1.1                          A bill for an act 
  1.2             relating to state government; modifying programs and 
  1.3             appropriations relating to jobs and economic 
  1.4             development; transferring funds; canceling 
  1.5             appropriations; appropriating money; amending 
  1.6             Minnesota Statutes 2000, sections 116J.8731, 
  1.7             subdivisions 5, 7; 326.975, as amended; Laws 2001, 
  1.8             First Special Session chapter 4, article 1, section 4, 
  1.9             subdivision 6; repealing Minnesota Statutes 2000, 
  1.10            section 82.34, subdivisions 1, 2, 3, 4, 5, 6, 7, 8, 9, 
  1.11            10, 11, 13, 14, 16, 17, 18, 19; Minnesota Statutes 
  1.12            2001 Supplement, section 82.34, subdivisions 7a, 15. 
  1.13  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.14  Section 1.  [APPROPRIATIONS AND REDUCTIONS.] 
  1.15     The dollar amounts in the columns under "APPROPRIATIONS" 
  1.16  are added to or, if shown in parentheses, subtracted from the 
  1.17  appropriations in Laws 2001, First Special Session chapter 4, or 
  1.18  other law to the specified agencies.  The appropriations are 
  1.19  from the general fund or other named fund and are available for 
  1.20  the fiscal years indicated for each purpose.  The figure "2002" 
  1.21  or "2003" means that the addition to or subtraction from the 
  1.22  appropriations listed under the figure are for the fiscal year 
  1.23  ending June 30, 2002, or June 30, 2003, respectively. 
  1.24                          SUMMARY BY FUND
  1.25                            2002          2003           TOTAL
  1.26  General             ($  4,376,000) ($  9,990,000) ($ 14,366,000)
  1.27  Special Revenue          (125,000)      (300,000)      (425,000)
  1.28  TANF                      -0-           (750,000)      (750,000)
  1.29  Cancellations         (10,000,000)    (5,676,000)   (15,676,000)
  2.1   Transfers            (145,485,000)      (930,000)  (146,415,000)
  2.2   TOTAL             ($  159,986,000) ($ 17,646,000) ($177,632,000)
  2.3   Sec. 2.  TRADE AND ECONOMIC DEVELOPMENT 
  2.4   Subdivision 1.  Total
  2.5   Appropriation                         ($559,000)    ($4,441,000)
  2.6                 Summary By Fund 
  2.7   General                                (559,000)     (3,691,000)
  2.8   TANF                                       -0-         (750,000)
  2.9   Of these amounts: 
  2.10  (a) $600,000 the second year is a 
  2.11  reduction in the department's 
  2.12  appropriation as a result of the 
  2.13  reorganization of state agencies.  This 
  2.14  reduction is effective only if H.F. No. 
  2.15  3151 or similar legislation becomes 
  2.16  law, or if the governor reorganizes 
  2.17  state agencies by executive order on or 
  2.18  before July 1, 2003.  The department's 
  2.19  base appropriation shall be reduced by 
  2.20  an additional $400,000 in fiscal year 
  2.21  2004 and then by an additional $500,000 
  2.22  in fiscal year 2005. 
  2.23  (b) $80,000 the first year and $190,000 
  2.24  the second year are for reductions in 
  2.25  administrative costs.  The department's 
  2.26  appropriation shall be reduced an 
  2.27  additional $200,000 each year for the 
  2.28  2004-2005 biennium. 
  2.29  (c) $146,000 the first year is a 
  2.30  reduction for strike salary savings. 
  2.31  (d) Other reductions are as stated in 
  2.32  this section. 
  2.33  Subd. 2.  Business and Community
  2.34  Development                              (55,000)    (1,060,000)
  2.35  Of these amounts: 
  2.36  (a) $1,000,000 the second year is a 
  2.37  reduction in the general fund 
  2.38  appropriation for the Minnesota 
  2.39  investment fund.  The base funding for 
  2.40  this program is reduced by an 
  2.41  additional $250,000 in fiscal year 2004 
  2.42  and then by an additional $250,000 in 
  2.43  fiscal year 2005. 
  2.44  (b) $150,000 each year is added to the 
  2.45  base funding for the rural policy and 
  2.46  development center, beginning in fiscal 
  2.47  year 2004. 
  2.48  Subd. 3.  Minnesota Trade Office         (43,000)      (270,000)
  2.49  The Minnesota trade office's base 
  2.50  funding shall be increased by $52,000 
  2.51  each year of the 2004-2005 biennium 
  2.52  over its base funding for fiscal year 
  2.53  2003. 
  3.1   Subd. 4.  Workforce Development          -0-          (635,000)
  3.2   Of these amounts: 
  3.3   (a) $850,000 the second year is a 
  3.4   reduction in the appropriation for the 
  3.5   job skills partnership and pathways 
  3.6   programs. 
  3.7   (b) $250,000 the second year is an 
  3.8   appropriation for the ISEEK program, 
  3.9   and shall become the program's base 
  3.10  funding level. 
