House File 368 - Introduced HOUSE FILE 368 BY GARRETT , WORTHAN , ROGERS , RAYHONS , WATTS , FRY , BRANDENBURG , HEARTSILL , GASSMAN , L. MILLER , HANUSA , DOLECHECK , SALMON , BYRNES , HESS , DRAKE , PETTENGILL , FISHER , ALONS , DEYOE , KOESTER , SHEETS , WINDSCHITL , HUSEMAN , SCHULTZ , SHAW , MAXWELL , R. TAYLOR , and HANSON A BILL FOR An Act relating to the employment of unauthorized aliens and 1 providing penalties and remedies. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1596YH (7) 85 je/rj

H.F. 368 Section 1. NEW SECTION . 93.1 Definitions. 1 As used in this chapter, unless the context otherwise 2 requires: 3 1. “Agency” means an agency, department, board, or 4 commission of this state or a political subdivision that issues 5 a license for purposes of operating a business in this state. 6 2. “Economic development incentive” means a grant, loan, or 7 performance-based incentive awarded by a public employer of 8 this state. “Economic development incentive” does not include a 9 tax credit or tax incentive program. 10 3. “Employ” means hiring or continuing to employ an 11 individual to perform services. 12 4. “Employee” means an individual who provides services 13 or labor for an employer or public employer in this state for 14 wages or other remuneration. “Employee” does not include an 15 independent contractor. 16 5. “Employer” means a person, as defined in chapter 4, 17 that does business with or receives an economic development 18 incentive from a public employer, and that employs one or more 19 employees in this state. 20 6. “E-verify program” means the employment verification 21 program as jointly administered by the United States department 22 of homeland security and the United States social security 23 administration or any successor program. 24 7. a. “Independent contractor” means a person that carries 25 on an independent business, that contracts to do a piece of 26 work according to the person’s own means and methods and that 27 is subject to control only as to results. Whether a person is 28 an independent contractor is determined on a case-by-case basis 29 through various factors, including whether the person does any 30 of the following: 31 (1) Supplies tools or materials. 32 (2) Makes services available to the general public. 33 (3) Works or may work for a number of clients at the same 34 time. 35 -1- LSB 1596YH (7) 85 je/rj 1/ 10

H.F. 368 (4) Has an opportunity for profit or loss as a result of 1 labor or service provided. 2 (5) Invests in facilities for work. 3 (6) Directs the order or sequence in which the work is 4 completed. 5 (7) Determines the hours when the work is completed. 6 b. Independent contractor status includes an individual who 7 performs services and is not an employee pursuant to section 8 3508 of the Internal Revenue Code. 9 8. “Knowingly employ an unauthorized alien” means the 10 actions described in 8 U.S.C. § 1324a, and shall be interpreted 11 consistently with 8 U.S.C. § 1324a and any applicable federal 12 regulations. 13 9. “License” means a permit, certificate, approval, 14 registration, charter, or similar form of authorization, other 15 than a professional license, that is required by law and that 16 is issued by an agency, allowing the licensee to do business 17 in this state. 18 10. “Political subdivision” means a city, county, township, 19 school district, area education agency, community college, or 20 institution governed by the state board of regents. 21 11. “Professional license” means a license, certification, 22 or registration required by law to engage in a profession or 23 occupation in this state. 24 12. “Public employer” means this state or a political 25 subdivision of this state. 26 13. “Unauthorized alien” means an alien who does not have 27 the legal right or authorization under federal law to work in 28 the United States as described in 8 U.S.C. § 1324a(h)(3). 29 Sec. 2. NEW SECTION . 93.2 Knowingly employing unauthorized 30 aliens. 31 1. Knowingly employing unauthorized aliens prohibited. An 32 employer or public employer shall not knowingly employ an 33 unauthorized alien. If an employer or public employer uses 34 a contract, subcontract, or other independent contractor 35 -2- LSB 1596YH (7) 85 je/rj 2/ 10

