HF 3505

1st Engrossment - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to commerce; regulating certain disclosures; 
  1.3             regulating insurance compliance self-audits; 
  1.4             authorizing insurance against vicarious liability for 
  1.5             certain damages; specifying the license term and fees 
  1.6             of a managing general agent; regulating securities 
  1.7             broker-dealers and investment advisers; authorizing 
  1.8             the commissioner to withdraw certain inactive 
  1.9             registration applications; extending a real estate 
  1.10            continuing education pilot project; regulating the 
  1.11            contractor recovery fund; making collection agencies 
  1.12            responsible for the acts of collectors; providing 
  1.13            standards of conduct for notarial acts; regulating 
  1.14            unclaimed property; amending Minnesota Statutes 1998, 
  1.15            sections 45.027, subdivision 7a; 60H.03, by adding a 
  1.16            subdivision; 60K.03, subdivision 4; 80A.04, 
  1.17            subdivisions 2 and 3; 80A.07, subdivision 1; 80A.10, 
  1.18            subdivision 2; 80C.05, subdivision 4; 80C.07; 82.22, 
  1.19            subdivision 13; 82A.04, subdivision 4, and by adding a 
  1.20            subdivision; 82B.14; 83.23, by adding a subdivision; 
  1.21            308A.711, subdivision 1; 326.975, subdivision 1; and 
  1.22            345.515; Minnesota Statutes 1999 Supplement, sections 
  1.23            60A.06, subdivision 1; and 80A.15, subdivision 2; 
  1.24            proposing coding for new law in Minnesota Statutes, 
  1.25            chapters 60A; 332; and 359. 
  1.26  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.27     Section 1.  Minnesota Statutes 1998, section 45.027, 
  1.28  subdivision 7a, is amended to read: 
  1.29     Subd. 7a.  [AUTHORIZED DISCLOSURES OF INFORMATION AND 
  1.30  DATA.] (a) The commissioner may release and disclose any active 
  1.31  or inactive investigative information and data on licensees to 
  1.32  any national securities exchange or national securities 
  1.33  association registered under the Securities Exchange Act of 1934 
  1.34  when necessary for the requesting agency in initiating, 
  1.35  furthering, or completing an investigation. 
  2.1      (b) The commissioner may release any active or inactive 
  2.2   investigative data relating to the conduct of the business of 
  2.3   insurance to the Office of the Comptroller of the Currency or 
  2.4   the Office of Thrift Supervision in order to facilitate the 
  2.5   initiation, furtherance, or completion of the investigation. 
  2.6      Sec. 2.  [60A.033] [DEFINITIONS.] 
  2.7      Subdivision 1.  [APPLICATION.] For purposes of sections 
  2.8   60A.033 to 60A.039, the definitions in this section have the 
  2.9   meanings given them. 
  2.10     Subd. 2.  [INSURANCE COMPLIANCE SELF-AUDIT OR 
  2.11  SELF-AUDIT.] "Insurance compliance self-audit" or "self-audit" 
  2.12  means a voluntary internal evaluation, review, assessment, 
  2.13  process, or audit, not expressly required by law of an insurer 
  2.14  and designed to identify, correct, or prevent noncompliance or 
  2.15  to improve compliance with statutes, rules, and orders of an 
  2.16  activity regulated under chapters 60A to 79A or other laws of 
  2.17  this state or other states or federal law applicable to an 
  2.18  insurer. 
  2.19     Subd. 3.  [INSURANCE COMPLIANCE SELF-AUDIT DOCUMENT OR 
  2.20  SELF-AUDIT DOCUMENT.] "Insurance compliance self-audit document" 
  2.21  or "self-audit document" means a document prepared as a result 
  2.22  of or in connection with and not before an insurance compliance 
  2.23  self-audit and includes, but is not limited to, any of the 
  2.24  following: 
  2.25     (1) correspondence, instructions, field notes and records 
  2.26  of observations, findings, opinions, suggestions, conclusions, 
  2.27  drafts, checklists, memoranda, drawings, photographs, 
  2.28  computer-generated or electronically recorded information, 
  2.29  telephone records, maps, charts, graphs, and surveys, if this 
  2.30  information is collected or developed for the primary purpose 
  2.31  and in the course of an insurance compliance self-audit; 
  2.32     (2) a report prepared by an auditor, who may be an employee 
  2.33  of the insurer or an independent contractor, which may include 
  2.34  the scope of the audit, the information gained in the audit, and 
  2.35  conclusions and recommendations, with exhibits and appendices; 
  2.36     (3) memoranda and documents analyzing portions or all of 
  3.1   the report and discussing potential implementation issues; 
  3.2      (4) an implementation plan that addresses correcting past 
  3.3   noncompliance, improving current compliance, and preventing 
  3.4   future noncompliance identified as part of the self-audit; 
  3.5      (5) analytic data generated in the course of conducting the 
  3.6   insurance compliance self-audit; or 
  3.7      (6) a written response to the findings of an insurance 
  3.8   compliance self-audit. 
  3.9      An insurance compliance self-audit document does not 
  3.10  include (1) a document or other information contained within an 
  3.11  insurance compliance self-audit document, but not prepared in 
  3.12  connection with or as a result of a self-audit, or (2) a 
  3.13  document, not prepared in connection with or as a result of a 
  3.14  self-audit, requested by the commissioner in conjunction with 
  3.15  the investigation of a consumer complaint where the document 
  3.16  relates solely to the complainant's policy or any claim made 
  3.17  against the policy and the complainant has provided the 
  3.18  commissioner with written authorization requesting its release. 
  3.19     Sec. 3.  [60A.034] [SCOPE OF PRIVILEGE.] 
  3.20     Subdivision 1.  [PRIVILEGED INFORMATION.] An insurance 
  3.21  compliance self-audit document is privileged information and is 
  3.22  not discoverable or admissible as evidence in a civil or 
  3.23  criminal legal action except as otherwise provided in section 
  3.24  60A.035.  If an insurance compliance self-audit document 
  3.25  provided by an insurer to the commissioner is disclosed to a 
  3.26  third party by the commissioner, the document is not admissible 
  3.27  as evidence in a civil or criminal legal action.  This privilege 
  3.28  does not extend to self-audits initiated after the insurer has 
  3.29  received notice of an examination by state or federal 
  3.30  regulators.  Assertion of the privilege established under this 
  3.31  subdivision to prevent disclosure of an insurance compliance 
  3.32  self-audit document does not constitute a fraudulent purpose 
  3.33  under section 60A.035. 
  3.34     Subd. 2.  [EXAMINATION PROHIBITED.] If an insurer, person, 
  3.35  or entity performs or directs the performance of an insurance 
  3.36  compliance self-audit, an officer or employee involved with the 
  4.1   insurance compliance self-audit or a consultant who is hired for 
  4.2   the purpose of performing or assisting in the performance of the 
  4.3   insurance compliance self-audit may not be examined in a civil 
  4.4   or criminal proceeding as to the insurance compliance self-audit 
  4.5   or an insurance compliance self-audit document.  This 
  4.6   subdivision does not apply if the privilege is determined under 
  4.7   section 60A.035 not to apply. 
  4.8      Subd. 3.  [SUBMISSION PURSUANT TO EXAMINATION.] An insurer 
  4.9   must submit, in connection with examinations conducted under 
  4.10  this chapter or chapter 60D, an insurance compliance self-audit 
  4.11  document to the commissioner.  The submission does not waive the 
  4.12  privilege established under this section to which the insurer is 
  4.13  otherwise entitled, and the submission is subject to sections 
  4.14  60A.03, subdivision 9, and 60A.031, subdivision 4, paragraph (f).
  4.15     Sec. 4.  [60A.035] [PRIVILEGE WAIVED OR DISCLOSURE 
  4.16  ORDERED.] 
  4.17     Subdivision 1.  [WAIVER.] The insurance compliance 
  4.18  self-audit privilege does not apply to the extent the insurer 
  4.19  that prepared or caused to be prepared the insurance compliance 
  4.20  self-audit document expressly waives the privilege by so stating 
  4.21  its intent in writing. 
