HB2779 - 481R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 13-2009, Arizona Revised Statutes, is amended to read:

START_STATUTE13-2009. Aggravated taking identity of another person or entity; classification

A. A person commits aggravated taking the identity of another person or entity if the person knowingly takes, purchases, manufactures, records, possesses or uses any personal identifying information or entity identifying information of either:

1. Five or more other persons or entities, including real or fictitious persons or entities, without the consent of the other persons or entities, with the intent to obtain or use the other persons' or entities' identities for any unlawful purpose or to cause loss to the persons or entities whether or not the persons or entities actually suffer any economic loss.

2. Another person or entity, including a real or fictitious person or entity, without the consent of that other person or entity, with the intent to obtain or use the other person's or entity's identity for any unlawful purpose and causes another person or entity to suffer an economic loss of three thousand dollars or more.

3. Another person, including a real or fictitious person, with the intent to obtain employment.

B. In an action for aggravated taking the identity of another person or entity under subsection A, paragraph 1 of this section, proof of possession out of the regular course of business of the personal identifying information or entity identifying information of five or more other persons or entities may give rise to an inference that the personal identifying information or entity identifying information of the five or more other persons or entities was possessed for an unlawful purpose.

C. This section does not apply to a violation of section 4‑241 by a person who is under twenty-one years of age.

D. Aggravated taking the identity of another person or entity is a class 3 felony. END_STATUTE

Sec. 2. Title 23, chapter 2, Arizona Revised Statutes, is amended by adding article 2, to read:

ARTICLE 2. EMPLOYMENT OF UNAUTHORIZED ALIENS

START_STATUTE23-211. Definitions

In this article, unless the context otherwise requires:

1. "Agency" means any agency, department, board or commission of this state or a county, city or town that issues a license for purposes of operating a business in this state.

2. "Basic pilot program" means the basic employment verification pilot program as jointly administered by the United States department of homeland security and the social security administration or its successor program.

3. "Business entity" means any individual or type of organization that has in its employ one or more individuals performing services for it in employment, whether for profit or not for profit. Business entity includes self‑employed persons.

4. "Employee" means any person who performs work or a service of any kind or character for hire.

5. "License" means any agency permit, certificate, approval, registration, charter or similar form of authorization that is required by law and that is issued by any agency for the purposes of operating a business in this state.

6. "Unauthorized alien" means an alien who does not have the legal right or authorization under federal law to work in the United States as described in 8 United States code section 1324a(h)(3). END_STATUTE

START_STATUTE23-212. Employment of unauthorized aliens; prohibition; verification; affidavit; violation; classification

A. Any business entity in this state shall not knowingly employ an unauthorized alien.

B. Before filing articles of incorporation under title 10 or A certificate of partnership, a partnership registration or articles of organization under title 29, every business entity shall file a signed sworn affidavit with the secretary of state that indicates that the business entity does not knowingly employ an unauthorized alien and that the business entity will not direct any other person to employ an unauthorized alien. On receipt of the affidavit, the secretary of state shall distribute to the business entity an informational pamphlet regarding the basic pilot program and federal immigration laws.

C. A person or business entity commits false swearing under this section by filing a false sworn affidavit, believing it to be false. False swearing under this section is:

1. For a first violation, a class 6 felony. The person or business entity shall pay an additional assessment of at least five thousand dollars but not more than fifty thousand dollars to be deposited in the immigration enforcement fund established by section 26-103. This assessment is not subject to any surcharge.

2. For a second violation, a class 6 felony, and the court shall not enter an order designating the offense a misdemeanor pursuant to section 13‑702, subsection G. The person or business entity shall pay an additional assessment of at least ten thousand dollars but not more than one hundred thousand dollars to be deposited in the immigration enforcement fund established by section 26-103. This assessment is not subject to any surcharge.

3. For a third violation, a class 5 felony. The person or business entity shall pay an additional assessment of at least fifteen thousand dollars but not more than one hundred fifty thousand dollars to be deposited in the immigration enforcement fund established by section 26-103. This assessment is not subject to any surcharge.

