1.1 	A bill for an act
1.2 	relating to housing; providing for the licensure of
1.3 	manufactured and industrialized/modular home sales;
1.4 	authorizing rules; amending Minnesota Statutes 2004,
1.5 	sections 327B.01, by adding a subdivision; 327B.04,
1.6 	subdivisions 1, 4; proposing coding for new law in
1.7 	Minnesota Statutes, chapters 16B; 327B.
1.8 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.9 	Section 1. [16B.751] SALES OF INDUSTRIALIZED/MODULAR
1.10 	BUILDINGS.
1.11 	Salespersons and brokers of industrialized/modular homes
1.12 	must be licensed under sections 327B.041 to 327B.045.  A dealer
1.13 	of industrialized/modular homes must be a licensed manufactured
1.14 	home dealer under chapter 327B, a licensed residential
1.15 	contractor under chapter 326, or a licensed real estate broker
1.16 	under chapter 82.

1.17 	Sec. 2. Minnesota Statutes 2004, section 327B.01, is
1.18 	amended by adding a subdivision to read:
1.19 		Subd. 7a.Employer. "Employer" means a licensed
1.20 	manufactured home dealer, a licensed residential contractor
1.21 	under chapter 326, or a licensed real estate broker under
1.22 	chapter 82.

1.23 	Sec. 3. Minnesota Statutes 2004, section 327B.04,
1.24 	subdivision 1, is amended to read:
1.25 		Subdivision 1.License and bond required.  No person
1.26 	shall act as a dealer in manufactured homes, new or used,
2.1 	without a license and a surety bond as provided in this
2.2 	section.  No person shall manufacture manufactured homes without
2.3 	a license and a surety bond as provided in this section.  The
2.4 	licensing and bonding requirements of this section do not apply
2.5 	to any bank, savings bank, savings association, or credit union,
2.6 	chartered by either this state or the federal government, which
2.7 	acts as a dealer only by repossessing manufactured homes and
2.8 	then offering the homes for resale.
2.9 	A dealer of industrialized/modular homes, as defined in
2.10 	section 16B.75, must be licensed as a dealer under this section,
2.11 	as a residential contractor under chapter 326, or as a real
2.12 	estate broker under chapter 82.

2.13 	Sec. 4. Minnesota Statutes 2004, section 327B.04,
2.14 	subdivision 4, is amended to read:
2.15 		Subd. 4.License prerequisites.  No application shall be
2.16 	granted nor license issued until the applicant proves to the
2.17 	commissioner that:
2.18 	(a) the applicant has a permanent, established place of
2.19 	business at each licensed location.  An "established place of
2.20 	business" means a permanent enclosed building other than a
2.21 	residence, or a commercial office space, either owned by the
2.22 	applicant or leased by the applicant for a term of at least one
2.23 	year, located in an area where zoning regulations allow
2.24 	commercial activity, and where the books, records and files
2.25 	necessary to conduct the business are kept and maintained.  The
2.26 	owner of a licensed manufactured home park who resides in or
2.27 	adjacent to the park may use the residence as the established
2.28 	place of business required by this subdivision, unless
2.29 	prohibited by local zoning ordinance.