  3.11  Subd. 5.  Office of Tourism             (120,000)     (820,000)
  3.12  (a) No part of this reduction may be 
  3.13  accomplished by decreasing the grant to 
  3.14  the Mississippi River Parkway 
  3.15  Commission in Laws 2001, First Special 
  3.16  Session chapter 4, article 1, section 
  3.17  2, subdivision 5.  The office of 
  3.18  tourism's base funding shall be 
  3.19  increased by $55,000 each year in the 
  3.20  2004-2005 biennium over its base 
  3.21  funding for fiscal year 2003. 
  3.22  (b) $500,000 the second year is to 
  3.23  eliminate funding for the snowbate 
  3.24  program in the Minnesota Film Board. 
  3.25  Subd. 6.  Information and 
  3.26  Analysis                                (100,000)      (100,000)
  3.27  The base funding shall be reduced by an 
  3.28  additional $75,000 each year for the 
  3.29  2004-2005 biennium. 
  3.30  Subd. 7.  Administrative
  3.31  Support                                  (15,000)       (16,000)
  3.32  Subd. 8.  Dislocated 
  3.33  Worker Program                            
  3.34  The commissioner of finance shall 
  3.35  transfer $10,000,000 from the general 
  3.36  fund to the workforce development fund 
  3.37  for the dislocated worker program.  
  3.38  This transfer shall occur within 14 
  3.39  days following final enactment of this 
  3.40  act.  
  3.41  Subd. 9.  Biomedical Innovation
  3.42  and Commercialization Initiative     
  3.43  The Laws 2001, First Special Session 
  3.44  chapter 5, article 19, section 2, 
  3.45  appropriation of $10,000,000 for the 
  3.46  biomedical innovation and 
  3.47  commercialization initiative is 
  3.48  canceled to the general fund.  This 
  3.49  cancellation is effective the day 
  3.50  following final enactment. 
  3.51  Subd. 10.  Health Care Workers
  3.52  Training                                 -0-           (750,000)
  3.53  This appropriation is from the state's 
  3.54  TANF block grant.  The unobligated 
  3.55  balance for the health care and human 
  3.56  services worker training and retention 
  4.1   program under Minnesota Statutes, 
  4.2   section 116L.10, is canceled. 
  4.3   Sec. 3.  MINNESOTA TECHNOLOGY, 
  4.4   INC.                                     -0-         (1,000,000)
  4.5   The base funding is reduced by an 
  4.6   additional $500,000 each year for the 
  4.7   2004-2005 biennium. 
  4.8   Sec. 4.  ECONOMIC SECURITY              (205,000)    (1,200,000)
  4.9                 Summary by Fund
  4.10  General Fund            (80,000)     (800,000)
  4.11  Special Revenue        (125,000)     (400,000)
  4.12  Subdivision 1.  Youth Intervention
  4.13  Program                              -0-               (300,000)
  4.14  Subd. 2.  Minnesota Youth Program    -0-               (500,000)
  4.15  Subd. 3.  Displaced Homemakers
  4.16  Program                                 (125,000)      (400,000)
  4.17  This appropriation is from the 
  4.18  workforce development fund. 
  4.19  Subd. 4.  Strike Salary
  4.20  Savings                                  (80,000)         -0-
  4.21  Sec. 5.  HOUSING FINANCE
  4.22  AGENCY                                (2,497,000)    (2,632,000)
  4.23  $170,000 is reduced from the fiscal 
  4.24  year 2003 appropriation for nonprofit 
  4.25  capacity building grants.  Base funding 
  4.26  for this program is $170,000 each year 
  4.27  beginning July 1, 2003. 
  4.28  Base funding for the housing 
  4.29  rehabilitation and accessibility 
  4.30  program is $4,062,000 each year 
  4.31  beginning July 1, 2003. 
  4.32  $1,897,000 is reduced from the fiscal 
  4.33  year 2002 appropriation and $1,837,000 
  4.34  is reduced from the fiscal year 2003 
  4.35  appropriation for the economic 
  4.36  development and housing challenge 
  4.37  program.  Base funding for this program 
  4.38  is $9,804,000 each year beginning July 
  4.39  1, 2003. 
  4.40  The $400,000 appropriation to the 
  4.41  manufactured home park redevelopment 
  4.42  program under Laws 2001, First Special 
  4.43  Session chapter 4, article 1, section 
  4.44  5, subdivision 13, is canceled. 
  4.45  Sec. 6.  COMMERCE
  4.46  Subdivision 1.  Total
  4.47  Appropriation                           (506,000)      (376,000)
  4.48  $50,000 the first year and $125,000 the 
  4.49  second year are for administrative cost 
  4.50  reductions.  The department's base 
  4.51  funding shall be reduced an additional 
  4.52  $25,000 each year for the 2004-2005 
  5.1   biennium.  $353,000 the first year is a 
  5.2   reduction for strike salary savings. 
  5.3   Subd. 2.  Administrative
  5.4   Services                                 (44,000)      (104,000)
  5.5   Subd. 3.  Weights and Measures           (59,000)      (147,000)
  5.6   Sec. 7.  LABOR AND INDUSTRY             (304,000)      (361,000)
  5.7                 Summary by Fund
  5.8   General                (304,000)     (461,000)
  5.9   Special Revenue         -0-           100,000 
  5.10  $50,000 the first year and $100,000 the 
  5.11  second year are for staff reductions.  
