HB2577 - 472R - Senate Fact Sheet

ARIZONA STATE SENATE

Forty-seventh Legislature, Second Regular Session

VETOED

FINAL AMENDED

FACT SHEET FOR H.B. 2577

~~illegal aliens; employment; verification~~

(NOW: immigration law; employment; enforcement)

Purpose

Makes numerous changes relating to immigration policy, including: the employment of unauthorized workers; trespassing by illegal aliens; mobilization of the National Guard; border radar; prohibition against the award of punitive damages for those persons in violation of certain federal immigration laws; legal residency requirements for the family literacy, adult education, childcare assistance and financial assistance programs for public universities or community colleges; cooperation and assistance in enforcement of federal immigration laws by cities, towns and counties; use of verifiable identification documents; and expansion of the Gang Intelligence Team Enforcement Mission (GITEM). Establishes the Arizona Border Enforcement Security Team, the Border Security Fund and the Joint Legislative Committee on Immigration. Appropriates approximately $137 million and 162.8 FTE positions from the state General Fund in FY 2006-2007 and $25 million from the state General Fund in FY 2007-2008 for these purposes.

Federal Immigration Reform and Control Act

The federal Immigration Reform and Control Act (IRCA) makes all United States employers responsible for verifying the identity and work authorization of all individuals, including United States citizens, hired after November 6, 1986. IRCA provides civil penalties for any person who knowingly hires an individual not authorized to work in the United States (unauthorized alien) or who continues to employ an unauthorized alien. Additionally, employers are required to complete Employment Eligibility Verification forms (I-9 Forms) for each employee when hired.

I-9 Forms must be retained for three years after the date the person begins work or one year after the person’s employment is terminated, whichever is later. Employers are required to make the I-9 Form available for inspection to an officer of the Bureau of Immigration and Customs Enforcement, the Department of Labor and/or the Justice Department’s Office of Special Counsel for Unfair Immigration-Related Employment Practices. A person who hires an individual without complying with the I-9 Form requirements is subject to a civil penalty of between $100 and $1,000 for each violation.

IRCA also requires the Department of Homeland Security to establish a system for verifying the immigration status of noncitizen applicants for certain types of federally funded benefits, such as Temporary Assistance for Needy Families, Medicaid, unemployment compensation, Title IV Educational Assistance and certain housing assistance programs. IRCA requires selected programs participate in the Systematic Alien Verification for Entitlements (SAVE) Program. Other programs, such as the Food Stamp and Social Security programs, may also participate in the SAVE Program. State or local benefit programs and licensing bureaus that must verify an applicant’s immigration status may participate in the SAVE Program.

Basic Pilot Employment Verification Program

The SAVE Program, together with the Social Security Administration, administers the Basic Pilot Employment Verification Program (Basic Pilot Program), which allows employers to confirm the employment eligibility of all newly hired employees. The Basic Pilot Program involves verification checks of Social Security Administration and Department of Homeland Security databases by using an automated system to verify employment authorization. The system uses Social Security numbers (SSN), alien registration numbers and I-94 numbers (arrival/departure numbers) to perform the verification checks. As of December 2004, the Basic Pilot Program has been available to all 50 states and it is scheduled to end in November 2008. Employers must register and complete a Memorandum of Understanding (MOU) and a web-based tutorial for participation in the Basic Pilot Program. An I-9 Form must be completed before the employer initiates a verification inquiry, and the employer is required to make the verification inquiries within three business days of hire. Employers are prohibited from using the system to prescreen applicants for employment.

National Guard

The Arizona Army National Guard is part of the reserve component of the U.S. Army and provides the armed services with trained and equipped units in case of a state or national emergency. The Army National Guard is accessible under federal mobilization and can be called-up for operations, national emergencies or war. Unless federalized, the National Guard is under the command of the Governor, through the direction of the Adjutant General. In the event of emergency mobilization at the request of the Governor, the state is responsible for the payment of expenses incurred by the National Guard.

On August 15, 2005, the Governor declared a State of Emergency for Cochise, Pima, Santa Cruz and Yuma counties due to the increase in unauthorized border crossings and the related increase in deaths, crime and property damage. The declaration cited that the number of unauthorized immigrants entering the United States had risen from 140,000 each year in the 1980s to over 700,000 in 2004. This has led to an increase in illegal activity along the Arizona-Mexico international border.

Enforcement of Immigration Laws

Arizona law punishes the act of human smuggling, but it is silent on penalties against persons who have illegally entered the United States and enter or remain in Arizona. Currently, the U.S. Department of Justice may enter into a written agreement with a state or political subdivision of state to allow an officer or employee of the state or subdivision to perform a function of an immigration officer in relation to the investigation, apprehension or detention of aliens in the United States (8 U.S.C. 1357(g)).

Federal law contains both civil and criminal immigration offenses. The Office of Detention and Removal (DRO) is a division of Immigration and Customs Enforcement (ICE) and is responsible for removing persons who have illegally entered the country. DRO transports these persons, manages them while in custody and waiting for their cases to be processed and removes them from the United States when ordered.

