H.F. 2430 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 government entity 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 in this state for wages or other 14 remuneration. “Employee” does not include an independent 15 contractor. 16 5. “Employer” means a person, as defined in chapter 4, that 17 transacts business in this state, that has a license issued by 18 an agency in this state, and that employs one or more employees 19 in this state. “Employer” includes this state, a political 20 subdivision of this state, and a self-employed individual. 21 In the case of an independent contractor, “employer” means 22 the independent contractor and does not mean the person or 23 organization that uses the contract labor. 24 6. “E-verify program” means the employment verification 25 program as jointly administered by the United States department 26 of homeland security and the United States social security 27 administration or any successor program. 28 7. “Government entity” means this state or a political 29 subdivision of this state that receives and uses tax revenues. 30 8. a. “Independent contractor” means a person that carries 31 on an independent business, that contracts to do a piece of 32 work according to the person’s own means and methods and that 33 is subject to control only as to results. Whether a person is 34 an independent contractor is determined on a case-by-case basis 35 -1- LSB 5018HV (4) 84 je/rj 1/ 11

H.F. 2430 through various factors, including whether the person does any 1 of the following: 2 (1) Supplies tools or materials. 3 (2) Makes services available to the general public. 4 (3) Works or may work for a number of clients at the same 5 time. 6 (4) Has an opportunity for profit or loss as a result of 7 labor or service provided. 8 (5) Invests in facilities for work. 9 (6) Directs the order or sequence in which the work is 10 completed. 11 (7) Determines the hours when the work is completed. 12 b. Independent contractor status includes an individual who 13 performs services and is not an employee pursuant to section 14 3508 of the Internal Revenue Code. 15 9. “Knowingly employ an unauthorized alien” means the 16 actions described in 8 U.S.C. § 1324a, and shall be interpreted 17 consistently with 8 U.S.C. § 1324a and any applicable federal 18 regulations. 19 10. “License” means a permit, certificate, approval, 20 registration, charter, or similar form of authorization, other 21 than a professional license, that is required by law and that 22 is issued by an agency, allowing the licensee to do business 23 in this state. 24 11. “Social security number verification service” means 25 the program administered by the United States social security 26 administration or any successor program. 27 12. “Unauthorized alien” means an alien who does not have 28 the legal right or authorization under federal law to work in 29 the United States as described in 8 U.S.C. § 1324a(h)(3). 30 Sec. 2. NEW SECTION . 93.2 Knowingly employing unauthorized 31 aliens. 32 1. Knowingly employing unauthorized aliens prohibited. An 33 employer shall not knowingly employ an unauthorized alien. If 34 an employer uses a contract, subcontract, or other independent 35 -2- LSB 5018HV (4) 84 je/rj 2/ 11

H.F. 2430 contractor agreement to obtain the labor of an alien in 1 this state, and the 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 violates this subsection. 5 2. Complaints. 6 a. The secretary of state shall prescribe a complaint 7 form for a person to allege a violation of subsection 1. The 8 complainant shall not be required to list the complainant’s 9 social security number on the complaint form or to have the 10 complaint form notarized. Complaints shall be submitted to the 11 county sheriff or a local law enforcement agency in the county 12 in which the alleged unauthorized alien is or was employed 13 by the employer. This subsection shall not be construed to 14 prohibit the filing of anonymous complaints that are not 15 submitted on a prescribed complaint form. 16 b. On receipt of a complaint on a prescribed complaint 17 form which alleges that an employer knowingly employs or 18 employed a named individual employee who is an unauthorized 19 alien, the county sheriff or local law enforcement agency 20 shall investigate whether the employer has violated subsection 21 1. On receipt of a complaint on a prescribed complaint 22 form which alleges that an employer knowingly employs or 23 employed an unauthorized alien, but which does not name a 24 specific individual employee, the county sheriff or local law 25 enforcement agency may investigate whether the employer has 26 violated subsection 1. If a complaint is received but is not 27 submitted on a prescribed complaint form or is an anonymous 28 complaint, the county sheriff or local law enforcement agency 29 may investigate whether the employer has violated subsection 1. 30 c. The county sheriff or local law enforcement agency shall 31 not investigate complaints that are based solely on race, 32 color, or national origin. When investigating a complaint 33 alleging that a named individual is an unauthorized alien, the 34 county sheriff or local law enforcement agency shall verify the 35 -3- LSB 5018HV (4) 84 je/rj 3/ 11

