1.1 	A bill for an act
1.2 	relating to state government; environment, natural resources, and energy 
1.3 	finance; appropriating money for environment and natural resources; authorizing 
1.4 	sale of gift cards and certificates; establishing composting competitive grant 
1.5 	program; modifying regulation of storm water discharges; modifying waste 
1.6 	management reporting requirements and creating a work group; requiring 
1.7 	nonresident all-terrain vehicle state trail pass; modifying horse trail and state 
1.8 	park pass requirements; requiring disclosure of certain chemicals in children's 
1.9 	products by manufacturers; requiring plastic yard waste bags to be compostable 
1.10 	and establishing labeling standards; authorizing uses of the Hennepin County 
1.11 	solid and hazardous waste fund; modifying greenhouse gas emissions provisions 
1.12 	and requiring a registry; establishing and authorizing fees; providing for 
1.13 	disposition of certain fees; modifying and establishing assessments for certain 
1.14 	regulatory expenses; providing for fish consumption advisories in different 
1.15 	languages; limiting use of certain funds; requiring reports; appropriating 
1.16 	money to Department of Commerce and Public Utilities Commission to finance 
1.17 	activities related to commerce and energy; modifying provisions related to 
1.18 	Telecommunications Access Minnesota assessments, insurance audits, insurers 
1.19 	and insurance products, certain financial institutions, regulated activities related 
1.20 	to certain mortgage transactions and professionals, and debt management and 
1.21 	debt settlement services; providing penalties and remedies; appropriating and 
1.22 	allocating federal stimulus money for various energy programs;amending 
1.23 	Minnesota Statutes 2008, sections 45.011, subdivision 1; 45.027, subdivision 1; 
1.24 	46.04, subdivision 1; 46.05; 46.131, subdivision 2; 47.58, subdivision 1; 47.60, 
1.25 	subdivisions 1, 3, 6; 48.21; 58.05, subdivision 3; 58.06, subdivision 2; 58.126; 
1.26 	58.13, subdivision 1; 60A.124; 60A.14, subdivision 1; 60B.03, subdivision 
1.27 	15; 60L.02, subdivision 3; 61B.19, subdivision 4; 61B.28, subdivisions 4, 8; 
1.28 	67A.01; 67A.06; 67A.07; 67A.14, subdivisions 1, 7; 67A.18, subdivision 
1.29 	1; 84.0835, subdivision 3; 84.415, subdivision 5, by adding a subdivision; 
1.30 	84.63; 84.631; 84.632; 84.922, subdivision 1a; 85.015, subdivision 1b; 85.053, 
1.31 	subdivision 10; 85.46, subdivisions 3, 4, 7; 93.481, subdivisions 1, 3, 5, 7; 
1.32 	97A.075, subdivision 1; 103G.301, subdivisions 2, 3; 115.03, subdivision 5c; 
1.33 	115.073; 115.56, subdivision 4; 115.77, subdivision 1; 115A.1314, subdivision 2; 
1.34 	115A.557, subdivision 3; 115A.931; 116.07, subdivision 4d; 116.41, subdivision 
1.35 	2; 116C.834, subdivision 1; 116D.045; 216B.62, subdivisions 3, 4, 5, by 
1.36 	adding a subdivision; 216H.10, subdivision 7; 216H.11; 325E.311, subdivision 
1.37 	6; 332A.02, subdivisions 5, 8, 9, 10, 13, by adding a subdivision; 332A.04, 
1.38 	subdivision 6; 332A.08; 332A.10; 332A.11, subdivision 2; 332A.14; Laws 2002, 
1.39 	chapter 220, article 8, section 15; Laws 2007, chapter 57, article 1, section 
2.1 	4, subdivision 2; Laws 2008, chapter 363, article 5, section 4, subdivision 
2.2 	7; proposing coding for new law in Minnesota Statutes, chapters 60A; 61A; 
2.3 	67A; 84; 93; 115A; 116; 216H; 325E; 383B; proposing coding for new law as 
2.4 	Minnesota Statutes, chapter 332B; repealing Minnesota Statutes 2008, sections 
2.5 	60A.129; 61B.19, subdivision 6; 67A.14, subdivision 5; 67A.17; 67A.19; Laws 
2.6 	2008, chapter 363, article 5, section 30; Minnesota Rules, parts 2675.2180; 
2.7 	2675.7100; 2675.7110; 2675.7120; 2675.7130; 2675.7140.
2.8 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.9 	ARTICLE 1
2.10 	ENVIRONMENT AND NATURAL RESOURCES FINANCE

2.11	Section 1.  SUMMARY OF APPROPRIATIONS.
 	
2.12 	The amounts shown in this section summarize direct appropriations, by fund, made 
2.13 	in this act.

2.14			2010
		2011
		Total
	
2.15	General
	$
	107,346,000
	$
	106,571,000
	$
	213,917,000
	
2.16
2.17	State Government Special 
Revenue
		48,000
		48,000
		96,000
	
2.18
2.19	Miscellaneous Special 
Revenue
		200,000
		200,000
		400,000
	
2.20	Environmental
		70,399,000
		70,659,000
		141,058,000
	
2.21	Natural Resources
		81,070,000
		79,970,000
		161,040,000
	
2.22	Game and Fish
		93,942,000
		93,792,000
		187,734,000
	
2.23	Remediation
		11,186,000
		11,186,000
		22,372,000
	
2.24	Permanent School
		200,000
		200,000
		400,000
	
2.25	Total
	$
	364,391,000
	$
	362,626,000
	$
	727,017,000

2.26	Sec. 2. ENVIRONMENT AND NATURAL RESOURCES APPROPRIATIONS.
 	
2.27 	The sums shown in the columns marked "Appropriations" are appropriated to the 
2.28 	agencies and for the purposes specified in this act. The appropriations are from the general 
2.29 	fund, or another named fund, and are available for the fiscal years indicated for each 
2.30 	purpose. The figures "2010" and "2011" used in this act mean that the appropriations 
2.31 	listed under them are available for the fiscal year ending June 30, 2010, or June 30, 2011, 
2.32 	respectively. "The first year" is fiscal year 2010. "The second year" is fiscal year 2011. 
2.33 	"The biennium" is fiscal years 2010 and 2011. Appropriations for the fiscal year ending 
2.34 	June 30, 2009, are effective the day following final enactment.

2.35				APPROPRIATIONS
	
2.36				Available for the Year
	
2.37				Ending June 30
	
2.38					2010
		2011

3.1	Sec. 3. POLLUTION CONTROL AGENCY

3.2	Subdivision 1.Total Appropriation
 	$
	92,124,000
	$
	91,884,000

3.3	Appropriations by Fund
	
3.4		2010
	2011
	
3.5	General
	10,591,000
	10,091,000
	
3.6
3.7	State Government 
Special Revenue
	48,000
	48,000
	
3.8	Environmental
	70,399,000
	70,659,000
	
3.9	Remediation
	11,086,000
	11,086,000
	
3.10 	The amounts that may be spent for each 
3.11 	purpose are specified in the following 
3.12 	subdivisions.
3.13 	The commissioner shall require the chief 
3.14 	financial officer or other financial staff to 
3.15 	display the agency's budget on the agency's 
3.16 	Web site in a manner that will allow citizens 
3.17 	to easily understand the value they are 
3.18 	getting for their money. The agency must 
3.19 	have an air permit and regulatory account, 
3.20 	water permit and regulatory account, and 
3.21 	solid waste permit and regulatory account to 
3.22 	track revenues and expenses.
3.23 	The proposed rules increasing permit fees 
3.24 	first noticed on June 16, 2008, are effective 
3.25 	July 1, 2009. The agency shall adopt 
3.26 	amended permit fee rules incorporating 
3.27 	these permit fee increases under Minnesota 
3.28 	Statutes, section 14.389. The commissioner 
3.29 	shall begin collecting the increased permit 
3.30 	fees on July 1, 2009, even if the rule 
3.31 	adoption process has not been completed. 
3.32 	Notwithstanding Minnesota Statutes, section 
3.33 	14.18, subdivision 2, the increased permit 
3.34 	fees reflecting the permit fee increases 
3.35 	in this section and the rule amendments 
4.1 	incorporating those permit fee increases do 
4.2 	not require further legislative approval.
4.3 	The commissioner shall adopt and implement 
4.4 	rules in compliance with Minnesota Statutes, 
4.5 	section 116.07, subdivision 4d, so that fees 
4.6 	are collected beginning January 1, 2011.
4.7 	A recipient of a grant funded by an 
4.8 	appropriation under this section shall display 
4.9 	on its Web site detailed information on 
4.10 	the expenditure of the grant funds, and 
4.11 	measurable outcomes as a result of the 
4.12 	expenditure of funds, and submit this 
4.13 	information to the agency by June 30 each 
4.14 	year. A recipient without an active Web site 
4.15 	shall report to the agency by June 30 each 
4.16 	year detailed information on the expenditure 
4.17 	of the grant funds, and measurable outcomes 
4.18 	as a result of the expenditure of funds. The 
4.19 	commissioner shall display the information 
4.20 	received by recipients under this paragraph 
4.21 	on the agency's Web site.

4.22	Subd. 2.Water
 		33,752,000
		33,252,000

4.23	Appropriations by Fund
	
4.24	General
	7,583,000
	7,083,000
	
4.25
4.26	State Government 
Special Revenue
	48,000
	48,000
	
4.27	Environmental
	26,121,000
	26,121,000
	
4.28 	$1,498,000 the first year and $1,498,000 
4.29 	the second year are for the clean water 
4.30 	partnership program. Priority shall be 
4.31 	given to projects preventing impairments 
4.32 	and degradation of lakes, rivers, streams, 
4.33 	and groundwater according to Minnesota 
4.34 	Statutes, section 114D.20, subdivision 2, 
4.35 	clause (4). Funds from this appropriation 
4.36 	may not be used to purchase or use pesticides 
5.1 	suspected of being endocrine disruptors. Any 
5.2 	restoration conducted with money from this 
5.3 	appropriation must plant vegetation or sow 
5.4 	seed only of ecotypes native to Minnesota, 
5.5 	and preferably of the local ecotype, using a 
5.6 	high diversity of species originating from as 
5.7 	close to the restoration site as possible, and 
5.8 	protect existing native prairies from genetic 
5.9 	contamination. Any balance remaining in the 
5.10 	first year does not cancel and is available for 
5.11 	the second year.
5.12 	$2,324,000 the first year and $2,324,000 the 
5.13 	second year must be distributed as grants to 
5.14 	delegated counties to administer the county 
5.15 	feedlot program. Distribution of funds 
5.16 	must be as provided in Laws 2005, First 
5.17 	Special Session chapter 1, article 2, section 
5.18 	2, subdivision 2. The commissioner, in 
5.19 	consultation with the Minnesota Association 
5.20 	of County Feedlot Officers executive team, 
5.21 	may use up to five percent of the annual 
5.22 	appropriation for initiatives that will reduce 
5.23 	feedlot-related pollution hazards. Any 
5.24 	money remaining after the first year is 
5.25 	available for the second year.
5.26 	$335,000 the first year and $335,000 the 
5.27 	second year are for community technical 
5.28 	assistance and education, including grants 
5.29 	and technical assistance to communities for 
5.30 	local and basinwide water quality protection.
5.31 	$550,000 the first year and $550,000 the 
5.32 	second year are for challenge grants to 
5.33 	counties for subsurface sewage treatment 
5.34 	system (SSTS) inventories that will 
5.35 	determine the number of systems that are 
6.1 	failing or that pose an imminent health threat 
6.2 	and are located on riparian land or a lake 
6.3 	or near wetlands or other sensitive waters. 
6.4 	Counties must provide a nonstate match of 
6.5 	at least 50 percent that may be in cash or in 
6.6 	kind. The commissioner shall, by county, 
6.7 	report: the number of systems evaluated, the 
6.8 	number of systems determined to be failing 
6.9 	or that pose an imminent health threat located 
6.10 	on riparian land or a lake or near wetlands or 
6.11 	other sensitive waters, the number replaced 
6.12 	or soon to be replaced, and the gallons of 
6.13 	sewage that are prevented from threatening 
6.14 	waters. The commissioner shall develop 
6.15 	recommendations and a plan for directly 
6.16 	or indirectly inspecting and providing an 
6.17 	inventory for all subsurface sewage treatment 
6.18 	systems and submit a report to the chairs of 
6.19 	the legislative committees having primary 
6.20 	jurisdiction over environment and natural 
6.21 	resources policy and finance no later than 
6.22 	September 15, 2010. Direct inspection 
6.23 	methods shall include field verification of 
6.24 	each SSTS on riparian land or a lake or 
6.25 	near wetlands or other sensitive waters to 
6.26 	determine the owner, location, and which 
6.27 	systems are failing or are an imminent 
6.28 	health threat. Indirect inspection methods 
6.29 	may include census-type data collection to 
6.30 	determine the owner and location of each 
6.31 	SSTS in the remaining portion of each 
6.32 	county. An SSTS with a valid certificate of 
6.33 	compliance may be considered inventoried 
6.34 	without further work.
6.35 	$405,000 the first year and $405,000 the 
6.36 	second year are for subsurface sewage 
7.1 	treatment system (SSTS) administration and 
7.2 	grants. Of this amount, $86,000 each year 
7.3 	is for assistance to counties through grants 
7.4 	for SSTS program administration. Any 
7.5 	unexpended balance in the first year does not 
7.6 	cancel but is available in the second year.
7.7 	$740,000 the first year and $740,000 the 
7.8 	second year are from the environmental 
7.9 	fund to address the need for continued 
7.10 	increased activity in the areas of new 
7.11 	technology review, technical assistance 
7.12 	for local governments, and enforcement 
7.13 	under Minnesota Statutes, sections 115.55 
7.14 	to 115.58, and to complete the requirements 
7.15 	of Laws 2003, chapter 128, article 1, section 
7.16 	165. Of this amount, $48,000 each year is for 
7.17 	administration of individual septic tank fees, 
7.18 	as provided in this article.
7.19 	$100,000 the first year and the $100,000 
7.20 	second year are for a grant to the Red River 
7.21 	Watershed Management Board to enhance 
7.22 	and expand existing river watch activities in 
7.23 	the Red River of the North and shall enhance 
7.24 	student understanding of the causes of 
7.25 	flooding, flood prevention, and the impacts 
7.26 	of flood waters on land and water resources. 
7.27 	The Red River Watershed Management 
7.28 	Board shall provide a report that includes 
7.29 	formal evaluation results from the river watch 
7.30 	program to the commissioners of education 
7.31 	and the Pollution Control Agency and to the 
7.32 	legislative committees with jurisdiction over 
7.33 	the environment and natural resources policy 
7.34 	and finance and K-12 policy and finance by 
7.35 	February 15, 2011.
8.1 	$7,540,000 the first year and $7,540,000 
8.2 	the second year are for completion of 20 
8.3 	percent of the needed statewide assessments 
8.4 	of surface water quality and trends.
8.5 	$500,000 the first year is to develop minimal 
8.6 	impact design standards for urban storm 
8.7 	water runoff. This is a onetime appropriation 
8.8 	and is available until June 30, 2011. The 
8.9 	commissioner shall report to the chairs and 
8.10 	ranking minority members of the legislative 
8.11 	committees and divisions having primary 
8.12 	jurisdiction over environment and natural 
8.13 	resources policy and finance no later than 
8.14 	January 12, 2011, regarding the expenditure 
8.15 	of this appropriation.
8.16 	By October 1 each year, the commissioner 
8.17 	shall report to the chairs of the legislative 
8.18 	committees having primary jurisdiction 
8.19 	over environment and natural resources 
8.20 	policy and finance on the effectiveness of 
8.21 	enforcement actions in the previous fiscal 
8.22 	year in preventing water pollution.
8.23 	Notwithstanding Minnesota Statutes, section 
8.24 	16A.28, the appropriations encumbered on or 
8.25 	before June 30, 2011, as grants or contracts 
8.26 	for clean water partnership, SSTS's, surface 
8.27 	water and groundwater assessments, total 
8.28 	maximum daily loads, stormwater, and local 
8.29 	basinwide water quality protection in this 
8.30 	subdivision are available until June 30, 2013.

8.31	Subd. 3.Air
 		11,871,000
		12,131,000
	
8.32 	Up to $150,000 the first year and $150,000 
8.33 	the second year may be transferred from the 
8.34 	environmental fund to the small business 
8.35 	environmental improvement loan account 
9.1 	established in Minnesota Statutes, section 
9.2 	116.993.
9.3 	$200,000 the first year and $200,000 the 
9.4 	second year are from the environmental fund 
9.5 	for a monitoring program under Minnesota 
9.6 	Statutes, section 116.454.
9.7 	$125,000 the first year and $125,000 the 
9.8 	second year are from the environmental fund 
9.9 	for monitoring ambient air for hazardous 
9.10 	pollutants in the metropolitan area.
9.11 	An agency report on the level of fine 
9.12 	particulate matter in Minnesota's air must 
9.13 	compare measured levels with a 24-hour 
9.14 	PM 2.5 standard of 13 to 14 micrograms 
9.15 	per cubic meter and an annual PM 2.5 
9.16 	standard of 30 to 35 micrograms per cubic 
9.17 	meter, as recommended by the Particulate 
9.18 	Matter Review Panel of the Environmental 
9.19 	Protection Agency's Clean Air Scientific 
9.20 	Advisory Committee in its June 2005 report, 
9.21 	EPA's Review of the National Ambient Air 
9.22 	Quality Standards for Particulate Matter 
9.23 	(Second Draft PM Staff Paper, January 
9.24 	2005).

9.25	Subd. 4.Land
 		18,502,000
		18,502,000

9.26	Appropriations by Fund
	
9.27	General
	500,000
	500,000
	
9.28	Environmental
	6,916,000
	6,916,000
	
9.29	Remediation
	11,086,000
	11,086,000
	
9.30 	All money for environmental response, 
9.31 	compensation, and compliance in the 
9.32 	remediation fund not otherwise appropriated 
9.33 	is appropriated to the commissioners of the 
9.34 	Pollution Control Agency and agriculture 
9.35 	for purposes of Minnesota Statutes, section 
10.1 	115B.20, subdivision 2, clauses (1), (2), 
10.2 	(3), (6), and (7). At the beginning of each 
10.3 	fiscal year, the two commissioners shall 
10.4 	jointly submit an annual spending plan to 
10.5 	the commissioner of finance that maximizes 
10.6 	the utilization of resources and appropriately 
10.7 	allocates the money between the two 
10.8 	departments. This appropriation is available 
10.9 	until June 20, 2011.
10.10 	$3,616,000 the first year and $3,616,000 the 
10.11 	second year are from the petroleum tank fund 
10.12 	to be transferred to the remediation fund for 
10.13 	purposes of the leaking underground storage 
10.14 	tank program to protect the land.
10.15 	$252,000 the first year and $252,000 the 
10.16 	second year are from the remediation fund to 
10.17 	be transferred to the Department of Health for 
10.18 	private water supply monitoring and health 
10.19 	assessment costs in areas contaminated 
10.20 	by unpermitted mixed municipal solid 
10.21 	waste disposal facilities and drinking water 
10.22 	advisories and public information activities 
10.23 	for areas contaminated by hazardous releases.
10.24 	$500,000 each year is for environmental 
10.25 	health tracking and biomonitoring of a 
10.26 	representative sample of the population 
10.27 	including indigenous people and people of 
10.28 	color. Of this amount, $450,000 each year is 
10.29 	for transfer to the Department of Health.

10.30
10.31	Subd. 5.Environmental Assistance and 
Cross-Media
 		26,605,000
		26,605,000

10.32	Appropriations by Fund
	
10.33	General
	1,114,000
	1,114,000
	
10.34	Environmental
	25,491,000
	25,491,000
	
11.1 	$14,500,000 each year is from the 
11.2 	environmental fund for SCORE block grants 
11.3 	to counties.
11.4 	$500,000 the first year and $500,000 the 
11.5 	second year are from the environmental 
11.6 	fund for composting grants under Minnesota 
11.7 	Statutes, section 115A.559, and are available 
11.8 	until June 30, 2011. This amount is added to 
11.9 	the agency base.
11.10 	Any unencumbered grant and loan balances 
11.11 	in the first year do not cancel but are available 
11.12 	for grants and loans in the second year.
11.13 	All money deposited in the environmental 
11.14 	fund for the metropolitan solid waste 
11.15 	landfill fee in accordance with Minnesota 
11.16 	Statutes, section 473.843, and not otherwise 
11.17 	appropriated, is appropriated for the purposes 
11.18 	of Minnesota Statutes, section 115B.39.
11.19 	Notwithstanding Minnesota Statutes, section 
11.20 	16A.28, the appropriations encumbered on 
11.21 	or before June 30, 2011, as contracts or 
11.22 	grants for surface water and groundwater 
11.23 	assessments; environmental assistance 
11.24 	awarded under Minnesota Statutes, section 
11.25 	115A.0716; technical and research assistance 
11.26 	under Minnesota Statutes, section 115A.152; 
11.27 	technical assistance under Minnesota 
11.28 	Statutes, section 115A.52; and pollution 
11.29 	prevention assistance under Minnesota 
11.30 	Statutes, section 115D.04, are available until 
11.31 	June 30, 2013.
11.32 	Before the governor makes budget 
11.33 	recommendations to the legislature in 2011, 
11.34 	the commissioner must report on revenues 
11.35 	received and expenditures made under 
12.1 	Minnesota Statutes, section 115A.1314, 
12.2 	subdivision 2, during fiscal years 2010 
12.3 	and 2011 to determine if fees collected are 
12.4 	covering the costs of the program.

12.5	Subd. 6.Administrative Support
 		1,394,000
		1,394,000

12.6	Appropriations by Fund
	
12.7		2010
	2011
	
12.8	General
	1,394,000
	1,394,000
	
12.9 	The commissioner may transfer money from 
12.10 	the environmental fund to the remediation 
12.11 	fund as necessary for the purposes of the 
12.12 	remediation fund under Minnesota Statutes, 
12.13 	section 116.155, subdivision 2.

12.14	Sec. 4. NATURAL RESOURCES

12.15	Subdivision 1.Total Appropriation
 	$
	246,232,000
	$
	244,982,000

12.16	Appropriations by Fund
	
12.17		2010
	2011
	
12.18	General
	75,980,000
	75,980,000
	
12.19	Natural Resources
	76,010,000
	74,910,000
	
12.20	Game and Fish
	93,942,000
	93,792,000
	
12.21	Remediation
	100,000
	100,000
	
12.22	Permanent School
	200,000
	200,000
	
12.23 	The amounts that may be spent for each 
12.24 	purpose are specified in the following 
12.25 	subdivisions.
12.26 	To the extent possible, any restoration 
12.27 	conducted with money appropriated in this 
12.28 	section must plant vegetation or sow seed 
12.29 	only of ecotypes native to Minnesota, and 
12.30 	preferably of the local ecotype, using a high 
12.31 	diversity of species originating from as 
12.32 	close to the restoration site as possible, and 
12.33 	protect existing native prairies from genetic 
12.34 	contamination.
13.1 	A recipient of a grant funded by an 
13.2 	appropriation under this section shall display 
13.3 	on its Web site detailed information on 
13.4 	the expenditure of the grant funds, and 
13.5 	measurable outcomes as a result of the 
13.6 	expenditure of funds, and submit this 
13.7 	information to the department by June 30 
13.8 	each year. A recipient without an active 
13.9 	Web site shall report to the department by 
13.10 	June 30 each year detailed information on 
13.11 	the expenditure of the grant funds, and 
13.12 	measurable outcomes as a result of the 
13.13 	expenditure of funds. The commissioner 
13.14 	shall display the information received by 
13.15 	recipients under this paragraph on the 
13.16 	department's Web site.
13.17 	The commissioner shall require the chief 
13.18 	financial officer or other financial staff 
13.19 	to display the department's budget on the 
13.20 	department's Web site in a manner that will 
13.21 	allow citizens to easily understand the value 
13.22 	they are getting for their money.

13.23
13.24	Subd. 2.Land and Mineral Resources 
Management
 		10,398,000
		10,398,000

13.25	Appropriations by Fund
	
13.26	General
	3,351,000
	3,351,000
	
13.27	Natural Resources
	5,461,000
	5,461,000
	
13.28	Game and Fish
	1,386,000
	1,386,000
	
13.29	Permanent School
	200,000
	200,000
	
13.30 	$1,202,000 the first year and $1,202,000 
13.31 	the second year are from the mining 
13.32 	administration account in the natural 
13.33 	resources fund to cover the costs associated 
13.34 	with issuing mining permits.
13.35 	$612,000 each year is from the dedicated 
13.36 	receipts account in the natural resources fund 
14.1 	to cover the costs associated with issuing 
14.2 	licenses for land and water crossings and 
14.3 	road easements.
14.4 	$351,000 the first year and $351,000 the 
14.5 	second year are for iron ore cooperative 
14.6 	research. Of this amount, $200,000 each year 
14.7 	is from the minerals management account 
14.8 	in the natural resources fund. $175,500 the 
14.9 	first year and $175,500 the second year are 
14.10 	available only as matched by $1 of nonstate 
14.11 	money for each $1 of state money. The 
14.12 	match may be cash or in-kind.
14.13 	$86,000 the first year and $86,000 the 
14.14 	second year are for minerals cooperative 
14.15 	environmental research, of which $43,000 
14.16 	the first year and $43,000 the second year are 
14.17 	available only as matched by $1 of nonstate 
14.18 	money for each $1 of state money. The 
14.19 	match may be cash or in-kind.
14.20 	$2,696,000 the first year and $2,696,000 
14.21 	the second year are from the minerals 
14.22 	management account in the natural resources 
14.23 	fund for use as provided in Minnesota 
14.24 	Statutes, section 93.2236, paragraph (c), 
14.25 	for mineral resource management, projects 
14.26 	to enhance future mineral income, and 
14.27 	projects to promote new mineral resource 
14.28 	opportunities.
14.29 	$200,000 the first year and $200,000 the 
14.30 	second year are from the state forest suspense 
14.31 	account in the permanent school fund to 
14.32 	accelerate land exchanges, land sales, and 
14.33 	commercial leasing of school trust lands and 
14.34 	to identify, evaluate, and lease construction 
14.35 	aggregate located on school trust lands. This 
15.1 	appropriation is to be used for securing 
15.2 	maximum long-term economic return 
15.3 	from the school trust lands consistent with 
15.4 	fiduciary responsibilities and sound natural 
15.5 	resources conservation and management 
15.6 	principles.

15.7	Subd. 3.Water Resources Management
 		11,772,000
		11,772,000

15.8	Appropriations by Fund
	
15.9	General
	11,492,000
	11,492,000
	
15.10	Natural Resources
	280,000
	280,000
	
15.11 	$11,109,000 the first year and $11,109,000 
15.12 	the second year are for:
15.13 	(1) public waters protection by managing 
15.14 	and regulating activities through floodplain 
15.15 	management, shoreland management, 
15.16 	public waters permitting, and outreach and 
15.17 	education;
15.18 	(2) water supply management by ensuring 
15.19 	appropriate sources of water are available for 
15.20 	current and future generations through water 
15.21 	appropriation permitting, public water supply 
15.22 	planning, and water use reporting; and
15.23 	(3) hydrologic information that supports 
15.24 	decision making by providing technical 
15.25 	services through technical surface water 
15.26 	and groundwater studies, dam safety and 
15.27 	maintenance, regional hydrogeologic 
15.28 	assessments, lake level monitoring, stream 
15.29 	flow monitoring, ground water monitoring, 
15.30 	surveying, climatology, and environmental 
15.31 	review.
15.32 	By January 15, 2010, the commissioner 
15.33 	shall submit a report evaluating and 
15.34 	recommending options to provide for the 
15.35 	long-term protection of the state's surface 
16.1 	water and groundwater resources and 
16.2 	the funding of programs to provide this 
16.3 	protection.
16.4 	$280,000 the first year and $280,000 the 
16.5 	second year are for grants for up to 50 
16.6 	percent of the cost of implementation of 
16.7 	the Red River mediation agreement. The 
16.8 	commissioner shall submit a report to the 
16.9 	chairs of the legislative committees having 
16.10 	primary jurisdiction over environment and 
16.11 	natural resources policy and finance on the 
16.12 	accomplishments achieved with the grants 
16.13 	by January 15, 2012.
16.14 	$103,000 the first year and $103,000 
16.15 	the second year are to assist the Red 
16.16 	River Watershed Management Board and 
16.17 	watershed districts in constructing flood 
16.18 	protection farmstead ring levees in the Red 
16.19 	River watershed. If the appropriation for 
16.20 	either year is insufficient, the appropriation 
16.21 	for the other year is available for it.
16.22 	By October 1, 2009, the commissioner shall 
16.23 	develop a plan for the development of an 
16.24 	adequate groundwater level monitoring 
16.25 	network of wells in the 11-county 
16.26 	metropolitan area. The commissioner, 
16.27 	working with the Metropolitan Council and 
16.28 	the commissioner of the Pollution Control 
16.29 	Agency, shall design the network so that 
16.30 	the wells can be used to identify threats to 
16.31 	groundwater quality and institute practices to 
16.32 	protect the groundwater from degradation. 
16.33 	The network must be sufficient to ensure 
16.34 	that water use in the metropolitan area 
16.35 	does not harm ecosystems, degrade water 
17.1 	quality, or compromise the ability of future 
17.2 	generations to meet their own needs. The 
17.3 	plan should include recommendations on 
17.4 	the necessary payment rates for users of the 
17.5 	system expressed in cents per gallon for well 
17.6 	drilling, operation, and maintenance.

17.7	Subd. 4.Forest Management
 		39,359,000
		38,259,000

17.8	Appropriations by Fund
	
17.9	General
	25,952,000
	25,952,000
	
17.10	Natural Resources
	12,193,000
	11,093,000
	
17.11	Game and Fish
	1,214,000
	1,214,000
	
17.12 	$2,000,000 each year is to maintain forest 
17.13 	management operations. This is a onetime 
17.14 	appropriation.
17.15 	$500,000 the first year and $500,000 the 
17.16 	second year are reductions in the private 
17.17 	forest landowner assistance program.
17.18 	$950,000 the first year and $950,000 
17.19 	the second year are from the heritage 
17.20 	enhancement account in the game and fish 
17.21 	fund to maintain and expand the ecological 
17.22 	classification system program on state forest 
17.23 	lands and prevent the introduction and spread 
17.24 	of invasive species on state lands. This is a 
17.25 	onetime appropriation.
17.26 	$7,217,000 the first year and $7,217,000 
17.27 	the second year are for prevention, 
17.28 	presuppression, and suppression costs of 
17.29 	emergency firefighting and other costs 
17.30 	incurred under Minnesota Statutes, section 
17.31 	88.12. If the appropriation for either 
17.32 	year is insufficient to cover all costs of 
17.33 	presuppression and suppression, the amount 
17.34 	necessary to pay for these costs during the 
18.1 	biennium is appropriated from the general 
18.2 	fund.
18.3 	By November 15 of each year, the 
18.4 	commissioner of natural resources shall 
18.5 	submit a report to the chairs of the house 
18.6 	and senate committees and divisions having 
18.7 	jurisdiction over environment and natural 
18.8 	resources finance, identifying all firefighting 
18.9 	costs incurred and reimbursements received 
18.10 	in the prior fiscal year. These appropriations 
18.11 	may not be transferred. Any reimbursement 
18.12 	of firefighting expenditures made to the 
18.13 	commissioner from any source other than 
18.14 	federal mobilizations shall be deposited into 
18.15 	the general fund.
18.16 	$12,193,000 the first year and $11,093,000 
18.17 	the second year are from the forest 
18.18 	management investment account in the 
18.19 	natural resources fund for only the purposes 
18.20 	specified in Minnesota Statutes, section 
18.21 	89.039, subdivision 2.
18.22 	$780,000 the first year and $780,000 the 
18.23 	second year are for the Forest Resources 
18.24 	Council for implementation of the 
18.25 	Sustainable Forest Resources Act. 

18.26	Subd. 5.Parks and Trails Management
 		68,322,000
		68,322,000

18.27	Appropriations by Fund
	
18.28	General
	23,207,000
	23,207,000
	
18.29	Natural Resources
	42,921,000
	42,921,000
	
18.30	Game and Fish
	2,194,000
	2,194,000
	
18.31 	$1,400,000 the first year and $1,400,000 the 
18.32 	second year are from the water recreation 
18.33 	account in the natural resources fund for 
18.34 	enhancing public water access facilities. 
18.35 	Of this amount, $100,000 is a onetime 
19.1 	appropriation to provide downloadable 
19.2 	GPS coordinates and river gauge data 
19.3 	interpretation. The base appropriation is 
19.4 	$1,300,000.
19.5 	The appropriation in Laws 2003, chapter 
19.6 	128, article 1, section 5, subdivision 6, from 
19.7 	the water recreation account in the natural 
19.8 	resources fund for a cooperative project with 
19.9 	the United States Army Corps of Engineers 
19.10 	to develop the Mississippi Whitewater Park 
19.11 	is available until June 30, 2011. The project 
19.12 	must be designed to prevent the spread of 
19.13 	aquatic invasive species.
19.14 	$3,996,000 the first year and $3,996,000 the 
19.15 	second year are from the natural resources 
19.16 	fund for state park and recreation area 
19.17 	operations. This appropriation is from the 
19.18 	revenue deposited in the natural resources 
19.19 	fund under Minnesota Statutes, section 
19.20 	297A.94, paragraph (e), clause (2).
19.21 	$8,424,000 the first year and $8,424,000 
19.22 	the second year are from the snowmobile 
19.23 	trails and enforcement account in the 
19.24 	natural resources fund for the snowmobile 
19.25 	grants-in-aid program. This additional 
19.26 	money may be used for new grant-in-aid 
19.27 	trails. Any unencumbered balance does not 
19.28 	cancel at the end of the first year and is 
19.29 	available for the second year.
19.30 	$400,000 the first year and $400,000 the 
19.31 	second year are from the snowmobile account 
19.32 	in the natural resources fund for operation 
19.33 	and maintenance of state trails and increased 
19.34 	oversight and training for the grant-in-aid 
19.35 	program. This is a onetime appropriation.
20.1 	$1,360,000 the first year and $1,360,000 
20.2 	the second year are from the natural 
20.3 	resources fund for the off-highway vehicle 
20.4 	grants-in-aid program. Of this amount, 
20.5 	$1,110,000 each year is from the all-terrain 
20.6 	vehicle account; $150,000 each year is from 
20.7 	the off-highway motorcycle account; and 
20.8 	$100,000 each year is from the off-road 
20.9 	vehicle account. Any unencumbered balance 
20.10 	does not cancel at the end of the first year 
20.11 	and is available for the second year.
20.12 	$760,000 the first year and $760,000 the 
20.13 	second year are from the natural resources 
20.14 	fund for state trail operations. This 
20.15 	appropriation is from the revenue deposited 
20.16 	in the natural resources fund under Minnesota 
20.17 	Statutes, section 297A.94, paragraph (e), 
20.18 	clause (2).

20.19	Subd. 6.Fish and Wildlife Management
 		68,557,000
		68,407,000

20.20	Appropriations by Fund
	
20.21	General
	2,323,000
	2,323,000
	
20.22	Natural Resources
	2,096,000
	2,096,000
	
20.23	Game and Fish
	64,138,000
	63,988,000
	
20.24 	$220,000 the first year and $220,000 the 
20.25 	second year are from the nongame wildlife 
20.26 	account in the natural resources fund for gray 
20.27 	wolf management and research.
20.28 	$285,000 the first year and $285,000 the 
20.29 	second year are from the walleye stamp 
20.30 	account in the game and fish fund for the 
20.31 	purposes specified under Minnesota Statutes, 
20.32 	section 97A.075, subdivision 6.
20.33 	$600,000 the first year and $600,000 the 
20.34 	second year are to accelerate wildlife health 
20.35 	programs. This is a onetime appropriation.
21.1 	$1,860,000 the first year and $1,860,000 the 
21.2 	second year are from the wildlife acquisition 
21.3 	surcharge account for only the purposes 
21.4 	specified in Minnesota Statutes, section 
21.5 	97A.071, subdivision 2a. This appropriation 
21.6 	is available until spent.
21.7 	$8,167,000 the first year and $8,167,000 
21.8 	the second year are from the heritage 
21.9 	enhancement account in the game and 
21.10 	fish fund only for activities specified in 
21.11 	Minnesota Statutes, section 297A.94, 
21.12 	paragraph (e), clause (1). Of this amount, at 
21.13 	least 80 percent must be used to purchase 
21.14 	or restore land, and of this, over half must 
21.15 	be used for restoration. Notwithstanding 
21.16 	Minnesota Statutes, section 297A.94, five 
21.17 	percent of this appropriation may be used for 
21.18 	expanding hunter and angler recruitment and 
21.19 	retention. This appropriation may be used to 
21.20 	leverage other funds and to provide fish and 
21.21 	wildlife technical assistance for shallow lake 
21.22 	management and restoration and stream and 
21.23 	lake shoreland and habitat improvement and 
21.24 	maintenance on private lands.
21.25 	Notwithstanding Minnesota Statutes, section 
21.26 	84.943, $13,000 the first year and $13,000 
21.27 	the second year from the critical habitat 
21.28 	private sector matching account may be used 
21.29 	to publicize the critical habitat license plate 
21.30 	match program.
21.31 	$830,000 the first year and $830,000 the 
21.32 	second year are from the trout and salmon 
21.33 	management account for only the purposes 
21.34 	specified in Minnesota Statutes, section 
21.35 	97A.075, subdivision 3.
22.1 	$1,553,000 the first year and $1,553,000 
22.2 	the second year are from the deer habitat 
22.3 	improvement account for only the purposes 
22.4 	specified in Minnesota Statutes, section 
22.5 	97A.075, subdivision 1, paragraph (b).
22.6 	$890,000 the first year and $890,000 the 
22.7 	second year are from the deer and bear 
22.8 	management account for only the purposes 
22.9 	specified in Minnesota Statutes, section 
22.10 	97A.075, subdivision 1, paragraph (c).
22.11 	$700,000 the first year and $700,000 the 
22.12 	second year are from the waterfowl habitat 
22.13 	improvement account for only the purposes 
22.14 	specified in Minnesota Statutes, section 
22.15 	97A.075, subdivision 2.
22.16 	$925,000 the first year and $925,000 the 
22.17 	second year are from the pheasant habitat 
22.18 	improvement account for only the purposes 
22.19 	specified in Minnesota Statutes, section 
22.20 	97A.075, subdivision 4.
22.21 	$192,000 the first year and $192,000 the 
22.22 	second year are from the wild turkey 
22.23 	management account for only the purposes 
22.24 	specified in Minnesota Statutes, section 
22.25 	97A.075, subdivision 5. Of this amount, 
22.26 	$8,000 the first year and $8,000 the second 
22.27 	year are appropriated from the game and 
22.28 	fish fund for transfer to the wild turkey 
22.29 	management account for purposes specified 
22.30 	in Minnesota Statutes, section 97A.075, 
22.31 	subdivision 5.
22.32 	Notwithstanding Minnesota Statutes, section 
22.33 	16A.28, the appropriations encumbered 
22.34 	under contract on or before June 30, 2011, for 
23.1 	aquatic restoration grants and wildlife habitat 
23.2 	grants are available until June 30, 2012.

23.3	Subd. 7.Ecological Services
 		14,475,000
		14,475,000

23.4	Appropriations by Fund
	
23.5	General
	6,530,000
	6,530,000
	
23.6	Natural Resources
	3,994,000
	3,994,000
	
23.7	Game and Fish
	3,951,000
	3,951,000
	
23.8 	$1,223,000 the first year and $1,223,000 the 
23.9 	second year are from the nongame wildlife 
23.10 	management account in the natural resources 
23.11 	fund for the purpose of nongame wildlife 
23.12 	management. Notwithstanding Minnesota 
23.13 	Statutes, section 290.431, $100,000 the first 
23.14 	year and $100,000 the second year may be 
23.15 	used for nongame information, education, 
23.16 	and promotion.
23.17 	$1,636,000 the first year and $1,636,000 
23.18 	the second year are from the heritage 
23.19 	enhancement account in the game and 
23.20 	fish fund for only the purposes specified 
23.21 	in Minnesota Statutes, section 297A.94, 
23.22 	paragraph (e), clause (1).
23.23 	$2,142,000 the first year and $2,142,000 
23.24 	the second year are from the invasive 
23.25 	species account and $500,000 each year is 
23.26 	appropriated from the game and fish fund to 
23.27 	the invasive species account for management, 
23.28 	public awareness, assessment and monitoring 
23.29 	research, law enforcement, and water access 
23.30 	inspection to prevent the spread of invasive 
23.31 	species; management of invasive plants in 
23.32 	public waters; and management of terrestrial 
23.33 	invasive species on state-administered lands. 
23.34 	Funds from this appropriation may not be 
24.1 	used to purchase or use pesticides suspected 
24.2 	of being endocrine disruptors. 

24.3	Subd. 8.Enforcement
 		31,519,000
		31,519,000

24.4	Appropriations by Fund
	
24.5	General
	2,918,000
	2,918,000
	
24.6	Natural Resources
	8,531,000
	8,531,000
	
24.7	Game and Fish
	19,970,000
	19,970,000
	
24.8	Remediation
	100,000
	100,000
	
24.9 	$1,082,000 the first year and $1,082,000 the 
24.10 	second year are from the water recreation 
24.11 	account in the natural resources fund for 
24.12 	grants to counties for boat and water safety.
24.13 	$315,000 the first year and $315,000 the 
24.14 	second year are from the snowmobile 
24.15 	trails and enforcement account in the 
24.16 	natural resources fund for grants to local 
24.17 	law enforcement agencies for snowmobile 
24.18 	enforcement activities.
24.19 	$1,164,000 the first year and $1,164,000 
24.20 	the second year are from the heritage 
24.21 	enhancement account in the game and 
24.22 	fish fund for only the purposes specified 
24.23 	in Minnesota Statutes, section 297A.94, 
24.24 	paragraph (e), clause (1).
24.25 	$510,000 the first year and $510,000 
24.26 	the second year are from the natural 
24.27 	resources fund for grants to county law 
24.28 	enforcement agencies for off-highway 
24.29 	vehicle enforcement and public education 
24.30 	activities based on off-highway vehicle use 
24.31 	in the county. Of this amount, $498,000 each 
24.32 	year is from the all-terrain vehicle account; 
24.33 	$11,000 each year is from the off-highway 
24.34 	motorcycle account; and $1,000 each year 
24.35 	is from the off-road vehicle account. The 
25.1 	county enforcement agencies may use 
25.2 	money received under this appropriation 
25.3 	to make grants to other local enforcement 
25.4 	agencies within the county that have a high 
25.5 	concentration of off-highway vehicle use. Of 
25.6 	this appropriation, $25,000 each year is for 
25.7 	administration of these grants.