The Bureau of Justice Assistance (BJA) in conjunction with ICE, administers the State Criminal Alien Assistance Program (SCAAP). SCAAP provides federal payments to states and localities that incur correctional officer salary costs for incarcerating persons who are illegally in the United States with at least one felony or two misdemeanor convictions for violations of state or local law, and incarcerated for at least four consecutive days during the reporting period. Arizona received approximately $14.3 million from SCAAP in federal FY 2005. The President’s budget proposes termination of SCAAP; however, the President has recommended the termination of SCAAP since federal FY 2003 and the funding has continued.

Fiscal Impact

The fiscal impact on state government associated with H.B. 2577 cannot be determined with certainty. The measure appropriates approximately $137 million and 162.8 FTE positions from the state General Fund in FY 2006-2007 and $25 million from the state General Fund in FY 2007-2008 to various agencies and funds.

According to the Joint Legislative Budget Committee (JLBC) fiscal note for H.B. 2577, the bill could generate state and local government savings to the extent it reduces costs associated with the unauthorized population. The state General Fund may experience a positive impact if savings are achieved in public benefit programs. In addition, there is a potential positive fiscal impact due to the potential to generate revenue for both state and local governments resulting from fines, fees and surcharges associated with the criminal and civil penalties; however, revenues resulting from these fines are unknown as the number of offenders charged, actual monetary penalties, collection rates and case processing times cannot be determined.

There may also be a negative fiscal impact associated with criminal prosecution and detention of persons who are accused and convicted of trespassing by illegal aliens. According to the Department of Justice’s Bureau of Justice Statistics, in FY 2003, there were 2,555 defendants in cases filed in federal court for violations of 8 U.S.C. § 1325. The fiscal note indicates the bill’s precise impact on law enforcement and incarceration expenses is not known and is difficult to determine in advance of how actual costs will relate to appropriations made. The fiscal note also states the measure could have an annual cost to the state General Fund of $117,000 to process additional fingerprints. A portion of these costs could potentially be offset from the monies appropriated to the Department of Public Safety (DPS) for GITEM.

H.B. 2577 appropriates $2 million from the state General Fund to the Attorney General to implement employer sanction provisions. According to the fiscal note, the main cost involves the employer audits. The Attorney General estimates that the maximum five percent audit provision would require $11.5 million and 115 FTE positions. The JLBC fiscal note extrapolates the Attorney General workload estimates, adjusting to the $2 million appropriation, and reports this amount could fund 23 FTE positions, covering over 3,100 employers, which would be a one percent sample for the audits.

The JLBC fiscal note states, that beyond the specified appropriations, H.B. 2577 could have broader consequences to both state revenues and expenditures. The magnitude of these broader revenue and spending impacts will depend on how much the bill affects the level of immigration, which cannot be determined in advance.

Provisions

Enforcement of Federal Immigration Laws

1. Requires all officials, agencies and personnel of counties, cities and towns to fully comply with and, to the extent permitted by law, support the enforcement of federal immigration laws of the United States.

2. Authorizes, to the extent permitted by federal law, peace officers to investigate or apprehend illegal aliens in the United States, including transferring illegal aliens to federal law enforcement agencies and transporting illegal aliens across state lines to detention centers, in the enforcement of federal immigration laws.

3. Requires county sheriffs, police departments of cities and towns and the Director of DPS to enter into an MOU with the U.S. Department of Justice or the U.S. Department of Homeland Security to designate officers as immigration officers qualified to investigate, apprehend and detain illegal aliens in the United States to the fullest extent consistent with state and federal law.

4. Specifies, except as provided in federal law, no official, personnel or agent of counties, cities and towns may be prohibited or in any way restricted from sending, receiving or maintaining information relating to the immigration status, lawful or unlawful, of any individual or exchanging that information with any other federal, state or local governmental entity for the following official purposes:

a) determination of eligibility for any federal, state or local public benefit, service or license that is restricted in whole or in part on the basis of immigration status.

b) verification of any claim of legal domicile if legal domicile is required by law or contract.

c) confirmation of the identity of any person who is detained and who claims not to be a citizen of the United States.

5. Requires the county sheriffs, police departments of cities and towns and the Director of DPS to implement a program, paid for by federal funding, to train peace officers to investigate violations of federal immigration laws. The Arizona Peace Officer Standards and Training Board may assist in the implementation of a training program if requested by a county sheriff or city or town police department.

6. Requires that the requirements and obligations of these Enforcement of Federal Immigration Laws provisions be implemented in a manner fully consistent with federal law regulating immigration and protecting the civil rights of citizens and aliens.

7. Intends that law enforcement agencies and personnel fully comply with these Enforcement of Federal Immigration Laws provisions to accomplish the goal of supplementing the efforts of federal law enforcement agencies to stop human smuggling and trespassing by illegal aliens and by transferring illegal aliens to such agencies, notwithstanding any local law enforcement policies that would otherwise inhibit such compliance.

Questioning of Immigration Status

8. Permits a peace officer to question a person regarding the person’s immigration status if the peace officer lawfully detains the person based on the reasonable suspicion that the person has committed or is committing a crime or any other violation of law.

