Forty-seventh Legislature                                                    

Second Regular Session                                                       

 

COMMITTEE ON JUDICIARY

 

HOUSE OF REPRESENTATIVES AMENDMENTS TO H.C.R. 2044

 

(Reference to printed concurrent resolution)

 


Strike everything after the resolving clause and insert:

"1.  Under the power of the referendum, as vested in the Legislature, the following measure, relating to the employment of unauthorized workers, is enacted to become valid as a law if approved by the voters and on proclamation of the Governor:

AN ACT

Amending section 13-2002, arizona revised statutes; Amending Title 23, chapter 2, Arizona Revised Statutes, by adding articles 2 and 2.1; Amending section 41-763, Arizona Revised Statutes; Amending Title 41, chapter 6, Arizona Revised Statutes, by adding article 7.2; Amending section 41-1376, arizona revised statutes; Amending title 41, chapter 8, article 5, Arizona revised statutes, by adding section 41-1384; amending title 41, CHAPTER 23, article 1, arizona revised statutes, by adding section 41‑2505; amending section 43-1021, Arizona Revised Statutes, as amended by Laws 2005, chapter 316, section 3 and chapter 317, section 11; repealing section 43‑1021, Arizona Revised Statutes, as amended by Laws 2005, chapter 292, section 2; relating to the employment of unauthorized workers.

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

Section 1.  Section 13-2002, Arizona Revised Statutes, is amended to read:

START_STATUTE13-2002.  Forgery; classification

A.  A person commits forgery if, with intent to defraud, the person:1.  Falsely makes, completes or alters a written instrument; or

2.  Knowingly possesses a forged instrument; or

3.  Offers or presents, whether accepted or not, a forged instrument or one that contains false information; or

4.  Falsely makes or alters a written instrument that purports to be a document that fulfills the requirements for establishing identity or eligibility to work in the United States pursuant to the federal immigration reform and control act of 1986 and that is used to obtain employment in this state by a person who is not authorized to work in the United States.

B.  The possession of five or more forged instruments may give rise to an inference that the instruments are possessed with an intent to defraud.

C.  If the court orders restitution for a violation of subsection A, paragraph 4, the restitution order shall include damages incurred by any employer who relied on a forged INSTRUMENT in hiring or employing a person who was not AUTHORIZED to work in the united states, including the employer's costs, attorney fees and expenses.

C.  D.  Forgery pursuant to subsection A, paragraph 4 is a class 3 felony.  Forgery pursuant to subsection A, paragraph 1, 2 or 3 is a class 4 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 WORKERS

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 political subdivision of 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.  "Employer" means any person who owns a percentage of the business entity.  Employer does not include shareholders of companies who have a class of common equity stock listed or authorized to be listed on the New York stock exchange or the American stock exchange or listed on the NASDAQ stock market.

4.  "License" includes the whole or a part of any agency or political subdivision permit, certificate, approval, registration, charter or similar form of permission required by law.

5.  "sanction" includes a fine, a civil penalty or imprisonment.

6.  "Unauthorized worker" means a person who is all of the following:

(a)  a person who is not a citizen or national of the united states.

(b)  An alien who is not lawfully admitted for permanent residence.

(c)  An alien who is not authorized to be employed under federal law.END_STATUTE

START_STATUTE23-212.  Verification of employees; civil and criminal immunity

Notwithstanding any other statute, an employer who voluntarily verifies the immigration status of the employer's employees through the basic pilot program is not subject to any civil sanction or criminal penalty imposed by this state for employing an unauthorized worker.

END_STATUTE

START_STATUTE23-213.  Employees; social security numbers

A.  An employer shall discharge an employee if the employer discovers that the employee provided an invalid social security number to the employer, unless the employee provides an accurate social security number to the employer within ten business days after receiving notice from the employer that the initial number was invalid.

B.  This section does not apply if an error occurred when a valid social security number was processed by the employer.END_STATUTE

START_STATUTE23-214.  Employment of unauthorized workers; cease and desist notice; civil penalty

A.  Beginning January 1, 2007, if an investigation that is initiated by an agency or by a written complaint submitted by a private party to an agency determines that a person who operates a business or enterprise in this state employs an unauthorized worker, as verified by the agency with the federal government, the agency shall notify the attorney general and the attorney general shall immediately:

1.  Order the person to cease and desist from employing the unauthorized worker and to discharge for cause other unauthorized workers that are employed by the person in this state.  The person shall comply with the cease and desist order by the following business day.