  5.12  $100,000 the second year is a transfer 
  5.13  from the workforce development fund for 
  5.14  statewide and agency indirect costs 
  5.15  associated with the apprenticeship 
  5.16  program. 
  5.17  Sec. 8.  BUREAU OF MEDIATION 
  5.18  SERVICES                                 (30,000)       (30,000)
  5.19  These amounts reduce labor-management 
  5.20  cooperation grants.  Base funding for 
  5.21  labor-management cooperation grants is 
  5.22  $102,000 each year for the 2004-2005 
  5.23  biennium. 
  5.24  Sec. 9.  MINNESOTA HISTORICAL SOCIETY 
  5.25  Subdivision 1.  Total 
  5.26  Appropriation                           (400,000)    (1,000,000)
  5.27  It is the intention of the legislature 
  5.28  that all reductions in the society's 
  5.29  budget be implemented with the smallest 
  5.30  possible reduction in services and, if 
  5.31  possible, without the closing of sites. 
  5.32  Subd. 2.  Education
  5.33  and Outreach                            (224,000)      (560,000)
  5.34  Subd. 3.  Preservation
  5.35  and Access                              (176,000)      (440,000)
  5.36     Sec. 10.  [CANCELLATIONS.] 
  5.37     Subdivision 1.  [JOURNEY TRAVEL INFORMATION SYSTEM.] The 
  5.38  Laws 1999, chapter 223, article 1, section 2, subdivision 5, 
  5.39  appropriation to the office of tourism to fund the Journey 
  5.40  travel information system is canceled to the general fund. 
  5.41     Subd. 2.  [PATHWAYS PROGRAM.] Temporary assistance to needy 
  5.42  families funding from the pathways program from Laws 1999, 
  5.43  chapter 223, article 1, section 2, subdivision 2, is eliminated 
  5.44  as of July 1, 2002. 
  5.45     Sec. 11.  [ADDITIONAL TRANSFERS.] 
  5.46     Subdivision 1.  [RURAL POLICY DEVELOPMENT CENTER FUND.] By 
  6.1   June 30, 2002, the commissioner of finance shall transfer 
  6.2   $1,000,000 from the rural policy development center fund 
  6.3   established in Minnesota Statutes, section 116J.422, to the 
  6.4   general fund.  After July 1, 2003, and before June 30, 2004, the 
  6.5   commissioner shall transfer an additional $1,000,000 from the 
  6.6   rural policy development center fund to the general fund. 
  6.7      Subd. 2.  [REAL ESTATE EDUCATION, RESEARCH, AND RECOVERY 
  6.8   FUND.] By June 15, 2002, the commissioner of finance shall 
  6.9   transfer $3,200,000 from the real estate education, research, 
  6.10  and recovery fund established under Minnesota Statutes, section 
  6.11  82.34, to the general fund.  By June 30, 2002, the remaining 
  6.12  unobligated balance of the real estate education, research, and 
  6.13  recovery fund shall be transferred to the contractor's recovery 
  6.14  fund established under Minnesota Statutes, section 326.975. 
  6.15     Subd. 3.  [MINNESOTA MINERALS 21ST CENTURY FUND.] By June 
  6.16  30, 2002, the commissioner of finance shall transfer $35,735,000 
  6.17  from the Minnesota minerals 21st century fund established in 
  6.18  Minnesota Statutes, section 116J.423, to the general fund.  
  6.19  Within 14 days of enactment of this chapter, the commissioner 
  6.20  shall transfer $10,000,000 from the Minnesota minerals 21st 
  6.21  century fund established in Minnesota Statutes, section 
  6.22  116J.423, to the workforce development fund.  This subdivision 
  6.23  is effective the day following final enactment. 
  6.24     Subd. 4.  [WORKERS' COMPENSATION ASSIGNED RISK PLAN EXCESS 
  6.25  SURPLUS.] (a) "Excess surplus" means the amount of the Minnesota 
  6.26  workers' compensation assigned risk plan funds that exceeds the 
  6.27  amount necessary to pay all current liabilities of this plan, 
  6.28  including, but not limited to: 
  6.29     (1) administrative expenses; 
  6.30     (2) benefit claims; and 
  6.31     (3) in the event that the Minnesota workers' compensation 
  6.32  assigned risk plan is dissolved under Minnesota Statutes, 
  6.33  section 79.251, subdivision 8, the amounts that would be due 
  6.34  insurers who have paid assessments to this plan. 
  6.35     (b) On or before June 15, 2002, the commissioner of 
  6.36  commerce shall certify to the commissioner of finance the amount 
  7.1   of the Minnesota workers' compensation assigned risk plan excess 
  7.2   surplus.  On or before June 15, 2002, the commissioner of 
  7.3   finance and the commissioner of commerce must direct the 
  7.4   transfer of $95,975,000 of assets of the assigned risk plan 
  7.5   excess surplus to the general fund.  The transfer of funds 
  7.6   authorized by this paragraph is not subject to review under 
  7.7   Minnesota Statutes, chapter 14. 
  7.8      (c) Once during fiscal year 2004 and once during fiscal 
  7.9   year 2005, the commissioner of commerce shall certify to the 
  7.10  commissioner of finance the amount of the Minnesota workers' 
  7.11  compensation assigned risk plan excess surplus.  Once during 
  7.12  fiscal year 2004 and once during fiscal year 2005, the 
  7.13  commissioner of finance and the commissioner of commerce must 
  7.14  direct the transfer of $320,000 of assets of the assigned risk 
  7.15  plan excess surplus to the general fund.  The transfer of funds 
  7.16  authorized by this paragraph is not subject to review under 
  7.17  Minnesota Statutes, chapter 14. 
  7.18     Subd. 5.  [WORLD TRADE CONFERENCE CENTER.] All special 
  7.19  revenue accounts for the World Trade Conference Center in the 
  7.20  trade office are transferred to the general fund. 