9. Exempts public entities and public employees from liability for the lawful questioning of any person about the person’s immigration status, unless the public entity or employee intended to cause injury, was grossly negligent or was acting outside the scope of his or her employment.

10. Prevents the state or any political subdivision from prohibiting a peace officer from questioning a person about his or her immigration status if that person has committed or is committing a crime or violation.

Trespassing by Illegal Aliens

11. Prohibits, as “trespassing by illegal aliens,” a person who is not a citizen of the United States and who has improperly entered the United States, from entering into or being on any public or private land in Arizona. This crime is in addition to any violation of federal law.

12. Prohibits a peace officer from stopping or arresting a person for trespassing by illegal aliens unless the peace officer has reasonable suspicion to believe that the person has committed or is committing another violation of Arizona or federal law.

13. Requires the arresting authority to fingerprint a person arrested for trespassing by illegal aliens.

14. Permits the arresting authority, on a person’s first offense for trespassing by illegal aliens, to transfer the person to a federal agency with jurisdiction over the person or refer the person for prosecution.

15. Requires the court, in addition to any other fine, to order the person to pay a civil penalty in the following amount:

a) not less than $50 and not more than $250 for a first violation of trespassing by illegal aliens.

b) twice the amount if the person was previously subject to a civil penalty for trespassing by illegal aliens.

16. Requires the civil penalties collected for trespassing by illegal aliens be deposited into the Border Security Fund.

17. Prescribes the following penalties for trespassing by illegal aliens:

a) a class 1 misdemeanor for a first offense.

b) a class 4 felony for a second or subsequent offense.

c) a class 2 felony for any offense if the defendant also is in possession of a dangerous drug, a precursor chemical used in manufacturing methamphetamine, a deadly weapon, dangerous instrument or property used for the purpose of committing an act of terrorism.

18. Requires the court to sentence a person who is convicted of trespassing by illegal aliens to imprisonment for not less than the maximum sentence authorized by law.

19. Specifies that a person convicted of trespassing by illegal aliens is not eligible for suspension or commutation of sentence or release on any basis until the sentence imposed is served.

20. Requires the sentence for trespassing by illegal aliens must run consecutively to any other sentence imposed on the person and to any undischarged term of imprisonment of the person.

Prohibition on Punitive Damage Awards

21. Prevents a person who is present in Arizona, but improperly entered the United States, from being awarded punitive damages in any Arizona court action.

Employment Eligibility Document Forgery

22. States a person commits forgery if, with intent to defraud, the person 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 and that is used to obtain employment in Arizona by a person who is not authorized to work in the United States.

23. Makes employment eligibility document forgery a class 3 felony.

24. Includes 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 in the restitution order, if the court orders restitution for employment eligibility document forgery violation. Damages include the employer’s costs, attorney fees and expenses.

Public Program Legal Residency Restrictions

25. Prohibits the Arizona Department of Education from providing adult education classes to adults who are not citizens, legal residents or lawfully present in the United States.

26. Prohibits the Department of Economic Security from providing child care assistance to persons not lawfully present in the United States.

27. States that a person without lawful immigration status is not entitled to classification as an in‑state student in a public university or as a county resident for resident tuition purposes at a community college district.

28. Prohibits any student enrolled in a university or community college who is without lawful immigration status to receive tuition or fee waivers, grants, scholarship assistance, financial aid or other types of assistance funded in whole or in part with state monies.

29. Requires biannual reporting to the JLBC on the number of people who applied to participate in the specified programs and the number who were not eligible for those programs due to their status as a person not lawfully present in the United States from the following entities:

a) State Board of Education.

b) Department of Education.

c) Community College Districts.

d) Arizona State University, Northern Arizona University, University of Arizona.

e) Department of Economic Security.

30. Requires these Public Program Legal Residency Restrictions provisions to be enforced without regard to race, religion, gender, ethnicity or national origin.

Social Security Numbers

(Employer Sanctions)

31. Requires an employer to discharge an employee if the employer discovers that the employee provided an invalid SSN to the employer unless the employee provides a valid SSN or a legal and valid federal or state identification document to the employer within ten business days of receiving notice that the initial number was invalid.

32. States an employer is not required to discharge an employee for providing an invalid SSN if an error occurred when a valid SSN was processed by the employer or by the federal or state government.

Investigation of Employment of Unauthorized Workers

(Employer Sanctions)

33. Requires, beginning January 1, 2007, the Attorney General after conducting an investigation determining that an employer knowingly employs an unauthorized worker, as verified by the Attorney General with the federal government, to immediately:

a) order the employer to cease and desist from employing the unauthorized worker and to discharge for cause other unauthorized workers identified in the order.

b) notify ICE of the unauthorized worker.

34. Requires the employer to comply with the cease and desist order within ten business days after the Attorney General confirms that the employer received the order, unless the employer has filed an appeal of the cease and desist order.

35. Allows the employer that receives a cease and desist order to either:

a) request a hearing before the Office of Administrative Hearings.

b) serve a notice of contest of the order; the Attorney General may then bring an action in superior court, seeking to enforce the order.