  4.22     Subd. 2.  [REQUIRED DISCLOSURE.] In a civil proceeding, a 
  4.23  court of record may, after an in camera review, require 
  4.24  disclosure of material for which the insurance compliance 
  4.25  self-audit privilege is asserted, if the court determines one of 
  4.26  the following: 
  4.27     (1) the privilege is asserted for a fraudulent purpose; or 
  4.28     (2) the material is not subject to the privilege. 
  4.29     Sec. 5.  [60A.036] [BURDEN OF PROOF.] 
  4.30     Subdivision 1.  [BURDEN.] An insurer asserting the 
  4.31  insurance compliance self-audit privilege has the burden of 
  4.32  demonstrating the applicability of the privilege. 
  4.33     Subd. 2.  [STIPULATION.] The parties may at any time 
  4.34  stipulate in proceedings under section 60A.035 to entry of an 
  4.35  order directing that specific information contained in an 
  4.36  insurance compliance self-audit document is or is not subject to 
  5.1   the insurance compliance self-audit privilege. 
  5.2      Sec. 6.  [60A.037] [EXCEPTIONS TO PRIVILEGE.] 
  5.3      The insurance compliance self-audit privilege does not 
  5.4   apply to the following: 
  5.5      (1) documents, communications, data, reports, or other 
  5.6   information, other than an insurance compliance self-audit 
  5.7   document, required to be collected, developed, maintained, 
  5.8   reported, or otherwise made available to the commissioner, or 
  5.9   under federal or state law, rule, or order; 
  5.10     (2) information obtained by observation or monitoring by 
  5.11  the commissioner of commerce or commissioner or head of any 
  5.12  other regulatory agency; or 
  5.13     (3) information obtained from a source independent of the 
  5.14  insurance compliance self-audit. 
  5.15     Sec. 7.  [60A.038] [STATUTORY OR COMMON LAW PRIVILEGE 
  5.16  PRESERVED.] 
  5.17     Nothing in sections 60A.033 to 60A.037 limits, waives, or 
  5.18  abrogates the scope or nature of any statutory or common law 
  5.19  privilege including, but not limited to, the work product 
  5.20  doctrine, the attorney-client privilege, or the subsequent 
  5.21  remedial measures exclusion. 
  5.22     Sec. 8.  [60A.039] [COMMISSIONER'S AUTHORITY NOT 
  5.23  RESTRICTED.] 
  5.24     Nothing in sections 60A.033 to 60A.037 restricts the 
  5.25  authority of the commissioner to examine and investigate 
  5.26  insurers or conduct appropriate disciplinary actions or other 
  5.27  administrative proceedings. 
  5.28     Sec. 9.  Minnesota Statutes 1999 Supplement, section 
  5.29  60A.06, subdivision 1, is amended to read: 
  5.30     Subdivision 1.  [STATUTORY LINES.] Insurance corporations 
  5.31  may be authorized to transact in any state or territory in the 
  5.32  United States, in the Dominion of Canada, and in foreign 
  5.33  countries, when specified in their charters or certificates of 
  5.34  incorporation, either as originally granted or as thereafter 
  5.35  amended, any of the following kinds of business, upon the stock 
  5.36  plan, or upon the mutual plan when the formation of such mutual 
  6.1   companies is otherwise authorized by law; and business trusts as 
  6.2   authorized by law of this state shall only be authorized to 
  6.3   transact in this state the following kind of business 
  6.4   hereinafter specified in clause (7) hereof when specified in 
  6.5   their "declaration of trust": 
  6.6      (1) To insure against loss or damage to property on land 
  6.7   and against loss of rents and rental values, leaseholds of 
  6.8   buildings, use and occupancy and direct or consequential loss or 
  6.9   damage caused by fire, smoke or smudge, water or other fluid or 
  6.10  substance, lightning, windstorm, tornado, cyclone, earthquake, 
  6.11  collapse and slippage, rain, hail, frost, snow, freeze, change 
  6.12  of temperature, weather or climatic conditions, excess or 
  6.13  deficiency of moisture, floods, the rising of waters, oceans, 
  6.14  lakes, rivers or their tributaries, bombardment, invasion, 
  6.15  insurrection, riot, civil war or commotion, military or usurped 
  6.16  power, electrical power interruption or electrical breakdown 
  6.17  from any cause, railroad equipment, motor vehicles or aircraft, 
  6.18  accidental injury to sprinklers, pumps, conduits or containers 
  6.19  or other apparatus erected for extinguishing fires, explosion, 
  6.20  whether fire ensues or not, except explosions on risks specified 
  6.21  in clause (3); provided, however, that there may be insured 
  6.22  hereunder the following:  (a) explosion of any kind originating 
  6.23  outside the insured building or outside of the building 
  6.24  containing the property insured, (b) explosion of pressure 
  6.25  vessels which do not contain steam or which are not operated 
  6.26  with steam coils or steam jackets; and (c) risks under home 
  6.27  owners multiple peril policies; 
  6.28     (2)(a) To insure vessels, freight, goods, wares, 
  6.29  merchandise, specie, bullion, jewels, profits, commissions, bank 
  6.30  notes, bills of exchange, and other evidences of debt, bottomry 
  6.31  and respondentia interest, and every insurance appertaining to 
  6.32  or connected with risks of transportation and navigation on and 
  6.33  under water, on land or in the air; 
  6.34     (b) To insure all personal property floater risks; 
  6.35     (3) To insure against any loss from either direct or 
  6.36  indirect damage to any property or interest of the assured or of 
  7.1   another, resulting from the explosion of or injury to (a) any 
  7.2   boiler, heater or other fired pressure vessel; (b) any unfired 
  7.3   pressure vessel; (c) pipes or containers connected with any of 
  7.4   said boilers or vessels; (d) any engine, turbine, compressor, 
  7.5   pump or wheel; (e) any apparatus generating, transmitting or 
  7.6   using electricity; (f) any other machinery or apparatus 
  7.7   connected with or operated by any of the previously named 
  7.8   boilers, vessels or machines; and including the incidental power 
  7.9   to make inspections of and to issue certificates of inspection 
  7.10  upon, any such boilers, apparatus, and machinery, whether 
  7.11  insured or otherwise; 
  7.12     (4) To make contracts of life and endowment insurance, to 
  7.13  grant, purchase, or dispose of annuities or endowments of any 
  7.14  kind; and, in such contracts, or in contracts supplemental 
  7.15  thereto to provide for additional benefits in event of death of 
  7.16  the insured by accidental means, total permanent disability of 
  7.17  the insured, or specific dismemberment or disablement suffered 
  7.18  by the insured, or acceleration of life or endowment or annuity 
  7.19  benefits in advance of the time they would otherwise be payable; 
  7.20     (5)(a) To insure against loss or damage by the sickness, 
  7.21  bodily injury or death by accident of the assured or dependents, 
  7.22  or those for whom the assured has assumed a portion of the 
  7.23  liability for the loss or damage, including liability for 
  7.24  payment of medical care costs or for provision of medical care; 
  7.25     (b) To insure against the legal liability, whether imposed 
  7.26  by common law or by statute or assumed by contract, of employers 
  7.27  for the death or disablement of, or injury to, employees; 
  7.28     (6) To guarantee the fidelity of persons in fiduciary 
  7.29  positions, public or private, or to act as surety on official 
  7.30  and other bonds, and for the performance of official or other 
  7.31  obligations; 
  7.32     (7) To insure owners and others interested in real estate 
  7.33  against loss or damage, by reason of defective titles, 
  7.34  encumbrances, or otherwise; 
  7.35     (8) To insure against loss or damage by breakage of glass, 
  7.36  located or in transit; 
  8.1      (9)(a) To insure against loss by burglary, theft, or 
  8.2   forgery; 
  8.3      (b) To insure against loss of or damage to moneys, coins, 
  8.4   bullion, securities, notes, drafts, acceptance or any other 
  8.5   valuable paper or document, resulting from any cause, except 
  8.6   while in the custody or possession of and being transported by 
  8.7   any carrier for hire or in the mail; 
  8.8      (c) To insure individuals by means of an all risk type of 
  8.9   policy commonly known as the "personal property floater" against 
  8.10  any kind and all kinds of loss of or damage to, or loss of use 
  8.11  of, any personal property other than merchandise; 
  8.12     (d) To insure against loss or damage by water or other 
  8.13  fluid or substance; 
  8.14     (10) To insure against loss from death of domestic animals 
  8.15  and to furnish veterinary service; 
  8.16     (11) To guarantee merchants and those engaged in business, 
  8.17  and giving credit, from loss by reason of giving credit to those 
  8.18  dealing with them; this shall be known as credit insurance; 
  8.19     (12) To insure against loss or damage to automobiles or 
  8.20  other vehicles or aircraft and their contents, by collision, 
  8.21  fire, burglary, or theft, and other perils of operation, and 
  8.22  against liability for damage to persons, or property of others, 
  8.23  by collision with such vehicles or aircraft, and to insure 
  8.24  against any loss or hazard incident to the ownership, operation, 
  8.25  or use of motor or other vehicles or aircraft; 
  8.26     (13) To insure against liability for loss or damage to the 
  8.27  property or person of another caused by the insured or by those 
  8.28  for whom the insured is responsible, including insurance of 
  8.29  medical, hospital, surgical, funeral or other related expense of 
  8.30  the insured or other person injured, irrespective of legal 
  8.31  liability of the insured, when issued with or supplemental to 
  8.32  policies of liability insurance; 
  8.33     (14) To insure against loss of or damage to any property of 
  8.34  the insured, resulting from the ownership, maintenance or use of 
  8.35  elevators, except loss or damage by fire; 
  8.36     (15) To insure against attorneys fees, court costs, witness 
  9.1   fees and incidental expenses incurred in connection with the use 
  9.2   of the professional services of attorneys at law.; 
  9.3      (16) To insure against vicarious liability for punitive or 
  9.4   exemplary damages. 