2.30 	If a license is granted, the licensee may use unimproved
2.31 	lots and premises for sale, storage, and display of manufactured
2.32 	homes, if the licensee first notifies the commissioner in
2.33 	writing;
2.34 	(b) if the applicant desires to sell, solicit or advertise
2.35 	the sale of new manufactured homes, it has a bona fide contract
2.36 	or franchise in effect with a manufacturer or distributor of the
3.1 	new manufactured home it proposes to deal in;
3.2 	(c) the applicant has secured a surety bond in the amount
3.3 	of $20,000 for the protection of consumer customers, executed by
3.4 	the applicant as principal and issued by a surety company
3.5 	admitted to do business in this state.  The bond shall be
3.6 	exclusively for the purpose of reimbursing consumer customers
3.7 	and shall be conditioned upon the faithful compliance by the
3.8 	applicant with all of the laws and rules of this state
3.9 	pertaining to the applicant's business as a dealer or
3.10 	manufacturer, including sections 325D.44, 325F.67 and 325F.69,
3.11 	and upon the applicant's faithful performance of all its legal
3.12 	obligations to consumer customers;
3.13 	(d) the applicant has established a trust account as
3.14 	required by section 327B.08, subdivision 3, unless the applicant
3.15 	states in writing its intention to limit its business to
3.16 	selling, offering for sale, soliciting or advertising the sale
3.17 	of new manufactured homes; and
3.18 	(e) the applicant has provided evidence of having had at
3.19 	least two years' prior experience in the sale of manufactured
3.20 	homes, working for a licensed dealer holds a salesperson license
3.21 	under sections 327B.041 to 327B.045 and has:  (1) a minimum of
3.22 	two years' experience as an active salesperson for a licensed
3.23 	dealer within the past four years; or (2) two years' continuous
3.24 	experience as an active salesperson for a licensed dealer within
3.25 	the past ten years.  This requirement does not apply to dealers
3.26 	holding valid licenses prior to November 1, 2005.

3.27 	Sec. 5. [327B.041] SALESPERSON LICENSE; EXAMINATION.
3.28 		Subdivision 1.License required for salesperson or
3.29 	broker. A person may not act as a salesperson or broker of
3.30 	manufactured homes, new or used, or of industrialized/modular
3.31 	buildings as defined in section 16B.75, without a salesperson
3.32 	license as provided in sections 327B.041 to 327B.045.
3.33 		Subd. 2.Examination eligibility; revocation. A person
3.34 	is not eligible to take the examination for a salesperson
3.35 	license under this section if the applicant has had any related
3.36 	professional or trade license, as defined by the commissioner,
4.1 	revoked or suspended in this or any other state within five
4.2 	years of the date of the application.
4.3 		Subd. 3.Examination frequency. The commissioner shall
4.4 	hold examinations at times and places the commissioner
4.5 	determines, except that the examinations must be held at least
4.6 	every 90 days.
4.7 		Subd. 4.Examination format. The examination must
4.8 	consist of not more than 100 multiple-choice questions in an
4.9 	open-book format.  The examination must be developed by the
4.10 	commissioner with input and guidance from the Minnesota
4.11 	Manufactured Home Association or its successor organization.  A
4.12 	passing grade for the examination is a score of 70 percent or
4.13 	higher.
4.14 		Subd. 5.Exemption from salesperson examination. The
4.15 	testing provisions of this section do not apply to a person who,
4.16 	as of July 1, 2006, holds a salesperson license under sections
4.17 	327B.041 to 327B.045 and has acted as a salesperson or broker of
4.18 	manufactured homes, new or used, or of industrialized/modular
4.19 	buildings as defined in section 16B.75, for an employer for a
4.20 	continuous period of two years immediately prior to July 1, 2006.
4.21 		Subd. 6.Reexaminations. An examination is required
4.22 	before the renewal of a salesperson license that has been
4.23 	suspended, or before the issuance of a license to a person whose
4.24 	license has been ineffective for a period of two years, except
4.25 	no reexamination is required of an individual who has failed to
4.26 	renew an existing license because of absence from the state
4.27 	while on active duty with the armed forces of the United States.

4.28 	Sec. 6. [327B.042] SALESPERSON LICENSING; APPLICATION.
4.29 		Subdivision 1.Qualification of applicants. An applicant
4.30 	for a salesperson license must be at least 18 years of age at
4.31 	the time of applying for the license.
4.32 		Subd. 2.Application for license; contents. (a) An
4.33 	applicant for a license as a salesperson shall apply in writing
4.34 	on forms prepared and furnished by the commissioner.  Each
4.35 	application must be signed and sworn to by the applicant and be
4.36 	accompanied by a license fee set by the commissioner.