25.8	Subd. 9.Operations Support
 		1,830,000
		1,830,000

25.9	Appropriations by Fund
	
25.10	General
	207,000
	207,000
	
25.11	Natural Resources
	534,000
	534,000
	
25.12	Game and Fish
	1,089,000
	1,089,000
	
25.13 	The commissioner may redirect the general 
25.14 	fund reduction of $1,933,000 in fiscal year 
25.15 	2010 and $1,933,000 in fiscal year 2011, to 
25.16 	other subdivisions of this section. No grants 
25.17 	may be reduced. The commissioner shall 
25.18 	report by October 1, 2011, to the chairs of 
25.19 	the legislative committees having primary 
25.20 	jurisdiction over environment and natural 
25.21 	resources policy and finance regarding any 
25.22 	redirection and what department outcomes 
25.23 	were affected by the redirection.
25.24 	$320,000 the first year and $320,000 the 
25.25 	second year are from the natural resources 
25.26 	fund for grants to be divided equally between 
25.27 	the city of St. Paul for the Como Zoo 
25.28 	and Conservatory and the city of Duluth 
25.29 	for the Duluth Zoo. This appropriation 
25.30 	is from the revenue deposited to the fund 
25.31 	under Minnesota Statutes, section 297A.94, 
25.32 	paragraph (e), clause (5).

25.33
25.34	Sec. 5. BOARD OF WATER AND SOIL 
RESOURCES
 	$
	16,693,000
	$
	16,418,000

26.1	Appropriations by Fund
	
26.2		2010
	2011
	
26.3	General
	16,493,000
	16,218,000
	
26.4 	$3,856,000 the first year and $3,856,000 the 
26.5 	second year are for natural resources block 
26.6 	grants to local governments. The board may 
26.7 	reduce the amount of the natural resources 
26.8 	block grant to a county by an amount equal to 
26.9 	any reduction in the county's general services 
26.10 	allocation to a soil and water conservation 
26.11 	district from the county's previous year 
26.12 	allocation when the board determines that 
26.13 	the reduction was disproportionate. Grants 
26.14 	must be matched with a combination of local 
26.15 	cash or in-kind contributions. The base 
26.16 	grant portion related to water planning must 
26.17 	be matched by an amount as specified by 
26.18 	Minnesota Statutes, section 103B.3369.
26.19 	$3,506,000 the first year and $3,506,000 
26.20 	the second year are for grants requested 
26.21 	by soil and water conservation districts for 
26.22 	general purposes, nonpoint engineering, 
26.23 	and implementation of the reinvest in 
26.24 	Minnesota conservation reserve program. 
26.25 	Upon approval of the board, expenditures 
26.26 	may be made from these appropriations for 
26.27 	supplies and services benefiting soil and 
26.28 	water conservation districts. Any district 
26.29 	requesting a grant under this paragraph shall 
26.30 	maintain a Web page that publishes, at a 
26.31 	minimum, its annual plan, annual report, 
26.32 	annual audit, and annual budget, including 
26.33 	membership dues and meeting notices and 
26.34 	minutes.
27.1 	$500,000 the first year and $500,00 the 
27.2 	second year are for feedlot water quality 
27.3 	grants for feedlots under 300 animal units 
27.4 	where there are impaired waters.
27.5 	$1,169,000 the first year and $1,169,000 
27.6 	the second year are for grants to soil and 
27.7 	water conservation districts for cost-sharing 
27.8 	contracts for erosion control and related 
27.9 	water quality management.
27.10 	$1,200,000 the first year and $1,200,000 the 
27.11 	second year are for grants for cost sharing 
27.12 	contracts to establish and maintain vegetation 
27.13 	buffers and restored native prairie.
27.14 	$200,000 the first year and $200,000 
27.15 	the second year are available for county 
27.16 	cooperative weed management programs and 
27.17 	to restore native plants in selected invasive 
27.18 	species management sites by providing 
27.19 	local native seeds and plants to landowners 
27.20 	for implementation. This appropriation is 
27.21 	available until expended. If the appropriation 
27.22 	in either year is insufficient, the appropriation 
27.23 	in the other year is available for it. Any 
27.24 	unencumbered balance in the board's 
27.25 	program of grants does not cancel at the 
27.26 	end of the first year and is available for the 
27.27 	second year for the same grant program. 
27.28 	Notwithstanding Minnesota Statutes, section 
27.29 	103C.501, a balance in the board's cost-share 
27.30 	program is available for $150,000 each year 
27.31 	for evaluating and reporting on performance, 
27.32 	financial, and activity information of local 
27.33 	water management entities as provided for 
27.34 	in Minnesota Statutes, section 103B.102. 
27.35 	Notwithstanding Minnesota Statutes, section 
28.1 	103C.501, the board may shift cost-share 
28.2 	funds in this section and may adjust the 
28.3 	technical and administrative assistance 
28.4 	portion of the grant funds to leverage 
28.5 	federal or other nonstate funds or to address 
28.6 	high-priority needs identified in local water 
28.7 	management plans.
28.8 	$500,000 the first year and $500,000 the 
28.9 	second year are for implementation and 
28.10 	enforcement of the Wetland Conservation 
28.11 	Act. The board must make available 
28.12 	information about these activities on the 
28.13 	board's Web site.
28.14 	$60,000 each year is for staff to monitor and 
28.15 	enforce wetland replacement, wetland bank 
28.16 	sites, and the Wetland Conservation Act. The 
28.17 	board must include in its biennial report to 
28.18 	the legislature information on all state and 
28.19 	local units of government, including special 
28.20 	purpose districts and impacts on wetlands 
28.21 	in the state. This information must be made 
28.22 	available on the board's Web site.
28.23 	$340,000 the first year and $340,000 the 
28.24 	second year are for cost-share grants to local 
28.25 	governments for public drainage records 
28.26 	modernization.
28.27 	$212,000 in each year is to provide assistance 
28.28 	to local drainage management officials and 
28.29 	for the costs of the Drainage Work Group.
28.30 	$90,000 the first year and $90,000 the second 
28.31 	year are for a grant to the Red River Basin 
28.32 	Commission for water quality and floodplain 
28.33 	management, including administration of 
28.34 	programs. The commission shall submit 
28.35 	a report to the chairs of the legislative 
29.1 	committees having primary jurisdiction 
29.2 	over environment and natural resources 
29.3 	policy and finance on the accomplishments 
29.4 	achieved with this appropriation by January 
29.5 	15, 2012. If the appropriation in either year 
29.6 	is insufficient, the appropriation in the other 
29.7 	year is available for it.
29.8 	$90,000 each year is to the Minnesota River 
29.9 	Basin Joint Powers Board, also known as 
29.10 	the Minnesota River Board, for operating 
29.11 	expenses to measure and report the results of 
29.12 	projects in the 12 major watersheds within 
29.13 	the Minnesota River basin. This amount 
29.14 	may be matched by nonstate funds. The 
29.15 	board shall submit a report to the chairs of 
29.16 	the legislative committees with jurisdiction 
29.17 	over environment and natural resources 
29.18 	policy and finance on a plan to transition to 
29.19 	self-sufficiency.
29.20 	$136,000 the first year and $136,000 
29.21 	the second year are for a grant to Area 
29.22 	II, Minnesota River Basin Projects, 
29.23 	for floodplain management, including 
29.24 	administration of programs.
29.25 	The appropriations for grants in this 
29.26 	section are available until expended. If an 
29.27 	appropriation for grants in either year is 
29.28 	insufficient, the appropriation in the other 
29.29 	year is available for it.
29.30 	To the extent possible, any restoration 
29.31 	conducted with money appropriated in this 
29.32 	section must plant vegetation or sow seed 
29.33 	only of ecotypes native to Minnesota, and 
29.34 	preferably of the local ecotype, using a high 
29.35 	diversity of species originating from as 
30.1 	close to the restoration site as possible, and 
30.2 	protect existing native prairies from genetic 
30.3 	contamination.
30.4 	A recipient of a grant funded by an 
30.5 	appropriation under this section shall display 
30.6 	on its Web site detailed information on 
30.7 	the expenditure of the grant funds, and 
30.8 	measurable outcomes as a result of the 
30.9 	expenditure of funds, and submit this 
30.10 	information to the board by June 30 each 
30.11 	year. A recipient without an active Web site 
30.12 	shall report to the board by June 30 each year 
30.13 	detailed information on the expenditure of 
30.14 	the grant funds, and measurable outcomes 
30.15 	as a result of the expenditure of funds. The 
30.16 	board shall display the information received 
30.17 	by recipients under this paragraph on the 
30.18 	board's Web site.
30.19 	The board shall require the chief financial 
30.20 	officer or other financial staff to display the 
30.21 	board's budget on the board's Web site in 
30.22 	a manner that will allow citizens to easily 
30.23 	understand the value they are getting for their 
30.24 	money.

30.25	Sec. 6. METROPOLITAN COUNCIL
 	$
	8,377,000
	$
	8,377,000

30.26	Appropriations by Fund
	
30.27		2010
	2011
	
30.28	General
	3,807,000
	3,807,000
	
30.29	Natural Resources
	4,570,000
	4,570,000
	
30.30 	$3,807,000 the first year and $3,807,000 
30.31 	the second year are for metropolitan area 
30.32 	regional parks operation and maintenance 
30.33 	according to Minnesota Statutes, section 
30.34 	473.351.
31.1 	$4,570,000 the first year and $4,570,000 the 
31.2 	second year are from the natural resources 
31.3 	fund for metropolitan area regional parks 
31.4 	and trails maintenance and operations. This 
31.5 	appropriation is from the revenue deposited 
31.6 	in the natural resources fund under Minnesota 
31.7 	Statutes, section 297A.94, paragraph (e), 
31.8 	clause (3).

31.931.10
	Sec. 7. MINNESOTA CONSERVATION 
CORPS
 	$
	965,000
	$
	965,000

31.11	Appropriations by Fund
	
31.12		2010
	2011
	
31.13	General
	475,000
	475,000
	
31.14	Natural Resources
	490,000
	490,000
	
31.15 	The Minnesota Conservation Corps may 
31.16 	receive money appropriated from the 
31.17 	natural resources fund under this section 
31.18 	only as provided in an agreement with the 
31.19 	commissioner of natural resources.

31.20	Sec. 8. ZOOLOGICAL BOARD
 	$
	6,839,000
	$
	6,839,000

31.21	Appropriations by Fund
	
31.22		2010
	2011
	
31.23	General
	6,701,000
	6,701,000
	
31.24	Natural Resources
	138,000
	138,000
	
31.25 	$138,000 the first year and $138,000 the 
31.26 	second year are from the natural resources 
31.27 	fund from the revenue deposited under 
31.28 	Minnesota Statutes, section 297A.94, 
31.29 	paragraph (e), clause (5).

31.30
31.31	Sec. 9. SCIENCE MUSEUM OF 
MINNESOTA
 	$
	1,187,000
	$
	1,187,000

31.32 	Sec. 10. Minnesota Statutes 2008, section 84.0835, subdivision 3, is amended to read:
32.1 		Subd. 3.Citation authority. Employees designated by the commissioner under 
32.2 	subdivision 1 may issue citations, as specifically authorized under this subdivision, for 
32.3 	violations of:
32.4 	(1) sections 85.052, subdivision 3 (payment of camping fees in state parks), 
32.5 	85.45, subdivision 1 (cross-country ski pass), and85.46 (horse trail pass), and 84.9275 
32.6 	(nonresident all-terrain vehicle state trail pass); 
32.7 	(2) rules relating to hours and days of operation, restricted areas, noise, fireworks, 
32.8 	environmental protection, fires and refuse, pets, picnicking, camping and dispersed 
32.9 	camping, nonmotorized uses, construction of unauthorized permanent trails, mooring of 
32.10 	boats, fish cleaning, swimming, storage and abandonment of personal property, structures 
32.11 	and stands, animal trespass, state park individual and group motor vehicle permits, 
32.12 	licensed motor vehicles, designated roads, and snowmobile operation off trails;
32.13 	(3) rules relating to off-highway vehicle registration, display of registration numbers, 
32.14 	required equipment, operation restrictions, off-trail use for hunting and trapping, and 
32.15 	operation in lakes, rivers, and streams;
32.16 	(4) rules relating to off-highway vehicle and snowmobile operation causing damage 
32.17 	or in closed areas within the Richard J. Dorer Memorial Hardwood State Forest;
32.18 	(5) rules relating to parking, snow removal, and damage on state forest roads; and
32.19 	(6) rules relating to controlled hunting zones on major wildlife management units.

32.20 	EFFECTIVE DATE. This section is effective January 1, 2010.

32.21 	Sec. 11. [84.0854] GIFT CARD AND CERTIFICATE SALES; RECEIPTS; 
32.22 	TRANSFERS; APPROPRIATION.
32.23 		Subdivision 1.Sales authorized; gift cards and certificates. The commissioner 
32.24 	may sell gift cards and certificates that can be used to purchase licenses, permits, products, 
32.25 	or services sold by the commissioner. Gift cards and certificates are valid until they are 
32.26 	redeemed. The commissioner may advertise the availability of this program and items 
32.27 	offered for sale under this section.
32.28 		Subd. 2.Receipts; disposition. Proceeds of gift card and certificate sales shall be 
32.29 	deposited in an account in the special revenue fund. When gift cards or certificates are 
32.30 	redeemed, funds shall be transferred to the appropriate account or fund based on the 
32.31 	license, permit, product, or service purchased. Money in the gift card and certificate 
32.32 	account shall accrue interest, which shall be credited to the account. Interest on funds in 
32.33 	the account is appropriated to the commissioner to help cover the cost of administering 
32.34 	the gift card and certificate program. Money from gift cards and certificates sold but 
32.35 	unredeemed after three years shall be transferred to the various accounts and funds 
33.1 	receiving revenue from purchases of licenses, permits, products, or services purchased 
33.2 	with gift card or certificate redemptions in the last two fiscal years. Funds shall be 
33.3 	distributed based on the dollar value of cards redeemed for the various licenses, permits, 
33.4 	products, or services on a pro rata basis.
33.5 		Subd. 3.Exemption from rulemaking. This section is not subject to the 
33.6 	rulemaking provisions of chapter 14 and section 14.386 does not apply.

33.7 	Sec. 12. Minnesota Statutes 2008, section 84.415, subdivision 5, is amended to read:
33.8 		Subd. 5.Fee Fees; disposition. (a) In the event the construction of such lines causes 
33.9 	damage to timber or other property of the state on or along the same, the license or permit 
33.10 	shall also provide for payment to the commissioner of finance of the amount thereof as 
33.11 	may be determined by the commissioner.
33.12 	(b) The application fee specified in Minnesota Rules, chapter 6135, is credited 
33.13 	to the general fund.
33.14 	All money received under such licenses or permits(c) The utility crossing fees 
33.15 	specified in Minnesota Rules, chapter 6135, shall be credited to the fund to which other 
33.16 	income or proceeds of sale from such land would be credited, if provision therefor be 
33.17 	made by law, otherwise to the general fund.
33.18 	(d) Money received under subdivision 6 must be deposited in the land management 
33.19 	account in the natural resources fund. Money in the land management account of the 
33.20 	natural resources fund is appropriated to the commissioner of natural resources to cover 
33.21 	the costs incurred for issuing and monitoring utility licenses.

33.22 	Sec. 13. Minnesota Statutes 2008, section 84.415, is amended by adding a subdivision 
33.23 	to read:
33.24 		Subd. 6.Supplemental application fee and monitoring fee. (a) In addition to 
33.25 	the application fee and utility crossing fees specified in Minnesota Rules, chapter 6135, 
33.26 	the commissioner of natural resources shall assess the applicant for a utility license the 
33.27 	following fees:
33.28 	(1) a supplemental application fee of $1,500 for a public water crossing license and 
33.29 	a supplemental application fee of $4,500 for a public lands crossing license, to cover 
33.30 	reasonable costs for reviewing the application and preparing the license; and
33.31 	(2) a monitoring fee to cover the projected reasonable costs for monitoring the 
33.32 	construction of the utility line and preparing special terms and conditions of the license 
33.33 	to ensure proper construction. The commissioner must give the applicant an estimate of 
33.34 	the monitoring fee before the applicant submits the fee.
34.1 	(b) The applicant shall pay fees under this subdivision to the commissioner of 
34.2 	natural resources. The commissioner shall not issue the license until the applicant has 
34.3 	paid all fees in full.
34.4 	(c) Upon completion of construction, the commissioner shall refund any remaining 
34.5 	balance left between the fee assessed for monitoring and the amount used by the 
34.6 	commissioner in monitoring the construction of the utility line. The commissioner shall 
34.7 	not return the application fees, even if the application is withdrawn or denied.

34.8 	Sec. 14. Minnesota Statutes 2008, section 84.63, is amended to read:
34.9 	84.63 CONVEYANCE OF INTERESTS IN LANDS TO STATE AND 
34.10 	FEDERAL GOVERNMENTS.
34.11 	(a) Notwithstanding any existing law to the contrary, the commissioner of natural 
34.12 	resources is hereby authorized on behalf of the state to convey to the United States 
34.13 	or to the state of Minnesota or any of its subdivisions, upon state-owned lands under 
34.14 	the administration of the commissioner of natural resources, permanent or temporary 
34.15 	easements for specified periods or otherwise for trails, highways, roads including 
34.16 	limitation of right of access from the lands to adjacent highways and roads, flowage for 
34.17 	development of fish and game resources, stream protection, flood control, and necessary 
34.18 	appurtenances thereto, such conveyances to be made upon such terms and conditions 
34.19 	including provision for reversion in the event of non-user as the commissioner of natural 
34.20 	resources may determine.
34.21 	(b) In addition to the fee for the market value of the easement, the commissioner of 
34.22 	natural resources shall assess the applicant the following fees:
34.23 	(1) an application fee of $2,000 to cover reasonable costs for reviewing the 
34.24 	application and preparing the easement; and
34.25 	(2) a monitoring fee to cover the projected reasonable costs for monitoring the 
34.26 	construction of the easement and preparing special terms and conditions for the easement. 
34.27 	The commissioner must give the applicant an estimate of the monitoring fee before the 
34.28 	applicant submits the fee.
34.29 	(c) The applicant shall pay these fees to the commissioner of natural resources. 
34.30 	The commissioner shall not issue the easement until the applicant has paid in full the 
34.31 	application fee, the monitoring fee, and the market value payment for the easement.
34.32 	(d) Upon completion of construction, the commissioner shall refund any remaining 
34.33 	balance left between the monitoring fee assessed and the amount used by the commissioner 
34.34 	in monitoring the construction of the easement. The commissioner shall not return the 
34.35 	application fee, even if the application is withdrawn or denied.
35.1 	(e) Money received under paragraph (b) must be deposited in the land management 
35.2 	account in the natural resources fund. Money in the land management account of the 
35.3 	natural resources fund is appropriated to the commissioner of natural resources to cover 
35.4 	the reasonable costs incurred for issuing and monitoring easements.

35.5 	Sec. 15. Minnesota Statutes 2008, section 84.631, is amended to read:
35.6 	84.631 ROAD EASEMENTS ACROSS STATE LANDS.
35.7 	(a) Except as provided in section 85.015, subdivision 1b, the commissioner, on 
35.8 	behalf of the state, may convey a road easement across state land under the commissioner's 
35.9 	jurisdiction other than school trust land, to a private person requesting an easement for 
35.10 	access to property owned by the person only if the following requirements are met: (1) 
35.11 	there are no reasonable alternatives to obtain access to the property; and (2) the exercise 
35.12 	of the easement will not cause significant adverse environmental or natural resource 
35.13 	management impacts.
35.14 	(b) The commissioner shall:
35.15 	(1) require the applicant to pay the market value of the easement;
35.16 	(2) provide that the easement reverts to the state in the event of nonuse; and
35.17 	(3) impose other terms and conditions of use as necessary and appropriate under 
35.18 	the circumstances.
35.19 	(c) An applicant shall submit aan application fee of up to $2,000 with each 
35.20 	application for a road easement across state land. The commissioner must give the 
35.21 	applicant an estimate of the costs of the road easement before the applicant submits the 
35.22 	fee. The application fee is nonrefundable, even if the application is withdrawn or denied.
35.23 	(d) In addition to the payment for the market value of the easement and the 
35.24 	application fee, the commissioner of natural resources shall assess the applicant a 
35.25 	monitoring fee to cover the projected reasonable costs for monitoring the construction 
35.26 	of the easement and preparing special terms and conditions for the easement. The 
35.27 	commissioner must give the applicant an estimate of the monitoring fee before the 
35.28 	applicant submits the fee. The applicant shall pay the application and monitoring fees to 
35.29 	the commissioner of natural resources. The commissioner shall not issue the easement 
35.30 	until the applicant has paid in full the application fee, the monitoring fee, and the market 
35.31 	value payment for the easement. 
35.32 	(e) Upon completion of construction, the commissioner shall refund any remaining 
35.33 	balance left between the monitoring fee assessed and the amount used by the commissioner 
35.34 	in monitoring the construction of the easement.
36.1 	(f) Fees collected under paragraphparagraphs (c) and (d) must be deposited in the 
36.2 	land management account in the natural resources fund. Money in the land management 
36.3 	account of the natural resources fund is appropriated to the commissioner of natural 
36.4 	resources to cover the reasonable costs incurred under this section.

36.5 	Sec. 16. Minnesota Statutes 2008, section 84.632, is amended to read:
36.6 	84.632 CONVEYANCE OF UNNEEDED STATE EASEMENTS.
36.7 	(a) Notwithstanding section 92.45, the commissioner of natural resources may, 
36.8 	in the name of the state, release all or part of an easement acquired by the state upon 
36.9 	application of a landowner whose property is burdened with the easement if the easement 
36.10 	is not needed for state purposes.  
36.11 	(b) All or part of an easement may be released by payment of consideration of not 
36.12 	less than $500, to be determined by the commissioner the market value of the easement. 
36.13 	The release must be in a form approved by the attorney general.
36.14 	(c) Money received for release of the easement under paragraph (b) must be credited 
36.15 	to the account from which money was expended for purchase of the easement. If there is 
36.16 	no specific account, the money must be credited to the land acquisition account established 
36.17 	in section 94.165.  
36.18 	(d) In addition to payment under paragraph (b), the commissioner of natural 
36.19 	resources shall assess a landowner who applies for a release under this section an 
36.20 	application fee of $2,000 for reviewing the application and preparing the release of 
36.21 	easement. The applicant shall pay the application fee to the commissioner of natural 
36.22 	resources. The commissioner shall not issue the release of easement until the applicant 
36.23 	has paid the application fee in full. The commissioner shall not return the application fee, 
36.24 	even if the application is withdrawn or denied.
36.25 	(e) Money received under paragraph (d) must be deposited in the land management 
36.26 	account in the natural resources fund. Money in the land management account of the 
36.27 	natural resources fund is appropriated to the commissioner of natural resources to cover 
36.28 	the reasonable costs incurred under this section.

36.29 	Sec. 17. Minnesota Statutes 2008, section 84.922, subdivision 1a, is amended to read:
36.30 		Subd. 1a.Exemptions. All-terrain vehicles exempt from registration are:
36.31 	(1) vehicles owned and used by the United States, the state, another state, or a 
36.32 	political subdivision;
36.33 	(2) vehicles registered in another state or country that have not been in this state for 
36.34 	more than 30 consecutive days; 
37.1 	(3) vehicles that:
37.2 	(i) are owned by a resident of another state or country that does not require 
37.3 	registration of all-terrain vehicles;
37.4 	(ii) have not been in this state for more than 30 consecutive days; and
37.5 	(iii) are operated on state and grant-in-aid trails by a nonresident possessing a 
37.6 	nonresident all-terrain vehicle state trail pass;
37.7 	(3) (4) vehicles used exclusively in organized track racing events; and
37.8 	(4) (5) vehicles that are 25 years old or older and were originally produced as a 
37.9 	separate identifiable make by a manufacturer.

37.10 	EFFECTIVE DATE. This section is effective January 1, 2010.

37.11 	Sec. 18. [84.9275] NONRESIDENT ALL-TERRAIN VEHICLE STATE TRAIL 
37.12 	PASS.
37.13 		Subdivision 1.Pass required; fee. (a) A nonresident may not operate an all-terrain 
37.14 	vehicle on a state or grant-in-aid all-terrain vehicle trail unless the operator carries a valid 
37.15 	nonresident all-terrain vehicle state trail pass in immediate possession. The pass must 
37.16 	be available for inspection by a peace officer, a conservation officer, or an employee 
37.17 	designated under section 84.0835.
37.18 	(b) The commissioner of natural resources shall issue a pass upon application and 
37.19 	payment of a $20 fee. The pass is valid from January 1 through December 31. Fees 
37.20 	collected under this section, except for the issuing fee for licensing agents, shall be 
37.21 	deposited in the state treasury and credited to the all-terrain vehicle account in the natural 
37.22 	resources fund and, except for the electronic licensing system commission established by 
37.23 	the commissioner under section 84.027, subdivision 15, must be used for grants-in-aid to 
37.24 	counties and municipalities for all-terrain vehicle organizations to construct and maintain 
37.25 	all-terrain vehicle trails and use areas.
37.26 	(c) A nonresident all-terrain vehicle state trail pass is not required for:
37.27 	(1) an all-terrain vehicle that is owned and used by the United States, another state, 
37.28 	or a political subdivision thereof that is exempt from registration under section 84.922, 
37.29 	subdivision 1a; or
37.30 	(2) a person operating an all-terrain vehicle only on the portion of a trail that is 
37.31 	owned by the person or the person's spouse, child, or parent.
37.32 		Subd. 2.License agents. The commissioner may appoint agents to issue and sell 
37.33 	nonresident all-terrain vehicle state trail passes. The commissioner may revoke the 
37.34 	appointment of an agent at any time. The commissioner may adopt additional rules as 
37.35 	provided in section 97A.485, subdivision 11. An agent shall observe all rules adopted 
38.1 	by the commissioner for accounting and handling of passes pursuant to section 97A.485, 
38.2 	subdivision 11. An agent shall promptly deposit and remit all money received from the 
38.3 	sale of the passes, exclusive of the issuing fee, to the commissioner.
38.4 		Subd. 3.Issuance of passes. The commissioner and agents shall issue and sell 
38.5 	nonresident all-terrain vehicle state trail passes. The commissioner shall also make the 
38.6 	passes available through the electronic licensing system established under section 84.027, 
38.7 	subdivision 15.
38.8 		Subd. 4.Agent's fee. In addition to the fee for a pass, an issuing fee of $1 per pass 
38.9 	shall be charged. The issuing fee may be retained by the seller of the pass. Issuing fees for 
38.10 	passes issued by the commissioner shall be deposited in the all-terrain vehicle account in 
38.11 	the natural resources fund and retained for the operation of the electronic licensing system.
38.12 		Subd. 5.Duplicate passes. The commissioner and agents shall issue a duplicate 
38.13 	pass to persons whose pass is lost or destroyed using the process established under section 
38.14 	97A.405, subdivision 3, and rules adopted thereunder. The fee for a duplicate nonresident 
38.15 	all-terrain vehicle state trail pass is $2, with an issuing fee of 50 cents.

38.16 	EFFECTIVE DATE. This section is effective January 1, 2010.

38.17 	Sec. 19. Minnesota Statutes 2008, section 85.015, subdivision 1b, is amended to read:
38.18 		Subd. 1b.Easements for ingress and egress. (a) Notwithstanding section 
38.19 	16A.695, when a trail is established under this section, a private property owner who has a 
38.20 	preexisting right of ingress and egress over the trail right-of-way is granted, without 
38.21 	charge, a permanent easement for ingress and egress purposes only. The easement is 
38.22 	limited to the preexisting crossing and reverts to the state upon abandonment. Nothing 
38.23 	in this subdivision is intended to diminish or alter any written or recorded easement that 
38.24 	existed before the state acquired the land for the trail. 
38.25 	(b) The commissioner of natural resources shall assess the applicant an application 
38.26 	fee of $2,000 for reviewing the application and preparing the easement. The applicant 
38.27 	shall pay the application fee to the commissioner of natural resources. The commissioner 
38.28 	shall not issue the easement until the applicant has paid the application fee in full. The 
38.29 	commissioner shall not return the application fee, even if the application is withdrawn 
38.30 	or denied.
38.31 	(c) Money received under paragraph (b) must be deposited in the land management 
38.32 	account in the natural resources fund. Money in the land management account of the 
38.33 	natural resources fund is appropriated to the commissioner of natural resources to cover 
38.34 	the reasonable costs incurred under this section.

39.1 	Sec. 20. Minnesota Statutes 2008, section 85.053, subdivision 10, is amended to read:
39.2 		Subd. 10.Free entrance; totally and permanently disabled veterans. The 
39.3 	commissioner shall issue an annual park permit for no charge for to any veteran with a 
39.4 	total and permanent service-connected disability, as determined by the United States 
39.5 	Department of Veterans Affairs, who presents each year a copy of their determination 
39.6 	letter to a park attendant or commissioner's designee. For the purposes of this section, 
39.7 	"veteran"with a total and permanent service-connected disability" means a resident who 
39.8 	has a total and permanent service-connected disability as adjudicated by the United States 
39.9 	Veterans Administration or by the retirement board of one of the several branches of the 
39.10 	armed forces has the meaning given in section 197.447.

39.11 	EFFECTIVE DATE. This section is effective July 1, 2009, for state park permits 
39.12 	issued on or after that date.

39.13 	Sec. 21. Minnesota Statutes 2008, section 85.46, subdivision 3, is amended to read:
39.14 		Subd. 3.Issuance. The commissioner of natural resources and agents shall issue 
39.15 	and sell horse trail passes. The pass shall include the applicant's signature and other 
39.16 	information deemed necessary by the commissioner. To be valid, a daily or annual pass 
39.17 	must be signed by the person riding, leading, or driving the horse, and a commercial 
39.18 	annual pass must be signed by the owner of the commercial trail riding facility.

39.19 	EFFECTIVE DATE. This section is effective January 1, 2010.

39.20 	Sec. 22. Minnesota Statutes 2008, section 85.46, subdivision 4, is amended to read:
39.21 		Subd. 4.Pass fees. (a) The fee for an annual horse trail pass is $20 for an individual 
39.22 	16 years of age and over. The fee shall be collected at the time the pass is purchased. 
39.23 	Annual passes are valid for one year beginning January 1 and ending December 31.
39.24 	(b) The fee for a daily horse trail pass is $4 for an individual 16 years of age and 
39.25 	over. The fee shall be collected at the time the pass is purchased. The daily pass is valid 
39.26 	only for the date designated on the pass form.
39.27 	(c) The fee for a commercial annual horse trail pass is $200 and includes issuance 
39.28 	of 15 passes. Additional or individual commercial annual horse trail passes may be 
39.29 	purchased by the commercial trail riding facility owner at a fee of $20 each. Commercial 
39.30 	annual horse trail passes are valid for one year beginning January 1 and ending December 
39.31 	31 and may be affixed to the horse tack, saddle, or person. Commercial annual horse trail 
39.32 	passes are not transferable. For the purposes of this section, a "commercial trail riding 
40.1 	facility" is an operation where horses are used for riding instruction or other equestrian 
40.2 	activities for hire.

40.3 	EFFECTIVE DATE. This section is effective January 1, 2010.

40.4 	Sec. 23. Minnesota Statutes 2008, section 85.46, subdivision 7, is amended to read:
40.5 		Subd. 7.Duplicate horse trail passes. The commissioner of natural resources and 
40.6 	agents shall issue a duplicate pass to a person or commercial trail riding facility owner 
40.7 	whose pass is lost or destroyed using the process established under section 97A.405, 
40.8 	subdivision 3, and rules adopted thereunder. The fee for a duplicate horse trail pass is $2, 
40.9 	with an issuing fee of 50 cents.

40.10 	EFFECTIVE DATE. This section is effective January 1, 2010.

40.11 	Sec. 24. Minnesota Statutes 2008, section 93.481, subdivision 1, is amended to read:
40.12 		Subdivision 1.Prohibition against mining without permit; application for 
40.13 	permit. Except as provided in this subdivision, after June 30, 1975, no person shall 
40.14 	engage in or carry out a mining operation for metallic minerals within the state unless the 
40.15 	person has first obtained a permit to mine from the commissioner. Any person engaging 
40.16 	in or carrying out a mining operation as of the effective date of the rules promulgated
40.17 	adopted under section 93.47 shall apply for a permit to mine within 180 days after the 
40.18 	effective date of such rules. Any such existing mining operation may continue during the 
40.19 	pendency of the application for the permit to mine. The person applying for a permit shall 
40.20 	apply on forms prescribed by the commissioner and shall submit such information as the 
40.21 	commissioner may require, including but not limited to the following: 
40.22 	(a) (1) a proposed plan for the reclamation or restoration, or both, of any mining 
40.23 	area affected by mining operations to be conducted on and after the date on which permits 
40.24 	are required for mining under this section;
40.25 	(b) (2) a certificate issued by an insurance company authorized to do business in 
40.26 	the United States that the applicant has a public liability insurance policy in force for 
40.27 	the mining operation for which the permit is sought, or evidence that the applicant has 
40.28 	satisfied other state or federal self-insurance requirements, to provide personal injury 
40.29 	and property damage protection in an amount adequate to compensate any persons who 
40.30 	might be damaged as a result of the mining operation or any reclamation or restoration 
40.31 	operations connected with the mining operation;
40.32 	(3) an application fee of:
40.33 	(i) $25,000 for a permit to mine for a taconite mining operation;
41.1 	(ii) $50,000 for a permit to mine for a nonferrous metallic minerals operation;
41.2 	(iii) $10,000 for a permit to mine for a scram mining operation; or
41.3 	(iv) $5,000 for a permit to mine for a peat operation;
41.4 	(c) (4) a bond which may be required pursuant to section 93.49; and 
41.5 	(d) (5) a copy of the applicant's advertisement of the ownership, location, and 
41.6 	boundaries of the proposed mining area and reclamation or restoration operations, which 
41.7 	advertisement shall be published in a legal newspaper in the locality of the proposed site 
41.8 	at least once a week for four successive weeks before the application is filed, except that if 
41.9 	the application is for a permit to conduct lean ore stockpile removal the advertisement 
41.10 	need be published only once.

41.11 	Sec. 25. Minnesota Statutes 2008, section 93.481, subdivision 3, is amended to read:
41.12 		Subd. 3.Term of permit; amendment. A permit issued by the commissioner 
41.13 	pursuant to this section shall be granted for the term determined necessary by the 
41.14 	commissioner for the completion of the proposed mining operation, including reclamation 
41.15 	or restoration. A permit may be amended upon written application to the commissioner. 
41.16 	A permit amendment application fee must be submitted with the written application. The 
41.17 	permit amendment application fee is ten percent of the amount provided for in subdivision 
41.18 	1, clause (3), for an application for the applicable permit to mine. If the commissioner 
41.19 	determines that the proposed amendment constitutes a substantial change to the permit, 
41.20 	the person applying for the amendment shall publish notice in the same manner as for a 
41.21 	new permit, and a hearing shall be held if written objections are received in the same 
41.22 	manner as for a new permit. An amendment may be granted by the commissioner if the 
41.23 	commissioner determines that lawful requirements have been met.

41.24 	Sec. 26. Minnesota Statutes 2008, section 93.481, subdivision 5, is amended to read:
41.25 		Subd. 5.Assignment. A permit may not be assigned or otherwise transferred 
41.26 	without the written approval of the commissioner. A permit assignment application fee 
41.27 	must be submitted with the written application. The permit assignment application fee 
41.28 	is ten percent of the amount provided for in subdivision 1, clause (3), for an application 
41.29 	for the applicable permit to mine.

41.30 	Sec. 27. Minnesota Statutes 2008, section 93.481, subdivision 7, is amended to read:
41.31 		Subd. 7.Mining administration account. The mining administration account is 
41.32 	established as an account in the natural resources fund. Ferrous mining administrative Fees 
41.33 	charged to owners, operators, or managers of mines under sections 93.481 and 93.482 shall 
42.1 	be credited to the account and may be appropriated to the commissioner to cover the costs 
42.2 	of providing and monitoring permits to mine ferrous metals under this section. Interest 
42.3 	accruing from investment of the account remains with the account until appropriated.

42.4 	EFFECTIVE DATE. This section is effective the day following final enactment.

42.5 	Sec. 28. [93.482] RECLAMATION FEES.
42.6 		Subdivision 1.Annual permit to mine fee. (a) The commissioner shall charge 
42.7 	every person holding a permit to mine an annual permit fee. The fee is payable to the 
42.8 	commissioner by June 30 of each year, beginning in 2009.
42.9 	(b) The annual permit to mine fee for a taconite mining operation is $60,000 if the 
42.10 	operation had production within the past calendar year to the year in which payment is due 
42.11 	and $30,000 if there has been no production within the past calendar year.
42.12 	(c) The annual permit to mine fee for a nonferrous metallic minerals mining 
42.13 	operation is $75,000 if the operation had production within the past calendar year to the 
42.14 	year in which payment is due and $37,500 if there has been no production within the 
42.15 	past calendar year.
42.16 	(d) The annual permit to mine fee for a scram mining operation is $5,000 if the 
42.17 	operation had production within the past calendar year to the year in which payment is due 
42.18 	and $2,500 if there has been no production within the past calendar year.
42.19 	(e) The annual permit to mine fee for a peat mining operation is $1,000 if the 
42.20 	operation had production within the past calendar year to the year in which payment is due 
42.21 	and $500 if there has been no production within the past calendar year.
42.22 		Subd. 2.Supplemental application fee for taconite and nonferrous metallic 
42.23 	minerals mining operation. (a) In addition to the application fee specified in section 
42.24 	93.481, the commissioner shall assess a person submitting an application for a permit to 
42.25 	mine for a taconite or a nonferrous metallic minerals mining operation the reasonable 
42.26 	costs for reviewing the application and preparing the permit to mine. For nonferrous 
42.27 	metallic minerals mining, the commissioner shall assess reasonable costs for monitoring 
42.28 	construction of the mining facilities.
42.29 	(b) The commissioner must give the applicant an estimate of the supplemental 
42.30 	application fee under this subdivision. The estimate must include a brief description 
42.31 	of the tasks to be performed and the estimated cost of each task. The application fee 
42.32 	under section 93.481 shall be subtracted from the estimate of costs to determine the 
42.33 	supplemental application fee.
42.34 	(c) The applicant and the commissioner shall enter into a written agreement to cover 
42.35 	the estimated costs to be incurred by the commissioner.
43.1 	(d) The commissioner shall not issue the permit to mine until the applicant has 
43.2 	paid all fees in full. Upon completion of construction of a nonferrous metallic minerals 
43.3 	facility, the commissioner shall refund any remaining balance between the fee assessed 
43.4 	for monitoring construction and the amount used by the commissioner in monitoring 
43.5 	construction of the mining facilities.
43.6 		Subd. 3.Reclamation fee on taconite iron ore produced. (a) For the purposes 
43.7 	of this subdivision:
43.8 	(1) "fee owner" means a person having any right, title, or interest in any minerals 
43.9 	or mineral rights in this state from which taconite iron ore is mined. Fee owner does not 
43.10 	include the United States, the state, or the University of Minnesota; 
43.11 	(2) "taconite iron ore" means a ferruginous chert or ferruginous slate in the form of 
43.12 	compact siliceous rock, in which the iron oxide is so finely disseminated that substantially 
43.13 	all of the iron bearing particles of merchantable grade are smaller than 20 mesh; and
43.14 	(3) "ton" means a gross ton of 2,240 pounds.
43.15 	(b) A fee owner is subject to a reclamation fee of $.0075 per ton of taconite iron ore 
43.16 	mined from the minerals or mineral rights owned by the fee owner.
43.17 	(c) The fee owner shall make payment to the commissioner no later than January 
43.18 	20 of each calendar year for ore removed during the previous calendar year. The fee 
43.19 	owner is liable for the payment of the reclamation fee. The fee owner may enter into an 
43.20 	agreement with the mining operator to make the payment on their behalf from royalties 
43.21 	due and owing or other financial terms.

43.22 	EFFECTIVE DATE. This section is effective the day following final enactment.

43.23 	Sec. 29. Minnesota Statutes 2008, section 97A.075, subdivision 1, is amended to read:
43.24 		Subdivision 1.Deer, bear, and lifetime licenses. (a) For purposes of this 
43.25 	subdivision, "deer license" means a license issued under section 97A.475, subdivisions 2, 
43.26 	clauses (5), (6), (7), (11), (13), (15), (16), and (17), and 3, clauses (2), (3), (4), (9), (11), 
43.27 	(12), and (13), and licenses issued under section 97B.301, subdivision 4. 
43.28 	(b) $2 from each annual deer license and $2 annually from the lifetime fish and 
43.29 	wildlife trust fund, established in section 97A.4742, for each license issued under section 
43.30 	97A.473, subdivision 4, shall be credited to the deer management account and shall be 
43.31 	used for deer habitat improvement or deer management programs. 
43.32 	(c) $1 from each annual deer license and each bear license and $1 annually from 
43.33 	the lifetime fish and wildlife trust fund, established in section 97A.4742, for each license 
43.34 	issued under section 97A.473, subdivision 4, shall be credited to the deer and bear 
44.1 	management account and shall be used for deer and bear management programs, including 
44.2 	a computerized licensing system. 
44.3 	(d) Fifty cents from each deer license is credited to the emergency deer feeding 
44.4 	and wild cervidae health management account and is appropriated for emergency deer 
44.5 	feeding and wild cervidae health management. Money appropriated for emergency 
44.6 	deer feeding and wild cervidae health management is available until expended. When 
44.7 	the unencumbered balance in the appropriation for emergency deer feeding and wild 
44.8 	cervidae health management at the end of a fiscal year exceeds $2,500,000 for the first 
44.9 	time, $750,000 is canceled to the unappropriated balance of the game and fish fund.
44.10 	The commissioner must inform the legislative chairs of the natural resources finance 
44.11 	committees every two years on how the money for emergency deer feeding and wild 
44.12 	cervidae health management has been spent. 
44.13 	Thereafter, When the unencumbered balance in the appropriation for emergency 
44.14 	deer feeding and wild cervidae health management exceeds $2,500,000 at the end of a 
44.15 	fiscal year, the unencumbered balance in excess of $2,500,000 is canceled and available 
44.16 	for deer and bear management programs and computerized licensing.

