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MADELEINE BRAND, host:

This is DAY TO DAY. I'm Madeleine Brand.

ALEX COHEN, host:

And I'm Alex Cohen.

Arizona now has the toughest law in the nation against employers who knowingly hire illegal immigrants. The state's Democratic governor, Janet Napolitano, signed the law this week. Like a lot of governors, she's frustrated that Congress failed to pass national immigration legislation.

BRAND: Governor Napolitano, welcome to DAY TO DAY.

Governor JANET NAPOLITANO (Democrat, Arizona): Thank you.

BRAND: Now, your press release says you signed the bill because it is now quote, "abundantly clear that Congress finds itself incapable of coping with the immigration reforms our country needs."

Gov. NAPOLITANO: That's right. Once again, a major piece of legislation on which many people had worked goes down, with no kind of plan B about how this country is going to get at the problem of an immigration system that is broken. And the end result of that, of course, is that the states once again will fill the void as we are doing in energy policy and as we're doing in health care.

BRAND: Okay, so let's talk about this law in particular. It doesn't go into effect until next January. Describe what it does.

Gov. NAPOLITANO: What this law does is it says that if you are an employer in Arizona and you are found to have intentionally hired an illegal immigrant on the first finding, your business license will be suspended for 10 days and you can pay a fine to get out of that suspension. But if you're found a second time to have intentionally hired an illegal immigrant, your license will be revoked permanently.

BRAND: When this came around last year, you vetoed it.

Gov. NAPOLITANO: It was a different bill last year, a very different bill last year. Last year was really an employer amnesty bill dressed up as an employer sanction. The licensing revocation is really a state-based employer sanction bill with some teeth in it.

BRAND: Is this something that Arizonans, you constituents, wanted?

Gov. NAPOLITANO: The polling on this was off the charts, but you know, I don't act just according to polls. You've really got to think about what is the role of the state, and to me, we can't just deal with border and border security. You need to couple that with really effective enforcement on the employer side to deal with the demand side of the illegal labor.

BRAND: Well, on that demand side, I understand that businesses strongly objected to this bill. They lobbied you pretty much incessantly. They say that legitimate workers, American citizens, will lose their jobs if businesses are penalized.

Gov. NAPOLITANO: Well, I hope not. We're gonna monitor this very carefully. I don't want, obviously don't want legitimate Arizonans losing their jobs. Nobody does. But I think a little bit of the business community wanted to have their cake and eat it too, in the sense of we do have employers, unfortunately some in this state and other states who intentionally go out and use this illegal immigrant market to keep wages low and not to have to compete for workers. And to me that's not good immigration policy either. I think it's gonna take some of these measures really to have a balanced approach to immigration while we wait, perhaps forever, for the federal government to act.

BRAND: You're having a sizable housing boom in your state. A lot of people are moving into Arizona. I'm wondering how this might affect the construction business, which does rely a lot on immigrants, a lot on illegal immigrants.

Gov. NAPOLITANO: Well, I think we'll see. But you know, if your premise is true that the housing industry relies on illegal immigrants, what better to show the hypocrisy of an immigration system at the federal level that doesn't recognize that and adjust our legitimate visa caps accordingly. But to me, I've heard from a lot of folks in the construction industry that say they're having to compete unfairly against contractors who are unfairly going out and hiring illegal immigrant labor. That's depressing wages in the construction industry, and that's not fair either. Again, we're in uncharted territory here, certainly uncharted territory for a state. But given the failure of the Congress to act, the states are gonna have to lead. And I think given where Arizona is, Arizona will take the lead among the states.

BRAND: Governor Napolitano, thanks for joining us.

Gov. NAPOLITANO: Thank you so much.

BRAND: That's Janet Napolitano, governor of Arizona.

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