South Carolina General Assembly
117th Session, 2007-2008

Download This Version in Microsoft Word format

Bill 1160


Indicates Matter Stricken
Indicates New Matter


(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

A BILL

TO AMEND SECTION 40-68-30, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO LICENSES REQUIRED FOR PROFESSIONAL EMPLOYER ORGANIZATIONS, SO AS TO REVISE HOW THE ONE-YEAR TIME PERIOD AN APPLICANT MUST WAIT AFTER THE REVOCATION OR DENIAL OF A LICENSE IS DETERMINED; TO AMEND SECTION 40-68-40, AS AMENDED, RELATING TO QUALIFICATIONS TO SERVE AS A CONTROLLING PERSON AND CERTAIN REQUIREMENTS FOR LICENSURE, SO AS TO MAKE TECHNICAL CORRECTIONS AND DELETE A SPECIFIC NET WORTH REQUIREMENT FOR APPLICANTS OPERATING A PROFESSIONAL EMPLOYER ORGANIZATION ON OR BEFORE JANUARY 1, 1991; TO AMEND SECTION 40-68-45, RELATING TO CONTINUING PROFESSIONAL EDUCATION REQUIREMENTS, SO AS TO FURTHER PROVIDE FOR THESE REQUIREMENTS; TO AMEND SECTION 40-68-50, AS AMENDED, RELATING TO LICENSE FEES, SO AS TO REVISE THE MANNER OF THEIR COMPUTATION AND THE ANNIVERSARY DATE OF LICENSES; TO AMEND SECTION 40-68-90, AS AMENDED, RELATING TO RESTRICTED LICENSES FOR NONRESIDENT COMPANIES OR GROUPS, SO AS TO REVISE THE CONDITIONS UNDER WHICH A NONRESIDENT COMPANY OR GROUP MAY BE LICENSED; TO AMEND SECTION 40-68-100, AS AMENDED, RELATING TO LICENSES, RENEWALS, AND THE TIME A LICENSE IS VALID, SO AS TO REVISE THIS TIME PERIOD; TO AMEND SECTION 40-68-120, AS AMENDED, RELATING TO BENEFIT PLANS FOR ASSIGNED EMPLOYEES, SO AS TO PROVIDE THAT NO LICENSEE MAY OFFER NONLICENSED WORKERS' COMPENSATION BENEFITS; AND TO AMEND SECTION 40-68-140, AS AMENDED, RELATING TO NAMES UNDER WHICH A BUSINESS MAY BE CONDUCTED, SO AS TO FURTHER PROVIDE FOR WHEN A LICENSEE MUST NOTIFY THE DEPARTMENT OF CONSUMER AFFAIRS OF CERTAIN INFORMATION.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION    1.    Section 40-68-30(D) of the 1976 Code, as last amended by Act 112 of 2005, is further amended to read:

"(D)    An application for a professional employer organization group license under Section 40-68-80 must provide the information required by this chapter for each member of the group. An applicant or licensee is ineligible for a license for one year after the date of final departmental action on the denial or revocation of a license applied for or issued under this chapter. This restriction does not apply to a denial or revocation of a license if the basis of the action was:

(1)    an inadvertent error or omission in the application if that error or omission is promptly corrected;

(2)    the experience documented to the department was insufficient at the time of the previous application;

(3)    the department was unable to complete the criminal background investigation required under Section 40-68-40 because of insufficient information received from a local, state, or federal law enforcement agency; or

(4)    that one or more of the controlling persons affiliated with the applicant or licensee was determined by the department to be unsuitable, if that unsuitable controlling person has in fact ceased to be a controlling person of the applicant or licensee."

SECTION    2.    Section 40-68-40(C), (E), and (G) of the 1976 Code, as last amended by Act 112 of 2005, is further amended to read:

"(C)    Conviction of a crime does not automatically disqualify a controlling person, require the revocation of a license, or require the denial of an application for a new or renewed renewal license.

