2007S0668-1 03/07/07
 
  By: Williams S.B. No. 1365
 
 
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of staff leasing services.
       BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
       SECTION 1.  Section 91.001, Labor Code, is amended by adding
Subdivisions (15-a) and (18) to read as follows:
             (15-a)  "Staff leasing services group" means two or
more staff leasing services companies under common ownership.
             (18)  "Working capital" of an applicant means the
applicant's current assets minus the applicant's current
liabilities as determined by generally accepted accounting
principles.
       SECTION 2.  Section 91.014, Labor Code, is amended to read as
follows:
       Sec. 91.014.  WORKING CAPITAL [NET WORTH] REQUIREMENTS.  
(a)  An applicant for an original or renewal license must
demonstrate a positive working capital [net worth] as follows:
             (1)  $50,000 if the applicant employs fewer than 250
assigned employees;
             (2)  $75,000 if the applicant employs at least 250 but
not more than 750 assigned employees; and
             (3)  $100,000 if the applicant employs more than 750
assigned employees.
       (b)  The applicant may demonstrate the applicant's working
capital [net worth] to the department by providing the department
with the applicant's financial statement or a copy of the
applicant's most recent federal tax return. The applicant may also
satisfy any deficiencies in the working capital [the net worth]
requirement through guarantees, letters of credit, a bond in an
amount that demonstrates compliance with the requirements of
Subsection (a), or other security acceptable to the department. 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.
       (c)  In computing working capital [net worth], an applicant
shall include adequate reserves for all taxes and insurance,
including reserves for claims incurred but not paid and for claims
incurred but not reported under plans of self-insurance for health
benefits. The computation of working capital [net worth] by an
applicant is to be made according to Section 448, Internal Revenue
Code (26 U.S.C. Section 448).
       (d)  A document submitted to establish working capital [net
worth] must show the working capital [net worth] on a date not
earlier than nine months before the date on which the application is
submitted. A document submitted to establish working capital [net
worth] must be prepared or certified by an independent certified
public accountant. Information submitted to or maintained by the
department is subject to Chapter 552, Government Code, other than
information related to:
             (1)  identification of client companies;
             (2)  working capital [net worth];
             (3)  financial statements; or
             (4)  federal tax returns.
       SECTION 3.  Section 91.015, Labor Code, is amended by adding
Subsection (g) to read as follows:
       (g)  The department by rule may provide for the acceptance of
an affidavit and related supporting information provided by a
bonded, independent, and qualified assurance organization that has
been approved by the department in lieu of the requirements of this
section and Sections 91.012, 91.013, and 91.014.
       SECTION 4.  Section 91.016, Labor Code, is amended by adding
Subsection (b-1) to read as follows:
       (b-1)  If a license holder submits a timely and sufficient
application for renewal of a license issued or renewed by the
department under this chapter, the license holder's existing staff
leasing services license does not expire until the application has
been finally determined by the department.
       SECTION 5.  Section 91.020, Labor Code, is amended to read as
follows:
       Sec. 91.020.  GROUNDS FOR DISCIPLINARY ACTION.  The
department may take disciplinary action against a license holder on
any of the following grounds:
             (1)  engaging in staff leasing services or offering to
engage in the provision of staff leasing services without a
license;
             (2)  transferring or attempting to transfer a license
issued under this chapter;
             (3)  violating this chapter or any order or rule issued
by the executive director or commission under this chapter;
             (4)  failing after the 31st day after the date on which
a felony conviction of a controlling person is final to notify the
department in writing of the conviction;
             (5)  failing to cooperate with an investigation,
examination, or audit of the license holder's records conducted by
the license holder's insurance company or the insurance company's
designee, as allowed by the insurance contract or as authorized by
law by the Texas Department of Insurance;
             (6)  failing after the 31st day after the effective
date of a change in ownership, principal business address, or the
address of accounts and records to notify the department and the
Texas Department of Insurance of the change;
             (7)  failing to correct any tax filings or payment
deficiencies within a reasonable time as determined by the
executive director;
             (8)  refusing, after reasonable notice, to meet
reasonable health and safety requirements within the license
holder's control and made known to the license holder by a federal
or state agency;
             (9)  being delinquent in the payment of the license
holder's insurance premiums other than those subject to a
legitimate dispute;
             (10)  being delinquent in the payment of any employee
benefit plan premiums or contributions other than those subject to
a legitimate dispute;
             (11)  knowingly making a material misrepresentation to
an insurance company or to the department or other governmental
agency;
             (12)  failing to maintain the working capital [net
worth] requirements required under Section 91.014; or
             (13)  using staff leasing services to avert or avoid an
existing collective bargaining agreement.
       SECTION 6.  Subchapter B, Chapter 91, Labor Code, is amended
by adding Section 91.021 to read as follows:
       Sec. 91.021.  GROUP LICENSURE. A staff leasing services
group may satisfy the reporting and financial requirements of this
chapter on a combined and consolidated basis if each staff leasing
services company that is a member of the group guarantees the
obligations under this chapter of each other staff leasing services
company that is a member of the group. If a staff leasing services
group submits a combined or consolidated financial statement that
includes entities that are not staff leasing services companies or
that are not in the staff leasing services group, each controlling
entity of the staff leasing services group under the statement must
guarantee the obligations of the staff leasing services companies
in the group.
       SECTION 7.  Subdivision (12), Section 91.001, Labor Code, is
repealed.
       SECTION 8.  The changes in law made by this Act apply to a
staff leasing services license issued or renewed under Chapter 91,
Labor Code, on or after the effective date of this Act. A license
issued or renewed before the effective date of this Act is governed
by the law in effect immediately before the effective date of this
Act, and the former law is continued in effect for that purpose.
       SECTION 9.  This Act takes effect September 1, 2007.