44.17 	Sec. 30. Minnesota Statutes 2008, section 103G.301, subdivision 2, is amended to read:
44.18 		Subd. 2.Permit application fees. (a) A permit application fee to defray the costs of 
44.19 	receiving, recording, and processing the application must be paid for a permit authorized 
44.20 	under this chapter and for each request to amend or transfer an existing permit. Fees 
44.21 	established under this subdivision, unless specified in paragraph (c), shall be compliant 
44.22 	with section 16A.1285.
44.23 	(b) The fee for a project appropriatingProposed projects that require water in excess 
44.24 	of 100 million gallons per year must be assessed fees to recover the reasonable costs 
44.25 	of preparing and processing the permit, including costsincurred to evaluate the project 
44.26 	and the costs incurred for environmental review. Fees collected under this paragraph 
44.27 	must be credited to an account in the natural resources fund and are appropriated to the 
44.28 	commissioner for fiscal years 2008 and 2009.
44.29 	(c) The fee to apply for a permit to appropriate water, other than a permit subject 
44.30 	to thein addition to any fee under paragraph (b); a permit to construct or repair a dam 
44.31 	that is subject to dam safety inspection; or a state general permit or to apply for the state 
44.32 	water bank program is $150. The application fee for a permit to work in public waters or 
44.33 	to divert waters for mining must be at least $150, but not more than $1,000, according to a 
44.34 	schedule of fees adopted under section 16A.1285.

45.1 	Sec. 31. Minnesota Statutes 2008, section 103G.301, subdivision 3, is amended to read:
45.2 		Subd. 3.Field inspection fees. (a) In addition to the application fee, the 
45.3 	commissioner may charge a field inspection fee for:
45.4 	(1) projects requiring a mandatory environmental assessment under chapter 116D;
45.5 	(2) projects undertaken without a required permit or application; and
45.6 	(3) projects undertaken in excess of limitations established in an issued permit.
45.7 	(b) The fee must be at least $100 but not more than actual inspection costs.
45.8 	(c) The fee is to cover actual costs related to a permit applied for under this chapter 
45.9 	or for a project undertaken without proper authorization.
45.10 	(d) The commissioner shall establish a schedule of field inspection fees under section 
45.11 	16A.1285. The schedule must include actual costs related to field inspection, including 
45.12 	investigations of the area affected by the proposed activity, analysis of the proposed 
45.13 	activity, consultant services, and subsequent monitoring, if any, of the activity authorized 
45.14 	by the permit. Fees collected under this subdivision must be credited to an account in the 
45.15 	natural resources fund and are appropriated to the commissioner.

45.16 	Sec. 32. Minnesota Statutes 2008, section 115.03, subdivision 5c, is amended to read:
45.17 		Subd. 5c.Regulation of storm water discharges. (a) The agency may issue a 
45.18 	general permit to any category or subcategory of point source storm water discharges 
45.19 	that it deems administratively reasonable and efficient without making any findings 
45.20 	under agency rules. Nothing in this subdivision precludes the agency from requiring an 
45.21 	individual permit for a point source storm water discharge if the agency finds that it is 
45.22 	appropriate under applicable legal or regulatory standards.
45.23 	(b) Pursuant to this paragraph, the legislature authorizes the agency to adopt and 
45.24 	enforce rules regulating point source storm water discharges. No further legislative 
45.25 	approval is required under any other legal or statutory provision whether enacted before or 
45.26 	after May 29, 2003.
45.27 	(c) The agency may develop performance standards, design standards, or other 
45.28 	tools to enable and promote the implementation of low-impact development and other 
45.29 	storm water management techniques. For the purposes of this section, "low-impact 
45.30 	development" means an approach to storm water management that mimics a site's natural 
45.31 	hydrology as the landscape is developed. Using the low-impact development approach, 
45.32 	storm water is managed on-site and the rate and volume of predevelopment storm water 
45.33 	reaching receiving waters is unchanged. The calculation of predevelopment hydrology is 
45.34 	based on native soil and vegetation.

46.1 	Sec. 33. Minnesota Statutes 2008, section 115.073, is amended to read:
46.2 	115.073 ENFORCEMENT FUNDING.
46.3 	Except as provided in section 115C.05, all money recovered by the state under this 
46.4 	chapter and chapters 115A and 116, including civil penalties and money paid under an 
46.5 	agreement, stipulation, or settlement, excluding money paid for past due fees or taxes, 
46.6 	up to the amount appropriated for implementation of Laws 1991, chapter 347, must be 
46.7 	deposited in the state treasury and credited to the environmental fund.  

46.8 	Sec. 34. Minnesota Statutes 2008, section 115.56, subdivision 4, is amended to read:
46.9 		Subd. 4.License fee. The fee for a license required under subdivision 2 is $100
46.10 	$200 per year. Revenue from the fees must be credited to the environmental fund and is 
46.11 	exempt from section 16A.1285.

46.12 	Sec. 35. Minnesota Statutes 2008, section 115.77, subdivision 1, is amended to read:
46.13 		Subdivision 1.Fees established. The following fees are established for the 
46.14 	purposes indicated: agency shall collect fees in amounts necessary, but no greater than the 
46.15 	amounts necessary, to cover the reasonable costs of reviewing applications and issuing 
46.16 	certifications.
46.17 	(1) application for examination, $32;
46.18 	(2) issuance of certificate, $23;
46.19 	(3) reexamination resulting from failure to pass an examination, $32;
46.20 	(4) renewal of certificate, $23;
46.21 	(5) replacement certificate, $10; and
46.22 	(6) reinstatement or reciprocity certificate, $40.

46.23 	Sec. 36. Minnesota Statutes 2008, section 115A.1314, subdivision 2, is amended to 
46.24 	read:
46.25 		Subd. 2.Creation of account; appropriations. (a) The electronic waste account 
46.26 	is established in the environmental fund. The commissioner of revenue must deposit 
46.27 	receipts from the fee established in subdivision 1 in the account. Any interest earned on 
46.28 	the account must be credited to the account. Money from other sources may be credited to 
46.29 	the account. Beginning in the second program year and continuing each program year 
46.30 	thereafter, as of the last day of each program year, the commissioner of revenue shall 
46.31 	determine the total amount of the variable fees that were collected. By July 15, 2009, and 
46.32 	each July 15 thereafter, the commissioner of the Pollution Control Agency shall inform 
46.33 	the commissioner of revenue of the amount necessary to operate the program in the new 
47.1 	program year. To the extent that the total fees collected by the commissioner of revenue
47.2 	in connection with this section exceed the amount the commissioner of the Pollution 
47.3 	Control Agency determines necessary to operate the program for the new program 
47.4 	year, the commissioner of revenue shall refund on a pro rata basis, to all manufacturers 
47.5 	who paid any fees for the previous program year, the amount of fees collected by the 
47.6 	commissioner of revenue in excess of the amount necessary to operate the program for the 
47.7 	new program year. No individual refund is required of amounts of $100 or less for a fiscal 
47.8 	year. Manufacturers who report collections less than 50 percent of their obligation for the 
47.9 	previous program year are not eligible for a refund. Amounts not refunded pursuant to this 
47.10 	paragraph shall remain in the account. The commissioner of revenue shall issue refunds 
47.11 	by August 10. In lieu of issuing a refund, the commissioner of revenue may grant credit 
47.12 	against a manufacturer's variable fee due by September 1.
47.13 	(b) Until June 30, 2009 2011, money in the account is annually appropriated to the 
47.14 	Pollution Control Agency:
47.15 	(1) for the purpose of implementing sections 115A.1312 to 115A.1330, including 
47.16 	transfer to the commissioner of revenue to carry out the department's duties under 
47.17 	section 115A.1320, subdivision 2, and transfer to the commissioner of administration for 
47.18 	responsibilities under section 115A.1324; and 
47.19 	(2) to the commissioner of the Pollution Control Agency to be distributed on a 
47.20 	competitive basis through contracts with counties outside the 11-county metropolitan 
47.21 	area, as defined in paragraph (c), and with private entities that collect for recycling 
47.22 	covered electronic devices in counties outside the 11-county metropolitan area, where the 
47.23 	collection and recycling is consistent with the respective county's solid waste plan, for 
47.24 	the purpose of carrying out the activities under sections 115A.1312 to 115A.1330. In 
47.25 	awarding competitive grants under this clause, the commissioner must give preference to 
47.26 	counties and private entities that are working cooperatively with manufacturers to help 
47.27 	them meet their recycling obligations under section 115A.1318, subdivision 1.
47.28 	(c) The 11-county metropolitan area consists of the counties of Anoka, Carver, 
47.29 	Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington, and Wright.

47.30 	Sec. 37. Minnesota Statutes 2008, section 115A.557, subdivision 3, is amended to read:
47.31 		Subd. 3.Eligibility to receive money. (a) To be eligible to receive money 
47.32 	distributed by the commissioner under this section, a county shall within one year of 
47.33 	October 4, 1989:
47.34 	(1) create a separate account in its general fund to credit the money; and
48.1 	(2) set up accounting procedures to ensure that money in the separate account is 
48.2 	spent only for the purposes in subdivision 2.
48.3 	(b) In each following year, each county shall also:
48.4 	(1) have in place an approved solid waste management plan or master plan including 
48.5 	a recycling implementation strategy under section 115A.551, subdivision 7, and a 
48.6 	household hazardous waste management plan under section 115A.96, subdivision 6, 
48.7 	by the dates specified in those provisions; 
48.8 	(2) submit a report by April 1 of each year to the commissioner detailing for the 
48.9 	previous calendar year:
48.10 	(i) how the money was spent including, but not limited to, specific information on 
48.11 	the number of employees performing SCORE planning, oversight, and administration; the 
48.12 	percentage of those employees' total work time allocated to SCORE planning, oversight, 
48.13 	and administration; the specific duties and responsibilities of those employees; and the 
48.14 	amount of staff salary for these SCORE duties and responsibilities of the employees; and
48.15 	(ii) the resulting gains achieved in solid waste management practices; and
48.16 	(3) provide evidence to the commissioner that local revenue equal to 25 percent of 
48.17 	the money sought for distribution under this section will be spent for the purposes in 
48.18 	subdivision 2.
48.19 	(c) The commissioner shall withhold all or part of the funds to be distributed 
48.20 	to a county under this section if the county fails to comply with this subdivision and 
48.21 	subdivision 2.
48.22 	(d) The requirements for the report specified in paragraph (b), clause (2), that is due 
48.23 	April 1, 2010, shall be abbreviated in scope. The information collected shall be sufficient 
48.24 	for the commissioner to determine that counties have complied with the requirement 
48.25 	of this subdivision.

48.26 	Sec. 38. [115A.559] COMPOSTING COMPETITIVE GRANT PROGRAM.
48.27 		Subdivision 1.Grant program established. The commissioner shall make 
48.28 	competitive grants to political subdivisions to increase composting, reduce the amount of 
48.29 	organic wastes entering disposal facilities, and reduce the costs associated with hauling 
48.30 	waste by locating the composting site as close as possible to the site where the waste is 
48.31 	generated. To achieve the purpose of the grant program, the commissioner shall actively 
48.32 	recruit potential applicants beyond traditional solid waste professionals and organizations, 
48.33 	such as soil and water conservation districts and schools. Each grant must include an 
48.34 	educational component.
49.1 		Subd. 2.Application. (a) The commissioner must develop forms and procedures 
49.2 	for soliciting and reviewing applications for grants under this section.
49.3 	(b) The determination of whether to make a grant under this section is within the 
49.4 	discretion of the commissioner, subject to subdivision 4. The commissioner's decisions 
49.5 	are not subject to judicial review, except for abuse of discretion.
49.6 		Subd. 3.Priorities; eligible projects. (a) If applications for grants exceed the 
49.7 	available appropriations, grants must be made for projects that, in the commissioner's 
49.8 	judgment, provide the highest return in public benefits.
49.9 	(b) To be eligible to receive a grant, a project must:
49.10 	(1) be locally administered;
49.11 	(2) have measured outcomes; and
49.12 	(3) include at least one of the following elements:
49.13 	(i) the development of erosion control methods that use compost;
49.14 	(ii) activities to encourage on-site composting by homeowners; or
49.15 	(iii) activities to encourage composting by schools or public institutions.
49.16 		Subd. 4.Cancellation of grant. If a grant is awarded under this section and 
49.17 	funds are not encumbered for the grant within four years after the award date, the grant 
49.18 	must be canceled.

49.19 	Sec. 39. Minnesota Statutes 2008, section 115A.931, is amended to read:
49.20 	115A.931 YARD WASTE PROHIBITION.
49.21 	(a) Except as authorized by the agency, in the metropolitan area after January 1, 
49.22 	1990, and outside the metropolitan area after January 1, 1992, a person may not place 
49.23 	yard waste:
49.24 	(1) in mixed municipal solid waste;
49.25 	(2) in a disposal facility; or
49.26 	(3) in a resource recovery facility except for the purposes of reuse, composting, or 
49.27 	cocomposting.
49.28 	(b) [Renumbered 115A.03, subd 38] 
49.29 	(c) On or after January 1, 2010, a person may not place yard waste or 
49.30 	source-separated compostable materials generated in a metropolitan county in a plastic bag 
49.31 	delivered to a transfer station or compost facility unless the bag meets all the specifications 
49.32 	in ASTM Standard Specification for Compostable Plastics (D6400). For purposes of this 
49.33 	paragraph, "metropolitan county" has the meaning given in section 473.121, subdivision 
49.34 	4, and "ASTM" has the meaning given in section 296A.01, subdivision 6.
50.1 	(d) A person who immediately empties a plastic bag containing yard waste or 
50.2 	source-separated compostable materials delivered to a transfer station or compost facility 
50.3 	and removes the plastic bag from the transfer station or compost facility is exempt from 
50.4 	paragraph (c).
50.5 	(e) Residents of a city of the first class that currently contracts for the collection of 
50.6 	yard waste are exempt from paragraph (c) until January 1, 2013, if, by that date, the 
50.7 	city implements a citywide source-separated compostable materials collection program 
50.8 	using durable carts.

50.9 	EFFECTIVE DATE. This section is effective January 1, 2010.

50.10 	Sec. 40. Minnesota Statutes 2008, section 116.07, subdivision 4d, is amended to read:
50.11 		Subd. 4d.Permit fees. (a) The agency may shall collect permit fees in amounts 
50.12 	not greater than those necessary, but no greater than the amounts necessary, to cover 
50.13 	the reasonable costs of developing, reviewing, and acting upon applications for agency 
50.14 	permits and implementing and enforcing the conditions of the permits pursuant to 
50.15 	agency rules. Permit fees shall not include the costs of litigation. The fee schedule 
50.16 	must reflect reasonable and routine direct and indirect costs associated with permitting, 
50.17 	implementation, and enforcement. The agency may impose an additional enforcement 
50.18 	fee to be collected for a period of up to two years to cover the reasonable costs of 
50.19 	implementing and enforcing the conditions of a permit under the rules of the agency. Any 
50.20 	money collected under this paragraph shall be deposited in the appropriate account in 
50.21 	the environmental fund.
50.22 	(b) Notwithstanding paragraph (a), the agency shall collect an annual fee from 
50.23 	the owner or operator of all stationary sources, emission facilities, emissions units, air 
50.24 	contaminant treatment facilities, treatment facilities, potential air contaminant storage 
50.25 	facilities, or storage facilities subject to the requirement to obtain a permit under 
50.26 	subchapter V of the federal Clean Air Act, United States Code, title 42, section 7401 et 
50.27 	seq., or section 116.081. The annual fee shall be used to pay for all direct and indirect 
50.28 	reasonable costs, including attorney general costs, required to develop and administer 
50.29 	the permit program requirements of subchapter V of the federal Clean Air Act, United 
50.30 	States Code, title 42, section 7401 et seq., and sections of this chapter and the rules 
50.31 	adopted under this chapter related to air contamination and noise. Those costs include the 
50.32 	reasonable costs of reviewing and acting upon an application for a permit; implementing 
50.33 	and enforcing statutes, rules, and the terms and conditions of a permit; emissions, ambient, 
50.34 	and deposition monitoring; preparing generally applicable regulations; responding to 
51.1 	federal guidance; modeling, analyses, and demonstrations; preparing inventories and 
51.2 	tracking emissions; and providing information to the public about these activities. 
51.3 	(c) The agency shall set fees that:
51.4 	(1) will result in the collection, in the aggregate, from the sources listed in paragraph 
51.5 	(b), of an amount not less than $25 per ton of each volatile organic compound; pollutant 
51.6 	regulated under United States Code, title 42, section 7411 or 7412 (section 111 or 112 
51.7 	of the federal Clean Air Act); and each pollutant, except carbon monoxide, for which a 
51.8 	national primary ambient air quality standard has been promulgated;
51.9 	(2) may result in the collection, in the aggregate, from the sources listed in paragraph 
51.10 	(b), of an amount not less than $25 per ton of each pollutant not listed in clause (1) that is 
51.11 	regulated under this chapter or air quality rules adopted under this chapter; and
51.12 	(3) shall collect, in the aggregate, from the sources listed in paragraph (b), the 
51.13 	amount needed to match grant funds received by the state under United States Code, title 
51.14 	42, section 7405 (section 105 of the federal Clean Air Act).
51.15 	The agency must not include in the calculation of the aggregate amount to be collected 
51.16 	under clauses (1) and (2) any amount in excess of 4,000 tons per year of each air pollutant 
51.17 	from a source. The increase in air permit fees to match federal grant funds shall be a 
51.18 	surcharge on existing fees. The commissioner may not collect the surcharge after the grant 
51.19 	funds become unavailable. In addition, the commissioner shall use nonfee funds to the 
51.20 	extent practical to match the grant funds so that the fee surcharge is minimized.
51.21 	(d) To cover the reasonable costs described in paragraph (b), the agency shall 
51.22 	provide in the rules promulgated under paragraph (c) for an increase in the fee collected 
51.23 	in each year by the percentage, if any, by which the Consumer Price Index for the most 
51.24 	recent calendar year ending before the beginning of the year the fee is collected exceeds 
51.25 	the Consumer Price Index for the calendar year 1989. For purposes of this paragraph the 
51.26 	Consumer Price Index for any calendar year is the average of the Consumer Price Index 
51.27 	for all-urban consumers published by the United States Department of Labor, as of the 
51.28 	close of the 12-month period ending on August 31 of each calendar year. The revision 
51.29 	of the Consumer Price Index that is most consistent with the Consumer Price Index for 
51.30 	calendar year 1989 shall be used.
51.31 	(e) Any money collected under paragraphs (b) to (d) must be deposited in the 
51.32 	environmental fund and must be used solely for the activities listed in paragraph (b).
51.33 	(f) Persons who wish to construct or expand a facility may offer to reimburse the 
51.34 	agency for the costs of staff overtime or consultant services needed to expedite permit 
51.35 	review. The reimbursement shall be in addition to fees imposed by law. When the agency 
51.36 	determines that it needs additional resources to review the permit application in an 
52.1 	expedited manner, and that expediting the review would not disrupt permitting program 
52.2 	priorities, the agency may accept the reimbursement. Reimbursements accepted by the 
52.3 	agency are appropriated to the agency for the purpose of reviewing the permit application. 
52.4 	Reimbursement by a permit applicant shall precede and not be contingent upon issuance 
52.5 	of a permit and shall not affect the agency's decision on whether to issue or deny a permit, 
52.6 	what conditions are included in a permit, or the application of state and federal statutes 
52.7 	and rules governing permit determinations.
52.8 	(g) The fees under this subdivision are exempt from section 16A.1285.

52.9 	Sec. 41. Minnesota Statutes 2008, section 116.41, subdivision 2, is amended to read:
52.10 		Subd. 2.Training and certification programs. The agency shall develop standards 
52.11 	of competence for persons operating and inspecting various classes of disposal facilities. 
52.12 	The agency shall conduct training programs for persons operating facilities for the 
52.13 	disposal of waste and for inspectors of such facilities, and may shall charge such fees as 
52.14 	are necessary to cover the actual costs of the training programs. All fees received shall be 
52.15 	paid into the state treasury and credited to the Pollution Control Agency training account 
52.16 	and are appropriated to the agency to pay expenses relating to the training of disposal 
52.17 	facility personnel.
52.18 	The agency shall require operators and inspectors of such facilities to obtain from 
52.19 	the agency a certificate of competence. The agency shall conduct examinations to test the 
52.20 	competence of applicants for certification, and shall require that certificates be renewed at 
52.21 	reasonable intervals. The agency may charge such fees as are necessary to cover the actual 
52.22 	costs of receiving and processing applications, conducting examinations, and issuing 
52.23 	and renewing certificates. Certificates shall not be required for a private individual for 
52.24 	land-spreading and associated interim and temporary storage of sewage sludge on property 
52.25 	owned or farmed by that individual.

52.26 	Sec. 42. [116.9401] DEFINITIONS.
52.27 	(a) For the purposes of sections 116.9401 to 116.9408, the following terms have 
52.28 	the meanings given them.
52.29 	(b) "Agency" means the Pollution Control Agency.
52.30 	(c) "Alternative" means a substitute process, product, material, chemical, strategy, 
52.31 	or combination of these that serves a functionally equivalent purpose to a chemical in a 
52.32 	children's product.
53.1 	(d) "Chemical" means a substance with a distinct molecular composition or a group 
53.2 	of structurally related substances and includes the breakdown products of the substance or 
53.3 	substances that form through decomposition, degradation, or metabolism.
53.4 	(e) "Chemical of high concern" means a chemical identified on the basis of credible 
53.5 	scientific evidence by a governmental entity or the United Nations' World Health 
53.6 	Organization as being known or suspected with a high degree of probability to:
53.7 	(1) harm the normal development of a fetus or child or cause other developmental 
53.8 	toxicity;
53.9 	(2) cause cancer, genetic damage, or reproductive harm;
53.10 	(3) disrupt the endocrine or hormone system;
53.11 	(4) damage the nervous system, immune system, or organs, or cause other systemic 
53.12 	toxicity;
53.13 	(5) be persistent, bioaccumulative, and toxic; or
53.14 	(6) be very persistent and very bioaccumulative.
53.15 	(f) "Child" means a person under 12 years of age.
53.16 	(g) "Children's product" means a consumer product intended for use by children, 
53.17 	such as baby products, toys, car seats, personal care products, and clothing.
53.18 	(h) "Commissioner" means the commissioner of the Pollution Control Agency. 
53.19 	(i) "Department" means the Department of Health.
53.20 	(j) "Distributor" means a person who sells consumer products to retail establishments 
53.21 	on a wholesale basis.
53.22 	(k) "Green chemistry" means an approach to designing and manufacturing products 
53.23 	in ways that minimize the use and generation of toxic substances.
53.24 	(l) "Manufacturer" means any person who manufactures a final consumer product 
53.25 	sold at retail or whose brand name is affixed to the consumer product. In the case of a 
53.26 	consumer product imported into the United States, manufacturer includes the importer 
53.27 	or domestic distributor of the consumer product if the person who manufactured or 
53.28 	assembled the consumer product or whose brand name is affixed to the consumer product 
53.29 	does not have a presence in the United States.
53.30 	(m) "Priority chemical" means a chemical identified by the commissioner as a 
53.31 	chemical of high concern that is contained in a children's product offered for sale in 
53.32 	Minnesota and meets the criteria in section 116.9403.
53.33 	(n) "Safer alternative" means an alternative whose potential to harm human health is 
53.34 	less than that of a priority chemical that it could replace.

53.35 	EFFECTIVE DATE. This section is effective the day following final enactment.

54.1 	Sec. 43. [116.9402] IDENTIFICATION OF CHEMICALS OF HIGH CONCERN.
54.2 	(a) By July 1, 2010, the department shall, after consultation with the agency, publish 
54.3 	in the State Register and on the agency's Internet Web site a list of chemicals of high 
54.4 	concern.
54.5 	(b) The department must periodically review and revise the list of chemicals of high 
54.6 	concern at least every three years. The department may add chemicals to the list if the 
54.7 	chemical meets one or more of the criteria in section 116.9401, paragraph (e).
54.8 	(c) The department shall consider, among others, chemicals listed in the following 
54.9 	sources for possible inclusion on the list of chemicals of high concern:
54.10 	(1) chemicals identified as "Group 1 carcinogens" or "Group 2A carcinogens" by the 
54.11 	United Nations' World Health Organization, International Agency for Research on Cancer;
54.12 	(2) chemicals identified as "known to be a human carcinogen" and "reasonably 
54.13 	anticipated to be a human carcinogen" by the secretary of the United States Department 
54.14 	of Health and Human Services;
54.15 	(3) chemicals identified as "Group A carcinogens" or "Group B carcinogens" by the 
54.16 	United States Environmental Protection Agency;
54.17 	(4) chemicals identified as reproductive or developmental toxicants by: 
54.18 	(i) the United States Department of Health and Human Services, National 
54.19 	Toxicology Program, Center for the Evaluation of Risks to Human Reproduction; and
54.20 	(ii) the California Environmental Protection Agency, Office of Environmental Health 
54.21 	Hazard Assessment, pursuant to the California Health and Safety Code, Safe Drinking 
54.22 	Water and Toxic Enforcement Act of 1986, chapter 6.6, section 25249.8;
54.23 	(5) chemicals identified as known or likely endocrine disruptors through screening 
54.24 	or testing conducted in accordance with protocols developed by the United States 
54.25 	Environmental Protection Agency pursuant to the federal Food, Drug, and Cosmetic Act, 
54.26 	United States Code, title 21, section 346a(p), as amended by the federal Food Quality 
54.27 	Protection Act, Public Law 104-170, or the federal Safe Drinking Water Act, United States 
54.28 	Code, title 42, section 300j-17;
54.29 	(6) chemicals listed on the basis of endocrine-disrupting properties in Annex 
54.30 	XIV, List of Substances Subject to Authorisation, Regulation (EC) No 1907/2006 of 
54.31 	the European Parliament concerning the Registration, Evaluation, Authorisation, and 
54.32 	Restriction of Chemicals;
54.33 	(7) persistent, bioaccumulative, and toxic chemicals identified by:
54.34 	(i) the state of Washington Department of Ecology in Washington Administrative 
54.35 	Code, chapter 173-333; or
55.1 	(ii) the United States Environmental Protection Agency in Code of Federal 
55.2 	Regulations, title 40, part 372; and
55.3 	(8) a very persistent, very bioaccumulative chemical listed in Annex XIV, List of 
55.4 	Substances Subject to Authorisation, Regulation (EC) No 1907/2006 of the European 
55.5 	Parliament concerning the Registration, Evaluation, Authorisation, and Restriction of 
55.6 	Chemicals.
55.7 	(d) The department may consider chemicals listed by another state as harmful to 
55.8 	human health or the environment for possible inclusion in the list of chemicals of high 
55.9 	concern.

55.10 	EFFECTIVE DATE. This section is effective the day following final enactment.

55.11 	Sec. 44. [116.9403] IDENTIFICATION OF PRIORITY CHEMICALS.
55.12 	The department, after consultation with the agency, may designate a chemical of 
55.13 	high concern as a priority chemical if the department finds that the chemical:
55.14 	(1) has been identified as a high-production volume chemical by the United States 
55.15 	Environmental Protection Agency; and
55.16 	(2) meets any of the following criteria:
55.17 	(i) the chemical has been found through biomonitoring to be present in human blood, 
55.18 	including umbilical cord blood, breast milk, urine, or other bodily tissues or fluids;
55.19 	(ii) the chemical has been found through sampling and analysis to be present in 
55.20 	household dust, indoor air, drinking water, or elsewhere in the home environment; or
55.21 	(iii) the chemical has been found through monitoring to be present in fish, wildlife, 
55.22 	or the natural environment.

55.23 	EFFECTIVE DATE. This section is effective the day following final enactment.

55.24 	Sec. 45. [116.9404] IDENTIFICATION OF SAFER ALTERNATIVES.
55.25 		Subdivision 1.Department determination. The department shall determine 
55.26 	whether a safer alternative to a priority chemical is available and is a technically feasible 
55.27 	replacement for the priority chemical. In making this determination, the department:
55.28 	(1) must utilize information from current scientific literature, the Interstate 
55.29 	Chemicals Clearinghouse, manufacturers of children's products, and other sources it 
55.30 	deems appropriate;
55.31 	(2) may presume that an alternative is a safer alternative if the alternative is not 
55.32 	a chemical of high concern; and
55.33 	(3) may presume that a safer alternative is available if:
56.1 	(i) the sale of the children's product containing the priority chemical has been 
56.2 	prohibited by another state within the United States;
56.3 	(ii) the children's product containing the priority chemical is an item of apparel 
56.4 	or a novelty; or
56.5 	(iii) the alternative is sold in the United States.
56.6 		Subd. 2.Department designation. (a) If the department determines that a safer 
56.7 	alternative is available and is a technically feasible replacement for a priority chemical, 
56.8 	the department shall designate that priority chemical a Level 1 priority chemical. If the 
56.9 	department determines that current information does not indicate that a safer alternative is 
56.10 	available or is a technically feasible replacement for a priority chemical, the department 
56.11 	shall designate that chemical a Level 2 priority chemical. By February 1, 2011, the 
56.12 	department shall publish a list of Level 1 and Level 2 priority chemicals in the State 
56.13 	Register and on the department's Internet Web site and shall update the published list 
56.14 	whenever a new priority chemical is designated.
56.15 	(b) The department shall designate at least five priority chemicals as Level 1 or 
56.16 	Level 2 by July 1, 2011, and at least five additional priority chemicals as Level 1 or Level 
56.17 	2 by January 1, 2013.
56.18 	(c) The department shall, at least every two years:
56.19 	(1) review the list of chemicals of high concern and determine, which, if any, should 
56.20 	be designated Level 1 or Level 2 priority chemicals; and
56.21 	(2) review the reports submitted by manufacturers under section 116.9405 to 
56.22 	determine if any Level 2 priority chemicals should be designated as Level 1 priority 
56.23 	chemicals.

56.24 	EFFECTIVE DATE. This section is effective the day following final enactment.

56.25 	Sec. 46. [116.9405] DISCLOSURE OF INFORMATION ON PRIORITY 
56.26 	CHEMICALS.
56.27 		Subdivision 1.Reporting of chemical use. Not later than 180 days after Level 1 
56.28 	and Level 2 priority chemicals are identified under section 116.9404, any person who is a 
56.29 	manufacturer or distributor of a children's product for sale in this state that contains a Level 
56.30 	1 or Level 2 priority chemical shall notify the agency of that fact in writing unless the 
56.31 	children's product is exempt under section 116.9406. This written notice must identify the 
56.32 	product, the number of units sold or distributed for sale in this state or nationally during the 
56.33 	previous calendar year, and the priority chemical or chemicals contained in the product.
57.1 		Subd. 2.Supplemental information. The manufacturer or distributor of a 
57.2 	children's product that contains a Level 1 or Level 2 priority chemical shall provide the 
57.3 	following additional information if requested by the agency:
57.4 	(1) information on the likelihood that the chemical will be released from the 
57.5 	children's product to the environment during the children's product's life cycle and the 
57.6 	extent to which users of the children's product are likely to be exposed to the chemical;
57.7 	(2) additional information regarding the potential for harm to human health from 
57.8 	specific uses of the priority chemical; and
57.9 	(3) an assessment of the availability, cost, feasibility, and performance, including 
57.10 	potential for harm to human health of alternatives to the priority chemical and the reason 
57.11 	the priority chemical is used in the manufacture of the children's product in lieu of 
57.12 	identified alternatives. If an assessment acceptable to the agency is not timely submitted as 
57.13 	determined by the agency, the agency may assess a fee on the manufacturer or distributor 
57.14 	to cover the costs to prepare an independent report on the availability of safer alternatives 
57.15 	by a contractor of the agency's choice.

57.16 	EFFECTIVE DATE. This section is effective the day following final enactment.

57.17 	Sec. 47. [116.9406] APPLICABILITY.
57.18 	The requirements of sections 116.9401 to 116.9408 do not apply to:
57.19 	(1) chemicals in used children's products;
57.20 	(2) priority chemicals used in the manufacturing process, but that are not present 
57.21 	in the final product;
57.22 	(3) priority chemicals used in agricultural production;
57.23 	(4) motor vehicles as defined in chapter 168 or their component parts, except that the 
57.24 	use of priority chemicals in detachable car seats is not exempt;
57.25 	(5) priority chemicals generated solely as combustion by-products or that are present 
57.26 	in combustible fuels;
57.27 	(6) retailers, unless that retailer knowingly sells a children's product containing 
57.28 	a priority chemical after the effective date of its prohibition, of which that retailer has 
57.29 	received prior notification from a manufacturer, distributor, or the state;
57.30 	(7) pharmaceutical products or biologics;
57.31 	(8) a medical device as defined in the federal Food, Drug, and Cosmetic Act, United 
57.32 	States Code, title 21, section 321(h); 
57.33 	(9) food and food or beverage packaging, except a container containing baby food 
57.34 	or infant formula; 
58.1 	(10) consumer electronics products and electronic components, including but not 
58.2 	limited to personal computers; audio and video equipment; calculators; digital displays; 
58.3 	wireless phones; cameras; game consoles; printers; and handheld electronic and electrical 
58.4 	devices used to access interactive software or their associated peripherals; or products that 
58.5 	comply with the provisions of directive 2002/95/EC of the European Union, adopted by 
58.6 	the European Parliament and Council of the European Union now or hereafter in effect; or
58.7 	(11) outdoor sport equipment, including snowmobiles as defined in section 84.81, 
58.8 	subdivision 3; all-terrain vehicles as defined in section 84.92, subdivision 8; personal 
58.9 	watercraft as defined in section 86B.005, subdivision 14a; watercraft as defined in section 
58.10 	86B.005, subdivision 18; and off-highway motorcycles, as defined in section 84.787, 
58.11 	subdivision 7, and all attachments and repair parts for all of this equipment.

58.12 	EFFECTIVE DATE. This section is effective the day following final enactment.

58.13 	Sec. 48. [116.9407] DONATIONS TO THE STATE.
58.14 	The commissioners of health and pollution control may accept donations, grants, 
58.15 	and other funds to carry out the purposes of sections 116.9401 to 116.9408. All such 
58.16 	donations, grants, and other funds must be accepted without preconditions regarding the 
58.17 	outcomes of the oversight processes set forth in sections 116.9401 to 116.9408.

58.18 	EFFECTIVE DATE. This section is effective the day following final enactment.

58.19 	Sec. 49. [116.9408] PARTICIPATION IN INTERSTATE CHEMICALS 
58.20 	CLEARINGHOUSE.
58.21 	The agency may participate in an interstate chemicals clearinghouse to promote 
58.22 	safer chemicals in consumer products in cooperation with other states, including the 
58.23 	classification of chemicals in commerce; organizing and managing available data on 
58.24 	chemicals, including information on uses, hazards, and environmental and health 
58.25 	concerns; and producing and evaluating information on safer alternatives to specific uses 
58.26 	of chemicals of concern.

58.27 	EFFECTIVE DATE. This section is effective the day following final enactment.

58.28 	Sec. 50. Minnesota Statutes 2008, section 116C.834, subdivision 1, is amended to read:
58.29 		Subdivision 1.Costs. All costs incurred by the state to carry out its responsibilities 
58.30 	under the compact and under sections 116C.833 to 116C.843 shall be paid by generators 
58.31 	of low-level radioactive waste in this state through fees assessed by the Pollution Control 
58.32 	Agency. Fees may be reasonably assessed on the basis of volume or degree of hazard of 
59.1 	the waste produced by a generator. Costs for which fees may be assessed include, but 
59.2 	are not limited to:  
59.3 	(1) the state contribution required to join the compact;
59.4 	(2) the expenses of the commission member and state agency costs incurred to 
59.5 	support the work of the Interstate Commission; and
59.6 	(3) regulatory costs.
59.7 	The fees are exempt from section 16A.1285.

59.8 	Sec. 51. Minnesota Statutes 2008, section 116D.045, is amended to read:
59.9 	116D.045 ENVIRONMENTAL IMPACT STATEMENTS; REVIEW COSTS.
59.10 		Subdivision 1.Assessment. (a) The board shall by rule adopt procedures to assess 
59.11 	the proposer of a specific action for reasonable costs of preparing and distributing an 
59.12 	environmental impact statement on that action required pursuant to section 116D.04. 
59.13 	Such The costs shall be determined by the responsible governmental unit pursuant to the 
59.14 	rules promulgated by the board. 
59.15 	(b) A responsible government unit shall assess the proposer of a specific action for 
59.16 	the reasonable costs of preparing and distributing an environmental assessment worksheet 
59.17 	on that action required under section 116D.04 in accordance with Minnesota Rules, parts 
59.18 	4410.6100 and 4410.6200, except that a local unit of government is exempt from paying 
59.19 	the equivalent of the first ten hours of the assessed reasonable costs of preparing and 
59.20 	distributing the environmental assessment worksheet. This paragraph is not subject to the 
59.21 	rulemaking provisions of chapter 14 and section 14.386 does not apply.
59.22 		Subd. 2.Modification. In the event of a disagreement between the proposer of the 
59.23 	action and the responsible governmental unit over the cost of an environmental impact 
59.24 	statement or environmental assessment worksheet, the responsible governmental unit shall 
59.25 	consult with the board, which may modify the cost or determine that the cost assessed by 
59.26 	the responsible governmental unit is reasonable.
59.27 		Subd. 3.Use of assessment. The responsible governmental unit shall assess the 
59.28 	project proposer for reasonable costs in preparing and distributing the environmental 
59.29 	impact statement or environmental assessment worksheet and the proposer shall pay the 
59.30 	assessed cost to the responsible governmental unit. Money received under this subdivision 
59.31 	by a responsible governmental unit may be retained by the unit for the same purposes. 
59.32 	Money received by a state agency must be credited to a special account and is appropriated 
59.33 	to the agency to cover the assessed costs incurred.
59.34 		Subd. 4.Partial cost to be paid. No responsible governmental unit shall commence 
59.35 	the preparation of an environmental impact statement or environmental assessment 
60.1 	worksheet until at least one-half of the assessed cost of the environmental impact statement 
60.2 	or environmental assessment worksheet is paid pursuant to subdivision 3. Other laws 
60.3 	notwithstanding, no state agency may issue any permits for the construction or operation 
60.4 	of a project for which an environmental impact statement or environmental assessment 
60.5 	worksheet is prepared until the assessed cost for the environmental impact statement or 
60.6 	environmental assessment worksheet has been paid in full.

60.7 	Sec. 52. [216H.021] GREENHOUSE GAS EMISSIONS REPORTING.
60.8 		Subdivision 1.Commissioner to establish reporting system and maintain 
60.9 	inventory. In order to measure the progress in meeting the goals of section 216H.02, 
60.10 	subdivision 1, and to provide information to develop strategies to achieve those goals, the 
60.11 	commissioner of the Pollution Control Agency shall establish a system for reporting and 
60.12 	maintaining an inventory of greenhouse gas emissions. The commissioner must consult 
60.13 	with the chief information officer of the Office of Enterprise Technology about system 
60.14 	design and operation. Greenhouse gas emissions include those emissions described in 
60.15 	section 216H.01, subdivision 2.
60.16 		Subd. 2.Reporting system design. (a) The commissioner shall, to the extent 
60.17 	practicable, design the system to coordinate with other regional or federal greenhouse gas 
60.18 	emissions-reporting and inventory systems. The coordination may, without limitation, 
60.19 	include the use of similar forms and reports, the sharing of information, and the use of 
60.20 	common facilities, systems, and databases.
60.21 	(b) The reporting system need not include all sources of emissions nor all amounts 
60.22 	of emissions but, at its outset, must include:
60.23 	(1) all stationary sources and other facilities required to obtain a permit under Title 
60.24 	V of the federal Clean Air Act, United States Code, title 42, section 7401 et. seq.; and
60.25 	(2) facilities whose annual carbon dioxide equivalent emissions, as defined in 
60.26 	section 216H.10, subdivision 3, exceed a threshold set by the commissioner at between 
60.27 	10,000 tons and 25,000 tons. The reporting threshold set by the commissioner must 
60.28 	be consistent with the goal of accurately tracking progress in attaining greenhouse 
60.29 	gas emissions-reduction goals and the need for emissions data to assist in developing 
60.30 	greenhouse gas emissions-reduction strategies.
60.31 	(c) In designing the greenhouse gas emissions reporting system, the commissioner 
60.32 	shall consider requiring the reporting of greenhouse gas emissions from transportation 
60.33 	fuels and greenhouse gas emissions from natural gas combustion that are not included 
60.34 	in reporting from stationary sources.  In determining whether to include reporting of 
60.35 	these emissions, the commissioner must consider both the goal of accurately tracking 
61.1 	progress in attaining greenhouse gas emissions-reduction goals and the need for emissions 
61.2 	data to assist in developing greenhouse gas emissions-reduction strategies recommended 
61.3 	by the Minnesota Climate Change Advisory Group.  If the commissioner decides that 
61.4 	transportation fuels and portions of natural gas combustion should not be included in 
61.5 	the initial emissions reporting system, the commissioner must report to the chairs and 
61.6 	ranking minority members of the senate and house of representatives committees with 
61.7 	primary jurisdiction over energy and environmental policy the reasons for that decision 
61.8 	and suggestions for steps that should be taken to allow their inclusion in the emissions 
61.9 	reporting system in the future.
61.10 	(d) A facility reporting greenhouse gas emissions under this section must maintain 
61.11 	the data used to create the reports for a minimum of five years.
61.12 		Subd. 3.Rules. The commissioner of the Pollution Control Agency may adopt rules 
61.13 	for the purposes of this section.