D. If the attorney general determines that a business entity has filed a false sworn affidavit under this section, the attorney general shall Notify the county attorney to prosecute the business entity for filing a false sworn affidavit.

E. On a conviction for a violation of this section, the court shall report the conviction to The attorney general. The attorney general shall determine the appropriate action pursuant to section 23-213 and notify the appropriate agency. END_STATUTE

START_STATUTE23-213. Employment of unauthorized aliens; enforcement; suspension of license

A. On receipt of a signed written complaint that a business entity allegedly employs an unauthorized alien, the attorney general or county attorney shall investigate whether the business entity has violated section 23-212. The complaint shall indicate the name of the business entity that allegedly violated section 23-212, the specific actions that constitute the alleged violation and the date and location of the alleged violation. The attorney general or county attorney shall not investigate a complaint that is solely or primarily based on national origin, ethnicity or race.

B. Within three business days after receiving a complaint under subsection A of this section, the attorney general or county attorney shall notify the business entity of the complaint and request that the business entity provide the identity of the alleged unauthorized alien. The business entity shall provide the identity of the alleged unauthorized alien within three business days after receiving the request from the attorney general or county attorney.

C. After receiving the identity of an alleged unauthorized alien under subsection b of this section, the attorney general or county attorney shall submit the identity of the alleged unauthorized alien for verification to the federal government pursuant to 8 United States Code section 1373. After receiving the results of the verification from the federal government, the attorney general or county attorney shall notify the business entity either that the complaint is valid or that the complaint is dismissed. If the complaint is valid, the business entity has three business days to correct the violation in the manner prescribed in subsection d of this section. If the business entity fails to correct the violation, the attorney general or county attorney shall notify the appropriate agency to suspend the license of the business entity and the appropriate agency shall immediately suspend the license.

D. A business entity may correct a violation under subsection C of this section by doing either of the following:

1. Terminating the employment of the unauthorized alien. If the termination is challenged in superior court, the required three business days to correct the violation under subsection C of this section shall be tolled while the challenge is adjudicated. For any action in superior court under this paragraph, the court shall expedite the action, including assigning the hearing at the earliest practicable date.

2. Acquiring additional information from the employee to verify the employment eligibility of the employee through the basic pilot program, and the verification determines that the employee is authorized to work in the United States. The required three business days to correct the violation under subsection C of this section shall be tolled while the verification is conducted under this paragraph.

E. If the business entity fails to provide the identity of the alleged unauthorized alien within the required three business days pursuant to subsection B of this section, the attorney general or county attorney shall notify the appropriate agency to suspend the license of the business entity and the appropriate agency shall immediately suspend the license. The attorney general or county attorney shall notify the appropriate agency and the appropriate agency shall reinstate a business entity's suspended license under this subsection if the business entity files a signed affidavit with the attorney general or county attorney containing the following:

1. A description of the Business entity's actions to correct the violation.

2. A list of the names and addresses of the unauthorized aliens that were the basis of the complaint.

3. an affirmation that the Business entity is enrolled in and is participating to the fullest extent in the basic pilot program.

F. For a second violation under this section, the attorney general or county attorney shall notify the appropriate agency to suspend the license of the business entity and the appropriate agency shall immediately suspend the license. The attorney general or county attorney shall not notify the appropriate agency to reinstate the business license until the business entity takes corrective action pursuant to subsection D of this section and files the signed affidavit that is required under subsection E of this section.

G. For a third violation under this section, the attorney general or county attorney shall notify the appropriate agency to revoke the license of the business entity and the appropriate agency shall permanently revoke the license.

H. On completion of the processing of a valid complaint pursuant to this section, the attorney general or county attorney shall forward a copy of the complaint and any associated documents to the United States immigration and customs enforcement.

I. Notwithstanding any other law, Any county, city or town that fails to suspend a license as ordered by the attorney general under this section shall not receive any funding from this state.

