(a)(1) A person may not provide, advertise, or otherwise hold itself out as providing professional employer services in this state unless the person is registered under this chapter to operate a professional employer organization.

(2) Each person desiring to operate as a professional employer organization shall file with the secretary a completed registration form to include the following information:

a. The name or names under which the professional employer organization conducts business.

b. The address of the principal place of business of the professional employer organization and the address of each office it maintains in this state.

c. The professional employer organization's taxpayer or employer identification number.

d. A list by jurisdiction of each name under which the professional employer organization has operated in the preceding five years, including any alternative names, names of predecessors and, if known, successor business entities.

e. A statement of ownership, which shall include the name and evidence of the business experience of any person that, individually or acting in concert with one or more other persons, owns or controls, directly or indirectly, 25 percent or more of the equity interests of the professional employer organization.

f. A statement of management, which shall include the name and evidence of the business experience of any person who serves as president, chief executive officer, or otherwise has the authority to act as senior executive officer of the professional employer organization.

g. A financial statement setting forth the financial condition of the professional employer organization, as of a date not earlier than 180 days prior to the date submitted to the department, prepared in accordance with generally accepted accounting principles, and audited or reviewed by an independent certified public accountant licensed to practice in the jurisdiction in which such accountant is located. The secretary, by rule, may allow for a waiver of the audit or review procedures for new professional employer organizations in business for less than one year. In no event shall a professional employer organization be allowed a renewal of the waiver after its first year of existence.

(3) In addition to the completed registration form, the applicant shall also file any reasonable form, material, and information as is necessary to enable the secretary to ascertain whether individuals affiliated with the registrant are qualified to serve as controlling persons.

(4) The secretary shall determine, by rule, the registration process.

(5) Each professional employer organization operating within this state shall immediately, upon request by the secretary, furnish a complete and current listing of all client employers.

(b) The secretary shall determine, by rule, the financial requirements for a registrant or renewal of registration. The rule may require the submission of securities or guarantees securing the payment of all unemployment taxes and workers' compensation claims payments due to or with respect to covered employees and may require that the security or assets to secure such payments be maintained by a financial institution located in the State of Alabama. The secretary may accept net worth based upon audited financial statements in whole or in part for the financial requirements. The financial requirements shall not exceed one hundred thousand dollars ($100,000).

(c) The rules may provide and may establish fees for the consolidated application and licensing of professional employer organizations that are majority owned by the same parent, entity, or persons provided that: (1) The department may require an application fee for each professional employer organization, and (2) the multiple professional employer organizations may file reports and meet financial requirements on a consolidated basis if each company that is a part of the multiple employer organization group guarantees the obligations of each.

(d) A professional employer organization may be eligible for limited registration under this chapter if the professional employer organization:

(1) Is domiciled outside this state and is licensed or registered as a professional employer organization in another state that has substantially the same or greater requirements as this chapter.

(2) Does not maintain an office in this state or solicit clients located or domiciled within this state.

(3) Does not have more than 50 covered employees employed or domiciled in this state on any given day.

(4) The secretary shall determine, by rule, the limited registration requirements and process.

(e) The department, by rule, may provide for the reciprocal acceptance of a professional employer organization license or registration from another state if the licensing, operational, financial, and reporting requirements are substantially similar to those of this state. Neither this subsection nor a rule may be construed to relieve a registrant of the requirement of paying a fee required by this chapter or from any requirement to provide additional securities.

(f)(1) The secretary shall determine, by rule or regulation, the fees allowed by this chapter. The fees may not exceed those reasonably necessary for the administration and regulation of professional employer organizations in this state.

(2) The fee for any initial registration may not exceed one thousand dollars ($1,000), and the fee for a renewal registration may not exceed five hundred dollars ($500). The fee for any limited registration may not exceed five hundred dollars ($500), and the fee for a renewal of a limited registration may not exceed two hundred fifty dollars ($250). Fees for an initial or renewal registration shall be submitted at the time of registration and made payable to the Professional Employer Organization Registration Administrative Trust Fund. All registration fees shall be nonrefundable.

(g)(1) Each professional employer organization operating within this state on June 1, 2006, shall complete its initial registration not later than 180 days after June 1, 2006.

(2) Each professional employer organization not operating within this state on June 1, 2006, shall complete its initial registration prior to commencement of operations within this state.

(3) Any transfer or sale of stock or other ownership interest in a registrant that results in a change in the ownership of a majority of voting power over the stock or other ownership interest within a 12-month period shall require a new registration.

(4) A notice shall be posted in each business office maintained within the state which states that the professional employer organization is registered and regulated by the department and that any questions or complaints should be directed to the secretary.

(5) A notice shall be maintained in the administrative office of a client employer maintained within the state and shall be made available to any covered employee or the department's representative upon request which states the name of the professional employer organization the employer is associated with, that the professional employer organization is registered and regulated by the department, and that any questions or complaints should be directed to the secretary.

(6) Each professional employer organization shall maintain an agent within the state for service of process.

(7) Any registration or limited registration shall remain valid for a period of one year from the date of registration. Each professional employer organization continuing to operate within this state shall renew its registration every year. The registrant must demonstrate each year continued compliance with all requirements of this chapter, including, without limitation, all requirements set forth for the initial registration.

(h) All records, client listings, client reports, financial statements, and other information obtained from a professional employer organization under this chapter, except to the extent necessary for the proper administration of this chapter by the department, shall be confidential and shall not be published or open to public inspection.