Pre-Payment Fraud Prevention and Treasury Data Access Act

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8463 Introduced in House (IH)]

<DOC>

119th CONGRESS
  2d Session
                                H. R. 8463

    To establish governmentwide requirements for pre-payment fraud
   prevention actions, to provide the U.S. Treasury appropriate data
  resources, to facilitate participation in governmentwide anti-fraud
                 data sharing, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             April 23, 2026

  Mr. Comer (for himself and Mr. Arrington) introduced the following
 bill; which was referred to the Committee on Oversight and Government
   Reform, and in addition to the Committee on Ways and Means, for a
 period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
                          committee concerned

_______________________________________________________________________

                                 A BILL

    To establish governmentwide requirements for pre-payment fraud
   prevention actions, to provide the U.S. Treasury appropriate data
  resources, to facilitate participation in governmentwide anti-fraud
                 data sharing, 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 ``Pre-Payment Fraud Prevention and
Treasury Data Access Act''.

SEC. 2. PRE-PAYMENT FRAUD PREVENTION REQUIREMENTS FOR AGENCIES.

    (a) Establishment of Pre-Payment Agency Responsibilities.--
            (1) Amendment.--Chapter 33 of title 31, United States Code,
        is amended by inserting after section 3325 the following:
``Sec. 3325a. Agency duties for fraud and improper payment prevention
              before the issuance of a payment voucher request
    ``(a) Mandatory Actions Before Issuing a Payment Voucher.--The head
of an agency, or an officer or employee described in section
3325(a)(1)(B), may not certify a voucher under section 3325 until the
following requirements are met:
            ``(1) Each pre-certification requirement described in
        subsection (b) for such payment request.
            ``(2) Confirmation is provided that the payment complies
        with any disbursement requirement and instruction, including
        any pre-certification requirement, published by the Secretary
        of the Treasury.
            ``(3) Confirmation is provided that any other appropriate
        payment, account, and payee validation program or service that
        the Secretary of the Treasury, in consultation with the
        Director, requires to reduce fraud and an improper payment
        resulting in financial loss to the Government, including any
        agency evaluation of the fraud-risk indicator of a program
        required under section 3352 and agency procedures required
        under section 3554(b)(1), have been conducted, in accordance
        with necessary exceptions for statutory, policy, or operational
        reasons.
    ``(b) Payment Verification Pre-Certification Requirements.--Not
later than 180 days after the date of the enactment of this section,
and as needed thereafter, the Secretary of the Treasury shall, in
consultation with the Director of the Office of Management and Budget,
issue regulations, and guidance as necessary, for the pre-certification
requirements of this section, for vouchers certified under section
3325, including any deadline for pre-certification information and
related records to be submitted to the requisite Treasury official and
disbursing official under subchapter IV of this chapter, before the
date of disbursement in order to allow for sufficient time to meet the
requirements of this section, including the following:
            ``(1) Funds are available at the time the obligation is
        incurred and if an obligation is incurred when funds are not
        available, then the agency may not certify the payment voucher.
            ``(2) The amount of the payment and the name of the payee
        on the payment voucher are correct, in conformance with the
        prescribed standard format.
            ``(3) A valid social security number, taxpayer
        identification number, employer identification number,
        individual taxpayer identification number, or payee ID number
        is provided for each payee on the voucher, if applicable.
            ``(4) The appropriation or fund from which the payment will
        be made is available for the purpose described in the voucher
        and indicated with the appropriate Treasury Account Symbol or
        Business Event Type Code.
            ``(5) A payee is not deceased, if the payment would be
        improperly made to a deceased payee.
            ``(6) The account number, if any, provided on the payment
        voucher is held at a financial institution and is open, valid,
        and belongs to the payee or a valid designee of the payee.
            ``(7) Any other identifier in conformance with the payment
        verification pre-certification requirements established by the
        Secretary of the Treasury, which may include the Procurement
        Instrument Identified and the Federal Award Identification
        Number.
    ``(c) Return of Payment Voucher.--The Secretary, in consultation
with the Director, shall issue guidance and establish procedures to
authorize the Chief Disbursing Officer of the Department of the
Treasury, or an agency disbursing official, to return to the relevant
agency certifying official, including a notification to the agency, any
payment or payment voucher issued under section 3325 which does not
comply with pre-certification verification requirements established
under this section as determined by the Secretary.
    ``(d) Agency Requests for Exemptions.--The Secretary of the
Treasury shall include in the guidance issued under subsection (b), or
in other regulations or guidance issued under this chapter, a process
for agencies to request exemptions from some or all of the payment
verification requirements for specific payments or categories of
payments under this section. Any approved exemption shall be documented
in any related payment voucher certified under section 3325 for the
duration of the exemption.''.
            (2) Technical and conforming amendment.--The table of
        sections for chapter 33 of title 31, United States Codes, is
        amended by inserting after the item for section 3325 the
        following:

``3325a. Agency duties for fraud and improper payment prevention prior
                            to issuing a payment voucher request.''.
    (b) Amendment to Responsibilities of Agency Certifying Official for
Payment Vouchers.--Section 3528(a) of title 31, United States Code, is
amended--
            (1) in paragraph (2), by inserting after ``of this title''
        the following: ``, including pre-certification requirement
        described in section 3325a'';
            (2) by redesignating paragraphs (4) and (5) as paragraphs
        (5) and (6), respectively; and
            (3) by inserting after paragraph (3) the following:
            ``(4) Ensuring that--
                    ``(A) the agency has complied with the requirements
                of section 3325a and subchapter IV of this title; and
                    ``(B) a covered recipient is in compliance with the
                reporting requirements under section 6107.''.
    (c) Prepayment Requirements of Payment Disbursing Officials.--
Section 3325 of title 31, United States Code, is amended--
            (1) in subsection (d) by striking ``taxpayer identifying
        number of each person'' and inserting ``information required to
        be submitted under section 3325a(b) of each payee''; and
            (2) by adding at the end the following:
    ``(e)(1) Before certifying a voucher to a disbursing official, the
head of an agency or an officer or employee of an agency described in
subparagraph (A) or (B) of subsection (a)(1), as applicable, shall take
necessary actions to accurately disburse payments to the recipients of
those payments, including by--
                    ``(A) verifying the accuracy of the bank account
                information to which a payment is to be disbursed, to
                the extent practicable; and
                    ``(B) comparing the bank account information of the
                proposed recipient to other payment records available
                to the agency, to the extent practicable.
            ``(2) The Secretary of the Treasury shall issue guidance to
        carry out this subsection, which may be carried out through any
        guidance issued for section 3325a(b).''.
    (d) Requirements and Authorities of Payment Disbursing Officials.--
Paragraph (3) of section 3325(a) of title 31, United States Code, is
amended--
            (1) by inserting ``, compliance with an order to pause a
        payment pursuant to section 3337(b),'' after ``except for the
        correctness of computations on a voucher''; and
            (2) by striking ``,,'' and inserting a comma.
    (e) Addition of Fraud Prevention Indicators to Agency Improper
Payment Risk Assessments.--
            (1) Definitions amendments.--Section 3351 of title 31,
        United States Code is amended--
                    (A) in paragraph (3)--
                            (i) in the heading, by striking
                        ``Initiative'' and inserting ``System'';
                            (ii) by striking ``Initiative'' and
                        inserting ``System''; and
                            (iii) by striking ``initiative'' and
                        inserting ``system''; and
                    (B) by adding the following in the appropriate
                alphabetical order and redesignating the paragraphs
                accordingly:
            ``(9) Appropriate authorizing and appropriations committees
        of congress.--The term `appropriate authorizing and
        appropriations committees of Congress' means the following:
                    ``(A) The Committees on Appropriations of the
                Senate and the House of Representatives.
                    ``(B) The Committee on Homeland Security and
                Governmental Affairs of the Senate.
                    ``(C) The Committee on Oversight and Government
                Reform of the House of Representatives.
                    ``(D) The Budget Committee of the House of
                Representatives and the Committee on the Budget of the
                Senate.
                    ``(D) Any other relevant congressional committee of
                jurisdiction.
            ``(10) Director.--The term `Director' means the Director of
        the Office of Management and Budget.
            ``(11) Fraud-risk indicator.--The term `fraud-risk
        indicator' means an objective data point or analytic signal
        that indicates an anomalous payment pattern or increase in the
        volume of a payment amount, a verified data mismatch, network
        or behavioral anomaly, or match identified by the Do Not Pay
        system and any other payment, account, and payee validation
        program or service provided by the Department of the Treasury
        that would result in financial loss to the Government.''.
            (2) Amendment.--Section 3352(a)(1) of title 31, United
        States Code, is amended--
                    (A) in subparagraph (A), by striking ``; and'' and
                inserting a semicolon;
                    (B) in subparagraph (B), by striking the period at
                the end and inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(C) design and apply fraud-risk indicators to the
                programs identified under paragraph (A).''.

