An Act To Require Surety Bonding by Payroll Processing Companies LR 2668(02)
Maine Legislature, Session 121, LD 1843
Committee Amendment CA_A_H838 (House)
Amends: 10 MRSA §1495-A, 10 MRSA §1495-B, 10 MRSA §1495-C, 36 MRSA §112, 36 MRSA §182, 36 MRSA §191

AMENDMENT ·A" to H.P. 1369, L.D. 1843, Bill, 
Surety Bonding by Payroll Processing Companies" 
"An 
Amend the bill by striking out everything after the title 
and before the summary and inserting in its place the following: 
, Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 10 MRS A §1495, sub-§I-A is enacted to read: 
I-A. 
Administrator. 
"Administrator" means. except in cases 
in which the payroll processor is a wholly owned subsidiary of a 
supervised 
financial 
organization 
as 
defined 
by 
Title 
9-A. 
section 1-301. subsection 38-A. the pirector of the Office of 
Consumer Credit Regulation within the Department of Professional 
and 
Financial 
Regulation. 
In 
cases 
in 
which 
the 
payroll 
processor is a wholly owned subsidiary of a supervised financial 
organization as defined by Title 9-A. section 1-301. subsection 
38-A. 
"administrator" 
means 
the 
Superintendent 
of 
Financial 
Institutions within the Department of Professional and Financial 
Regulation. 
Sec. 2. 10 MRSA §1495-A, as amended by PL 1999, c. 172, §l 
and affected by §2, is repealed. 
Sec. 3. 10 MRSA §1495-B, sub-§§1 and 2, as enacted by PL 1997, 
c. 495, §l, are repealed. 
Sec. 4. 10 MRSA §1495-B, sub-§§3 to 6 are enacted to read: 
Page l-LR2668(2) 
COMMITTEE AMENDMENT 
t' 
1/ 
COMMITTEE AMENDMENT "k· to H.P. 1369, L.D. 1843 
3. 
Periodic reports to emplQyers. 
On a regular basis not 
less frequently than quarterly, a payroll processor shall provide 
to each employer an accounting of: 
A. 
Funds received from that employer: and 
B. 
The aggregate amounts disbursed for: 
(1) 
Payroll; 
(2) 
Each category of local, state and federal tax; and 
(3) 
Unemployment compensation premiums. 
4. 
Disclosure of methods of verification. 
On 
a 
regular 
basis not less frequently than quarterly, 
a payroll processor 
shall clearly and conspicuously and in easily understood language 
disclose 
to 
each 
employer 
for 
which 
it 
provides 
payroll 
processing services the specific method or methods whereby each 
employer 
can contact state and federal 
tax 
and 
unemployment 
insurance authorities, 
including but not limited to Internet 
address and toll-free telephone number information, 
to verify 
that payments haye been made and properly credited on behalf of 
the employer. 
5. Disclosure of limitations of surety bond. 
Whenever a 
payroll processor promotes, markets or advertises itself or its 
seryices and uses the phrase "bonded with the State" or "fully 
bonded" 
or 
other 
language 
that 
in 
the 
op1nJ.On 
of 
the 
administrator would lead an employer to belieye that the bond 
coverage provides full compensation for potential losses should 
the payroll processor fail to make required payments or become 
insolvent, the payroll processor shall also include a clear and 
conspicuous 
disclaimer 
stating 
that 
use 
of 
the 
language 
referencing bonding does not signify or ensure that the bond will 
coyer all potential claims if the payroll processor fails to 
comply with its responsibilities under this chapter. 
A payroll 
processor also shall provide this disclaimer to an employer 
before 
contracting 
for 
payroll 
processing 
seryices 
to 
that 
employer. 
6. 
Notices of nonpiU'JIlftnt to be sent to employers. 
A 
payroll processor may not designate itself as the sole recipient 
of notices from state or federal authorities for nonpayment of 
taxes 
or 
unemployment 
insurance 
contributions. 
A 
payroll 
processor shall ensure that such notices are provided directly to 
the affected employers. 
