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mountmccabe
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The factsheet linked to above is for an old version of the bill. The version signed into law was the House Engrossed Version. One significant change is that it now states what is sufficient for proving legal status (an Arizona driver license is one option.)

Factsheet: http://www.azleg.gov/FormatDocument.asp?inDoc=/legtext/49leg/2r/summary/s.1070pshs_housechanges.doc.htm

Chaptered Bill 0113: http://www.azleg.gov/FormatDocument.asp?inDoc=/legtext/49leg/2R/laws/0113.htm

Additionally I believe that it is already Federal law that aliens register and carry ID; the AZ law does not create that need though it will add additional enforcement personnel checking that ID.

It is also worth noting that HB 2162 (not (yet) signed into law by Governor Brewer) would make significant changes to some of the language added by SB 1070 including changing the phrase “lawful conduct” to “lawful stop, detention or arrest… in the enforcement of any other law or ordinance of a county, city or town or this state.”

HB 2162: http://www.azleg.gov/DocumentsForBill.asp?Bill_Number=HB2162