BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1544
                                                                  Page  1

          Date of Hearing:   May 9, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

               AB 1544 (V. Manual Perez) - As Amended:  April 23, 2012 

          Policy Committee:                              Labor and 
          Employment   Vote:                            5-1           

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              No

           SUMMARY  

          This bill establishes the California Agricultural Jobs and 
          Industry Stabilization Act of 2012 (AJIS Act), which requires 
          the Employment Development Department (EDD) to issue permits 
          authorizing an undocumented person who meets specified criteria 
          to reside and work as an employee in the state.  Specifically, 
          this bill:  

          1)Prohibits EDD from issuing permits under the AJIS Act until it 
            certifies there are not enough state legal residents to fill 
            all open agricultural and service industry jobs in the state.  


          2)Defines employee as an agricultural employee and a person 
            employed to provide domestic services, janitorial/building 
            maintenance services, food preparation services, or 
            housekeeping services.   

          3)Establishes the following criteria for undocumented person to 
            receive a permit: 

             a)   The person has established that he or she was present in 
               the state before January 25, 2012 and has continuously 
               resided here since this time.  
             b)   The person has established he or she was employed in the 
               state as an agricultural or service industry worker before 
               January 25, 2012.  Further authorizes this person to 
               establish employment status by submitting specified 
               employment records.  
             c)   The person has paid a fee to EDD for costs to administer 
               this program.  








                                                                  AB 1544
                                                                  Page  2

             d)   The person has not been convicted of a felony or 
               misdemeanor involving bodily injury, threat of bodily 
               injury, or property damage in excess of $500.  

          4)Prohibits EDD from granting a permit to an undocumented person 
            unless he or she submits to fingerprints, as specified.  
            Further requires EDD to use documents submitted for use in the 
            fingerprinting process to conduct a background check of the 
            person to determine program eligibility.  

          5)Requires EDD to issue a permit under the AJIS Act to the 
            spouse or child (i.e., immediate family member) of an 
            undocumented person who already received a permit under this 
            act, as specified.  Requires the immediate family member to 
            comply with pay a fee and not have been convicted of a felony 
            as specified above. 

          6)Prohibits an employer, within 90 days of implementing this 
            bill, from employing an undocumented person who does not have 
            a permit, as specified. 

          7)Specifies an employee permitted to work in the state under the 
            AJIS Act is entitled to all of the same wage and hour and 
            working condition protections under existing law provided to 
            an employee who is a legal resident of the state.    

          8)Requires EDD (in conjunction with the Legislative Analyst 
            Office), beginning three years after initial implementation of 
            this act, to annually publish a report analyzing whether this 
            program has caused displacement of employable legal residents 
            of California in the agricultural and service industries.  

          9)Specifies this program is not intended to confer legal status 
            in a manner that would restrict the enactment of superseding 
            federal legislation.  

          10)Requires this program to remain in existence and requires EDD 
            to administer it only to the extent monies are available in 
            the AJIS Act Fund, as specified.  

           FISCAL EFFECT  

          1)One-time GF costs, likely in excess of $20 million, to EDD to 
            establish the infrastructure to implement this program, 
            including developing a new automated system to store permit 








                                                                  AB 1544
                                                                  Page  3

            information (e.g., fingerprinting and background checks).  The 
            one-time cost to add an additional withholding from an 
            employees' payroll to an existing system used by EDD will be 
            $19 million GF.  

          2)On-going GF costs, likely in excess of $7 million, to EDD to 
            implement this program.  These costs are associated with 
            additional personnel to review permit applications and train 
            and hire   staff in regional offices.  

          3)Department of Justice (DOJ) preliminary estimates indicate 
            between $3 million and $5 million in personnel costs to 
            process an influx of fingerprinting submissions. 

          4)This bill establishes the AJIS Act Fund in the state GF and 
            requires the fees collected for this program to be deposited 
            in this fund.  Further requires monies deposited in this fund 
            to only be used to pay for EDD's costs to administer this 
            program.  This bill requires an unspecified  fee sufficient to 
            pay for all administrative costs incurred by EDD; any fee, 
            however, will likely not cover the full cost of this program.  
              

           COMMENTS  

           1)Background  .  According to a 2011 At Issue report by the Public 
            Policy Institute of California (PPIC), the number of 
            undocumented immigrants in the United States has fallen after 
            several years of increase.  PPPIC states: "From 1990 to 2007, 
            the number of Ýundocumented] immigrants increased by an 
            average of 500,000 per year, and the population grew from a 
            few million to about 12 million. By 2009 the population had 
            shrunk to approximately 11 million, and 2010 estimates suggest 
            little change from 2009. California has experienced a similar 
            decline: the Department of Homeland Security estimates that 
            2.6 million Ýundocumented] immigrants resided in California in 
            2010, a decline of 280,000 since 2008."  