(E)    An applicant for an original initial or renewal license must demonstrate a net worth of at least fifty thousand dollars. The applicant shall demonstrate the net worth to the department by providing the department with the applicant's audited financial statement. The net worth requirement also may be satisfied through guarantees, letters of credit, or other security acceptable to the department in a combined total amount of at least fifty thousand dollars. A guaranty is not acceptable to satisfy this subsection unless the applicant submits sufficient evidence to satisfy the department that the guarantor has adequate resources to satisfy the obligations of the guaranty. For applicants operating a professional employer organization or professional employer organization group on or before January 1, 1991, the net worth requirement will be satisfied by the documentation of a positive net worth.

(G)(1)    An applicant and any controlling person must have at least two years of other related industry experience as approved by the department before the initial license is issued.

(2)    Notwithstanding subsection (G)(1), an applicant for a nonresident restricted license under Section 40-68-90 may be issued a license without the necessary two years' experience.

(3)    However, Notwithstanding subsection (G)(1), all licensees filed persons licensed before September 30, 2005, may continue to act as professional employment organizations after that date without regard to the experience requirement of this subsection if they maintain compliance with the continuing professional education requirements of Section 40-68-45 and otherwise comply with this chapter."

SECTION    3.    Section 40-68-45(A) of the 1976 Code, as added by Act 112 of 2005, is amended to read:

"(A)(1)    Effective for license years beginning after September 30, 2005, key Key management personnel of all licensees must complete at least eight hours of continuing professional education annually.

(2)    For purposes of this subsection:

(a)    if the licensee is a sole proprietorship or partnership, "key personnel" means any controlling person, as defined in this chapter, of that licensee.

(b)    if the licensee is a corporation, 'key personnel' means any person who both:

(i)(a)    possesses the power to direct or cause the direction of the management of a company seeking to offer professional employment services in this State; and

(ii)(b)    is directly responsible for the day-to-day management of the company's operations in this State.

(3)    The holder of a nonresident restricted license under Section 40-68-90 is not required to complete the continuing education required by this subsection.

(4)    Up to eight hours of continuing professional education may be carried forward from one year to the next year; for the license year beginning September 30, 2005, up to eight hours of continuing professional education taken in the preceding twelve months may be carried forward."

SECTION    4.    Section 40-68-50(A) and (E) of the 1976 Code, as last amended by Act 112 of 2005, is further amended to read:

"(A)    An applicant for an original initial or renewal license shall pay a fee to the department on the issuance of the license or license renewal. License fees are assessed as follows:

(1)    for initial licenses, in the first year of the biennium:

(a)    two thousand dollars for a resident professional employer organization;

(b)    four thousand dollars for a resident professional employer organization group;

(c)    two thousand dollars for a nonresident professional employer organization. However, if the state of residency of the nonresident professional employer organization imposes a greater fee for licensing nonresident applicants, the greater fee must be assessed. The maximum fee that may be charged is five thousand dollars for a nonresident professional employer organization;

(d)    four thousand dollars for each nonresident professional employer organization group. However, if the state of residency of the nonresident professional employer organization group imposes a greater fee for licensing nonresident applicants, the greater fee must be assessed. The maximum fee that may be charged is ten thousand dollars for each nonresident professional employer organization group;

(2)    for initial licenses in the second year of the biennium:

(a)    one thousand dollars for each resident professional employer organization;

(b)    three thousand five hundred dollars for each resident professional employer organization group;

(c)    one thousand dollars for a nonresident professional employer organization. However, if the state of residency of the nonresident professional employer organization imposes a greater fee for licensing nonresident applicants, the greater fee must be assessed. The maximum fee that may be charged is two thousand five hundred dollars for a nonresident professional employer organization;

(d)    three thousand five hundred dollars for each nonresident professional employer organization group. However, if the state of residency of the nonresident professional employer organization group imposes a greater fee for licensing nonresident applicants, the greater fee must be assessed. The maximum fee that may be charged is five thousand dollars for each nonresident professional employer organization group;