Sec. 5. 10 MRSA §1495-C, sub-§I, 1J8, as enacted by PL 1997, c. 
495, §l, is amended to read: 
COMMITTEE AMENDMENT 
~ 
t 
COMMITTEE AMENDMENT .. A 
.. to H.P. 1369, L.D. 1843 
B. 
A payroll processor that conducts business in this State 
and fails to 
Fel!fi-s1;.&~-w4~h obtain a license from the St;at;e 
~aH--Asse&&e£' administrator as required by section 14ge-A 
l495-D commits a civil violation for which a penalty of not 
less than $e99 $1. 500 nor more than $6re99 $7,500 may be 
adjudged. 
Sec. 6. 10 MRS A §§1495-D to 1495·1 are enacted to read: 
§1495-D. 
Licensing: proof of insurance and bonding: fees 
1. 
License 
required. 
A person desiring to 
engage 
or 
continue in business in this State as a payroll processor shall 
apply to the administrator for a license under this chapter on or 
before January 31st of each year. The application must be in a 
form prescribed by 
the 
administrator. 
The 
administrator 
may 
refuse the application if it contains erroneous or incomplete 
information. 
A 
license 
may 
not 
be 
issued 
unless 
the 
administrator, 
upon 
investigation, 
finds 
that 
the 
financial 
responsibility, character and fitness of the applicant and, where 
applicable, its partners, officers or directors, warrant belief 
that the business will be operated honestly and fairly within the 
purposes of this chapter. 
2. 
Proof of fidelity insurance. 
Each applicant shall 
provide to the administrator proof of one of the following, at 
the applicant's option, in an amount 2 times the highest weekly 
payroll processed by the applicant in the preceding year or in 
the amount of $5,000,000, whichever is less: 
A. 
Fidelity bond: 
B. 
Employee dishonesty bond: 
C. 
Third-party fidelity coverage; or 
D. 
Liability insurance, including crime coverage. 
3. 
Proof of surety bond. 
An applicant under subsection 1 
shall provide to the administrator proof of the surety bond 
required pursuant to section l495-E. 
4. 
Fees. 
The 
initial 
application 
and 
annual 
renewal 
application must include a fee of $250 if the payroll processor 
has fewer than 25 employers as payroll processing clients; $500 
if the payroll processor has from 25 to 500 employers as payroll 
processing clients: and $750 for those payroll processors that 
have more than 500 employers as payroll processing clients. 
The 
aggregate of license fees and other fees and assessments provided 
COMMITTEE AMENDMENT 
fro· 
~, 
COMMITTEE AMENDMENT .. 4, to H.P. 1369, L.D. 1843 
for 
by 
this 
chapter 
is 
appropriated 
for 
the 
use 
of 
the 
administrator. 
Any balance of these funds does not lapse but 
must be carried forward to be expended for the same purpose in 
the following fiscal year. 
§1495-E. ; Surety bonding 
1. 
Bond 
reQYired; 
m1n1mum 
amount; 
duration. 
Each 
application 
for 
a 
license 
under 
section 
1495 D 
must 
be 
accompanied by evidence of a surety bond, in a form approved by 
the administrator, in an amount equal to the total of all local. 
state 
and 
federal 
tax 
payments 
and 
unemployment 
insurance 
premiums 
processed 
by 
the 
payroll 
processor 
on 
behalf 
of 
employers in this State in the 3-consecutive month period of 
highest volume during the previous calendar year or $100.000, 
whichevenris greater, but not to exceed $500.000. 
The bond must 
designate-
the admlnistrator as payee. 
The bond paid to the 
administrator may be used for the purposes of the administrator 
and for the benefit of any employer who may have a 
cause of 
action against the payroll processor. The terms of the bond must 
run continuously until cancelled and the aggregate amount of the 
bond must be maintained at all times during the licensing period. 
2. 
Modification of bond terms. 
If bonding is unavailable 
under 
the 
terms 
and 
conditions 
of 
subsection 
I. 
the 
administrator, within the administrator's discretion, may modify 
those 
terms 
and 
conditions 
so 
as 
to 
ensure 
the 
maximum 
practicable protection for employers. 
