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HB 2092

ASRS; eligibility waiver

57th Legislature - Second Regular Session Introduced by David Livingston

The bill standardizes PEO registration expirations to October 15, requires annual audits with renewals, and restricts insufficient-capital surety to bonds only with a minimum value

Signed by Governor
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Bill Summary · HB 2092

Summary — HB 2092 (Kansas)

Title: Setting the time for professional employer organization registration expiration, renewal and the filing of audits with the secretary of state; limiting the method of providing surety for professional employer organizations with insufficient working capital to bonds and eliminating a market value measure of the sufficiency of such bonds.

Purpose

To streamline and standardize Professional Employer Organization (PEO) registration and renewal deadlines with the Secretary of State and to tighten/clarify surety requirements for PEOs that lack required working capital.

Key provisions

  • Registration expiration date

    • Replaces the current automatic expiration tied to “120 days after a PEO’s fiscal year” with a single, uniform automatic expiration date of October 15 following issuance of the registration.
    • Transitional rule: any registrations issued on or after January 1, 2025 are exempt from the new cycle and instead expire on October 15, 2026.

  • Audit filing and renewal timing

    • Requires a PEO seeking renewal to submit an annual audit that is no older than 12 months at the time of renewal — aligning audit filing with the renewal application (i.e., audits must accompany the renewal).
    • (Existing flexibility for the initial registration’s audit and possible extension requests remains in statute language.)

  • Surety for insufficient working capital

    • For PEOs that do not meet statutory working-capital requirements, the bill limits acceptable surety to surety bonds only. It removes irrevocable letters of credit and securities as alternatives.
    • Eliminates any market-value measure previously used to evaluate bond sufficiency.
    • Requires the bond to have a minimum face value equal to the amount necessary to meet the statutory working-capital requirement plus $100,000.
    • The bond must cover unpaid taxes, wages, benefits or other entitlements due to covered employees if the PEO cannot make payments when due.

  • Statutory updates

    • Amends K.S.A. 2024 Supp. 44-1704 and 44-1706 and repeals the prior sections as applicable.

Who is affected

  • Primary: PEOs operating or registering to operate in Kansas (including those seeking limited registrations).
  • Secondary: PEO clients and their covered employees (indirectly, through changes to financial assurance standards).
  • Other: Providers of letters of credit or securities used previously for PEO surety will no longer be acceptable in this context; surety bond market/issuers may see increased demand. The Secretary of State’s office administers the registration/renewal process.

Timeline & procedural history

  • Introduced: January 24, 2025 (requested by the Office of the Secretary of State).
  • Passed Legislature and presented to Governor; enrolled version indicates the law becomes effective July 1, 2025.
  • Registrations issued on/after Jan 1, 2025 expire Oct 15, 2026 (transitional provision).

Fiscal impact & support

  • Fiscal note: The Office of the Secretary of State indicated no fiscal effect on agency operations.
  • Support: Testimony from the Secretary of State’s office and at least one PEO (Lever1) argued the bill simplifies administration and surety processes.

Context / Practical effect

  • Standardizing the expiration to October 15 simplifies renewal scheduling and aligns audit submission with renewals.
  • Restricting surety to bonds (with a set minimum buffer of $100,000 over required working capital) raises the certainty and liquidity of protections available to employees and creditors, while removing alternative financial instruments that may have been used to meet bond-equivalency tests.

Compiled from official sources — confirm details with the bill’s official record.

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