  9.5      Sec. 10.  Minnesota Statutes 1998, section 60H.03, is 
  9.6   amended by adding a subdivision to read: 
  9.7      Subd. 4.  [TERM AND FEES.] The term of a managing general 
  9.8   agent license issued under this section and the license fees 
  9.9   imposed are the same as those applicable to a licensed insurance 
  9.10  agent under chapter 60K.  
  9.11     Sec. 11.  Minnesota Statutes 1998, section 60K.03, 
  9.12  subdivision 4, is amended to read: 
  9.13     Subd. 4.  [TERM.] All licenses issued pursuant to this 
  9.14  section remain in force until voluntarily terminated by the 
  9.15  licensee, not renewed as prescribed in section 60K.06, or until 
  9.16  suspended or revoked by the commissioner.  A voluntary 
  9.17  termination occurs when the license is surrendered to the 
  9.18  commissioner with the request that it be terminated or when the 
  9.19  licensee dies, or when the licensee is dissolved or its 
  9.20  existence is terminated.  In the case of a nonresident license, 
  9.21  a voluntary termination also occurs upon the happening of the 
  9.22  event described in subdivision 3, paragraph (c).  
  9.23     Every licensed agent shall notify the commissioner within 
  9.24  30 ten days of a change of name, address, or information 
  9.25  contained in the application. 
  9.26     Sec. 12.  Minnesota Statutes 1998, section 80A.04, 
  9.27  subdivision 2, is amended to read: 
  9.28     Subd. 2.  It is unlawful for any broker-dealer or issuer to 
  9.29  employ an agent as a representative in this state unless the 
  9.30  agent is licensed.  The licensing of an agent is not effective 
  9.31  during any period when the agent is not associated with a 
  9.32  specified broker-dealer licensed under this chapter or a 
  9.33  specified issuer.  No agent shall at any time represent more 
  9.34  than one broker-dealer or issuer, except that where 
  9.35  broker-dealers affiliated by direct common control are licensed 
  9.36  under this chapter, an agent may represent the broker-dealer.  
 10.1   When an agent begins or terminates employment with a 
 10.2   broker-dealer or issuer, or begins or terminates those 
 10.3   activities which make that person an agent, the agent as well as 
 10.4   the broker-dealer or issuer shall promptly notify the 
 10.5   commissioner or the commissioner's designated representative. 
 10.6      A broker-dealer or investment adviser is affiliated by 
 10.7   direct common control when 80 percent or more of the equity of 
 10.8   each broker-dealer or investment adviser is beneficially owned 
 10.9   by the same person or group of persons. 
 10.10     Sec. 13.  Minnesota Statutes 1998, section 80A.04, 
 10.11  subdivision 3, is amended to read: 
 10.12     Subd. 3.  It is unlawful for any person to transact 
 10.13  business in this state as an investment adviser unless that 
 10.14  person is so licensed or licensed as a broker-dealer under this 
 10.15  chapter as described in section 80A.14, subdivision 9, clause 
 10.16  (3), or unless:  (1) that person's only clients in this state 
 10.17  are investment companies as defined in the Investment Company 
 10.18  Act of 1940, other investment advisers, broker-dealers, banks, 
 10.19  trust companies, savings associations, federal covered advisers 
 10.20  insurance companies, corporations with a class of equity 
 10.21  securities registered under section 12(b) or 12(g) of the 
 10.22  Securities Exchange Act of 1934, small business investment 
 10.23  companies, and government agencies or instrumentalities, whether 
 10.24  acting for themselves or as trustees with investment control, or 
 10.25  other institutional buyers; or (2) that person has no place of 
 10.26  business in this state and during the preceding 12-month period 
 10.27  has had fewer than six clients who are residents of this state. 
 10.28     Sec. 14.  Minnesota Statutes 1998, section 80A.07, 
 10.29  subdivision 1, is amended to read: 
 10.30     Subdivision 1.  [GENERAL GROUNDS.] The commissioner may by 
 10.31  order deny, suspend, or revoke any license or may censure the 
 10.32  licensee, if the commissioner finds (a) that the order is in the 
 10.33  public interest and (b) that the applicant or licensee or, in 
 10.34  the case of a broker-dealer or investment adviser, any partner, 
 10.35  officer, or director, any person occupying a similar status or 
 10.36  performing similar functions, or any person directly or 
 11.1   indirectly controlling the broker-dealer or investment adviser: 
 11.2      (1) has filed an application for license which as of its 
 11.3   effective date, or as of any date after filing in the case of an 
 11.4   order denying effectiveness, was incomplete in any material 
 11.5   respect or contained any statement which was, in light of the 
 11.6   circumstances under which it was made, false or misleading with 
 11.7   respect to any material fact; 
 11.8      (2) has willfully violated or failed to comply with any 
 11.9   provision of this chapter or a predecessor law or any provision 
 11.10  of the Securities Act of 1933, the Securities Exchange Act of 
 11.11  1934, the Investment Advisers Act of 1940, the Investment 
 11.12  Company Act of 1940, the Commodity Exchange Act, or any rule or 
 11.13  order under any of these statutes, of which that person has 
 11.14  notice and is subject; 
 11.15     (3) has been convicted, within the past ten years, of any 
 11.16  misdemeanor involving a security or any aspect of the securities 
 11.17  business, or any felony; 
 11.18     (4) is permanently or temporarily enjoined by any court of 
 11.19  competent jurisdiction from engaging in or continuing any 
 11.20  conduct or practice involving any aspect of the securities 
 11.21  business; 
 11.22     (5) is the subject of an order of the commissioner denying, 
 11.23  suspending, or revoking a license as a broker-dealer, agent or 
 11.24  investment adviser; 
 11.25     (6) is the subject of an order entered within the past five 
 11.26  years by the securities administrator of any other state or by 
 11.27  the securities and exchange commission, or any national 
 11.28  securities exchange or national securities association 
 11.29  registered under the Securities Exchange Act of 1934, denying or 
 11.30  revoking registration or license as a broker-dealer, agent, or 
 11.31  investment adviser, or is the subject of an order of the 
 11.32  securities and exchange commission or any national securities 
 11.33  exchange or national securities association registered under the 
 11.34  Securities Exchange Act of 1934, suspending, barring, or 
 11.35  expelling that person from a national securities exchange or 
 11.36  association registered under the Securities Exchange Act of 
 12.1   1934, or is the subject of a United States post office fraud 
 12.2   order.  The commissioner may not institute a revocation or 
 12.3   suspension proceeding under this clause more than one year from 
 12.4   the date of the order relied on, and may not enter an order 
 12.5   under this clause on the basis of an order under another state 
 12.6   law unless the order was based on facts which would currently 
 12.7   constitute a ground for an order under this section; 
 12.8      (7) has engaged in dishonest or fraudulent practices in the 
 12.9   securities business; 
 12.10     (8) has failed to maintain the minimum net capital or to 
 12.11  comply with the limitation on aggregate indebtedness which the 
 12.12  commissioner by rule prescribes; 
 12.13     (9) is not qualified on the basis of such factors as 
 12.14  training, experience, and knowledge of the securities business; 
 12.15     (10) has failed reasonably to supervise agents, investment 
 12.16  adviser representatives, or employees to assure their compliance 
 12.17  with this chapter; 
 12.18     (11) has failed to pay the proper filing fee, but the 
 12.19  commissioner shall vacate the order when the deficiency has been 
 12.20  corrected; 
 12.21     (12) has offered or sold securities in this state through 
 12.22  any unlicensed agent; 
 12.23     (13) has made any material misrepresentation to the 
 12.24  commissioner, or upon request reasonably made by the 
 12.25  commissioner, has withheld or concealed information from, or 
 12.26  refused to furnish information to, the commissioner; 
 12.27     (14) has failed to reasonably supervise agents, investment 
 12.28  adviser representatives, or employees if that person has assumed 
 12.29  or has been designated to carry out the supervisory procedures 
 12.30  of the broker-dealer or investment adviser; or 
 12.31     (15) has failed, within 20 business days after receiving 
 12.32  written instructions from a customer, to do any of the following:
 12.33     (a) transfer or deliver securities that have been 
 12.34  purchased; 
 12.35     (b) transfer or deliver any free credit balances reflecting 
 12.36  completed transactions; or 
 13.1      (c) transfer or deliver a customer's account securities 
 13.2   positions and balances to another broker-dealer. 
