(a) As a condition for the award of any contract, grant, or incentive by the state, any political subdivision thereof, or any state-funded entity to a business entity or employer that employs one or more employees, the business entity or employer shall not knowingly employ, hire for employment, or continue to employ an unauthorized alien within the State of Alabama.

(b) As a condition for the award of any contract, grant, or incentive by the state, any political subdivision thereof, or any state-funded entity to a business entity or employer that employs one or more employees within the State of Alabama, the business entity or employer shall provide documentation establishing that the business entity or employer is enrolled in the E-Verify program. During the performance of the contract, the business entity or employer shall participate in the E-Verify program and shall verify every employee that is required to be verified according to the applicable federal rules and regulations.

(c) Any subcontractor on a project paid for by contract, grant, or incentive by the state, any political subdivision thereof, or any state-funded entity shall not knowingly employ, hire for employment, or continue to employ an unauthorized alien within the State of Alabama and shall also enroll in the E-Verify program prior to performing any work on the project. Furthermore, during the performance of the contract, the subcontractor shall participate in the E-Verify program and shall verify every employee that is required to be verified according to the applicable federal rules and regulations. This subsection shall only apply to subcontractors performing work on a project subject to the provisions of this section and not to collateral persons or business entities hired by the subcontractor.

(d) A contractor of any tier shall not be liable under this section when such contractor contracts with its direct subcontractor who violates subsection (c) unless it is shown that the contractor knew or should have known that the direct subcontractor was in violation of subsection (c).

(e)(1) Upon a finding by a court of competent jurisdiction of a first violation of subsection (a) by any business entity or employer, including a subcontractor:

a. The business entity or employer shall be deemed in breach of contract and the state, political subdivision thereof, or state-funded entity may terminate the contract after providing notice and an opportunity to be heard.

b. The court shall do all of the following:

1. Order the business entity or employer to terminate the employment of every unauthorized alien.

2. Subject the business entity or employer to a three-year probationary period throughout the state. During the probationary period, the business entity or employer shall file quarterly reports with the Department of Labor of each new employee who is hired by the business entity or employer in the state.

3. Order the business entity or employer to file, subject to the penalty of perjury, a signed, sworn affidavit with the Department of Labor within three days after the order is issued by the court stating that the business entity or employer has terminated the employment of every unauthorized alien and the business entity or employer will not knowingly or intentionally employ an unauthorized alien in this state.

c.1. If the court determines that the business entity or employer has a policy or practice that violates this section, the court shall direct the applicable state, county, or municipal governing bodies to suspend the business licenses or permits of the business entity or employer for a period not to exceed 60 days specific to the location or locations where the unauthorized alien performed work.

2. Before a business license or permit that has been suspended under this paragraph is reinstated, a legal representative of the business entity or employer shall submit to the court a signed, sworn affidavit stating that the business entity or employer is in compliance with the provisions of this subdivision and a copy of the Memorandum of Understanding issued to the business entity or employer at the time of enrollment in E-Verify.

(2) Upon a finding by a court of competent jurisdiction of a second violation of subsection (a) by a business entity or employer, including a subcontractor, awarded a contract by the state, any political subdivision thereof, or any state-funded entity that occurs within ten years of a finding by a court of competent jurisdiction of a first violation by the business entity or employer:

a. The business entity or employer shall be deemed in breach of contract and the state, political subdivision thereof, or state-funded entity shall terminate the contract after providing notice and an opportunity to be heard.

b. The court shall do all of the following:

1. Order the business entity or employer to terminate the employment of every unauthorized alien.

2. Subject the business entity or employer to a five-year probationary period throughout the state. During the probationary period, the business entity or employer shall file quarterly reports with the Department of Labor of each new employee who is hired by the business entity or employer in the state.

3. Order the business entity or employer to file, subject to the penalty of perjury, a signed, sworn affidavit with the Department of Labor within three days after the order is issued by the court stating that the business entity or employer has terminated the employment of every unauthorized alien and the business entity or employer will not knowingly or intentionally employ an unauthorized alien in this state.

c.1. If the court determines that the business entity or employer has a policy or practice that violates this section, the court shall direct the applicable state, county, or municipal governing bodies to suspend the business licenses or permits of the business entity or employer for a period not less than 60 days and not to exceed 120 days specific to the location or locations where the unauthorized alien performed work.

2. Before a business license or permit that has been suspended under this paragraph is reinstated, a legal representative of the business entity or employer shall submit to the court a signed, sworn affidavit stating that the business entity or employer is in compliance with the provisions of this subdivision and a copy of the Memorandum of Understanding issued to the business entity or employer at the time of enrollment in E-Verify.

d. A finding by a court of competent jurisdiction of a second violation of subsection (a) that does not occur within ten years of a first violation shall still be considered a second violation of subsection (a) by the business entity or employer, even though the penalty for the second violation shall be governed by subdivision (1).

(3) Upon a finding by a court of competent jurisdiction of a third violation of subsection (a) by a business entity or employer, including a subcontractor, awarded a contract by the state, any political subdivision thereof, or any state-funded entity:

a. The business entity or employer shall be deemed in breach of contract and the state, political subdivision thereof, or state-funded entity shall terminate the contract after providing notice and an opportunity to be heard.

b. The court shall direct the applicable state, county, or municipal governing bodies to permanently revoke all business licenses or permits of the business entity or employer.

(f)(1) This section shall not be construed to deny any procedural mechanisms or legal defenses included in the E-Verify program or any other federal work authorization program.

(2) A business entity or employer that has enrolled in the E-Verify program and has used the program to verify the work authorization of an employee shall not be liable under this section for violations resulting from the hiring of that employee.

(g) The Secretary of State may adopt rules to administer this section and shall report any rules adopted to the Legislature.

(h) Compliance with this section may be verified by the contracting authority or any state or local law enforcement agency at any time to ensure a contractual agreement as provided for in this section is being met.

(i) Anything to the contrary notwithstanding, this section shall not apply to agreements by the state, any political subdivision thereof, or any state-funded entity relating to debt obligations by such entities.

(j) Any business entity or employer found in violation of this section that has had their business license or permit suspended shall not, for the duration of the suspension, be allowed, directly or indirectly, to procure or execute a license or permit similar to those that have been suspended.

(k) All contracts or agreements to which the state, a political subdivision, or state-funded entity are a party shall include the following clause: "By signing this contract, the contracting parties affirm, for the duration of the agreement, that they will not violate federal immigration law or knowingly employ, hire for employment, or continue to employ an unauthorized alien within the State of Alabama. Furthermore, a contracting party found to be in violation of this provision shall be deemed in breach of the agreement and shall be responsible for all damages resulting therefrom."

(l) For purposes of this section, "contract" shall mean a contract awarded by the state, any political subdivision thereof, or any state-funded entity that was competitively bid or would, if entered into by the state or an agency thereof, be required to be submitted to the Contract Review Permanent Legislative Oversight Committee.

(m) All actions brought under this section shall be brought in circuit court.