SEC. 3. TREASURY DO NOT PAY SYSTEM.

    (a) Amendment.--Section 3354 of title 31, United States Code, is
amended--
            (1) in the heading, by striking ``Initiative'' and
        inserting ``System'';
            (2) in subsection (a)--
                    (A) by amending paragraph (1) to read as follows:
            ``(1) In general.--The head of each executive agency shall
        establish and maintain appropriate preaward and prepayment
        procedures to prevent and recover improper payments, including
        payments resulting in financial loss to the Government, and to
        prevent financial fraud. Such procedures shall include, at a
        minimum--
                    ``(A) screening all persons or entities that
                receive, or seek to receive, Federal awards or payments
                against all appropriate Do Not Pay system data assets,
                including data assets described in paragraph (2)(a),
                and risk tools before an award is made or a payment
                request is submitted to the disbursing officer in
                accordance with section 3325a; and
                    ``(B) a periodic review of available data assets
                and notification to the Secretary of any data asset
                that the agency requires access to, either directly or
                through the Do Not Pay system.'';
                    (B) in paragraph (2)--
                            (i) by striking ``At a minimum and before
                        issuing any payment or award, each executive
                        agency shall review as appropriate the
                        following databases to verify eligibility of
                        the payment and award:'' and inserting the
                        following: ``Notwithstanding any other
                        provision of law, including the Internal
                        Revenue Code of 1986, the Social Security Act,
                        and the Personal Responsibility and Work
                        Opportunity Reconciliation Act, the Secretary
                        shall have access to the following data assets
                        and incorporate them in the Do Not Pay system,
                        without the need to pursue designation under
                        paragraph (3), for the sole purposes of
                        improper payment prevention and detection:'';
                        and
                            (ii) by adding at the end the following:
                    ``(G) The National Directory of New Hires pursuant
                to section 453(j) of the Social Security Act (42 U.S.C.
                653(j)).
                    ``(H) Information made available to such head
                pursuant to a request made under section 6103(i)(9)(A)
                of the Internal Revenue Code of 1986.
                    ``(I) Information made available to the Secretary
                of Treasury by the Commissioner of Social Security
                pursuant to section 235 of the Social Security Act.'';
                and
                    (C) by adding at the end the following:
            ``(3) Additional data assets.--
                    ``(A) Designation.--The Secretary may designate
                additional categories of data assets for inclusion in
                the Do Not Pay system to address risks of fraud and
                improper payments.
                    ``(B) Privacy and notice.--In designating data
                assets that include personally identifiable
                information, law enforcement sensitive information, or
                information subject to section 552a of title 5, the
                Secretary shall--
                            ``(i) act in coordination with the Director
                        of the Office of Management and Budget; and
                            ``(ii) provide public notice and an
                        opportunity for comment for not less than 30
                        days prior to designation.
                    ``(C) Database inclusion.--Following designation of
                a category of data assets under subparagraph (A), the
                Secretary shall provide public notice and an
                opportunity for comment for not less than 30 days
                before adding any specific data asset within such
                category.
                    ``(D) Non-sensitive data.--Data assets that do not
                include personally identifiable or law enforcement
                sensitive information may be added at the discretion of
                the Secretary without designation if a list of such
                data sets is disclosed to the public on a public
                website maintained by the Department of the Treasury.
            ``(4) Treatment of data matching for purposes of agency use
        of do not pay system.--For purposes of section 552a of title 5,
        or any other provision of law, a computerized comparison of two
        or more automated Federal systems of records, or a computerized
        comparison of a Federal system of records with other records or
        non-Federal records, carried out by the Secretary to verify
        payments or identify or recover improper payments under this
        section shall not be considered a matching program.
            ``(5) Limitation on use.--Information obtained through the
        Do Not Pay system may be used solely for the purposes described
        in paragraph (1), or for Federal or State law enforcement or
        investigative purposes. Any officer, employee, contractor,
        subcontractor, or agent of a Federal or State entity may not
        publish, examine for a purpose not explicitly authorized under