 13.3   This clause shall not serve as a basis for denial, suspension, 
 13.4   or revocation of a broker-dealer's or agent's license if:  (i) 
 13.5   the transfer or delivery is between broker-dealers and meets the 
 13.6   rules and requirements established by the New York Stock 
 13.7   Exchange with regard to the transfer or delivery; or (ii) the 
 13.8   delivery of securities to a customer cannot be accomplished 
 13.9   within 20 business days, and the broker-dealer or agent has 
 13.10  notified the customer in writing of the inability to deliver the 
 13.11  securities and the reasons for the nondelivery within 20 
 13.12  business days of receiving the customer's written instructions.  
 13.13     Sec. 15.  Minnesota Statutes 1998, section 80A.10, 
 13.14  subdivision 2, is amended to read: 
 13.15     Subd. 2.  A registration statement under this section shall 
 13.16  contain the following information and be accompanied by the 
 13.17  following documents in addition to the information specified in 
 13.18  section 80A.12 and the consent to service of process required by 
 13.19  section 80A.27, subdivision 7; 
 13.20     (a) Two copies One copy of the latest form of prospectus 
 13.21  filed under the Securities Act of 1933; 
 13.22     (b) If the commissioner by rule or otherwise requires, a 
 13.23  copy of the articles of incorporation and bylaws (or their 
 13.24  substantial equivalent) currently in effect, a copy of any 
 13.25  agreements with or among underwriters, a copy of any indenture 
 13.26  or other instrument governing the issuance of the security to be 
 13.27  registered, and a specimen or copy of the security; 
 13.28     (c) If the commissioner requests, any other information, or 
 13.29  copies of any other documents, filed under the Securities Act of 
 13.30  1933; and 
 13.31     (d) An undertaking to forward all amendments to the federal 
 13.32  prospectus, other than an amendment which merely delays the 
 13.33  effective date of the registration statement, not later than the 
 13.34  first business day after the day they are forwarded to or filed 
 13.35  with the securities and exchange commission or such longer 
 13.36  period as the commissioner permits.  
 14.1      Sec. 16.  Minnesota Statutes 1999 Supplement, section 
 14.2   80A.15, subdivision 2, is amended to read: 
 14.3      Subd. 2.  The following transactions are exempted from 
 14.4   sections 80A.08 and 80A.16: 
 14.5      (a) Any sales, whether or not effected through a 
 14.6   broker-dealer, provided that: 
 14.7      (1) no person shall make more than ten sales of 
 14.8   securities in Minnesota of the same issuer pursuant to this 
 14.9   exemption, exclusive of sales according to clause (2), during 
 14.10  any period of 12 consecutive months; provided further, that in 
 14.11  the case of sales by an issuer, except sales of securities 
 14.12  registered under the Securities Act of 1933 or exempted by 
 14.13  section 3(b) of that act, (i) the seller reasonably believes 
 14.14  that all buyers are purchasing for investment, and (ii) the 
 14.15  securities are not advertised for sale to the general public in 
 14.16  newspapers or other publications of general circulation or 
 14.17  otherwise, or by radio, television, electronic means or similar 
 14.18  communications media, or through a program of general 
 14.19  solicitation by means of mail or telephone; and or 
 14.20     (2) no issuer shall make more than 25 sales of its 
 14.21  securities in Minnesota according to this exemption, exclusive 
 14.22  of sales pursuant to clause (1), during any period of 12 
 14.23  consecutive months; provided further, that the issuer meets the 
 14.24  conditions in clause (1) and, in addition meets the following 
 14.25  additional conditions:  (i) files with the commissioner, ten 
 14.26  days before a sale according to this clause, a statement of 
 14.27  issuer on a form prescribed by the commissioner; and (ii) no 
 14.28  commission or other remuneration is paid or given directly or 
 14.29  indirectly for soliciting any prospective buyers in this state 
 14.30  in connection with a sale according to this clause except 
 14.31  reasonable and customary commissions paid by the issuer to a 
 14.32  broker-dealer licensed under this chapter. 
 14.33     (b) Any nonissuer distribution of an outstanding security 
 14.34  if (1) either Moody's, Fitch's, or Standard & Poor's Securities 
 14.35  Manuals, or other recognized manuals approved by the 
 14.36  commissioner contains the names of the issuer's officers and 
 15.1   directors, a balance sheet of the issuer as of a date not more 
 15.2   than 18 months prior to the date of the sale, and a profit and 
 15.3   loss statement for the fiscal year preceding the date of the 
 15.4   balance sheet, and (2) the issuer or its predecessor has been in 
 15.5   active, continuous business operation for the five-year period 
 15.6   next preceding the date of sale, and (3) if the security has a 
 15.7   fixed maturity or fixed interest or dividend provision, the 
 15.8   issuer has not, within the three preceding fiscal years, 
 15.9   defaulted in payment of principal, interest, or dividends on the 
 15.10  securities. 
 15.11     (c) The execution of any orders by a licensed broker-dealer 
 15.12  for the purchase or sale of any security, pursuant to an 
 15.13  unsolicited offer to purchase or sell; provided that the 
 15.14  broker-dealer acts as agent for the purchaser or seller, and has 
 15.15  no direct material interest in the sale or distribution of the 
 15.16  security, receives no commission, profit, or other compensation 
 15.17  from any source other than the purchaser and seller and delivers 
 15.18  to the purchaser and seller written confirmation of the 
 15.19  transaction which clearly itemizes the commission, or other 
 15.20  compensation. 
 15.21     (d) Any nonissuer sale of notes or bonds secured by a 
 15.22  mortgage lien if the entire mortgage, together with all notes or 
 15.23  bonds secured thereby, is sold to a single purchaser at a single 
 15.24  sale. 
 15.25     (e) Any judicial sale, exchange, or issuance of securities 
 15.26  made pursuant to an order of a court of competent jurisdiction. 
 15.27     (f) The sale, by a pledge holder, of a security pledged in 
 15.28  good faith as collateral for a bona fide debt. 
