House State Agencies and Govt'l Affairs Committee
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Speaker 12
2:23
you.
Thank
you.
That was four years ago. Rick Green's bill was the first step. This is
Speaker 19
3:23
just a continuation of that process. A lot of the things that
are in Rick Green's bill are also covered by this bill. House Bill 1013 basically gives the contractor's license for the right and the duty to investigate
and hold hearings on contractors that hire illegal workers. Now, this state is facing a massive problem with our UI system due to the hiring of the illegal. We are facing a tremendous challenge in coming up with over $300 million that we owe to the federal government because of our trust fund being depleted.
Now, that trust fund is the Unaffordable and Incurrence Trust Fund, and the funds that you send fund back come from the wages, from the employers who are paying wages to their workers. Well, the illegals are what if I'm off the books, those funds are not going into that trust fund to cover the unemployed workers in this state. So right now, we are facing a massive deficit in that particular fund.
And this bill, I think, will help that particular problem. It won't solve it, but it's something that we need to have to drift in. because the hiring is illegal hurts that fund and hurts the viability of our state. I heard that mention this morning over
in George Floyd about the amount of money the state owed from the federal government for the unemployment tax year. The
contractors and home builders say
we can't be responsible for our son, but only our direction for him. I disagree with that. Knowing the construction industry as I do know the construction industry, the general contractor or the owner of the home building controls their self. That's just the nature of the business. Now, does this mean that the general contractors don't want any responsibility? And the people that work in their particular job, they just want to throw it aside and let that be the responsibility of somebody else.
I don't think that's good for the policy of the state. They do have a problem in the state of the hiring of the illegal. This bill, I hope, will deal with that activity. Are contractors required to do more? Yes, they are. required to do any more than what they're required to do now as far as workers' compensation making sure that their subs have workers' compensation coverage they have to be responsible for that why can't we make the general make their subs
provide information on the verification of the workers that they have hired it's a small small burden but it could bring It brings big benefits to not only the construction industry, but to the workers that are employed legitimately in that industry. The general contractor just has to make sure it's required by law that I-9s are completed on their work.
that the subs have done the verification responsibility as it was by the I-9. Another argument in opposition to this bill is that the contractor's license board should not be enforcing immigration law. Well, the immigration law of 1986 specifically left it to the state to deal with the businesses and the licensing of businesses in their respective states, because it's a state's right to them.
We are not enforcing immigration law. We are just dealing with the licenses of our contractors, and that is permissible under federal law, and I think under the fifth amendment of the Constitution, and it's something that we can assert the power to do. It's a state, almost a state's rights issue. The federal government has, they have no right to allow federal incorporation. Corporations are allowed by the state. License is allowed by the state.
The dealing with the problem of illegal immigration, I think we'll all agree that the federal government has not done and had a good job in protecting our borders. That's a reality. This legislation hopefully will stem that tide of the illegal workers coming in the state of Arkansas and taking jobs away from those folks that are citizens of this state.
Also, some contractors are saying that we're kind of in a depression right now in our industry and that we don't need to be putting any more burdens on contractors right now. What does that mean? We want to give the construction industry, the home building industry, kind of a safe harbor there where they can continue business as usual until the economy gets better. But what about that unemployed worker out there, who's right now our unemployment rate is 7.9 percent.
Can they afford to wait until the economy gets better so they can get a job. Those are the questions that we have to answer. I think the bill strikes the balance for protection of workers and also the protection to the legitimate contractor. The Contractors License Board is authorized to hear complaints about contractors. They conduct hearings. They make rulings.
This is what part of their responsibility is, this bill, if not an omnibus bill that just says that anybody's going to lose their license is a higher degree of the illegals, this puts it within the contractor's license board where the board is made up of contractors and they can hear these issues that come before them and they can make their rulings based upon their knowledge of the industry.