H.F. 2430 work authorization of the alleged unauthorized alien with the 1 federal government pursuant to 8 U.S.C. § 1373(c). A state, 2 county, or local official shall not attempt to independently 3 make a final determination on whether an alien is authorized 4 to work in the United States. 5 d. A person who knowingly files a false or frivolous 6 complaint under this subsection is guilty of a simple 7 misdemeanor. 8 3. Required notifications. If, after an investigation, 9 the county sheriff or local law enforcement agency determines 10 that the complaint is not false and not frivolous, the 11 county sheriff or local law enforcement agency shall ask the 12 appropriate county attorney to bring an action pursuant to 13 subsection 4. The county sheriff or local law enforcement 14 agency shall also notify United States immigration and customs 15 enforcement of the unauthorized alien. 16 4. Court action required. An action for a violation of 17 subsection 1 shall be brought against the employer by the 18 county attorney in the district court of the county where the 19 unauthorized alien employee is or was employed by the employer. 20 The district court shall expedite the action, including 21 assigning a hearing at the earliest practicable date. 22 5. Court order —— first violation. On a finding of a first 23 violation as described in subsection 7, the court shall require 24 by order all of the following: 25 a. The employer shall terminate the employment of all 26 unauthorized aliens. 27 b. (1) The employer shall be subject to a three-year 28 probationary period for the business location where the 29 unauthorized alien performed work. 30 (2) During the probationary period, the employer shall file 31 quarterly reports on the form prescribed in section 252G.3 with 32 the county attorney for each new employee who is hired by the 33 employer at the business location where the unauthorized alien 34 performed work. 35 -4- LSB 5018HV (4) 84 je/rj 4/ 11

H.F. 2430 c. The employer shall be required to file a signed sworn 1 affidavit with the county attorney within three business days 2 after the order is issued. The affidavit shall state that the 3 employer has terminated the employment of all unauthorized 4 aliens in this state and that the employer will not knowingly 5 employ an unauthorized alien in this state. 6 (1) The court shall order the appropriate agencies to 7 suspend all licenses that are held by the employer if the 8 employer fails to file a signed sworn affidavit with the county 9 attorney within three business days after the order is issued. 10 All licenses that are suspended shall remain suspended until 11 the employer files a signed sworn affidavit with the county 12 attorney. Upon filing of the affidavit, the suspended licenses 13 shall be reinstated immediately by the appropriate agencies. 14 (2) Licenses that are subject to suspension under this 15 paragraph “c” are all licenses that are held by the employer 16 specific to the business location where the unauthorized alien 17 performed work. If the employer does not hold a license 18 specific to the business location where the unauthorized alien 19 performed work, but a license is necessary to operate the 20 employer’s business in general, the licenses that are subject 21 to suspension under this paragraph “c” are all licenses that 22 are held by the employer at the employer’s primary place of 23 business. On receipt of the court’s order, the appropriate 24 agencies shall suspend the licenses according to the court’s 25 order. The court shall send a copy of the court’s order to the 26 secretary of state and the secretary of state shall maintain 27 the copy pursuant to subsection 8. 28 (3) The court may order the appropriate agencies to suspend 29 all licenses described in this paragraph “c” that are held by 30 the employer for not more than ten business days. The court 31 shall base its decision to suspend under this subparagraph 32 on any evidence or information submitted to it during the 33 action for a violation of subsection 1 and shall consider the 34 following factors, if relevant: 35 -5- LSB 5018HV (4) 84 je/rj 5/ 11

H.F. 2430 (a) The number of unauthorized aliens employed by the 1 employer. 2 (b) Any prior misconduct by the employer. 3 (c) The degree of harm resulting from the violation. 4 (d) Whether the employer made good faith efforts to comply 5 with any applicable requirements. 6 (e) The duration of the violation. 7 (f) The role of the directors, officers, or principals of 8 the employer in the violation. 9 (g) Any other factors the court deems appropriate. 10 6. Court order —— second violation. For a second violation, 11 as described in subsection 7, the court shall order the 12 appropriate agencies to permanently revoke all licenses that 13 are held by the employer specific to the business location 14 where the unauthorized alien performed work. If the employer 15 does not hold a license specific to the business location 16 where the unauthorized alien performed work, but a license 17 is necessary to operate the employer’s business in general, 18 the court shall order the appropriate agencies to permanently 19 revoke all licenses that are held by the employer at the 20 employer’s primary place of business. On receipt of the order, 21 the appropriate agencies shall immediately revoke the licenses. 22 7. Violations defined. 23 a. A violation shall be considered a first violation by 24 an employer at a business location if the violation did not 25 occur during a probationary period ordered by the court under 26 subsection 5, paragraph “b” , for that employer’s business 27 location. 28 b. A violation shall be considered a second violation by 29 an employer at a business location if the violation occurred 30 during a probationary period ordered by the court under 31 subsection 5, paragraph “b” , for that employer’s business 32 location. 33 8. Secretary of state database. The secretary of state 34 shallmaintain copies of court orders that are received pursuant 35 -6- LSB 5018HV (4) 84 je/rj 6/ 11