 15.29     (g) Any offer or sale to a bank, savings institution, trust 
 15.30  company, insurance company, investment company as defined in the 
 15.31  Investment Company Act of 1940, or other financial institution 
 15.32  or institutional buyer, or to a broker-dealer, whether the 
 15.33  purchaser is acting for itself or in some fiduciary capacity. 
 15.34     (h) An offer or sale of securities by an issuer made in 
 15.35  reliance on the exemptions provided by Rule 505 or 506 of 
 15.36  Regulation D promulgated by the Securities and Exchange 
 16.1   Commission, Code of Federal Regulations, title 17, sections 
 16.2   230.501 to 230.508, subject to the conditions and definitions 
 16.3   provided by Rules 501 to 503 of Regulation D, if the offer and 
 16.4   sale also satisfies the conditions and limitations in clauses 
 16.5   (1) to (10). 
 16.6      (1) The exemption under this paragraph is not available for 
 16.7   the securities of an issuer if any of the persons described in 
 16.8   Rule 252(c) to (f) of Regulation A promulgated by the Securities 
 16.9   and Exchange Commission, Code of Federal Regulations, title 17, 
 16.10  sections 230.251 to 230.263:  
 16.11     (i) has filed a registration statement that is the subject 
 16.12  of a currently effective order entered against the issuer, its 
 16.13  officers, directors, general partners, controlling persons, or 
 16.14  affiliates, according to any state's law within five years 
 16.15  before the filing of the notice required under clause (5), 
 16.16  denying effectiveness to, or suspending or revoking the 
 16.17  effectiveness of, the registration statement; 
 16.18     (ii) has been convicted, within five years before the 
 16.19  filing of the notice required under clause (5), of a felony or 
 16.20  misdemeanor in connection with the offer, sale, or purchase of a 
 16.21  security or franchise, or a felony involving fraud or deceit, 
 16.22  including but not limited to forgery, embezzlement, obtaining 
 16.23  money under false pretenses, larceny, or conspiracy to defraud; 
 16.24     (iii) is subject to an effective administrative order or 
 16.25  judgment entered by a state securities administrator within five 
 16.26  years before the filing of the notice required under clause (5), 
 16.27  that prohibits, denies, or revokes the use of an exemption from 
 16.28  securities registration, that prohibits the transaction of 
 16.29  business by the person as a broker-dealer or agent, or that is 
 16.30  based on fraud, deceit, an untrue statement of a material fact, 
 16.31  or an omission to state a material fact; or 
 16.32     (iv) is subject to an order, judgment, or decree of a court 
 16.33  entered within five years before the filing of the notice 
 16.34  required under clause (5), temporarily, preliminarily, or 
 16.35  permanently restraining or enjoining the person from engaging in 
 16.36  or continuing any conduct or practice in connection with the 
 17.1   offer, sale, or purchase of a security, or the making of a false 
 17.2   filing with a state. 
 17.3      A disqualification under paragraph (h) involving a 
 17.4   broker-dealer or agent is waived if the broker-dealer or agent 
 17.5   is or continues to be licensed in the state in which the 
 17.6   administrative order or judgment was entered against the person 
 17.7   or if the broker-dealer or agent is or continues to be licensed 
 17.8   in this state as a broker-dealer or agent after notifying the 
 17.9   commissioner of the act or event causing disqualification. 
 17.10     The commissioner may waive a disqualification under 
 17.11  paragraph (h) upon a showing of good cause that it is not 
 17.12  necessary under the circumstances that use of the exemption be 
 17.13  denied. 
 17.14     A disqualification under paragraph (h) may be waived if the 
 17.15  state securities administrator or agency of the state that 
 17.16  created the basis for disqualification has determined, upon a 
 17.17  showing of good cause, that it is not necessary under the 
 17.18  circumstances that an exemption from registration of securities 
 17.19  under the state's laws be denied. 
 17.20     It is a defense to a violation of paragraph (h) based upon 
 17.21  a disqualification if the issuer sustains the burden of proof to 
 17.22  establish that the issuer did not know, and in the exercise of 
 17.23  reasonable care could not have known, that a disqualification 
 17.24  under paragraph (h) existed. 
 17.25     (2) This exemption must not be available to an issuer with 
 17.26  respect to a transaction that, although in technical compliance 
 17.27  with this exemption, is part of a plan or scheme to evade 
 17.28  registration or the conditions or limitations explicitly stated 
 17.29  in paragraph (h). 
 17.30     (3) No commission, finder's fee, or other remuneration 
 17.31  shall be paid or given, directly or indirectly, for soliciting a 
 17.32  prospective purchaser, unless the recipient is appropriately 
 17.33  licensed, or exempt from licensure, in this state as a 
 17.34  broker-dealer. 
 17.35     (4) Nothing in this exemption is intended to or should be 
 17.36  in any way construed as relieving issuers or persons acting on 
 18.1   behalf of issuers from providing disclosure to prospective 
 18.2   investors adequate to satisfy the antifraud provisions of the 
 18.3   securities law of Minnesota.  
 18.4      (5) The issuer shall file with the commissioner a notice on 
 18.5   form D as adopted by the Securities and Exchange Commission 
 18.6   according to Regulation D, Code of Federal Regulations, title 
 18.7   17, section 230.502.  The notice must be filed not later than 15 
 18.8   days after the first sale in this state of securities in an 
 18.9   offering under this exemption.  Every notice on form D must be 
 18.10  manually signed by a person duly authorized by the issuer and 
 18.11  must be accompanied by a consent to service of process on a form 
 18.12  prescribed by the commissioner.  
 18.13     (6) A failure to comply with a term, condition, or 
 18.14  requirement of paragraph (h) will not result in loss of the 
 18.15  exemption for an offer or sale to a particular individual or 
 18.16  entity if the person relying on the exemption shows that:  (i) 
 18.17  the failure to comply did not pertain to a term, condition, or 
 18.18  requirement directly intended to protect that particular 
 18.19  individual or entity, and the failure to comply was 
 18.20  insignificant with respect to the offering as a whole; and (ii) 
 18.21  a good faith and reasonable attempt was made to comply with all 
 18.22  applicable terms, conditions, and requirements of paragraph (h), 
 18.23  except that, where an exemption is established only through 
 18.24  reliance upon this provision, the failure to comply shall 
 18.25  nonetheless constitute a violation of section 80A.08 and be 
 18.26  actionable by the commissioner.  
 18.27     (7) The issuer, upon request by the commissioner, shall, 
 18.28  within ten days of the request, furnish to the commissioner a 
 18.29  copy of any and all information, documents, or materials 
 18.30  furnished to investors or offerees in connection with the offer 
 18.31  and sale according to paragraph (h).  
 18.32     (8) Neither compliance nor attempted compliance with the 
 18.33  exemption provided by paragraph (h), nor the absence of an 
 18.34  objection or order by the commissioner with respect to an offer 
 18.35  or sale of securities undertaken according to this exemption, 
 18.36  shall be considered to be a waiver of a condition of the 
 19.1   exemption or considered to be a confirmation by the commissioner 
 19.2   of the availability of this exemption.  
 19.3      (9) The commissioner may, by rule or order, increase the 
 19.4   number of purchasers or waive any other condition of this 
 19.5   exemption.  
 19.6      (10) The determination whether offers and sales made in 
 19.7   reliance on the exemption set forth in paragraph (h) shall be 
 19.8   integrated with offers and sales according to other paragraphs 
 19.9   of this subdivision shall be made according to the integration 
 19.10  standard set forth in Rule 502 of Regulation D promulgated by 
 19.11  the Securities and Exchange Commission, Code of Federal 
 19.12  Regulations, title 17, section 230.502.  If not subject to 
 19.13  integration according to that rule, offers and sales according 
 19.14  to paragraph (h) shall not otherwise be integrated with offers 
 19.15  and sales according to other exemptions set forth in this 
 19.16  subdivision. 