        this section, or communicate such information furnished in such
        data assets other than in fulfillment of the purposes of this
        section.
            ``(6) Penalty for unlawful disclosure.--Any person
        described in paragraph (5) who knowingly and willfully
        discloses information in violation of that paragraph shall be
        fined not more than $5,000, imprisoned not more than 5 years,
        or both.
            ``(7) Exception when payment otherwise required under
        law.--The head of an executive agency may be exempt from the
        requirements of paragraph (1) if a Federal statute expressly
        requires that a payment or award be made notwithstanding
        potential ineligibility, and the agency head notifies the
        Secretary of the Treasury and the Director of the Office of
        Management and Budget prior to certification of the payment
        under section 3325.
            ``(8) Definition.--In this section, the term `data asset'
        has the meaning given that term in section 3502(17) of title
        44.''; and
            (3) by striking subsections (b) through (e) and inserting
        the following:
    ``(b) Establishment of System.--The Secretary of the Treasury shall
establish and maintain a Do Not Pay system, which shall be administered
and operated by the Fiscal Service of the Department of the Treasury.
The Do Not Pay system shall include--
            ``(1) the data assets described in subsection (a)(2); and
            ``(2) such other data assets as the Secretary of the
        Treasury may designate, in consultation with the Director of
        the Office of Management and Budget, to assist agencies in
        carrying out subsection (a)(1).
    ``(c) State and Other Governmental Use.--
            ``(1) In general.--Each State and local government
        administering a federally funded program, and any contractor,
        subcontractor, or agent thereof, including State and local
        government auditors, shall establish and maintain appropriate
        preaward and prepayment procedures to prevent and recover
        improper payments, including payments resulting in financial
        loss to the Government, and to prevent financial fraud. Such
        procedures shall include, at a minimum--
                    ``(A) screening all persons or entities that
                receive, or seek to receive, Federal awards or payments
                against all appropriate Do Not Pay system data assets,
                including data assets described in subsection (a)(2),
                and risk tools before an award is made or a payment
                request is submitted to the disbursing officer; and
                    ``(B) periodic review of available data assets and
                notification to the Secretary of any data asset that
                the agency requires access to, either directly or
                through the Do Not Pay system.
            ``(2) Other governmental use.--The judicial and legislative
        branches of the United States (as defined in section 202(e) of
        title 18) shall have access to the Do Not Pay system for
        purposes of verifying eligibility for payments and preventing
        fraud and improper payments.
            ``(3) Privacy requirements.--The Secretary, in consultation
        with the Director of the Office of Management and Budget, shall
        issue guidance establishing privacy and other requirements
        applicable to such access, consistent with section 552a of
        title 5.
    ``(d) Annual Report.--The Secretary shall submit to the appropriate
authorizing and appropriations committees of Congress an annual report
on the operation of the Do Not Pay system, which may be included as
part of another report submitted to Congress by the Secretary, and
which shall include the following:
            ``(1) An evaluation of the effectiveness of the system in
        reducing improper payments.
            ``(2) Information on the frequency of corrections and
        identification of erroneous data.
            ``(3) Recommendations for legislative or administrative
        action to enhance the operations of the system.
            ``(4) An assessment of agency compliance with the
        requirements of this section, including a listing of all
        memorandums established with the head of an agency under
        subsection (a)(4) that documents agency use of the Do Not Pay
        system.
    ``(e) Continuity and Transition.--
            ``(1) Continuation of previous system if necessary.--The Do
        Not Pay initiative in effect on the day before the date of the
        enactment of this section shall continue as necessary to
        support implementation of the Do Not Pay system.
            ``(2) Guidance, rules, and procedures.--Guidance, rules,
        and procedures in effect before the date of the enactment of
        this section shall remain in effect until modified by the
        Secretary or the Director of the Office of Management and
        Budget.
            ``(3) Rules of construction.--Nothing in this subsection
        may be construed--
                    ``(A) except as specifically provided in subsection
                (a)(4), to modify or supersede the requirements of
                section 552a of title 5, including the requirements for
                notice in section 552a(e)(12) and for due process
                rights of an individual under section 552a(p); or
                    ``(B) to limit any authority of an Inspector
                General under applicable law.''.
    (b) Technical and Conforming Amendment.--The item relating to
section 3354 in the table of sections for chapter 33 of title 31,
United States Code, is amended, by striking ``Initiative'' and
inserting ``Program''.

