An Act To Adjust Payroll Processor License Fees
Maine Legislature, Session 125, LD 1368
Committee Amendment CA_A_H394 (House)
Amends: 10 MRSA §1495, 10 MRSA §1495-D, 10 MRSA §1495-F

COMMITTEE AMENDMENT "R " 
to H.P. 1007, L.D. 1368, Bill, "An Act To 
Adjust Payroll Processor License Fees" 
Amend the bill by striking out everything after the enacting clause and before the 
summary and inserting the following: 
'Sec. 1. 10 MRSA §1495, sub-§§I-B to I-D are enacted to read: 
1-B. 
Full-service uavroll processor license. 
"Full-service payroll processor 
license" means a license permitting a payroll processor to prepare and issue payroll 
checks, prepare and file state or federal income withholding tax reports and 
unemployment insurance compensation reports and collect, hold and tum over to the 
State Tax Assessor or to federal tax authorities income withholding taxes or 
unemployment insurance contributions. 
i-C. Issue payroll checks. To "issue payroll checks" means to provide redeemable 
payroll payment instruments and includes functions performed by a payroll processor that 
holds a signature stamp, electronic signature or presigned check stock ftom the employer, 
but does not include functions perfonned by a payroll processor that provides unsigned 
checks to the employer for distribution by the employer. 
I-D. Limited payroll processor license. "Limited payroll processor license" means 
a license that permits a payroll processor to prepare and issue payroll checks and prepare 
and file state or federal income withholding tax reports and unemployment insurance 
compensation reports, but does not pennit the licensee to collect, hold or tum over to the 
State Tax Assessor or to federal tax authorities income withholding taxes or 
unemployment insurance contributions. 
Sec. 2. 10 MRSA §1495, sub-§2, as amended by PL 1997, c. 668, §2, is further 
amended to read: 
2. Payroll processing services. "Payroll processing services" means preparing and 
issuing payroll checks; preparing and filing state or federal income withholding tax 
reports or unemployment insurance contribution reports; or collecting, holding and 
turning over to the State Tax Assessor or to federal tax authorities income withholding 
Page I - 125LR0456(02)-1 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A 
.. to H.P. 1007, L.D. 1368 
taxes pursuant to Title 36, chapter 827 or federal law or unemployment Insurance 
contributions pursuant to Title 26, chapter 13, subchapter 7 or federallaw. 
Sec. 3. 10 MRS A §1495, sub-§4 is enacted to read: 
4. 
Restricted payroll processor license. 
"Restricted payroll processor license" 
means a license that permits a payroll processor to prepare and file state or federal 
income withholding tax reports and unemployment insurance compensation reports, but 
does not permit the licensee to collect, hold or tum over to the State Tax Assessor or to 
federal 
tax authorities income withholding taxes or unemployment insurance 
contributions or to issue payroll checks. 
Sec. 4. 10 MRSA §1495-D, sub-§2, as enacted by PL 2003, c. 668, §6 and 
affected by § 12, is amended to read: 
2. 
Proof of fidelity insurance. Each applicant for a limited payroll processor 
license, and each applicant for a full-service payroll processor license that issues payroll 
checks, 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. 
Sec. 5. 10 MRSA §1495-D, sub-§4, as amended by PL 2005, c. 278, §3, is 
repealed and the following enacted in its place: 
4. Fees. The initial license application and annual renewal application must include 
the fees set out in this subsection. 
A. The fee for a full-service payroll processor license or a limited payroll processor 
license is $200 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 $800 for those payroll processors that have more than 
employers as payroll processing clients. 
B. The fee for a restricted payroll processor license is $100. 
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. 6. 10 MRSA §1495-F, sub-§3-A is enacted to read: 
3-A. 
Accounting standards and escrow requirement. 
To facilitate the 
administrator's compliance examination responsibilities, a payroll processor shall 
maintain a trust account for client funds in accordance with generally accepted 
accounting principles, international accounting standards or other recognized accounting 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" {}" to H.P. 1007, L.D. 1368 
standards. A payroll processor may not commingle funds held on behalf of its clients 
with the payroll processor's operating funds.' 
SUMMARY 
This amendment limits the new licensing fee category to those payroll processors 
whose functions consist solely of filing withholding reports on behalf of clients, but 
retains the bill's reduced $100 fee for those processors. It also makes several technical 
changes to improve supervision and employer protections. 
FISCAL ~UTE REQUKED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 05/25/1 I 
ft'LZc:.. 
LD 1368 
LR4S6(02) 
An Act To Adjust Payroll Processor License Fees 
Fiscal Note for Bill as Amended by Committee Amendment ,A" 
Committee: Labor, Commerce, Research and Economic Development 
Fiscal Note Required: Yes 
Fiscal Detail and Notes 
Fiscal Note 
Minor cost increase - Other Special Revenue Funds 
Minor revenue decrease - Other Special Revenue Funds 
Any additional costs and loss of revenue to'the Bureau of Consumer Credit Protection in the Department of 
Professional and Financial Regulation are assumed to be minor and can be absorbed within existing budgeted 
resources. 
LR0456(02) - Fiscal Note - Page I of I