 19.17     (i) Any offer (but not a sale) of a security for which a 
 19.18  registration statement has been filed under sections 80A.01 to 
 19.19  80A.31, if no stop order or refusal order is in effect and no 
 19.20  public proceeding or examination looking toward an order is 
 19.21  pending; and any offer of a security if the sale of the security 
 19.22  is or would be exempt under this section.  The commissioner may 
 19.23  by rule exempt offers (but not sales) of securities for which a 
 19.24  registration statement has been filed as the commissioner deems 
 19.25  appropriate, consistent with the purposes of sections 80A.01 to 
 19.26  80A.31. 
 19.27     (j) The offer and sale by a cooperative organized under 
 19.28  chapter 308A or under the laws of another state, of its 
 19.29  securities when the securities are offered and sold only to its 
 19.30  members, or when the purchase of the securities is necessary or 
 19.31  incidental to establishing membership in the cooperative, or 
 19.32  when such securities are issued as patronage dividends.  This 
 19.33  paragraph applies to a cooperative organized under the laws of 
 19.34  another state only if the cooperative has filed with the 
 19.35  commissioner a consent to service of process under section 
 19.36  80A.27, subdivision 7, and has, not less than ten days prior to 
 20.1   the issuance or delivery, furnished the commissioner with a 
 20.2   written general description of the transaction and any other 
 20.3   information that the commissioner requires by rule or otherwise. 
 20.4   This exemption only applies when the issuing cooperative is 
 20.5   seeking to raise up to $1,000,000. 
 20.6      (l) The issuance and delivery of any securities of one 
 20.7   corporation to another corporation or its security holders in 
 20.8   connection with a merger, exchange of shares, or transfer of 
 20.9   assets whereby the approval of stockholders of the other 
 20.10  corporation is required to be obtained, provided, that the 
 20.11  commissioner has been furnished with a general description of 
 20.12  the transaction and with other information as the commissioner 
 20.13  by rule prescribes not less than ten days prior to the issuance 
 20.14  and delivery. 
 20.15     (m) Any transaction between the issuer or other person on 
 20.16  whose behalf the offering is made and an underwriter or among 
 20.17  underwriters. 
 20.18     (n) The distribution by a corporation of its or other 
 20.19  securities to its own security holders as a stock dividend or as 
 20.20  a dividend from earnings or surplus or as a liquidating 
 20.21  distribution; or upon conversion of an outstanding convertible 
 20.22  security; or pursuant to a stock split or reverse stock split. 
 20.23     (o) Any offer or sale of securities by an affiliate of the 
 20.24  issuer thereof if:  (1) a registration statement is in effect 
 20.25  with respect to securities of the same class of the issuer and 
 20.26  (2) the offer or sale has been exempted from registration by 
 20.27  rule or order of the commissioner.  
 20.28     (p) Any transaction pursuant to an offer to existing 
 20.29  security holders of the issuer, including persons who at the 
 20.30  time of the transaction are holders of convertible securities, 
 20.31  nontransferable warrants, or transferable warrants exercisable 
 20.32  within not more than 90 days of their issuance, if:  (1) no 
 20.33  commission or other remuneration (other than a standby 
 20.34  commission) is paid or given directly or indirectly for 
 20.35  soliciting any security holder in this state; and (2) the 
 20.36  commissioner has been furnished with a general description of 
 21.1   the transaction and with other information as the commissioner 
 21.2   may by rule prescribe no less than ten days prior to the 
 21.3   transaction. 
 21.4      (q) Any nonissuer sales of any security, including a 
 21.5   revenue obligation, issued by the state of Minnesota or any of 
 21.6   its political or governmental subdivisions, municipalities, 
 21.7   governmental agencies, or instrumentalities. 
 21.8      (r) Any transaction as to which the commissioner by rule or 
 21.9   order finds that registration is not necessary in the public 
 21.10  interest and for the protection of investors. 
 21.11     (s) An offer or sale of a security issued in connection 
 21.12  with an employee's stock purchase, savings, option, profit 
 21.13  sharing, pension, or similar employee benefit plan, if the 
 21.14  following conditions are met:  
 21.15     (1) the issuer, its parent corporation or any of its 
 21.16  majority-owned subsidiaries offers or sells the security 
 21.17  according to a written benefit plan or written contract relating 
 21.18  to the compensation of the purchaser; and 
 21.19     (2) the class of securities offered according to the plan 
 21.20  or contract, or if an option or right to purchase a security, 
 21.21  the class of securities to be issued upon the exercise of the 
 21.22  option or right, is registered under section 12 of the 
 21.23  Securities Exchange Act of 1934, or is a class of securities 
 21.24  with respect to which the issuer files reports according to 
 21.25  section 15(d) of the Securities Exchange Act of 1934; or 
 21.26     (3) the issuer fully complies with the provisions of Rule 
 21.27  701 as adopted by the Securities and Exchange Commission, Code 
 21.28  of Federal Regulations, title 12, section 230.701. 
 21.29     The issuer shall file not less than ten days before the 
 21.30  transaction, a general description of the transaction and any 
 21.31  other information that the commissioner requires by rule or 
 21.32  otherwise or, if applicable, a Securities and Exchange Form S-8. 
 21.33  Annually, within 90 days after the end of the issuer's fiscal 
 21.34  year, the issuer shall file a notice as provided with the 
 21.35  commissioner. 
 21.36     (t) Any sale of a security of an issuer that is a pooled 
 22.1   income fund, a charitable remainder trust, or a charitable lead 
 22.2   trust that has a qualified charity as the only charitable 
 22.3   beneficiary. 
 22.4      (u) Any sale by a qualified charity of a security that is a 
 22.5   charitable gift annuity if the issuer has a net worth, otherwise 
 22.6   defined as unrestricted fund balance, of not less than $300,000 
 22.7   and either:  (1) has been in continuous operation for not less 
 22.8   than three years; or (2) is a successor or affiliate of a 
 22.9   qualified charity that has been in continuous operation for not 
 22.10  less than three years. 
 22.11     Sec. 17.  Minnesota Statutes 1998, section 80C.05, 
 22.12  subdivision 4, is amended to read: 
 22.13     Subd. 4.  An application for registration that has not 
 22.14  become effective will be considered withdrawn If no activity 
 22.15  occurs with respect to the an application for registration for a 
 22.16  period of 120 days, the commissioner may by order declare the 
 22.17  application withdrawn. 
 22.18     Sec. 18.  Minnesota Statutes 1998, section 80C.07, is 
 22.19  amended to read: 
 22.20     80C.07 [AMENDMENT OF REGISTRATION.] 
 22.21     A person with a registration in effect shall, within 30 
 22.22  days after the occurrence of any material change in the 
 22.23  information on file with the commissioner, notify the 
 22.24  commissioner in writing of the change by an application to amend 
 22.25  the registration accompanied by a fee of $100.  The commissioner 
 22.26  may by rule define what shall be considered a material change 
 22.27  for such purposes, and may determine the circumstances under 
 22.28  which a revised public offering statement must accompany the 
 22.29  application.  If the amendment is approved by the commissioner, 
 22.30  it shall become effective upon the issuance by the commissioner 
 22.31  of an order amending the registration.  
 22.32     The commissioner may withdraw an amendment application that 
 22.33  has not become effective.  If no activity occurs with respect to 
 22.34  the application for a period of 120 days, the commissioner may 
 22.35  by order declare the application withdrawn. 
 22.36     Sec. 19.  Minnesota Statutes 1998, section 82.22, 
 23.1   subdivision 13, is amended to read: 
 23.2      Subd. 13.  [CONTINUING EDUCATION.] (a) After their first 
 23.3   renewal date, all real estate salespersons and all real estate 
 23.4   brokers shall be required to successfully complete 30 hours of 
 23.5   real estate continuing education, either as a student or a 
 23.6   lecturer, in courses of study approved by the commissioner, 
 23.7   during each 24-month license period.  At least 15 of the 30 
 23.8   credit hours must be completed during the first 12 months of the 
 23.9   24-month licensing period.  Salespersons and brokers whose 
 23.10  initial license period extends more than 12 months are required 
 23.11  to complete 15 hours of real estate continuing education during 
 23.12  the initial license period.  Those licensees who will receive a 
 23.13  12-month license on July 1, 1995, because of the staggered 
 23.14  implementation schedule must complete 15 hours of real estate 
 23.15  continuing education as a requirement for renewal on July 1, 
 23.16  1996.  Licensees may not claim credit for continuing education 
 23.17  not actually completed as of the date their report of continuing 
 23.18  education compliance is filed. 