5.1 	(b) An application for a salesperson license must contain:
5.2 	(1) information required by the commissioner consistent
5.3 	with the administration of this chapter;
5.4 	(2) the applicant's name, age, Social Security number,
5.5 	residence address, employment history for the past ten years,
5.6 	and the name and place of business of the employer on whose
5.7 	behalf the salesperson will be acting;
5.8 	(3) the names of any company, partnership, or corporation
5.9 	licensed or registered in Minnesota in which the applicant has
5.10 	held any ownership interest or over which the applicant has
5.11 	exercised control as either owner or management; and 
5.12 	(4) whether the applicant or any entity identified in
5.13 	clause (3) has ever filed for bankruptcy laws or been declared
5.14 	insolvent.
5.15 	(c) The commissioner may require further information the
5.16 	commissioner deems appropriate to administer sections 327B.041
5.17 	to 327B.045.
5.18 	(d) An applicant for a salesperson license must submit to
5.19 	the commissioner, along with the application for licensure,
5.20 	consents for credit and criminal background checks.  The
5.21 	criminal background check must be multistate for all states of
5.22 	past residency over the previous ten years.  A salesperson
5.23 	license may not be issued to an applicant who the commissioner
5.24 	determines may not be of fit character or has, in the conduct of
5.25 	the applicant's affairs, been shown to be incompetent,
5.26 	untrustworthy, or financially irresponsible, or has engaged in
5.27 	criminal, fraudulent, deceptive, or dishonest practices.
5.28 		Subd. 3.Provisional 90-day license. An applicant who
5.29 	has submitted a complete application to the commissioner must be
5.30 	issued a provisional license under which the applicant may work
5.31 	for the employer identified in the license application, but may
5.32 	not sign purchase agreements or any financing documents, all of
5.33 	which must be signed by the employer.  The applicant has 90 days
5.34 	to pass the salesperson's examination.  Upon obtaining a passing
5.35 	score on the examination and issuance of a salesperson's
5.36 	license, the provisional license expires and the employer must
6.1 	surrender it to the commissioner.  No more than two provisional
6.2 	licenses may be issued to an applicant within any 24-month
6.3 	period.  A provisional 90-day license must not be issued to
6.4 	brokers.
6.5 		Subd. 4.Change of application information. The
6.6 	commissioner must be notified in writing of a change of
6.7 	information contained in the license application on file with
6.8 	the commissioner within ten days of the change.

6.9 	Sec. 7. [327B.043] SALESPERSON LICENSING; CONTINUING
6.10 	EDUCATION.
6.11 	(a) A person holding a salesperson license must
6.12 	successfully complete ten hours of continuing education, either
6.13 	as a student or a lecturer, in courses of study approved by the
6.14 	commissioner, during the initial license period and during each
6.15 	succeeding 24-month license period.  During the initial term of
6.16 	licensure, at least six of the ten credit hours must be
6.17 	completed during the first 12 months of the 24-month licensing
6.18 	period.  A salesperson may not claim credit for continuing
6.19 	education not actually completed as of the date the report of
6.20 	continuing education compliance is filed.
6.21 	(b) The commissioner may adopt rules defining the standards
6.22 	for course and instructor approval and continuing education as
6.23 	required under this section.  The commissioner may not approve a
6.24 	course which can be completed by the salesperson at home or
6.25 	outside the classroom without the supervision of an instructor
6.26 	except accredited courses using new delivery technology,
6.27 	including interactive technology, and the Internet.  The
6.28 	commissioner may approve courses of study in the field offered
6.29 	in educational institutions of higher learning in this state or
6.30 	courses of study in the field developed by and offered under the
6.31 	auspices of the Manufactured Housing Institute, the Minnesota
6.32 	Manufactured Home Association, or their successors and
6.33 	affiliates, or private schools.  Courses in motivation,
6.34 	salesmanship, psychology, or time management are not eligible
6.35 	for continuing education credit.  Courses in professionalism in
6.36 	home sales and legal requirements involving purchase agreements
7.1 	and other salesperson legal and regulatory obligations are
7.2 	eligible for approval.
7.3 	(c) Any program approved by the commissioner of commerce
7.4 	for continuing education for real estate brokers and licensees
7.5 	under chapter 82 must be approved by the commissioner for
7.6 	continuing education for salespersons under this section.  A
7.7 	program approved by the commissioner of commerce for continuing
7.8 	education for contractors under chapter 326 must be approved by
7.9 	the commissioner for continuing education for salespersons under
7.10 	this section.
