; and (B) by adding at the end the following new subparagraph: (C) Retention of percentage of recovered funds The State agency may retain 25 percent of any amount recovered from overpayments of pandemic emergency unemployment compensation that were determined to be made due to fraud. Amounts so retained by the State agency shall be used for any of following: (i) Modernizing unemployment compensation systems and information technology to improve identity verification and validation of applicants. (ii) Reimbursement of administrative costs incurred by the State to identify and pursue recovery of fraudulent overpayments. (iii) Hiring fraud investigators and prosecutors. (iv) Other program integrity activities as determined by the State. . (4) Extended unemployment compensation A State to which section 4105 of the Families First Coronavirus Response Act ( 26 U.S.C. 3304 note) applied may retain 25 percent of any amount recovered from overpayments of sharable extended compensation and sharable regular compensation (as such terms are defined in section 204 of the Federal-State Extended Unemployment Compensation Act of 1970) paid for weeks of unemployment described in such section 4105 that were determined to be made due to fraud. Amounts so retained by the State agency shall be used for any of the purposes described in section 2107(e)(3)(C) of the CARES Act ( 15 U.S.C. 9025(e)(3)(C) ). (5) First week of regular compensation A State that was a party to an agreement under section 4105 of the CARES Act ( 15 U.S.C. 9024 ) may retain 25 percent of any amount recovered from overpayments of regular compensation paid to individuals by the State for their first week of regular unemployment for which the State received full Federal funding under such agreement in any case in which such overpayments were determined to be made due to fraud. Amounts so retained by the State agency shall be used for any of the purposes described in section 2107(e)(3)(C) of the CARES Act ( 15 U.S.C. 9025(e)(3)(C) ). (b) Treatment under withdrawal