3. 
Cancellation notification. 
A surety company issuing a 
bond pursuant to this 
section shall 
immediately notify the 
administrator when that 
bond is cancelled or 
terminated or 
lapses. 
The notice must include the name and address of the 
payroll processor and the amount of the bond. 
The cancellation. 
termination or lapse is not effective until at least 30 days 
after the administrator receives notice. 
§1495-F. 
Powers of administrator 
1. 
Examinations. 
The 
administrator 
shall establish 
a 
program of regular eXaminations of payroll processors subject to 
the provisions of this chapter. 
The regular examinations must be 
conducted 
not 
less 
frequently 
than 
every 
months. 
The 
administrator may. 
in the administrator's discretion. 
use 
an 
audit report of a payroll processor performed by the processor or 
another party to supplement or substitute for the administrator's 
own regular examination. In addition, the administrator may. at 
any time. conduct a special examination or investigation of any 
payroll 
processor the. administrator 
believes has 
engaged 
in 
conduct that is a violation of any provision in this chapter. 
COMMITTEE AMENDMENT 
,. . 
.. t~ 
COMMITTEE AMENDMENT .. A 
.. to H.P. 1369, L.D. 1843 
For 
purposes 
of 
both 
routine 
and 
special 
examinations 
and 
investigations, 
the 
payroll 
processor 
shall 
give 
the 
administrator free and reasonable access to the offices, places 
of 
business 
and 
records 
of 
the payroll processor, 
and 
the 
administrator may 
make 
and procure copies of those records, 
books, 
documents 
or 
other 
materials 
without 
employing 
the 
subpoena powers provided by subsection 2. 
For purposes of both 
routine 
and special 
examinations 
and 
investigations, 
and 
in 
addition to reviewing for compliance with other provisions of 
this 
chapter, 
the 
administrator 
may 
review 
the 
safety 
and 
soundness of the payroll processor, including but not limited to 
an examination of its assets and liabilities and its investments 
of 
employer 
funds 
to 
ensure that the payroll 
processor 
is 
utilizing prudent investment practices with respect to those 
funds. 
2. 
Subpoenas. 
For 
the purposes 
of this 
section, 
the 
administrator may administer oaths or affirmations and, upon the 
administrator's own motion or upon request of any party, may 
subpoena witnesses, compel their attendance, adduce evidence and 
require the production of any matter that is relevant to an 
examination 
or 
investigation, 
including 
the 
existence, 
description, 
nature, 
custody, 
condition and location of 
any 
books, documents or other material and the identity and location 
of persons having knowledge of relevant facts or any other matter 
reasonably calculated to lead to the discovery of admissible 
evidence. 
3. 
Inspection of records. 
If the payroll processor's 
records are located outside this State. that payroll processor, 
at the administrator's option, shall either make the records 
available to the administrator at a convenient location within 
the State or allow the administrator or the administrator's 
representatives to inspect them at the place where the records 
are maintained. The administrator may designate representatives, 
including comparable officials of the state in which the records 
are located. to inspect them on the administrator's behalf. 
4. 
Maintenance of records. 
A payroll processor 
shall 
maintain records of its payroll processing service activity in 
conformity with generally accepted 
accounting principles 
and 
practices and in a manner that will enable the administrator to 
determine whether the payroll processor is complying with the 
provisions of this chapter. 
The records need not be kept in the 
place 
of 
business 
where 
the 
activity 
took 
place 
if the 
administrator is given free access 
to the records, 
wherever 
located. 
All records relating to payroll processing services 
must be maintained for at least 6 years from the end of the 
fiscal year in which the activity took place. 
COMMITTEE AMENDMENT 
;~. 
~~ 
COMMITTEE AMENDMENT "A .. to H.P. 1369, L.D. 1843 
5. 
Enforcement. 