SEC. 4. SINGLE REPORT ON FIRST TIME USE OF FUNDS BY RECIPIENT.

    (a) Establishment of Post-Award Single Report Requirement on First-
Time Use of Funds by Recipient of Federal Award.--Chapter 61 of title
31, United States Code, is amended by adding at the end the following:

``SEC. 6107. SINGLE REPORT ON FIRST TIME USE OF FUNDS BY RECIPIENT.

    ``(a) Federal Award Reporting Requirement.--The head of each agency
that administers a covered award shall require each covered recipient
to, as a condition of receiving amounts under such award, submit to the
head of the agency, not later than 180 days after the receipt of such
award unless a deadline exception may be applied pursuant to pursuant
to regulations promulgated under subsection (b), a one-time report on
the use of such amounts that--
            ``(1) includes any content required to be included in such
        report pursuant to subsection (b); and
            ``(2) is in the format required under such subsection.
    ``(b) Governmentwide Report Regulations and Guidance.--
            ``(1) Contents and format of report.--
                    ``(A) Promulgation.--Not later than 1 year after
                the date of the enactment of this section, the
                Director, in coordination with the Secretary of the
                Treasury and the standard-setting agency designated
                under section 6402(a)(1), shall promulgate regulations,
                and any clarifying guidance as may be necessary, to
                establish governmentwide requirements for the content
                and format of the report described under subsection
                (a).
                    ``(B) Updates.--Any guidance or regulation
                promulgated under subparagraph (A) shall be updated as
                necessary, but in any case, shall be updated not less
                often than once every 5 years.
            ``(2) Report minimum requirements.--The regulations and any
        clarifying guidance promulgated under paragraph (1), shall at a
        minimum--
                    ``(A) enable the head of an awarding agency to
                determine whether amounts provided under a covered
                award are being used by the recipient required to
                submit the report, and any sub-recipient or sub-grantee
                thereof, for the intended purpose of the program, as
                set forth in statute, regulation, or policies and
                procedures of the agency;
                    ``(B) enable fraud prevention, detection,
                investigation, and mitigation, in future awards of
                Federal funds to the recipient required to submit the
                report by identifying relevant fraud-risk indicators
                that would require a referral for investigation and
                criminal referral to the appropriate entity of the
                Federal Government, including any identified effort by
                a recipient to defraud the Federal Government or
                violate sections 3729 through 3731 of title 31, United
                States Code (commonly referred to as the `False Claims
                Act');
                    ``(C) ensure that any sub-recipient or sub-grantee,
                at any level, of the recipient required to submit the
                report provide to such recipient such information as
                may be necessary to enable aggregate reporting on the
                covered award by the recipient;
                    ``(D) require the heads of agencies to apply the
                governmentwide data standards established under chapter
                64 with respect to the format and content of the report
                required to be submitted;
                    ``(E) align with the Federal award reporting
                requirements and data standards under the Federal
                Funding Accountability and Transparency Act of 2006
                (Public Law 109-282; 31 U.S.C. 6101 note), to the
                maximum extent practicable;
                    ``(F) reduce recipient and agency reporting burdens
                by avoiding duplication in recipient reporting
                obligations, to the extent practicable; and
                    ``(G) provide clarification for agencies to apply a
                reporting deadline exception under subsection (a)(1),
                which may be made for an entire program or type of
                covered award, beyond 180 days when the use of the
                covered funds by the covered recipient takes place more
                than 180 days after a receipt of such covered award.
    ``(c) Agency Requirements.--In accordance with the regulations and
any clarifying guidance promulgated under subsection (b), the head of
an agency that administers a covered award shall--
            ``(1) update the terms and conditions of Federal awards in
        the agency programs to implement subsection (a) for covered