61.14 	EFFECTIVE DATE. This section is effective the day following final enactment.

61.15 	Sec. 53. Minnesota Statutes 2008, section 216H.10, subdivision 7, is amended to read:
61.16 		Subd. 7. High-GWP greenhouse gas. "High-GWP greenhouse gas" means 
61.17 	hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride, nitrous trifluoride, and any 
61.18 	other gas the agency determines by rule to have a high global warming potential. 

61.19 	Sec. 54. Minnesota Statutes 2008, section 216H.11, is amended to read:
61.20 	216H.11 HIGH-GWP GREENHOUSE GAS REPORTING. 
61.21 		Subdivision 1. Gas manufacturers. Beginning October 1, 2008, and each year 
61.22 	thereafter, a manufacturer of a high-GWP greenhouse gas must report to the agency the 
61.23 	total amount of each high-GWP greenhouse gas sold to a purchaser in this state during 
61.24 	the previous year. 
61.25 		Subd. 2. Purchases. Beginning October 1, 2008, and each year thereafter, a person 
61.26 	in this state who purchases 500 10,000 metric tons or more carbon dioxide equivalent of a 
61.27 	high-GWP greenhouse gas for use or retail sale in this state must report to the agency, on a 
61.28 	form prescribed by the commissioner, the total amount of each high-GWP greenhouse gas 
61.29 	purchased for use or retail sale in this state during the previous year and the purpose for 
61.30 	which the gas was used. The commissioner may adopt rules under chapter 14 to establish 
61.31 	a different reporting threshold or to adopt specific reporting requirements for commercial 
61.32 	or industrial facilities that purchase high-GWP gases for use or retail sale in this state.
62.1 		Subd. 3. Acceptance of federal filing. With the approval of the commissioner, this 
62.2 	section may be satisfied by filing with the commissioner a copy of a greenhouse gas 
62.3 	emissions report filed with a federal agency or a regional or national greenhouse gas 
62.4 	registry, provided that the entity with which the report is filed requires the emissions 
62.5 	data to be verified.

62.6 	Sec. 55. [325E.046] STANDARDS FOR LABELING PLASTIC BAGS.
62.7 		Subdivision 1.Biodegradable label. A manufacturer, distributor, or wholesaler 
62.8 	may not offer for sale in this state a plastic bag labeled "biodegradable," "degradable," 
62.9 	or any form of those terms, or in any way imply that the bag will chemically decompose 
62.10 	into innocuous elements in a reasonably short period of time in a landfill, composting, or 
62.11 	other terrestrial environment unless a scientifically based standard for biodegradability is 
62.12 	developed and the bags are certified as meeting the standard. 
62.13 		Subd. 2.Compostable label. A manufacturer, distributor, or wholesaler may not 
62.14 	offer for sale in this state a plastic bag labeled "compostable" unless, at the time of sale, 
62.15 	the bag meets the ASTM Standard Specification for Compostable Plastics (D6400). Each 
62.16 	bag must be labeled to reflect that it meets the standard. For purposes of this subdivision, 
62.17 	"ASTM" has the meaning given in section 296A.01, subdivision 6.
62.18 		Subd. 3.Enforcement; civil penalty; injunctive relief. (a) A manufacturer, 
62.19 	distributor, or wholesaler who willfully violates this section is subject to a civil penalty 
62.20 	of $100 for each violation up to a maximum of $5,000 and may be enjoined from such 
62.21 	violations.
62.22 	(b) The attorney general may bring an action in the name of the state in a court of 
62.23 	competent jurisdiction for recovery of civil penalties or for injunctive relief as provided in 
62.24 	this subdivision. The attorney general may accept an assurance of discontinuance of acts 
62.25 	in violation of this section in the manner provided in section 8.31, subdivision 2b.

62.26 	EFFECTIVE DATE. This section is effective January 1, 2010.

62.27 	Sec. 56. [383B.236] WASTE MANAGEMENT BY HENNEPIN COUNTY.
62.28 	The Hennepin County Board of Commissioners may utilize money received from 
62.29 	the sale of energy and recovered materials, and placed in the county solid and hazardous 
62.30 	waste fund under section 473.811, subdivision 9, for program expenses of the Department 
62.31 	of Environmental Services, or the department or office succeeding to the functions of the 
62.32 	Department of Environmental Services. This authority shall be in addition to the authority 
62.33 	given in section 473.811, subdivision 9.

63.1 	Sec. 57. Laws 2002, chapter 220, article 8, section 15, is amended to read:
63.2 	Sec. 15. INCREASE TO WATER QUALITY PERMIT FEES.
 63.3 	(a) The pollution control agency shall collect water quality permit application and 
63.4 	annual fees that reflect the fees in Minnesota Rules, part 7002.0310, increased to the 
63.5 	amounts described in paragraphs (b) to (g).
63.6 	(b) The application fee for individual permits, general permits, and general industrial 
63.7 	stormwater permits is $240.
63.8 	(c) The annual fees for individual National Pollutant Discharge Elimination System 
63.9 	permits for major municipal facilities are as follows:
63.10 	Design Flow in Million Gallons Per Day Annual Fee 50 and over $175,750 20 to 
63.11 	49.99 $40,350 5 to 19.99 $14,350 Up to 4.99 $5,900 
63.12 	(d) The annual fees for individual National Pollutant Discharge Elimination System 
63.13 	permits for major nonmunicipal facilities are as follows:
63.14 	Design Flow in Million Gallons Per Day Annual Fee 20 to 49.99 $44,200 5 to 
63.15 	19.99 $18,250 Up to 4.99 $8,450 
63.16 	Cooling or mine pit dewatering (any flow) $16,900 
63.17 	(e) The annual fees for individual National Pollutant Discharge Elimination System 
63.18 	and State Disposal System permits for nonmajor municipal facilities with design flows 
63.19 	greater than 0.100 million gallons per day are $1,450.
63.20 	(f) The annual fees for general industrial stormwater permits are $280.
63.21 	(g) The annual fees for general National Pollutant Discharge Elimination System 
63.22 	and State Disposal System permits are $345.
63.23 	(h) The application and annual fees are not increased for general construction 
63.24 	stormwater permits and sanitary sewer extension permits. The annual fees are not 
63.25 	increased for National Pollutant Discharge Elimination System and State Disposal System 
63.26 	permits regulating municipal nonmajors with facility design flow of 0 to .100, sewage 
63.27 	sludge landspreading facilities, and nonmajor nonmunicipal facilities.
63.28 	(i) (h) The increased permit fees are effective July 1, 2002. The agency shall 
63.29 	adopt amended water quality permit fee rules incorporating the permit fee increases in 
63.30 	this subdivision under Minnesota Statutes, section 14.389. The pollution control agency 
63.31 	shall begin collecting the increased permit fees on July 1, 2002, even if the rule adoption 
63.32 	process has not been initiated or completed. Notwithstanding Minnesota Statutes, section 
63.33 	14.18, subdivision 2, the increased permit fees reflecting the permit fee increases in this 
63.34 	section and the rule amendments incorporating those permit fee increases do not require 
63.35 	further legislative approval.

64.1 	Sec. 58. Laws 2007, chapter 57, article 1, section 4, subdivision 2, is amended to read:

64.2
64.3	Subd. 2.Land and Mineral Resources 
Management
 		11,747,000
		11,272,000

64.4	Appropriations by Fund
	
64.5	General
	6,633,000
	6,230,000
	
64.6	Natural Resources
	3,551,000
	3,447,000
	
64.7	Game and Fish
	1,363,000
	1,395,000
	
64.8	Permanent School
	200,000
	200,000
	
64.9 	$475,000 the first year and $475,000 the 
64.10 	second year are for iron ore cooperative 
64.11 	research. Of this amount, $200,000 each year 
64.12 	is from the minerals management account in 
64.13 	the natural resources fund and $275,000 each 
64.14 	year is from the general fund. $237,500 the 
64.15 	first year and $237,500 the second year are 
64.16 	available only as matched by $1 of nonstate 
64.17 	money for each $1 of state money. The 
64.18 	match may be cash or in-kind.
64.19 	$86,000 the first year and $86,000 the 
64.20 	second year are for minerals cooperative 
64.21 	environmental research, of which $43,000 
64.22 	the first year and $43,000 the second year are 
64.23 	available only as matched by $1 of nonstate 
64.24 	money for each $1 of state money. The 
64.25 	match may be cash or in-kind.
64.26 	$2,800,000 the first year and $2,696,000 
64.27 	the second year are from the minerals 
64.28 	management account in the natural resources 
64.29 	fund for use as provided in Minnesota 
64.30 	Statutes, section 93.2236, paragraph (c).
64.31 	$200,000 the first year and $200,000 the 
64.32 	second year are from the state forest suspense 
64.33 	account in the permanent school fund to 
64.34 	accelerate land exchanges, land sales, and 
64.35 	commercial leasing of school trust lands and 
64.36 	to identify, evaluate, and lease construction 
65.1 	aggregate located on school trust lands. This 
65.2 	appropriation is to be used for securing 
65.3 	maximum long-term economic return 
65.4 	from the school trust lands consistent with 
65.5 	fiduciary responsibilities and sound natural 
65.6 	resources conservation and management 
65.7 	principles.
65.8 	$15,000 the first year is for a report 
65.9 	by February 1, 2008, to the house and 
65.10 	senate committees with jurisdiction over 
65.11 	environment and natural resources on 
65.12 	proposed minimum legal and conservation 
65.13 	standards that could be applied to 
65.14 	conservation easements acquired with public 
65.15 	money.
65.16 	$1,201,000 the first year and $701,000 the 
65.17 	second year are to support the land records 
65.18 	management system. Of this amount, 
65.19 	$326,000 the first year and $326,000 the 
65.20 	second year are from the game and fish fund 
65.21 	and $375,000 the first year and $375,000 the 
65.22 	second year are from the natural resources 
65.23 	fund. The unexpended balances are available 
65.24 	until June 30, 2011. The commissioner 
65.25 	must report to the legislative chairs on 
65.26 	environmental finance on the outcomes of 
65.27 	the land records management support.
65.28 	$500,000 the first year and $500,000 the 
65.29 	second year are for land asset management. 
65.30 	This is a onetime appropriation.

65.31 	Sec. 59. Laws 2008, chapter 363, article 5, section 4, subdivision 7, is amended to read:

65.32	Subd. 7.Fish and Wildlife Management
 		123,000
		119,000

66.1	Appropriations by Fund
	
66.2	General
	-0-
	(427,000)
	
66.3	Game and Fish
	123,000
	546,000
	
66.4 	$329,000 in 2009 is a reduction for fish and 
66.5 	wildlife management.
66.6 	$46,000 in 2009 is a reduction in the 
66.7 	appropriation for the Minnesota Shooting 
66.8 	Sports Education Center.
66.9 	$52,000 in 2009 is a reduction for licensing.
66.10 	$123,000 in 2008 and $246,000 in 2009 are 
66.11 	from the game and fish fund to implement 
66.12 	fish virus surveillance, prepare infrastructure 
66.13 	to handle possible outbreaks, and implement 
66.14 	control procedures for highest risk waters 
66.15 	and fish production operations. This is a 
66.16 	onetime appropriation.
66.17 	Notwithstanding Minnesota Statutes, section 
66.18 	297A.94, paragraph (e), $300,000 in 2009 
66.19 	is from the second year appropriation in 
66.20 	Laws 2007, chapter 57, article 1, section 4, 
66.21 	subdivision 7, from the heritage enhancement 
66.22 	account in the game and fish fund to study, 
66.23 	predesign, and design a shooting sports 
66.24 	facilities at the Vermillion Highlands Wildlife 
66.25 	Management Area authorized by Laws 2007, 
66.26 	chapter 57, article 1, section 168 facility in 
66.27 	the seven-county metropolitan area. This is 
66.28 	available onetime only and is available until 
66.29 	expended.
66.30 	$300,000 in 2009 is appropriated from the 
66.31 	game and fish fund for only activities that 
66.32 	improve, enhance, or protect fish and wildlife 
66.33 	resources. This is a onetime appropriation.

66.34 	Sec. 60. WORKING GROUP ON SCORE REPORTING.
 67.1 	By July 1, 2009, the commissioner of the Pollution Control Agency shall convene 
67.2 	a working group on SCORE reporting to review the requirements for counties to report 
67.3 	to the agency on activities funded under Minnesota Statutes, section 115A.557. The 
67.4 	commissioner shall appoint to the working group representatives from, at a minimum, 
67.5 	the following organizations: the Association of Minnesota Counties, the Solid Waste 
67.6 	Administrators Association, and the Solid Waste Management Coordinating Board. The 
67.7 	working group shall make recommendations to amend the reporting requirements under 
67.8 	Minnesota Statutes, section 115A.557, subdivision 3, in ways that reduce the resources 
67.9 	counties employ to collect the data reported, while ensuring that estimation methods used 
67.10 	to report data are consistent across counties and that the data reported are accurate and 
67.11 	useful as a guide to solid waste management policy makers. The working group shall 
67.12 	also make recommendations regarding the feasibility and desirability of multicounty 
67.13 	reporting of the data. The working group's recommendations must be presented in a 
67.14 	report submitted to the chairs and ranking minority members of the senate and house of 
67.15 	representatives committees with primary jurisdiction over solid waste policy no later 
67.16 	than December 15, 2009.

67.17 	Sec. 61. COMPOST REPORT.
 67.18 	By December 15, 2011, the commissioner of the Pollution Control Agency shall 
67.19 	report to the legislative committees with jurisdiction over environment and natural 
67.20 	resources policy on:
67.21 	(1) the mixed municipal solid waste diversion rates accomplished by the grant 
67.22 	program under Minnesota Statutes, section 115A.559;
67.23 	(2) participants in the grant program and the programs developed with grant funds; 
67.24 	and
67.25 	(3) the potential for new permanent programs based on results of projects funded 
67.26 	with grants issued under Minnesota Statutes, section 115A.559.

67.27 	Sec. 62. PRIORITY CHEMICAL REPORTS.
67.28 	(a) By January 15, 2010, the commissioner of health, in consultation with the 
67.29 	Pollution Control Agency, shall report to the chairs and ranking minority members 
67.30 	of the senate and house of representatives committees with primary jurisdiction over 
67.31 	environment and natural resources policy, commerce, and public health regarding the 
67.32 	progress on implementing Minnesota Statutes, sections 116.9401 to 116.9408.
67.33 	(b) By January 15, 2010, the commissioner of the Pollution Control Agency 
67.34 	shall report to the chairs and ranking minority members of the senate and house of 
68.1 	representatives committees with primary jurisdiction over environment and natural 
68.2 	resources policy, commerce, and public health on the agency's plans to implement 
68.3 	Minnesota Statutes, section 116.9405, and assess mechanisms to reduce and phase out the 
68.4 	use of priority chemicals in children's products, including potential funding mechanisms. 
68.5 	The report must include information on the progress of other states in reducing toxic 
68.6 	chemicals in children's products and recommend ways to promote product design that 
68.7 	incorporates the principles of green chemistry and life cycle analysis in order to protect 
68.8 	public health and the environment. In developing the report, the agency may consult 
68.9 	outside experts and groups working to reduce toxic chemicals in children's products in 
68.10 	Minnesota and nationally.

68.11 	EFFECTIVE DATE. This section is effective the day following final enactment.

68.12 	Sec. 63. ENVIRONMENTAL REVIEW STREAMLINING REPORT.
 68.13 	By January 15, 2010, the commissioner of the Pollution Control Agency must 
68.14 	submit a report to the environment and natural resources policy and finance committees of 
68.15 	the house of representatives and senate on options to streamline the environmental review 
68.16 	process under chapter 116D. In preparing the report, the commissioner must consult 
68.17 	with state agencies, local government units, and business, agriculture, and environmental 
68.18 	advocacy organizations with an interest in the environmental review process. The report 
68.19 	must include options that will reduce the time required to complete environmental review 
68.20 	and the cost of the process to responsible governmental units and project proposers while 
68.21 	maintaining air, land, and water quality standards.

68.22 	Sec. 64. COMPENSATION OF GOVERNOR'S STAFF.
 68.23 	For fiscal years 2010 and 2011, the Department of Natural Resources, the Pollution 
68.24 	Control Agency, and the Board of Water and Soil Resources may not use funds 
68.25 	appropriated in this act or funds from any statutory or open appropriation to directly or 
68.26 	indirectly pay for the compensation costs of staff in the office of the governor.

68.27 	Sec. 65. FISH CONSUMPTION ADVISORIES.
 68.28 	The commissioner of natural resources, in cooperation with the commissioner of 
68.29 	health, shall ensure that fish consumption advisories are displayed in at least four different 
68.30 	languages to fairly represent the population of the state.

68.31 	Sec. 66. CARBON SEQUESTRATION FORESTRY REPORT.
 69.1 	The Minnesota Forest Resources Council shall review the Minnesota Climate 
69.2 	Change Advisory Group's recommendation to increase carbon sequestration in forests by 
69.3 	planting 1,000,000 acres of trees and shall submit a report to the chairs of the house of 
69.4 	representatives and senate committees with jurisdiction over energy and energy finance, 
69.5 	environment and natural resources, and environment and natural resources finance; the 
69.6 	governor; and the commissioner of natural resources by January 15, 2010. The report 
69.7 	shall, at a minimum, include recommendations on implementation and analysis of the 
69.8 	number and ownership of acres available for tree planting, the types of native species best 
69.9 	suited for planting, the availability of planting stock, and potential costs.

69.10 	Sec. 67.  REPEALER.
 69.11 	Laws 2008, chapter 363, article 5, section 30, is repealed.

69.12 	ARTICLE 2
69.13 	ENERGY FINANCE

69.14	Section 1.  SUMMARY OF APPROPRIATIONS.
 	
69.15 	The amounts shown in this section summarize direct appropriations, by fund, made 
69.16 	in this article.

69.17			2010
		2011
		Total
	
69.18	General
	$
	28,041,000
	$
	27,041,000
	$
	55,082,000
	
69.19	Petroleum Tank Cleanup
		1,084,000
		1,084,000
		2,168,000
	
69.20	Workers' Compensation
		751,000
		751,000
		1,502,000
	
69.21	Special Revenue
		300,000
		300,000
		600,000
	
69.22	Total
	$
	30,176,000
	$
	29,176,000
	$
	59,352,000

69.23	Sec. 2. ENERGY FINANCE APPROPRIATIONS.
 	
69.24 	The sums shown in the columns marked "Appropriations" are appropriated to the 
69.25 	agencies and for the purposes specified in this article. The appropriations are from the 
69.26 	general fund, or another named fund, and are available for the fiscal years indicated 
69.27 	for each purpose. The figures "2010" and "2011" used in this article mean that the 
69.28 	appropriations listed under them are available for the fiscal year ending June 30, 2010, or 
69.29 	June 30, 2011, respectively. "The first year" is fiscal year 2010. "The second year" is fiscal 
69.30 	year 2011. "The biennium" is fiscal years 2010 and 2011. Appropriations for the fiscal 
69.31 	year ending June 30, 2009, are effective the day following final enactment.

69.32				APPROPRIATIONS
	
69.33				Available for the Year
	
70.1				Ending June 30
	
70.2					2010
		2011

70.3	Sec. 3. DEPARTMENT OF COMMERCE

70.4	Subdivision 1.Total Appropriation
 	$
	24,743,000
	$
	23,743,000

70.5	Appropriations by Fund
	
70.6		2010
	2011
	
70.7	General
	22,608,000
	21,608,000
	
70.8	Petroleum Cleanup
	1,084,000
	1,084,000
	
70.970.10
	Workers' 
Compensation
	751,000
	751,000
	
70.11	Special Revenue
	300,000
	300,000
	
70.12 	The amounts that may be spent for each 
70.13 	purpose are specified in the following 
70.14 	subdivisions.

70.15	Subd. 2.Financial Institutions
 		6,638,000
		6,638,000
	
70.16 	$1,000 each year is for consumer small loan 
70.17 	regulation modifications in article 7. This 
70.18 	appropriation is added to the department's 
70.19 	base.

70.20
70.21	Subd. 3.Petroleum Tank Release Cleanup 
Board
 		1,084,000
		1,084,000
	
70.22 	This appropriation is from the petroleum 
70.23 	tank release cleanup fund. The base funding 
70.24 	for this program ends June 30, 2012.

70.25	Subd. 4.Administrative Services
 		4,300,000
		4,300,000

70.26	Subd. 5.Telecommunications
 		1,010,000
		1,010,000

70.27	Subd. 6.Market Assurance
 		7,421,000
		7,421,000

70.28	Appropriations by Fund
	
70.29	General
	6,670,000
	6,670,000
	
70.30
70.31	Workers' 
Compensation
	751,000
	751,000

70.32	Subd. 7.Office of Energy Security
 		3,990,000
		2,990,000

70.33
70.34	Subd. 8.Telecommunications Access 
Minnesota
 		300,000
		300,000
	
71.1 	$300,000 the first year and $300,000 
71.2 	the second year are for transfer to the 
71.3 	commissioner of human services to 
71.4 	supplement the ongoing operational expenses 
71.5 	of the Minnesota Commission Serving 
71.6 	Deaf and Hard-of-Hearing People. This 
71.7 	appropriation is from the telecommunication 
71.8 	access Minnesota fund, and is added to 
71.9 	the commission's base. This appropriation 
71.10 	consolidates, and is not in addition to, 
71.11 	appropriation language from Laws 2006, 
71.12 	chapter 282, article 11, section 4, and 
71.13 	Laws 2007, chapter 57, article 2, section 3, 
71.14 	subdivision 7.

71.15	Sec. 4. PUBLIC UTILITIES COMMISSION
 	$
	5,433,000
	$
	5,433,000

71.16 	Sec. 5. Minnesota Statutes 2008, section 45.027, subdivision 1, is amended to read:
71.17 		Subdivision 1.General powers. In connection with the duties and responsibilities 
71.18 	entrusted to the commissioner, and Laws 1993, chapter 361, section 2, the commissioner 
71.19 	of commerce may:
71.20 	(1) make public or private investigations within or without this state as the 
71.21 	commissioner considers necessary to determine whether any person has violated or is 
71.22 	about to violate any law, rule, or order related to the duties and responsibilities entrusted 
71.23 	to the commissioner;
71.24 	(2) require or permit any person to file a statement in writing, under oath or otherwise 
71.25 	as the commissioner determines, as to all the facts and circumstances concerning the 
71.26 	matter being investigated;
71.27 	(3) hold hearings, upon reasonable notice, in respect to any matter arising out of the 
71.28 	duties and responsibilities entrusted to the commissioner;
71.29 	(4) conduct investigations and hold hearings for the purpose of compiling 
71.30 	information related to the duties and responsibilities entrusted to the commissioner;
71.31 	(5) examine the books, accounts, records, and files of every licensee, and of every 
71.32 	person who is engaged in any activity regulated; the commissioner or a designated 
71.33 	representative shall have free access during normal business hours to the offices and 
72.1 	places of business of the person, and to all books, accounts, papers, records, files, safes, 
72.2 	and vaults maintained in the place of business;
72.3 	(6) publish information which is contained in any order issued by the commissioner; 
72.4 	and
72.5 	(7) require any person subject to duties and responsibilities entrusted to the 
72.6 	commissioner, to report all sales or transactions that are regulated. The reports must 
72.7 	be made within ten days after the commissioner has ordered the report. The report is 
72.8 	accessible only to the respondent and other governmental agencies unless otherwise 
72.9 	ordered by a court of competent jurisdiction.; and
72.10 	(8) assess a licensee the necessary expenses of the investigation performed by the 
72.11 	department when an investigation is made by order of the commissioner. The cost of the 
72.12 	investigation shall be determined by the commissioner and is based on the salary cost 
72.13 	of investigators or assistants and at an average rate per day or fraction thereof so as to 
72.14 	provide for the total cost of the investigations. All money collected must be deposited 
72.15 	into the general fund.

72.16 	Sec. 6. Minnesota Statutes 2008, section 60A.14, subdivision 1, is amended to read:
72.17 		Subdivision 1.Fees other than examination fees. In addition to the fees and 
72.18 	charges provided for examinations, the following fees must be paid to the commissioner 
72.19 	for deposit in the general fund:
72.20 	(a) by township mutual fire insurance companies;
72.21 	(1) for filing certificate of incorporation $25 and amendments thereto, $10;
72.22 	(2) for filing annual statements, $15;
72.23 	(3) for each annual certificate of authority, $15;
72.24 	(4) for filing bylaws $25 and amendments thereto, $10;
72.25 	(b) by other domestic and foreign companies including fraternals and reciprocal 
72.26 	exchanges;
72.27 	(1) for filing an application for an initial certification of authority to be admitted 
72.28 	to transact business in this state, $1,500;
72.29 	(2) for filing certified copy of certificate of articles of incorporation, $100;
72.30 	(3) for filing annual statement, $225;
72.31 	(4) for filing certified copy of amendment to certificate or articles of incorporation, 
72.32 	$100;
72.33 	(5) for filing bylaws, $75 or amendments thereto, $75;
72.34 	(6) for each company's certificate of authority, $575, annually;
72.35 	(c) the following general fees apply:
73.1 	(1) for each certificate, including certified copy of certificate of authority, renewal, 
73.2 	valuation of life policies, corporate condition or qualification, $25;
73.3 	(2) for each copy of paper on file in the commissioner's office 50 cents per page, 
73.4 	and $2.50 for certifying the same;
73.5 	(3) for license to procure insurance in unadmitted foreign companies, $575;
73.6 	(4) for valuing the policies of life insurance companies, one cent per $1,000 of 
73.7 	insurance so valued, provided that the fee shall not exceed $13,000 per year for any 
73.8 	company. The commissioner may, in lieu of a valuation of the policies of any foreign life 
73.9 	insurance company admitted, or applying for admission, to do business in this state, accept 
73.10 	a certificate of valuation from the company's own actuary or from the commissioner of 
73.11 	insurance of the state or territory in which the company is domiciled;
73.12 	(5) for receiving and filing certificates of policies by the company's actuary, or by 
73.13 	the commissioner of insurance of any other state or territory, $50;
73.14 	(6) for each appointment of an agent filed with the commissioner, $10;
73.15 	(7) for filing forms, rates, and compliance certifications under section 60A.315, $90
73.16 	$140 per filing, or $75$125 per filing when submitted via electronic filing system. Filing 
73.17 	fees may be paid on a quarterly basis in response to an invoice. Billing and payment may 
73.18 	be made electronically;
73.19 	(8) for annual renewal of surplus lines insurer license, $300.
73.20 	The commissioner shall adopt rules to define filings that are subject to a fee.

73.21 	Sec. 7. Minnesota Statutes 2008, section 216B.62, subdivision 3, is amended to read:
73.22 		Subd. 3.Assessing all public utilities. The department and commission shall 
73.23 	quarterly, at least 30 days before the start of each quarter, estimate the total of their 
73.24 	expenditures in the performance of their duties relating to (1) public utilities under section 
73.25 	216A.085, sections 216A.085 and 216B.01 to 216B.67, other than amounts chargeable 
73.26 	to public utilities under subdivision 2 or, 6, and (2) alternative energy engineering 
73.27 	activity under section 216C.261 or 7. The remainder, except the amount assessed 
73.28 	against cooperatives and municipalities for alternative energy engineering activity under 
73.29 	subdivision 5, shall be assessed by the commission and department to the several public 
73.30 	utilities in proportion to their respective gross operating revenues from retail sales of gas 
73.31 	or electric service within the state during the last calendar year. The assessment shall be 
73.32 	paid into the state treasury within 30 days after the bill has been transmitted via mail, 
73.33 	personal delivery, or electronic service to the several public utilities, which shall constitute 
73.34 	notice of the assessment and demand of payment thereof. The total amount which may 
73.35 	be assessed to the public utilities, under authority of this subdivision, shall not exceed 
74.1 	one-sixth of one percent of the total gross operating revenues of the public utilities 
74.2 	during the calendar year from retail sales of gas or electric service within the state. The 
74.3 	assessment for the third quarter of each fiscal year shall be adjusted to compensate for the 
74.4 	amount by which actual expenditures by the commission and department for the preceding 
74.5 	fiscal year were more or less than the estimated expenditures previously assessed. 

74.6 	Sec. 8. Minnesota Statutes 2008, section 216B.62, subdivision 4, is amended to read:
74.7 		Subd. 4.Objections. Within 30 days after the date of the transmittal of any bill as 
74.8 	provided by subdivisions subdivision 2 and, 3,  or 7, the public utility against which the bill 
74.9 	has been rendered may file with the commission objections setting out the grounds upon 
74.10 	which it is claimed the bill is excessive, erroneous, unlawful or invalid. The commission 
74.11 	shall within 60 days hold a hearing and issue an order in accordance with its findings. The 
74.12 	order shall be appealable in the same manner as other final orders of the commission.

74.13 	Sec. 9. Minnesota Statutes 2008, section 216B.62, subdivision 5, is amended to read:
74.14 		Subd. 5.Assessing cooperatives and municipals. The commission and department 
74.15 	may charge cooperative electric associations, generation and transmission cooperative 
74.16 	electric associations, municipal power agencies, and municipal electric utilities their 
74.17 	proportionate share of the expenses incurred in the review and disposition of resource 
74.18 	plans, adjudication of service area disputes, proceedings under section 216B.1691, 
74.19 	216B.2425, or 216B.243, and the costs incurred in the adjudication of complaints over 
74.20 	service standards, practices, and rates. Cooperative electric associations electing to 
74.21 	become subject to rate regulation by the commission pursuant to section 216B.026, 
74.22 	subdivision 4, are also subject to this section. Neither a cooperative electric association 
74.23 	nor a municipal electric utility is liable for costs and expenses in a calendar year in excess 
74.24 	of the limitation on costs that may be assessed against public utilities under subdivision 
74.25 	2. A cooperative electric association, generation and transmission cooperative electric 
74.26 	association, municipal power agency, or municipal electric utility may object to and appeal 
74.27 	bills of the commission and department as provided in subdivision 4.
74.28 	The department shall assess cooperatives and municipalities for the costs of 
74.29 	alternative energy engineering activities under section 216C.261. Each cooperative and 
74.30 	municipality shall be assessed in proportion that its gross operating revenues for the sale 
74.31 	of gas and electric service within the state for the last calendar year bears to the total of 
74.32 	those revenues for all public utilities, cooperatives, and municipalities.

75.1 	Sec. 10. Minnesota Statutes 2008, section 216B.62, is amended by adding a 
75.2 	subdivision to read:
75.3 		Subd. 7.Assessing all utilities. The department shall assess public utilities, 
75.4 	cooperative electric associations, and municipal utilities for the costs of activities under 
75.5 	chapter 216C. The department shall not assess for costs of grants, loans, or other aids or 
75.6 	for costs that can be recovered through other assessment authority. Each public utility, 
75.7 	cooperative, and municipal utility shall be assessed in the proportion that its gross 
75.8 	operating revenue for the sale of gas and electric service within the state for the last 
75.9 	calendar year bears to the total of those revenues for all public utilities, cooperatives, 
75.10 	and municipalities.

75.11 	ARTICLE 3
75.12 	ENERGY DEFINITIONS; GOALS; LEGISLATIVE REVIEW

75.13 	Section 1. FEDERAL STIMULUS FUNDING; GOAL OF ENERGY 
75.14 	PROGRAMS.
 75.15 		Subdivision 1.Definitions. For the purposes of articles 2 to 6, the following terms 
75.16 	have the meaning given them.
75.17 	(a) "Act" means the American Recovery and Reinvestment Act of 2009.
75.18 	(b) "Commissioner" means the commissioner of commerce.
75.19 	(c) "Stimulus funding" or "funding" means funding provided to the state under 
75.20 	the act for:
75.21 	(1) energy efficiency and conservation block grants authorized under subtitle E of 
75.22 	title V of the federal Energy Independence and Security Act of 2007, United States Code, 
75.23 	title 42, section 17151 et seq.;
75.24 	(2) the Weatherization Assistance Program authorized under part A of title IV of the 
75.25 	federal Energy Conservation and Production Act, United States Code, title 42, section 
75.26 	6861, et seq.; and
75.27 	(3) the State Energy Program authorized under part D of title III of the federal 
75.28 	Energy Policy and Conservation Act, United States Code, title 42, section 6321, et seq.
75.29 		Subd. 2.Stimulus funding allocation and use goals. To the extent allowed by 
75.30 	federal law and regulation and consistent with the purposes and principles of the act, 
75.31 	stimulus funding must be allocated and expended under articles 2 to 4 for activities that 
75.32 	best achieve the following goals:
75.33 	(1) job retention and creation;
75.34 	(2) improved energy efficiency and increased renewable energy production capacity;
76.1 	(3) coordination with and leveraging of other resources to increase the total benefits 
76.2 	derived from stimulus funding;
76.3 	(4) timely implementation of funded activities;
76.4 	(5) long-term sustainability of benefits derived from stimulus funds;
76.5 	(6) geographic distribution across the state; and
76.6 	(7) compliance with the disadvantaged business enterprise outreach requirements in 
76.7 	Minnesota Statutes, section 16C.16, subdivision 4.

76.8 	EFFECTIVE DATE. This section is effective the day following final enactment.

76.9 	Sec. 2. LEGISLATIVE REVIEW.
 76.10 	The Office of Energy Security shall, prior to expending any stimulus funds, submit 
76.11 	to the chairs and ranking minority members of the senate and house of representatives 
76.12 	committees with primary jurisdiction over energy policy and finance the criteria it 
76.13 	proposes to use to rank the programs in articles 2 to 6 in order to allocate stimulus funding 
76.14 	among the programs. Comments on the proposed criteria must be submitted to the Office 
76.15 	of Energy Security within ten working days of receipt of the criteria. The Office of Energy 
76.16 	Security shall consider the comments before establishing the final allocation criteria, and 
76.17 	shall submit a report on the amount of stimulus funds allocated to each of the programs 
76.18 	under articles 2 to 6 the chairs and ranking minority members of the senate and house of 
76.19 	representatives committees with primary jurisdiction over energy policy and finance 
76.20 	within ten working days of establishing the stimulus funding allocations.

76.21 	EFFECTIVE DATE. This section is effective the day following final enactment.

76.22 	ARTICLE 4
76.23 	ENERGY EFFICIENCY

76.24 	Section 1. WEATHERIZATION.
 76.25 		Subdivision 1.Allocation of funds. All stimulus funds for weatherization must be 
76.26 	allocated by the director of the Office of Energy Security, consistent with federal allocation 
76.27 	requirements and state allocation formulas in the state weatherization plan. Existing 
76.28 	providers of weatherization services must be fully utilized, consistent with effective 
76.29 	program delivery, before additional providers of weatherization services are added.
76.30 		Subd. 2.Rental units.  Programs that include rental units must be developed, 
76.31 	including developing procedures to increase low-income rental unit participation in 
76.32 	programs. Priority must be given to serving the largest number of new weatherization 
76.33 	clients consistent with federal eligibility requirements.

77.1 	EFFECTIVE DATE. This section is effective the day following final enactment.

77.2 	Sec. 2. LOCAL GOVERNMENT AND SCHOOL DISTRICT BUILDING 
77.3 	RENOVATIONS.
 77.4 	The Office of Energy Security must coordinate the use of stimulus funds with the 
77.5 	local public building enhanced energy-efficiency program under Minnesota Statutes, 
77.6 	section 216C.43. The Office of Energy Security shall prioritize lighting upgrades, energy 
77.7 	recommissioning, and other cost-effective energy projects that are ready for immediate 
77.8 	implementation. Stimulus funds may be used for, but are not limited to, grants for a portion 
77.9 	of costs incurred by local governments to implement energy efficiency improvements 
77.10 	under the local public building enhanced energy-efficiency program.  The Office of Energy 
77.11 	Security may require a local government, as a condition of receiving a grant, to commit to 
77.12 	implement future activities, including, but not limited to, staff training, that are designed 
77.13 	to create additional energy or operating savings to the local government.  The Office of 
77.14 	Energy Security shall coordinate with the Department of Education to prioritize school 
77.15 	district projects for funding under this section, consistent with the principles of statewide 
77.16 	geographic distribution of projects, optimized energy savings, and an improved learning 
77.17 	environment for schoolchildren.

77.18 	EFFECTIVE DATE. This section is effective the day following final enactment.

77.19 	Sec. 3. STATE GOVERNMENT BUILDINGS.
 77.20 	The Department of Administration shall develop a plan and procedures to select, 
77.21 	fund, and implement projects using stimulus funds. The plan and procedures shall 
77.22 	prioritize lighting upgrades, energy-efficient windows, energy recommissioning, and other 
77.23 	cost-effective energy projects that are ready for immediate implementation. Funds may be 
77.24 	used for, but are not limited to, grants for a portion of costs incurred by state agencies in 
77.25 	implementing energy efficiency improvements.  The Department of Administration may 
77.26 	require a state agency, as a condition of receiving stimulus funds, to commit to implement 
77.27 	future activities, including, but not limited to, staff training, that are designed to create 
77.28 	additional energy or operating savings to the state agency.

77.29 	EFFECTIVE DATE. This section is effective the day following final enactment.

77.30 	Sec. 4. RESIDENTIAL ENERGY EFFICIENCY PROGRAMS.
 78.1 	The Office of Energy Security shall coordinate with the Minnesota Housing Finance 
78.2 	Agency to use stimulus funds in conjunction with the Minnesota Housing Finance 
78.3 	Agency's existing financing programs to improve energy efficiency in dwellings.

78.4 	EFFECTIVE DATE. This section is effective the day following final enactment.

78.5 	Sec. 5. TRAINING AND WORKFORCE DEVELOPMENT.
 78.6 	(a) The Department of Employment and Economic Development, in consultation 
78.7 	with the Office of Energy Security and the Office of Higher Education, shall develop a 
78.8 	plan and procedures to:
78.9 	(1) allocate stimulus funds to training programs to train energy professionals needed 
78.10 	to implement the energy programs described in sections 2 to 4, including but not limited to 
78.11 	energy auditors, energy managers, and building operators;
78.12 	(2) coordinate, oversee, and monitor the training and certification of energy 
78.13 	professionals; and
78.14 	(3) allocate stimulus funding for the purposes of clauses (1) and (2) and to training 
78.15 	providers.
78.16 	(b) Training strategies must be designed to meet the wide range of facilities 
78.17 	managers and building sizes and types, and must protect the occupational health and safety 
78.18 	of workers employed on these energy projects. Technical skills training must include 
78.19 	insulation, air sealing, and mechanical work.
78.20 	(c) The plan must include procedures to:
78.21 	(1) train individuals already employed in implementing energy programs;
78.22 	(2) recruit individuals to be trained to perform work in energy projects using 
78.23 	stimulus funding who are unemployed, especially targeting communities experiencing 
78.24 	disproportionately high rates of unemployment, including, but not limited to, low-income, 
78.25 	rural, or tribal communities and individuals in construction trades and crafts; and
78.26 	(3) ensure that the full capacity of current training providers is utilized, including, 
78.27 	but not limited to, opportunities industrialization centers, skilled trades labor unions, tribal 
78.28 	colleges or nonprofits working in tribal communities, community action partnerships, 
78.29 	utility companies, higher education institutions, and nonprofit organizations with 
78.30 	demonstrated expertise in energy efficiency.

78.31 	EFFECTIVE DATE. This section is effective the day following final enactment.

78.32 	Sec. 6. ACCOUNTABILITY AND TRANSPARENCY REPORTING.
 79.1 	The director of the Office of Energy Security, after compiling information supplied 
79.2 	by the Departments of Administration, Education, and Employment and Economic 
79.3 	Development, and the Office of Higher Education, shall report on the progress of the 
79.4 	programs funded under articles 2 to 6 to the house of representatives and senate committees 
79.5 	with jurisdiction over energy finance and workforce development policy by September 1, 
79.6 	2009, January 15, 2010, April 1, 2010, and September 1, 2010. The report must include a 
79.7 	complete accounting of all stimulus funds spent on the programs funded under articles 2 to 
79.8 	6, to the extent allowable by state and federal law, including, but not limited to:
79.9 	(1) the specific projects funded, including the location, building owner, and project 
79.10 	manager;
79.11 	(2) the number of jobs retained or created by each project;
79.12 	(3) the total calculated and actual energy savings for each project;
79.13 	(4) the remaining balances in each stimulus fund;
79.14 	(5) the nonstimulus funding leveraged by stimulus funds for each project;
79.15 	(6) the training courses provided, including the location and provider of courses 
79.16 	offered, the funding source for each training course, and the total number of trainees; and
79.17 	(7) compliance with prevailing wage, veterans, and disadvantaged business 
79.18 	enterprise requirements.

79.19 	EFFECTIVE DATE. This section is effective the day following final enactment.

79.20 	ARTICLE 5
79.21 	RENEWABLE ENERGY

79.22 	Section 1. RENEWABLE ENERGY GRANT PROGRAM.
 79.23 	(a) The commissioner of commerce shall establish a program to award grants to 
79.24 	energy projects that meet the following conditions:
79.25 	(1) the project qualifies as a community-based energy development (C-BED) project, 
79.26 	as defined in Minnesota Statutes, section 216B.1612, subdivision 2, paragraph (g);
79.27 	(2) for wind projects, the project is located in an area where the measured wind 
79.28 	resource is Class 4 or above;
79.29 	(3) the project begins commercial operation after July 1, 2009;
79.30 	(4) the project does not receive renewable energy payment incentives under 
79.31 	Minnesota Statutes, section 216C.41; and
79.32 	(5) the project meets any other conditions established under the American Recovery 
79.33 	and Reinvestment Act of 2009, Public Law 111-5, for use of these funds.
80.1 	(b) The department shall develop an application form, application review procedures, 
80.2 	criteria that projects must meet in order to be considered for a grant award, procedures 
80.3 	and guidelines for project monitoring and evaluation, and other administrative procedures 
80.4 	necessary to fully implement a grant program.
80.5 	(c) The maximum grant to a project is $500,000.
80.6 	(d) No more than two projects in a single county may receive a grant under this 
80.7 	section.
80.8 	(e) No C-BED qualifying owner may financially participate in more than one project 
80.9 	that receives a grant under this section.
80.10 	(f) Grant awards must be geographically dispersed throughout the state.