If an individual without lawful excuse 
fails to obey a subpoena or to give testimony when directed to do 
so by the administrator or obstructs the proceedings by any 
means, whether or not in the presence of the administrator, that 
individual is guilty of contempt. The administrator, through the 
Attorney General, may file a complaint in the Superior Court of 
the county in which an act on which the complaint is based was 
performed 
or 
in which 
the 
individual 
resides 
or 
transacts 
business setting forth the facts constituting the contempt and 
reguesting an order returnable in not less than 2 days nor more 
than 5 days directing the individual to show cause before the 
court why the individual should not be punished for contempt. If 
the 
court 
determines 
that the 
individual 
has 
committed 
any 
alleged 
contempt, 
the 
court 
shall 
punish 
the 
offender 
for 
contempt. 
6. 
Expenses. 
At the discretion of the administrator, the 
expenses 
of 
the 
administrator 
necessarily 
incurred 
in 
the 
eXamination or investigation of any payroll processor engaged in 
conduct governed by this chapter may be charged to that payroll 
processor. 
That payroll processor may be assessed for the actual 
expenses 
incurred by 
the 
administrator, 
including, 
but 
not 
limited to, travel expenses and the proportionate part of the 
salaries and expenses of examiners engaged in the examination or 
investigation. 
Notice of any assessment of those costs must be 
given to the payroll processor by the administrator as soon as 
feasible after the close of the examination or investigation and 
the payroll 
processor 
must 
have 
the 
time 
specified by 
the 
administrator to pay the assessment, which may not be less than 
days. 
7. 
Rules. 
The administrator may adopt reasonable rules 
governing payroll processors in accordance with this chapter. 
These rules are routine technical rules pursuant to Title 5, 
chapter 375, subchapter 2-A. 
§1495 G. 
Contracts and cooperation with other agencies 
1. 
Other agencies' staff. 
The administrator may employ and 
engage experts, professionals or other personnel of other state 
or federal regulatory agencies as may be necessary to assist the 
administrator in carrying out the regulatory functions of this 
chapter. The administrator may contract agency staff to other 
state and federal agencies to assist those other state and 
federal agencies in carrying out their regulatory functions. 
2. 
Cooperative agreements. 
The 
administrator may enter 
into cooperative agreements with other state, federaln foreign 
agencies 
to 
facilitate 
the 
regulatory 
functions~ 
of 
the 
administrator, including, but not limited to, the sharing between 
COMMITTEE AMENDMENT 
tt~' 
~. 
COMMITTEE AMENDMENT ,~ to H.P. 1369, L.D. 1843 
agencies 
of 
information 
that 
is 
otherwise 
confidential, 
coordination of examinations and joint examinations. 
3. 
Confidentiality. 
Any information furnished pursuant to 
this section by or to the administrator that has been designated 
as confidential by the agency furnishing the information remains 
the property of the agency furnishing the information and must be 
kept confidential by the recipient of the information except as 
authorized by the furnishing agency. 
4. 
Provision 
of 
information 
~ state 
agencies. 
Notwithstanding any other provision of 
law, 
a 
state agency, 
including but not limited to the State Tax Assessor and the 
Department of 
Labor, 
shall provide 
such 
information to 
the 
administrator as is necessary for the administrator's enforcement 
of this chapter. 
§1495-B. 
EnforCement actions 
A payroll processor that fails to obtain a license under 
section l495-D or that violates any provision of this chapter or 
IDly rule issued by the administrator, or through any unfair, 
unconscionable or deceptive practice causes or has the potential 
to cause damage to an employer or employee of that employer, is 
subject to one or more of the actions specified in this section: 
1. 
Cease and desist order. 
A cease and desist order. 
A. 
The administrator may issue and serve an order upon a 
payroll processor 
regu~r~ng that processor to cease 
and 
desist from the violation or practice if in the opinion of 
the administrator that payroll processor subject to the 
provisions of this chapter is engaging in or has engaged in 
or if the administrator has reasonable cause to believe that 
the processor is about to engage in any of the following 
violations or practices: 
(1) 
Violation of a law. rule or regulation relating to 
the supervision of the payroll processor; 
(2) 
Violation of any written agreement entered into 
with the administrator: or 
(3) 
An anticompetitive or deceptive practice or one 
that is otherwise injuriQus to the public interest. 
