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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
ENGROSSED SENATE
BILL NO. 638 By: Montgomery of the Senate
and
Sneed of the House
An Act relating to the Oklahoma Professio nal Employer
Organization Recognition and Registration Act;
amending 40 O.S. 2021, Section 600.4, which re lates
to registration; requiring electronic sub mission of
registration application; extending time period for
the submission of a financial statement; requiring
electronic submission of a cha nge in name, address,
or contact information by certain time; prescri bing a
fee; removing provisions for initial registration;
modifying provisions for renewal of registration ;
increasing time frame for renewal ; requiring
reapplication if past certain time frame; prescribing
fees for late registration; requiring response to
Insurance Commissioner inquiry in a certain time
frame; expanding scope for rejection of application;
and providing an effective date .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 40 O.S. 2 021, Section 600.4, is
amended to read as follows:
Section 600.4. A. Registration required. Except as otherwise
provided in the Oklahoma Professional Employer Organi zation
Recognition and Registration Act, no person shall , unless the person
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is registered as a PEO or PEO Group under the Oklahoma Professional
Employer Organization Recognition and R egistration Act, provide,
advertise, or otherwise hold itself out as prov iding professional
employer services in this state.
B. Registration information.
1. Each PEO or PEO Group required to be registered under the
Oklahoma Professional Employer Organiza tion Recognition and
Registration Act shall provide electronically submit a complete
registration application to the Insurance Commissioner with
information required by the Commissioner on forms in a manner and
form prescribed by the Commissioner , along with any applicable fees .
Pursuant to paragraph 2 of this subsection, a PE O or PEO Group may
use a qualified assurance organiza tion as approved by the
Commissioner to provide services related to the registration of the
PEO or PEO Group. A PEO or PEO Group may authorize an assurance
organization to act on behalf of the PEO or PE O Group in complying
with the registration requiremen ts set forth in the Oklahoma
Professional Employer Organization Recognition and Registration Act,
including, but not limited to, e lectronic filings of information and
payment of registration fees. At a minimum, PEOs, PEO Groups or an
approved assurance or ganization acting on behalf of the PEO or PEO
Group, shall provide the following information:
a. the name or names under which the PEO or PEO Group
conducts business,
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b. the address of the principal plac e of business of the
PEO or PEO Group and the address of each office it
maintains in this state,
c. the PEO’s or PEO Group’s taxpayer or employer
identification number,
d. a list by jurisdiction of each name under which the
PEO or PEO Group has operated in the preceding five
(5) years, including any alternat ive names, names of
predecessors and, if known, successor business
entities,
e. a statement of ownership, which shall include the name
and evidence of the business ex perience of any person
that, individually or acting in concert with one or
more other persons, owns or controls, directly or
indirectly, twenty-five percent (25%) or more of the
equity interests of the PEO or PEO Group,
f. a statement of management, which shall include the
name and evidence of the business experience of any
person who serves as president, chief executive
officer, or otherwise has the authority to act as
senior executive officer of the PEO or PEO Group, an d
g. a financial statement setting f orth the financial
condition of the PEO or PEO Group, as of a date not
earlier than one hundred eighty (180) three hundred
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sixty-five (365) days prior to the date submitted to
the Commissioner, prepared in accordance wit h
generally accepted accounting principles, and audited
or reviewed by an independent certified public
accountant licensed to pra ctice in the jurisdiction in
which such accountant is located. A PEO Group may
submit combined or consolidated audited or revi ewed
financial statements to meet the requirements of this
section.
2. The financial statement required by subparagraph g of
paragraph 1 of this subsection may be dated as of a date that is not
earlier than three hundred sixty -five (365) days before the d ate on
which the application is submitted in the event the PEO or P EO Group
provides the following:
a. evidence that is acceptabl e to the Commissioner that
it is licensed or registered in good standing in
another state with equal or greater requirements th an
the requirements of the Oklahoma Professional Employer
Organization Recognition and Registration Act,
b. quarterly financial s tatements of management for each
calendar quarter as of the most recent audit that
demonstrate continuing financial operations acceptable
to the Commissioner, and
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c. the certification of an inde pendent Certified Public
Accountant that as of the end of the most recent
calendar quarter, the PEO or PEO Group has paid all of
its state and federal payroll taxes, health and
workers’ compensation premiums, and contributions to
employee retirement plans in a timely and appropriate
manner.
