Undocumented immigrants would be able to work in Utah legally for a two-year period and have health insurance funded by a special guest worker tax under a plan laid out by business leaders Wednesday.

The Salt Lake Chamber of Commerce delivered its proposal to the Legislature's Immigration Interim Committee. The plan is designed to address concerns employers have about keeping their workforce intact while complying with state and federal laws.

"This is something that we can do now that will address solutions and address fundamental problems in our immigration system," said Wesley Smith, policy director for the chamber. "There are folks here that want to work and contribute. If that's the case, we can resolve a lot of issues by allowing that to take place."

Called Utah's Employer Sponsored Work Program, it would require public notices for open positions at participating companies. Guest workers could only fill positions that no qualified U.S. worker wanted.

The Department of Workforce Services would administer the program. It would allow any undocumented immigrant who had not committed a major crime to sign up to work in the state legally for a two-year period with the option for renewal. About 15 percent of their wages -- the same amount withheld for Social Security tax -- would be collected in a tax used to pay for health insurance and for administrative costs. Another 10 percent would be withheld and put into an interest-bearing account that would be returned to workers who completed the program with no problems. The interest would be used to cover the program's costs.

However, Smith realizes major barriers would have to be overcome for the guest-worker program to succeed. The federal government would have to agree to let Social Security withholdings go to the state and give local authorities the ability to "aggressively enforce" immigration laws to ensure the state did not see a dramatic influx of undocumented workers.

Legislators said they appreciated the business community's work on immigration solutions, but several saw major sticking points.

Rep. Ben Ferry, R-Corinne, questioned whether withholding 25 percent of a guest worker's wages was feasible, especially when many would be employed in low-skill, low-paying jobs.

"By creating additional withholdings, I think you run into some real equal protection issues," said Rep. Brad Dee, R-Washington Terrace, committee co-chairman.

Sen. Mark Madsen, R-Lehi, questioned the definition of criminal activity.

"If they committed a crime, they're not eligible [for the program], but many who are here have submitted stolen or fabricated Social Security numbers," Madsen said.

"I don't know if there's going to be enough of those people who haven't committed a crime," Madsen said, adding that undocumented workers already are criminals for entering the country illegally. "I don't know how it will work if we're not going to allow criminals to participate."

Smith said the plan does not yet have specific guidelines for what crimes would disqualify someone from participating.

Rolando Murillo, a community activist in Cache Valley, wholeheartedly supports the proposed program.

"I welcome something like that in Utah," Murillo said.

He said a state law set to take effect next summer and aimed at getting tougher on undocumented residents has caused a "lot of fear … and now is a great time to implement a program like this."

The health-insurance component, he said, would help answer one of biggest complaints about illegal immigration -- that undocumented residents are using taxpayer funded services without paying taxes.

While Murillo is hopeful that President-elect Barack Obama will address immigration reform in his first 100 days, he supports a state program that could be put into place quickly.

"This program seems to be very well thought out," he said. "It needs to be done. We can't wait around."

smcfarland@sltrib.com