud‑prevention and system upgrades, while extending the recovery window to ten years. The bill also sets data‑matching requirements, extends emergency staffing flexibility, and limits fraud prosecutions to ten years.

Key Provisions

  • States may retain 25% of any amount recovered from fraudulent pandemic unemployment payments to fund modernizing systems, reimburse administrative costs, hire investigators, or other integrity activities.
  • The recovery period for pandemic unemployment assistance and emergency compensation is extended from three to ten years.
  • States may deposit up to 5% of recovered overpayments into a state fund for fraud deterrence, technology upgrades, and related purposes.
  • States must certify use of data‑matching tools such as the National Directory of New Hires, state data‑exchange systems, and checks for incarcerated or deceased claimants.
  • Emergency staffing changes for fraud detection are exempt from certain federal staffing rules and may continue through Dec. 31, 2030.
  • Any criminal or civil action for unemployment fraud must be filed within ten years of the offense.
  • The CARES Act budget offset provision is repealed, and unused CARES funds may be transferred to the Treasury to support state unemployment trust accounts as needed.

Legislative Activity

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19 earlier actions
HouseFloor Latest Action

Motion to reconsider laid on the table Agreed to without objection.

May 11, 2023 • 4:37 PM

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HouseIntro Referral

Introduced in House

February 24, 2023

HouseIntro Referral

Referred to the House Committee on Ways and Means.

February 24, 2023

HouseCommittee

Committee Consideration and Mark-up Session Held.

February 28, 2023

HouseCommittee

Ordered to be Reported in the Nature of a Substitute (Amended) by the Yeas and Nays: 20 - 17.

February 28, 2023

HouseCommittee

Reported (Amended) by the Committee on Ways and Means. H. Rept. 118-34.

April 6, 2023

HouseCalendars

Placed on the Union Calendar, Calendar No. 21.

April 6, 2023

HouseFloor

Rules Committee Resolution H. Res. 383 Reported to House. Rule provides for consideration of H.R. 2 and H.R. 1163. The resolution provides for consideration of H.R. 2 under a closed rule with five hours of general debate, and the resolution provides for consideration of H.R. 1163 under a closed rule with one hour of general debate. The resolution provides for a motion to recommit on each measure.

May 10, 2023 • 10:01 AM

HouseFloor

Rule H. Res. 383 passed House.

May 10, 2023 • 6:21 PM

HouseFloor

Considered under the provisions of rule H. Res. 383. (consideration: CR H2281-2292)

May 11, 2023 • 2:36 PM

HouseFloor

Rule provides for consideration of H.R. 2 and H.R. 1163. The resolution provides for consideration of H.R. 2 under a closed rule with five hours of general debate, and the resolution provides for consideration of H.R. 1163 under a closed rule with one hour of general debate. The resolution provides for a motion to recommit on each measure.

May 11, 2023 • 2:36 PM

HouseFloor

DEBATE - The House proceeded with one hour of debate on H.R. 1163.

May 11, 2023 • 2:37 PM

HouseFloor

The previous question was ordered pursuant to the rule.

May 11, 2023 • 3:38 PM

HouseFloor

Mrs. Sykes moved to recommit to the Committee on Ways and Means. (text: CR H2292)

May 11, 2023 • 3:38 PM

HouseFloor

The previous question on the motion to recommit was ordered pursuant to clause 2(b) of rule XIX.

May 11, 2023 • 3:38 PM

HouseFloor

POSTPONED PROCEEDINGS - The Chair put the question on the motion to recommit the bill and by voice vote announced the noes had prevailed. Mrs. Sykes demanded the yeas and nays, and the Chair postoned further proceedings until a time to be announced.

May 11, 2023 • 3:39 PM

HouseFloor

Considered as unfinished business. (consideration: CR H2294-2295)

May 11, 2023 • 4:23 PM

HouseFloor

On motion to recommit Failed by the Yeas and Nays: 210 - 221 (Roll no. 210).