  7.21     Sec. 12.  [TRANSFER.] 
  7.22     On July 1, 2003, the commissioner of finance shall transfer 
  7.23  $200,000,000 in assets of the excess surplus account within the 
  7.24  special compensation fund created under Minnesota Statutes, 
  7.25  section 176.129, to the general fund. 
  7.26     Sec. 13.  [CONTINGENCY TRANSFER REDUCTION.] 
  7.27     If the forecast of general fund revenues and expenditures 
  7.28  issued in November or December 2002 as required in Minnesota 
  7.29  Statutes, section 16A.103, determines that the unrestricted 
  7.30  general fund balance on June 30, 2005, will be positive, the 
  7.31  transfer in section 12 is reduced by the positive amount.  The 
  7.32  transfer must not be less than zero. 
  7.33     Sec. 14.  Minnesota Statutes 2000, section 116J.8731, 
  7.34  subdivision 5, is amended to read: 
  7.35     Subd. 5.  [GRANT LIMITS.] A Minnesota investment fund grant 
  7.36  may not be approved for an amount in excess of $500,000.  This 
  8.1   limit covers all money paid to complete the same project, 
  8.2   whether paid to one or more grant recipients and whether paid in 
  8.3   one or more fiscal years.  The portion of a Minnesota investment 
  8.4   fund grant that exceeds $100,000 must be repaid to the state 
  8.5   when it is repaid to the local community or recognized Indian 
  8.6   tribal government by the person or entity to which it was loaned 
  8.7   by the local community or Indian tribal government.  Money 
  8.8   repaid to the state must be credited to the general fund a 
  8.9   Minnesota investment revolving loan account.  Funds in the 
  8.10  account must be used in the same manner as are funds 
  8.11  appropriated to the Minnesota investment fund.  Funds repaid to 
  8.12  the state through existing Minnesota investment fund agreements 
  8.13  must be credited to the Minnesota investment revolving loan 
  8.14  account effective July 1, 2001.  A grant or loan may not be made 
  8.15  to a person or entity for the operation or expansion of a casino 
  8.16  or a store which is used solely or principally for retail sales. 
  8.17  Persons or entities receiving grants or loans must pay each 
  8.18  employee total compensation, including benefits not mandated by 
  8.19  law, that on an annualized basis is equal to at least 110 
  8.20  percent of the federal poverty level for a family of four. 
  8.21     Sec. 15.  Minnesota Statutes 2000, section 116J.8731, 
  8.22  subdivision 7, is amended to read: 
  8.23     Subd. 7.  [CONTRACTUAL OBLIGATION.] A business receiving 
  8.24  Minnesota investment fund grants must demonstrate why the grant 
  8.25  is necessary for a project and enter into an agreement with the 
  8.26  local grantor.  The agreement, among other things, must obligate 
  8.27  the recipient to pay the minimum compensation set by this 
  8.28  section and meet job creation goals.  A recipient that breaches 
  8.29  the agreement must repay the grant directly to the 
  8.30  commissioner.  Repayments under this subdivision must be 
  8.31  deposited in the general fund Minnesota investment revolving 
  8.32  loan account. 
  8.33     Sec. 16.  Minnesota Statutes 2000, section 326.975, as 
  8.34  amended by Laws 2001, chapter 208, section 23, is amended to 
  8.35  read: 