(3)    for renewal licenses:

(a)    fifteen hundred dollars for a professional employer organization;

(b)    three thousand dollars for a professional employer organization group;

(c)    fifteen hundred dollars for a nonresident professional employer organization. However, if the state of residency of the nonresident leasing company imposes a greater fee for licensing nonresident applicants, the greater fee must be assessed. The maximum fee that may be charged is three thousand seven hundred fifty dollars for a nonresident professional employer organization;

(d)    three thousand dollars for each nonresident professional employer organization group. However, if the state of residency of the nonresident professional employer organization group imposes a greater fee for licensing nonresident applicants, the greater fee must be assessed. The maximum fee that may be charged is seven thousand five hundred dollars for each nonresident professional employer organization group.

(E)    The department may change the anniversary date of the first biennium, as established in Regulation 28-910(3)(d) 28-1000(A)(1), so that approximately one-half of the applications for renewal licenses will be due on or before September 30 thirtieth of the biennium and the other half on or before March 30 thirtieth of the following year."

SECTION    5.    Section 40-68-90 of the 1976 Code, as last amended by Act 112 of 2005, is further amended to read:

"Section 40-68-90.    (A)    The department may issue a restricted license to a nonresident professional employer organization or professional employer organization group for limited operation within this State under the following conditions if the applicant:

(1)    applicant's state of residence provides for licensing of professional employer organizations, the applicant is licensed and in good standing in its state of residence, and the applicant's state of residence grants a similar privilege for restricted licensing to professional employer organizations or professional employer organization groups that are residents in South Carolina is domiciled outside this State and is licensed or registered as a professional employer organization in good standing in another state and is properly registered as a foreign entity with the South Carolina Secretary of State;

(2)    applicant does not maintain an office, sales force, or representatives in this State, and it does not solicit clients that are residents in this State; and

(3)    applicant does not have more than forty leased employees working in this State.

(B)    An applicant for a restricted license is exempt from the requirements of Section 40-68-40(F).

(C)    An applicant for a nonresident or restricted license shall file on a form approved by the department an appointment of a recognized and approved entity as its attorney to receive service of legal process issued against it in this State."

SECTION    6.    Section 40-68-100 of the 1976 Code, as last amended by Act 112 of 2005, is further amended to read:

"Section 40-68-100.    The department shall issue a license to an applicant that meets the requirements of this chapter. The license must be issued not later than the ninetieth day after the date on which the completed application is filed with the department. A license issued by the department under this chapter is valid for two years until the end of the two-year licensing cycle in which the application was filed. The department shall renew a license on receipt of a renewal application approved by the department and payment of the required renewal fees."

SECTION    7.    Section 40-68-120(F) of the 1976 Code, as last amended by Act 112 of 2005, is further amended to read:

"(F)    A licensee and client company both are deemed an employer and may sponsor and maintain benefit plans for assigned workers. An employee health benefit plan sponsored by a licensee for the benefit of assigned employees must be an insured health benefit plan offered by an insurer licensed under Title 38. The employee health benefit plans provided by a licensed insurance provider, including the use of third party administrators, must comply with the applicable provisions of the insurance laws of this State and other federal law, including The Employment Retirement Income Security Act (ERISA), 29 USC Section 101, et seq. No licensee may maintain, sponsor, offer, endorse, or otherwise proffer self-insured, self-funded, or other plans for health benefits, or workers' compensation benefits that are not licensed with the Department of Insurance."

SECTION    8.    Section 40-68-140(C) of the 1976 Code, as last amended by Act 112 of 2005, is further amended to read:

"(C)    A licensee must notify the department in writing of:

(1)    a change in the location of its primary business office;

(2)    the addition of more business offices; or

(3)    a change in the location of business records maintained by the licensee; or

(4)    any other information relevant to change in status that may be required by the department."

SECTION    9.    This act takes effect upon approval by the Governor.

----XX----

This web page was last updated on Monday, June 22, 2009 at 2:26 P.M.