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A BILL TO BE ENTITLED
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AN ACT
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relating to the regulation of staff leasing services. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 91.001, Labor Code, is amended by adding |
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Subdivisions (2-a) and (18) to read as follows: |
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(2-a) "Assurance organization" means an independent |
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entity approved by the commission that: |
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(A) provides a national program of accreditation |
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and financial assurance for staff leasing services companies; |
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(B) has documented qualifications, standards, |
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and procedures acceptable to the department; and |
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(C) agrees to provide information, compliance |
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monitoring services, and financial assurance useful to the |
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department in accomplishing the provisions of this chapter. |
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(18) "Working capital" of an applicant means the |
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applicant's current assets minus the applicant's current |
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liabilities as determined by generally accepted accounting |
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principles. |
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SECTION 2. Section 91.014, Labor Code, is amended to read as |
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follows: |
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Sec. 91.014. WORKING CAPITAL [NET WORTH] REQUIREMENTS. |
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(a) An applicant for an original or renewal license must |
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demonstrate positive working capital in the following amounts [a
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net worth as follows]: |
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(1) $50,000 if the applicant employs fewer than 250 |
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assigned employees; |
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(2) $75,000 if the applicant employs at least 250 but |
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not more than 750 assigned employees; and |
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(3) $100,000 if the applicant employs more than 750 |
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assigned employees. |
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(b) The applicant shall [may] demonstrate the applicant's |
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working capital [net worth] to the department by providing the |
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department with the applicant's financial statement [or a copy of
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the applicant's most recent federal tax return]. The financial |
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statement must be prepared in accordance with generally accepted |
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accounting principles, be audited by an independent certified |
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public accountant, and be without qualification as to the going |
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concern status of the applicant. An applicant that has not had |
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sufficient operating history to have audited financial statements |
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based on at least 12 months of operations must meet the financial |
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capacity requirements required by Subsection (a) and provide the |
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department with financial statements that have been reviewed by a |
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certified public accountant. The applicant may [also] satisfy |
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any deficiencies in the working capital [the net worth] requirement |
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through guarantees, letters of credit, a bond in an amount that |
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demonstrates compliance with the amounts required under |
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[requirements of] Subsection (a), or other security acceptable to |
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the department. A guaranty is not acceptable to satisfy this |
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subsection unless the applicant submits sufficient evidence to |
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satisfy the department that the guarantor has adequate resources to |
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satisfy the obligations of the guaranty. |
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(c) [In computing net worth, an applicant shall include
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adequate reserves for all taxes and insurance, including reserves
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for claims incurred but not paid and for claims incurred but not
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reported under plans of self-insurance for health benefits. The
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computation of net worth by an applicant is to be made according to
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Section 448, Internal Revenue Code (26 U.S.C. Section 448).
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[(d)
A document submitted to establish net worth must show
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the net worth on a date not earlier than nine months before the date
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on which the application is submitted. A document submitted to
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establish net worth must be prepared or certified by an independent
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certified public accountant.] Information submitted to or |
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maintained by the department is subject to Chapter 552, Government |
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Code, other than information related to: |
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(1) identification of client companies; |
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(2) working capital [net worth]; |
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(3) financial statements; or |
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(4) federal tax returns. |
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SECTION 3. Section 91.020, Labor Code, is amended to read as |
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follows: |
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Sec. 91.020. GROUNDS FOR DISCIPLINARY ACTION. The |
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department may take disciplinary action against a license holder on |
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any of the following grounds: |
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(1) engaging in staff leasing services or offering to |
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engage in the provision of staff leasing services without a |
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license; |
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(2) transferring or attempting to transfer a license |
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issued under this chapter; |
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(3) violating this chapter or any order or rule issued |
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by the executive director or commission under this chapter; |
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(4) failing after the 31st day after the date on which |
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a felony conviction of a controlling person is final to notify the |
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department in writing of the conviction; |
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(5) failing to cooperate with an investigation, |
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examination, or audit of the license holder's records conducted by |
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the license holder's insurance company or the insurance company's |
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designee, as allowed by the insurance contract or as authorized by |
