A BILL TO BE ENTITLED
AN ACT to make various technical, clarifying, and other changes to the Professional Employer organization Statutes.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 58‑89A‑5 reads as rewritten:
"§ 58‑89A‑5.  Definitions.
In this Article:
…
(8)	"Hazardous financial condition" means inability by an applicant for an original or renewal license to demonstrate a net worth of at least fifty thousand dollars ($50,000). For purposes of this definition, the applicant shall demonstrate net worth by providing the Department with the applicant's audited financial statements. The net worth requirement also may be satisfied through guarantees, letters of credit, or other security acceptable to the Department.
…."
SECTION 2.  G.S. 58‑89A‑50 reads as rewritten:
"§ 58‑89A‑50.  Surety bond; letter of credit; other deposits.
(a)	An applicant for licensure shall file with the Commissioner a surety 		
bond, or other items as set forth in subsection (f) of this section, in the amount of one hundred thousand dollars ($100,000) for the benefit of the Commissioner.(b)	The surety bond required by this section shall be in a form acceptable to the Commissioner, issued by an insurer authorized by the Commissioner to write surety business in this State, and maintained in force while the license remains in effect or any obligations or liabilities of the applicant, licensee or PEO previously licensed by this State remain outstanding.
(c)	The surety bond required by this section may be exchanged or replaced with another surety bond if (i) the surety bond applies to obligations and liabilities that arose during the period of the original surety bond, (ii) the surety bond meets the requirements of this section, and (iii) 90 days' advance written notice is provided to the Commissioner.
	
…."
SECTION 3.  G.S. 58‑89A‑60(b) reads as rewritten:
"(b)	Every applicant shall file with the Commissioner evidence of financial responsibility. Evidence of financial responsibility includes an audited GAAP financial statement, prepared as of a date not more than 90 days before the date of application that demonstrates that the applicant or licensee meets financial qualifications as specified by the Commissioner and attached to which is a separate document signed by the chief executive and the chief financial officer certifying that (i) each has reviewed the financial statement; (ii) based on each signatory's knowledge, the financial statement does not contain any untrue or misleading statement of material fact or omit a fact with respect to the period covered by the financial statement; and (iii) based on each signatory's knowledge, the financial statement fairly presents in all material respects the financial condition of the licensee as of, and for, the period presented in the financial statement.
Notwithstanding the requirements of this subsection, the Commissioner may, in the Commissioner's discretion, accept an audited GAAP financial statement that has been prepared more than 90 days before submission to the Commissioner if the Commissioner deems such acceptance appropriate. The Commissioner may, in the Commissioner's discretion, impose conditions upon such acceptance of financial statements prepared more than 90 days prior to submission."
SECTION 4.  G.S. 58‑89A‑95 reads as rewritten:
"§ 58‑89A‑95.  Agreement.
	A licensee shall establish the terms of a PEO agreement by a written contract between the licensee and the client company.
		"
SECTION 5.  G.S. 58‑89A‑100 reads as rewritten:
"§ 58‑89A‑100.  Contract requirements.
A contract between a licensee and a client company shall provide:
(1)	That employment responsibilities not allocated to the licensee by the PEO agreement or this section remain with the client company.
(2)	That the licensee assumes responsibility for the payment of wages to the assigned employees as agreed to in the PEO agreement.
(3)	That the licensee assumes responsibility for the payment of payroll taxes and collection of taxes from payroll on assigned employees.
	
(5)	That the licensee retains a right of direction and control over the adoption of employment policies and the management of workers' compensation claims, claim filings, and related procedures in accordance with applicable federal laws and the laws of this State.
(6)	That responsibility to obtain workers' compensation coverage for assigned employees, from an entity authorized to do business in this State and otherwise in compliance with all applicable requirements, shall be specifically allocated in the PEO agreement to either the client company or the licensee. If the responsibility is allocated to the licensee under any such agreement, that agreement shall require that the licensee maintain and provide to the client company, at the termination of the agreement if requested by the client company, records regarding the loss experience related to workers' compensation insurance provided to assigned employees pursuant to the agreement."
SECTION 6.  G.S. 58‑89A‑145 is repealed.
SECTION 7.  G.S. 58‑89A‑155(a)(4) is repealed.
SECTION 8.  This act becomes effective July 1, 2013.