B. 
Except as provided in paragraph C, prior to the issuance 
of any order to cease and desist in accordance with this 
subsection, the administrator shall provide notice to the 
payroll processor. This notice must contain a statement of 
COMMITTEE AMENDMENT 
.~. 
~ 
COMMITTEE AMENDMENT ·A· to H.P. 1369, L.D. 1843 
the facts upon which the order is to be issued and the date 
upon which the order is to take effect. 
Upon petition of 
any interested party, a hearing in conformity with Title 5, 
chapter 375 must be provided prior to the effective date of 
any order issued pursuant to this subsection, 
except as 
provided in paragraph C. 
C. 
Whenever, 
in the 
opinion 
of 
the 
administrator, 
a 
violation or practice reQuires 
immediate action for the 
protection of the public or when the violation or practice 
or the continuation thereof is likely to cause insolvency or 
substantial dissipation of the assets or earnings of the 
payroll processor, 
the administrator may 
issue an order 
pursuant to this subsection which becomes effective upon 
service of that order, without prior notice or hearing. 
If 
an 
order 
subseQuently 
is 
issued 
by 
the 
administrator 
pursuant to paragraph A, the administrator shall afford an 
opportunity for a hearing to rescind the order and action 
taken promptly thereafter, upon application by an interested 
party; 
2. 
Bond forfeiture. 
After notice and hearing, forfeiture 
of that portion of the required bond as proportionately may make 
aggrieved parties whole: 
3. 
Civil action by administrator. 
A civil action seeking 
civil penalties, remedial action and injunctive relief by the 
administrator through the Attorney General. after which a court 
may assess a civil penalty of not less than $1.500 nor more than 
$7,500 per violation or order remedial or injunctive relief. 
When the violation consists of failure to maintain the surety 
bond required by section l495-E, each day in which coverage is 
not provided constitutes a separate violation; 
4. 
Private civil action. 
A civil action by an aggrieved 
employer in which that employer has the right to recover actual 
damages from the payroll processor in an amount determined by the 
court, 
plus 
costs 
of 
the 
action 
together 
with 
reasonable 
attorney's fees; 
5. 
Regulato~ oversight. 
Increased regulatory oversight by 
the 
administrator, 
including 
reQu~r~ng 
reports 
or 
other 
information to be submitted at those times and in such forms as 
the 
administrator 
considers 
appropriate 
for 
the 
proper 
supervision and regulation of the payroll processor; and 
6. 
Action on license. 
Revocation. suspension or nonrenewal 
of the payroll processor's license. 
§1495-I. 
Insolyency and liquidation 
COMMITTEE AMENDMENT 
:«0' 
tt-~ 
B 
COMMITTEE AMENDMENT "ft· to H.P. 1369, L.D. 1843 
1. 
Voluntar.y 
liquidation. 
A 
payroll 
processor 
who 
voluntarily ceases to do business in the State is subject to the 
following provisions. 
A. 
Prior to voluntarily ceasing business 
as 
a 
payroll 
processor, a payroll processor shall; 
(1) 
Notify 
the 
administrator 
of 
the 
proposed 
termination at least 30 days prior to its effective 
(2) Notify all employers in writing of the proposed 
termination at least 30 days prior to its effective 
date; 
(3) 
Provide 
a~ll~~e~mwp~l~o*y~e~r~sL-~w~iwtdh~~d~e~t~a~~~'l~e~d~~f~~~'n~a~l 
accountings of all accounts; 
(4) Remit all money held by the payroll processor to 
each respective 
employer 
or 
the 
appropriate 
taxing 
authority; and 
(5) 
Return 
its 
license 
to 
the 
administrator 
for 
cancellation. 
B. 
When terminating a business, a payroll processor whose 
contract with an employer does not authorize the processor 
to assign the account to another processor may not transfer 
the account to another processor without first securing the 
written permission of the employer. 
2. 
Inyoluntary ligyidation. 
