Senate File 243 - Introduced SENATE FILE 243 BY GARRETT , CHAPMAN , GUTH , JOHNSON , WHITING , SEGEBART , GREENE , ZUMBACH , BEHN , ROZENBOOM , KAPUCIAN , SHIPLEY , ZAUN , CARLIN , SINCLAIR , SWEENEY , COSTELLO , COURNOYER , KRAAYENBRINK , EDLER , FEENSTRA , NUNN , R. SMITH , SCHULTZ , MILLER-MEEKS , and BREITBACH A BILL FOR An Act relating to the employment of unauthorized aliens and 1 providing penalties. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1498XS (2) 88 je/rn

S.F. 243 Section 1. NEW SECTION . 95.1 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 section 4.1, 17 that transacts business in this state and that has a license 18 issued by an agency in this state. “Employer” includes 19 this state, a political subdivision of this state, and a 20 self-employed individual. In the case of an independent 21 contractor, “employer” means the independent contractor and 22 does not mean the person or organization that uses the contract 23 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 1498XS (2) 88 je/rn 1/ 10

S.F. 243 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. “Unauthorized alien” means an alien who does not have 25 the legal right or authorization under federal law to work in 26 the United States as described in 8 U.S.C. §1324a(h)(3). 27 Sec. 2. NEW SECTION . 95.2 Knowingly employing unauthorized 28 aliens. 29 1. Knowingly employing unauthorized aliens prohibited. An 30 employer shall not knowingly employ an unauthorized alien. If 31 an employer uses a contract, subcontract, or other independent 32 contractor agreement to obtain the labor of an alien in 33 this state, and the employer knowingly contracts with an 34 unauthorized alien or with a person who employs or contracts 35 -2- LSB 1498XS (2) 88 je/rn 2/ 10

S.F. 243 with an unauthorized alien to perform the labor, the employer 1 violates this subsection. 2 2. Court action required. An action for a violation of 3 subsection 1 shall be brought against the employer by the 4 county attorney in the district court of the county where the 5 unauthorized alien employee is or was employed by the employer. 6 The district court shall expedite the action, including 7 scheduling a hearing at the earliest practicable date. 8 3. Court order —— first violation. On a finding of a first 9 violation as described in subsection 5, the court shall require 10 by order all of the following: 11 a. The employer shall terminate the employment of all 12 unauthorized aliens. 13 b. (1) The employer shall be subject to a three-year 14 probationary period for the business location where the 15 unauthorized alien performed work. 16 (2) During the probationary period, the employer shall file 17 quarterly reports on the form prescribed in section 252G.3 with 18 the county attorney for each new employee who is hired by the 19 employer at the business location where the unauthorized alien 20 performed work. 21 c. The employer shall be required to file a signed sworn 22 affidavit with the county attorney within three business days 23 after the order is issued. The affidavit shall state that the 24 employer has terminated the employment of all unauthorized 25 aliens in this state and that the employer will not knowingly 26 employ an unauthorized alien in this state. 27 (1) The court shall order the appropriate agencies to 28 suspend all licenses that are held by the employer if the 29 employer fails to file a signed sworn affidavit with the county 30 attorney within three business days after the order is issued. 31 All licenses that are suspended shall remain suspended until 32 the employer files a signed sworn affidavit with the county 33 attorney. Upon filing of the affidavit, the suspended licenses 34 shall be reinstated immediately by the appropriate agencies. 35 -3- LSB 1498XS (2) 88 je/rn 3/ 10

S.F. 243 (2) Licenses that are subject to suspension under this 1 paragraph “c” are all licenses that are held by the employer 2 specific to the business location where the unauthorized alien 3 performed work. If the employer does not hold a license 4 specific to the business location where the unauthorized alien 5 performed work, but a license is necessary to operate the 6 employer’s business in general, the licenses that are subject 7 to suspension under this paragraph “c” are all licenses that 8 are held by the employer at the employer’s primary place of 9 business. On receipt of the court’s order, the appropriate 10 agencies shall suspend the licenses according to the court’s 11 order. The court shall send a copy of the court’s order to the 12 secretary of state and the secretary of state shall maintain 13 the copy pursuant to subsection 6. 14 (3) The court may order the appropriate agencies to suspend 15 all licenses described in this paragraph “c” that are held by 16 the employer for not more than ten business days. The court 17 shall base its decision to suspend under this subparagraph 18 on any evidence or information submitted to it during the 19 action for a violation of subsection 1 and shall consider the 20 following factors, if relevant: 21 (a) The number of unauthorized aliens employed by the 22 employer. 23 (b) Any prior misconduct by the employer. 24 (c) The degree of harm resulting from the violation. 25 (d) Whether the employer made good faith efforts to comply 26 with any applicable requirements. 27 (e) The duration of the violation. 28 (f) The role of the directors, officers, or principals of 29 the employer in the violation. 30 (g) Any other factors the court deems appropriate. 31 4. Court order —— second violation. For a second violation, 32 as described in subsection 5, the court shall order the 33 appropriate agencies to permanently revoke all licenses that 34 are held by the employer specific to the business location 35 -4- LSB 1498XS (2) 88 je/rn 4/ 10