3. For purposes of the Ok lahoma Professional Employer
Organization Recognition and Registration Act, “assurance
organization” means an independent entit y approved by the
Commissioner to certify the qualifications of a P EO or PEO Group for
registration under this section and Sectio n 600.6 of this title and
any related requirements and procedures. To be considered for
approval as an independent and qualifi ed assurance organization, the
assurance organization shall submit a written request for approval
to the Commissioner. The writt en request shall include, bu t not be
limited to, the following:
a. evidence that the assurance organization is
independent and has an established national program
for the accreditation and finan cial assurance of PEOs
and PEO Groups based on requirements si milar to the
requirements of the Oklahoma Professional Employer
Organization Recognition and Registration Act, and any
rules promulgated for the implementation of the
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Oklahoma Professional Emplo yer Organization
Recognition and Registration Act,
b. evidence that the assurance organiza tion has
documented qualifications, standards, procedures, and
financial assurance acceptable to th e Commissioner and
is licensed or otherwise approved by one or more
states to certify the qualifications of PEOs or PEO
Groups,
c. an agreement to provide in formation, compliance
monitoring services, and a level of financial
assurance as deemed acceptable by the Commissioner,
d. an agreement to provide the Commissioner wi th an
application that has been executed by each PEO or PEO
Group requesting alternative r egistration under this
section and Section 600.6 of this title and related
requirements and procedu res in a form approved by the
Commissioner. The application shall:
(1) authorize the assurance organization to share
with the Commissioner any application a nd
compliance reporting information required under
the Oklahoma Professional Employer Organization
Recognition and Registration Act that has been
provided to the assu rance organization by the PEO
or PEO Group,
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(2) authorize the Commissioner to accept infor mation
shared by the assurance organization for
registration or renewal of registration of the
PEO or PEO Group as if the information was
provided directly to the Com missioner by the PEO
or PEO Group,
(3) provide the certificati on of the PEO or PEO Group
that the information provided by the assurance
organization to the Commissioner is true and
complete and that the PEO or PEO Group is in full
and complete compliance w ith all requirements of
the Oklahoma Professional Employer Org anization
Recognition and Registration Act, and
(4) provide the certification of the assurance
organization that the PEO or PEO Group is in
compliance with the standards and procedures of
the assurance organization which are similar to
the requirements of the Oklahoma Professional
Employer Organization Recognition and
Registration Act and is qualified for
registration or renewal o f registration under the
Oklahoma Professional Employer Organizatio n
Recognition and Registration Act,
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e. an agreement to provide written notice to the
Commissioner within two (2) business days of
determination by the assurance organization of the
failure of a PEO or PEO Group to meet the
qualifications for registration u nder the Oklahoma
Professional Employer Organization Recogniti on and
Registration Act or d etermination by the assurance
organization of the failure of the PEO or PEO Group to
meet the qualifications for accreditation or
certification by the assurance organ ization, and
f. an agreement to share with the Commissioner in a
timely manner the informa tion and supporting
documentation provided to the assurance organization
by the PEO or PEO Group si milar to the information and
documentation required for registratio n or renewal of
registration under the Oklahoma Professional E mployer
Organization Recogni tion and Registration Act.
4. Each person, PEO , or PEO Group shall electronically submit,
in a form and manner prescribed by the Commissioner, along with any
applicable fees, any change of legal business name, “doing business
as” or assumed name, address, or contact email address within thirty
(30) days after the change occurred. Any submission of a change of
legal name, “doing business as” or assumed name, address, or contact
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email address received more than thirty (3 0) days after the change
occurred shall be accompanied by a fee of Fifty Dollars ($50.00).
C. Initial registration.
1. Each PEO or PEO Group operating within this state as of
November 1, 2002, shall complete its initial registration not later
than one hundred eig hty (180) days after the end of the PEO’s or PEO
Group’s first fiscal year ending after November 1, 2002.
2. Each PEO or PEO G roup not operating within this state as of
November 1, 2002, shall comple te its initial registration prior to
commencement of operations within this state. A re gistration is
valid for a term of one (1) yea r.