36. States the cease and desist order does not become effective if an employer requests a hearing or serves a notice of contest until ten business days after the expiration of any time period to appeal from the final administrative decision of the Office of Administrative Hearings or superior court and any subsequent appeals.

37. States that proof of the following circumstances, unless satisfactorily explained, creates a rebuttable presumption that an employer knowingly employed an unauthorized worker:

a) the employer violated the minimum wage requirements of the federal Fair Labor Standards Act for the identified employee.

b) 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.

38. Allows the Attorney General to bring a civil cause of action to assess a civil penalty of up to $5,000 and to have an employer’s business license suspended or revoked if the employer fails to comply with a cease and desist order. Deposits any civil penalties assessed into the Border Security Fund.

39. Requires the court, if the court orders an employer’s business license be suspended or revoked, to suspend or revoke the employer’s license that prevents the employer from conducting business at the business location where the unauthorized worker identified in the cease and desist order is employed.

40. Prohibits an agency from issuing a new license to an employer whose license has been revoked due to the employer’s failure to comply with a cease and desist order until two years after the date of revocation.

I-9 Forms

(Employer Sanctions)

41. Requires all employers to complete and retain I-9 Forms for all employees as prescribed by federal law.

42. Requires the Attorney General to notify the U.S. Citizenship and Immigration Services if the Attorney General determines an employer has failed to complete and retain I-9 Forms as prescribed by federal law.

Employment Practices Requirements

(Employer Sanctions)

43. Stipulates, if the Attorney General determines that an employer has knowingly failed to comply with the unemployment insurance (UI) contribution, workers’ compensation and income tax withholding requirements (employment practices requirements), the following penalties for the first violation during a one-year period:

a) a civil penalty of $2,000 per employee for which the employer knowingly failed to comply with the employment practices requirements. The civil penalty cannot exceed $10,000.

b) an employer that is assessed a civil penalty is also subject to an additional penalty in an amount equal to the amount of revenue, including interest, that was lost to the state because of the violation of the employment practices requirements.

44. Specifies the procedure for notification to an employer that the Attorney General has determined the employer failed to comply with the employment practices requirements and appeal of the determination by the employer.

45. Specifies the following penalties for a second violation of the employment practices requirements during a one-year period:

a) the second violation is a class 1 misdemeanor.

b) on conviction, allows a court to order the employer’s business license to be suspended.

c) on conviction, requires the court to order the employer to pay an additional assessment of $4,000 for each employee for whom the employer knowingly failed to comply with the employment practices requirements.

d) on conviction, the court is also required to order the employer to pay an additional assessment equal to two times the amount of revenue, including interest, that was lost to the state because of a violation of the employment practices requirements.

46. Specifies the following penalties for a third violation of the employment practices requirements during a one-year period:

a) the third violation is a class 1 misdemeanor and requires the court to sentence the employer to serve six months in jail, the maximum as allowed by law.

b) on conviction, the court may order that the employer’s business license be suspended or revoked.

c) on conviction, the court is required to order the employer to pay an additional assessment of $6,000 per employee for whom the employer knowingly failed to comply with the employment practices requirements.

d) on conviction, the court is also required to order the employer to pay an additional assessment equal to three times the amount of revenue, including interest, that was lost as a result of the violation of the employment practices requirements.

e) requires the Attorney General to record an unpaid judgment of the court as a lien against the employer.

47. Deposits penalties assessed for violations of the employment practices requirements into the Border Security Fund.

48. Prohibits law enforcement authorities from providing any incentives to law enforcement officers for investigating alleged violations of the employment practices requirements.

49. States the penalties for a violation of the employment practices requirements are in addition to any other penalties that may be imposed by law.

Affirmations by Licensees and Licensee Audits

(Employer Sanctions)

50. Requires an employer, in order to receive a license to operate a business in Arizona from an agency, to provide a signed affirmation that the employer has complied with all federal and state laws regarding the authorization for employment in the United States of every employee who is employed by the employer.

51. Defines “agency” as any agency, department, board or commission of the state or a county, city or town that issues a license for purposes of operating a business in Arizona.

52. Prohibits an agency from issuing a business license to any employer who fails to submit a signed affirmation.

53. Requires, beginning January 1, 2007, each agency that issues business licenses to quarterly submit to the Attorney General the names of the employers who are issued a new license or who have a license renewed during the previous quarter.

54. Requires the Attorney General to annually select from an aggregate list of all employer names submitted up to five percent of the names that have been submitted at random and conduct an audit of those employers to determine whether the employers knowingly employ unauthorized workers.

55. Prohibits the Attorney General from selecting an employer for an audit that was the subject of an audit within the preceding two years, unless the employer has previously violated the employer sanctions provisions or if the Attorney General can show just cause for the audit.

56. Requires the Attorney General to conduct an annual audit of at least one state agency and one political subdivision of the state.

57. Requires the Attorney General to review the following as part of an audit:

a) the employer’s signed affirmation.

b) the employer’s compliance with federal and state laws regarding lawful employment.

c) the completed I-9 Forms of the employer.

