To enact sections 8.01 to 8.04 and 5747.027 of the Revised Code to require in specified situations the verification of immigration status of persons who are not United States citizens, to impose state income taxes at a rate of six per cent per annum on the compensation of specified independent contractors who fail to document such verification, and to restrict the employment of persons who are not legal residents of the United States.

Section 1. That sections 8.01, 8.02, 8.03, 8.04, and 5747.027 of the Revised Code be enacted to read as follows:

Sec. 8.01.  As used in the Revised Code:

(A) "Alien" means a person who is not a United States citizen or a United States national.

(B) "Legal permanent resident alien" means an alien who has been granted the right by the United States bureau of citizenship and immigration services to reside permanently in the United States and to work without restrictions in the United States.

(C) "Nonimmigrant" means an alien who has been granted the right by the United States bureau of citizenship and immigration services to reside temporarily in the United States and the period of that temporary residence has not expired.

(D) "Public employer" means any department, agency, or instrumentality of the state or a political subdivision of the state.

(E) "Status verification system" means any electronic system the federal government operates to enable a person to verify or ascertain the citizenship or immigration status of any individual. "Status verification system" includes all of the following:

(1) The electronic verification of work authorization program known as the "e-verify program," 8 U.S.C. 1324a, operated by the United States department of homeland security, and any equivalent federal program that the United States department of homeland security or other federal agency designates to verify the work eligibility status of newly hired employees, pursuant to the "Immigration Reform and Control Act of 1986," Pub. L. No. 99-603, 100 Stat. 3360.

(2) Any independent, third-party system with an equal or higher degree of reliability as the programs, systems, or processes described in division (E)(1) of this section.

(3) The social security number verification service, or any similar online verification process the United States social security administration operates.

(F) "Subcontractor" means a subcontractor, contract employee, staffing agency, or any contractor regardless of its tier.

(G) "Unauthorized alien" means an alien who is not authorized to be employed as determined in accordance with section 101(a) of the "Immigration Reform and Control Act of 1986," 100 Stat. 3360, 8 U.S.C. 1324a.

Sec. 8.02. (A) Every public employer shall register with a status verification system and use that system to verify the employment authorization status of all new employees.

(B)(1) After July 1, 2009, no public employer shall enter into a contract for the physical performance of services within this state unless the contractor registers and participates in a status verification system.

(2) After July 1, 2009, no contractor or subcontractor shall enter into any contract to provide a public employer with the physical performance of services in this state unless the contractor or subcontractor registers and participates in a status verification system to verify information of all new employees.

(3) Division (B) of this section does not apply to any contract entered into prior to the effective date of this section even if the service or labor is performed after July 1, 2009.

(C) The director of commerce shall adopt rules pursuant to Chapter 119. of the Revised Code under which the director administers sections 8.02 to 8.04 of the Revised Code.

Sec. 8.03. (A) Any individual who acts as an independent contractor and contracts to provide the physical performance of services in this state shall document the employment authorization of persons who perform labor for that independent contractor.

(B) If a contractor fails to provide the contracting entity with documentation of employment authorization as division (A) of this section requires, the contracting entity shall withhold from that contractor's compensation an amount for state income taxes at the rate of six per cent of the total amount of compensation paid to the contractor. The Ohio income taxes imposed on any such compensation shall be computed pursuant to section 5747.027 of the Revised Code.

(C) Any contracting entity that fails to comply with the withholding division (B) of this section requires is liable for the income taxes imposed pursuant to that section unless the contracting entity is exempt from federal withholding with respect to the contractor pursuant to a properly filed internal revenue service form 8233 or its equivalent.

(D) Nothing in this section shall be construed as creating an employer-employee relationship between a contracting entity and an individual independent contractor.

Sec. 8.04. (A) No employer shall discharge an employee who is a United States citizen or legal permanent resident alien while that employer retains an employee whom the employer knows, or reasonably should have known, is an unauthorized alien hired after July 1, 2009 and who works for the employer in a job category that, as defined by 29 U.S.C. 206(d)(1), requires equal skill, effort, and responsibility and is performed under similar working conditions as the job category of the discharged employee.

(B) An employer is exempt from liability, investigation, or suit arising from any action under this division if on the date of a discharge that is alleged to violate division (A) of this section, the employer was enrolled in and used a status verification system to verify the employment eligibility of its employees.

(C) A violation of this section does not give rise to any cause of action except as provided in this section.

Sec. 5747.027. In the case of an independent contractor who fails to provide documentation of employment authorization to a contracting entity as section 8.03 of the Revised Code requires, the tax imposed on the total compensation the independent contractor receives from the contracting entity shall be at the rate of six per cent.