| 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. |