80.11 	EFFECTIVE DATE. This section is effective the day following final enactment.

80.12 	Sec. 2. RENEWABLE ELECTRIC GENERATION FACILITY REBATES.
 80.13 	(a) The commissioner shall establish a program to award rebates to qualifying 
80.14 	facilities that generate electricity from a renewable source and that:
80.15 	(1) begin operation after July 1, 2009; 
80.16 	(2) meet all other conditions established under the act; and
80.17 	(3) provide electricity to:
80.18 	(i) a homeowner's primary residence; or
80.19 	(ii) a business, with 20 or fewer full-time employees.
80.20 	(b) The commissioner shall develop an application form, application review 
80.21 	procedures, criteria that projects must meet in order to be considered for a rebate, 
80.22 	procedures and guidelines for project monitoring and evaluation, and other administrative 
80.23 	procedures necessary to fully implement a rebate program.
80.24 	(c) The owner of a qualifying facility may apply to the commissioner for a rebate of 
80.25 	the lesser of $2,500 or 35 percent of the cost of the electric generation facility, including 
80.26 	installation costs.
80.27 	(d) The commissioner shall award rebates only from funds appropriated for that 
80.28 	purpose and to the extent of those appropriations. Grants must be made to applicants in 
80.29 	the order of the time of receipt of a complete application.
80.30 	(e) For purposes of this section:
80.31 	(1) "Qualifying facility" means an electric generation facility with a capacity of less 
80.32 	than 40 kilowatts that generates electricity from a renewable energy source.
80.33 	(2) "Renewable energy source" means:
80.34 	(i) solar;
80.35 	(ii) wind;
81.1 	(iii) hydroelectric;
81.2 	(iv) hydrogen, provided that after January 1, 2010, the hydrogen must be generated 
81.3 	from the resources listed in this clause; or
81.4 	(v) biomass, which includes, without limitation, landfill gas; an anaerobic digester 
81.5 	system; and the predominantly organic components of wastewater effluent, sludge, or 
81.6 	related by-products from publicly owned treatment works, but not including incineration 
81.7 	of wastewater sludge to produce electricity.

81.8 	EFFECTIVE DATE. This section is effective the day following final enactment.

81.9 	Sec. 3. SOLAR ENERGY PROJECTS IN PUBLIC BUILDINGS AND 
81.10 	SCHOOLS.
 81.11 	(a) The commissioner shall establish a program to award grants to:
81.12 	(1) local units of government to pay the costs of installing solar energy projects to 
81.13 	generate energy used in public buildings; or
81.14 	(2) to school districts to pay the costs of installing solar energy projects to generate 
81.15 	energy used in K-12 schools.
81.16 	(b) To be eligible to receive a grant, a project must:
81.17 	(1) begin operation after July 1, 2009; and
81.18 	(2) meet all other conditions established under the act.
81.19 	(c) The commissioner shall develop an application form, application review 
81.20 	procedures, criteria that a project must meet in order to be considered for a grant award, 
81.21 	procedures and guidelines for project monitoring and evaluation, and other administrative 
81.22 	procedures necessary to fully implement a grant program.
81.23 	(d) In awarding grants, the commissioner must determine, at a minimum, the 
81.24 	following:
81.25 	(1) that the physical condition of the building is sufficient to support the efficient 
81.26 	operation of the solar energy project;
81.27 	(2) that there is no significant possibility that the building may close within ten 
81.28 	years, which determination, for a school, must be based on enrollment projections; and
81.29 	(3) that the projected cumulative energy savings exceed the grant amount within 15 
81.30 	years for a qualifying solar thermal project, and within 20 years for a photovoltaic device.
81.31 	(e) In awarding grants, the commissioner must also consider:
81.32 	(1) the reliability and cost-effectiveness of the solar technology to be installed;
81.33 	(2) the extent to which the proposal effectively coordinates with the conservation 
81.34 	and energy efficiency programs offered by the energy utilities serving the building in 
82.1 	which the project is located, and with the public building enhanced energy efficiency 
82.2 	program under section 216C.43, if applicable;
82.3 	(3) life cycle energy use reductions and greenhouse gas emissions reductions 
82.4 	projected per dollar of installed cost of the project; and
82.5 	(4) the geographic distribution of grant recipients throughout the state.
82.6 	(f) For the purposes of this section:
82.7 	(1) "public building" means any publicly owned building, sports arena, or other 
82.8 	facility of a county, city, or other local unit of government; and
82.9 	(2) "solar energy" means:
82.10 	(i) a photovoltaic device, as defined in Minnesota Statutes, section 216C.06, 
82.11 	subdivision 16; or
82.12 	(ii) a qualifying thermal project, as defined in Minnesota Statutes, section 
82.13 	216B.2411, subdivision 2, that includes modifications made to a distribution system to 
82.14 	distribute heating or cooling throughout a building.

82.15 	EFFECTIVE DATE. This section is effective the day following final enactment.

82.16 	ARTICLE 6
82.17 	MISCELLANEOUS ENERGY PROGRAMS 

82.18 	Section 1. ENERGY PROGRAMS IN COMMERCIAL AND INDUSTRIAL 
82.19 	BUILDINGS.
 82.20 	(a) The commissioner shall establish a program to award grants to commercial 
82.21 	and industrial facilities for the purpose of installing energy-efficiency improvements or 
82.22 	creating renewable energy sources to generate electricity or to heat or cool a building. To 
82.23 	be eligible to receive a grant, a project must:
82.24 	(1) begin commercial operation after July 1, 2009; and
82.25 	(2) meet all other conditions established under the act.
82.26 	(b) The commissioner shall develop an application form, application review 
82.27 	procedures, criteria that a project must meet in order to be considered for a grant award, 
82.28 	procedures and guidelines for project monitoring and evaluation, and other administrative 
82.29 	procedures necessary to fully implement a grant program.
82.30 	(c) For the purposes of this section, "renewable energy source" means:
82.31 	(i) solar;
82.32 	(ii) wind;
82.33 	(iii) hydroelectric;
83.1 	(iv) hydrogen, provided that after January 1, 2010, the hydrogen must be generated 
83.2 	from the resources listed in this clause; or
83.3 	(v) biomass, which includes, without limitation, landfill gas; an anaerobic digester 
83.4 	system; and the predominantly organic components of wastewater effluent, sludge, or 
83.5 	related by-products from publicly owned treatment works, but not including incineration 
83.6 	of wastewater sludge to produce electricity.

83.7 	EFFECTIVE DATE. This section is effective the day following final enactment.

83.8 	Sec. 2. ENERGY EDUCATION, TRAINING, AND DATA SYSTEMS.
 83.9 	The Office of Energy Security shall establish programs to work with teachers and 
83.10 	other energy experts to include energy issues in K-12 curricula; develop training and 
83.11 	certification programs for technicians to install and service wind and solar energy systems; 
83.12 	and upgrade data systems to enable accurate tracking of energy savings resulting from the 
83.13 	conservation improvement program and other state energy programs.

83.14 	EFFECTIVE DATE. This section is effective the day following final enactment.

83.15 	Sec. 3. ENERGY EFFICIENCY GRANTS TO LOCAL GOVERNMENTS.
 83.16 	The Office of Energy Security shall establish a grant program to award grants to 
83.17 	local units of government to enhance energy efficiency and reduce energy use. Energy 
83.18 	efficiency and conservation block grant funds may be used for grants for planning, 
83.19 	consultant services, energy audits, implementing energy-efficient building codes and 
83.20 	inspection services, energy efficiency renovations, street lighting, and the installation of 
83.21 	renewable energy devices deployed on public buildings.

83.22 	ARTICLE 7
83.23 	OTHER ENERGY APPROPRIATIONS

83.24 	Section 1. WEATHERIZATION ASSISTANCE PROGRAM APPROPRIATION.
 83.25 	Of the funds available to the state of Minnesota from the federal stimulus funding for 
83.26 	the weatherization assistance program under the American Recovery and Reinvestment 
83.27 	Act of 2009, Public Law 111-5, $131,937,411 is appropriated to the commissioner of 
83.28 	commerce. The funds must be administered consistent with the requirements in article 4, 
83.29 	section 1.

83.30 	Sec. 2. ENERGY EFFICIENCY AND CONSERVATION BLOCK PROGRAM 
83.31 	APPROPRIATION.
 84.1 	Of the funds available to the state of Minnesota from the federal stimulus funding 
84.2 	for the Energy Efficiency and Conservation Block Grant Program under the American 
84.3 	Recovery and Reinvestment Act of 2009, Public Law 111-5, $10,644,100, is appropriated 
84.4 	to the commissioner of commerce. The appropriation must be distributed as follows:
84.5 	(1) $6,546,121 is for energy efficiency grants to local government in article 6, 
84.6 	section 3; and
84.7 	(2) $4,097,979, is for local government and school district buildings consistent 
84.8 	with the requirements in article 4, section 2.

84.9 	EFFECTIVE DATE. This section is effective the day following final enactment.

84.10 	Sec. 3. STATE ENERGY PROGRAM APPROPRIATION.
 84.11 	Of the funds available to the state of Minnesota from the federal stimulus funding 
84.12 	for the State Energy Program under the American Recovery and Reinvestment Act of 
84.13 	2009, Public Law 111-5, $54,172,000 is appropriated to the commissioner of commerce. 
84.14 	Of this amount:
84.15 	(1) $10,650,000 is for local government and school district buildings consistent 
84.16 	with the requirements in article 4, section 2;
84.17 	(2) $8,000,000 is for state government buildings consistent with the requirements in 
84.18 	article 4, section 3;
84.19 	(3) $12,000,000 is for the residential energy financing program in article 4, section 5;
84.20 	(4) $12,000,000 is for renewable energy programs, including, but not limited to, the 
84.21 	programs specified in article 5;
84.22 	(6) $5,000,000 is for grants to commercial and industrial facilities for energy 
84.23 	efficiency and renewable energy projects in article 6, section 1;
84.24 	(7) $5,022,000 is for energy education, training, and information and data systems in 
84.25 	article 6, section 2; and
84.26 	(8) $1,500,000 is for a grant to the Board of Trustees of the Minnesota State Colleges 
84.27 	and Universities for the International Renewable Energy Technology Institute (IRETI) to 
84.28 	be located at Minnesota State University, Mankato, as a public and private partnership to 
84.29 	support applied research in renewable energy and energy efficiency to aid in the transfer of 
84.30 	technology from Sweden to Minnesota and to support technology commercialization from 
84.31 	companies located in Minnesota and throughout the world.

84.32 	EFFECTIVE DATE. This section is effective the day following final enactment.

85.1 	ARTICLE 8
85.2 	DEPARTMENT OF COMMERCE; OTHER REGULATORY PROVISIONS

85.3 	Section 1. Minnesota Statutes 2008, section 47.58, subdivision 1, is amended to read:
85.4 		Subdivision 1.Definitions. For the purposes of this section, the terms defined in this 
85.5 	subdivision have the meanings given them.
85.6 	(a) "Reverse mortgage loan" means a loan:
85.7 	(1) Made to a borrower wherein the committed principal amount is paid to the 
85.8 	borrower in equal or unequal installments over a period of months or years, interest is 
85.9 	assessed, and authorized closing costs are incurred as specified in the loan agreement;
85.10 	(2) Which is secured by a mortgage on residential property owned solely by the 
85.11 	borrower; and
85.12 	(3) Which is due when the committed principal amount has been fully paid to the 
85.13 	borrower, or upon sale of the property securing the loan, or upon the death of the last 
85.14 	surviving borrower, or upon the borrower terminating use of the property as principal 
85.15 	residence so as to disqualify the property from the homestead credit given in chapter 290A.
85.16 	(b) "Lender" means any bank subject to chapter 48, credit union subject to chapter 
85.17 	52, savings bank organized and operated pursuant to chapter 50, savings association 
85.18 	subject to chapter 51A, any residential mortgage originator subject to chapter 58, or any 
85.19 	insurance company as defined in section 60A.02, subdivision 4. "Lender" also includes 
85.20 	any federally chartered bank supervised by the comptroller of the currency or federally 
85.21 	chartered savings association supervised by the Federal Home Loan Bank Board or 
85.22 	federally chartered credit union supervised by the National Credit Union Administration, 
85.23 	to the extent permitted by federal law.  
85.24 	(c) "Borrower" includes any natural person holding an interest in severalty or as joint 
85.25 	tenant or tenant-in-common in the property securing a reverse mortgage loan.
85.26 	(d) "Outstanding loan balance" means the current net amount of money owed by the 
85.27 	borrower to the lender whether or not that sum is suspended pursuant to the terms of the 
85.28 	reverse mortgage loan agreement or is immediately due and payable. The outstanding 
85.29 	loan balance is calculated by adding the current totals of the items described in clauses (1) 
85.30 	to (5) and subtracting the current totals of the item described in clause (6):
85.31 	(1) The sum of all payments made by the lender which are necessary to clear the 
85.32 	property securing the loan of any outstanding mortgage encumbrance or mechanics or 
85.33 	material supplier's lien.
85.34 	(2) The total disbursements made by the lender to date pursuant to the loan 
85.35 	agreement as formulated in accordance with subdivision 3.
86.1 	(3) All taxes, assessments, insurance premiums and other similar charges paid to 
86.2 	date by the lender pursuant to subdivision 6, which charges were not reimbursed by the 
86.3 	borrower within 60 days.
86.4 	(4) All actual closing costs which the borrower has deferred, if a deferral provision 
86.5 	is contained in the loan agreement as authorized by subdivision 7.
86.6 	(5) The total accrued interest to date, as authorized by subdivision 5.
86.7 	(6) All payments made by the borrower pursuant to subdivision 4.
86.8 	(e) "Actual closing costs" mean reasonable charges or sums ordinarily paid at the 
86.9 	time of closing for the following, whether or not retained by the lender:
86.10 	(1) Any insurance premiums on policies covering the mortgaged property including 
86.11 	but not limited to premiums for title insurance, fire and extended coverage insurance, flood 
86.12 	insurance, and private mortgage insurance.
86.13 	(2) Abstracting, title examination and search, and examination of public records 
86.14 	related to the mortgaged property.
86.15 	(3) The preparation and recording of any or all documents required by law or custom 
86.16 	for closing a reverse mortgage loan agreement.
86.17 	(4) Appraisal and survey of real property securing a reverse mortgage loan.
86.18 	(5) A single service charge, which service charge shall include any consideration, 
86.19 	not otherwise specified in this section as an "actual closing cost," paid by the borrower to 
86.20 	the lender for or in relation to the acquisition, making, refinancing or modification of a 
86.21 	reverse mortgage loan, and shall also include any consideration received by the lender 
86.22 	for making a commitment for a reverse mortgage loan, whether or not an actual loan 
86.23 	follows the commitment. The service charge shall not exceed one percent of the bona fide 
86.24 	committed principal amount of the reverse mortgage loan.
86.25 	(6) Charges and fees necessary for or related to the transfer of real property securing 
86.26 	a reverse mortgage loan or the closing of a reverse mortgage loan agreement paid by the 
86.27 	borrower and received by any party other than the lender.

86.28 	Sec. 2. Minnesota Statutes 2008, section 47.60, subdivision 1, is amended to read:
86.29 		Subdivision 1.Definitions. For purposes of this section, the terms defined have 
86.30 	the meanings given them:
86.31 	(a) "Consumer small loan" is a loan transaction in which cash is advanced to a 
86.32 	borrower for the borrower's own personal, family, or household purpose. A consumer 
86.33 	small loan is a short-term, unsecured loan to be repaid in a single installment. The cash 
86.34 	advance of a consumer small loan is equal to or less than $350. A consumer small loan 
87.1 	includes an indebtedness evidenced by but not limited to a promissory note or agreement 
87.2 	to defer the presentation of a personal check for a fee.
87.3 	(b) "Consumer small loan lender" is a financial institution as defined in section 
87.4 	47.59 or a person business entity registered with the commissioner and engaged in the 
87.5 	business of making consumer small loans. 

87.6 	Sec. 3. Minnesota Statutes 2008, section 47.60, subdivision 3, is amended to read:
87.7 		Subd. 3.Filing. Before a person business entity other than a financial institution 
87.8 	as defined by section 47.59 engages in the business of making consumer small loans to 
87.9 	Minnesota residents, the person business entity shall file with the commissioner as a 
87.10 	consumer small loan lender. The filing must be on a form prescribed by the commissioner 
87.11 	together with a fee of $250 for each place of business and contain the following 
87.12 	information in addition to the information required by the commissioner: 
87.13 	(1) evidence that the filer has available for the operation of the business at the 
87.14 	location specified, liquid assets of at least $50,000; and
87.15 	(2) a biographical statement on the principal person responsible for the operation 
87.16 	and management of the business to be certified.
87.17 	Revocation of the filing and the right to engage in the business of a consumer small 
87.18 	loan lender is the same as in the case of a regulated lender license in section 56.09. 
87.19 	For purposes of this subdivision, "business entity" includes one that does not have a 
87.20 	physical location in Minnesota that makes a consumer small loan electronically via the 
87.21 	Internet. 

87.22 	Sec. 4. Minnesota Statutes 2008, section 47.60, subdivision 6, is amended to read:
87.23 		Subd. 6.Penalties for violation. A person business entity or the person's entity's
87.24 	members, officers, directors, agents, and employees who violate or participate in the 
87.25 	violation of any of the provisions of this section may be liable in the same manner as in 
87.26 	section 56.19. 

87.27 	Sec. 5. Minnesota Statutes 2008, section 48.21, is amended to read:
87.28 	48.21 REAL ESTATE; RESTRICTIONS ON HOLDING.
87.29 		Subdivision 1.Specific restrictions. (a) A bank may purchase, carry as an asset, 
87.30 	and convey real estate only:
87.31 	(1) as provided for in section 47.10;  
87.32 	(2) if acquired through foreclosure of a mortgage given to it in good faith as security 
87.33 	for loans made by or money due to it;
88.1 	(3) if conveyed to it in satisfaction of debts previously contracted in good faith in 
88.2 	the course of its dealings;
88.3 	(4) if acquired by sale on execution or judgment of a court in its favor; or
88.4 	(5) if reasonably necessary to mitigate or avoid loss on a loan or investment 
88.5 	theretofore made.
88.6 	(b) Real estate acquired under clauses (2) to (5) shall be carried as an asset only in 
88.7 	accordance with rules the commissioner prescribes. The maximum period for holding 
88.8 	other real estate as an asset shall be five years, provided that upon application to the 
88.9 	commissioner, the commissioner may approve the possession of such real estate by a bank 
88.10 	for a period longer than five years, but not to exceed an additional five years, if:
88.11 	(1) the bank has made a good faith attempt to dispose of the real estate within the 
88.12 	initial five-year period; or
88.13 	(2) disposal within the initial five-year period would be detrimental to the bank.
88.14 		Subd. 2.Real estate holdings not bank liabilities. Real estate owned by a bank 
88.15 	as a result of actions authorized in clauses (2) to (5) of subdivision 1 and subsequently 
88.16 	sold to any buyer on a contract for deed may not be considered creating a liability to a 
88.17 	bank for purposes of section 48.24.  
88.18 		Subd. 3.Real estate holdings not sold; authority to write off. Notwithstanding 
88.19 	any rules of the commissioner to the contrary, if real estate owned by a bank pursuant to 
88.20 	clauses (2) to (5) of subdivision 1 is not sold or otherwise disposed of within the maximum 
88.21 	period established by rule by the commissioner, the bank may write off any remaining 
88.22 	balance at a rate not less than one-fifth of that balance each subsequent calendar year.

88.23 	Sec. 6. Minnesota Statutes 2008, section 58.05, subdivision 3, is amended to read:
88.24 		Subd. 3.Certificate of exemption. A person must obtain a certificate of exemption 
88.25 	from the commissioner to qualify as an exempt person under section 58.04, subdivision 1, 
88.26 	paragraph (c), a financial institution under clause (2), or by order of the commissioner 
88.27 	under clause (6); or under section 58.04, subdivision 2, paragraph (b), as a financial 
88.28 	institution under clause (3) (4), or by order of the commissioner under clause (7) (8). 

88.29 	Sec. 7. Minnesota Statutes 2008, section 58.06, subdivision 2, is amended to read:
88.30 		Subd. 2.Application contents. (a) The application must contain the name and 
88.31 	complete business address or addresses of the license applicant. The license applicant 
88.32 	must be a partnership, limited liability partnership, association, limited liability company, 
88.33 	corporation, or other form of business organization, and the application must contain the 
88.34 	names and complete business addresses of each partner, member, director, and principal 
89.1 	officer. The application must also include a description of the activities of the license 
89.2 	applicant, in the detail and for the periods the commissioner may require.
89.3 	(b) An A residential mortgage originator applicant must submit one of the following:
89.4 	(1) evidence which shows, to the commissioner's satisfaction, that either the federal 
89.5 	Department of Housing and Urban Development or the Federal National Mortgage 
89.6 	Association has approved the residential mortgage originator applicant as a mortgagee;
89.7 	(2) a surety bond or irrevocable letter of credit in the amount of not less than 
89.8 	$50,000 in a form approved by the commissioner, issued by an insurance company or bank 
89.9 	authorized to do so in this state. The bond or irrevocable letter of credit must be available 
89.10 	for the recovery of expenses, fines, and fees levied by the commissioner under this chapter 
89.11 	and for losses incurred by borrowers. The bond or letter of credit must be submitted with 
89.12 	the license application, and evidence of continued coverage must be submitted with each 
89.13 	renewal. Any change in the bond or letter of credit must be submitted for approval by the 
89.14 	commissioner within ten days of its execution; or
89.15 	(3) a copy of the residential mortgage originator applicant's most recent audited 
89.16 	financial statement, including balance sheet, statement of income or loss, statements of 
89.17 	changes in shareholder equity, and statement of changes in financial position. Financial 
89.18 	statements must be as of a date within 12 months of the date of application.
89.19 	(c) The application must also include all of the following:
89.20 	(1) an affirmation under oath that the applicant:
89.21 	(i) is in compliance with the requirements of section 58.125;
89.22 	(ii) will maintain a perpetual roster of individuals employed as residential mortgage 
89.23 	originators, including employees and independent contractors, which includes the date
89.24 	dates that mandatory testing, initial education was, and continuing education were
89.25 	completed. In addition, the roster must be made available to the commissioner on demand, 
89.26 	within three business days of the commissioner's request;
89.27 	(iii) will advise the commissioner of any material changes to the information 
89.28 	submitted in the most recent application within ten days of the change;
89.29 	(iv) will advise the commissioner in writing immediately of any bankruptcy petitions 
89.30 	filed against or by the applicant or licensee;
89.31 	(v) will maintain at all times either a net worth, net of intangibles, of at least 
89.32 	$250,000 or a surety bond or irrevocable letter of credit in the amount of at least $50,000;
89.33 	(vi) complies with federal and state tax laws; and
89.34 	(vii) complies with sections 345.31 to 345.60, the Minnesota unclaimed property 
89.35 	law;  
90.1 	(2) information as to the mortgage lending, servicing, or brokering experience of the 
90.2 	applicant and persons in control of the applicant;
90.3 	(3) information as to criminal convictions, excluding traffic violations, of persons in 
90.4 	control of the license applicant;
90.5 	(4) whether a court of competent jurisdiction has found that the applicant or persons 
90.6 	in control of the applicant have engaged in conduct evidencing gross negligence, fraud, 
90.7 	misrepresentation, or deceit in performing an act for which a license is required under 
90.8 	this chapter;
90.9 	(5) whether the applicant or persons in control of the applicant have been the subject 
90.10 	of: an order of suspension or revocation, cease and desist order, or injunctive order, or 
90.11 	order barring involvement in an industry or profession issued by this or another state or 
90.12 	federal regulatory agency or by the Secretary of Housing and Urban Development within 
90.13 	the ten-year period immediately preceding submission of the application; and
90.14 	(6) other information required by the commissioner.

90.15 	Sec. 8. Minnesota Statutes 2008, section 58.126, is amended to read:
90.16 	58.126 EDUCATION AND TESTING REQUIREMENT.
90.17 	(a) No individual shall engage in residential mortgage origination or make residential 
90.18 	mortgage loans, whether as an employee or independent contractor, before the completion 
90.19 	of 15 20 hours of educational training which has been approved by the commissioner, and 
90.20 	covering state and federal laws concerning residential mortgage lending.
90.21 	(b) In addition to the initial education requirements in paragraph (a), each individual 
90.22 	must also complete eight hours of continuing education annually. The education must 
90.23 	include:
90.24 	(1) three hours of federal law and regulations;
90.25 	(2) two hours of ethics, which must include fraud, consumer protection, and fair 
90.26 	lending; and 
90.27 	(3) two hours of standards governing nontraditional mortgage lending.
90.28 	(c) The commissioner may by rule establish testing requirements for individuals 
90.29 	subject to the requirements of paragraphs (a) and (b). An individual must satisfy the 
90.30 	testing requirements established by the commissioner before engaging in residential 
90.31 	mortgage loan origination or making residential mortgage loans.

90.32 	EFFECTIVE DATE. This section is effective September 1, 2009, and applies to 
90.33 	license applications and renewals made on or after that date.

91.1 	Sec. 9. Minnesota Statutes 2008, section 58.13, subdivision 1, is amended to read:
91.2 		Subdivision 1. Generally. (a) No person acting as a residential mortgage originator 
91.3 	or servicer, including a person required to be licensed under this chapter, and no person 
91.4 	exempt from the licensing requirements of this chapter under section 58.04, except as 
91.5 	otherwise provided in paragraph (b), shall: 
91.6 	(1) fail to maintain a trust account to hold trust funds received in connection with a 
91.7 	residential mortgage loan; 
91.8 	(2) fail to deposit all trust funds into a trust account within three business days of 
91.9 	receipt; commingle trust funds with funds belonging to the licensee or exempt person; or 
91.10 	use trust account funds for any purpose other than that for which they are received; 
91.11 	(3) unreasonably delay the processing of a residential mortgage loan application, 
91.12 	or the closing of a residential mortgage loan. For purposes of this clause, evidence of 
91.13 	unreasonable delay includes but is not limited to those factors identified in section 47.206, 
91.14 	subdivision 7, clause (d); 
91.15 	(4) fail to disburse funds according to its contractual or statutory obligations; 
91.16 	(5) fail to perform in conformance with its written agreements with borrowers, 
91.17 	investors, other licensees, or exempt persons; 
91.18 	(6) charge a fee for a product or service where the product or service is not actually 
91.19 	provided, or misrepresent the amount charged by or paid to a third party for a product 
91.20 	or service; 
91.21 	(7) fail to comply with sections 345.31 to 345.60, the Minnesota unclaimed property 
91.22 	law; 
91.23 	(8) violate any provision of any other applicable state or federal law regulating 
91.24 	residential mortgage loans including, without limitation, sections 47.20 to 47.208, and 
91.25 	47.58; 
91.26 	(9) make or cause to be made, directly or indirectly, any false, deceptive, or 
91.27 	misleading statement or representation in connection with a residential loan transaction 
91.28 	including, without limitation, a false, deceptive, or misleading statement or representation 
91.29 	regarding the borrower's ability to qualify for any mortgage product; 
91.30 	(10) conduct residential mortgage loan business under any name other than that 
91.31 	under which the license or certificate of exemption was issued; 
91.32 	(11) compensate, whether directly or indirectly, coerce or intimidate an appraiser for 
91.33 	the purpose of influencing the independent judgment of the appraiser with respect to the 
91.34 	value of real estate that is to be covered by a residential mortgage or is being offered as 
91.35 	security according to an application for a residential mortgage loan; 
92.1 	(12) issue any document indicating conditional qualification or conditional approval 
92.2 	for a residential mortgage loan, unless the document also clearly indicates that final 
92.3 	qualification or approval is not guaranteed, and may be subject to additional review; 
92.4 	(13) make or assist in making any residential mortgage loan with the intent that the 
92.5 	loan will not be repaid and that the residential mortgage originator will obtain title to 
92.6 	the property through foreclosure; 
92.7 	(14) provide or offer to provide for a borrower, any brokering or lending services 
92.8 	under an arrangement with a person other than a licensee or exempt person, provided that 
92.9 	a person may rely upon a written representation by the residential mortgage originator that 
92.10 	it is in compliance with the licensing requirements of this chapter; 
92.11 	(15) claim to represent a licensee or exempt person, unless the person is an employee 
92.12 	of the licensee or exempt person or unless the person has entered into a written agency 
92.13 	agreement with the licensee or exempt person; 
92.14 	(16) fail to comply with the record keeping and notification requirements identified 
92.15 	in section 58.14 or fail to abide by the affirmations made on the application for licensure; 
92.16 	(17) represent that the licensee or exempt person is acting as the borrower's agent 
92.17 	after providing the nonagency disclosure required by section 58.15, unless the disclosure 
92.18 	is retracted and the licensee or exempt person complies with all of the requirements of 
92.19 	section 58.16; 
92.20 	(18) make, provide, or arrange for a residential mortgage loan that is of a lower 
92.21 	investment grade if the borrower's credit score or, if the originator does not utilize credit 
92.22 	scoring or if a credit score is unavailable, then comparable underwriting data, indicates 
92.23 	that the borrower may qualify for a residential mortgage loan, available from or through 
92.24 	the originator, that is of a higher investment grade, unless the borrower is informed that 
92.25 	the borrower may qualify for a higher investment grade loan with a lower interest rate 
92.26 	and/or lower discount points, and consents in writing to receipt of the lower investment 
92.27 	grade loan; 
92.28 	For purposes of this section, "investment grade" refers to a system of categorizing 
92.29 	residential mortgage loans in which the loans are: (i) commonly referred to as "prime" or 
92.30 	"subprime"; (ii) commonly designated by an alphabetical character with "A" being the 
92.31 	highest investment grade; and (iii) are distinguished by interest rate or discount points 
92.32 	or both charged to the borrower, which vary according to the degree of perceived risk 
92.33 	of default based on factors such as the borrower's credit, including credit score and 
92.34 	credit patterns, income and employment history, debt ratio, loan-to-value ratio, and prior 
92.35 	bankruptcy or foreclosure; 
93.1 	(19) make, publish, disseminate, circulate, place before the public, or cause to be 
93.2 	made, directly or indirectly, any advertisement or marketing materials of any type, or any 
93.3 	statement or representation relating to the business of residential mortgage loans that is 
93.4 	false, deceptive, or misleading; 
93.5 	(20) advertise loan types or terms that are not available from or through the licensee 
93.6 	or exempt person on the date advertised, or on the date specified in the advertisement. 
93.7 	For purposes of this clause, advertisement includes, but is not limited to, a list of sample 
93.8 	mortgage terms, including interest rates, discount points, and closing costs provided by 
93.9 	licensees or exempt persons to a print or electronic medium that presents the information 
93.10 	to the public; 
93.11 	(21) use or employ phrases, pictures, return addresses, geographic designations, or 
93.12 	other means that create the impression, directly or indirectly, that a licensee or other 
93.13 	person is a governmental agency, or is associated with, sponsored by, or in any manner 
93.14 	connected to, related to, or endorsed by a governmental agency, if that is not the case; 
93.15 	(22) violate section 82.49, relating to table funding; 
93.16 	(23) make, provide, or arrange for a residential mortgage loan all or a portion 
93.17 	of the proceeds of which are used to fully or partially pay off a "special mortgage" 
93.18 	unless the borrower has obtained a written certification from an authorized independent 
93.19 	loan counselor that the borrower has received counseling on the advisability of the 
93.20 	loan transaction. For purposes of this section, "special mortgage" means a residential 
93.21 	mortgage loan originated, subsidized, or guaranteed by or through a state, tribal, or 
93.22 	local government, or nonprofit organization, that bears one or more of the following 
93.23 	nonstandard payment terms which substantially benefit the borrower: (i) payments vary 
93.24 	with income; (ii) payments of principal or interest are not required or can be deferred under 
93.25 	specified conditions; (iii) principal or interest is forgivable under specified conditions; 
93.26 	or (iv) where no interest or an annual interest rate of two percent or less is charged in 
93.27 	connection with the loan. For purposes of this section, "authorized independent loan 
93.28 	counselor" means a nonprofit, third-party individual or organization providing homebuyer 
93.29 	education programs, foreclosure prevention services, mortgage loan counseling, or credit 
93.30 	counseling certified by the United States Department of Housing and Urban Development, 
93.31 	the Minnesota Home Ownership Center, the Minnesota Mortgage Foreclosure Prevention 
93.32 	Association, AARP, or NeighborWorks America; 
93.33 	(24) make, provide, or arrange for a residential mortgage loan without verifying 
93.34 	the borrower's reasonable ability to pay the scheduled payments of the following, as 
93.35 	applicable: principal; interest; real estate taxes; homeowner's insurance, assessments, 
93.36 	and mortgage insurance premiums. For loans in which the interest rate may vary, the 
94.1 	reasonable ability to pay shall be determined based on a fully indexed rate and a repayment 
94.2 	schedule which achieves full amortization over the life of the loan. For all residential 
94.3 	mortgage loans, the borrower's income and financial resources must be verified by tax 
94.4 	returns, payroll receipts, bank records, or other similarly reliable documents. 
94.5 	Nothing in this section shall be construed to limit a mortgage originator's or exempt 
94.6 	person's ability to rely on criteria other than the borrower's income and financial resources 
94.7 	to establish the borrower's reasonable ability to repay the residential mortgage loan, 
94.8 	including criteria established by the United States Department of Veterans Affairs or the 
94.9 	United States Department of Housing and Urban Development for interest rate reduction 
94.10 	refinancing loans or streamline loans, or criteria authorized or promulgated by the 
94.11 	Federal National Mortgage Association or Federal Home Loan Mortgage Corporation; 
94.12 	however, such other criteria must be verified through reasonably reliable methods and 
94.13 	documentation. The mortgage originator's analysis of the borrower's reasonable ability 
94.14 	to repay may include, but is not limited to, consideration of the following items, if 
94.15 	verified: (1) the borrower's current and expected income; (2) current and expected cash 
94.16 	flow; (3) net worth and other financial resources other than the consumer's equity in the 
94.17 	dwelling that secures the loan; (4) current financial obligations; (5) property taxes and 
94.18 	insurance; (6) assessments on the property; (7) employment status; (8) credit history; (9) 
94.19 	debt-to-income ratio; (10) credit scores; (11) tax returns; (12) pension statements; and 
94.20 	(13) employment payment records, provided that no mortgage originator shall disregard 
94.21 	facts and circumstances that indicate that the financial or other information submitted by 
94.22 	the consumer is inaccurate or incomplete. A statement by the borrower to the residential 
94.23 	mortgage originator or exempt person of the borrower's income and resources or sole 
94.24 	reliance on any single item listed above is not sufficient to establish the existence of the 
94.25 	income or resources when verifying the reasonable ability to pay. 
94.26 	(25) engage in "churning." As used in this section, "churning" means knowingly or 
94.27 	intentionally making, providing, or arranging for a residential mortgage loan when the 
94.28 	new residential mortgage loan does not provide a reasonable, tangible net benefit to the 
94.29 	borrower considering all of the circumstances including the terms of both the new and 
94.30 	refinanced loans, the cost of the new loan, and the borrower's circumstances; 
94.31 	(26) the first time a residential mortgage originator orally informs a borrower of the 
94.32 	anticipated or actual periodic payment amount for a first-lien residential mortgage loan 
94.33 	which does not include an amount for payment of property taxes and hazard insurance, 
94.34 	the residential mortgage originator must inform the borrower that an additional amount 
94.35 	will be due for taxes and insurance and, if known, disclose to the borrower the amount of 
94.36 	the anticipated or actual periodic payments for property taxes and hazard insurance. This 
95.1 	same oral disclosure must be made each time the residential mortgage originator orally 
95.2 	informs the borrower of a different anticipated or actual periodic payment amount change 
95.3 	from the amount previously disclosed. A residential mortgage originator need not make 
95.4 	this disclosure concerning a refinancing loan if the residential mortgage originator knows 
95.5 	that the borrower's existing loan that is anticipated to be refinanced does not have an 
95.6 	escrow account; or 
95.7 	(27) make, provide, or arrange for a residential mortgage loan, other than a reverse 
95.8 	mortgage pursuant to United States Code, title 15, chapter 41, if the borrower's compliance 
95.9 	with any repayment option offered pursuant to the terms of the loan will result in negative 
95.10 	amortization during any six-month period. 
95.11 	(b) Paragraph (a), clauses (24) through (27), do not apply to a state or federally 
95.12 	chartered bank, savings bank, or credit union, an institution chartered by Congress under 
95.13 	the Farm Credit Act, or to a person making, providing, or arranging a residential mortgage 
95.14 	loan originated or purchased by a state agency or a tribal or local unit of government. This 
95.15 	paragraph supersedes any inconsistent provision of this chapter. 

95.16 	Sec. 10. Minnesota Statutes 2008, section 60A.124, is amended to read:
95.17 	60A.124 INDEPENDENT AUDIT.
95.18 	The audit report of the independent certified public accountant that performs the 
95.19 	audit of an insurer's annual statement as required under section 60A.129 60A.1291, 
95.20 	subdivision 3 2, paragraph (a), should contain a statement as to whether anything, in 
95.21 	connection with their audit, came to their attention that caused them to believe that the 
95.22 	insurer failed to adopt and consistently apply the valuation procedure as required by 
95.23 	sections 60A.122 and 60A.123.  

