Oklahoma 2023 Regular Session

Oklahoma Senate Bill SB638 Compare Versions

Version 1 (Old)

Version 2 (New)

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4		-	An Act
5		-	ENROLLED SENATE
	29	+	HOUSE OF REPRESENTATIVES - FLOOR VERSION
	30	+
	31	+	STATE OF OKLAHOMA
	32	+
	33	+	1st Session of the 59th Legislature (2023)
	34	+
	35	+	ENGROSSED SENATE
6	36		BILL NO. 638 By: Montgomery of the Senate
7	37
8	38		and
9	39
10		-	~~Tedford and~~ Sneed of the
11		-	~~House~~
	40	+	Sneed of the House
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15	45		An Act relating to the Oklahoma Professio nal Employer
16	46		Organization Recognition and Registration Act;
17	47		amending 40 O.S. 2021, Section 600.4, which re lates
18	48		to registration; requiring electronic sub mission of
19	49		registration application; extending time period for
20	50		the submission of a financial statement; requiring
21	51		electronic submission of a cha nge in name, address,
22	52		or contact information by certain time; prescri bing a
23	53		fee; removing provisions for initial registration;
24	54		modifying provisions for renewal of registration ;
25	55		increasing time frame for renewal ; requiring
26	56		reapplication if past certain time frame; prescribing
27	57		fees for late registration; requiring response to
28	58		Insurance Commissioner inquiry in a certain time
29	59		frame; expanding scope for rejection of application;
30	60		and providing an effective date .
31	61
32	62
33	63
34		-	SUBJECT: Professional employer organizations
35	64
36	65		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
37		-
38	66		SECTION 1. AMENDATORY 40 O.S. 2 021, Section 600.4, is
39	67		amended to read as follows:
40		-
41	68		Section 600.4. A. Registration required. Except as otherwise
42	69		provided in the Oklahoma Professional Employer Organi zation
43	70		Recognition and Registration Act, no person shall , unless the person
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44	98		is registered as a PEO or PEO Group under the Oklahoma Professional
45	99		Employer Organization Recognition and R egistration Act, provide,
46		-
47		-	ENR. S. B. NO. 638 Page 2
48	100		advertise, or otherwise hold itself out as prov iding professional
49	101		employer services in this state.
50		-
51	102		B. Registration information.
52		-
53	103		1. Each PEO or PEO Group required to be registered under the
54	104		Oklahoma Professional Employer Organiza tion Recognition and
55	105		Registration Act shall provide electronically submit a complete
56	106		registration application to the Insurance Commissioner with
57	107		information required by the Commissioner on forms in a manner and
58	108		form prescribed by the Commissioner , along with any applicable fees .
59	109		Pursuant to paragraph 2 of this subsection, a PE O or PEO Group may
60	110		use a qualified assurance organiza tion as approved by the
61	111		Commissioner to provide services related to the registration of the
62	112		PEO or PEO Group. A PEO or PEO Group may authorize an assurance
63	113		organization to act on behalf of the PEO or PE O Group in complying
64	114		with the registration requiremen ts set forth in the Oklahoma
65	115		Professional Employer Organization Recognition and Registration Act,
66	116		including, but not limited to, e lectronic filings of information and
67	117		payment of registration fees. At a minimum, PEOs, PEO Groups or an
68	118		approved assurance or ganization acting on behalf of the PEO or PEO
69	119		Group, shall provide the following information:
70		-
71	120		a. the name or names under which the PEO or PEO Group
72	121		conducts business,
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74	149		b. the address of the principal plac e of business of the
75	150		PEO or PEO Group and the address of each office it
76	151		maintains in this state,
77		-
78	152		c. the PEO’s or PEO Group’s taxpayer or employer
79	153		identification number,
80		-
81	154		d. a list by jurisdiction of each name under which the
82	155		PEO or PEO Group has operated in the preceding five
83	156		(5) years, including any alternat ive names, names of
84	157		predecessors and, if known, successor business
85	158		entities,
86		-
87	159		e. a statement of ownership, which shall include the name
88	160		and evidence of the business ex perience of any person
89	161		that, individually or acting in concert with one or
90		-
91		-	ENR. S. B. NO. 638 Page 3
92	162		more other persons, owns or controls, directly or
93	163		indirectly, twenty-five percent (25%) or more of the
94	164		equity interests of the PEO or PEO Group,
95		-
96	165		f. a statement of management, which shall include the
97	166		name and evidence of the business experience of any
98	167		person who serves as president, chief executive
99	168		officer, or otherwise has the authority to act as
100	169		senior executive officer of the PEO or PEO Group, an d
101		-
102	170		g. a financial statement setting f orth the financial
103	171		condition of the PEO or PEO Group, as of a date not
104	172		earlier than one hundred eighty (180) three hundred
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105	200		sixty-five (365) days prior to the date submitted to
106	201		the Commissioner, prepared in accordance wit h
107	202		generally accepted accounting principles, and audited
108	203		or reviewed by an independent certified public
109	204		accountant licensed to pra ctice in the jurisdiction in
110	205		which such accountant is located. A PEO Group may
111	206		submit combined or consolidated audited or revi ewed
112	207		financial statements to meet the requirements of this
113	208		section.