  8.36     326.975 [CONTRACTOR'S CONTRACTOR AND REAL ESTATE RECOVERY 
  9.1   FUND.] 
  9.2      Subdivision 1.  [GENERALLY.] (a) In addition to any other 
  9.3   fees, each applicant for a license under sections 326.83 to 
  9.4   326.98 and each real estate broker, real estate salesperson, and 
  9.5   real estate closing agent entitled under chapter 82 to renew a 
  9.6   license shall pay a fee to the contractor's contractor and real 
  9.7   estate recovery fund.  The contractor's contractor and real 
  9.8   estate recovery fund is created in the state treasury and must 
  9.9   be administered by the commissioner in the manner and subject to 
  9.10  all the requirements and limitations provided by section 82.34 
  9.11  with the following exceptions as follows: 
  9.12     (1) each licensee under sections 326.83 to 326.98 who 
  9.13  renews a license shall pay in addition to the appropriate 
  9.14  renewal fee an additional fee which shall be credited to the 
  9.15  contractor's recovery fund.  The amount of the fee shall be 
  9.16  based on the licensee's gross annual receipts for the licensee's 
  9.17  most recent fiscal year preceding the renewal, on the following 
  9.18  scale: 
  9.19            Fee           Gross Receipts
  9.20            $100          under $1,000,000
  9.21            $150          $1,000,000 to $5,000,000
  9.22            $200          over $5,000,000
  9.23  Any person who receives a new license shall pay a fee based on 
  9.24  the same scale; 
  9.25     (2) each licensee under chapter 82 who renews a license 
  9.26  shall pay in addition to the appropriate renewal fee an 
  9.27  additional fee of $20 which shall be credited to the contractor 
  9.28  and real estate recovery fund, and each licensee under chapter 
  9.29  82 who obtains an initial license shall pay in addition to the 
  9.30  appropriate initial licensing fee an additional fee of $30 which 
  9.31  shall be credited to the contractor and real estate recovery 
  9.32  fund; 
  9.33     (3) the sole purpose purposes of this fund is are: 
  9.34     (i) to compensate any aggrieved owner or lessee of 
  9.35  residential property located within this state who obtains a 
  9.36  final judgment in any court of competent jurisdiction against a 
 10.1   licensee licensed under section 326.84, on grounds of 
 10.2   fraudulent, deceptive, or dishonest practices, conversion of 
 10.3   funds, or failure of performance arising directly out of any 
 10.4   transaction when the judgment debtor was licensed and performed 
 10.5   any of the activities enumerated under section 326.83, 
 10.6   subdivision 19, on the owner's residential property or on 
 10.7   residential property rented by the lessee, or on new residential 
 10.8   construction which was never occupied prior to purchase by the 
 10.9   owner, or which was occupied by the licensee for less than one 
 10.10  year prior to purchase by the owner, and which cause of action 
 10.11  arose on or after April 1, 1994; and 
 10.12     (ii) to compensate any aggrieved person who obtains a final 
 10.13  judgment in any court of competent jurisdiction, regardless of 
 10.14  whether the judgment has been discharged by a bankruptcy court, 
 10.15  against an individual licensed under chapter 82, on grounds of 
 10.16  fraudulent, deceptive, or dishonest practices, or conversion of 
 10.17  trust funds arising directly out of any transaction when the 
 10.18  judgment debtor was licensed and performed acts for which a 
 10.19  license is required under chapter 82, or performed acts 
 10.20  permitted by section 327B.04, subdivision 5.  An aggrieved 
 10.21  person under this paragraph may, upon the judgment becoming 
 10.22  final, and upon termination of all proceedings, including 
 10.23  reviews and appeals, file a verified application in the court in 
 10.24  which the judgment was entered.  The application shall state 
 10.25  with specificity the grounds upon which the application seeks to 
 10.26  recover from the fund, and request an order directing payment 
 10.27  out of the fund of the amount of actual and direct out of pocket 
 10.28  loss in the transaction, but excluding any attorney's fees, 
 10.29  interest on the loss and on any judgment obtained as a result of 
 10.30  the loss, up to the sum of $150,000 of the amount unpaid upon 
 10.31  the judgment, provided that nothing in this chapter shall be 
 10.32  construed to obligate the fund for more than $150,000 per 
 10.33  claimant, per transaction, subject to the limitations set forth 
 10.34  in subdivision 14, regardless of the number of persons aggrieved 
 10.35  or parcels of real estate involved in the transaction, provided 
 10.36  that regardless of the number of claims against a licensee, 
 11.1   nothing in this chapter may obligate the fund for more than 
 11.2   $250,000 per licensee.  An aggrieved person who has a cause of 
 11.3   action under section 80A.23 shall first seek recovery as 
 11.4   provided in section 80A.05, subdivision 5, before the 
 11.5   commissioner may order payment from the recovery fund.  For 
 11.6   purposes of this section, persons who are joint tenants or 
 11.7   tenants in common are deemed to be a single claimant.  A copy of 
 11.8   the verified application shall be served upon the commissioner 
 11.9   and upon the judgment debtor, and a certificate or affidavit of 
 11.10  service filed with the court.  For the purpose of this 
 11.11  paragraph, "aggrieved person" does not include a government 
 11.12  agency, financial institution, or other entity that purchases, 
 11.13  guarantees, or insures a loan secured by real estate, and does 
 11.14  not include a licensee unless (A) the licensee is acting in the 
 11.15  capacity of principal in the sale of interests in real property 
 11.16  owned by the licensee; or (B) the licensee is acting in the 
 11.17  capacity of principal in the purchase of interests in real 
 11.18  property to be owned by the licensee.  Under no circumstances 
 11.19  shall a licensee be entitled to payment under this section for 
 11.20  the loss of a commission or similar fee. 
 11.21     For the purposes of this section, recovery is limited to 
 11.22  transactions where the property involved is intended for the 
 11.23  direct personal habitation or commercial use of the buyer. 
 11.24     Except for securities permitted to be sold by a licensee 
 11.25  pursuant to section 82.19, subdivision 7, for any action 
 11.26  commenced after July 1, 1993, recovery under this section is not 
 11.27  available where the buyer's participation is for investment 
 11.28  purposes only, and is limited to providing capital to fund the 
 11.29  transaction. 
 11.30     (3) (4) in cases arising under clause (3), item (i), 
 11.31  nothing may obligate the fund for more than $50,000 per 
 11.32  claimant, nor more than $75,000 per licensee; and 
 11.33     (4) (5) nothing may obligate the fund for claims based on a 
 11.34  cause of action that arose before the licensee paid the recovery 
 11.35  fund fee set in clause (1) or (2), or as provided in section 
 11.36  326.945, subdivision 3.  