A payroll processor who is no 
longer eligible to do business in this State is subject to the 
following provisions. 
A. 
If, 
upon 
examination 
of 
a 
payroll 
processor, 
the 
administrator is of the opinion that the payroll processor 
is insolvent or can no longer obtain a surety bond or when 
the license of a payroll processor has expired or terminated 
for any reason, the administrator may appoint a receiver who 
shall proceed to close the payroll processor! The person 
appointed by the administrator as a 
receiver may be the 
administrator, 
a 
deputy 
or 
such 
other 
person 
as 
the 
administrator may choose, and a certified copy of the order 
making such appointment is evidence of the appointment. A 
receiver 
has 
the 
power 
and authority provided in this 
chapter 
and such other powers 
and authority as 
may 
be 
expressed 
in 
the 
order 
of 
the 
administrator. 
If 
the 
administrator 
or 
a 
deputy 
is 
appointed 
receiver, 
no 
COMMITTEE AMENDMENT 
~. 
~~ 
COMMITTEE AMENDMENT ,~. to H.P. 1369, L.D. 1843 
additional compensation need be paid. but any reasonable and 
necessary expenses 
as 
a 
receiver must 
be 
paid 
by 
the 
processor. 
If 
another 
person 
is 
appointed. 
then 
the 
compensation of the receiver must be paid from the assets of 
that processor. 
B. 
Upon taking possession of the property and business of a 
payroll processor under this section. the receiver: 
( 1) 
May collect money due to the administrator and 
perform all acts necessary to conserve 
the payroll 
processor' s assets and business and shall proceed to 
liquidate the payroll processor's affairs: 
(2) Shall collect all debts due and claims belonging to 
the payroll processor and may sell or compound all bad 
or doubtful debts: 
(3) May sell. for cash or other consideration or as 
provided by law. all or any part of the real and 
personal property of the payroll processor: 
(4) 
May take. 
in the name of the administrator. 
a 
mortgage 
on 
the 
real 
propert.y 
from 
a 
bona 
fide 
purchaser to secure the whole or part. of t.he purchase 
pri;:;e: and 
(5) May borrow money and issue evidence of indebtedness 
t.herefor. To secure the repayment of t.his money. the 
receiver may mortgage. pledge, t.ransfer in trust or 
hypothecat.e 
any 
of 
the 
property 
of 
the 
payroll 
processor, whether real. personal or mixed. superior to 
any charge for expenses of liquidation. 
C. 
The assets of the payroll processor in liquidation. 
exclusive of any bond proceeds. must be disbursed in the 
following order: 
(1) First.. 
t.he payment of the costs and expenses of 
liquidation: 
(2) Second. 
payment of payroll. tax and unemployment 
insurance premium funds held by the payroll processor: 
(3) Third, payment of all debts, claims and obligations 
owed by the payroll processor: 
(4) Fourth. the payment of claims otherwise proper that 
were not filed within the prescribed time: and 
COMMITTEE AMENDMENT 
~. 
li 
't-. 
COMMITTEE AMENDMENT "Jr., to H.P. 1369, L.D. 1843 
(5) 
Fifth, 
the payment of any obligation expressly 
subordinated 
to 
claims 
entitled 
to 
the 
priority 
established by subparagraphs (1) to (3). 
3. 
Judicial review. 
A payroll processor closed by action 
of the administrator pursuant to this chapter may bring an action 
challenging 
the 
administrator's 
appointment 
of 
receiver 
in 
Superior Court of Kennebec County or of the county in which the 
processor 
transacts 
business 
within 
days 
after 
the 
administrator appoints a receiyer. 
The court shall uphold the 
administrator's finding that a payroll processor is insolvent or 
that its condition is such as to render its further proceedings 
hazardous to the public or to those haying funds in its custody 
and shall uphold the appointment of a receiver unless the court 
finds 
that 
the 
administrator's 
action 
was 
arbitrary 
and 
capricious. 
Sec. 7. 36 MRSA §112, sub-§4, as repealed and replaced by PL 
1999, c. 127, Pt. A, §49, is amended to read: 
4. 
