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Committee hears bill to standardize PEO renewals, narrow surety options
Summary
A committee heard House Bill 2092, which would set a uniform October 15 renewal date for professional employer organization registrations in Kansas, change audit timing, and limit acceptable financial assurances to bonds rather than letters of credit or securities.
House Bill 2092, which updates the state’s requirements for professional employer organizations, received proponent testimony in a committee hearing where sponsors and industry representatives described the changes as technical and intended to simplify filings.
The bill would fix PEO registration renewals to a single annual date — October 15 — instead of having renewals tied to each registrant’s fiscal year. “This bill concerns professional employer organizations or PEOs,” a staff presenter said in the committee overview. The measure would also change when audited financial statements are filed: the initial audit submitted with a first registration must not be older than 13 months, while succeeding audits filed with renewal applications could be no older than 12 months, a staff presenter explained.
Clay Barker, deputy secretary of state, told the committee that the office moved PEO filings to the Secretary of State last year and has worked with national PEO organizations on the changes. “We brought the bill, HB 20 92, which went through the house, without opposition,” Barker said, adding the state has only 248 PEOs and most use national filers that can accommodate a single renewal date.
The bill would retain a requirement that PEOs demonstrate positive working capital in audited statements. If a PEO lacks the required positive working capital, current law lets the registrant post a bond, an irrevocable letter of credit, or securities whose market value equals the shortfall plus $100,000. HB 2092 would remove letters of credit and securities from that list and would eliminate the statutory reference to “market” value; the provision would require a bond with a minimum stated value instead.
Erica Brune, chief executive officer of Level 1 PEO and leadership council chair for the Heartlands Region of the National Association of Professional Employer Organizations (NAPEO), testified in support. “NAPEO has worked closely with the secretary of state's office on these proposed changes to the Kansas PEO Act,” Brune said, calling the changes an update to streamline registrations and remove an unnecessary surety option.
Barker also told the committee the Secretary of State’s office plans separate regulatory action to reduce some filing fees, including a reduction in PEO fees that would lower current charges (either $500 or $1,000 depending on the filing) to $250 under a forthcoming fee-reduction plan. He noted that change is not part of HB 2092 but would occur administratively after the legislative session.
The hearing record did not include a committee vote; testimony for HB 2092 was limited to proponents and staff. No opponents registered during the hearing and committee members asked no substantive technical questions during the testimony.