2.  Notify the United States immigration and customs enforcement of the unauthorized worker.

B.  FOR the PURPOSES OF SUBSECTION A, PROOF OF THE FOLLOWING CIRCUMSTANCES, UNLESS SATISFACTORILY EXPLAINED, MAY GIVE RISE TO THE INFERENCE THAT AN EMPLOYER KNOWINGLY EMPLOYED AN UNAUTHORIZED WORKER:

1.  The employer pays the employee with cash instead of by check or automatic deposit.

2.  The employer uses the services of a person who is reasonably known to be violating title 13, chapter 23 or to be acting in concert with others who are violating title 13, chapter 23.

3.  The Employer violates the minimum wage requirements prescribed by the federal fair labor standards act.

4.  The employer accepts a consular identification card that is issued by a foreign government as a form of identification when determining the employee's identity.

C.  The attorney general may assess a civil penalty of five thousand dollars against any person who fails to comply by the following business day with a cease and desist order pursuant to subsection A, paragraph 1.END_STATUTE

START_STATUTE23-215.  Employment of unauthorized workers; failure to comply with cease and desist order; civil cause of action

A.  Any employer in this state who is aggrieved by a person's failure to comply with the cease and desist order under section 23-214 may bring a civil cause of action to have the person's license suspended or revoked.  The court shall suspend or revoke the person's license based on the severity of the offense.  The court may award appropriate relief, including damages, costs and reasonable attorney fees.

B.  Recovery of damages by an employer under this section is limited to the employer's actual damages for specific business losses that were incurred by the employer due to the person's employment of an unauthorized worker. END_STATUTE

Sec. 3.  Title 23, chapter 2, Arizona Revised Statutes, is amended by adding article 2.1, to read:

ARTICLE 2.1.  UNLAWFUL EMPLOYMENT PRACTICES

START_STATUTE23-221.  Unlawful employment practices; civil penalty; classification; unlawful employment revolving funds; definitions

A.  All employers in this state shall comply with the employment security laws prescribed in chapter 4 of this title, the workers' compensation laws prescribed in chapter 6 of this title and the income tax withholding laws prescribed in title 43, chapter 4.  This subsection applies to all employers whether the employer pays the employees by cash, check or automatic deposit.

B.  All employers in this state shall complete and retain I-9 employment eligibility verification forms for all employees as prescribed by federal law.  If the attorney general determines that an employer has failed to complete and retain I-9 employment eligibility verification forms as prescribed by federal law, the attorney general shall notify the United States citizenship and immigration services.

C.  An enforcement agency shall coordinate with the department of economic security, the industrial commission and the department of revenue to investigate employers in this state that pay employees by cash and that fail to comply with subsection A of this section.

D.  If an enforcement agency determines sufficient evidence exists that an employer pays employees by cash and has knowingly failed to comply with subsection A of this section, the following apply for a first violation of subsection A of this section during a one year period:

1.  The enforcement agency shall mail a written notice to the employer by certified mail describing the violation.

2.  Within thirty days after receiving the notice under paragraph 1 of this subsection, the employer may contest the enforcement agency's determination by notifying the enforcement agency.  After the employer notifies the enforcement agency that the employer is contesting the enforcement agency's determination, the employer shall provide supporting evidence to the enforcement agency that the employer did not violate subsection A of this section.  The enforcement agency shall allow a reasonable amount of time under this subsection for the employer to obtain copies of supporting information and documents from federal and state agencies.

3.  After receiving supporting evidence under paragraph 2 of this subsection, the enforcement agency shall evaluate the evidence and shall issue a final determination that either affirms the original determination or dismisses the original determination.  The enforcement agency shall mail the final determination by certified mail to the employer.

4.  If an employer does not contest the enforcement agency's determination under paragraph 2 of this subsection or the employer receives a final determination under paragraph 3 of this subsection that affirms the violation, the employer is subject to a civil penalty.  The civil penalty is two thousand dollars for each employee for which the employer knowingly failed to comply with this section.  The enforcement agency shall transmit fifty per cent of the monies collected pursuant to this paragraph to the state treasurer and the state treasurer shall deposit the monies in the state general fund.  The enforcement agency shall transmit the remaining fifty per cent of the monies collected pursuant to this paragraph to either:

(a)  If the attorney general was the first enforcement agency that initiated the first investigation that brought forth the action under this subsection, the state treasurer for deposit in the state general fund.

(b)  If the county attorney was the first enforcement agency that initiated the first investigation that brought forth the action under this subsection, the county treasurer for deposit in the county general fund.

(c)  If the city or town attorney was the first enforcement agency that initiated the first investigation that brought forth the action under this subsection, the city or town treasurer for deposit in the city or town general fund.