114		-
115	209		2. The financial statement required by subparagraph g of
116	210		paragraph 1 of this subsection may be dated as of a date that is not
117	211		earlier than three hundred sixty -five (365) days before the d ate on
118	212		which the application is submitted in the event the PEO or P EO Group
119	213		provides the following:
120		-
121	214		a. evidence that is acceptabl e to the Commissioner that
122	215		it is licensed or registered in good standing in
123	216		another state with equal or greater requirements th an
124	217		the requirements of the Oklahoma Professional Employer
125	218		Organization Recognition and Registration Act,
126		-
127	219		b. quarterly financial s tatements of management for each
128	220		calendar quarter as of the most recent audit that
129	221		demonstrate continuing financial operations acceptable
130	222		to the Commissioner, and
131	223
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132	250		c. the certification of an inde pendent Certified Public
133	251		Accountant that as of the end of the most recent
134		-
135		-	ENR. S. B. NO. 638 Page 4
136	252		calendar quarter, the PEO or PEO Group has paid all of
137	253		its state and federal payroll taxes, health and
138	254		workers’ compensation premiums, and contributions to
139	255		employee retirement plans in a timely and appropriate
140	256		manner.
141		-
142	257		3. For purposes of the Ok lahoma Professional Employer
143	258		Organization Recognition and Registration Act, “assurance
144	259		organization” means an independent entit y approved by the
145	260		Commissioner to certify the qualifications of a P EO or PEO Group for
146	261		registration under this section and Sectio n 600.6 of this title and
147	262		any related requirements and procedures. To be considered for
148	263		approval as an independent and qualifi ed assurance organization, the
149	264		assurance organization shall submit a written request for approval
150	265		to the Commissioner. The writt en request shall include, bu t not be
151	266		limited to, the following:
152		-
153	267		a. evidence that the assurance organization is
154	268		independent and has an established national program
155	269		for the accreditation and finan cial assurance of PEOs
156	270		and PEO Groups based on requirements si milar to the
157	271		requirements of the Oklahoma Professional Employer
158	272		Organization Recognition and Registration Act, and any
159	273		rules promulgated for the implementation of the
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160	301		Oklahoma Professional Emplo yer Organization
161	302		Recognition and Registration Act,
162		-
163	303		b. evidence that the assurance organiza tion has
164	304		documented qualifications, standards, procedures, and
165	305		financial assurance acceptable to th e Commissioner and
166	306		is licensed or otherwise approved by one or more
167	307		states to certify the qualifications of PEOs or PEO
168	308		Groups,
169		-
170	309		c. an agreement to provide in formation, compliance
171	310		monitoring services, and a level of financial
172	311		assurance as deemed acceptable by the Commissioner,
173		-
174	312		d. an agreement to provide the Commissioner wi th an
175	313		application that has been executed by each PEO or PEO
176	314		Group requesting alternative r egistration under this
177	315		section and Section 600.6 of this title and related
178		-
179		-	ENR. S. B. NO. 638 Page 5
180	316		requirements and procedu res in a form approved by the
181	317		Commissioner. The application shall:
182		-
183	318		(1) authorize the assurance organization to share
184	319		with the Commissioner any application a nd
185	320		compliance reporting information required under
186	321		the Oklahoma Professional Employer Organization
187	322		Recognition and Registration Act that has been
188	323		provided to the assu rance organization by the PEO
189	324		or PEO Group,
190	325
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191	352		(2) authorize the Commissioner to accept infor mation
192	353		shared by the assurance organization for
193	354		registration or renewal of registration of the
194	355		PEO or PEO Group as if the information was
195	356		provided directly to the Com missioner by the PEO
196	357		or PEO Group,
197		-
198	358		(3) provide the certificati on of the PEO or PEO Group
199	359		that the information provided by the assurance
200	360		organization to the Commissioner is true and
201	361		complete and that the PEO or PEO Group is in full
202	362		and complete compliance w ith all requirements of
203	363		the Oklahoma Professional Employer Org anization
204	364		Recognition and Registration Act, and
205		-
206	365		(4) provide the certification of the assurance
207	366		organization that the PEO or PEO Group is in
208	367		compliance with the standards and procedures of
209	368		the assurance organization which are similar to
210	369		the requirements of the Oklahoma Professional
211	370		Employer Organization Recognition and
212	371		Registration Act and is qualified for
213	372		registration or renewal o f registration under the
214	373		Oklahoma Professional Employer Organizatio n
215	374		Recognition and Registration Act,
216	375
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217	402		e. an agreement to provide written notice to the
218	403		Commissioner within two (2) business days of
219	404		determination by the assurance organization of the
220	405		failure of a PEO or PEO Group to meet the
221	406		qualifications for registration u nder the Oklahoma
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224	407		Professional Employer Organization Recogniti on and
225	408		Registration Act or d etermination by the assurance
226	409		organization of the failure of the PEO or PEO Group to
227	410		meet the qualifications for accreditation or
228	411		certification by the assurance organ ization, and
229		-
230	412		f. an agreement to share with the Commissioner in a
231	413		timely manner the informa tion and supporting
232	414		documentation provided to the assurance organization
233	415		by the PEO or PEO Group si milar to the information and
234	416		documentation required for registratio n or renewal of
235	417		registration under the Oklahoma Professional E mployer
236	418		Organization Recogni tion and Registration Act.