H.F. 2430 to subsection 5, paragraph “c” , and shall maintain a database of 1 the employers and business locations found to have committed 2 a first violation of subsection 1 and make the court orders 3 available on the secretary of state’s internet site. 4 9. Federal determination governs. In determining whether 5 an employee is an unauthorized alien, the court shall consider 6 only the federal government’s determination pursuant to 8 7 U.S.C. § 1373(c). The federal government’s determination 8 creates a rebuttable presumption of the employee’s lawful 9 status. The court may take judicial notice of the federal 10 government’s determination and may request the federal 11 government to provide automated or testimonial verification 12 pursuant to 8 U.S.C. § 1373(c). 13 10. Good-faith compliance. For the purposes of this 14 section, an employer that establishes that it has complied 15 in good faith with the requirements of 8 U.S.C. § 1324a(b) 16 establishes a conclusive affirmative defense that the employer 17 did not knowingly employ an unauthorized alien. An employer is 18 considered to have complied with the requirements of 8 U.S.C. § 19 1324a(b), notwithstanding an isolated, sporadic, or accidental 20 technical or procedural failure to meet the requirements, if 21 there is a good-faith attempt to comply with the requirements. 22 11. Entrapment as affirmative defense. 23 a. It is an affirmative defense to a violation of subsection 24 1 that the employer was entrapped. To claim entrapment, the 25 employer must admit by the employer’s testimony or other 26 evidence the substantial elements of the violation. An 27 employer who asserts an entrapment defense has the burden 28 of proving all of the following by a preponderance of the 29 evidence: 30 (1) The idea of committing the violation started with law 31 enforcement officers or their agents rather than with the 32 employer. 33 (2) The law enforcement officers or their agents urged and 34 induced the employer to commit the violation. 35 -7- LSB 5018HV (4) 84 je/rj 7/ 11

H.F. 2430 (3) The employer was not predisposed to commit the violation 1 before the law enforcement officers or their agents urged and 2 induced the employer to commit the violation. 3 b. An employer does not establish entrapment if the employer 4 was predisposed to violate subsection 1 and the law enforcement 5 officers or their agents merely provided the employer with an 6 opportunity to commit the violation. It is not entrapment for 7 law enforcement officers or their agents merely to use a ruse 8 or to conceal their identity. The conduct of law enforcement 9 officers and their agents may be considered in determining if 10 an employer has proven entrapment. 11 Sec. 3. NEW SECTION . 93.3 E-verify program —— employer 12 participation. 13 1. An employer, after hiring an employee, shall verify the 14 employment eligibility of the employee through the e-verify 15 program and shall keep a record of the verification for the 16 duration of the employee’s employment or at least three years, 17 whichever is longer. 18 2. In addition to any other requirement for an employer to 19 receive an economic development incentive from a government 20 entity, the employer shall register with and participate 21 in the e-verify program. Before receiving the economic 22 development incentive, the employer shall provide proof to the 23 government entity that the employer is registered with and 24 is participating in the e-verify program. If the government 25 entity determines that the employer is not complying with this 26 subsection, the government entity shall notify the employer 27 by certified mail of the government entity’s determination 28 of noncompliance and the employer’s right to appeal the 29 determination. On a final determination of noncompliance, 30 the employer shall repay all moneys received as an economic 31 development incentive to the government entity within thirty 32 days of the final determination. 33 3. Every three months, the secretary of state shall request 34 from the United States department of homeland security a 35 -8- LSB 5018HV (4) 84 je/rj 8/ 11