H.F. 368 agreement to obtain the labor of an alien in this state, and 1 the employer or public employer knowingly contracts with an 2 unauthorized alien or with a person who employs or contracts 3 with an unauthorized alien to perform the labor, the employer 4 or public employer violates this subsection. 5 2. Court action required. An action for a violation of 6 subsection 1 shall be brought against an employer by the 7 county attorney in the district court of the county where the 8 unauthorized alien employee is or was employed by the employer. 9 The district court shall expedite the action, including 10 assigning a hearing at the earliest practicable date. 11 3. Court order —— first violation. On a finding of a first 12 violation as described in subsection 5, the court shall require 13 by order all of the following: 14 a. The employer shall terminate the employment of all 15 unauthorized aliens. 16 b. (1) The employer shall be subject to a three-year 17 probationary period for the business location where the 18 unauthorized alien performed work. 19 (2) During the probationary period, the employer shall file 20 quarterly reports in the form prescribed in section 252G.3 with 21 the county attorney for each new employee who is hired by the 22 employer at the business location where the unauthorized alien 23 performed work. 24 c. The employer shall be required to file a signed sworn 25 affidavit with the county attorney within three business days 26 after the order is issued. The affidavit shall state that 27 the employer has terminated the employment of all of the 28 employer’s unauthorized alien employees in this state and that 29 the employer will not knowingly employ an unauthorized alien 30 in this state. 31 (1) The court shall order the appropriate agencies to 32 suspend all licenses that are held by the employer if the 33 employer fails to file a signed sworn affidavit with the county 34 attorney within three business days after the order is issued. 35 -3- LSB 1596YH (7) 85 je/rj 3/ 10

H.F. 368 All licenses that are suspended shall remain suspended until 1 the employer files a signed sworn affidavit with the county 2 attorney. Upon filing of the affidavit, the suspended licenses 3 shall be reinstated immediately by the appropriate agencies. 4 (2) Licenses that are subject to suspension under this 5 paragraph “c” are all licenses that are held by the employer 6 specific to the business location where the unauthorized alien 7 performed work. If the employer does not hold a license 8 specific to the business location where the unauthorized alien 9 performed work, but a license is necessary to operate the 10 employer’s business in general, the licenses that are subject 11 to suspension under this paragraph “c” are all licenses that 12 are held by the employer at the employer’s primary place of 13 business. On receipt of the court’s order, the appropriate 14 agencies shall suspend the licenses according to the court’s 15 order. The court shall send a copy of the court’s order to the 16 secretary of state and the secretary of state shall maintain 17 the copy pursuant to subsection 6. 18 (3) The court may order the appropriate agencies to suspend 19 all licenses described in this paragraph “c” that are held 20 by the employer for not more than ten business days. The 21 court shall base its decision to suspend licenses under this 22 subparagraph on any evidence or information submitted to the 23 court during the action for a violation of subsection 1 and 24 shall consider the following factors, if relevant: 25 (a) The number of unauthorized aliens employed by the 26 employer. 27 (b) Any prior misconduct by the employer. 28 (c) The degree of harm resulting from the violation. 29 (d) Whether the employer made good faith efforts to comply 30 with any applicable requirements. 31 (e) The duration of the violation. 32 (f) The role of the directors, officers, or principals of 33 the employer in the violation. 34 (g) Any other factors the court deems appropriate. 35 -4- LSB 1596YH (7) 85 je/rj 4/ 10