D. Renewal. 1. A registration expires one (1 ) year following
the registration unless it is renewed pursuant to this s ubsection.
Before expiration of the registration, a reg istrant may renew the
registration for an additional one-year term if the registrant:
a. remains in good standing and otherwise is entitled to
be registered pursuant to the Oklahoma Professional
Employer Organization Recognition and Registration
Act,
b. files with the Commissioner a rene wal application on a
form prescribed by the Commissioner, and
c. pays to the Commissioner a ren ewal fee as provided for
in Section 600.5 of this title.
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2. A registration shall be considered late thirty (30) days
after the renewal date. Any registration r eceived more than thirty
(30) days after the renewal date shall be accompanied by a late
registration fee of Five Hundred Dollars ($500.00) A registration
expired for failure to submit a renewal application may be
reinstated within ninety (90) days after the expiration date by
electronically submitting a fee in an amount that is twice the
amount of the renewal fee and a renewal application in the form and
manner prescribed by the Insurance Commissioner, along with any
transaction or other applicable fees. The Commissioner shall
require a person, PEO, or P EO Group whose registration has been
expired for more than ninety (90) days to reapply as if a new
applicant and pay an application fee equal to an amount that is
twice the initial application fee in additi on to any fines imposed.
All applications received after the registration has been expired
for more than ninety (90) days shall include a detailed report of
professional employer services provided in this state during the
period of expired registration.
E. D. Group registration. Any two or more PEOs he ld under
common control of any other person o r persons acting in concert may
be registered as a PEO Group. A PEO Grou p may satisfy any reporting
and financial requirements o f this registration law on a
consolidated basis.
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F. E. Electronic filing and complia nce. A PEO, PEO Group or an
approved independent and qualified assurance organization as
provided for in subsectio n B of this section may electronically
submit filings in conformance with Sections 15 -101 through 15-121 of
Title 12A of the Oklahoma Statute s. Electronically submitted
filings include, but are not limited to, applications, docume nts,
reports, and other f ilings required under the Oklahoma Uniform
Electronic Transactions Act.
G. F. De minimis exemption.
1. A PEO is exempt from the registration r equirements payable
under the Oklahoma Professional Employer Organization Recognition
and Registration Act if su ch PEO:
a. submits a properly executed request for exemp tion on a
form provided by the D epartment,
b. is domiciled outside this state and is lic ensed or
registered as a professional e mployer organization in
another state that has the same or greater
requirements as the Oklahoma Professional Employer
Organization Recognition and Registration A ct,
c. does not maintain an office in this state or soli cit
in any manner clients located or do miciled within this
state, and
d. does not have more than twenty-five covered employees
employed or domiciled in this state.
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2. An exemption of a professional e mployer organization from
the registration requirements under the Oklahoma Professional
Employer Organization Recognition and Registration Act sha ll be
valid for one (1) year, subject to renewal.
H. G. List. The Commission er shall maintain a list of
professional employer organizations registered or exempted unde r the
Oklahoma Professional Employer Organization Recognition and
Registration Act and a l ist of approved assurance organizations.
I. H. Forms. The Commissioner ma y prescribe forms necessary to
promote the efficient administration of this section.
J. I. The Commissioner is authorized to p romulgate reasonable
rules necessary for the administration and implementation of this
section.
J. Every person, PEO, or PEO Group, upon receipt of any inquiry
from the Commissioner, shall, within twenty (20) days from the date
of receipt of the inquiry, fur nish the Commissioner with an adequate
response to the inquiry.
K. The Commissioner may reject an application for registratio n,
renewal of registration, or f or an exemption from registration if
the Commissioner finds that:
1. The application is not fully completed or properly execu ted;
2. Documents required to supplement the application are not
included in the application pack et or are inadequate;
3. The registration fee is not submitted with the application;
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4. The applicant or any person named in the application
misrepresents material in the application;
5. The applicant, or any of its officers, is determined by the
Commissioner to lack good moral charac ter, business integrity, or
financial responsibility; or
6. The controlling person has violated a provision of the
Oklahoma Professional Employer Organization Recognit ion and
Registration Act or rules promulgated thereto.
SECTION 2. This act shall become effective November 1, 2023.
COMMITTEE REPORT BY: COMMITTEE ON INSURANCE, dated 04/04/2023 - DO
PASS.