5.  An employer who is subject to a civil penalty under paragraph 4 of this subsection is subject to an additional penalty.  The amount of the additional penalty is equal to the amount of revenue, including interest, that was lost to this state because of the violation of this section.  The enforcement agency shall transmit the monies received pursuant to this paragraph to the state treasurer and the state treasurer shall deposit the monies in the state general fund.

E.  The following apply for a second violation by an employer who pays employees by cash and who knowingly fails to comply with subsection A of this section during a one year period:

1.  A second violation is a class 1 misdemeanor.  The employer is not subject to prosecution for a second violation unless the process described under subsection D of this section is totally completed.

2.  On conviction, the court may order that the employer's license be suspended.  If the court suspends a license pursuant to this subsection, the court shall notify the appropriate agency and the appropriate agency shall immediately suspend the employer's license.

3.  On conviction, the court shall order the employer to pay an additional assessment.  The additional assessment is four thousand dollars for each employee for which the employer knowingly failed to comply with this section.  The court shall transmit fifty per cent of the monies collected pursuant to this paragraph to the state treasurer and the state treasurer shall deposit the monies in the state general fund.  The court shall transmit the remaining fifty per cent of the monies collected pursuant to this paragraph to either:

(a)  If the attorney general was the first enforcement agency that initiated the first investigation that brought forth the action under this subsection, the state treasurer for deposit in the state general fund.

(b)  If the county attorney was the first enforcement agency that initiated the first investigation that brought forth the action under this subsection, the county treasurer for deposit in the county general fund.

(c)  If the city or town attorney was the first enforcement agency that initiated the first investigation that brought forth the action under this subsection, the city or town treasurer for deposit in the city or town general fund.

4.  On conviction, the court shall order the employer to pay an amount that is equal to two times the amount of revenue, including interest, that was lost to this state because of the violation of this section.  The court shall transmit the monies received pursuant to this paragraph to the state treasurer and the state treasurer shall deposit the monies in the state general fund.

F.  The following apply for a third violation by and employer who pays employees by cash and who knowingly fails to comply with  subsection A of this section during a one year period:

1.  A third violation is a class 1 misdemeanor and the court shall sentence the employer to serve the maximum sentence authorized by law.

2.  On conviction, the court may order that the employer's license be suspended or revoked.  If the court suspends or revokes a license pursuant to this subsection, the court shall notify the appropriate agency and the appropriate agency shall immediately suspend or revoke the employer's license.

3.  On conviction, the court shall order the employer to pay an additional assessment.  The additional assessment is six thousand dollars for each employee for which the employer knowingly failed to comply with this section.  The court shall transmit fifty per cent of the monies collected pursuant to this paragraph to the state treasurer and the state treasurer shall deposit the monies collected in the state general fund.  The court shall transmit the remaining fifty per cent of the monies collected pursuant to this paragraph to either:

(a)  If the attorney general was the first enforcement agency that initiated the first investigation that brought forth the action under this subsection, the state treasurer for deposit in the state general fund.

(b)  If the county attorney was the first enforcement agency that initiated the first investigation that brought forth the action under this subsection, the county treasurer for deposit in the county general fund.

(c)  If the city or town attorney was the first enforcement agency that initiated the first investigation that brought forth the action under this subsection, the city or town treasurer for deposit in the city or town general fund.

4.  On conviction, the court shall order the employer to pay an amount that is equal to three times the amount of revenue, including interest, that was lost to this state because of the violation of this section.  The court shall transmit the monies received pursuant to this paragraph to the state treasurer and the state treasurer shall deposit the monies in the state general fund.

5.  The enforcement agency shall record the judgment of the court as a lien against the employer.

6.  The penalties under this subsection are in addition to any penalty that may be imposed under section 23-657, section 23-932, section 42-1125, subsection H and section 43-435.

G.  For the purposes of this section:

1.  "Employer" means any person who owns a percentage of the business entity.  Employer does not include shareholders of companies who have a class of common equity stock listed or authorized to be listed on the New York stock exchange or the American stock exchange or listed on the NASDAQ stock market.

2.  "Enforcement agency" means the attorney general or a county, city or town attorney.

3.  "License" means the whole or a part of any agency permit, certificate, approval, registration, charter or similar form of permission that is required by law for the purposes of operating a business in this state.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.

(c)  Measuring employee performance and the use of performance evaluation methods.

(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. 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 AND AUDITS

START_STATUTE41-1080.  Definitions

In this article, unless the context otherwise requires:

1.  "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.

