North Carolina SB 268: Amend NC PEO Act.-AB

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 268

Short Title: Amend NC PEO Act.-AB (Public)
Sponsors: Senators Johnson, Britt, and Settle (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 13, 2025
*S268-v-1*
A BILL TO BE ENTITLED 1
AN ACT ENACTING CHANGES TO THE NORTH CAROLINA PROFESSIONAL 2
EMPLOYER ORGANIZATION ACT, AS RECOMMENDED BY THE DEPARTMENT 3
OF INSURANCE. 4
The General Assembly of North Carolina enacts: 5
SECTION 1. G.S. 58-89A-5 reads as rewritten: 6
"§ 58-89A-5. Definitions. 7
In this Article: 8
... 9
(3) "Audited GAAP financial statement" means a financial statement that is 10
audited by an independent certified public accountant and presented in 11
accordance with generally accepted accounting principles. 12
... 13
(17) "Tangible net worth" means the difference between total tangible assets and 14
total liabilities. For purposes of this definition, tangible assets are physical 15
assets and do not include goodwill, patents, copyrights, intellectual property, 16
trademarks, and any other non-physical asset. 17
(17)(18) "Temporary employees" means persons employed under an arrangement 18
by which an organization hires its own employees and assigns them to a client 19
company to support or supplement the client's workforce in a special work 20
situation, including: 21
... 22
(19) "Working capital" means the difference between current assets and current 23
liabilities." 24
SECTION 2. G.S. 58-89A-35 reads as rewritten: 25
"§ 58-89A-35. License required; professional employer organization groups. 26
... 27
(b) Two or more professional employer organizations persons that are controlled by the 28
same ultimate parent, entity, or persons may be licensed as a professional employer organization 29
group. A professional employer organization group may satisfy the reporting and financial 30
requirements of this Article on a consolidated or combined basis. As a condition of licensure as 31
a professional employer organization group, each professional employer organization person that 32
is proposes to be a member of the a professional employer organization group shall guarantee 33
payment of all financial obligations of every other member. Notwithstanding the definition of 34
"person" in this Article, whenever two or more entities combine to seek issuance of a single 35
license under this Article, the requirements for group licensure under this subsection shall be met 36

General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 268-First Edition
before issuance of a license and any license issued will be a professional employer organization 1
group license issued pursuant to this subsection." 2
SECTION 3. G.S. 58-89A-50 reads as rewritten: 3
"§ 58-89A-50. Surety bond; letter of credit; other deposits. 4
(a) An applicant for licensure shall file with the Commissioner a surety bond, or other 5
items as set forth in subsection (f) of this section, in the amount of one hundred thousand dollars 6
($100,000) for the benefit of the Commissioner. An applicant whose current assets do not exceed 7
current liabilities or licensee who does not have positive working capital pursuant to 8
G.S. 58-89A-60(b) shall file an additional surety bond or other items set forth in subsection (f) 9
of this section equal to or in excess of current liabilities less current assets.the applicant's or 10
licensee's negative working capital. 11
...." 12
SECTION 4. G.S. 58-89A-60(g) is repealed. 13
SECTION 5. G.S. 58-89A-60, as amended by Section 4 of this act, reads as 14
rewritten: 15
"§ 58-89A-60. License application. 16
(a) Every applicant for licensure shall file with the Commissioner, on a form prescribed 17
by the Commissioner, the following information: 18
... 19
(3) A list of all officers officers, directors, and other controlling persons of the 20
applicant, their biographical information, including their education, 21
management background, and business experience, and an affidavit from each 22
attesting to his or her good moral character and management competence. 23
... 24
(6) Any other reasonable information the Commissioner deems necessary and 25
requires by rule to establish that the applicant and the officers and controlling 26
persons are of good moral character, have business integrity, have applicable 27
educational and business experience, and have financial responsibility. 28
(b) Every applicant shall file with the Commissioner an audited GAAP financial 29
statement, prepared as of a date not more than 90 120 days before the date of application that 30
demonstrates that the applicant or licensee's current assets exceed current liabilities and attached 31
has a tangible net worth of not less than fifty thousand dollars ($50,000) and positive working 32
capital. The applicant shall attach to which is the audited financial statement a separate document 33
signed by the applicant's chief executive and the chief financial officer certifying that (i) each 34
has reviewe