 23.19     (b) The commissioner shall adopt rules defining the 
 23.20  standards for course and instructor approval, and may adopt 
 23.21  rules for the proper administration of this subdivision.  The 
 23.22  commissioner may not approve a course which can be completed by 
 23.23  the student at home or outside the classroom without the 
 23.24  supervision of an instructor approved by the department of 
 23.25  commerce.  The commissioner has discretion to establish a pilot 
 23.26  program to explore delivery of accredited courses using new 
 23.27  delivery technology, including interactive technology.  This 
 23.28  pilot program expires on August 1, 2000 2001. 
 23.29     (c) Any program approved by Minnesota continuing legal 
 23.30  education shall be approved by the commissioner of commerce for 
 23.31  continuing education for real estate brokers and salespeople if 
 23.32  the program or any part thereof relates to real estate.  
 23.33     (d) As part of the continuing education requirements of 
 23.34  this section, the commissioner shall require that all real 
 23.35  estate brokers and salespersons receive: 
 23.36     (1) at least two hours of training during each license 
 24.1   period in courses in laws or regulations on agency 
 24.2   representation and disclosure; and 
 24.3      (2) at least two hours of training during each license 
 24.4   period in courses in state and federal fair housing laws, 
 24.5   regulations, and rules, or other antidiscrimination laws. 
 24.6      Clause (1) does not apply to real estate salespersons and 
 24.7   real estate brokers engaged solely in the commercial real estate 
 24.8   business who file with the commissioner a verification of this 
 24.9   status along with the continuing education report required under 
 24.10  paragraph (a). 
 24.11     (e) The commissioner is authorized to establish a procedure 
 24.12  for renewal of course accreditation. 
 24.13     Sec. 20.  Minnesota Statutes 1998, section 82A.04, 
 24.14  subdivision 4, is amended to read: 
 24.15     Subd. 4.  [EFFECTIVE DATE.] Unless an order denying 
 24.16  registration under section 82A.12 is in effect, or unless 
 24.17  declared effective by order of the commissioner prior thereto, 
 24.18  the application for registration shall automatically become 
 24.19  effective upon the expiration of 15 business days following 
 24.20  filing with the commissioner, but an applicant may consent in 
 24.21  writing to the delay of registration until the time the 
 24.22  commissioner may issue an order of registration.  If the 
 24.23  commissioner requests additional information with respect to the 
 24.24  application, the application shall become effective upon the 
 24.25  expiration of 15 business days following the filing with the 
 24.26  commissioner of the additional information unless an order 
 24.27  denying registration under section 82A.12 is in effect or unless 
 24.28  declared effective by order of the commissioner prior thereto. 
 24.29  The registration is effective on the date the commissioner 
 24.30  declares by order. 
 24.31     Sec. 21.  Minnesota Statutes 1998, section 82A.04, is 
 24.32  amended by adding a subdivision to read: 
 24.33     Subd. 5.  [WITHDRAWAL OF APPLICATION.] If no activity 
 24.34  occurs with respect to an application for a period of 120 days, 
 24.35  the commissioner may by order declare the application 
 24.36  withdrawn.  No part of the filing fee will be returned by the 
 25.1   commissioner if a registration application is withdrawn 
 25.2   according to this subdivision. 
 25.3      Sec. 22.  Minnesota Statutes 1998, section 82B.14, is 
 25.4   amended to read: 
 25.5      82B.14 [EXPERIENCE REQUIREMENT.] 
 25.6      (a) As a prerequisite for licensing as a registered real 
 25.7   property appraiser or licensed real property appraiser, an 
 25.8   applicant must present evidence satisfactory to the commissioner 
 25.9   that the person has obtained 2,000 hours of experience in real 
 25.10  property appraisal. 
 25.11     As a prerequisite for licensing as a certified residential 
 25.12  real property appraiser, an applicant must present evidence 
 25.13  satisfactory to the commissioner that the person has obtained 
 25.14  2,500 hours of experience in real property appraisal. 
 25.15     As a prerequisite for licensing as a certified general real 
 25.16  property appraiser, an applicant must present evidence 
 25.17  satisfactory to the commissioner that the person has obtained 
 25.18  3,000 hours of experience in real property appraisal.  At least 
 25.19  50 percent, or 1,500 hours, must be in nonresidential appraisal 
 25.20  work. 
 25.21     (b) Each applicant for license under section 82B.11, 
 25.22  subdivision 3, 4, or 5, shall give under oath a detailed listing 
 25.23  of the real estate appraisal reports or file memoranda for which 
 25.24  experience is claimed by the applicant.  Upon request, the 
 25.25  applicant shall make available to the commissioner for 
 25.26  examination, a sample of appraisal reports that the applicant 
 25.27  has prepared in the course of appraisal practice. 
 25.28     (c) Applicants may not receive credit for experience 
 25.29  accumulated while unlicensed, if the experience is based on 
 25.30  activities which required a license under this section. 
 25.31     Sec. 23.  Minnesota Statutes 1998, section 83.23, is 
 25.32  amended by adding a subdivision to read: 
 25.33     Subd. 5.  [WITHDRAWAL OF APPLICATION.] If no activity 
 25.34  occurs with respect to an application for a period of 120 days, 
 25.35  the commissioner may by order declare the application 
 25.36  withdrawn.  No part of the filing fee will be returned by the 
 26.1   commissioner if a registration application is withdrawn 
 26.2   according to this subdivision. 
 26.3      Sec. 24.  Minnesota Statutes 1998, section 308A.711, 
 26.4   subdivision 1, is amended to read: 
 26.5      Subdivision 1.  [ALTERNATE PROCEDURE TO DISBURSE PROPERTY.] 
 26.6   Notwithstanding the provisions of section 345.43, a cooperative 
 26.7   may, in lieu of paying or delivering to the commissioner of 
 26.8   commerce the unclaimed property specified in its report of 
 26.9   unclaimed property, distribute the unclaimed property to a 
 26.10  corporation or organization that is exempt from taxation under 
 26.11  section 290.05, subdivision 1, paragraph (b), or 2.  A 
 26.12  cooperative making the election to distribute unclaimed property 
 26.13  shall, within 20 days after the time specified in section 345.42 
 26.14  for claiming the property from the holder, 85 days following the 
 26.15  publication of lists of abandoned property file with the 
 26.16  commissioner of commerce: 
 26.17     (1) a verified written explanation of the proof of claim of 
 26.18  an owner establishing a right to receive the abandoned property; 
 26.19     (2) any errors in the presumption of abandonment; 
 26.20     (3) the name, address, and exemption number of the 
 26.21  corporation or organization to which the property was or is to 
 26.22  be distributed; and 
 26.23     (4) the approximate date of distribution. 
 26.24     Sec. 25.  Minnesota Statutes 1998, section 326.975, 
 26.25  subdivision 1, is amended to read: 
 26.26     Subdivision 1.  [GENERALLY.] (a) In addition to any other 
 26.27  fees, each applicant for a license under sections 326.83 to 
 26.28  326.98 shall pay a fee to the contractor's recovery fund.  The 
 26.29  contractor's recovery fund is created in the state treasury and 
 26.30  must be administered by the commissioner in the manner and 
 26.31  subject to all the requirements and limitations provided by 
 26.32  section 82.34 with the following exceptions: 
 26.33     (1) each licensee who renews a license shall pay in 
 26.34  addition to the appropriate renewal fee an additional fee which 
 26.35  shall be credited to the contractor's recovery fund.  The amount 
 26.36  of the fee shall be based on the licensee's gross annual 
 27.1   receipts for the licensee's most recent fiscal year preceding 
 27.2   the renewal, on the following scale: 
 27.3             Fee           Gross Receipts
 27.4             $100          under $1,000,000
 27.5             $150          $1,000,000 to $5,000,000
 27.6             $200          over $5,000,000
 27.7   Any person who receives a new license shall pay a fee based on 
 27.8   the same scale; 
 27.9      (2) the sole purpose of this fund is to compensate any 
 27.10  aggrieved owner or lessee of residential property located within 
 27.11  this state who obtains a final judgment in any court of 
 27.12  competent jurisdiction against a licensee licensed under section 
 27.13  326.84, on grounds of fraudulent, deceptive, or dishonest 
 27.14  practices, conversion of funds, or failure of performance 
 27.15  arising directly out of any transaction when the judgment debtor 
 27.16  was licensed and performed any of the activities enumerated 
 27.17  under section 326.83, subdivision 19, on the owner's residential 
 27.18  property or on residential property rented by the lessee, or on 
 27.19  new residential construction which was never occupied prior to 
 27.20  purchase by the owner, or which was occupied by the licensee for 
 27.21  less than one year prior to purchase by the owner, and which 
 27.22  cause of action arose on or after April 1, 1994; 
 27.23     (3) nothing may obligate the fund for more than $50,000 per 
 27.24  claimant, nor more than $50,000 per licensee; and 
 27.25     (4) nothing may obligate the fund for claims based on a 
 27.26  cause of action that arose before the licensee paid the recovery 
 27.27  fund fee set in clause (1), or as provided in section 326.945, 
 27.28  subdivision 3.  