58. Allows the Attorney General, when conducting an audit, to verify the employment authorization of the employer’s employees through the Basic Pilot Program.

59. Allows the Attorney General to issue a subpoena and compel the employer to produce records relating to an audit. If the employer fails to comply with the subpoena, the Attorney General may bring a civil cause of action to assess a civil penalty of up to $1,000 per day.

60. Requires the Attorney General, if an audit determines that an employer knowingly employs an unauthorized worker, to immediately:

a) order the employer to cease and desist from employing the unauthorized worker and to discharge for cause other unauthorized workers identified in the order.

b) notify ICE of the unauthorized worker.

61. Requires the employer to comply with the cease and desist order within ten business days after the Attorney General confirms that the employer received the order, unless the employer has filed an appeal of the order.

62. States the cease and desist order does not become effective if an employer requests a hearing or serves a notice of contest until ten business days after the expiration of any time period to appeal from the final administrative decision of the Office of Administrative Hearings or superior court and any subsequent appeals.

63. States that proof of the following circumstances, unless satisfactorily explained, creates a rebuttable presumption that an employer knowingly employed an unauthorized worker:

a) the employer violated the minimum wage requirements of the federal Fair Labor Standards Act for the identified employee.

b) 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.

64. Allows the Attorney General to bring a civil cause of action to assess a civil penalty of up to $5,000 and to have an employer’s business license suspended or revoked if the employer fails to comply with a cease and desist order. Deposits any civil penalties assessed into the Border Security Fund.

65. Requires the court, if the court orders an employer’s business license be suspended or revoked, to suspend or revoke the employer’s license that prevents the employer from conducting business at the business location where the unauthorized worker identified in the cease and desist order is employed.

66. Prohibits an agency from issuing a new license to an employer whose license has been revoked due to the employer’s failure to comply with a cease and desist order until two years after the date of revocation.

Immigration Ombudsman-Citizens Aide (OCA)

(Employer Sanctions)

67. Creates the Immigration OCA who is required to provide employers with information that helps employers to comply with federal immigration laws, to comply with state law regarding employment of unauthorized workers, employment practices requirements and audit requirements and to provide assistance to enroll employers in the Basic Pilot Program.

68. Requires the Immigration OCA to establish a procedure for employers to report charges of illegal hiring to ICE.

69. Requires the Immigration OCA to establish a protocol to inform employers of appropriate actions to take when an employee’s or prospective employee’s SSN is in question.

70. Requires the Immigration OCA to assist county sheriffs and police departments of cities and towns with completing and entering into the MOU with the federal government for the enforcement of immigration laws.

71. Appropriates $100,000 and one FTE position from the state General Fund in FY 2006-2007 to the OCA for the purpose of the Immigration OCA. The appropriation is exempt from lapsing.

Other Employer Sanction Provisions

72. Requires the state to indemnify an employer if any administrative or judicial action is brought against the employer by a former employee as a result of the employer’s good faith actions in compliance with the investigation of the employment of unauthorized workers, employment practices requirements or the audit provisions or any order, determination or notice of those provisions.

73. Requires any indemnification to be limited only to actions specifically identified in the employment of unauthorized workers, employment practices requirements or the audit provisions.

74. Requires the state to verify and pay the actual damages and costs, including attorney fees, incurred by the employer in defense of the administrative or judicial action within 45 days after the employer submits the costs to the state.

75. Exempts an employer from any civil or criminal penalty imposed by the state or any administrative or judicial action for employing an unauthorized worker if the employer does any of the following:

a) verifies the employment eligibility of the employer’s employees through the Basic Pilot Program.

b) complies with federal and state laws regarding I-9 Forms and reporting employees to the Arizona Department of Economic Security, the Arizona Department of Revenue, the Internal Revenue Service and the Social Security Administration.

c) makes a good faith determination that the person providing the service to the employer is done through an independent contractor relationship.

76. Requires complaints used by the Attorney General to begin an investigation of an employer for knowingly employing an unauthorized worker or for a violation of the employment practices requirements to be in writing and be signed by the complainant.

77. Requires the Director of the Arizona Department of Administration (ADOA) to verify the authorization for employment in the United States of every state employee and contractors with the state through the Basic Pilot Program that are hired after the state enters into the MOU that is required to participate in the program.

78. Requires the Director of ADOA to establish guidelines for the use of the Basic Pilot Program by agencies and business entities the state contracts with.

79. Requires the Auditor General to include, in its audits and investigations of agencies, an audit of the agencies’ adherence to immigration employment practices.

80. Requires the court to expedite actions brought under the provisions regarding knowingly employing unauthorized workers, employment practices requirements and audits.

81. States the provisions regarding employment of unauthorized workers, employment practices requirements and audits do not require an employer to take any action that the employer believes in good faith would violate federal law.

82. Adds the amount of salary or other compensation that is paid to an unauthorized worker who is knowingly hired by the taxpayer and that is deducted as a business expense to the calculation for Arizona gross income.