 12.1      (b) Should the commissioner pay from the contractor's 
 12.2   recovery fund any amount in settlement of a claim or toward 
 12.3   satisfaction of a judgment against a licensee, the license shall 
 12.4   be automatically suspended upon the effective date of an order 
 12.5   by the court authorizing payment from the fund.  No licensee 
 12.6   shall be granted reinstatement until the licensee has repaid in 
 12.7   full, plus interest at the rate of 12 percent a year, twice the 
 12.8   amount paid from the fund on the licensee's account, and has 
 12.9   obtained a surety bond issued by an insurer authorized to 
 12.10  transact business in this state in the amount of at least 
 12.11  $40,000.  
 12.12     (c) Any funds shall, upon request of the commissioner, be 
 12.13  invested by the state board of investment in the class of 
 12.14  securities specified in section 11A.24 and acts amendatory 
 12.15  thereto.  All interest and profits from such investments shall 
 12.16  be credited to the fund.  The state treasurer shall be the 
 12.17  custodian of securities purchased under the provisions of this 
 12.18  section. 
 12.19     Subd. 2.  [ACCELERATED CLAIMS PAYMENT.] Recovery fund 
 12.20  claims that do not exceed the jurisdiction limits for 
 12.21  conciliation court matters as specified in section 491A.01 shall 
 12.22  be paid on an accelerated basis if all of the following 
 12.23  requirements have been satisfied: 
 12.24     (a) When any aggrieved person obtains a judgment in any 
 12.25  court of competent jurisdiction, regardless of whether the 
 12.26  judgment has been discharged by a bankruptcy court against a 
 12.27  residential building contractor or residential remodeler on 
 12.28  grounds specified in subdivision 1, paragraph (a), 
 12.29  clause (2) (3), item (i) or (ii), the aggrieved person may file 
 12.30  a verified application with the commissioner for payment out of 
 12.31  the fund of the amount of actual and direct out-of-pocket loss 
 12.32  in the transaction, but excluding any attorney fees, interest on 
 12.33  the loss and on any judgment obtained as a result of the loss, 
 12.34  up to the conciliation court jurisdiction limits, of the amount 
 12.35  unpaid upon the judgment.  For purposes of this section, persons 
 12.36  who are joint tenants or tenants in common are deemed to be a 
 13.1   single claimant. 
 13.2      (b) The commissioner has sent the licensee a copy of the 
 13.3   verified application by first-class mail to the licensee's 
 13.4   address as it appears in the records of the department of 
 13.5   commerce with a notice that the claim will be paid 15 days from 
 13.6   the date of the notice unless the licensee notifies the 
 13.7   commissioner prior to that date of the commencement of an appeal 
 13.8   of the judgment, if the time for appeal has not expired, and 
 13.9   that payment of the claim will result in automatic suspension of 
 13.10  the licensee's license. 
 13.11     (c) If the licensee does not notify the commissioner of the 
 13.12  commencement of an appeal, the commissioner shall pay the claim 
 13.13  at the end of the 15-day period. 
 13.14     (d) If an appeal is commenced, the payment of the claim is 
 13.15  stayed until the conclusion of the appeal. 
 13.16     (e) The commissioner may pay claims which total no more 
 13.17  than $15,000 against the licensee under this accelerated 
 13.18  process.  The commissioner may prorate the amount of claims paid 
 13.19  under this subdivision if claims in excess of $15,000 against 
 13.20  the licensee are submitted.  Any unpaid portions of such claims 
 13.21  shall be satisfied in the manner set forth in subdivision 1. 
 13.22     Subd. 3.  [APPROPRIATION.] Money in the contractor's 
 13.23  contractor and real estate recovery fund is appropriated to the 
 13.24  commissioner for the purposes of this section. 
 13.25     Subd. 3a.  The court shall conduct a hearing upon 
 13.26  application under subdivision 1 within 30 days after service of 
 13.27  the application upon the commissioner.  Upon petition of the 
 13.28  commissioner, the court shall continue the hearing up to 60 days 
 13.29  further; and upon a showing of good cause may continue the 
 13.30  hearing for such further period as the court deems appropriate.  
 13.31  At the hearing, the aggrieved person shall be required to show 
 13.32  that the person: 
 13.33     (1) is not a spouse of the debtor, or the personal 
 13.34  representative of the spouse; 
 13.35     (2) has complied with all the requirements of this section; 
 13.36     (3) has obtained a judgment as set out in subdivision 1, 
 14.1   stating the amount of the judgment and the amount owing thereon 
 14.2   at the date of the application; 
 14.3      (4) has made all reasonable searches and inquiries to 
 14.4   ascertain whether the judgment debtor is possessed of real or 
 14.5   personal property or other assets, liable to be sold or applied 
 14.6   in satisfaction of the judgment; 
 14.7      (5) by such search has discovered no personal or real 
 14.8   property or other assets liable to be sold or applied, or has 
 14.9   discovered certain of them, describing them, owned by the 
 14.10  judgment debtor and liable to be so applied, and has taken all 
 14.11  necessary action and proceedings for the realization thereof, 
 14.12  and that the amount thereby realized was insufficient to satisfy 
 14.13  the judgment, stating the amount so realized and the balance 
 14.14  remaining due on the judgment after application of the amount 
 14.15  realized; 
 14.16     (6) has diligently pursued remedies against all the 
 14.17  judgment debtors and all other persons liable to that person in 
 14.18  the transaction for which that person seeks recovery from the 
 14.19  fund; 
 14.20     (7) is making said application no more than one year after 
 14.21  the judgment becomes final, or no more than one year after the 
 14.22  termination of any review or appeal of the judgment. 
