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ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
nonprofits; facilitation; trafficking offenses; penalties
Purpose
Prohibits the Arizona Corporation Commission (ACC) from incorporating a corporation if an officer, director or trustee has been convicted of specified trafficking offenses. Subjects a person who facilitates, rather than just engages in, trafficking offenses to civil liability to the person trafficked.
Background
Incorporation occurs and the corporate existence begins when the articles of incorporation and certificate of disclosure are delivered to the ACC for filing. The certificate of disclosure must set forth specified information regarding all persons who, at the time of the disclosure's delivery, are officers, directors, trustees and incorporators, including whether any of the persons have been convicted of a felony involving a transaction in securities, consumer fraud or antitrust, or an offense for which the essential elements consisted of fraud, misrepresentation, theft by false pretenses or restraint of trade or monopoly, in any state or federal jurisdiction within the five-year period immediately preceding the execution of the certificate (A.R.S. §§ 10-3202 and 10-3203).
A person who engages in the trafficking of a person or who intentionally or knowingly benefits from the trafficking of another person is civilly liable to the person trafficked for damages that arise from the trafficking of that person, including actual damages, court costs, reasonable attorney fees, exemplary damages and mental anguish. For the purposes of determining civil liability, trafficking of a person means conduct that constitutes an offense under unlawfully obtaining labor or services, sex trafficking, trafficking of persons for forced labor or services, taking a child for the purpose of prostitution and child sex trafficking (A.R.S. § 12-722).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Prohibits the ACC from incorporating a corporation if an officer, director or trustee of the corporation has been convicted of:
a) smuggling;
b) participating in or assisting a human smuggling organization;
c) unlawfully obtaining labor or services;
d) sex trafficking;
e) trafficking of persons for forced labor or services;
f) child sex trafficking; or
g) any federal immigration offense.
2. Subjects a person who facilitates the trafficking of a person or who intentionally or knowingly benefits from a trafficking venture to civil liability for outlined damages to the person trafficked.
3. Becomes effective on the general effective date.
House Action
JUD 2/15/23 DP 5-3-0-0
3rd Read 3/1/23 31-28-1
Prepared by Senate Research
March 20, 2023
ZD/sr