83. Allows the Attorney General, notwithstanding any other law, to have access to any records, documents or materials regarding the implementation or enforcement of the employment of unauthorized workers provisions, employment practices requirements and employer audit provisions.

84. Requires the Attorney General to submit a quarterly report to the Governor, the JLBC and the Joint Legislative Committee on Immigration regarding the implementation and enforcement of the employment of unauthorized workers provisions, employment practices requirements and employer audit provisions.

National Guard Mobilization

85. Allows the Governor to mobilize the National Guard to the border due to a declaration of a state of emergency.

86. Requires the Governor to report to the Speaker of the House of Representatives and the President of the Senate regarding the plan to stabilize the emergency within 30 days after the declaration of the emergency or by the general effective date, whichever is later.

87. Appropriates $10 million from the state General Fund in FY 2006-2007 to the Department of Emergency and Military Affairs (DEMA) for National Guard mobilization expenses if the Governor reports the plan for stabilization. The appropriation is exempt from lapsing.

88. Requires any federal monies provided to the state for National Guard deployment to be used to offset the $10 million appropriation and reverts the offset amount to the state General Fund.

Border Radar

89. Establishes the Border Radar Fund administered by DEMA consisting of legislative appropriations, monies received from the federal Department of Homeland Security, gifts and grants to the fund for border radar along the southern border of Arizona. Monies in the fund are continuously appropriated.

90. Appropriates $25 million from the state General Fund in each of the FYs 2006-2007 and 2007-2008 to the Border Radar Fund for DEMA to lease or purchase a border radar system and establishes reporting requirements regarding the progress of implementation of the border radar project.

91. Requires any federal monies provided to the state for border radar to be used to offset the state appropriation and reverts the offset amount to the state General Fund.

Joint Legislative Committee on Immigration

92. Establishes the Joint Legislative Committee on Immigration consisting of three members from the Senate and three members from the House of Representatives to review the Attorney General’s report regarding the employer sanctions provisions and the implementation and enforcement of immigration laws.

93. Requires the Joint Legislative Committee on Immigration to submit a report with its recommendations to secure the borders, prevent unauthorized border crossings and improve the enforcement of immigration laws in Arizona by December 1, annually, to the Governor, President of the Senate and Speaker of the House of Representatives.

94. Repeals the committee on December 31, 2009.

Secure and Verifiable Identification

95. Prohibits a department, agency, commission, board or district of the state or a political subdivision of the state that requires identification for services from accepting or recognizing any identification document unless the document was issued by a political subdivision of the state, a federally recognized Indian tribe, a state or a federal authority.

96. Requires the identification to be verifiable by a law enforcement or a homeland security agency.

97. Prohibits law enforcement services from being withheld because of the presentation of unverifiable identification, except that the unverifiable document cannot be used to establish identity.

98. Prohibits political subdivisions from relying on anything other than a verifiable identification for the purposes of issuing a form of identification, license, permit or official document.

99. Clarifies that exceptions can only be made as required by treaty or federal law or for the purpose of reporting a crime.

100. Provides that any actions made knowingly in violation of these Secure and Verifiable Identification provisions are not protected by governmental immunity.

Arizona Border Enforcement Security Team (Team)

101. Establishes the Team consisting of 11 members for the purpose of making grants to political subdivisions for border security.

102. Specifies that members serve at the pleasure of the appointing officer and, in the case of elected officials, until their elective term of office expires.

103. Establishes that the two legislative members are advisory, nonvoting members of the Team and are not members for purposes of determining whether a quorum is present.

104. Requires the nonelective office holding members to serve staggered three-year terms, except for the terms of the first members, which are established.

105. Requires the voting members of the Team to annually select a chairperson who shall not serve consecutive terms.

106. Prohibits all members of the Team from receiving compensation, but allows voting members to be reimbursed for expenses.

107. Allows the Team to use the staff of DEMA and DEMA’s facilities for meetings.

108. Permits the Team to enter into interagency agreements for Team business.

109. Requires the Team to do the following:

a) make grants, after review by JLBC, from one-half of the monies in the Border Security Fund to counties for incarceration operating expenses, including temporary and movable detainment facilities, tents for immigration control and operating and personnel costs for the detainment facilities.

b) make grants, after review by JLBC, from one-half of the monies in the Border Security Fund to city, town and county law enforcement agencies, including city and town prosecutors and county attorneys for border security personnel, physical barriers and any other immigration enforcement purposes. The Team may also make a grant to the Arizona Department of Transportation (ADOT) to construct an unpaved southern Arizona border road. ADOT may work in cooperation with the Arizona Department of Corrections (ADC).

c) receive quarterly reports from the entities receiving grants and evaluate the entities’ effectiveness.

d) by December 1 of each year, submit a report on the effectiveness of the grants provided to the Governor, the JLBC, the President of the Senate and the Speaker of the House of Representatives, as well as provide a copy to the Secretary of State and the Director of the Arizona, State Library, Archives and Public Records.

