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108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-731
======================================================================
 
TO AMEND SECTION 274A OF THE IMMIGRATION AND NATIONALITY ACT TO IMPROVE 
  THE PROCESS FOR VERIFYING AN INDIVIDUAL'S ELIGIBILITY FOR EMPLOYMENT

                                _______
                                

October 5, 2004.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Sensenbrenner, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 4306]

                  [Including Committee Cost Estimate]

  The Committee on the Judiciary, to whom was referred the bill 
(H.R. 4306) to amend section 274A of the Immigration and 
Nationality Act to improve the process for verifying an 
individual's eligibility for employment, having considered the 
same, reports favorably thereon with an amendment and 
recommends that the bill as amended do pass.

                                CONTENTS

                                                                   Page
The Amendment....................................................     2
Purpose and Summary..............................................     2
Background and Need for the Legislation..........................     2
Hearings.........................................................     4
Committee Consideration..........................................     4
Vote of the Committee............................................     4
Committee Oversight Findings.....................................     4
New Budget Authority and Tax Expenditures........................     5
Committee Cost Estimate..........................................     5
Performance Goals and Objectives.................................     5
Constitutional Authority Statement...............................     5
Section-by-Section Analysis and Discussion.......................     5
Agency Views.....................................................     6
Changes in Existing Law Made by the Bill, as Reported............     7
Markup Transcript................................................     9

                             The Amendment

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. IMPROVEMENTS TO EMPLOYMENT VERIFICATION SYSTEM.

    (a) In General.--Section 274A(b) of the Immigration and Nationality 
Act (8 U.S.C. 1324a(b)) is amended--
            (1) in paragraph (1)(A), by inserting before ``A person or 
        entity has complied'' the following: ``Such attestation may be 
        manifested by either a hand-written or an electronic 
        signature.'';
            (2) in paragraph (2), by adding at the end the following: 
        ``Such attestation may be manifested by either a hand-written 
        or an electronic signature.''; and
            (3) in paragraph (3), by inserting ``a paper, microfiche, 
        microfilm, or electronic version of'' after ``must retain''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on the earlier of--
            (1) the date on which final regulations implementing such 
        amendments take effect; or
            (2) 90 days after the date of the enactment of this Act.

                          Purpose and Summary

    H.R. 4306 would amend the Immigration and Nationality Act 
to allow employers to comply with a statutory mandate to 
prepare and retain Employment Eligibility Verification Forms 
(Forms I-9) for their employees electronically.