237		-
238	419		4. Each person, PEO , or PEO Group shall electronically submit,
239	420		in a form and manner prescribed by the Commissioner, along with any
240	421		applicable fees, any change of legal business name, “doing business
241	422		as” or assumed name, address, or contact email address within thirty
242	423		(30) days after the change occurred. Any submission of a change of
243	424		legal name, “doing business as” or assumed name, address, or contact
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244	452		email address received more than thirty (3 0) days after the change
245	453		occurred shall be accompanied by a fee of Fifty Dollars ($50.00).
246		-
247	454		C. Initial registration.
248		-
249	455		1. Each PEO or PEO Group operating within this state as of
250	456		November 1, 2002, shall complete its initial registration not later
251	457		than one hundred eig hty (180) days after the end of the PEO’s or PEO
252	458		Group’s first fiscal year ending after November 1, 2002.
253		-
254	459		2. Each PEO or PEO G roup not operating within this state as of
255	460		November 1, 2002, shall comple te its initial registration prior to
256	461		commencement of operations within this state. A re gistration is
257	462		valid for a term of one (1) yea r.
258		-
259	463		D. Renewal. 1. A registration expires one (1 ) year following
260	464		the registration unless it is renewed pursuant to this s ubsection.
261	465		Before expiration of the registration, a reg istrant may renew the
262	466		registration for an additional one-year term if the registrant:
263		-
264	467		a. remains in good standing and otherwise is entitled to
265	468		be registered pursuant to the Oklahoma Professional
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268	469		Employer Organization Recognition and Registration
269	470		Act,
270		-
271	471		b. files with the Commissioner a rene wal application on a
272	472		form prescribed by the Commissioner, and
273		-
274	473		c. pays to the Commissioner a ren ewal fee as provided for
275	474		in Section 600.5 of this title.
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276	501
277	502		2. A registration shall be considered late thirty (30) days
278	503		after the renewal date. Any registration r eceived more than thirty
279	504		(30) days after the renewal date shall be accompanied by a late
280	505		registration fee of Five Hundred Dollars ($500.00) A registration
281	506		expired for failure to submit a renewal application may be
282	507		reinstated within ninety (90) days after the expiration date by
283	508		electronically submitting a fee in an amount that is twice the
284	509		amount of the renewal fee and a renewal application in the form and
285	510		manner prescribed by the Insurance Commissioner, along with any
286	511		transaction or other applicable fees. The Commissioner shall
287	512		require a person, PEO, or P EO Group whose registration has been
288	513		expired for more than ninety (90) days to reapply as if a new
289	514		applicant and pay an application fee equal to an amount that is
290	515		twice the initial application fee in additi on to any fines imposed.
291	516		All applications received after the registration has been expired
292	517		for more than ninety (90) days shall include a detailed report of
293	518		professional employer services provided in this state during the
294	519		period of expired registration.
295		-
296	520		E. D. Group registration. Any two or more PEOs he ld under
297	521		common control of any other person o r persons acting in concert may
298	522		be registered as a PEO Group. A PEO Grou p may satisfy any reporting
299	523		and financial requirements o f this registration law on a
300	524		consolidated basis.
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302	552		F. E. Electronic filing and complia nce. A PEO, PEO Group or an
303	553		approved independent and qualified assurance organization as
304	554		provided for in subsectio n B of this section may electronically
305	555		submit filings in conformance with Sections 15 -101 through 15-121 of
306	556		Title 12A of the Oklahoma Statute s. Electronically submitted
307	557		filings include, but are not limited to, applications, docume nts,
308	558		reports, and other f ilings required under the Oklahoma Uniform
309	559		Electronic Transactions Act.