 27.29     (b) Should the commissioner pay from the contractor's 
 27.30  recovery fund any amount in settlement of a claim or toward 
 27.31  satisfaction of a judgment against a licensee, the license shall 
 27.32  be automatically suspended upon the effective date of an order 
 27.33  by the court authorizing payment from the fund.  No licensee 
 27.34  shall be granted reinstatement until the licensee has repaid in 
 27.35  full, plus interest at the rate of 12 percent a year, twice the 
 27.36  amount paid from the fund on the licensee's account, and has 
 28.1   obtained a surety bond issued by an insurer authorized to 
 28.2   transact business in this state in the amount of at least 
 28.3   $40,000.  
 28.4      Sec. 26.  [332.355] [AGENCY RESPONSIBILITY FOR COLLECTORS.] 
 28.5      The commissioner may take action against a collection 
 28.6   agency for any violations of debt collection laws by its debt 
 28.7   collectors.  The commissioner may also take action against the 
 28.8   debt collectors themselves for these same violations. 
 28.9      Sec. 27.  Minnesota Statutes 1998, section 345.515, is 
 28.10  amended to read: 
 28.11     345.515 [AGREEMENTS TO LOCATE REPORTED PROPERTY.] 
 28.12     It is unlawful for a person to seek or receive from another 
 28.13  person or contract with a person for a fee or compensation for 
 28.14  locating property knowing it to have been reported or paid or 
 28.15  delivered to the commissioner pursuant to chapter 345 prior to 
 28.16  seven months after the date of published notice by the 
 28.17  commissioner as required by section 345.42. 
 28.18     No agreement entered into after seven months from the date 
 28.19  of published notice by the commissioner is valid if a person 
 28.20  thereby undertakes to locate property included in a report for a 
 28.21  fee or other compensation exceeding ten percent of the value of 
 28.22  the recoverable property unless the agreement is in writing and 
 28.23  signed by the owner and discloses the nature and value of the 
 28.24  property and the name and address of the holder thereof as such 
 28.25  facts have been reported.  Nothing in this section shall be 
 28.26  construed to prevent an owner from asserting at any time that an 
 28.27  agreement to locate property is based upon an excessive or 
 28.28  unjust consideration. (a) An agreement by an owner, the primary 
 28.29  purpose of which is to locate, deliver, recover, or assist in 
 28.30  the recovery of property that is presumed abandoned, is void and 
 28.31  unenforceable if it was entered into during the period beginning 
 28.32  on the date the property was presumed abandoned and extending to 
 28.33  a time that is 24 months after the date the property is paid or 
 28.34  delivered to the administrator.  This paragraph does not apply 
 28.35  to an owner's agreement with an attorney to file a claim as to 
 28.36  identified property or contest the administrator's denial of a 
 29.1   claim. 
 29.2      (b) An agreement by an owner, the primary purpose of which 
 29.3   is to locate, deliver, recover, or assist in the recovery of 
 29.4   property, is enforceable only if the agreement is in writing, 
 29.5   clearly sets forth the nature of the property and the services 
 29.6   to be rendered, is signed by the apparent owner, and states the 
 29.7   value of the property before and after the fee or other 
 29.8   compensation has been deducted. 
 29.9      (c) If an agreement covered by this section applies to 
 29.10  mineral proceeds and the agreement contains a provision to pay 
 29.11  compensation that includes a portion of the underlying minerals 
 29.12  or any mineral proceeds not then presumed abandoned, the 
 29.13  provision is void and unenforceable. 
 29.14     (d) An agreement covered by this section that provides for 
 29.15  compensation that is unconscionable is unenforceable except by 
 29.16  the owner.  An owner who has agreed to pay compensation that is 
 29.17  unconscionable, or the administrator on behalf of the owner, may 
 29.18  maintain an action to reduce the compensation to a conscionable 
 29.19  amount.  The court may award reasonable attorney fees to an 
 29.20  owner who prevails in the action. 
 29.21     (e) This section does not preclude an owner from asserting 
 29.22  that an agreement covered by this section is invalid on grounds 
 29.23  other than unconscionable compensation. 
 29.24     Sec. 28.  [359.085] [STANDARDS OF CONDUCT FOR NOTARIAL 
 29.25  ACTS.] 
 29.26     Subdivision 1.  [ACKNOWLEDGMENTS.] In taking an 
 29.27  acknowledgment, the notarial officer must determine, either from 
 29.28  personal knowledge or from satisfactory evidence, that the 
 29.29  person appearing before the officer and making the 
 29.30  acknowledgment is the person whose true signature is on the 
 29.31  instrument. 
 29.32     Subd. 2.  [VERIFICATIONS.] In taking a verification upon 
 29.33  oath or affirmation, the notarial officer must determine, either 
 29.34  from personal knowledge or from satisfactory evidence, that the 
 29.35  person appearing before the officer and making the verification 
 29.36  is the person whose true signature is on the statement verified. 
 30.1      Subd. 3.  [WITNESSING OR ATTESTING SIGNATURES.] In 
 30.2   witnessing or attesting a signature the notarial officer must 
 30.3   determine, either from personal knowledge or from satisfactory 
 30.4   evidence, that the signature is that of the person appearing 
 30.5   before the officer and named in the document. 
 30.6      Subd. 4.  [CERTIFYING OR ATTESTING DOCUMENTS.] In 
 30.7   certifying or attesting a copy of a document or other item, the 
 30.8   notarial officer must determine that the proffered copy is a 
 30.9   full, true, and accurate transcription or reproduction of that 
 30.10  which was copied. 
 30.11     Subd. 5.  [MAKING OR NOTING PROTESTS OF NEGOTIABLE 
 30.12  INSTRUMENTS.] In making or noting a protest of a negotiable 
 30.13  instrument the notarial officer must determine the matters set 
 30.14  forth in section 336.3-505. 
 30.15     Subd. 6.  [SATISFACTORY EVIDENCE.] A notarial officer has 
 30.16  satisfactory evidence that a person is the person whose true 
 30.17  signature is on a document if that person (i) is personally 
 30.18  known to the notarial officer, (ii) is identified upon the oath 
 30.19  or affirmation of a credible witness personally known to the 
 30.20  notarial officer, or (iii) is identified on the basis of 
 30.21  identification documents. 
 30.22     Subd. 7.  [PROHIBITED ACTS.] A notarial officer may not 
 30.23  acknowledge, witness or attest to the officer's own signature, 
 30.24  or take a verification of the officer's own oath or affirmation. 
 30.25     Sec. 29.  [EFFECTIVE DATE.] 
 30.26     Sections 1, 9 to 13, 15 to 19, 22, and 25 to 28 are 
 30.27  effective the day following enactment, except that the amendment 
 30.28  made in section 16 to Minnesota Statutes 1999 Supplement, 
 30.29  section 80A.15, subdivision 2, paragraph (j), is effective 
 30.30  retroactive to August 1, 1999.