EXaJIlination of records and premises. Whenever necessary 
to the administration of this Title, the assessor may make, or 
cause to be made by an employee, an examination or investigation 
of the place of business, books and other documents and any other 
relevant personal property of any person who the assessor has 
reason to believe is liable for any tax imposed by this Title. 
~he-a££e££e~-~~~-&~~ft&-~he-eee«£-~~~~~~-a-pay~e~~ 
pFeeesseFT-as-4ef4BeQ-~~~~~~~-~-~~-~~r-a&G-elieR~-Beeks 
aRe-reeetes-iR-eae-pessessieR-e~-a-pay~e~~-p~eeeSSerT 
At the conclusion of an audit, the assessor or an agent shall 
conduct an audit conference with the taxpayer and shall give the 
taxpayer a written summary of the audit findings, including the 
legal basis for the audit findings and adjustments, along with 
copies of relevant bureau audit workpapers. 
Sec. 8. 36 MRSA §182, sub-§2, as enacted by PL 2001, c. 583, 
§8, is repealed. 
Sec. 9. 36 MRSA §191, sub-§2, ~~AA and BB, as enacted by PL 
2003, c. 390, §4, are amended to read: 
AA. 
The disclosure by employees of the bureau to designated 
representatives 
of 
the 
Finance 
Authority 
of 
Maine 
of 
information required to ensure that recipients of certain 
benefits under Title 20-A, chapter 417-E are eligible to 
receive such benefits; aRe 
BB. 
The disclosure to an authorized representative of the 
Department of Human Services, Office of Head Start and Child 
Page ll-LR2668(2) 
COMMITTEE AMENDMENT 
~. 
'I:-~ 
COMMITTEE AMENDMENT .~ to H.P. 1369, L.D. 1843 
Care 
of 
taxpayer 
information 
directly 
relating 
to 
the 
certification of investments eligible for or the eligibility 
of a taxpayer for the quality child care investment credit 
provided by section 5219-QT: and 
Sec. 10. 36 MRS A §191, sub-§2, 1JCC is enacted to read: 
CC. 
The disclosure to an authorized representative of the 
Department 
of 
Professional 
and 
Financial 
Regulation 
of 
information necessary for the administration of Title 10, 
chapter 222. 
Sec. 
11. 
Appropriations 
and 
allocations. 
appropriations and allocations are made. 
PROFESSIONAL AND FINANCIAL REGULATION, 
DEPAR'.I.'MENT OF 
Office of Consumer Credit Regulation 
The 
following 
Initiative: 
Allocates 
Examiner 
position, 
a 
administrative costs to 
payroll processors. 
funds 
for 
Clerk 
IV 
administer 
a 
Senior 
Consumer 
Credit 
position 
and 
All 
Other 
the licensing program for 
Other Special Revenue Funds 
Positions - Legislative Count 
Personal Services 
All Other 
Other Special Revenue Funds Total 
2003-04 
(0.000) 
$0 
$0 
$0 
2004-05 
(2.000) 
$109,813 
$9,500 
$119,313 
Sec. 12. Effective date. 
This Act· takes effect January 31, 
2005 •• 
SUMMARY 
This amendment replaces the bill. 
The amendment: 
1. 
Designates 
the Office of 
Consumer Credit Regulation 
within the Department of Professional and Financial Regulation as 
the 
administrator 
for 
the 
licensing 
program 
for 
payroll 
processors other than those payroll processors that are wholly 
owned 
subsidiaries 
of 
financial 
institutions; 
for 
payroll 
processors 
that 
are 
wholly 
owned 
subsidiaries 
of 
financial 
institutions, 
the 
amendment 
designates 
the 
Superintendent of 
Financial Institutions within the Department of Professional and 
Financial 
Regulation 
as 
the administrator 
for 
the 
licensing 
program; 
COMMITTEE AMENDMENT 
" 
• :t,) 
~ 
~. 
COMMITTEE AMENDMENT .. A 
.. to H.P. 1369, L.D. 1843 
2. 