May 11, 2023 • 4:29 PM

HouseFloor

Passed/agreed to in House: On passage Passed by recorded vote: 230 - 200 (Roll no. 211). (text: CR H2281-2283)

May 11, 2023 • 4:37 PM

HouseFloor

On passage Passed by recorded vote: 230 - 200 (Roll no. 211). (text: CR H2281-2283)

May 11, 2023 • 4:37 PM

HouseFloor

Motion to reconsider laid on the table Agreed to without objection.

May 11, 2023 • 4:37 PM

Floor Debate

21 members

What members said about H.R. 1163 on the floor

15 Republicans6 Democrats
James P. McGovern
Rep. James P. McGovernD-MA-2 · Sep 18, 2024

Mr. Speaker, I thank the gentlewoman from Indiana for yielding me the time, and I yield myself such time as I may consume. Mr. Speaker, it is good to be back on the House floor with the gentlewoman…

Mary Gay Scanlon
Rep. Mary Gay ScanlonD-PA-5 · May 10, 2023

Mr. Speaker, I thank the gentleman from Texas for yielding the customary 30 minutes, and I yield myself such time as I may consume. Mr. Speaker, it is now after 4 o'clock in the afternoon. We were…

Chip Roy
Rep. Chip RoyR-TX-21 · May 10, 2023

Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 383 and ask for its immediate consideration. Mr. Speaker, for the purpose of debate only, I yield the customary 30…

Jason Smith
Rep. Jason SmithR-MO-8 · May 11, 2023

Mr. Speaker, pursuant to House Resolution 383, I call up the bill (H.R. 1163) to provide incentives for States to recover fraudulently paid Federal and State unemployment compensation, and for other…

Erin Houchin
Rep. Erin HouchinR-IN-9 · Sep 18, 2024

Mr. Speaker, for the purpose of debate only, I yield the customary 30 minutes to the gentleman from Massachusetts (Mr. McGovern), pending which I yield myself such time as I may consume. During…

Show 8 more
Danny K. Davis
Rep. Danny K. DavisD-IL-7 · May 11, 2023

Mr. Speaker, I yield myself such time as I may consume. Democrats strongly agree that those who took advantage of the COVID crisis to commit fraud must be held accountable. Indeed, Democrats put $2…

Sheila Jackson Lee
Rep. Sheila Jackson LeeD-TX-18 · May 11, 2023

Mr. Speaker, let me say that I believe in border security at the southern border. I also believe in the fact that we are a land of immigrants, as well as a land of laws. Here we have two bad bills…

Darin LaHood
Rep. Darin LaHoodR-IL-16 · May 11, 2023

Mr. Speaker, I thank Chairman Smith for yielding. Mr. Speaker, today, Republicans are following through on our promise to the American people last fall in our commitment to a government that is…

Ron Estes
Rep. Ron EstesR-KS-4 · May 11, 2023

Mr. Speaker, I rise today in support of the Protecting Taxpayers and Victims of Unemployment Fraud Act. Right now, our Federal Government is borrowing one out of $5 we spend, over $45,000 a second.…

James P. McGovern
Rep. James P. McGovernD-MA-2 · May 10, 2023

Mr. Speaker, we are about to debate H.R. 2, a horrible immigration bill that betrays our values, hurts our farmers, and makes it easier to put fentanyl on our streets. We are told it was rewritten in…

Ralph Norman
Rep. Ralph NormanR-SC-5 · May 10, 2023

Mr. Speaker, hearing my friends on the other side of the aisle talk, you know, we really are in two different universes. We live in two different universes. The invasion that is happening at the…

Michael C. Burgess
Rep. Michael C. BurgessR-TX-26 · Sep 18, 2024

Mr. Speaker, I thank the gentlewoman for yielding. Mr. Speaker, the reason we are here is because the average family of four is paying over $17,000 more per year thanks to the policies of the…

Ralph Norman
Rep. Ralph NormanR-SC-5 · Sep 18, 2024

Mr. Speaker, I thank and appreciate Mrs. Houchin for putting forward these bills. I am glad there are citizens up here listening to the two different points of view. We are totally different. Some of…