        recipients;
            ``(2) include a summary of the post-award reporting
        requirements established under subsection (a), including the
        required content and reporting format, in the Notice of Funding
        Opportunity (which has the meaning given the term in section
        200.1 of title 2, Code of Federal Regulations) for Federal
        financial assistance (as defined under section 7501 of this
        title) in order to assist applicants for such assistance in
        understanding post-award reporting obligations;
            ``(3) to the maximum extent practicable--
                    ``(A) provide user-friendly and plain language
                directives for covered recipients to fulfill their
                reporting obligation under subsection (a); and
                    ``(B) use existing post-award reporting
                requirements to reduce the burden of cumulative post-
                award reporting; and
            ``(4) establish procedures within the agency to identify
        covered recipients that are not in compliance with the
        reporting requirement under subsection (a).
    ``(d) Noncompliance.--For a case in which a covered recipient does
not submit the report required by subsection (a), the awarding agency
shall--
            ``(1) provide a timely written notice of noncompliance to
        the recipient that--
                    ``(A) clearly states the reason for noncompliance;
                    ``(B) notifies the recipient of the obligation of
                the agency to cease further disbursements to the entity
                until the covered recipient is in compliance; and
                    ``(C) provides clear instructions to the covered
                recipient on how to come back into compliance; and
            ``(2) prevent a payment voucher from being issued under
        section 3325 for a payment to such recipient, for any program
        funds, until such report is submitted.
    ``(e) Availability of Report.--Each report submitted under
subsection (a) shall be--
            ``(1) kept on file by the agency for a period of not less
        than 5 years after the date on the conclusion of the duration
        of the award; and
            ``(2) made available upon request to--
                    ``(A) the Director;
                    ``(B) the Secretary of the Treasury;
                    ``(C) the Attorney General;
                    ``(D) the Inspector General of the agency
                concerned; and
                    ``(E) the appropriate congressional committees.
    ``(f) Use of Information Included in Report.--Information included
in the report required by subsection (a) shall be used by the agency in
support of improper payment activities of the agency under section 3352
as appropriate and applicable.
    ``(g) Definitions.--In this section:
            ``(1) Appropriate congressional committees.--The term
        `appropriate congressional committees' means--
                    ``(A) the Committees on Appropriations of the
                Senate and the House of Representatives;
                    ``(B) the Committee on Homeland Security and
                Governmental Affairs of the Senate;
                    ``(C) the Committee on Oversight and Government
                Reform of the House of Representatives; and
                    ``(D) any other relevant congressional committee of
                jurisdiction.
            ``(2) Covered award.--The term `covered award' means a
        Federal award (as defined under section 7501) in an amount not
        less than $50,000 (based on fiscal year 2027 constant dollars).
            ``(3) Covered recipient.--The term `covered recipient'
        means any entity, including any State, the District of
        Columbia, and any territory or possession of the United States,
        including a pass-through entity (as defined under section
        7501), that receives the covered award from a particular agency
        program for the first time in that program's existence.
            ``(4) Fraud-risk indicator.--The term `fraud-risk
        indicator' means an objective data point or analytic signal
        that indicates an anomalous payment pattern or increase in the
        volume of a payment amount, a verified data mismatch, network
        or behavioral anomaly, or match identified by the Do Not Pay
        system and any other payment, account, and payee validation
        program or service provided by the Department of the Treasury
        that would result in financial loss to the government.''.
    (b) Clarification of Application of First Reporting Deadline.--The
report required under subsection (a) of section 6107 of title 31,
United States Code, as added by subsection (a), shall apply to a
covered award made during the fiscal year following the promulgation of
regulations or guidance by the Director under subsection (b)(1)(A) of
such section.