7.11 	(d) As part of the continuing education requirements of
7.12 	this section, a salesperson must receive:
7.13 	(1) at least four hours of training during each license
7.14 	period in courses regarding laws or regulations on dual agency
7.15 	representation and disclosure; laws or regulations governing the
7.16 	sale, construction standards, and installation of manufactured
7.17 	homes or prefabricated modular homes; and the Minnesota State
7.18 	Building Code; and 
7.19 	(2) at least one hour of training during each license
7.20 	period in courses in state and federal fair housing laws and
7.21 	regulations or other antidiscrimination laws or regulations or
7.22 	courses designed to assist in meeting the housing needs of
7.23 	immigrant and other underserved populations; and courses in
7.24 	consumer fair credit laws and consumer privacy requirements.
7.25 	(e) The commissioner may establish a procedure for renewal
7.26 	of course accreditation and must apply broadly the requirements
7.27 	of this section when reviewing courses submitted for approval.
7.28 	The commissioner may expand the list of qualifying subject areas
7.29 	for course approval based on changes within the industry or
7.30 	changes related to state and federal requirements.
7.31 	(f) Credit may not be earned if the salesperson has
7.32 	previously obtained credit for the same course as either a
7.33 	student or instructor during the same licensing period.
7.34 	(g) The continuing education course completion certificate
7.35 	must be in the form prescribed by the commissioner.
7.36 	(h) Salespersons are responsible for maintaining copies of
8.1 	course completion certificates.

8.2 	Sec. 8. [327B.044] SALESPERSON LICENSING; RENEWAL.
8.3 		Subdivision 1.Duration. A salesperson license is not
8.4 	effective for more than two years except as provided in section
8.5 	327B.045, subdivision 4, for certain new licenses.  The
8.6 	commissioner shall cancel and not renew the license of any
8.7 	person who fails to comply with the continuing education
8.8 	requirements of section 327B.043.
8.9 		Subd. 2.Timely renewals. A salesperson whose renewal
8.10 	application has been properly and timely filed who has not
8.11 	received notice of denial of renewal is considered to have been
8.12 	approved for renewal and may continue to transact business
8.13 	whether or not the renewed license has been received on or
8.14 	before July 1 of the renewal year.  An application for renewal
8.15 	of a license is considered timely filed if received by the
8.16 	commissioner by, or mailed with proper postage and postmarked
8.17 	by, June 15 of the renewal year.  An application for renewal is
8.18 	properly filed if made on notarized forms accompanied by fees
8.19 	set by the commissioner, and containing information the
8.20 	commissioner requires.
8.21 		Subd. 3.Failure to renew. A salesperson who has failed
8.22 	to make a timely application for renewal of a salesperson
8.23 	license and who has not received the renewal license as of July
8.24 	1 of the renewal year is unlicensed until the license has been
8.25 	issued by the commissioner and is received.
8.26 		Subd. 4.Effect of failure to renew license. If a
8.27 	salesperson license lapses or becomes ineffective, the
8.28 	commissioner may institute a revocation or suspension proceeding
8.29 	within two years after the license was last effective and enter
8.30 	a revocation or suspension order as of the last date on which
8.31 	the license was in effect and may require that the salesperson
8.32 	take the salesperson license examination.
8.33 		Subd. 5.Cancellation of salesperson license. A
8.34 	salesperson license that has been canceled for failure of a
8.35 	salesperson to complete continuing education requirements must
8.36 	be returned to the commissioner by the employer within ten days
9.1 	of receipt of notice of cancellation.  The license must be
9.2 	reinstated without reexamination if the salesperson completes
9.3 	the required instruction, filing an application, and pays the
9.4 	fee for a salesperson license prior to the expiration date of
9.5 	the license.