S.F. 243 where the unauthorized alien performed work. If the employer 1 does not hold a license specific to the business location 2 where the unauthorized alien performed work, but a license 3 is necessary to operate the employer’s business in general, 4 the court shall order the appropriate agencies to permanently 5 revoke all licenses that are held by the employer at the 6 employer’s primary place of business. On receipt of the order, 7 the appropriate agencies shall immediately revoke the licenses. 8 5. Violations defined. 9 a. A violation shall be considered a first violation by 10 an employer at a business location if the violation did not 11 occur during a probationary period ordered by the court under 12 subsection 3, paragraph “b” , for that employer’s business 13 location. 14 b. A violation shall be considered a second violation by 15 an employer at a business location if the violation occurred 16 during a probationary period ordered by the court under 17 subsection 3, paragraph “b” , for that employer’s business 18 location. 19 6. Secretary of state database. The secretary of state 20 shall maintain copies of court orders that are received 21 pursuant to subsection 3, paragraph “c” , and shall maintain a 22 database of the employers and business locations found to have 23 committed a first violation of subsection 1 and make the court 24 orders available on the secretary of state’s internet site. 25 7. Federal determination creates rebuttable presumption. In 26 determining whether an employee is an unauthorized alien, the 27 court shall consider the federal government’s determination 28 of the immigration status of the employee pursuant to 8 29 U.S.C. §1373(c). The court may take judicial notice of the 30 federal government’s determination. The federal government’s 31 determination that the employee is an unauthorized alien 32 creates a rebuttable presumption of the employee’s unauthorized 33 status. The employer may present evidence that the employee 34 is not an unauthorized alien. 35 -5- LSB 1498XS (2) 88 je/rn 5/ 10

S.F. 243 8. Good-faith compliance. For the purposes of this section, 1 an employer that establishes that it has complied in good 2 faith with the requirements of 8 U.S.C. §1324a(b) establishes 3 a conclusive affirmative defense that the employer did not 4 knowingly employ an unauthorized alien. An employer is 5 considered to have complied with the requirements of 8 U.S.C. 6 §1324a(b), notwithstanding an isolated, sporadic, or accidental 7 technical or procedural failure to meet the requirements, if 8 there is a good-faith attempt to comply with the requirements. 9 9. Entrapment as affirmative defense. 10 a. It is an affirmative defense to a violation of subsection 11 1 that the employer was entrapped. To claim entrapment, the 12 employer must admit by the employer’s testimony or other 13 evidence the substantial elements of the violation. An 14 employer who asserts an entrapment defense has the burden 15 of proving all of the following by a preponderance of the 16 evidence: 17 (1) The idea of committing the violation started with law 18 enforcement officers or their agents rather than with the 19 employer. 20 (2) The law enforcement officers or their agents urged and 21 induced the employer to commit the violation. 22 (3) The employer was not predisposed to commit the violation 23 before the law enforcement officers or their agents urged and 24 induced the employer to commit the violation. 25 b. An employer does not establish entrapment if the employer 26 was predisposed to violate subsection 1 and the law enforcement 27 officers or their agents merely provided the employer with an 28 opportunity to commit the violation. It is not entrapment for 29 law enforcement officers or their agents merely to use a ruse 30 or to conceal their identity. The conduct of law enforcement 31 officers and their agents may be considered in determining if 32 an employer has proven entrapment. 33 Sec. 3. NEW SECTION . 95.3 E-verify program —— employer 34 participation —— economic development incentives from government 35 -6- LSB 1498XS (2) 88 je/rn 6/ 10