95.24 	Sec. 11. [60A.1291] ANNUAL AUDIT.
95.25 		Subdivision 1.Definitions. The definitions in this subdivision apply to this section.
95.26 	(a) "Accountant" and "independent public accountant" mean an independent certified 
95.27 	public accountant or accounting firm in good standing with the American Institute of 
95.28 	Certified Public Accountants and in all states in which the accountant or firm is licensed 
95.29 	or is required to be licensed to practice. For Canadian and British companies, the term 
95.30 	means a Canadian-chartered or British-chartered accountant.
95.31 	(b) "Audit committee" means a committee or equivalent body established by the 
95.32 	board of directors of an entity for the purpose of overseeing the accounting and financial 
95.33 	reporting processes of an insurer or group of insurers, and audits of financial statements of 
95.34 	the insurer or group of insurers. The audit committee of any entity that controls a group of 
96.1 	insurers may be deemed to be the audit committee for one or more of these controlled 
96.2 	insurers solely for the purposes of this section at the election of the controlling person 
96.3 	under subdivision 15, paragraph (e). If an audit committee is not designated by the insurer, 
96.4 	the insurer's entire board of directors constitutes the audit committee.
96.5 	(c) "Indemnification" means an agreement of indemnity or a release from liability 
96.6 	where the intent or effect is to shift or limit in any manner the potential liability of the 
96.7 	person or firm for failure to adhere to applicable auditing or professional standards, 
96.8 	whether or not resulting in part from knowing of other misrepresentations made by the 
96.9 	insurer or its representatives.
96.10 	(d) "Independent board member" has the same meaning as described in subdivision 
96.11 	15, paragraph (c).
96.12 	(e) "Internal control over financial reporting" means a process effected by an entity's 
96.13 	board of directors, management and other personnel designed to provide reasonable 
96.14 	assurance regarding the reliability of the financial statements, for example, those items 
96.15 	specified in subdivision 4, paragraphs (a), clauses (2) to (6), (b), and (c), and includes 
96.16 	those policies and procedures that:
96.17 	(1) pertain to the maintenance of records that, in reasonable detail, accurately and 
96.18 	fairly reflect the transactions and dispositions of assets;
96.19 	(2) provide reasonable assurance that transactions are recorded as necessary to permit 
96.20 	preparation of the financial statements, for example, those items specified in subdivision 4, 
96.21 	paragraphs (a), clauses (2) to (6), (b), and (c), and that receipts and expenditures are being 
96.22 	made only in accordance with authorizations of management and directors; and
96.23 	(3) provide reasonable assurance regarding prevention or timely detection of 
96.24 	unauthorized acquisition, use or disposition of assets that could have a material effect on 
96.25 	the financial statements, for example, those items specified in subdivision 4, paragraphs 
96.26 	(a), clauses (2) to (6), (b), and (c).
96.27 	(f) "SEC" means the United States Securities and Exchange Commission.
96.28 	(g) "Section 404" means Section 404 of the Sarbanes-Oxley Act of 2002 and the 
96.29 	SEC's rules and regulations promulgated under it.
96.30 	(h) "Section 404 report" means management's report on "internal control over 
96.31 	financial reporting" as defined by the SEC and the related attestation report of the 
96.32 	independent certified public accountant as described in paragraph (a).
96.33 	(i) "SOX compliant entity" means an entity that either is required to be 
96.34 	compliant with, or voluntarily is compliant with, all of the following provisions of the 
96.35 	Sarbanes-Oxley Act of 2002: (i) the preapproval requirements of Section 201 (section 
96.36 	10A(i) of the Securities Exchange Act of 1934); (ii) the audit committee independence 
97.1 	requirements of Section 301 (section 10A(m)(3) of the Securities Exchange Act of 1934); 
97.2 	and (iii) the internal control over financial reporting requirements of Section 404 (Item 
97.3 	308 of SEC Regulation S-K).
97.4 		Subd. 2.Filing requirements. Every insurance company doing business in this 
97.5 	state, including fraternal benefit societies, reciprocal exchanges, service plan corporations 
97.6 	licensed pursuant to chapter 62C, and legal service plans licensed pursuant to chapter 
97.7 	62G, unless exempted by the commissioner pursuant to subdivision 9, paragraph (a), or by 
97.8 	subdivision 18, shall have an annual audit of the financial activities of the most recently 
97.9 	completed calendar year performed by an independent certified public accountant, and 
97.10 	shall file the report of this audit with the commissioner on or before June 1 for the 
97.11 	immediately preceding year ending December 31. The commissioner may require an 
97.12 	insurer to file an audited financial report earlier than June 1 with 90 days' advance notice 
97.13 	to the insurer.
97.14 	Extensions of the June 1 filing date may be granted by the commissioner for 30-day 
97.15 	periods upon a showing by the insurer and its independent certified public accountant of 
97.16 	the reasons for requesting the extension and a determination by the commissioner of good 
97.17 	cause for the extension.
97.18 	The request for extension must be submitted in writing not less than ten days before 
97.19 	the due date in sufficient detail to permit the commissioner to make an informed decision 
97.20 	with respect to the requested extension.
97.21 	If an extension is granted in accordance with this subdivision, a similar extension of 
97.22 	30 days is granted to the filing of management's report of internal control over financial 
97.23 	reporting.
97.24 	Every insurer required to file an annual audited financial report pursuant to this 
97.25 	subdivision shall designate a group of individuals as constituting its audit committee. The 
97.26 	audit committee of an entity that controls an insurer may be deemed to be the insurer's 
97.27 	audit committee for purposes of this subdivision at the election of the controlling person.
97.28 		Subd. 3.Exemptions. Foreign and alien insurers filing audited financial reports in 
97.29 	another state under the other state's requirements of audited financial reports which have 
97.30 	been found by the commissioner to be substantially similar to these requirements are 
97.31 	exempt from this subdivision if a copy of the audited financial report, communication of 
97.32 	internal control related matters noted in an audit, accountant's letter of qualifications, and 
97.33 	report on significant deficiencies in internal controls, which are filed with the other state, 
97.34 	are filed with the commissioner in accordance with the filing dates specified in subdivision 
97.35 	2 (Canadian insurers may submit accountants' reports as filed with the Canadian Dominion 
97.36 	Department of Insurance); and a copy of any notification of adverse financial condition 
98.1 	report filed with the other state is filed with the commissioner within the time specified 
98.2 	in subdivision 11. Foreign or alien insurers required to file management's report of 
98.3 	internal control over financial reporting in another state are exempt from filing the report 
98.4 	in this state provided the other state has substantially similar reporting requirements and 
98.5 	the report is filed with the commissioner of the other state within the time specified. 
98.6 	This subdivision does not prohibit or in any way limit the commissioner from ordering, 
98.7 	conducting, and performing examinations of insurers under the authority of this chapter.
98.8 		Subd. 4.Contents of annual audit; financial report. (a) The annual audited 
98.9 	financial report must report, in conformity with statutory accounting practices required 
98.10 	or permitted by the commissioner of insurance of the state of domicile, the financial 
98.11 	position of the insurer as of the end of the most recent calendar year and the results of 
98.12 	its operations, cash flows, and changes in capital and surplus for the year ended. The 
98.13 	annual audited financial report must include:
98.14 	(1) a report of an independent certified public accountant;
98.15 	(2) a balance sheet reporting admitted assets, liabilities, capital, and surplus;
98.16 	(3) a statement of operations;
98.17 	(4) a statement of cash flows;
98.18 	(5) a statement of changes in capital and surplus; and
98.19 	(6) notes to the financial statements.
98.20 	(b) The notes required under paragraph (a) are those required by the appropriate 
98.21 	National Association of Insurance Commissioners (NAIC) annual statement instructions 
98.22 	and National Association of Insurance Commissioners Accounting Practices and 
98.23 	Procedures Manual and include reconciliation of differences, if any, between the audited 
98.24 	statutory financial statements and the annual statement filed under section 60A.13, 
98.25 	subdivision 1, with a written description of the nature of these differences.
98.26 	(c) The financial statements included in the audited financial report must be prepared 
98.27 	in a form and using language and groupings substantially the same as the relevant sections 
98.28 	of the annual statement of the insurer filed with the commissioner. The financial statement 
98.29 	must be comparative, presenting the amounts as of December 31 of the current year and 
98.30 	the amounts as of the immediately preceding December 31. In the first year in which 
98.31 	an insurer is required to file an audited financial report, the comparative data may be 
98.32 	omitted. The amounts may be rounded to the nearest $1,000, and all immaterial amounts 
98.33 	may be combined.
98.34 		Subd. 5.Designation of independent certified public accountant. Each insurer 
98.35 	required by this section to file an annual audited financial report must notify the 
98.36 	commissioner in writing of the name and address of the independent certified public 
99.1 	accountant or accounting firm retained to conduct the annual audit within 60 days after 
99.2 	becoming subject to the annual audit requirement. The insurer shall obtain from the 
99.3 	accountant a letter which states that the accountant is aware of the provisions that relate 
99.4 	to accounting and financial matters in the insurance laws and the rules of the insurance 
99.5 	regulatory authority of the state of domicile. The letter shall affirm that the accountant will 
99.6 	express an opinion on the financial statements in terms of their conformity to the statutory 
99.7 	accounting practices prescribed or otherwise permitted by that insurance regulatory 
99.8 	authority, specifying the exceptions believed to be appropriate. A copy of the accountant's 
99.9 	letter shall be filed with the commissioner.
99.10 		Subd. 6.Report of disagreements. If an accountant who was the accountant for 
99.11 	the immediately preceding filed audited financial report is dismissed or resigns, the 
99.12 	insurer shall notify the commissioner of this event within five business days. Within 
99.13 	ten business days of this notification, the insurer shall also furnish the commissioner 
99.14 	with a separate letter stating whether in the 24 months preceding this event there were 
99.15 	any disagreements with the former accountant on any matter of accounting principles or 
99.16 	practices, financial statement disclosure, or auditing scope or procedure, which, if not 
99.17 	resolved to the satisfaction of the former accountant, would have caused that person to 
99.18 	make reference to the subject matter of the disagreement in connection with the opinion 
99.19 	on the financial statements. The disagreements required to be reported in response to this 
99.20 	subdivision include both those resolved to the former accountant's satisfaction and those 
99.21 	not resolved to the former accountant's satisfaction. Disagreements contemplated by this 
99.22 	subdivision are those disagreements between personnel of the insurer responsible for 
99.23 	presentation of its financial statements and personnel of the accounting firm responsible 
99.24 	for rendering its report. The insurer shall also in writing request the former accountant 
99.25 	to furnish a letter addressed to the insurer stating whether the accountant agrees with 
99.26 	the statements contained in the insurer's letter and, if not, stating the reasons for any 
99.27 	disagreement. The insurer shall furnish this responsive letter from the former accountant 
99.28 	to the commissioner together with its own.
99.29 		Subd. 7.Qualifications of independent certified public accountant. (a) The 
99.30 	commissioner shall not recognize any person or firm as a qualified independent certified 
99.31 	public accountant that is not in good standing with the American Institute of Certified 
99.32 	Public Accountants and in all states in which the accountant is licensed or is required 
99.33 	to be licensed to practice, or for a Canadian or British company, that is not a chartered 
99.34 	accountant. Except as otherwise provided, an independent certified public accountant must 
99.35 	be recognized as qualified as long as the person conforms to the standards of the person's 
99.36 	profession, as contained in the Code of Professional Conduct of the American Institute 
100.1 	of Certified Public Accountants and the Code of Professional Conduct of the Minnesota 
100.2 	Board of Public Accountancy or similar code and the person is properly licensed in good 
100.3 	standing with all required state boards of accountancy.
100.4 	(b) The lead or coordinating audit partner, having primary responsibility for the 
100.5 	audit, may not act in that capacity for more than five consecutive years. The person shall 
100.6 	be disqualified from acting in that or a similar capacity for the same company or its 
100.7 	insurance subsidiaries or affiliates for a period of five consecutive years. An insurer may 
100.8 	make application to the commissioner for relief from this rotation requirement on the 
100.9 	basis of unusual circumstances. This application must be made at least 30 days before 
100.10 	the end of the calendar year. The commissioner may consider the following factors in 
100.11 	determining if the relief should be granted:
100.12 	(1) number of partners, expertise of the partners, or the number of insurance clients 
100.13 	in the currently registered firm;
100.14 	(2) premium volume of the insurer; or
100.15 	(3) number of jurisdictions in which the insurer transacts business.
100.16 	The insurer shall file, with its annual statement filing, the approval for relief from this 
100.17 	paragraph with the states that it is licensed in or doing business in and with the NAIC. If 
100.18 	the nondomestic state accepts electronic filing with the NAIC, the insurer shall file the 
100.19 	approval in an electronic format acceptable to the NAIC.
100.20 	(c) The commissioner shall not recognize as a qualified independent certified public 
100.21 	accountant, nor accept an annual audited financial report, prepared in whole or in part by 
100.22 	an accountant who provides to an insurer, contemporaneously with the audit, the following 
100.23 	nonaudit services:
100.24 	(1) bookkeeping or other services related to the accounting records or financial 
100.25 	statements of the insurer;
100.26 	(2) financial information systems design and implementation;
100.27 	(3) appraisal or valuation services, fairness opinions, or contribution in-kind reports;
100.28 	(4) actuarially oriented advisory services involving the determination of amounts 
100.29 	recorded in the financial statements. The accountant may assist an insurer in understanding 
100.30 	the methods, assumptions, and inputs used in the determination of amounts recorded in the 
100.31 	financial statement only if it is reasonable to conclude that the services provided will not 
100.32 	be subject to audit procedures during an audit of the insurer's financial statements. An 
100.33 	accountant's actuary may also issue an actuarial opinion or certification on an insurer's 
100.34 	reserves if the following conditions have been met:
100.35 	(i) neither the accountant nor the accountant's actuary has performed any 
100.36 	management functions or made any management decisions;
101.1 	(ii) the insurer has competent personnel, or engages a third-party actuary, to estimate 
101.2 	the loss reserves for which management takes responsibility; and
101.3 	(iii) the accountant's actuary tests the reasonableness of the reserves after the 
101.4 	insurer's management has determined the amount of the loss reserves;
101.5 	(5) internal audit outsourcing services;
101.6 	(6) management functions or human resources;
101.7 	(7) broker or dealer, investment adviser, or investment banking services;
101.8 	(8) legal services or expert services unrelated to the audit; and
101.9 	(9) any other services that the commissioner determines, by rule, are impermissible.
101.10 	(d) The commissioner shall not recognize as a qualified independent certified public 
101.11 	accountant, nor accept any audited financial report, prepared in whole or in part by any 
101.12 	natural person who has been convicted of fraud, bribery, a violation of the Racketeer 
101.13 	Influenced and Corrupt Organizations Act, United States Code, title 18, sections 1961 to 
101.14 	1968, or any dishonest conduct or practices under federal or state law, has been found to 
101.15 	have violated the insurance laws of this state with respect to any previous reports submitted 
101.16 	under this section, or has demonstrated a pattern or practice of failing to detect or disclose 
101.17 	material information in previous reports filed under the provisions of this section.
101.18 	(e) The commissioner, after notice and hearing under chapter 14, may find that 
101.19 	the accountant is not qualified for purposes of expressing an opinion on the financial 
101.20 	statements in the annual audited financial report. The commissioner may require the 
101.21 	insurer to replace the accountant with another whose relationship with the insurer is 
101.22 	qualified within the meaning of this section.
101.23 		Subd. 8.Exemptions to qualifications of certified public accountant. (a) Insurers 
101.24 	having direct written and assumed premiums of less than $100,000,000 in any calendar 
101.25 	year may request an exemption from subdivision 7, paragraph (c). The insurer shall 
101.26 	file with the commissioner a written statement discussing the reasons why the insurer 
101.27 	should be exempt from these provisions. If the commissioner finds, upon review of this 
101.28 	statement, that compliance with this section would constitute a financial or organizational 
101.29 	hardship upon the insurer, an exemption may be granted.
101.30 	(b) A qualified independent certified public accountant who performs the audit 
101.31 	may engage in other nonaudit services, including tax services, that are not described in 
101.32 	subdivision 7, paragraph (c), only if the activity is approved in advance by the audit 
101.33 	committee, in accordance with paragraph (c).
101.34 	(c) All auditing services and nonaudit services provided to an insurer by the qualified 
101.35 	independent certified public accountant of the insurer must be preapproved by the audit 
101.36 	committee. The preapproval requirement is waived with respect to nonaudit services if 
102.1 	the insurer is a SOX compliant entity or a direct or indirect wholly owned subsidiary of a 
102.2 	SOX compliant entity or:
102.3 	(1) the aggregate amount of all such nonaudit services provided to the insurer 
102.4 	constitutes not more than five percent of the total amount of fees paid by the insurer to 
102.5 	its qualified independent certified public accountant during the fiscal year in which the 
102.6 	nonaudit services are provided;
102.7 	(2) the services were not recognized by the insurer at the time of the engagement to 
102.8 	be nonaudit services; and
102.9 	(3) the services are promptly brought to the attention of the audit committee and 
102.10 	approved before the completion of the audit by the audit committee or by one or more 
102.11 	members of the audit committee who are the members of the board of directors to whom 
102.12 	authority to grant such approvals has been delegated by the audit committee.
102.13 	(d) The audit committee may delegate to one or more designated members of the 
102.14 	audit committee the authority to grant the preapprovals required by paragraph (c). The 
102.15 	decisions of any member to whom this authority is delegated must be presented to the full 
102.16 	audit committee at each of its scheduled meetings.
102.17 	(e) The commissioner shall not recognize an independent certified public accountant 
102.18 	as qualified for a particular insurer if a member of the board, president, chief executive 
102.19 	officer, controller, chief financial officer, chief accounting officer, or any person serving in 
102.20 	an equivalent position for that insurer, was employed by the independent certified public 
102.21 	accountant and participated in the audit of that insurer during the one-year period preceding 
102.22 	the date that the most current statutory opinion is due. This paragraph applies only to 
102.23 	partners and senior managers involved in the audit. An insurer may make application to 
102.24 	the commissioner for relief from this paragraph on the basis of unusual circumstances.
102.25 	(f) The insurer shall file, with its annual statement filing, the approval for relief with 
102.26 	the states that it is licensed in or doing business in and the NAIC. If the nondomestic state 
102.27 	accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic 
102.28 	format acceptable to the NAIC.
102.29 		Subd. 9.Consolidated or combined audits. (a) The commissioner may allow 
102.30 	an insurer to file consolidated or combined audited financial statements required by 
102.31 	subdivision 2, in lieu of separate annual audited financial statements, where it can be 
102.32 	demonstrated that an insurer is part of a group of insurance companies that has a pooling 
102.33 	or 100 percent reinsurance agreement which substantially affects the solvency and 
102.34 	integrity of the reserves of the insurer and the insurer cedes all of its direct and assumed 
102.35 	business to the pool. An affiliated insurance company not meeting these requirements may 
102.36 	be included in the consolidated or combined audited financial statements, if the company's 
103.1 	total admitted assets are less than five percent of the consolidated group's total admitted 
103.2 	assets. If these circumstances exist, then the company may file a written application to 
103.3 	file consolidated or combined audited financial statements. This application must be for 
103.4 	a specified period.
103.5 	(b) Upon written application by a domestic insurer, the commissioner may 
103.6 	authorize the domestic insurer to include additional affiliated insurance companies in the 
103.7 	consolidated or combined audited financial statements. A foreign insurer must obtain the 
103.8 	prior written authorization of the commissioner of its state of domicile in order to submit 
103.9 	an application for authority to file consolidated or combined audited financial statements. 
103.10 	This application must be for a specified period.
103.11 	(c) A consolidated annual audit filing must include a columnar consolidated or 
103.12 	combining worksheet. Amounts shown on the audited consolidated or combined financial 
103.13 	statement must be shown on the worksheet. Amounts for each insurer must be stated 
103.14 	separately. Noninsurance operations may be shown on the worksheet on a combined or 
103.15 	individual basis. Explanations of consolidating or eliminating entries must be shown on 
103.16 	the worksheet. A reconciliation of any differences between the amounts shown in the 
103.17 	individual insurer columns of the worksheet and comparable amounts shown on the annual 
103.18 	statement of the insurers must be included on the worksheet.
103.19 		Subd. 10.Scope of audit and report of independent certified public accountant.
 103.20 	Financial statements furnished pursuant to subdivision 4 must be examined by an 
103.21 	independent certified public accountant. The audit of the insurer's financial statements 
103.22 	must be conducted in accordance with generally accepted auditing standards. In 
103.23 	accordance with AICPA Statement on Auditing Standards (SAS) No. 109, Understanding 
103.24 	the Entity and its Environment and Assessing the Risks of Material Misstatement, or its 
103.25 	replacement, the independent certified public accountant should obtain an understanding 
103.26 	of internal control sufficient to plan the audit. To the extent required by SAS No. 109, 
103.27 	for those insurers required to file a management's report of internal control over financial 
103.28 	reporting pursuant to subdivision 17, the independent certified public accountant should 
103.29 	consider (as that term is defined in SAS No. 102, Defining Professional Requirements in 
103.30 	Statements on Auditing Standards or its replacement) the most recently available report in 
103.31 	planning and performing the audit of the statutory financial statements. Consideration 
103.32 	should be given to other procedures illustrated in the Financial Condition Examiners 
103.33 	Handbook promulgated by the National Association of Insurance Commissioners as the 
103.34 	independent certified public accountant deems necessary.
103.35 		Subd. 11.Notification of adverse financial condition. The insurer required to 
103.36 	furnish the annual audited financial report shall require the independent certified public 
104.1 	accountant to provide written notice within five business days to the board of directors of 
104.2 	the insurer or its audit committee of any determination by that independent certified public 
104.3 	accountant that the insurer has materially misstated its financial condition as reported to 
104.4 	the commissioner as of the balance sheet date currently under audit or that the insurer does 
104.5 	not meet the minimum capital and surplus requirement of sections 60A.07, 66A.32, and 
104.6 	66A.33 as of that date. An insurer required to file an annual audited financial report who 
104.7 	received a notification of adverse financial condition from the accountant shall file a 
104.8 	copy of the notification with the commissioner within five business days of the receipt 
104.9 	of the notification. The insurer shall provide the independent certified public accountant 
104.10 	making the notification with evidence of the report being furnished to the commissioner. 
104.11 	If the independent certified public accountant fails to receive the evidence within the 
104.12 	required five-day period, the independent certified public accountant shall furnish to the 
104.13 	commissioner a copy of the notification to the board of directors or its audit committee 
104.14 	within the next five business days. No independent certified public accountant is liable in 
104.15 	any manner to any person for any statement made in connection with this subdivision if 
104.16 	the statement is made in good faith in compliance with this subdivision. If the accountant 
104.17 	becomes aware of facts which might have affected the audited financial report after 
104.18 	the date it was filed, the accountant shall take the action prescribed by AU section 
104.19 	561, Subsequent Discovery of Facts Existing at the Date of the Auditor's Report of the 
104.20 	Professional Standards issued by the American Institute of Certified Public Accountants, 
104.21 	or its replacement.
104.22 		Subd. 12.Communication of internal control related matters noted in an 
104.23 	audit. In addition to the annual audited financial report, each insurer shall furnish the 
104.24 	commissioner with a written communication as to any unremediated material weaknesses 
104.25 	in its internal control over financial reporting noted during the audit. The communication 
104.26 	must be prepared by the accountant within 60 days after the filing of the annual audited 
104.27 	financial report, and must contain a description of any unremediated material weakness, as 
104.28 	the term material weakness is defined by SAS No. 115, Communicating Internal Control 
104.29 	Related Matters Identified in an Audit, as of December 31 immediately preceding so as 
104.30 	to coincide with the audited financial report discussed in subdivision 2 in the insurer's 
104.31 	internal control over financial reporting noted by the accountant during the course of their 
104.32 	audit of the financial statements. If no unremediated material weaknesses were noted, the 
104.33 	communication should so state.
104.34 	The insurer is required to provide a description of remedial actions taken or 
104.35 	proposed to correct unremediated material weaknesses, if the actions are not described in 
104.36 	the accountant's communication.
105.1 		Subd. 13.Accountant's letter of qualification. The accountant shall furnish the 
105.2 	insurer in connection with, and for inclusion in, the filing of the annual audited financial 
105.3 	report, a letter stating that the accountant is independent with respect to the insurer and 
105.4 	conforms to the standards of the accountant's profession as contained in the Code of 
105.5 	Professional Conduct of the American Institute of Certified Public Accountants and the 
105.6 	Code of Professional Conduct of the Minnesota Board of Accountancy or similar code; 
105.7 	the background and experience in general, and the experience in audits of insurers of the 
105.8 	staff assigned to the engagement and whether each is an independent certified public 
105.9 	accountant; that the accountant understands that the annual audited financial report and the 
105.10 	opinion on it will be filed in compliance with this statute and that the commissioner will 
105.11 	be relying on this information in the monitoring and regulation of the financial position of 
105.12 	insurers; that the accountant consents to the requirements of subdivision 14 and that the 
105.13 	accountant consents and agrees to make available for review by the commissioner, or the 
105.14 	commissioner's designee or appointed agent, the work papers, as defined in subdivision 
105.15 	14; a representation that the accountant is properly licensed in good standing by the 
105.16 	appropriate state licensing authorities and is a member in good standing in the American 
105.17 	Institute of Certified Public Accountants; and a representation that the accountant complies 
105.18 	with subdivision 7. Nothing in this section prohibits the accountant from utilizing staff 
105.19 	the accountant deems appropriate where use is consistent with the standards prescribed 
105.20 	by generally accepted auditing standards.
105.21 		Subd. 14.Availability and maintenance of independent certified public 
105.22 	accountants' work papers. Work papers are the records kept by the independent certified 
105.23 	public accountant of the procedures followed, tests performed, information obtained, and 
105.24 	conclusions reached pertinent to the independent certified public accountant's audit of the 
105.25 	financial statements of an insurer. Work papers may include audit planning documents, 
105.26 	work programs, analyses, memoranda, letters of confirmation and representation, 
105.27 	management letters, abstracts of company documents, and schedules or commentaries 
105.28 	prepared or obtained by the independent certified public accountant in the course of the 
105.29 	audit of the financial statements of an insurer and that support the accountant's opinion. 
105.30 	Every insurer required to file an audited financial report shall require the accountant, 
105.31 	through the insurer, to make available for review by the examiners the work papers 
105.32 	prepared in the conduct of the audit and any communications related to the audit between 
105.33 	the accountant and the insurer. The work papers must be made available at the offices of 
105.34 	the insurer, at the offices of the commissioner, or at any other reasonable place designated 
105.35 	by the commissioner. The insurer shall require that the accountant retain the audit work 
105.36 	papers and communications until the commissioner has filed a report on examination 
106.1 	covering the period of the audit but no longer than seven years after the period reported 
106.2 	upon, provided retention of the working papers beyond the seven years is not required by 
106.3 	other professional or regulatory requirements. In the conduct of the periodic review by 
106.4 	the examiners, it must be agreed that photocopies of pertinent audit work papers may be 
106.5 	made and retained by the commissioner. These copies shall be part of the commissioner's 
106.6 	work papers and must be given the same confidentiality as other examination work papers 
106.7 	generated by the commissioner.
106.8 		Subd. 15.Requirements for audit committee. (a) The audit committee must 
106.9 	be directly responsible for the appointment, compensation, and oversight of the work 
106.10 	of any accountant including resolution of disagreements between management and the 
106.11 	accountant regarding financial reporting for the purpose of preparing or issuing the audited 
106.12 	financial report or related work pursuant to this regulation. Each accountant shall report 
106.13 	directly to the audit committee.
106.14 	(b) Each member of the audit committee must be a member of the board of directors 
106.15 	of the insurer or a member of the board of directors of an entity elected pursuant to 
106.16 	paragraph (e) and subdivision 1, paragraph (b).
106.17 	(c) In order to be considered independent for purposes of this section, a member of 
106.18 	the audit committee may not, other than in his or her capacity as a member of the audit 
106.19 	committee, the board of directors, or any other board committee, accept any consulting, 
106.20 	advisory, or other compensatory fee from the entity or be an affiliated person of the entity 
106.21 	or any subsidiary of the entity. However, if law requires board participation by otherwise 
106.22 	nonindependent members, that law shall prevail and such members may participate in the 
106.23 	audit committee and be designated as independent for audit committee purposes, unless 
106.24 	they are an officer or employee of the insurer or one of its affiliates.
106.25 	(d) If a member of the audit committee ceases to be independent for reasons outside 
106.26 	the member's reasonable control, that person, with notice by the responsible entity to the 
106.27 	state, may remain an audit committee member of the responsible entity until the earlier of 
106.28 	the next annual meeting of the responsible entity or one year from the occurrence of the 
106.29 	event that caused the member to be no longer independent.
106.30 	(e) To exercise the election of the controlling person to designate the audit committee 
106.31 	for purposes of this section, the ultimate controlling person shall provide written notice to 
106.32 	the commissioners of the affected insurers. Notification must be made timely before the 
106.33 	issuance of the statutory audit report and include a description of the basis for the election. 
106.34 	The election can be changed through notice to the commissioner by the insurer, which 
106.35 	shall include a description of the basis for the change. The election remains in effect for 
106.36 	perpetuity, until rescinded.
107.1 	(f) The audit committee shall require the accountant that performs for an insurer any 
107.2 	audit required by this section to timely report to the audit committee in accordance with 
107.3 	the requirements of SAS No. 114, The Auditor's Communication with Those Charged 
107.4 	with Governance, including:
107.5 	(1) all significant accounting policies and material permitted practices;
107.6 	(2) all material alternative treatments of financial information within statutory 
107.7 	accounting principles that have been discussed with management officials of the insurer, 
107.8 	ramifications of the use of the alternative disclosures and treatments, and the treatment 
107.9 	preferred by the accountant; and 
107.10 	(3) other material written communications between the accountant and the 
107.11 	management of the insurer, such as any management letter or schedule of unadjusted 
107.12 	differences.
107.13 	(g) If an insurer is a member of an insurance holding company system, the reports 
107.14 	required by paragraph (f) may be provided to the audit committee on an aggregate basis 
107.15 	for insurers in the holding company system, provided that any substantial differences 
107.16 	among insurers in the system are identified to the audit committee.
107.17 	(h) The proportion of independent audit committee members shall meet or exceed 
107.18 	the following criteria:
107.19 	(1) for companies with prior calendar year direct written and assumed premiums $0 
107.20 	to $300,000,000, no minimum requirements;
107.21 	(2) for companies with prior calendar year direct written and assumed premiums 
107.22 	over $300,000,000 to $500,000,000, majority of members must be independent; and
107.23 	(3) for companies with prior calendar year direct written and assumed premiums 
107.24 	over $500,000,000, 75 percent or more must be independent.
107.25 	(i) An insurer with direct written and assumed premium, excluding premiums 
107.26 	reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less 
107.27 	than $500,000,000 may make application to the commissioner for a waiver from the 
107.28 	requirements of this subdivision based upon hardship. The insurer shall file, with its 
107.29 	annual statement filing, the approval for relief from this subdivision with the states that 
107.30 	it is licensed in or doing business in and the NAIC. If the nondomestic state accepts 
107.31 	electronic filing with the NAIC, the insurer shall file the approval in an electronic format 
107.32 	acceptable to the NAIC.
107.33 	This subdivision does not apply to foreign or alien insurers licensed in this state or 
107.34 	an insurer that is a SOX compliant entity or a direct or indirect wholly-owned subsidiary 
107.35 	of a SOX compliant entity.
108.1 		Subd. 16.Conduct of insurer in connection with the preparation of required 
108.2 	reports and documents. (a) No director or officer of an insurer shall, directly or indirectly:
108.3 	(1) make or cause to be made a materially false or misleading statement to an 
108.4 	accountant in connection with any audit, review, or communication required under this 
108.5 	section; or
108.6 	(2) omit to state, or cause another person to omit to state, any material fact necessary 
108.7 	in order to make statements made, in light of the circumstances under which the statements 
108.8 	were made, not misleading to an accountant in connection with any audit, review, or 
108.9 	communication required under this section.
108.10 	(b) No officer or director of an insurer, or any other person acting under the direction 
108.11 	thereof, shall directly or indirectly take any action to coerce, manipulate, mislead, or 
108.12 	fraudulently influence any accountant engaged in the performance of an audit pursuant to 
108.13 	this section if that person knew or should have known that the action, if successful, could 
108.14 	result in rendering the insurer's financial statements materially misleading.
108.15 	(c) For purposes of paragraph (b), actions that, "if successful, could result in 
108.16 	rendering the insurer's financial statements materially misleading" include, but are not 
108.17 	limited to, actions taken at any time with respect to the professional engagement period to 
108.18 	coerce, manipulate, mislead, or fraudulently influence an accountant:
108.19 	(1) to issue or reissue a report on an insurer's financial statements that is not 
108.20 	warranted in the circumstances due to material violations of statutory accounting 
108.21 	principles prescribed by the commissioner, generally accepted auditing standards, or 
108.22 	other professional or regulatory standards;
108.23 	(2) not to perform audit, review, or other procedures required by generally accepted 
108.24 	auditing standards or other professional standards;
108.25 	(3) not to withdraw an issued report; or
108.26 	(4) not to communicate matters to an insurer's audit committee.
108.27 		Subd. 17.Management's report of internal control over financial reporting.
 108.28 	(a) Every insurer required to file an audited financial report pursuant to this section that 
108.29 	has annual direct written and assumed premiums, excluding premiums reinsured with the 
108.30 	Federal Crop Insurance Corporation and Federal Flood Program, of $500,000,000 or 
108.31 	more, shall prepare a report of the insurer's or group of insurers' internal control over 
108.32 	financial reporting, as these terms are defined in subdivision 1. The report must be filed 
108.33 	with the commissioner along with the communication of internal control related matters 
108.34 	noted in an audit described under subdivision 12. Management's report of internal control 
108.35 	over financial reporting shall be as of December 31 immediately preceding.
109.1 	(b) Notwithstanding the premium threshold in paragraph (a), the commissioner may 
109.2 	require an insurer to file management's report of internal control over financial reporting if 
109.3 	the insurer is in any RBC level event, or meets any one or more of the standards of an 
109.4 	insurer deemed to be in hazardous financial condition as pursuant to sections 606.20 
109.5 	to 606.22.
109.6 	(c) An insurer or a group of insurers that is:
109.7 	(1) directly subject to Section 404;
109.8 	(2) part of a holding company system whose parent is directly subject to Section 404;
109.9 	(3) not directly subject to Section 404 but is a SOX compliant entity; or
109.10 	(4) a member of a holding company system whose parent is not directly subject to 
109.11 	Section 404 but is a SOX compliant entity;
109.12 	may file its or its parent's Section 404 report and an addendum in satisfaction of this 
109.13 	requirement provided that those internal controls of the insurer or group of insurers 
109.14 	having a material impact on the preparation of the insurer's or group of insurers' audited 
109.15 	statutory financial statements, consisting of those items included in subdivision 4, 
109.16 	paragraphs (a), clauses (2) to (6), (b), and (c), were included in the scope of the Section 
109.17 	404 report. The addendum shall be a positive statement by management that there are 
109.18 	no material processes with respect to the preparation of the insurer's or group of insurers' 
109.19 	audited statutory financial statements, consisting of those items included in subdivision 4, 
109.20 	paragraphs (a), clauses (2) to (6), (b), and (c), excluded from the Section 404 report. If 
109.21 	there are internal controls of the insurer or group of insurers that have a material impact on 
109.22 	the preparation of the insurer's or group of insurers' audited statutory financial statements 
109.23 	and those internal controls were not included in the scope of the Section 404 report, the 
109.24 	insurer or group of insurers may either file (i) a report under this subdivision, or (ii) the 
109.25 	Section 404 report and a report under this subdivision for those internal controls that have 
109.26 	a material impact on the preparation of the insurer's or group of insurers' audited statutory 
109.27 	financial statements not covered by the Section 404 report.
109.28 	(d) Management's report of internal control over financial reporting shall include:
109.29 	(1) a statement that management is responsible for establishing and maintaining 
109.30 	adequate internal control over financial reporting;
109.31 	(2) a statement that management has established internal control over financial 
109.32 	reporting and an assertion, to the best of management's knowledge and belief, after diligent 
109.33 	inquiry, as to whether its internal control over financial reporting is effective to provide 
109.34 	reasonable assurance regarding the reliability of financial statements in accordance with 
109.35 	statutory accounting principles;
110.1 	(3) a statement that briefly describes the approach or processes by which 
110.2 	management evaluated the effectiveness of its internal control over financial reporting;
110.3 	(4) a statement that briefly describes the scope of work that is included and whether 
110.4 	any internal controls were excluded;
110.5 	(5) disclosure of any unremediated material weaknesses in the internal control over 
110.6 	financial reporting identified by management as of December 31 immediately preceding. 
110.7 	Management is not permitted to conclude that the internal control over financial reporting 
110.8 	is effective to provide reasonable assurance regarding the reliability of financial statements 
110.9 	in accordance with statutory accounting principles if there is one or more unremediated 
110.10 	material weaknesses in its internal control over financial reporting;
110.11 	(6) a statement regarding the inherent limitations of internal control systems; and
110.12 	(7) signatures of the chief executive officer and the chief financial officer or 
110.13 	equivalent position or title.
110.14 	(e) Management shall document and make available upon financial condition 
110.15 	examination the basis upon which its assertions, required in paragraph (d), are made. 
110.16 	Management may base its assertions, in part, upon its review, monitoring, and testing of 
110.17 	internal controls undertaken in the normal course of its activities.
110.18 	(1) Management has discretion as to the nature of the internal control framework 
110.19 	used, and the nature and extent of documentation, in order to make its assertion in a 
110.20 	cost-effective manner and, as such, may include assembly of or reference to existing 
110.21 	documentation.
110.22 	(2) Management's report on internal control over financial reporting, required by 
110.23 	paragraph (a), and any documentation provided in support of the report during the course 
110.24 	of a financial condition examination, must be kept confidential by the Department of 
110.25 	Commerce.
110.26 		Subd. 18.Exemptions. (a) Upon written application of any insurer, the 
110.27 	commissioner may grant an exemption from compliance with the provisions of this 
110.28 	section. In order to receive an exemption, an insurer must demonstrate to the satisfaction 
110.29 	of the commissioner that compliance would constitute a financial or organizational 
110.30 	hardship upon the insurer. An exemption may be granted at any time and from time 
110.31 	to time for specified periods. Within ten days from the denial of an insurer's written 
110.32 	request for an exemption, the insurer may request in writing a hearing on its application 
110.33 	for an exemption. This hearing must be held in accordance with chapter 14. Upon written 
110.34 	application of any insurer, the commissioner may permit an insurer to file annual audited 
110.35 	financial reports on some basis other than a calendar year basis for a specified period. An 
110.36 	exemption may not be granted until the insurer presents an alternative method satisfying 
111.1 	the purposes of this section. Within ten days from a denial of a written request for an 
111.2 	exemption, the insurer may request in writing a hearing on its application. The hearing 
111.3 	must be held in accordance with chapter 14.
111.4 	(b) This section applies to all insurers, unless otherwise indicated, required to file 
111.5 	an annual audit by subdivision 2, except insurers having less than $1,000,000 of direct 
111.6 	written premiums in this state in any calendar year and fewer than 1,000 policyholders 
111.7 	or certificate holders of directly written policies nationwide at the end of the calendar 
111.8 	year, are exempt from this section for that year, unless the commissioner makes a 
111.9 	specific finding that compliance is necessary for the commissioner to carry out statutory 
111.10 	responsibilities, except that insurers having assumed premiums from reinsurance contracts 
111.11 	or treaties of $1,000,000 or more are not exempt.
111.12 		Subd. 19.Canadian and British companies. (a) In the case of Canadian and 
111.13 	British insurers, the annual audited financial report means the annual statement of total 
111.14 	business on the form filed by these companies with their domiciliary supervision authority 
111.15 	and duly audited by an independent chartered accountant.
111.16 	(b) For these insurers the letter required in subdivision 5 shall state that the 
111.17 	accountant is aware of the requirements relating to the annual audited statement filed 
111.18 	with the commissioner under subdivision 2, and shall affirm that the opinion expressed 
111.19 	is in conformity with those requirements.
111.20 		Subd. 20.Commercial mortgage loan valuation procedures. A report of the 
111.21 	independent certified public accountant that performs the audit of an insurer's annual 
111.22 	statement as required under subdivision 2, shall be filed and contain a statement as to 
111.23 	whether anything in connection with the audit came to the accountant's attention that 
111.24 	caused the accountant to believe that the insurer failed to adopt and consistently apply the 
111.25 	valuation procedures as required by sections 60A.122 and 60A.123. 
111.26 		Subd. 21.Examinations. (a) The commissioner or a designated representative shall 
111.27 	determine the nature, scope, and frequency of examinations under this section conducted 
111.28 	by examiners under section 60A.031. These examinations may cover all aspects of the 
111.29 	insurer's assets, condition, affairs, and operations and may include and be supplemented 
111.30 	by audit procedures performed by independent certified public accountants. Scheduling 
111.31 	of examinations will take into account all relevant matters with respect to the insurer's 
111.32 	condition, including results of the National Association of Insurance Commissioners, 
111.33 	Insurance Regulatory Information Systems, changes in management, results of market 
111.34 	conduct examinations, and audited financial reports. The type of examinations performed 
111.35 	by examiners under this section must be compliance examinations, targeted examinations, 
111.36 	and comprehensive examinations. 
112.1 	(b) Compliance examinations will consist of a review of the accountant's workpapers 
112.2 	defined under this section and a general review of the insurer's corporate affairs and 
112.3 	insurance operations to determine compliance with the Minnesota insurance laws and 
112.4 	the rules of the Department of Commerce. The examiners may perform alternative or 
112.5 	additional examination procedures to supplement those performed by the accountant 
112.6 	when the examiners determine that the procedures are necessary to verify the financial 
112.7 	condition of the insurer.
112.8 	(c) Targeted examinations may cover limited areas of the insurer's operations as 
112.9 	the commissioner may deem appropriate.
112.10 	(d) Comprehensive examinations will be performed when the report of the 
112.11 	accountant as provided for in subdivision 7, paragraph (b), the notification required by 
112.12 	subdivision 7, paragraph (c), the results of compliance or targeted examinations, or other 
112.13 	circumstances indicate in the judgment of the commissioner or a designated representative 
112.14 	that a complete examination of the condition and affairs of the insurer is necessary.
112.15 	(e) Upon completion of each targeted, compliance, or comprehensive examination, 
112.16 	the examiner appointed by the commissioner shall make a full and true report on the 
112.17 	results of the examination. Each report shall include a general description of the audit 
112.18 	procedures performed by the examiners and the procedures of the accountant that 
112.19 	the examiners may have utilized to supplement their examination procedures and the 
112.20 	procedures that were performed by the registered independent certified public accountant 
112.21 	if included as a supplement to the examination.
112.22 		Subd. 22.Penalties. An annual statement, report, or document related to the 
112.23 	business of insurance must not be filed with the commissioner or issued to the public if it 
112.24 	is signed by anyone who is represented in the instrument as an "accountant," unless the 
112.25 	person is qualified as defined by this section. A violation of this subdivision is a violation 
112.26 	of section 72A.19 and punishable in accordance with section 72A.25.

112.27 	EFFECTIVE DATE. (a) Domestic insurers retaining a certified public accountant 
112.28 	on the effective date of this section who qualify as independent shall comply with this 
112.29 	section for the year ending December 31, 2010, and each year thereafter unless the 
112.30 	commissioner permits otherwise.
112.31 	(b) Domestic insurers not retaining a certified public accountant on the effective 
112.32 	date of this section who qualifies as independent shall meet the following schedule for 
112.33 	compliance unless the commissioner permits otherwise.
112.34 	(1) As of December 31, 2010, file with the commissioner an audited financial report.
112.35 	(2) For the year ending December 31, 2010, and each year thereafter, such insurers 
112.36 	shall file with the commissioner all reports and communication required by this section.
113.1 	(c) Foreign insurers shall comply with this section for the year ending December 31, 
113.2 	2010, and each year thereafter, unless the commissioner permits otherwise.
113.3 	(d) The requirements of subdivision 7, paragraph (b), are in effect for audits of the 
113.4 	year beginning January 1, 2010, and thereafter.
113.5 	(e) The requirements of subdivision 15 are in effect January 1, 2010. An insurer or 
113.6 	group of insurers that is not required to have independent audit committee members or 
113.7 	only a majority of independent audit committee members, as opposed to a supermajority, 
113.8 	because the total written and assumed premium is below the threshold and subsequently 
113.9 	becomes subject to one of the independence requirements due to changes in premium has 
113.10 	one year following the year the threshold is exceeded, but not earlier than January 1, 
113.11 	2010, to comply with the independence requirements. Likewise, an insurer that becomes 
113.12 	subject to one of the independence requirements as a result of a business combination 
113.13 	has one calendar year following the date of acquisition or combination to comply with 
113.14 	the independence requirements.
113.15 	(f) An insurer or group of insurers that is not required to file a report because the total 
113.16 	written premium is below the threshold and subsequently becomes subject to the reporting 
113.17 	requirements has two years following the year the threshold is exceeded, but not earlier 
113.18 	than December 31, 2010, to file a report. Likewise, an insurer acquired in a business 
113.19 	combination has two calendar years following the date of acquisition or combination to 
113.20 	comply with the reporting requirements.
113.21 	(g) The requirements and provisions contained in this section are effective January 
113.22 	1, 2010, and thereafter.

113.23 	Sec. 12. Minnesota Statutes 2008, section 60B.03, subdivision 15, is amended to read:
113.24 		Subd. 15.Insolvency. "Insolvency" means:
113.25 	(a) For an insurer organized under sections 67A.01 to 67A.26, the inability to pay 
113.26 	any uncontested debt as it becomes due or any other loss within 30 days after the due date 
113.27 	specified in the first assessment notice issued pursuant to section 67A.17.  
113.28 	(b) For any other insurer, that it is unable to pay its debts or meet its obligations 
113.29 	as they mature or that its assets do not exceed its liabilities plus the greater of (1) any 
113.30 	capital and surplus required by law to be constantly maintained, or (2) its authorized and 
113.31 	issued capital stock. For purposes of this subdivision, "assets" includes one-half of the 
113.32 	maximum total assessment liability of the policyholders of the insurer, and "liabilities" 
113.33 	includes reserves required by law. For policies issued on the basis of unlimited assessment 
113.34 	liability, the maximum total liability, for purposes of determining solvency only, shall be 
114.1 	deemed to be that amount that could be obtained if there were 100 percent collection of an 
114.2 	assessment at the rate of ten mills per dollar of insurance written by it and in force.

