2011 Legislative Preview: HB 1013

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Bill Name: AN ACT TO ALLOW THE CONTRACTORS LICENSING BOARD TO IMPOSE CIVIL PENALTIES OR SUSPEND OR REVOKE THE CERTIFICATE OF LICENSE FOR A CONTRACTOR WHO IS FOUND TO KNOWINGLY EMPLOY WORKERS WITHOUT LEGAL STATUS EITHER DIRECTLY OR THROUGH A SUBCONTRACTOR

Sponsor: Jim Nickels (D-43), 501-833-2424, jim.nickels@arkansashouse.org.

Purpose: To impose penalties — in the form of a revoked contractor’s license — on contractors who knowingly hire illegal immigrants or whose subcontractors do the same. The bill addresses procedural due process concerns with a notice and a hearing requirement before actions can be taken against a contractor, and specifies the possible punishments for knowing violations as: (1) civil penalties of up to $200 for each day the violation occurs, (2) suspension of the contractor’s license, or (3) revocation of the license. It also provides an affirmative defense if the contractor verifies all employees through the e-Verify system.

Pros for Average Arkansans: Theoretically, the bill would open up jobs by forcing the firing of any illegal immigrants currently employed. In turn, it would be a disincentive for illegal immigrants who were in Arkansas to remain in Arkansas if they could find work in a neighboring state more easily, which would (one assumes) lessen state costs associated with illegal immigration/immigrants.

Cons for Average Arkansans: Not to equivocate, but it sort of depends. Primarily, it depends on the U.S. Supreme Court’s resolution of Chamber of Commerce v. Candelaria, which will be ruled upon at some point during this term (but could possibly come as late as the end of June). That case includes a challenge to an Arizona law similar to this one, albeit slightly more strict, in that the AZ law seems to require participation in e-Verify. The Ninth Circuit already held that Arizona’s law was not preempted by federal law, and that question is the gravamen of the appeal to the Supreme Court. (There is a split among U.S. District Courts in various states dealing with similar laws.)

If the Supreme Court affirms and finds that Congress has not sought to “occupy the field” vis-a-vis all questions of immigration law, then the Arizona statute will probably be kosher, and the Ninth Circuit ruling will be affirmed. See, e.g., Wyeth v. Levine, 555 U.S. ___ (2009). In that situation, the risk of tax dollars being spent to defend the law against challenges will mainly be limited to lawsuits where a specific contractor claims that the law as applied in his specific case was violative of some right. (There could also be lawsuits by contractor associations and the like, though (a) those are not likely to be successful in this scenario and (b) from what I hear, the many of the people who have traditionally opposed a measure like this are tentatively on board at this point.)

On the other hand, if the Supreme Court reverses the Ninth Circuit and finds that the law is preempted by federal immigration law, then you’ve got the costs associated with a challenge to the Arkansas law in state court (and, if necessary, federal court). This would be in addition to any costs from the above-mentioned lawsuits while the challenges to the law itself were still pending.

Recommendations: Ideally, I think we’d take a wait-and-see approach on this until after the Supreme Court decides. That said, immigration as an issue is at the political forefront at the moment — thanks, Arizona! — so I can understand wanting to do something on it this term. As these bills go, this one is pretty well-done, and, while there is certainly some wiggle room for any amendments that might strengthen/improve it, none seems so necessary as to make me oppose this bill. My only recommendation would be to closely monitor this issue in other states’ courts and, if necessary, pull the bill to avoid unnecessary costs.

Official BHR Position: Support with recommendations.