SEC. 5. U.S. TREASURY DATA ACCESS FOR PURPOSES OF PROGRAM INTEGRITY.

    (a) Access to the National Directory of New Hires.--Section 453(j)
of the Social Security Act (42 U.S.C. 653(j)) is amended by adding at
the end the following:
            ``(12) Information to assist in the prevention of improper
        payments.--
                    ``(A) In general.--The Secretary of the Treasury
                shall have access to the information in the National
                Directory of New Hires for the sole purpose of
                detecting, preventing, and recovering improper payments
                (as defined under section 3351 of title 31, United
                States Code), including for use in the Do Not Pay
                system established under section 3354 of title 31,
                United States Code.
                    ``(B) Disclosure.--For the sole purpose of
                detecting, preventing, and recovering improper
                payments, the Secretary of the Treasury may disclose
                information in the National Directory of New Hires to--
                            ``(i) agents and contractors of the
                        Secretary of the Treasury;
                            ``(ii) Federal and non-Federal individuals
                        and entities authorized to receive information
                        in the National Directory of New Hires directly
                        from the Secretary;
                            ``(iii) entities with access to the Do Not
                        Pay system; and
                            ``(iv) such additional individuals and
                        entities as agreed to by the Secretary and the
                        Secretary of the Treasury.''.
    (b) Privacy-Preserving Validation of Select Tax Information.--
            (1) In general.--Section 6103(i) of the Internal Revenue
        Code of 1986 is amended by adding at the end the following new
        paragraph:
            ``(9) Disclosure of certain return information for use in
        the do not pay working system.--
                    ``(A) In general.--Upon execution of a written
                intra agency agreement between the Internal Revenue
                Service and the office of the Department of the
                Treasury that operates the Do Not Pay system described
                in section 3354(c) of title 31, United States Code, the
                Secretary may disclose to any authorized person
                described in subparagraph (B) return information
                described in subparagraph (C) with respect to an
                individual taxpayer for the applicable period described
                in subparagraph (D) for the limited purpose described
                in subparagraph (E). The Secretary may further
                authorize the redisclosure of such return information
                by an authorized person described in subparagraph (B),
                subject to such terms, conditions, and safeguards as
                the Secretary determines appropriate, to other
                authorized persons described in subparagraph (B) solely
                for the limited purpose described in subparagraph (E).
                The Secretary shall disclose or permit the redisclosure
                of such return information only to the extent necessary
                and for the purpose of the Do Not Pay system assisting
                an authorized person to identify, prevent, and recover
                improper payments.
                    ``(B) Authorized person.--For purposes of this
                paragraph, the term `authorized person' means--
                            ``(i) an officer, employee, agent, or
                        contractor of the Department of Treasury, whose
                        official duties require access to the Do Not
                        Pay system for the purpose of facilitating the
                        identification, prevention, or recovery of
                        improper payments, or
                            ``(ii) an officer, employee, or contractor
                        of an entity authorized to access the Do Not
                        Pay system for the purposes described in
                        subparagraph (E).
                    ``(C) Return information.--The return information
                that may be disclosed under this paragraph is limited
                to--
                            ``(i) taxpayer identity information,
                            ``(ii) filing status,
                            ``(iii) adjusted gross income,
                            ``(iv) net profit or loss, as reported on
                        Schedule C of Form 1040 (or successor form),
                            ``(v) bank account and routing information,
                            ``(vi) if applicable, the fact that there
                        was no return filed,
                            ``(vii) the taxable year with respect to
                        which the preceding information relates, and
                            ``(viii) any reported identity theft
                        related to the taxpayer identification number.
                    ``(D) Applicable period.--For purposes of this
                paragraph, the term `applicable period' means, with
                respect to any individual taxpayer, the period--
                            ``(i) consisting of the number of taxable
                        years specified in the agreement entered under
                        subparagraph (A), except that such period shall
                        not be fewer than 3 taxable years, and
                            ``(ii) ending with the most recent taxable
                        year for which the information described in
                        subparagraph (C) is available.
                    ``(E) Limitation on use of information.--
                Information disclosed under this subparagraph shall be
                solely for the use of the authorized persons to whom
                such information is disclosed and solely for the
                purpose of detecting, preventing, and recovering
                improper payments.''.
            (2) Conforming amendments.--
                    (A) Section 6103(a)(3) of the Internal Revenue Code
                of 1986 is amended by inserting ``subsection (i)(9),''
                after ``subsection (e)(1)(D)(iii),''.
                    (B) Section 6103(p)(4) of such Code is amended--
                            (i) in the matter preceding subparagraph
                        (A)--
                                    (I) by striking ``or (7),'' and
                                inserting ``(7), or (9),''; and
                                    (II) by striking ``or (7)(A)(ii),''
                                and inserting ``(7)(A)(ii), or (9),'';
                            (ii) in subparagraph (F)(i), by inserting
                        ``or (9)'' after ``(i)(3)(B)(i)''; and
                            (iii) in the matter preceding subclause (I)
                        of subparagraph (F)(ii), by striking ``(5) or
                        (7),'' and inserting ``(5), (7), or (9),''.
                    (C) Section 7213(a)(2) of such Code is amended by
                striking ``or (7)(A)(ii),'' and inserting ``(7)(A)(ii),
                or (9),''.
            (3) Effective date.--The amendments made by this subsection
        shall apply to any disclosure made after the effective date of
        this Act.
    (c) Access to Social Security Information.--Title II of the Social
Security Act (42 U.S.C. 401 et seq.) is amended by adding at the end
the following new section:

``SEC. 235. DISCLOSURE OF INFORMATION FOR DO NOT PAY SYSTEM.

    ``(a) The Commissioner of Social Security shall enter into an
agreement with the Secretary of the Treasury (or his designee) under
which--
            ``(1) the Commissioner establishes a reliable, secure
        method, which compares the name and social security account
        number provided in an inquiry against such information
        maintained by the Commissioner in order to confirm (or not
        confirm, including the reason for the nonconfirmation) the
        validity of the information provided;
            ``(2) appropriate safeguards are included to assure that
        the confirmation (or nonconfirmation) is used solely for the
        use of the authorized persons to whom such information is
        disclosed and solely for the purpose of using the Do No Pay
        system to identify, prevent, and recover improper payments, and
        any redisclosure shall be subject to the provisions of section
        3354 of title 31, United States Code; and
            ``(3) the Secretary shall pay the Commissioner of Social
        Security the full costs (including systems and administrative
        costs) of providing the confirmation described in paragraph
        (1).
    ``(b) For purposes of this paragraph the term `authorized person'
means--
            ``(1) an officer, employee, contractor, or agent of the
        Department of Treasury, whose official duties require access to
        the Do Not Pay system, or
            ``(2) an officer, employee, or contractor of another
        Federal agency, or a State agency that manages Federally funded
        State-administered programs, whose official duties require
        access to the Do Not Pay system.''.

SEC. 6. EFFECTIVE DATE.

    This Act and the amendments made by this Act shall take effect on
the date that is 180 days after the date of the enactment of this Act.
                                 <all>