Volume 1, Number 3 State of Georgia September 2006 Federal Inaction Forces States to React The Illegal Immigration Crisis By: Alexander J. Azarian, Principal Analyst At-A-Glance: Home heating fuels By: Brian S. Johnson, I mmigration has played an important role in American history, and the United States continues to have the most open immigration policy in the world. During the period of westward expansion, our young nation encouraged relatively open immigration to settle its empty lands and accel- Principal Analyst Hurricanes Katrina and Rita did not create an energy crisis one erate industrialization. After several states passed immigration laws following year ago; however, they did ex- the Civil War, the Supreme Court in 1875 declared the regulation of immigration acerbate issues that were already a federal responsibility. In 1891, the Immigration Service was established to deal present regarding energy avail- with the large increase in immigration which started in 1880. ability, transportation, and com- modity trading. The devasta- The Immigration Act of tion suffered by the people of 1924, however, was the Louisiana and Mississippi along first permanent limita- the Gulf Coast affected the tion on immigration and established the "national origins quota system," pumping, refining, and transportation of the nation's fuel re- which governed Ameri- sources from the Gulf of Mexico can immigration policy to consumers throughout the until the Immigration United States. The resulting and Nationality Act of frenzy of market speculation and 1952 and the Immigra- fears of supply shortages com- tion and Naturalization bined to drive energy prices to Services Act of 1965. A near unprecedented levels. This State Sen. John Douglas of Covington and Sen. Nancy Schaefer of Turnerville look at the U.S. Border Patrol screens monitoring the New Mexico/Mexico border during a recent trip to visit Georgia troops assisting in the Border Patrol efforts to keep illegal immigrants out of the United States. significant provision of the 1924 Act was the establishment of the "consular control system" of immigration which mandated that no frenzy specifically affected the cost of home heating fuels which provide necessary heating during cold winter months. All of this occurred in conjunction alien may be permitted with industry analysts' pre- entry into the United States without an unexpired immigration visa issued by an hurricane predictions that home American consular officer abroad. heating fuels' costs were already expected to dramatically in- The type of visa issued depended on the native country of the applicant, as well as crease over the previous winter their reason for entering the United States. If their native country was subject to season prior to the impact of a U.S. immigration quota, as were most European and Asian countries, the appli- Hurricanes Katrina and Rita. cant applied for a "Quota" visa. Western Hemisphere countries were all exempt from quotas between 1924 and 1944. (Continued on Page 2) (Continued on Page 5) Page One At Issue Senate Research Office The Illegal Immigration Crisis (Continued from Page 1) Clearly, our country's unending S. 2611, the Comprehensive Immigra- demand for cheap labor attracts tion Reform Act, proposes to increase illegal immigrants. The typical security along the Mexican border, Mexican worker earns one-tenth allows long-time illegal immigrants to his American counterpart, and gain citizenship with some restric- numerous American businesses tions, and increases the number of are willing to hire cheap, non- guest workers over and above those compliant labor from abroad; already present in the U.S. through a such businesses are seldom pun- new "blue card" visa program. It ished because the federal and passed the Senate on May 25, 2006, by state governments lack a viable a vote of 62-36, but stalled in the system to verify an employee's House upon its arrival. work eligibility. H.R. 4437, The Border Protection, Anti-terrorism, and Illegal Immigra- tion Control Act of 2005, calls for a The Federal Response: variety of steps to restrain illegal im- Inaction, Inability, and migration. At the southern border, the legislation authorizes construction Powerlessness of an additional 700 miles of security fencing. The legislation also requires For decades, illegal immigration the implementation of a mandatory Army National Guard Specialist has been dismissed as a federal electronic verification system to be Daniel Montgomery of Ellenwood and problem, and the standard re- used by all employers to ensure that Sen. John Douglas of Covington look sponse has been a call for in- the workers they hire are legal resi- out over the Mexican border during a creased border enforcement. dents. Failure to comply with the recent trip to visit the 150 troops stationed in New Mexico. Compounding the border prob- verification procedure would result in lem is that there has been al- fines of up to $7,000 per violation for a most no attention paid to en- first offense and as high as $40,000 the forcement at