                Background and Need for the Legislation

    All employers in the United States are required to complete 
and retain Employment Eligibility Verification Forms (Forms I-
9) for each individual they hire for employment in the United 
States.\1\ On the form, the employer must identify the 
employment eligibility and identity documents presented by the 
employee and verify review of those documents. The employer is 
not required to file the form with the government, but instead 
must keep the form in paper form or on microfiche or microfilm, 
either for 3 years after the date of hire or for 1 year after 
employment is terminated, whichever is later.
---------------------------------------------------------------------------
    \1\ See section 274A of the Immigration and Nationality Act.
---------------------------------------------------------------------------
    The form must be made available for inspection by Federal 
officials from U.S. Immigration and Customs Enforcement 
(``ICE''), the Justice Department's Civil Rights Division, and 
the Department of Labor. Government officials who want to 
inspect those documents must provide the employer with three 
business days' notice of such inspection. The documents must be 
made available for inspection either at the place where the 
request was made or elsewhere if the employer and government 
officials agree.
    H.R. 4306 would allow employers to electronically complete 
and store I-9 forms. This legislation is a reasonable extension 
of the current law. It would not only facilitate employer 
compliance, but also enhance enforcement of the law.
    In allowing for the electronic storage and retrieval of I-9 
forms, the bill would facilitate both an employer's 
presentation of documents and the government's inspection of 
them. Electronic storage would allow an employer to easily 
maintain a single I-9 storage system for its various facilities 
throughout the country. This is particularly important to 
companies that operate multiple worksites in different states. 
Such a system could be accessed from remote locations by 
computer and, therefore, could eliminate the practical problem 
of unearthing and relocating individual forms each time an 
employee is transferred from one facility to another. 
Electronically stored I-9 forms could also be retrieved more 
quickly than paper, microfiche, or microfilm copies, simply by 
entering the employee's name or identification number into a 
storage system.
    Centralized electronic storage would also facilitate review 
of the documents and thereby facilitate enforcement of the 
immigration laws by Federal officials. Currently, in many cases 
the breadth of the inspection request by the government is 
unclear. Often, the difficulty of presenting the documents 
circumscribes the scope of the inspection. For example, if an 
inspection were scheduled for the I-9 forms of an outlet of a 
chain store, generally only forms for that outlet would be 
provided. The presentation of documents from the company as a 
whole, within the 3 days required by law, would be impractical.
    Often, however, the actions of an outlet are indicative of 
the actions of the company as a whole. If the company were to 
maintain I-9 forms electronically, government officials could 
request documents for the company as a whole as easily as they 
could for any individual outlet. In addition, inspection of the 
forms themselves, which currently requires examination of 
writing that is often barely legible, would also be 
facilitated. Further, ICE, the Justice Department, or the Labor 
Department could request a company that retains I-9 forms 
electronically to provide the documents electronically for 
inspection purposes. Those Federal officials could then perform 
``virtual audits'' of businesses by sending out the requisite 
notice, and receiving electronic copies of the forms and other 
requested documents without ever going to the place of 
employment.
    Maintaining sufficient storage space to accommodate hard 
copies of I-9 forms has become a significant document 
management challenge for many companies, especially in 
industries with high turnover rates for employees. This burden 
is magnified by the length of the retention requirements for I-
9 forms. Storing forms electronically would greatly alleviate, 
if not eliminate, this burden.
    Concerns have been raised in the past that paper I-9 forms, 
which contain a significant amount of personal information on 
the employee (e.g., name, Social Security number, A-number), 
can pose a privacy risk if they are improperly used or are 
stolen. The largely paper-based nature of those documents is 
one of the main reasons for this concern because access to 
paper (or even microfiche and microfilm) records can be 
restricted only by physical security devices. Access to 
electronically stored records can be restricted effectively to 
authorized personnel through the use of passwords and access 
codes, in addition to physical security measures, such as 
locks.
    Electronic storage could greatly increase the organization 
of Forms I-9, making them both easier to provide and to review. 
Regardless of the degree of care exercised in storing paper 
documents, inevitably such documents can be lost, misplaced, 
misfiled, or physically damaged. This likelihood increases over 
time, as physical records are removed from and returned to 
files, or transferred from file to file. In addition to the 
typical day-to-day damage that paper documents often suffer 
over time, such documents are subject to complete loss in the 
event of theft or disaster. Companies have raised such losses 
as a defense to non-compliance with the retention and 
presentation requirements in the past. While no company could 
be expected to ``back up'' all their original I-9 forms with 
photocopies, securely backing up electronic files has become a 
routine part of any company's daily procedures.
    The electronic completion and storage of I-9 forms is 
consistent with the Government Paperwork Elimination Act 
(GPEA).\2\ GPEA gave Federal agencies until October 2003 to 
provide citizens the option of conducting business with the 
government electronically. The law also provides that 
electronic records and their related electronic signatures are 
not to be denied legal effect, validity, or enforceability 
merely because they are in electronic form. Moreover, the 
Electronic Signatures in Global and National Commerce Act \3\ 
provides that electronic signatures on contracts and most other 
legal documents are as valid and enforceable as written 
signatures. Under this bill, electronic copies of I-9 forms are 
to be considered legally valid and enforceable. Likewise, the 
Federal Rules of Evidence provide for the admissibility of 
electronically stored data and information, specifying that 
printouts of such information constitute ``originals'' for 
evidentiary purposes. Under this bill, therefore, electronic 
copies of I-9 forms could be submitted in connection with a 
criminal or administrative proceeding relating to the 
documents.
---------------------------------------------------------------------------
    \2\ Pub. L. No. 105-277 (1998).
    \3\ Pub. L. No. 106-229 (2000).
---------------------------------------------------------------------------

                                Hearings

    No hearings were held in the Committee on the Judiciary on 
H.R. 4306.

                        Committee Consideration

    On September 14, 2004, the Subcommittee on Immigration, 
Border Security, and Claims met in open session and ordered 
favorably reported the bill H.R. 4306, with an amendment, by a 
voice vote, a quorum being present. On September 30, 2004, the 
Committee met in open session and ordered favorably reported 
the bill H.R. 4306 with an amendment, by voice vote, a quorum 
being present.

                         Vote of the Committee

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee notes that there 
were no recorded votes during the Committee's consideration of 
H.R. 4306.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee reports that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

                        Committee Cost Estimate

    In compliance with clause 3(d)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee believes that 
the bill will have no significant cost for the current fiscal 
year, and no significant cost for the next five fiscal years. 
The Committee did not receive any estimates of the costs of 
this legislation from any other government agency as outlined 
in clause 3(d)(2)(B) of rule XIII. The bill does not authorize 
programs so the Committee cannot provide a comparison with 
relevant programs under current law as outlined in clause 
3(d)(2)(C) of rule XIII.

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, the 
bill would amend the Immigration and Nationality Act to allow 
employers to comply with a statutory mandate to prepare and 
retain Employment Eligibility Verification Forms (Forms I-9) 
for their employees electronically, making more efficient the 
retention of the documents and facilitating their review by the 
government.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in article I, Sec. 8 of the Constitution.

