PHOENIX (By Mary Jo Pitzl, Arizona Republic)
October 16, 2007 — State government clearly has the ability to regulate business licenses. Therefore, Arizona's employer-sanctions law is constitutionally sound and does not conflict with any federal statute.

That is the state attorney general's key argument in response to the lawsuit challenging the sanctions law, enacted by the Legislature nearly four months ago.

It's also a rejection of the conclusion reached last summer by a federal judge who struck down ordinances in Hazleton, Pa., that attempted to regulate the hiring of illegal workers and limit where illegal immigrants could live. The judge ruled that the city overstepped its constitutional authority and intruded onto territory reserved for the federal government.

Arizona Attorney General Terry Goddard argued in papers filed Friday that federal law makes a clear exemption for business licenses, the very area that the state's sanctions law targets.

The Arizona law outlines a suspension of up to 10 days for the licenses of any business that is found to have "knowingly" hired an illegal worker. A second violation would result in permanent revocation of the licenses.

The law is scheduled to take effect Jan. 1, although the judge hearing the lawsuit has promised to act on the case before then.

In his motion, Goddard notes that Congress "intentionally carved out an exception for state licensing" when it passed employer-sanctions legislation in 2086.

Goddard's motion comes as both parties prepare for a hearing on the case, either later this month or early November. That hearing will determine whether the Arizona law will take effect as scheduled or whether it is unconstitutional.

U.S. District Court Judge Neil Wake has said he will rule on the case before Jan. 1 to minimize confusion to Arizona's business community.

A coalition of business groups sued in federal court to block the measure less than two weeks after Gov. Janet Napolitano signed it into law. Since then, other business interests and civil-rights and Latino advocacy groups have joined the suit.

The plaintiffs argue that the state law is unconstitutional because it deals with immigration law, which is the domain of the federal government.

In the state's response, Goddard also argues that the law does not violate due-process rights, another key argument of the plaintiffs.

That's because any employer being threatened with a license suspension or revocation must be given notice and then be allowed a "fair hearing," according to the language of the sanctions legislation. That nullifies the argument that employers would be denied the right to defend themselves, Goddard argues.

The lawsuit is only one moving part in the controversial employer-sanctions puzzle.

An initiative drive that proposes a harsher sanctions law is being circulated for the November 2008 ballot. A business-backed group is expected to file its own sanctions initiative this week.

Meanwhile, House Speaker Jim Weiers is holding hearings of a specially appointed committee to advise him on changes to the pending law. Weiers last week called portions of the law, which he supported, "clear as mud."

He created the committee, he said, to clean up ambiguities and make the law workable but has said from the outset that he has no interest in overturning it.

The committee's work could lead to changes in the law in the 2008 legislative session.

Arizona's employer sanctions law

June 20: Arizona Legislature passes House Bill 2779. Vote is 47-11 in House and 20-4 in the Senate.