110. Prohibits the Team from making grants to any city, town or county that does not enforce the immigration law as required by this legislation or that has any sanctuary policy involving any form of aid to illegal aliens or any reduced enforcement of illegal immigration, as determined by the Team.

111. Requires the Team to administer the Border Security Fund.

112. Allows the Team to direct the State Treasurer to invest and divest the monies in the Border Security Fund, and the monies earned must be credited to the Border Security Fund.

113. Sunsets the Team on July 1, 2016.

Border Security Fund

114. Establishes the Border Security Fund, which consists of legislative appropriations, gifts, grants and specified civil penalties. Monies in the fund are exempt from lapsing.

115. Requires ADOA to send billing invoices to the federal government to recover the appropriations made to the Border Security Fund for deposit back into the state General Fund.

116. Appropriates the following amounts from the state General Fund to the Border Security Fund in FY 2006-2007:

a) $27 million for grants to counties for incarceration operating expenses, including temporary and movable detainment facilities, tents for immigration control and operating and personnel costs for the detainment facilities.

b) $27 million for grants to city, town and county law enforcement agencies, city and town prosecutors and the county attorney for border security personnel, physical barriers and any other immigration enforcement purposes.

c)$850,000 for grants to ADC and county sheriffs for border clean-up restoration costs.

d) $1 million for grants to ADOT to construct a southern Arizona border road.

117. States, for appropriations made to the Border Security Fund, if federal monies are granted for the purpose specified for the state appropriation, then the federal dollars will be used to offset the state appropriation and the offset amount reverts back to the state General Fund.

118. Repeals the Border Security Fund on January 1, 2017.

Additional Funding and Appropriations

119. Appropriates and exempts from lapsing $28,952,900 and 161.8 FTE positions to DPS in FY 2006-2007 for the following purposes:

a) the operating expenses of the existing GITEM program.

b) to expand the GITEM into a multi-jurisdiction task force known as the Gang and Immigration Intelligence Team Mission.

c) new functions relating to immigration enforcement, including border security and border personnel.

d) an additional 100 DPS sworn personnel, 50 of whom will be used for immigration and border security.

120. Specifies if DPS uses any of the monies appropriated to GITEM for an agreement or contract with a city, town, county or other entity to provide services for the GITEM program, the city, county or other entity must provide 15 percent of the costs of the services and DPS must provide 85 percent of the costs for each agreement or contract.

121. Specifies the purpose of the DPS appropriation is to expand GITEM and not to add a new unit or increased administration to the mission.

122. Requires DPS to submit an expenditure plan to JLBC for review prior to expending any appropriated monies.

123. Requires DPS to provide a summary of quarterly and year-to-date expenditures to JLBC within 30 days after the last day of each calendar year.

124. Appropriates $14.3 million from the state General Fund to DPS in FY 2006-2007 for the establishment of a southern Arizona crime laboratory. Exempts the appropriation from lapsing.

125. Appropriates $200,000 from the state General Fund in FY 2006-2007 to the State Land Department for an environmental impact study of the effects of illegal immigration on state lands in the southern Arizona border counties. Exempts the appropriation from lapsing.

126. Requires the State Land Department to submit a report of the findings of the environmental impact study to the President of the Senate and the Speaker of the House of Representatives by December 1, 2007.

127. Appropriates $2 million from the state General Fund in FY 2006-2007 to the Attorney General for enforcement of the Investigation of Employment of Unauthorized Workers, Employment Practices Requirements, I-9 Forms, Affirmations by Licensees and Licensee Audits provisions. Exempts the appropriation from lapsing.

128. Appropriates $150,000 from the state General Fund in FY 2006-2007 to the Auditor General for the purpose of contracting with a third party to conduct any fiscal audits that are federally required.

129. States if federal monies are granted for the purpose specified for the state appropriations, then the federal dollars will be used to offset the state appropriation and the offset amount reverts back to the state General Fund.

Miscellaneous

130. Prescribes definitions.

131. Provides for severability of the provisions.

132. Requires the provisions that are relevant to immigration or the classification of aliens to be construed to conform with federal immigration law.

133. Makes technical and conforming changes.

134. Becomes effective on the general effective date.

Amendments Adopted by CED Committee

1. Exempts an employer from a civil liability or criminal penalty imposed by the state for employing an unauthorized worker if the employer makes a good faith determination that the person providing services to the employer is done through an independent contractor relationship.

2. Requires the state to indemnify an employer if any administrative or judicial action is brought against the employer as a result of the employer’s actions in compliance with any order, determination or notice under the act.

3. States the specific federal and state laws regarding lawful employment that an employer must comply with to be exempt from any civil liability or criminal penalty imposed by the state for employing an unauthorized worker.

4. Allows only an agency of the state or a county, not any agency of a political subdivision, to notify the Attorney General that an investigation has determined a person employs an unauthorized worker.

5. Requires an employer to be notified by certified mail of a cease and desist order.

6. Requires an employer to have knowingly employed an unauthorized worker to be subject to a cease and desist order.

7. Removes the stipulation that an employer paying an employee with cash rather than by check or automatic deposit gives rise to the inference that an employer knowingly employed an unauthorized worker.