114.3 	Sec. 13. Minnesota Statutes 2008, section 60L.02, subdivision 3, is amended to read:
114.4 		Subd. 3.Additional requirements. (a) In order to be eligible to be governed by 
114.5 	sections 60L.01 to 60L.15, the insurer must meet the requirements specified under this 
114.6 	subdivision.  
114.7 	(b) The insurer shall:
114.8 	(1) have been in continuous operation for a minimum of five years; and
114.9 	(2) maintain a minimum claims-paying, financial strength, or equivalent rating from 
114.10 	at least one nationally recognized statistical rating organization in one of the organization's 
114.11 	three highest rating categories for the time period during which sections 60L.01 to 60L.15
114.12 	apply to the insurer. For purposes of this subdivision, the rating must be based on a 
114.13 	review of the insurer by the nationally recognized statistical rating organization with the 
114.14 	cooperation of the insurer; must not depend on a guarantee or other credit enhancement 
114.15 	from another entity; and must not be modified or otherwise qualified to show dependence 
114.16 	of the rating on the performance or a contractual obligation of, or the insurer's affiliation 
114.17 	with, another insurer.  
114.18 	(c) The insurer or an affiliate, as defined in section 60D.15, subdivision 2, of the 
114.19 	insurer shall employ at least one individual as a professional investment manager for 
114.20 	the insurer's investments whom the board of directors or trustees of the insurer finds 
114.21 	is qualified on the basis of experience, education or training, competence, personal 
114.22 	integrity, and who conducts professional investment management activities in accordance 
114.23 	with the Code of Ethics and Standards of Professional Conduct of the Association for 
114.24 	Investment Management and Research. For purposes of complying with this paragraph, 
114.25 	an employee of an affiliate may only be used if they are responsible for managing the 
114.26 	insurer's investments.  
114.27 	(d) The board of directors of the insurer must annually adopt a resolution finding 
114.28 	that the insurer or an affiliate, as defined in section 60D.15, subdivision 2, of the insurer 
114.29 	has employed a professional investment manager for the insurer's investments with 
114.30 	sufficient expertise and has sufficient other resources to implement and monitor the 
114.31 	insurer's investment policies and strategies.  
114.32 	(e) In the report required under section 60A.129 60A.1291, subdivision 3 12, 
114.33 	paragraph (l), the insurer's independent auditor shall not have identified any significant 
114.34 	deficiencies in the insurer's internal control structure related to investments during any of 
115.1 	the five years immediately preceding the date on which sections 60L.01 to 60L.15 begin to 
115.2 	apply to the insurer, and as long as sections 60L.01 to 60L.15 apply to the insurer.  

115.3 	Sec. 14. [61A.258] PRENEED INSURANCE PRODUCTS; MINIMUM 
115.4 	MORTALITY STANDARDS FOR RESERVES AND NONFORFEITURE VALUES.
115.5 		Subdivision 1.Definitions. For the purposes of this section, the following terms 
115.6 	have the meanings given them:
115.7 	(1) "2001 CSO Mortality Table (2001 CSO)" means that mortality table, consisting 
115.8 	of separate rates of mortality for male and female lives, developed by the American 
115.9 	Academy of Actuaries CSO Task Force from the Valuation Basic Mortality Table 
115.10 	developed by the Society of Actuaries Individual Life Insurance Valuation Mortality 
115.11 	Task Force, and adopted by the National Association of Insurance Commissioners 
115.12 	(NAIC) in December 2002. The 2001 CSO Mortality Table (2001 CSO) is included in 
115.13 	the Proceedings of the NAIC (2nd Quarter 2002). Unless the context indicates otherwise, 
115.14 	the "2001 CSO Mortality Table (2001 CSO)" includes both the ultimate form of that 
115.15 	table and the select and ultimate form of that table and includes both the smoker and 
115.16 	nonsmoker mortality tables and the composite mortality tables. It also includes both the 
115.17 	age-nearest-birthday and age-last-birthday bases of the mortality tables;
115.18 	(2) "Ultimate 1980 CSO" means the Commissioners' 1980 Standard Ordinary Life 
115.19 	Valuation Mortality Tables (1980 CSO) without ten-year selection factors, incorporated 
115.20 	into the 1980 amendments to the NAIC Standard Valuation Law approved in December 
115.21 	1983; and
115.22 	(3) "preneed insurance" is any life insurance policy or certificate that is issued 
115.23 	in combination with, in support of, with an assignment to, or as a guarantee for a 
115.24 	prearrangement agreement for goods and services to be provided at the time of and 
115.25 	immediately following the death of the insured. Goods and services may include, but 
115.26 	are not limited to embalming, cremation, body preparation, viewing or visitation, coffin 
115.27 	or urn, memorial stone, and transportation of the deceased. The status of the policy or 
115.28 	contract as preneed insurance is determined at the time of issue in accordance with the 
115.29 	policy form filing.
115.30 		Subd. 2.Minimum valuation mortality standards. For preneed insurance 
115.31 	contracts, the minimum mortality standard for determining reserve liabilities and 
115.32 	nonforfeiture values for both male and female insureds shall be the Ultimate 1980 CSO.
115.33 		Subd. 3.Minimum valuation interest rate standards. (a) The interest rates used 
115.34 	in determining the minimum standard for valuation of preneed insurance shall be the 
115.35 	calendar year statutory valuation interest rates as defined in section 61A.25.
116.1 	(b) The interest rates used in determining the minimum standard for nonforfeiture 
116.2 	values for preneed insurance shall be the calendar year statutory nonforfeiture interest 
116.3 	rates as defined in section 61A.24.
116.4 		Subd. 4.Minimum valuation method standards. (a) The method used in 
116.5 	determining the standard for the minimum valuation of reserves of preneed insurance shall 
116.6 	be the method defined in section 61A.25.
116.7 	(b) The method used in determining the standard for the minimum nonforfeiture 
116.8 	values for preneed insurance shall be the method defined in section 61A.24.

116.9 	EFFECTIVE DATE; TRANSITION RULES. (a) This section is effective January 
116.10 	1, 2009, and applies to preneed insurance policies and certificates issued on or after that 
116.11 	date.
116.12 	(b) For preneed insurance policies issued on or after the effective date of this 
116.13 	section and before January 1, 2012, the 2001 CSO may be used as the minimum standard 
116.14 	for reserves and minimum standard for nonforfeiture benefits for both male and female 
116.15 	insureds.
116.16 	(c) If an insurer elects to use the 2001 CSO as a minimum standard for any policy 
116.17 	issued on or after the effective date of this section and before January 1, 2012, the insurer 
116.18 	shall provide, as a part of the actuarial opinion memorandum submitted in support of 
116.19 	the company's asset adequacy testing, an annual written notification to the domiciliary 
116.20 	commissioner. The notification shall include:
116.21 	(1) a complete list of all preneed policy forms that use the 2001 CSO as a minimum 
116.22 	standard;
116.23 	(2) a certification signed by the appointed actuary stating that the reserve 
116.24 	methodology employed by the company in determining reserves for the preneed policies 
116.25 	issued after the effective date and using the 2001 CSO as a minimum standard, develops 
116.26 	adequate reserves (For the purposes of this certification, the preneed insurance policies 
116.27 	using the 2001 CSO as a minimum standard cannot be aggregated with any other 
116.28 	policies.); and
116.29 	(3) supporting information regarding the adequacy of reserves for preneed insurance 
116.30 	policies issued after the effective date of this section and using the 2001 CSO as a 
116.31 	minimum standard for reserves.
116.32 	(d) Preneed insurance policies issued on or after January 1, 2012, must use the 
116.33 	Ultimate 1980 CSO in the calculation of minimum nonforfeiture values and minimum 
116.34 	reserves.

116.35 	Sec. 15. Minnesota Statutes 2008, section 61B.19, subdivision 4, is amended to read:
117.1 		Subd. 4.Limitation of benefits. The benefits for which the association may become 
117.2 	liable shall in no event exceed the lesser of:
117.3 	(1) the contractual obligations for which the insurer is liable or would have been 
117.4 	liable if it were not an impaired or insolvent insurer; or
117.5 	(2) subject to the limitation in clause (5), with respect to any one life, regardless of 
117.6 	the number of policies or contracts:
117.7 	(i) $300,000 $500,000 in life insurance death benefits, but not more than $100,000
117.8 	$130,000 in net cash surrender and net cash withdrawal values for life insurance;
117.9 	(ii) $300,000 $500,000 in health insurance benefits, including any net cash surrender 
117.10 	and net cash withdrawal values;
117.11 	(iii) $100,000 $250,000 in annuity net cash surrender and net cash withdrawal values;
117.12 	(iv) $300,000 $410,000 in present value of annuity benefits for structured settlement 
117.13 	annuities or for annuities in regard to which periodic annuity benefits, for a period of not 
117.14 	less than the annuitant's lifetime or for a period certain of not less than ten years, have 
117.15 	begun to be paid, on or before the date of impairment or insolvency; or
117.16 	(3) subject to the limitations in clauses (5) and (6), with respect to each individual 
117.17 	resident participating in a retirement plan, except a defined benefit plan, established under 
117.18 	section 401, 403(b), or 457 of the Internal Revenue Code of 1986, as amended through 
117.19 	December 31, 1992, covered by an unallocated annuity contract, or the beneficiaries 
117.20 	of each such individual if deceased, in the aggregate, $100,000 $250,000 in net cash 
117.21 	surrender and net cash withdrawal values;
117.22 	(4) where no coverage limit has been specified for a covered policy or benefit, the 
117.23 	coverage limit shall be $300,000 $500,000 in present value;
117.24 	(5) in no event shall the association be liable to expend more than $300,000
117.25 	$500,000 in the aggregate with respect to any one life under clause (2), items (i), (ii), (iii), 
117.26 	(iv), and clause (4), and any one individual under clause (3);
117.27 	(6) in no event shall the association be liable to expend more than $7,500,000
117.28 	$10,000,000 with respect to all unallocated annuities of a retirement plan, except a defined 
117.29 	benefit plan, established under section 401, 403(b), or 457 of the Internal Revenue Code 
117.30 	of 1986, as amended through December 31, 1992. If total claims from a plan exceed 
117.31 	$7,500,000 $10,000,000, the $7,500,000 $10,000,000 shall be prorated among the 
117.32 	claimants;
117.33 	(7) for purposes of applying clause (2)(ii) and clause (5), with respect only to 
117.34 	health insurance benefits, the term "any one life" applies to each individual covered by a 
117.35 	health insurance policy;
118.1 	(8) where covered contractual obligations are equal to or less than the limits stated in 
118.2 	this subdivision, the association will pay the difference between the covered contractual 
118.3 	obligations and the amount credited by the estate of the insolvent or impaired insurer, if 
118.4 	that amount has been determined or, if it has not, the covered contractual limit, subject 
118.5 	to the association's right of subrogation;
118.6 	(9) where covered contractual obligations exceed the limits stated in this subdivision, 
118.7 	the amount payable by the association will be determined as though the covered 
118.8 	contractual obligations were equal to those limits. In making the determination, the estate 
118.9 	shall be deemed to have credited the covered person the same amount as the estate would 
118.10 	credit a covered person with contractual obligations equal to those limits; or
118.11 	(10) the following illustrates how the principles stated in clauses (8) and (9) apply. 
118.12 	The example illustrated concerns hypothetical claims subject to the limit stated in clause 
118.13 	(2)(iii). The principles stated in clauses (8) and (9), and illustrated in this clause, apply 
118.14 	to claims subject to any limits stated in this subdivision.
118.15 	CONTRACTUAL OBLIGATIONS OF:

118.16					$50,000
			
118.17
118.18				Estate
		Guaranty 
Association
	
118.19
118.20	0% recovery 
from estate
			$ 0
			$ 50,000
	
118.21
118.22	25% recovery 
from estate
			$ 12,500
			$ 37,500
	
118.23
118.24	50% recovery 
from estate
			$ 25,000
			$ 25,000
	
118.25
118.26	75% recovery 
from estate
			$ 37,500
			$ 12,500
	
118.27					$100,000
			
118.28
118.29				Estate
		Guaranty 
Association
	
118.30
118.31	0% recovery 
from estate
			$ 0
			$ 100,000
	
118.32
118.33	25% recovery 
from estate
			$ 25,000
			$ 75,000
	
118.34
118.35	50% recovery 
from estate
			$ 50,000
			$ 50,000
	
118.36
118.37	75% recovery 
from estate
			$ 75,000
			$ 25,000
	
118.38					$200,000
			
118.39
118.40				Estate
		Guaranty 
Association
	
118.41
118.42	0% recovery 
from estate
			$ 0
			$ 100,000
	
119.1
119.2	25% recovery 
from estate
			$ 50,000
			$ 75,000
	
119.3
119.4	50% recovery 
from estate
			$ 100,000
			$ 50,000
	
119.5
119.6	75% recovery 
from estate
			$ 150,000
			$ 25,000
	
119.7 	For purposes of this subdivision, the commissioner shall determine the discount rate 
119.8 	to be used in determining the present value of annuity benefits.

119.9 	EFFECTIVE DATE. This section is effective the day following final enactment 
119.10 	and applies to member insurers who are first determined to be impaired or insolvent on or 
119.11 	after that date. Member insurers who are subject to an order of impairment in effect on the 
119.12 	effective date but are not declared insolvent until after the effective date shall continue to 
119.13 	be governed by the law in effect prior to the effective date.

119.14 	Sec. 16. Minnesota Statutes 2008, section 61B.28, subdivision 4, is amended to read:
119.15 		Subd. 4.Prohibited sales practice. No person, including an insurer, agent, or 
119.16 	affiliate of an insurer, shall make, publish, disseminate, circulate, or place before the 
119.17 	public, or cause directly or indirectly, to be made, published, disseminated, circulated, 
119.18 	or placed before the public, in any newspaper, magazine, or other publication, or in the 
119.19 	form of a notice, circular, pamphlet, letter, or poster, or over any radio station or television 
119.20 	station, or in any other way, an advertisement, announcement, or statement, written or 
119.21 	oral, which uses the existence of the Minnesota Life and Health Insurance Guaranty 
119.22 	Association for the purpose of sales, solicitation, or inducement to purchase any form of 
119.23 	insurance covered by sections 61B.18 to 61B.32. The notice required by subdivision 8 
119.24 	is not a violation of this subdivision nor is it a violation of this subdivision to explain 
119.25 	verbally to an applicant or potential applicant the coverage provided by the Minnesota 
119.26 	Life and Health Insurance Guaranty Association at any time during the application process 
119.27 	or thereafter. This subdivision does not apply to the Minnesota Life and Health Insurance 
119.28 	Guaranty Association or an entity that does not sell or solicit insurance. A person violating 
119.29 	this section is guilty of a misdemeanor.

119.30 	Sec. 17. Minnesota Statutes 2008, section 61B.28, subdivision 8, is amended to read:
119.31 		Subd. 8.Form. The form of notice referred to in subdivision 7, paragraph (a), 
119.32 	is as follows:
119.33 	"....................
119.34 	....................
119.35 	....................
120.1 	(insert name, current address, and
120.2 	telephone number of insurer)
120.3 	NOTICE CONCERNING POLICYHOLDER RIGHTS IN AN
120.4 	INSOLVENCY UNDER THE MINNESOTA LIFE AND HEALTH
120.5 	INSURANCE GUARANTY ASSOCIATION LAW
120.6 	If the insurer that issued your life, annuity, or health insurance policy becomes 
120.7 	impaired or insolvent, you are entitled to compensation for your policy from the assets of 
120.8 	that insurer. The amount you recover will depend on the financial condition of the insurer.
120.9 	In addition, residents of Minnesota who purchase life insurance, annuities, or health 
120.10 	insurance from insurance companies authorized to do business in Minnesota are protected, 
120.11 	SUBJECT TO LIMITS AND EXCLUSIONS, in the event the insurer becomes financially 
120.12 	impaired or insolvent. This protection is provided by the Minnesota Life and Health 
120.13 	Insurance Guaranty Association.
120.14 	Minnesota Life and Health Insurance Guaranty Association
120.15 	(insert current
120.16 	address and telephone number)
120.17 	The maximum amount the guaranty association will pay for all policies issued on 
120.18 	one life by the same insurer is limited to $300,000 $500,000. Subject to this $300,000
120.19 	$500,000 limit, the guaranty association will pay up to $300,000 $500,000 in life 
120.20 	insurance death benefits, $100,000 $130,000 in net cash surrender and net cash withdrawal 
120.21 	values for life insurance, $300,000 $500,000 in health insurance benefits, including any 
120.22 	net cash surrender and net cash withdrawal values, $100,000 $250,000 in annuity net 
120.23 	cash surrender and net cash withdrawal values, $300,000 $410,000 in present value of 
120.24 	annuity benefits for annuities which are part of a structured settlement or for annuities 
120.25 	in regard to which periodic annuity benefits, for a period of not less than the annuitant's 
120.26 	lifetime or for a period certain of not less than ten years, have begun to be paid on or 
120.27 	before the date of impairment or insolvency, or if no coverage limit has been specified 
120.28 	for a covered policy or benefit, the coverage limit shall be $300,000 $500,000 in present 
120.29 	value. Unallocated annuity contracts issued to retirement plans, other than defined benefit 
120.30 	plans, established under section 401, 403(b), or 457 of the Internal Revenue Code of 
120.31 	1986, as amended through December 31, 1992, are covered up to $100,000 $250,000 in 
120.32 	net cash surrender and net cash withdrawal values, for Minnesota residents covered by 
120.33 	the plan provided, however, that the association shall not be responsible for more than 
120.34 	$7,500,000 $10,000,000 in claims from all Minnesota residents covered by the plan. If 
120.35 	total claims exceed $7,500,000 $10,000,000, the $7,500,000 $10,000,000 shall be prorated 
120.36 	among all claimants. These are the maximum claim amounts. Coverage by the guaranty 
120.37 	association is also subject to other substantial limitations and exclusions and requires 
120.38 	continued residency in Minnesota. If your claim exceeds the guaranty association's limits, 
121.1 	you may still recover a part or all of that amount from the proceeds of the liquidation of 
121.2 	the insolvent insurer, if any exist. Funds to pay claims may not be immediately available. 
121.3 	The guaranty association assesses insurers licensed to sell life and health insurance in 
121.4 	Minnesota after the insolvency occurs. Claims are paid from this assessment.
121.5 	THE COVERAGE PROVIDED BY THE GUARANTY ASSOCIATION IS NOT 
121.6 	A SUBSTITUTE FOR USING CARE IN SELECTING INSURANCE COMPANIES 
121.7 	THAT ARE WELL MANAGED AND FINANCIALLY STABLE. IN SELECTING AN 
121.8 	INSURANCE COMPANY OR POLICY, YOU SHOULD NOT RELY ON COVERAGE 
121.9 	BY THE GUARANTY ASSOCIATION.
121.10 	THIS NOTICE IS REQUIRED BY MINNESOTA STATE LAW TO ADVISE 
121.11 	POLICYHOLDERS OF LIFE, ANNUITY, OR HEALTH INSURANCE POLICIES 
121.12 	OF THEIR RIGHTS IN THE EVENT THEIR INSURANCE CARRIER BECOMES 
121.13 	FINANCIALLY INSOLVENT. THIS NOTICE IN NO WAY IMPLIES THAT THE 
121.14 	COMPANY CURRENTLY HAS ANY TYPE OF FINANCIAL PROBLEMS. ALL LIFE, 
121.15 	ANNUITY, AND HEALTH INSURANCE POLICIES ARE REQUIRED TO PROVIDE 
121.16 	THIS NOTICE."
121.17 	Additional language may be added to the notice if approved by the commissioner 
121.18 	prior to its use in the form. This section does not apply to fraternal benefit societies 
121.19 	regulated under chapter 64B.

121.20 	Sec. 18. Minnesota Statutes 2008, section 67A.01, is amended to read:
121.21 	67A.01 NUMBER OF MEMBERS REQUIRED, PROPERTY AND 
121.22 	TERRITORY.
121.23 		Subdivision 1.Number of members. (a) It shall be lawful for any number of 
121.24 	persons, not less than 25, residing in adjoining townships counties in this state, who shall 
121.25 	collectively own property worth at least $50,000, to form themselves into a corporation 
121.26 	for mutual insurance against loss or damage by the perils listed in section 67A.13.  
121.27 	(b) Except as otherwise provided in this section, the company shall operate in no 
121.28 	more than 150 adjoining townships in the aggregate at the same time. The company may, 
121.29 	if approval has been granted by the commissioner, operate in more than 150 adjoining 
121.30 	townships in the aggregate at the same time, subject to a maximum of 300 townships. 
121.31 	If the company confines its operations to one county it may transact business in that 
121.32 	county by so providing in its certificate of incorporation. In case of merger of two or 
121.33 	more companies having contiguous territories, the surviving company in the merger may 
121.34 	transact business in the entire territory of the merged companies, but the territory of the 
121.35 	surviving company in the merger must not be larger than 300 townships.
122.1 		Subd. 2.Authorized territory. (a) A township mutual fire insurance company may 
122.2 	be authorized to write business in up to nine adjoining counties in the aggregate at the 
122.3 	same time. If policyholder surplus is at least $500,000 as reported in the company's last 
122.4 	annual financial statement filed with the commissioner, the company may, if approval has 
122.5 	been granted by the commissioner, be authorized to write business in ten or more counties 
122.6 	in the aggregate at the same time, subject to a maximum of 20 adjoining counties, in 
122.7 	accordance with the following schedule:

122.8
122.9		Number of 
Counties
		Surplus 
Requirement
		
122.10		10
		$500,000
		
122.11		11
		600,000
		
122.12		12
		700,000
		
122.13		13
		800,000
		
122.14		14
		900,000
		
122.15		15
		1,000,000
		
122.16		16
		1,100,000
		
122.17		17
		1,200,000
		
122.18		18
		1,300,000
		
122.19		19
		1,400,000
		
122.20		20
		1,500,000
		
122.21 	(b) In the case of a merger of two or more companies having contiguous territories, 
122.22 	the surviving company in the merger may transact business in the entire territory of the 
122.23 	merged companies; however, the territory of the surviving company in the merger may not 
122.24 	be larger than 20 counties.
122.25 	(c) A township mutual fire insurance company may write new and renewal insurance 
122.26 	on property in cities within the company's authorized territory having a population less 
122.27 	than 25,000. A township mutual may continue to write new and renewal insurance once 
122.28 	the population increases to 25,000 or greater provided that amended and restated articles 
122.29 	are filed with the commissioner along with a certification that such city's population has 
122.30 	increased to 25,000 or greater.
122.31 	(d) A township mutual fire insurance company may write new and renewal insurance 
122.32 	on property in cities within the company's authorized territory with a population of 25,000 
122.33 	or greater, but less than 150,000, if approval has been granted by the commissioner. 
122.34 	No township mutual fire insurance company shall insure any property in cities with a 
122.35 	population of 150,000 or greater.
122.36 	(e) If a township mutual fire insurance company provides evidence to the 
122.37 	commissioner that the company had insurance in force on December 31, 2007, in a city 
122.38 	within the company's authorized territory with a population of 25,000 or greater, but less 
123.1 	than 150,000, the company may write new and renewal insurance on property in that city 
123.2 	provided that the company files amended and restated articles by July 31, 2010, naming 
123.3 	that city.

123.4 	Sec. 19. Minnesota Statutes 2008, section 67A.06, is amended to read:
123.5 	67A.06 POWERS OF CORPORATION.
123.6 	Every corporation formed under the provisions of sections 67A.01 to 67A.26, 
123.7 	shall have power:
123.8 	(1) to have succession by its corporate name for the time stated in its certificate of 
123.9 	incorporation;
123.10 	(2) to sue and be sued in any court;
123.11 	(3) to have and use a common seal and alter the same at pleasure;
123.12 	(4) to acquire, by purchase or otherwise, and to hold, enjoy, improve, lease, 
123.13 	encumber, and convey all real and personal property necessary for the purpose of its 
123.14 	organization, subject to such limitations as may be imposed by law or by its articles of 
123.15 	incorporation;
123.16 	(5) to elect or appoint in such manner as it may determine all necessary or proper 
123.17 	officers, agents, boards, and committees, fix their compensation, and define their powers 
123.18 	and duties;
123.19 	(6) to make and amend consistently with law bylaws providing for the management 
123.20 	of its property and the regulation and government of its affairs;
123.21 	(7) to wind up and liquidate its business in the manner provided by chapter 60B; and
123.22 	(8) to indemnify certain persons against expenses and liabilities as provided in 
123.23 	section 302A.521. In applying section 302A.521 for this purpose, the term "members" 
123.24 	shall be substituted for the terms "shareholders" and "stockholders."; and
123.25 	(9) to eliminate or limit a director's personal liability to the company or its members 
123.26 	for monetary damages for breach of fiduciary duty as a director. A company shall not 
123.27 	eliminate or limit the liability of a director:
123.28 	(i) for breach of loyalty to the company or its members;
123.29 	(ii) for acts or omissions made in bad faith or with intentional misconduct or 
123.30 	knowing violation of law;
123.31 	(iii) for transactions from which the director derived an improper personal benefit; or
123.32 	(iv) for acts or omissions occurring before the date that the provisions in the articles 
123.33 	eliminating or limiting liability become effective.

124.1 	Sec. 20. Minnesota Statutes 2008, section 67A.07, is amended to read:
124.2 	67A.07 PRINCIPAL OFFICE.
124.3 	The principal office of a township mutual fire insurance company shall be located in 
124.4 	a township or in a city in a township county in which the company is authorized to do 
124.5 	business.

124.6 	Sec. 21. Minnesota Statutes 2008, section 67A.14, subdivision 1, is amended to read:
124.7 		Subdivision 1.Kinds of property; property outside authorized territory. (a) 
124.8 	Township mutual fire insurance companies may insure qualified property. Qualified 
124.9 	property means dwellings, household goods, appurtenant structures, farm buildings, farm 
124.10 	personal property, churches, church personal property, county fair buildings, community 
124.11 	and township meeting halls and their usual contents.
124.12 	(b) Township mutual fire insurance companies may extend coverage to include 
124.13 	an insured's secondary property if the township mutual fire insurance company covers 
124.14 	qualified property belonging to the insured. Secondary property means any real or 
124.15 	personal property that is not considered qualified property for a township mutual fire 
124.16 	insurance company to cover under this chapter. The maximum amount of coverage that a 
124.17 	township mutual fire insurance company may write for secondary property is 25 percent of 
124.18 	the total limit of liability of the policy issued to an insured covering the qualified property.
124.19 	(c) A township mutual fire insurance company may insure any real or personal 
124.20 	property, including qualified or secondary property, subject to the limitations in 
124.21 	subdivision 1, paragraph (b), located outside the limits of the territory in which the 
124.22 	company is authorized by its certificate or articles of incorporation to transact business, if 
124.23 	the company is already covering qualified property belonging to the insured, inside the 
124.24 	limits of the company's territory.
124.25 	(d) A township mutual fire insurance company may insure property temporarily 
124.26 	outside of the authorized territory of the township mutual fire insurance company.

124.27 	Sec. 22. Minnesota Statutes 2008, section 67A.14, subdivision 7, is amended to read:
124.28 		Subd. 7.Amount of insurable risk. No township mutual fire insurance company 
124.29 	shall insure or reinsure a single risk or hazard in a larger sum than the greater of $3,000, or 
124.30 	one tenth of its net assets plus two tenths of a mill of its insurance in force; provided that 
124.31 	no portion of any such risk or hazard which shall have been reinsured, as authorized by 
124.32 	the laws of this state, shall be included in determining the limitation of risk prescribed 
124.33 	by this subdivision.

125.1 	Sec. 23. [67A.175] SURPLUS REQUIREMENTS.
125.2 		Subdivision 1.Minimum. Township mutual fire insurance companies shall maintain 
125.3 	a minimum policyholders' surplus of $300,000 at all times.
125.4 		Subd. 2.Corrective action plan; filing. A township mutual fire insurance company 
125.5 	that falls below the $300,000 minimum surplus requirement must file a corrective action 
125.6 	plan with the commissioner. The plan shall state how the company will correct its surplus 
125.7 	deficiency. The plan must be submitted within 45 days of the company falling below the 
125.8 	minimum surplus level.
125.9 		Subd. 3.Corrective action plan; commissioner's notification. Within 30 days 
125.10 	after the submission by a township mutual fire insurance company of a corrective action 
125.11 	plan, the commissioner shall notify the insurer whether the plan may be implemented or 
125.12 	is, in the judgment of the commissioner, unsatisfactory. If the commissioner determines 
125.13 	the plan is unsatisfactory, the notification to the company must set forth the reasons for the 
125.14 	determination, and may set forth proposed revisions that will render the plan satisfactory 
125.15 	in the judgment of the commissioner. Upon notification from the commissioner, the 
125.16 	insurer shall prepare a revised corrective action plan that may incorporate by reference 
125.17 	any revisions proposed by the commissioner, and shall submit the revised plan to the 
125.18 	commissioner within 45 days.

125.19 	Sec. 24. Minnesota Statutes 2008, section 67A.18, subdivision 1, is amended to read:
125.20 		Subdivision 1.By member. Any member may terminate membership in the 
125.21 	company by giving written notice or returning the member's policy to the secretary and 
125.22 	paying the withdrawing member's share of all existing claims.

125.23 	Sec. 25.  REPEALER.
 125.24 		Subdivision 1.Annual audits. Minnesota Statutes 2008, section 60A.129, is 
125.25 	repealed.
125.26 		Subd. 2.Township mutual insured properties, joint or partial risks, and 
125.27 	assessments. Minnesota Statutes 2008, sections 67A.14, subdivision 5; 67A.17; and 
125.28 	67A.19, are repealed.
125.29 		Subd. 3.Banking procedures; real estate tax records. Minnesota Rules, part 
125.30 	2675.2180, is repealed.
125.31 		Subd. 4.Debt prorating companies. Minnesota Rules, parts 2675.7100; 
125.32 	2675.7110; 2675.7120; 2675.7130; and 2675.7140, are repealed.
125.33 		Subd. 5.Guaranty association; inflation indexing. Minnesota Statutes 2008, 
125.34 	section 61B.19, subdivision 6, is repealed.

126.1 	ARTICLE 9
126.2 	DEBT MANAGEMENT AND DEBT SETTLEMENT SERVICE

126.3 	Section 1. Minnesota Statutes 2008, section 45.011, subdivision 1, is amended to read:
126.4 		Subdivision 1.Scope. As used in chapters 45 to 83, 155A,  332, 332A, 332B, 
126.5 	345, and 359, and sections 325D.30 to 325D.42, 326B.802 to 326B.885, and 386.61 to 
126.6 	386.78, unless the context indicates otherwise, the terms defined in this section have 
126.7 	the meanings given them. 

126.8 	Sec. 2. Minnesota Statutes 2008, section 46.04, subdivision 1, is amended to read:
126.9 		Subdivision 1.General. The commissioner of commerce, referred to in chapters 46 
126.10 	to 59A, and chapter 332A, and 332B as the commissioner, is vested with all the powers, 
126.11 	authority, and privileges which, prior to the enactment of Laws 1909, chapter 201, were 
126.12 	conferred by law upon the public examiner, and shall take over all duties in relation to 
126.13 	state banks, savings banks, trust companies, savings associations, and other financial 
126.14 	institutions within the state which, prior to the enactment of chapter 201, were imposed 
126.15 	upon the public examiner. The commissioner of commerce shall exercise a constant 
126.16 	supervision, either personally or through the examiners herein provided for, over the 
126.17 	books and affairs of all state banks, savings banks, trust companies, savings associations, 
126.18 	credit unions, industrial loan and thrift companies, and other financial institutions doing 
126.19 	business within this state; and shall, through examiners, examine each financial institution 
126.20 	at least once every 24 calendar months. In satisfying this examination requirement, the 
126.21 	commissioner may accept reports of examination prepared by a federal agency having 
126.22 	comparable supervisory powers and examination procedures. With the exception of 
126.23 	industrial loan and thrift companies which do not have deposit liabilities and licensed 
126.24 	regulated lenders, it shall be the principal purpose of these examinations to inspect and 
126.25 	verify the assets and liabilities of each and so far investigate the character and value of 
126.26 	the assets of each institution as to determine with reasonable certainty that the values are 
126.27 	correctly carried on its books. Assets and liabilities shall be verified in accordance with 
126.28 	methods of procedure which the commissioner may determine to be adequate to carry out 
126.29 	the intentions of this section. It shall be the further purpose of these examinations to 
126.30 	assess the adequacy of capital protection and the capacity of the institution to meet usual 
126.31 	and reasonably anticipated deposit withdrawals and other cash commitments without 
126.32 	resorting to excessive borrowing or sale of assets at a significant loss, and to investigate 
126.33 	each institution's compliance with applicable laws and rules. Based on the examination 
126.34 	findings, the commissioner shall make a determination as to whether the institution 
127.1 	is being operated in a safe and sound manner. None of the above provisions limits the 
127.2 	commissioner in making additional examinations as deemed necessary or advisable. The 
127.3 	commissioner shall investigate the methods of operation and conduct of these institutions 
127.4 	and their systems of accounting, to ascertain whether these methods and systems are 
127.5 	in accordance with law and sound banking principles. The commissioner may make 
127.6 	requirements as to records as deemed necessary to facilitate the carrying out of the 
127.7 	commissioner's duties and to properly protect the public interest. The commissioner may 
127.8 	examine, or cause to be examined by these examiners, on oath, any officer, director, 
127.9 	trustee, owner, agent, clerk, customer, or depositor of any financial institution touching 
127.10 	the affairs and business thereof, and may issue, or cause to be issued by the examiners, 
127.11 	subpoenas, and administer, or cause to be administered by the examiners, oaths. In 
127.12 	case of any refusal to obey any subpoena issued under the commissioner's direction, 
127.13 	the refusal may at once be reported to the district court of the district in which the bank 
127.14 	or other financial institution is located, and this court shall enforce obedience to these 
127.15 	subpoenas in the manner provided by law for enforcing obedience to subpoenas of the 
127.16 	court. In all matters relating to official duties, the commissioner of commerce has the 
127.17 	power possessed by courts of law to issue subpoenas and cause them to be served and 
127.18 	enforced, and all officers, directors, trustees, and employees of state banks, savings banks, 
127.19 	trust companies, savings associations, and other financial institutions within the state, 
127.20 	and all persons having dealings with or knowledge of the affairs or methods of these 
127.21 	institutions, shall afford reasonable facilities for these examinations, make returns and 
127.22 	reports to the commissioner of commerce as the commissioner may require; attend and 
127.23 	answer, under oath, the commissioner's lawful inquiries; produce and exhibit any books, 
127.24 	accounts, documents, and property as the commissioner may desire to inspect, and in all 
127.25 	things aid the commissioner in the performance of duties. 

127.26 	Sec. 3. Minnesota Statutes 2008, section 46.05, is amended to read:
127.27 	46.05 SUPERVISION OVER FINANCIAL INSTITUTIONS.
127.28 	Every state bank, savings bank, trust company, savings association, debt management 
127.29 	services provider, debt settlement services provider, and other financial institutions shall 
127.30 	be at all times under the supervision and subject to the control of the commissioner 
127.31 	of commerce. If, and whenever in the performance of duties, the commissioner finds 
127.32 	it necessary to make a special investigation of any financial institution under the 
127.33 	commissioner's supervision, and other than a complete examination, the commissioner 
127.34 	shall make a charge therefor to include only the necessary costs thereof. Such a fee shall 
127.35 	be payable to the commissioner on the commissioner's making a request for payment.

128.1 	Sec. 4. Minnesota Statutes 2008, section 46.131, subdivision 2, is amended to read:
128.2 		Subd. 2.Assessment authority. Each bank, trust company, savings bank, savings 
128.3 	association, regulated lender, industrial loan and thrift company, credit union, motor 
128.4 	vehicle sales finance company, debt management services provider, debt settlement 
128.5 	services provider, and insurance premium finance company organized under the laws of 
128.6 	this state or required to be administered by the commissioner of commerce shall pay 
128.7 	into the state treasury its proportionate share of the cost of maintaining the Department 
128.8 	of Commerce.

128.9 	Sec. 5. Minnesota Statutes 2008, section 325E.311, subdivision 6, is amended to read:
128.10 		Subd. 6.Telephone solicitation. "Telephone solicitation" means any voice 
128.11 	communication over a telephone line for the purpose of encouraging the purchase or 
128.12 	rental of, or investment in, property, goods, or services, whether the communication is 
128.13 	made by a live operator, through the use of an automatic dialing-announcing device as 
128.14 	defined in section 325E.26, subdivision 2, or by other means. Telephone solicitation 
128.15 	does not include communications:
128.16 	(1) to any residential subscriber with that subscriber's prior express invitation or 
128.17 	permission; or
128.18 	(2) by or on behalf of any person or entity with whom a residential subscriber has a 
128.19 	prior or current business or personal relationship.
128.20 	Telephone solicitation also does not include communications if the caller is identified by a 
128.21 	caller identification service and the call is:
128.22 	(i) by or on behalf of an organization that is identified as a nonprofit organization 
128.23 	under state or federal law, unless the organization is a debt management services provider 
128.24 	defined in section 332A.02 or a debt settlement services provider defined in section 
128.25 	332B.02;
128.26 	(ii) by a person soliciting without the intent to complete, and who does not in 
128.27 	fact complete, the sales presentation during the call, but who will complete the sales 
128.28 	presentation at a later face-to-face meeting between the solicitor who makes the call 
128.29 	and the prospective purchaser; or
128.30 	(iii) by a political party as defined under section 200.02, subdivision 6.

128.31 	Sec. 6. Minnesota Statutes 2008, section 332A.02, is amended by adding a subdivision 
128.32 	to read:
128.33 		Subd. 2a.Advertise. "Advertise" means to solicit business through any means or 
128.34 	medium.

129.1 	Sec. 7. Minnesota Statutes 2008, section 332A.02, subdivision 5, is amended to read:
129.2 		Subd. 5.Controlling or affiliated party. "Controlling or affiliated party" means 
129.3 	any person or entity that controls or is controlled, directly or indirectly controlling, 
129.4 	controlled by, or is under common control with another person. Controlling or affiliated 
129.5 	party includes, but is not limited to, employees, officers, independent contractors, 
129.6 	corporations, partnerships, and limited liability corporations.

129.7 	Sec. 8. Minnesota Statutes 2008, section 332A.02, subdivision 8, is amended to read:
129.8 		Subd. 8.Debt management services provider. "Debt management services 
129.9 	provider" means any person offering or providing debt management services to a debtor 
129.10 	domiciled in this state, regardless of whether or not a fee is charged for the services and 
129.11 	regardless of whether the person maintains a physical presence in the state. This term 
129.12 	includes any person to whom duties under a debt management services agreement or 
129.13 	debt management services plan are delegated, and does not include services performed 
129.14 	by the following when engaged in the regular course of their respective businesses and 
129.15 	professions:
129.16 	(1) attorneys at law, escrow agents, accountants, broker-dealers in securities;
129.17 	(2) state or national banks, trust companies, savings associations, title insurance 
129.18 	companies, insurance companies, and all other lending institutions duly authorized to 
129.19 	transact business in Minnesota, provided no fee is charged for the service;
129.20 	(3) persons who, as employees on a regular salary or wage of an employer not 
129.21 	engaged in the business of debt management, perform credit services for their employer;
129.22 	(4) public officers acting in their official capacities and persons acting as a debt 
129.23 	management services provider pursuant to court order;
129.24 	(5) any person while performing services incidental to the dissolution, winding up, 
129.25 	or liquidation of a partnership, corporation, or other business enterprise;
129.26 	(6) the state, its political subdivisions, public agencies, and their employees;
129.27 	(7) credit unions and collection agencies, provided no fee is charged for the service
129.28 	that the services are provided to a creditor;
129.29 	(8) "qualified organizations" designated as representative payees for purposes of the 
129.30 	Social Security and Supplemental Security Income Representative Payee System and the 
129.31 	federal Omnibus Budget Reconciliation Act of 1990, Public Law 101-508;
129.32 	(9) accelerated mortgage payment providers. "Accelerated mortgage payment 
129.33 	providers" are persons who, after satisfying the requirements of sections 332.30 to 
129.34 	332.303, receive funds to make mortgage payments to a lender or lenders, on behalf 
129.35 	of mortgagors, in order to exceed regularly scheduled minimum payment obligations 
130.1 	under the terms of the indebtedness. The term does not include: (i) persons or entities 
130.2 	described in clauses (1) to (8); (ii) mortgage lenders or servicers, industrial loan and 
130.3 	thrift companies, or regulated lenders under chapter 56; or (iii) persons authorized to 
130.4 	make loans under section 47.20, subdivision 1. For purposes of this clause and sections 
130.5 	332.30 to 332.303, "lender" means the original lender or that lender's assignee, whichever 
130.6 	is the current mortgage holder;
130.7 	(10) trustees, guardians, and conservators; and
130.8 	(11) debt settlement services providers.; and
130.9 	(12) credit unions.

130.10 	Sec. 9. Minnesota Statutes 2008, section 332A.02, subdivision 9, is amended to read:
130.11 		Subd. 9.Debt management services. "Debt management services" means the 
130.12 	provision of any one or more of the following services in connection with debt incurred 
130.13 	primarily for personal, family, or household services:
130.14 	(1) managing the financial affairs of an individual by distributing income or money 
130.15 	to the individual's creditors; 
130.16 	(2) receiving funds for the purpose of distributing the funds among creditors in 
130.17 	payment or partial payment of obligations of a debtor; or
130.18 	(3) adjusting, prorating, pooling, or liquidating the indebtedness of a debtor  whereby 
130.19 	a debt management services provider assists in managing the financial affairs of a debtor 
130.20 	by distributing periodic payments to the debtor's creditors from funds that the debt 
130.21 	management services provider receives from the debtor and where the primary purpose 
130.22 	of the services is to effect repayment of debt incurred primarily for personal, family, or 
130.23 	household services. 
130.24 	Any person so engaged or holding out as so engaged is deemed to be engaged in the 
130.25 	provision of debt management services regardless of whether or not a fee is charged for 
130.26 	such services.

130.27 	Sec. 10. Minnesota Statutes 2008, section 332A.02, subdivision 10, is amended to read:
130.28 		Subd. 10.Debtor. "Debtor" means the person for whom the debt prorating service 
130.29 	is management services are performed.

130.30 	Sec. 11. Minnesota Statutes 2008, section 332A.02, subdivision 13, is amended to read:
130.31 		Subd. 13.Debt settlement services provider. "Debt settlement services provider" 
130.32 	means any person engaging in or holding out as engaging in the business of negotiating, 
130.33 	adjusting, or settling debt incurred primarily for personal, family, or household purposes 
131.1 	without holding or receiving the debtor's funds or personal property and without paying 
131.2 	the debtor's funds to, or distributing the debtor's property among, creditors has the 
131.3 	meaning given in section 332B.02, subdivision 10. The term shall not include persons 
131.4 	listed in subdivision 8, clauses (1) to (10).