9.6 	Sec. 9. [327B.045] SALESPERSON LICENSING; OTHER.
9.7 		Subdivision 1.Generally. The commissioner shall issue a
9.8 	salesperson license to any person who qualifies for the license
9.9 	under sections 327B.041 to 327B.045.  A salesperson license must
9.10 	be issued in the name of the applicant to the employer
9.11 	identified in the license application.
9.12 		Subd. 2.Responsibility. Each employer is responsible
9.13 	for the acts of all of the employer's salespersons while acting
9.14 	as agents on the employer's behalf.  Each officer of a
9.15 	corporation or partner in a partnership licensed as an employer
9.16 	has the same responsibility under sections 327B.041 to 327B.045
9.17 	as a corporate or partnership employer with regard to the acts
9.18 	of the salespersons acting on behalf of the corporation or
9.19 	partnership.
9.20 		Subd. 3.Issuance of salesperson license. A salesperson
9.21 	is licensed to act on behalf of an employer and may not be
9.22 	licensed to act on behalf of more than one employer in this
9.23 	state during the same period of time.  The license of each
9.24 	salesperson must be mailed to and remain in the possession of
9.25 	the employer with whom the salesperson is or will be associated
9.26 	until canceled or until the salesperson leaves the employer.
9.27 		Subd. 4.Effective date of license. Licenses renewed
9.28 	under sections 327B.041 to 327B.045 are valid for 24 months.
9.29 	New licenses expire on June 30 of the following year unless the
9.30 	term of the new license would be less than 18 months in which
9.31 	case the new license expires on June 30 of the subsequent year.
9.32 	Implementation of the 24-month licensing program must be
9.33 	staggered so that approximately one-half of the licenses will
9.34 	expire on June 30 of each even-numbered year and the other
9.35 	one-half on June 30 of each odd-numbered year.  Those
9.36 	salespersons who will receive a 36-month license on July 1,
10.1 	2006, because of the staggered implementation schedule, must pay
10.2 	for the license a fee increased by an amount equal to one-half
10.3 	the fee for renewal of the license.
10.4 		Subd. 5.Terminations; transfers. (a) Except as provided
10.5 	in paragraph (b), if a salesperson terminates activity on behalf
10.6 	of an employer, the salesperson's license is ineffective.
10.7 	Within ten days of the termination, the employer shall notify
10.8 	the commissioner in writing and return the license of the
10.9 	salesperson to the commissioner.  The salesperson may apply for
10.10 	transfer of the license to another employer at any time during
10.11 	the remainder of the license period on forms provided by the
10.12 	commissioner.  If the application for transfer qualifies, the
10.13 	commissioner shall grant the application.  Upon receipt of a
10.14 	transfer application and payment of the transfer fee, the
10.15 	commissioner may issue a 45-day probationary license.  If an
10.16 	application for transfer is not made within the license period,
10.17 	the commissioner shall require that an application for a new
10.18 	license be filed.
10.19 	(b) If a salesperson terminates activity on behalf of an
10.20 	employer in order to begin association immediately with another
10.21 	employer, the commissioner shall permit the automatic transfer
10.22 	of the salesperson's license.  The transfer is effective either
10.23 	upon the mailing of the required fee and the executed documents
10.24 	by certified mail or upon personal delivery of the fee and
10.25 	documents to the commissioner's office.  The commissioner may
10.26 	adopt rules and prescribe forms as necessary to implement this
10.27 	paragraph.  Upon submission of an application for automatic
10.28 	transfer, the salesperson's license held by the employer from
10.29 	whom the salesperson is transferring shall be void and returned
10.30 	to the commissioner.
10.31 	(c) The transfer is ineffective if the fee is paid by means
10.32 	of a check, draft, or other instrument or order of withdrawal
10.33 	drawn on an account with insufficient funds.
10.34 	(d) The salesperson shall retain the certified mail return
10.35 	receipt if the transfer application is delivered to the
10.36 	commissioner by mail, retain a photocopy of the executed
11.1 	transfer application, and provide a photocopy of the executed
11.2 	transfer application to the employer from whom the salesperson
11.3 	is transferring.
11.4 	(e) The salesperson's automatic transfer must be in the
11.5 	form prescribed by the commissioner.