2.  "License" includes the whole or a part of any agency or political subdivision permit, certificate, approval, registration, charter or similar form of permission required by law.

3.  "Unauthorized worker" means a person who is all of the following:

(a)  A person who is not a citizen or national of the United States.

(b)  An alien who is not lawfully admitted for permanent residence.

(c)  An alien who is not authorized to be employed under federal law. END_STATUTE

START_STATUTE41-1080.01.  Licensing; employee verification; signed affirmation

Before receiving a license from an agency or political subdivision of this state, an applicant shall provide a signed affirmation that the applicant has verified the authorization for employment in the United States of every employee who is employed by the applicant.  An agency or a political subdivision of this state shall not issue a license to any applicant who fails to submit the signed affirmation.END_STATUTE

START_STATUTE41-1080.02.  Licensing audits; employee verification; penalties

A.  Beginning January 1, 2007, each agency and political subdivision of this state that issues licenses shall annually conduct random audits of up to five per cent of all persons who have been issued a license to determine whether the person knowingly employs any UNAUTHORIZED WORKERS.  If an agency or political subdivision is conducting an audit of a person under this section, another agency or political subdivision shall not simultaneously conduct a separate audit of the person for other LICENSES THAT ARE ISSUED TO THE PERSON. WHEN CONDUCTING THE AUDIT, THE AGENCY OR POLITICAL SUBDIVISION:

1.  SHALL REVIEW THE SIGNED AFFIRMATION THAT THE PERSON SUBMITTED PURSUANT TO SECTION 41-1080.01.

2.  SHALL REVIEW THE COMPLETED I-9 EMPLOYMENT ELIGIBILITY FORMS THAT THE EMPLOYER IS REQUIRED TO RETAIN UNDER FEDERAL LAW.

3.  MAY VERIFY THE EMPLOYMENT AUTHORIZATION OF THE PERSON'S EMPLOYEES THROUGH THE BASIC PILOT PROGRAM."

B.  If an audit determines that a person knowingly employs an unauthorized worker, the agency shall notify the attorney general and the attorney general shall immediately:

1.  Order the person to cease and desist from employing the unauthorized worker and to discharge for cause other unauthorized workers that are employed by the person in this state.  The person shall comply with the cease and desist order by the following business day.

2.  Notify the United States immigration and customs enforcement of the unauthorized worker.

C.  FOR the PURPOSES OF SUBSECTION A, PROOF OF THE FOLLOWING CIRCUMSTANCES, UNLESS SATISFACTORILY EXPLAINED, MAY GIVE RISE TO THE INFERENCE THAT AN EMPLOYER KNOWINGLY EMPLOYED AN UNAUTHORIZED WORKER:

1.  the employer pays the employee with cash instead of by check or automatic deposit.

2.  The employer uses the services of a person who is reasonably known to be violating Title 13, chapter 23 or to be acting in concert with others who are violating title 13, chapter 23.

3.  The Employer violates the minimum wage requirements prescribed by the federal fair labor standards act.

4.  The employer accepts a Consular identification card that is issued by a foreign government as a form of identification when determining the employee's identity.

D.  The attorney general may assess a civil penalty of five thousand dollars against any person who fails to comply by the following business day with a cease and desist order pursuant to subsection B, paragraph 1.

START_STATUTE41-1080.03.  Employment of unauthorized workers; failure to comply with cease and desist order; civil cause of action

A.  Any employer in this state who is aggrieved by a person's failure to comply with the cease and desist order under section 41-1080.02 may bring a civil cause of action to have the person's license suspended or revoked.  The court shall suspend or revoke the person's license based on the severity of the offense.  The court may award appropriate relief, including damages, costs and reasonable attorney fees.

B.  Recovery of damages by an employer under this section is limited to the employer's actual damages for specific business losses that were incurred by the employer due to the person's employment of an unauthorized worker. END_STATUTE

Sec. 6.  Section 41-1376, Arizona Revised Statutes, is amended to read:

START_STATUTE41-1376.  Powers and duties

A.  The ombudsman‑citizens aide shall:

1.  Investigate the administrative acts of agencies pursuant to section 41‑1377, subsections A and B except as provided in section 41‑1377, subsections C, D and E.  The ombudsman‑citizens aide shall investigate the administrative acts of an agency without regard to the finality of the administrative act.

2.  Annually before January 1 prepare a written report to the governor, the legislature and the public that contains a summary of the ombudsman‑citizens aide's activities during the previous fiscal year.  The ombudsman‑citizens aide shall semiannually present this report before the legislative council.  This report shall include:

(a)  The ombudsman‑citizens aide's mission statement.

