An Act To Improve the Surety Bond Requirement for Small Payroll Companies Further amend the bill by striking out everything after the enacting clause and before the emergency clause and inserting in its place the following: Sec. 1. 10 MRSA §1495-D, sub-§3, as enacted by PL 2003, c. 668, §6 and affected by §12, is amended to read: 3. Proof of surety bond or other security. Except as provided in section 1495-E, subsection 4, an applicant under subsection I shall provide to the administrator proof of the surety bond or other security instrument required pursuant to section 1495-E. Sec. 2. 10 MRSA §1495-D, sub-§3-A is enacted to read: 3-A. Conditional, prObationa~ or provisional licenses. The administrator, within the administrator's discretion, may issue a conditional, probationary or provisional license to an applicant. A conditional, probationary or provisional license may run for any time period the administrator considers appropriate and must be consistent with ensuring the maximum practicable protection for employers. Page I-LR0840(2) COMMITTEE AMENDMENT
Maine Legislature, Session 122, LD 0633
Committee Amendment CA_A_H417 (House)
Amends: 10 MRSA §1495-D, 10 MRSA §149, 10 MRSA §1495-H

AMENDMENT ,,-It to H.P. 466, L.D. 633, Bill, "An 
Small Payroll Companies from Excessive Regulation" 
Amend the bill by striking out the title and substituting 
the following: 
'An Act To Improve the Surety Bond Requirement for Small Payroll 
Companies' 
Further amend the bill by striking out everything after the 
enacting clause and before the emergency clause and inserting in 
its place the following: 
'Sec. 1. 10 MRSA §1495-D, sub-§3, as enacted by PL 2003, c. 
668, §6 and affected by §12, is amended to read: 
3. 
Proof of surety bond or other security. 
Except as 
provided in section 1495-E, 
subsection 4, 
an applicant under 
subsection I 
shall provide to the administrator proof of the 
surety bond or other security instrument required pursuant to 
section 1495-E. 
Sec. 2. 10 MRSA §1495-D, sub-§3-A is enacted to read: 
3-A. Conditional, prObationa~ or provisional licenses. 
The 
administrator, within the administrator's discretion, may issue a 
conditional, 
probationary 
or 
provisional 
license 
to 
an 
applicant. 
A conditional, probationary or provisional license 
may 
run 
for 
any 
time 
period 
the 
administrator 
considers 
appropriate and must be consistent with ensuring the maximum 
practicable protection for employers. 
Page I-LR0840(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,,~, to H.P. 466, L.D. 633 
Sec. 3. 10 MRSA §149S-D, sub-§4, as enacted by PL 2003, c. 
668, §6 and affected by §12, is amended to read: 
4. 
Fees. 
The 
initial 
application 
and 
annual 
renewal 
application must include a 
fee of 
$6§Q t1QQ if the payroll 
processor has 
fewer than 25 
employers 
as payroll processing 
clients; 
$500 if the payroll processor has 
from 
to 
employers as payroll processing clients; and $+SQ ~ 
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 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. 
Sec. 4. 10 MRSA §149S-E, sub-§§I, 2 and 4, as enacted by PL 
2003, c. 668, §6 and affected by §12, are amended to read: 
1. 
Bond 
required; 
m1D1mum 
amount; 
duration. 
Each 
application 
for 
a 
license 
under 
section 
1495-0 
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 
$lQQrQQQ 
$50.000, whichever is greater, but not to exceed $500,000. 
The 
bond must designate the administrator 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 
requirement. 
If 
bonding 
is 
unavailable under the terms and conditions of subsection 1, the 
administrator, within the administrator's discretion, may modify 
those 
terms 
and 
conditions 
or 
may 
permit submission of 
an 
irrevocable letter of 
credit or 
other 
alternative 
form 
of 
security so as to ensure the maximum practicable protection for 
employers. 
4. 
Exceptions. 
A payroll processor that does not have the 
authority to access, control, direct, transfer or disburse a 
client's funds 
is not subject to this section. 
A payroll 
processor that arranges 
for 
the transfer of 
funds 
from 
an 
employer's account directly to taxing authorities for payment of 
the employer's taxes is not subject to this section. as long as 
the payroll processor is not authorized to arrange for 
the 
COMMITTEE AMENDMENT 
( 
COMMITTEE AMENDMENT .. A, to H.P. 466, L.D. 633 
transfer of funds for any other uses or to any other accounts. 
The administrator may construe this subsection through issuance 
of 
an advisory ruling or through rules adopted pursuant to 
section l495-F. 
Sec. 5. 10 MRSA §1495-H, sub-§2, as enacted by PL 2003, c. 
668, §6 and affected by §12, is amended to read: 
2. 
Bond or security forfeiture. 
After notice and hearing, 
forfeiture of that portion of the required bond or other security 
instrument as proportionately may make aggrieved parties whole;' 
SUMMARY 
This amendment replaces the bill and changes the title. 
It 
alters the sliding scale for initial application and annual 
renewal application fees for payroll processors and lowers the 
minimum surety bond requirement from $100,000 to $50,000. 
It 
also provides an exemption for certain payroll processors from 
the 
requirement 
of surety bonding if the payroll processor 
arranges for the transfer of funds from an employer's account 
directly to taxing authorities for payment of the employer's 
taxes, as long as the payroll processor is not authorized to 
arrange for the transfer of the client's funds for any other uses 
or to any other accounts. 
FISCAL :'\OTE REQUIRED 
(See attached) 
COMMI7TEE AMENDMENT 
Revised: 05/16/05 ~.ae 
LD633 
LR0840(02) 
An Act To Relieve Small Payroll Companies from Excessive Regulation 
Fiscal Note for Bill as Amended by Committee Amendment ,A, 
Committee: Business, Research and Economic Development 
Fiscal Note Required: Yes 
Fiscal Note 
Minor revenue decrease - Other Special Revenue Funds 
Fiscal Detail and Notes 
Assumes a loss of payroll processor application\renewal fee revenue that is expected to be minor. 
LR0840(2) - Fiscal Note - Page 1 of 1 
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