And then again, if a contractor feels like they did not get a fair shake under our Arkansas Administrative Procedures Act, they can appeal that into court. So the protections are there for the contractors. This is designed for contractors to regulate themselves. As you know, it's impossible to write a perfect bill.
That's one reason we just had this amendment, because there are some grammatical
problems in the bill. I cannot come up with every scenario that is out there that may result in
something that this doesn't seem fair but I think the contractor's license board has the authority to take care of those things because the act does give them the authority to make rules in this area so they can make those rules they can provide them to us here to legislatures are required to do and I think they are fully suited to deal with this issue I know they don't necessarily want to deal with it but this is the best state structure that we have for
dealing with it now there are the e-verify system that is in the bill e-verify is a way if a contractor and the subs do the e-verify there's
Speaker 17
12:02
And the numbers that we need to cross-check for Social Security Administration and the Department of Social Security and their databases. High 90% come back okay if you can come back to the problem. The point of the data is told there's a problem they can check if they enter the correct Social Security number sometimes instead of 3-8 and they can determine what's the right. And so they can check that
Speaker 19
12:29
out. And, and, and, and, you know,
99% of them are going to come back probably okay, and then if there is one that is not okay, then under the federal law and the contractor or the employer hires them anyway, then it will appear that they knowingly hired somebody not authorized to work in the United States. So that's the key to what the contractor has to do is in order to keep from having any liability under this, and that is to make sure the subs do the E-Verify and they show
those records to the general contractor or the home builder. I
think that's a minimum burden. Right now, this issue
Speaker 33
13:19
of using E-Verify, a state law requiring
Speaker 19
13:23
employers to use E-Verify, which is a federal system. That issue is right now before the United States Supreme Court in one of the Arizona cases.
Not the recent Arizona laws, but the laws they passed. I like the same time Rick Green passed his bill. And that particular issue has been litigated all the way up to the Supreme Court, and the lower court said the states can require e-verify. The Ninth Circuit Court of Appeals said they could require e-verify. Our state, Dustin McDaniel, our Attorney General, filed, along with other AGs across the country,
about 10 or 12 of them, filed an amicus brief, a friend of the court brief, asking for the Supreme Court to uphold that decision that states have the right to require employers to e-verify. Also, in a press release I saw, Governor Beebe also supported the state intervening as an amicus in that Supreme Court decision. So hopefully we will have a ruling within the next few months, I assume.
They've already had oral arguments on that particular issue. But I feel that this legislation is constitutionally sound. It addresses the problem of illegal immigrants in this state. And it's a modest proposal, and I
will be happy to entertain questions from any of you on this particular topic. Thank you, Representative. We have questions
Speaker 39
15:08
from the committee. Before I recognize Representative Garner, I have one question.
I'm not familiar with the Contractors Licensing Board. What's the number on that board, and what's the makeup of that board? Well, I see
Speaker 19
15:26
their executive director is here, and he may be able to tell you exactly who are on there. I was just not sure if they had consumer representatives on there or not, so that's why I didn't. But he would be the person to answer that question. If that's okay, can
Speaker 41
15:45
you take the seat and state your name and who you're with for the record, please.
Speaker 41
16:20
Thank you, Mr. Lennon. Representative Garner.
Representative Ed Garner
Unverified
16:26
Thank you, Mr. Chairman. Representative Nichols, in your bill, you're saying that a contractor would be able to verify that he did not know the status of the worker that is
Speaker 53
16:46
hired actually by a subcontractor If he uses the e-verify
Representative Ed Garner
Unverified
16:52
system, you're talking about, I understand that you're talking about two separate legal entities, a contractor and a subcontractor that he agrees to do work on his site.
Does a contractor have the right to use the e-verify system of anybody? I mean, can a contractor say, I want to run the e-verify system on employees of another
company? I think what the general contractor and the home builder
Speaker 19
17:30
can do is tell that subcontractor who will be working for the general
contractor, that general contractor or home builder can tell their subs,
you show me that you have run the E-Verify. It's not that the general is running an E-Verify on another company's employees. It's just that that sub has to
Speaker 62
17:56
tell the home builder or the general contractor that E-Verify was run.