               Section-by-Section Analysis and Discussion

    The following discussion describes the bill as reported by 
the Committee.
Sec. 1. Improvements to Employment Verification System.
    Subsection 1(a) amends the Immigration and Nationality Act 
to allow employers to complete Forms I-9 electronically. This 
section specifically allows employers and employees to complete 
the attestation required under paragraph 274A(b)(1) of the INA 
electronically. It also allows employers to retain Forms I-9 
electronically, as well as in paper form or on microfilm and 
microfiche.
    Subsection 1(b) provides that the amendments in this bill 
will take effect on the earlier of the date on which final 
regulations implementing the regulations take effect, or 90 
days after enactment, whichever is earlier.

                              Agency Views


         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

                  SECTION 274A OF THE IMMIGRATION AND 
                            NATIONALITY ACT

                     unlawful employment of aliens

    Sec. 274A. (a) * * *
    (b) Employment Verification System.--The requirements 
referred to in paragraphs (1)(B) and (3) of subsection (a) are, 
in the case of a person or other entity hiring, recruiting, or 
referring an individual for employment in the United States, 
the requirements specified in the following three paragraphs:
            (1) Attestation after examination of 
        documentation.--
                    (A) In general.--The person or entity must 
                attest, under penalty of perjury and on a form 
                designated or established by the Attorney 
                General by regulation, that it has verified 
                that the individual is not an unauthorized 
                alien by examining--
                            (i) * * *

           *       *       *       *       *       *       *

                Such attestation may be manifested by either a 
                hand-written or an electronic signature. A 
                person or entity has complied with the 
                requirement of this paragraph with respect to 
                examination of a document if the document 
                reasonably appears on its face to be genuine. 
                If an individual provides a document or 
                combination of documents that reasonably 
                appears on its face to be genuine and that is 
                sufficient to meet the requirements of the 
                first sentence of this paragraph, nothing in 
                this paragraph shall be construed as requiring 
                the person or entity to solicit the production 
                of any other document or as requiring the 
                individual to produce such another document.
            (2) Individual attestation of employment 
        authorization.--The individual must attest, under 
        penalty of perjury on the form designated or 
        established for purposes of paragraph (1), that the 
        individual is a citizen or national of the United 
        States, an alien lawfully admitted for permanent 
        residence, or an alien who is authorized under this Act 
        or by the Attorney General to be hired, recruited, or 
        referred for such employment. Such attestation may be 
        manifested by either a hand-written or an electronic 
        signature.
            (3) Retention of verification form.--After 
        completion of such form in accordance with paragraphs 
        (1) and (2), the person or entity must retain a paper, 
        microfiche, microfilm, or electronic version of the 
        form and make it available for inspection by officers 
        of the Service, the Special Counsel for Immigration-
        Related Unfair Employment Practices, or the Department 
        of Labor during a period beginning on the date of the 
        hiring, recruiting, or referral of the individual and 
        ending--
                    (A) * * *

           *       *       *       *       *       *       *


                           Markup Transcript






                            BUSINESS MEETING

                      THURSDAY, SEPTEMBER 30, 2004

                  House of Representatives,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:05 a.m., in 
Room 2141, Rayburn House Office Building, Hon. F. James 
Sensenbrenner, Jr. [Chairman of the Committee] presiding.
    Chairman Sensenbrenner. The Committee will come to order. A 
working quorum is present. The first item on the agenda is H.R. 
4306, to amend section 274A of the Immigration and Nationality 
Act to improve the process for verifying an individual's 
eligibility for employment. The Chair recognizes the gentleman 
from Indiana, Mr. Hostettler, the Chairman of the Subcommittee 
on Immigration, Border Security, and Claims, for a motion.
    Mr. Hostettler. Mr. Chairman, the Subcommittee on 
Immigration, Border Security, and Claims reports favorably the 
bill H.R. 4306 with the single amendment in the nature of a 
substitute and moves its favorable recommendation to the full 
House.
    Chairman Sensenbrenner. Without objection, the bill will be 
considered as read and open for amendment at any point.
    [The bill, H.R. 4306, follows:]
    
    
    Chairman Sensenbrenner. And the Subcommittee amendment in 
the nature of a substitute which the Members have before them 
will be considered as read, considered as the original text for 
purposes of amendment and open for amendment at any point.
    [The amendment follows:]
    
