CHAPTER 500
H.P. 1318 - L.D. 1878
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 10 MRSA §980-D is enacted to read:
§980-D. Payroll Processor Recovery Fund
The Payroll Processor Recovery Fund, referred to in this section as "the fund," is created. The fund must be deposited with and maintained by the authority. The fund must be administered by the Director of the Office of Consumer Credit Regulation within the Department of Professional and Financial Regulation, referred to in this section as "the fund administrator," in accordance with the provisions of chapter 222. All money received by the authority from the fund administrator for the purpose of providing a source of recovery for employers injured by a payroll processor's failure to pay taxes or unemployment premiums must be credited to the fund. A portion of the interest earned on money in the fund may be used to pay the fund maintenance expenses of the authority; the balance must be credited to the fund. The balance in the fund must revert to the fund administrator if the need for the fund is obviated.
Sec. 2. 10 MRSA §1495, sub-§1-A, as enacted by PL 2003, c. 668, §1 and affected by §12, is amended to read:
1-A. Administrator. "Administrator" means, except in cases in which the payroll processor is a supervised financial organization or a wholly owned subsidiary of a supervised financial organization as defined by Title 9-A, section 1-301, subsection 38-A, the Director of the Office of Consumer Credit Regulation within the Department of Professional and Financial Regulation. In cases in which the payroll processor is a supervised financial organization or 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. For the purposes of this subsection, "supervised financial organization" has the same meaning as in Title 9-A, section 1-301, subsection 38-A.
Sec. 3. 10 MRSA §1495-E, sub-§2, as amended by PL 2005, c. 278, §4, is further amended to read:
2. Modification of bond requirement. If bonding is unavailable under the terms and conditions of subsection 1, the The administrator, within the administrator's discretion, may modify those terms and conditions specified in subsection 1 or may permit submission of an irrevocable letter of credit or other alternative form of security so as to ensure the maximum practicable or appropriate protection for employers.
Sec. 4. 10 MRSA §1495-E, sub-§2-A is enacted to read:
2-A. Alternative security; Payroll Processor Recovery Fund. The Director of the Office of Consumer Credit Regulation within the Department of Professional and Financial Regulation, referred to in this subsection as "the fund administrator," shall administer the Payroll Processor Recovery Fund, established in section 980-D and referred to in this section as "the fund." Participation in the fund must be made available to any payroll processor that is not a supervised financial organization as defined in Title 9-A, section 1-301, subsection 38-A or a wholly owned subsidiary of such a supervised financial organization. The fund administrator may increase the fund, replenish the fund and seek reimbursement for the fund administrator's initial deposit into the fund through annual or special assessments against payroll processors using the fund. Before being eligible to participate in the fund, a payroll processor must provide a $10,000 surety bond or irrevocable letter of credit in a form acceptable to the fund administrator. Assessments into the fund must be in amounts equal to 1% of the balance of bond coverage required pursuant to this section. An initial deposit into the fund must be made by the fund administrator in an amount not less than 1/2 of the maximum amount of a surety bond or other security required pursuant to subsection 1. All amounts assessed by the fund administrator must be paid into the fund until the fund reaches the maximum amount of a surety bond or other security required pursuant to subsection 1, after which time assessments must be equally divided between payments into the fund and payments to the fund administrator until the fund administrator is reimbursed for the fund administrator's initial deposit into the fund. If an employer's loss due to a participating payroll processor's failure to pay taxes or unemployment insurance premiums is demonstrated to the satisfaction of the fund administrator, the fund administrator shall require release of funds to the fund administrator for the benefit of the employer. If employer losses exceed the maximum amount recoverable pursuant to this subsection, funds are distributed to employers on a pro rata basis, based on the magnitude of the demonstrated loss. In the event an initial claim is made against the fund, any other claims arising within 45 days of the initial claim must be treated as having arisen on the same day as the initial claim for purposes of allocating recoveries to affected employers. Total funds released as a result of the failure of any one payroll processor to pay taxes or unemployment insurance premiums may not exceed 50% of the current fund balance. Fund proceeds must be used only for recovery of unpaid taxes and unemployment insurance premiums and may not be used for any other purpose.
Sec. 5. Appropriations and allocations. The following appropriations and allocations are made.
PROFESSIONAL AND FINANCIAL REGULATION, DEPARTMENT OF
Office of Consumer Credit Regulation 0091
Initiative: Allocates funds for the initial deposit into the Payroll Processor Recovery Fund.
OTHER SPECIAL REVENUE
FUNDS 2005-06 2006-07
All Other $0 $250,000
__________ __________
OTHER SPECIAL REVENUE
FUNDS TOTAL $0 $250,000
Effective August 23, 2006.
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