Federal Taxpayer Funds Protection and Clawback Act

The bill amends the False Claims Act to define a claim as including requests for money originating in whole or in part from federal funds distributed through states or other intermediaries, and to treat states and local governments as "persons" subject to suits brought by the Attorney General. It creates a new section requiring states or state agencies to remit 100 percent of disputed federal funds to the Treasury within 180 days of notice that the Attorney General has initiated or intervened in a related action, with the funds held in escrow pending final resolution and returned to the general fund or the state depending on the outcome. The bill also requires states receiving federal funds to certify compliance with federal audit and inspection rules, authorizes agencies and pass-through entities to impose remedies such as withholding payments or debarment for noncompliance, and mandates recoupment of federal funds from recipients found to have violated federal employment verification law (INA section 274A).