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Code · BILL · 117th Congress · H.R. 8661 (Introduced in House) — To improve equity and accountability in State unemployment programs, recover fraudulent payments, and prevent future... · Sec. 203

Sec. 203. Retention of certain recoveries for program integrity and equitable access

549 words·~2 min read·/bill/117/hr/8661/ih/section-203·

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Section 3304(a)(4) of the Internal Revenue Code of 1986 is amended— in subparagraph (F), by striking and after the semicolon; by inserting after subparagraph
(G)the following: amounts may be withdrawn, to be deposited in a separate State fund from which amounts may be withdrawn for administrative costs related to program integrity or equitable access to benefits for workers, up to the sum of— a portion, not to exceed 5 percent, of any overpayment of compensation due to fraud that is recovered by the State; and a portion, not to exceed 5 percent, of any contribution collected as a result of the misclassification of employees as independent contractors, implementation of provisions of State law implementing section 303(k) of the Social Security Act, or other provisions of State law relating to employer fraud or evasion of contributions; and amounts collected by the State in penalty and interest payments shall be deposited in a separate State fund from which amounts may be withdrawn for administrative costs, including costs relating to improving technology and access, and for reemployment services under section 306 of the Social Security Act, except that, in the case of a State with an improper payment rate of 10 percent or higher, at least 50 percent of such funds must be used for program integrity; . Chapter 23 of the Internal Revenue Code of 1986 is amended— in section 3304(a)(3), by striking and except for refunds paid in accordance with the provisions of section 3305(b) and inserting refunds paid in accordance with the provisions of section 3305(b), and as otherwise provided in section 3304(a)(4) ; and in section 3306(f), by striking ; except that— and all that follows and inserting , except as otherwise provided in section 3304(a)(4). . Section 303(a) of the Social Security Act ( 42 U.S.C. 503(a) ) is amended— in paragraph (4), by striking and except for refunds paid in accordance with the provisions of 3305(b) of the Federal Unemployment Tax Act and inserting refunds paid in accordance with the provisions of 3305(b) of the Internal Revenue Code of 1986, and as otherwise provided in section 3304(a)(4) of such Code ; and in paragraph (5), by striking refunds paid in accordance with the provisions of 3305(b) and all that follows and inserting , except as otherwise provided in . section 3304(a)(4) of the Internal Revenue Code of 1986. Not later than 1 year after the date of the enactment of this Act, the Secretary of Labor shall issue guidance describing— the method by which a State shall determine the amounts for deposit under a separate State fund pursuant to each of subparagraphs
(H)and
(I)of section 3304(a)(4) of the Internal Revenue Code of 1986; requirements for the establishment of such separate State funds; and the purposes for which amounts withdrawn from such separate State funds may be used. The amendments made by this section shall apply with respect to overpayments and contributions (or payments in lieu of contributions) collected as a result of an investigation and assessment by a State agency and to penalties and interest collected after the earlier of— the end of the two-year period beginning on the date of the enactment of this Act; or the date on which a State’s law comes into conformity with the requirements of this section.
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Sec. 203
Retention of certain recoveries for program integrity and equitable access
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