Builders in Alabama are anxiously awaiting a ruling by a federal court judge in Birmingham that will determine whether that state’s new immigration law, which is being touted as the toughest in the nation, can go into effect on Sept. 1.

Elements of that law have been challenged by the U.S. Justice Department, the American Civil Liberties Union, and civic and religious groups, mostly on the grounds that it violates rights protected under the federal constitution. This law’s enactment is looming at a time when the Obama Administration last week announced that it was launching a case-by-case review of 300,000 cases in immigration courts, and would detain and deport only those immigrants who are determined to be serious violators of immigration law. Other immigrants would be given the opportunity to stay in the U.S. and apply for a work permit.

Builders in Alabama are hoping the Alabama bill doesn’t become law, based on calls around the state on Wednesday. “It’s way out there, in my opinion,” says Louis Breland, chairman of Breland Homes in Huntsville, Ala., who spoke with Builder by phone from his vacation home in Alaska. The bill, he says, “has the opportunity to be devastating, and I don’t think Alabama has studied the true effect of this law on industries, and not just construction.”

Alabama officials have positioned this bill, which Gov. Robert Bentley signed on June 1, as the state’s best way to execute federal immigration laws already on the books. The state has seen a considerable influx of Hispanic workers, documented and undocumented, over the years, particularly in the state’s rural areas where its thriving poultry businesses operate. Some of that influx “has spilled into construction,” observes Russell Davis, executive vice president for the Home Builders Association of Alabama in Montgomery.

Immigration reform was one of several highly charged issues that became part of the “Handshake with Alabama,” which Republican candidates for state legislature promised to address swiftly if elected. Republicans not only retained control of the governor’s office but took control of both houses of Alabama’s legislature. “So this bill was on a fast track,” recalls Bart Fletcher, executive director of the HBA chapter in Birmingham.

Under the original language of the bill, builders could have lost their licenses if illegal immigrant workers were found on their job sites. However, Fletcher notes that the state’s HBA managed to get the language changed, so that builders are protected as long as they have affidavits from their contractors verifying that all of the subs the contractors employ are in the country legally.

Obviously, the onus for compliance would fall more heavily on contractors. And builders such as Breland—whose company is on track to build nearly 800 houses this year—worry that the law would restrict their access to immigrant labor at a time when market conditions in certain areas of the state, like Huntsville, have been improving.

''We’re already experiencing labor shortages in certain trades,” says Joe Murphy, owner of Murphy Homes in Madison, Ala., which expects to close between 10 and 15 homes in 2011. Murphy elaborates that in several trades—concrete, roofing, framing, painting—there simply aren’t enough crews manned by Caucasian workers to do the volume of work. He observes that immigrant laborers are “operating without a net [so] they have to do a good job.”

The bill’s passage this summer has put pressure on Hispanic workers, regardless of this legal status, say builders. “We have a lot of great craftsmen who are here legally, but we’re losing them every day” because of their fear of this law’s ramifications, says Davis.

Some builders also fear the worst if the law goes into effect. For example, a builder could potentially lose its license if it sold or rented a house to a person who is found to be in the country illegally. (Davis thinks that aspect of the bill won’t survive because it’s been found unconstitutional in other states.) Murphy goes so far to suggest that, under this law, someone who helps a driver whose car broke down on the road could be arrested if that driver were found to be here illegally.

“On a human rights level, this bill is extremely punitive,” he says, adding that the bill’s passage betrayed “a strong xenophobic and racist strain in our legislature.”

Echoing builders around the country when immigration emerged as a hot national topic in 2007 and 2008, Breland and Murphy believe a better solution for their state and the nation would be to secure the borders to keep criminals out of the country, and then create a guest worker program that would allow immigrants to be employed in the U.S. in a free-flowing manner. Breland points admiringly to Grand Cayman, where he recently met a person from Bosnia who was working there on a seven-year visa. Upon its expiration that worker is required to leave the country for a year, and then can return to work for another seven years.

Both builders say they also favor a “path to citizenship” for immigrants that was the centerpiece of legislation co-sponsored by Sens. John McCain and the late Edward Kennedy, but which withered under anti-immigration attacks.

Breland isn’t buying, either, assertions made by Alabama officials that the enactment of the state’s immigration law is partly meant to protect local jobs. “If that’s the case, why is Texas, which has more Hispanics than any other state, the No. 1 job creator in the country,” he asks?

John Caulfield is senior editor for Builder magazine.

Learn more about markets featured in this article: Birmingham, AL, Huntsville, AL.