J. Any business entity that is subject to enforcement under this section may challenge the enforcement in superior court. For any action in superior court under this section, the court shall expedite the action, including assigning the hearing at the earliest practicable date. On determining whether a person is an unauthorized alien, the court shall consider only the federal government's determination pursuant to 8 United States Code section 1373(c). The federal government's determination creates a rebuttable presumption of the person's lawful status. The court may take judicial notice of the federal government's determination and may request the federal government to provide automated or testimonial verification pursuant to 8 united states code section 1373(c). END_STATUTE

Sec. 3. Title 26, chapter 1, article 1, Arizona Revised Statutes, is amended by adding section 26-103, to read:

START_STATUTE26-103. Immigration enforcement fund

The immigration enforcement fund is established consisting of assessments deposited pursuant to sections 23-212 and 41-1080.01. the department of military affairs and emergency management shall administer the fund. Monies in the fund:

1. are subject to legislative appropriation.

2. are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

3. shall be used to reiMburse agencies and departments of this state and of political subdivisions of this state for costs incurred in enforcing immigration laws. END_STATUTE

Sec. 4. Section 41-763, Arizona Revised Statutes, is amended to read:

START_STATUTE41-763. Powers and duties of the director relating to personnel

The director shall:

1. Appoint employees necessary to perform the duties prescribed by this article.

2. Have authority for developing and administering a program of personnel administration for the state service in conformance with the personnel rules.

3. Have authority to establish such offices as may be necessary to maintain an effective and economical program of personnel administration.

4. Have the power to deputize employees in various state agencies where certain of the functions of personnel administration can be performed by such deputies.

5. Make an annual report and recommendation to the legislature and the joint legislative budget committee as provided in section 41‑763.01.

6. Adopt rules relating to personnel and personnel administration.

7. Subject to legislative appropriation, have the authority to contract for the services of consultants necessary to perform the annual salary plan and salary plan adjustment recommendations.

8. Establish a mandatory program of annual personnel management training for all state employees with supervisory or managerial responsibility that is appropriate to the nature and scope of the employees' supervisorial responsibilities. The director may waive the annual mandatory training on a case by case basis. The training shall include at least the following subjects:

(a) Basic employee supervisory or managerial skills.

(b) Establishing employee objectives and performance measures.

(d) Employee discipline training and discipline procedures.

(e) Other subjects as determined by the director.

9. Verify the authorization for employment in the United States of every state employee through the basic employment verification pilot program as jointly administered by the United States department of homeland security and the social security administration or its successor program. This paragraph applies only to employees who are hired after this state has agreed to the memorandum of understanding that is required to participate in the pilot program. END_STATUTE

Sec. 5. Title 41, chapter 6, Arizona Revised Statutes, is amended by adding article 7.2, to read:

ARTICLE 7.2. LICENSING ELIGIBILITY

START_STATUTE41-1080. Definitions

In this article, unless the context otherwise requires:

1. "Agency" means any agency, department, board or commission of this state or A county, city or town that issues a license for purposes of operating a business in this state.

4. "License" means any agency permit, certificate, approval, registration, charter or similar form of authorization that is required by law and that is issued by any agency for the purposes of operating a business in this state. END_STATUTE

START_STATUTE41-1080.01. Licensing; employee verification; signed affidavit; violation; classification

A. Before receiving a license or a renewal of a license from an agency, a business entity shall file a signed sworn affidavit with the agency that states that the business entity does not knowingly employ an unauthorized alien and that the business entity will not direct any other person to employ an unauthorized alien. An agency shall not issue or renew a license to any business entity that fails to submit the signed affidavit.

B. A person or business entity commits false swearing under this section by filing a false sworn affidavit, believing it to be false. False swearing under this section is:

3. For a third violation, a class 5 felony. The person or business entity shall pay an additional assessment of one at least fifteen thousand dollars but not more than one hundred fifty thousand dollars to be deposited in the immigration enforcement fund established by section 26-103. This assessment is not subject to any surcharge.

C. If the attorney general determines that a business entity has filed a false sworn affidavit under this section, the attorney general shall Notify the county attorney to prosecute the business entity for filing a false sworn affidavit.