Requires 
that 
payroll-
processors 
be 
licensed 
and 
establishes a 3-tiered fee for licensure, based on the number of 
client employers a payroll processor serves, as follows: 
$250 
for processors serving fewer than 25 client employers; $500 for 
processors serving 25 to 500 client employers; 
and $750 for 
processors serving more than 500 client employers; 
3. 
Restores the current statutory requirement that payroll 
processors provide proof o(_fidelity insurance; 
4. 
Sets the amount for required surety bonds at between 
$100,000 
and $500,000, 
depending on the amount of employers' 
taxes and unemployment insurance premiums handled, and authorizes 
the administrator to modify the surety bonding requirement if the 
bonds are not available; 
5. 
Triples existing statutory fines for failure to register 
per violation, from a range of $500 to $2,500 to a range of 
$1,500 to $7,500 for failure to obtain a license per violation; 
6. 
Requires disclosures by payroll processors to client 
employers, 
including quarterly accountings of funds disbursed, 
notice of methods by which the employers may verify that taxes 
have been paid and limitations of surety bonds; 
7. 
Prohibits payroll processors from being designated as 
sole recipients of delinquency notices for tax payments; 
8. 
Requires notification when bond coverage lapses, as in 
the bill, and establishes each day of lapsed coverage as a civil 
violation subject to a penalty of $1,500 to $7,500; 
9. 
Establishes regulatory powers of the administrator of 
the 
licensing 
program, 
including 
regular 
and 
special 
examinations, 
subpoena 
power, 
inspection 
and 
maintenance 
of 
records, assessment of expenses and rule-making authority. 
The 
amendment also allows the administrator to use an internal or 
external audit of a payroll processor to supplement or substitute 
for the administrator's own regular examination; 
10. 
Enables 
the 
administrator 
agencies, 
including for 
the 
purpose 
information 
in 
furtherance 
of 
the 
enforcement; 
to 
contract with 
other 
of 
sharing confidential 
licensing 
program 
and 
11. 
Establishes 
enforcement 
actions 
available 
to 
the 
administrator, 
including 
cease 
and 
desist 
actions, 
bond 
forfeiture, 
civil actions, 
increased regulatory oversight and 
COMMITTEE AMENDMENT 
~. 
~ 
~ 
COMMITTEE AMENDMENT .j(.. to H.P. 1369, L.D. 1843 
license suspensions and revocations, as well as a private right 
of action; 
12. 
Establishes procedures for the administrator to appoint 
a receiver in cases of insolvency or potential liquidation of a 
payroll processor; 
13. 
Makes technical corrections to existing statutes to 
reflect the changes made by the amendment; and 
14. 
Adds an appropriations and allocations section. 
FlseAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Appropriations! Allocations 
Other Special Revenue Funds 
Revenue 
Other Special Revenue Funds 
Approved: 03129/04 ~ae 
Office of Fiscal and Program Review 
LD 1843 
An Act To Require Surety Bonding by Payroll Processing Companies 
LR 2668(02) 
Fiscal Note for Bill as Amended by Committee Amendment" " 
Committee: Business, Research and Economic Development 
Fiscal Note Required: Yes 
Fiscal Note 
Projections 
Projections 
2003·04 
2004·05 
2005·06 
2006·07 
$0 
$119,3l3 
$130,290 
$l35,241 
$0 
$120,000 
$124,560 
$129,293 
Correctional and Judicial Impact Statements 
Increases the number of civil suits 
Fiscal Detail and Notes 
The fiscal notes assumes two additional positions in the Office of Consumer Credit Regulation will be necessary to 
administer this program: a Clerk IV position to process license applications and renewals, compile and type exam 
reports and handle correspondence and communications; and a Senior Consumer Credit Examiner position for 
examinations and investigations. It is estimated that $80,000 will be collected annually in application and renewal fees 
from the approximately 160 entities and $40,000 will be collected in examination fees. Any savings to Maine 
Revenue Services are assumed to be minor. 
LR2668(2) - Fiscal Note - Page 1 of 1