H.F. 368 4. Court order —— second violation. For a second violation, 1 as described in subsection 5, the court shall order the 2 appropriate agencies to revoke all licenses that are held 3 by the employer specific to the business location where the 4 unauthorized alien performed work. If the employer does not 5 hold a license specific to the business location where the 6 unauthorized alien performed work, but a license is necessary 7 to operate the employer’s business in general, the court shall 8 order the appropriate agencies to revoke all licenses that 9 are held by the employer at the employer’s primary place of 10 business. On receipt of the order, the appropriate agencies 11 shall immediately revoke the licenses. An agency shall not 12 reissue a license revoked in this manner. 13 5. Violations defined. 14 a. A violation shall be considered a first violation by 15 an employer at a business location if the violation did not 16 occur during a probationary period ordered by the court under 17 subsection 3, paragraph “b” , for that employer’s business 18 location. 19 b. A violation shall be considered a second violation by 20 an employer at a business location if the violation occurred 21 during a probationary period ordered by the court under 22 subsection 3, paragraph “b” , for that employer’s business 23 location. 24 6. Secretary of state database. The secretary of state 25 shall maintain copies of court orders that are received 26 pursuant to subsection 3, paragraph “c” , and shall maintain a 27 database of the employers and business locations found to have 28 committed a first violation of subsection 1 and make the court 29 orders available on the secretary of state’s internet site. 30 7. Federal determination governs. In determining whether 31 an employee is an unauthorized alien, the court shall consider 32 only the federal government’s determination pursuant to 8 33 U.S.C. § 1373(c). The federal government’s determination 34 creates a rebuttable presumption of the employee’s lawful 35 -5- LSB 1596YH (7) 85 je/rj 5/ 10

H.F. 368 status. The court may take judicial notice of the federal 1 government’s determination and may request the federal 2 government to provide automated or testimonial verification 3 pursuant to 8 U.S.C. § 1373(c). 4 8. Good-faith compliance. For the purposes of this section, 5 an employer that establishes that it has complied in good 6 faith with the requirements of 8 U.S.C. § 1324a(b) establishes 7 a conclusive affirmative defense that the employer did not 8 knowingly employ an unauthorized alien. An employer is 9 considered to have complied with the requirements of 8 U.S.C. § 10 1324a(b), notwithstanding an isolated, sporadic, or accidental 11 technical or procedural failure to meet the requirements, if 12 there is a good-faith attempt to comply with the requirements. 13 9. Entrapment as affirmative defense. 14 a. It is an affirmative defense to a violation of subsection 15 1 that the employer was entrapped. To claim entrapment, the 16 employer must admit by the employer’s testimony or other 17 evidence the substantial elements of the violation. An 18 employer who asserts an entrapment defense has the burden 19 of proving all of the following by a preponderance of the 20 evidence: 21 (1) The idea of committing the violation started with law 22 enforcement officers or their agents rather than with the 23 employer. 24 (2) The law enforcement officers or their agents urged and 25 induced the employer to commit the violation. 26 (3) The employer was not predisposed to commit the violation 27 before the law enforcement officers or their agents urged and 28 induced the employer to commit the violation. 29 b. An employer does not establish entrapment if the employer 30 was predisposed to violate subsection 1 and the law enforcement 31 officers or their agents merely provided the employer with an 32 opportunity to commit the violation. It is not entrapment for 33 law enforcement officers or their agents merely to use a ruse 34 or to conceal their identity. The conduct of law enforcement 35 -6- LSB 1596YH (7) 85 je/rj 6/ 10

H.F. 368 officers and their agents may be considered in determining if 1 an employer has proven entrapment. 2 Sec. 3. NEW SECTION . 93.3 E-verify program —— employer 3 participation. 4 1. An employer or public employer, after hiring an employee, 5 shall verify the employment eligibility of the employee 6 through the e-verify program and shall keep a record of the 7 verification for the duration of the employee’s employment or 8 at least three years, whichever is longer. 9 2. In addition to any other requirement for an employer 10 to receive an economic development incentive from a public 11 employer, the employer shall register with and participate 12 in the e-verify program. Before receiving the economic 13 development incentive, the employer shall provide proof to 14 the public employer that the employer is registered with and 15 is participating in the e-verify program. If the public 16 employer determines that the employer is not complying with 17 this subsection, the public employer shall notify the employer 18 by certified mail of the public employer’s determination 19 of noncompliance and the employer’s right to appeal the 20 determination. On a final determination of noncompliance, 21 the employer shall repay all moneys received as an economic 22 development incentive to the public employer within thirty days 23 of the final determination. 24 3. Every three months, the secretary of state shall request 25 from the United States department of homeland security a list 26 of employers and public employers from this state that are 27 registered with the e-verify program. On receipt of the list 28 of employers and public employers, the secretary of state shall 29 make the list available on the secretary of state’s internet 30 site. 31 Sec. 4. NEW SECTION . 93.4 Compliance with federal and state 32 law. 33 This chapter shall not be construed to require an employer or 34 public employer to take any action that the employer or public 35 -7- LSB 1596YH (7) 85 je/rj 7/ 10