worksites within the third time an employer is discovered In 1965, Congress replaced the na- United States. hiring illegal aliens. Illegal aliens tional origins system with a prefer- themselves would also face stiffer pen- ence system designed to unite immi- The Center for Immigration Studies alties for violating U.S. immigration grant families and attract skilled im- estimated that the cost of the illegal laws: illegal entry, now considered a migrants to the United States. This immigration presence in the U.S. to misdemeanor offense, would become a change to national policy responded to the federal government was roughly felony and illegal aliens could receive changes in the sources of immigration $10 billion in 2002, even after ac- jail time for immigration violations. since 1924. By the 1960s, the majority counting for taxes paid by illegal The legislation was passed by the of applicants for immigration visas aliens. These costs are primarily for House on December 16, 2005 by a came from Asia and Latin America Medicaid, healthcare for the unin- vote of 239 to 182. rather than Europe. sured, food assistance, the prison and court systems, and education funding. The major controversial difference Today, the United States is struggling However, the federal government has between the H.R. 4437 and S. 2611 is with how to deal with an influx and gained very little traction in dealing that there is a citizenship path, or am- presence of an illegal immigration with the problem. Two major pieces nesty, proposed in S. 2611 which population. It is estimated that a of legislation that have attracted a lot would allow illegal immigrants who population of roughly 11 million ille- of public attention, House Resolution have been in the country for more gal aliens currently resides in the 4437 and Senate Bill 2611, bogged than five years to apply for citizenship country. The vast majority of this down in Congress earlier this year, by paying fines and back taxes. Those population is from Central America and will not be acted upon again this who have been in the country for two and the overwhelming majority of Congressional session. these are from Mexico. (Continued on Page 3) Page Two At Issue Senate Research Office The Illegal Immigration Crisis (Continued from Page 2) to five years would be allowed to stay on comprehensive immigration re- public employers, government con- in the country without fear of deporta- form." The Senate passed H.R. 6061 tractors, and government subcontrac- tion, but after three years would have on September 29th and the legislation tors are required to register and par- to return to their native country be- now awaits the President's signature. ticipate in the program in order to fore applying for citizenship at border verify information on all new employ- check points. Those in the country for ees prior to entering into any contract under two years would be required to States Respond Individually in connection with the physical per- return to their original nations. Congress's failure to pass a meaning- formance services within this state. S. 2611 also introduces an H-2C visa, or "blue card" which would allow em- ful immigration reform measure has This provision is phased in forced states to take the initiative and adopt policies to address this problem, as follows: ployers to bring in outside workers for both to minimize the fiscal costs, and up to six years after which the em- also to contribute to the larger federal ployee must spend one year in their effort to reduce illegal immigration. original country. S. 2611 also pro- According to the National Conference poses 370 miles of fencing along of State Legislatures, over 500 pieces July 1, 2007 for all public employers, government contractors, and government subcontractors with 500 or more employees; highly populated areas near the border of legislation concerning immigrants July 1, 2008 for such entities with compared to the 700 miles proposed in have been introduced in state legisla- 100 or more employees; and H.R. 4437. tures in 2006 alone. While these bills July 1, 2009 for all such entities; cover a wide variety of topics, many With Congress's inability to pass a states focused on employment, traf- Requires verification of eligibility for comprehensive immigration reform ficking, public benefits, education, and adult applicants for public benefits; bill, the House and Senate have turned their attention to passing legislation that simply secures the U.S.-Mexico law enforcement. Over 60 bills have been enacted in 27 states, with a handful of bills having been vetoed. Establishes penalties for human trafficking; border. On September 14, 2006, the Authorizes the enforcement of fed- House passed H.R. 6061, the Secure eral immigration and custom laws by Fence Act of 2006. The bill contains none of the comprehensive measures that President Bush, Democrats and some Senate Republicans have de- Georgia acts first with Georgia State Patrol officers and for comprehensive reform Statewide concerns over the presence such officers to receive training in the enforcement of such laws; manded and that are found in H.R. of 300,000 to 800,000 illegal immi- Requires all Georgia employers to 4437 and S.2611. Instead, all that grants in Georgia and their impact on verify the legal status of any employ- H.R. 6061 provides for is the con- the state's healthcare, educational, la- ees hired on or after January 1, 2008 struction of an additional 700 miles of bor, business, and criminal justice sys- in order to claim a state income tax fencing along the U.S.