Representative Ed Garner
Unverified
18:03
Yes, sir. Well, on line 12 of your bill,
it says the contractor shall be found to not, well, I'm starting with part two, line 10 on the second page.
A contractor shall not be found to have knowingly employed workers without legal authorization to work in the
United States if the contractor uses the federal e-verify system to verify the legal status of all persons offered employment. but those persons offered employment actually work for another legal entity, the subcontractor. So I'm going to
ask again, as an entity, the contractor, do I have the legal right to run an e-verify system on anybody I want who works for somebody else,
who is actually in the employee of somebody else?
Speaker 19
18:59
Can I do that? I don't think that's the intent of this legislation. I think what
I'm saying is that the contractor has to make sure that another contractor, a subcontractor, is a
Speaker 67
19:12
contractor. Well, you offer this as proof that the
Representative Ed Garner
Unverified
19:17
contractor won't be found to have knowingly employed, that this is a criteria for not knowing, and I'm
Speaker 69
19:23
quoting your bill, if the contractor uses the federal e-verify system to verify the legal status of these people.
Representative Ed Garner
Unverified
19:31
I mean, I'm quoting from your bill, and that seems to be in plain English to me that you're asking contractors to use the e-verify system to run the status
of people who work for a subcontractor, which is another
Speaker 19
19:49
legal entity. It is another legal entity. It is a contractor. And so that one contractor has to make sure if they are hiring another contractor that that other contractor did run the E-Verify.
Representative Ed Garner
Unverified
20:01
Then there's no liability. Okay, but your bill says the contractor, not subcontractor, the contractor uses the federal E-Verify system. And
Speaker 19
20:13
the contractor includes subs and generals. Okay, but
Representative Ed Garner
Unverified
20:17
if I'm a contractor and I'm going to hire you as a subcontractor, do I have the legal right to run the e-verify system on your
Speaker 19
20:30
employees? I'm not saying the bill does not require
one contractor to run the employees of another contractor.
What it requires is that for every contractor that does work and they're licensed by the contractor's license board, They have to run the e-verify, so the general contractor just has to make
Representative Ed Garner
Unverified
20:51
sure that that was done. Okay. I understand as a contractor under the board, I'm responsible for my employees using, but you list this as a criteria for not knowing. Is this the only criteria that is used in defense when a contractor says before the board,
I didn't know that this subcontractor's employee was illegal? Is this your only... Knowingly
Speaker 19
21:17
has a legal definition. It basically means that you assign to her knowledge that they were illegals. There is a burden on the people bringing these charges to show that that person knowingly hired illegals. Okay. And the contractor's board, I think, is the proper body to hear these arguments
about whether it was knowingly done.
Representative Ed Garner
Unverified
21:41
So the contractor has to use the federal e-verify system to fulfill the requirement of two to say that he shall not have been found to knowingly employed. And beyond that, how do people prove what they don't know? Well, that's up to the
Speaker 19
21:59
adjudication process within the contractor's license board. Those folks that know the industry and know how it operates knowingly is a term that is used in several laws.
to find liability. So it's not anything that I've invented here. It's just that I have given the contractors a way to have a safe harbor where they're not going to have any liability, and
that is by making sure that everybody that's on that job has been through an e-verify system. Okay.
Representative Ed Garner
Unverified
22:30
I'm going to ask this one because I'm still not clear on one thing.
Can I, as a contractor who is hiring you as a subcontractor,
Can I use my company, can I have someone in my company use the e-verify system on your employees?
Speaker 19
22:50
I think you can contract to tell that sub, show me the e-verify. Okay, but your
Speaker 69
22:57
bill says that a contractor has to do that. Well,
Speaker 19
23:00
I think a sub is a contractor of Representative Arnold Garner, and so we just disagree on that interpretation, I guess.
