H.R. 7847

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7847 Introduced in House (IH)]

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119th CONGRESS
2d Session
H. R. 7847

To amend title III of the Social Security Act and the Federal 
Unemployment Tax Act to require identity verification procedures and 
data matching, to prevent unemployment fraud, and to strengthen work 
search requirements, and for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

March 5, 2026

Mr. Smucker (for himself, Mr. Smith of Nebraska, Mr. Buchanan, Mr. 
Fong, Ms. Van Duyne, Mr. Feenstra, Mr. Miller of Ohio, Ms. Tenney, Mr. 
Kelly of Pennsylvania, Mr. Arrington, Mr. Moore of Utah, Mr. Moran, 
Mrs. Miller of West Virginia, Mr. Bean of Florida, Mr. Yakym, and Mr. 
Estes) introduced the following bill; which was referred to the 
Committee on Ways and Means

_______________________________________________________________________

A BILL

To amend title III of the Social Security Act and the Federal 
Unemployment Tax Act to require identity verification procedures and 
data matching, to prevent unemployment fraud, and to strengthen work 
search requirements, and for other purposes.

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Stop Unemployment Fraud Act''.

SEC. 2. VERIFICATION OF APPLICANT IDENTITY.

(a) In General.--Section 303 of the Social Security Act (42 U.S.C. 
503) is amended by adding at the end the following:
``(n)(1) The State agency charged with the administration of the 
State law shall certify that the State has procedures in place to 
verify the identity of claimants of unemployment compensation, 
including requiring the claimant to provide documentation of their 
identity, which shall consist of--
``(A) at least one currently valid Federal or State 
government-issued identification document; and
``(B) one or more supporting documents, which may include 
utility bills, lease agreements, voter registration cards, 
vehicle registration, insurance documents, or other reliable 
documents, so long as such documents are--
``(i) determined by the State to be sufficient to 
verify the identity of the claimant; or
``(ii) approved by the Secretary for such purpose.
``(2) Not later than 12 months after the date of enactment of this 
subsection, the Secretary of Labor shall promulgate regulations 
governing identity verification procedures for claimants of 
unemployment compensation used by State agencies. Such regulations 
shall--
``(A) take into account--
``(i) administrative costs, including for 
technology and cybersecurity systems; and
``(ii) any other factors the Secretary determines 
appropriate;
``(B) provide due process protections for claimants;
``(C) specify methods to ensure that the documentation 
required under paragraph (1)(A)--
``(i) is accurate, current, and reliable; and
``(ii) does not produce systematic mismatches that 
unfairly deny or delay the payment of unemployment 
compensation;
``(D) require safeguards to ensure that the procedures--
``(i) minimize false positive or negative rates;
``(ii) do not result in the flagging, denial, or 
delay of claims based on the personal characteristics 
of an individual, including race, color, religion, sex, 
national origin, age, disability, or political 
affiliation or belief; and
``(iii) comply with applicable civil rights laws;
``(E) require that such procedures comply with best 
practices for privacy and cybersecurity, as determined by the 
Secretary of Labor;
``(F) any other factors the Secretary determines 
appropriate; and
``(G) include any other provisions necessary to ensure the 
proper implementation, oversight, and continuous improvement of 
data-matching practices under this subsection.
``(3) In this subsection, the term `unemployment compensation' has 
the meaning given the term in subsection (d)(2)(A).''.
(b) Effective Date.--The amendments made by this Act shall apply, 
with respect to a State, to initial applications for unemployment 
compensation received by such State on or after the date that is 2 
years after the date of enactment of this Act.

SEC. 3. PREVENTING UNEMPLOYMENT COMPENSATION FRAUD THROUGH DATA 
MATCHING.

(a) In General.--Section 3304 of the Internal Revenue Code of 1986 
is amended--
(1) by redesignating subsection (f) as subsection (g); and
(2) by inserting after subsection (e) the following:
``(f) Preventing Unemployment Compensation Fraud Through Data 
Matching.--As a condition of eligibility of a State to implement the 
exceptions to the withdrawal standard described in subparagraphs (H) 
and (I) of subsection (a)(4), the State shall certify to the Secretary 
of Labor 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.--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 claimants 
of 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 
subparagraph (A) are employed; and
``(iii) upon making a verification 
described in clause (ii), to take appropriate 
action to deny or reduce unemployment 
compensation payments, and to initiate recovery 
of any overpayments 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 request for information from the 
State workforce agencies.
``(C) Incarcerated individuals.--Request 
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.''.

SEC. 4. STOPPING THE PAY AND CHASE MODEL; PROHIBITION ON SELF-
ATTESTATION.