H.F. 368 employer believes in good faith would violate federal or state 1 law. 2 Sec. 5. IMPLEMENTATION OF ACT. Section 25B.2, subsection 3 3, shall not apply to this Act. 4 EXPLANATION 5 This bill prohibits employers and public employers from 6 knowingly employing unauthorized aliens. The bill defines an 7 “employer” as a person, as defined in Code chapter 4, that does 8 business with or receives an economic development incentive 9 from a public employer, and that employs one or more employees 10 in the state. The bill defines “public employer” as this state 11 or a political subdivision of this state. 12 The bill requires the county attorney to bring an action 13 in district court against an employer for a violation in the 14 county where the unauthorized alien employee is or was employed 15 by the employer. The bill provides that such an action must be 16 expedited by the court. 17 The bill provides that for a first violation, the court 18 must order the employer to terminate the employment of all 19 of its unauthorized alien employees and to submit a signed 20 sworn affidavit to that effect or face suspension of business 21 licenses by appropriate agencies. The court must also order 22 a three-year probationary period for the employer. The court 23 may also order the suspension of the employer’s business 24 licenses by appropriate agencies for up to 10 business days, 25 after considering certain factors. The bill provides that for 26 a second violation, defined as a violation occurring during a 27 probationary period for a previous violation, the court must 28 order the revocation of the employer’s business licenses. 29 Licenses revoked in this manner cannot be reissued. The bill 30 directs the secretary of state to maintain an online database 31 of first-time offenders. 32 The bill provides that the district court can only consider 33 a determination by the federal government in determining the 34 immigration status of an alleged unauthorized alien employee. 35 -8- LSB 1596YH (7) 85 je/rj 8/ 10

H.F. 368 The bill provides that an employer who establishes that the 1 employer complied in good faith with 8 U.S.C. § 1324a(b) 2 establishes a conclusive affirmative defense that the employer 3 did not knowingly employ an unauthorized alien. The bill 4 provides that an employer is considered to have complied with 5 the requirements of 8 U.S.C. § 1324a(b), notwithstanding an 6 isolated, sporadic, or accidental technical or procedural 7 failure to meet the requirements, if there is a good-faith 8 attempt to comply with the requirements. The bill provides an 9 employer with an affirmative defense of entrapment if certain 10 elements are met. 11 The bill requires an employer or public employer hiring a 12 new employee to verify the employee’s employment eligibility 13 through the federal e-verify program. The bill requires the 14 employer or public employer to keep records of the verification 15 for the duration of the employee’s employment or three years, 16 whichever is longer. 17 The bill also requires an employer receiving an economic 18 development incentive from a public employer in the state to 19 register with the federal e-verify program. The bill provides 20 that an employer who does not comply with the requirement 21 must repay all moneys received as an economic development 22 incentive. The bill provides an employer the right to appeal a 23 determination of noncompliance, and does not require repayment 24 until a final determination of noncompliance is made. 25 The bill directs the secretary of state to request from 26 the United States department of homeland security a list of 27 employers and public employers registered with the e-verify 28 program every three months. The bill directs the secretary of 29 state to make the list available on the secretary of state’s 30 internet site. 31 The bill provides that the bill shall not be construed to 32 require an employer or public employer to take any action that 33 the employer believes in good faith would violate federal or 34 state law. 35 -9- LSB 1596YH (7) 85 je/rj 9/ 10

H.F. 368 The bill may include a state mandate as defined in Code 1 section 25B.3. The bill makes inapplicable Code section 25B.2, 2 subsection 3, which would relieve a political subdivision from 3 complying with a state mandate if funding for the cost of 4 the state mandate is not provided or specified. Therefore, 5 political subdivisions are required to comply with any state 6 mandate included in the bill. 7 -10- LSB 1596YH (7) 85 je/rj 10/ 10