-Mexico border. tems spurred the passage of Senate deduction on such employees' salaries; Although Senate Majority Leader Bill Frist supports comprehensive immigration reform legislation, he has all but conceded that since no consensus can be reached on other immigration Bill 529 The Georgia Security and Immigration Compliance Act. Although the legislature had attempted to address the issue with legislation that addressed single areas impacted by illegal immigration in the past, SB Requires employers to withhold a 6 percent tax from contract workers who are unable to provide a valid taxpayer identification number or Social Security number; issues, Congress should move ahead 529 tackled the problem with a com- Requires county, municipal, and re- with border security. It is not prehensive approach. Significant pro- gional jails to determine the legal "enforcement only," he said, but visions of the legislation include the status of prisoners charged with a fel- "enforcement first." "Border security following: ony or DUI; and is the essential first step of any effort to enact immigration reform," Mr. Frist said. "Only when we have convinced the American people of our commitment to securing our borders will we be able to reach a consensus Requires all public employers to regis- Establishes and enforces standards ter and participate in the Federal of ethics for individuals who provide Work Authorization Program by July immigration assistance, also known as 1, 2007 in order to verify information "Notorios," and for those who are not on all new employees. In addition, all licensed attorneys. (Continued on Page 4) Page Three At Issue Senate Research Office The Illegal Immigration Crisis (Continued from Page 3) nomic development incentive awards. ment for all costs associated with ille- Activity in Other States Although Georgia was the first state to pass comprehensive legislation cracking down on the illegal immigra- Contractors receiving awards and later found to employ unauthorized workers must repay the award and will be ineligible for another award for five years. gal immigration, including incarceration, education, and healthcare. Ohio's SB 9 requires a list of all unauthorized immigrants currently serving tion problem, it is not the only state to address the issue. However, rather than attempt to deal with all areas that are impacted by illegal immigration, such as education, employment, public benefits, and law enforcement, several states have opted to take a Colorado also enacted HB 1017 which requires employers to examine the work status of each newly hired employee and retain proof that each newly hired employee has legal work status. The legislation em- prison terms to be compiled and given to the U.S. Immigration and Customs Enforcement Agency (ICE) to determine if ICE wishes to gain custody of any undocumented prisoner. Aliens currently serving prison terms will be released to the custody of ICE upon powers the state to audit and completion of their prison term. verify the proof. Employers discovered hiring unauthorized workers or for submitting falsified documents face a $5,000 fine for each infraction. Trafficking Colorado's SB 225 creates a division in the Colorado State Patrol Department of Public Safety to address human smuggling and human trafficking on state highways. Louisiana's SB 753 allows contracting state agencies to investigate a contractor's Conclusion hiring policies to discover if If Congress continues its inability to any unauthorized immigrants resolve the illegal immigration crisis, have been employed. The then many states, including Georgia, district attorney can issue an will expand on their efforts to contain order to fire undocumented State Sen. Nancy Schaefer of Turnerville meets workers, and, if the contracwith Sgt. Clayton Currier of Marietta during a tor does not comply within trip to New Mexico to see the Georgia Army ten days of receiving notice, National Guard troops guarding the border the contractor is subject to illegal immigration's impact on employment, education, and public services. In 2007, many state legislatures will realize that tightening the U.S. Mexico border will resolve nothing in penalties of up to $10,000. the near future since a large degree of more piecemeal approach to dealing with the problem. Some legislation that other states have passed which contain provisions not found in SB 529 includes the following: Education the problem continues to emanate Pennsylvania's HB 2319, known as the from within our borders. SRO Prohibition of Illegal Alien