(b)  The number of matters that were within each of the categories specified in section 41‑1379, subsection B.

(c)  Legislative issues affecting the ombudsman‑citizens aide.

(d)  Selected case studies that illustrate the ombudsman‑citizens aide's work and reasons for complaints.

(e)  Ombudsman‑citizens aide's contact statistics.

(f)  Ombudsman‑citizens aide's staff.

3.  Before conducting the first investigation, adopt rules that ensure that confidential information that is gathered will not be disclosed.

4.  Appoint a deputy ombudsman and prescribe the duties of employees or, subject to appropriation, contract for the services of independent contractors necessary to administer the duties of the office of ombudsman‑citizens aide.  All staff serves at the pleasure of the ombudsman‑citizens aide, and they are exempt from chapter 4, articles 5 and 6 of this title.  All staff shall be subject to the conflict of interest provisions of title 38, chapter 3, article 8.

5.  Before conducting the first investigation, adopt rules that establish procedures for receiving and processing complaints, including guidelines to ensure each complainant has exhausted all reasonable alternatives within the agency, conducting investigations, incorporating agency responses into recommendations and reporting findings.

6.  Notify the chief executive or administrative officer of the agency in writing of the intention to investigate unless notification would unduly hinder the investigation or make the investigation ineffectual.

7.  Appoint an assistant to help the ombudsman‑citizens aide investigate complaints relating to child protective services in the department of economic security.  The assistant shall have expertise in child protective services procedures and laws.  Notwithstanding any law to the contrary, the ombudsman‑citizens aide and the assistant have access to child protective services records and to any automated case management system used by child protective services in the department of economic security.

8.  appoint an immigration ombudsman-Citizens Aide who shall receive complaints and provide immigration information to employers pursuant to section 41-1384.  The immigration ombudsman-Citizens Aide serves at the pleasure of the ombudsman‑citizens aide.

B.  After the conclusion of an investigation and notice to the head of the agency pursuant to section 41‑1379, the ombudsman‑citizens aide may present the ombudsman‑citizens aide's opinion and recommendations to the governor, the legislature, the office of the appropriate prosecutor or the public, or any combination of these persons.  The ombudsman‑citizens aide shall include in the opinion the reply of the agency, including those issues that were resolved as a result of the ombudsman‑citizens aide's preliminary opinion or recommendation.END_STATUTE

Sec. 7.  Title 41, chapter 8, article 5, Arizona Revised Statutes, is amended by adding section 41-1384, to read:

START_STATUTE41-1384.  Immigration ombudsman-citizens aide; assistance with federal immigration laws and employee verification; definitions

A.  On receiving a complaint that an employer in this state employs an identifiable unauthorized worker, the Immigration ombudsman-citizens aide shall forward the information contained in the complaint to the attorney general.

B.  THe Immigration ombudsman-citizens aide shall provide employers with information that helps employers to properly comply with federal immigration laws.  The immigration ombudsman-citizens aide shall provide assistance to employers to enroll in and use the basic pilot PROGRAM.

C.  For the purposes of this section:

1.  "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.

2.  "Unauthorized worker" means a person who is all of the following:

(a)  a person who is not a citizen or national of the united states.

(b)  An alien who is not lawfully admitted for permanent residence.

(c)  An alien who is not authorized to be employed under federal law.END_STATUTE

Sec. 8.  Section 43-1021, Arizona Revised Statutes, as amended by Laws 2005, chapter 316, section 3 and chapter 317, section 11, 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 worker and that is deducted as a business expense under section 162 of the internal revenue code.  For the purposes of this paragraph, "UNAUTHORIZED WORKER" MEANS a person who is all of the following:

(a)  a person who is not a citizen or national of the united states.

(b)  An alien who is not lawfully admitted for permanent residence.

(c)  An alien who is not authorized to be employed under federal law.END_STATUTE

Sec. 9.  Repeal

Section 43-1021, Arizona Revised Statutes, as amended by Laws 2005, chapter 292, section 2, is repealed.

Sec. 10.  Severability; construction

A.  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.

B.  All provisions in this act that are relevant to immigration or the classification of aliens shall be construed to be in conformity with federal immigration law.

Sec. 11.  Short title

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

2.  The Secretary of State shall submit this proposition to the voters at the next general election as provided by article IV, part 1, section 1, Constitution of Arizona."

Amend title to conform


and, as so amended, it do pass

 

                                                EDDIE FARNSWORTH

                                                Chairman

 

 

hcr2044-se-jud

2/23/06

H:sh

 

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02/21/2006

2:42 PM

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