            The PPIC attributes the decrease in the number of undocumented 
            immigrants to the county's severe economic downturn and 
            increased enforcement efforts.  For example, "Pre-recession 
            unemployment rates were lower among Ýundocumented] immigrants 
            than other workers, but are now higher.  This has weakened the 
            jobs magnet that attracts most Ýundocumented] immigrants to 
            the United States.  At the same time, stepped-up interior 








                                                                  AB 1544
                                                                  Page  4

            enforcement has led to dramatic increases in deportations. In 
            2009, a record 393,000 Ýundocumented] immigrants were 
            deported, compared to less than 200,000 annually in the early 
            2000s and less than 100,000 annually before 1997."

            Under federal law, people can enter the United States 
            permanently or temporarily.  Through permanent means, an 
            individual receives a permanent resident card (green card) 
            which enables him or her to work and he or she may apply for 
            citizenship.  An individual entering the country via temporary 
            means (i.e., tourist, student, diplomat, agricultural worker) 
            may not work or only work for a particular place; is not 
            eligible for citizenship; and must leave the country when his 
            or her visa expires.  

           2)Purpose  .  According to PPIC, in California, where the 
            concentration of Ýundocumented] immigrants is almost twice as 
            high as in the rest of the nation, about 9% of workers are 
            Ýundocumented] immigrants.  According to one estimate, 14% of 
            workers in Los Angeles County are in the informal economy and 
            more than half (61%) of those workers are Ýundocumented] 
            immigrants."

            According to the author, "While programs such as the federal 
            H-2A guest worker program and E-verify have been highlighted 
            as options to protect jobs for U.S. citizens and legal 
            residents, most growers in the U.S. agriculture industry argue 
            that these programs threaten the viability and sustainability 
            of their businesses.  In the state's service industry, similar 
            workforce dynamics have been documented among businesses that 
            provide domestic services, janitorial or building maintenance 
            services, food preparation services, and housekeeping 
            services. These employers rely heavily on unauthorized workers 
            as a sustainable labor supply."

            The author further states: "In the absence of federal 
            comprehensive immigration reform, business interests in the 
            states of Utah and Oklahoma have either passed or introduced 
            legislation creating state guest worker programs. Several 
            other states have studies or are considering the introduction 
            of such state initiatives."
           
          3)Does this bill apply all state labor laws to agricultural and 
            service workers  ?  This bill states: "An employee permitted to 
            work in this state pursuant to this chapter is entitled to all 








                                                                  AB 1544
                                                                  Page  5

            the same wage and hour and working conditions protections 
            under existing law provided to an employee who is a legal 
            resident of California."  Currently, some state labor laws do 
            not apply to agricultural or certain service industry workers. 
             For example, agricultural workers are not governed by the 
            eight hour workday as other legal resident employees in the 
            state.  As such, it appears the language in this measure would 
            require employers of agricultural and service workers to 
            comply with all state labor laws, including ones that 
            currently do not apply to them.  

           4)Opposition  .  The Mexican American Legal Defense and Education 
            Fund (MALDEF), the California Immigrant Policy Center (CIPC), 
            and the California Labor Federation (Labor Fed) oppose this 
            bill for a number of reasons, including the following: 

              a)   Violation of federal law for states to govern 
               immigration issues  .  According to MALDEF, "The Supreme 
               Court held that the Supremacy Clause Ýof the U.S. 
               Constitution] bars state involvement in immigration 
               regulation.  The ÝSupreme] Court recognized a form of 
               constitutional preemption in the area of immigration, 
               concluding 'the determination of who should or should not 
               be admitted into the country, and the conditions under 
               which a legal entrant may remain is a regulation of 
               immigration and thus per se pre-empted by this 
               constitutional power.''    

               This bill requires EDD, by May 1, 2013, to submit a formal 
               request to the federal government to receive the necessary 
               authority to administer the AJIS Act.  MALDEF, however, 
               contends there is no federal statute that provides the 
               federal government with authority to grant such a request.  

           
             b)   No path to citizenship  .  Opponents argue that creating a 
               guest worker program does not solve the fundamental problem 
               of undocumented workers - how do they obtain U.S. 
               citizenship?    According to the CLF, "Guest worker 
               programs have historically benefitted employers, not 
               workers.  Because workers are dependent on a particular 
               employer or the ability to work in a particular industry, 
               they are extremely vulnerable to abuse.  A guest worker 
               program without a path to permanent status is, by nature, 
               exploitative."  








                                                                  AB 1544
                                                                  Page  6


              c)   False sense of security this program creates for 
               undocumented workers  .  According to the Labor Fed, "this 
               bill provides no protection to California's immigrant 
               workers from the threat of deportation.   Individuals who 
               apply for a permit Ýunder this program] potentially could 
               be at greater risk of being deported. Despite the proposed 
               state employment authorization, eligible workers in the 
               program will still be subject to federal immigration 
               worksite enforcement actions.  They will still be subject 
               to possible termination of employment as a consequence of 
               I-9 audits, E-Verify tentative non-confirmation notices, 
               and Social Security Administration no match letters, as 
               well as self-audits conducted by employers."    


            
           Analysis Prepared by  :    Kimberly Rodriguez / APPR. / (916) 
          319-2081