310		-
311		-	ENR. S. B. NO. 638 Page 8
312		-
313	560		G. F. De minimis exemption.
314		-
315	561		1. A PEO is exempt from the registration r equirements payable
316	562		under the Oklahoma Professional Employer Organization Recognition
317	563		and Registration Act if su ch PEO:
318		-
319	564		a. submits a properly executed request for exemp tion on a
320	565		form provided by the D epartment,
321		-
322	566		b. is domiciled outside this state and is lic ensed or
323	567		registered as a professional e mployer organization in
324	568		another state that has the same or greater
325	569		requirements as the Oklahoma Professional Employer
326	570		Organization Recognition and Registration A ct,
327		-
328	571		c. does not maintain an office in this state or soli cit
329	572		in any manner clients located or do miciled within this
330	573		state, and
331		-
332	574		d. does not have more than twenty-five covered employees
333	575		employed or domiciled in this state.
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334	602
335	603		2. An exemption of a professional e mployer organization from
336	604		the registration requirements under the Oklahoma Professional
337	605		Employer Organization Recognition and Registration Act sha ll be
338	606		valid for one (1) year, subject to renewal.
339		-
340	607		H. G. List. The Commission er shall maintain a list of
341	608		professional employer organizations registered or exempted unde r the
342	609		Oklahoma Professional Employer Organization Recognition and
343	610		Registration Act and a l ist of approved assurance organizations.
344		-
345	611		I. H. Forms. The Commissioner ma y prescribe forms necessary to
346	612		promote the efficient administration of this section.
347		-
348	613		J. I. The Commissioner is authorized to p romulgate reasonable
349	614		rules necessary for the administration and implementation of this
350	615		section.
351		-
352	616		J. Every person, PEO, or PEO Group, upon receipt of any inquiry
353	617		from the Commissioner, shall, within twenty (20) days from the date
354		-
355		-	ENR. S. B. NO. 638 Page 9
356	618		of receipt of the inquiry, fur nish the Commissioner with an adequate
357	619		response to the inquiry.
358		-
359	620		K. The Commissioner may reject an application for registratio n,
360	621		renewal of registration, or f or an exemption from registration if
361	622		the Commissioner finds that:
362		-
363	623		1. The application is not fully completed or properly execu ted;
364		-
365	624		2. Documents required to supplement the application are not
366	625		included in the application pack et or are inadequate;
	626	+	3. The registration fee is not submitted with the application;
367	627
368		-	3. The registration fee is not submitted with the application;
	628	+	SB638 HFLR Page 13
	629	+	BOLD FACE denotes Committee Amendments. 1
	630	+	2
	631	+	3
	632	+	4
	633	+	5
	634	+	6
	635	+	7
	636	+	8
	637	+	9
	638	+	10
	639	+	11
	640	+	12
	641	+	13
	642	+	14
	643	+	15
	644	+	16
	645	+	17
	646	+	18
	647	+	19
	648	+	20
	649	+	21
	650	+	22
	651	+	23
	652	+	24
369	653
370	654		4. The applicant or any person named in the application
371	655		misrepresents material in the application;
372		-
373	656		5. The applicant, or any of its officers, is determined by the
374	657		Commissioner to lack good moral charac ter, business integrity, or
375	658		financial responsibility; or
376		-
377	659		6. The controlling person has violated a provision of the
378	660		Oklahoma Professional Employer Organization Recognit ion and
379	661		Registration Act or rules promulgated thereto.
380		-
381	662		SECTION 2. This act shall become effective November 1, 2023.
382	663
383		-
384		-	ENR. S. B. NO. 638 Page 10
385		-	Passed the Senate the 7th day of March, 2023.
386		-
387		-
388		-
389		-	Presiding Officer of the Senate
390		-
391		-
392		-	Passed the House of Representa tives the 26th day of April, 2023.
393		-
394		-
395		-
396		-	Presiding Officer of the House
397		-	of Representatives
398		-
399		-	OFFICE OF THE GOVERNOR
400		-	Received by the Office of the Governor this _______ _____________
401		-	day of _________________ __, 20_______, at _______ o'clock _______ M.
402		-	By: _______________________________ __
403		-	Approved by the Governor of the State of Oklahoma this _____ ____
404		-	day of _________________ __, 20_______, at _______ o'clock _______ M.
405		-
406		-	_________________________________
407		-	Governor of the State of Oklahoma
408		-
409		-
410		-	OFFICE OF THE SECRETARY OF STATE
411		-	Received by the Office of the Secretary of State this _______ ___
412		-	day of __________________, 20 _______, at _______ o'clock _______ M.
413		-	By: _______________________________ __
	664	+	COMMITTEE REPORT BY: COMMITTEE ON INSURANCE, dated 04/04/2023 - DO
	665	+	PASS.