131.5 	Sec. 12. Minnesota Statutes 2008, section 332A.04, subdivision 6, is amended to read:
131.6 		Subd. 6.Right of action on bond. If the registrant has failed to account to a debtor 
131.7 	or distribute to the debtor's creditors the amounts required by this chapter and, or has 
131.8 	failed to perform any of the services promised in  the debt management services agreement 
131.9 	between the debtor and registrant, the registrant is in default. The debtor or the debtor's 
131.10 	legal representative or receiver, the commissioner, or the attorney general, shall have, in 
131.11 	addition to all other legal remedies, a right of action in the name of the debtor on the bond 
131.12 	or the security given under this section, for loss suffered by the debtor, not exceeding the 
131.13 	face amount of the bond or security, and without the necessity of joining the registrant 
131.14 	in the suit or action based on the default.

131.15 	Sec. 13. Minnesota Statutes 2008, section 332A.08, is amended to read:
131.16 	332A.08 DENIAL OF REGISTRATION.
131.17 	The commissioner, with notice to the applicant by certified mail sent to the address 
131.18 	listed on the application, may deny an application for a registration upon finding that 
131.19 	the applicant:
131.20 	(1) has submitted an application required under section 332A.04 that contains 
131.21 	incorrect, misleading, incomplete, or materially untrue information. An application is 
131.22 	incomplete if it does not include all the information required in section 332A.04;
131.23 	(2) has failed to pay any fee or pay or maintain any bond required by this chapter, 
131.24 	or failed to comply with any order, decision, or finding of the commissioner made under 
131.25 	and within the authority of this chapter;
131.26 	(3) has violated any provision of this chapter or any rule or direction lawfully made 
131.27 	by the commissioner under and within the authority of this chapter;
131.28 	(4) or any controlling or affiliated party has ever been convicted of a crime or found 
131.29 	civilly liable for an offense involving moral turpitude, including forgery, embezzlement, 
131.30 	obtaining money under false pretenses, larceny, extortion, conspiracy to defraud, or any 
131.31 	other similar offense or violation, or any violation of a federal or state law or regulation 
131.32 	in connection with activities relating to the rendition of debt management services or 
131.33 	any consumer fraud, false advertising, deceptive trade practices, or similar consumer 
131.34 	protection law;
132.1 	(5) has had a registration or license previously revoked or suspended in this state or 
132.2 	any other state or the applicant or licensee has been permanently or temporarily enjoined 
132.3 	by any court of competent jurisdiction from engaging in or continuing any conduct or 
132.4 	practice involving any aspect of the debt management services provider business; or 
132.5 	any controlling or affiliated party has been an officer, director, manager, or shareholder 
132.6 	owning more than a ten percent interest in a debt management services provider whose 
132.7 	registration has previously been revoked or suspended in this state or any other state, or 
132.8 	who has been permanently or temporarily enjoined by any court of competent jurisdiction 
132.9 	from engaging in or continuing any conduct or practice involving any aspect of the debt 
132.10 	management services provider business;
132.11 	(6) has made any false statement or representation to the commissioner;
132.12 	(7) is insolvent;
132.13 	(8) refuses to fully comply with an investigation or examination of the debt 
132.14 	management services provider by the commissioner;
132.15 	(9) has improperly withheld, misappropriated, or converted any money or properties 
132.16 	received in the course of doing business;
132.17 	(10) has failed to have a trust account with an actual cash balance equal to or greater 
132.18 	than the sum of the escrow balances of each debtor's account;
132.19 	(11) has defaulted in making payments to creditors on behalf of debtors as required 
132.20 	by agreements between the provider and debtor; or
132.21 	(12) has used fraudulent, coercive, or dishonest practices, or demonstrated 
132.22 	incompetence, untrustworthiness, or financial irresponsibility in this state or elsewhere; or
132.23 	(13) has been shown to have engaged in a pattern of failing to perform the services 
132.24 	promised.

132.25 	Sec. 14. Minnesota Statutes 2008, section 332A.10, is amended to read:
132.26 	332A.10 WRITTEN DEBT MANAGEMENT SERVICES AGREEMENT.
132.27 		Subdivision 1.Written agreement required. (a) A debt management services 
132.28 	provider may not perform any debt management services or receive any money related 
132.29 	to a debt management services plan until the provider has obtained a debt management 
132.30 	services agreement that contains all  terms of the agreement between the debt management 
132.31 	services provider and the debtor.
132.32 	(b) A debt management services agreement must:
132.33 	(1) be in writing, dated, and signed by the debt management services provider and 
132.34 	the debtor;
133.1 	(2) conspicuously indicate whether or not the debt management services provider 
133.2 	is registered with the Minnesota Department of Commerce and include any registration 
133.3 	number; and
133.4 	(3) be written in the debtor's primary language if the debt management services 
133.5 	provider advertised in that language. 
133.6 	(c) The registrant must furnish the debtor with a copy of the signed contract upon 
133.7 	execution.
133.8 		Subd. 2.Actions prior to written agreement. No person may provide debt 
133.9 	management services for a debtor or execute a debt management services agreement 
133.10 	unless the person first has:
133.11 	(1) provided the debtor individualized counseling and educational information 
133.12 	that, at a minimum, addresses managing household finances, managing credit and debt, 
133.13 	budgeting, and personal savings strategies;
133.14 	(2) prepared in writing and provided to the debtor, in a form that the debtor may 
133.15 	keep, an individualized financial analysis and a proposed debt management services 
133.16 	plan listing the debtor's known debts with specific recommendations regarding actions 
133.17 	the debtor should take to reduce or eliminate the amount of the debts, including written 
133.18 	disclosure that debt management services are not suitable for all debtors and that there are 
133.19 	other ways, including bankruptcy, to deal with indebtedness;
133.20 	(3) made a determination supported by an individualized financial analysis that the 
133.21 	debtor can reasonably meet the requirements of the proposed debt management services 
133.22 	plan and that there is a net tangible benefit to the debtor of entering into the proposed debt 
133.23 	management services plan; and
133.24 	(4) prepared, in a form the debtor may keep, a written list identifying all known 
133.25 	creditors of the debtor that the provider reasonably expects to participate in the plan 
133.26 	and the creditors, including secured creditors, that the provider reasonably expects not 
133.27 	to participate; and
133.28 	(5) disclosed, in addition to the written disclosure on the agreement required under 
133.29 	subdivision 1, whether or not the debt management services provider is registered with the 
133.30 	Minnesota Department of Commerce and any registration number.
133.31 		Subd. 3.Required terms provisions. (a) Each debt management services 
133.32 	agreement must contain the following terms provisions, which must be disclosed 
133.33 	prominently and clearly in bold print on the front page of the agreement, segregated by 
133.34 	bold lines from all other information on the page:
133.35 	(1) the origination fee amount to be paid by the debtor and whether all or a portion 
133.36 	of the initial origination fee amount is refundable or nonrefundable;
134.1 	(2) the monthly fee amount or percentage to be paid by the debtor; and
134.2 	(3) the total amount of fees reasonably anticipated to be paid by the debtor over 
134.3 	the term of the agreement.
134.4 	(b) Each debt management services agreement must also contain the following:
134.5 	(1) a disclosure that if the amount of debt owed is increased by interest, late fees, 
134.6 	over the limit fees, and other amounts imposed by the creditors, the length of the debt 
134.7 	management services agreement will be extended and remain in force and that the total 
134.8 	dollar charges agreed upon may increase at the rate agreed upon in the original contract 
134.9 	agreement;
134.10 	(2) a prominent statement describing the terms upon which the debtor may cancel 
134.11 	the contract as set forth in section 332A.11;
134.12 	(3) a detailed description of all services to be performed by the debt management 
134.13 	services provider for the debtor;
134.14 	(4) the debt management services provider's refund policy; and
134.15 	(5) the debt management services provider's principal business address and the name 
134.16 	and address of its agent in this state authorized to receive service of process.
134.17 		Subd. 4.Prohibited terms. The following terms shall not be included in the debt 
134.18 	management services agreement:
134.19 	(1) a hold harmless clause;
134.20 	(2) a confession of judgment, or a power of attorney to confess judgment against the 
134.21 	debtor or appear as the debtor in any judicial proceeding;
134.22 	(3) a waiver of the right to a jury trial, if applicable, in any action brought by 
134.23 	or against a debtor;
134.24 	(4) an assignment of or an order for payment of wages or other compensation for 
134.25 	services;
134.26 	(5) a provision in which the debtor agrees not to assert any claim or defense arising 
134.27 	out of the debt management services agreement;
134.28 	(6) a waiver of any provision of this chapter or a release of any obligation required 
134.29 	to be performed on the part of the debt management services provider; or
134.30 	(7) a mandatory arbitration or choice of law clause.
134.31 		Subd. 5. New debt management services agreements; modification of existing 
134.32 	agreements. (a) Separate and additional debt management services agreements that 
134.33 	comply with this chapter may be entered into by the debt management services provider 
134.34 	and the debtor provided that no additional initial origination fee may be charged by the 
134.35 	debt management services provider. 
135.1 	(b) Any modification of an existing debt management services agreement, including 
135.2 	any increase in the number or amount of debts included in the debt management service
135.3 	services agreement, must be in writing and signed by both parties, except that the signature 
135.4 	of the debtor is not required if: 
135.5 	(1) a creditor is added to or deleted from a debt management services agreement 
135.6 	at the request of the debtor or a debtor voluntarily increases the amount of a payment, 
135.7 	provided the debt management services provider must provide an updated payment 
135.8 	schedule to the debtor within seven days; or 
135.9 	(2) the payment amount to a creditor in the agreement increases by $10 or less 
135.10 	and the total payment amount to all creditors increases a total of $20 or less as a result 
135.11 	of incorrect or incomplete information provided by the debtor regarding the amount of 
135.12 	debt owed a creditor, provided the debt management services provider must notify the 
135.13 	debtor of the increase within seven days. 
135.14 	No fees, charges, or other consideration may be demanded from the debtor for 
135.15 	the modification, other than an increase in the amount of the monthly maintenance fee 
135.16 	established in the original debt management services agreement. 

135.17 	Sec. 15. Minnesota Statutes 2008, section 332A.11, subdivision 2, is amended to read:
135.18 		Subd. 2.Notice of debtor's right to cancel. A debt management services 
135.19 	agreement must contain, on its face, in an easily readable typeface type immediately 
135.20 	adjacent to the space for signature by the debtor, the following notice: "Right To Cancel: 
135.21 	You have the right to cancel this contract at any time on ten days' written notice." 

135.22 	Sec. 16. Minnesota Statutes 2008, section 332A.14, is amended to read:
135.23 	332A.14 PROHIBITIONS.
135.24 	A registrant (a) No debt management services provider shall not:
135.25 	(1) purchase from a creditor any obligation of a debtor;
135.26 	(2) use, threaten to use, seek to have used, or seek to have threatened the use of any 
135.27 	legal process, including but not limited to garnishment and repossession of personal 
135.28 	property, against any debtor while the debt management services agreement between the 
135.29 	registrant and the debtor remains executory;
135.30 	(3) advise, counsel, or encourage a debtor to stop paying a creditor until a debt 
135.31 	management services plan is in place, or imply, infer, encourage, or in any other way 
135.32 	indicate, that it is advisable to stop paying a creditor;
136.1 	(4) sanction or condone the act by a debtor of ceasing payments or imply, infer, 
136.2 	or in any manner indicate that the act of ceasing payments is advisable or beneficial to 
136.3 	the debtor;
136.4 	(4) (5) require as a condition of performing debt management services the purchase 
136.5 	of any services, stock, insurance, commodity, or other property or any interest therein 
136.6 	either by the debtor or the registrant;
136.7 	(5) (6) compromise any debts unless the prior written approval of the debtor has 
136.8 	been obtained to such compromise and unless such compromise inures solely to the 
136.9 	benefit of the debtor;
136.10 	(6) (7) receive from any debtor as security or in payment of any fee a promissory 
136.11 	note or other promise to pay or any mortgage or other security, whether as to real or 
136.12 	personal property;
136.13 	(7) (8) lend money or provide credit to any debtor if any interest or fee is charged, 
136.14 	or directly or indirectly collect any fee for referring, advising, procuring, arranging, or 
136.15 	assisting a consumer in obtaining any extension of credit or other debtor service from a 
136.16 	lender or debt management services provider;
136.17 	(8) (9) structure a debt management services agreement that would result in negative 
136.18 	amortization of any debt in the plan;
136.19 	(9) (10) engage in any unfair, deceptive, or unconscionable act or practice in 
136.20 	connection with any service provided to any debtor;
136.21 	(10) (11) offer, pay, or give any material cash fee, gift, bonus, premium, reward, or 
136.22 	other compensation to any person for referring any prospective customer to the registrant 
136.23 	or for enrolling a debtor in a debt management services plan, or provide any other 
136.24 	incentives for employees or agents of the debt management services provider to induce 
136.25 	debtors to enter into a debt management services plan;
136.26 	(11) (12) receive any cash, fee, gift, bonus, premium, reward, or other compensation 
136.27 	from any person other than the debtor or a person on the debtor's behalf in connection 
136.28 	with activities as a registrant, provided that this paragraph does not apply to a registrant 
136.29 	which is a bona fide nonprofit corporation duly organized under chapter 317A or under 
136.30 	the similar laws of another state;
136.31 	(12) (13) enter into a contract with a debtor unless a thorough written budget analysis 
136.32 	indicates that the debtor can reasonably meet the requirements of the financial adjustment 
136.33 	plan and will be benefited by the plan;
136.34 	(13) (14) in any way charge or purport to charge or provide any debtor credit 
136.35 	insurance in conjunction with any contract or agreement involved in the debt management 
136.36 	services plan;
137.1 	(14) (15) operate or employ a person who is an employee or owner of a collection 
137.2 	agency or process-serving business; or
137.3 	(15) (16) solicit, demand, collect, require, or attempt to require payment of a sum 
137.4 	that the registrant states, discloses, or advertises to be a voluntary contribution to a debt 
137.5 	management services provider or designee from the debtor.

137.6 	Sec. 17. [332B.02] DEFINITIONS.
137.7 		Subdivision 1.Scope. Unless a different meaning is clearly indicated by the context, 
137.8 	for the purposes of this chapter, the terms defined in this section have the meanings given 
137.9 	them.
137.10 		Subd. 2.Advertise. "Advertise" means to solicit business through any means or 
137.11 	medium.
137.12 		Subd. 3.Aggregate debt. "Aggregate debt" means the total of principal and interest 
137.13 	that is owed by the debtor to the creditors at the time of execution of the debt settlement 
137.14 	agreement.
137.15 		Subd. 4.Attorney general. "Attorney general" means the attorney general of the 
137.16 	state of Minnesota.
137.17 		Subd. 5.Commissioner. "Commissioner" means the commissioner of commerce.
137.18 		Subd. 6.Controlling or affiliated party. "Controlling or affiliated party" means 
137.19 	any person or entity that controls or is controlled, directly or indirectly, or is under 
137.20 	common control with another person. Controlling or affiliated party includes, but is not 
137.21 	limited to, employees, officers, independent contractors, corporations, partnerships, and 
137.22 	limited liability corporations.
137.23 		Subd. 7.Debt settlement services. "Debt settlement services" means any one or 
137.24 	more of the following activities:
137.25 	(1) offering to provide advice, or offering to act or acting as an intermediary between 
137.26 	a debtor and one or more of the debtor's creditors, where the primary purpose of the 
137.27 	advice or action is to obtain a settlement for less than the full amount of debt, whether 
137.28 	in principal, interest, fees, or other charges, incurred primarily for personal, family, or 
137.29 	household purposes including, but not limited to, offering debt negotiation, debt reduction, 
137.30 	or debt relief services; or
137.31 	(2) advising, encouraging, assisting, or counseling a debtor to accumulate funds in 
137.32 	an account for future payment of a reduced amount of debt to one or more of the debtor's 
137.33 	creditors.
138.1 	Any person so engaged or holding out as so engaged is deemed to be engaged in 
138.2 	the provision of debt settlement services, regardless of whether or not a fee is charged for 
138.3 	such services.
138.4 		Subd. 8.Debt settlement services agreement. "Debt settlement services 
138.5 	agreement" means the written contract between the debt settlement services provider 
138.6 	and the debtor.
138.7 		Subd. 9.Debt settlement services plan. "Debt settlement services plan" means the 
138.8 	debtor's individualized package of debt settlement services set forth in the debt settlement 
138.9 	services agreement.
138.10 		Subd. 10.Debt settlement services provider. "Debt settlement services provider" 
138.11 	means any person offering or providing debt settlement services to a debtor domiciled 
138.12 	in this state, regardless of whether or not a fee is charged for the services and regardless 
138.13 	of whether the person maintains a physical presence in the state. The term includes any 
138.14 	person to whom duties under a debt management agreement or debt management plan 
138.15 	are delegated.
138.16 		Subd. 11.Person. "Person" means an individual, firm, partnership, association, 
138.17 	or corporation.

138.18 	Sec. 18. [332B.03] REQUIREMENT OF REGISTRATION.
138.19 	On or after August 1, 2009, it is unlawful for any person, whether or not located 
138.20 	in this state, to operate as a debt settlement services provider or provide debt settlement 
138.21 	services including, but not limited to, offering, advertising, or executing or causing to be 
138.22 	executed any debt settlement services or debt settlement services agreement, except as 
138.23 	authorized by law, without first becoming registered as provided in this chapter. Debt 
138.24 	settlement services providers may continue to provide debt settlement services without 
138.25 	complying with this chapter to those debtors who entered into a contract to participate 
138.26 	in a debt settlement services plan prior to August 1, 2009, but may not enter into a debt 
138.27 	settlement services agreement with a debt on or after August 1, 2009, without complying 
138.28 	with this chapter.

138.29 	Sec. 19. [332B.04] REGISTRATION.
138.30 		Subdivision 1.Form. Application for registration to operate as a debt settlement 
138.31 	services provider in this state must be made in writing to the commissioner, under oath, in 
138.32 	the form prescribed by the commissioner, and must contain:
138.33 	(1) the full name of each principal of the entity applying;
139.1 	(2) the address, which must not be a post office box, and the telephone number and, 
139.2 	if applicable, the e-mail address, of the applicant;
139.3 	(3) consent to the jurisdiction of the courts of this state;
139.4 	(4) the name and address of the registered agent authorized to accept service of 
139.5 	process on behalf of the applicant or appointment of the commissioner as the applicant's 
139.6 	agent for purposes of accepting service of process;
139.7 	(5) disclosure of:
139.8 	(i) whether any controlling or affiliated party has ever been convicted of a crime 
139.9 	or found civilly liable for an offense involving moral turpitude, including forgery, 
139.10 	embezzlement, obtaining money under false pretenses, larceny, extortion, conspiracy to 
139.11 	defraud, or any other similar offense or violation, or any violation of a federal or state 
139.12 	law or regulation in connection with activities relating to the rendition of debt settlement 
139.13 	services or involving any consumer fraud, false advertising, deceptive trade practices, or 
139.14 	similar consumer protection law;
139.15 	(ii) any judgments, private or public litigation, tax liens, written complaints, 
139.16 	administrative actions, or investigations by any government agency against the applicant 
139.17 	or any officer, director, manager, or shareholder owning more than five percent interest 
139.18 	in the applicant, unresolved or otherwise, filed or otherwise commenced within the 
139.19 	preceding ten years;
139.20 	(iii) whether the applicant or any person employed by the applicant has had a record 
139.21 	of having defaulted in the payment of money collected for others, including the discharge 
139.22 	of debts through bankruptcy proceedings; and
139.23 	(iv) whether the applicant's license or registration to provide debt settlement services 
139.24 	in any other state has ever been revoked or suspended;
139.25 	(6) a copy of the applicant's standard debt settlement services agreement that the 
139.26 	applicant intends to execute with debtors;
139.27 	(7) proof of accreditation; and
139.28 	(8) any other information and material as the commissioner may require.
139.29 	The commissioner may, for good cause shown, temporarily waive any requirement 
139.30 	of this subdivision.
139.31 		Subd. 2.Term and scope of registration. A registration is effective until 11:59 
139.32 	p.m. on December 31 of the year for which the application for registration is filed or until 
139.33 	it is surrendered by the registrant or revoked or suspended by the commissioner. The 
139.34 	registration is limited solely to the business of providing debt settlement services.
139.35 		Subd. 3.Fees; bond. An applicant for registration as a debt settlement services 
139.36 	provider must comply with the requirements of section 332A.04, subdivisions 3, 4, and 5.
140.1 		Subd. 4.Right of action on bond. If the registrant has failed to account to a debtor, 
140.2 	or has failed to perform any of the services promised, the registrant is in default. The 
140.3 	debtor or the debtor's legal representative or receiver, the commissioner, or the attorney 
140.4 	general, shall have, in addition to all other legal remedies, a right of action in the name of 
140.5 	the debtor on the bond or the security given under this section, for loss suffered by the 
140.6 	debtor, not exceeding the face amount of the bond or security, and without the necessity of 
140.7 	joining the registrant in the suit or action based on the default.
140.8 		Subd. 5.Registrant list. The commissioner must maintain a list of registered debt 
140.9 	settlement services providers. The list must be made available to the public in written 
140.10 	form upon request and on the Department of Commerce Web site.
140.11 		Subd. 6.Renewal of registration. Each year, each registrant under the provisions 
140.12 	of this chapter must not, more than 60 nor less than 30 days before its registration is to 
140.13 	expire, apply to the commissioner for renewal of its registration on a form prescribed by 
140.14 	the commissioner. The application must be signed by the registrant under penalty of 
140.15 	perjury, contain current information on all matters required in the original application, and 
140.16 	be accompanied by a payment of $250. The registrant must maintain a continuous surety 
140.17 	bond that satisfies the requirements of section 332A.04, subdivision 4. The renewal is 
140.18 	effective for one year. The commissioner may, for good cause shown, temporarily waive 
140.19 	any requirement of this section.

140.20 	Sec. 20. [332B.05] DENIAL, SUSPENSION, REVOCATION, OR 
140.21 	NONRENEWAL OF REGISTRATION.
140.22 		Subdivision 1.Denial. The commissioner, with notice to the applicant by certified 
140.23 	mail sent to the address listed on the application, may deny an application for a registration 
140.24 	for any of the reasons specified under section 332A.08.
140.25 		Subd. 2.Suspension, revocation, or nonrenewal. The commissioner may suspend, 
140.26 	revoke, or refuse to renew any registration issued under this chapter, or may levy a civil 
140.27 	penalty under section 45.027, or any combination of actions, if the debt settlement services 
140.28 	provider or any controlling or affiliated person has committed any act or omission for 
140.29 	which the commissioner could have refused to issue an initial registration.
140.30 		Subd. 3.Procedure. Suspension, revocation, or nonrenewal must be upon notice 
140.31 	and under the conditions prescribed in section 332A.09, subdivision 1. Upon issuance of 
140.32 	an order suspending, revoking, or refusing to renew a registration, the commissioner:
140.33 	(1) shall follow the procedure established in section 332A.09, subdivision 2; and
140.34 	(2) may follow the procedure specified in section 332A.09, subdivision 3, concerning 
140.35 	the appointment of a receiver for funds of sanctioned registrants.

141.1 	Sec. 21. [332B.06] WRITTEN DEBT SETTLEMENT SERVICES AGREEMENT; 
141.2 	DISCLOSURES; TRUST ACCOUNT.
141.3 		Subdivision 1.Written agreement required. (a) A debt settlement services 
141.4 	provider may not perform, or impose any charges or receive any payment for, any debt 
141.5 	settlement services until the provider and the debtor have executed a debt settlement 
141.6 	services agreement that contains all terms of the agreement between the debt settlement 
141.7 	services provider and the debtor and complies with all the applicable requirements of 
141.8 	this chapter.
141.9 	(b) A debt settlement services agreement must:
141.10 	(1) be in writing, dated, and signed by the debt settlement services provider and 
141.11 	the debtor;
141.12 	(2) conspicuously indicate whether or not the debt settlement services provider is 
141.13 	registered with the Minnesota Department of Commerce and include any registration 
141.14 	number; and
141.15 	(3) be written in the debtor's primary language if the debt settlement services 
141.16 	provider advertises in that language.
141.17 	(c) The registrant must furnish the debtor with a copy of the signed contract upon 
141.18 	execution.
141.19 		Subd. 2.Actions prior to executing a written agreement. No person may provide 
141.20 	debt settlement services for a debtor or execute a debt settlement services agreement 
141.21 	unless the person first has: 
141.22 	(1) provided the debtor individualized counseling that, at a minimum, addresses 
141.23 	managing household finances, managing credit and debt, budgeting, personal savings 
141.24 	strategies, and a detailed description of all the various ways to reduce or eliminate the 
141.25 	debt, which must, at a minimum, include bankruptcy; and
141.26 	(2) prepared in writing and provided to the debtor, in a form the debtor may keep, 
141.27 	an individualized financial analysis of the debtor's financial circumstances, including 
141.28 	income and liabilities, and made a determination supported by the individualized financial 
141.29 	analysis that:
141.30 	(i) the debt settlement plan proposed for addressing the debt is suitable for the 
141.31 	individual debtor;
141.32 	(ii) the debtor can reasonably meet the requirements of the proposed debt settlement 
141.33 	services plan; and
141.34 	(iii) there is a net tangible benefit to the debtor of entering into the proposed debt 
141.35 	settlement services plan.
142.1 		Subd. 3.Disclosures. (a) A person offering to provide or providing debt settlement 
142.2 	services must disclose both orally and in writing whether or not the person is registered 
142.3 	with the Minnesota Department of Commerce and any registration number.
142.4 	(b) No person may provide debt settlement services unless the person first has 
142.5 	provided, both orally and in writing, on a single sheet of paper, separate from any other 
142.6 	document or writing, the following verbatim notice:
142.7 	WARNING
142.8 	We CANNOT GUARANTEE that you will successfully reduce or eliminate your 
142.9 	debt.
142.10 	You SHOULD NOT stop paying your creditors.
142.11 	Fees, interest, and other charges will continue to mount up during the (insert 
142.12 	number) months this plan is in effect.
142.13 	Even if you sign up for this service:
142.14 	• YOUR WAGES OR BANK ACCOUNT MAY STILL BE GARNISHED.
142.15 	• YOU MAY STILL BE CONTACTED BY CREDITORS.
142.16 	• YOU MAY STILL BE SUED BY CREDITORS for the money you owe.
142.17 	Even if we do settle your debt, YOU MAY STILL HAVE TO PAY TAXES on 
142.18 	the amount forgiven.
142.19 	Your credit rating may be adversely affected.
142.20 	(c) The heading, "WARNING," must be in bold, underlined, 28-point type, and the 
142.21 	remaining text must be in 14-point type, with a double space between each statement.
142.22 	(d) The disclosure and notice required under this subdivision must be provided in 
142.23 	the debtor's primary language if the debt settlement provider advertises in that language.
142.24 		Subd. 4.Required information. (a) Each debt settlement services agreement must 
142.25 	contain the following information, which must be disclosed prominently and clearly in 
142.26 	bold print on the front page of the agreement, segregated by bold lines from all other 
142.27 	information on the page:
142.28 	(1) the origination fee amount to be paid by the debtor and whether all or part of the 
142.29 	origination fee is refundable or nonrefundable; and
142.30 	(2) the service fee formula and the total amount of service fees reasonably 
142.31 	anticipated to be paid by the debtor over the term of the agreement.
142.32 	(b) Each debt settlement services agreement must also contain the following:
142.33 	(1) a prominent statement describing the terms upon which the debtor may cancel 
142.34 	the contract as set forth in section 332B.07;
142.35 	(2) a detailed description of all services to be performed by the debt settlement 
142.36 	services provider for the debtor;
143.1 	(3) the debt settlement services provider's refund policy;
143.2 	(4) the debt settlement services provider's principal business address, which must 
143.3 	not be a post office box, and the name and address of its agent in this state authorized to 
143.4 	receive service of process; and
143.5 	(5) the name of each creditor the debtor has listed and the aggregate debt owed to 
143.6 	each creditor that will be the subject of settlement.
143.7 		Subd. 5.Prohibited terms. A debt settlement services agreement may not contain 
143.8 	any of the terms prohibited under section 332A.10, subdivision 4.
143.9 		Subd. 6.New debt settlement services agreements; modifications of existing 
143.10 	agreements. (a) Separate and additional debt settlement services agreements that comply 
143.11 	with this chapter may be entered into by the debt settlement services provider and the 
143.12 	debtor, provided that no additional origination fee may be charged by the debt settlement 
143.13 	services provider.
143.14 	(b) Any modification of an existing debt settlement services agreement, including 
143.15 	any increase in the number or amount of debts included in the debt settlement services 
143.16 	agreement, must be in writing and signed by both parties. No fee may be charged to 
143.17 	modify an existing agreement.
143.18 		Subd. 7.Payments held in trust. If the registrant holds funds for the debtor, the 
143.19 	registrant must maintain a separate trust account and deposit in the account all payments 
143.20 	received from the moment that the funds are available, except that the registrant may 
143.21 	commingle the payment with the registrant's own property or funds, but only to the extent 
143.22 	necessary to ensure the maintenance of a minimum balance if the financial institution at 
143.23 	which the trust account is held requires a minimum balance to avoid the assessment of 
143.24 	fees or penalties for failure to maintain a minimum balance. All disbursements, whether 
143.25 	to the debtor or to the creditors of the debtor, or to the registrant, must be made from 
143.26 	such account.

143.27 	Sec. 22. [332B.07] RIGHT TO CANCEL.
143.28 		Subdivision 1.Debtor's right to cancel. (a) A debtor has the right to cancel a debt 
143.29 	settlement services agreement without cause at any time upon ten days' written notice 
143.30 	to the debt settlement services provider.
143.31 	(b) In the event of cancellation, the debt settlement services provider must, within 
143.32 	ten days of the cancellation, notify the debtor's creditors of the cancellation and provide 
143.33 	a refund of all funds paid by or for the debtor to the debt settlement services provider, 
143.34 	except for the origination fee specified in section 332B.09, subdivision 1.
144.1 		Subd. 2.Notice of debtor's right to cancel. A debt settlement services agreement 
144.2 	must contain, on its face, in an easily readable type immediately adjacent to the space for 
144.3 	signature by the debtor, the following notice: "Right to Cancel: You have the right to 
144.4 	cancel this contract at any time on ten days' written notice."
144.5 		Subd. 3.Automatic termination. Upon the payment of all listed or settled debts 
144.6 	and fees, the debt settlement services agreement must automatically terminate, and all 
144.7 	unexpended funds paid by or for the debtor to the debt settlement services provider must 
144.8 	be immediately returned to the debtor.
144.9 		Subd. 4.Debt settlement services provider's right to cancel. (a) A debt settlement 
144.10 	services provider may cancel a debt settlement services agreement with good cause upon 
144.11 	30 days' written notice to the debtor.
144.12 	(b) Within ten days after the cancellation, the debt settlement services provider must:
144.13 	(1) notify the debtor's creditors of the cancellation; and
144.14 	(2) return to the debtor all funds paid by or for the debtor to the debt settlement 
144.15 	provider, except for the origination fee specified in section 332B.09, subdivision 1.

144.16 	Sec. 23. [332B.08] BOOKS, RECORDS, AND INFORMATION.
144.17 		Subdivision 1.Records retention; annual report. Every registrant must keep, and 
144.18 	use in the registrant's business, such books, accounts, and records, including electronic 
144.19 	records, as will enable the commissioner to determine whether the registrant is complying 
144.20 	with this chapter and the rules, orders, and directives adopted by the commissioner under 
144.21 	this chapter. Every registrant must preserve such books, accounts, and records for at least 
144.22 	six years after making the final entry on any transaction recorded therein. Examinations 
144.23 	of the books, records, and method of operations conducted under the supervision of the 
144.24 	commissioner shall be done at the cost of the registrant. The cost must be assessed as 
144.25 	determined under section 46.131.
144.26 		Subd. 2.Annual report. On or before March 15 of each calendar year, each 
144.27 	registrant must file a report with the commissioner containing such information as the 
144.28 	commissioner may require about the preceding calendar year. The report must be in a 
144.29 	form the commissioner prescribes.
144.30 		Subd. 3.Statements to debtors. (a) Each registrant must:
144.31 	(1) maintain and make available records and accounts that will enable each debtor to 
144.32 	ascertain the amounts paid to the creditors of the debtor. A statement showing amounts 
144.33 	received from the debtor, disbursements to each creditor, amounts that any creditor has 
144.34 	agreed to as payment in full for any debt owed the creditor by the debtor, charges deducted 
144.35 	by the registrant, and other information as the commissioner may prescribe, must be 
145.1 	furnished by the registrant to the debtor at least monthly and, in addition, upon any 
145.2 	cancellation or termination of the contract;
145.3 	(2) include in the statement furnished to debtors a list of all activities conducted 
145.4 	pursuant to the contract, including the number and description of communications with 
145.5 	each creditor during the reporting period; and
145.6 	(3) prepare and retain in the file of each debtor a written analysis of the debtor's 
145.7 	income and expenses to substantiate that the plan of payment is feasible and practicable.
145.8 	(b) Each debtor must have reasonable access, without cost, by electronic or other 
145.9 	means, to information in the registrant's files applicable to the debtor. These statements, 
145.10 	records, and accounts must otherwise remain confidential, except for duly authorized 
145.11 	state and government officials, the commissioner, the attorney general, the debtor, and 
145.12 	the debtor's representative and designees.

145.13 	Sec. 24. [332B.09] FEES, PAYMENTS, AND CONSENT OF CREDITORS.
145.14 		Subdivision 1.Origination fee. A debt settlement services provider may charge a 
145.15 	nonrefundable origination fee of not more than $50.
145.16 		Subd. 2.Service fee. In addition to the origination fee under subdivision 1, a debt 
145.17 	settlement services provider may charge a service fee equal to five percent of the savings 
145.18 	actually negotiated by the debt settlement services provider. No other fees may be charged. 
145.19 	The savings shall be calculated as the difference between the aggregate debt that is stated 
145.20 	in the debt settlement services agreement at the time of its execution and total amount 
145.21 	that the debtor actually pays to settle all the debts stated in the debt settlement services 
145.22 	agreement, provided that only savings resulting from concessions actually negotiated by 
145.23 	the debt settlement services provider may be counted.
145.24 		Subd. 3.Collection of fees. No debt settlement services provider may claim, 
145.25 	demand, charge, collect, or receive any compensation until after the debt settlement 
145.26 	service provider has fully performed each and every service the provider has contracted to 
145.27 	perform or represented would be performed or as otherwise provided in this section.
145.28 		Subd. 4.Consent of creditors. Before providing any services, a debt settlement 
145.29 	services provider must obtain the written consent of all creditors that agree to participate in 
145.30 	the debt settlement services plan set forth in the debt management services agreement. The 
145.31 	debt settlement services provider must notify the debtor within ten days after any failure to 
145.32 	obtain the required consent of any creditor and of the debtor's right to cancel the agreement 
145.33 	without penalty. If not all creditors listed in the debt settlement services agreement have 
145.34 	consented to participate in the debt settlement services plan, the debt settlement services 
146.1 	provider must obtain the written authorization from the debtor to proceed with the debt 
146.2 	settlement services agreement without the participation of all listed creditors.
146.3 		Subd. 5.Withdrawal of creditor. Whenever a creditor withdraws from a debt 
146.4 	settlement services plan, the debt settlement services provider must promptly notify the 
146.5 	debtor of the withdrawal, identify the creditor, and inform the debtor of the right to cancel 
146.6 	the debt settlement services agreement. In no case may this notice be provided more 
146.7 	than 15 days after the debt settlement services provider learns of the creditor's decision 
146.8 	to withdraw from a plan.
146.9 		Subd. 6.Timely notification of settlement. A debt settlement services provider 
146.10 	must notify the debtor within 24 hours of settlement of a debt with a creditor.

146.11 	Sec. 25. [332B.10] PROHIBITIONS.
146.12 	No debt settlement services provider shall:
146.13 	(1) engage in any activity, act, or omission prohibited under section 332A.14;
146.14 	(2) promise, guarantee, or directly or indirectly imply, infer, or in any manner 
146.15 	represent that any debt will be settled prior to the presentation to the debtor of an offer by 
146.16 	the creditors participating in the debt settlement plan to settle;
146.17 	(3) misrepresent the timing of negotiations with creditors;
146.18 	(4) imply, infer, or in any manner represent that:
146.19 	(i) fees, interest, and other charges will not continue to accrue prior to the time 
146.20 	debts are settled;
146.21 	(ii) wages or bank accounts are not subject to garnishment;
146.22 	(iii) creditors will not continue to contact the debtor;
146.23 	(iv) the debtor is not subject to legal action; and
146.24 	(v) the debtor will not be subject to tax consequences for the portion of any debts 
146.25 	forgiven;
146.26 	(5) execute a power of attorney or any other agreement, oral or written, express 
146.27 	or implied, that extinguishes or limits the debtor's right at any time to contract or 
146.28 	communicate with any creditor or the creditor's right at any time to communicate with 
146.29 	the debtor;
146.30 	(6) exercise or attempt to exercise a power of attorney after an individual has 
146.31 	terminated an agreement;
146.32 	(7) state, imply, infer, or, in any other manner, indicate that entering into a debt 
146.33 	settlement services agreement or settling debts will either have no effect on, or improve, 
146.34 	the debtor's credit, credit rating, and credit score;
146.35 	(8) challenge a debt without the written consent of the debtor;
147.1 	(9) make any false or misleading claim regarding a creditor's right to collect a debt;
147.2 	(10) represent that the debt settlement services provider can negotiate better 
147.3 	settlement terms with a creditor than the debtor alone can negotiate;
147.4 	(11) provide or offer to provide legal advice or legal services unless the person 
147.5 	providing or offering to provide legal advice is licensed to practice law in the state;
147.6 	(12) misrepresent that it is authorized or competent to furnish legal advice or 
147.7 	perform legal services; and
147.8 	(13) settle a debt or lead an individual to believe that a payment to a creditor is in 
147.9 	settlement of a debt to the creditor unless, at the time of settlement, the individual receives 
147.10 	a certification from the creditor that the payment is in full settlement of the debt.

147.11 	Sec. 26. [332B.11] ADVERTISEMENT OF DEBT SETTLEMENT SERVICES 
147.12 	PLAN.
147.13 	No debt settlement services provider may engage in any activity proscribed by 
147.14 	section 332A.16, or represent, claim, imply, or infer that secured debts may be settled.

147.15 	Sec. 27. [332B.12] DEBT SETTLEMENT SERVICES AGREEMENT 
147.16 	RESCISSION.
147.17 	Any debtor has the right to rescind any debt settlement services agreement with a 
147.18 	debt settlement services provider that commits a material violation of this chapter. On 
147.19 	rescission, all fees paid to the debt settlement services provider or any other person other 
147.20 	than creditors of the debtor must be returned to the debtor entering into the debt settlement 
147.21 	services agreement within ten days of rescission of the debt settlement services agreement.

147.22 	Sec. 28. [332B.13] ENFORCEMENT; REMEDIES.
147.23 		Subdivision 1.Violation as deceptive practice. A violation of any of the provisions 
147.24 	of this chapter is considered an unfair or deceptive trade practice under section 8.31, 
147.25 	subdivision 1. A private right of action under section 8.31 by an aggrieved debtor is in 
147.26 	the public interest.
147.27 		Subd. 2.Private right of action. (a) A debt settlement provider who fails to comply 
147.28 	with any of the provisions of this chapter is liable under this section in an individual 
147.29 	action for the sum of:
147.30 	(1) actual, incidental, and consequential damages sustained by the debtor as a result 
147.31 	of the failure; and
147.32 	(2) statutory damages of up to $5,000.
148.1 	(b) A debt settlement provider who fails to comply with any of the provisions of this 
148.2 	chapter is liable to the named plaintiffs under this section in a class action for the amount 
148.3 	that each named plaintiff could recover under paragraph (a), clause (1), and to the other 
148.4 	class members for such amount as the court may allow.
148.5 	(c) In determining the amount of statutory damages, the court shall consider, among 
148.6 	other relevant factors:
148.7 	(1) the frequency, nature, and persistence of noncompliance;
148.8 	(2) the extent to which the noncompliance was intentional; and
148.9 	(3) in the case of a class action, the number of debtors adversely affected.
148.10 	(d) A plaintiff or class successful in a legal or equitable action under this section is 
148.11 	entitled to the costs of the action, plus reasonable attorney fees.
148.12 		Subd. 3.Injunctive relief. A debtor may sue a debt settlement services provider 
148.13 	for temporary or permanent injunctive or other appropriate equitable relief to prevent 
148.14 	violations of any provision of this chapter. A court must grant injunctive relief on a 
148.15 	showing that the debt settlement services provider has violated any provision of this 
148.16 	chapter, or in the case of a temporary injunction, on a showing that the debtor is likely to 
148.17 	prevail on allegations that the debt settlement services provider violated any provision 
148.18 	of this chapter.
148.19 		Subd. 4.Remedies cumulative. The remedies provided in this section are 
148.20 	cumulative and do not restrict any remedy that is otherwise available. The provisions 
148.21 	of this chapter are not exclusive and are in addition to any other requirements, rights, 
148.22 	remedies, and penalties provided by law.
148.23 		Subd. 5.Public enforcement. The attorney general shall enforce this chapter 
148.24 	under section 8.31.

148.25 	Sec. 29. [332B.14] INVESTIGATIONS.
148.26 	At any reasonable time, the commissioner may examine the books and records of 
148.27 	every registrant and of any person engaged in the business of providing debt settlement 
148.28 	services. The commissioner, once during any calendar year, may require the submission 
148.29 	of an audit prepared by a certified public accountant of the books and records of each 
148.30 	registrant. If the registrant has, within one year previous to the commissioner's demand, 
148.31 	had an audit prepared for some other purpose, this audit may be submitted to satisfy the 
148.32 	requirement of this section. The commissioner may investigate any complaint concerning 
148.33 	violations of this chapter and may require the attendance and sworn testimony of witnesses 
148.34 	and the production of documents.