8. Requires an enforcement agency to evaluate evidence given by an employer and issue a final determination of whether the employer violated the employment practices requirements within 60 days.

9. Removes the ability of a city or town attorney to enforce the employment practices requirements.

10. Removes the requirement that the Director of ADOA verify the authorization for employment in the United States of every state employee through the Basic Pilot Program.

11. Requires the Attorney General, instead of an agency, to audit up to five percent of employers that have received licenses.

12. Requires complaints received by the Immigration OCA to be forwarded to the employer subject to the complaint, in addition to the Attorney General.

13. Requires the Immigration OCA to provide employers with assistance in complying with the provisions of this act.

14. Modifies definitions.

15. Makes technical and conforming changes.

Amendments Adopted by Appropriations Committee

· Adopted the strike everything amendment.

Amendments Adopted by Committee of the Whole

1. Adopted the Appropriations strike everything amendment.

2. Adds the provisions of the following sections: Enforcement of Federal Immigration Laws, Trespassing by Illegal Aliens, Questioning of Immigration Status, Prohibition on Punitive Damage Awards, Arizona Border Enforcement Security Team, Border Security Fund, Additional Funding and Appropriations, Secure and Verifiable Identification, Public Program Legal Residency Restrictions, National Guard Mobilization and Border Radar.

3. Removes the ability of a county attorney to investigate to determine if an employer knowingly employs an unauthorized worker and to investigate if an employer violates the employment practices requirements.

4. Requires the Attorney General to submit a quarterly report on the implementation and enforcement of the employer sanctions provisions.

5. States the requirement for the ADOA to use the Basic Pilot Program for all state employees applies to all employees hired after the state enters into the MOU that is required to participate in the program.

6. Deposits the civil penalties and additional penalties for violations of knowingly employing unauthorized workers and for violating employment practices requirements into the Border Security Fund instead of the state General Fund.

7. Requires complaints used by the Attorney General to begin an investigation of an employer to be in writing and be signed by the complainant.

8. Requires agencies to submit the names of the employer that are issued new licenses or who have a license renewed each quarter.

9. Removes the requirement that the Immigration OCA forward complaints regarding the employment of unauthorized workers to the Attorney General.

10. States an employer’s business license is suspended for the time period specified by the court.

11. Prescribes definitions.

12. Makes technical and conforming changes.

Amendments Adopted by Conference Committee

1. Expands the duties of the Immigration OCA.

2. Limits the indemnification requirement of the employer sanctions provisions to actions brought against an employer by a former employee.

3. Requires ADOA to verify the work authorization of contractors with the state through the Basic Pilot Program and to establish guidelines for use of the Basic Pilot Program by agencies and business entities with which the state contracts.

4. Allows an employer to be audited in the two-year period after an audit if an employer has violated the employer sanctions provisions or if the Attorney General can show just cause for the audit.

5. Allows the Attorney General to issue a subpoena and compel the employer to produce records relating to an audit. If the employer fails to comply with the subpoena, the Attorney General may bring a civil cause of action to assess a civil penalty of up to $1,000 per day.

6. Gives the Attorney General access to any records or documents regarding the implementation or enforcement of the employer sanctions provisions.

7. Requires the Auditor General to include, in its audits and investigations of agencies, an audit of the agencies’ adherence to immigration employment practices.

8. Requires the Arizona Peace Officer Standards and Training Board to provide assistance to implement a training program for peace officers to investigate violations of federal law if requested by a county sheriff or a police department.

9. Allows the Team to make grants to ADOT to construct an unpaved southern Arizona border road and allows ADOT to work in cooperation with ADC for its construction.

10. Reduces the state General Fund appropriations made to the Border Security Fund for grants to cities, towns and counties, and for border cleanup restoration costs. The difference is appropriated as follows: $1 million to the Border Security Fund for grants to ADOT to construct the southern Arizona border road and $150,000 to the Auditor General to contract with a third party to conduct any fiscal audits that are federally required.

11. States, that for every appropriation, if federal monies are granted for the purpose specified for the state appropriation, then the federal dollars will be used to offset the state appropriation and the offset amount reverts back to the state General Fund.

12. Makes technical and conforming changes.

Governor’s Veto Message

In her veto message, the Governor states that H.B. 2577 is “a weak and ineffective illegal immigration bill that offers complete amnesty to employers, violates the constitution, and is overwhelmingly opposed by law enforcement and top border elected officials in the state.” The Governor indicates the bill offers no constructive new ideas, has provisions that she has previously objected to or vetoed, and does not have strong employer sanctions provisions.

Senate Action House Action

CED 3/29/06 DPA 6-2-0-0 FMPR 2/6/06 DPA/SE 3-0-3-0

APPROP 4/19/06 DPA/SE 8-2-1-0 3^rd Read 3/9/06 35-20-5

3^rd Read 5/16/06 18-7-5-0 Final Read 5/25/06 33-22-5

Final Read 5/25/06 16-9-5-0

Vetoed by the Governor 6/6/06

Prepared by Senate Research

June 7, 2006

BP/jas