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law by the Texas Department of Insurance; |
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(6) failing after the 31st day after the effective |
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date of a change in ownership, principal business address, or the |
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address of accounts and records to notify the department and the |
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Texas Department of Insurance of the change; |
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(7) failing to correct any tax filings or payment |
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deficiencies within a reasonable time as determined by the |
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executive director; |
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(8) refusing, after reasonable notice, to meet |
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reasonable health and safety requirements within the license |
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holder's control and made known to the license holder by a federal |
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or state agency; |
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(9) being delinquent in the payment of the license |
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holder's insurance premiums other than those subject to a |
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legitimate dispute; |
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(10) being delinquent in the payment of any employee |
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benefit plan premiums or contributions other than those subject to |
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a legitimate dispute; |
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(11) knowingly making a material misrepresentation to |
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an insurance company or to the department or other governmental |
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agency; |
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(12) failing to maintain the working capital [net
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worth requirements] required under Section 91.014; or |
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(13) using staff leasing services to avert or avoid an |
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existing collective bargaining agreement. |
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SECTION 4. Subchapter B, Chapter 91, Labor Code, is amended |
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by adding Section 91.021 to read as follows: |
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Sec. 91.021. ELECTRONIC FILING AND COMPLIANCE. (a) The |
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commission may adopt rules to permit the acceptance of electronic |
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filings under this chapter, including the filing of applications, |
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documents, reports, and other documents required by this chapter. |
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The rules may provide for the acceptance of electronic filing and |
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other assurance by an assurance organization, qualified and |
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approved by the commission, that provides satisfactory assurance |
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and documentation of compliance acceptable to the department that |
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meets or exceeds the requirements of this chapter. |
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(b) A staff leasing services company may authorize an |
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assurance organization that is qualified and approved by the |
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commission to act on its behalf in complying with the licensing |
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requirements of this chapter, including the electronic filing of |
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information and the payment of application and licensing fees. Use |
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of an assurance organization is optional and is not mandatory for a |
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staff leasing services company. |
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(c) Nothing in this section may be construed to change or |
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affect the department's authority to issue licenses, revoke |
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licenses, conduct investigations, or enforce any provision of this |
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chapter. |
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SECTION 5. Subchapter D, Chapter 91, Labor Code, is amended |
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by adding Section 91.050 to read as follows: |
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Sec. 91.050. TAX CREDITS AND OTHER INCENTIVES. (a) For |
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the purpose of determining tax credits, grants, and other economic |
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incentives provided by this state or other governmental entities |
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that are based on employment, assigned employees are considered |
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employees of the client, and the client is solely entitled to the |
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benefit of any tax credit, economic incentive, or other benefit |
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arising from the employment of assigned employees of the client. |
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This subsection applies even if the staff leasing services company |
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is the reporting employer for federal income tax purposes. |
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(b) If a grant or the amount of any incentive described by |
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Subsection (a) is based on the number of employees, each client |
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shall be treated as employing only those assigned employees |
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co-employed by the client. Assigned employees working for other |
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clients of the staff leasing services company may not be included in |
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the computation. |
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(c) Each staff leasing services company shall provide, on |
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the request of a client or an agency of this state, employment |
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information reasonably required by the state agency responsible for |
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the administration of any tax credit or economic incentive |
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described by Subsection (a) and necessary to support a request, |
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claim, application, or other action by a client seeking the tax |
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credit or economic incentive. |
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SECTION 6. Subdivision (12), Section 91.001, Labor Code, is |
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repealed. |
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SECTION 7. The changes in law made by this Act regarding the |
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qualifications for or the issuance or renewal of a license apply to |
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a staff leasing services license issued or renewed under Chapter |
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91, Labor Code, on or after December 31, 2010. A license issued or |
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renewed before December 31, 2010, is governed by the law as it |
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existed immediately before that date, and that law is continued in |
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effect for that purpose. |
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SECTION 8. (a) Except as provided by Subsection (b) of |
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this section, this Act takes effect September 1, 2009. |
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(b) Section 91.014, Labor Code, as amended by this Act, |
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takes effect December 31, 2011. |
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* * * * * |