Labor on Assisted Project Act, prohibits the use of labor by illegal immigrants on pro- jects financed by grants or loans from the state government. At Issue Wyoming's SB 85 prohibits non- Identification/Drivers' License At Issue is published monthly during citizens and non-Legal Permanent Residents from receiving scholarship funding. Students whose parents have claimed foreign residency status during the student's high school attendance are also ineligible. Colorado's SB 110 provides funding for a full-time investigator in the attorney general's office assigned to investigate the counterfeiting of identification documents. the interim. For more information on this publication contact the Senate Research Office in Suite 204 of the Coverdell Legislative Office Employment Colorado's HB 1001 requires contractors to verify the work status of their employees before applying for eco- Law Enforcement Colorado's HB 1014 instructs the state attorney general to pursue reimbursement from the federal govern- Building or by calling 404.656.0015. - -Jill Fike, Director Page Four At Issue Senate Research Office Home heating fuels (Continued from Page 1) Increase of retail home heating fuel able for assistance is $440 per house- What did happen in September 2005? prices is due to the wholesale market hold. These households are identified which is beyond the control of any through the Georgia Department of elected official and representative Human Resources and the PSC, and The destruction or closure of off-shore drilling platforms and stations in the Locally, the average retail the funds are distributed through local agencies. Gulf of Mexico and of refineries in the Mississippi River corridor and at the price of regular gasoline fell The USF receives funding of about Texas and Louisiana border heavily and negatively impacted the supply of from $3.04 per gallon on Au- $11.5 million annually which is authorized by O.C.G.A. 46-4-161 to home heating fuels. Both hurricanes gust 7, 2006, to $2.62 per assist low-income customers or assist passed through the heart of the energy complex of the Gulf of Mexico, and as gallon on September 11, low-income customers of regulated providers by allowing access to the much as 100 percent of oil production and 80 percent of the natural gas pro- 2006, and is expected to fall USF to cover bad debt. duction was "shut-in" for weeks during September and October last au- to a national average of Over $15 million in LIHEAP funds has been distributed to assist Geor- tumn. Additionally, speculation re- $2.00 per gallon by Novem- garding the future costs of home heat- ing fuels aggravated the situation by ber before rising again next driving up wholesale prices on the open commodities market (typically, summer as demand increases gia's low-income customers in paying their natural gas bills. Some of the funds were redistributed from the USF. Nearly 170,000 eligible households received energy assistance funds wholesale prices for energy are set six months before retail sale). The whole- and gasoline formulas are re- during the last year (this includes first time ever cooling assistance during sale market thrives on the temperatures and demands in the northeastern quired to change to the sum- the summer); moreover, the State assisted over 124,000 senior households United States; therefore, consumer retail prices in Georgia are directly mer blend. with their winter heating bills. linked to temperatures and demand in the northeastern states. Competition from emerging markets in Asia was, body. The average price per therm What can Georgia expect and remains, a factor in setting whole- charged by Georgia marketers has sale prices, as well. been increasing since September this winter season? 2000--notably a 50 percent increase First, the PSC opens the energy assis- Georgia's home heating fuel providers since September 2003. There are two tance program to seniors and the dis- and marketers were adequately pre- natural gas distribution companies abled on Wednesday, November 1, pared to meet the energy challenge; regulated by the Georgia Public Ser- 2006; the general public may apply for however, the wholesale and retail cost vice Commission (PSC): Atlanta Gas assistance on or after Friday, Decem- for home heating fuels rose to record Light Company and Atmos Energy ber 1, 2006. The PSC's projected levels. Fortunately, the winter follow- Corporation. budget for federally funded assistance ing the crisis proved warmer than ex- equals about $17 million, but some pected, and wholesale energy prices analysts suggest that there may be dropped accordingly. Help for low-income much more available in total for energy assistance. Fortunately, the At- Crude oil prices have been consis- Georgians lantic hurricane season has not proven tently increasing for nearly four years Low-income Georgia consumers may to be as severe as had been forecast, as world demand continues to reach be eligible to receive state assistance and political tensions in the Middle new peaks coupled with declining sur- through a variety of programs