Show 11 more
Beth Van Duyne
Rep. Beth Van DuyneR-TX-24 · May 10, 2023

Mr. Speaker, I rise in support of this bill. President's Biden's policies have caused a massive surge of 370,000 unaccompanied children to come to our southwest border since he took office. Where is…

Michael C. Burgess
Rep. Michael C. BurgessR-TX-26 · May 10, 2023

Mr. Speaker, I rise today in support of the rule and the underlying bill, H.R. 2, the Secure the Border Act of 2023. For over 2 years, the Biden administration has continued to ignore crisis after…

Lloyd Smucker
Rep. Lloyd SmuckerR-PA-11 · May 11, 2023

Mr. Speaker, I thank the chairman for yielding. Mr. Speaker, the premise of this bill is simple: Criminals and fraudsters should be held accountable for dollars that were illegally obtained, and we…

Veronica Escobar
Rep. Veronica EscobarD-TX-16 · Sep 18, 2024

Mr. Speaker, we are only 12 days away from a potential government shutdown, and yet here we are debating yet another slate of unserious Republican policies, so-called antiwoke bills. Instead of…

Teresa Leger Fernandez
Rep. Teresa Leger FernandezD-NM-3 · May 10, 2023

Mr. Speaker, I have been at the border. I have seen the sadness and faint hope in the faces of the children seeking asylum. Imagine the desperation a mother must feel sending a child across a…

Claudia Tenney
Rep. Claudia TenneyR-NY-24 · May 11, 2023

Mr. Speaker, I rise in support of H.R. 1163, the Protecting Taxpayers and Victims of Unemployment Fraud Act. This bill makes meaningful strides to recover hundreds of billions of dollars in…

Josh Brecheen
Rep. Josh BrecheenR-OK-2 · May 10, 2023

Mr. Speaker, title 42 expires tomorrow. As Republicans are advancing the most conservative border bill ever, this administration is going to usher in more chaos on the southern border. It is going to…

Michelle Fischbach
Rep. Michelle FischbachR-MN-7 · Sep 18, 2024

Mr. Speaker, I rise today in support of H.R. 5717, the No Bailout for Sanctuary Cities Act. I do have to comment that the ranking member and I sit on the Rules Committee, and the ranking member and I…

Mark Alford
Rep. Mark AlfordR-MO-4 · May 10, 2023

Mr. Speaker, I rise today to express my strong support for the rules package of H.R. 2, the Secure the Border Act. One year ago today I was on the border with Mexico to see firsthand the deadly,…

Bob Good
Rep. Bob GoodR-VA-5 · May 10, 2023

Mr. Speaker, I thank my friend from Texas for his leadership on this initiative and on this bill. It is sad that we find ourselves today having to force the administration to enforce the security of…

Mike Carey
Rep. Mike CareyR-OH-15 · May 11, 2023

Mr. Speaker, I rise in support of H.R. 1163. Our jobs recovery has been hampered by bloated COVID relief benefits that paid people more not to work, while criminals and fraudsters were lining their…

Bill Text

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Latest
Engrossed in HouseIssued May 11, 2023

118th CONGRESS

1st Session

H. R. 1163

AN ACT

To provide incentives for States to recover fraudulently paid Federal and State unemployment compensation, and for other purposes.

1.

Short title

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

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.

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.

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.

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.

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.

7.

Budget offset

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

8.

State fund contingency

Subject to appropriations, the unobligated balance as of the day before the date of the enactment of this Act of amounts made available under section 2118 of the CARES Act (15 U.S.C. 9034) shall be transferred to the Secretary of the Treasury and periodically credited, on an as-needed basis, to the appropriate State account in the Unemployment Trust Fund established by section 904 of the Social Security Act (42 U.S.C. 1104) in an amount that replaces the amount deposited by a State in a State fund in accordance with subparagraph (H) or (I) of section 3304(a)(4) of the Internal Revenue Code of 1986 (as amended by section 3(a) of this Act) if the amount in such State account is less than the amount that would be in such State account if such subparagraphs had not been enacted.

Passed the House of Representatives May 11, 2023.

Clerk.