 14.23     Subd. 4.  Whenever the court proceeds upon an application 
 14.24  as set forth in subdivision 1, it shall order payment out of the 
 14.25  fund only upon a determination that the aggrieved party has a 
 14.26  valid cause of action within the purview of subdivision 1 and 
 14.27  has complied with the provisions of subdivision 3.  The judgment 
 14.28  shall be only prima facie evidence of such cause of action and 
 14.29  for the purposes of this section shall not be conclusive.  The 
 14.30  commissioner may defend any such action on behalf of the fund 
 14.31  and shall have recourse to all appropriate means of defense and 
 14.32  review including examination of witnesses.  The commissioner may 
 14.33  move the court at any time to dismiss the application when it 
 14.34  appears there are no triable issues and the petition is without 
 14.35  merit.  The motion may be supported by affidavit of any person 
 14.36  or persons having knowledge of the facts, and may be made on the 
 15.1   basis that the petition, and the judgment referred to therein, 
 15.2   does not form the basis for a meritorious recovery claim within 
 15.3   the purview of subdivision 1; provided, however, the 
 15.4   commissioner shall give written notice at least ten days before 
 15.5   such motion.  The commissioner may, subject to court approval, 
 15.6   compromise a claim based upon the application of an aggrieved 
 15.7   party but shall not be bound by any prior compromise or 
 15.8   stipulation of the judgment debtor. 
 15.9      Subd. 5.  The commissioner may defend any such action on 
 15.10  behalf of the fund and shall have recourse to all appropriate 
 15.11  means of defense and review, including examination of 
 15.12  witnesses.  The judgment debtor may defend any such action on 
 15.13  the debtor's own behalf and shall have recourse to all 
 15.14  appropriate means of defense and review, including examination 
 15.15  of witnesses.  Whenever an applicant's judgment is by default, 
 15.16  stipulation, or consent, or whenever the action against the 
 15.17  licensee was defended by a trustee in bankruptcy, the applicant 
 15.18  shall have the burden of proving the cause of action for 
 15.19  fraudulent, deceptive, or dishonest practices, or conversion of 
 15.20  trust funds.  Otherwise, the judgment shall create a rebuttable 
 15.21  presumption of the fraudulent, deceptive, or dishonest 
 15.22  practices, or conversion of trust funds.  This presumption is a 
 15.23  presumption affecting the burden of producing evidence. 
 15.24     Subd. 6.  If the court finds after the hearing that said 
 15.25  claim should be levied against the fund, the court shall enter 
 15.26  an order directed to the commissioner requiring payment from the 
 15.27  fund of whatever sum it shall find to be payable upon the claim 
 15.28  pursuant to the provisions of and in accordance with the 
 15.29  limitations contained in this section. 
 15.30     Subd. 7.  Should the commissioner pay from the recovery 
 15.31  portion of the fund any amount in settlement of a claim or 
 15.32  toward satisfaction of a judgment against a licensee, the 
 15.33  license shall be automatically suspended upon the effective date 
 15.34  of an order by the court as set forth herein authorizing payment 
 15.35  from the recovery portion of the fund.  No licensee shall be 
 15.36  granted reinstatement until the person has repaid in full, plus 
 16.1   interest at the rate of 12 percent a year, twice the amount paid 
 16.2   from the fund on the person's account, and has obtained a surety 
 16.3   bond issued by an insurer authorized to transact business in 
 16.4   this state in the amount of $40,000.  The bond shall be filed 
 16.5   with the commissioner, with the state of Minnesota as obligee, 
 16.6   conditioned for the prompt payment to any aggrieved person 
 16.7   entitled thereto, of any amounts received by the licensee or to 
 16.8   protect any aggrieved person from loss resulting from 
 16.9   fraudulent, deceptive, or dishonest practices or conversion of 
 16.10  trust funds arising out of any transaction when the licensee was 
 16.11  licensed and performed acts for which a license is required 
 16.12  under chapter 82 or sections 326.83 to 326.98.  The bond shall 
 16.13  remain operative for as long as that licensee is licensed.  No 
 16.14  payment shall be made from the fund based upon claims against 
 16.15  any licensee who is granted reinstatement pursuant to this 
 16.16  subdivision.  A discharge in bankruptcy shall not relieve a 
 16.17  person from the penalties and disabilities provided in this 
 16.18  section. 