(a) Payments Due When Eligibility Is Confirmed.--Section 303 of the 
Social Security Act (42 U.S.C. 503) is amended--
(1) in subsection (a)(1), by inserting ``(as described in 
subsection (n))'' after ``when due''; and
(2) by adding at the end the following:
``(o)(1) When Payments Are Due.--For the purposes of subsection 
(a)(1), a payment is due on the date that an individual has established 
eligibility for a benefit year or period, filed a weekly claim for 
unemployment compensation (as defined in subsection (d)(2)(A)), and has 
been determined to have met the requirements of weekly eligibility 
described in paragraphs (10) and (12) of subsection (a), and any 
additional requirements pursuant to State law. Such a payment shall be 
made to the individual after payment is due, and such a payment shall 
not be made prior to the determination that an individual is eligible 
to receive such payment, including through the identification 
verification required under subsection (n)(1).
``(2) Promulgation of Regulation.--Not later than 180 days after 
the date of enactment of the Stop Unemployment Fraud Act, the Secretary 
of Labor shall promulgate a regulation, for the purposes of carrying 
out paragraph (1), that establishes maximum time frames for benefit 
payment following an initial eligibility determination, including 
standards for periods in which there is a high volume of claims.''.
(b) Self-Attestation Prohibition.--Section 303 of the Social 
Security Act (42 U.S.C. 503) is further amended by adding at the end 
the following:
``(p) Self-Attestation Prohibition.--For the purpose of determining 
whether a claimant is eligible for unemployment compensation (as 
defined under subsection (d)(2)(A)) for any week, a claimant's self-
attestation or self-certification shall not be sufficient on its own to 
prove the claimant is eligible for such compensation.''.
(c) Effective Date.--The amendments made by this section shall 
apply to certifications for payment made after the date that is 2 years 
after the date of enactment of this Act.

SEC. 5. SECRETARIAL MONITORING.

Section 303 of the Social Security Act (42 U.S.C. 503) is further 
amended by adding at the end the following:
``(q) Monitoring Required.--
``(1) In general.--The Secretary of Labor shall monitor 
each State's compliance with subsection (r).
``(2) Withholding of funds.--In the case that the Secretary 
identifies a State that is not in compliance with subsection 
(n) or (o), the Secretary may, after reasonable notice and 
hearing--
``(A) withhold 5 percent of the funds appropriated 
pursuant to section 901(c)(1)(A) for such State; and
``(B) implement for the State a corrective action 
plan to bring the State into compliance with such 
subsections.''.

SEC. 6. STRENGTHENING WORK SEARCH REQUIREMENTS.

(a) In General.--Section 303 of the Social Security Act (42 U.S.C. 
503(a)(12)) is further amended--
(1) in subsection (a)(12), by striking ``and actively'' and 
inserting ``and, subject to subsection (r), actively''; and
(2) by adding at the end the following:
``(r)(1) Actively Seeking Work.--For the purposes of subsection 
(a)(12), subject to paragraph (2), a claimant of unemployment 
compensation (as defined in subsection (d)(2)(A)) shall only be 
considered to be actively seeking work if the individual--
``(A) is registered for employment services in such 
a manner and to such extent as prescribed by the State 
agency;
``(B) maintains a record of such work search, 
including employers contacted, method of contact, and 
date contacted; and
``(C) provides such record to the State agency each 
week the individual receives unemployment benefits.
``(2) Verification of work search record.--The State shall 
verify the work search records received pursuant to paragraph 
(1)(C).
``(3) Regulation.--Not later than 6 months after the date 
of enactment of the Stop Unemployment Fraud Act, the Secretary 
shall issue guidance outlining standards for--
``(A) employment service registration; and
``(B) verifying work search records.''.
(b) Effective Date.--The amendments made by this section shall 
apply to claimants who receive regular unemployment compensation 
beginning on the date that is 2 years after the date of enactment of 
this Act.

SEC. 7. 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;
(2) in subparagraph (G), by adding ``and'' at the end; and
(3) by adding at the end the following:
``(H) provided the certifications made by the State as described in 
section 3304(f) of the Internal Revenue Code of 1986 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 used for--
``(1) the payment of costs of deterring, detecting, and 
preventing improper payments;
``(2) purposes related to the proper classification of 
individuals as being in employment (as defined in section 
3306(c) of the Internal Revenue Code of 1986), an independent 
contract, or as an employer (as defined in section 3306(a) of 
such Code), and the provisions of State law implementing 
section 303(k) of the Social Security Act;
``(3) the payment to the Secretary of the Treasury to the 
credit of the account of the State in the Unemployment Trust 
Fund;
``(4) modernizing the State's unemployment insurance 
technology infrastructure; or
``(5) 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 Stop 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 the following: ``, 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 the 
following: ``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 receipt be paid over to the Secretary of the 
Treasury to the credit of the Unemployment Trust Fund 
established under 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.--Section 
303(a)(4) of the Social Security Act (42 U.S.C. 503(a)(4)) is amended 
by striking ``(except for refunds of sums erroneously paid into such 
fund and except for refunds paid in accordance with the provisions of 
3305(b) of the Federal Unemployment Tax Act)'' 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 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.
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