D. On a conviction for a violation of this section, the court shall report the conviction to The attorney general. The attorney general shall determine the appropriate action pursuant to section 23-213 and notify the appropriate agency. END_STATUTE

Sec. 6. Title 41, chapter 23, article 1, Arizona Revised Statutes, is amended by adding section 41-2505, to read:

START_STATUTE41-2505. Awarded contracts; employee verification; definition

A. A procurement officer of this state shall not award a contract under this chapter that exceeds ten thousand dollars to any contractor or subcontractor unless the employment eligibility of the employees of the contractor or subcontractor has been verified by the contractor or subcontractor through the basic pilot program. The contractor or subcontractor shall file a signed affidavit with the procurement officer that states that the contractor or subcontractor is enrolled and participates in the basic pilot program.

B. For the purposes of this section, "basic pilot program" means the basic employment verification pilot program as jointly administered by the united states department of homeland security and the social security administration or its successor program. END_STATUTE

Sec. 7. Section 43-1021, Arizona Revised Statutes, is amended to read:

START_STATUTE43-1021. Additions to Arizona gross income

In computing Arizona adjusted gross income, the following amounts shall be added to Arizona gross income:

1. A beneficiary's share of the fiduciary adjustment to the extent that the amount determined by section 43‑1333 increases the beneficiary's Arizona gross income.

2. An amount equal to the "ordinary income portion" of a lump sum distribution that was excluded from federal adjusted gross income pursuant to section 402(d) of the internal revenue code.

3. The amount of interest income received on obligations of any state, territory or possession of the United States, or any political subdivision thereof, located outside the state of Arizona, reduced, for tax years beginning from and after December 31, 1996, by the amount of any interest on indebtedness and other related expenses that were incurred or continued to purchase or carry those obligations and that are not otherwise deducted or subtracted in arriving at Arizona gross income.

4. Annuity income received during the taxable year to the extent that the sum of the proceeds received from such annuity in all taxable years prior to and including the current taxable year exceeds the total consideration and premiums paid by the taxpayer. This paragraph applies only to those annuities with respect to which the first payment was received prior to December 31, 1978.

5. The excess of a partner's share of partnership taxable income required to be included under chapter 14, article 2 of this title over the income required to be reported under section 702(a)(8) of the internal revenue code.

6. The excess of a partner's share of partnership losses determined pursuant to section 702(a)(8) of the internal revenue code over the losses allowable under chapter 14, article 2 of this title.

7. The amount by which the adjusted basis of property described in this paragraph and computed pursuant to the internal revenue code exceeds the adjusted basis of such property computed pursuant to this title and the income tax act of 1954, as amended. This paragraph shall apply to all property which is held for the production of income and which is sold or otherwise disposed of during the taxable year, except depreciable property used in a trade or business.

8. The amount of depreciation or amortization of costs of any capital investment that is deducted pursuant to section 167 or 179 of the internal revenue code by a qualified defense contractor with respect to which an election is made to amortize pursuant to section 43‑1024.

9. The amount of gain from the sale or other disposition of a capital investment which a qualified defense contractor has elected to amortize pursuant to section 43‑1024.

10. Amounts withdrawn from the Arizona state retirement system, the corrections officer retirement plan, the public safety personnel retirement system, the elected officials' retirement plan or a county or city retirement plan by an employee upon termination of employment before retirement to the extent they were deducted in arriving at Arizona taxable income in any year.

11. That portion of the net operating loss included in federal adjusted gross income which has already been taken as a net operating loss for Arizona purposes or which is separately taken as a subtraction under the special net operating loss transition rule.

12. Any nonitemized amount deducted pursuant to section 170 of the internal revenue code representing contributions to an educational institution which denies admission, enrollment or board and room accommodations on the basis of race, color or ethnic background except those institutions primarily established for the education of American Indians.

13. The amount paid as taxes on property in this state with respect to which a credit is claimed under section 43‑1078.

14. Amounts withdrawn from a medical savings account by the individual during the taxable year computed pursuant to section 220(f) of the internal revenue code and not included in federal adjusted gross income.

15. Any amount of agricultural water conservation expenses that were deducted pursuant to the internal revenue code for which a credit is claimed under section 43‑1084.

