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HB2463 - 572R - I Ver
REFERENCE TITLE:
misclassification; tax fraud; task force
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
HB 2463
Introduced by
Representatives
Sandoval: Abeytia, Aguilar, Austin, Blattman, Connolly, Contreras L,
Contreras P, Crews, Garcia, Liguori, Luna-N�jera, M�rquez, Mathis, Peshlakai,
Simacek, Stahl Hamilton, Tsosie, Villegas;� Senators Alston, Epstein, Kuby,
Ortiz
AN
ACT
amending title 23, chapter 10, article 1,
Arizona Revised Statutes, by adding section 23-1606; relating to employment
relationships.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 23, chapter 10, article 1,
Arizona Revised Statutes, is amended by adding section 23-1606, to read:
START_STATUTE
23-1606.
Employee misclassification and payroll tax fraud advisory task
force; membership; duties; annual report
A. The employee misclassification and
payroll tax fraud advisory task force is established to study and make
recommendations regarding issues relating to employee misclassification and
payroll tax fraud in the construction industry. The task force shall
consist of the following members:
1. The director of the industrial
commission of Arizona or the director's designee.
2. The director of the department of
insurance and financial institutions or the director's designee.
3. The registrar of contractors or
the registrar's designee.
4. As nonvoting advisory members:
(
a
) The
secretary of state or the secretary of state's designee.
(
b
) The
attorney general or the attorney general's designee.
B. The task force may appoint
additional nonvoting advisory members as the task force deems appropriate.
C. On or before February 1, 2027, the
director of the industrial commission of Arizona shall convene the first
meeting of the task force.� At the first meeting, the task force shall elect a
chairperson and any other officers the task force deems appropriate from the
task force's voting membership.� Advisory members are not counted to determine
the presence of a quorum.
D. The task force shall study issues
relating to employee misclassification and payroll tax fraud in the
construction industry, including:
1. The
impact of employee misclassification and payroll tax fraud on this state and
local governments of this state and the amount of state revenue, if any, that
is lost or not collected due to employee misclassification and payroll tax
fraud.
2. The lost earnings of the insurance
industry due to employee misclassification and payroll tax fraud.
3. Estimates of the frequency of
occurrence and economic impact of employee misclassification and payroll tax
fraud and whether particular industries are more likely to engage in the
misclassification of employees and payroll tax fraud practices.
4. Whether state law should specify a
uniform definition of the employment relationship and, if so, how it should be
defined.
5. Whether
existing laws of this state aimed at preventing, investigating and taking
enforcement action against the failure of employers to properly classify
individuals as employees or investigating payroll tax fraud are effective.
6. Whether there are ways to
facilitate sharing information among agencies represented by task force members
relating to violations of laws by employers that fail to classify individuals
as employees and that engage in related payroll tax fraud practices.
7. Whether there are new ways to
pool, focus and target investigative and enforcement resources relating to
employee misclassification and payroll tax fraud practices.
8. New strategies for systematically
investigating the failure of employers to properly classify individuals as
employees and payroll tax fraud practices.
9. Whether
improvements are needed to facilitate filing complaints and identifying
potential violators, including soliciting referrals and other relevant
information from the public.
10. Changes in the law, if any, that
need to be made to ensure that agencies represented by task force members
investigating the failure of employers to properly classify individuals as
employees and payroll tax fraud practices under their own statutory or
administrative enforcement mechanisms have the authority to refer a matter to
other participating agencies to assess potential liability under the other
agencies' relevant statutory or administrative enforcement mechanisms.
11. Innovative
ways to prevent misclassification of employees by employers and payroll tax
fraud practices, such as through disseminating educational materials regarding
the legal differences between independent contractors and employees.
12. Methods
by which public awareness can be increased of the illegal nature and harms
inflicted by the failure of employers to properly classify individuals as
employees and payroll tax fraud practices.
13. Any
other issues relating to employee misclassification and payroll tax fraud
practices in the construction industry.
E. The task force shall seek public
input and may conduct public hearings or appoint study groups as necessary to
obtain information necessary to conduct the task force's study.
F. On or before February 1, 2028, and
on or before February 1 annually thereafter, the task force shall submit a
report on its findings and progress to the senate commerce committee and the
house of representatives commerce committee, or their successor
committees. The task force shall submit a copy of the annual report
to the secretary of state.
G. To
the extent allowed by law, every agency, department, office and division of
this state shall cooperate with the task force and furnish any information that
the task force determines is reasonably necessary to accomplish the task
force's purposes.
H. The industrial commission of
Arizona, the department of insurance and financial institutions and the
registrar of contractors may individually implement recommendations of the task
force if the implementation is authorized under the existing statutory
authority of the respective agency.
END_STATUTE