S.F. 243 entities. 1 1. An employer, after hiring an employee, shall verify the 2 employment eligibility of the employee through the e-verify 3 program and shall keep a record of the verification for the 4 duration of the employee’s employment or at least three years, 5 whichever is longer. 6 2. In addition to any other requirement for an employer to 7 receive an economic development incentive from a government 8 entity, the employer shall register with and participate 9 in the e-verify program. Before receiving the economic 10 development incentive, the employer shall provide proof to the 11 government entity that the employer is registered with and 12 is participating in the e-verify program. If the government 13 entity determines that the employer is not complying with this 14 subsection, the government entity shall notify the employer 15 by certified mail of the government entity’s determination 16 of noncompliance and the employer’s right to appeal the 17 determination. On a final determination of noncompliance, 18 the employer shall repay all moneys received as an economic 19 development incentive to the government entity within thirty 20 days of the final determination. 21 3. Every three months, the secretary of state shall request 22 from the United States department of homeland security a 23 list of employers from this state that are registered with 24 the e-verify program. On receipt of the list of employers, 25 the secretary of state shall make the list available on the 26 secretary of state’s internet site. 27 Sec. 4. NEW SECTION . 95.4 Compliance with federal and state 28 law. 29 This chapter shall not be construed to require an employer to 30 take any action that the employer believes in good faith would 31 violate federal or state law. 32 Sec. 5. IMPLEMENTATION OF ACT. Section 25B.2, subsection 33 3, shall not apply to this Act. 34 EXPLANATION 35 -7- LSB 1498XS (2) 88 je/rn 7/ 10

S.F. 243 The inclusion of this explanation does not constitute agreement with 1 the explanation’s substance by the members of the general assembly. 2 This bill prohibits employers from knowingly employing 3 unauthorized aliens. 4 The bill defines “employer” as a person that transacts 5 business in this state and that has a license issued by an 6 agency in this state. “Employer” includes this state, a 7 political subdivision of this state, and a self-employed 8 individual. In the case of an independent contractor, 9 “employer” means the independent contractor and does not mean 10 the person or organization that uses the contract labor. 11 The bill requires the county attorney to bring an action 12 in district court against an employer for a violation in the 13 county where the unauthorized alien employee is or was employed 14 by the employer. The bill provides that such an action must be 15 expedited by the court. 16 The bill provides that for a first violation, the court 17 must order the employer to terminate the employment of all 18 unauthorized aliens and to submit a signed sworn affidavit 19 to that effect or face suspension of business licenses by 20 appropriate agencies. The court must also order a three-year 21 probationary period for the employer. The court may also 22 order the suspension of the employer’s business licenses 23 by appropriate agencies for up to 10 business days, after 24 considering certain specified factors. The bill provides that 25 for a second violation, defined as a violation occurring during 26 a probationary period for a previous violation, the court must 27 order the permanent revocation of the employer’s business 28 licenses. The bill directs the secretary of state to maintain 29 an online database of first-time offenders. 30 In determining the immigration status of an alleged 31 unauthorized alien employed by an employer, the bill requires 32 the district court to consider the federal government’s 33 determination of the immigration status of the employee. The 34 federal government’s determination that the employee is an 35 -8- LSB 1498XS (2) 88 je/rn 8/ 10

S.F. 243 unauthorized alien creates a rebuttable presumption of the 1 employee’s unauthorized status. The employer may present 2 evidence that the employee is not an unauthorized alien. 3 The bill provides that an employer who establishes that the 4 employer complied in good faith with 8 U.S.C. §1324a(b), 5 relating to verification of authorization for employment, 6 establishes a conclusive affirmative defense that the employer 7 did not knowingly employ an unauthorized alien. The bill 8 provides that an employer is considered to have complied with 9 the requirements of 8 U.S.C. §1324a(b), notwithstanding an 10 isolated, sporadic, or accidental technical or procedural 11 failure to meet the requirements, if there is a good-faith 12 attempt to comply with the requirements. The bill provides an 13 employer with an affirmative defense of entrapment if certain 14 elements are met. 15 The bill requires an employer hiring a new employee to 16 verify the employee’s employment eligibility through the 17 federal e-verify program. The bill requires the employer 18 to keep records of the verification for the duration of the 19 employee’s employment or three years, whichever is longer. The 20 bill requires an employer receiving an economic development 21 incentive from a state government entity to register with the 22 federal e-verify program. The bill provides that an employer 23 who does not comply with the requirement must repay all moneys 24 received for the economic development incentive. The bill 25 provides an employer the right to appeal a determination of 26 noncompliance and does not require repayment until a final 27 determination of noncompliance is made. The bill directs the 28 secretary of state to request from the United States department 29 of homeland security a list of employers registered with the 30 e-verify program every three months. The bill directs the 31 secretary of state to make the list available on the secretary 32 of state’s internet site. 33 The bill provides that the bill shall not be construed 34 to require an employer to take any action that the employer 35 -9- LSB 1498XS (2) 88 je/rn 9/ 10

S.F. 243 believes in good faith would violate federal or state law. 1 The bill may include a state mandate as defined in Code 2 section 25B.3. The bill makes inapplicable Code section 25B.2, 3 subsection 3, which would relieve a political subdivision from 4 complying with a state mandate if funding for the cost of 5 the state mandate is not provided or specified. Therefore, 6 political subdivisions are required to comply with any state 7 mandate included in the bill. 8 -10- LSB 1498XS (2) 88 je/rn 10/ 10