16. The amount by which the depreciation or amortization computed under the internal revenue code with respect to property for which a credit was taken under section 43‑1080 exceeds the amount of depreciation or amortization computed pursuant to the internal revenue code on the Arizona adjusted basis of the property.

17. The amount by which the adjusted basis computed under the internal revenue code with respect to property for which a credit was claimed under section 43‑1080 and which is sold or otherwise disposed of during the taxable year exceeds the adjusted basis of the property computed under section 43‑1080.

18. The amount by which the depreciation or amortization computed under the internal revenue code with respect to property for which a credit was taken under either section 43‑1081 or 43‑1081.01 exceeds the amount of depreciation or amortization computed pursuant to the internal revenue code on the Arizona adjusted basis of the property.

19. The amount by which the adjusted basis computed under the internal revenue code with respect to property for which a credit was claimed under section 43-1074.02, 43‑1081 or 43‑1081.01 and which is sold or otherwise disposed of during the taxable year exceeds the adjusted basis of the property computed under section 43-1074.02, 43‑1081 or 43‑1081.01, as applicable.

20. The deduction referred to in section 1341(a)(4) of the internal revenue code for restoration of a substantial amount held under a claim of right.

21. The amount by which a net operating loss carryover or capital loss carryover allowable pursuant to section 1341(b)(5) of the internal revenue code exceeds the net operating loss carryover or capital loss carryover allowable pursuant to section 43‑1029, subsection F.

22. Any amount deducted pursuant to section 170 of the internal revenue code representing contributions to a school tuition organization or a public school for which a credit is claimed under section 43‑1089 or 43‑1089.01.

23. Any amount deducted in computing Arizona gross income as expenses for installing solar stub outs or electric vehicle recharge outlets in this state with respect to which a credit is claimed pursuant to section 43‑1090.

24. Any wage expenses deducted pursuant to the internal revenue code for which a credit is claimed under section 43‑1087 and representing net increases in qualified employment positions for employment of temporary assistance for needy families recipients.

25. Any amount deducted for conveying ownership or development rights of property to an agricultural preservation district under section 48‑5702 for which a credit is claimed under section 43‑1081.02.

26. The amount of any depreciation allowance allowed pursuant to section 167(a) of the internal revenue code to the extent not previously added.

27. With respect to property for which an expense deduction was taken pursuant to section 179 of the internal revenue code, the amount in excess of twenty‑five thousand dollars.

28. The amount of any deductions that are claimed in computing federal adjusted gross income representing expenses for which a credit is claimed under section 43-1075.

29. The amount by which the depreciation or amortization computed under the internal revenue code with respect to property for which a credit was taken under section 43-1090.01 exceeds the amount of depreciation or amortization computed pursuant to the internal revenue code on the Arizona adjusted basis of the property.

30. The amount by which the adjusted basis computed under the internal revenue code with respect to property for which a credit was claimed under section 43-1090.01 and which is sold or otherwise disposed of during the taxable year exceeds the adjusted basis of the property computed under section 43-1090.01.

31. The amount of salary or other compensation that is paid to an unauthorized alien who is knowingly hired by the taxpayer and that is deducted as a business expense under section 162 of the internal revenue code. For the purposes of this paragraph, "unauthorized alien" means an alien who does not have the legal right or authorization under federal law to work in the United States as described in 8 United States code section 1324a(h)(3). END_STATUTE

Sec. 8. Appropriation; department of law

The sum of $3,000,000 is appropriated from the state general fund in fiscal year 2007-2008 to the department of law for the purposes provided in this act.

Sec. 9. Severability

If any provision of this act or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this act that can be given effect without the invalid provision or application, and to this end the provisions of this act are severable.

Sec. 10. Legislative findings

The Legislature finds that this act complies with the requirements of 8 United States Code section 1324(a)(h)(2) by addressing employer sanctions through licensure and similar means. Criminal penalties contained in this act are associated exclusively with the state crime of false swearing on application for a license or on the filing of articles of incorporation for a business, not the act of employing unauthorized persons.

Sec. 11. Short title

This act shall be known as and may be cited as the "Arizona Fair and Legal Employment Act."