Representative Ann V. Clemmer
Unverified
23:13
Representative Plummer. Thank you, Mr. Chairman. Representative Nichols, I appreciate what you are trying to do. I understand that your bill attempts to stop the incentives for illegal immigration, stop the jobs. um that said i i do have a couple of issues um and i'm not a builder um i have i have had a lot
of builders talk to me but i told you yesterday i had a dear friend from i don't even want to count the years 30 years that's been a builder and and i did have that conversation but i needed to put it in terms that I could kind of deal with, and it kind of hit me this morning that if I hire someone to clean my house and I leave for the day, I don't know who walks
in the door with the housekeeper to clean my house. And I don't know how I could be held accountable for what she did in my absence. And I think that that's sort of what the reservation is about your bill. I don't think it's not that I think people basically support what you're trying to do I just think it's who you're holding accountable. So with that said and I showed it to you and I know you didn't have a long time to look at it
this just got drafted I have what I consider to be sort of a friendly amendment if we could pass that out that would essentially say if I can get the right piece of paper in front of me, that a contractor would not be held liable through a subcontractor under this section if the contractor and subcontractor agree in writing
that the subcontractor shall be responsible for verifying each worker employed by the subcontractor is legally authorized to work in the United States. because that way well okay that is I am asking my question Mr. Chairman would then be would you be willing to accept such an amendment or clarification I guess I forgot I was on
Speaker 19
25:39
the committee I didn't get a copy of it and I just had
Representative Ann V. Clemmer
Unverified
25:44
the one the man presenting the bill
Speaker 19
25:49
does need one and I don't know about I think I could accept this as a friendly amendment if it said that sub was required to run the e-verify not just verifying but e-verify because that's the only system that has
any real legitimacy to it as far as verifying the status of workers.
Representative Ann V. Clemmer
Unverified
26:28
This amendment does not specify e-verifying, but it would allow the subcontractor to look. It would require him to verify through IDs or e-verify. but I think the other problem that this kind of deals with is that all the subcontractors are not licensed if you build a house your tile guy may be somebody from down the street with a pickup truck that comes in to do the tile
he's not going to necessarily be a licensed tile guy so I think that that person then is beyond the scope of the licensing board I mean, you were saying that the subs and the contractors could both be considered contractors. But the sub, in the case I just gave, would not necessarily be have a tile license. Representative
Speaker 19
27:25
Glemmer, I'll tell you what. I will accept this as a friendly amendment, and we will see how it works over the next couple years.
And if the law is doing what it needs to do, then there won't need to be any changes. But I will accept that if that's the will of the committee as a friendly amendment. Do we have a motion from the committee? Could I make
Representative Ann V. Clemmer
Unverified
27:50
the motion for the amendment then be added? I move that the amendment that's been passed out, do we have a number? We don't have an amendment number on here. I guess it's the second amendment to the government.
Speaker 92
28:04
We already had the. We'll work out the details. Right. We have a motion to amend a
Speaker 41
28:10
friendly amendment to House Bill 1013, all in point of order. Yes, ma'am. We
Speaker 1
28:16
already voted on Amendment 1, correct? So that's already been accepted. So this
Speaker 94
28:22
is just on top of that? Thank you. This would be the replacement of that amendment. I
Speaker 41
28:28
mean, it would be on top of that amendment. The other amendment just cleared up some language.
this amendment is to change page 2 line 14 representative Bernard
Representative Tracy Pennartz
Unverified
28:48
was trying to compare both of these and I'm not sure that lines 10 10 through 14, and this additional subsection C that represent the Clemmer, which I'm in
favor of, are not contradictive in their use of language. Could you give us a couple of minutes, Mr. Chair, just to look? Because I just want to make sure that they're not in conflict. Would that be all right, sir? Could you give us about two minutes just to look further
Speaker 95
29:30
at this? Absolutely. I want to make sure that the language is not contradictive.