H.F. 2430 list of employers from this state that are registered with 1 the e-verify program. On receipt of the list of employers, 2 the secretary of state shall make the list available on the 3 secretary of state’s internet site. 4 Sec. 4. NEW SECTION . 93.4 Compliance with federal and state 5 law. 6 This chapter shall not be construed to require an employer to 7 take any action that the employer believes in good faith would 8 violate federal or state law. 9 Sec. 5. IMPLEMENTATION OF ACT. Section 25B.2, subsection 10 3, shall not apply to this Act. 11 EXPLANATION 12 This bill prohibits employers from knowingly employing 13 unauthorized aliens. The bill directs the secretary of 14 state to prescribe a complaint form for alleged violations of 15 the prohibition. The bill provides that complaints may be 16 submitted to the county sheriff or local law enforcement agency 17 in the county in which the alleged unauthorized alien is or was 18 employed by the employer. The bill directs the county sheriff 19 or local law enforcement agency to investigate complaints they 20 receive, and to verify the work authorization of an alleged 21 unauthorized alien with the federal government. The bill 22 provides that the investigation is discretionary for complaints 23 which do not name specific employees, anonymous complaints, 24 and complaints not submitted on a prescribed complaint form. 25 The bill prohibits the county sheriff or local law enforcement 26 agency from investigating complaints that are based solely 27 on race, color, or national origin. The bill provides that 28 a person who knowingly files a false or frivolous complaint 29 is guilty of a simple misdemeanor, which is punishable by 30 confinement for no more than 30 days or a fine of at least $65 31 but not more than $625 or by both. 32 The bill requires the county sheriff or local law 33 enforcement agency to notify United States immigration and 34 customs enforcement and the county attorney of a complaint 35 -9- LSB 5018HV (4) 84 je/rj 9/ 11

H.F. 2430 that is not false and not frivolous. The bill requires the 1 county attorney to bring an action in district court against an 2 employer for a violation in the county where the unauthorized 3 alien employee is or was employed by the employer. The bill 4 provides that such an action must be expedited by the court. 5 The bill provides that for a first violation, the court 6 must order the employer to terminate the employment of all 7 unauthorized aliens and to submit a signed sworn affidavit 8 to that effect or face suspension of business licenses by 9 appropriate agencies. The court will also order a three-year 10 probationary period for the employer. The court may also 11 order the suspension of the employer’s business licenses 12 by appropriate agencies for up to 10 business days, after 13 considering certain factors. The bill provides that for a 14 second violation, defined as a violation occurring during a 15 probationary period for a previous violation, the court must 16 order the permanent revocation of the employer’s business 17 licenses. The bill directs the secretary of state to maintain 18 an online database of first-time offenders. 19 The bill provides that the district court can only consider 20 a determination by the federal government in determining the 21 immigration status of an alleged unauthorized alien employed 22 by an employer. The bill provides that an employer who 23 establishes that the employer complied in good faith with 8 24 U.S.C. § 1324a(b) establishes a conclusive affirmative defense 25 that the employer did not knowingly employ an unauthorized 26 alien. The bill provides that an employer is considered to 27 have complied with the requirements of 8 U.S.C. § 1324a(b), 28 notwithstanding an isolated, sporadic, or accidental technical 29 or procedural failure to meet the requirements, if there is a 30 good-faith attempt to comply with the requirements. The bill 31 provides an employer with an affirmative defense of entrapment 32 if certain elements are met. 33 The bill requires an employer hiring a new employee to 34 verify the employee’s employment eligibility through the 35 -10- LSB 5018HV (4) 84 je/rj 10/ 11

H.F. 2430 federal e-verify program. The bill requires the employer 1 to keep records of the verification for the duration of the 2 employee’s employment or three years, whichever is longer. The 3 bill requires an employer receiving an economic development 4 incentive from a state government entity to register with the 5 federal e-verify program. The bill provides that an employer 6 who does not comply with the requirement must repay all moneys 7 received for the economic development incentive. The bill 8 provides an employer the right to appeal a determination of 9 noncompliance, and does not require repayment until a final 10 determination of noncompliance is made. The bill directs the 11 secretary of state to request from the United States department 12 of homeland security a list of employers registered with the 13 e-verify program every three months. The bill directs the 14 secretary of state to make the list available on the secretary 15 of state’s internet site. 16 The bill provides that the bill shall not be construed 17 to require an employer to take any action that the employer 18 believes in good faith would violate federal or state law. 19 The bill may include a state mandate as defined in Code 20 section 25B.3. The bill makes inapplicable Code section 25B.2, 21 subsection 3, which would relieve a political subdivision from 22 complying with a state mandate if funding for the cost of 23 the state mandate is not provided or specified. Therefore, 24 political subdivisions are required to comply with any state 25 mandate included in the bill. 26 -11- LSB 5018HV (4) 84 je/rj 11/ 11