11.6 	Subd. 6.[AUTOMATIC TRANSFER OF DEALER'S LICENSE.] If a
11.7 	dealer terminates activity in order to begin association with
11.8 	another dealer, the commissioner shall permit the automatic
11.9 	transfer of the dealer license to a salesperson license.  If
11.10 	there are salespersons working for the dealer, the dealer shall:
11.11 	(1) certify to the commissioner that another dealer will
11.12 	remain in the company that the dealer is leaving prior to
11.13 	issuance of the transfer and shall identify the dealer
11.14 	remaining;
11.15 	(2) certify to the commissioner that the salespersons will
11.16 	be transferring with the dealer, in which case the salespersons
11.17 	must comply with subdivision 5; or 
11.18 	(3) return the licenses of all salespersons to the
11.19 	commissioner.
11.20 	The transfer is effective either upon the mailing of the
11.21 	required fee and the executed documents by certified mail or
11.22 	upon personal delivery of the fee and documents to the
11.23 	commissioner's office.
11.24 		Subd. 7.Nonresidents. A nonresident of Minnesota may be
11.25 	licensed as a salesperson upon compliance with sections 327B.041
11.26 	to 327B.045.
11.27 	Subd. 8.[TEMPORARY DEALER'S LICENSE.] In the event of the
11.28 	death or incapacity of a dealer, the commissioner may issue a
11.29 	60-day temporary dealer license to a salesperson of the dealer
11.30 	if the salesperson has had a minimum of two years' experience as
11.31 	a salesperson and is otherwise reasonably qualified to act as a
11.32 	dealer.  Upon application prior to its expiration, the 60-day
11.33 	temporary permit may be renewed once for an additional 45 days
11.34 	by the commissioner if the applicant demonstrates a good-faith
11.35 	effort to obtain a dealer's license within the preceding 60 days
11.36 	and an extension of time will not harm the public interest.
12.1 	Only those salespersons licensed at the time of the
12.2 	dealer's death or incapacity may conduct business for or on
12.3 	behalf of the person to whom the temporary dealer's license was
12.4 	issued.
12.5 		Subd. 9.Withdrawal of license or application. A
12.6 	salesperson or salesperson license applicant may at any time
12.7 	file with the commissioner a request to withdraw from the status
12.8 	of salesperson or to withdraw a pending license application.
12.9 	Withdrawal from the status of salesperson or withdrawal of the
12.10 	license application becomes effective 30 days after receipt of a
12.11 	request to withdraw or within a shorter period the commissioner
12.12 	determines, unless a revocation, suspension, or denial
12.13 	proceeding is pending when the request to withdraw is filed or a
12.14 	proceeding to revoke, suspend, deny, or impose conditions upon
12.15 	the withdrawal is instituted within 30 days after the request to
12.16 	withdraw is filed.  If a proceeding is pending or instituted,
12.17 	withdrawal becomes effective at the time and upon the conditions
12.18 	the commissioner determines by order.  If no proceeding is
12.19 	pending or instituted and withdrawal automatically becomes
12.20 	effective, the commissioner may institute a revocation or
12.21 	suspension proceeding within one year after withdrawal became
12.22 	effective and enter a revocation or suspension order as of the
12.23 	last date on which the license was in effect.
12.24 		Subd. 10.Exemption. The following persons, when acting
12.25 	as salespersons, are exempt from sections 327B.041 to 327B.045:
12.26 	(1) a licensed residential contractor under chapter 326;
12.27 	(2) a licensed real estate broker or salesperson under
12.28 	chapter 82; and 
12.29 	(3) a salesperson who is employed by a manufacturer of
12.30 	manufactured homes or modular homes who engages in sales only at
12.31 	the wholesale level but not to the public.

12.32 	Sec. 10. FEES.
 12.33 	The commissioner of administration may set initial fees
12.34 	under sections 5 to 9 by rule, notwithstanding Minnesota
12.35 	Statutes, section 16A.1283.

12.36 	Sec. 11. EFFECTIVE DATE.
 13.1 	Sections 1 to 10 are effective November 1, 2005.