Speaker 39
29:35
Thank you. We can do that because we're going on with Representative Rogers right now has another question. Representative Rogers?
Speaker 99
29:40
Thank you, Mr. Chair. At what point would it be appropriate to try
Speaker 100
29:43
to defer this so that we have time to digest the amendment and come back? I presume it would be at
Speaker 38
29:52
the will of the committee. Is it appropriate to
Speaker 100
29:55
make that motion at this point in time with one pending? We're
Speaker 41
30:00
going to have a conference here. Just hold on. Remind me not to be a committee chair. It would be advisable if Representative Nichols would pull the bill down
and work out the details on the amendment and come back. That would be the easiest way to handle this, seeing it as a friendly amendment. But we will bow to Representative Nichols on his wishes. I have no problem with that because I don't want to rush
Speaker 19
30:29
into something. We need to get it right. And so at the appropriate time, I do not mind pulling the bill back. There are a lot of people here who are opposed to my bill,
and they may want to come in and have their say. And they may not, you know, so whatever.
You know, I'm going to pull it right now
Speaker 39
30:56
or just over time. Representative Renari. Mr. Chair, I appreciate Representative
Representative Tracy Pennartz
Unverified
31:02
Nichols' complaint for the wishes of the committee. After looking at this further, the wording, I believe this wording to be contradictive.
And I really would like Representative Clemmer and Representative Nichols to get together and come back with a revised amendment that is
Speaker 95
31:22
not conflictive in the wording, which I believe these two subsections to be. Representative Clemmer. Representative Nichols,
Representative Ann V. Clemmer
Unverified
31:30
Representative Penartz, I, too, actually, you know, we were trying to draft this to deal quickly with this situation. I believe there's a little bit of editing as I looked at it that I would prefer to see clarified as well.
So that's fine with me, and I'll be happy to work with Representative Nichols. I'm
Speaker 19
31:52
willing to, just the timing, Mr. Chairman, do you want me to pull it down right now? I don't
Representative Ann V. Clemmer
Unverified
31:59
think so. I think if he's pulling his, I don't have to withdraw
Speaker 19
32:03
my motion, do I? No, Representative Clemmer, you and I will work, and maybe I
Speaker 73
32:07
can make it a member-owned amendment, and then we won't have to deal with it. at the at our next committee meeting if
Speaker 39
32:14
that's okay representative nichols one second though if you would uh representative uh cowling do you have a comment that you before we go forward you
Speaker 102
32:24
representative hutchinson did you have anything you wanted to add
Speaker 105
32:30
i i do but i think uh wait till we get this wording worked out and then we can actually
Speaker 41
32:37
know what we're discussing well the committee is i mean representative nichols is going to pull his bill down and revise it with a representative climber is that your wish that's my wish mr. chairman thank you thank y'all and yes we're getting ready to we're getting ready to just hang out we have a record request from
representative Nicholas to withdraw his bill I would entertain a motion motion made. All in favor of him withdrawing, say aye. Aye. Any opposed? You're on, Representative. And we will see you hopefully next week. Thank you, Mr. Chairman. Thank you, committee. I'm sorry that we had this controversy on those that came today, but I think they're trying to work it out and negotiate it to the best of the
people of Arkansas. So we're sorry that y'all did not get to speak, but come back next week.
Agenda
HB1005
HB1013
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Speakers
Speaker 1
Speaker 2
Speaker 4
Speaker 12
Speaker 7
Speaker 19
Speaker 17
Speaker 33
Speaker 39
Speaker 25
Speaker 41
Speaker 47
Speaker 49
Representative Ed Garner
Unverified
Speaker 53
Speaker 62
Speaker 67
Speaker 69
Representative Ann V. Clemmer
Unverified
Speaker 92
Speaker 94
Speaker 95
Representative Tracy Pennartz
Unverified
Speaker 99
Speaker 100
Speaker 38
Speaker 73
Speaker 102
Speaker 105