 16.19     Subd. 8.  The commissioner shall satisfy all claims against 
 16.20  licensees for which an order pursuant to subdivision 6 directing 
 16.21  payment from the recovery portion of the fund has become final 
 16.22  during the calendar year.  Each claim shall be satisfied by the 
 16.23  commissioner by July 15 of the calendar year after the year in 
 16.24  which the order directing payment of the claim becomes final, 
 16.25  subject to the limitations of this section.  If, at the end of 
 16.26  any calendar year, the commissioner determines that the courts 
 16.27  have issued orders that have become final during the year 
 16.28  directing payment out of the fund in a total amount in excess of 
 16.29  the funds available for recovery purposes, the commissioner 
 16.30  shall allocate the funds available for recovery purposes among 
 16.31  all claimants in the ratio that the amount ordered paid to each 
 16.32  claimant bears to the aggregate of all amounts ordered paid.  
 16.33  The commissioner shall mail notice of the allocation to all 
 16.34  claimants not less than 45 days following the end of the 
 16.35  calendar year.  Any claimant who objects to the plan of 
 16.36  allocation shall file a petition in the district court of Ramsey 
 17.1   or Hennepin county within 20 days of the mailing of notice 
 17.2   setting forth the grounds for objection.  Upon motion of the 
 17.3   commissioner, the court shall summarily dismiss the petition and 
 17.4   order distribution in accordance with the proposed plan of 
 17.5   allocation unless it finds substantial reason to believe that 
 17.6   the distribution would be in violation of the provisions of this 
 17.7   section.  If a petition is filed, no distribution shall be made 
 17.8   except in accordance with a final order of the court.  In the 
 17.9   event no petition is filed within 20 days of the mailing of 
 17.10  notice, the commissioner shall make a distribution in accordance 
 17.11  with the plan of allocation.  Any distribution made by the 
 17.12  commissioner in accordance with this subdivision shall be deemed 
 17.13  to satisfy and extinguish the claims of any claimant receiving a 
 17.14  distribution against the fund. 
 17.15     Subd. 9.  Any sums received by the commissioner pursuant to 
 17.16  any provisions of this section shall be deposited in the state 
 17.17  treasury, and credited to the contractor and real estate 
 17.18  recovery fund, and said sums shall be allocated exclusively for 
 17.19  the purposes provided in this section.  All moneys in the fund 
 17.20  are appropriated annually to the commissioner for the purposes 
 17.21  of this section. 
 17.22     Subd. 10.  It shall be unlawful for any person or the agent 
 17.23  of any person to knowingly file with the commissioner any 
 17.24  notice, statement, or other document required under the 
 17.25  provisions of this section which is false or untrue or contains 
 17.26  any material misstatement of fact.  Such conduct shall 
 17.27  constitute a gross misdemeanor. 
 17.28     Subd. 11.  When, upon the order of the court, the 
 17.29  commissioner has paid from the recovery portion of the fund any 
 17.30  sum to the judgment creditor, the commissioner shall be 
 17.31  subrogated to all of the rights of the judgment creditor to the 
 17.32  extent of the amount so paid and the judgment creditor shall 
 17.33  assign all right, title and interest in the judgment to the 
 17.34  extent of the amount so paid to the commissioner and any amount 
 17.35  and interest so recovered by the commissioner on the judgment 
 17.36  shall be deposited to the fund. 
 18.1      Subd. 12.  Nothing contained in this section shall limit 
 18.2   the authority of the commissioner to take disciplinary action 
 18.3   against any licensee under other provisions of this chapter; nor 
 18.4   shall the repayment in full of all obligations to the fund by 
 18.5   any licensee nullify or modify the effect of any other 
 18.6   disciplinary proceeding brought pursuant to the provisions of 
 18.7   this chapter. 
 18.8      Subd. 13.  The commissioner shall, on or before October 1 
 18.9   in each even-numbered year, prepare and file in the office of 
 18.10  the governor for the preceding two fiscal years ending June 30 a 
 18.11  report on the activities of the real estate education, research 
 18.12  and recovery fund; noting the amount of money received by the 
 18.13  fund, the amount of money expended, and the purposes therefore. 
 18.14     Sec. 17.  Laws 2001, First Special Session chapter 4, 
 18.15  article 1, section 4, subdivision 6, is amended to read: 
 18.16  Subd. 6.  Economic Security Contingent Account
 18.17  Beginning in the 2002-2003 biennium, 
 18.18  the first $2,000,000 deposited in each 
 18.19  year of the biennium into the economic 
 18.20  security contingent account created 
 18.21  under Minnesota Statutes, section 
 18.22  268.196, subdivision 3, shall be 
 18.23  transferred upon deposit to the 
 18.24  workforce development fund.  Deposits 
 18.25  in excess of the $2,000,000 shall be 
 18.26  used for purposes of the economic 
 18.27  security contingent account.  It is the 
 18.28  intent of the legislature that in 
 18.29  future years, $2,000,000 each year will 
 18.30  be transferred in this 
 18.31  manner transferred upon deposit to the 
 18.32  general fund. 
 18.33     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 18.34  following final enactment. 
 18.35     Sec. 18.  [REPEALER.] 
 18.36     Minnesota Statutes 2000, sections 82.34, subdivisions 1, 2, 
 18.37  3, 4, 5, 6, 7, 8, 9, 10, 11, 13, 14, 16, 17, 18, and 19; and 
 18.38  Minnesota Statutes 2001 Supplement, section 82.34, subdivisions 
 18.39  7a and 15, are repealed.