    
    Chairman Sensenbrenner. The Chair recognizes the gentleman 
from Indiana, Mr. Hostettler, to strike the last word briefly.
    Mr. Hostettler. Thank you, Mr. Chairman. I urge my 
colleagues to support H.R. 4306, introduced by our colleague 
Mr. Cannon, which would allow for the electronic preparation 
and storage of employment eligibility verification forms known 
as forms I-9.
    In the Immigration Reform and Control Act of 1986 Congress 
prohibited American employers from hiring aliens who lack 
employment authorization. To assist employers in complying with 
this requirement, the IRCA mandated that employers review 
documents establishing their employees employment authorization 
and ensure that the employees attested to the fact that they 
were eligible to be employed. Both the employee's attestation 
and the employer's review of the documents were to be 
memorialized on the form I-9, a document that was introduced by 
INS in 1987. Forms I-9 are not filed with the Federal 
Government. Rather, to ensure that the employer complied with 
the I-9 requirements and to allow the government the 
opportunity to ensure that the employer complied with the 
immigration and labor laws, IRCA required the employer to 
retain the form for 3 years after hire or 1 year after the 
employee's termination, whichever was later.
    The 1987 regulations implementing this provision allow the 
employer to keep those forms in one of three ways, on the 
original paper form, on microfilm or microfiche. While there 
have been many advances in document preparation and retention 
technology in the past 17 years, those changes have not been 
reflected in the employment eligibility verification 
regulations. As a consequence, there is still only one method 
for preparing form I-9 and that is on the original form. There 
are still only three ways to retain those forms, on the 
original paper, on microfilm and on microfiche.
    H.R. 4306 would bring the employment verification process 
into the 21st century by allowing employers to complete and 
retain forms I-9 electronically. This proposal would benefit 
the employer in maintaining records as well as the government 
in enforcing the immigration and labor laws. Electronic 
preparation and retention will allow employers to improve 
efficiency in the hiring process and save resources that they 
currently spend on preparing and storing paper forms I-9. 
Further, electronic access to forms I-9 will make it easier for 
government agents to review those forms and in particular make 
it easier for the Department of Homeland Security to enforce 
the employer sanctions provisions of the Immigration and 
Nationality Act.
    For these reasons I urge my colleagues to support H.R. 4306 
and yield back the balance of my time.
    Chairman Sensenbrenner. Does the gentleman from Virginia 
wish to give an opening statement?
    Mr. Scott. Mr. Chairman, I would ask unanimous consent that 
a statement from the gentlelady from Texas, Ms. Jackson Lee in 
support of the bill be entered into the record.
    Chairman Sensenbrenner. Without objection, so ordered. And 
without objection all Members may include opening statements in 
the record at this point.
    [The prepared statement of Ms. Jackson Lee follows:]
       Prepared Statement of the Honorable Sheila Jackson Lee, a 
Representative in Congress From the State of Texas, and Ranking Member, 
        Subcommittee on Immigration, Border Security, and Claims
    The regulation 8 CFR Sec. 274a2(b)(2) requires United States 
employers to process and retain I-9 forms for up to 3 years. These 
forms are used to verify the employment eligibility and identity of all 
employees in the United States. They are required to be kept on paper 
or on microfilm or microfiche. This was fine in 1988, when the 
regulation was promulgated. Computers were expensive and less widely 
used in 1988. Paper records were an unavoidable burden then, and 
microfilm and microfiche were being used far more in 1988 than they are 
now. It is not appropriate to be restricted to such records in the 
computer age that we live in today.
    More than half of the benefits applications that are submitted to 
the U.S. Citizenship and Immigration Service are filed on its website, 
but employers are still required to maintain paper I-9 forms. Employers 
should be permitted to keep the Form I-9 in electronic form. In 
addition to saving paper and storage space, an electronic storage 
system would permit a central reservoir of data and allow retrieval of 
I-9 forms in a fraction of the time it takes to retrieve paper, 
microfiche, or microfilm copies.
    H.R. 4306 simply would allow employers the option of electronic 
processing and storage of the I-9 forms. This would include electronic 
signatures. I will vote for H.R. 4306.
    Thank you.

    Chairman Sensenbrenner. Are there amendments? If there are 
no amendments, a reporting quorum is not present, and without 
objection the previous question is ordered on reporting the 
bill favorably.
    [Intervening business.]
    Chairman Sensenbrenner. The unfinished business is the 
motion to report favorably the bill, H.R. 4306, to amend 
section 274A of the Immigration and Nationality Act, to improve 
the process for verifying an individual's eligibility for 
employment, on which the previous question is ordered.
    The question occurs on the motion to report--or excuse me. 
A reporting quorum is present. The question occurs on the 
motion to report the bill, H.R. 4306, favorably. All those in 
favor will say aye. Opposed, no. The ayes appear to have it. 
The ayes have it. The motion to report favorably is agreed to.
    Without objection, the Chairman is authorized to move to go 
to conference pursuant to House rules. Without objection, the 
staff is directed to make any technical and conforming changes, 
and all Members will be given 2 days as provided by the House 
rules in which to submit additional, dissenting, supplemental, 
or minority views.