includ- East have eased since August. The plus storage. This is important be- ing the Low Income Home Energy result has shown falling prices for cause natural gas generally trades Assistance Program (LIHEAP), Heat- crude oil and natural gas. with crude oil prices acting as a cap on ing Energy Assistance Team (HEAT), the natural gas prices; therefore, the and the Universal Service Fund two are directly linked. (USF). The maximum amount avail- (Continued on Page 6) Page Five At Issue Senate Research Office Home heating fuels (Continued from Page 1) Considering that crude oil and natural fore, the natural gas industry is re- litical tensions escalate, Georgians gas commodity prices are linked, it is porting strong storage supplies. Natu- will receive a reprieve from the energy important to note that as of October 3, ral gas price averages originating frenzy experienced last year at this 2006, crude oil prices were hovering from the Henry Hub facility in Louisi- time. around $58 per barrel. The national ana have dropped significantly since retail sales price of gasoline dropped about 12 cents a gallon per week during September. Gasoline futures continue to fall on the NYMEX futures exchange as commodity investors re- December 2005; however, these prices If conditions change, and there is a are projected to increase as demand desire to check on available rates and for winter heating fuel grows with plans, the following marketers provide falling temperatures. Residential natural gas or propane to meet Geor- natural gas consumption is projected gia's winter home heating fuel needs: spond to high inventories and easing to fall in 2006 by 7.5 percent from the geopolitical tension; however, the high 2005 level because of mild Atlanta Gas Light Company commodities markets remain vulner- weather early in 2006. Consumption 770-907-4231 able to price spikes and continued fluc- is then forecast to increase by 9 per- Atmos Energy tuations. Natural gas futures on NY- cent in 2007, assuming sustained high MEX closed on September 23, 2006, oil prices, normal weather, and contin- at their lowest trading level since Sep- ued economic expansion in the United tember 10, 2006. States. Long term prices for natural gas remain above historical levels, but Locally, the average retail price of they are expected to continue to dete- regular gasoline fell from $3.04 per riorate from the record price per 800-621-1867 Catalyst Energy 866-514-2545 Commerce Energy 877-226-5389 Coweta-Fayette Natural Gas gallon on August 7, 2006, to $2.62 per therm set in autumn 2005. 770-502-0226 gallon on September 11, 2006, and is GasKey expected to fall to a national average Consider, too, that electricity provid- of $2.00 per gallon by November be- ers are increasingly turning to natural fore rising again next summer as de- gas in order to meet upward demand mand increases and gasoline formulas during summer months for cooling. are required to change to the summer This increase is making it more diffi- blend. Over half of the demand cult to increase natural gas storage growth for energy in 2007 is projected during traditionally low demand 678-904-0820 GasSouth 877-472-4932 Georgia Natural Gas 770-850-6200 Georgia Propane Association to come from two nations: the United months; however, this trend will de- 770-645-8677 States and China. crease as more coal-fired generating Infinite Energy facilities come online during the next 770-661-1870 Demand growth is also projected to be decade. By the numbers, natural gas strong in the oil-exporting countries used for power generation was down of the Middle East, which are benefit- 1.5 percent as compared to summer ing from their current high oil reve- 2005. nues. Surplus world crude oil production capacity, all of which is located in In conclusion, Georgia consumers Municipal Gas Authority 770-590-1000 MX Energy 877.677.4355 Scana Energy Saudi Arabia, is expected to increase should expect this winter's home heat- 877.467.2262 slightly in 2007. Due to these factors, ing fuel prices to remain below the Vectren Source as well as the continued tight supply- record levels set last year. Home 866.200.5693 demand balance, federal energy analysts expect short term relief during the winter from higher pricing pat- heating fuel providers have maintained adequate storage capacity during the refill months, and, so far, no Walton Natural Gas 770.267.2505 terns. natural weather event has compro- The warmer-than-normal weather this past winter left natural gas inventories at high levels at the start of the cooling, or "refill," season, which runs from April through October; there- mised the production facilities in Louisiana and Texas. Additionally, Georgia should receive a greater allocation in federal funding for low-income assistance. Unless there is a colderthan-normal winter, or global geopo- Portions of the information discussed herein were provided by Atlanta Gas Light, Georgia Natural Gas, Georgia Public Service Commission, and the Georgia Department of Human Resources. SRO Page Six At Issue Senate Research Office